##### 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, 2009.

or



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

For the transition period fromto

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.

3,116,361,139 Common Shares were outstanding as of December 31, 2009

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, 2009

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                                                   |  | 17  
|Item 5.                                                              |  | Operating and Financial Review and Prospects                                 |  | 30  
|Item 6.                                                              |  | Directors, Senior Management and Employees                                   |  | 49  
|Item 7.                                                              |  | Major Shareholders and Related Party Transactions                            |  | 53  
|Item 8.                                                              |  | Financial Information                                                        |  | 55  
|Item 9.                                                              |  | The Offer and Listing                                                        |  | 56  
|Item 10.                                                             |  | Additional Information                                                       |  | 58  
|Item 11.                                                             |  | Quantitative and Qualitative Disclosures About Market Risk                   |  | 73  
|Item 12.                                                             |  | Description of Securities Other Than Equity Securities                       |  | 74  
|                                                                     | 
|PART II                                                              |  | 76                                                                          
|                                                                     |  |                                                                             
|Item 13.                                                             |  | Defaults, Dividend Arrearages and Delinquencies                              |  | 76  
|Item 14.                                                             |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |  | 76  
|Item 15.                                                             |  | Controls and Procedures                                                      |  | 76  
|Item 16A.                                                            |  | Audit Committee Financial Expert                                             |  | 77  
|Item 16B.                                                            |  | Code of Ethics                                                               |  | 77  
|Item 16C.                                                            |  | Principal Accountant Fees and Services                                       |  | 77  
|Item 16D.                                                            |  | Exemptions from the Listing Standards for Audit Committees                   |  | 78  
|Item 16E.                                                            |  | Purchase of Equity Securities by the Issuer and Affiliated Purchasers        |  | 78  
|Item 16F.                                                            |  | Change in Registrants Certifying Accountant                                 |  | 78  
|Item 16G.                                                            |  | Corporate Governance                                                         |  | 78  
|                                                                     | 
|PART III                                                             |  | 80                                                                          
|                                                                     |  |                                                                             
|Item 17.                                                             |  | Financial Statements                                                         |  | 80  
|Item 18.                                                             |  | Financial Statements                                                         |  | 80  
|Item 19.                                                             |  | Exhibit Index                                                                |  | 81  
|                                                                     | 
|Exhibit 8.1                                                          |  |                                                                             
|Exhibit 12.1                                                         |  |                                                                             
|Exhibit 12.2                                                         |  |                                                                             
|Exhibit 13.1                                                         |  |                                                                             
|Exhibit 13.2                                                         |  |                                                                             



---

##### 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 ending 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



---

##### 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, 2007, 2008 and
2009 and the selected balance sheet data as of December 31, 2008 and 2009 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, 2005 and 2006 and the selected balance sheet data as of December 31, 2005, 2006 and 2007 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,                                              |  
|                                                               |  | 2005                                                                  |   |  | 2006    |   |  | 2007    |   |  | 2008    |   |  | 2009    |  
|                                                               |  | NT$                                                                   |   |  | NT$     |   |  | NT$     |   |  | NT$     |   |  | NT$     |   |  | US$(6)   |  
|                                                               |  | (in millions, except earnings or dividends per share and per ADSdata) |  
|Income Statement Data:                                         |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|R.O.C. GAAP                                                    |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|Net operating revenues                                         |  | 43,488                                                                |   |  | 57,126  |   |  | 66,177  |   |  | 62,403  |   |  | 59,295  |   |  | 1,855.9  |  
|Cost of goods sold                                             |  | (33,995                                                               | ) |  | (41,895 | ) |  | (46,776 | ) |  | (49,454 | ) |  | (47,852 | ) |  | (1,497.7 | )
|                                                               |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|Gross profit                                                   |  | 9,493                                                                 |   |  | 15,231  |   |  | 19,401  |   |  | 12,949  |   |  | 11,443  |   |  | 358.2    |  
|                                                               |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|Operating expenses                                             |  | (2,279                                                                | ) |  | (2,989  | ) |  | (3,224  | ) |  | (4,003  | ) |  | (3,300  | ) |  | (103.3   | )
|                                                               |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|Operating income                                               |  | 7,214                                                                 |   |  | 12,242  |   |  | 16,177  |   |  | 8,946   |   |  | 8,143   |   |  | 254.9    |  
|Equity investment income (loss)(1)                             |  | 448                                                                   |   |  | 1,154   |   |  | 246     |   |  |        |   |  |        |   |  |         |  
|Other non-operating
income(1)                                  |  | 841                                                                   |   |  | 1,078   |   |  | 3,353   |   |  | 718     |   |  | 2,261   |   |  | 70.8     |  
|Other non-operating expenses                                   |  | (893                                                                  | ) |  | (196    | ) |  | (148    | ) |  | (3,140  | ) |  | (191    | ) |  | (6.0     | )
|                                                               |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|Income before income
tax(1)                                    |  | 7,609                                                                 |   |  | 14,278  |   |  | 19,628  |   |  | 6,524   |   |  | 10,213  |   |  | 319.7    |  
|Income tax benefit (expense)                                   |  | (16                                                                   | ) |  | (949    | ) |  | (2,139  | ) |  | (210    | ) |  | (1,423  | ) |  | (44.6    | )
|                                                               |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|Income from continuing operations                              |  | 7,593                                                                 |   |  | 13,329  |   |  | 17,489  |   |  | 6,314   |   |  | 8,790   |   |  | 275.1    |  
|                                                               |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|Cumulative effects of changes in accounting principles         |  | 651                                                                   |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|Net
income(1)(2)                                               |  | 8,244                                                                 |   |  | 13,329  |   |  | 17,489  |   |  | 6,314   |   |  | 8,790   |   |  | 275.1    |  
|                                                               |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|Earnings per
share(3)                                          |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|Basic                                                          |  | 3.09                                                                  |   |  | 4.63    |   |  | 5.66    |   |  | 2.03    |   |  | 2.82    |   |  | 0.09     |  
|Diluted                                                        |  | 2.91                                                                  |   |  | 4.36    |   |  | 5.63    |   |  | 2.01    |   |  | 2.80    |   |  | 0.09     |  
|Shares used in per share calculation (average, as
adjusted)(2) |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  
|Basic                                                          |  | 2,662                                                                 |   |  | 2,873   |   |  | 3,092   |   |  | 3,115   |   |  | 3,116   |   |  | 3,116    |  
|Diluted                                                        |  | 3,102                                                                 |   |  | 3,066   |   |  | 3,115   |   |  | 3,139   |   |  | 3,138   |   |  | 3,138    |  
|Earnings (loss) per
ADS(3)                                     |  |                                                                       |   |  |         |   |  |         |   |  |         |   |  |         |   |  |          |  



2



---

##### Table of Contents

|                                                               |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|-------------------------------------------------------------- |  | --------------------------------------------------------------------- | - |  | ------ | - |  | ------ | - |  | ------ | - |  | ------ | - |  | ------- | -
|                                                               |  | Years Ended December 31,                                              |  
|                                                               |  | 2005                                                                  |   |  | 2006   |   |  | 2007   |   |  | 2008   |   |  | 2009   |  
|                                                               |  | NT$                                                                   |   |  | NT$    |   |  | NT$    |   |  | NT$    |   |  | NT$    |   |  | US$(6)  |  
|                                                               |  | (in millions, except earnings or dividends per share and perADS data) |  
|Basic                                                          |  | 15.45                                                                 |   |  | 23.15  |   |  | 28.30  |   |  | 10.15  |   |  | 14.10  |   |  | 0.44    |  
|Diluted                                                        |  | 14.55                                                                 |   |  | 21.80  |   |  | 28.15  |   |  | 10.05  |   |  | 14.00  |   |  | 0.44    |  
|Dividends per
share(4)                                         |  | 1.55                                                                  |   |  | 2.62   |   |  | 3.55   |   |  | 4.60   |   |  | 1.80   |   |  | 0.06    |  
|ADSs used in per ADS calculation (average, as
adjusted)(3)     |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|Basic                                                          |  | 532                                                                   |   |  | 575    |   |  | 618    |   |  | 623    |   |  | 623    |   |  | 623     |  
|Diluted                                                        |  | 620                                                                   |   |  | 613    |   |  | 623    |   |  | 628    |   |  | 628    |   |  | 628     |  
|U.S. GAAP                                                      |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|Net operating revenues                                         |  | 43,488                                                                |   |  | 57,126 |   |  | 66,177 |   |  | 62,403 |   |  | 59,295 |   |  | 1,855.9 |  
|Operating Income                                               |  | 5,968                                                                 |   |  | 10,292 |   |  | 12,534 |   |  | 7,363  |   |  | 8,128  |   |  | 254.4   |  
|Income before income tax                                       |  | 3,972                                                                 |   |  | 9,368  |   |  | 15,165 |   |  | 4,646  |   |  | 10,194 |   |  | 319.0   |  
|Income tax benefit (expense)                                   |  | (1                                                                    | ) |  | (955   | ) |  | (2,066 | ) |  | (252   | ) |  | (1,439 | ) |  | (45.0   | )
|Income from continuing operations                              |  | 3,971                                                                 |   |  | 8,413  |   |  | 13,099 |   |  | 4,394  |   |  | 8,755  |   |  | 274.0   |  
|Net income                                                     |  | 3,971                                                                 |   |  | 8,413  |   |  | 13,099 |   |  | 4,394  |   |  | 8,755  |   |  | 274.0   |  
|Earnings (loss) per
share(5)                                   |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|Basic                                                          |  | 1.54                                                                  |   |  | 3.02   |   |  | 4.33   |   |  | 1.42   |   |  | 2.81   |   |  | 0.09    |  
|Diluted                                                        |  | 1.53                                                                  |   |  | 3.01   |   |  | 4.32   |   |  | 1.42   |   |  | 2.81   |   |  | 0.09    |  
|Shares used in per share calculation (average, as
adjusted)(5) |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|Basic                                                          |  | 2,570                                                                 |   |  | 2,783  |   |  | 3,026  |   |  | 3,089  |   |  | 3,116  |   |  | 3,116   |  
|Diluted                                                        |  | 2,592                                                                 |   |  | 2,798  |   |  | 3,032  |   |  | 3,103  |   |  | 3,116  |   |  | 3,116   |  
|Earnings (loss) per ADS                                        |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|Basic                                                          |  | 7.70                                                                  |   |  | 15.10  |   |  | 21.65  |   |  | 7.10   |   |  | 14.05  |   |  | 0.44    |  
|Diluted                                                        |  | 7.65                                                                  |   |  | 15.05  |   |  | 21.60  |   |  | 7.10   |   |  | 14.05  |   |  | 0.44    |  
|ADSs used in per ADS calculation (average, as
adjusted)(5)     |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|Basic                                                          |  | 514                                                                   |   |  | 557    |   |  | 605    |   |  | 618    |   |  | 623    |   |  | 623     |  
|Diluted                                                        |  | 518                                                                   |   |  | 560    |   |  | 606    |   |  | 621    |   |  | 623    |   |  | 623     |  
|                                                               | 
|                                                               |  | Years Ended December 31,                                              |  
|                                                               |  | 2005                                                                  |   |  | 2006   |   |  | 2007   |   |  | 2008   |   |  | 2009   |  
|                                                               |  | NT$                                                                   |   |  | NT$    |   |  | NT$    |   |  | NT$    |   |  | NT$    |   |  | US$(6)  |  
|                                                               |  | (in millions, except earnings or dividends per share and perADS data) |  
|Other Data:                                                    |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|R.O.C. GAAP                                                    |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|Capital expenditures                                           |  | 8,245                                                                 |   |  | 11,039 |   |  | 12,151 |   |  | 10,048 |   |  | 5,303  |   |  | 166.0   |  
|Depreciation and amortization                                  |  | 6,572                                                                 |   |  | 7,294  |   |  | 8,169  |   |  | 9,432  |   |  | 8,954  |   |  | 280.3   |  
|Dividends declared per share                                   |  | 2.62                                                                  |   |  | 3.55   |   |  | 4.60   |   |  | 1.80   |   |  | 2.58   |   |  | 0.08    |  
|                                                               | 
|                                                               |  | As of December 31,                                                    |  
|                                                               |  | 2005                                                                  |   |  | 2006   |   |  | 2007   |   |  | 2008   |   |  | 2009   |  
|                                                               |  | NT$                                                                   |   |  | NT$    |   |  | NT$    |   |  | NT$    |   |  | NT$    |   |  | US$(6)  |  
|                                                               |  | (in millions, except earnings or dividends per share and perADS data) |  
|Balance Sheet Data:                                            |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|R.O.C. GAAP                                                    |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|Cash and cash equivalents                                      |  | 12,341                                                                |   |  | 14,731 |   |  | 22,625 |   |  | 18,841 |   |  | 19,615 |   |  | 613.9   |  
|Working capital                                                |  | 15,475                                                                |   |  | 18,741 |   |  | 26,363 |   |  | 18,481 |   |  | 20,978 |   |  | 656.6   |  
|Total assets                                                   |  | 67,175                                                                |   |  | 78,991 |   |  | 85,773 |   |  | 73,380 |   |  | 78,311 |   |  | 2,451.0 |  
|Short-term debt and current portion of long-term debt          |  | 1,885                                                                 |   |  | 446    |   |  | 529    |   |  | 1,404  |   |  | 225    |   |  | 7.0     |  
|Long-term debt                                                 |  | 14,644                                                                |   |  | 5,801  |   |  | 2,996  |   |  | 2,248  |   |  |       |   |  |        |  
|Total liabilities                                              |  | 26,350                                                                |   |  | 16,055 |   |  | 16,865 |   |  | 14,066 |   |  | 15,229 |   |  | 476.7   |  
|Capital stock                                                  |  | 23,289                                                                |   |  | 28,878 |   |  | 30,734 |   |  | 31,526 |   |  | 31,164 |   |  | 975.4   |  
|Total stockholders equity                                     |  | 40,825                                                                |   |  | 62,936 |   |  | 68,908 |   |  | 59,314 |   |  | 63,081 |   |  | 1,974.4 |  
|U.S. GAAP                                                      |  |                                                                       |   |  |        |   |  |        |   |  |        |   |  |        |   |  |         |  
|Total assets                                                   |  | 81,167                                                                |   |  | 83,770 |   |  | 90,836 |   |  | 78,365 |   |  | 83,357 |   |  | 2,609.0 |  
|Total liabilities                                              |  | 29,776                                                                |   |  | 18,911 |   |  | 19,140 |   |  | 14,448 |   |  | 15,899 |   |  | 497.6   |  
|Total stockholders equity                                     |  | 51,391                                                                |   |  | 64,859 |   |  | 71,696 |   |  | 63,917 |   |  | 67,458 |   |  | 2,111.4 |  



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|(1) | Prior to January 1, 2005, the R.O.C. Securities and Futures Bureau allowed us to delay our recognition of investment income or loss in certain investee companies
accounted for under the equity method until the following accounting year. In addition, in 2004, we delayed the recognition of investment income of NT$668 million, in relation to the financial results of ChipMOS Technologies Inc., or ChipMOS Taiwan,
until 2005, and recorded the above-mentioned amount of NT$668 million as cumulative effects of changes in accounting principles in 2005. From January 1, 2005, we adopted R.O.C. Statement of Financial Accounting Standards No. 5,
Accounting for Long-term Equity Investment, pursuant to which we ceased to defer the recognition of investment income or loss of investees accounted for under the equity method until the subsequent year, and recognized investment income
or loss from all investees accounted for under the equity method based on investees audited financial statements for the same periods. We recognized investment income of NT$433 million and NT$1,125 million for the years ended December 31,
2005 and 2006, respectively, and NT$246 million for the period between January 1, 2007 and March 27, 2007 from ChipMOS Taiwans financial results. In 2005, 2006 and 2007, our investment incomes under U.S. GAAP from ChipMOS Taiwan were
NT$469 million, NT$1,045 million and NT$253 million, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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) | We did not have minority interest in 2005, 2006, 2007, 2008 and 2009. Therefore, no such information is presented separately in this table.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Retroactively adjusted for all subsequent stock dividends and employee share bonuses.
|--- | -------------------------------------------------------------------------------------

|(4) | Adjusted to reflect 267,794,338 shares, 93,876,060 shares, 77,892,337 shares and nil shares distributed as stock dividends and employee stock bonuses in 2006, 2007,
2008 and 2009, respectively, with respect to the earnings of 2005, 2006, 2007 and 2008.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Retroactively adjusted for all subsequent stock dividends only.
|--- | ---------------------------------------------------------------

|(6) | Amounts translated for convenience at NT$31.95 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 31, 2009.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Certain accounts in the consolidated financial statements for the years of 2005, 2006, 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$31.95 = US$1.00, which was the noon buying rate as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2009. 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
|                               |  |            |  |      
|2005                           |  | 32.16      |  | 33.77 |  | 30.65 |  | 32.80        
|2006                           |  | 32.51      |  | 33.31 |  | 31.28 |  | 32.59        
|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        
|October                        |  | 32.29      |  | 32.61 |  | 32.04 |  | 32.61        
|November                       |  | 32.32      |  | 32.58 |  | 32.12 |  | 32.20        
|December                       |  | 32.25      |  | 32.38 |  | 31.95 |  | 31.95        
|2010 (through April 16, 2010)  |  | 31.79      |  | 32.14 |  | 31.35 |  | 31.35        
|January                        |  | 31.87      |  | 32.04 |  | 31.65 |  | 31.94        
|February                       |  | 32.06      |  | 32.14 |  | 31.98 |  | 32.12        
|March                          |  | 31.83      |  | 32.04 |  | 31.70 |  | 31.73        
|April (through April 16, 2010) |  | 31.56      |  | 31.74 |  | 31.35 |  | 31.35        



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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.

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

The current global recession and conditions in the financial and credit markets
may cause significant disruptions to our major customers businesses as well as to their ability to access sources of liquidity. Demand for our products has been, and will continue to be, adversely affected by overall macroeconomic conditions

The current global recession and conditions in the financial and credit markets, which have experienced disruption,
volatility and deterioration since the second half of 2008, have had a significant negative impact on businesses around the world. Many of our key markets and our targeted markets, including North America and Asia have entered a period of economic
contraction or significantly slower economic growth. In particular, the current global economic crisis, weak consumer confidence, diminished consumer and business spending, and asset depreciation have contributed to a significant 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 cannot assure you when an economic recovery may occur, or even when an economic recovery does occur,
that demand for our services will increase. The combined effects of the global recession may have a material adverse impact on our results of operations, cash flows and financial condition, which may cause the price of our ADSs to decline.

In addition, if our customers are unable to obtain credit on commercially feasible terms, the disruption in the ability of
our customers to access sources of liquidity or increase in the cost of financing could have a material adverse effect on the financial condition of our customers, which could lead to the inability or failure on their part to meet their payment
obligations to us.

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 gross margin, which would seriously harm our manufacturing services.



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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 change, our operating results usually fluctuate.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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

From 2005 to the third quarter of 2008, we maintained relatively high capacity utilization rates due to
relatively high demand for our manufacturing services. However, since the fourth quarter of 2008, demand decline in the semiconductor industry has adversely affected our capacity utilization and profitability and we cannot assure you that we will be
able to achieve or sustain a high utilization rate in the future. While demand in the semiconductor industry recovered slightly in the third quarter of 2009, we cannot assure you that this trend will continue. Any general downturn in the
semiconductor industry would harm our capacity utilization, and as a result may adversely affect our profitability and results of operations in the future.

Given the high fixed costs of our services, high capacity utilization allows us to maintain higher gross margins because it allows us to
allocate fixed costs over a greater number of units we package and test. Increases or decreases in capacity utilization rates can 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 addition, in order to continue to
increase or sustain our capacity utilization, we must:



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



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



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



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

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

We are dependent on a small group of customers for a substantial portion of our manufacturing services. In 2007, 2008 and 2009, 61.0%,
56.6% and 60.0% of our net operating revenues, respectively, were derived from sales to our top ten customers. In 2009, our largest customer accounted for 11.7% 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 binding 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 substrate 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 PRC, 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 have, 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.



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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.

If demand for the services of Taiwans wafer foundries from fabless semiconductor companies and integrated device
manufacturers decreases, a significant source of our sales would decrease, which would seriously harm our business

We
primarily depend on outsourcing of packaging and testing services by fabless semiconductor companies and integrated device manufacturers to source our sales orders. In recent years, a significant portion of our net operating revenues were derived
from packaging and testing semiconductor wafers manufactured at Taiwans wafer foundries. If the demand for foundry services offered by Taiwans wafer foundries decreases for any reason, including shifts in demand for these services to
wafer foundries in other countries, an important source of our sales would be lost and our profitability would suffer.

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 2009, the spot price of gold
fluctuated from a low of approximately US$810 per ounce to a high of approximately US$1,210 per ounce. The increase in the price of gold wire contributed to the decrease in our gross margin between 2008 and 2009. To the extent we are not able to
offset any increases in our raw material costs, our gross margins may be adversely impacted.



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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.

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 onto wafer chips and cleansed with water after wafer chips are bonded onto them and capsulated by mold resin. Moreover, excess material on leads and moldings are removed from packaged
semiconductors 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.



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We and many Taiwan 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. We cannot guarantee that future earthquakes 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 earthquakes 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.

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 2007, 2008 and 2009, sales to our overseas customers accounted for 64.6%, 66.3% and 66.1%, 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 overseas
convertible bonds, employee bonuses and 10% tax on undistributed earnings, our net income in 2007, 2008 and 2009 under U.S. GAAP was NT$13,099 million, NT$4,394 million and NT$8,755 million (US$274.0 million), respectively, as compared to net income
under R.O.C. GAAP of NT$17,489 million, NT$6,314 million and NT$8,790 million (US$275.1 million), respectively.

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.



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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 or testing designs 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 based on the number of pads or balls used in our packages. We also 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 being asserted by Tessera against us in the California Litigation. The PTO has rejected all of the asserted patent claims on the grounds that each
claim is invalid in view of certain prior art. Tessera has appealed some of these decisions to the Board of Patent Appeals and Interferences. On April 21, 2008, Tessera filed a complaint with ITC pursuant to §337 of the Tariff Act of 1930
against us, our subsidiary Siliconware U.S.A., Inc. and other semiconductor companies, alleging infringement of patents, all of which are being litigated in the California Litigation and reexamined by the PTO. The ITC instituted an investigation, on
May 21, 2008. On March 12, 2009, Tessera requested to terminate the investigation. On August 7, 2009, the ITC Commission agreed to the termination request and the investigation was closed. 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 PRC

Our principal executive offices and all of our assets are substantially
located in Taiwan. Accordingly, our services, financial condition and results of operations and the market price of our common shares and the ADSs may be affected by changes in 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
PRC claims that it is the sole government in China and that Taiwan is part of China. Although significant economic and cultural relations have been established during recent years between the R.O.C. and the PRC, relations have often been strained.
The PRC government has refused to renounce the use of military force to gain control over Taiwan and, in March 2005, further passed an Anti-Secession Law that authorizes non-peaceful means and other necessary measures should Taiwan move to gain
independence from the PRC. Past developments in relations between the R.O.C. and the PRC 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 US, which
has sometimes led to increased friction between the US and the PRC. Any deterioration in relations among the US, the R.O.C. and the PRC and other factors affecting military, political or economic conditions in Taiwan could materially and adversely
affect our financial condition and results of operations, as well as the market price and the liquidity of our securities.



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

Our shares are listed on the Taiwan Stock Exchange. The trading price of our ADSs may be affected by the trading price of our shares on
the Taiwan Stock Exchange. The Taiwan Stock Exchange is a smaller market and, more volatile than the securities markets in the United States and a number of European countries. The Taiwan Stock Exchange has experienced substantial fluctuations in
the prices and volumes of sales of listed securities, and there are currently limits on the range of daily price movements on the Taiwan Stock Exchange. During 2009, the Taiwan Stock Exchange Index peaked at 8,188.11 on December 31, 2009 and
reached a low of 4,242.61 on January 20, 2009. From January 1, 2009 to December 31, 2009, daily closing values of our shares ranged from NT$25.90 per share to NT$ 48.9 per share. The Taiwan Stock Exchange is particularly volatile
during times of political instability, including when relations between Taiwan and the PRC are strained. Moreover, the Taiwan Stock Exchange has experienced problems including market manipulation, insider trading and settlement defaults. The
recurrence of these or similar problems could decrease the market price and liquidity of our shares and ADSs.

The market
price of the ADSs may also be affected by general trading activities on the U.S. stock exchanges, which have experienced significant price volatility with respect to shares of technology companies. Fluctuations in interest rates and other general
economic conditions, such as recession and economic downturns caused by the sub-prime 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, 2009. 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 2009, the foreign exchange rate between the U.S.
dollar and the NT dollar has ranged from a high of NT$35.21 per US$1.00 to a low of NT$31.95 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 or avian influenza, may disrupt our ability to
adequately staff our manufacturing services, and may generally disrupt our operations. If any of our employees is suspected of having contracted any contagious disease, we may, under certain circumstances, be required to quarantine such employees
and the affected areas of our premises. 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

According to the sunset clauses for the Statute for Upgrading Industries effective from January 1, 2010, we are no longer
entitled to the five-year tax exemptions and investment tax credits that we previously enjoyed for the acquisition cost of qualifying machinery and equipment. However, the corporate income tax rate has been reduced from 25% to 20% since
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 PRC

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

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

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

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

Prior to January 1, 2008, the basic income tax rate for
foreign-invested enterprises in the PRC was 33% (30% enterprise income tax and 3% local income tax). However, the PRC 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 PRC Enterprise Income Tax Law, or the EIT Law, which took effect on January 1, 2008, the PRC 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 were 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 PRC operating subsidiary will continue, and any legislative changes to the tax regime could discontinue any preferential tax treatment applicable to our subsidiary in the PRC.

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

The exchange rate between the Renminbi and the U.S. dollar and other foreign currencies is affected by, among other
things, changes in Chinas political and economic conditions. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. dollar. Under the new policy, the Renminbi is permitted to
fluctuate within a narrow and managed band against a basket of foreign currencies. This change in policy has resulted in an approximately 17.5% appreciation of Renminbi against the U.S. dollar between July 21, 2005 and December 31, 2009.
There remains significant international pressure on the PRC government to adopt a more flexible currency policy, which 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.

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



| |  |  | 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.



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Moreover, holders of the ADSs do not have individual rights to propose any matter for
shareholders votes at our shareholders meetings. However, holders of at least 51% of the 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.

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 PRC are not permitted to hold our shares or withdraw shares represented by ADSs from our ADS program.



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

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 2009, 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
2010 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 PRC, a wholly-owned subsidiary with a facility 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. In November 2009, we acquired a factory
and its adjacent facility at a price of NT$1,780 million (US$55.7 million) from Powerchip Semiconductor Corporation for capacity expansion.



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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 advanced substrate packages such as the flip-chip ball grid array 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 2009, 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 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.

The manufacturing services we offer are customized to the needs of our individual customers.
In 2009, 86.6% of our net operating revenues were from packaging services and 13.4% 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,         
|                             |  | 2007                              |  | 2008  |  | 2009  
|                             |  | NT$                               |  | %     |  | NT$    |  | %     |  | NT$    |  | %    
|                             |  | (in millions, except percentages)
|                             |  |                                   |  |       |  |       
|Substrate base packages      |  | 32,180                            |  | 48.6  |  | 31,243 |  | 50.1  |  | 30,242 |  | 51.0 
|Lead-frame base packages     |  | 19,601                            |  | 29.6  |  | 18,473 |  | 29.6  |  | 18,235 |  | 30.8 
|Other packages               |  | 5,795                             |  | 8.8   |  | 4,064  |  | 6.5   |  | 2,880  |  | 4.8  
|Total packaging revenues     |  | 57,576                            |  | 87.0  |  | 53,780 |  | 86.2  |  | 51,357 |  | 86.6 
|Testing and other revenues   |  | 8,601                             |  | 13.0  |  | 8,623  |  | 13.8  |  | 7,938  |  | 13.4 
|Total net operating revenues |  | 66,177                            |  | 100.0 |  | 62,403 |  | 100.0 |  | 59,295 |  | 100.0



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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. Our operations, however, are not subject to any clear 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 gird array packages, together with lead-frame packages.
Our flip-chip ball grid array packages are based on the Flex-On-Cap wafer bumping and redistribution technologies. 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 by die-attached material. Substrate or leads on the
lead-frame are then connected by extremely fine gold wires to the input/output terminals on the chip, using machines called wire bonders. Each chip is then encapsulated, generally in a plastic casing molded from a molding compound, with only the
leads protruding from the finished casing. To complete the packaging process, excess molding compound is eliminated from the packaged semiconductor chip and the leads are trimmed and formed into various shapes.

Semiconductor packages have evolved from lead-frame packages to substrate packages in response to the increasing demands of todays
high-performance electronics products. The differentiating characteristics of these packages include:



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



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



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

As 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.



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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.

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.

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.



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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, DDR II memory,
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.

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, TDBI-test during burn-in service to screen out device infant mortality, laser
repair/laser trim service to modify device connection structure for specific product applications, lead/ball scanner service to screen out abnormal products, including bent lead or ball defective devices, so as to prevent them from
being shipped to the end customers, marking service to specify the unique customer logo and batch identification on products and tape and reel service to packaging devices into one complete reel for surface mount operation.

Customers

We currently have more than 100 customers worldwide, and our customers include many of the largest semiconductor companies in the world.
In 2007, 2008 and 2009, 61.0%, 56.6% and 60.0% of our net operating revenues were derived from sales to our top ten customers, respectively. In 2009, our top two customers provided approximately 11.7% and 10.6%, respectively, of our net operating
revenues. Our representative customers as of December 31, 2009 include Advanced Micro Devices Inc., Broadcom Corporation, Intel Corporation, MediaTek Inc., Marvell Semiconductor Inc., NVIDIA Corp., SanDisk Corporation and Xilinx, Inc.



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##### Table of Contents

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 to 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,         
|                |  | 2007                              |  | 2008  |  | 2009  
|                |  | NT$                               |  | %     |  | NT$    |  | %     |  | NT$    |  | %    
|                |  | (in millions, except percentages)
|                |  |                                   |  |       |  |       
|U.S. and Canada |  | 37,842                            |  | 57.2  |  | 32,300 |  | 51.8  |  | 29,875 |  | 50.4 
|Taiwan          |  | 23,462                            |  | 35.4  |  | 21,021 |  | 33.7  |  | 20,098 |  | 33.9 
|Others(1)       |  | 4,873                             |  | 7.4   |  | 9,082  |  | 14.5  |  | 9,322  |  | 15.7 
|Total           |  | 66,177                            |  | 100.0 |  | 62,403 |  | 100.0 |  | 59,295 |  | 100.0
|                |  |                                   |  |       |  |        |  |       |  |        |  |      



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

Sales from outside of Taiwan accounted for 64.6%, 66.3% and 66.1% of our net operating revenues in 2007, 2008 and 2009, respectively. We
primarily target U.S. and Canadian semiconductor companies that contract their wafer foundry services to major independent R.O.C. foundries. Our U.S. and Canadian customers, including AMD and NVIDIA Corp., are world-leading suppliers of graphic
chipsets. Our U.S. 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 have been 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.

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 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 have been 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.



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Sales and Marketing

Our sales and marketing strategy is focused on providing high-quality advanced 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 near 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 Europe office in Germany 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.

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% for lead frame base, substrate base
and flip-chip in 2009. 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 or
lead-frames.

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



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##### Table of Contents

Research and Development

We focus our research and development efforts on developing new package designs and improving the efficiency and capabilities of our
production process technologies. Production process enhancements include:



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



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



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



| |  |  | reduction of spacing between leads;
| | - |  | -----------------------------------



| |  |  | shortening the length and minimizing the diameter of gold wire used in the wire bonding process;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | increasing packaging yields;
| | - |  | ----------------------------



| |  |  | shortening cycle times; and
| | - |  | ---------------------------



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

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. We are also developing Integrated Passive Devices and Through Silicon Via technologies for advanced 3D-SiP/SIC modules. 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
design department, characterization department and manufacturing technology development department. In addition, our quality assurance and manufacturing personnel also participate in research and development activities. In 2007, 2008 and 2009, our
research and development expenses amounted to NT$1,288 million, NT$1,383 million and NT$1,276 million (US$39.9 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.

In order to reduce the impact from fluctuations in the price of gold wire, we have been developing copper wire bonding processes, which
has gained popularity recently due to its economic advantage, to replace conventional processes based on gold wire. We have conducted engineering studies and qualification tests on fine pitch bonding, thin wire and advanced pad structure over active
circuit. Presently, copper wire bonding is running at high growth stage of production for lead frame and substrate packaging. We have established development and production experience for copper wire bonding processes. In addition, we have also been
improving our manufacturing process to shorten the length and minimizing the diameter of the gold wire used.

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 2009, the spot price of gold fluctuated from a low of approximately US$810 per ounce to a high of approximately US$1,210 per ounce. The volatility in the price of gold
wire contributed to the decrease of our gross margin in 2009 compared to 2008. 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., Chroma New Material Corp., Nanya Printed Circuit Board Corp., Unimicron Technology Corp., Sumitomo Metal Mining Asia Pacific Pte Ltd., and Sumitomo Bakelite (Taiwan) Co., Ltd., are leading companies in the types of materials
they supply. We work closely with them and provide them with rolling forecasts. For 2007, 2008 and 2009, our raw material costs were 57.1%, 54.9% and 56.1%, respectively, of cost of goods sold.



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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., ASM Technology Singapore PTE LTD. 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.

As of December 31, 2009, we operated 4,939 wire bonders and 361
testers in Taiwan. In addition, our subsidiary, Siliconware Suzhou has 674 wire bonders and 40 testers in the PRC. We must order equipment in advance of customer demand to expand our capacity, based on our expectation of future demand for our
packaging and testing services.

Competition

We face substantial competition from established packaging and testing service providers, including companies with greater manufacturing,
financial and other resources. These companies include Advanced Semiconductor Engineering, Inc. (Taiwan), Amkor Technology Inc. (USA) and 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.
| | - |  | ------



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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, 2009, we held a 4.94% equity interest in Unimicron.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ChipMOS Technologies (Bermuda) Ltd., or ChipMOS Bermuda. As of December 31, 2009, we held a 14.5% equity interest in ChipMOS Bermuda, a
semiconductor packaging and testing and LCD driver and IC manufacturing company.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On February 26, 2010,
pursuant to a resolution by our board of directors, we entered into an equipment purchase / sales agreement with ChipMOS Technologies Inc., or ChipMOS Taiwan, to sell certain equipment to ChipMOS Taiwan for an aggregate consideration of
NT$1,630,580. 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.

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$1,630,580. ChipMOS Taiwan is a 100% owned subsidiary of ChipMOS Bermuda. The share purchase represents approximately 15.77% 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.

Intellectual Property

As of December 31, 2009, we held 313 Taiwan patents, 279 U.S. patents and 66 PRC patents related to various semiconductor
packaging technologies, including patents for improvements of thermal and electrical performance used in the semiconductor packaging process. As of December 31, 2009, we also had a total of 49 pending patent applications in the United States,
69 in Taiwan and 22 in the PRC. In addition, we had registered SPIL as a trademark and as a servicemark in Taiwan.



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We have licensed from Freescale, formerly part of Motorola prior to April 2004, the
technology for ball grid array for which we make royalty payments based upon the number of pads or balls used in our packages. This license will expire in December 2010. 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, 2007, 2008 and 2009.

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

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



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



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



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



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

Environmental Matters

The principal pollutants produced during semiconductor packaging are 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 existing environmental requirements of semiconductor industries and regulations in Taiwan in all respects.



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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 we received the ISO-14001 certification in 1999. By continually improving our environmental performance over the years, we have moved from pollution control in 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 joined the Carbon Disclosure Project in 2007.

Insurance

Our insurance policies on buildings, equipment and inventories cover physical damages due to natural disasters, subject to
certain exceptions in the policy. In Taiwan, our insurance coverage includes business interruption losses. We also maintain insurance policies on inland transit of inventories. Our insurance policies cover the risk of loss of the silicon wafers
delivered to us while they are in our possession or consigned by our customers and/or during inland transportation.

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$12,151 million, NT$10,048 million and NT$5,303 million (US$166.0 million) in 2007, 2008 and 2009,
respectively. Our initial budget for capital expenditures for 2010 is approximately NT$14,300 million (US$447.6 million), which is funded from our retained earnings. We expect our capital expenditures in 2010 will primarily consist of purchasing
equipment, improving our facilities and constructing new plants. 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)           
|                                             |  | 2007                     |  | 2008  |  | 2009 
|                                             |  | NT$                      |  | NT$   |  | NT$   |  | US$  
|Equipment purchases                          |  | 10,420                   |  | 8,587 |  | 3,561 |  | 111.5
|Land and building construction and purchases |  | 1,731                    |  | 1,461 |  | 1,742 |  | 54.5 



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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 all of the asserted patent claims on the grounds that each claim is invalid in view of certain prior art. Tessera has appealed some of these decisions to
the Board of Patent Appeals and Interferences.

