Interim report
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1 Stock Code:3105 WIN SEMICONDUCTORS CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS With Independent Auditors’ Report For the Years Ended December 31, 2025 and 2024 Address: No.69, Keji 7th Rd., Hwaya Technology Park, Guishan Dist., Taoyuan City, Taiwan Telephone: 886-3-397-5999 The independent auditors’ r eport and the accompanying consolidated financial statements a re the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.
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2 Table of contents Contents Page 1. Cover Page 1 2. Table of Contents 2 3. Representation Letter 3 4. Independent Auditors’ Report 4 5. Consolidated Balance Sheets 5 6. Consolidated Statement of Comprehensive Income 6 7. Consolidated Statement of Changes in Equity 7 8. Consolidated Statement of Cash Flows 8 9. Notes to the Consolidated Financial Statements (1) Company history 9 (2) Approval date and procedures of the consolidated financial statements 9 (3) New standards, amendments and interpretations adopted 9～11 (4) Summary of material accounting policies 11～32 (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty 32～34 (6) Explanation of significant accounts 34～84 (7) Related-party transactions 85～86 (8) Pledged assets 87 (9) Commitments and contingencies 87 (10) Losses due to major disasters 87 (11) Subsequent events 87～88 (12) Other 88 (13) Other disclosures (a) Information on significant transactions 91～94 (b) Information on investments 95 (c) Information on investment in mainland China 96 (14) Segment information 89～90
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3 Representation Letter The entities that are required to be included in the consolidated financial statements of WIN Semiconductors Corp. a s of and for the year ended December 31, 2025, under the “ Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises” are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the consolidated financial statements is included in the consolidated financial statements. Consequently, WIN Semiconductors Corp. and its subsidiaries do not prepare a separate set of consolidated financial statements. Company name: WIN Semiconductors Corp. Chairman: CHEN, CHIN-TSAI Date: March 10, 2026
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4 Independent Auditors’ Report To the Board of Directors of WIN Semiconductors Corp.: Opinion We have audited the consolidated financial statements of WIN Semiconductors Corp. and its subsidiaries (“the Group”), which comprise the consolidated balance sheet as of December 31, 2025 and 2024, the consolidated statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years t hen ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers a nd with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Basis for Opinion We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We b elieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgm ent, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In our judgment, the key audit matters we communicated in the auditors’ report were as follows: 1. Assessment of impairment on investments accounted for using equity method Please refer to Note 4(o) “I mpairment of non-financial assets” for accounting policies, Note 5 for accounting assumptions, judgments and estimation uncertainty of impairment on investments accounted for using equity method, and Note 6(g) for assessment of impairment on investments accounted for using equity method.
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4-1 Description of key audit matter The Group periodically assesses and performs its impairment test on investments accounted for using equity method based on the recoverable amount that is calculated by using the value-in-use method, which takes into account by predicting the future cash flow, and is decided by applying the discount rate. Since the assessment of impairment on investments accounted for using equity method relies on the subjective judgments and estimation made by the management, it has been identified as the key matter in our audit. How the matter was addressed in our audit Our principal audit procedures included: -Assessing the rationality of method used in measuring the recoverable amount, which is provided by the management of the Group, including evaluating the appropriateness of assumption and estimation on major parameters, such as the forecast of cash flow and discount rate; -Comparing the historical accuracy of judgements, including inspecting the amount of forecast of cash flow in prior year, with the actual cash flow to evaluate the appropriateness of the assumptions; moreover, performing the sensitivity analysis on main assumption. 2. Accuracy of revenue recognition timing Refer to note 4(q) “R evenue” f or accounting policies and note 6(z) to the financial statements for the disclosure of revenue recognition. Description of key audit matter The sales of the Company are subject to the terms and conditions agreed upon in sales contracts with customers, wherein it will affect the timing of revenue recognition and transfer of control to the buyer to be in compliance with the accounting standards. If the revenue is recognized prior to the customer having obtained the goods, it will result in an inappropriate timing of revenue recognition in the period surrounding the reporting date. Hence, the accuracy of the timing of revenue recognition during these periods is one of our key audit matters. How the matter was addressed in our audit Our principal audit procedures included: -Understanding the main type of revenue, contract content and transaction terms to assess the accuracy of the timing of revenue recognition; -Conducting the variance analysis on the revenue from major customers to evaluate if there are any significant unusual transactions; -Testing the design, operation and implantation of the effectiveness of internal control on revenue recognition; -Selecting some samples of transaction records of sales within the balance sheet date in order to obtain the related transaction documents to evaluate the appropriateness of timing of recognition. Other Matter WIN Semiconductors Corp. has prepared its parent-company-only financial statements as of and for the years ended December 31, 2025 and 2024, on which we have issued an unmodified opinion.
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4-2 Responsibilities of Management and Those Charged with Governance for 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 with the IFRSs, IASs, IFRIC as well as SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is also responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Group’s financial reporting process. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also: 1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. 3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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4-3 4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern. 5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 6. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partners on the audit r esulting in this independent auditors’ report are Chen, Ya-Ling a nd Cheng, Po-Jen. KPMG Taipei, Taiwan (Republic of China) March 10, 2026 Notes to Readers The accompanying consolidated financial statements a re intended only to present the consolidated s tatement of financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China. The independent auditors’ audit report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and consolidated financial statements, the Chinese version shall prevail.
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5 (English Translation of Consolidated Financial Statements Originally Issued in Chinese) WIN Semiconductors Corp. and Subsidiaries Consolidated Balance Sheets December 31, 2025 and 2024 (Expressed in Thousands of New Taiwan Dollars) December 31, 2025 December 31, 2024 Assets Amount % Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 7,066,909 12 5,419,305 8 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 227,101 - 182,692 - 1136 Current financial assets at amortized cost, net (Note 6(b)) 96,504 - 92,542 - 1170 Notes and accounts receivable, net (Notes 6(c) and 6(z)) 1,597,432 3 1,225,791 2 1310 Inventories (Note 6(e)) 4,978,534 8 4,992,151 8 1400 Current biological assets (Note 6(f)) 249,743 - 170,983 - 1470 Other current assets (Notes 6(d) and 6(n)) 340,647 1 371,968 1 Total current assets 14,556,870 24 12,455,432 19 Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (Note 6(b)) 1,400,730 2 1,669,574 3 1517 Non-current financial assets at fair value through other comprehensive income (Note 6(b)) 8,871,623 15 6,520,071 10 1550 Investments accounted for using equity method (Note 6(g)) 10,818,652 18 10,772,626 17 1600 Property, plant and equipment (Notes 6(j), 8 and 9) 19,671,911 32 28,264,866 44 1755 Right-of-use assets (Notes 6(k) and 8) 467,412 1 952,402 2 1760 Investment property (Note 6(l)) 1,032,682 2 1,037,999 2 1780 Intangible assets (Note 6(m)) 65,517 - 145,256 - 1830 Non-current biological assets (Note 6(f)) 162,932 - 139,237 - 1840 Deferred tax assets (Note 6(v)) 2,000,867 3 1,543,522 2 1915 Prepayments for business facilities 1,042,483 2 273,017 - 1990 Other non-current assets (Notes 6(n) and 8) 636,996 1 484,755 1 Total non-current assets 46,171,805 76 51,803,325 81 Total assets $ 60,728,675 100 64,258,757 100 December 31, 2025 December 31, 2024 Liabilities and Equity Amount % Amount % Current liabilities: 2100 Short-term borrowings (Notes 6(o), 6(af) and 8) $ 35,237 - 26,330 - 2130 Current contract liabilities (Note 6(z)) 443,102 1 264,338 - 2170 Notes and accounts payable 1,661,888 3 1,094,119 2 2200 Other payables (Notes 6(s) and 6(aa)) 3,136,856 5 2,199,224 4 2220 Other payables to related parties (Note 7) 295,848 1 - - 2280 Current lease liabilities (Notes 6(r) and 6(af)) 67,188 - 115,999 - 2322 Long-term borrowings, current portion (Notes 6(p), 6(af) and 8) - - 3,692,452 6 2399 Other current liabilities 224,997 - 210,776 - Total current liabilities 5,865,116 10 7,603,238 12 Non-current liabilities: 2540 Long-term borrowings (Notes 6(p), 6(af) and 8) 12,328,202 20 16,531,765 26 2570 Deferred tax liabilities (Note 6(v)) 8,191 - 4,975 - 2580 Non-current lease liabilities (Notes 6(r) and 6(af)) 352,380 1 799,062 1 2600 Other non-current liabilities (Notes 6(u), 6(af) and 7) 183,974 - 181,666 - Total non-current liabilities 12,872,747 21 17,517,468 27 Total liabilities 18,737,863 31 25,120,706 39 Equity (Notes 6(b), 6(g), 6(h), 6(i), 6(u), 6(v), 6(w) and 6(x)) : 3110 Ordinary shares 4,239,404 7 4,239,404 7 3200 Capital surplus 9,976,512 16 9,970,132 15 3300 Retained earnings 19,269,149 32 17,997,492 28 3400 Other equity interests 8,060,197 13 5,911,076 9 Total equity attributable to owners of parent 41,545,262 68 38,118,104 59 36XX Non-controlling interests 445,550 1 1,019,947 2 Total equity 41,990,812 69 39,138,051 61 Total liabilities and equity $ 60,728,675 100 64,258,757 100 See accompanying notes to consolidated financial statements.
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6 (English Translation of Consolidated Financial Statements Originally Issued in Chinese) WIN Semiconductors Corp. and Subsidiaries Consolidated Statement of Comprehensive Income For the years ended December 31, 2025 and 2024 (Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share) 2025 2024 Amount % Amount % 4000 Operating revenue (Notes 6(b) and 6(z)) $ 16,638,534 100 17,457,713 100 5000 Operating costs (Notes 6(e), 6(f), 6(g), 6(j), 6(k), 6(m), 6(r), 6(s), 6(u), 6(x), 6(aa), 7 and 12) (12,612,441) (76) (13,415,743) (77) Gross profit from operating 4,026,093 24 4,041,970 23 Operating expenses (Notes 6(c), 6(j), 6(k), 6(l), 6(m), 6(r), 6(u), 6(x), 6(aa), 7 and 12) : 6100 Selling expenses (449,261) (3) (442,228) (2) 6200 Administrative expenses (1,259,293) (7) (1,146,874) (7) 6300 Research and development expenses (1,600,291) (10) (1,690,747) (10) 6450 Losses on expected credit impairment (2,546) - (89) - Total operating expenses (3,311,391) (20) (3,279,938) (19) Net operating income 714,702 4 762,032 4 Non-operating income and expenses (Notes 6(b), 6(g), 6(h), 6(j), 6(k), 6(m), 6(q), 6(r), 6(t), 6(ab), 6(af) and 7) : 7100 Interest income from bank deposits 153,604 1 186,007 1 7010 Other income 239,727 1 77,391 - 7020 Other gains and losses 687,562 4 (22,552) - 7050 Finance costs (674,978) (4) (794,979) (4) 7060 Share of profit (loss) of associates and joint ventures accounted for using equity method, net 266,278 2 124,895 1 Total non-operating income and expenses 672,193 4 (429,238) (2) 7900 Profit before tax 1,386,895 8 332,794 2 7950 Tax (expense) benefit (Note 6(v)) (297,077) (2) 7,017 - Profit 1,089,818 6 339,811 2 8300 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss (Notes 6(g), 6(u), 6(v) and 6(w)) 8311 Remeasurements of defined benefit plans (8,312) - 14,708 - 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 2,360,760 14 2,897,202 17 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method that will not be reclassified to profit or loss 6,404 - (1,130) - 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 1,663 - (2,942) - Total components of other comprehensive income (loss) that will not be reclassified to profit or loss 2,360,515 14 2,907,838 17 8360 Components of other comprehensive income that will be reclassified to profit or loss (Notes 6(g) and 6(w)) 8361 Exchange differences on translation of foreign financial statements (190,975) (1) 327,635 2 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method that will be reclassified to profit or loss (46,562) - 205,646 1 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss - - - - Total components of other comprehensive income (loss) that will be reclassified to profit or loss (237,537) (1) 533,281 3 8300 Other comprehensive income, net 2,122,978 13 3,441,119 20 8500 Total comprehensive income $ 3,212,796 19 3,780,930 22 Profit attributable to: 8610 Profit attributable to owners of parent $ 1,693,801 10 768,133 4 8620 Loss attributable to non-controlling interests (603,983) (4) (428,322) (2) $ 1,089,818 6 339,811 2 Comprehensive income attributable to: 8710 Comprehensive income, attributable to owners of parent $ 3,844,718 23 4,159,963 24 8720 Comprehensive loss, attributable to non-controlling interests (631,922) (4) (379,033) (2) $ 3,212,796 19 3,780,930 22 Earnings per common share (expressed in New Taiwan dollars) (Note 6(y)) 9750 Basic earnings per share $ 4.00 1.81 9850 Diluted earnings per share $ 3.99 1.81 See accompanying notes to consolidated financial statements.
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7 (English Translation of Consolidated Financial Statements Originally Issued in Chinese) WIN Semiconductors Corp. and Subsidiaries Consolidated Statement of Changes in Equity For the years ended December 31, 2025 and 2024 (Expressed in Thousands of New Taiwan Dollars) Equity attributable to owners of parent Other equity interests Retained earnings Exchange Unrealized gains (losses) on financial assets Ordinary shares Capital surplus Legal reserve Unappropriated retained earnings Total retained earnings differences on translation of foreign financial statements measured at fair value through other comprehensive income Total other equity interests Total equity attributable to owners of parent Non-controlling interests Total equity Balance at January 1, 2024 $ 4,239,404 9,967,188 4,070,984 13,142,012 17,212,996 (12,053) 2,547,662 2,535,609 33,955,197 1,394,134 35,349,331 Profit (losses) for the year ended December 31, 2024 - - - 768,133 768,133 - - - 768,133 (428,322) 339,811 Other comprehensive income (loss) for the year ended December 31, 2024 - - - 11,737 11,737 483,965 2,896,128 3,380,093 3,391,830 49,289 3,441,119 Total comprehensive income (loss) for the year ended December 31, 2024 - - - 779,870 779,870 483,965 2,896,128 3,380,093 4,159,963 (379,033) 3,780,930 Changes in equity of associates accounted for using equity method - 2,944 - - - - - - 2,944 - 2,944 Stock option compensation cost of subsidiary - - - - - - - - - 4,846 4,846 Disposal of investments in equity instruments designated at fair value through other comprehensive income - - - 4,626 4,626 - (4,626) (4,626) - - - Balance at December 31, 2024 4,239,404 9,970,132 4,070,984 13,926,508 17,997,492 471,912 5,439,164 5,911,076 38,118,104 1,019,947 39,138,051 Appropriation and distribution of retained earnings: Legal reserve appropriated - - 78,450 (78,450) - - - - - - - Cash dividends of ordinary shares - - - (423,940) (423,940) - - - (423,940) - (423,940) - - 78,450 (502,390) (423,940) - - - (423,940) - (423,940) Profit (losses) for the year ended December 31, 2025 - - - 1,693,801 1,693,801 - - - 1,693,801 (603,983) 1,089,818 Other comprehensive income (loss) for the year ended December 31, 2025 - - - (4,968) (4,968) (209,680) 2,365,565 2,155,885 2,150,917 (27,939) 2,122,978 Total comprehensive income (loss) for the year ended December 31, 2025 - - - 1,688,833 1,688,833 (209,680) 2,365,565 2,155,885 3,844,718 (631,922) 3,212,796 Changes in equity of associates accounted for using equity method - 3,030 - - - - - - 3,030 - 3,030 Changes in ownership interest in subsidiaries - 3,350 - - - - - - 3,350 (3,350) - Stock option compensation cost of subsidiary - - - - - - - - - 875 875 Disposal of investments in equity instruments designated at fair value through other comprehensive income - - - 6,764 6,764 - (6,764) (6,764) - - - Changes in non-controlling interests - - - - - - - - - 60,000 60,000 Balance at December 31, 2025 $ 4,239,404 9,976,512 4,149,434 15,119,715 19,269,149 262,232 7,797,965 8,060,197 41,545,262 445,550 41,990,812 See accompanying notes to consolidated financial statements.
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8 (English Translation of Consolidated Financial Statements Originally Issued in Chinese) WIN Semiconductors Corp. and Subsidiaries Consolidated Statement of Cash Flows For the years ended December 31, 2025 and 2024 (Expressed in Thousands of New Taiwan Dollars) 2025 2024 Cash flows from (used in) operating activities: Profit before tax $ 1,386,895 332,794 Adjustments: Adjustments to reconcile profit (loss): Depreciation expense 3,906,623 4,595,397 Amortization expense 87,042 104,165 Losses on expected credit impairment 2,546 89 Net (gains) losses on financial assets or liabilities at fair value through profit or loss (46,970) 188,429 Interest expense 674,978 794,979 Interest income (153,604) (186,007) Dividend income (248,032) (90,498) Share-based payments 875 4,846 Share of profit of associates and joint ventures accounted for using equity method (264,926) (90,736) (Gains) losses on disposal of property, plant and equipment (1,953,270) 17,339 Prepayments for business facilities transferred to expenses - 3,690 Property, plant and equipment transferred to expenses 199 1,153 Gains on disposal of investments (45) - Changes in biological assets at fair value 3,134 73,464 Unrealized foreign exchange (gains) losses (305,899) 209,670 Gains on lease modification (23,422) (176) Impairment loss 1,641,913 372,922 Gains on financial liabilities at amortized cost - (253,828) Total adjustments to reconcile profit (loss) 3,321,142 5,744,898 Changes in operating assets and liabilities: Changes in operating assets: Increase in financial assets at fair value through profit or loss (27,395) (5,912) Increase in notes and accounts receivable (374,187) (77,222) Decrease in inventories 13,501 118,321 Increase in biological assets (150,552) (164,411) Increase in other current assets (43,171) (86,175) Total changes in operating assets (581,804) (215,399) Changes in operating liabilities: Increase (decrease) in contract liabilities 178,764 (299,427) Increase (decrease) in notes and accounts payable 567,769 (268,136) Increase in other payables 414,503 16,401 Increase (decrease) in other current liabilities 14,221 (7,254) Decrease in other non-current liabilities (4,572) (17,453) Total changes in operating liabilities 1,170,685 (575,869) Total changes in operating assets and liabilities 588,881 (791,268) Cash flows generated from operations 5,296,918 5,286,424 Dividends received 56,455 52,800 Income taxes paid (400,402) (439,210) Net cash flows from operating activities 4,952,971 4,900,014 Cash flows from (used in) investing activities: Proceeds from disposal of financial assets at fair value through other comprehensive income 7,678 32,875 Acquisition of financial assets measured at amortized cost (781,416) (92,542) Proceeds from disposal of financial assets measured at amortized cost 777,884 - Acquisition of financial assets at fair value through profit or loss (14,396) (68,215) Proceeds from disposal of financial assets at fair value through profit or loss 94 284 Proceeds from capital reduction of financial assets at fair value through profit or loss 71,552 50,420 Proceeds from disposal of subsidiaries 45 - Acquisition of property, plant and equipment (697,229) (1,089,842) Proceeds from disposal of property, plant and equipment 6,234,869 1,137 Acquisition of intangible assets (70,690) (54,637) Decrease (increase) in other non-current assets 77,964 (57,767) Increase in prepayments for business facilities (994,189) (131,709) Interest received 153,123 187,287 Dividends received 346,991 167,210 Net cash flows from (used in) investing activities 5,112,280 (1,055,499) Cash flows from (used in) financing activities: Increase in short-term loans 33,647 26,330 Decrease in short-term loans (25,569) (21,129) Proceeds from long-term debt 487,343 3,068,310 Repayments of long-term debt (7,993,043) (6,462,006) Repayments of lease liabilities (76,400) (91,274) (Decrease) increase in other non-current liabilities (1,432) 3,301 Increase in other payables to related parties 295,848 - Cash dividends paid (423,940) - Interest paid (636,459) (737,601) Changes in non-controlling interests 60,000 - Redemption of bonds payable - (4,724,694) Net cash flows used in financing activities (8,280,005) (8,938,763) Effect of exchange rate changes on cash and cash equivalents (137,642) 187,844 Net increase (decrease) in cash and cash equivalents 1,647,604 (4,906,404) Cash and cash equivalents at beginning of period 5,419,305 10,325,709 Cash and cash equivalents at end of period $ 7,066,909 5,419,305 See accompanying notes to consolidated financial statements.
