Interim report
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Formosa Sumco Technology Corporation and Subsidiaries Consolidated Financial Statements for the Nine Months Ended September 30, 2025 and 2024 and Independent Auditors’ Review Report
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- 1 - INDEPENDENT AUDITORS’ REVIEW REPORT The Board of Directors and Shareholders Formosa Sumco Technology Corporation Introduction We have reviewed the accompanying consolidated balance sheets of Formosa Sumco Technology Corporation and its subsidiaries (collectively, the “Group”) as of September 30, 2025 and 2024, the related consolidated statements of comprehensive income for the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, the consolidated statements of changes in equity and cash flows for the nine months then ended, and the related notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the “consolidated financial statements”). Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews. Scope of Review We conducted our reviews in accordance with the Standards on Review Engagements of the Republic of China 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of September 30, 2025 and 2024, its consolidated financial performance for the three months ended September 30, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the nine months ended September 30, 2025 and 2024 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.
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- 2 - The engagement partners on the reviews resulting in this independent auditors’ review report are Ching-Ting Yang and Wen-Yuan Chuang. Deloitte & Touche Taipei, Taiwan Republic of China November 13, 2025 Notice to Readers The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally applied in the Republic of China. For the convenience of readers, the independent auditors’ review report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ review report and consolidated financial statements shall prevail.
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- 3 - FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars) September 30, 2025 December 31, 2024 September 30, 2024 ASSETS Amount % Amount % Amount % CURRENT ASSETS Cash and cash equivalents (Note 6) $ 1,273,424 2 $ 4,691,406 9 $ 3,437,389 7 Trade receivables from unrelated parties (Notes 8 and 19) 2,337,320 5 1,602,387 3 1,332,597 3 Trade receivables from related parties (Notes 8, 19 and 25) 277,581 1 446,309 1 436,018 1 Other receivables from unrelated parties (Note 8) 36,636 - 86,591 - 122,881 - Other receivables from related parties (Notes 8 and 25) 529 - 1,547 - 2,433 - Inventories (Note 9) 3,870,127 8 3,617,309 7 3,716,530 7 Prepayments (Note 14) 240,350 - 142,707 - 221,161 - Total current assets 8,035,967 16 10,588,256 20 9,269,009 18 NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Note 7) 132 - 112 - 171 - Property, plant and equipment (Notes 11, 25 and 26) 42,720,684 83 42,319,378 79 41,309,995 81 Right-of use assets (Notes 12 and 25) 25,440 - 29,009 - 16,896 - Intangible assets (Notes 13 and 25) 2,480 - 3,485 - 4,191 - Deferred tax assets (Notes 4 and 21) 244,584 1 292,066 1 302,936 - Prepayment for equipment 148,775 - 187,073 - 345,129 1 Refundable deposits 193 - 180 - 212 - Other non-current assets - others (Note 14) 4,961 - 1,937 - 2,175 - Total non-current assets 43,147,249 84 42,833,240 80 41,981,705 82 TOTAL $ 51,183,216 100 $ 53,421,496 100 $ 51,250,714 100 LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 15) $ - - $ 2,070,000 4 $ 5,582,200 11 Contract liabilities - current (Note 19) 435,177 1 639,822 1 1,142,936 2 Trade payables to unrelated parties 335,023 - 319,260 1 260,167 1 Trade payables to related parties (Note 25) 157,731 - 222,567 - 133,220 - Other payables to unrelated parties (Note 16) 1,944,832 4 2,373,113 5 3,264,680 6 Other payables to related parties (Notes 16 and 25) 361,776 1 488,567 1 505,479 1 Current tax liabilities (Notes 4 and 21) 31,799 - 110,044 - 35,010 - Lease liabilities - current (Notes 12 and 25) 7,235 - 6,875 - 5,068 - Other current liabilities 31,210 - 40,310 - 32,429 - Total current liabilities 3,304,783 6 6,270,558 12 10,961,189 21 NON-CURRENT LIABILITIES Contract liabilities - non-current (Note 19) 2,211,516 5 2,221,099 4 2,198,043 4 Long-term borrowings (Note 15) 20,500,000 40 19,250,000 36 12,800,000 25 Deferred tax liabilities (Notes 4 and 21) 41,333 - 37,070 - 20,825 - Lease liabilities - non-current (Notes 12 and 25) 18,436 - 22,275 - 11,968 - Net defined benefit liabilities - non-current (Notes 4 and 17) 132,313 - 208,589 1 232,427 1 Guarantee deposits 553,641 1 553,225 1 553,411 1 Other non-current liabilities 9,774 - 52,955 - 49,909 - Total non-current liabilities 23,467,013 46 22,345,213 42 15,866,583 31 Total liabilities 26,771,796 52 28,615,771 54 26,827,772 52 EQUITY (Notes 18 and 23) Share capital Ordinary shares 3,878,483 8 3,878,483 7 3,878,483 8 Capital surplus 5,739,399 11 5,739,321 11 5,739,321 11 Retained earnings Legal reserve 3,527,132 7 3,396,199 6 3,396,199 7 Special reserve 79,070 - 65,842 - 65,842 - Unappropriated earnings 11,273,203 22 11,804,950 22 11,401,662 22 Total retained earnings 14,879,405 29 15,266,991 28 14,863,703 29 Other equity (85,867) - (79,070) - (58,565) - Total equity 24,411,420 48 24,805,725 46 24,422,942 48 TOTAL $ 51,183,216 100 $ 53,421,496 100 $ 51,250,714 100 The accompanying notes are an integral part of the consolidated financial statements.
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- 4 - FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Amount % Amount % Amount % Amount % OPERATING REVENUE (Notes 19, 25 and 29) $ 3,088,467 100 $ 3,050,105 100 $ 9,065,551 100 $ 9,304,542 100 OPERATING COSTS (Notes 9, 13, 17, 20 and 25) (2,612,766 ) (84 ) (2,372,411 ) (78 ) (7,628,124 ) (84 ) (7,310,783 ) (79 ) GROSS PROFIT 475,701 16 677,694 22 1,437,427 16 1,993,759 21 OPERATING EXPENSES (Notes 17, 20 and 25) Marketing (110,581 ) (4 ) (162,423 ) (5 ) (377,744 ) (4 ) (432,797 ) (4 ) Administrative (125,163 ) (4 ) (124,775 ) (4 ) (362,764 ) (4 ) (342,668 ) (4 ) Total operating expenses (235,744 ) (8 ) (287,198 ) (9 ) (740,508 ) (8 ) (775,465 ) (8 ) INCOME FROM OPERATIONS 239,957 8 390,496 13 696,919 8 1,218,294 13 NON-OPERATING INCOME AND EXPENSES (Notes 20 and 25) Interest income 8,526 - 41,047 1 53,715 - 85,236 1 Other income 4,628 - 6,605 - 15,629 - 21,561 - Other gains and losses 33,151 1 (156,750 ) (5 ) (304,762 ) (3 ) (73,257 ) (1 ) Finance costs (9,817 ) - (64,508 ) (2 ) (65,265 ) (1 ) (118,881 ) (1 ) Total non-operating income and expenses 36,488 1 (173,606 ) (6 ) (300,683 ) (4 ) (85,341 ) (1 ) INCOME BEFORE INCOME TAX 276,445 9 216,890 7 396,236 4 1,132,953 12 INCOME TAX EXPENSE (Notes 4 and 21) (57,636 ) (2 ) (43,092 ) (1 ) (85,695 ) (1 ) (226,910 ) (2 ) NET INCOME 218,809 7 173,798 6 310,541 3 906,043 10 (Continued)
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- 5 - FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Amount % Amount % Amount % Amount % OTHER COMPREHENSIVE INCOME (LOSS) (Note 18) Items that will not be reclassified subsequently to profit or loss: Unrealized (loss) gain on investments in equity instruments at fair value through other comprehensive income $ 15 - $ (39 ) - $ 20 - $ (91 ) - Items that may be reclassified subsequently to profit or loss: Exchange difference on translating the financial statements of foreign operations 6,833 - 28,405 1 (6,817 ) - 7,368 - Other comprehensive income (loss) for the period, net of income tax 6,848 - 28,366 1 (6,797 ) - 7,277 - TOTAL COMPREHENSIVE INCOME FOR THE PERIOD $ 225,657 7 $ 202,164 7 $ 303,744 3 $ 913,320 10 EARNINGS PER SHARE (Note 22) Basic earnings per share $ 0.56 $ 0.45 $ 0.80 $ 2.34 Diluted earnings per share $ 0.56 $ 0.45 $ 0.80 $ 2.34 The accompanying notes are an integral part of the consolidated financial statements. (Concluded)
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- 6 - FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) Others Equity Retained Earnings Exchange Differences on Translating the Financial Statements of Unrealized Gain (Loss) on Investments in Financial Assets at Fair Value Through Other Share Capital Capital Surplus Legal Reserve Special Reserve Unappropriated Earnings Total Foreign Operations Comprehensive Income Total Total Equity BALANCE ON JANUARY 1, 2024 $ 3,878,483 $ 5,739,308 $ 3,049,367 $ 45,560 $ 12,801,975 $ 15,896,902 $ (66,066) $ 224 $ (65,842) $ 25,448,851 Net profit for the nine months ended September 30, 2024 - - - - 906,043 906,043 - - - 906,043 Other comprehensive income (loss) for the nine months ended September 30, 2024 - - - - - - 7,368 (91) 7,277 7,277 Total comprehensive income (loss) for the nine months ended September 30, 2024 - - - - 906,043 906,043 7,368 (91) 7,277 913,320 Appropriation of the 2023 earnings Legal reserve - - 346,832 - (346,832) - - - - - Special reserve - - - 20,282 (20,282) - - - - - Cash dividends - - - - (1,939,242) (1,939,242) - - - (1,939,242) - - 346,832 20,282 (2,306,356) (1,939,242) - - - (1,939,242) Dividends expired and uncollected by shareholders - 13 - - - - - - - 13 BALANCE ON SEPTEMBER 30, 2024 $ 3,878,483 $ 5,739,321 $ 3,396,199 $ 65,842 $ 11,401,662 $ 14,863,703 $ (58,698) $ 133 $ (58,565) $ 24,422,942 BALANCE ON JANUARY 1, 2025 $ 3,878,483 $ 5,739,321 $ 3,396,199 $ 65,842 $ 11,804,950 $ 15,266,991 $ (79,144) $ 74 $ (79,070) $ 24,805,725 Net profit for the nine months ended September 30, 2025 - - - - 310,541 310,541 - - - 310,541 Other comprehensive income (loss) for the nine months ended September 30, 2025 - - - - - - (6,817) 20 (6,797) (6,797) Total comprehensive income (loss) for the nine months ended September 30, 2025 - - - - 310,541 310,541 (6,817) 20 (6,797) 303,744 Appropriation of the 2024 earnings Legal reserve - - 130,933 - (130,933) - - - - - Special reserve - - - 13,228 (13,228) - - - - - Cash dividends - - - - (698,127) (698,127) - - - (698,127) - - 130,933 13,228 (842,288) (698,127) - - - (698,127) Dividends expired and uncollected by shareholders - 78 - - - - - - - 78 BALANCE ON SEPTEMBER 30, 2025 $ 3,878,483 $ 5,739,399 $ 3,527,132 $ 79,070 $ 11,273,203 $ 14,879,405 $ (85,961) $ 94 $ (85,867) $ 24,411,420 The accompanying notes are an integral part of the consolidated financial statements.