On April 21, 2008, Tessera filed a complaint with ITC pursuant to
§337 of the Tariff Act of 1930 against us, our subsidiary Siliconware U.S.A., Inc. and other semiconductor companies, alleging infringement of patents, all of which are being litigated in the California Litigation and reexamined by the PTO. The
ITC instituted an investigation on May 21, 2008. On March 12, 2009, Tessera requested to terminate the investigation. On August 7, 2009, the ITC Commission agreed to the termination request and the investigation was closed.

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.

C. Organizational Structure

The following table sets forth certain information as of December 31, 2009 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$                                | 98.4  | (1) |                                | 100.0 | %
|Siliconware U.S.A. Inc.                 |  | Communicating and maintaining relationships with companies headquartered in North America |  | San Jose, CA, USA      |  | US$                                | 1.3   | (1) |                                | 100.0 | %
|SPIL (Cayman) Holding Limited           |  | Investment activities                                                                     |  | Cayman Islands         |  | US$                                | 100.2 | (1) |                                | 100.0 | %
|Siliconware Technology (Suzhou) Limited |  | Assembly and testing services                                                             |  | Suzhou, Jiangsu, China |  | US$                                | 100.0 | (2) |                                | 100.0 | %



|(1) | Aggregate par value of all issued shares.
|--- | -----------------------------------------

|(2) | Contributed capital.
|--- | --------------------

The
following table sets forth certain information regarding our investees as of December 31, 2009.



|                                    |  |                       |  |                 |  |                                    |     |     |                                |      |  
|----------------------------------- |  | --------------------- |  | --------------- |  | ---------------------------------- | --- | --- | ------------------------------ | ---- | -
|Company                             |  | Main Activities       |  | Location        |  | Total
Paid-inCapital of SuchEntity |     |     | Direct/IndirectEquity Interest |     
|                                    |  |                       |  |                 |  | (in millions)                      |     |     |                                |     
|ChipMOS Technologies (Bermuda) Inc. |  | Investment activities |  | Hsinchu, Taiwan |  | US$                                | 0.9 | (1) |                                | 14.5 | %



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##### Table of Contents

|                                 |  |                                                                              |  |                 |  |                                    |        |     |                                |     |  
|-------------------------------- |  | ---------------------------------------------------------------------------- |  | --------------- |  | ---------------------------------- | ------ | --- | ------------------------------ | --- | -
|Company                          |  | Main Activities                                                              |  | Location        |  | Total
Paid-inCapital of SuchEntity |        |     | Direct/IndirectEquity Interest |    
|                                 |  |                                                                              |  |                 |  | (in millions)                      |        |     |                                |    
|Unimicron Technology Corp.       |  | Researching, developing, manufacturing and selling ball grid array substrate |  | Taoyuan, Taiwan |  | NT$                                | 15,474 | (1) |                                | 4.9 | %
|Hsieh Yong Capital Co., Ltd.     |  | Investment activities                                                        |  | Taipei, Taiwan  |  | NT$                                | 7,631  | (1) |                                | 7.6 | %
|Mega Mission Limited Partnership |  | Investment activities                                                        |  | Cayman Islands  |  | US$                                | 150    | (2) |                                | 4.0 | %



|(1) | Aggregate par value of all issued shares.
|--- | -----------------------------------------

|(2) | 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. In 2009, we completed the expansion of the DF and HS facilities and began construction of plant C in Changhua in December 2009 and
expect to complete 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, 2009.



|                |  |                      |  |                  |  |                 |     |  |                                   
|--------------- |  | -------------------- |  | ---------------- |  | --------------- | --- |  | ----------------------------------
|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          |     |  | 2,154 wire bonders                
|CS Facility II  |  | Taichung, Taiwan     |  | 141,000          |  | 47,000          |     |  | 1,812 wire bonders and 182 testers
|HS Facility III |  | Hsinchu, Taiwan      |  | 95,000           |  | 26,500          | (2) |  | 179 testers                       
|CH Facility IV  |  | Changhua, Taiwan     |  | 58,000           |  | 42,000          |     |  | 973 wire bonders                  
|SZ Facility V   |  | Suzhou, China        |  | 74,000           |  | 148,500         | (2) |  | 674 wire bonders and 40 testers   



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

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

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.



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##### Table of Contents

A. Operating Results

Overview

We are one of the worlds leading independent providers of semiconductor packaging and testing services. We offer a complete
portfolio 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$16,177 million, NT$8,946 million and NT$8,143 million (US$254.9 million) in 2007, 2008 and 2009, respectively. Decreases in our operating income for 2009 compared to 2007 and 2008 were mainly attributable to the reduction of general demand in
2009 due to the global recession. In addition, the decrease of our gross margin for 2009 compared to 2007 and 2008 was primarily due to the reduction of operating revenues in 2009.

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



| |  |  | 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

A general factor affecting our results of operations is the global recession and conditions in the financial and credit markets. Since the
second half of 2008, disruptions, volatility and deterioration in the financial and credit markets and macroeconomic conditions have had a negative impact on businesses around the world. Many of our key markets and our targeted markets, including
North America and Asia have entered a period of economic contraction or slower economic growth. In particular, the global economic crisis, weak consumer confidence, diminished consumer and business spending, and asset depreciation 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. As a result, our net operating revenues decreased by 5.0% from NT$62,403 million in
2008 to NT$59,295 million (US$1,855.9 million) in 2009 and our gross margin decreased as well.

In addition, some of our
customers have experienced difficulty in obtaining credit in the current economic environment, and even if they have been able to obtain credit, the cost of such financing has increased and/or the time necessary to arrange such financing has been
substantially prolonged. This lack of and increase in the cost of financing could have a material adverse effect on the financial condition of our customers. A protracted disruption in the ability of our customers to access sources of liquidity
could cause serious disruptions to or an overall deterioration in their businesses, which could lead to the inability or failure on their part to meet their payment obligations to us.



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##### Table of Contents

Consolidation

For each of 2007 and 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

As of March 27, 2007, we owned a 28.8% equity interest in ChipMOS Taiwan, a semiconductor packaging and testing and LCD driver and IC
manufacturing company located in Hsinchu, Taiwan. We recognized investment income of NT$1,125 million for the years ended December 31, 2006 and NT$246 million for the period between January 1, 2007 and March 27, 2007 from ChipMOS
Taiwans financial results. In 2006 and 2007, our investment income under U.S. GAAP from ChipMOS Taiwan was NT$1,045 million and NT$253 million, respectively. 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 sale and purchase, we owned 14.7% of ChipMOS Bermuda. As of December 31, 2009, we held a 14.5% ownership in 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 Technologies Inc., or ChipMOS Taiwan, to sell certain equipment to ChipMOS Taiwan for an aggregate consideration of NT$1,630,580. 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.

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$1,630,580. ChipMOS Taiwan is a 100% owned subsidiary of ChipMOS Bermuda. The share purchase
represents approximately 15.77% 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.

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).



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|                             |  |                                   |  |       |  |        |  |       |  |        |  |      
|---------------------------- |  | --------------------------------- |  | ----- |  | ------ |  | ----- |  | ------ |  | -----
|                             |  | Years Ended December 31,         
|                             |  | 2007                              |  | 2008  |  | 2009  
|                             |  | NT$                               |  | %     |  | NT$    |  | %     |  | NT$    |  | %    
|                             |  | (in millions, except percentages)
|                             |  |                                   |  |       |  |       
|Substrate base packages      |  | 32,180                            |  | 48.6  |  | 31,243 |  | 50.1  |  | 30,242 |  | 51.0 
|Lead-frame base packages     |  | 19,601                            |  | 29.6  |  | 18,473 |  | 29.6  |  | 18,235 |  | 30.8 
|Other packages               |  | 5,795                             |  | 8.8   |  | 4,064  |  | 6.5   |  | 2,880  |  | 4.8  
|Total packaging revenues     |  | 57,576                            |  | 87.0  |  | 53,780 |  | 86.2  |  | 51,357 |  | 86.6 
|Testing and other revenues   |  | 8,601                             |  | 13.0  |  | 8,623  |  | 13.8  |  | 7,938  |  | 13.4 
|Total net operating revenues |  | 66,177                            |  | 100.0 |  | 62,403 |  | 100.0 |  | 59,295 |  | 100.0

Expansion and
Utilization Rate

As we continue to expand our capacity in order to meet increasing demand from our customers, the number
of our wire bonders and testers increased to 5,080 and 360, respectively, as of December 31, 2007, 5,176 and 381, respectively, as of December 31, 2008 and 5,613 and 401, respectively, as of December 31, 2009.

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 packaging equipment for use in the production of different packages and by utilizing
our test equipment also for probing purposes. Our ability to maintain or enhance our margins will continue to depend in part on our ability to effectively manage capacity utilization rates. The capacity utilization rates of our facilities were
approximately 90%, 82% and 95% in 2007, 2008 and 2009, 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 vary 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. The allowance for doubtful accounts is provided based on the estimated allowance to be incurred and is recorded as deduction of accounts receivable.



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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 estimated based on the evaluation of collectibility and aging analysis.

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 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. 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 net selling price or value in use. The net selling price 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 2007, 2008 and 2009, we recognized an impairment charge of NT$49 million, NT$43 million and NT$74 million (US$2.3 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 2007, 2008 and 2009.

Impairment of Equity
Investments

We evaluate quarterly our equity investments for impairment due to declines in the market 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. In the event of a
determination that a decline in market value is other than temporary, loss is recognized in the current years income. The evaluation of whether a decline in market value is other than temporary requires considerable management judgment. 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, 2009, we had approximately NT$1,906 million (US$59.7 million) of net deferred income tax
assets related principally to investment tax credits that expire at various dates through 2013, the unrealized loss on idle assets and loss carryforwards. 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.

Employee Bonuses

Some of our employees are entitled to bonuses in accordance with applicable provisions of our articles of incorporation. Employee bonuses
are determined at 10% of distributable retained earnings. Distributable retained earnings are calculated as retained earnings after various reserves are made in accordance with R.O.C. law and our articles of incorporation and after appropriation for
remuneration to directors are made. Employee bonuses may be granted in cash, shares or a combination of both. Under R.O.C. GAAP, prior to January 1, 2008, such bonuses are appropriated from retained earnings during the accounting period during
which such shareholders approval is obtained. If such employee bonuses are settled through the issuance of our shares, the amount charged against retained earnings would be based on the par value of the common shares issued. Effective
January 1, 2008, pursuant to R.O.C. EITF 96-052, a company should no longer treat such bonuses as a reduction of retained earnings but record it as an expense and related liability when a company has legal obligations and could reasonably
estimate such amount, which is similar to the requirements of U.S. GAAP.

Under U.S. GAAP, the employee bonus expense is
initially accrued at the end of the period when services are rendered, at 10% of the distributable retained earnings. When bonuses are approved by the shareholders in the subsequent year, an additional compensation expense is recorded for the
difference between the par value and the fair market value of shares granted to employees.

Goodwill

Goodwill arising from business combination is recognized under U.S. GAAP as the difference between the fair market value of shares issued
and the fair market value of net assets acquired. ASC Topic 350, Intangibles  Goodwill and Other, or ASC Topic 350, requires that we cease amortization of goodwill and perform an impairment review, at the reporting unit level, upon
adoption and at least annually thereafter. Since we operate on an integrated basis, we have only one reporting unit. Based on the comparison of the fair value and carrying value of our company, we concluded that goodwill was not impaired as of
December 31, 2009.

Embedded Derivatives

Under U.S. GAAP, the convertible or exchangeable option embedded in investments in convertible bonds or exchangeable bonds is separated
from the host and accounted for as though it was a discrete derivative instrument when the embedded derivative meets the definition of a derivative instrument under ASC Topic 815, Derivatives and Hedging, or ASC Topic 815, and are not clearly and
closely related to the economic characteristics and risks of the host contract. The derivative instrument is measured at fair value, with changes in the fair value reported in earnings.



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Under R.O.C. GAAP, when an issuer issues convertible bonds, the entire instrument is
recorded as a liability at an amount equal to the proceeds received. Any discount or premium to the par value of the convertible bond is amortized in the statement of operations by using the effective interest rate method. If the convertible bonds
contain a redemption premium above their par value amount, the excess is accrued, using the effective interest rate method, over the period to redemption as a charge to interest expense. Upon conversion, the carrying value of the bond is credited to
common stock at its par value and the difference between the carrying value of the bond and the par value of the stock is recorded to additional paid-in capital. No gain or loss is recognized.

Under U.S. GAAP, in accordance with ASC Topic 815, the conversion feature embedded in a bond does not have to be separately accounted for
as a derivative at fair value, if the feature is indexed only to the issuers own stock and would otherwise be classified in stockholders equity in the issuers statement of financial position, or the Scope Exception.

As of December 31, 2007, 2008 and 2009, the total amount of net loss recognized from applying derivative accounting amounting to
NT$1,181 million based on the independent appraisal report, nil and nil, respectively.

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. Our net operating revenues do not include the cost of semiconductors, which are our customers
property.

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

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



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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, |  
|                                                      |  | 2007                     |   |  | 2008  |   |  | 2009  |  
|                                                      |  | %                        |   |  | %     |   |  | %     |  
|Net operating revenues                                |  | 100.0                    |   |  | 100.0 |   |  | 100.0 |  
|Cost of goods sold                                    |  | 70.7                     |   |  | 79.3  |   |  | 80.7  |  
|                                                      |  |                          |   |  |       |   |  |       |  
|Gross profit                                          |  | 29.3                     |   |  | 20.7  |   |  | 19.3  |  
|                                                      |  |                          |   |  |       |   |  |       |  
|Operating expenses:                                   |  |                          |   |  |       |   |  |       |  
|Selling expenses                                      |  | 0.7                      |   |  | 1.5   |   |  | 1.1   |  
|General and administrative expenses                   |  | 2.2                      |   |  | 2.7   |   |  | 2.4   |  
|Research and development expenses                     |  | 1.9                      |   |  | 2.2   |   |  | 2.1   |  
|                                                      |  |                          |   |  |       |   |  |       |  
|Operating expenses                                    |  | 4.8                      |   |  | 6.4   |   |  | 5.6   |  
|                                                      |  |                          |   |  |       |   |  |       |  
|Operating income                                      |  | 24.5                     |   |  | 14.3  |   |  | 13.7  |  
|                                                      |  |                          |   |  |       |   |  |       |  
|Investment income                                     |  | 0.4                      |   |  |      |   |  |      |  
|Net non-operating income (loss)                       |  | 4.8                      |   |  | (3.9  | ) |  | 3.5   |  
|Income before income tax                              |  | 29.7                     |   |  | 10.4  |   |  | 17.2  |  
|Income tax expense                                    |  | (3.3                     | ) |  | (0.3  | ) |  | (2.4  | )
|                                                      |  |                          |   |  |       |   |  |       |  
|Income from continuing operations                     |  | 26.4                     |   |  | 10.1  |   |  | 14.8  |  
|                                                      |  |                          |   |  |       |   |  |       |  
|Cumulative effects of changes in accounting principle |  |                         |   |  |      |   |  |      |  
|Net income                                            |  | 26.4                     |   |  | 10.1  |   |  | 14.8  |  
|                                                      |  |                          |   |  |       |   |  |       |  

The Year ended December 31, 2009 Compared to the Year Ended December 31, 2008

Net operating revenues. Net operating revenues decreased by 5.0% from NT$62,403 million in 2008 to NT$59,295
million (US$1,855.9 million) in 2009. Our sales revenue decreased by 5.0% in 2009 compared to 2008 because of an overall reduction in demand due to the global economic recession.

Net operating revenues from our packaging business decreased by 4.5% from 2008 to 2009. Such decrease was primarily due to
the impact from the global financial crisis, where the tightening of commercial spending and of capital and credit availability and declining consumer confidence has resulted in reduction in demand and a general industry downturn.

Substrate base package sales decreased by 3.2% from NT$31,243 million in 2008 to NT$30,242 million (US$946.5 million) in
2009. The deteriorating worldwide economic conditions lead to an overall decrease in demand, which resulted in decline in revenues for the substrate base packages. In 2009, substrate base package accounted for 51.0% of our net operating revenues, up
from 50.1% in 2008.

Lead-frame base package sales decreased by 1.3% from NT$18,473 million in 2008 to
NT$18,235 million (US$570.7 million) in 2009. The decrease in lead-frame base package sales was attributable to the decline in demand due to the global financial crisis. In 2009, lead-frame base package accounted for 30.8% of our net operating
revenues, up from 29.6% in 2008.



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Gross profit and gross margin. Our gross profit decreased by 11.6% from NT$12,949
million in 2008 to NT$11,443 million (US$358.2 million) in 2009 mainly due to the decrease of net operating revenues. Our gross margin (gross profit as a percentage of net operating revenues) decreased from 20.7% in 2008 to 19.3% in 2009. Our cost
of goods sold decreased by 3.2% from NT$49,454 million in 2008 to NT$47,852 (US$1,497.7 million) million in 2009.

Operating expenses. Operating expenses decrease by 17.6% from NT$4,003 million in 2008 to NT$3,300 million (US$103.3 million) in
2009. Operating expenses as a percentage of net operating revenues was 6.4% and 5.6% in 2008 and 2009, respectively.

Selling expenses. Selling expenses decreased by NT$320 million between these two years mainly due to decreases in bad debt, legal
fees and commission fees.

General and administrative expenses. General and administrative expenses decreased by NT$276
million between these two years mainly due to decreases in employees bonuses, legal fees and salary expenses.

Research and development expenses. Research and development expenses decrease by NT$107 million between these two years mainly due
to decreases in new package development expenses.

Operating income and operating margin. We recorded an operating
income of NT$8,946 million and an operating margin of 14.3% (operating income as a percentage of net operating revenues) in 2008 and generated operating income of NT$8,143 million (US$254.9 million) and operating margin of 13.7% in 2009. The
decrease in operating margin was primarily due to reductions in our operating revenues in 2009.

Net non-operating (loss)
income. Our net non-operating (loss) income increase from NT$(2,422) million in 2008 to NT$2,070 million (US$64.8 million) in 2009. The increase in net non-operating income was primarily due to a gain on disposal of investments of NT$1,948
million (US$61.0 million) recognized in 2009 and an impairment loss of NT$3,031 million (US$94.9 million) recognized in 2008.

Income tax expense. We recognized an income tax expense of NT$211 million in 2008 and NT$1,423 million (US$44.5 million) in 2009
primarily due to expiration of certain five-year income tax exemptions.

Net income. As a result of the factors
discussed above, our net income increased from NT$6,314 million in 2008 to NT$8,790 million (US$275.1 million) in 2009.

The Year Ended December 31, 2008 Compared to the Year Ended December 31, 2007

Net operating revenues. Net operating revenues decreased by 5.7% from NT$66,177 million in 2007 to NT$62,403 million in 2008.

Net operating revenues from our packaging business decreased by 6.6% from 2007 to 2008. Such decrease was
primarily due to the impact from the global financial crisis, where the tightening of commercial spending and of capital and credit availability and declining consumer confidence has resulted in reduction in demand and a general industry downturn.

Substrate base package sales decreased by 2.9% from NT$32,180 million in 2007 to NT$31,243 million in 2008.
The deteriorating worldwide economic conditions lead to an overall decrease in demand, which resulted in decline in revenues for all packages. In 2008, substrate base package accounted for 50.1% of our net operating revenues, up from 48.60% in 2007.

Lead-frame base package sales decreased by 5.8% from NT$19,601 million in 2007 to NT$18,473 million in 2008.
The decrease in lead-frame base package sales was attributable to the decline in demand due to the global financial crisis. In 2008, lead-frame base package accounted for 29.60% of our net operating revenues, the same as the percentage in 2007.



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Gross profit and gross margin. Our gross profit decreased by 33.3% from NT$19,401
million in 2007 to NT$12,949 million in 2008. Our gross margin (gross profit as a percentage of net operating revenues) decreased from 29.3% in 2007 to 20.7% in 2008. Our cost of goods sold increased by 5.7% from NT$46,776 million in 2007 to
NT$49,454 million in 2008. Our sales revenue decreases by 5.7% in 2008 compared to the one in 2007 because of a reduction of our product sales price and fluctuations in foreign exchange rates in 2008. In addition, the decrease of our gross margin
for 2008 was primarily due to the increasing price of gold wire and the recording of expenses for employees bonuses, which resulted in an increase of manufacturing unit cost.

Operating expenses. Operating expenses increased by 24.2% from NT$3,224 million in 2007 to NT$4,003 million in 2008. Operating
expenses as a percentage of net operating revenues was 4.8% and 6.4% in 2007 and 2008, respectively.

Selling expenses.
Selling expenses increased by NT$448 million between these two years mainly due to the increase in bad debt of NT$262 million and an increase in employees bonuses.

General and administrative expenses. General and administrative expenses increased by NT$236 million between these two years
mainly due to the increase in employees bonuses and the increase in directors and supervisors remuneration of NT$57 million.

Research and development expenses. Research and development expenses increased by NT$95 million between these two years mainly due
to increases in salary expenses and employees bonuses.

Operating income and operating margin. We recorded an
operating income of NT$16,177 million and an operating margin of 24.5% (operating income as a percentage of net operating revenues) in 2007 and generated operating income of NT$8,946 million and operating margin of 14.3% in 2008. The decrease in
operating margin was primarily due to a decrease in gross margin from 29.3% in 2007 to 20.7% in 2008.

Net non-operating
(loss) income. Our net non-operating income decreased from NT$3,452 million in 2007 to NT$(2,422) million (US$-73.9 million) in 2008. The decrease in net non-operating income was primarily due to an increase in impairment loss of NT$3,031
million (US$92.5 million) and decrease in gain on disposal of investments of NT$2,323 million (US$70.9 million).

Income
tax expense. We recognized an income tax expense of NT$2,139 million in 2007 and an income tax expense of NT$211 million (US$6.4 million) in 2008. The decrease in income tax expense was primarily due to a large decrease in income before tax in
2008.

Net income. As a result of the factors discussed above, our net income decreased from NT$17,489 million in 2007
to NT$6,314 million (US$192.7 million) in 2008.

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 present requirements. 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.



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Liquidity

As of December 31, 2009, our primary source of liquidity was NT$19,615 million (US$613.9 million) of cash and cash equivalents. As of
December 31, 2009, we had total availability under existing short-term lines of credit of NT$6,958 million (US$217.8 million) available from seven domestic and foreign financial institutions, of which NT$313 million (US$9.8 million) were used
as letters of credit and guarantees. 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. As of December 31, 2009, we had short-term
borrowing NT$225 million (US$7.0 million) outstanding under these short-term 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, |  
|                                                     |  | 2007                     |   |  | 2008    |   |  | 2009   |  
|                                                     |  | NT$                      |   |  | NT$     |   |  | NT$    |   |  | US$    |  
|                                                     |  | (in millions)            |  
|Net cash provided by operating activities            |  | 24,423                   |   |  | 21,605  |   |  | 15,492 |   |  | 484.9  |  
|Net cash used in investing activities                |  | (5,395                   | ) |  | (10,555 | ) |  | (5,621 | ) |  | (175.9 | )
|Net cash used in financing activities                |  | (11,157                  | ) |  | (14,927 | ) |  | (9,054 | ) |  | (283.4 | )
|Effect of exchange rate changes on cash              |  | 22                       |   |  | 94      |   |  | (43    | ) |  | (1.4   | )
|                                                     |  |                          |   |  |         |   |  |        |   |  |        |  
|Net increase (decrease) in cash and cash equivalents |  | 7,893                    |   |  | (3,783  | ) |  | 774    |   |  | 24.2   |  
|                                                     |  |                          |   |  |         |   |  |        |   |  |        |  

Net Cash Provided by Operating Activities

In 2009, net cash provided by operations was NT$15,492 million (US$484.9 million) compared to NT$21,605 million in 2008. The decrease in
net cash provided by operating activities was primarily the result of a significant increase in accounts receivable. Our accounts receivable decreased by NT$3,611 million in 2008 and increased by NT$4,390 million (US$137.4 million) in 2009, mainly
due to increase in net operating revenue in the forth quarter of 2009 compared to the same quarter in 2008.

In 2008, net cash
provided by operations was NT$21,605 million compared to NT$24,423 million in 2007. The decrease in net cash provided by operating activities was primarily the result of a significant decrease in net income. Our accounts receivable increased by
NT$2,042 million in 2007 and decreased by NT$3,611 million in 2008, and our accounts payable increased by NT$2,304 million in 2007 and decreased by NT$1,618 million in 2008. Our depreciation and amortization expenses increased from NT$8,169 million
in 2007 to NT$9,432 million in 2008. The increase in our depreciation and amortization expenses in 2008 compared to 2007 was due to additional increased number of equipment installed in connection with our capacity expansion program.

Net Cash Used in Investing Activities

In 2009, cash used in investing activities was NT$5,621 million (US$175.9 million) compared to NT$10,555 million in 2008. The decrease in
net cash used in investing activities was primarily the result of a significant decrease in cash used in the acquisition of property, plant and equipment in the amount of NT$5,303 million (US$166.0 million) in 2009 compared to NT$10,048 million in
2008. Net cash used in investing activities primarily reflected capital expenditures for property, plants and equipment. 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, 2008 and 2009, 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, 2008 and 2009, outstanding balances of prepayments for purchases of equipment amounted to NT$652 million and NT$1,182 million (US$37.0
million), respectively. We have entered into agreements with third parties in connection with our expansion plans. We do not have any written options on non-financial assets.



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In 2008, cash used in investing activities was NT$10,555 million compared to NT$5,395
million in 2007. The increase in net cash used in investing activities was primarily the result of a significant decrease in proceeds from disposal of long-term investments in the amount of nil in 2008 compared to NT$9,564 million in 2007. Net cash
used in investing activities primarily reflected capital expenditures for property, plants and equipment. 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, 2007 and 2008, 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, 2007 and 2008, outstanding balances of prepayments for purchases of equipment amounted to NT$2,211 million and NT$652 million, respectively. We have entered
into agreements with third parties in connection with our expansion plans. 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$14,927 million and NT$9,054 million (US$283.4 million) in 2008 and 2009, respectively. In
2008, net cash used in financing activities reflected primarily our payment of stockholders dividends and employees bonuses of NT$14,775 million in aggregate. In 2009, net cash used by financing activities reflected primarily our payment
of stockholders dividends of NT$5,609 million (US$175.6 million) and our repayment of long-term borrowings of NT$3,000 million (US$93.9 million).

Net cash used in financing activities was NT$11,157 million and NT$14,927 million in 2007 and 2008, respectively. In 2007, net cash used
by financing activities reflected primarily our payment of stockholders dividends and employees bonuses of NT$10,678 million and our repayment of long-term borrowings of NT$166 million. In 2008, net cash used in financing activities
reflected primarily our payment of stockholders dividends and employees bonuses of NT$14,775 million in aggregate.

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
2010 is approximately NT$14,300 million (US$447.6 million), which is funded from our retained earnings. We expect that our capital expenditures in 2010 will primarily consist of purchasing equipment, improving our facilities and constructing new
plants. 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.
As of December 31, 2009, we did not have any outstanding long-term borrowings. We entered into a multiple-purpose credit facility led by Mega Bank in May 2006 in the aggregate principal amount of NT$7,000 million for the purposes of
(i) refinancing certain of our long-term indebtedness and (ii) funding our capital expenditure. This facility is a mid-term credit facility expiring in May 2011. On June 26, 2009, we repaid the entire NT$3,000 million (US$91.6
million) we have drawn from this credit facility and consequently this credit facility has been terminated.

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.



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Inflation/Deflation

The inflation rate in Taiwan was 1.8% in 2007, 3.5% in 2008 and -0.9% in 2009. We do not believe that inflation in Taiwan has had a
material impact on our results of operations.

Taxation

The corporate income tax rate has been reduced from 25% to 20% since January 1, 2010. Therefore, the corporate income tax rate in
Taiwan which currently applies to us is 20%. 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$1,184 million, NT$826 million and NT$307 million (US$9.6 million) in 2007, 2008 and 2009, 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 sunset clauses for the Statute for Upgrading Industries effective from January 1, 2010, we are no longer entitled to the five-year tax
exemptions and investment tax credits that we previously enjoyed for the acquisition cost of qualifying machinery and equipment. Historically, these tax incentives have resulted in decreases of income tax payable by approximately NT$1,475 million,
NT$858 million and NT$863 million (US$27.0 million) in 2007, 2008 and 2009, respectively. In 2007, 2008 and 2009, our effective income tax rates were 12.87%, 12.50% and 12.50%, 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.

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, |  
|                                                       |  | 2007                             |   |  | 2008   |   |  | 2009  |  
|                                                       |  | NT$                              |   |  | NT$    |   |  | NT$   |   |  | US$   |  
|                                                       |  | (in millions)                    |  
|Net income as reported under R.O.C. GAAP               |  | 17,489                           |   |  | 6,314  |   |  | 8,790 |   |  | 275.1 |  
|U.S. GAAP adjustments:                                 |  |                                  |   |  |        |   |  |       |   |  |       |  
|Compensated absences                                   |  | (13                              | ) |  | (2     | ) |  | (15   | ) |  | (0.5  | )
|Compensation                                           |  | (3,635                           | ) |  | (1,582 | ) |  |      |   |  |      |  
|Employee stock option                                  |  | (2                               | ) |  |       |   |  |      |   |  |      |  
|Impairment on long-term investments                    |  |                                 |   |  | (280   | ) |  |      |   |  |      |  
|Embedded derivative                                    |  | (1,181                           | ) |  |       |   |  |      |   |  |      |  
|Defined benefit pension plan-net periodic pension cost |  | 7                                |   |  | 1      |   |  | 1     |   |  |      |  
|Equity investments:                                    |  |                                  |   |  |        |   |  |       |   |  |       |  
|Net income variance between U.S. GAAP and R.O.C. GAAP  |  | 7                                |   |  |       |   |  |      |   |  |      |  
|Gain on disposal of long-term investments              |  | 403                              |   |  |       |   |  |      |   |  |      |  
|Total U.S. GAAP adjustments                            |  | (4,414                           | ) |  | (1,863 | ) |  | (14   | ) |  | (0.5  | )
|Taxation effect                                        |  | 24                               |   |  | (56    | ) |  | (21   | ) |  | (0.6  | )
|                                                       |  |                                  |   |  |        |   |  |       |   |  |       |  
|Net income under U.S. GAAP                             |  | 13,099                           |   |  | 4,393  |   |  | 8,755 |   |  | 274.0 |  
|                                                       |  |                                  |   |  |        |   |  |       |   |  |       |  



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Reconciliation of Consolidated Shareholders 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
shareholders equity. For other GAAP differences, please refer to note 31 to our consolidated financial statements included elsewhere in this annual report.



|                                                         |  |                                  |   |  |        |   |  |        |   |  |         |  
|-------------------------------------------------------- |  | -------------------------------- | - |  | ------ | - |  | ------ | - |  | ------- | -
|                                                         |  | For the Years Ended December 31, |  
|                                                         |  | 2007                             |   |  | 2008   |   |  | 2009   |  
|                                                         |  | NT$                              |   |  | NT$    |   |  | NT$    |   |  | US$     |  
|                                                         |  | (in millions)                    |  
|Total shareholders equity as reported under R.O.C. GAAP |  | 68,908                           |   |  | 59,314 |   |  | 63,081 |   |  | 1,974.4 |  
|U.S. GAAP adjustments:                                   |  |                                  |   |  |        |   |  |        |   |  |         |  
|Compensated absences                                     |  | (56                              | ) |  | (58    | ) |  | (73    | ) |  | (2.3    | )
|Compensation                                             |  | (1,729                           | ) |  |       |   |  |       |   |  |        |  
|Defined benefit pension plan                             |  | (317                             | ) |  | (172   | ) |  | (363   | ) |  | (11.3   | )
|Acquisition of Siliconware Corporation                   |  | 4,874                            |   |  | 4,874  |   |  | 4,874  |   |  | 152.5   |  
|Taxation effect                                          |  | 16                               |   |  | (40    | ) |  | (61    | ) |  | (1.9    | )
|                                                         |  |                                  |   |  |        |   |  |        |   |  |         |  
|Shareholders equity under U.S. GAAP                     |  | 71,696                           |   |  | 63,917 |   |  | 67,458 |   |  | 2,111.4 |  
|                                                         |  |                                  |   |  |        |   |  |        |   |  |         |  

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

Employee Bonuses

Certain employees of our company are entitled to bonuses in accordance with applicable provisions of our articles of incorporation.
Employee bonuses are determined at 10% of distributable retained earnings. Distributable retained earnings are calculated as retained earnings after various reserves in accordance with R.O.C. regulations and our articles of incorporation and after
appropriation for remuneration to directors. Employee bonuses may be granted in cash, shares or a combination of both. Before January 1, 2008, under R.O.C. GAAP, such bonuses are appropriated from retained earnings in the accounting period
during which such shareholders approval is obtained. If such employee bonuses are in the form of our shares, the amount charged against retained earnings is based on the par value of the shares issued. Under U.S. GAAP, any employee bonus
expense is initially accrued at the end of the period when services are rendered, at 10% of the distributable retained earnings. When bonuses are approved by the shareholders in the subsequent year, an additional compensation expense is recorded for
the difference between the par value and the fair market value of shares granted to employees. The difference between U.S. GAAP and R.O.C. GAAP in this area would result in adjustments to net income and shareholders equity as shown in the
above schedules. In addition to the adjustments to net income and shareholders equity as shown in the above schedules, application of U.S. GAAP on employee bonuses would also result in a reclassification from retained earnings to additional
paid-in capital.



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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, we no longer treat employee bonuses as a reduction of
retained earnings, but as a cost / expense and related liability when we have legal obligations and could reasonably estimate such amount.

Employee Stock Option

Prior to January 1, 2006, U.S. GAAP allowed us to use the intrinsic value prescribed by Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees, or APB 25, for measurement of stock-based compensation expense with pro-forma disclosure of net income (loss) and earnings (loss) per share, as if the fair-value method of accounting
defined in ASC Topic 718, Compensation  Stock Compensation, or ASC Topic 718, were used. Under the fair-value method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period,
which is usually the vesting period. ASC Topic 718 requires us to use the fair value method with forfeitures estimated at the time of grant and revise in subsequent periods if actual forfeitures differ from those estimates. In addition, the exercise
price of our stock options is subject to change due to the distribution of stock dividends. We were required to measure the effects of the modification and record incremental compensation cost, if any.

For computing the fair value of options granted, we use the Black-Scholes option-pricing model with input assumptions of expected
volatility, expected life, expected dividend rate and expected risk-free rate of return. We apply the historical volatility based on the historical stock price volatility over the historical time period commensurate with the expected term of the
employee stock options, which is based on our contractual term. We estimate dividend yield based on historical experience. In addition, we use the yield of Taiwan Government Bonds with a contract term equal to the expected term of the stock options
as our risk-free interest rate pursuant to ASC Topic 718, which requires entities based in jurisdiction outside the United States to use the implied yield of zero coupon government bonds currently available in the market where the shares are
primarily traded when estimating the risk-free interest rate.

Equity Investments

Our proportionate share of the income (loss) from an equity investee may differ if the equity investees net income (loss) under
R.O.C. GAAP differs from U.S. GAAP. Any difference would be recognized if and when we sell the equity investment.

Our
proportionate share of the income or loss from an equity investee may differ from our share in the investees equity. Under both R.O.C. GAAP and U.S. GAAP, we are required to adjust our investment in correspondence to our pro rata share of the
investees equity. Under R.O.C. GAAP, adjustments may include, but are not limited to, cumulative translation and unrecognized pension cost. For reconciliation to U.S. GAAP, additional adjustments are made for the variances exclusively
resulting from U.S. GAAP, such as defined benefit pension plan pursuant to ASC Topic 715, Compensation  Retirement Benefits, or ASC Topic 715.

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.



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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 have elected to perform our annual impairment review in each fiscal year. We have completed our annual goodwill impairment test for fiscal 2007, 2008 and 2009 and concluded that there was no impairment in these three years.

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 and
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 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 net selling price 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 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. We recognized impairment losses of NT$49 million, NT$43 million and NT$74 million (US$2.3 million), respectively, on idle
assets for the years ended December 31, 2007, 2008 and 2009. 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, 2007, 2008 and 2009.