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9 (English Translation of Consolidated Financial Statements Originally Issued in Chinese) WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified) (1) Company history: WIN Semiconductors Corp. (the “Company”) was incorporated on October 16, 1999 as a company limited by shares and registered under the Ministry of Economic Affairs, R.O.C. The address of the Company’s registered office is No. 69, Keji 7th Rd., Hwaya Technology Park, Guishan Dist., Taoyuan City, Taiwan. The main operations of the Company and its subsidiaries (together referred to as “t he Group” ) are as follows: (a) Researching, developing, manufacturing, and selling of GaAs wafers. (b) Developing hog farming technology and trading. (c) Researching, manufacturing and selling of high-density gene chips, biochip optical readers, micro- electrophoresis analyzers and diagnostic tool for endometrial cancer. (2) Approval date and procedures of the consolidated financial statements: These consolidated financial statements was authorized for issue by the Board of Directors as of March 10, 2026. (3) New standards, amendments and interpretations adopted: (a) The impact of the IFRS Accounting Standards endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted. The Group h as initially adopted the f ollowing n ew amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2025: ● Amendments to IAS21 “Lack of Exchangeability” (b) The impact of IFRS Accounting Standards endorsed by the FSC but not yet effective The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2026, would not have a significant impact on its consolidated financial statements: ● IFRS 17 “Insurance Contracts” and amendments to IFRS 17 “Insurance Contracts” ● Amendments to IFRS 9 and IFRS 7 “A mendments to the Classification and Measurement of Financial Instruments” ● Annual Improvements to IFRS Accounting Standards—Volume 11 ● Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity” (Continued)
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10 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (c) The impact of IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC: Standards or Interpretations Content of amendment Effective date per IASB IFRS 18 “Presentation and Disclosure in Financial Statements” The new standard introduces three categories of income and expenses, two income statement subtotals and one single note on management performance measures. The three amendments, combined with enhanced guidance on how to disaggregate information, set the stage for better and more consistent information for users, and will affect all the entities. ● A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’s main business activities. ● Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards. ● Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes. January 1, 2027 note: On September 25, 2025, the FSC issued a press release announcing that Taiwan will adopt IFRS 18 beginning in 2028. Entities that need to adopt the new standard earlier may do with the endorsement of the FSC. (Continued)
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11 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements The Group is evaluating the impact on its consolidated financial position and consolidated financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Group completes its evaluation. The Group does not expect the other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements: ● Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture” ● IFRS 19 “Subsidiaries without Public Accountability: Disclosures” and amendments to IFRS 19 “Subsidiaries without Public Accountability: Disclosures” ● Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency” (4) Summary of material accounting policies: The consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language consolidated financial statements, the Chinese version shall prevail. The material accounting policies presented in the consolidated financial statements are summarized below. The following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements. (a) Statement of compliance These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations” ) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C. (b) Basis of preparation (i) Basis of measurement The consolidated financial statements have been prepared on a historical cost basis except for the following significant accounts: 1) Financial assets and liabilities at fair value through profit or loss are measured at fair value; 2) Financial assets at fair value through other comprehensive income are measured at fair value; 3) Biological assets are measured at fair value less costs to sell; (Continued)
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12 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 4) The net defined benefit liabilities are recognized as the present value of the defined benefit obligation, and the effect of the plan assets ceiling disclosure in Note 4(s) less plan assets. (ii) Functional and presentation currency The functional currency of each Group e ntity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in Taiwan Dollars (TWD), which is the Company’ s functional currency. All financial information presented in TWD has been rounded to the nearest thousand. (c) Basis of consolidation (i) Principles of preparation of the consolidated financial statements The consolidated financial statements comprise the Company and its subsidiaries. Subsidiaries are entities controlled by the Group. When the Company is exposed to the variable remuneration from investing on other individual or sharing the rights of the remuneration, also, is able to influence the rewards, the Company controls the individual. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Transactions, balances and any other unrealized profit or loss between the Company and other subsidiaries are all eliminated while preparing the consolidated financial reports. Comprehensive income (loss) of subsidiaries belongs to owner of the Company and the non-controlling interest respectively. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non- controlling interests even if doing so causes the non-controlling interests to have a deficit balance. Financial reports of subsidiaries had been adjusted properly and the accounting policies used in subsidiaries are same to the Group’s accounting policies. Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Differences between the amount paid or received from fair value and the adjustment of the non-controlling interest are directly realized to the equity and belong to the owners of the Company. (ii) Losing control of subsidiaries When the Group loses control of its subsidiaries, the assets (including goodwill) and liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost will be derecognized and any investment retained in the former subsidiary at its fair value at the date when control is lost will be rem easured in the consolidated financial statement. The difference of disposal gain or loss is between the aggregate of (i) the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the date when control is lost and (ii) the assets (including goodwill) and liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Group had directly disposed of the related assets or liabilities. (Continued)
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13 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) List of subsidiaries in the consolidated financial statements: Shareholding Name of investor Name of subsidiary Principal activity December 31, 2025 December 31, 2024 Remark The Company WIN SEMI. USA, INC. Marketing %100.00 %100.00 The Company Win Semiconductors Cayman Islands Co., Ltd. (abbrev. Win Cayman) Investment activities %100.00 %100.00 The Company WIN Venture Capital Corp. (abbrev. WVC) Venture Investment %100.00 %100.00 The Company Phalanx Biotech Group, Inc. (abbrev. PBL) Researching, manufacturing and selling of high-density gene chips and testing service %73.67 %73.67 The Company WIN Earn Investment Corp. Investment activities %100.00 %100.00 The Company WIN Chance Investment Corp. Investment activities %100.00 %100.00 WVC Phalanx Biotech Group, Inc. Researching, manufacturing and selling of high-density gene chips and testing service %1.54 %1.54 Win Cayman Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. (abbrev. Chainwin Cayman) Investment activities %81.23 %81.23 Chainwin Cayman Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. Developing hog farming technology and trading %87.24 %87.24 Chainwin Cayman Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd. (abbrev. Jiangsu Chainwin) Farm feed development and trading %100.00 %100.00 Chainwin Cayman Jiangsu Win Yield Agriculture Development Co., Ltd. Developing hog farming technology and trading %91.50 %91.50 Chainwin Cayman Win Lux Biotech (Cayman Islands) Co., Ltd. Investment activities %100.00 %100.00 Chainwin Cayman Jiangsu Win Shine Agriculture Development Co., Ltd. Logistics management service - %100.00 (Note 1) Chainwin Cayman i-Chainwin Technology Co., Ltd. Information software services %100.00 %100.00 Chainwin Cayman Win Lux Biotech Co., Ltd. Biotechnology service and pharmaceutical testing %100.00 %100.00 Chainwin Cayman Jiangsu Win Lux Biotech Co., Ltd. Biotech research and development and bioassay %100.00 %100.00 Jiangsu Chainwin Jiangsu Win Boutique Agriculture Development Co., Ltd. (abbrev. Jiangsu Win Boutique) Developing hog farming technology and trading %100.00 %100.00 Jiangsu Chainwin Jiangsu Win Sunlight Agriculture Developement Co., Ltd. (abbrev Jiangsu Win Sunlight) Developing hog farming technology and trading %100.00 %100.00 Jiangsu Chainwin Jiangsu Win Chance Agriculture Developement co., Ltd. (abbrev. Jaingsu Win Chance) Developing hog technology farming and trading - %100.00 (Note 2) Jiangsu Chainwin Jiangsu Win Fortune Agriculture Development Co., Ltd. (abbrev. Jiangsu Win Fortune) Developing hog farming technology and trading %100.00 %100.00 Jiangsu Chainwin Jiangsu Win Advane Bio-Assay Co., Ltd. Biotechnology testing service %100.00 %100.00 Jiangsu Chainwin Jiangsu Win Wonder Agriculture Development Co., Ltd. Developing farming technology and trading %100.00 - (Note 1) Jiangsu Chainwin Jiangsu Win Shine Agriculture Developement Co., Ltd. Logistics management service %100.00 - (Note 1) Jiangsu Win Chance Jiangsu Win Wonder Agriculture Developement Co., Ltd. Developing farming technology and trading - %100.00 (Note 1) Jiangsu Win Sunlight Jiangsu Chainwin Kang Yuan Agriculture Development Co., Ltd Developing hog farming technology and trading %6.38 %6.38 Jiangsu Win Fortune Jiangsu Chainwin Kang Yuan Agriculture Development Co., Ltd Developing hog farming technology and trading %6.38 %6.38 Jiangsu Win Boutique Jiangsu Win Yield Agriculture Developement Co., Ltd. Developing hog farming technology and trading %8.50 %8.50 PBL PhalanxBio, Inc. Selling of high-density gene chips and testing service %100.00 %100.00 PBL Phalanx Biotech Limited.(abbrev. PBL(HK)) Investment actvities %100.00 %100.00 PBL Guzip Biomarkers Corporation Developing and selling of diagnostic tool for endometrial cancer %100.00 %100.00 PBL Phalanx Genomics Inc. (abbrev. Phalanx Gene) Genetic testing service %57.14 - (Note 3) PBL (HK) Onearray Biotech (Kunshan) Co., Ltd. Selling of high-density gene chips and testing service %100.00 %100.00 Note 1: Changes in organizational structure. Note 2: Jiangsu Win Chance was sold in 4th quarter of 2025. Note 3: Phalanx Gene was established by dividing the assets of PBL, with the base date for the division being on March 28, 2025. The registration process has been completed in 2nd quarter of 2025. Note 4: The aforementioned subsidiaries were recognized based on the audited financial statements by the certified public accountant. (iv) List of subsidiaries which are not included in the consolidated financial statements: None. (Continued)
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14 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (d) Foreign currency (i) Foreign currency transaction Transactions in foreign currencies are translated into the respective functional currencies of the Group at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate of the date the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of translation. Exchange differences are generally recognized in profit or loss, except for the following differences which are recognized in other comprehensive income that arises from the retranslation: an investment in equity securities designated as at fair value through other comprehensive income; a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or qualifying cash flow hedges to the extent that the hedges are effective. (ii) Foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the reporting currency of the consolidated financial statements at the exchange rates of the reporting date. The income and expenses of foreign operations are translated to the reporting currency of the consolidated financial statements at average rate. Foreign currency differences are recognized in other comprehensive income, and presented in the foreign currency translation reserve in equity. However, if the foreign operation is a non-wholly owned subsidiary, then the relevant proportion of the translation difference is allocated to non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes of only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss. (Continued)
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15 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely predicted in the foreseeable future, the foreign currency gains and losses arising from such items are considered to a part of investment in the foreign operation and are recognized in other comprehensive income. (e) Classification of current and non-current assets and liabilities The Group classifies the asset as current under one of the following criteria, and all other assets are classified as non current. (i) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle; (ii) It holds the asset primarily for the purpose of trading; (iii) It expects to realize the asset within twelve months after the reporting period; or (iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. The Group c lassifies the liability as current under one of the following criteria, and all other liabilities are classified as non current. (i) It expects to settle the liability in its normal operating cycle; (ii) It holds the liability primarily for the purpose of trading (iii) It is due to be settled within twelve months after the reporting period; or (iv) The Group does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. (f) Cash and cash equivalents Cash comprises cash on hand and cash in bank. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents. (g) Financial instruments Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price. (Continued)
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16 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (i) Financial assets All regular way purchases or sales of financial assets are recognized and derecognized on a trade date and settle date basis. On initial recognition, a financial asset is classified as measured at: amortized cost; fair value through other comprehensive income (FVOCI); or fair value through profit and loss ( FVTPL). Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. Regular way purchase or sales of financial assets shall be recognized and derecognized, as applicable, using trade day. 1) Financial assets measured at amortized cost A financial asset is measured at amortized cost if both of the following conditions are met and is not designated as at FVTPL: it is held within a business model whose objective is to hold assets to collect contractual cash flows; and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding. These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss. 2) Fair value through other comprehensive income (FVOCI) A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL: it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis. (Continued)
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17 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss. Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss. Dividend income from equity investments is recognized in profit or loss on the date on which the Group’s r ight to receive payment is established, which is normally the ex- dividend date. 3) Fair value through profit or loss (FVTPL) All financial assets not classified as amortized cost or FVOCI described above (e.g. financial assets held for trading and those that are managed and whose performance is evaluated on a fair value basis) are measured at FVTPL, including derivative financial assets. On initial recognition, the Group m ay irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss. 4) Assessment whether contractual cash flows are solely payments of principal and interest For the purposes of this assessment, ‘p rincipal’ i s defined as the fair value of the financial assets on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin. In assessing whether the contractual cash flows are solely payments of principal and interest, the Group c onsiders the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers: contingent events that would change the amount or timing of cash flows; terms that may adjust the contractual coupon rate, including variable rate features; prepayment and extension features; and terms that limit the Group’s c laim to cash flows from specified assets (e.g. non-recourse features) (Continued)
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18 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 5) Impairment of financial assets The Group r ecognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables, refundable deposits and other financial assets). The Group measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL: debt securities that are determined to have low credit risk at the reporting date; and other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition. Loss allowances for accounts receivable are always measured at an amount equal to lifetime ECL. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available (without undue cost or effort). This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment, as well as forward-looking information. The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade which is considered to be BBB- o r higher per Standard & Poor’ s, Baa3 o r higher per Moody’s or twA or higher per Taiwan Ratings’. The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due. The Group considers a financial asset to be in default when the financial asset is more than 180 days past due. Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset. (Continued)
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19 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘c redit- impaired’ w hen one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following events: significant financial difficulty of the borrower or issuer; a breach of contract such as a default or being more than 90 days past due; the lender of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider; it is probable that the borrower will enter bankruptcy or other financial reorganization; or the disappearance of an active market for a financial asset because of financial difficulties. Loss allowances for financial assets measured at amortized cost are deducted from its carrying amount. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset. The gross carrying amount of a financial asset is written off when the Group h as no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due. 6) Derecognition of financial assets The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group n either transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized. (Continued)
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20 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (ii) Financial liabilities 1) Classification of debt or equity Debt and equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. 2) Equity instrument An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing. 3) Financial liabilities Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss. 4) Derecognition of financial liabilities The Group d erecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group a lso derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss. 5) Offsetting of financial assets and liabilities Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group c urrently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously. (Continued)
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21 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) Derivative financial instruments and hedge accounting The Group h olds derivative financial instruments to hedge its foreign currency exposures. Derivatives are recognized initially at fair value and attributable transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss, and are included in other gains and losses. When a derivative is designated as a hedging instrument, its timing of recognition in profit or loss is determined based on the nature of the hedging relationship. When the fair value of a derivative instrument is positive, it is classified as a financial asset, and when the fair value is negative, it is classified as a financial liability. (h) Inventories Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted-average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. (i) Biological assets Biological assets are measured at fair value less costs to sell on initial recognition, with any change therein recognized in profit or loss at the end of each reporting period. Costs to sell include all costs that would be necessary to sell the assets, excluding finance costs and tax expenses. Biological asset does not have a quoted market price in an active market and for which alternative fair value measurements are determined to be clearly unreliable. In such case, the asset is measured at cost less accumulated depreciation and impairment losses. (j) Investment in associates Associates are those entities in which the Group has significant influence, but not control, or joint control over their financial and operating policies. Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses. The consolidated financial statements include the Group’s s hare of the profit or loss and other comprehensive income of those associates, after adjustments to align the accounting policies with those of the Group, from the date on which significant influence commences until the date on which significant influence ceases. The Group r ecognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share. (Continued)