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- 7 - FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) For the Nine Months Ended September 30 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax $ 396,236 $ 1,132,953 Adjustments for: Depreciation expense 1,382,145 1,748,090 Amortization expense 1,328 2,078 Interest expense 65,265 118,881 Interest income (53,715) (85,236) Dividend income (3) (6) Write-down of inventories 9,980 7,799 Gains on disposal of property, plant and equipment (40) (20) Net (gain) loss on foreign currency exchange (15,696) 29,594 Changes in operating assets and liabilities Trade receivables (549,278) 1,401,694 Other receivables 46,052 69,346 Inventories (268,764) 6,168 Prepayments (96,674) (68,103) Contract liabilities (214,228) (1,753,132) Notes payable - - Trade payables (37,451) (95,965) Other payables 42,344 (59,891) Other current liabilities (9,100) 17,775 Net defined benefit liabilities (76,276) (103,135) Cash generated from operations 622,125 2,368,890 Interest received 58,636 83,025 Dividends received 3 6 Interest paid (65,265) (121,988) Income tax paid (112,195) (1,056,372) Net cash generated from operating activities 503,304 1,273,561 CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment (2,227,183) (7,069,200) Proceeds from disposal of property, plant and equipment 40 20 (Increase) decrease in refundable deposits (13) 42,112 Payments for intangible assets (323) (409) (Increase) decrease in other non-current assets (3,024) 712 Increase in prepayments for equipment (122,346) (85,100) Net cash used in investing activities (2,352,849) (7,111,865) (Continued)
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- 8 - FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) For the Nine Months Ended September 30 2025 2024 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings $ 9,038,200 $ 5,582,200 Repayments of short-term borrowings (11,108,200) - Proceeds from long-term borrowings 5,000,000 1,800,000 Repayments of long-term borrowings (3,750,000) (500,000) Proceeds from guarantee deposits received 416 3,275 Repayment of the principal portion of lease liabilities (5,426) (2,425) (Decrease) increase in other non-current liabilities (43,181) 9,081 Cash dividends paid (698,066) (1,939,088) Net cash (used in) generated from financing activities (1,566,257) 4,953,043 EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES (2,180) 1,946 NET DECREASE IN CASH AND CASH EQUIVALENTS (3,417,982) (883,315) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 4,691,406 4,320,704 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 1,273,424 $ 3,437,389 The accompanying notes are an integral part of the consolidated financial statements. (Concluded)
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- 9 - FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) 1. GENERAL INFORMATION Formosa Sumco Technology Corporation (the “Company”, formerly Formosa Komatsu Silicon Corporation) was established by Formosa Plastics Corporation, Asia Pacific Investment Corporation and Komatsu Electronic Metals Co., Ltd. The Company was incorporated in the Republic of China (ROC) and commenced business in November 1995. The Company mainly manufactures, sells and trades silicon wafers. On October 18, 2006, Sumco Corporation acquired 51% of the equity in Komatsu Electronic Metals Co., Ltd. As the result, the Company’s name was changed to Formosa Sumco Technology Corporation in accordance with the resolution passed at the general shareholders’ meeting on December 29, 2006, and this name change was registered with the Ministry of Economic Affairs, Republic of China. In addition, Komatsu Electronic Metals Co., Ltd. changed its name to Sumco Techxiv Corporation. The Company publicly listed on September 12, 2006, and its shares have been listed and started trading on the Emerging Stock Board (ESB) on November 23, 2006. The Company was subsequently listed and started trading on the Taiwan Stock Exchange since December 10, 2007. The Company’s parent company is Sumco Techxiv Corporation, which held 45.05% and 45.57% of the ordinary shares of the Company as of September 30, 2025 and 2024, respectively. The Company’s ultimate parent company is Sumco Corporation. The consolidated financial statements are presented in the Company’s functional currency, the New Taiwan dollar (NTD). 2. APPROVAL OF FINANCIAL STATEMENTS The consolidated financial statements were approved by the Company’s board of directors on November 13, 2025. 3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRS Accounting Standards”) endorsed and issued into effect by the Financial Supervisory Commission (FSC) The initial application of the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have a material impact on the Group’s accounting policies.
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- 10 - b. The IFRS Accounting Standards endorsed by the FSC for application starting from 2026 New, Amended and Revised Standards and Interpretations Effective Date Announced by IASB Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” January 1, 2026 Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity” January 1, 2026 Annual Improvements to IFRS Accounting Standards - Volume 11 January 1, 2026 IFRS 17 “Insurance Contracts” (including the 2020 and 2021 amendments to IFRS 17) January 1, 2023 As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact of the application of the amendments on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed. c. The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC New, Amended and Revised Standards and Interpretations Effective Date Announced by IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” To be determined by IASB IFRS 18 “Presentation and Disclosure in Financial Statements” January 1, 2027 (Note 2) IFRS 19 “Subsidiaries without Public Accountability: Disclosures” (including the 2025 amendments to IFRS 19) January 1, 2027 Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates. Note 2: On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC. IFRS 18 “Presentation and Disclosure in Financial Statements” IFRS 18 will supersede IAS 1 “Presentation of Financial Statements”. The main changes comprise: Items of income and expenses included in the statement of profit or loss shall be classified into the operating, investing, financing, income taxes and discontinued operations categories. The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss. Provides guidance to enhance the requirements of aggregation and disaggregation: The Group shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The Group shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Group labels items as “other” only if it cannot find a more informative label.
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- 11 - Disclosures on Management-defined Performance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management’s view of an aspect of the financial performance of the Group as a whole, the Group shall disclose related information about its MPMs in a single note to the financial statements, including the description of such measures, calculations, reconciliations to the subtotal or total specified by IFRS Accounting Standards and the income tax and non-controlling interests effects of related reconciliation items. Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the other impacts of the above amended standards and interpretations on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed. 4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION a. Statement of compliance These interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. Disclosure information included in these interim consolidated financial statements is less than the disclosure information required in a complete set of annual consolidated financial statements. b. Basis of preparation The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of defined benefit obligation less the fair value of plan assets. The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows: 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and 3) Level 3 inputs are unobservable inputs for an asset or liability. c. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries). When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Group. See Note 10 and Table 6 for detailed information on subsidiaries (including percentages of ownership and main businesses).