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Embedded Derivatives

Under R.O.C. GAAP, when an issuer issues convertible bonds, the entire instrument is recorded as a liability in the amount of the proceeds
received. Any discount or premium to the par value of the convertible bonds is amortized in the statement of operations by using the effective interest rate method. If the convertible bonds contain a redemption premium above their par value amount,
the excess is accrued, using the effective interest rate method, over the period to redemption as a charge to interest expense. Upon conversion, the carrying value of the bonds is credited to common stock at its par value and the difference between
the carrying value of the bond and the par value of the common stock is recorded to additional paid-in capital. No gain or loss is recognized.

Under U.S. GAAP, in accordance with ASC Topic 815, convertible bonds, with the feature of the combination of mutually exclusive
conversion of the debt to equity or redemption at a multiple of the bonds par value, are required to be accounted for as embedded derivative instruments. In addition, if the bonds are denominated in foreign currency and conversion terms contain a
fixed foreign exchange feature determining the rate at which the bonds are to be converted into local currency stock, the combination of the conversion option and the fixed foreign exchange forward contract makes the bonds dual indexed and therefore
the conversion right should be bifurcated. The embedded derivatives separated from the book value of bonds are measured at fair value and changes in fair value are recognized as unrealized gain (loss) in the income statement for each accounting
period.

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. Hence, reclassification from retained earnings to
additional paid-in capital is not needed.

Marketable Securities

Prior to the adoption of R.O.C. SFAS No. 34 effective January 1, 2006, marketable equity securities and long-term equity
investments in which we owned less than 20% of the voting rights of a publicly listed investee company were carried at the lower of cost or market value, and debt securities at cost. The market value of listed stocks was determined by the average
closing price during the last month of the accounting period. After the adoption of R.O.C. SFAS No. 34, we are required to reclassify our equity investments into financial assets at fair value through profit or loss, available-for-sale,
held-to-maturity securities or financial assets carried at costs. Unrealized gains or losses on available-for-sale securities are reported through shareholders equity.

Under U.S. GAAP ASC Topic 320, Investments  Debt and Equity Securities, or ASC Topic 320, debt and equity securities that have
readily determinable fair values are to be classified as either trading, available-for-sale or held-to-maturity securities. Debt securities that we have the positive intent and ability to hold to maturity are classified as held-to-maturity
securities and reported at amortized cost. Debt and equity securities that are bought and traded for short-term profit are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Debt and
equity securities not classified as either held-to-maturity or trading are classified as available-for-sale securities and reported at fair value, with unrealized gains and losses excluded from earnings and reported in a separate component of
shareholders equity. The fair value of listed stock under U.S. GAAP is generally determined by the closing price at the balance sheet date. We perform impairment analysis to determine whether our marketable securities suffer an
other-than-temporary decline in fair value below the cost. Under the impact of the global financial crisis, we performed evaluations of impairment toward ChipMOS Bermuda and recognized an other-than temporary impairment loss of NT$2.1 billion under
R.O.C. GAAP and NT$2.4 billion under U.S. GAAP for the year ended December 31, 2008. No such impairment has been identified for 2009.

Calculation of EPS

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. 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. The numbers of employee bonus shares issued in 2007, 2008 and 2009 were 35,203,522 shares, 47,145,362 shares and nil, respectively.



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In computing the dilutive effect of convertible bonds when calculating net income available
to common stockholders for diluted EPS, the after-tax results of compensated interest expenses, unrealized foreign exchange gain/loss, amortization of bond issuance costs are taken into consideration under R.O.C. GAAP. However, under U.S. GAAP, in
addition to the above three items, the after tax result of mark-to-market gain or loss on embedded derivatives bifurcated from the host bonds is also taken into consideration. Anti-dilutive effect is considered both under R.O.C. GAAP and under U.S.
GAAP.

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 share 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.

Disposal of investment under equity method for exchange of noncontrolling ownership
interest and monetary consideration

Under R.O.C. GAAP, commercial substance, the expectation of a significant change
of future cash flows, is evaluated for determining whether gain on investments should be deferred. A gain is recognized only for the portion related to the monetary consideration received. However, under U.S. GAAP, a transaction involved significant
monetary consideration is deemed to be a monetary exchange. Therefore, an exchange of investment would be recorded at fair value and no gain on disposal of investment would be deferred.

Recent Accounting Pronouncements

U.S. GAAP

In December 2008, the FASB issued guidance regarding employers disclosures about postretirement benefit plan assets, including
investment allocation decisions, inputs and valuation techniques used to measure the fair value of plan assets and significant concentrations of risks within plan assets. This guidance is effective for fiscal years ending after December 15,
2009. The adoption of this guidance does not have any significant impact on our consolidated financial results.

In June 2009,
the FASB issued authoritative guidance on the consolidation of variable interest entities, or VIE,, which is effective for interim and annual periods ending beginning November 15, 2009. The new guidance for VIEs eliminates the quantitative
approach previously required for determining the primary beneficiary of a VIE and requires ongoing qualitative reassessments of whether an enterprise is the primary beneficiary. We do not expect the adoption of this guidance to have any significant
impact on our consolidated financial results.

In July 2009, the FASB issued the FASB Accounting Standards Codification, or
ASC . The issued guidance establishes ASC as the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. The Codification was effective for interim and annual periods ending after September 15, 2009.
The adoption of this guidance does not have any significant impact on our consolidated financial results.

In August 2009, the
FASB issued guidance on the measurement of liabilities at fair value. The guidance clarifies the application of certain valuation techniques in circumstances when a quoted price in an active market for the identical liability is not available. This
guidance is effective for annual period ending December 31, 2009. The adoption of this guidance does not have any significant impact on our consolidated financial results.



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In October 2009, the FASB issued amended guidance for the scope of existing software revenue
recognition accounting. Software elements and tangible products that have software components that are essential to the functionality of the tangible product will no longer be within the scope of the software revenue recognition guidance, and
software-enabled products will now be subject to other relevant revenue recognition guidance. The new guidance is effective for all new or materially modified arrangements entered into on or after June 15, 2010 with earlier adoption permitted.
We do not expect the adoption of this guidance to have any significant impact on our consolidated financial results.

In
October 2009, the FASB issued guidance on revenue recognition for arrangements with multiple deliverables. Under the new guidance, when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be
determined, the residual method of revenue recognition is prohibited. Rather, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. The new guidance
is effective for all new or materially modified arrangements entered into on or after June 15, 2010 with earlier adoption permitted. We are currently evaluating the impact of adopting this new guidance.

In February 2010, the FASB issued FASB ASU 2010-09, Subsequent Events, Amendments to Certain Recognition and Disclosure
Requirements, which clarifies certain existing evaluation and disclosure requirements in ASC 855 Subsequent Events related to subsequent events. FASB ASU 2010-09 requires SEC filers to evaluate subsequent events through the date in
which the financial statements are issued and is effective immediately upon issuance. The adoption of this guidance does not have any significant impact on our consolidated financial results.

R.O.C. GAAP

In November 2007, the R.O.C. Accounting Research and Development Foundation issued SFAS No. 10 (revised), Inventories,
which provides guidance on the determination of cost and its subsequent recognition as an expense, including any write-down to net realizable value. It also provides guidance on the cost formulas that are used to assign costs to inventories. This
statement is effective for fiscal years beginning on or after January 1, 2009. The adoption of R.O.C. SFAS No.10 (revised) does not have any significant impact on our consolidated financial statements.

In April 2009, the R.O.C. Accounting Research and Development Foundation issued R.O.C. SFAS No. 41, Disclosure for Operating
Segments Information, which provides guidance on the identification of operating segments and required disclosure for operating segments information. This statement is effective for fiscal years beginning on or after January 1, 2011. We
do not expect the adoption of this guidance to have any significant impact on our consolidated financial results.

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 2009. 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, 2009, we do not have any off-balance sheet arrangements.



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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, 2009.



|                                   |  |                        |  |                 |  |          |  |          |  |                 
|---------------------------------- |  | ---------------------- |  | --------------- |  | -------- |  | -------- |  | ----------------
|                                   |  | Payments Due by Period
|Contractual Obligations (1)        |  | Total                  |  | Less Than1 Year |  | 1-3Years |  | 4-5Years |  | More Than5 Years
|                                   |  | (in NT$ millions)     
|Long-term debt                     |  |                       |  |                |  |         |  |         |  |                
|Secured long-term loans            |  |                       |  |                |  |         |  |         |  |                
|Unsecured long-term loans          |  |                       |  |                |  |         |  |         |  |                
|Short-term loans                   |  | 225                    |  | 225             |  |         |  |         |  |                
|Secured bonds                      |  |                       |  |                |  |         |  |         |  |                
|Unsecured bonds                    |  |                       |  |                |  |         |  |         |  |                
|Operating leases (2)               |  | 189                    |  | 18              |  | 36       |  | 35       |  | 100             
|Purchase obligations               |  |                       |  |                |  |         |  |         |  |                
|                                   |  |                        |  |                 |  |          |  |          |  |                 
|Total contractual cash obligations |  | 414                    |  | 243             |  | 36       |  | 35       |  | 100             
|                                   |  |                        |  |                 |  |          |  |          |  |                 



|(1) | Excludes interest payments.
|--- | ---------------------------

|(2) | Represents our obligations to make lease payments to use the land on which our facilities are located, primarily in Hsinchu, Taiwan.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

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, 2009 include NT$222.4 million (US$7.0 million) of pension plan obligations for which the timing and actual amount of funding required have not been determined. We expect to contribute NT$15.6 million (US$0.5
million) to the pension plan in 2010.



|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, 2010. 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      |  | 58  |  | Chairman; Executive Vice President |  | 26           |  | Director of SPILs subsidiaries.                                                                                   
|Chi-Wen Tsai   |  | 62  |  | Vice Chairman; President           |  | 26           |  | Director of SPILs subsidiaries.                                                                                   
|Wen-Lung Lin   |  | 58  |  | Director                           |  | 5            |  | Chairman of Ku-Ming Investment Co.                                                                                 
|Yen-Chun Chang |  | 55  |  | Director; Senior Vice President    |  | 26           |  | Director of SPILs subsidiary.                                                                                     
|Wen-Jung Lin   |  | 63  |  | Director                           |  | 19           |  | None                                                                                                               
|Teresa
Wang(1) |  | 54  |  | Director                           |  | 0            |  | None                                                                                                               
|Hsiu-Li Liu    |  | 55  |  | Independent
Director(2)            |  | 19           |  | Chairman of So Dar Investment; Director of Chi Cheng Enterprise, Li Fu Investment, More Power Electronics Corp.    
|Ing Dar Liu    |  | 62  |  | Independent
Director(2)            |  | 5            |  | Director of InnoLux Display Corp., AME Inc.; Chairman of Jing-Hong Investment.                                     
|Jing-Shan Aur  |  | 61  |  | Independent
Director(2)            |  | 5            |  | Director of RSEA Engineering Corp.,                                                                                
|Wen-Lung Cheng |  | 62  |  | Supervisor                         |  | 8            |  | Chairman of Joinwin Investment; Director of SPILs subsidiary; Supervisor of Gamania Digital Entertainment Co. Ltd.
|Fu-Mei Tang    |  | 58  |  | Supervisor                         |  | 5            |  | None                                                                                                               
|C.Y. Lin       |  | 56  |  | Senior Vice President              |  | 13           |  | None                                                                                                               
|Kuo-Jui Tai    |  | 47  |  | Vice President                     |  | 7            |  | None                                                                                                               
|Chien-An Chen  |  | 60  |  | Vice President                     |  | 18           |  | None                                                                                                               
|Chien-Hua Chen |  | 55  |  | Vice President                     |  | 11           |  | None                                                                                                               



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|              |  |     |  |                         |  |              |  |                                                           
|------------- |  | --- |  | ----------------------- |  | ------------ |  | ----------------------------------------------------------
|Name          |  | Age |  | Position                |  | Yearswith Us |  | Principal Business Activities PerformedOutside Our
Company
|Michael Chang |  | 48  |  | Vice President          |  | 11           |  | None                                                      
|C.S Hsiao     |  | 51  |  | Vice President          |  | 23           |  | None                                                      
|Yu Hu Liu     |  | 52  |  | Vice President          |  | 25           |  | None                                                      
|Kun-Yi Chien  |  | 54  |  | Vice President          |  | 21           |  | None                                                      
|John Yu       |  | 45  |  | Vice President          |  | 18           |  | None                                                      
|Eva Chen      |  | 52  |  | Chief Financial Officer |  | 5            |  | None                                                      



|(1) | Representing Pei-Sheng Cultural Educational Foundation.
|--- | -------------------------------------------------------

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

Bough Lin is our chairman and executive vice president. He has been our director since August 1984. Mr. Lin is also currently
a director of our subsidiaries, SPIL (B.V.I.) Holding Ltd.and Siliconware U.S.A., Inc., as our representative. He graduated from National Chiao Tung University in Taiwan in 1973 with a Bachelors degree in electronic physics. 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 received a Bachelors degree in electrical engineering from National Taipei Institute of
Technology in Taiwan in 1969.

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 electrical engineering.

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.

Teresa Wangis currently our Special
Assistant of Chairman Office. She has been our director since December 2009. She received a Bachelors degree in accounting and statistics from Ming Chuang College in 1978.

Hsiu-Li Liu has been our director since June 1991 and our independent director since 2005. She received a Bachelors degree
in international trade from Ming Chuang College in Taiwan in 1975. In addition, Ms. Liu has served as the chairman of So Dar Investment Corporation.

Ing-Dar Liu has been our independent director since June 2005. He received a Masters degree in electronic 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.

Fu-Mei Tang
has been our supervisor since June 2005. Mr. Tang graduated from Kuang-Hwa Technology School in Taiwan. He previously served as our chief audit officer.



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C.Y. Linis our senior vice president in charge of Asia District Marketing and Sales
Group. Before joining us, Mr. Lin was the director of Orient Semiconductor Electronics, Ltd. Mr. Lin graduated from Nan-Jeon College of Technology in 1974 with a Bachelors degree in electrical engineering.

Kuo-Jui Tai has been a vice president since 2003. Before joining us, Mr. Tai was the vice-general manager of You Li Co.
Mr. Tai received a Masters degree in industrial engineering and engineering management from National Tsing Hua University.

Chien-An Chen has been a vice president since 2000. Mr. Chen received an MBA from University of Warwick in England.

Chien-Hua Chen has been our vice president since 1999. Before joining us, Mr. Chen was the general manager of
Ling Sheng Co. Mr. Chen received a Masters degree in electrical engineering from Arizona State University.

Michael Chang has been our vice president since 2005. Mr. Chang received a Bachelors degree in Industrial Engineering
from ChungYuan Christian University in 1984.

C.S Hsiao has been our vice president in our research and development
center since 2007. Mr. Hsiao received a Bachelors degree in chemical engineering from Feng Chia University.

Yu
Hu Liu has been our vice president in charge of our Changhua factory since 2007. Mr. Liu graduated from Lien Ho College with a Bachelors degree in electrical engineering.

Kun-Yi Chienis currently our vice president in our administration center. He received an EMBA from Tunghai University in 2009.

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

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

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 2009 was NT$236
million (US$7.4 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 13, 2008 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 Hsiu-Li Liu, 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.



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Differences between NASDAQ Corporate Governance Requirements and Home Country Practices

See Item 16G.Corporate Governance.

D. Employees

As of December 31, 2007, 2008 and 2009, we, together with our subsidiaries, had 16,071, 15,762 and 16,077 full-time employees,
respectively. Of these employees as of December 31, 2009, 14,546 were located in Taiwan, and 1,470 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$631 million (US$19.7 million) in 2009.

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, 2010, our most recent record
date.



|               |  |                       |  |                           |  
|-------------- |  | --------------------- |  | ------------------------- | -
|Name           |  | Number of SharesOwned |  | Percentage ofShares Owned |  
|               |  |                      
|Bough Lin      |  | 65,294,075            |  | 2.10                      | %
|Chi-Wen Tsai   |  | 40,175,555            |  | 1.29                      | %
|Wen-Lung Lin   |  | 19,754,751            |  | *                         |  
|Yen-Chun Chang |  | 10,416,417            |  | *                         |  
|Wen-Jung Lin   |  | 5,391,914             |  | *                         |  
|Teresa
Wang(1) |  | 11,251,831            |  | *                         |  
|Hsiu-Li Liu    |  | 12,251,189            |  | *                         |  
|Ing-Dar Liu    |  |                      |  |                          |  
|Jing-Shan Aur  |  | 146,292               |  | *                         |  
|Wen-Lung Cheng |  | 10,133,937            |  | *                         |  
|Fu-Mei Tang    |  | 9,025,917             |  | *                         |  
|C.Y. Lin       |  | 239,819               |  | *                         |  
|Kuo-Jui Tai    |  | 302,304               |  | *                         |  
|Chien-An Chen  |  | 473,833               |  | *                         |  
|Chien-Hua Chen |  | 32,668                |  | *                         |  



52



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##### Table of Contents

|              |  |                       |  |                          
|------------- |  | --------------------- |  | -------------------------
|Name          |  | Number of SharesOwned |  | Percentage ofShares Owned
|              |  |                      
|Michael Chang |  | 206,560               |  | *                        
|C.S Hsiao     |  | 135,408               |  | *                        
|Yu Hu Liu     |  | 7,438,972             |  | *                        
|Kun-Yi Chien  |  | 300,029               |  | *                        
|John Yu       |  | 165,894               |  | *                        
|Eva Chen      |  | 213,164               |  | *                        



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

|(1) | Representing Pei-Sheng Cultural Educational Foundation.
|--- | -------------------------------------------------------



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

A. Major Shareholders

The following table presents information known to us concerning the record ownership of our shares as of August 4,
2007, July 30, 2008 and July 19, 2009 (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.



|                                                                         |  |                       |     |  |                           |      |  |                       |     |  |                           |      |  |                       |     |  |                           |     
|------------------------------------------------------------------------ |  | --------------------- | --- |  | ------------------------- | ---- |  | --------------------- | --- |  | ------------------------- | ---- |  | --------------------- | --- |  | ------------------------- | ----
|                                                                         |  | August 4, 2007        |     |  | July 30, 2008             |      |  | July 19,
2009(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)                                                           |  | 618,309,437           |     |  | 20.15                     | %    |  | 517,969,290           |     |  | 16.43                     | %    |  | 624,143,605           |     |  | 19.80                     | %   
|National Financial Stability Fund Commission                             |  | *                     |     |  | *                         |      |  | *                     |     |  | *                         |      |  | 82,255,000            |     |  | 2.61                      | %   
|                                                                         |  |                       |     |  |                           |     
|JPMorgan in Custody for Capital World Growth and Income Fund Inc.        |  | *                     |     |  | *                         |      |  | 151,319,210           |     |  | 4.80                      | %    |  | 78,206,000            |     |  | 2.48                      | %   
|JPMorgan in Custody for Capital Income Builder Inc.                      |  | *                     |     |  | *                         |      |  | 93,455,300            |     |  | 2.96                      | %    |  | 68,555,300            |     |  | 2.17                      | %   
|                                                                         |  |                       |     |  |                           |     
|Bough Lin                                                                |  | 44,746,609            |     |  | 1.46                      | %    |  | 66,494,075            |     |  | 2.11                      | %    |  | 66,494,075            |     |  | 2.11                      | %   
|                                                                         |  |                       |     |  |                           |     
|Nan Shan Life Insurance Company Ltd                                      |  | *                     |     |  | *                         |      |  | 64,847,374            |     |  | 2.06                      | %    |  | 56,324,354            |     |  | 1.79                      | %   
|                                                                         |  |                       |     |  |                           |     
|Old Labor Pension Fund                                                   |  | *                     |     |  | *                         |      |  | *                     |     |  | *                         |      |  | 56,230,907            |     |  | 1.78                      | %   
|                                                                         |  |                       |     |  |                           |     
|Ku-Ming Investment Company
Ltd(4)                                        |  | 55,547,404            |     |  | 1.81                      | %    |  | 56,102,878            |     |  | 1.78                      | %    |  | 56,102,878            |     |  | 1.78                      | %   
|                                                                         |  |                       |     |  |                           |     
|Citibank in Custody for Government of Singapore Investment Corp. PFE Ltd |  | 42,913,044            |     |  | 1.40                      | %    |  | 48,150,784            |     |  | 1.53                      | %    |  | 51,312,275            |     |  | 1.63                      | %   
|                                                                         |  |                       |     |  |                           |     
|Chunghwa Post Co., Ltd                                                   |  | *                     |     |  | *                         |      |  | 44,524,157            |     |  | 1.41                      | %    |  | 43,252,067            |     |  | 1.37                      | %   
|Directors and Supervisors as a
group(5)                                  |  | 227,869,603           | (6) |  | 7.42                      | %(6) |  | 220,480,610           | (7) |  | 6.99                      | %(7) |  | 183,841,878           | (5) |  | 5.90                      | %(5)



|* | 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.
|--- | ----------------------------



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##### Table of Contents

|(3) | As of December 31, 2009 and based on the Schedule 13G filed by Blackrock, Inc. on January 8, 2010, Blackrock Inc. beneficially owned 343,334,190 common shares
in the form of ADSs, which represented 10.09% of our outstanding share capital as of December 31, 2009. The address of Blackrock Inc. is 40 East 52nd Street, New York, NY 10022.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

|(6) | As of March 31, 2008.
|--- | ---------------------

|(7) | As of March 31, 2009.
|--- | ---------------------

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

As of March 31, 2010, a total of 124,628,695 ADSs and 3,116,361,139 of our shares (including the shares represented by these ADSs)
were outstanding. With certain limited exceptions, holders of common shares that are not 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, 2010, 623,143,605 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, 2010, 623,143,605 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.

Sigurd Microelectronics Corp.

For 2007, we had total sales of packaging services to Sigurd of NT$224 million. We resigned as a director of Sigurd on November 9,
2007, and Sigurd ceased to be a related party of our company.

ChipMOS Technologies Inc. and ChipMOS Technologies
(Bermuda) Ltd.

For 2007, the amount of purchases we made with ChipMOS Taiwan was immaterial. 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. We resigned as a director of ChipMOS Taiwan on March 26, 2007.

On February 26, 2010, we entered into an equipment purchase / sales agreement with ChipMOS Taiwan and a share purchase / sales
agreement with ChipMOS Bermuda to purchase 133,000,000 common shares of ChipMOS Taiwan. See Item 4. Information on the CompanyB. Business OverviewStrategic Acquisitions and Dispositions.

Pei-Sheng Foundation

We sold land and buildings to Pei-Sheng Foundation totaling NT$182 million and recognized a loss on disposal of property, plant and
equipment of NT$33 million in 2007.



54



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##### Table of Contents

Phoenix Precision Technology Corporation

We purchased semiconductor raw materials from Phoenix Precision Technology Corporation, or Phoenix Precision, totaling NT$2,544 million,
NT$2,093 million and NT$2,085 million (US$65.3 million) in 2007, 2008 and 2009, respectively. The average payment period is approximately 90 days from the date of completion of service or purchase. As of December 31, 2007 and 2008, we owed
NT$663 million and NT$436 million, respectively, in accounts payable, to Phoenix Precision Technology.

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.

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.



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



55



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##### Table of Contents

|        |  |                        |  |                             |  |                                                  |  |                               
|------- |  | ---------------------- |  | --------------------------- |  | ------------------------------------------------ |  | ------------------------------
|        |  | Cash Dividend pershare |  | Stock Dividend 
pershare(1) |  | Total Number ofShares Issued
asStock Dividend(2) |  | Outstanding Sharesat Year 
End
|        |  | (NT$)                  |  | (NT$)                       |  |                                                  |  |                               
|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                 



|(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, 2010 amounted to NT$15,689 million. Our net
operating revenues for the first three months of 2010 are not indicative of our financial performance on either an unconsolidated or a consolidated basis for the remaining months of 2010. 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)     |  |          |  |         
|2005           |  | 46.90                            |  | 21.90         |  | 20,048                      |  | 6,267.32 |  | 5,565.41
|2006           |  | 52.50                            |  | 33.70         |  | 18,554                      |  | 7,823.72 |  | 6,257.80
|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
|First Quarter  |  | 56.30                            |  | 41.15         |  | 24,097                      |  | 8,865.35 |  | 7,408.40
|Second Quarter |  | 58.10                            |  | 44.00         |  | 16,060                      |  | 9,295.20 |  | 7,523.54
|Third Quarter  |  | 48.80                            |  | 33.30         |  | 15,686                      |  | 7,407.98 |  | 5,641.95
|Fourth Quarter |  | 36.80                            |  | 22.95         |  | 14,859                      |  | 5,764.01 |  | 4,089.93
|2009           |  | 48.90                            |  | 25.90         |  | 28,392                      |  | 8,188.11 |  | 4,242.61
|First Quarter  |  | 37.45                            |  | 25.90         |  | 18,230                      |  | 5,390.70 |  | 4,259.98
|Second Quarter |  | 46.00                            |  | 36.00         |  | 25,674                      |  | 6,954.10 |  | 5,314.45
|Third Quarter  |  | 46.50                            |  | 38.55         |  | 27,411                      |  | 7,526.55 |  | 6,530.82
|Fourth Quarter |  | 48.90                            |  | 40.25         |  | 36,038                      |  | 8,188.11 |  | 7,322.93



56



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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)     |  |          |  |         
|November                       |  | 47.10                            |  | 42.00         |  | 32,466                      |  | 7,792.68 |  | 7,322.93
|December                       |  | 43.85                            |  | 40.25         |  | 28,768                      |  | 8,188.11 |  | 7,649.23
|2010 (through April 16, 2010)  |  | 46.65                            |  | 37.25         |  | 25,703                      |  | 8,356.89 |  | 7,212.87
|First Quarter                  |  | 46.65                            |  | 37.25         |  | 25,350                      |  | 8,356.89 |  | 7,212.87
|January                        |  | 46.65                            |  | 41.65         |  | 31,823                      |  | 8,356.89 |  | 7,560.03
|February                       |  | 41.70                            |  | 37.25         |  | 25,233                      |  | 7,597.44 |  | 7,212.87
|March                          |  | 39.50                            |  | 37.50         |  | 19,792                      |  | 7,962.22 |  | 7,569.80
|April (through April 16, 2010) |  | 41.80                            |  | 39.15         |  | 27,536                      |  | 8,171.94 |  | 8,013.09



Sources: Taiwan Stock Exchange Statistical Data 1999-2010, 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 DailyTrading 
Volume
|Period                         |  | High                           |  | Low                          | 
|                               |  | US$                            |  | US$                          |  | (in thousands
|                               |  |                                |  |                              |  | of shares)   
|2004                           |  | 6.00                           |  | 2.83                         |  | 1,047,141    
|2005                           |  | 6.95                           |  | 3.08                         |  | 719,177      
|2006                           |  | 7.94                           |  | 4.74                         |  | 1,786,700    
|2007                           |  | 12.54                          |  | 7.45                         |  | 1,877,492    
|First Quarter                  |  | 10.11                          |  | 7.45                         |  | 1,698,074    
|Second Quarter                 |  | 11.52                          |  | 9.56                         |  | 1,776,946    
|Third Quarter                  |  | 12.41                          |  | 9.08                         |  | 1,858,061    
|Fourth Quarter                 |  | 12.54                          |  | 7.85                         |  | 2,176,888    
|2008                           |  | 9.55                           |  | 3.24                         |  | 2,506,994    
|First Quarter                  |  | 8.80                           |  | 6.50                         |  | 2,928,278    
|Second Quarter                 |  | 9.55                           |  | 7.17                         |  | 1,844,209    
|Third Quarter                  |  | 8.05                           |  | 5.38                         |  | 2,378,050    
|Fourth Quarter                 |  | 5.66                           |  | 3.24                         |  | 2,883,350    
|November                       |  | 5.22                           |  | 3.31                         |  | 2,996,400    
|December                       |  | 4.82                           |  | 3.24                         |  | 2,886,255    
|2009                           |  | 8.11                           |  | 3.85                         |  | 2,241,612    
|First Quarter                  |  | 6.40                           |  | 3.85                         |  | 2,147,803    
|Second Quarter                 |  | 8.11                           |  | 5.87                         |  | 2,345,231    
|Third Quarter                  |  | 7.36                           |  | 6.17                         |  | 2,199,202    
|Fourth Quarter                 |  | 7.83                           |  | 6.38                         |  | 2,258,291    
|2010 (through April 16, 2010)  |  | 7.64                           |  | 5.84                         |  | 2,691,788    
|First Quarter                  |  | 7.64                           |  | 5.84                         |  | 2,819,946    
|January                        |  | 7.64                           |  | 6.76                         |  | 3,784,442    
|February                       |  | 6.67                           |  | 5.84                         |  | 3,003,779    
|March                          |  | 6.17                           |  | 5.84                         |  | 1,871,326    
|April (through April 16, 2010) |  | 6.69                           |  | 6.24                         |  | 1,981,091    



Source: NASDAQ Stock Exchange.



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



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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 2008. 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 Hsiu-Li Liu. 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.



58



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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 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, 2010, our authorized share capital was NT$36.0 billion, divided into 3.6 billion shares, of which NT$31.16 billion,
divided into 3.12 billion shares, were issued and outstanding. As of March 31, 2010, 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, 2010. 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.

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.



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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 capitalized portion payable out of our legal reserve is limited to 50% of the total accumulated legal reserve and is payable only if and to the extent the accumulated legal reserve exceeds 50% of our paid-in capital.

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 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.

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



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



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



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If the depositary timely receives voting instructions from holders of at least 51% of the
outstanding ADSs to vote in the same manner on a resolution, including election of directors 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. Under the terms of the agreement, we make royalty payments based on the number of pads or balls used in our packages. This agreement will expire in December 2010.

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.

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.

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 and June 15, 2004, the Securities and Futures Bureau issued amendments to the
Guideline 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.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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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.

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.



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

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).



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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 Taiwan 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.

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.



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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.

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 have
purchased such 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 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;
| | - |  | -------------------------------



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



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



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



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



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

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

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

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

In general, for U.S. federal income tax purposes, a U.S. person who is the beneficial owner of an ADS will be treated as the owner of the
shares underlying its ADS. However, the U.S. Treasury has expressed concerns that parties involved in transactions in which depositary shares are pre-released may be taking actions that are inconsistent with the claiming of foreign tax credits by
the holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax, described below, applicable to dividends received by certain non-corporate holders. Accordingly, the analysis of the creditability of R.O.C.
taxes and the availability of the reduced tax rate for dividends received by certain non-corporate holders, each described below could be affected by future actions taken by parties to whom the ADSs are released. 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, 2011, 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.



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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.

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 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.



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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 2009 and do not expect to become one in the future, although there can be no assurance in this regard.

In general, a 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 2009 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, we have made a number of assumptions regarding the amount of this value
allocable to goodwill. We believe our valuation approach is reasonable. However, it is possible that the Internal Revenue Service will challenge the valuation of our goodwill, which may also result in us being classified as a PFIC.

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. Because we have valued our goodwill based on the market value of our shares, a decrease in the price of our shares may result in our becoming a PFIC.

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



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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 foreign 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 and must meet certain trading, listing, financial disclosure and
other requirements to be treated as a qualified exchange under applicable U.S. Treasury regulations for purposes of the mark-to-market election, and no assurance can be given that the shares will be regularly traded for purposes of the
mark-to-market election.

If you make an effective mark-to-market election, you will include in income each year as ordinary
income the excess of the fair market value of your 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.

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 us 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, 2011, 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 such as a corporation, 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.



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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.

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 and foreign currency exchange rates, 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 2009, sales in the amount of
US$1,307 million were denominated in U.S. dollars. In 2009, material purchases from our overseas vendors in the amounts of US$392 million and ¥8,084 million were denominated in U.S. dollars and Japanese yen, respectively. As of
December 31, 2009, we had certificates of deposit, bank deposits and accounts receivable denominated in U.S. dollars of US$301.5 million. As of December 31, 2009, we also had accounts payable and other liabilities denominated in U.S.
dollars and the Japanese yen of US$125.85 million and of ¥3,596.73 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, 2009:



|                                         |  |                        |  |      |  |      |  |      |  |      |  |            |  |          |  |           
|---------------------------------------- |  | ---------------------- |  | ---- |  | ---- |  | ---- |  | ---- |  | ---------- |  | -------- |  | ----------
|                                         |  | Expected Maturity Date
|Expressed in NT$ amount
(in millions)    |  | 2010                   |  | 2011 |  | 2012 |  | 2013 |  | 2014 |  | Thereafter |  | Total    |  | Fair value
|On-balance sheet financial instruments   |  |                        |  |      |  |      |  |      |  |      |  |            |  |          |  |           
|Assets                                   |  |                        |  |      |  |      |  |      |  |      |  |            |  |          |  |           
|Marketable Securities Time Deposit (US$) |  | 1,725.30               |  |     |  |     |  |     |  |     |  |           |  | 1,725.30 |  | 1,725.30  



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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.

We had no long-term debt obligation outstanding as of December 31, 2009.
Therefore, there is no significant interest rate risk.



|Item 12. | Description of Securities Other Than Equity Securities
|-------- | ------------------------------------------------------

A. Debt Securities

Not applicable

B. Warrants and Rights

Not applicable

C. Other Securities

Not applicable

D. American Depositary Shares

Depositary Fees

Under the terms of the deposit agreement for our ADSs, an ADS holder may have to pay the following service fees to the depositary:



|                                                                                                  |  |                                
|------------------------------------------------------------------------------------------------- |  | -------------------------------
|Service                                                                                           |  | Fees                           
|Issuance of ADSs                                                                                  |  | Up to US$0.05 per ADS issued   
|Cancellation of ADSs                                                                              |  | Up to US$0.05 per ADS cancelled
|Distribution of cash dividends or other cash distributions                                        |  | Up to US$0.05 per ADS held     
|Distribution of ADSs pursuant to stock dividends, free stock distributions or exercises of rights |  | Up to US$0.05 per ADS held     

Depositary
Charges

In addition, an ADS holder shall be responsible for the following charges:



| |  |  | taxes (including applicable interest and penalties) and other governmental charges;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | such registration fees as may from time to time be in effect for the registration of common shares or other deposited securities on the share register
and applicable to transfers of common shares or other deposited securities to or from the name of the custodian, the depositary or any nominees upon the making of deposits and withdrawals, respectively;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the deposit agreement to be at the expense of ADS
holders and beneficial owners of ADSs;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the expenses and charges incurred by the depositary in the conversion of foreign currency;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | such fees and expenses as are incurred by the depositary in connection with compliance with exchange control regulations and other regulatory
requirements applicable to common shares, deposited securities, ADSs and ADRs; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the fees and expenses incurred by the depositary, the custodian or any nominee in connection with the servicing or delivery of deposited securities.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



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Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the
depositary by the brokers (on behalf of their clients) receiving the newly-issued ADSs from the depositary and by the brokers (on behalf of their clients) delivering the ADSs to the depositary for cancellation. The brokers in turn charge these
transaction fees to their clients.

Depositary fees payable in connection with distributions of cash or securities to ADS
holders and the depositary services fee are charged by the depositary to the holders of record of ADSs as of the applicable ADS record date. The depositary fees payable for cash distributions are generally deducted from the cash being distributed.
In the case of distributions other than cash (i.e., stock dividends, rights offerings), the depositary charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the
investor (whether certificated or un-certificated in direct registration), the depositary sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts via the central clearing and settlement
system, The Depository Trust Company, or DTC, the depositary generally collects its fees through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC
accounts. The brokers and custodians who hold their clients ADSs in DTC accounts in turn charge their clients accounts the amount of the fees paid to the depositary.

In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested
service until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder.

The fees and charges ADS holders may be required to pay may vary over time and may be changed by us and by the depositary. ADS holders
will receive prior notice of such changes.

Payments by Depositary

In 2009, we received the following payments from Citibank, N.A., the depositary bank for our ADR program:



|                                                 |  |                  
|------------------------------------------------ |  | -----------------
|Item                                             |  | US$(in thousands)
|Reimbursement of investor relations efforts      |  | 47.7             
|Reimbursement of legal and consulting fees       |  | 373.4            
|Reimbursement of listing fees                    |  | 64.7             
|Reimbursement of proxy process expenses          |  | 213.2            
|Reimbursement of SEC filing and maintenance fees |  | 1,577.6          
|                                                 |  |                  
|Total                                            |  | 2,276.6          
|                                                 |  |                  



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PART II



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

None of these events occurred in any of the years ended December 31, 2007, 2008 and 2009.



|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, 2009, 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 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. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and
procedures are effective as of December 31, 2009.

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,
2009 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, 2009. 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, 2009, as stated in their report included on page F-2.