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22 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Unrealized gains and losses resulting from transactions between the Group a nd an associate are recognized only to the extent of unrelated Group’s interests in the associate. When the Group’s share of losses of an associate equals or exceeds its interest in associates, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. The Group discontinues the use of the equity method and measures the retained interest at fair value from the date when its investment ceases to be an associate. The difference between the fair value of retained interest and proceeds from disposing, and the carrying amount of the investment at the date the equity method was discontinued is recognized in profit or loss. The Group accounts for all the amounts previously recognized in other comprehensive income in relation to that investment on the same basis as would have been required if the associates had directly disposed of the related assets or liabilities. If a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss (or retained earnings) on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) (or retained earnings) when the equity method is discontinued. If the Group’s ownership interest in an associate is reduced while it continues to apply the equity method, the Group r eclassifies the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest to profit or loss. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Group c ontinues to apply the equity method without remeasuring the retained interest. When the Group s ubscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the net assets of the associate. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. Moreover, a difference shall be debited to retained earnings when the balance of capital surplus resulting from investments accounted for using equity method is not sufficient to be written off. If the Group’s o wnership interest is reduced due to the additional subscription to the shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate shall be reclassified to profit or loss on the same basis as would be required if the associate or jointly controlled entity had directly disposed of the related assets or liabilities. (k) Investment property Investment property is the property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business use in the production or supply of goods or services or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment. (Continued)
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23 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss. When the use of an investment property changes such that it is reclassified as property, plant and equipment, its carrying amount at the date of reclassification becomes its cost for subsequent accounting. Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. (l) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses. If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss. (ii) Subsequent expenditure Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. (iii) Depreciation Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives of property, plant and equipment for current and comparative periods are as follows: 1) Buildings and structures: 2 to 30 years 2) Machinery and equipment: 1 to 10 years 3) Factory and equipment: 2 to 15 years 4) Other equipment: 1 to 19 years Depreciation methods, useful lives, and residual values are reviewed at each reporting date at lease and adjusted if appropriate. (Continued)
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24 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (m) Leases (i) Identifying a lease At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: 1) the contract involves the use of an identified asset – t his may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and 2) the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and 3) the Group has the right to direct the use of the asset: ● The Group has the right to direct the use of the asset when it has the decision- making rights that are most relevant to changing how and for what purpose the asset is used. ● In rare cases where the decision on how, and for what purpose, the asset is used is predetermined, the Group has the right to direct the use of an asset if either: － the Group has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or － the Group d esigned the asset in a way that predetermines how and for what purpose the asset will be used throughout the period of use. At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Group h as elected not to separate non-lease components and account for the lease and non- lease components as a single lease component. (ii) As a lessee The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. (Continued)
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25 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determ ined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. Lease payments included in the measurement of the lease liability comprise the following: 1) fixed payments, including substantively fixed payments; 2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; 3) amounts expected to be payable under a residual value guarantee; and 4) payments for purchase or termination options that are reasonably certain to be exercised. The lease liability is measured at amortized cost using the effective interest method. It i s remeasured when: 1) there is a change in future lease payments arising from the change in an index or rate; or 2) there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or 3) there is a change in the assessment on whether it will have the option to exercise a purchase; or 4) there is a change in the assessment on lease term as to whether it will be extended or terminated; or 5) there is any lease modification. When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero. When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group a ccounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease. The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position. The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term. (Continued)
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26 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) As a lessor When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group m akes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group c onsiders certain indicators such as whether the lease is for the major part of the economic life of the asset. When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It a ssesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group a pplies the exemption described above, then it classifies the sub-lease as an operating lease. If an arrangement contains lease and non-lease components, the Group a pplies IFRS15 to allocate the consideration in the contract. The lessor recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The lessor recognizes the interest income over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor’ s net investment in the lease. The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘rent income’. (n) Intangible assets (i) Goodwill 1) Initial Recognition Goodwill arising from the acquisition has been recognized as intangible assets. 2) Subsequent measurement Goodwill is measured at cost less accumulated impairment losses. Impairment loss on equity investment in investees accounted for under the equity method is not allocated to any asset, including goodwill that forms part of the carrying amount of such investment. (ii) Other intangible assets Subsequent to the initial recognition, an intangible asset is measured at cost, less any accumulated amortization and any accumulated impairment losses. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred. (Continued)
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27 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) Amortization Except goodwill, amortizable amount is the cost of an asset less its residual values. Intangible assets are amortized from the date that they are available for use by using straight-line method, the estimated useful lives for the current and comparative periods are as follows: 1) Technical know-how: 6 to 20 years 2) Computer software and information systems: 1 to 10 years 3) Others: 1 to 5 years The residual value, amortization period, and amortization method for an intangible asset with a finite useful life shall be reviewed at least annually at each fiscal year-end, and adjusted if appropriate. (o) Impairment of non-financial assets At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, deferred tax assets and biological assets measured at fair value less costs) to determine whether there is any indication of impairment. If any such indication exists, then the recoverable amount of the asset is estimated. Goodwill is tested annually for impairment. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis. An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. (Continued)
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28 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (p) Provisions A provision is recognized if, as a result of a past event, the Group has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost. (i) Carbon fees Carbon fees levied in accordance with Taiwan’ s Climate Change Response Act and Regulations Governing the Collection of Carbon Fees are recognized when the annual greenhouse gas emissions are probably to exceed the threshold. The provision for the carbon fee is measured based on the volume of greenhouse gas emissions incurred that exceeds the statutory threshold, using the rate expected to be applied, during the reporting period. (q) Revenue (i) Revenue from contracts with customers Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below: 1) Sale of goods The Group recognizes revenue when control of the products has been transferred, when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied. The Group o ften offers volume discounts to its customers based on aggregate sales of electronic components over a 12-month period. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated volume discounts. Accumulated experience is used to estimate the discounts, using the expected value method, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. A contract liability is recognized for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales of electronic components are made with a credit term of 30 to 60 days, which is consistent with the market practice. A receivable is recognized when the goods are delivered, as this is the point in time that the Group has a right to an amount of consideration that is unconditional. (Continued)
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29 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 2) Financing components The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money. (r) Government grants The Group recognizes an unconditional government grant related to property, plant and equipment and research and development plan in profit or loss as other income when the grant becomes receivable. Grants that compensate the Group for expenses or losses incurred are recognized in profit or loss on a systematic basis in the periods in which the expenses or losses are recognized. (s) Employee benefits (i) Defined contribution plans Obligations for contributions to defined contribution pension plans are recognized as expense as the related services is provided. (ii) Defined benefit plans The Group’s n et obligation in respect of the defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognized asset is limited to the total of the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any minimum funding requirements. Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs. (Continued)
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30 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) Short-term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (t) Share-based payment The grant-date fair value of equity-settled share-based payment agreements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of award that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share- based payment is measured to reflect such conditions and there is no true-up for differences between the expected and the actual outcomes. The grant date of the share-based payment is the date the Group inform their employees about the exercise price and shares. (u) Income taxes Income taxes comprise both current taxes and deferred taxes. Except for expenses related to business combinations, or are recognized directly in equity or other comprehensive income, all current and deferred taxes shall be recognized in profit or loss. The Group has determined that interest and penalties related to income taxes, including uncertain tax treatment, do not meet the definition of income taxes, and therefore accounted for them under IAS37. Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It i s measured using tax rates enacted or substantively enacted at the reporting date. Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes shall not be recognized for the below exceptions: (i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transaction (i) affects neither accounting nor taxable profits (losses) and (ii) does not give rise to equal taxable and deductible temporary differences; (Continued)
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31 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and (iii) taxable temporary differences arising on the initial recognition of goodwill. Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any. Deferred tax assets and liabilities are offset if the following criteria are met: (i) the Group has the legal right to settle tax assets and liabilities on a net basis; and (ii) the taxing of deferred tax assets and liabilities fulfill one of the below scenarios: 1) the same taxable entity; or 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized. (v) Business combinations The Group treats the business com bination as acquisition. Goodwill is measured at the consideration transferred less the amounts of the identifiable assets acquired and liabilities assumed (generally at fair value) at the acquisition date. If the amount of net assets acquired and liabilities assumed exceeds the acquisition price, the Group re-assesses whether it has correctly identified all of the assets acquired and liabilities assumed, and recognize a gain for the excess. All transaction cost relating to a business combination are recognized immediately as expense when incurred, except for the issuance of debt or equity instruments. The Group shall measure any non-controlling interests in the acquiree either at fair value or at the non-controlling interest’ s proportionate share of the acquiree’ s identifiable net assets, if the non- controlling interests are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation. Other non-controlling interests are evaluated by their fair value or by another basis permitted by the IFRS Accounting Standards endorsed by the FSC. (Continued)
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32 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements In a business combination achieved in batches, the previously held equity interest in the acquiree at its acquisition-date fair value is remeasured, and the resulting gain or loss, if any, is recognized in profit or loss. In prior reporting periods, the Group may have recognized changes in the value of its equity interest in the acquire in other comprehensive income. If so, the amount that was recognized in other comprehensive income shall be recognized on the same basis as would be required if the Group had directly disposed the previously held equity interest. If the disposal of the equity interest required a reclassification to profit or loss, such an amount shall be reclassified to profit or loss. (w) Earnings per share The Group discloses the Company’s basic and diluted earnings per share attributable to ordinary equity holders of the Company. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholder of the Company divided by weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Company, divided by weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as employee remuneration and convertible bonds payable. (x) Operating segment An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Each operating segment consists of standalone financial information. (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty: In preparing these consolidated financial statements, management has made judgments and estimates about the future, including climate-related risks and opportunities, that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis and are consistent with the Group’s risk management and climate-related commitments where appropriate. Revisions to estimates are recognized prospectively in the period of the change and future periods. Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows: (a) Judgment of whether the Group has significant influence on its investee. Please refer to Note 6(b). (b) Judgment of whether the Group has substantive control over its investee. Please refer to Note 6(g). (Continued)
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33 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (c) Classification of lease The factory lease agreements entered into by the Group were combined leases of land and buildings, recognized as operating leases. The proprietary of land was not transferred and the rental fee is increased to market rent at regular intervals. Also, the lessee does not participate in the residual value of the land and buildings. As a result, it was determined that the Group is responsible for all the risks and rewards of the land and buildings. Please refer to Note 6(t). Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows: (a) Valuation of inventories As inventories are stated at the lower of cost or net realizable value, the Group estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The valuation of inventories is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. The further description of the valuation of inventories, please refer to Note 6(e). (b) Assessment of Impairment on investments accounted for using equity method The assessment of impairment on investments accounted for using equity method requires the management of the Group t o make subjective judgments to identify any indication of material impairment on cash-generating units, estimate the future cash flows deriving from the relevant cash- generating units and determine the discount rate to be applied. For further description of the assessment of impairment on investments accounted for using equity method, please refer to Note 6(g). The accounting policy and disclosure of the Group include that measuring the financial and non-financial assets and financial liabilities at fair value. The Group uses external information to make the evaluation result agreed to market status and to confirm the data resource is independent reliable and consistent with other resource. The Group regularly revises the inputs and any essential adjustments on the fair value to confirm that evaluation results is reasonable. When measuring the fair value of an asset or a liability, the Group usually uses market observable data. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: ● Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). ● Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). (Continued)
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34 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements The Group r ecognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values, please refer to Note 6(ac) Financial instruments. (6) Explanation of significant accounts: (a) Cash and cash equivalents December 31, 2025 December 31, 2024 Cash on hand $ 246 231 Cash in bank 7,041,607 5,416,574 Time deposits 25,056 2,500 $ 7,066,909 5,419,305 Please refer to Note 6(ac) for the currency risk and sensitivity analysis of the financial assets and liabilities of the Group. (b) Financial instruments (i) Financial assets and liabilities at fair value through profit or loss: December 31, 2025 December 31, 2024 Mandatorily measured at financial assets at fair value through profit or loss: Non-derivative financial assets Publicly traded stocks (Note 1) $ 103,815 277,342 Money market funds 205,280 175,118 Private fund (Note 1)(Note 2) 1,318,736 1,399,806 Total $ 1,627,831 1,852,266 Current $ 227,101 182,692 Non-current 1,400,730 1,669,574 $ 1,627,831 1,852,266 Note 1: As of December 31, 2024, part of the private fund and publicly traded stocks were during the lock-up period. Note 2: The 32.88% shares of the Group in NFC Fund II L.P. is deemed as mutual fund. Since the Group is only a limited partner of the fund, it cannot be allowed any representative to take part in the decision making of the policy of NFC Fund II L.P. As a result, the Group has no significant influence over the company. Refer to Note (ab) for the amount of re-measurement at fair value recognized in profit or loss. (Continued)
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35 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (ii) Current financial assets measured at amortized cost December 31, 2025 December 31, 2024 Time deposits over three months $ - 59,980 Repurchase agreement bonds 96,504 32,562 $ 96,504 92,542 The Group has assessed that these financial assets are held to maturity to collect contract cash flows, which consist solely of payments of principal and interest on principal amount outstanding. Therefore, these investments were classified as financial assets measured at amortized cost. For the year ended December 31, 2024, the Group held domestic time deposits, with a weighted average annual interest rate of 1.31%, which mature in May 2025. The Group purchased repurchase agreement in November 2025 and December 2024, with the coupon rates of 3.90% and 4.80%, respectively, which mature in January 2026 and January 2025, respectively. (iii) Non-current financial assets at fair value through other comprehensive income (FVOCI): December 31, 2025 December 31, 2024 Stocks listed on domestic markets $ 391,101 491,783 Stocks listed on US markets 8,158,442 5,701,525 Non-public stocks 322,080 326,763 $ 8,871,623 6,520,071 The Group d ecided to hold these equity instruments, which are not held for trading, at fair value through other comprehensive income. For the years ended December 31, 2025 and 2024, the Group received dividend income $60,232 thousand and $57,011 thousand, respectively, of the equity investment designated at fair value though other comprehensive income. For the year ended December 31, 2025 and 2024, due to the redemption of preferred shares and disposal of investee company, the Group disposed its equity investments designated at fair value through other comprehensive income, which are currently acquired by other or liquidated, at fair values of $7,678 thousand and $32,875 thousand, respectively, resulting in the gains on disposal, accumulated in other equity of $6,764 thousand and $4,626 thousand, respectively, to be reclassified from other equity to retained earnings upon derecognition. (Continued)