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- 12 - d. Other material accounting policies Except for the following, please refer to the consolidated financial statements for the year ended December 31, 2024. 1) Carbon fee provision In accordance with the Regulations Governing the Collection of Carbon Fees and related regulations of the ROC, the carbon fee provision is recognized and measured on the basis of the best estimate of the expenditure required to settle the obligation for the current year and the proportion of actual emissions to the total annual emissions. 2) Retirement benefit plan Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events. 3) Income tax expense Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period’s pre-tax income the tax rate that would be applicable to expected total annual earnings. 5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY The material accounting judgments and key sources of estimation uncertainty applied to these consolidated financial statements are consistent with those applied to the consolidated financial statements for the year ended December 31, 2024. 6. CASH AND CASH EQUIVALENTS September 30, 2025 December 31, 2024 September 30, 2024 Checking accounts $ 4,787 $ 2,426 $ 493 Demand deposits 368 403 401 Foreign currency deposits 459,574 596,970 856,866 Cash equivalents (investments with original maturities of less than 3 months) Commercial papers 351,660 2,094,221 - Time deposits 457,035 1,997,386 2,579,629 $ 1,273,424 $ 4,691,406 $ 3,437,389
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- 13 - The market rate intervals of cash in bank, commercial papers and time deposits at the end of the reporting period were as follows: September 30, 2025 December 31, 2024 September 30, 2024 Demand deposits 0.705% 0.705% 0.705% Foreign currency deposits 0.0001%-0.01% 0.0001%-0.01% 0.0001%-0.01% Commercial papers 1.2%-1.3% 1.107%-1.3% - Time deposits 4.28% 4.69%-4.85% 5.03%-5.43% 7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME September 30, 2025 December 31, 2024 September 30, 2024 Non-current Domestic investments Listed shares Ordinary shares - Formosa Petrochemical Corporation $ 132 $ 112 $ 171 The Group invested in the ordinary shares of Formosa Petrochemical Corporation for long-term strategy purposes and expects to profit from the shares through long-term investment. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes. 8. TRADE RECEIVABLES AND OTHER RECEIVABLES September 30, 2025 December 31, 2024 September 30, 2024 Trade receivables At amortized cost Gross carrying amount Trade receivables from unrelated parties $ 2,337,320 $ 1,602,387 $ 1,332,597 Trade receivables from related parties 277,581 446,309 436,018 Less: Allowance for impairment loss - - - $ 2,614,901 $ 2,048,696 $ 1,768,615 Other receivables Tax refund receivables (sales tax) $ 35,269 $ 80,605 $ 116,710 Others 1,367 5,986 6,171 $ 36,636 $ 86,591 $ 122,881 Other receivables - related parties Others $ 529 $ 1,547 $ 2,433
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- 14 - Trade Receivables at Amortized Cost In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced. The Group provides for expected credit losses based on the use of lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base. The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss. The following table details the loss allowance of trade receivables based on the Group’s provision matrix. September 30, 2025 Not Past Due Less than 60 Days 61 to 90 Days 91 to 120 Days Over 120 Days Total Expected credit loss rate 0% 0% 0% 0% 0% Gross carrying amount $ 2,614,901 $ - $ - $ - $ - $ 2,614,901 Loss allowance (Lifetime ECLs) - - - - - - Amortized cost $ 2,614,901 $ - $ - $ - $ - $ 2,614,901 December 31, 2024 Not Past Due Less than 60 Days 61 to 90 Days 91 to 120 Days Over 120 Days Total Expected credit loss rate 0% 0% 0% 0% 0% Gross carrying amount $ 2,048,696 $ - $ - $ - $ - $ 2,048,696 Loss allowance (Lifetime ECLs) - - - - - - Amortized cost $ 2,048,696 $ - $ - $ - $ - $ 2,048,696
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- 15 - September 30, 2024 Not Past Due Less than 60 Days 61 to 90 Days 91 to 120 Days Over 120 Days Total Expected credit loss rate 0% 0% 0% 0% 0% Gross carrying amount $ 1,768,615 $ - $ - $ - $ - $ 1,768,615 Loss allowance (Lifetime ECLs) - - - - - - Amortized cost $ 1,768,615 $ - $ - $ - $ - $ 1,768,615 9. INVENTORIES September 30, 2025 December 31, 2024 September 30, 2024 Raw materials $ 1,021,409 $ 817,646 $ 803,857 Supplies 1,732,489 1,558,501 1,646,399 Work in progress 531,018 535,639 559,553 Finished goods 713,795 814,488 814,508 Merchandise inventories 5,718 15,357 18,188 Less: Allowance for inventory devaluation (134,302) (124,322) (125,975) $ 3,870,127 $ 3,617,309 $ 3,716,530 The cost of inventories recognized as cost of goods sold for the three months ended September 30, 2025 and for the nine months ended September 30, 2025 was $2,612,766 thousand and $7,628,124 thousand, respectively. The cost of inventories recognized as cost of goods sold for the three months ended September 30, 2024 and for the nine months ended September 30, 2024 was $2,372,411 thousand and $7,310,783 thousand, respectively. The cost of goods sold for the three months ended September 30, 2025 and for the nine months ended September 30, 2025, included unallocated fixed manufacturing overhead of $50,440 thousand and $143,115 thousand and inventory write-downs of $2,244 thousand and $9,980 thousand, and income from the sale of silicon waste of $(9,402) thousand and $(42,122) thousand, respectively. The cost of goods sold for the three months ended September 30, 2024 and for the nine months ended September 30, 2024, included unallocated fixed manufacturing overhead of $67,343 thousand and $254,467 thousand and inventory write-downs of $3,746 thousand and $7,799 thousand, and income from the sale of silicon waste of $(21,126) thousand and $(51,641) thousand, respectively. 10. SUBSIDIARIES Subsidiary Included in the Consolidated Financial Statements Proportion of Ownership Investor Investee Nature of Activities September 30, 2025 December 31, 2024 September 30, 2024 The Company Japan Formosa Sumco Technology Corporation Manufacture and sale of high quality ingots and other related businesses 100% 100% 100%
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- 16 - 11. PROPERTY, PLANT AND EQUIPMENT Asset Used by the Group Freehold Land Buildings Machinery and Equipment Other Equipment Equipment Under Installation and Construction in Progress Total Cost Balance on January 1, 2025 $ 913,329 $ 3,957,212 $ 39,070,985 $ 793,395 $ 35,066,775 $ 79,801,696 Additions - - 34,082 19,984 1,727,297 1,781,363 Reclassifications - 1,129 269,324 5,176 (276,208 ) (579 ) Disposals - - (33,304 ) (8,181 ) - (41,485 ) Effect of foreign currency exchange differences - - (16,588 ) (299 ) - (16,887 ) Balance on September 30, 2025 $ 913,329 $ 3,958,341 $ 39,324,499 $ 810,075 $ 36,517,864 $ 81,524,108 Accumulated depreciation and impairment Balance on January 1, 2025 $ - $ 2,022,178 $ 34,853,959 $ 606,181 $ - $ 37,482,318 Disposals - - (33,304 ) (8,181 ) - (41,485 ) Depreciation expense - 84,503 1,230,030 62,095 - 1,376,628 Effect of foreign currency exchange differences - - (13,766 ) (271 ) - (14,037 ) Balance on September 30, 2025 $ - $ 2,106,681 $ 36,036,919 $ 659,824 $ - $ 38,803,424 Carrying amount on September 30, 2025 $ 913,329 $ 1,851,660 $ 3,287,580 $ 150,251 $ 36,517,864 $ 42,720,684 Carrying amount on December 31, 2024 and January 1, 2025 $ 913,329 $ 1,935,034 $ 4,217,026 $ 187,214 $ 35,066,775 $ 42,319,378 Cost Balance on January 1, 2024 $ 913,329 $ 3,955,332 $ 38,000,615 $ 727,638 $ 28,315,381 $ 71,912,295 Additions - - 53,753 25,309 6,371,263 6,450,325 Reclassifications - - 901,374 12,880 (931,590 ) (17,336 ) Disposals - - (56,318 ) (4,623 ) - (60,941 ) Effect of foreign currency exchange differences - - 21,521 347 - 21,868 Balance on September 30, 2024 $ 913,329 $ 3,955,332 $ 38,920,945 $ 761,551 $ 33,755,054 $ 78,306,211 Accumulated depreciation and impairment Balance on January 1, 2024 $ - $ 1,909,598 $ 32,857,265 $ 531,304 $ - $ 35,298,167 Disposals - - (56,318 ) (4,623 ) - (60,941 ) Depreciation expense - 84,415 1,593,348 64,753 - 1,742,516 Effect of foreign currency exchange differences - - 16,157 317 - 16,474 Balance on September 30, 2024 $ - $ 1,994,013 $ 34,410,452 $ 591,751 $ - $ 36,996,216 Carrying amount on September 30, 2024 $ 913,329 $ 1,961,319 $ 4,510,493 $ 169,800 $ 33,755,054 $ 41,309,995
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- 17 - The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful life of the asset: Building Real estate, dormitories, warehouses and readiness rooms 23-35 years Wastewater treatment area and strain tanks 15-35 years Machinery and equipment 5-12 years Other equipment 3-12 years No impairment loss or reversal of impairment loss was recognized for the nine months ended September 30, 2025 and 2024. 12. LEASE ARRANGEMENTS a. Right-of-use assets September 30, 2025 December 31, 2024 September 30, 2024 Carrying amount Buildings $ 25,440 $ 29,009 $ 16,896 For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Additions to right-of-use assets $ 2,148 $ - Depreciation charge for right-of-use assets Buildings $ 1,806 $ 1,896 $ 5,517 $ 5,574 The Group renewed the lease for its Hsinchu office in June 2025, recognizing an additional net right-of-use asset of $2,148 thousand. Except for the aforementioned derecognition and recognized depreciation, the Group did not have a significant increase in sublease or impairment of right-of-use assets during the nine months ended September 30, 2025 and 2024. b. Lease liabilities September 30, 2025 December 31, 2024 September 30, 2024 Carrying amount Current $ 7,235 $ 6,875 $ 5,068 Non-current $ 18,436 $ 22,275 $ 11,968
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- 18 - Range of discount rate for lease liabilities was as follows: September 30, 2025 December 31, 2024 September 30, 2024 Buildings 1.1%-1.6% 1.1%-1.6% 1.1%-1.6% 13. INTANGIBLE ASSETS September 30, 2025 December 31, 2024 September 30, 2024 Technical cooperation fees $ 2,480 $ 3,485 $ 4,191 For the Three Months Ended September 30 2025 2024 Cost Balance on January 1 $ 14,116 $ 13,707 Additions 323 409 Balance on September 30 $ 14,439 $ 14,116 Accumulated amortization Balance on January 1 $ 10,631 $ 7,847 Amortization expense 1,328 2,078 Balance on September 30 $ 11,959 $ 9,925 Carrying amount on September 30 $ 2,480 $ 4,191 The Group signed a technical cooperation arrangement with Sumco Corporation with a total fee of JPY2,000 thousand (NT$323 thousand) in 2025. In 2025, the Company paid JPY2,000 thousand (NT$323 thousand) in 2025, which was amortized over a period of 60 months. The Group signed a technical cooperation arrangement with Sumco Corporation with a total fee of JPY2,000 thousand (NT$409 thousand) in 2024. In 2024, the Company paid JPY2,000 thousand (NT$409 thousand) in 2024, which was amortized over a period of 60 months. The amortized expense for the three months ended September 30, 2025 and for the nine months ended September 30, 2025 was $375 thousand and $1,328 thousand, respectively. The amortization expense is recognized as technical corporation expense under operating costs. The amortized expense for the three months ended September 30, 2024 and for the nine months ended September 30, 2024 was $707 thousand and $2,078 thousand, respectively. The amortization expense is recognized as technical corporation expense under operating costs.