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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, 2009 that
have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



|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 Officers (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, 2009, 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 2008 and 2009.



|                      |  |                    |  |                    |  |                   
|--------------------- |  | ------------------ |  | ------------------ |  | ------------------
|                      |  | 2008               |  | 2009               |  | 2009              
|                      |  | NT$
(in thousands) |  | NT$
(in thousands) |  | US$
(in thousands)
|Audit
Fees(1)         |  | 21,980             |  | 18,450             |  | 577.5             
|Audit-related
Fees(2) |  | 380                |  | 380                |  | 11.9              
|Tax
Fees(3)           |  | 3,470              |  | 3,170              |  | 99.2              
|                      |  |                    |  |                    |  |                   
|Total                 |  | 25,830             |  | 22,000             |  | 688.6             
|                      |  |                    |  |                    |  |                   



|(1) | Audit fees consist of fees billed for the audit or review of our annual financial statements, internal control over financial reporting, quarterly financial statements,
and related statutory and regulatory filings.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial
statements and are not reported above as Audit Fees, including consultations of financial accounting and reporting standards.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Tax fees include fees billed for tax compliance services and tax advice services.
|--- | ---------------------------------------------------------------------------------

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.



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All audit and non-audit services performed by PricewaterhouseCoopers, Taiwan for 2008 and
2009 were pre-approved by the Audit Committee.



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

None.



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

None.



|ITEM 16F. | Change in Registrants Certifying Accountant
|--------- | --------------------------------------------

Not applicable.



|ITEM 16G. | Corporate Governance
|--------- | --------------------

In
general, corporate governance principles for Taiwanese companies are set forth in the 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.

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 R.O.C. Company Act, which requires that the compensation of
directors be approved by shareholders. In addition, we also follow Article 29 of the R.O.C. Company Act, which provides that the compensation of executive officers of the company shall be decided by resolutions adopted by the majority of the board
at a meeting satisfying a quorum of more than one-half of the 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.



78



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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.



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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 reports 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, 2008 and 2009                                                    |  | F-4 
|Consolidated Statements of Income for the Years Ended December 31, 2007, 2008 and 2009                          |  | F-6 
|Consolidated Statements of Changes in Stockholders Equity for the Years Ended December 31, 2007, 2008 and
2009 |  | F-7 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2008 and 2009                      |  | F-10
|Notes to Consolidated Financial Statements                                                                      |  | F-12



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



|              |  |                                                                                                                                                                                                                                                                    
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibits                                                                                                                                                                                                                                            
|              | 
|1.1           |  | Articles of Incorporation of Siliconware Precision Industries Co., Ltd., as amended on June 13, 2007(English
translation)(1)                                                                                                                                       
|              | 
|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(2)
|              | 
|4.1           |  | Immunity Agreement with Motorola, Inc. (effective from November 5, 1996 to December 31,
2010)(3)                                                                                                                                                                   
|              | 
|4.2           |  | License Agreement with Flip Chip Technologies, L.L.C. (effective from November 28, 1999 to November 27,
2009)(4)                                                                                                                                                   
|              | 
|4.3           |  | Joint Venture Agreement with Mosel Vitelic, Inc. (English
translation)(5)                                                                                                                                                                                          
|              | 
|*8.1          |  | List of Significant Subsidiaries of Siliconware Precision Industries Co., Ltd.                                                                                                                                                                                     
|              | 
|11.1          |  | Code of
Ethics(6)                                                                                                                                                                                                                                                  
|              | 
|*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 1.1 to our Annual Report on Form 20-F filed with the Securities and Exchange Commission on June 20, 2007.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

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

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

|(4) | 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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(5) | 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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Incorporated by reference to Exhibit 11.1 to our Annual Report on Form 20-F filed with the Securities and Exchange Commission on June 28, 2004.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------



81



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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 29, 2010



82



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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, 2008 and 2009                                                     |  | F-4 
|Consolidated Statements of Income for the Years Ended December 31, 2007, 2008 and
2009                           |  | F-6 
|Consolidated Statements of Changes in Stockholders Equity for the Years Ended December 
31, 2007, 2008 and 2009 |  | F-7 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2008 and
2009                       |  | 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, 2009 and December 31, 2008, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2009 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, 2009, 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

As discussed in Note 3, Commencing from January 1, 2008, the Company adopted 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..

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 29, 2010



F-3



---

##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                 |  |              |   |  |             |   |  |              |  
|---------------------------------------------------------------- |  | ------------ | - |  | ----------- | - |  | ------------ | -
|                                                                 |  | December 31, |  
|                                                                 |  | 2008         |   |  | 2009        |  
|                                                                 |  | NT$          |   |  | NT$         |   |  | US$
(Note 2) |  
|ASSETS                                                           |  |              |   |  |             |   |  |              |  
|Current Assets                                                   |  |              |   |  |             |   |  |              |  
|Cash and cash equivalents (Note 4)                               |  | 18,840,965   |   |  | 19,615,161  |   |  | 613,933      |  
|Notes receivable, net                                            |  | 46,173       |   |  | 40,545      |   |  | 1,269        |  
|Accounts receivable, net (Note 5)                                |  | 7,290,315    |   |  | 11,299,418  |   |  | 353,659      |  
|Other financial assets, current (Note 24)                        |  | 464,557      |   |  | 462,428     |   |  | 14,473       |  
|Inventories (Note 6)                                             |  | 2,383,067    |   |  | 2,992,331   |   |  | 93,657       |  
|Deferred income tax assets, current (Note 20)                    |  | 425,761      |   |  | 799,410     |   |  | 25,021       |  
|Other current assets  other                                     |  | 696,466      |   |  | 773,861     |   |  | 24,221       |  
|                                                                 |  |              |   |  |             |   |  |              |  
|                                                                 |  | 30,147,304   |   |  | 35,983,154  |   |  | 1,126,233    |  
|                                                                 |  |              |   |  |             |   |  |              |  
|Long-term Investments                                            |  |              |   |  |             |   |  |              |  
|Available-for-sale financial assets, noncurrent (Notes 7 and 28) |  | 1,075,480    |   |  | 3,825,793   |   |  | 119,743      |  
|Financial assets carried at cost, noncurrent (Notes 8 and 28)    |  | 322,036      |   |  | 315,394     |   |  | 9,871        |  
|                                                                 |  |              |   |  |             |   |  |              |  
|                                                                 |  | 1,397,516    |   |  | 4,141,187   |   |  | 129,614      |  
|                                                                 |  |              |   |  |             |   |  |              |  
|Property, Plant and Equipment (Note 10)                          |  |              |   |  |             |   |  |              |  
|Cost:                                                            |  |              |   |  |             |   |  |              |  
|Land                                                             |  | 2,902,823    |   |  | 2,903,192   |   |  | 90,867       |  
|Buildings                                                        |  | 11,435,051   |   |  | 13,108,575  |   |  | 410,284      |  
|Machinery and equipment                                          |  | 53,528,647   |   |  | 53,002,069  |   |  | 1,658,907    |  
|Utility equipment                                                |  | 1,225,810    |   |  | 1,117,124   |   |  | 34,965       |  
|Furniture and fixtures                                           |  | 829,769      |   |  | 722,071     |   |  | 22,600       |  
|Other equipment                                                  |  | 2,356,471    |   |  | 2,189,994   |   |  | 68,544       |  
|                                                                 |  |              |   |  |             |   |  |              |  
|                                                                 |  | 72,278,571   |   |  | 73,043,025  |   |  | 2,286,167    |  
|Less: Accumulated depreciation                                   |  | (34,090,559  | ) |  | (37,909,299 | ) |  | (1,186,520   | )
|Construction in progress and prepayments for equipment           |  | 651,621      |   |  | 1,182,399   |   |  | 37,008       |  
|                                                                 |  |              |   |  |             |   |  |              |  
|                                                                 |  | 38,839,633   |   |  | 36,316,125  |   |  | 1,136,655    |  
|                                                                 |  |              |   |  |             |   |  |              |  
|Other Assets                                                     |  |              |   |  |             |   |  |              |  
|Refundable deposits                                              |  | 10,034       |   |  | 8,248       |   |  | 258          |  
|Deferred charges                                                 |  | 727,025      |   |  | 487,234     |   |  | 15,250       |  
|Deferred income tax asset, noncurrent (Note 20)                  |  | 2,061,567    |   |  | 1,106,205   |   |  | 34,623       |  
|Other assets  other                                             |  | 197,122      |   |  | 268,434     |   |  | 8,402        |  
|                                                                 |  |              |   |  |             |   |  |              |  
|                                                                 |  | 2,995,748    |   |  | 1,870,121   |   |  | 58,533       |  
|                                                                 |  |              |   |  |             |   |  |              |  
|TOTAL ASSETS                                                     |  | 73,380,201   |   |  | 78,310,587  |   |  | 2,451,035    |  
|                                                                 |  |              |   |  |             |   |  |              |  

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

(Continued)



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                       |  |              |   |  |            |   |  |              |  
|------------------------------------------------------ |  | ------------ | - |  | ---------- | - |  | ------------ | -
|                                                       |  | December 31, |  
|                                                       |  | 2008         |   |  | 2009       |  
|                                                       |  | NT$          |   |  | NT$        |   |  | US$
(Note 2) |  
|LIABILITIES AND STOCKHOLDERS EQUITY                   |  |              |   |  |            |   |  |              |  
|Current Liabilities                                    |  |              |   |  |            |   |  |              |  
|Short-term loans (Notes 11 and 28)                     |  | 654,933      |   |  | 225,488    |   |  | 7,058        |  
|Notes payable                                          |  | 655          |   |  |           |   |  |             |  
|Accounts payable (Note 23)                             |  | 4,836,163    |   |  | 7,953,743  |   |  | 248,943      |  
|Income tax payable (Note 20)                           |  | 821,878      |   |  | 849,351    |   |  | 26,584       |  
|Accrued expenses                                       |  | 3,184,879    |   |  | 3,526,756  |   |  | 110,384      |  
|Other payables (Notes 12 and 23)                       |  | 1,253,730    |   |  | 2,253,304  |   |  | 70,526       |  
|Current portion of long-term loans (Note 13)           |  | 749,354      |   |  |           |   |  |             |  
|Other current liabilities                              |  | 164,589      |   |  | 196,346    |   |  | 6,145        |  
|                                                       |  |              |   |  |            |   |  |              |  
|                                                       |  | 11,666,181   |   |  | 15,004,988 |   |  | 469,640      |  
|                                                       |  |              |   |  |            |   |  |              |  
|Long-term Liabilities                                  |  |              |   |  |            |   |  |              |  
|Long-term loans (Notes 13 and 28)                      |  | 2,248,065    |   |  |           |   |  |             |  
|                                                       |  |              |   |  |            |   |  |              |  
|                                                       |  |              |  
|Other Liabilities (Note 14)                            |  |              |   |  |            |   |  |              |  
|Other liabilities  other                              |  | 151,834      |   |  | 224,373    |   |  | 7,022        |  
|                                                       |  |              |   |  |            |   |  |              |  
|Total Liabilities                                      |  | 14,066,080   |   |  | 15,229,361 |   |  | 476,662      |  
|                                                       |  |              |   |  |            |   |  |              |  
|                                                       |  |              |  
|Stockholders Equity                                   |  |              |   |  |            |   |  |              |  
|Capital stock (Notes 1 and 15)                         |  | 31,525,899   |   |  | 31,163,611 |   |  | 975,387      |  
|Capital reserve (Note 16)                              |  |              |   |  |            |   |  |              |  
|Additional paid in capital                             |  | 14,456,352   |   |  | 14,290,224 |   |  | 447,268      |  
|Premium arising from merger                            |  | 1,951,563    |   |  | 1,929,136  |   |  | 60,380       |  
|Other                                                  |  | 412,296      |   |  | 234,167    |   |  | 7,329        |  
|Retained earnings (Note 17)                            |  |              |   |  |            |   |  |              |  
|Legal reserve                                          |  | 5,089,066    |   |  | 5,720,419  |   |  | 179,043      |  
|Unappropriated earnings                                |  | 6,453,435    |   |  | 8,937,249  |   |  | 279,726      |  
|Unrealized gain on available-for-sale financial assets |  |             |   |  | 767,157    |   |  | 24,011       |  
|Cumulative translation adjustments                     |  | 296,866      |   |  | 208,577    |   |  | 6,528        |  
|Net loss not recognized as pension cost                |  | (77,172      | ) |  | (169,314   | ) |  | (5,299       | )
|Treasury stock (Note 18)                               |  | (794,184     | ) |  |           |   |  |             |  
|                                                       |  |              |   |  |            |   |  |              |  
|Total Stockholders Equity                             |  | 59,314,121   |   |  | 63,081,226 |   |  | 1,974,373    |  
|                                                       |  |              |   |  |            |   |  |              |  
|                                                       |  |              |  
|Commitments and Contingencies (Note 25)                |  |              |   |  |            |   |  |              |  
|                                                       |  |              |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY             |  | 73,380,201   |   |  | 78,310,587 |   |  | 2,451,035    |  
|                                                       |  |              |   |  |            |   |  |              |  

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



F-5



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##### 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, |  
|                                                              |  | 2007                             |   |  | 2008        |   |  | 2009        |  
|                                                              |  | NT$                              |   |  | NT$         |   |  | NT$         |   |  | US$        |  
|                                                              |  |                                  |   |  |             |   |  |             |   |  | (Note 2)   |  
|Net Operating Revenues                                        |  | 66,177,329                       |   |  | 62,402,934  |   |  | 59,294,592  |   |  | 1,855,856  |  
|Cost of Goods Sold (Notes 6 and 23)                           |  | (46,776,590                      | ) |  | (49,453,501 | ) |  | (47,851,772 | ) |  | (1,497,708 | )
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|Gross Profit                                                  |  | 19,400,739                       |   |  | 12,949,433  |   |  | 11,442,820  |   |  | 358,148    |  
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|Operating Expenses (Note 23)                                  |  |                                  |   |  |             |   |  |             |   |  |            |  
|Selling expenses                                              |  | (494,598                         | ) |  | (942,653    | ) |  | (622,208    | ) |  | (19,474    | )
|General and administrative expenses                           |  | (1,441,499                       | ) |  | (1,677,753  | ) |  | (1,401,541  | ) |  | (43,867    | )
|Research and development expenses                             |  | (1,287,951                       | ) |  | (1,382,560  | ) |  | (1,276,041  | ) |  | (39,939    | )
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|                                                              |  | (3,224,048                       | ) |  | (4,002,966  | ) |  | (3,299,790  | ) |  | (103,280   | )
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|Operating Income                                              |  | 16,176,691                       |   |  | 8,946,467   |   |  | 8,143,030   |   |  | 254,868    |  
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|Non-operating Income and Gain                                 |  |                                  |   |  |             |   |  |             |   |  |            |  
|Interest income (Note 28)                                     |  | 368,610                          |   |  | 366,086     |   |  | 49,221      |   |  | 1,541      |  
|Investment income recognized under the equity method (Note 9) |  | 246,410                          |   |  |            |   |  |            |   |  |           |  
|Gain on disposal of investments (Note 7)                      |  | 2,323,279                        |   |  |            |   |  | 1,947,879   |   |  | 60,966     |  
|Others (Note 9)                                               |  | 661,489                          |   |  | 351,465     |   |  | 263,511     |   |  | 8,248      |  
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|                                                              |  | 3,599,788                        |   |  | 717,551     |   |  | 2,260,611   |   |  | 70,755     |  
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|Non-operating Expenses and Losses                             |  |                                  |   |  |             |   |  |             |   |  |            |  
|Interest expenses (Note 28)                                   |  | (90,294                          | ) |  | (89,017     | ) |  | (36,850     | ) |  | (1,154     | )
|Impairment loss (Notes 7 and 8)                               |  |                                 |   |  | (3,030,605  | ) |  |            |   |  |           |  
|Others (Note 23)                                              |  | (57,693                          | ) |  | (20,343     | ) |  | (153,653    | ) |  | (4,809     | )
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|                                                              |  | (147,987                         | ) |  | (3,139,965  | ) |  | (190,503    | ) |  | (5,963     | )
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|Income from Continuing Operations Before Income Tax           |  | 19,628,492                       |   |  | 6,524,053   |   |  | 10,213,138  |   |  | 319,660    |  
|Income Tax Expense (Note 20)                                  |  | (2,139,141                       | ) |  | (210,523    | ) |  | (1,423,309  | ) |  | (44,548    | )
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|Net Income                                                    |  | 17,489,351                       |   |  | 6,313,530   |   |  | 8,789,829   |   |  | 275,112    |  
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|                                                              | 
|                                                              |  | For the years ended December 31, |  
|                                                              |  | 2007                             |   |  | 2008        |   |  | 2009        |  
|                                                              |  | NT$                              |   |  | NT$         |   |  | NT$         |   |  | US$        |  
|Basic Earnings Per Share (in dollars) (Note 21)               |  |                                  |   |  |             |   |  |             |   |  |            |  
|Net Income (Before Tax)                                       |  | 6.35                             |   |  | 2.09        |   |  | 3.28        |   |  | 0.10       |  
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|Net Income (After Tax)                                        |  | 5.66                             |   |  | 2.03        |   |  | 2.82        |   |  | 0.09       |  
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|                                                              |  |                                  |   | 
|Diluted Earnings Per Share (in dollars) (Note 21)             |  |                                  |   |  |             |   |  |             |   |  |            |  
|Net Income (Before Tax)                                       |  | 6.32                             |   |  | 2.08        |   |  | 3.25        |   |  | 0.10       |  
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  
|Net Income (After Tax)                                        |  | 5.63                             |   |  | 2.01        |   |  | 2.80        |   |  | 0.09       |  
|                                                              |  |                                  |   |  |             |   |  |             |   |  |            |  

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



F-6



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                                             |  |                      |  |               |  |                 |                   |  |               |  |                |   |  |                        |   |  |                                                            |   |  |                                  |   |  |                                       |   |  |               |   |  |            |  
|-------------------------------------------------------------------------------------------- |  | -------------------- |  | ------------- |  | --------------- | ----------------- |  | ------------- |  | -------------- | - |  | ---------------------- | - |  | ---------------------------------------------------------- | - |  | -------------------------------- | - |  | ------------------------------------- | - |  | ------------- | - |  | ---------- | -
|                                                                                             |  |                      |  |               |  |                 |                   |  |               |  |                |   |  |                        |   |  | Unrealized Gain(Loss) onAvailable-for-sale FinancialAssets |   |  | CumulativeTranslationAdjustments |   |  | Net Loss NotRecognized asPension Cost |   |  | TreasuryStock |   |  | Total      |  
|                                                                                             |  | Capital Stock Issued |  |               |  |                 | Retained Earnings |  |               |  |                |   | 
|                                                                                             |  | Shares(Thousand)     |  | Capital Stock |  | Capital Reserve |                   |  | Legal Reserve |  | SpecialReserve |   |  | UnappropriatedEarnings |   |  |                                                            |   |  |                                 
|2007                                                                                         |  |                      |  | NT$           |  | NT$             |                   |  | NT$           |  | NT$            |   |  | NT$                    |   |  | NT$                                                        |   |  | NT$                              |   |  | NT$                                   |   |  | NT$           |   |  | NT$        |  
|Balance at January 1, 2007                                                                   |  | 2,887,757            |  | 28,877,574    |  | 14,645,653      |                   |  | 2,003,494     |  | 50,029         |   |  | 13,413,928             |   |  | 4,765,148                                                  |   |  | (22,276                          | ) |  | (1,787                                | ) |  | (795,550      | ) |  | 62,936,213 |  
|Appropriation for legal reserve                                                              |  |                     |  |              |  |                |                   |  | 1,336,637     |  |               |   |  | (1,336,637             | ) |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  |           |  
|Reversal of special reserve                                                                  |  |                     |  |              |  |                |                   |  |              |  | (50,029        | ) |  | 50,029                 |   |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  |           |  
|Remuneration to directors and supervisors                                                    |  |                     |  |              |  |                |                   |  |              |  |               |   |  | (120,797               | ) |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  | (120,797   | )
|Employees cash bonuses                                                                      |  |                     |  |              |  |                |                   |  |              |  |               |   |  | (821,415               | ) |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  | (821,415   | )
|Employees stock bonuses                                                                     |  | 35,204               |  | 352,035       |  |                |                   |  |              |  |               |   |  | (352,035               | ) |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  |           |  
|Cash dividends                                                                               |  |                     |  |              |  |                |                   |  |              |  |               |   |  | (9,974,332             | ) |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  | (9,974,332 | )
|Stock dividends                                                                              |  | 58,673               |  | 586,726       |  |                |                   |  |              |  |               |   |  | (586,726               | ) |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  |           |  
|Conversion of Euro convertible bonds                                                         |  | 80,711               |  | 807,112       |  | 1,929,508       |                   |  |              |  |               |   |  |                       |   |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  | 2,736,620  |  
|Employee stock option exercised                                                              |  | 11,080               |  | 110,798       |  | (16,313         | )                 |  |              |  |               |   |  |                       |   |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  | 94,485     |  
|Long-term investment adjustment for investee companys additional paid-in capital            |  |                     |  |              |  | (18,200         | )                 |  |              |  |               |   |  |                       |   |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  | (18,200    | )
|Long-term investment adjustment for investee companys cumulative translation adjustments    |  |                     |  |              |  |                |                   |  |              |  |               |   |  |                       |   |  |                                                           |   |  | 107,202                          |   |  |                                      |   |  |              |   |  | 107,202    |  
|Unrealized loss on available-for-sale securities                                             |  |                     |  |              |  |                |                   |  |              |  |               |   |  |                       |   |  | (3,604,489                                                 | ) |  |                                 |   |  |                                      |   |  |              |   |  | (3,604,489 | )
|Long-term investment adjustment for investee companys treasury stock variances              |  |                     |  |              |  |                |                   |  |              |  |               |   |  |                       |   |  |                                                           |   |  |                                 |   |  |                                      |   |  | 1,366         |   |  | 1,366      |  
|Reversal of long-term investment adjustment for investee companys unrecognized pension cost |  |                     |  |              |  |                |                   |  |              |  |               |   |  |                       |   |  |                                                           |   |  |                                 |   |  | 1,787                                 |   |  |              |   |  | 1,787      |  
|Net loss not recognized as pension cost                                                      |  |                     |  |              |  |                |                   |  |              |  |               |   |  |                       |   |  |                                                           |   |  |                                 |   |  | (37,613                               | ) |  |              |   |  | (37,613    | )
|Cash dividends for treasury stock held by subsidiary                                         |  |                     |  |              |  | 117,976         |                   |  |              |  |               |   |  |                       |   |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  | 117,976    |  
|Net income                                                                                   |  |                     |  |              |  |                |                   |  |              |  |               |   |  | 17,489,351             |   |  |                                                           |   |  |                                 |   |  |                                      |   |  |              |   |  | 17,489,351 |  
|                                                                                             |  |                      |  |               |  |                 |                   |  |               |  |                |   |  |                        |   |  |                                                            |   |  |                                  |   |  |                                       |   |  |               |   |  |            |  
|Balance at December 31, 2007                                                                 |  | 3,073,425            |  | 30,734,245    |  | 16,658,624      |                   |  | 3,340,131     |  |               |   |  | 17,761,366             |   |  | 1,160,659                                                  |   |  | 84,926                           |   |  | (37,613                               | ) |  | (794,184      | ) |  | 68,908,154 |  
|                                                                                             |  |                      |  |               |  |                 |                   |  |               |  |                |   |  |                        |   |  |                                                            |   |  |                                  |   |  |                                       |   |  |               |   |  |            |  

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 (Loss) 
onAvailable-for-sale FinancialAssets |   |  | CumulativeTranslationAdjustments |  | Net Loss NotRecognized asPension Cost |   |  | TreasuryStock |   |  | Total       |  
|                                                                                          |  | Capital Stock Issued |  |               |  |                | Retained Earnings |  |              |  |                        |   | 
|                                                                                          |  | Shares(Thousand)     |  | Capital Stock |  | CapitalReserve |                   |  | LegalReserve |  | UnappropriatedEarnings |   |  |                                                             |   |  |                                 
|2008                                                                                      |  |                      |  | NT$           |  | NT$            |                   |  | NT$          |  | NT$                    |   |  | NT$                                                         |   |  | NT$                              |  | NT$                                   |   |  | NT$           |   |  | NT$         |  
|Balance at January 1, 2008                                                                |  | 3,073,425            |  | 30,734,245    |  | 16,658,624     |                   |  | 3,340,131    |  | 17,761,366             |   |  | 1,160,659                                                   |   |  | 84,926                           |  | (37,613                               | ) |  | (794,184      | ) |  | 68,908,154  |  
|Appropriation for earnings for prior years:                                               |  |                      |  |               |  |                |                   |  |              |  |                        |   |  |                                                             |   |  |                                  |  |                                       |   |  |               |   |  |             |  
|Legal reserve                                                                             |  |                     |  |              |  |               |                   |  | 1,748,935    |  | (1,748,935             | ) |  |                                                            |   |  |                                 |  |                                      |   |  |              |   |  |            |  
|Remuneration to directors and supervisors                                                 |  |                     |  |              |  |               |                   |  |             |  | (157,405               | ) |  |                                                            |   |  |                                 |  |                                      |   |  |              |   |  | (157,405    | )
|Employees cash bonuses                                                                   |  |                     |  |              |  |               |                   |  |             |  | (1,100,058             | ) |  |                                                            |   |  |                                 |  |                                      |   |  |              |   |  | (1,100,058  | )
|Employees stock bonuses                                                                  |  | 47,145               |  | 471,454       |  |               |                   |  |             |  | (471,454               | ) |  |                                                            |   |  |                                 |  |                                      |   |  |              |   |  |            |  
|Cash dividends                                                                            |  |                     |  |              |  |               |                   |  |             |  | (13,836,139            | ) |  |                                                            |   |  |                                 |  |                                      |   |  |              |   |  | (13,836,139 | )
|Stock dividends                                                                           |  | 30,747               |  | 307,470       |  |               |                   |  |             |  | (307,470               | ) |  |                                                            |   |  |                                 |  |                                      |   |  |              |   |  |            |  
|Employee stock option exercised                                                           |  | 1,273                |  | 12,730        |  | (5,335         | )                 |  |             |  |                       |   |  |                                                            |   |  |                                 |  |                                      |   |  |              |   |  | 7,395       |  
|Long-term investment adjustment for investee companys additional paid-in capital         |  |                     |  |              |  | 5,507          |                   |  |             |  |                       |   |  |                                                            |   |  |                                 |  |                                      |   |  |              |   |  | 5,507       |  
|Long-term investment adjustment for investee companys cumulative translation adjustments |  |                     |  |              |  |               |                   |  |             |  |                       |   |  |                                                            |   |  | 211,940                          |  |                                      |   |  |              |   |  | 211,940     |  
|Unrealized loss on available-for-sale financial assets                                    |  |                     |  |              |  |               |                   |  |             |  |                       |   |  | (1,160,659                                                  | ) |  |                                 |  |                                      |   |  |              |   |  | (1,160,659  | )
|Net loss not recognized as pension cost                                                   |  |                     |  |              |  |               |                   |  |             |  |                       |   |  |                                                            |   |  |                                 |  | (39,559                               | ) |  |              |   |  | (39,559     | )
|Cash dividends for treasury stock held by subsidiary                                      |  |                     |  |              |  | 161,415        |                   |  |             |  |                       |   |  |                                                            |   |  |                                 |  |                                      |   |  |              |   |  | 161,415     |  
|Net income                                                                                |  |                     |  |              |  |               |                   |  |             |  | 6,313,530              |   |  |                                                            |   |  |                                 |  |                                      |   |  |              |   |  | 6,313,530   |  
|                                                                                          |  |                      |  |               |  |                |                   |  |              |  |                        |   |  |                                                             |   |  |                                  |  |                                       |   |  |               |   |  |             |  
|Balance at December 31, 2008                                                              |  | 3,152,590            |  | 31,525,899    |  | 16,820,211     |                   |  | 5,089,066    |  | 6,453,435              |   |  |                                                            |   |  | 296,866                          |  | (77,172                               | ) |  | (794,184      | ) |  | 59,314,121  |  
|                                                                                          |  |                      |  |               |  |                |                   |  |              |  |                        |   |  |                                                             |   |  |                                  |  |                                       |   |  |               |   |  |             |  

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

(Continued)



F-8



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##### 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 |   |  |               |   |  | Retained Earnings |   |  | Unrealized
Gain on
Available-for- |  | CumulativeTranslationAdjustments |   |  | Net Loss NotRecognized 
asPension Cost |  |         | TreasuryStock |  |          | Total | 
|                                                                                          |  | Shares(Thousand)     |   |  | Capital Stock |   |  | CapitalReserve    |   |  | LegalReserve                      |  | UnappropriatedEarnings           |   |  | sale FinancialAssets                   |  |         |               | 
|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.



F-9



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                                  |  |                                  |   |  |            |   |  |            |   |  |          |  
|--------------------------------------------------------------------------------- |  | -------------------------------- | - |  | ---------- | - |  | ---------- | - |  | -------- | -
|                                                                                  |  | For the years ended December 31, |  
|                                                                                  |  | 2007                             |   |  | 2008       |   |  | 2009       |  
|                                                                                  |  | NT$                              |   |  | NT$        |   |  | NT$        |   |  | US$      |  
|                                                                                  |  |                                  |   |  |            |   |  |            |   |  | (Note 2) |  
|Cash flows from operating activities                                              |  |                                  |   |  |            |   |  |            |   |  |          |  
|Net income                                                                        |  | 17,489,351                       |   |  | 6,313,530  |   |  | 8,789,829  |   |  | 275,112  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                  |   |  |            |   |  |            |   |  |          |  
|Depreciation                                                                      |  | 7,603,913                        |   |  | 8,845,225  |   |  | 8,448,458  |   |  | 264,427  |  
|Amortization                                                                      |  | 564,893                          |   |  | 586,439    |   |  | 505,687    |   |  | 15,827   |  
|Provision for bad debts expense                                                   |  | 8,800                            |   |  | 271,091    |   |  | 79,754     |   |  | 2,496    |  
|(Reversal of) provision for sales allowance                                       |  | (19,532                          | ) |  | 120,153    |   |  | 290,109    |   |  | 9,080    |  
|Provision for loss on obsolescence and decline in market value of inventories     |  | 18,471                           |   |  | 9,065      |   |  | 6,946      |   |  | 217      |  
|Gain on disposal of investments                                                   |  | (2,323,279                       | ) |  |           |   |  | (1,947,879 | ) |  | (60,966  | )
|Gain on liquidation of investment                                                 |  |                                 |   |  |           |   |  | (5,871     | ) |  | (184     | )
|Impairment loss                                                                   |  |                                 |   |  | 3,030,605  |   |  |           |   |  |         |  
|Investment loss                                                                   |  | 3,891                            |   |  |           |   |  |           |   |  |         |  
|Gain on disposal of property, plant and equipment                                 |  | (8,670                           | ) |  | (30,473    | ) |  | (8,469     | ) |  | (265     | )
|Provision for loss on idle assets                                                 |  | 48,528                           |   |  | 43,093     |   |  | 73,882     |   |  | 2,312    |  
|Amortization of discount on long-term notes                                       |  | 62,790                           |   |  | 1,548      |   |  | 2,581      |   |  | 81       |  
|Long-term investment income under the equity method                               |  | (246,410                         | ) |  |           |   |  |           |   |  |         |  
|Compensation interest on bonds payable                                            |  | 36                               |   |  |           |   |  |           |   |  |         |  
|Foreign currency exchange loss on bonds payable                                   |  | 34,880                           |   |  |           |   |  |           |   |  |         |  
|(Increase) decrease in assets:                                                    |  |                                  |   |  |            |   |  |            |   |  |          |  
|Notes receivable                                                                  |  | (75,511                          | ) |  | 70,449     |   |  | 5,629      |   |  | 176      |  
|Accounts receivable                                                               |  | (2,042,049                       | ) |  | 3,611,376  |   |  | (4,389,987 | ) |  | (137,402 | )
|Other financial assets, current                                                   |  | 53,214                           |   |  | 248,323    |   |  | (2,706     | ) |  | (85      | )
|Inventories                                                                       |  | (635,695                         | ) |  | 1,085,907  |   |  | (620,639   | ) |  | (19,425  | )
|Deferred income tax assets                                                        |  | 575,077                          |   |  | (691,318   | ) |  | 546,367    |   |  | 17,101   |  
|Other current assets  other                                                      |  | (132,388                         | ) |  | (66,688    | ) |  | (78,480    | ) |  | (2,456   | )
|Increase (decrease) in liabilities:                                               |  |                                  |   |  |            |   |  |            |   |  |          |  
|Notes payable                                                                     |  | 769                              |   |  | (114       | ) |  | (655       | ) |  | (21      | )
|Accounts payable                                                                  |  | 2,303,799                        |   |  | (1,618,261 | ) |  | 3,121,234  |   |  | 97,691   |  
|Income tax payable                                                                |  | 554,274                          |   |  | (679,778   | ) |  | 27,473     |   |  | 860      |  
|Accrued expenses                                                                  |  | 221,131                          |   |  | 737,548    |   |  | 346,707    |   |  | 10,852   |  
|Other payables                                                                    |  | 413,761                          |   |  | (312,998   | ) |  | 273,954    |   |  | 8,575    |  
|Other current liabilities                                                         |  | (64,436                          | ) |  | 20,847     |   |  | 33,022     |   |  | 1,034    |  
|Other liabilities  other                                                         |  | 9,175                            |   |  | 928        |   |  | (797       | ) |  | (25      | )
|Accrued pension liabilities                                                       |  | 3,798                            |   |  | 8,195      |   |  | (3,867     | ) |  | (121     | )
|                                                                                  |  |                                  |   |  |            |   |  |            |   |  |          |  
|Net cash provided by operating activities                                         |  | 24,422,581                       |   |  | 21,604,692 |   |  | 15,492,282 |   |  | 484,891  |  
|                                                                                  |  |                                  |   |  |            |   |  |            |   |  |          |  

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

(Continued)



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(EXPRESSED IN THOUSANDS OF DOLLARS)



|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|----------------------------------------------------------------------- |  | -------------------------------- | - |  | ----------- | - |  | ---------- | - |  | -------- | -
|                                                                        |  | For the years ended December 31, |  
|                                                                        |  | 2007                             |   |  | 2008        |   |  | 2009       |  
|                                                                        |  | NT$                              |   |  | NT$         |   |  | NT$        |   |  | US$      |  
|                                                                        |  |                                  |   |  |             |   |  |            |   |  | (Note 2) |  
|Cash flows from investing activities                                    |  |                                  |   |  |             |   |  |            |   |  |          |  
|Payment for security deposits                                           |  | (52,395                          | ) |  | (19,500     | ) |  |           |   |  |         |  
|Decrease of financial assets carried at cost                            |  | 9,163                            |   |  | 3,559       |   |  | 6,642      |   |  | 208      |  
|Proceeds from liquidation of long-term investment                       |  |                                 |   |  |            |   |  | 5,871      |   |  | 184      |  
|Acquisition of property, plant and equipment                            |  | (12,151,393                      | ) |  | (10,048,005 | ) |  | (5,303,328 | ) |  | (165,988 | )
|Acquisition of leased assets                                            |  |                                 |   |  |            |   |  | (87,732    | ) |  | (2,746   | )
|Proceeds from disposal of assets                                        |  | 397,046                          |   |  | 48,911      |   |  | 9,277      |   |  | 289      |  
|Purchase of available-for-sale financial assets                         |  | (2,523,529                       | ) |  |            |   |  |           |   |  |         |  
|Proceeds from disposal of long-term investments                         |  | 9,563,882                        |   |  |            |   |  |           |   |  |         |  
|Payment for deferred charges                                            |  | (638,421                         | ) |  | (540,914    | ) |  | (253,402   | ) |  | (7,931   | )
|Receipt of refundable deposits                                          |  | 683                              |   |  | 479         |   |  | 1,754      |   |  | 55       |  
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|Net cash used in investing activities                                   |  | (5,394,964                       | ) |  | (10,555,470 | ) |  | (5,620,918 | ) |  | (175,929 | )
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|                                                                        |  |                                  |   | 
|Cash flows from financing activities                                    |  |                                  |   |  |             |   |  |            |   |  |          |  
|Proceeds from short-term loans                                          |  | 73,745                           |   |  | 687,298     |   |  | 1,137,549  |   |  | 35,604   |  
|Repayment of short-term loans                                           |  |                                 |   |  | (603,309    | ) |  | (1,551,573 | ) |  | (48,563  | )
|Repayment of long-term loans                                            |  | (166,443                         | ) |  |            |   |  | (3,000,000 | ) |  | (93,897  | )
|Redemption of bonds payable                                             |  | (18,945                          | ) |  |            |   |  |           |   |  |         |  
|Repayment of deposit-in                                                 |  | (340,983                         | ) |  | (86,331     | ) |  | (30,083    | ) |  | (941     | )
|Proceeds from the exercise of employee stock option                     |  | 94,485                           |   |  | 7,395       |   |  |           |   |  |         |  
|Remuneration to directors and supervisors                               |  | (120,798                         | ) |  | (157,405    | ) |  |           |   |  |         |  
|Payment for cash dividends and employees bonuses                       |  | (10,677,739                      | ) |  | (14,774,769 | ) |  | (5,609,430 | ) |  | (175,569 | )
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|Net cash used in financing activities                                   |  | (11,156,678                      | ) |  | (14,927,121 | ) |  | (9,053,537 | ) |  | (283,366 | )
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|Effect on foreign currency exchange                                     |  | 22,231                           |   |  | 94,206      |   |  | (43,631    | ) |  | (1,365   | )
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|Net increase (decrease) in cash                                         |  | 7,893,170                        |   |  | (3,783,693  | ) |  | 774,196    |   |  | 24,231   |  
|Cash at the beginning of the year                                       |  | 14,731,488                       |   |  | 22,624,658  |   |  | 18,840,965 |   |  | 589,702  |  
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|Cash at the end of the year                                             |  | 22,624,658                       |   |  | 18,840,965  |   |  | 19,615,161 |   |  | 613,933  |  
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|                                                                        |  |                                  |   | 
|Supplemental disclosures of cash flow information:                      |  |                                  |   |  |             |   |  |            |   |  |          |  
|Cash paid for interest                                                  |  | 91,459                           |   |  | 91,999      |   |  | 33,779     |   |  | 1,057    |  
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|Cash paid for income tax                                                |  | 994,542                          |   |  | 1,575,888   |   |  | 851,721    |   |  | 26,658   |  
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|                                                                        |  |                                  |   | 
|Supplemental disclosures of partial cash paid for investing activities: |  |                                  |   |  |             |   |  |            |   |  |          |  
|Acquisition of property, plant and equipment                            |  | 12,540,792                       |   |  | 8,974,422   |   |  | 6,039,790  |   |  | 189,039  |  
|Deduction on payment due to exchange of assets                          |  |                                 |   |  |            |   |  | (8,631     | ) |  | (270     | )
|Add: Payable at the beginning of the year                               |  | 1,327,112                        |   |  | 1,716,511   |   |  | 642,928    |   |  | 20,123   |  
|Less: Payable at the end of the year                                    |  | (1,716,511                       | ) |  | (642,928    | ) |  | (1,370,759 | ) |  | (42,904  | )
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|Cash paid                                                               |  | 12,151,393                       |   |  | 10,048,005  |   |  | 5,303,328  |   |  | 165,988  |  
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|                                                                        |  |                                  |   | 
|Non-cash investing and financing activities:                            |  |                                  |   |  |             |   |  |            |   |  |          |  
|Convertible bonds converted to capital stock and premium                |  |                                  |   |  |             |   |  |            |   |  |          |  
|Convertible bonds converted to capital stock                            |  | 807,112                          |   |  |            |   |  |           |   |  |         |  
|Convertible bonds converted to paid-in capital                          |  | 1,929,508                        |   |  |            |   |  |           |   |  |         |  
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|Converted amount of convertible bonds                                   |  | 2,736,620                        |   |  |            |   |  |           |   |  |         |  
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  
|Current portion of long-term loans                                      |  |                                 |   |  | 749,354     |   |  |           |   |  |         |  
|                                                                        |  |                                  |   |  |             |   |  |            |   |  |          |  

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



F-11



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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



| | (1) | 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. On August 31, 2009, the Company merged with its wholly owned
subsidiary, Siliconware Investment Company Ltd. (SIC). The Company is the surviving entity while SIC is the dissolved entity. As of December 31, 2009, the Company and its subsidiaries had 16,077 employees.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Consolidated subsidiaries:
| | --- | --------------------------



|                              |  |                                         |  |                                                                                           |  |                                                           |   |  |      |  
|----------------------------- |  | --------------------------------------- |  | ----------------------------------------------------------------------------------------- |  | --------------------------------------------------------- | - |  | ---- | -
|                              |  |                                         |  |                                                                                           |  | % of ownership held by thenamed investors as of 
December |  
|Name of investor              |  | Name of subsidiaries                    |  | Main operating activities                                                                 |  | 2008                                                      |   |  | 2009 |  
|The Company                   |  | SPIL (B.V.I.) Holding Limited           |  | Investment activities                                                                     |  | 100                                                       | % |  | 100  | %
|                              |  |                                         |  |                                                                                          
|SPIL (B.V.I.) Holding Limited |  | Siliconware USA, Inc.                   |  | 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 service providing                                                    |  | 100                                                       | % |  | 100  | %



| | (3) | Non-consolidated subsidiaries:
| | --- | ------------------------------

None.



| | (4) | Adjustments for subsidiaries with different accounting periods:
| | --- | ---------------------------------------------------------------

None.



| | (5) | Extraordinary risks from foreign subsidiaries:
| | --- | ----------------------------------------------

None.



| | (6) | Material limitations for capital transfer from subsidiaries to the parent company:
| | --- | ----------------------------------------------------------------------------------

None.



| | (7) | The parent companys stocks held by subsidiaries:
| | --- | -------------------------------------------------

Please refer to Note 18.



| | (8) | Convertible bonds and stocks issued by subsidiaries:
| | --- | ----------------------------------------------------

Please refer to Note 29.