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36 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iv) Sensitivity analysis in the equity price risk: If the equity price changes, the impact to comprehensive income, using the sensitivity analysis based on the same variables except for the price index for both periods, will be as follows: 2025 2024 Prices of securities at the reporting date After-tax other comprehensive income After-tax profit (loss) After-tax other comprehensive income After-tax profit (loss) Increasing 3% $ 266,149 3,114 195,602 8,320 Decreasing 3% $ (266,149) (3,114) (195,602) (8,320) (v) As of December 31, 2025 and 2024, the financial assets were not pledged. For information on the Group’s credit risk, currency risk, and fair value information was disclosed in Note 6(ac). (c) Notes and accounts receivable, net December 31, 2025 December 31, 2024 Notes receivable $ 877 1,031 Accounts receivable 1,599,273 1,224,932 Less: loss allowance (2,718) (172) $ 1,597,432 1,225,791 The Group applies the simplified approach to provide for its loss allowance used for expected credit losses, which permit the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and accounts receivable have been grouped based on shared credit risk characteristics and days past due, as well as incorporate forward looking information. The loss allowance provision was determined as follows: (i) The segment of foundry and agriculture technology: December 31, 2025 Gross carrying amount Weighted- average expected loss rate Lifetime expected credit loss allowance Not past due $ 1,325,236 0% - Past due 1~60 days 267,417 0% - Past due 61~120 days - 0% - Past due 121~180 days - 2.66%~5.99% - Past due more than 181 days 2,055 100% 2,055 $ 1,594,708 2,055 (Continued)
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37 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2024 Gross carrying amount Weighted- average expected loss rate Lifetime expected credit loss allowance Not past due $ 1,156,214 0% - Past due 1~60 days 62,305 0% - Past due 61~120 days - 0% - Past due 121~180 days - 1.02%~4.35% - Past due more than 181 days - 100% - $ 1,218,519 - (ii) The segment of gene chip testing service: December 31, 2025 Gross carrying amount Weighted- average expected loss rate Lifetime expected credit loss allowance Not past due $ 3,470 0%~2.29% 29 Past due 1~60 days 1,003 0%~14.74% 67 Past due 61~120 days 395 0%~27.85% 82 Past due 121~180 days 149 0%~59.17% 60 Past due more than 181 days 425 100% 425 $ 5,442 663 December 31, 2024 Gross carrying amount Weighted- average expected loss rate Lifetime expected credit loss allowance Not past due $ 5,185 0%~2.64% - Past due 1~60 days 1,544 0%~4.80% 18 Past due 61~120 days 378 0%~7.24% 5 Past due 121~180 days 238 0%~38.89% 50 Past due more than 181 days 99 100% 99 $ 7,444 172 (Continued)
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38 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements The movements of loss allowance were as follows: 2025 2024 Beginning balance $ 172 825 Impairment losses recognized 2,546 89 Amounts written off - (750) Effect of changes in foreign exchange rates - 8 Ending balance $ 2,718 172 As of December 31, 2025 a nd 2024, the notes and accounts receivable were not discounted nor pledged. (d) Other receivables (recognized as other current assets) December 31, 2025 December 31, 2024 Other receivables $ 15,367 16,372 Less: loss allowance - - $ 15,367 16,372 As of December 31, 2025 and 2024, other receivables were not past due nor impaired. The information on the Group’s credit risk was disclosed in Note 6(ac). (e) Inventories December 31, 2025 December 31, 2024 Raw materials, supplies and spare parts $ 3,495,661 3,909,919 Work in process 1,065,117 607,590 Finished goods 417,756 474,642 $ 4,978,534 4,992,151 Except for cost of goods sold and inventories recognized as expenses, the remaining gains or losses which were recognized as operating cost or deduction of operating cost were as follows: 2025 2024 Losses on valuation of inventories and obsolescence (reversal of inventories write-downs) $ (99,683) 234,972 Unallocated overheads $ 248,487 292,665 Revenue from sale of scraps $ (19,353) (21,406) Losses on physical inventory count $ 73 2,779 (Continued)
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39 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements For the year ended December 31, 2025, the reversal of write-downs on inventories was due to inventory destocking, wherein the factor causing the net realizable value of inventories to be lower than the cost no longer exists, resulting in an increase in net realizable value to be recognized as a deduction in operating costs. As of December 31, 2025 and 2024, the inventories were not pledged. (f) Biological assets (i) List of biological assets: December 31, 2025 December 31, 2024 Consumable biological assets $ 249,743 170,983 Bearer biological assets $ 162,932 139,237 (ii) Movements in biological assets: 2025 2024 Beginning balance $ 310,220 255,275 Increase due to purchase 168,224 119,511 Input costs 1,214,521 890,659 Depreciation expenses (53,107) (41,405) Decrease due to sales and disposals (1,232,193) (845,759) Changes in fair value less costs to sell due to price changes (3,134) (73,464) Effect of changes in foreign exchange rates 8,144 5,403 Ending balance $ 412,675 310,220 Current $ 249,743 170,983 Non-current 162,932 139,237 $ 412,675 310,220 For the years ended December 31, 2025 and 2024, the losses of $3,134 thousand and $73,464 thousand, respectively, were recognized as operating costs of the consolidated statement of comprehensive income as a result of the rem easurement of biological assets at the higher of its carrying amount or fair value less costs to sell. (iii) The numbers of the Group’s biological assets were as follows: Unit: head December 31, 2025 December 31, 2024 Farrows, hogs and breeders 81,325 50,782 (Continued)
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40 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iv) Fair value The Group uses valuation method to measure its biological assets to determine the fair value of the hogs and the farrows (which are required to reach a certain weight), less, cost to sell at the end of the reporting period. If biological asset does not have a quoted market price in an active market, the asset is measured at cost less accumulated depreciation and impairment losses. Costs of the biological assets include all of the costs within the growth cycle, such as the cost of new-born farrows, the feed and the raising farm. The cost of the productive biological assets shall be depreciated on a straight-line basis over the producible term. The amortized term is within 36 months. For the years ended December 31, 2025 and 2024, the depreciation expenses of biological assets (which will be converted into its breeding biological assets) were $53,107 thousand and $41,405 thousand, respectively. (v) The Group is exposed to the following risks relating to its hog farming: 1) Regulations and environmental risks The Group is subject to laws and regulations in various countries in which it operates. The Group h as established environmental policies and procedures aimed at complying with the local environment and other laws. Management performs regular reviews to identify environmental risks and to ensure that systems in place are adequate to manage those risks. 2) Supply and demand risks The Group is exposed to risks arising from fluctuations in the price and sales volume of hogs. When possible, the Group manages this risk by aligning its farming volume with market supply and demand. Management performs regular industry trend analyses to ensure that the Group’s pricing structure is in line with the market. 3) Climate and other risks The Group’s hog farming is exposed to the risk of damage from climate change, diseases, and other natural forces. The Group has extensive processes in place aimed at monitoring and mitigating those risks, including regular pig health inspections and industry pest and disease surveys. (vi) As of December 31, 2025 and 2024, the biological assets were not pledged. (vii) Fair value valuation technique of biological assets used inputs that were categorized in level 3. Please refer to the table above regarding the movement of biological assets for a reconciliation beginning from the opening balance to the closing balance for level 3 fair value. In this period the fair value hierarchy of the biological assets were not transferred into or out of level 3. The valuation technique and significant unobservable inputs were as follows: (Continued)
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41 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Items Fair value valuation technique Significant unobservable inputs Relationship between significant unobservable inputs and fair value Hogs in China Price comparison: Estimated value of price comparison is compared with the biological assets of different type, quality and kinds, etc. Evaluate the quality Evaluate the changes in fair value, according to the quality of biological assets. (g) Investments accounted for using equity method The components of investments accounted for using the equity method at the reporting date were as follows: December 31, 2025 December 31, 2024 Associates $ 10,818,652 10,772,626 (i) Associates Associates which are material to the Group consisted of the followings: Main Operating Location/ Registered Proportion of Shareholding and Voting Rights Name of Associates Main Businesses and Products Country of the Company December 31, 2025 December 31, 2024 Jiangsu CM/Chainwin Agriculture Development Co., Ltd. (abbrev. Jiangsu CM/Chainwin) Developing hog farming technology and trading China %49 %49 ITEQ Corporation (abbrev. ITEQ) Manufactures and sells mass lamination boards, copper-clad laminates, prepreg, and electronic components Taiwan %23.76 %23.79 The fair value of significant associate listed on the Taiwan Stock Exchange Corporation (TWSE) which is material to the Group is as follows: December 31, 2025 December 31, 2024 ITEQ $ 9,799,729 6,795,055 The following consolidated financial information of significant associates has been adjusted according to individually prepared IFRS financial statements of these associates. (Continued)
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42 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 1) The consolidated financial information of Jiangsu CM/Chainwin: December 31, 2025 December 31, 2024 Current assets $ 169,323 169,229 Non-current assets 1,052,367 1,134,785 Current liabilities (99,762) (124,101) Non-current liabilities (28,321) (28,113) Net assets $ 1,093,607 1,151,800 2025 2024 Operating revenue $ 525,940 432,078 Loss $ (59,185) (17,476) Other comprehensive income - - Total comprehensive loss $ (59,185) (17,476) 2025 2024 Carrying amount of equity of Jiangsu CM/Chainwin attributable to the Group at the beginning $ 562,722 552,336 Loss attributable to the Group (29,001) (8,563) Exchange differences on translation of foreign financial statements attributable to the Group 26,918 (19,677) Shares of net assets of Jiangsu CM/Chainwin at the end 560,639 524,096 Add: Effect of changes in foreign exchange rates (26,363) 38,626 Carrying amount of equity of Jiangsu CM/Chainwin attributable to the Group at the end $ 534,276 562,722 2) The consolidated financial information of ITEQ: December 31, 2025 December 31, 2024 Current assets $ 25,972,248 22,258,591 Non-current assets 12,241,085 12,585,598 Current liabilities (13,560,663) (11,385,054) Non-current liabilities (3,385,640) (2,813,188) Net assets $ 21,267,030 20,645,947 (Continued)
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43 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 2025 2024 Operating revenue $ 33,098,283 29,377,677 Profit $ 1,510,219 821,787 Other comprehensive (loss) income (281,418) 916,370 Total comprehensive income $ 1,228,801 1,738,157 2025 2024 Carrying amount of equity of ITEQ attributable to the Group at the beginning $ 10,208,556 9,977,473 Profit attributable to the Group 295,279 133,458 Comprehensive (loss) income attributable to the Group (68,756) 224,222 Dividend received from ITEQ (155,414) (129,512) Changes in defined benefit plans of associates 1,681 (29) Changes in capital surplus of associates 3,030 2,944 Carrying amount of equity of ITEQ attributable to the Group at the end 10,284,376 10,208,556 Less: Goodwill and other (5,237,293) (5,298,571) Shares of net assets of ITEQ at the end $ 5,047,083 4,909,985 Summary of financial information for the individually insignificant investments in associates accounted for using equity method were as follows. The aforementioned financial information was included in the consolidated financial statements of the Group: December 31, 2025 December 31, 2024 Total equity of the individually insignificant investments in associates $ - 1,348 2025 2024 Attributable to the Group: Loss $ (1,352) (34,159) Other comprehensive income - - Total comprehensive loss $ (1,352) (34,159) (ii) Pledge to secure As of December 31, 2025 and 2024, the investments accounted for using equity method were not pledged. (Continued)
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44 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) Judgment of whether the Group has substantive control over its investee The Group holds 49% of the outstanding voting shares of Rainbow Star Group Limited and is the single largest shareholder of the investee. The remaining 51% of Rainbow Star Group Limited’s shares are concentrated within specific shareholders, and therefore the Group cannot obtain more than half of the total num ber of Rainbow Star Group Limited directors, and it also cannot obtain more than half of the voting rights at a shareholders’ meeting. As a result, it is determined that the Group has significant influence but not control over Rainbow Star Group Limited. The Group holds 23.76% of the outstanding voting shares of ITEQ Corporation (hereinafter referred to as “ I TEQ” ) and is the single largest shareholder of the investee. Although the remaining 76.24% of ITEQ’ s s hares are not concentrated within specific shareholders, the Group still cannot obtain more than half of the total number of ITEQ directors, and it also cannot obtain more than half of the voting rights at a shareholders’ meeting. As a result, it is determined that the Group has significant influence but not control over ITEQ. (iv) Impairment testing for goodwill ITEQ is regarded as a cash-generating unit to generate cash flows that are independent of those from others. Therefore, the impairment testing of the said investment accounted for using equity method is conducted by comparing the recoverable amount of ITEQ with its carrying amount to determine whether an impairment loss should be recognized. On December 31, 2025 and 2024, the recoverable amount determined by using the value-in-use for the cash-generating unit was higher than the carrying amount. Therefore, there was no impairment loss should be recognized. The key assumptions used in the estimation of the value-in-use were as follows: 1) The future cash flow that was based on ITEQ’s expectations of future operations, taking into account the past experience, adjusted for the anticipated revenue growth. 2) The assumption on discount rate which was based on the weighted average cost of the capital. As of December 31, 2025 and 2024, the applied before-tax discount rate of the recoverable amount of the units were 9.00% and 7.40%, respectively. (h) Changes in parent’s ownership interest in a subsidiary (i) Subsidiary’s cash capital increase did not result in the Group’s loss of control Phalanx Genomics Inc., a subsidiary, conducted a cash capital increase of NT$60,000 thousand on October 21, 2025, wherein the Group did not participate, resulting in a decrease in its shareholding from 100% to 57.14%. (Continued)
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45 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (ii) Disposal of subsidiaries The Group had sold its entire shares in Jiangsu Win Chance Agriculture Development Co., Ltd. to a third party for $7,304 thousand on December 1, 2025, resulting in a gain on disposal of investments of $45 thousand, which had since been received and recognized as other gains and losses. The carrying amount of assets and liabilities of Jiangsu Win Chance Agriculture Developement Co., Ltd. as of December 1, 2025, was as follows: Cash and cash equivalents $ 7,259 Carrying amount of net assets $ 7,259 (i) Material non-controlling interests of subsidiaries The material non-controlling interests of subsidiaries were as follows: Percentage of non-controlling interests Subsidiaries Registration December 31, 2025 December 31, 2024 Chainwin Cayman Cayman Islands %18.77 %18.77 The following information of the aforementioned subsidiaries have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Included in the information are the fair value adjustment made during the acquisition and relevant difference in accounting principles between the Group as at the acquisition date. Intergroup transactions were not eliminated in this information. December 31, 2025 December 31, 2024 Current assets $ 1,162,414 1,922,735 Non-current assets 9,769,711 12,274,457 Current liabilities (704,643) (1,593,345) Non-current liabilities (8,470,220) (7,626,148) Net assets $ 1,757,262 4,977,699 Non-controlling interests $ 329,902 934,494 2025 2024 Operating revenue $ 492,323 323,389 Loss $ (3,072,060) (2,046,318) Other comprehensive income (loss) (148,378) 262,506 Total comprehensive loss $ (3,220,438) (1,783,812) Loss attributable to non-controlling interests $ (576,737) (384,168) Comprehensive loss, attributable to non-controlling interests $ (604,593) (334,886) (Continued)
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46 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 2025 2024 Net cash flows from (used in) operating activities $ 354,361 (711,530) Net cash flows used in investing activities (152,968) (102,098) Net cash flows used in financing activities (600,112) (708,455) Effect of changes in foreign exchange rates (358,338) 237,657 Decrease in cash and cash equivalents $ (757,057) (1,284,426) (j) Property, plant and equipment The movements in property, plant and equipment were as follows: Land Buildings and structures Machinery and equipment Factory and equipment Other equipment Construction in progress and inspection- awaited devices Total Cost: Balance as of January 1, 2025 $ 3,761,153 11,633,395 15,696,440 9,472,551 445,045 4,681,114 45,689,698 Additions - 20,230 114,143 204,807 48,522 478,686 866,388 Reclassification (Note 1)(Note 2) - 284,089 87,551 213,271 (9,532) (370,983) 204,396 Disposals (16,849) (20,236) (4,696,107) (90,343) (41,790) (4,235,474) (9,100,799) Effect of changes in foreign exchange rates - 48,810 1,733 17,028 654 (20,815) 47,410 Balance as of December 31, 2025 $ 3,744,304 11,966,288 11,203,760 9,817,314 442,899 532,528 37,707,093 Balance as of January 1, 2024 $ 3,761,153 11,358,474 17,643,557 8,215,687 493,129 5,515,934 46,987,934 Additions - 2,810 156,941 145,641 21,186 522,340 848,918 Reclassification (Note 1) - - 435,846 1,194,007 20,370 (1,435,082) 215,141 Disposals - (20,129) (2,553,648) (120,724) (94,154) - (2,788,655) Effect of changes in foreign exchange rates - 292,240 13,744 37,940 4,514 77,922 426,360 Balance as of December 31, 2024 $ 3,761,153 11,633,395 15,696,440 9,472,551 445,045 4,681,114 45,689,698 Accumulated depreciation and impairment losses: Balance as of January 1, 2025 $ - 2,301,610 10,951,732 3,791,768 247,063 132,659 17,424,832 Depreciation - 553,765 2,128,440 1,009,467 72,308 - 3,763,980 Impairment loss - 518,436 315,605 542,433 9,303 182,738 1,568,515 Reclassification (Note 2) - 38,107 (7,997) - (9,532) (44,741) (24,163) Disposals - (20,236) (4,695,003) (62,460) (41,499) - (4,819,198) Effect of changes in foreign exchange rates - 48,333 19,494 42,636 1,842 8,911 121,216 Balance as of December 31, 2025 $ - 3,440,015 8,712,271 5,323,844 279,485 279,567 18,035,182 Balance as of January 1, 2024 $ - 1,717,763 10,638,635 2,964,965 236,515 117,917 15,675,795 Depreciation - 564,692 2,859,656 916,856 101,926 - 4,443,130 Impairment loss - - 5,845 28,406 - 4,415 38,666 Disposals - (2,567) (2,553,648) (119,861) (94,077) - (2,770,153) Effect of changes in foreign exchange rates - 21,722 1,244 1,402 2,699 10,327 37,394 Balance as of December 31, 2024 $ - 2,301,610 10,951,732 3,791,768 247,063 132,659 17,424,832 (Continued)
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47 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Land Buildings and structures Machinery and equipment Factory and equipment Other equipment Construction in progress and inspection- awaited devices Total Carrying amount: Balance as of December 31, 2025 $ 3,744,304 8,526,273 2,491,489 4,493,470 163,414 252,961 19,671,911 Balance as of January 1, 2024 $ 3,761,153 9,640,711 7,004,922 5,250,722 256,614 5,398,017 31,312,139 Balance as of December 31, 2024 $ 3,761,153 9,331,785 4,744,708 5,680,783 197,982 4,548,455 28,264,866 Note 1: Inventories and prepayments for business facilities were reclassified as property, plant and equipment. Beside, property, plant and equipment were reclassified to expenses. Note 2: The assets were divided and transferred to the subsidiary and recorded at book value. (i) For the years ended December 31, 2025 and 2024, the Group assessed an impairment loss of $1,568,515 t housand and $38,666 t housand, respectively, recognized as property, plant and equipment of agriculture technology segment due to the carrying amount was determined to be higher than its recoverable amount. This impairment loss shall be disclosed in the consolidated statements of comprehensive income, please refer to Note 6(ab). For the years ended December 31, 2025 and 2024, the estimated recoverable amount was calculated using pre-tax discount rates of 8.83% and 8.65%, respectively. (ii) Pledge to secure As of December 31, 2025 a nd 2024, the property, plant and equipment were subject to a registered debenture to secured bank loans and line of credit, the collateral for these long-term borrowings was disclosed in Note 8. (iii) Property, plant and equipment under construction The Group leased certain parcels pieces of land for the construction of its new factories, with the total amounts of $501,419 thousand and $4,452,523 thousand as of December 31, 2025 and 2024, respectively. (iv) On August 11, 2025, the Board of Directors resolved to dispose of the factory under construction and its ancillary facilities located in Luku Section, Luzhu District, Kaohsiung City, with a total transaction amount of $6,500,000 thousand (including tax). The gain on disposal amounted to $1,954,502 thousand. The Group has completed the transaction on September 2, 2025. (v) For the years ended December 31, 2025 and 2024, capitalized interest expenses amounted to $44,030 thousand and $71,915 thousand, respectively. The annual interest rates at which these interest expenses were capitalized ranged from 1.68%~2.27% and 1.50%~5.88%, respectively. (vi) For the gains or losses on disposal of property, plant, and equipment, please refer to Note 6(ab). (Continued)