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- 19 - 14. OTHER ASSETS September 30, 2025 December 31, 2024 September 30, 2024 Prepayments $ 240,350 $ 142,707 $ 221,161 Others (including testing fees and electricity subsidies) 4,961 1,937 2,175 $ 245,311 $ 144,644 $ 223,336 Current $ 240,350 $ 142,707 $ 221,161 Non-current 4,961 1,937 2,175 $ 245,311 $ 144,644 $ 223,336 15. BORROWINGS a. Short-term borrowings September 30, 2025 December 31, 2024 September 30, 2024 Unsecured borrowings Line of credit borrowings $ - $ 2,070,000 $ 5,582,200 Interest rate Line of credit borrowings - 1.775%-1.820% 1.770%-1.795% b. Long-term borrowings September 30, 2025 December 31, 2024 September 30, 2024 Unsecured borrowings Bank loans $ 20,500,000 $ 19,250,000 $ 12,800,000 Interest rate Bank loans 1.6000%- 1.8211% 1.7926%- 2.049% 1.7895% The Group received loan drawdowns of $3,000,000 thousand and $2,000,000 thousand on July 2025 and September 2025, respectively. The maturity dates of the above long-term borrowings are July 15, 2030 and September 29, 2030. The principal will be repaid in one lump sum on their maturity dates according to their loan contracts; the loan interest rates are all floating interest rates. Between 2025 and 2024, the Group paid off the long-term bank loan before its original maturity date of October 15, 2026.
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- 20 - 16. OTHER LIABILITIES September 30, 2025 December 31, 2024 September 30, 2024 Other payables - current Payables for purchases of equipment $ 844,096 $ 1,447,405 $ 2,286,485 Payables for salaries and bonuses 339,471 431,410 417,199 Payables for insurance 33,158 36,584 34,241 Payables for utilities 93,174 90,864 94,705 Payables for dividends 286 303 313 Others (Note) 634,647 366,547 431,737 $ 1,944,832 $ 2,373,113 $ 3,264,680 Other payables to related party (current) Payables for purchases of equipment - related parties $ 54,945 $ 58,679 $ 174,416 Payables for royalties - related parties 257,064 385,327 288,314 Payables for accrued expense - related parties 49,767 44,561 42,749 $ 361,776 $ 488,567 $ 505,479 Note: Others included under other payables - current are mainly payables for project fees, pension costs, employees’ compensation, taxation and carbon fee. 17. RETIREMENT BENEFIT PLANS Pension costs in respect of defined benefit plans are calculated by the actuarially determined pension cost rate at the end of the prior financial year and are recognized in each period respectively as follow: For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Operating cost $ 2,287 $ 2,458 $ 6,772 $ 7,157 Operating expenses 758 922 2,243 2,782 $ 3,045 $ 3,380 $ 9,015 $ 9,939
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- 21 - 18. EQUITY a. Share capital Ordinary shares September 30, 2025 December 31, 2024 September 30, 2024 Numbers of shares authorized (in thousands) 775,697 775,697 775,697 Shares authorized $ 7,756,966 $ 7,756,966 $ 7,756,966 Number of shares issued and fully paid (in thousands) 387,848 387,848 387,848 Shares issued $ 3,878,483 $ 3,878,483 $ 3,878,483 Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends. b. Capital surplus September 30, 2025 December 31, 2024 September 30, 2024 May be used to offset a deficit, distributed as cash dividends, or transferred to share capital Issuance of ordinary shares (1) $ 5,739,080 $ 5,739,080 $ 5,739,080 May be used to offset a deficit only Dividends expired and uncollected by shareholders (2) 319 241 241 $ 5,739,399 $ 5,739,321 $ 5,739,321 1) Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and to once a year). 2) Accounted for as capital surplus - others, may be used only to offset a deficit.
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- 22 - c. Retained earnings and dividends policy Under the dividends policy as set forth in the amended Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. The shareholders of the Company held their regular meeting on June 17, 2022 and, in that meeting, resolved the amendments to the Company’s Articles of Incorporation. When distributing surplus in cash, the distribution plan shall be approved by the board of directors with more than two-thirds of the directors attending the meeting and resolved by more than half of the directors and reported such distribution to the shareholders’ meeting. When distributing a surplus in share dividends, the distribution plan of share dividends shall be drawn by the Company’s board of directors and shall be resolved by the shareholders in the shareholders’ meeting. For the policies on distribution of employees’ compensation and remuneration of directors and supervisors before and after amendment, please refer to compensation of employees and remuneration of directors and supervisors in Note 20 (g). The Company belongs to a high-tech capital-intensive industry and is in the growth phase. To support the Company’s growth, the Company has three different methods to distribute dividends, including cash dividends, capitalization of retained earnings, and capital surplus, and no more than 80% of distributable surplus should be distributed from the legal reserve and special reserve. In principle, cash dividends should be distributed first, and the aggregate of capitalized of retained earnings and capital surplus shall not exceed 50% of total dividends. An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. The legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash. When a special reserve is appropriated for cumulative net debit balance reserves from prior period, the special reserve is only appropriated from the prior unappropriated earnings. The appropriations of earnings for 2024 and 2023, respectively, were as follows: Appropriation of Earnings Dividends Per Share (NT$) For the Year Ended December 31 For the Year Ended December 31 2024 2023 2024 2023 Legal reserve $ 130,933 $ 346,832 Special reserve 13,228 20,282 Cash dividends 698,127 1,939,242 $1.8 $5.0 The above appropriations for cash dividends were resolved by the Company’s board of directors on March 12, 2025 and March 7, 2024. The other appropriation of earnings for 2024 and 2023 was resolved by the shareholders in their meeting on June 6, 2025 and June 27, 2024.