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. Accounting principles generally accepted in the Republic of China 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, 2009 and the determination of consolidated shareholders equity and consolidated financial position also expressed in New Taiwan dollars, as of December 31, 2008 and 2009 to the extent
summarized in Note 31 to the consolidated financial statements.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



The Companys significant accounting policies are summarized as follows:

Basic of Consolidation

The Company adopted the R.O.C. Statement of Accounting Standards No. 7, Consolidated Financial Statements, which requires
an entity to 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 are eliminated.

Use of Estimates

The preparation of 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.

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 balance sheet 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.

Foreign Currency Transactions

The Company and its subsidiaries maintain their accounts in New Taiwan dollars and their functional currencies, 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.

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 2009 financial statements are presented solely for the convenience of the reader and were translated at the rate of NT$ 31.95 (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 31, 2009. 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.



F-13



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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:
|-- | ------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Assets arising from operating activities that are expected to be realized or consumed, or are intended to be sold within the normal operation cycle;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Assets held mainly for trading purposes;
| | --- | ----------------------------------------



| | (3) | Assets that are expected to be realized within twelve months from the balance sheet date;
| | --- | -----------------------------------------------------------------------------------------



| | (4) | 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:
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Liabilities arising from operating activities that are expected to be paid off within the normal operating cycle;
| | --- | -----------------------------------------------------------------------------------------------------------------



| | (2) | Liabilities arising mainly from trading activities;
| | --- | ---------------------------------------------------



| | (3) | Liabilities that are to be paid off within twelve months from the balance sheet date;
| | --- | -------------------------------------------------------------------------------------



| | (4) | Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------

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.

Accounts Receivable

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.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is estimated based on the evaluation of collectibility and aging analysis of notes receivable,
accounts receivable and other receivable.

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.

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. 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.



F-14



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



Available-for-sale Securities



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



|B. | Available-for-sale securities are measured at fair value at 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 balance sheet date.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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

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 impairment loss whenever there is objective evidence of impairment. Subsequent recovery of such impairment loss shall not be reversed.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

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 of the investee companies are accounted for under the equity method, unless the
Company cannot exercise significant influence over the investee company. The cost of an investment shall be analyzed and the cost of investment in excess of the fair value of the identifiable net assets acquired is capitalized as goodwill and tested
for impairment annually. If the fair value of identifiable assets acquired exceeds the cost of investment, the excess shall be proportionately allocated as reductions to the fair values of non-current assets. No retrospective adjustment is required
for amortization recognized in previous years. Long-term equity investments in which the Company holds more than 50% of the voting stocks or has controlling interests over the investee companies are accounted for under the equity method and are
included in the quarterly consolidated financial statements.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 investees and the Company is amortized to income over the assets economic service lives. Profit (loss) from sales of non-depreciable assets between the investees and the Company is recognized until such profit
(loss) is realized. Gains or losses on sales from the Company to equity method investees are deferred in proportion to the Companys ownership percentages in the investees 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 they are realized through transactions with third parties.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-15



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(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 the stockholders equity.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 and
depreciated accordingly.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B. | Depreciation is provided on the straight-line method over the assets estimated economic service lives, plus an additional year as the salvage value. Salvage
values of fixed assets which are still in use after reaching their estimated economic service lives are depreciated over their new estimated remaining 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. | Idled 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.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Deferred Charges

The 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. Convertible bond issuance costs are amortized over the period of the bonds.

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 to 70 years.

Bonds Payable

According to R.O.C. EITF 95-078, Compound Financial Instrument with Multiple Embedded Derivatives Issue,
as prescribed by Accounting Research and Development Foundation, R.O.C., the Companys accounting policies for its convertible bonds issued on or prior to December 31, 2005 are as follows:



|A. | The excess of the stated redemption price over the par value is recognized as interest expense and compensation interest payable using the effective interest method
during the period from the issuance date to the last day of the redemption period.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B. | When a bondholder exercises his / her conversion rights, the book value of bonds is credited to common stock at an amount equal to the par value of the stock and the
excess to capital reserve; no gain or loss is recognized on bond conversion.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



|C. | The related issuance costs of convertible bonds are recorded as deferred charges and amortized over the period of the bonds.
|-- | ----------------------------------------------------------------------------------------------------------------------------



|D. | For convertible bonds with redemption options, the right of redemption becomes invalid if the bondholder fails to exercise his / her redemption right upon expiration.
The balance of the compensation interest payable is amortized over the period from the date following the expiration date to the maturity date using the effective interest method. However, if the fair value of common stocks, which would have been
converted on the expiration date of the redemption right, is higher than the redemption price, compensation interest should be reclassified from the liability to additional paid-in capital.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|E. | The convertible bonds with redemption options are classified as current or noncurrent liabilities based on the date of redemption.
|-- | ----------------------------------------------------------------------------------------------------------------------------------

Pension Cost

Under a defined benefit plan, the net pension cost is computed based on the results of the actuarial report. 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 contributions to employees individual pension accounts during the employees service periods. These
contributions are recorded as pension costs in the current period.

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, qualifying personnel training expenditure and qualifying investments in significant technology companies 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.
|-- | ------------------------------------------------------------------------------------------------------------------------



|D. | The Taiwan imputation tax system requires that any undistributed earnings in domestic consolidated entities be subject to an additional 10% corporate income tax, which
is recognized as 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.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-17



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



Revenue and Cost

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.

Employee Stock Option Plan

According to R.O.C. EITF 92-070, R.O.C. EITF 92-071, R.O.C. EITF 92-072, Accounting for Employee Stock Option Plans as
prescribed by the Accounting Research and Development Foundation, R.O.C., the Company adopts intrinsic value method for the recording of compensation expenses.

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 a 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.

Treasury Stock



|A. | The Company records treasury stock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock and as a reduction of
shareholders equity.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B. | Upon subsequent disposal of the treasury stock, the excess of the proceeds from disposal over the book value, determined by the weighted-average method, is credited to
capital reserve. However, if the book value of the treasury stock exceeds the proceeds from disposal, the excess is first charged against capital reserve arising from treasury stock and the remainder, if any, is charged against retained earnings.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|C. | When retiring treasury stock, the Company shall credit treasury stock and debit capital and capital reserve  additional paid-in capital. If the book value of
treasury stock exceeds the aggregated amount of par value and capital reserve  additional paid-in capital, the excess is charged to capital reserve  treasury stock and to retained earnings for the remaining amount. If the book value of
treasury stock is lower than the aggregated amount of par value and capital reserve  additional paid-in capital, the difference is credited to capital reserve  treasure stock in the same category.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|D. | The book value of treasury stock is calculated using the weighted-average method.
|-- | ---------------------------------------------------------------------------------



|E. | Stock of the Company held by the subsidiaries is treated as treasury stock. Subsidiaries gain on disposal of the Companys stock and the cash dividend income
received from the Company are recorded as additional paid-in capital  treasury stock.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-18



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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



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

Impairment Loss of Non-financial Assets



|A. | The Company recognizes impairment loss whenever an event occurs or evidence indicates the carrying amount of an asset exceeds its recoverable amount. Recoverable amount
is measured as the higher of net selling price or value in use. Net selling price 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.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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, 2008, the Company adopted 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. As a result of the adoption of R.O.C. EITF 96-052, total expenses increased by NT$687,340, net income after tax decreased by
NT$515,505, and basic earnings per share decreased by approximately NT$0.17 (in dollars) for the year ended December 31, 2008.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Effective January 1, 2009, the Company adopted the amendments of R.O.C. SFAS No. 10, Accounting for Inventories. The change in accounting
principle does not cause significant impact toward the consolidated financial statements for the year ended December 31, 2009.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4. Cash and Cash Equivalents



|                                       |  |              |  |           
|-------------------------------------- |  | ------------ |  | ----------
|                                       |  | December 31,
|                                       |  | 2008         |  | 2009      
|                                       |  | NT$          |  | NT$       
|Cash on hand and petty cash            |  | 2,068        |  | 1,918     
|Cash equivalents                       |  |             |  | 23,187    
|Savings accounts and checking accounts |  | 1,293,207    |  | 1,752,314 
|Time deposits                          |  | 17,545,690   |  | 17,837,742
|                                       |  |              |  |           
|                                       |  | 18,840,965   |  | 19,615,161
|                                       |  |              |  |           

As of December 31, 2008 and 2009, the interest
rates for time deposits ranged from 0.2 % to 7.11 % and from 0.11% to 2.69 %, respectively.



F-19



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



5. Accounts Receivable, Net



|                                    |  |              |   |  |            |  
|----------------------------------- |  | ------------ | - |  | ---------- | -
|                                    |  | December 31, |  
|                                    |  | 2008         |   |  | 2009       |  
|                                    |  | NT$          |   |  | NT$        |  
|Accounts receivable                 |  | 7,750,698    |   |  | 12,078,003 |  
|Less: Allowance for sales discounts |  | (156,096     | ) |  | (446,049   | )
|Allowance for doubtful accounts     |  | (304,287     | ) |  | (332,536   | )
|                                    |  |              |   |  |            |  
|                                    |  | 7,290,315    |   |  | 11,299,418 |  
|                                    |  |              |   |  |            |  

6. Inventories



|                                                                                    |  |              |   |  |           |  
|----------------------------------------------------------------------------------- |  | ------------ | - |  | --------- | -
|                                                                                    |  | December 31, |  
|                                                                                    |  | 2008         |   |  | 2009      |  
|                                                                                    |  | NT$          |   |  | NT$       |  
|Raw materials and supplies                                                          |  | 2,040,999    |   |  | 2,392,684 |  
|Work in process                                                                     |  | 245,016      |   |  | 455,406   |  
|Finished goods                                                                      |  | 172,633      |   |  | 226,672   |  
|                                                                                    |  |              |   |  |           |  
|                                                                                    |  | 2,458,648    |   |  | 3,074,762 |  
|Less: Allowance for loss on obsolescence and decline in market value of inventories |  | (75,581      | ) |  | (82,431   | )
|                                                                                    |  |              |   |  |           |  
|                                                                                    |  | 2,383,067    |   |  | 2,992,331 |  
|                                                                                    |  |              |   |  |           |  



|                                                 |  |                                  |   |  |            |   |  |            |  
|------------------------------------------------ |  | -------------------------------- | - |  | ---------- | - |  | ---------- | -
|                                                 |  | For the years ended December 31, |  
|                                                 |  | 2007                             |   |  | 2008       |   |  | 2009       |  
|                                                 |  | NT$                              |   |  | NT$        |   |  | NT$        |  
|Expense / loss incurred related to inventories:  |  |                                  |   |  |            |   |  |            |  
|Cost of goods sold                               |  | 46,785,974                       |   |  | 49,456,149 |   |  | 47,904,790 |  
|Decline in market value and loss on obsolescence |  | 45,436                           |   |  | 8,823      |   |  | 6,946      |  
|Others                                           |  | (27,820                          | ) |  | (11,471    | ) |  | (59,964    | )
|                                                 |  |                                  |   |  |            |   |  |            |  
|                                                 |  | 46,803,590                       |   |  | 49,453,501 |   |  | 47,851,772 |  
|                                                 |  |                                  |   |  |            |   |  |            |  



F-20



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



7. Available-for-sale Financial Assets, Noncurrent



|                            |  |              |   |  |            |  
|--------------------------- |  | ------------ | - |  | ---------- | -
|                            |  | December 31, |  
|                            |  | 2008         |   |  | 2009       |  
|                            |  | NT$          |   |  | NT$        |  
|Cost of listed securities   |  | 3,712,625    |   |  | 5,167,332  |  
|Valuation adjustment        |  |             |   |  | 802,434    |  
|Accumulated impairment loss |  | (2,637,145   | ) |  | (2,143,973 | )
|                            |  |              |   |  |            |  
|                            |  | 1,075,480    |   |  | 3,825,793  |  
|                            |  |              |   |  |            |  



| | A. | Under the impact of global financial crisis, the Company performed evaluation of impairment toward its investments of equity securities based on R.O.C. SFAS No. 34
and recognized other-than-temporary impairment loss of NT$2,637,145 for the year ended December 31, 2008.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Phoenix Precision Technology Corporation (PPT), an investee of the Company, merged with Unimicron Technology Corporation (Unimicron) on December 1, 2009. Unimicron
is the surviving entity while PPT is the dissolved entity. One PPTs common share is converted to 0.628 shares of Unimicrons common share. The shares of PPT held by the Company were converted to Unimicrons common shares. The Company
owns 4.94% of Unimicrons common shares and recognized gains on disposal of investment of NT$1,947,879 from the above merger.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8. Financial Assets Carried at Cost, Noncurrent



|                            |  |              |   |  |          |  
|--------------------------- |  | ------------ | - |  | -------- | -
|                            |  | December 31, |  
|                            |  | 2008         |   |  | 2009     |  
|                            |  | NT$          |   |  | NT$      |  
|Unlisted securities         |  | 715,496      |   |  | 708,854  |  
|Accumulated impairment loss |  | (393,460     | ) |  | (393,460 | )
|                            |  |              |   |  |          |  
|                            |  | 322,036      |   |  | 315,394  |  
|                            |  |              |   |  |          |  



| | A. | There are no reliable quoted prices for unlisted securities. Therefore, these investments are measured at cost.
| | -- | ---------------------------------------------------------------------------------------------------------------



| | B. | Under the impact of global financial crisis, the Company performed an evaluation of impairment toward its investments of equity securities in accordance with R.O.C.
SFAS No. 34 and recognized other-than-temporary impairment loss of NT$393,460 based on the proportional interests on these financial assets for the year ended December 31, 2008.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-21



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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



| | A. | Details of long-term investments in stocks are summarized as follows:
| | -- | ---------------------------------------------------------------------



|                                  |  |              |   |  |                        |   |  |        |  |                       
|--------------------------------- |  | ------------ | - |  | ---------------------- | - |  | ------ |  | ----------------------
|                                  |  | December 31,
|                                  |  | 2008         |   |  | 2009                  
|Investee company                  |  | Amount       |   |  | Percentage ofownership |   |  | Amount |  | Percentage ofownership
|                                  |  | NT$          |   |  |                        |   |  | NT$    |  |                       
|Equity method:                    |  |              |   |  |                        |   |  |        |  |                       
|Double Win Enterprise Co., Ltd.   |  | 84,450       |   |  | 24.14                  | % |  |       |  |                      
|Less: Accumulated impairment loss |  | (84,450      | ) |  |                        |   |  |       |  |                       
|                                  |  |              |   |  |                        |   |  |        |  |                       
|                                  |  |             |   |  |                        |   |  |       |  |                       
|                                  |  |              |   |  |                        |   |  |        |  |                       



| | B. | In March 2009, Double Win Enterprise Co., Ltd. (Double Win) was completely dissolved and the Company received NT$5,871 for return on capital from Double Win (recognized
in other income). As of December 31, 2009, the book value of Double Win held by the Company was nil.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10. Property,
Plant and Equipment



|                                                       |  |                   |  |                         |   |  |           
|------------------------------------------------------ |  | ----------------- |  | ----------------------- | - |  | ----------
|                                                       |  | December 31, 2008
|                                                       |  | Cost              |  | Accumulateddepreciation |   |  | Book value
|                                                       |  | NT$               |  | NT$                     |   |  | NT$       
|Land                                                   |  | 2,902,823         |  |                        |   |  | 2,902,823 
|Buildings                                              |  | 11,435,051        |  | (3,224,764              | ) |  | 8,210,287 
|Machinery and equipment                                |  | 53,528,647        |  | (28,564,096             | ) |  | 24,964,551
|Utility equipment                                      |  | 1,225,810         |  | (560,254                | ) |  | 665,556   
|Furniture and fixtures                                 |  | 829,769           |  | (479,881                | ) |  | 349,888   
|Other equipment                                        |  | 2,356,471         |  | (1,261,564              | ) |  | 1,094,907 
|Construction in progress and prepayments for equipment |  | 651,621           |  |                        |   |  | 651,621   
|                                                       |  |                   |  |                         |   |  |           
|                                                       |  | 72,930,192        |  | (34,090,559             | ) |  | 38,839,633
|                                                       |  |                   |  |                         |   |  |           
|                                                       | 
|                                                       |  | December 31, 2009
|                                                       |  | Cost              |  | Accumulateddepreciation |   |  | Book value
|                                                       |  | NT$               |  | NT$                     |   |  | NT$       
|Land                                                   |  | 2,903,192         |  |                        |   |  | 2,903,192 
|Buildings                                              |  | 13,108,575        |  | (3,837,362              | ) |  | 9,271,213 
|Machinery and equipment                                |  | 53,002,069        |  | (31,781,058             | ) |  | 21,221,011
|Utility equipment                                      |  | 1,117,124         |  | (554,471                | ) |  | 562,653   
|Furniture and fixtures                                 |  | 722,071           |  | (452,793                | ) |  | 269,278   
|Other equipment                                        |  | 2,189,994         |  | (1,283,615              | ) |  | 906,379   
|Construction in progress and prepayments for equipment |  | 1,182,399         |  |                        |   |  | 1,182,399 
|                                                       |  |                   |  |                         |   |  |           
|                                                       |  | 74,225,424        |  | (37,909,299             | ) |  | 36,316,125
|                                                       |  |                   |  |                         |   |  |           



F-22



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



11. Short-term Loans



|                |  |              |   |  |         |  
|--------------- |  | ------------ | - |  | ------- | -
|                |  | December 31, |  
|Nature of loans |  | 2008         |   |  | 2009    |  
|                |  | NT$          |   |  | NT$     |  
|Credit loans    |  | 654,933      |   |  | 225,488 |  
|                |  |              |   |  |         |  
|Interest rates  |  | 3.61         | % |  | 1.2445  | %
|                |  |              |   |  |         |  

12. Other Payables



|                       |  |              |  |  |           | 
|---------------------- |  | ------------ |  |  | --------- | 
|                       |  | December 31, | 
|                       |  | 2008         |  |  | 2009      | 
|                       |  | NT$          |  |  | NT$       | 
|Payables for equipment |  | 642,928      |  |  | 1,370,759 | 
|Other payables         |  | 610,802      |  |  | 882,545   | 
|                       |  |              |  |  |           | 
|                       |  | 1,253,730    |  |  | 2,253,304 | 
|                       |  |              |  |  |           | 

13. Long-term Loans



|                                         |  |                                                            |  |              |   |  |     
|---------------------------------------- |  | ---------------------------------------------------------- |  | ------------ | - |  | ----
|                                         |  |                                                            |  | December 31,
|Nature of loans                          |  | Repayment period                                           |  | 2008         |   |  | 2009
|                                         |  |                                                            |  | NT$          |   |  | NT$ 
|Commercial papers                        |  | Repayable in 4 semi-annual installments from November 2009 |  | 3,000,000    |   |  |    
|Less: Discount on commercial paper       |  |                                                            |  | (2,581       | ) |  |    
|                                         |  |                                                            |  |              |   |  |     
|                                         |  |                                                            |  | 2,997,419    |   |  |    
|Less: Current portion of long-term loans |  |                                                            |  | (749,354     | ) |  |    
|                                         |  |                                                            |  |              |   |  |     
|                                         |  |                                                            |  | 2,248,065    |   |  |    
|                                         |  |                                                            |  |              |   |  |     
|Interest rates                           |  |                                                            |  | 2.093        | % |  |    
|                                         |  |                                                            |  |              |   |  |     



| | A. | The loan agreements require, among other things, the maintenance of certain specific financial ratios and consent obtained from the majority banks on certain covenants.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | The Company repaid the outstanding long-term loans in June 2009 before the maturity dates.
| | -- | ------------------------------------------------------------------------------------------

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. 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 deposited with the Bank of Taiwan, the custodian, which acquired the Central Trust of China on July 1, 2007. 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.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-23



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | 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 pension periodic costs amounting to NT$275,976, NT$312,441 and NT$272,177 were recognized for
the years ended December 31, 2007, 2008 and 2009, respectively.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Siliconware USA, Inc. 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 Internal Revenue Code, as well as discretionary matching contributions determined annually by its Board of Directors from Siliconware USA, Inc. to its
employees individual pension accounts. Contributions made in accordance with the Plan amounted NT$8,188, NT$8,812 and NT$8,782, respectively, for the years ended December 31, 2007, 2008 and 2009.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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. The contributions are recorded as pension expense.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | The following tables set forth the actuarial assumptions, funded status and amounts recognized for the Companys defined benefit pension plan pursuant to R.O.C.
SFAS No. 18:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Assumptions used in actuarial calculations for the years ended December 31, 2007, 2008 and 2009:
| | --- | ------------------------------------------------------------------------------------------------



|                                        |  |                                  |   |  |      |   |  |      |  
|--------------------------------------- |  | -------------------------------- | - |  | ---- | - |  | ---- | -
|                                        |  | For the years ended December 31, |  
|                                        |  | 2007                             |   |  | 2008 |   |  | 2009 |  
|Discount rate                           |  | 2.75                             | % |  | 2.20 | % |  | 2.25 | %
|                                        |  |                                  |   |  |      |   |  |      |  
|Long-term rate of compensation increase |  | 2.00                             | % |  | 1.00 | % |  | 2.00 | %
|                                        |  |                                  |   |  |      |   |  |      |  
|Expected rate of return on plan assets  |  | 3.00                             | % |  | 2.50 | % |  | 2.00 | %
|                                        |  |                                  |   |  |      |   |  |      |  



|                               |  |              |   |  |            |  
|------------------------------ |  | ------------ | - |  | ---------- | -
|                               |  | December 31, |  
|                               |  | 2008         |   |  | 2009       |  
|                               |  | NT$          |   |  | NT$        |  
|Vested benefit                 |  | (47,463      | ) |  | (77,782    | )
|                               |  |              |   |  |            |  
|Vested benefit obligation      |  | (44,852      | ) |  | (68,100    | )
|                               |  |              |   |  |            |  
|Accumulated benefit obligation |  | (1,249,343   | ) |  | (1,365,669 | )
|                               |  |              |   |  |            |  



F-24



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (2) | Changes in benefit obligation for the years ended December 31, 2007, 2008 and 2009:
| | --- | -----------------------------------------------------------------------------------



|                                                          |  |                                  |   |  |            |   |  |            |  
|--------------------------------------------------------- |  | -------------------------------- | - |  | ---------- | - |  | ---------- | -
|                                                          |  | For the years ended December 31, |  
|                                                          |  | 2007                             |   |  | 2008       |   |  | 2009       |  
|                                                          |  | NT$                              |   |  | NT$        |   |  | NT$        |  
|Projected benefit obligation at the beginning of the year |  | (1,346,909                       | ) |  | (1,620,782 | ) |  | (1,544,731 | )
|Service cost                                              |  | (36,639                          | ) |  | (36,001    | ) |  | (29,786    | )
|Interest cost                                             |  | (43,775                          | ) |  | (45,252    | ) |  | (34,630    | )
|Plan amendments                                           |  |                                 |   |  | 59,238     |   |  | (73,596    | )
|(Loss) gain on projected benefit obligation               |  | (198,886                         | ) |  | 77,386     |   |  | (284,261   | )
|Benefit paid                                              |  | 5,427                            |   |  | 20,680     |   |  | 44,408     |  
|                                                          |  |                                  |   |  |            |   |  |            |  
|Projected benefit obligation at the end of the year       |  | (1,620,782                       | ) |  | (1,544,731 | ) |  | (1,922,596 | )
|                                                          |  |                                  |   |  |            |   |  |            |  



| | (3) | Changes in plan assets during the years ended December 31, 2007, 2008 and 2009:
| | --- | -------------------------------------------------------------------------------



|                                                       |  |                                  |   |  |           |   |  |           |  
|------------------------------------------------------ |  | -------------------------------- | - |  | --------- | - |  | --------- | -
|                                                       |  | For the years ended December 31, |  
|                                                       |  | 2007                             |   |  | 2008      |   |  | 2009      |  
|                                                       |  | NT$                              |   |  | NT$       |   |  | NT$       |  
|Fair value of plan assets at the beginning of the year |  | 981,249                          |   |  | 1,059,039 |   |  | 1,130,537 |  
|Actual return on plan assets                           |  | 28,022                           |   |  | 38,553    |   |  | 7,487     |  
|Employer contributions                                 |  | 55,195                           |   |  | 53,625    |   |  | 49,660    |  
|Benefits paid                                          |  | (5,427                           | ) |  | (20,680   | ) |  | (44,408   | )
|                                                       |  |                                  |   |  |           |   |  |           |  
|Fair value of plan assets at the end of the year       |  | 1,059,039                        |   |  | 1,130,537 |   |  | 1,143,276 |  
|                                                       |  |                                  |   |  |           |   |  |           |  



| | (4) | Funded status at December 31, 2008 and 2009:
| | --- | --------------------------------------------



|                                |  |              |   |  |            |  
|------------------------------- |  | ------------ | - |  | ---------- | -
|                                |  | December 31, |  
|                                |  | 2008         |   |  | 2009       |  
|                                |  | NT$          |   |  | NT$        |  
|Fair value of plan assets       |  | 1,130,537    |   |  | 1,143,276  |  
|Projected benefit obligation    |  | (1,544,731   | ) |  | (1,922,596 | )
|                                |  |              |   |  |            |  
|Funded status                   |  | (414,194     | ) |  | (779,320   | )
|Unrecognized transition assets  |  | (1,825       | ) |  | (912       | )
|Prior service cost              |  | (57,814      | ) |  | 15,312     |  
|Unrecognized net actuarial loss |  | 432,199      |   |  | 727,153    |  
|Additional pension liability    |  | (77,172      | ) |  | (184,626   | )
|                                |  |              |   |  |            |  
|Accured pension liability       |  | (118,806     | ) |  | (222,393   | )
|                                |  |              |   |  |            |  



F-25



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (5) | Components of net periodic cost for the years ended December 31, 2007, 2008 and 2009:
| | --- | -------------------------------------------------------------------------------------



|                                                   |  |                                  |   |  |         |   |  |         |  
|-------------------------------------------------- |  | -------------------------------- | - |  | ------- | - |  | ------- | -
|                                                   |  | For the years ended December 31, |  
|                                                   |  | 2007                             |   |  | 2008    |   |  | 2009    |  
|                                                   |  | NT$                              |   |  | NT$     |   |  | NT$     |  
|Service cost                                       |  | 36,639                           |   |  | 36,001  |   |  | 29,786  |  
|Interest cost                                      |  | 43,775                           |   |  | 45,252  |   |  | 34,630  |  
|Expected return on plan assets                     |  | (31,891                          | ) |  | (32,470 | ) |  | (28,862 | )
|Amortization of unrecognized net transition assets |  | (913                             | ) |  | (913    | ) |  | (913    | )
|Amortization of prior service cost                 |  |                                 |   |  | (1,424  | ) |  | 470     |  
|Amortization of unrecognized loss                  |  | 11,388                           |   |  | 15,374  |   |  | 10,682  |  
|                                                   |  |                                  |   |  |         |   |  |         |  
|Net periodic cost                                  |  | 58,998                           |   |  | 61,820  |   |  | 45,793  |  
|                                                   |  |                                  |   |  |         |   |  |         |  

15. Capital Stock



| | A. | As of December 31, 2009, the authorized capital of the Company was NT$36,000,000, represented by 3,600,000,000 common shares with par value of NT$10 (in dollars)
per share. As of December 31, 2009, the paid-in capital was NT$31,163,611.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | On August 31, 2009, the Company merged with SIC and retired 36,229 thousand shares of the Companys shares held by SIC. The capital reduction was
approved by the Ministry of Economic Affairs on September 18, 2009.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | The Company issued NT$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 (in dollars) per ADS. As of December 31, 2009, the outstanding ADSs amounted to 124,828,695 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.



| | (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.



F-26



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | D. | The exercise price of the employee stock option was decided according to the closing price at the measurement date and is subject to adjustment for distribution of cash
dividend or changes in capital stock in accordance with certain formula. The granted employee stock options will expire in five years and will be graded vested after two years of service in accordance with the employee stock option plan.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For the years ended December 31, 2007, 2008 and 2009, details of the employee stock option granted,
exercised and canceled and exercise price of the employee stock option are as follows: (Numbers of options are presented in thousands)



|                                         |  |                  |   |  |                                          
|---------------------------------------- |  | ---------------- | - |  | -----------------------------------------
|                                         |  | Numberof options |   |  | Weightedaverageexercise price(in dollars)
|                                         |  |                  |   |  | NT$                                      
|Outstanding options at January 1, 2007   |  | 12,631           |   |  | 9.25                                     
|Exercised                                |  | (11,080          | ) |  | 5.74                                     
|Forfeited / cancelled                    |  | (37              | ) |  | 5.78                                     
|                                         |  |                  |   |  |                                          
|Outstanding options at December 31, 2007 |  | 1,514            |   |  | 5.83                                     
|Exercised                                |  | (1,273           | ) |  | 5.81                                     
|Forfeited / cancelled                    |  | (241             | ) |  | 5.97                                     
|                                         |  |                  |   |  |                                          
|Outstanding options at December 31, 2008 |  |                 |   |  |                                         
|                                         |  |                  |   |  |                                          
|Outstanding options at December 31, 2009 |  |                 |   |  |                                         
|                                         |  |                  |   |  |                                          

16. Capital Reserve



| | A. | According 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. Other capital reserve 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 one 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.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-27



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | B. | Among the total dividend distributed, at least 50% of which is distributed as cash dividend and the rest is stock dividend. The appropriation of the profit is subject
to the resolution adopted by the Board and approval by the shareholders. As of April 29, 2010, the Board of Directors of the Company has resolved the distribution of the 2009 earnings. Any information in relation to the appropriation of the
Companys 2009 earnings will be posted in the Market Observation Post System at the website of the Taiwan Stock Exchanges after the Boards resolution and the shareholders approval.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Legal reserve can only be used to offset deficits or increase capital. The legal reserve can be used to increase capital when and only when the reserve balance exceeds
50% of the capital stock, and the amount capitalized should be limited to 50% of the legal reserve.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | 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 foreign currency translation adjustment 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 foreign currency translation adjustment 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.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | 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, 2009, the undistributed earnings derived on or after January 1, 1998 was NT$8,937,249.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | F. | As of December 31, 2009, the balance of stockholders imputation tax credit account of the Company was NT$26,308. The rate of stockholders imputation
tax credit to undistributed earnings for the earnings distributed in 2009 is 13.78%. The rate of stockholders imputation tax credit to undistributed earnings for the earnings distributed in the following year is approximately 9.8%. 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.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | G. | The distributions of 2006, 2007 and 2008 dividends had been resolved at the stockholders meetings on June 13, 2007, June 13, 2008 and June 10,
2009, respectively. Details are summarized below:
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                |  |            |  |                                  |  |            |  |                                  |  |           |  |                                 
|--------------- |  | ---------- |  | -------------------------------- |  | ---------- |  | -------------------------------- |  | --------- |  | --------------------------------
|                |  | 2006       |  | 2007                             |  | 2008      
|                |  | Amount     |  | Dividendsper share(in NTdollars) |  | Amount     |  | Dividendsper share(in NTdollars) |  | Amount    |  | Dividendsper share(in NTdollars)
|                |  | NT$        |  |                                  |  | NT$        |  |                                  |  | NT$       |  |                                 
|Stock dividends |  | 586,726    |  | 0.20                             |  | 307,470    |  | 0.10                             |  |          |  |                                
|Cash dividends  |  | 9,974,332  |  | 3.35                             |  | 13,836,139 |  | 4.50                             |  | 5,674,662 |  | 1.80                            
|                |  |            |  |                                  |  |            |  |                                  |  |           |  |                                 
|                |  | 10,561,058 |  | 3.55                             |  | 14,143,609 |  | 4.60                             |  | 5,674,662 |  | 1.80                            
|                |  |            |  |                                  |  |            |  |                                  |  |           |  |                                 

At the stockholders meeting on June 10,
2009, the Companys stockholders also resolved to distribute NT$630,518 cash as employees bonuses and NT$56,822 as directors and supervisors remunerations, respectively. The distributed amount is the same as the estimated
amount accrued in 2008. 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.