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48 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (k) Right-of-use assets The movements in right-of-use assets were as follows: Land Buildings and structures Other equipment Total Cost: Balance as of January 1, 2025 $ 894,007 476,846 24,496 1,395,349 Additions 2,523 84,770 166 87,459 Disposals (512,857) (187,172) (6,515) (706,544) Effect of change in foreign exchange rates 2,543 (59) 12 2,496 Balance as of December 31, 2025 $ 386,216 374,385 18,159 778,760 Balance as of January 1, 2024 $ 860,988 473,838 22,324 1,357,150 Additions 19,571 1,774 10,349 31,694 Disposals - (271) (8,314) (8,585) Effect of change in foreign exchange rates 13,448 1,505 137 15,090 Balance as of December 31, 2024 $ 894,007 476,846 24,496 1,395,349 Accumulated depreciation: Balance as of January 1, 2025 $ 234,463 202,387 6,097 442,947 Depreciation 40,704 38,982 4,533 84,219 Disposals (140,039) (76,174) (1,599) (217,812) Effect of change in foreign exchange rates 1,783 193 18 1,994 Balance as of December 31, 2025 $ 136,911 165,388 9,049 311,348 Balance as of January 1, 2024 $ 177,527 155,978 8,519 342,024 Depreciation 53,614 46,265 5,667 105,546 Disposals - (271) (8,132) (8,403) Effect of change in foreign exchange rates 3,322 415 43 3,780 Balance as of December 31, 2024 $ 234,463 202,387 6,097 442,947 Carrying amount: Balance as of December 31, 2025 $ 249,305 208,997 9,110 467,412 Balance as of January 1, 2024 $ 683,461 317,860 13,805 1,015,126 Balance as of December 31, 2024 $ 659,544 274,459 18,399 952,402 On August 11, 2025, the Board of Directors resolved to terminate in advance the land lease agreement with Southern Taiwan Science Park Administration for the land located in the Luku Section, Luzhu District, Kaohsiung City, resulting in a decrease and an increase in the carrying amount of the land-of-use right asset and lease modification by $350,820 thousand and $6,198 thousand, respectively. (Continued)
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49 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (l) Investment property The movements in investment property were as follows: Land Buildings and structures Total Cost: Balance as of December 31, 2025 (Same as balance at January 1, 2025) $ 963,127 138,225 1,101,352 Balance as of December 31, 2024 (Same as balance at January 1, 2024) $ 963,127 138,225 1,101,352 Accumulated depreciation: Balance as of January 1, 2025 $ - 63,353 63,353 Depreciation - 5,317 5,317 Balance as of December 31, 2025 $ - 68,670 68,670 Balance as of January 1, 2024 $ - 58,037 58,037 Depreciation - 5,316 5,316 Balance as of December 31, 2024 $ - 63,353 63,353 Carrying amount: Balance as of December 31, 2025 $ 963,127 69,555 1,032,682 Balance as of January 1, 2024 $ 963,127 80,188 1,043,315 Balance as of December 31, 2024 $ 963,127 74,872 1,037,999 Fair value: Balance as of December 31, 2025 $ 1,104,623 Balance as of December 31, 2024 $ 1,118,997 When measuring the fair value of its investment property, the Group considered the present value of net cash flows to be generated from leasing the property. The expected net cash flows were discounted using the yield to reflect its specified inherit risk on the net cash flows. The inputs to the valuation technique used for measuring fair value were categorized as a Level 2 fair value. As of December 31, 2025 and 2024, the yield applied to the net annual rentals to determine fair value of property for which current prices in an active market were unavailable, was as follows: Location December 31, 2025 December 31, 2024 Hsinchu 0.50% 0.54% As of December 31, 2025 and 2024, the investment properties were not pledged. (Continued)
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50 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (m) Intangible assets The movements in intangible assets were as follows: Technical know-how Computer software and information systems Goodwill Others Total Cost: Balance as of January 1, 2025 $ 43,176 387,504 492,963 20,191 943,834 Additions 428 79,639 - 639 80,706 Reclassification (Note) - (335) - - (335) Disposals - (180,649) - (20,164) (200,813) Effect of changes in foreign exchange rates - (706) - - (706) Balance as of December 31, 2025 $ 43,604 285,453 492,963 666 822,686 Balance as of January 1, 2024 $ 42,172 347,808 484,344 20,166 894,490 Additions 1,004 47,375 - 25 48,404 Disposals - (9,229) - - (9,229) Effect of changes in foreign exchange rates - 1,550 8,619 - 10,169 Balance as of December 31, 2024 $ 43,176 387,504 492,963 20,191 943,834 Amortization and impairment losses: Balance as of January 1, 2025 $ 19,796 266,767 492,963 19,052 798,578 Amortization 6,257 79,618 - 1,167 87,042 Impairment loss - 73,398 - - 73,398 Reclassification (Note) - (335) - - (335) Disposals - (180,649) - (20,164) (200,813) Effect of changes in foreign exchange rates - (701) - - (701) Balance as of December 31, 2025 $ 26,053 238,098 492,963 55 757,169 Balance as of January 1, 2024 $ 12,245 189,761 159,382 5,614 367,002 Amortization 6,006 84,721 - 13,438 104,165 Impairment loss 1,545 - 332,711 - 334,256 Disposals - (9,229) - - (9,229) Effect of changes in foreign exchange rates - 1,514 870 - 2,384 Balance as of December 31, 2024 $ 19,796 266,767 492,963 19,052 798,578 Carrying amount: Balance as of December 31, 2025 $ 17,551 47,355 - 611 65,517 Balance as of January 1, 2024 $ 29,927 158,047 324,962 14,552 527,488 Balance as of December 31, 2024 $ 23,380 120,737 - 1,139 145,256 Note: The assets were divided and transferred to the subsidiary and recorded at book value. (Continued)
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51 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (i) Amortization expense recognized in profit or loss For the years ended December 31, 2025 a nd 2024, the amortization expenses of intangible assets were as follows: 2025 2024 Operating costs $ 8,635 24,790 Operating expenses 78,407 79,375 $ 87,042 104,165 (ii) For the years ended December 31, 2025 and 2024, the Group assessed an impairment loss of $73,398 t housand recognized as computer software and information systems of agriculture technology segment, and $1,545 thousand recognized as technical know-how of other segment due to the carrying amount was determined to be higher than its recoverable amount. This impairment loss shall be disclosed in the consolidated statements of comprehensive income, please refer to Note 6(ab). (iii) Impairment testing for goodwill 1) Chainwin Cayman The goodwill of $135,883 thousand was derived from the acquisition of and the control over Chainwin Cayman by the Group on August 19, 2016. The goodwill was mainly attributed to the profitability of the hog farming in mainland China. Chainwin Cayman is regarded as a cash-generating unit (the “C GU” ) to generate cash inflows that are independent of those from others. Therefore, goodwill is tested for impairment by comparing the recoverable amount of Chainwin Cayman with its carrying amount to determine whether an impairment loss should be recognized. On December 31, 2024, the recoverable amount determined by using the value-in-use for the cash-generating unit was lower than the carrying amount. Therefore, a goodwill impairment loss of $135,013 thousand was recognized, and the accumulative goodwill impairment loss was $135,883 thousand. The Group’s goodwill has been tested for impairment at the end of the annual reporting period and the recoverable amount is determined based on the value-in-use. The key assumptions used in the estimation of the value-in-use of the CGU were as follows: a) The future cash flow that was based on expectations of future operations, taking into account the past experience, adjusted for the anticipated revenue growth. b) The assumption on before-tax discount rate which was based on the weighted average cost of capital. As of December 31, 2024, the applied before-tax discount rate of the recoverable amount of the units was 8.65%. (Continued)
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52 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 2) PBL The goodwill of $318,763 t housand was derived from the Group became the largest shareholder of and obtained control over PBL on July 12, 2018. The goodwill was mainly attributed to the profitability in microarray services market and the know-how of PBL work force. PBL is regarded as a CGU to generate cash inflows that are independent of those from others. Therefore, goodwill is tested for impairment by comparing the recoverable amount of PBL with its carrying amount to determine whether an impairment loss should be recognized. Also, the Group estimated its operating revenue for certain periods based on the purchase price allocation valuation report issued by the specialist, who was entrusted by the Group. The preceding estimation was analyzed based on the financial forecasts from 2018 to 2025. The market share of PBL did not meet expectation and the technology transfer cases of PBL did not finished on time; therefore, the actual operating revenue for the years of 2025 and 2024 decreased by 89% and 86%, respectively, which was lower than the original forecast. As of December 31, 2024, the recoverable amount determined by using the valuein-use for the cash-generating unit was lower than the carrying amount. Therefore, a goodwill impairment loss of $159,381 thousand was recognized, and the accumulative goodwill impairment loss was $318,763 thousand. The Group’s goodwill has been tested for impairment at the end of the annual reporting period and the recoverable amount is determined based on the value-in-use. The key assumptions used in the estimation of the value-in-use of the CGU were as follows: a) The future cash flow that was based on expectations of future operations, taking into account the past experience, adjusted for the anticipated revenue growth. b) The assumption on before-tax discount rate which was based on the weighted average cost of the capital. As of December 31, 2024, the applied beforetax discount rate of the recoverable amount of the units was 15.35%. 3) Guzip The goodwill of $38,317 thousand was derived from the Group’s acquisition of 100% shares of Guzip through share swap. The goodwill was mainly attributed to the know- how of Guzip work force. Guzip is regarded as a CGU to generate cash inflows that are independent of those from others. Therefore, goodwill is tested for impairment by comparing the recoverable amount of Guzip with its carrying amounts to determine whether an impairment loss should be recognized. (Continued)
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53 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Also, the Group estimated its operating revenue for certain periods based on the purchase price allocation valuation report issued by the specialist, who was entrusted by the Group. The preceding estimation was analyzed based on the financial forecasts from 2022 to 2031. The market share of Guzip’s services did not meet expectation; therefore, the actual operating revenue for the year of 2025 and 2024 decreased by 99% and 98%, which were lower than the original forecast, respectively. As of December 31, 2024, the recoverable amount determined by using the value-in-use for the cash-generating unit was lower than the carrying amount. Therefore, a goodwill impairment loss of $38,317 t housand was recognized, and the accumulative goodwill impairment loss was $38,317 thousand. The Group’s goodwill has been tested for impairment at the end of the annual reporting period and the recoverable amount is determined based on the value-in-use. The key assumptions used in the estimation of the value-in-use of the CGU were as follows: a) The future cash flow that was based on expectations of future operations, taking into account the past experience, adjusted for the anticipated revenue growth. b) The assumption on before-tax discount rate which was based on the weighted average cost of the capital. As of December 31, 2024, the applied before-tax discount rate of the recoverable amount of the units was 13.36%. (iv) Pledge to secure As of December 31, 2025 and 2024, the intangible assets were not pledged. (n) Other current assets and other non-current assets December 31, 2025 December 31, 2024 Tax refund receivables $ 101,074 44,881 Other receivables 15,367 16,372 Prepayments to suppliers 76 1,490 Prepaid expenses 155,553 242,140 Offset against business tax payable 46,237 45,879 Other financial assets 232,853 - Restricted assets 224,865 288,257 Refundable deposits 97,072 93,777 Long-term prepayments to suppliers 68,602 88,809 Others 35,944 35,118 $ 977,643 856,723 (Continued)
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54 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (o) Short-term borrowings December 31, 2025 December 31, 2024 Secured short-term borrowings (in RMB) $ 35,237 26,330 Unsecured short-term borrowings $ - - Unused bank credit lines for short-term borrowings $ 1,086,213 1,315,520 Unused bank credit lines for short-term and long-term borrowings $ 4,351,336 4,246,621 Annual interest rate 3.70% 3.70% The collateral for these short-term borrowings were disclosed in Note 8. (p) Long-term borrowings December 31, 2025 December 31, 2024 Secured long-term borrowings (in TWD) $ 61,539 1,200,000 Secured long-term syndicated borrowings (in USD) 8,271,663 8,674,636 Unsecured long-term borrowings (in TWD) 3,995,000 10,349,581 Less: Current portion - (3,692,452) Total $ 12,328,202 16,531,765 Unused bank credit lines for long-term borrowings $ 5,290,000 7,838,000 Annual interest rate 1.73%~4.37% 1.13%~5.05% Expiry date 2027/03/15~2038/08/14 2025/02/15~2038/08/14 As of December 31, 2025, the remaining balances of the borrowing due were as follows: Redemption period Amount January 1, 2026~December 31, 2026 $ - January 1, 2027~December 31, 2027 9,161,663 January 1, 2028~December 31, 2028 855,000 January 1, 2029~December 31, 2029 750,000 January 1, 2030 and after 1,561,539 $ 12,328,202 (i) The unused bank credit lines for short-term and long-term borrowings at the reporting date were disclosed in Note 6(o). (ii) The collateral for these long-term borrowings were disclosed in Note 8. (Continued)
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55 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) In December 2021, the Group entered into a three-year syndicated loan agreement with Far Eastern International Bank and other ten banks. The total credit facility under this loan agreement is US$300,000 thousand. On March 7, 2025, the Company was granted a two-year extension from five of the participating banks, with a credit balance of US$265,000 thousand. The related financial covenants and restrictions for the syndicated loans mentioned above were as follows: 1) At the end of reporting period, current ratio (current assets / current liabilities): shall not lower than 100%; 2) Interest coverage ratio [(profit before tax + depreciation + amortization + interest expense) / interest expense)]: shall not be lower than 100%; and 3) Tangible net assets value (equity－ intangible assets): shall not be lower than NT$20,000,000 thousand. After the guarantor signs the loan agreement, the aforementioned financial ratio and criteria will be reviewed semi-annually, which are based on the year-end consolidated financial statements audited by the Certified Public Accountants (CPAs) that are approved by the leading bank, as well as the semi-annual consolidated financial statements reviewed by the CPAs. For the year ended December 31, 2025, the six months ended June 30, 2025, the year ended December 31, 2024, and the six months ended June 30, 2024, the Group were in compliance with the above financial covenants and restrictions. (q) Bonds payable On January 16, 2024, the Company had redeemed its convertible bonds, at the principal amount of USD$161,000 t housand, due to requirements of the bondholders. On February 23, 2024, as more than 90% of the bonds had been redeemed, the Company redeemed in advanced the remaining bonds, at the principal amount of USD$13,000 thousand, in accordance with the indenture, resulting in the gains, amounting $253,828 thousand, to be recognized as other gains and losses. Please refer to note 6(ab). (r) Lease liabilities The carrying amounts of lease liabilities were as follow: December 31, 2025 December 31, 2024 Current $ 67,188 115,999 Non-current $ 352,380 799,062 For the maturity analysis, please refer to Note 6(ac). (Continued)
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56 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements The amounts recognized in profit or loss were as follows: 2025 2024 Interest expenses on lease liabilities $ 18,410 22,126 Expenses relating to short-term leases $ 3,076 11,255 Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets $ 1,558 1,564 The amounts recognized in the statement of cash flows for the Group were as follows: 2025 2024 Total cash outflow for leases $ 94,765 118,355 (i) Land, buildings and structures leases The Group l eases land, buildings and structures for its plants, parking lots and staff dormitories. The leases of them typically run for a period of 2 to 50 years. (ii) Other leases The Group l eases printers and transportation equipment, with lease terms of 1 year and 4 months to 10 years. (iii) Others Parts of the leases of transportation equipment, machinery and equipment and staff dormitories are with contract terms of less than one year. These leases are short-term. The Group h as elected not to recognize right-of-use assets and lease liabilities for these leases. Also, some leases contain cancellation options exercisable by the Group. In which lease is not reasonably certain to use an optional extended lease term, payments associated with the optional period are not included within lease liabilities. (s) Provisions Carbon fees Balance at January 1, 2025 $ - Provisions made during the year 2,526 Balance at December 31, 2025 $ 2,526 (Continued)
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57 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements In 2024, The Ministry of Environment of the Republic of China issued the Regulations Governing the Collection of Carbon Fees and related supporting measures in accordance with the Climate Change Response Act. Starting from January 2025, carbon fees will be levied on the greenhouse gas emissions of specific industries. According to these regulations, for entities that have obtained approval from the central competent authority for a self-determined reduction plan, and achieve the the specified reduction targets, they are entitled for preferential rates; for entities that have been reviewed and recognized as belonging to industries with high carbon leakage risks, they are entitled for emission adjustment coefficients; otherwise, the carbon fee will be levied at the general rate based on the actual emissions for the year. The Group is subject to the Regulation Governing the Collection of Carbon Fees. As of the reporting date, the Group has submitted a self-reduction plan to the competent authority and the plan is currently under review. Considering the available internal and external infromation, the Group has continuously monitored and controlled the progress of greenhouse gas emission reductions, set targets and implemented carbon reduction based on the Science Based Targets initiative (SBTi), and commisioned experts to assist in the reduction plan. It i s assessed that the Group is probably to obtain approval and achieve the annual specified targets, thus qualifying for the preferential rate. Therefore, for the years ended December 31, 2025, the Group recognized a provision of 2,526 thousand for greenhouse gases emitted in Taiwan based on the preferential rate of 50 dollars and 100 dollars per ton of CO2 equivalent. (t) Operating lease The Group leased its investment property under operating lease, which was disclosed in Note 6(l). For the years ended December 31, 2025 a nd 2024, the rent income from investment properties were $32,593 thousand and $31,771 thousand, respectively. (u) Employee benefits (i) Defined benefit plans Reconciliation of defined benefit obligation at present value and plan asset at fair value were as follows: December 31, 2025 December 31, 2024 Present value of the defined benefit obligations $ 135,513 124,156 Fair value of plan assets (72,965) (65,348) Net defined benefit liabilities (Note) $ 62,548 58,808 Note: Recognized liabilities for defined benefit obligations were recognized as other non- current liabilities. (Continued)
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58 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements The Group makes defined benefit plan contributions to the pension fund account in the Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive an annual payment based on years of service and average salary prior to six months of retirement. 1) Composition of plan assets The Group set aside pension funds in accordance with the legislation from the Ministry of Labor and managed by the Bureau of Labor Founds. The annual budget for the allocation of the minimum income cannot be lower than the income calculated based on the interest rate of the banks’ two-year time deposit in accordance with the legislation “Management and Utilization of the Labor Pension Funds”. The Group’s labor pension reserve account balance in the Bank of Taiwan amounted to $72,965 t housand as of December 31, 2025. The utilization of the labor pension fund assets includes the asset allocation and the yield of the fund. Please refer to the website of Bureau of Labor Founds, Ministry of Labor. 2) The movements in present value of the defined benefit obligations For the years ended December 31, 2025 and 2024, movements in the present value of the defined benefit obligations were as follows: 2025 2024 Defined benefit obligations at the beginning $ 124,156 136,742 Current service costs and interest costs 2,677 2,945 Remeasurements of the net defined benefit liability (asset): －Actuarial (gains) losses arising from financial assumptions 2,822 (4,228) －Actuarial (gains) losses arising from experience adjustments 9,879 (6,386) Paid in the current period (4,021) (4,917) Defined benefit obligations at the end $ 135,513 124,156 (Continued)