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- 23 - d. Other equity items The exchange differences arising on translation of foreign operations’ net assets from their functional currencies to the Group’s presentation currency (NTD) are recognized directly in other comprehensive income and also accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the exchange differences on translating the financial statements of foreign operations are reclassified to profit or loss on the disposal of the foreign operation. Unrealized gain (loss) on available-for-sale financial assets represents the cumulative gains or losses arising from the fair value measurement of available-for-sale financial assets that are recognized in other comprehensive income, excluding those available-for-sale financial assets that have been disposed of or are determined to be impaired subsequently; the related cumulative gains or losses in other comprehensive income are reclassified into profit or loss. 19. REVENUE For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Revenue from the sale of goods $ 3,088,467 $ 3,050,105 $ 9,065,551 $ 9,304,542 Contract Balances September 30, 2025 December 31, 2024 September 30, 2024 January 1, 2024 Trade receivables (Note 8) $ 2,614,901 $ 2,048,696 $ 1,768,615 $ 3,187,834 Contract liabilities - current $ 435,177 $ 639,822 $ 1,142,936 $ 2,252,241 Contract liabilities - non-current $ 2,211,516 $ 2,221,099 $ 2,198,043 $ 2,841,870 20. NET INCOME a. Interest income For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Bank deposits $ 8,522 $ 41,047 $ 53,706 $ 85,198 Others 4 - 9 38 $ 8,526 $ 41,047 $ 53,715 $ 85,236
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- 24 - b. Other income For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Dividend income $ - $ - $ 3 $ 6 Others (including commission income, etc.) 4,628 6,605 15,626 21,555 $ 4,628 $ 6,605 $ 15,629 $ 21,561 c. Other gains and losses For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Net foreign exchange gains (losses) $ 33,475 $ (156,653) $ (304,418) $ (72,952) Gain on disposal of property, plant and equipment - 20 40 20 Others (324) (117) (384) (325) $ 33,151 $ (156,750) $ (304,762) $ (73,257) d. Finance costs For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Interest on lease liabilities $ 92 $ 71 $ 281 $ 231 Interest on bank loans 94,379 73,432 271,466 180,455 Other interest expenses 1 162 39 506 Less: Amounts included in the cost of qualifying assets (84,655) (9,157) (206,521) (62,311) $ 9,817 $ 64,508 $ 65,265 $ 118,881 Information on capitalized interest is as follows: For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Capitalized interest amount $ 84,665 $ 9,157 $ 206,521 $ 62,311 Capitalization rate 1.7895% 1.70% 1.7895% 1.70%
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- 25 - e. Depreciation and amortization For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 An analysis of depreciation by function Operating costs $ 406,060 $ 550,884 $ 1,371,848 $ 1,737,791 Operating expenses 3,427 3,318 10,297 10,299 $ 409,487 $ 554,202 $ 1,382,145 $ 1,748,090 An analysis of amortization by function Operating costs $ 375 $ 707 $ 1,328 $ 2,078 Operating expenses - - - - $ 375 $ 707 $ 1,328 $ 2,078 f. Employee benefits expense For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Post-employment benefits (see to Note 17) Defined contribution plans $ 17,707 $ 17,101 $ 53,209 $ 51,103 Defined benefit plans 3,045 3,380 9,015 9,939 20,752 20,481 62,224 61,042 Salaries and bonuses etc. 458,847 424,737 1,365,655 1,301,744 $ 479,599 $ 445,218 $ 1,427,879 $ 1,362,786 An analysis of employee benefits expense by function Operating costs $ 382,880 $ 351,364 $ 1,140,034 $ 1,119,107 Operating expenses 96,719 93,854 287,845 243,679 $ 479,599 $ 445,218 $ 1,427,879 $ 1,362,786 g. Employees’ compensation and remuneration of directors The Company accrued compensation of employees at rates of no less than 0.05% and no higher than 0.5%, respectively, of net profit before income tax excluding compensation of employees. In accordance with the amendments to the Securities and Exchange Act in August 2024, the shareholders of the Company resolved the amendment to the Company’s Articles at their 2025 regular meeting. The amendments explicitly stipulate the allocation of 0.02% to 0.2% of net profit before income tax, compensation of employees.
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- 26 - For the three and nine months ended September 30, 2025 and 2024, the employees’ compensation were as follows: Accrual rate For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Compensation of employees 0.30% 0.30% 0.30% 0.30% Remuneration of directors - - - - Amount For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Compensation of employees $ 810 $ 642 $ 1,155 $ 3,396 Remuneration of directors $ - $ - $ - $ - If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate. The appropriations for compensation of employees and remuneration of directors for 2024 and 2023 have been resolved by the board of directors on March 12, 2025 and March 7, 2024, respectively, were as follows: For the Year Ended December 31 2024 2023 Compensation of employees $ 4,878 $ 12,941 Remuneration of directors - - There is no difference between the actual amounts of compensation of employees and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2024 and 2023. Information on the compensation of employees and remuneration of directors resolved by the Company’s board of directors in 2024 and 2023 is available at the Market Observation Post System website of the Taiwan Stock Exchange. h. Gain or loss on foreign currency exchange For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Foreign exchange gains $ 98,062 $ 68,656 $ 299,109 $ 271,110 Foreign exchange losses (64,587) (225,309) (603,527) (344,062) Net gains (losses) $ 33,475 $ (156,653) $ (304,418) $ (72,952)
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- 27 - 21. INCOME TAX a. Income tax recognized in profit or loss Major components of income tax expense are as follows: For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Current tax In respect of the current year $ 32,206 $ 42,354 $ 37,813 $ 191,999 Adjustments for prior years (3,383) (3,106) (3,863) (3,123) Deferred tax In respect of the current year 28,813 3,844 51,745 38,034 Income tax expense recognized in profit or loss $ 57,636 $ 43,092 $ 85,695 $ 226,910 b. Income tax assessments The income tax returns through 2023 have been assessed by the tax authorities. 22. EARNINGS PER SHARE The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per shares were as follows: For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Net income $ 218,809 $ 173,798 $ 310,541 $ 906,043 Unit: Thousand Shares For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Weighted average number of ordinary shares used in the computation of basic earnings per share (in thousands) 387,848 387,848 387,848 387,848 Effect of potentially dilutive ordinary shares Employees’ compensation 11 85 25 45 Weighted average number of ordinary shares used for computation of diluted earnings per share (in thousands) 387,859 387,933 387,873 387,893
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- 28 - The Group may settle bonuses or compensation paid to employees in shares or cash; therefore, the Group assumes that the entire amount of the bonus or compensation will be settled in shares and the resulting potential shares will be included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, if the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year. 23. CAPITAL MANAGEMENT In consideration of the prevailing industry dynamics and the future development as well as the changes in the external economic environment, the Group manages its working capital and dividend payments in the future, to ensure that the Group will be able to continue as a going concern while maximizing the returns to shareholders as well as other related parties through the optimization of capital structure. The Group could make adjustments to dividends or issue new shares in order to maintain or adjust the capital structure. 24. FINANCIAL INSTRUMENTS a. Fair value of financial instruments that are not measured at fair value The Group’s management believes the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values. b. Fair value of financial instruments that are measured at fair value on a recurring basis Fair value hierarchy September 30, 2025 Level 1 Level 2 Level 3 Total Financial assets at FVTOCI Investments in equity instruments Domestic listed shares $ 132 $ - $ - $ 132 December 31, 2024 Level 1 Level 2 Level 3 Total Financial assets at FVTOCI Investments in equity instruments Domestic listed shares $ 112 $ - $ - $ 112 September 30, 2024 Level 1 Level 2 Level 3 Total Financial assets at FVTOCI Investments in equity instruments Domestic listed shares $ 171 $ - $ - $ 171 There were no transfers between Levels 1 and 2 in the current and prior periods.
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- 29 - c. Categories of financial instruments September 30, 2025 December 31, 2024 September 30, 2024 Financial assets Financial assets at amortized cost (1) $ 3,890,414 $ 6,747,815 $ 5,214,820 Financial assets at FVTOCI Equity instruments 132 112 171 Financial liabilities Amortized cost (2) 23,487,504 22,749,261 22,656,749 1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, trade receivables, other receivables (excluding sales tax refund receivables), and refundable deposits. 2) The balances included financial liabilities at amortized cost, which comprise short-term borrowings, trade payables, other payables (excluding payable for salary and bonus, employees’ compensation, pension cost, dividends payable and taxation), long-term borrowings and guarantee deposits. d. Financial risk management objectives and policies The Group’s major financial instruments include equity investments, trade receivables, trade payables, lease liabilities, and bank borrowings. The Group’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk. 1) Market risk The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). There has been no change to the Group’s exposure to market risks or the manner in which these risks were managed and measured. a) Foreign currency risk The Group had foreign currency sales and purchases, which exposed the Group to foreign currency risk. The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are set out in Note 27.