F-28



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | H. | According to the Articles of Incorporation of the Company, for the year ended December 31, 2009, the Company accrued NT$893,357 as employees bonuses and
NT$79,108 as directors and supervisors remuneration, respectively, which were accrued based on 10% and 1% of net income after considering the required capital reserve.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18. Treasury Stock

As
of December 31, 2008, SIC, the subsidiary of the Company, holds 36,229 thousand shares of the Companys stock, with book value of NT$21.92 (in dollars) per share. The closing price of the Companys stock was NT$28 (in dollars)
per share on December 31, 2008. SIC was merged into the Company on August 31, 2009 and all 36,229 thousand shares of the Companys stock held by SIC were retired for capital reduction.

19. Impairment of Assets



|                               |  |                                          |  |           |  |     
|------------------------------ |  | ---------------------------------------- |  | --------- |  | ----
|                               |  | Impairment loss on long-term investments
|                               |  | For the years ended December 31,        
|                               |  | 2007                                     |  | 2008      |  | 2009
|                               |  | NT$                                      |  | NT$       |  | NT$ 
|Recognized in income statement |  |                                         |  | 3,030,605 |  |    
|                               |  |                                          |  |           |  |     

Under the impact of global financial crisis, the
Company performed evaluation of impairment toward its investments of equity securities and recognized other-than-temporary impairment loss of NT$2,637,145 for the year ended December 31, 2008. In addition, Siliconware Investment Company Ltd.,
subsidiary of the Company, recognized a total amount of impairment loss of NT$393,460 based on the proportional interests on these financial assets for the year ended December 31, 2008.



F-29



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



20. 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 and for the years ended December 31, |  
|                                                                              |  | 2007                                       |   |  | 2008      |   |  | 2009      |  
|                                                                              |  | NT$                                        |   |  | NT$       |   |  | NT$       |  
|Income tax expense calculated at the statutory tax rate                       |  | 5,007,546                                  |   |  | 1,578,720 |   |  | 2,556,486 |  
|Tax exempt income and other permanent differences                             |  | (2,007,161                                 | ) |  | (566,347  | ) |  | (860,778  | )
|Investment tax credits                                                        |  | (931,664                                   | ) |  | (863,441  | ) |  | (355,923  | )
|Adjustment for deferred tax assets due to change of statutory tax rate        |  |                                           |   |  |          |   |  | 134,747   |  
|Under (over) provision from prior years                                       |  | 11,191                                     |   |  | (1,739    | ) |  | 22,375    |  
|Changes in allowance for deferred income tax assets                           |  | 25,673                                     |   |  | 63,330    |   |  | (74,349   | )
|Additional 10% tax on undistributed earnings                                  |  | 33,556                                     |   |  |          |   |  | 751       |  
|                                                                              |  |                                            |   |  |           |   |  |           |  
|Income tax expense                                                            |  | 2,139,141                                  |   |  | 210,523   |   |  | 1,423,309 |  
|Adjustments:                                                                  |  |                                            |   |  |           |   |  |           |  
|Net change of deferred income tax assets                                      |  | (575,108                                   | ) |  | 690,683   |   |  | (581,645  | )
|Directly debit shareholders equity                                           |  |                                           |   |  |          |   |  | 35,277    |  
|Increase in income tax payable                                                |  | (9,725                                     | ) |  | (33,987   | ) |  | (14,168   | )
|Prepaid and withholding tax                                                   |  | (52,652                                    | ) |  | (52,796   | ) |  | (13,601   | )
|Subsidiarys tax refund receivable (shown as other financial assets, current) |  |                                           |   |  | 7,455     |   |  | 179       |  
|                                                                              |  |                                            |   |  |           |   |  |           |  
|Income tax payable                                                            |  | 1,501,656                                  |   |  | 821,878   |   |  | 849,351   |  
|                                                                              |  |                                            |   |  |           |   |  |           |  
|Income tax payable (refund receivable) carried over from prior year           |  | (17,728                                    | ) |  |          |   |  | 7,270     |  
|                                                                              |  |                                            |   |  |           |   |  |           |  



| | A. | For the years ended December 31, 2007, 2008 and 2009, significant portion of the permanent differences were derived from the revenue from assembly of certain
integrated circuit products exempted from income tax, the income tax exemption of long-term investment income (loss) accounted for under the equity method and of capital gain resulted from the security transactions.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | As of December 31, 2008 and 2009, deferred income tax assets and liabilities were as follows:
| | -- | ---------------------------------------------------------------------------------------------



|                                                   |  |              |   |  |           |  
|-------------------------------------------------- |  | ------------ | - |  | --------- | -
|                                                   |  | December 31, |  
|                                                   |  | 2008         |   |  | 2009      |  
|                                                   |  | NT$          |   |  | NT$       |  
|Deferred income tax assets, current                |  | 425,761      |   |  | 799,410   |  
|                                                   |  |              |   |  |           |  
|                                                   |  |             
|Deferred income tax assets, noncurrent             |  | 2,460,298    |   |  | 1,410,247 |  
|Deferred income tax liabilities, noncurrent        |  | (142,017     | ) |  | (144,348  | )
|                                                   |  |              |   |  |           |  
|                                                   |  | 2,318,281    |   |  | 1,265,899 |  
|Valuation allowance for deferred income tax assets |  | (256,714     | ) |  | (159,694  | )
|                                                   |  |              |   |  |           |  
|                                                   |  | 2,061,567    |   |  | 1,106,205 |  
|                                                   |  |              |   |  |           |  



F-30



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



|C. | The details of deferred income tax assets and liabilities as of December 31, 2008 and 2009 were as follows:
|-- | -----------------------------------------------------------------------------------------------------------



|                                                                           |  |              |   |  |            |   |  |           |   |  |            |  
|-------------------------------------------------------------------------- |  | ------------ | - |  | ---------- | - |  | --------- | - |  | ---------- | -
|                                                                           |  | December 31, |  
|                                                                           |  | 2008         |   |  | 2009       |  
|                                                                           |  | Amount       |   |  | Tax effect |   |  | Amount    |   |  | Tax effect |  
|                                                                           |  | NT$          |   |  | NT$        |   |  | NT$       |   |  | NT$        |  
|Current :                                                                  |  |              |   |  |            |   |  |           |   |  |            |  
|Temporary differences                                                      |  |              |   |  |            |   |  |           |   |  |            |  
|Unrealized loss on obsolescence and decline in market value of inventories |  | 111,896      |   |  | 27,974     |   |  | 135,368   |   |  | 27,074     |  
|Unrealized sales allowance                                                 |  | 156,097      |   |  | 39,024     |   |  | 441,212   |   |  | 88,242     |  
|Unrealized foreign currency exchange loss                                  |  | 155,016      |   |  | 38,754     |   |  | 1,655     |   |  | 331        |  
|Allowance for doubtful accounts                                            |  | 233,422      |   |  | 58,355     |   |  | 218,944   |   |  | 43,789     |  
|Others                                                                     |  | 6,614        |   |  | 1,654      |   |  | 4,871     |   |  | 974        |  
|Investment tax credits                                                     |  |              |   |  | 260,000    |   |  |           |   |  | 639,000    |  
|                                                                           |  |              |   |  |            |   |  |           |   |  |            |  
|                                                                           |  |              |   |  | 425,761    |   |  |           |   |  | 799,410    |  
|                                                                           |  |              |   |  |            |   |  |           |   |  |            |  
|                                                                           |  |              |   | 
|Noncurrent :                                                               |  |              |   |  |            |   |  |           |   |  |            |  
|Temporary difference                                                       |  |              |   |  |            |   |  |           |   |  |            |  
|Impairment loss                                                            |  | 2,277,036    |   |  | 569,259    |   |  | 2,273,476 |   |  | 454,695    |  
|Depreciation expense                                                       |  | (568,069     | ) |  | (142,017   | ) |  | (545,356  | ) |  | (109,071   | )
|Unrealized gain arising from valuation for financial assets                |  |             |   |  |           |   |  | (176,384  | ) |  | (35,277    | )
|Unrealized asset - intercompany profit                                     |  | 21,933       |   |  | 5,483      |   |  | 51,946    |   |  | 10,389     |  
|Unrealized loss on idle assets                                             |  | 336,348      |   |  | 84,087     |   |  | 247,196   |   |  | 49,439     |  
|Others                                                                     |  | 4,321        |   |  | 1,080      |   |  | 5,268     |   |  | 1,055      |  
|Loss carryforwards                                                         |  | 219,118      |   |  | 27,390     |   |  | 109,850   |   |  | 12,083     |  
|Investment tax credits                                                     |  |              |   |  | 1,772,999  |   |  |           |   |  | 882,586    |  
|                                                                           |  |              |   |  |            |   |  |           |   |  |            |  
|                                                                           |  |              |   |  | 2,318,281  |   |  |           |   |  | 1,265,899  |  
|Allowance for deferred income tax assets                                   |  |              |   |  | (256,714   | ) |  |           |   |  | (159,694   | )
|                                                                           |  |              |   |  |            |   |  |           |   |  |            |  
|                                                                           |  |              |   |  | 2,061,567  |   |  |           |   |  | 1,106,205  |  
|                                                                           |  |              |   |  |            |   |  |           |   |  |            |  

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



|D. | The income tax returns of the Company have been assessed and approved by the Tax Authority through 2007.
|-- | --------------------------------------------------------------------------------------------------------



|E. | SICs income tax returns have been assessed and approved by the Tax Authority through 2009.
|-- | -------------------------------------------------------------------------------------------



|F. | According to the amended Enterprise of Income Tax Law of the Peoples Republic of China, effective January 1, 2008, Siliconware Technology (Suzhou) Limited that is
eligible for five-year tax holiday would be qualified for a five-year transition period to move up its tax rate to 25%. 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.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



|G. | As of December 31, 2009, the Companys unused portion of investment tax credits, under the Statue for Upgrading Industries, were as follow:
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------



|                                                       |  |                  |  |              |  |                
|------------------------------------------------------ |  | ---------------- |  | ------------ |  | ---------------
|Nature of investment tax credit                        |  | Deductibleamount |  | Unusedamount |  | Expirationyears
|                                                       |  | NT$              |  | NT$          |  |                
|Acquisition cost of qualifying machinery and equipment |  | 1,516,349        |  | 913,038      |  | 2010 to 2013   
|Qualifying research and development expenditure        |  | 864,366          |  | 608,548      |  | 2011 to 2013   
|                                                       |  |                  |  |              |  |                
|                                                       |  | 2,380,715        |  | 1,521,586    |  |                
|                                                       |  |                  |  |              |  |                



|H. | As of December 31, 2009, the unused loss carryforward of Siliconware Technology (Suzhou) Ltd. was as follow:
|-- | ------------------------------------------------------------------------------------------------------------



|                       |  |                  |  |               
|---------------------- |  | ---------------- |  | --------------
|Years of loss incurred |  | Deductibleamount |  | Expirationyear
|                       |  | NT$              |  |               
|2006                   |  | 12,083           |  | 2011          
|                       |  |                  |  |               



|I. | The Company has met the requirement of Incentives for Emerging Important Strategic Industries in Manufacturing and Technology Services for its
capitalization plans in 2004, 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 periods from 2006 and 2008, respectively. The five-year income tax
exemptions will expire in December 2010, 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.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21. Earnings Per Share



|                                              |  |                                      |  |                                        |  |                    |            |                 |           |     
|--------------------------------------------- |  | ------------------------------------ |  | -------------------------------------- |  | ------------------ | ---------- | --------------- | --------- | ----
|                                              |  | For the year ended December 31, 2007
|                                              |  | Income                               |  | Weightedaverageoutstandingcommon stock |  | Earnings per share
|                                              |  | Before tax                           |  | After tax                              |  |                    | Before tax |                 | After tax
|                                              |  | NT$                                  |  | NT$                                    |  | (in thousand)      |            | (in NT dollars)
|                                              |  |                                      |  |                                        |  | (Note)             |            |                
|Basic earnings per share                      |  |                                      |  |                                        |  |                    |            |                 |           |     
|Net income                                    |  | 19,628,492                           |  | 17,489,351                             |  | 3,092,309          |            | 6.35            |           | 5.66
|                                              |  |                                      |  |                                        |  |                    |            |                 |           |     
|Dilutive effect of employee stock option      |  |                                     |  |                                       |  | 3,624              |            |                 |           |     
|Dilutive effect of 3rd Euro convertible bonds |  | 51,606                               |  | 51,365                                 |  | 19,416             |            |                 |           |     
|                                              |  |                                      |  |                                        |  |                    |            |                 |           |     
|Diluted earnings per share                    |  | 19,680,098                           |  | 17,540,716                             |  | 3,115,349          |            | 6.32            |           | 5.63
|                                              |  |                                      |  |                                        |  |                    |            |                 |           |     

Note: Companys common stocks held by SIC are
deducted during the calculation of weighted average outstanding common stock.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



|                                         |  |                                      |  |                                        |  |                    |            |                 |           |     
|---------------------------------------- |  | ------------------------------------ |  | -------------------------------------- |  | ------------------ | ---------- | --------------- | --------- | ----
|                                         |  | For the year ended December 31, 2008
|                                         |  | Income                               |  | Weightedaverageoutstandingcommon stock |  | Earnings per share
|                                         |  | Before tax                           |  | After tax                              |  |                    | Before tax |                 | After tax
|                                         |  | NT$                                  |  | NT$                                    |  | (in thousand)      |            | (in NT dollars)
|                                         |  |                                      |  |                                        |  | (Note)             |            |                 |           |     
|Basic earnings per share                 |  |                                      |  |                                        |  |                    |            |                 |           |     
|Net income                               |  | 6,524,053                            |  | 6,313,530                              |  | 3,115,321          |            | 2.09            |           | 2.03
|                                         |  |                                      |  |                                        |  |                    |            |                 |           |     
|Dilutive effect of employee bonuses      |  |                                     |  |                                       |  | 24,125             |            |                 |           |     
|Dilutive effect of employee stock option |  |                                     |  |                                       |  | 13                 |            |                 |           |     
|                                         |  |                                      |  |                                        |  |                    |            |                 |           |     
|Diluted earnings per share               |  | 6,524,053                            |  | 6,313,530                              |  | 3,139,459          |            | 2.08            |           | 2.01
|                                         |  |                                      |  |                                        |  |                    |            |                 |           |     

Note: Companys common stocks held by SIC are
deducted during the calculation of weighted average outstanding common stock.



|                                    |  |                                      |  |                                        |  |                    |            |                 |           |     
|----------------------------------- |  | ------------------------------------ |  | -------------------------------------- |  | ------------------ | ---------- | --------------- | --------- | ----
|                                    |  | For the year ended December 31, 2009
|                                    |  | Income                               |  | Weightedaverageoutstandingcommon stock |  | Earnings per share
|                                    |  |                                      | 
|                                    |  |                                      | 
|                                    |  | Before tax                           |  | After tax                              |  |                    | Before tax |                 | After tax
|                                    |  | NT$                                  |  | NT$                                    |  | (in thousand)      |            | (in NT dollars)
|Basic earnings per share            |  |                                      |  |                                        |  |                    |            |                 |           |     
|Net income                          |  | 10,213,138                           |  | 8,789,829                              |  | 3,116,361          |            | 3.28            |           | 2.82
|                                    |  |                                      |  |                                        |  |                    |            |                 |           |     
|Dilutive effect of employee bonuses |  |                                     |  |                                       |  | 21,912             |            |                 |           |     
|                                    |  |                                      |  |                                        |  |                    |            |                 |           |     
|Diluted earnings per share          |  | 10,213,138                           |  | 8,789,829                              |  | 3,138,273          |            | 3.25            |           | 2.80
|                                    |  |                                      |  |                                        |  |                    |            |                 |           |     

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. However, the accounting treatment for the
appropriation of employees bonus for 2007 earnings resolved at the stockholders meeting held in 2008 is still in accordance with the regulations on capitalization of employees bonus under paragraphs 19 and 39 of R.O.C. SFAS
No. 24, Earnings per Share.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



22. Personnel Costs, Depreciation and Amortization



|                           |  |                                      |  |                    |  |           
|-------------------------- |  | ------------------------------------ |  | ------------------ |  | ----------
|                           |  | For the year ended December 31, 2007
|                           |  | Operating costs                      |  | Operating expenses |  | Total     
|                           |  | NT$                                  |  | NT$                |  | NT$       
|Personnel Cost             |  |                                      |  |                    |  |           
|Payroll                    |  | 5,776,433                            |  | 1,361,554          |  | 7,137,987 
|Labor and health insurance |  | 442,716                              |  | 102,638            |  | 545,354   
|Pension expense            |  | 274,920                              |  | 68,238             |  | 343,158   
|Other                      |  | 603,523                              |  | 133,000            |  | 736,523   
|                           |  |                                      |  |                    |  |           
|                           |  | 7,097,592                            |  | 1,665,430          |  | 8,763,022 
|                           |  |                                      |  |                    |  |           
|Depreciation               |  | 7,371,429                            |  | 232,484            |  | 7,603,913 
|                           |  |                                      |  |                    |  |           
|Amortization               |  | 419,864                              |  | 135,209            |  | 555,073   
|                           |  |                                      |  |                    |  |           
|                           | 
|                           |  | For the year ended December 31, 2008
|                           |  | Operating costs                      |  | Operating expenses |  | Total     
|                           |  | NT$                                  |  | NT$                |  | NT$       
|Personnel Cost             |  |                                      |  |                    |  |           
|Payroll                    |  | 6,586,012                            |  | 1,766,164          |  | 8,352,176 
|Labor and health insurance |  | 495,590                              |  | 109,989            |  | 605,579   
|Pension expense            |  | 309,474                              |  | 73,599             |  | 383,073   
|Other                      |  | 547,882                              |  | 124,923            |  | 672,805   
|                           |  |                                      |  |                    |  |           
|                           |  | 7,938,958                            |  | 2,074,675          |  | 10,013,633
|                           |  |                                      |  |                    |  |           
|Depreciation               |  | 8,632,102                            |  | 213,123            |  | 8,845,225 
|                           |  |                                      |  |                    |  |           
|Amortization               |  | 478,892                              |  | 104,733            |  | 583,625   
|                           |  |                                      |  |                    |  |           
|                           | 
|                           |  | 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   
|                           |  |                                      |  |                    |  |           



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



23. Related Party Transactions



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



|                                               |  |                                                                
|---------------------------------------------- |  | ---------------------------------------------------------------
|Name of related parties                        |  | Relationship with the Company                                  
|Phoenix Precision Technology Corporation (PPT) |  | The Company holds directorship (Note 1)                        
|                                               | 
|Sigurd Microelectronics Corporation            |  | The Company holds directorship (Note 2)                        
|                                               | 
|ChipMOS Technologies Inc.                      |  | Investee company accounted for under the equity method (Note 3)
|                                               | 
|Pei-Sheng Fundation                            |  | Same chairman of the board of the directors                    

Note 1: PPT merged with Unimicron on December 1, 2009 and PPT is the dissolved entity. Therefore, the named company ceased to be a
related party of the Company commencing December 1, 2009.

Note 2: The Company resigned its position as a director on
November 9, 2007. The named company ceased to be a related party of the Company.

Note 3: The Company disposed all of its
ownership on March 27, 2007. The named company ceased to be a related party of the Company.



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



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



|                                    |  |                                  |  |              |  |        |  |              |  |        |  |             
|----------------------------------- |  | -------------------------------- |  | ------------ |  | ------ |  | ------------ |  | ------ |  | ------------
|                                    |  | For the years ended December 31,
|                                    |  | 2007                             |  | 2008         |  | 2009  
|                                    |  | Amount                           |  | % ofnet sale |  | Amount |  | % ofnet sale |  | Amount |  | % ofnet sale
|                                    |  | NT$                              |  |              |  | NT$    |  |              |  | NT$    |  |             
|Sigurd Microelectronics Corporation |  | 223,991                          |  |             |  |       |  |             |  |       |  |            
|                                    |  |                                  |  |              |  |        |  |              |  |        |  |             

The sales price and payment terms provided to related
party were generally comparable to those provided to non-related parties. The average collection period is approximately three months from the date of sales, which is comparable to those provided to non-related parties.



| | (2) | Purchases
| | --- | ---------



|                                         |  |                                  |  |                  |  |           |  |                  |  |           |  |                 
|---------------------------------------- |  | -------------------------------- |  | ---------------- |  | --------- |  | ---------------- |  | --------- |  | ----------------
|                                         |  | For the years ended December 31,
|                                         |  | 2007                             |  | 2008             |  | 2009     
|                                         |  | Amount                           |  | % of netpurchase |  | Amount    |  | % of netpurchase |  | Amount    |  | % of netpurchase
|                                         |  | NT$                              |  |                  |  | NT$       |  |                  |  | NT$       |  |                 
|Phoenix Precision Technology Corporation |  | 2,544,206                        |  | 9                |  | 2,093,426 |  | 8                |  | 2,084,971 |  | 7               
|                                         |  |                                  |  |                  |  |           |  |                  |  |           |  |                 

The purchase prices provided by Phoenix Precision
Technology Corporation were generally comparable to those provided by non-related parties. The average payment period is approximately three months from the date of purchase, which is comparable to those provided by non-related parties.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (3) | Accounts payable
| | --- | ----------------



|                                         |  |              |  |                     |  |        |  |                    
|---------------------------------------- |  | ------------ |  | ------------------- |  | ------ |  | -------------------
|                                         |  | December 31,
|                                         |  | 2008         |  | 2009               
|                                         |  | Amount       |  | % ofaccountspayable |  | Amount |  | % ofaccountspayable
|                                         |  | NT$          |  |                     |  | NT$    |  |                    
|Phoenix Precision Technology Corporation |  | 435,777      |  | 9                   |  |       |  |                   
|                                         |  |              |  |                     |  |        |  |                    



| | (4) | Other Expenses / Other Payables
| | --- | -------------------------------



|                                         |  |                                            |  |               |  |               |  |               |  |               |  |              
|---------------------------------------- |  | ------------------------------------------ |  | ------------- |  | ------------- |  | ------------- |  | ------------- |  | -------------
|                                         |  | As of and for the years ended December 31,
|                                         |  | 2007                                       |  | 2008          |  | 2009         
|                                         |  | Otherexpenses                              |  | Otherpayables |  | Otherexpenses |  | Otherpayables |  | Otherexpenses |  | Otherpayables
|                                         |  | NT$                                        |  | NT$           |  | NT$           |  | NT$           |  | NT$           |  | NT$          
|Phoenix Precision Technology Corporation |  | 16,839                                     |  | 3,489         |  | 12,284        |  | 1,733         |  | 7,201         |  |             
|                                         |  |                                            |  |               |  |               |  |               |  |               |  |              

The purchase prices and payment terms provided by
related parties were generally comparable to those provided by non-related parties. The average payment period is approximately three months from the date of purchase, which is comparable to those provided by non-related parties.



| | (5) | Property Transaction
| | --- | --------------------



|                    |  |                                      |  |                   |  |           |  |                                                 |  
|------------------- |  | ------------------------------------ |  | ----------------- |  | --------- |  | ----------------------------------------------- | -
|                    |  | For the year ended December 31, 2007 | 
|                    |  | Name of theproperty                  |  | Transactionamount |  | Bookvalue |  | Loss on disposal ofproperty, plantand equipment |  
|                    |  |                                      |  | NT$               |  | NT$       |  | NT$                                             |  
|Pei-Sheng Fundation |  | Land                                 |  | 132,391           |  | 159,740   |  | (27,349                                         | )
|                    |  | Buildings                            |  | 49,336            |  | 54,610    |  | (5,274                                          | )
|                    |  |                                      |  |                   |  |           |  |                                                 |  
|                    |  |                                      |  | 181,727           |  | 214,350   |  | (32,623                                         | )
|                    |  |                                      |  |                   |  |           |  |                                                 |  



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (6) | Salaries / Remunerations Paid to Directors, Supervisors, and Managements
| | --- | ------------------------------------------------------------------------



|                            |  |                                  |  |         |  |        
|--------------------------- |  | -------------------------------- |  | ------- |  | -------
|                            |  | For the years ended December 31,
|                            |  | 2007                             |  | 2008    |  | 2009   
|                            |  | NT$                              |  | NT$     |  | NT$    
|Salary                      |  | 53,669                           |  | 53,917  |  | 54,394 
|Remuneration / compensation |  | 16,016                           |  | 14,178  |  | 35,333 
|Operating expenses          |  | 588                              |  | 474     |  | 506    
|Earnings distribution       |  | 462,362                          |  | 137,475 |  | 145,620
|                            |  |                                  |  |         |  |        
|                            |  | 532,635                          |  | 206,044 |  | 235,853
|                            |  |                                  |  |         |  |        



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



| | ii. | Compensation includes various kinds of bonuses, 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 remunerations and employees bonuses recognized for the current period.
| | --- | -------------------------------------------------------------------------------------------------------------------------------



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

24. Assets Pledged as Collaterals

As of December 31, 2008 and 2009 the following assets have been pledged as collaterals against certain obligations of the Company:



|                                                         |  |              |  |         |  |                             
|-------------------------------------------------------- |  | ------------ |  | ------- |  | ----------------------------
|                                                         |  | December 31, |  |        
|Assets                                                   |  | 2008         |  | 2009    |  | Subject of collateral       
|                                                         |  | NT$          |  | NT$     |  |                             
|Time deposits (shown as other financial assets, current) |  | 278,600      |  | 278,600 |  | Guarantees for custom duties
|                                                         |  |              |  |         |  |                             

25. Commitments and Contingencies



| | A. | For the needs of its future operation, the Company entered into several purchase agreements amounting to NT$3,042,000, of which NT$1,442,000 remained unpaid as of
December 31, 2009.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | The Company entered into several contracts with six foreign companies for the use of certain technologies and patents. The Company agreed to pay royalty fees based on
the total number of certain products sold. Contracts are valid through January 2010, December 2010, March 2012, May 2014 and May 2018, until all patents included in the contracts expire and until both parties agree to terminate the
contracts, respectively,.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | On March 1, 2006, the Company was 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 the Company, its 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 the Company has 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, the Company 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 the Company in the California Litigation. The PTO has rejected all of the asserted patent claims on the grounds that each claim is invalid in view of certain prior art. Tessera has
appealed some of these devisions to the Board of Patent Appeals and Interferences. On April 21, 2008, Tessera filed a complaint with ITC pursuant to §337 of the Tariff Act of 1930 against the Company, its subsidiary Siliconware U.S.A.,
Inc. and other semiconductor companies, alleging infringement of patents, all of which are being litigated in the California Litigation and reexamined by the PTO. The ITC instituted an investigation, on May 21, 2008. On March 12, 2009,
Tessera requested to terminate the investigation. On August 7, 2009, the ITC Commission agreed to the termination request and the investigation was closed.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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

26. Significant Disaster Loss

None.

27. Significant
Subsequent Event



| | A. | On February 26, 2010, the Companys Board of Directors resolved to sell certain equipment to ChipMOS Technologies Inc. (ChipMOS Taiwan). Proceeds of the
transaction totaled NT$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 the same day. Under the terms of the equipment purchase / sales agreement, the Company commits not to build up capacity for DRAM testing and LCD driver assembling and testing services within five years from February 26, 2010.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | On February 26, 2010, the Companys Board of Directors also resolved to purchase 133,000 thousand common shares of ChipMOS Taiwan from ChipMOS
Technologies (Bermuda) Ltd. (ChipMOS Bermuda). ChipMOS Taiwan is a 100% owned subsidiary of ChipMOS Bermuda. The share purchase represents approximately 15.77% of the outstanding shares of ChipMOS Taiwan. Consideration of the share purchase totaled
NT$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 the same day.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

28. Other



| | A. | Presentation of Consolidated Financial Statements:
| | -- | --------------------------------------------------

Certain accounts in 2007 and 2008 consolidated financial statements have been reclassified to conform to the 2009 consolidated financial
statement presentation.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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



|                                                          |  |              |  |                              |  |                                    |  |            |  |                              |  |                                    
|--------------------------------------------------------- |  | ------------ |  | ---------------------------- |  | ---------------------------------- |  | ---------- |  | ---------------------------- |  | -----------------------------------
|                                                          |  | December 31,
|                                                          |  | 2008         |  | 2009                        
|                                                          |  |              |  | Fair Value                   |  |                                    |  | Fair Value
|Non-derivative financial instruments:                     |  | Book Value   |  | Quotation in anactive market |  | Estimatedusing
avaluationtechnique |  | Book Value |  | Quotation in anactive market |  | Estimatedusing 
avaluationtechnique
|                                                          |  | NT$          |  | NT$                          |  | NT$                                |  | NT$        |  | NT$                          |  | NT$                                
|Financial assets                                          |  |              |  |                              |  |                                    |  |            |  |                              |  |                                    
|Financial assets with book value equal to fair value      |  | 26,652,044   |  |                             |  | 26,652,044                         |  | 31,425,800 |  |                             |  | 31,425,800                         
|Available-for-sale financial assets, noncurrent           |  | 1,075,480    |  | 1,075,480                    |  |                                   |  | 3,825,793  |  | 3,825,793                    |  |                                   
|Financial assets carried at cost, noncurrent              |  | 322,036      |  |                             |  |                                   |  | 315,394    |  |                             |  |                                   
|                                                          |  |              |  |                              |  |                                    |  |            |  |                              |  |                                    
|                                                          |  | 28,049,560   |  | 1,075,480                    |  | 26,652,044                         |  | 35,566,987 |  | 3,825,793                    |  | 31,425,800                         
|                                                          |  |              |  |                              |  |                                    |  |            |  |                              |  |                                    
|                                                          |  |              |  |                              |  |                                   
|Financial liabilities                                     |  |              |  |                              |  |                                    |  |            |  |                              |  |                                    
|Financial liabilities with book value equal to fair value |  | 10,837,281   |  |                             |  | 10,837,281                         |  | 14,872,398 |  |                             |  | 14,872,398                         
|Long-term loans (including current portion)               |  | 2,997,419    |  |                             |  | 3,053,716                          |  |           |  |                             |  |                                   
|                                                          |  |              |  |                              |  |                                    |  |            |  |                              |  |                                    
|                                                          |  | 13,834,700   |  |                             |  | 13,890,997                         |  | 14,872,398 |  |                             |  | 14,872,398                         
|                                                          |  |              |  |                              |  |                                    |  |            |  |                              |  |                                    

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 costs as there is no active quoted market prices and the fair value cannot be measured fairly.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The fair value of long-term loans, including current portion of long-term loans, is estimated by the discounted future cash flows. The discount rate of 1.011% for 2008
is based on the interest rate of the similar long-term loan, which the Company would have acquired.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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

As of December 31, 2008 and 2009, the Company and its subsidiaries financial assets with fair value risk of interest rate
fluctuation were NT$17,824,290 and NT$18,116,342, respectively. As of December 31, 2008 and 2009, the Company and its subsidiaries financial liabilities with fair value risk of interest rate fluctuation were NT$3,652,352 and NT$225,488,
respectively. As of December 31, 2008 and 2009, the Company and its subsidiaries did not have financial assets and liabilities with cash flow risk of interest rate fluctuation.



| | D. | Financial assets and liabilities whose changes in fair value are not recognized in earnings:
| | -- | --------------------------------------------------------------------------------------------

The Company and its subsidiaries interest incomes from financial assets whose changes in fair value were not recognized in earnings
were NT$368,610, NT$366,086 and NT$49,221, respectively, for the years ended December 31, 2007, 2008 and 2009. The Company and its subsidiaries interest expenses from financial liabilities whose changes in fair value were not recognized
in earnings were NT$90,294, NT$89,017 and NT$36,850, respectively, for the years ended December 31, 2007, 2008 and 2009. Available-for-sale financial assets are measured at fair value at balance sheet date. For the years ended December 31,
2007, 2008 and 2009, balance of the increase (decrease) to the shareholders equity due to changes in fair value were NT$2,085,514, NT($3,797,804) and NT$2,715,036, respectively. Unrealized gain (unrealized loss) on available-for-sale financial
assets reclassified from equity to current earnings were NT$1,519,146, NT($2,637,145) and NT$1,947,879, respectively, for the years ended December 31, 2007, 2008 and 2009.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | E. | 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.



| | F. | Financial risk information:
| | -- | ---------------------------



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



|                                    |  |              |  |          
|----------------------------------- |  | ------------ |  | ---------
|                                    |  | December 31,
|                                    |  | 2008         |  | 2009     
|                                    |  | NT$          |  | NT$      
|Available-for-sale financial assets |  | 1,075,480    |  | 3,825,793
|Financial assets carried at cost    |  | 322,036      |  | 315,394  
|                                    |  |              |  |          
|                                    |  | 1,397,516    |  | 4,141,187
|                                    |  |              |  |          



| | (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 and its
subsidiaries have evaluated counter parties credit condition each time when the Company and its subsidiaries 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 and its subsidiaries are 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 and its subsidiaries investments in equity financial assets are non-interest related. As a result, there is no cash
flow risk of interest rate.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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



|                 |  |              |  |        
|---------------- |  | ------------ |  | -------
|                 |  | December 31,
|                 |  | 2008         |  | 2009   
|                 |  | NT$          |  | NT$    
|Short-term loans |  | 654,933      |  | 225,488
|Long-term loans  |  | 2,997,419    |  |       
|                 |  |              |  |        
|                 |  | 3,652,352    |  | 225,488
|                 |  |              |  |        



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

The Company and
its subsidiaries loans are fixed interest rate for short-term and long-term loans, so there is no market risk of interest rate fluctuating.



| | (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. Therefore, there is no significant liquidity risk.



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

The Company and its subsidiaries loans are fixed interest rate borrowing. Therefore, there is no cash flow risk of interest rate.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



29. 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, 2009: None.



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

For the year ended December 31, 2009: None.



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

As of December 31, 2009:



|                                           |  |                   |  |                                     |  |                                                |  |                                                             |  |                               |   |  |            |  |                       |   |  |                                   |  |                
|------------------------------------------ |  | ----------------- |  | ----------------------------------- |  | ---------------------------------------------- |  | ----------------------------------------------------------- |  | ----------------------------- | - |  | ---------- |  | --------------------- | - |  | --------------------------------- |  | ---------------
|Investor                                   |  | Type ofsecurities |  | Name of securities                  |  | The relationshipof the
issuerswith the Company |  | General ledgeraccounts                                      |  | Numberof
shares(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 |  | 98,400                        |   |  | 3,637,473  |  | 100.00                | % |  | 36.97                             |  | (Notes 3 and 5)
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  | Stock             |  | Unimicron Technology Corporation    |  |                                               |  | Available-for-sale financial assets, noncurrent             |  | 76,502                        |   |  | 3,549,696  |  | 4.94                  | % |  | 46.40                             |  |                
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  | Stock             |  | ChipMOS Technologies (Bermuda) Ltd. |  |                                               |  | Available-for-sale financial assets, noncurrent             |  | 12,175                        |   |  | 276,097    |  | 14.50                 | % |  | 22.68                             |  | (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                  | % |  | 8.33                              |  | (Note 3)       
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  |                  |  | Mega Mission Limited Partnership    |  |                                               |  | Financial assets, carried at cost, noncurrent               |  | (Note 2                       | ) |  | 132,063    |  | 4.00                  | % |  |                                  |  |                
|                                           |  |                   |  |                                     |  |                                                |  |                                                             | 
|Siliconware Precision Industries Co., Ltd. |  |                  |  | Others (Note 1)                     |  |                                               |  | Financial assets, carried at cost, noncurrent               |  |                              |   |  | 13,331     |  |                      |   |  |                                  |  |                



Note 1: The book value of individual marketable security does not exceed NT$100,000.

Note 2: The contributed capital was US $6,000 thousand.

Note 3: The market value is not available. Therefore, the net equity per share as of December 31, 2009 was used.