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59 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 3) The movements in fair value of the defined benefit plan assets For the years ended December 31, 2025 and 2024, movements in the fair value of the plan assets were as follows: 2025 2024 Fair value of plan assets at the beginning $ 65,348 45,773 Interest revenue 1,283 733 Remeasurements of the net defined benefit liability (asset): －Return on plan assets (excluding the interest revenue) 4,389 4,094 Amounts contributed to plan 5,966 19,665 Paid in the current period (4,021) (4,917) Fair value of plan assets at the end $ 72,965 65,348 4) The movements in effect of plan asset ceiling For the years ended December 31, 2025 and 2024, there were no movements in the effect of plan asset ceiling. 5) The expenses recognized in profit or loss For the years ended December 31, 2025 and 2024, the expenses recognized in profit or loss for the Group were as follows: 2025 2024 Current service costs $ 358 828 Net interest expense of net defined benefit liability (asset) 1,036 1,384 $ 1,394 2,212 2025 2024 Administrative expenses $ 1,394 2,212 6) The remeasurements of the net defined benefit liabilities (assets) recognized in other comprehensive income For the years ended December 31, 2025 and 2024, the remeasurements of the net defined benefit liabilities (assets) recognized in other comprehensive income were as follows: 2025 2024 Balance at the beginning $ 35,751 50,459 Recognized in the current period 8,312 (14,708) Balance at the end $ 44,063 35,751 (Continued)
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60 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 7) Actuarial assumptions At the end of the reporting date, the principal actuarial assumptions were as follows: December 31, 2025 December 31, 2024 Discount rate %1.75 %2.00 Future salary rate increases %4.00 %4.00 The Group expects to make contributions of $3,207 thousand to the defined benefit plans in the next year starting from December 31, 2025. The weighted-average lifetime of the defined benefits plans for the year ended December 31, 2025 is 13.1 years. 8) Sensitivity analysis As of December 31, 2025 a nd 2024, the changes in main actuarial assumptions might have an impact on the present value of the defined benefit obligation as follows: Influences of defined benefit obligations Increase by 0.25% Decrease by 0.25% December 31, 2025 Discount rate $ (2,822) 2,935 Future salary increase rate 2,818 (2,716) December 31, 2024 Discount rate (2,687) 2,796 Future salary increase rate 2,678 (2,600) There is no change in other assumptions when performing the above-mentioned sensitivity analysis. In practice, assumptions may be interactive with each other. The method used on sensitivity analysis is consistent with the calculation on the net pension liabilities. There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2025 and 2024. (ii) Defined contribution plans The Group set aside 6% of the contribution rate of the em ployee’s monthly wages to the Labor Pension personal account of the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. The Group s et aside a fixed amount to the Bureau of Labor Insurance without the payment of additional legal or constructive obligations. The Group set aside $126,726 thousand and $127,126 thousand, respectively, of the pension under the pension plan costs to the Bureau of Labor Insurance for the years ended December 31, 2025 and 2024. (Continued)
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61 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) The Group’s m ainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Group has no further obligations. For the years ended December 31, 2025 and 2024, the Group recognized the pension costs in accordance with the pension regulations and amounted to $10,458 thousand and $10,310 thousand, respectively. (v) Income taxes (i) Income tax expense The amounts of income tax expense (benefit) for the years ended December 31, 2025 and 2024 were as follows: 2025 2024 Current tax expense (benefit) Current period $ 703,313 466,967 Adjustment for prior periods 46,230 (61,568) Subtotal 749,543 405,399 Deferred tax benefit Origination and reversal of temporary differences (452,466) (412,416) Income tax expense (benefit) $ 297,077 (7,017) The amounts of income tax (benefit) expense recognized in other comprehensive income for the years ended December 31, 2025 and 2024 were as follows: 2025 2024 Components of other comprehensive income that will not be classified to profit or loss: The remeasurements of defined benefit plans $ (1,663) 2,942 Reconciliation of income tax expenses (benefit) and profit before tax were as follows: 2025 2024 Profit before tax $ 1,386,895 332,794 Estimated income tax calculated using the Group’s domestic tax rate $ 277,379 66,559 Tax-exempt income (3,151) (957) Investment tax credits (75,000) (70,000) Change in unrecognized deductible temporary differences and the carry forward of unused tax losses 22,629 50,087 Adjustment for prior periods 46,230 (61,568) Additional tax on undistributed earnings 8,652 - Others 20,338 8,862 $ 297,077 (7,017) (Continued)
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62 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (ii) Deferred tax assets and liabilities 1) Unrecognized deferred tax assets and liabilities Deferred tax assets have not been recognized in respect of the following items: December 31, 2025 December 31, 2024 Tax effect of deductible temporary differences $ 53,279 49,577 The carry forward of unused tax losses 390,883 371,956 $ 444,162 421,533 The R.O.C. Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilize the benefits therefrom. As of December 31, 2025, the information of the Group’s unused tax losses for which no deferred tax assets were recognized are as follows: Year of loss Unused tax loss Expiry date 2016 $ 77,244 2026 2017 142,749 2027 2018 146,068 2028 2019 172,736 2029 2020 179,755 2030 2021 282,658 2031 2022 270,941 2032 2023 286,638 2033 2024 250,089 2034 2025 145,539 2035 $ 1,954,417 The Group had no unrecognized deferred tax liabilities as of December 31, 2025 a nd 2024. (Continued)
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63 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 2) Movements in the amount of deferred tax assets and liabilities for the years ended December 31, 2025 and 2024 were as follows: Allowance for obsolete inventories Unrealized investment losses recognized under equity method Others Total Deferred tax assets: Balance as of January 1, 2025 $ 133,696 1,365,910 43,916 1,543,522 Recognized in profit or loss (30,066) 483,463 2,285 455,682 Recognized in other comprehensive income - - 1,663 1,663 Balance as of December 31, 2025 $ 103,630 1,849,373 47,864 2,000,867 Balance as of January 1, 2024 $ 95,776 949,582 83,715 1,129,073 Recognized in profit or loss 37,920 416,328 (36,857) 417,391 Recognized in other comprehensive income - - (2,942) (2,942) Balance as of December 31, 2024 $ 133,696 1,365,910 43,916 1,543,522 Unrealized exchange gain Deferred tax liabilities: Balance as of January 1, 2025 $ 4,975 Recognized in loss 3,216 Balance as of December 31, 2025 $ 8,191 Balance as of January 1, 2024 $ - Recognized in loss 4,975 Balance as of December 31, 2024 $ 4,975 (iii) Assessment The Company’s corporate income tax returns for all the years through 2023 were assessed by the tax authorities. (w) Capital and other equity (i) Ordinary shares As of December 31, 2025 and 2024, the Company’ s authorized share capital consisted of 1,000,000 t housand shares of ordinary shares, with $10 d ollars par value per share, and the paid-in capital amounted to $4,239,404 t housand, of which 423,940 t housand shares were issued. The Company has reserved $1,000,000 thousand for employee stock options. (Continued)
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64 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (ii) Capital surplus The balance of capital surplus as of December 31, 2025 and 2024 were as follows: December 31, 2025 December 31, 2024 Additional paid-in capital $ 9,234,813 9,234,813 Equity component of convertible bonds 639,583 639,583 Changes in equity of subsidiaries, associates and joint ventures accounted for using equity method 101,418 95,038 Employee stock options 698 698 $ 9,976,512 9,970,132 In accordance with amended Company Act, realized capital reserves can only be reclassified as share capital or be distributed as cash dividends after offsetting against losses. The aforementioned capital reserves include share premiums and donation gains. In accordance with the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the actual amount of capital reserves to be reclassified under share capital shall not exceed 10% of the actual share capital amount. (iii) Retained earnings The Company’s Articles of Incorporation stipulate that 10% of the balance of annual income or earnings after deducting accumulated deficit, if any, must be set aside as a legal reserve and a special capital reserve is likewise appropriated or the annual income or earnings are retained in accordance with the relevant laws or regulations or as requested by the authorities, but the balance of such legal reserve reaches an amount equal to the paid-in capital, the appropriation to legal reserves is discontinued. Otherwise, the Company shall set aside at least 50% for shareholder, the distribution of remaining balance of the earnings should be further proposed by the Board of Directors and resolved by the shareholders’ meeting. And the cash dividends should not lower than 10% of the total stockholders’ dividends. It i s authorized the distributable dividends and bonuses or legal capital reserve and capital reserve in whole or in part may be paid in cash after a resolution has been adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting. As the Company is a technology and capital-intensive enterprise and is in its growth phase, it has adopted a more prudent approach in appropriating its remaining earnings as its dividend policy in order to sustain its long-term capital needs and thereby maintain continuous development and steady growth. (Continued)
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65 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 1) Legal reserve If the Company experienced profit for the year, the meeting of shareholders shall decide on the distribution of the legal reserve either by new shares or by cash of up to 25% of the actual share capital. 2) Special reverse In accordance with the requirements issued by the FSC, a portion of earnings shall be allocated as special reserve during earnings distribution. If the Company has already reclassified a portion of earnings to special reserve under the preceding subparagraph, it shall make supplemental allocation of special reserve for any difference between the amount it has already allocated and the amount of the current-period total net reduction of other shareholders’ equity. An equivalent amount of special reserve shall be allocated from the after-tax net profit in the period, plus items other than after-tax net profit in the period, that are included in the undistributed current-period earnings and the undistributed prior-period earnings. A portion of undistributed prior-period earnings shall be reclassified to special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to the net reduction of other shareholders’ e quity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions. 3) Appropriations of earnings The appropriation of earning for 2024 had been approved in the meeting of Board of Directors held on March 10, 2025. The appropriation and dividends were as follows: 2024 Cash dividends $ 423,940 On March 11, 2024, the Board of Directors resolved not to distribute any dividends for 2023. The related information mentioned above can be found on websites such as the Market Observation Post System. On March 10, 2026, the Board of Directors resolved to appropriate the 2025 earnings. The earnings were appropriated as follows: 2025 Amount per share (in dollars) Total amount Cash dividends $ 2.00 $ 847,881 (Continued)
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66 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iv) Other equity interests, net of tax Exchange differences on translation of foreign financial statements Unrealized gains (losses) on financial assets at fair value through other comprehensive income Balance as of January 1, 2025 $ 471,912 5,439,164 Foreign currency differences (net of tax): The Group (158,226) - Associates (51,454) - Unrealized gains (losses) on equity instruments at fair value through other comprehensive income (net of tax): The Group - 2,360,842 Associates - 4,723 Cumulative gains (losses) reclassified to retained earnings on disposal of investments in equity instruments at fair value through other comprehensive income (net of tax) - (6,764) Balance as of December 31, 2025 $ 262,232 7,797,965 Exchange differences on translation of foreign financial statements Unrealized gains (losses) on financial assets at fair value through other comprehensive income Balance as of January 1, 2024 $ (12,053) 2,547,662 Foreign currency differences (net of tax): The Group 274,872 - Associates 209,093 - Unrealized gains (losses) on equity instruments at fair value through other comprehensive income (net of tax): The Group - 2,897,229 Associates - (1,101) Cumulative gains (losses) reclassified to retained earnings on disposal of investments in equity instruments at fair value through other comprehensive income (net of tax) - (4,626) Balance as of December 31, 2024 $ 471,912 5,439,164 (Continued)
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67 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (x) Share-based payment The employee stock option (ESOPs) of subsidiary (PBL) (i) 2018 ESOPs 2018 ESOPs Grant date 2018.4.20 Number of options granted (units) 5,560 Number of common shares eligible (shares) 1,000 Contract period 2018.4.20~2026.4.19 Vesting period 2018.4.20~2021.4.19 Recipients Employees of PBL Vesting conditions (Note) (Note) The exercise ratio of the employee stock opinions over the grant period were as follows: Vesting period Exercise ratio (cumulative) 2019.4.19 40% 2020.4.19 70% 2021.4.19 100% PBL used the Black-Scholes Model in measuring the fair value of its employee stock option at the date of grant. The main inputs to the valuation model were as follows: 2018 employee stock options exercise in the 1st year 2018 employee stock options exercise in the 2nd year 2018 employee stock options exercise in the 3rd year Fair value at grant date (dollars) $ 3.93 $ 4.13 $ 4.32 Share price at grant date (dollars) $ 11.29 $ 11.29 $ 11.29 Exercise price (dollars) $ 11 $ 11 $ 11 Expected volatility 40% 40% 40% Expected life 4.5 years 5 years 5.5 years Risk-free interest rate 0.70% 0.74% 0.77% (Continued)
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68 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Details of the 2018 employee stock options were as follows: 2025 2024 Weighted average exercise price (expressed in dollars) Shares of options (expressed in thousands) Weighted average exercise price (expressed in dollars) Shares of options (expressed in thousands) Outstanding at January 1 $ 11 5,560 $ 11 5,560 Granted during the period - - - - Outstanding at December 31 11 5,560 11 5,560 Exercisable at December 31 - 5,560 - 5,560 The outstanding employee stock opinions were as follows: December 31, 2025 Range of exercise price (in dollar) $ 11 Weighted average of remaining contractual period (years) 0.30 4) 2022 ESOPs 2022 ESOPs Grant date 2022.4.1 Number of options granted (units) 6,440 Number of common shares eligible (shares) 1,000 Contract period 2022.4.1~2030.3.31 Vesting period 2022.4.1~2025.3.31 Recipients Employees of PBL Vesting conditions (Note) (Note) The exercise ratio of the employee stock opinions over the grant period were as follows: Vesting period Exercise ratio (cumulative) 2023.3.31 40% 2024.3.31 70% 2025.3.31 100% (Continued)
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69 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements PBL used the Black-Scholes Model in measuring the fair value of its employee stock option at the date of grant. The main inputs to the valuation model were as follows: 2022 employee stock options exercise in the 1st year 2022 employee stock options exercise in the 2nd year 2022 employee stock options exercise in the 3rd year Fair value at grant date (dollars) $ 5.29 $ 5.37 $ 5.51 Share price at grant date (dollars) $ 12.09 $ 12.09 $ 12.09 Exercise price (dollars) $ 10 $ 10 $ 10 Expected volatility 44.48% 42.90% 42.37% Expected life 4.5 years 5 years 5.5 years Risk-free interest rate 0.90% 0.91% 0.93% Details of the 2022 employee stock options were as follows: 2025 2024 Weighted average exercise price (expressed in dollars) Shares of options (expressed in thousands) Weighted average exercise price (expressed in dollars) Shares of options (expressed in thousands) Outstanding at January 1 $ 10 6,440 $ 10 6,440 Granted during the period - - - - Outstanding at December 31 10 6,440 10 6,440 Exercisable at December 31 - 6,440 - 4,508 The outstanding employee stock opinions were as follows: December 31, 2025 Range of exercise price (in dollar) $ 10 Weighted average of remaining contractual period (years) 4.25 For the the years ended December 31, 2025 and 2024, the PBL recognized the compensation cost of $875 thousand and $4,846 thousand for the aforementioned ESOPs, respectively. (Continued)
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70 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (y) Earnings per share (“EPS”) 2025 2024 Basic earnings per share: Profit belonging to common shareholders $ 1,693,801 768,133 Weighted-average number of outstanding shares of common stock (in thousands shares) 423,940 423,940 Basic earnings per share (in dollars) $ 4.00 1.81 Diluted earnings per share: Profit belonging to common shareholders (diluted) $ 1,693,801 768,133 Weighted-average number of outstanding shares of common stock (in thousands shares) 423,940 423,940 Effect of potentially dilutive common stock Employee remuneration (in thousands shares) 826 460 Weighted-average number of common stock (diluted) (in thousands shares) 424,766 424,400 Diluted earnings per share (in dollars) $ 3.99 1.81 (z) Revenue from contracts with customers (i) Disaggregation of revenue 2025 Segment- Foundry Segment- Agriculture technology Segment- Others (Note) Total Primary geographical markets: Asia $ 10,847,823 485,500 54,727 11,388,050 Americas 2,514,353 - 56,455 2,570,808 Taiwan 1,301,554 6,823 97,300 1,405,677 Europe 1,273,999 - - 1,273,999 $ 15,937,729 492,323 208,482 16,638,534 Main product/ services lines: Foundry $ 15,928,576 - - 15,928,576 Others 9,153 492,323 208,482 709,958 $ 15,937,729 492,323 208,482 16,638,534 (Continued)
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71 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 2024 Segment- Foundry Segment- Agriculture technology Segment- Others (Note) Total Primary geographical markets: Asia $ 11,899,365 312,253 3,346 12,214,964 Americas 3,163,981 - 52,801 3,216,782 Taiwan 935,765 10,683 103,123 1,049,571 Europe 976,396 - - 976,396 $ 16,975,507 322,936 159,270 17,457,713 Main product/ services lines: Foundry $ 16,963,362 - - 16,963,362 Others 12,145 322,936 159,270 494,351 $ 16,975,507 322,936 159,270 17,457,713 (ii) Balance of contracts December 31, 2025 December 31, 2024 January 1, 2024 Notes receivable $ 877 1,031 1,351 Accounts receivable 1,599,273 1,224,932 1,148,140 Less: loss allowance (2,718) (172) (825) $ 1,597,432 1,225,791 1,148,666 Contract liabilities $ 443,102 264,338 563,765 For details of notes and accounts receivable and allowance for impairment, please refer to Note 6(c). The major change in the balance of contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received. The amount of revenue recognized for the years ended December 31, 2025 and 2024 t hat was included in the contract liabilities balance at the beginning of the period was $208,781 t housand and $485,284 t housand, respectively. (aa) Employees’ and directors’ remuneration On May 28,2025, the Company resolved at the shareholders’ meeting to amend its Article of Incorporation. According to the amended Articles, if the Company has profit in a given fiscal year, 5% to 10% of the profit shall be allocated as employee remuneration (including a minimum of 50% to those base-level employees). Prior to the amendment, the Article on Incorporation stipulated that, if the Company has profit in a given fiscal year, it shall be allocated according to these following principles: (Continued)
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72 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (i) Employees’ remuneration: not less than 5% but no more than 10% shall be distributed in the form of shares or cash. Stock-type employee remuneration may be distributed to qualified employees of affiliates of the Company. (ii) Directors’ remuneration: no more than 3%. However, if there are any accumulated losses of the Company, the Company shall pre-reserve the amount to offset the loss. The distribution of employees’ remuneration and directors’ remuneration shall follow the special resolution by Board of Directors, and report it to the shareholders’ meeting. The Company estimated its employees’ and directors’ remuneration as follows: 2025 2024 Employees’ remuneration $ 134,200 51,500 Directors’ remuneration 38,800 14,500 $ 173,000 66,000 The amount of employees’ remuneration, and directors’ remuneration were estimated based on profit before tax, net of the amount of the remuneration, deduct the accumulated losses and multiplied by the rule of Company’ s Article of Incorporation. The above remuneration was included in the operating costs and operating expenses for the years ended December 31, 2025 and 2024, which was paid entirely in cash. The differences between the actual distributed amounts as determined by the Board of Directors and those recognized in the financial statements, if any, shall be accounted for as changes in accounting estimates and recognized in profit or loss in the following year. There was no differences between the actual distributed amounts as determined by the Board of Directors and those recognized in the consolidated financial statements for the years ended December 31, 2025 and 2024. The related information mentioned above can be found on websites such as the Market Observation Post System. (ab) Non-operating income and expenses (i) Interest income 2025 2024 Interest income from bank deposits $ 150,435 185,762 Other interest income 3,169 245 Interest income $ 153,604 186,007 (ii) Other income 2025 2024 Dividend income $ 191,577 37,698 Rent income 48,150 39,693 Other income $ 239,727 77,391 (Continued)