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- 30 - Sensitivity analysis The Group was mainly exposed to the U.S. dollars (USD) and Japanese Yen (JPY). The following table details the Group’s sensitivity to a 10% increase and decrease in NTD (the functional currency) against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 10% change in foreign currency rates. A positive number below indicates an increase (decrease) in pre-tax profit associated with the NTD weakening 10% against the relevant currency. For a 10% strengthening of NTD assets (liabilities) against the relevant currency, there would be an equal and opposite impact on pre-tax profit and the balances below would be negative. USD Impact JPY Impact For the Nine Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Profit or loss $ 315,738 (i) $ 463,255 (i) $ (57,363) (ii) $ (70,325) (ii) i. This was mainly attributable to the exposure on outstanding cash and cash equivalents, receivables and payables in USD, which were not hedged at the end of the reporting period. ii. This was mainly attributable to the exposure on outstanding cash, receivables and payables in JPY, which were not hedged, at the end of the reporting period. The Group’s sensitivity to the U.S. dollars (USD) decreased during the nine months ended September 30, 2025 mainly due to the decrease in time deposits in USD. In addition, the Group’s sensitivity to Japanese Yen (JPY) decreased during the nine months ended September 30, 2025 mainly due to the decrease of account payables in JPY. b) Interest rate risk The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows: September 30, 2025 December 31, 2024 September 30, 2024 Fair value interest rate risk Financial assets $ 808,695 $ 4,091,607 $ 2,579,629 Cash flow interest rate risk Financial assets 459,942 597,373 857,267 Financial liabilities 20,500,000 21,320,000 18,382,200
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- 31 - Sensitivity analysis The sensitivity analyses below were determined based on the Group’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate assets, the analysis was prepared assuming the amount of the assets outstanding at the end of the reporting period was outstanding for the whole year. A 1% increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates. If interest rates had been 1% higher/lower and all other variables were held constant, the Group’s pre-tax profit for the nine months ended September 30, 2025 would have decreased/increased by $150,300 thousand, respectively, which was mainly attributable to the Group’s exposure to interest rates on floating rate bank borrowings. If interest rates had been 1% higher/lower and all other variables were held constant, the Group’s pre-tax profit for the nine months ended September 30, 2024 would have decreased/increased by $131,437 thousand, respectively, which was mainly attributable to the Group’s exposure to interest rates on floating rate bank borrowings. The Group’s sensitivity to interest rates increased during the current period mainly due to the increase of bank loans for the nine months ended September 30, 2025 and 2024. 2) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group is exposed to credit risk from operating activities, primarily trade receivables. In order to minimize credit risk, management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowances are made for irrecoverable amounts. In this regard, management believes the Group’s credit risk was significantly reduced. Except for the trade receivables of the Group’s clients, Company A and Company B, which accounted for 10% of total monetary assets as of September 30, 2025, the Group did not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The receivables from Company A and Company B amounted to $781,754 thousand and $499,171 thousand as of September 30, 2025, respectively. The concentration of credit risk related to Company A and Company B was 20.09% and 12.83%, respectively, of the gross monetary assets at any time during the nine months ended September 30, 2025. The trade receivables from any other counterparties were 10% of the gross monetary assets at any time during the nine months ended September 30, 2025. Except for the trade receivables of the Group’s clients, Company A, which accounted for 10% of total monetary assets as of September 30, 2024, the Group did not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The receivables from Company A amounted to $545,946 thousand as of September 30, 2024. The concentration of credit risk related to Company A was 10.47%, of the gross monetary assets at any time during the nine months ended September 30, 2024. The trade receivables from any other counterparties were 10% of the gross monetary assets at any time during the nine months ended September 30, 2024.
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- 32 - 3) Liquidity risk The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents, highly liquid marketable securities, and sufficient bank borrowings deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. Liquidity and interest risk rate table The following tables detail the Group’s remaining contractual maturities for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount was derived from the interest rate at the end of the reporting period. September 30, 2025 1-6 Months 6 Months to 1 Year 1-3 Years 3+ Years Non-derivative financial liabilities Non-interest bearing $ 2,987,503 $ - $ - $ - Lease liabilities 3,605 3,630 13,902 4,534 Variable interest rate liabilities - - 20,532,201 - $ 2,991,108 $ 3,630 $ 20,546,103 $ 4,534 Less than 1 Year 1-5 Years 5-10 Years 10+ Years Lease liabilities $ 7,235 $ 18,436 $ - $ - December 31, 2024 1-6 Months 6 Months to 1 Year 1-3 Years 3+ Years Non-derivative financial liabilities Non-interest bearing $ 3,499,262 $ - $ - $ - Lease liabilities 3,631 3,244 16,585 5,690 Variable interest rate liabilities 2,072,071 - 19,272,477 - $ 5,574,964 $ 3,244 $ 19,289,062 $ 5,690 Less than 1 Year 1-5 Years 5-10 Years 10+ Years Lease liabilities $ 6,875 $ 22,275 $ - $ -
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- 33 - September 30, 2024 1-6 Months 6 Months to 1 Year 1-3 Years 3+ Years Non-derivative financial liabilities Non-interest bearing $ 4,274,548 $ - $ - $ - Lease liabilities 2,999 2,069 11,637 331 Variable interest rate liabilities 5,586,643 - 12,817,155 - $ 9,864,190 $ 2,069 $ 12,828,792 $ 331 Less than 1 Year 1-5 Years 5-10 Years 10+ Years Lease liabilities $ 5,068 $ 11,968 $ - $ - The following tables detail the Group’s expected maturities for some of its non-derivative financial assets. The tables below have been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Group’s liquidity risk management as the liquidity is managed on a net asset and liability basis. September 30, 2025 1-6 Months 6 Months to 1 Year Non-derivative financial assets Non-interest bearing $ 2,621,776 $ - Variable interest rate assets 459,943 - Fixed interest rate assets 810,424 - $ 3,892,143 $ - December 31, 2024 1-6 Months 6 Months to 1 Year Non-derivative financial assets Non-interest bearing $ 2,058,835 $ - Variable interest rate assets 597,436 - Fixed interest rate assets 4,094,107 - $ 6,750,378 $ -
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- 34 - September 30, 2024 1-6 Months 6 Months to 1 Year Non-derivative financial assets Non-interest bearing $ 1,777,923 $ - Variable interest rate assets 857,331 - Fixed interest rate assets 2,587,761 - $ 5,223,015 $ - The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities were subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period. 25. TRANSACTIONS WITH RELATED PARTIES Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and its related parties are disclosed below. a. Related parties and their relationships with the Group: Related Party Name Related Party Categories and Relationship with the Group Sumco Corporation Ultimate parent entity Sumco Techxiv Corporation Parent of the entity Sumco Technology Corporation Sister entity (subsidiary of Sumco Corporation) Formosa Plastics Corporation Investor with significant influence over the Group (equity-method investor holding 29.05% of the equity of the Company) Formosa Technologies Corporation Other (a director is the chairman of the Company) Formosa Daikin Advanced Chemicals Co., Ltd. Other (same chairman) Formosa Heavy Industries Corporation Other (same chairman) b. Operating transaction 1) Sale of good For the Three Months Ended September 30 For the Nine Months Ended September 30 Line Items Related Party Category 2025 2024 2025 2024 Sales Ultimate parent entity (Sumco Corporation) $ 44,544 $ 25,091 $ 198,818 $ 149,936 Parent of the entity (Sumco Techxiv Corporation) 355,585 553,660 1,033,876 1,203,842 $ 400,129 $ 578,751 $ 1,232,694 $ 1,353,778 The transaction prices of the Group for the nine months ended as of September 30, 2025 and 2024 are based on mutual agreements. The credit terms are from the day the related party confirms the sale: 55 days to ultimate parent entity and parent entity.
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- 35 - 2) Purchases of goods For the Three Months Ended September 30 For the Nine Months Ended September 30 Related Party Category 2025 2024 2025 2024 Ultimate parent entity (Sumco Corporation) $ 238,454 $ 169,440 $ 993,253 $ 310,247 Parent entity (Sumco Techxiv Corporation) 4,384 4,142 11,081 12,480 Investor with significant influence over the Group (Formosa Plastics Corporation) 17,349 10,742 48,110 28,580 Others (same chairman or a director is the chairman of the Company) 7,172 6,383 18,647 15,400 $ 267,359 $ 190,707 $ 1,071,091 $ 366,707 The transaction prices are based on mutual agreements. Payments are due within the following number of days from the receipt of the Group’s goods: (a) 30 to 120 days - ultimate parent entity; (b) 30 to 70 days - parent entity; and (c) immediately upon delivery - all other related parties. 3) Receivables from related parties are as follows: Line Items Related Party Category September 30, 2025 December 31, 2024 September 30, 2024 Trade receivables Ultimate parent entity (Sumco Corporation) $ 32,511 $ 62,355 $ 16,353 Parent of the entity (Sumco Techxiv Corporation) 245,070 383,954 419,665 $ 277,581 $ 446,309 $ 436,018 4) Payables to related parties are as follows: Line Items Related Party Category September 30, 2025 December 31, 2024 September 30, 2024 Trade payables Ultimate parent entity (Sumco Corporation) $ 149,513 $ 216,848 $ 128,289 Parent of the entity (Sumco Techxiv Corporation) 1,289 479 523 Investor with significant influence over the Group (Formosa Plastics Corporation) 6,668 4,719 3,743 Others (same chairman or a chairman is the chairman of the Company) 261 521 665 $ 157,731 $ 222,567 $ 133,220
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- 36 - The outstanding trade payables to related parties are unsecured and will be paid by cash. The outstanding trade receivables from related parties are unsecured. For the nine months ended September 30, 2025 and 2024, no impairment loss was recognized for trade receivables from related parties. c. Commission income, selling waste income, other income and other receivables - related parties For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Ultimate parent entity (commission income, accounted for as other revenue; other revenue accounted for as deduction of operating costs) $ 465 $ 414 $ 1,105 $ 1,697 Sister entity (selling waste income, accounted for as deduction of operating costs) 923 5,520 7,084 10,590 Investor with significant influence over the Group (other income) 429 328 1,673 1,310 $ 1,817 $ 6,262 $ 9,862 $ 13,597 Line Item Related Party Category September 30, 2025 December 31, 2024 September 30, 2024 Other receivables Ultimate parent entity (Sumco Corporation) $ 166 $ - $ 151 Sister entity (Sumco Technology Corporation) 363 1,547 2,282 $ 529 $ 1,547 $ 2,433 d. Lease arrangements - the Group is lessee Line Item Related Party Category September 30, 2025 December 31, 2024 September 30, 2024 Lease liabilities Ultimate parent entity (Sumco Corporation) $ 11,731 $ 14,563 $ 764 Investor with significant influence over the Group (Formosa Plastics Corporation) 11,968 14,791 15,724 $ 23,699 $ 29,354 $ 16,488
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- 37 - For the Three Months Ended September 30 For the Nine Months Ended September 30 Related Party Category 2025 2024 2025 2024 Interest expense Ultimate parent entity (Sumco Corporation) $ 33 $ 3 $ 109 $ 16 Investor with significant influence over the Group (Formosa Plastics Corporation) 50 65 162 207 $ 83 $ 68 $ 271 $ 223 The rent to the ultimate parent entity (Sumco Corporation) for the lease of the factory with 5-year lease terms in 2024 is based on the price agreed by the parties and paid in monthly. The rent to the investor with significant influence over the Group (Formosa Plastics Corporation) for the lease of offices with 5-year lease terms in 2023 is based on the price agreed by the parties and paid semiannually. The rent to the ultimate parent entity (Sumco Corporation) for the lease of the factory with 5-year lease term in 2020 is based on the price agreed by the parties and paid in monthly. e. Loans to related parties The Company has issued loans to the investor with significant influence over the Group (Formosa Plastic Corporation) which totaled $125,243 thousand. The Company provided the investor with significant influence over the Group with loans at interest rate of 1%, which were unsecured and has been recovered before June 30, 2025. The interest income from loan to the investor with significant influence over the Group (Formosa Plastic Corporation) were $0 thousand and $6 thousand, respectively, for the three months ended September 30, 2025 and for the nine months ended September 30, 2025. The Company has issued loans to the investor with significant influence over the Group (Formosa Plastic Corporation) which totaled $352,928 thousand. The Company provided the investor with significant influence over the Group with loans at interest rate of 1%, which were unsecured and has been recovered before June 30, 2024. The interest income from loan to the investor with significant influence over the Group (Formosa Plastic Corporation) were $0 thousand and $38 thousand, respectively, for the three months ended September 30, 2024 and for the nine months ended September 30, 2024. f. Loans from related parties Japan Formosa Sumco Technology Corporation obtained loan from the investor with significant influence over the Group (Formosa Plastic Corporation) totaled $125,243 thousand at interest rate of 1% on June 9, 2025, the loan is unsecured and has been repaid by Japan Formosa Sumco Technology Corporation before June 30, 2025. The interest expense paid to the investor with significant influence over the Group (Formosa Plastic Corporation) for the three months ended September 30, 2025 and for the nine months ended September 30, 2025 were $0 thousand and $6 thousand, respectively.