Note 4: The closing price of US$0.71 (in dollars) per share on December 31, 2009 was used. (Exchange rate at US$1: NT$31.94)

Note 5: Eliminated under consolidation.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (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, 2009:



|                                           |  |                               |  |                                                        |                                     |                           |        |                                             |                                     |                   |        |           |                                     |          |            |                |           |   |                          |     |                                     |     |                      |     |  |        |  |          
|------------------------------------------ |  | ----------------------------- |  | ------------------------------------------------------ | ----------------------------------- | ------------------------- | ------ | ------------------------------------------- | ----------------------------------- | ----------------- | ------ | --------- | ----------------------------------- | -------- | ---------- | -------------- | --------- | - | ------------------------ | --- | ----------------------------------- | --- | -------------------- | --- |  | ------ |  | ---------
|Investor                                   |  | Name of
the security          |  | General
ledger
accounts                                |                                     | Name
of
the
counter
party |        | Therelationshipof theissuerswith theCompany |                                     | Beginning balance |        | Addition  |                                     | Disposal |            | Ending balance
|                                           |  |                               |  |                                                        |                                     |                           |       
|                                           |  |                               |  |                                                        | Number ofshares
/unit (inthousands) |                           | Amount |                                             | Number
ofshares /unit
(inthousands) |                   | Amount |           | Number
ofshares /unit
(inthousands) |          | Salesprice |                | Bookvalue |   | Gain 
(loss)fromdisposal |     | Number
ofshares /unit (inthousands) |     | Amount(Notes 1and
2)
|                                           |  |                               |  |                                                        |                                     |                           |        |                                             |                                     |                   |        |           |                                    
|                                           |  |                               |  |                                                        |                                     |                           |        |                                             |                                     |                   |        |           |                                    
|                                           |  |                               |  |                                                        |                                     |                           |        |                                             |                                     |                   |        | NT$       |                                     |          |            | NT$            |           |   |                          | NT$ |                                     | NT$ |                      | NT$ |  |        |  | NT$      
|Siliconware Precision Industries Co., Ltd. |  | SPIL (B.V.I.) Holding Limited |  | Long-term investment accounted for under equity method |                                     | Capital increase by cash  |        |                                            |                                     | 88,400            |        | 3,167,712 |                                     | 10,000   |            | 331,100        |           |  |                          |    |                                     |    |                      |    |  | 98,400 |  | 3,637,473



Note 1: The ending balance includes the investment income and cumulative translation adjustments.

Note 2: Eliminated under consolidation.



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (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, 2009:



|                                 |  |                    |  |                   |  |                  |  |                                      |  |                            |  |                                                         |  |                                                     |  |                                |  |        |  |                                                |  |                                     |  |                                                
|-------------------------------- |  | ------------------ |  | ----------------- |  | ---------------- |  | ------------------------------------ |  | -------------------------- |  | ------------------------------------------------------- |  | --------------------------------------------------- |  | ------------------------------ |  | ------ |  | ---------------------------------------------- |  | ----------------------------------- |  | -----------------------------------------------
|                                 |  |                    |  |                   |  |                  |  |                                      |  |                            |  | Related party as counter party                          |  |                                                     |  |                                |  |       
|Name of theproperties            |  | Date oftransaction |  | Transactionamount |  | Status ofpayment |  | Counterparty                         |  | RelationshipwiththeCompany |  | Originalowner whichsold
theproperty to thecounter party |  | Therelationship ofthe originalowner
withthe Company |  | Date of theoriginaltransaction |  | Amount |  | The bases orreference usedin deciding theprice |  | Purpose andstatus of theacquisition |  | Othercommitment                                
|                                 |  |                    |  | NT$               |  | NT$              |  |                                      |  |                            |  |                                                         |  |                                                     |  |                                |  | NT$    |  |                                                |  |                                     |  |                                                
|Building / Building improvements |  | December2009       |  | 1,780,000         |  | 1,600,000        |  | PowerchipSemiconductorCorporation    |  |                           |  |                                                        |  |                                                    |  |                               |  |       |  | As specified in valuation report               |  | For operating use                   |  |                                               
|                                 |  |                    |  |                   |  |                  |  |                                      |  |                            |  |                                                        
|Building                         |  | December2009       |  | 824,000           |  |                 |  | Jun-BiauConstructionCorporationLtd.  |  |                           |  |                                                        |  |                                                    |  |                               |  |       |  | As specified in contract                       |  | For operating use                   |  | Payment made according to construction progress
|                                 |  |                    |  |                   |  |                  |  |                                      |  |                            |  |                                                        
|Building improvements            |  | December2009       |  | 438,000           |  |                 |  | Chung-RuiConstructionCorporationLtd. |  |                           |  |                                                        |  |                                                    |  |                               |  |       |  | As specified in contract                       |  | For operating use                   |  | Payment made according to construction progress



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (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, 2009: 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, 2009:



|                                           |  |                                          |  |                                       |  |                                |  |                                                                                                         |  |                                        |   |  |             |  |           |  |             |  |                        |  |                                                   |  
|------------------------------------------ |  | ---------------------------------------- |  | ------------------------------------- |  | ------------------------------ |  | ------------------------------------------------------------------------------------------------------- |  | -------------------------------------- | - |  | ----------- |  | --------- |  | ----------- |  | ---------------------- |  | ------------------------------------------------- | -
|                                           |  |                                          |  |                                       |  | Description of the transaction |  | Description of and reasons fordifference in transaction 
termscompared to non-relatedparty transactions |  | Notes or accounts receivable 
/payable |  
|Purchase /sales company                    |  | Name ofthe counter party                 |  | Relationship
with thecounter party    |  | Purchases/ sales               |  | Amount                                                                                                  |  | Percentageof netpurchases/ sales       |   |  | Creditterms |  | Unitprice |  | Creditterms |  | Amount                 |  | Percentage ofnotes or accountsreceivable /payable |  
|                                           |  |                                          |  |                                       |  |                                |  | NT$                                                                                                     |  |                                        |   |  |             |  | NT$       |  |             |  | NT$                    |  |                                                   |  
|Siliconware Precision Industries Co., Ltd. |  | Phoenix Precision Technology Corporation |  | The Company holds directorship (Note) |  | Purchases                      |  | 2,084,971                                                                                               |  | 7                                      | % |  | Threemonths |  |          |  |            |  | Accountspayable
      |  |                                                  |  
|                                           |  |                                          |  |                                       |  |                                |  |                                                                                                         |  |                                       
|Siliconware Precision Industries Co., Ltd. |  | Siliconware Technology (Suzhou) Limited  |  | Indirect subsidiary of the Company    |  | Purchases                      |  | 347,248                                                                                                 |  | 1                                      | % |  | Threemonths |  |          |  |            |  | Accountspayable189,952 |  | 2                                                 | %



Note: PPT merged with Unimicron on December 1, 2009 and PPT is the dissolved entity. Therefore, PPT ceased to be a related party for
the Company commencing December 1, 2009.



| | (8) | Receivables from related parties exceeding the lower of NT$100,000 or 20 percent of the capital stock:
| | --- | ------------------------------------------------------------------------------------------------------

As of December 31, 2009: None.



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

For the year ended December 31, 2009: None.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(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, 2009:



|                                           |  |                                         |  |                                    |  |                                                                                           |  |                            |  |                                             |  |                      |   |  |                     |   |  |            |  |                       |  |                               |  |                      
|------------------------------------------ |  | --------------------------------------- |  | ---------------------------------- |  | ----------------------------------------------------------------------------------------- |  | -------------------------- |  | ------------------------------------------- |  | -------------------- | - |  | ------------------- | - |  | ---------- |  | --------------------- |  | ----------------------------- |  | ---------------------
|                                           |  |                                         |  |                                    |  |                                                                                           |  | Original investments       |  | The Company / majorityowned subsidiary
owns |  | Current period       |   | 
|Investor                                   |  | Name of Investee                        |  | Location                           |  | Main activities                                                                           |  | Currentperiodendingbalance |  | Priorperiodendingbalance                    |  | Shares(in thousands) |   |  | OwnershipPercentage |   |  | Book value |  | Net incomeof investee |  | Incomerecognizedby
theCompany |  | Note                 
|                                           |  |                                         |  |                                    |  |                                                                                           |  | NT$                        |  | NT$                                         |  |                      |   |  |                     |   |  | NT$        |  | NT$                   |  | NT$                           |  |                      
|Siliconware Precision Industries Co., Ltd. |  | Double Win Enterprise Co., Ltd.         |  | Ping-chen City, Taoyuan            |  | SMT process and hand insert                                                               |  |                           |  | 152,100                                     |  |                     |   |  |                    |   |  |           |  |                      |  |                              |  | (Note 1)             
|Siliconware Precision Industries Co., Ltd. |  | SPIL (B.V.I.) Holding Limited           |  | British Virgin Islands             |  | Investment activities                                                                     |  | 3,142,896                  |  | 2,823,496                                   |  | 98,400               |   |  | 100.00              | % |  | 3,637,473  |  | 226,951               |  | 226,951                       |  | (Notes 1, 2, 7 and 8)
|SPIL (B.V.I.) Holding Limited              |  | Siliconware USA, Inc.                   |  | San Jose, CA, USA                  |  | Communications and relationship maintenance with companies headquartered in North America |  | 39,925                     |  | 39,925                                      |  | 1,250                |   |  | 100.00              | % |  | 143,937    |  | 4,006                 |  | 4,006                         |  | (Notes 3, 7 and 8)   
|SPIL (B.V.I.) Holding Limited              |  | SPIL (Cayman) Holding Limited           |  | Cayman Islands, British West India |  | Investment activities                                                                     |  | 3,200,388                  |  | 2,880,988                                   |  | 100,200              |   |  | 100.00              | % |  | 3,483,293  |  | 223,034               |  | 223,034                       |  | (Notes 3, 7 and 8)   
|SPIL (Cayman) Holding Limited              |  | Siliconware Technology (Suzhou) Limited |  | Suzhou Jiangsu, China              |  | Assembly and testing service providing                                                    |  | 3,194,000                  |  | 2,874,600                                   |  | (Note 5              | ) |  | 100.00              | % |  | 3,481,359  |  | 226,495               |  | 223,792                       |  | (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.

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$100,000.

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



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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, 2009:



|                              |  |                   |  |                                         |  |                                                |  |                                                             |  |                               |   |  |                          |  |                       |   |  |                                          
|----------------------------- |  | ----------------- |  | --------------------------------------- |  | ---------------------------------------------- |  | ----------------------------------------------------------- |  | ----------------------------- | - |  | ------------------------ |  | --------------------- | - |  | -----------------------------------------
|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                         |   |  | 143,937                  |  | 100.00                | % |  | 115.15                                   
|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 |  | 100,200                       |   |  | 3,483,293                |  | 100.00                | % |  | 34.76                                    
|SPIL (Cayman) Holding Limited |  |                  |  | Siliconware Technology (Suzhou) Limited |  | Indirect subsidiary of the Company             |  | Long-term investments accounted for under the equity method |  | (Note 1                       | ) |  | 3,481,359                |  | 100.00                | % |  |                                         



Note 1: The contributed capital was US$100,000 thousand.

Note 2: The market value is not available. Therefore, the net equity per share as of December 31, 2009 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.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (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, 2009:



|                              |  |                                         |  |                                                             |  |                          |  |                                             |                                      |                   |   |                |           |                                      |         |                |                |         |                                      |   |            |     |           |     |                        |     |                                      |         |   |                         |          
|----------------------------- |  | --------------------------------------- |  | ----------------------------------------------------------- |  | ------------------------ |  | ------------------------------------------- | ------------------------------------ | ----------------- | - | -------------- | --------- | ------------------------------------ | ------- | -------------- | -------------- | ------- | ------------------------------------ | - | ---------- | --- | --------- | --- | ---------------------- | --- | ------------------------------------ | ------- | - | ----------------------- | ---------
|                              |  |                                         |  |                                                             |  |                          |  | Therelationshipof
theissuerswith theCompany |                                      | Beginning balance |   | Addition       |           | Disposal                             |         | Ending balance
|Investor                      |  | Name
of thesecurity                     |  | Generalledgeraccounts                                       |  | Name
of thecounterparty  |  |                                             | Number ofshares / unit(in thousands) |                   |   | Amount(Note 5) |           | Number ofshares / unit(in thousands) |         |                | Amount(Note 5) |         | Number ofshares / unit(in thousands) |   | Salesprice |     | Bookvalue |     | Gain(loss)fromdisposal |     | Number
ofshares / unit(in thousands) |         |   | Amount(Notes 4,5 and 6)
|                              |  |                                         |  |                                                             |  |                          |  |                                             |                                      |                   |   |                | NT$       |                                      |         |                |                | NT$     |                                      |   |            | NT$ |           | NT$ |                        | NT$ |                                      |         |   |                         | NT$      
|SPIL (B.V.I.) Holding Limited |  | SPIL (Cayman) Holding Limited           |  | Long-term investments accounted for under the equity method |  | Capital increase by cash |  |                                            |                                      | 90,200            |   |                | 2,880,988 |                                      | 10,000  |                |                | 319,400 |                                      |  |            |    |           |    |                        |    |                                      | 100,200 |   |                         | 3,483,293
|SPIL (Cayman) Holding Limited |  | Siliconware Technology (Suzhou) Limited |  | Long-term investments accounted for under the equity method |  | Capital increase by cash |  |                                            |                                      | (Note 1           | ) |                | 2,874,600 |                                      | (Note 2 | )              |                | 319,400 |                                      |  |            |    |           |    |                        |    |                                      | (Note 3 | ) |                         | 3,481,359



Note 1: The contributed capital was US$90,000 thousand.

Note 2: The contributed capital was US$10,000 thousand.

Note 3: The contributed capital was US$100,000 thousand.

Note 4: The ending balance includes the investment income and cumulative translation adjustments.

Note 5: The foreign currency exchange rates prevailing at the balance sheet date were used for the currency translation.

Note 6: Eliminated under consolidation.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (4) | 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, 2009: None.

C. Information of investment in Mainland China:



| | (1) | Information of investment in Mainland China: (The amount in USD is presented in thousands.)
| | --- | -------------------------------------------------------------------------------------------



|                                        |  |                                        |  |                       |   |  |                  |   |  |                                           |   |  |                                |   |  |                                             |   |  |                                                 |  
|--------------------------------------- |  | -------------------------------------- |  | --------------------- | - |  | ---------------- | - |  | ----------------------------------------- | - |  | ------------------------------ | - |  | ------------------------------------------- | - |  | ----------------------------------------------- | -
|Name of investee in Mainland China      |  | Main activities of investee            |  | Capital               |   |  | Investmentmethod |   |  | Accumulatedremittance asof January 1,2009 |   |  | Remitted(collected)this period |   |  | Accumulatedremittance as ofDecember 31,2009 |   |  | Ownershipheld by theCompany(Direct andindirect) |  
|                                        |  |                                        |  | NT$                   |   |  |                  |   |  | NT$                                       |   |  | NT$                            |   |  | NT$                                         |   |  |                                                 |  
|Siliconware Technology (Suzhou) Limited |  | Assembly and testing service providing |  | 3,194,000(US$ 100,000 | ) |  | (Note 1          | ) |  | 2,874,600(US$90,000                       | ) |  | 319,400(US$10,000              | ) |  | 3,194,000(US$ 100,000                       | ) |  | 100                                             | %
|                                        |  |                                        |  | (Note 3               | ) |  |                  |   |  | (Note 3                                   | ) |  | (Note 3                        | ) |  | (Note 3                                     | ) |  |                                                 |  



|                                                                  |  |                             |   |  |                                                                 |  |                                                   |   |  |                                                                                   |   |  |                                                                                                        |  
|----------------------------------------------------------------- |  | --------------------------- | - |  | --------------------------------------------------------------- |  | ------------------------------------------------- | - |  | --------------------------------------------------------------------------------- | - |  | ------------------------------------------------------------------------------------------------------ | -
|                                                                  |  |                             |   |  |                                                                
|Investmentincome (loss)recognized by theCompanyduring the 
period |  | Ending balanceof investment |   |  | The investmentincome
(loss)remitted back as ofDecember 31, 2009 |  | 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$                                                                                                    |  
|223,792                                                           |  | 3,481,359                   |   |  |                                                                |  | 3,194,000                                         |   |  | 4,152,200                                                                         |   |  | (Note 5                                                                                                | )
|(Notes 2,3 and 4)                                                 |  | (Notes 3and 4               | ) |  |                                                                 |  | (US$ 100,000                                      | ) |  | (US$ 130,000                                                                      | ) |  |                                                                                                        |  



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 financial statements audited by the auditors.

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

Note 4: Eliminated under consolidation.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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.



| | (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 transaction between the
parent company and the subsidiary for the years ended December 31, 2008 and 2009:



|                                     |  |                                      |  |             |  |            |  |                                                 |  |                 
|------------------------------------ |  | ------------------------------------ |  | ----------- |  | ---------- |  | ----------------------------------------------- |  | ----------------
|                                     |  | For the year ended December 31, 2008
|                                     |  | Name ofthe property                  |  | Salesamount |  | Book Value |  | Gain on disposalof property, plantand equipment |  | Otherreceivables
|                                     |  |                                      |  | NT$         |  | NT$        |  | NT$                                             |  | NT$             
|                                     |  |                                      |  |             | 
|Siliconware Technology (Suzhou) Ltd. |  | Equipment                            |  | 48,382      |  | 25,252     |  | 23,130                                          |  | 25,563          
|                                     |  |                                      |  |             |  |            |  |                                                 |  |                 
|                                     | 
|                                     |  | For the year ended December 31, 2008
|                                     |  | Name ofthe property                  |  | Salesamount |  | Book Value |  | Gain on disposalof property, plantand equipment |  | Otherreceivables
|                                     |  |                                      |  | NT$         |  | NT$        |  | NT$                                             |  | NT$             
|                                     |  |                                      |  |             | 
|Siliconware Technology (Suzhou) Ltd. |  | Equipment                            |  | 163,522     |  | 116,162    |  | 47,360                                          |  | 20,230          
|                                     |  |                                      |  |             |  |            |  |                                                 |  |                 



|                                     |  |                     |  |                |  |               
|------------------------------------ |  | ------------------- |  | -------------- |  | --------------
|                                     |  | Name ofthe property |  | Purchaseamount |  | Other payables
|                                     |  |                     |  | NT$            |  | NT$           
|                                     |  |                     | 
|Siliconware Technology (Suzhou) Ltd. |  | Equipment           |  | 2,991          |  |              
|                                     |  |                     |  |                |  |               

ii. Transaction above was eliminated under
consolidation.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (3) | For the year ended December 31, 2007:
| | --- | -------------------------------------



|    |  |                                            |  |                       |  |                           |  |                      |  |         |  |                                                     |  |                                                  |  
|--- |  | ------------------------------------------ |  | --------------------- |  | ------------------------- |  | -------------------- |  | ------- |  | --------------------------------------------------- |  | ------------------------------------------------ | -
|    |  |                                            |  |                       |  |                           |  | 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    |  | 542,974 |  | As specified in contract                            |  | 0.82                                             | %
|0   |  | Siliconware Precision Industries Co., Ltd. |  | Siliconware USA, Inc. |  | Indirect owned
subsidiary |  | Accrued
expense      |  | 50,314  |  | Comparable to those provided by non-related parties |  | 0.06                                             | %



| | (4) | For the year ended December 31, 2008:
| | --- | -------------------------------------



|    |  |                                            |  |                       |  |                           |  |                      |  |         |  |                                                     |  |                                                  |  
|--- |  | ------------------------------------------ |  | --------------------- |  | ------------------------- |  | -------------------- |  | ------- |  | --------------------------------------------------- |  | ------------------------------------------------ | -
|    |  |                                            |  |                       |  |                           |  | 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    |  | 500,451 |  | As specified in contract                            |  | 0.80                                             | %
|0   |  | Siliconware Precision Industries Co., Ltd. |  | Siliconware USA, Inc. |  | Indirect owned subsidiary |  | Accrued
expense      |  | 155,016 |  | Comparable to those provided by non-related parties |  | 0.21                                             | %



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (5) | For the year ended December 31, 2009:
| | --- | -------------------------------------



|    |  |                                            |  |                                         |  |                           |  |                       |  |         |  |                                                     |  |                                                  |  
|--- |  | ------------------------------------------ |  | --------------------------------------- |  | ------------------------- |  | --------------------- |  | ------- |  | --------------------------------------------------- |  | ------------------------------------------------ | -
|    |  |                                            |  |                                         |  |                           |  | Transaction           | 
|No. |  | Company Name                               |  | Counterparty                            |  | Relationship              |  | General
ledgeraccount |  | Amount  |  | Transaction terms                                   |  | Percentage ofconsolidatedrevenues ortotal assets |  
|    |  |                                            |  |                                         |  |                           |  |                       |  | NT$     |  |                                                     |  |                                                  |  
|0   |  | Siliconware Precision Industries Co., Ltd. |  | Siliconware USA, Inc.                   |  | Indirect owned
subsidiary |  | Operating
expense     |  | 368,058 |  | As specified in contract                            |  | 0.62                                             | %
|0   |  | Siliconware Precision Industries Co., Ltd. |  | Siliconware USA, Inc.                   |  | Indirect owned
subsidiary |  | Accrued
expense       |  | 62,350  |  | Comparable to those provided by non-related parties |  | 0.08                                             | %
|0   |  | Siliconware Precision Industries Co., Ltd. |  | Siliconware Technology (Suzhou) Limited |  | Indirect owned
subsidiary |  | Purchase              |  | 347,248 |  | As specified in contract                            |  | 0.59                                             | %
|0   |  | Siliconware Precision Industries Co., Ltd. |  | Siliconware Technology (Suzhou) Limited |  | Indirect owned
subsidiary |  | Accounts
payable      |  | 189,952 |  | Comparable to those provided by non-related parties |  | 0.24                                             | %



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



30. Segment Information

A. Operation in Different Industries

The Company principally operates in one industry. The Companys operation involves assembly, testing and turnkey services of
integrated circuits.

B. Operations in Different Geographic Areas

The Company has no significant foreign operations.

C. Sales



|                 |  |                                  |  |            |  |           
|---------------- |  | -------------------------------- |  | ---------- |  | ----------
|                 |  | For the years ended December 31,
|Geographic areas |  | 2007                             |  | 2008       |  | 2009      
|                 |  | NT$                              |  | NT$        |  | NT$       
|Taiwan           |  | 23,462,544                       |  | 21,020,922 |  | 20,097,950
|U.S.             |  | 33,039,895                       |  | 28,631,910 |  | 26,006,761
|Canada           |  | 4,801,804                        |  | 3,668,015  |  | 3,867,950 
|Others           |  | 4,873,086                        |  | 9,082,087  |  | 9,321,931 
|                 |  |                                  |  |            |  |           
|                 |  | 66,177,329                       |  | 62,402,934 |  | 59,294,592
|                 |  |                                  |  |            |  |           

Sales by geographic region are identified by the
locations where customers are headquartered.

|                           |  |                                  |  |            |  |           
|-------------------------- |  | -------------------------------- |  | ---------- |  | ----------
|                           |  | For the years ended December 31,
|Services                   |  | 2007                             |  | 2008       |  | 2009      
|                           |  | NT$                              |  | NT$        |  | NT$       
|Packaging revenues         |  | 57,576,240                       |  | 53,780,062 |  | 51,356,743
|Testing and other revenues |  | 8,601,089                        |  | 8,622,872  |  | 7,937,849 
|                           |  |                                  |  |            |  |           
|                           |  | 66,177,329                       |  | 62,402,934 |  | 59,294,592
|                           |  |                                  |  |            |  |           

The above table shows, for the period indicated, net
revenues for group of similar services the Company provided.

D. 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.



|           |  |                                  |  |              |  |            |  |              |  |            |  |             
|---------- |  | -------------------------------- |  | ------------ |  | ---------- |  | ------------ |  | ---------- |  | ------------
|           |  | For the years ended December 31,
|           |  | 2007                             |  | 2008         |  | 2009      
|Customers  |  | Amount                           |  | % ofnet sale |  | Amount     |  | % ofnet sale |  | Amount     |  | % ofnet sale
|           |  | NT$                              |  |              |  | NT$        |  |              |  | NT$        |  |             
|Customer A |  | 6,735,258                        |  | 10           |  | 6,874,567  |  | 11           |  | 6,960,529  |  | 12          
|Customer B |  | 6,993,244                        |  | 11           |  | 5,164,169  |  | 8            |  | 6,293,643  |  | 11          
|           |  |                                  |  |              |  |            |  |              |  |            |  |             
|           |  | 13,728,502                       |  | 21           |  | 12,038,736 |  | 19           |  | 13,254,172 |  | 23          
|           |  |                                  |  |              |  |            |  |              |  |            |  |             



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(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, |  
|                                                                   |  | 2007                             |   |  | 2008       |   |  | 2009      |  
|                                                                   |  | NT$                              |   |  | NT$        |   |  | NT$       |   |  | US$       |  
|                                                                   |  |                                  |   | 
|Net income as reported under R.O.C. GAAP                           |  | 17,489,351                       |   |  | 6,313,530  |   |  | 8,789,829 |   |  | 275,112   |  
|U.S. GAAP adjustments:                                             |  |                                  |   |  |            |   |  |           |   |  |           |  
|Compensated absences                                               |  | (12,975                          | ) |  | (2,264     | ) |  | (14,994   | ) |  | (469      | )
|Compensation                                                       |  | (3,634,483                       | ) |  | (1,581,727 | ) |  |          |   |  |          |  
|Employee stock option                                              |  | (2,356                           | ) |  |           |   |  |          |   |  |          |  
|Impairment on long-term investments                                |  |                                 |   |  | (279,843   | ) |  |          |   |  |          |  
|Embedded derivative                                                |  | (1,181,410                       | ) |  |           |   |  |          |   |  |          |  
|Defined benefit pension plan  net periodic pension cost           |  | 7,160                            |   |  | 240        |   |  | 95        |   |  | 3         |  
|Equity investments:                                                |  |                                  |   |  |            |   |  |           |   |  |           |  
|Net income variance between U.S. GAAP and R.O.C. GAAP              |  | 6,672                            |   |  |           |   |  |          |   |  |          |  
|Gain on disposal of investments                                    |  | 402,781                          |   |  |           |   |  |          |   |  |          |  
|                                                                   |  |                                  |   |  |            |   |  |           |   |  |           |  
|Total U.S. GAAP adjustments                                        |  | (4,414,611                       | ) |  | (1,863,594 | ) |  | (14,899   | ) |  | (466      | )
|Taxation effect                                                    |  | 24,336                           |   |  | (56,164    | ) |  | (20,401   | ) |  | (639      | )
|                                                                   |  |                                  |   |  |            |   |  |           |   |  |           |  
|Net income under U.S. GAAP                                         |  | 13,099,076                       |   |  | 4,393,772  |   |  | 8,754,529 |   |  | 274,007   |  
|                                                                   |  |                                  |   |  |            |   |  |           |   |  |           |  
|                                                                   | 
|                                                                   |  | For the years ended December 31, |  
|                                                                   |  | 2007                             |   |  | 2008       |   |  | 2009      |  
|                                                                   |  | NT$                              |   |  | NT$        |   |  | NT$       |   |  | US$       |  
|                                                                   |  |                                  |   | 
|Earnings per share under U.S. GAAP (in dollars)                    |  |                                  |   |  |            |   |  |           |   |  |           |  
|Basic                                                              |  | 4.33                             |   |  | 1.42       |   |  | 2.81      |   |  | 0.09      |  
|                                                                   |  |                                  |   |  |            |   |  |           |   |  |           |  
|Diluted                                                            |  | 4.32                             |   |  | 1.42       |   |  | 2.81      |   |  | 0.09      |  
|                                                                   |  |                                  |   |  |            |   |  |           |   |  |           |  
|Weighted average number of common stock outstanding (in thousands) |  |                                  |   |  |            |   |  |           |   |  |           |  
|Basic                                                              |  | 3,026,156                        |   |  | 3,088,843  |   |  | 3,116,361 |   |  | 3,116,361 |  
|Effect of dilutive securities  employee stock option              |  | 6,251                            |   |  | 14,650     |   |  |          |   |  |          |  
|                                                                   |  |                                  |   |  |            |   |  |           |   |  |           |  
|Diluted                                                            |  | 3,032,407                        |   |  | 3,103,493  |   |  | 3,116,361 |   |  | 3,116,361 |  
|                                                                   |  |                                  |   |  |            |   |  |           |   |  |           |  



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



Reconciliation of consolidated shareholders equity



|                                                         |  |              |   |  |            |   |  |            |   |  |           |  
|-------------------------------------------------------- |  | ------------ | - |  | ---------- | - |  | ---------- | - |  | --------- | -
|                                                         |  | December 31, |  
|                                                         |  | 2007         |   |  | 2008       |   |  | 2009       |  
|                                                         |  | NT$          |   |  | NT$        |   |  | NT$        |   |  | US$       |  
|Total shareholders equity as reported under R.O.C. GAAP |  | 68,908,154   |   |  | 59,314,121 |   |  | 63,081,226 |   |  | 1,974,373 |  
|U.S. GAAP adjustments:                                   |  |              |   |  |            |   |  |            |   |  |           |  
|Compensated absences                                     |  | (55,943      | ) |  | (58,207    | ) |  | (73,201    | ) |  | (2,291    | )
|Compensation                                             |  | (1,728,916   | ) |  |           |   |  |           |   |  |          |  
|Defined benefit pension plan                             |  | (316,665     | ) |  | (171,901   | ) |  | (362,506   | ) |  | (11,346   | )
|Acquisition of Siliconware Corp.                         |  | 4,873,500    |   |  | 4,873,500  |   |  | 4,873,500  |   |  | 152,535   |  
|Taxation effect                                          |  | 15,855       |   |  | (40,309    | ) |  | (60,710    | ) |  | (1,900    | )
|                                                         |  |              |   |  |            |   |  |            |   |  |           |  
|Shareholders equity under U.S. GAAP                     |  | 71,695,985   |   |  | 63,917,204 |   |  | 67,458,309 |   |  | 2,111,371 |  
|                                                         |  |              |   |  |            |   |  |            |   |  |           |  

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



|                                                                         |  |                                  |   |  |             |   |  |            |   |  |           |  
|------------------------------------------------------------------------ |  | -------------------------------- | - |  | ----------- | - |  | ---------- | - |  | --------- | -
|                                                                         |  | For the years ended December 31, |  
|                                                                         |  | 2007                             |   |  | 2008        |   |  | 2009       |  
|                                                                         |  | NT$                              |   |  | NT$         |   |  | NT$        |   |  | US$       |  
|Balance at January 1, as reported                                        |  | 64,859,114                       |   |  | 71,695,985  |   |  | 63,917,204 |   |  | 2,000,538 |  
|Net income under U.S. GAAP                                               |  | 13,099,076                       |   |  | 4,393,772   |   |  | 8,754,529  |   |  | 274,007   |  
|Employee stock bonus                                                     |  | 2,257,602                        |   |  | 2,053,181   |   |  |           |   |  |          |  
|Employee stock option  amortized compensation                           |  | 2,356                            |   |  |            |   |  |           |   |  |          |  
|Adjustment for investee companies capital reserve                       |  | (18,200                          | ) |  | 5,507       |   |  |           |   |  |          |  
|Cumulative translation adjustment on long-term investments               |  | 107,202                          |   |  | 211,940     |   |  | (88,289    | ) |  | (2,763    | )
|Change in fair value of available-for-sale marketable securities         |  | (3,819,090                       | ) |  | (880,816    | ) |  | 767,157    |   |  | 24,011    |  
|Employee stock option exercised                                          |  | 94,485                           |   |  | 7,395       |   |  |           |   |  |          |  
|Conversion of Euro convertible bonds                                     |  | 2,736,620                        |   |  |            |   |  |           |   |  |          |  
|Cash dividends                                                           |  | (9,974,332                       | ) |  | (13,836,139 | ) |  | (5,674,662 | ) |  | (177,611  | )
|Adjustment for investee companys unrecognized pension cost              |  | 1,787                            |   |  |            |   |  |           |   |  |          |  
|Adjustment for investee companys treasury stock variances               |  | 1,366                            |   |  |            |   |  |           |   |  |          |  
|Cash dividends for treasury stock held by subsidiaries                   |  | 117,976                          |   |  | 161,415     |   |  | 65,212     |   |  | 2,041     |  
|ECB conversion  APIC                                                    |  | 2,367,172                        |   |  |            |   |  |           |   |  |          |  
|Defined benefit pension plan                                             |  | (151,879                         | ) |  | 104,964     |   |  | (282,842   | ) |  | (8,852    | )
|Adjustment for the variances between net income and shareholders equity |  | 14,730                           |   |  |            |   |  |           |   |  |          |  
|                                                                         |  |                                  |   |  |             |   |  |            |   |  |           |  
|Balance at December 31                                                   |  | 71,695,985                       |   |  | 63,917,204  |   |  | 67,458,309 |   |  | 2,111,371 |  
|                                                                         |  |                                  |   |  |             |   |  |            |   |  |           |  



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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



|                                           |  |              |  |            |  |          
|------------------------------------------ |  | ------------ |  | ---------- |  | ---------
|                                           |  | December 31,
|                                           |  | 2008         |  | 2009      
|                                           |  | NT$          |  | NT$        |  | US$      
|Current Assets                             |  |              |  |            |  |          
|Cash and cash equivalents                  |  | 12,941,842   |  | 9,242,800  |  | 289,290  
|Short-term investments                     |  | 5,899,123    |  | 10,372,361 |  | 324,644  
|Notes receivable, net                      |  | 46,173       |  | 40,545     |  | 1,269    
|Accounts receivable, net                   |  | 7,290,315    |  | 11,299,418 |  | 353,659  
|Inventories                                |  | 2,383,067    |  | 2,992,331  |  | 93,657   
|Other current assets                       |  | 1,593,045    |  | 2,042,399  |  | 63,924   
|                                           |  |              |  |            |  |          
|                                           |  | 30,153,565   |  | 35,989,854 |  | 1,126,443
|                                           |  |              |  |            |  |          
|                                           |  |              | 
|Long-term investments                      |  | 1,397,516    |  | 4,141,187  |  | 129,615  
|Property, plant and equipment              |  | 38,839,633   |  | 36,316,125 |  | 1,136,655
|Intangible assets                          |  | 4,873,500    |  | 4,873,500  |  | 152,535  
|Other assets                               |  | 3,101,076    |  | 2,036,686  |  | 63,746   
|                                           |  |              |  |            |  |          
|Total Assets                               |  | 78,365,290   |  | 83,357,352 |  | 2,608,994
|                                           |  |              |  |            |  |          
|                                           |  |              | 
|Current liabilities                        |  | 11,752,799   |  | 15,117,743 |  | 473,169  
|Long-term liabilities                      |  | 2,248,065    |  |           |  |         
|Other liabilities                          |  | 447,222      |  | 781,300    |  | 24,454   
|                                           |  |              |  |            |  |          
|Total Liabilities                          |  | 14,448,086   |  | 15,899,043 |  | 497,623  
|Total Stockholders Equity                 |  | 63,917,204   |  | 67,458,309 |  | 2,111,371
|                                           |  |              |  |            |  |          
|Total Liabilities and Stockholders Equity |  | 78,365,290   |  | 83,357,352 |  | 2,608,994
|                                           |  |              |  |            |  |          

The significant accounting policies for the reconciliation from R.O.C.
GAAP to U.S. GAAP is 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 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 absorbs a majority of the
entitys expected losses, receives a majority of its expected residual returns, or both. 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(Continued)

(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.



| | (3) | Share-based Compensation
| | --- | ------------------------

Employee Stock Option



| | A. | Under U.S. GAAP, ASC Topic 718, Compensation  Stock Compensation (ASC Topic 718) requires the Company to use the fair value method with forfeitures
estimated at the time of grant and revise in subsequent periods if actual forfeitures differ from those estimates. In addition, the exercise price of the Companys stock options is subject to change due to the distribution of stock dividends.
The Company was required to measure the effects of the modification and record incremental compensation cost, if any. For the year ended December 31, 2007, the Company recorded share-based compensation expense of NT$2,356.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | For computing the fair value of options granted, the Company used the Black-Scholes option-pricing model with input assumptions of expected volatility, expected life,
expected dividend rate and expected risk-free rate of return. The Company applied the historical volatility based on the historical stock price volatility over the historical time period commensurate with the expected term of the employee stock
option. The expected term is based on our contractual term. The Company estimated dividend yield by historical experience. Besides, the Company used the yield of Taiwan Government Bond with the contract term equal to the expected term of the share
options as our risk-free interest rate pursuant to ASC Topic 718, which required entities based in jurisdiction outside the United States to use the implied yield of zero-coupon government bonds currently available in the market where the shares are
primarily traded when estimating the risk-free interest rate. The fair value of the Companys stock options used to compute the 2007 compensation expense is the estimated present value at grant date using the Black-Scholes option pricing model
with the following weighted average assumptions:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                        |  |                 
|----------------------- |  | ----------------
|Volatility              |  | 59.96% ~ 67.12 %
|                        |  |                 
|Risk-free interest rate |  | 1.70% ~ 3.04 %  
|                        |  |                 
|Expected holding period |  | 3 ~ 5 years     
|                        |  |                 
|Dividend yield          |  | 0%              
|                        |  |                 



Note 1: No options granted in 2007, 2008 and 2009.