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73 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) Other gains and losses 2025 2024 Gains (losses) on disposals of property, plant and equipment $ 1,953,270 (17,339) Foreign exchange gains (losses) 334,802 (18,670) (Losses) gains on financial assets or liabilities at fair value through profit or loss (9,116) 79,733 Gains on financial liabilities measured at amortized cost - 253,828 Gains on lease modification 23,422 176 Impairment loss (1,641,913) (372,922) Government grants income 13,390 3,349 Others 13,707 49,293 Other gains and losses $ 687,562 (22,552) (iv) Finance costs 2025 2024 Interest expenses Bank borrowings $ 699,649 841,069 Bonds payable - 2,914 Lease liabilities 18,410 22,126 Less: capitalized interest (44,030) (71,915) Subtotal 674,029 794,194 Other finance costs 949 785 Finance costs $ 674,978 794,979 (ac) Financial instruments (i) Credit risk 1) Credit risk exposure a) As at reporting, the Group’s e xposure to credit risk and the maximum exposure were mainly from: i) The carrying amount of financial assets recognized in the consolidated balance sheet; and ii) The amount of liabilities as a result from the Group p roviding financial guarantees was US$7,350 thousand as of December 31, 2025 and 2024. (the amounts were equivalent to NT$231,011 thousand and NT$241,007 thousand, respectively). (Continued)
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74 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 2) Disclosures about concentrations of risk As of December 31, 2025 and 2024, the Group’s accounts receivable were concentrated on 7 a nd 5 c ustomers, respectively, whose accounts represented 62% a nd 49% o f the total accounts receivable, respectively. In order to reduce the credit risk on these accounts receivable, the Group c ontinues to evaluate the financial status of these customers and request for collaterals when necessary. 3) Receivables and debt securities For information on credit risk regarding notes and accounts receivable, please refer to Note 6(c). Other financial assets measured at amortized cost include other receivables, bonds and time deposits. For related information of investment and impairment, please refer to Note 6(b) and Note 6(d). All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited 12 months expected losses. (ii) Liquidity risk The following were the contractual maturities of financial liabilities: Carrying amount Contractual cash flows Within 1 year 1-2 years 2-5 years Over 5 years As of December 31, 2025 Non-derivative financial liabilities Secured bank loans $ 8,368,439 8,931,626 406,649 8,449,665 4,015 71,297 Unsecured bank loans 3,995,000 4,292,299 84,563 967,650 2,482,742 757,344 Notes and accounts payable 1,661,888 1,661,888 1,661,888 - - - Other payables (including related parties) 2,803,775 2,803,775 2,803,775 - - - Guarantee deposits received 121,426 121,426 298 11,128 110,000 - Lease liabilities 419,568 551,358 76,136 52,334 107,757 315,131 $ 17,370,096 18,362,372 5,033,309 9,480,777 2,704,514 1,143,772 As of December 31, 2024 Non-derivative financial liabilities Secured bank loans $ 9,900,966 10,954,513 2,145,655 470,812 7,463,376 874,670 Unsecured bank loans 10,349,581 10,817,906 2,523,465 3,277,855 3,491,149 1,525,437 Notes and accounts payable 1,094,119 1,094,119 1,094,119 - - - Other payables 1,919,425 1,919,425 1,919,425 - - - Guarantee deposits received 122,858 122,858 294 12,564 110,000 - Lease liabilities 915,061 1,079,922 126,375 116,164 211,068 626,315 $ 24,302,010 25,988,743 7,809,333 3,877,395 11,275,593 3,026,422 The Group d id not expect that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts. (Continued)
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75 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) Currency risk 1) Exposure to currency risk The Group’s significant exposure to foreign currency risk were as follows: December 31, 2025 December 31, 2024 Foreign currency Exchange rate NT$ Foreign currency Exchange rate NT$ Financial assets Monetary items USD $ 177,892 31.43 5,591,153 115,087 32.79 3,773,692 EUR 107 36.90 3,956 819 34.14 27,970 JPY 602,028 0.2008 120,887 610,058 0.2099 128,051 GBP 11 42.33 478 11 41.19 464 HKD 58 4.038 235 59 4.222 247 RMB 96 4.50 431 162 4.48 724 SGD 1 24.45 21 1 24.13 21 $ 5,717,161 $ 3,931,169 Non-monetary items USD $ 14,778 31.43 465,326 16,857 32.79 552,999 RMB 137,445 4.50 616,270 186,231 4.48 832,490 $ 1,081,596 $ 1,385,489 Financial liabilities Monetary items USD $ 243,209 31.43 7,644,065 230,568 32.79 7,560,309 EUR 458 36.90 16,898 429 34.14 14,635 JPY 696,307 0.2008 139,819 292,496 0.2099 61,395 $ 7,800,782 $ 7,636,339 2) Sensitivity analysis The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, notes and accounts receivable, other receivables, financial assets at fair value through profit or loss, notes and accounts payable, other payables, long-term borrowings, etc. that are denominated in foreign currency. All other variable factors that remain constant, a strengthening (weakening) 5 % of appreciation (depreciation) of the functional currency against the USD, EUR, GBP, JPY, HKD, RMB, SGD, etc. for the years ended December 31, 2025 and 2024 would impact the after-tax profit (loss) as follows. The analysis assumes that all other variables remain constant. 2025 2024 Functional currency against the above foreign currencies After-tax profit (loss) After-tax profit (loss) 5% of appreciation $ 62,172 115,458 5% of depreciation $ (62,172) (115,458) (Continued)
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76 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 3) Exchange gains or losses Since the Group has many kinds of functional currency, the information on foreign exchange gains (losses) on monetary items is disclosed by total amount. For years ended December 31, 2025 and 2024, foreign exchange gains (losses) (including realized and unrealized portions) amounted to $334,802 t housand and $(18,670) t housand, respectively. (iv) Interest rate risk Please refer to the attached note for the liquidity risk and the Group’s interest rate exposure to its financial liabilities. The following sensitivity analysis is based on the risk exposure to interest rates on the non- derivatives financial instruments on the reporting date. For variable rate instruments, the sensitivity analysis assumes the variable rate liabilities are outstanding for the whole year on the reporting date. If the interest rate increases (decreases) by 0.5%, the Group’s net profit after tax would have increased (decreased) by $57,510 t housand and $82,212 t housand for the years ended December 31, 2025 and 2024, respectively, all other variable factors that remain constant. This is mainly due to the Group’s borrowing in floating rates. (v) Fair value 1) Financial instrument classifications and fair values The fair value of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income are measured on a recurring basis. The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities disclosure of fair value information is not required. December 31, 2025 Fair value Carrying value Level 1 Level 2 Level 3 Total Financial assets at fair value through profit or loss Stocks listed on domestic markets $ 103,815 103,815 - - 103,815 Funds and investment 205,280 205,280 - - 205,280 Private funds 1,318,736 - - 1,318,736 1,318,736 Subtotal $ 1,627,831 309,095 - 1,318,736 1,627,831 Financial assets at fair value through other comprehensive income Stocks listed on domestic and foreign markets $ 8,549,543 8,549,543 - - 8,549,543 Non-public stocks 322,080 - - 322,080 322,080 Subtotal $ 8,871,623 8,549,543 - 322,080 8,871,623 Financial assets measured at amortized cost Cash and cash equivalents (Note) $ 7,066,909 - - - - Financial assets measured at amortized cost (Note) 96,504 - - - - Notes and accounts receivable (Note) 1,597,432 - - - - Other receivables (Note) 15,367 - - - - Other non-current assets (Note) 321,937 - - - - Subtotal $ 9,098,149 - - - - (Continued)
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77 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2025 Fair value Carrying value Level 1 Level 2 Level 3 Total Financial liabilities measured at amortized cost Bank loans (Note) $ 12,363,439 - - - - Notes and accounts payable (Note) 1,661,888 - - - - Other payables (including related parties) (Note) 2,803,775 - - - - Guarantee deposits received (Note) 121,426 - - - - Lease liabilities (Note) 419,568 - - - - Subtotal $ 17,370,096 - - - - December 31, 2024 Fair value Carrying value Level 1 Level 2 Level 3 Total Financial assets at fair value through profit or loss Stocks listed on domestic markets $ 277,342 277,342 - - 277,342 Funds and investment 175,118 175,118 - - 175,118 Private fund 1,399,806 - - 1,399,806 1,399,806 Subtotal $ 1,852,266 452,460 - 1,399,806 1,852,266 Financial assets at fair value through other comprehensive income Stocks listed on domestic and foreign markets $ 6,193,308 6,193,308 - - 6,193,308 Non-public stocks 326,763 - - 326,763 326,763 Subtotal $ 6,520,071 6,193,308 - 326,763 6,520,071 Financial assets measured at amortized cost Cash and cash equivalents (Note) $ 5,419,305 - - - - Financial assets measured at amortized cost (Note) 92,542 - - - - Notes and accounts receivable (Note) 1,225,791 - - - - Other receivables (Note) 16,372 - - - - Other non-current assets (Note) 382,034 - - - - Subtotal $ 7,136,044 - - - - Financial liabilities measured at amortized cost Bank loans (Note) $ 20,250,547 - - - - Accounts payable (Note) 1,094,119 - - - - Other payables (Note) 1,919,425 - - - - Guarantee deposits received (Note) 122,858 - - - - Lease liabilities (Note) 915,061 - - - - Subtotal $ 24,302,010 - - - - Note: The information on fair value is not disclosed since the carrying amount is a reasonable approximation of fair value. 2) Valuation techniques of financial instrument not valued at fair value The valuation techniques of the Group’s financial instrum ents not valued at fair value by using the methods and assumptions are as follows: Financial assets measured at amortized cost and financial liabilities measured at amortized cost. If recent transaction prices or market maker quotes are available, the fair value is based on such information. If there is no quoted market price available, the fair value is determined by using valuation techniques and calculated as the present value of the estimated cash flows. (Continued)
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78 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 3) Valuation techniques of financial instruments valued at fair value a) Non-derivative instruments The fair value of financial assets and liabilities traded in an active market is based on the quoted market prices. The quotation, which is published by the main exchange center or that which was deemed to be a public bond by the Treasury Bureau of Central Bank, is included in the fair value of the listed securities instruments and the debt instruments in active markets with open bid. A financial instrument is regarded as the quoted price in an active market if the quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency; and if those prices represent the actual and regularly occurring market transactions on an arm’ s length basis. Otherwise, the market is deemed to be inactive. Normally, a market is considered to be inactive when: The bid-ask spread is increasing; or The bid-ask spread varies significantly; or There has been a significant decline in trading volume. When the financial instrument of the Group is traded in an active market, its fair value is illustrated by the category and nature as follows: Financial assets and liabilities with standard terms and conditions and traded in an active market, for example, investment in stock of listed companies: the fair value is based on the market quoted price. Close-end funds with standard terms and conditions, such as money market funds; investors can require the investment trust company to redeem the fund at any time. The fair value is based on the net value of the fund. Except for the above-mentioned financial instruments traded in an active market, the fair value is based on the valuation techniques or the quotation from the counter-party. The fair value refers to the current fair value of the other financial instruments with similar conditions and characteristics, using a discounted cash flow analysis or other valuation techniques, such as calculations of using models (for example, applicable yield curve from Taipei Exchange, or average quoted price on interest rate of commercial paper from Reuters), based on the information acquired from the market at the balance sheet date. When the financial instrument of the Group is not traded in an active market, its fair value is determined as follows: The fair value is determined based on the ratio of the quoted m arket price of the comparative listed company and its book value per share and its sales revenue per share. Also, the fair value is discounted for its lack of liquidity in the market. (Continued)
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79 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements The fair value is determined by using the asset-based approach, whose assumptions are based on the market approach, income approach, cost approach or other valuation methods according to the nature of the assets or liabilities of the subject companies. b) Derivative instruments The fair value is determined by using the models that are acceptable to the market participants, for example, discounted cash flow analyses or option pricing models. Forward exchange contracts are measured using quoted forward exchange rates. The fair value of structured interest derivative financial instruments is determined by using the proper option pricing models, such as Black-Scholes model, or other valuation technique, such as Monte Carlo simulation. 4) Level transfers of financial instruments In December 2025, Beiley Biofund Inc., which the Group holds an investment in equity shares of, listed its equity shares on a stock exchange and it is currently actively traded in the market. Because the equity shares now have published price quotation in an active market, the fair value measurement was transferred from Level 3 to Level 1 of the fair value hierarchy since the fourth quarter of 2025. For the year ended December 31, 2024, there was no transfer of financial instrument. 5) Movement of level 3 Fair value through profit or loss Fair value through other comprehensive income Private fund Unquoted equity instruments Balance as of January 1, 2025 $ 1,399,806 326,763 Total gains or losses: Recognized in profit and loss (23,914) - Recognized in other comprehensive income - 28,285 Purchased 14,396 - Disposals - (7,678) Capital reduction (71,552) - Transfers out of level 3 - (25,290) Balance as of December 31, 2025 $ 1,318,736 322,080 (Continued)
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80 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Fair value through profit or loss Fair value through other comprehensive income Private fund Unquoted equity instruments Balance as of January 1, 2024 $ 1,334,075 374,409 Total gains or losses: Recognized in profit and loss 77,936 - Recognized in other comprehensive income - (15,640) Purchased 39,005 - Disposals - (32,875) Capital reduction (51,210) - Effect of changes in foreign exchange rates - 869 Balance as of December 31, 2024 $ 1,399,806 326,763 The preceding gains and losses were recognized as “other gains and losses” and “unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income”. As of December 31, 2025 and 2024, the related information of the assets which were still held by the Group were as follows: 2025 2024 Total gains or losses Profit or loss (recognized as other gains and losses) (23,914) 77,936 Other comprehensive income (recognized as unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income) 28,285 (47,645) 6) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement The Group’s financial instruments that use Level 3 inputs to measure fair value include “financial assets at fair value through profit or loss – private funds” and “financial assets at fair value through other comprehensive income – equity investments.” Most of the fair value measurements categorized within Level 3 use the single and significant unobservable input. Equity investments without an active market contains multiple significant unobservable inputs. The significant unobservable inputs of the equity investments are independent from each other, as a result, there is no relevance between them. (Continued)
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81 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Quantified information of significant unobservable inputs was as follows: Item Valuation technique Significant unobservable inputs Inter-relationships between significant unobservable inputs and fair value measurement Financial assets at fair value through other comprehensive income – equity investments without an active market ● Comparable companies approach ● Price-book ratio (as of December 31, 2025 and 2024 were 1.42~1.98 and 1.39~1.92, respectively) ● Market liquidity discount rate (as of December 31, 2025 and 2024 were both 20%) ● The higher the price- book ratio, the higher the fair value ● The higher the market liquidity discount rate, the lower the fair value ● Net asset value method ● Net asset value ● The higher the net assets value, the higher the fair value Financial assets at fair value through profit or loss – private fund ● Net asset value method ● Net asset value ● The higher the net assets value, the higher the fair value 7) Sensitivity analysis of reasonably possible alternative assumptions for fair value measurements in Level 3 of the fair value hierarchy The fair value measurements of the Group’ s financial instruments are reasonable. However, changes in the use of valuation models or valuation variables may affect the estimations. For fair value measurements in Level 3, a fluctuation in the valuation variable by 5% would have the following effect: Effects of changes in fair value on profit or loss Effects of changes in fair value on other comprehensive income Inputs Increase or decrease Favorable Unfavorable Favorable Unfavorable December 31, 2025 Financial assets at fair value through profit or loss Private fund Net asset value 5% $ 65,937 (65,937) - - Financial assets at fair value through other comprehensive income Equity investments without an active market Price-book ratio 5% - - 11,366 (11,366) 〃 Market liquidity discount rate 5% - - 11,366 (11,366) 〃 Net asset value 5% - - 4,738 (4,738) December 31, 2024 Financial assets at fair value through profit or loss Private fund Net asset value 5% 69,990 (69,990) - - Financial assets at fair value through other comprehensive income Equity investments without an active market Price-book ratio 5% - - 8,936 (8,936) 〃 Market liquidity discount rate 5% - - 8,936 (8,936) 〃 Net asset value 5% - - 7,403 (7,403) (Continued)
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82 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the inter-relationships with another input. (ad) Management of financial risk (i) The Group is exposed to the extent of the risks arising from financial instruments as below: 1) Credit risk 2) Liquidity risk 3) Market risk Detailed information about exposure risk arising from the aforementioned risk was listed below. The Group’s objective, policies and process for managing risks and methods used to measure the risk arising from financial instruments. (ii) Risk management framework The Board of Directors is responsible for overseeing the Group’s risk management framework. The Group’ s internal auditor is responsible to identify and analyze the risks faced by the Group. The management of each division sets appropriate risk limits and controls, and monitor risks that follow the adherence to limits. The Group, through their training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Group’ s Audit Committee oversees how management monitors compliance with the Group’ s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group’ s Audit Committee is assisted in its oversight role by the internal auditor. The internal auditor undertakes both regular and ad hoc reviews of risk management controls and the procedures, and the result of which are reported to the Audit Committee. (iii) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to financial instruments fails to meet it contractual obligations that arises principally from the Group’ s accounts receivable, investments in securities and investments in bond. 1) Notes and accounts receivable According to the credit policy, the Group a nalyze each new customer individually for their credit worthiness before granting the new customer standard payment terms and delivery terms. The Group’s r eview includes external ratings of customers’ f inancial information and bank references. Credit lines are established for each customer and reviewed periodically. (Continued)
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83 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements 2) Investments The credit risk exposure in the bank deposits, fixed income investments and equity instruments are measured and monitored by the Group’s finance department. Since the Group’ s transactions resulted from the external parties with good credit standing and investment grade above financial institutions, publicly traded stock companies and unlisted companies with good reputation, there are no incompliance issues and therefore no significant credit risk. 3) Guarantees According to the Group’s policy, the Group can only provide guarantees which are listed under the regulation. The Group did not provide any guarantee not listed under the regulation as of December 31, 2025 and 2024. (iv) Liquidity risk Liquidity risk is a risk that the Group w ill encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’ s approach to managing liquidity is to ensure, as far as possible, that it always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group’ s financial department monitors cash flow requirements and optimizing its cash return on investments. The Group aims to maintain the level of its cash and cash equivalents at an amount in excess of expected cash flows on financial liabilities (other than trade payables) over the succeeding one year. The Group also monitors the level of expected cash outflows on account and other payables. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. As of December 31, 2025, the Group has unused bank credit lines for short-term borrowings, the unused bank credit lines for short- term borrowings and long-term borrowings and long-term bank borrowings amounted to $1,086,213 thousand, $4,351,336 thousand and $5,290,000 thousand, respectively. (v) Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, which will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Group i s exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Group’s entities, primarily the Taiwan Dollars (TWD), US Dollars (USD) and Japanese Yen (JPY). (Continued)