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- 38 - Japan Formosa Sumco Technology Corporation obtained loan from the investor with significant influence over the Group (Formosa Plastic Corporation) totaled $352,928 thousand at interest rate of 1% on June 7, 2024, the loan is unsecured and has been repaid by Japan Formosa Sumco Technology Corporation before June 30, 2024. The interest expense paid to the investor with significant influence over the Group (Formosa Plastic Corporation) for the three months ended September 30, 2024 and for the nine months ended September 30, 2024 were $0 thousand and $38 thousand, respectively. g. Other transactions with related parties 1) Manufacturing expense and accrued expenses - related parties For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Manufacturing expense and repair costs Ultimate parent entity (Sumco Corporation) $ 80,098 $ 63,933 $ 208,078 $ 155,418 Other (Formosa Technologies Corporation) 2,016 5,562 10,776 16,614 Other (Formosa Heavy Industries Corporation) - - 2,126 313 $ 82,114 $ 69,495 $ 220,980 $ 172,345 September 30, 2025 December 31, 2024 September 30, 2024 Accrued expenses of other payables to related parties Ultimate parent entity (Sumco Corporation) $ 49,767 $ 44,561 $ 42,749 The above-mentioned the transaction prices between the Group and the related parties are based on mutual agreements and paid immediately. 2) Acquisitions of equipment and payables for purchase of equipment - related parties The Group’s purchased contract prices for equipment from each related party and equipment payable under other payables to related parties are summarized below: For the Nine Months Ended September 30 2025 2024 Acquisitions of equipment Investor with significant influence over the Group (Formosa Plastics Corporation) $ 6,000 $ 7,244 Other (Formosa Technologies Corporation) 419 13,106 Other (Formosa Heavy Industries Corporation) 8,066 - $ 14,485 $ 20,350
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- 39 - September 30, 2025 December 31, 2024 September 30, 2024 Accrued expenses of other payables to related parties Investor with significant influence over the Group (Formosa Plastics Corporation) $ 54,945 $ 58,679 $ 159,610 Other (Formosa Technologies Corporation) - - 14,806 $ 54,945 $ 58,679 $ 174,416 The above-mentioned transactions for the purchase of equipment accounted for as payable for equipment to related parties (other payables), and have been paid upon receipt. 3) Other transactions In 2025, the Company signed a technical compensation arrangement with its ultimate parent entity (Sumco Corporation) with a total fee of JPY2,000 thousand (NT$323 thousand). The Company has paid JPY2,000 thousand (NT$323 thousand), which is amortized over a period of 60 months. It was recognized as an intangible asset (refer to Note 13). In 2024, the Company signed a technical compensation arrangement with its ultimate parent entity (Sumco Corporation) with a total fee of JPY2,000 thousand (NT$409 thousand). The Company has paid JPY2,000 thousand (NT$409 thousand), which is amortized over a period of 60 months. It was recognized as an intangible asset (refer to Note 13). Under an existing agreement effective since 2003, the Company is obligated to pay recurring royalty fees to its parent entity (Sumco Techxiv Corporation). The royalty fee was recognized as technical commission fees classified under selling expenses for the nine months ended September 30, 2025 and 2024. The unpaid amount as of September 30, 2025, December 31, 2024 and September 30, 2024 was recognized as accrued expenses (other payables) and will be paid in February of the following year. In August 2010, the Company signed a technical right and support contract with its ultimate parent entity (Sumco Corporation). Under this contract, the Company receives support from the ultimate parent entity in technical know-how and assistance in manufacturing of silicon wafer semiconductors. The Company has the obligation to pay recurring royalty fees to the ultimate parent entity. The royalty fee was recognized as technical commission fees classified under selling expenses for the nine months ended September 30, 2025 and 2024. The unpaid amounts as of September 30, 2025, December 31, 2024 and September 30, 2024, was recognized as royalties payable to related parties (other payables) and will be paid in February of the subsequent year.
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- 40 - The above-mentioned selling expenses and accrued expenses (other payables) that resulted from transactions with related parties are summarized as follows: For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Selling expenses (technical support expense) Ultimate parent entity (Sumco Corporation) $ 75,655 $ 92,240 $ 247,904 $ 284,364 Parent of the entity (Sumco Techxiv Corporation) 3,012 3,201 9,160 3,950 $ 78,667 $ 95,441 $ 257,064 $ 288,314 September 30, 2025 December 31, 2024 September 30, 2024 Payables for royalties (other payables) - related parties Ultimate parent entity (Sumco Corporation) $ 247,904 $ 374,466 $ 284,364 Parent of the entity (Sumco Techxiv Corporation) 9,160 10,861 3,950 $ 257,064 $ 385,327 $ 288,314 h. Compensation of key management personnel For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Short-term employee benefits $ 1,491 $ 1,403 $ 4,632 $ 4,617 Post-employment benefits 22 21 65 62 Other long-term employee benefits 4 4 14 16 $ 1,517 $ 1,428 $ 4,711 $ 4,695 The remuneration of directors and key executives was determined by the remuneration committee with regard to the performance of individuals and market trends. 26. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of September 30, 2025 were as follows: a. The newly purchased machinery and equipment are exempt from tariff. Under the “estimated useful lives of fixed assets” enacted by Executive Yuan, should there be any capital reduction or other transfer of the machinery, equipment or components mentioned above to a third party, except those transferred to permitted businesses, the Group should pay supplementary import duties for the fixed assets.