Note 2: No additional compensation costs were recorded for the modification of employee stock option in 2007.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | C. | Additional information concerning our employee stock option is summarized as following:
| | -- | ---------------------------------------------------------------------------------------



|                                               |  |                                  |  |           |  |      |  |    
|---------------------------------------------- |  | -------------------------------- |  | --------- |  | ---- |  | ---
|                                               |  | For the years ended December 31,
|                                               |  | 2007                             |  | 2008      |  | 2009
|                                               |  | NT$                              |  | NT$       |  | NT$  |  | US$
|                                               |  |                                  |  |          
|Total intrinsic value of the options exercised |  | 563,999                          |  | 54,131    |  |     |  |   
|Total fair value of options vested             |  | 87,942                           |  |          |  |     |  |   
|                                               |  |                                  |  |          
|Compensation to Directors and Employees        |  |                                  |  |           |  |      |  |    
|                                               | 
|                                               |  | For the years ended December 31,
|Net income impact of compensation adjustment   |  | 2007                             |  | 2008      |  | 2009
|                                               |  | NT$                              |  | NT$       |  | NT$  |  | US$
|U.S. GAAP adjustment:                          |  |                                  |  |           |  |      |  |    
|Remuneration to directors                      |  | 157,404                          |  |          |  |     |  |   
|                                               |  |                                  |  |           |  |      |  |    
|Employee bonuses accrual                       |  | 1,571,512                        |  |          |  |     |  |   
|Adjustment to fair market value                |  | 1,905,567                        |  | 1,581,727 |  |     |  |   
|                                               |  |                                  |  |           |  |      |  |    
|Total employee bonuses                         |  | 3,477,079                        |  | 1,581,727 |  |     |  |   
|                                               |  |                                  |  |           |  |      |  |    
|Total net income adjustment to compensation    |  | 3,634,483                        |  | 1,581,727 |  |     |  |   
|                                               |  |                                  |  |           |  |      |  |    



| | A. | Remuneration to directors
| | -- | -------------------------

The
Companys Articles of Incorporation require a cash remuneration payment to its directors. Before January 1, 2008, such payments are charged directly to retained earnings for the period in which shareholders approve such payment under
R.O.C. GAAP. However, such cash payments should be recorded as compensation expense in the period when services are rendered under U.S. GAAP.

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 employees bonuses and directors and supervisors
remuneration as reductions of retained earnings but record an cost / expense and related liability when the Company has legal obligations and could reasonably estimate such amount.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | B. | Employee bonuses
| | -- | ----------------

Certain
employees of the Company are entitled to bonuses in accordance with applicable provisions of the Companys Articles of Incorporation. Employee bonuses are set at 10% of distributable retained earnings. Distributable retained earnings are
calculated as retained earnings after various reserves have been made in accordance with R.O.C. regulations and the Companys Articles of Incorporation and after appropriation for remuneration to directors. Employee bonuses may be granted in
cash, shares, or a combination of both. Regardless of the form of the bonus, however, the shareholders are required by the Article of Incorporation to approve a 10% of distributable earnings as the employee bonus whenever there is a dividend
distribution. Before January 1, 2008, such bonuses are appropriated from retained earnings in the period shareholders approval is obtained under R.O.C. GAAP. If such employee bonuses are settled through the issuance of shares of the
Company, the amount charged against retained earnings is based on the par value of the common shares issued. Under U.S. GAAP, employee bonus expense is initially accrued at the end of the period when services are rendered, at 10% of the
distributable retained earnings, which is considered the minimum liability the Company has to pay. When bonuses are approved by the shareholders in the subsequent year, an additional compensation expense is recorded for the difference between the
par value and the fair market value of shares granted to employees. The difference between U.S. GAAP and R.O.C. GAAP in this area would result in adjustments to the Companys net income and shareholders equity as shown in reconciliation
tables set forth at the beginning of this note. This accounting treatment for employee bonuses is based on the guidance of the U.S. SEC Staff Paper entitled International Reporting and Disclosure Issues in the Division of Corporate Finance
dated November 1, 2004. The Board of Directors of the Company resolved to distribute employee bonuses of NT$1,173,450 from 2006 earnings in 2007 and NT$1,571,512 from 2007 earnings in 2008. In addition to the adjustments to net income and
shareholders equity as shown in the above schedules, the application of U.S. GAAP to employees bonuses would also result in a reclassification from retained earnings to additional paid-in capital of NT$7,210,702 and NT$8,792,429 for the
years ended December 31, 2007 and 2008, respectively.

From January 1, 2008, the Company adopted R.O.C. EITF 96-052
Accounting for Employees Bonuses and Directors and Supervisors Remuneration under R.O.C. GAAP and should no longer treat employees bonus as a reduction of retained earnings but record an expense and related
liability when the Company has legal obligations and could reasonably estimate such amount.



| | (4) | Equity Investments
| | --- | ------------------

Under both
R.O.C. GAAP and U.S. GAAP, investments representing at least twenty percent of the voting interests of each investee for which the Company exercises significant influence over operating and financial policies are generally accounted for under the
equity method. However, there are the following differences in applying equity accounting under R.O.C. GAAP and U.S. GAAP.



| | A. | Net income (loss) variance between U.S. GAAP and R.O.C. GAAP
| | -- | ------------------------------------------------------------

The Companys proportionate share of the income (loss) from an equity investee may differ if the equity investees net income
(loss) under R.O.C. GAAP differs from U.S. GAAP, resulting in differences in the carrying amount of the equity investment reported under R.O.C. GAAP and U.S. GAAP. The differences between R.O.C. GAAP and U.S. GAAP for the equity investees include,
but are not limited to, accounting for compensation, joint venture accounting, embedded derivatives, deferred tax and compensated absences.



| | B. | Adjustment for the variances between net income and shareholders equity under U.S. GAAP
| | -- | ----------------------------------------------------------------------------------------

The Companys proportionate share of the income (loss) from an equity investee may differ from its share in the investees
equity. Under both R.O.C. GAAP and U.S. GAAP, the Company is required to adjust its investment in corresponded to its pro rata share of the investees equity. Under R.O.C. GAAP, adjustments may include, but are not limited to, cumulative
translation and unrecognized pension cost. For reconciliation to U.S. GAAP, additional adjustments are made for the variances exclusively resulting from U.S. GAAP, such as defined benefit pension plan pursuant to ASC Topic 715, Compensation 
Retirement Benefits (ASC Topic 715).



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (5) | Defined Benefit Pension Plan
| | --- | ----------------------------



| | A. | Net periodic pension 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.



| | 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.



| | (6) | 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 shareholders 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 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. For the years ended December 31, 2007, 2008 and 2009, total amounts of tax benefit
(expense) reconciled from R.O.C. GAAP to U.S. GAAP were NT$$24,336, NT$(56,164) and NT$(20,401), of which NT 22,446, NT$(56,822) and NT$(22,286) were adjusted for the undistributed earnings.



| | (7) | 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. However, the accounting treatment for the appropriation of employees bonus for 2007 earnings resolved at the
stockholders meeting held in 2008 is still in accordance with the regulations on capitalization of employees bonus under paragraphs 19 and 39 of R.O.C. SFAS No. 24, Earnings per Share. 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. The numbers of employee bonus shares issued in 2007, 2008, and 2009 were 35,203,522 shares, 47,145,362
shares and nil, respectively.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



In computing the dilutive effect of convertible bonds when calculating net income
available to common stockholders for diluted EPS, the after-tax results of compensated interest expenses, unrealized foreign exchange gain/loss, amortization of bond issuance costs are taken into consideration under R.O.C. GAAP. However, under U.S.
GAAP, in addition to the above three items, the after tax result of mark-to-market gain or loss on embedded derivatives bifurcated from the host bonds is also taken into consideration. Anti-dilutive effects are not adjusted under R.O.C. GAAP or U.S.
GAAP.

For the purpose of computing the dilutive effect of the employee stock option, the treasury-stock method is used.
Treasury shares that could be repurchased with assumed proceeds from the exercise of employee stock options might not be sufficient for the share 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 is 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 would 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.



| | (8) | Marketable Securities
| | --- | ---------------------

Under
R.O.C. SFAS No. 34, the Company is required to classify its equity investments into financial assets at fair value through profit or loss, available-for-sale, held-to-maturity securities or financial assets carried at costs. Unrealized gains or
losses on available-for-sale securities are reported through shareholders equity.

Under ASC Topic 320, Investments
 Debts and Equity Securities, debt and equity securities that have readily determinable fair values are to be classified as either trading, available-for-sale or held-to-maturity securities. Debt securities that the Company has the positive
intent and ability to hold to maturity are classified as held-to-maturity securities and reported at amortized cost. Debt and equity securities that are bought and traded for short-term profits are classified as trading securities and reported at
fair value, with unrealized gains and losses included in earnings. Debt and equity securities not classified as either held-to-maturity or trading are classified as available-for-sale securities and reported at fair value, with unrealized gains and
losses excluded from earnings and reported as a separate component of shareholders equity. The fair value of listed stock under U.S. GAAP is generally determined by the closing price at the balance sheet date. For individual securities
classified as either available-for-sale or held-to-maturity, the Company performs an analysis to determine whether a decline in fair value below cost is other than temporary.



| | (9) | 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.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



Under U.S. GAAP, in connection with acquisition of Siliconware Corporation in 2000, the
Company recorded net assets and goodwill of NT$5,415,439, respectively, based on 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 the annual impairment analysis using a fair value approach. As of December 31, 2009, the net carrying amount
of goodwill was NT$4,873,500 and no impairment of goodwill was identified during 2007 to 2009.



| | (10) | 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 and NT$34,554,263 at December 31, 2009 and 2008, respectively, which
causes the decrease of retained earnings and increase of additional paid-in capital. The adjustments have no effect on shareholders equity.



| | (11) | Impairment of Long-lived Assets and Equity Investments
| | ---- | ------------------------------------------------------

Impairment of long-lived assets

Under both R.O.C. GAAP and U.S. GAAP, the Company is required to valuate 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 net selling price 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.

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, 2007, 2008 and 2009 were NT$48,528, NT$43,093 and NT$73,882, 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, 2007, 2008 and 2009.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (12) | Embedded Derivative  The Companys Accounting as an Issuer
| | ---- | -----------------------------------------------------------

Under R.O.C. GAAP, when an issuer issues convertible bonds, the entire instrument is recorded as a liability at an amount equal to the
proceeds received. Any discount or premium to the par value of the convertible bond is amortized in the statement of operations by using the effective interest rate method. If the convertible bonds contain a redemption premium above their par value
amount, the excess is accrued, using the effective interest rate method, over the period to redemption as a charge to interest expense. Upon conversion, the carrying value of the bond is credited to common stock at its par value and the difference
between the carrying value of the bond and the par value of the stock is recorded to additional paid-in capital. No gain or loss is recognized.

Under U.S. GAAP, in accordance with ASC Topic 815, Derivatives and Hedging (ASC Topic 815), the conversion feature embedded in
a bond does not have to be separately accounted for as a derivative at fair value, if the feature is indexed only to the issuers own stock and would otherwise be classified in stockholders equity in the issuers statement of
financial position (the Scope Exception).

The Company issued zero-coupon convertible bonds on January 28,
2002 amounting to US$200,000 (the 2002 Bonds). The 2002 Bonds are denominated in US dollars and allow the bondholders to redeem at 105.9185% of their par value on July 29, 2004. The premium put option and the conversion option are
treated as a single-compound derivative instrument. Further, under U.S. GAAP, the embedded feature with the combination of mutually exclusive choices, i.e., conversion of the debt to equity or redemption at a multiple of the 2002 Bonds par value,
does not qualify for the Scope Exception. Additionally, our 2002 Bonds allow bondholders to convert into either the Companys common stock which is traded on the Taiwan Stock Exchange (denominated in New Taiwan Dollar) or into the
Companys ADSs, which are traded on NASDAQ (denominated in US Dollars). The conversion terms contain a fixed foreign exchange feature determining the rate at which the bonds are to be converted into New Taiwan Dollar stock. As a result of the
combination of the conversion option and the fixed foreign exchange rate, the 2002 Bonds are dual indexed and therefore not eligible for the Scope Exception. On February 5, 2004, the Company issued zero-coupon convertible bonds amounting to
US$200,000 (the 2004 Bonds). Similar to the 2002 Bonds, the 2004 Bonds permit the bondholders to convert those bonds into either the Companys New Taiwan Dollar shares or ADSs resulting in those bonds being dual indexed and also not
eligible for the Scope Exception. Both the compound embedded derivative in the 2002 Bonds and the embedded conversion option in the 2004 Bonds are accounted for as derivative instruments in accordance with ASC Topic 815 with changes in fair value
recognized in the income statement. The Company also recognized interest expense of NT$27,715 arising from the amortization of bond discount and loss on subsequent conversion and/or buyback of convertible bonds of NT$1,131,897 for the year ended
December 31, 2007.

For the year ended December 31, 2007, the net loss recognized from applying derivative accounting
amounting to NT$1,181,410.

All of the convertible bonds issued in 2002 have been converted into common stocks, redeemed, or
retired after being repurchased from the market as of March 31, 2007. All of the convertible bonds issued in 2004 have been converted into common stocks or redeemed as of September 30, 2007.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (13) | Disposal of ChipMOS Taiwan with Subscription of ChipMOS Technologies (Bermuda) Ltd.
| | ---- | -----------------------------------------------------------------------------------

On March 27, 2007, the Company disposed its common stock ownership in ChipMOS Technologies Inc., or ChipMOS Taiwan, and
acquired common stock ownership in ChipMOS Technologies (Bermuda) Ltd., or ChipMOS Bermuda, the parent company of ChipMOS Taiwan, through private stock offering. Under R.O.C. GAAP, the Company evaluated whether this exchange had commercial
substance, which was the expectation of significant change of the future cash flows of the Company, and concluded that no such significant change would be expected. Therefore, the Company recognized gain on disposal of investment of NT$793,492 for
the year ended December 31, 2007 and deferred the recognition of gain on disposal of NT$279,843. However, under U.S. GAAP, this transaction involved significant monetary consideration was deemed to be a monetary exchange in accordance with ASC
Topic 845, Nonmonetary Transactions (ASC Topic 845). Therefore, the Company recorded the exchange in fair value and included deferred gain under the R.O.C. GAAP in its U.S. GAAP earnings for the year ended December 31, 2007.

Under the impact of global financial crisis, the Company performed evaluation of impairment toward ChipMOS Bermuda and
recognized other-than-temporary impairment loss of NT$2,143,973 under R.O.C. GAAP and NT$2,423,816 under U.S. GAAP for the year ended December 31, 2008.

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 33.9% and North America of 50.4% in 2009. The Companys first two largest customers accounted for a total of 21%, 19% and 23% of net sales in 2007, 2008 and
2009, respectively, and its five largest customers accounted for 41%, 39% and 41% of the Companys net sales in 2007, 2008 and 2009, respectively.

In 2007, 2008 and 2009, some of the Companys net operating revenues were denominated in currencies other than N.T. dollars, such as
U.S. dollars. 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$3,287,444 and NT$5,262,940 as of December 31, 2008 and 2009, 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.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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

No long-term loans as of December 31, 2009.



| | (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 of 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 for the years ended December 31, 2008 and 2009 were as follows:



|                                                                |  |           |  |           |  |           |  |            |  |      |  |     
|--------------------------------------------------------------- |  | --------- |  | --------- |  | --------- |  | ---------- |  | ---- |  | ----
|                                                                |  | Level 1   |  | Level 2   |  | Level 3  
|                                                                |  | 2008      |  | 2009      |  | 2008      |  | 2009       |  | 2008 |  | 2009
|                                                                |  | NT$       |  | NT$       |  | NT$       |  | NT$        |  | NT$  |  | NT$ 
|                                                                |  |           |  |           |  |          
|Time deposit with original maturities more than 3 months (Note) |  |          |  |          |  | 5,899,123 |  | 10,372,361 |  |     |  |    
|Marketable securities  available-for-sale                      |  | 1,075,480 |  | 3,825,793 |  |          |  |           |  |     |  |    



Note: Included in short-term investments



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

For the year ended December 31, 2008, the Company identified circumstances that indicated the fair value of financial assets carried
at cost sustained other-than-temporary impairments and recognized impairment loss of NT$393,460 based on the proportional interests on these assets for the year ended December 31, 2008 to write down the carrying values of these investments to
their estimated values. The fair value measurements were determined using cost approach based on inputs, which were classified as Level 3 as they were unobservable and required managements judgment.



| | (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 a result of the evaluation, the Company did not recognize any cumulative effect
adjustment to the retained earnings at the beginning of the years 2008 and 2009. As of December 31, 2008 and 2009, 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(Continued)

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



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



| | A. | 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. In addition, payment for employees cash bonuses are classified as cash used in operating activities under U.S. GAAP compared to which
classified as cash used in financing activities under R.O.C. GAAP. Summarized cash flow information under U.S. GAAP would be presented as follows:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                     |  |                                  |   |  |             |   |  |             |   |  |          |  
|---------------------------------------------------- |  | -------------------------------- | - |  | ----------- | - |  | ----------- | - |  | -------- | -
|                                                     |  | For the years ended December 31, |  
|                                                     |  | 2007                             |   |  | 2008        |   |  | 2009        |  
|                                                     |  | NT$                              |   |  | NT$         |   |  | NT$         |   |  | US$      |  
|                                                     |  |                                  |   | 
|Net cash provided by operating activities            |  | 23,601,166                       |   |  | 20,504,634  |   |  | 15,492,282  |   |  | 484,891  |  
|Net cash provided by (used in) investing activities  |  | 2,891,936                        |   |  | (16,108,193 | ) |  | (10,094,156 | ) |  | (315,936 | )
|Net cash used in financing activities                |  | (10,335,263                      | ) |  | (13,827,063 | ) |  | (9,053,537  | ) |  | (283,366 | )
|Effect on foreign exchange                           |  | 22,231                           |   |  | 94,206      |   |  | (43,631     | ) |  | (1,366   | )
|                                                     |  |                                  |   |  |             |   |  |             |   |  |          |  
|Net increase (decrease) in cash and cash equivalents |  | 16,180,070                       |   |  | (9,336,416  | ) |  | (3,699,042  | ) |  | (115,776 | )
|Cash and cash equivalents at beginning of the year   |  | 6,098,188                        |   |  | 22,278,258  |   |  | 12,941,842  |   |  | 405,065  |  
|                                                     |  |                                  |   |  |             |   |  |             |   |  |          |  
|Cash and cash equivalents at the end of the year     |  | 22,278,258                       |   |  | 12,941,842  |   |  | 9,242,800   |   |  | 289,289  |  
|                                                     |  |                                  |   |  |             |   |  |             |   |  |          |  



| | B. | Non-cash financing activity:
| | -- | ----------------------------



| | (i) | Additional 166,354,273 shares of common stock were issued upon the conversion of the 2002 Euro convertible bonds with principal amounts of US$128,360 in 2006. All of
the convertible bonds issued in 2002 have been converted into common stocks, redeemed, or retired after being repurchased from the market as of March 31, 2007.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Additional 80,711,248 shares of common stock were issued upon the conversion of the 2004 Euro convertible bonds with principal amount of US$83,020 in 2007. All of the
convertible bonds issued in 2004 have been converted into common stocks or redeemed as of September 30, 2007.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(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, 2007, 2008 and 2009 and accumulated other comprehensive
income balances as of December 31, 2008 and 2009 are summarized as follows:



|                                                                             |  |                                  |   |  |            |   |  |           |   |  |         |  
|---------------------------------------------------------------------------- |  | -------------------------------- | - |  | ---------- | - |  | --------- | - |  | ------- | -
|                                                                             |  | For the years ended December 31, |  
|                                                                             |  | 2007                             |   |  | 2008       |   |  | 2009      |  
|                                                                             |  | NT$                              |   |  | NT$        |   |  | NT$       |   |  | US$     |  
|Net income                                                                   |  | 17,489,351                       |   |  | 6,313,530  |   |  | 8,789,829 |   |  | 275,112 |  
|Other comprehensive income (loss), net of taxes                              |  |                                  |   |  |            |   |  |           |   |  |         |  
|Cumulative translation adjustment on equity investments                      |  | 107,202                          |   |  | 211,940    |   |  | (88,289   | ) |  | (2,763  | )
|Remuneration to directors and supervisors                                    |  | (120,797                         | ) |  | (157,405   | ) |  |          |   |  |        |  
|Employees cash bonus                                                        |  | (821,415                         | ) |  | (1,100,058 | ) |  |          |   |  |        |  
|Adjustment for unrealized (loss) gain on available-for-sale financial assets |  | (3,604,489                       | ) |  | (1,160,659 | ) |  | 767,157   |   |  | 24,011  |  
|Adjustment for investee companies capital reserve                           |  | (18,200                          | ) |  | 5,507      |   |  |          |   |  |        |  
|Adjustment for investee companies unrecognized pension cost                 |  | 1,787                            |   |  |           |   |  |          |   |  |        |  
|Net loss not recognized as pension cost                                      |  | (37,613                          | ) |  | (39,559    | ) |  | (92,142   | ) |  | (2,884  | )
|                                                                             |  |                                  |   |  |            |   |  |           |   |  |         |  
|Comprehensive income                                                         |  | 12,995,826                       |   |  | 4,073,296  |   |  | 9,376,555 |   |  | 293,476 |  
|                                                                             |  |                                  |   |  |            |   |  |           |   |  |         |  



|                                                                      |  |                    |   |  |            |   |  |         |  
|--------------------------------------------------------------------- |  | ------------------ | - |  | ---------- | - |  | ------- | -
|                                                                      |  | As of December 31, |  
|                                                                      |  | 2008               |   |  | 2009       |  
|                                                                      |  | NT$                |   |  | NT$        |   |  | US$     |  
|Accumulated other comprehensive income balances                       |  |                    |   |  |            |   |  |         |  
|Cumulative translation adjustment on equity investments               |  | 294,223            |   |  | 205,934    |   |  | 6,446   |  
|Remuneration to directors and supervisors                             |  | (558,937           | ) |  | (558,937   | ) |  | (17,494 | )
|Employees cash bonus                                                 |  | (2,634,358         | ) |  | (2,634,358 | ) |  | (82,453 | )
|Adjustment for change in equity investment holding ratio              |  | 15,063             |   |  | 15,063     |   |  | 471     |  
|Adjustment for unrealized loss on available-for-sale financial assets |  |                   |   |  | 767,157    |   |  | 24,011  |  
|Adjustment for investee companies capital reserve                    |  | 4,998              |   |  | 4,998      |   |  | 156     |  
|Net loss not recognized as pension cost                               |  | (77,172            | ) |  | (169,314   | ) |  | (5,299  | )
|                                                                      |  |                    |   |  |            |   |  |         |  
|Accumulated other comprehensive income                                |  | (2,956,183         | ) |  | (2,369,457 | ) |  | (74,162 | )
|                                                                      |  |                    |   |  |            |   |  |         |  



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(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:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Assumptions:
| | --- | ------------



|                                        |  |                                  |   |  |      |   |  |      |  
|--------------------------------------- |  | -------------------------------- | - |  | ---- | - |  | ---- | -
|                                        |  | For the years ended December 31, |  
|                                        |  | 2007                             |   |  | 2008 |   |  | 2009 |  
|Discounted rate                         |  | 2.75                             | % |  | 2.20 | % |  | 2.25 | %
|                                        |  |                                  |   |  |      |   |  |      |  
|Long-term rate of compensation increase |  | 2.00                             | % |  | 1.00 | % |  | 2.00 | %
|                                        |  |                                  |   |  |      |   |  |      |  
|Expected rate of return on plan assets  |  | 3.00                             | % |  | 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.



| | (2) | Change in Benefit Obligation:
| | --- | -----------------------------



|                                                    |  |                                  |   |  |            |   |  |            |  
|--------------------------------------------------- |  | -------------------------------- | - |  | ---------- | - |  | ---------- | -
|                                                    |  | For the years ended December 31, |  
|                                                    |  | 2007                             |   |  | 2008       |   |  | 2009       |  
|                                                    |  | NT$                              |   |  | NT$        |   |  | NT$        |  
|                                                    |  |                                  |  
|Benefit obligation at the beginning of the year     |  | (1,321,342                       | ) |  | (1,620,782 | ) |  | (1,544,731 | )
|Service cost                                        |  | (35,315                          | ) |  | (35,463    | ) |  | (29,786    | )
|Interest cost                                       |  | (42,793                          | ) |  | (45,252    | ) |  | (34,630    | )
|Plan amendments                                     |  |                                 |   |  | 59,238     |   |  | (73,596    | )
|Actuarial loss                                      |  | (226,759                         | ) |  | 76,848     |   |  | (284,261   | )
|Benefits paid                                       |  | 5,427                            |   |  | 20,680     |   |  | 44,408     |  
|                                                    |  |                                  |   |  |            |   |  |            |  
|Projected benefit obligation at the end of the year |  | (1,620,782                       | ) |  | (1,544,731 | ) |  | (1,922,596 | )
|                                                    |  |                                  |   |  |            |   |  |            |  



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (3) | Change in Plan Assets:
| | --- | ----------------------



|                                                       |  |                                  |   |  |           |   |  |           |  
|------------------------------------------------------ |  | -------------------------------- | - |  | --------- | - |  | --------- | -
|                                                       |  | For the years ended December 31, |  
|                                                       |  | 2007                             |   |  | 2008      |   |  | 2009      |  
|                                                       |  | NT$                              |   |  | NT$       |   |  | NT$       |  
|                                                       |  |                                  |  
|Fair value of plan assets at the beginning of the year |  | 981,250                          |   |  | 1,059,039 |   |  | 1,130,537 |  
|Actual return on plan assets                           |  | 28,021                           |   |  | 38,553    |   |  | 7,487     |  
|Employer contributions                                 |  | 55,195                           |   |  | 53,625    |   |  | 49,660    |  
|Benefits paid                                          |  | (5,427                           | ) |  | (20,680   | ) |  | (44,408   | )
|                                                       |  |                                  |   |  |           |   |  |           |  
|Fair value of plan assets at the end of the year       |  | 1,059,039                        |   |  | 1,130,537 |   |  | 1,143,276 |  
|                                                       |  |                                  |   |  |           |   |  |           |  



| | (4) | Funded Status:
| | --- | --------------



|                                         |  |              |   |  |            |  
|---------------------------------------- |  | ------------ | - |  | ---------- | -
|                                         |  | December 31, |  
|                                         |  | 2008         |   |  | 2009       |  
|                                         |  | NT$          |   |  | NT$        |  
|                                         |  |             
|Projected benefit obligation             |  | (1,544,731   | ) |  | (1,922,596 | )
|Fair value of plan assets                |  | 1,130,537    |   |  | 1,143,276  |  
|                                         |  |              |   |  |            |  
|Funded status                            |  | (414,194     | ) |  | (779,320   | )
|Unrecognized transition assets           |  | (1,825       | ) |  | (912       | )
|Net prior service cost                   |  | (57,814      | ) |  | 15,691     |  
|Unrecognized net loss                    |  | 439,599      |   |  | 734,269    |  
|                                         |  |              |   |  |            |  
|Accrued pension cost - before adjustment |  | (34,234      | ) |  | (30,272    | )
|Additional liability                     |  | (379,960     | ) |  | (749,048   | )
|                                         |  |              |   |  |            |  
|Accrued pension cost - after adjustment  |  | (414,194     | ) |  | (779,320   | )
|                                         |  |              |   |  |            |  



| | (5) | Net Pension Cost:
| | --- | -----------------



|                                               |  |                                  |   |  |         |   |  |         |  
|---------------------------------------------- |  | -------------------------------- | - |  | ------- | - |  | ------- | -
|                                               |  | For the years ended December 31, |  
|                                               |  | 2007                             |   |  | 2008    |   |  | 2009    |  
|                                               |  | NT$                              |   |  | NT$     |   |  | NT$     |  
|                                               |  |                                  |  
|Service cost                                   |  | 35,315                           |   |  | 35,463  |   |  | 29,786  |  
|Interest cost                                  |  | 42,793                           |   |  | 45,252  |   |  | 34,630  |  
|Expected return on assets                      |  | (32,636                          | ) |  | (32,470 | ) |  | (28,862 | )
|Amortization of unrecognized transition assets |  | (913                             | ) |  | (913    | ) |  | (913    | )
|Net prior service cost                         |  |                                 |   |  | (1,424  | ) |  | 91      |  
|Amortization of unrecognized net loss          |  | 7,279                            |   |  | 15,672  |   |  | 10,966  |  
|                                               |  |                                  |   |  |         |   |  |         |  
|Net periodic pension cost                      |  | 51,838                           |   |  | 61,580  |   |  | 45,698  |  
|                                               |  |                                  |   |  |         |   |  |         |  



| | (6) | Other Required Disclosure:
| | --- | --------------------------



|                               |  |              |   |  |            |  
|------------------------------ |  | ------------ | - |  | ---------- | -
|                               |  | December 31, |  
|                               |  | 2008         |   |  | 2009       |  
|                               |  | NT$          |   |  | NT$        |  
|                               |  |             
|Accumulated benefit obligation |  | (1,249,343   | ) |  | (1,365,669 | )



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | B. | Valuation and allocation of plan assets
| | -- | ---------------------------------------

The plan assets are all maintained in cash in the designed 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, 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.



| | 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$   
|2010              |  | 15,634  |  | 489   
|2011              |  | 12,201  |  | 382   
|2012              |  | 13,372  |  | 419   
|2013              |  | 14,960  |  | 468   
|2014              |  | 29,814  |  | 933   
|Year 2015 to 2019 |  | 322,211 |  | 10,085



| | (ii) | Contributions:
| | ---- | --------------

The Company
expects to contribute NT$ 15,634 to its pension plan in 2010.



| | (iii) | Plan assets:
| | ----- | ------------

The plan assets
are all maintained in cash 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 equivalent. 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. The accounting treatment under R.O.C. GAAP is identical to which under U.S. GAAP.



| | (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 reasonable 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.



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (10) | Major Debt Covenants
| | ---- | --------------------

The
Company does not have any long-term loan as of December 31, 2009.



| | (11) | Operating Leases
| | ---- | ----------------

The Company
entered into three lease contracts with Science Park Administration for the use of land of the facility located in Hsinchu, Taiwan. None of these three 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, 2007, 2008 and 2009 were NT$10,300, NT$10,328 and NT$10,295, respectively.



| | (12) | Valuation and Qualifying Accounts and Reserves
| | ---- | ----------------------------------------------

The information about our valuation and qualifying accounts and reserves are as follows:



|                                                                            |  |                              |  |                            |  |                      |  |                        
|--------------------------------------------------------------------------- |  | ---------------------------- |  | -------------------------- |  | -------------------- |  | -----------------------
|Description                                                                 |  | Balance atbeginning ofperiod |  | AdditionsCharged toExpense |  | DeductionsWrite-offs |  | Balance at endof period
|                                                                            |  | NT$                          |  |                            |  |                      |  | NT$                    
|                                                                            |  |                              |  |                           
|For the year ended 2007                                                     |  |                              |  |                            |  |                      |  |                        
|Allowance for doubtful accounts                                             |  | 24,270                       |  | 8,844                      |  |                     |  | 33,114                 
|Allowance for sales discounts                                               |  | 55,475                       |  | 111,774                    |  | 131,306              |  | 35,943                 
|Allowance for loss on obsolescence and decline in market value of inventory |  | 47,787                       |  | 18,598                     |  |                     |  | 66,385                 
|Allowance for deferred income tax assets, current                           |  | 141                          |  | 5,020                      |  |                     |  | 5,161                  
|Allowance for deferred income tax assets, noncurrent                        |  | 174,343                      |  | 15,485                     |  |                     |  | 189,828                
|                                                                            |  |                              |  |                           
|For the year ended 2008                                                     |  |                              |  |                            |  |                      |  |                        
|Allowance for doubtful accounts                                             |  | 33,114                       |  | 271,173                    |  |                     |  | 304,287                
|Allowance for sales discounts                                               |  | 35,943                       |  | 552,676                    |  | 432,523              |  | 156,096                
|Allowance for loss on obsolescence and decline in market value of inventory |  | 66,385                       |  | 9,196                      |  |                     |  | 75,581                 
|Allowance for deferred income tax assets, current                           |  | 5,161                        |  |                           |  | 5,161                |  |                       
|Allowance for deferred income tax assets, noncurrent                        |  | 189,828                      |  | 66,886                     |  |                     |  | 256,714                
|                                                                            |  |                              |  |                           
|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 deferred income tax assets, current                           |  |                             |  |                           |  |                     |  |                       
|Allowance for deferred income tax assets, noncurrent                        |  | 256,714                      |  |                           |  | 97,020               |  | 159,694                



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##### Table of Contents

SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | (13) | Recent Accounting Pronouncements
| | ---- | --------------------------------

U.S. GAAP



| | A. | In February 2010, the FASB issued FASB ASU 2010-09, Subsequent Events, Amendments to Certain Recognition and Disclosure Requirements, which clarifies
certain existing evaluation and disclosure requirements in ASC 855 Subsequent Events related to subsequent events. FASB ASU 2010-09 requires SEC filers to evaluate subsequent events through the date in which the financial statements are
issued and is effective immediately upon issuance. The new guidance does not have any significant impact on the Companys consolidated financial statements as of and for the year ended December 31, 2009.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | In October 2009, the Financial Accounting Standards Board (FASB) issued guidance on revenue recognition for arrangements with multiple deliverables. Under the new
guidance, when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, the residual method of revenue recognition is prohibited. Rather, a best estimate of the selling price is required to
separate deliverables and allocate arrangement consideration using the relative selling price method. The new guidance is effective for all new or materially modified arrangements entered into on or after June 15, 2010 with earlier adoption
permitted. The Company is currently evaluating its impact of adopting this new guidance.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | In October 2009, the FASB issued amended guidance for the scope of existing software revenue recognition accounting. Software elements and tangible products that have
software components that are essential to the functionality of the tangible product will no longer be within the scope of the software revenue recognition guidance, and software-enabled products will now be subject to other relevant revenue
recognition guidance. The new guidance is effective for all new or materially modified arrangements entered into on or after June 15, 2010 with earlier adoption permitted. The Company does not expect any significant impact on the adoption of
this guidance.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | In August 2009, the FASB issued guidance on the measurement of liabilities at fair value. The guidance clarifies the application of certain valuation techniques in
circumstances when a quoted price in an active market for the identical liability is not available. This guidance is effective for annual period ending December 31, 2009. The adoption of this guidance did not have a material impact on the
Companys consolidated financial statements.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | In July 2009, the FASB issued the FASB Accounting Standards Codification (ASC). The issued guidance establishes ASC as the source of authoritative U.S. GAAP recognized
by the FASB to be applied by nongovernmental entities. The Codification was effective for interim and annual periods ending after September 15, 2009. The adoption of this guidance did not have a material impact on the Companys
consolidated financial statements.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | F. | In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities (VIE), which is effective for interim and annual periods
beginning after November 15, 2009. The new guidance for VIEs eliminates the quantitative approach previously required for determining the primary beneficiary of a VIE and requires ongoing qualitative reassessments of whether an enterprise is
the primary beneficiary. No significant impact is expected for the Company on the adoption of the guidance.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SILICONWARE PRECISION INDUSTRIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



| | G. | In December 2008, the FASB issued guidance regarding employers disclosures about postretirement benefit plan assets, including investment allocation decisions,
inputs and valuation techniques used to measure the fair value of plan assets and significant concentrations of risks within plan assets. This guidance is effective for fiscal years ending after December 15, 2009. The adoption of this new
guidance does not have a material impact on the Companys consolidated financial statements.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

R.O.C.
GAAP

In April 2009, the R.O.C. Accounting Research and Development Foundation issued R.O.C. SFAS No. 41,
Disclosure for Operating Segments Information, which provides guidance on the identification of operating segments and required disclosure for operating segments information. This statement is effective for fiscal years beginning on or
after January 1, 2011. The Company does not expect any significant impact on the adoption of this statement.

In November
2007, the R.O.C. Accounting Research and Development Foundation issued R.O.C. SFAS No. 10 (revised), Inventories, which provides guidance on the determination of cost and its subsequent recognition as an expense, including any
write-down to net realizable value. It also provides guidance on the cost formulas that are used to assign costs to inventories. This statement is effective for fiscal years beginning on or after January 1, 2009. The adoption of R.O.C. SFAS
No.10 (revised) does not have any significant impact on the Companys consolidated financial statements.



F-73