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- 41 - b. As of September 30, 2025, December 31, 2024 and September 30, 2024, the major construction projects and property, plant and equipment signed or ordered by the Group but have not been accepted, amounted to $4,731,739 thousand, $5,443,929 thousand and $6,367,802 thousand, respectively. 27. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES The following information was aggregated by the foreign currencies other than functional currencies of the group entities and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows: September 30, 2025 Foreign Currency Exchange Rate Carrying Amount Financial assets Monetary items USD $ 114,689 30.4690 (USD:NTD) $ 3,494,473 JPY 173,514 0.2050 (JPY:NTD) 35,570 $ 3,530,043 Financial liabilities Monetary items USD 5,450 30.4690 (USD:NTD) $ 166,062 USD 5,788 144.1300 (USD:JPY) 171,029 JPY 2,971,729 0.2050 (JPY:NTD) 609,204 $ 946,295 December 31, 2024 Foreign Currency Exchange Rate Carrying Amount Financial assets Monetary items USD $ 140,067 32.781 (USD:NTD) $ 4,591,526 JPY 246,698 0.2087 (JPY:NTD) 51,486 $ 4,643,012 Financial liabilities Monetary items USD 12,620 32.781 (USD:NTD) $ 413,701 USD 2,067 157.072 (USD:JPY) 67,773 JPY 2,935,376 0.2087 (JPY:NTD) 612,613 $ 1,094,087
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- 42 - September 30, 2024 Foreign Currency Exchange Rate Carrying Amount Financial assets Monetary items USD $ 162,832 31.651 (USD:NTD) $ 5,153,809 JPY 133,833 0.2220 (JPY:NTD) 29,711 $ 5,183,520 Financial liabilities Monetary items USD 15,535 31.651 (USD:NTD) $ 491,706 USD 934 142.572 (USD:JPY) 29,552 JPY 3,301,604 0.2220 (JPY:NTD) 732,956 $ 1,254,214 The Group is mainly exposed to the USD and JPY. For the significant realized and unrealized foreign exchange gains (losses), refer to Note 20. 28. DISCLOSED ITEMS a. Information about significant transactions and investees 1) Financing provided to others. (Table 1) 2) Endorsements/guarantees provided. (None) 3) Significant marketable securities held (excluding investment in subsidiaries, associates and jointly controlled entities) (Table 2) 4) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 3) 5) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 4) 6) Intercompany relationships and significant intercompany transactions. (Note 25 and Table 5) 7) Information on investees. (Table 6) b. Information on investments in mainland China None.
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- 43 - 29. SEGMENT INFORMATION Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods. The Group’s only reportable segment for the nine months ended September 30, 2025 and 2024 is the silicon wafer segment as the Group’s main activities are manufacturing and selling of silicon wafer electronic products. The accounting policy of the reportable segment is the same as Note 4 “summary of material accounting policy information”. a. Segment revenues and results The following was an analysis of the Group’s revenue and results from continuing operations by reportable segment. Segment Revenue Segment Profit and Loss For the Nine Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Silicon wafer segment $ 9,065,551 $ 9,304,542 $ 380,991 $ 1,111,717 Dividend income 3 6 Miscellaneous income 15,626 21,555 Miscellaneous expense (384) (325) Profit before tax $ 396,236 $ 1,132,953 Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales during the nine months ended September 30, 2025 and 2024. Segment profit represents the profit earned by silicon wafer segment without dividend income and allocation of miscellaneous income (included in non-operating income), miscellaneous expense (included in other profit and loss) and income tax expense. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance. b. Segment total assets and liabilities The Group’s assets and liabilities information is not reported to chief management decision maker on a regular basis. Therefore, all the assets and liabilities are not allocated to the reportable segment.
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- 44 - TABLE 1 FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES FINANCING PROVIDED TO OTHERS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) No. (Note 1) Lender Borrower Financial Statement Account Related Party Maximum Balance for the Period (Note 3) Ending Balance Actual Borrowing Amount Interest Rate Nature of Financing (Note 2) Business Transaction Amounts Reason for Short-term Financing Allowance for Bad Debt Collateral Financing Limits for Each Borrower Total Financing Amount Limits Note Item Value 0 Formosa Sumco Technology Corporation Japan Formosa Sumco Technology Corporation Receivables from related parties Yes $ 490,000 (Notes 3 and 4) $ 370,000 (Notes 3 and 4) $ 128,928 (Note 6) 1.75% 2 $ - Operating capital $ - None $ - $ 2,441,142 $ 12,205,710 Formosa Plastic Corporation Receivables from related parties Yes 370,000 (Notes 3 and 4) - (Notes 3 and 5) - 1.75% 2 - Operating capital - None - 6,102,855 12,205,710 Note 1: a. “0” financing provide. b. “1” and onward coded based on reduce of companies inverted. Note 2: a. “1” with trade transaction. b. “2” the need for short-term financing. Note 3: The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors. Note 4: Financing period for Japan Formosa Technology Corporation is from June 10, 2025 to June 9, 2026. Note 5: The Company recovered a $125,243 thousand loan from Formosa Plastic Corporation before September 30, 2025. Note 6: The amount was eliminated upon consolidation.
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- 45 - TABLE 2 FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES MARKETABLE SECURITIES HELD SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) Holding Company Name Type and Name of Marketable Securities (Note 1) Relationship with the Company (Note 2) Financial Statement Account Ending Balance Note Shares Carrying Value (Note 3) Percentage of Ownership (%) Fair Value Formosa Sumco Technology Corporation Shares Formosa Petrochemical Corporation Financial assets at FVTOCI - non-current 3,247 $ 132 $ 132 Note 1: The marketable securities listed above includes shares, bonds, beneficiary certificates, and all forms of securities listed under IFRS 9: Financial Instruments. Note 2: As the issuer of the securities is an unrelated party, the relationship column is intentionally left blank. Note 3: The carrying value equals the original cost of $38 thousand plus the year-end valuation adjustment of $94 thousand. Note 4: Refer to Table 6 for further information on the above investee.
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- 46 - TABLE 3 FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise) Buyer Related Party Relationship Transaction Details Abnormal Transaction Notes/Trade Receivables (Payable) Note Purchase/ Sale Amount % to Total Payment Terms Unit Price Payment Terms Ending Balance % to Total Formosa Sumco Technology Corporation Sumco Corporation Ultimate parent company of Formosa Sumco Technology Corporation Purchases $ 830,284 15.72 30 to 120 days from the receipt of the Company’s goods No significant difference No significant difference $ (108,991) (21.47) Sumco Corporation Ultimate parent company of Formosa Sumco Technology Corporation Sales 198,818 2.19 Net 55 days from the end of the month of when invoice is issued No significant difference No significant difference 32,511 1.24 Sumco Techxiv Corporation Parent entity of Formosa Sumco Technology Corporation Sales 1,033,876 11.40 Net 55 days from the end of the month of when invoice is issued No significant difference No significant difference 245,070 9.37 Japan Formosa Sumco Technology Corporation Subsidiary of Formosa Sumco Technology Corporation Purchases 628,221 11.89 70 days receipts of the Company’s goods No significant difference No significant difference (203,359) (40.06) Note Japan Formosa Sumco Technology Corporation Formosa Sumco Technology Corporation Parent company Sale 628,221 100.00 70 days receipts of the Company’s goods No significant difference No significant difference 203,359 100.00 Note Note: The amount was eliminated upon consolidation.
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- 47 - TABLE 4 FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) Company Name Related Party Nature of Relationships Ending Balance Turnover Rate Overdue Amounts Received in Subsequent Period Allowance for Bad Debts Amount Actions Taken Formosa Sumco Technology Corporation Sumco Techxiv Corporation Parent company $ 245,070 4.38 $ - - $ 121,955 $ - Japan Formosa Sumco Technology Corporation Formosa Sumco Technology Corporation Parent company 203,359 (Note 2) 6.09 - - 66,159 - Formosa Sumco Technology Corporation Japan Formosa Sumco Technology Corporation Subsidiary 129,235 (Notes 1 and 2) Not applicable - - - - Note 1: Due to the Company’s issuance of loans to Japan Formosa Sumco Technology Corporation, which includes the principal amount of $128,928 thousand and interest of $307 thousand. Note 2: The amount was eliminated upon consolidation.
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- 48 - TABLE 5 FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (Amounts in Thousands of New Taiwan Dollars) No. (Note 1) Company Name Counterparty Relationship Transactions Details Financial Statement Accounts Amount (Note 3) Payment Terms % to Total Sales or Assets (Note 2) 0 The Company Japan Formosa Sumco Technology Corporation Subsidiary Purchases of goods $ 628,221 General terms 6.93 〃 〃 Interest income 1,368 General terms 0.02 〃 〃 Trade payables 203,359 General terms 0.40 〃 〃 Other receivables (include interest receivables) 129,235 General terms 0.25 Note 1: The intercompany relationships are coded as blow: a. “0” parent company. b. “1” and above coded based on the type of intercompany relationship. Note 2: For assets and liabilities, amount is shown as a percentage to consolidated total assets as of September 30, 2025, while revenues, costs and expenses are shown as a percentage to consolidated total operating revenues for the nine months ended September 30, 2025. Note 3: The amount was eliminated upon consolidation.
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- 49 - TABLE 6 FORMOSA SUMCO TECHNOLOGY CORPORATION AND SUBSIDIARIES INFORMATION ON INVESTEES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) Investor Company Investee Company Location Main Businesses and Products Original Investment Amount As of September 30, 2025 Net Income (Loss) of the Investee Share of Profits (Loss) Note September 30, 2025 December 31, 2024 Shares % Carrying Amount Formosa Sumco Technology Corporation Japan Formosa Sumco Technology Corporation Japan Manufacturing, selling and other related business of high-quality ingot JPY 998,000 (NT$ 248,390) JPY 998,000 (NT$ 248,390) 9,980 100 JPY 1,685,223 (NT$ 345,241) JPY 171,989 (NT$ 36,085) JPY 175,569 (NT$ 37,391) Notes 1 and 2 Note 1: The share of profits (losses) of investee includes the effect of unrealized gross profit on intercompany transaction. Note 2: Intercompany balances and transactions between the investor company and investee company have been eliminated upon consolidation.