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84 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements The policy of response to currency risk: 1) The Group r eserves the foreign currency position arising from sales appropriately to remit the foreign currency expenditures and then meets the natural hedge. 2) The Group uses foreign currency borrowings and forward exchange contracts to hedge the remaining nature of currency risk arising from the netting of foreign currency accounts receivable and accounts payable. 3) The Group manages the currency risk and then determines the timing of exchanging the foreign currency through collecting the foreign currency information. It a lso stays in contact with the foreign currency department to control the foreign currency trend and market information. (ae) Capital management For the years ended December 31, 2025 and 2024, the Group’s return on common equity was 4.25% and 2.13%, respectively. The Group’s debt ratio at the reporting date were as follows: December 31, 2025 December 31, 2024 Debt ratio %30.86 %39.09 (af) Financing activity Reconciliations of liabilities arising from financing activities were as follows: Non-cash changes January 1, 2025 Cash flows Interest expense Others Amortization of arranger fee of syndicated loan December 31, 2025 Short-term borrowings $ 26,330 8,078 - 829 - 35,237 Long-term borrowings 20,224,217 (7,505,700) - (432,710) 42,395 12,328,202 Guarantee deposit received 122,858 (1,432) - - - 121,426 Lease liabilities 915,061 (90,131) 18,410 (423,772) - 419,568 Total liabilities from financing activity $ 21,288,466 (7,589,185) 18,410 (855,653) 42,395 12,904,433 Non-cash changes January 1, 2024 Cash flows Interest expense Others Amortization of arranger fee of syndicated loan December 31, 2024 Short-term borrowings $ 21,129 5,201 - - - 26,330 Long-term borrowings 23,026,304 (3,393,696) - 548,378 43,231 20,224,217 Bonds payable 4,743,834 (4,724,694) 2,914 (22,054) - - Guarantee deposit received 119,557 3,301 - - - 122,858 Lease liabilities 958,073 (105,536) 22,126 40,398 - 915,061 Total liabilities from financing activity$ 28,868,897 (8,215,424) 25,040 566,722 43,231 21,288,466 (Continued)
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85 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (7) Related-party transactions: (a) Names and relationship with the Group The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements: Name of related party Relationship with the Group Jiangsu CM/Chainwin Agriculture Development Co., Ltd. (abbrev. Jiangsu CM/Chainwin) Associates ITEQ Corporation (abbrev. ITEQ) Associates The Paper Windmill Arts and Educational Foundation Other related parties Taoyuan i-Fare Charity Foundation Other related parties ESG Wolrd Citizens & Digital Governance Foundation Other related parties (Note) Mr. Chin-Tsai Chen Key management personnel Note: The Foundation ceased to be a related party after the Chairman of the Company resigned from the position of Vice Chairman of the Foundation in March, 2025. (b) Significant transactions with related parties (i) Purchases The amounts of significant purchases by the Group from related parties were as follows: 2025 2024 Associates $ 31 - The terms and pricing of purchase transactions with related parties were not significantly different from those offered by other vendors. (ii) Operating expenses The amounts of operating expenses by the Group from related parties were as follows: 2025 2024 Other related parties $ 12,000 3,000 (Continued)
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86 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (iii) Borrowings from Related Parties The borrowings from related parties (recognized as other payables to related parties) were as follows: December 31, 2025 December 31, 2024 Borrowings Interest Payable Borrowings Interest Payable Mr. Chin-Tsai Chen $ 295,442 406 - - For the year ended December 31, 2025, the amount of interest expense was $406 thousand, and the interest rate was 2.00%. There was no such transaction for the year ended December 31, 2024. (iv) Guarantee As of December 31, 2025, and 2024, Chainwin Cayman had provided a guarantee for loans amounting to US$7,350 thousand (the amounts were equivalent to NT$231,011 thousand and NT$241,007 thousand, respectively) to its associate, Jiangsu CM/Chainwin. (v) Leases The Group leased the office and factories to its associate, ITEQ, and the rent income received monthly is based on the nearby office and factories rental rates. The amount of rent income is $32,593 t housand and $31,771 t housand for the years ended December 31, 2025 and 2024, respectively. The preceding rent payment has been received. The guarantee deposits received amounted to $110,000 thousand as of December 31, 2025, and 2024. (c) Transactions with key management personnel Key management personnel compensation was comprised as below: 2025 2024 Short-term employee benefits $ 212,285 171,573 Post-employment benefits 1,152 1,236 $ 213,437 172,809 (Continued)
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87 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (8) Pledged assets: The carrying amounts of pledged assets were as follows: Pledged assets Pledged to secure December 31, 2025 December 31, 2024 Other non-current assets Land and dormitory lease guarantee $ - 23,556 Other non-current assets Bank borrowings 156,554 176,163 Other non-current assets Gas deposits 5,600 5,600 Other non-current assets Customs guarantee with its interest 49,601 24,279 Other non-current assets Seized funds 13,110 58,659 Property, plant and equipment Bank borrowings 2,243,034 2,256,984 Total $ 2,467,899 2,545,241 (9) Commitments and contingencies: (a) Contingencies: None. (b) Commitment: (i) The unrecognized commitment of acquisition of plant expansion and machinery equipment was as follows: December 31, 2025 December 31, 2024 The unrecognized amount $ 1,377,462 3,410,839 (ii) The unused letters of credit was as follows: December 31, 2025 December 31, 2024 The unused letters of credit $ 39,664 3,379 (10) Losses due to major disasters: None. (11) Subsequent events: (a) Based on a resolution resolved in its board meetings held on December 17, 2025 and March 9, 2026, the Company’ s sub-subsidiary, Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd., issued 5,000 thousand and 16,000 thousand (maximum) new shares for cash, respectively, both with a par value of US$1 per share, wherein the Company waived its subscription right in full while taking into account its operational planning, resulting in the Company’ s i ndirect shareholding in Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd., through Win Semiconductors Cayman Islands Co., Ltd., to decrease to 64.47% (calculated based on the maximum). (b) A resolution was decided during its board meeting held on December 17, 2025 for the Company’ s sub-subsidiary, Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. to reduce 64.52% of its capital, at the amount of US$147,000 thousand, with 147,000 thousand shares to be cancelled, resulting in a capital surplus of US$213,305 thousand to be utilized to offset its accumulated losses of US$360,305 thousand. (Continued)
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88 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (c) On January 16, 2026, the Company’ s s ub-subsidiary, Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. sold its entire shares in Win Lux Biotech Co., Ltd., another subsidiary of the Company, to Homao Investment Co., Ltd., a related party, for a consideration of NT$35,000 thousand. (12) Other: (a) The followings were the summary statement of employee benefits, depreciation and amortization expenses by function: 2025 2024 Classified as operating costs Classified as operating expenses Total Classified as operating costs Classified as operating expenses Total Employee benefits Salaries 2,323,816 1,004,947 3,328,763 2,198,611 935,454 3,134,065 Labor and health insurance 212,382 68,601 280,983 213,382 70,235 283,617 Pension 100,040 38,538 138,578 99,481 40,167 139,648 Remuneration of directors - 48,794 48,794 - 26,828 26,828 Others 106,526 27,802 134,328 106,057 27,989 134,046 Depreciation 3,094,764 811,859 3,906,623 3,700,526 894,871 4,595,397 Amortization 8,635 78,407 87,042 24,790 79,375 104,165 (13) Other disclosures: (a) Information on significant transactions: The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group: (i) Loans to other parties: Please refer to schedule A. (ii) Guarantees and endorsements for other parties: Please refer to schedule B. (iii) Material securities held as of December 31, 2025 (excluding investment in subsidiaries, associates and joint ventures): Please refer to schedule C. (iv) Information regarding related-parties purchases and/or sales with amounts exceeding the lower of NT$100 million or 20% of the Company’s paid-in capital: Please refer to schedule D. (v) Information regarding receivables from related-parties exceeding the lower of NT$100 million or 20% of the Company’s paid-in capital: Please refer to schedule E. (vi) Business relationships and significant inter-company transactions: Please refer to schedule F. (b) Information on investments: Please refer to schedule G. (c) Information on investment in mainland China: Please refer to schedule H. (Continued)
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89 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements (14) Segment information: (a) General information: The Group’s reportable segment are the foundry segment, and agriculture technology segment. The segments engages separately in researching, developing, manufacturing, selling of GaAs wafers and researching and developing hog farming technology and trading, etc., respectively. Other operating segments are mainly engaged in investment activities and testing service gene chip, which do not exceed the quantitative thresholds to be reported. (b) Operating segment profit or loss (including reportable segment specific revenue and expenses), segment assets, segment liabilities, and their measurement and reconciliations: The reportable amount is same as that in the report used by the operating decision maker and the operating segment accounting policies are same as the ones described in Note 4 “s ignificant accounting policies” were as follows: 2025 Foundry Agriculture technology Others Reconciliation and elimination Total Revenue： Revenue from external customers $ 15,937,729 492,323 208,482 - 16,638,534 Interest expenses $ 134,368 534,272 6,338 - 674,978 Depreciation and amortization $ 3,101,731 861,447 30,487 - 3,993,665 Shares of profit (loss) of associates and joint ventures accounted for using equity method $ 226,033 (29,001) 67,894 - 264,926 Other material non-cash items: Impairment of non-financial assets $ - 1,641,913 - - 1,641,913 Reportable segment profit or loss $ 1,911,732 (1,166,534) (30,496) - 714,702 Assets: Capital expenditures in non-current assets $ 1,645,784 111,121 5,203 - 1,762,108 2024 Foundry Agriculture technology Others Reconciliation and elimination Total Revenue： Revenue from external customers $ 16,975,507 322,936 159,270 - 17,457,713 Interest expenses $ 167,198 621,393 6,388 - 794,979 Depreciation and amortization $ 3,843,078 824,621 31,863 - 4,699,562 Shares of profit (loss) of associates and joint ventures accounted for using equity method $ 103,444 (8,563) (4,145) - 90,736 Other material non-cash items: Impairment of non-financial assets $ 139,071 32,821 201,030 - 372,922 Reportable segment profit or loss $ 2,269,431 (1,091,126) (416,273) - 762,032 Assets: Capital expenditures in non-current assets $ 1,164,872 102,475 8,841 - 1,276,188 (Continued)
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90 WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024, reportable segment profit or loss excludes non- operating income and expenses, amounting to $672,193 t housand and $(429,238) t housand, respectively. (c) Segment information by products and services The information from the product and the service segment coincides with the administrative segment, and its revenue from external customers was disclosed in Note 14(b). (d) Geographic information In presenting information on the basis of geography, segment revenue is based on the geographical location of customers, and segment assets are based on the geographical location of the assets. Revenue from external customers for the years ended December 31, 2025 and 2024 were as follows: Area 2025 2024 External Customers: Asia $ 11,388,050 12,214,964 America 2,570,808 3,216,782 Taiwan 1,405,677 1,049,571 Europe 1,273,999 976,396 Total $ 16,638,534 17,457,713 Area December 31, 2025 December 31, 2024 Non-current Assets: Taiwan $ 13,411,776 19,483,050 Asia 9,031,030 11,329,577 America 131 150 Total $ 22,442,937 30,812,777 Non-current assets include property, plant and equipment, investment property, right-of-use assets, intangible assets, biological assets and prepayments for business facilities; not including financial instruments, goodwill and deferred tax assets. (e) Major customers For the years ended December 31, 2025 and 2024, sales to customers greater than 10% of net revenue were as follows: 2025 2024 Net revenue amount Percentage of net revenue (%) Net revenue amount Percentage of net revenue (%) Operating revenue of the Group-A company $ 2,350,549 14 1,919,942 11
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Schedule A Loans to other parties: (In thousands of Dollars) 1 Chainwin Biotech and Agrotech Jiangsu Chainwin Kang Yuan Agricultural Other receivables Y 634,572 631,114 631,114 1% 2 - Working - None - Net equity 40%= Net equity 40%= (Note 7) (Cayman Islands) Co., Ltd. Development Co., Ltd. 20,190 ) ( USD 20,080 )( USD 20,080 )( USD Capital 702,904 702,904 1 〃 Win Lux Biotech Co.,Ltd. Other receivables Y 100,576 - - 1% 2 - Working - None - Net equity 40%= Net equity 40%= (Note 7) 3,200 )( USD Capital 702,904 702,904 1 〃 Jiangsu Win Yield Agriculture Development Other receivables Y 124,463 119,591 119,591 1% 2 - Working - None - Net equity 40%= Net equity 40%= (Note 7) Co., Ltd. 3,960 ) ( USD 3,805 )( USD 3,805 )( USD Capital 702,904 702,904 1 〃 Jiangsu Chainwin Agriculture and Animal Other receivables Y 51,860 49,188 49,188 1% 2 - Working - None - Net equity 40%= Net equity 40%= (Note 7) Technology Co., Ltd 1,650 ) ( USD 1,565 )( USD 1,565 )( USD Capital 702,904 702,904 2 Jiangsu Win Sunlight Agriculture Jiangsu Chainwin Kang Yuan Agricultural Other receivables Y 4,944 - - 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Development Co., Ltd. Development Co., Ltd. 1,100 ) ( RMB Capital 430,990 430,990 2 〃 Jiangsu Chainwin Ariculture and Animal Other receivables Y 4,944 - - 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Technology Co., Ltd 1,100 ) ( RMB Capital 430,990 430,990 2 〃 Jiangsu Win Yield Agriculture Development Other receivables Y 5,843 5,843 5,843 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Co., Ltd. 1,300 ) ( RMB 1,300 )( RMB 1,300 )( RMB Capital 430,990 430,990 3 Jiangsu Win Fortune Agriculture Jiangsu Chainwin Kang Yuan Agricultural Other receivables Y 5,393 - - 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Development Co., Ltd. Development Co., Ltd. 1,200 ) ( RMB Capital 457,755 457,755 3 〃 Jiangsu Chainwin Ariculture and Animal Other receivables Y 5,393 - - 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Technology Co., Ltd 1,200 ) ( RMB Capital 457,755 457,755 3 〃 Jiangsu Win Yield Agriculture Development Other receivables Y 6,517 6,517 6,517 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Co., Ltd. 1,450 ) ( RMB 1,450 )( RMB 1,450 )( RMB Capital 457,755 457,755 4 Jiangsu Win Boutique Agriculture Jiangsu Chainwin Kang Yuan Agricultural Other receivables Y 6,742 - - 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Development Co., Ltd. Development Co., Ltd. 1,500 ) ( RMB Capital 360,360 360,360 4 〃 Jiangsu Chainwin Ariculture and Animal Other receivables Y 6,742 - - 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Technology Co., Ltd 1,500 ) ( RMB Capital 360,360 360,360 4 〃 Jiangsu Win Yield Agriculture Development Other receivables Y 2,472 2,472 2,472 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Co., Ltd. 550 ) ( RMB 550 )( RMB 550 )( RMB Capital 360,360 360,360 5 Jiangsu Chainwin Ariculture and Animal Jiangsu Chainwin Kang Yuan Agricultural Other receivables Y 301,131 301,131 271,917 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Technology Co., Ltd. Development Co., Ltd. 67,000 ) ( RMB 67,000 )( RMB 60,500 )( RMB Capital 731,412 731,412 6 Jiangsu Win Lux Biotech Co., Ltd. Jiangsu Win Yield Agriculture Development Other receivables Y 8,540 8,540 8,540 1% 2 - Working - None - Net equity 200%= Net equity 200%= (Note 7) Co., Ltd. 1,900 ) ( RMB 1,900 )( RMB 1,900 )( RMB Capital 65,234 65,234 Note 1: Company numbering as follows: Issuer－0 Investee starts from 1 Note 2: The credit amount to lending. Note 3: Purposes of lending were as follows: 1. Business relationship 2. Short-term financing Note 4: Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd.’s operating procedures of financing to other parties: 1. The loan limit to an individual party : (1) the total amount for lending to a company having business relationship with Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. shall not exceed their previous or current’s total purchasing or sales amount (whichever is higher). (2) the total amount for lending to a company having short-term funding needs shall not exceed 40% of Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd.’s equity based on its most recent audited or reviewed financial statements by a certified accountant. 2. The maximum loans to other parties limit provided by Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. to other parties should not exceed 40% of its equity based on its most recent audited or reviewed financial statements by a certified accountant. Note 5: Jiangsu Win Sunlight Agriculture Development Co., Ltd.’s, Jiangsu Win Fortune Agriculture Development Co., Ltd.’s, Jiangsu Win Boutique Agriculture Development Co., Ltd.’s, Jiangsu Chainwin Agriculture and Animal Technologu Co., Ltd.’s, and Jiangsu Win Lux Biotech Co., Ltd.’s operating procedures of financing to other parties: 1. The loan limit to an individual party：(1) the total amount for lending to a company having business relationship with Jiangsu Win Sunlight Agriculture Development Co., Ltd., Jiangsu Win Fortune Agriculture Development Co., Ltd., Jiangsu Win Boutique Agriculture Development Co., Ltd., Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd., and Jiangsu Win Lux Biotech Co., Ltd. shall not exceed their previous or current’s total purchasing or sales amount (whichever is higher). (2) the total amount for lending to a company having short-term funding needs shall not exceed 20% of Jiangsu Win Sunlight Agriculture Development Co., Ltd.’s, Jiangsu Win Fortune Agriculture Development Co., Ltd.’s, Jiangsu Win Boutique Agriculture Development Co., Ltd.’s, Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd.’s, and Jiangsu Win Lux Biotech Co., Ltd.’s equity based on its most recent audited or reviewed financial statements by a certified accountant. 2. The maximum loans to other parties provided by Jiangsu Win Sunlight Agriculture Development Co., Ltd., Jiangsu Win Fortune Agriculture Development Co., Ltd., Jiangsu Win Boutique Agriculture Development Co., Ltd., Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd., and Jiangsu Win Lux Biotech Co., Ltd. should not exceed 40% of its equity based on its most recent audited or reviewed financial statements by a certified accountant. 3. The fund lending to Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd.’s non-Taiwan subsidiaries (between subsidiaries) having, directly or indirectly, 100% of the voting rights; or the fund lending to the parent company, Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd., (subsidiary-to-parent), should not be restricted by the above limitations; however, the maximum limit for an individual party should not exceed 200% of Jiangsu Win Sunlight Agriculture Development Co., Ltd.’s, Jiangsu Win Fortune Agriculture Development Co., Ltd.’s, Jiangsu Win Boutique Agriculture Development Co., Ltd.’s, Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd.’s, and Jaingsu Win Lux Biotech Co., Ltd.’s equity, and the total amount should not exceed 200% of Jiangsu Win Sunlight Agriculture Development Co., Ltd.’s, Jiangsu Win Fortune Agriculture Development Co., Ltd.’s and Jiangsu Win Boutique Agriculture Development Co., Ltd.’s, Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd.’s, and Jiangsu Win Lux Biotech Co., Ltd.’s equity. Note 6: The aforementioned amount was translated at the exchange rate on the balance sheet date from USD to TWD and RMB to USD for TWD 31.43 and USD 0.143, respectively. Note 7: The amount of the transaction had been offset in the consolidated financial statements. WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Value Purposes of fund financing for the borrower (Note 3) Transaction amount Reasons for short- term financing Allowance for bad debts Collateral Remark Individual funding loan limits (Note 4)(Note 5) Number (Note 1) Name of lender Name of borrower Account name Related party Highest balance of financing to other parties during the period (Note 2) Ending balance (Note 2) Actual amount drawn down Interest rate Maximum limit of fund financing (Note 4)(Note 5) Item ～91～
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Schedule B Guarantees and endorsements for other parties: (In thousands of Dollars) 0 The Company Chainwin Biotech and Agrotech (Cayman Islands) 2 20,772,631 1,571,500 1,571,500 1,571,500 - 3.78% Net equity 50%= Y - - Co., Ltd. 20,772,631 0 〃 Jiangsu Chainwin Kang Yuan Agricultural 2 20,772,631 1,885,800 1,885,800 1,885,800 - 4.54% Net equity 50%= Y - Y Development Co., Ltd. 20,772,631 0 〃 Jiangsu Win Yield Agriculture Development 2 20,772,631 3,457,300 3,457,300 3,457,300 - 8.32% Net equity 50%= Y - Y Co., Ltd. 20,772,631 0 〃 Jiangsu Chainwin Agriculture and Animal 2 20,772,631 1,414,350 1,414,350 1,414,350 - 3.40% Net equity 50%= Y - Y Technology Co., Ltd. 20,772,631 0 〃 Jiangsu Win Fortune Agriclture 2 20,772,631 - - - - - Net equity 50%= Y - Y Development Co., Ltd. 20,772,631 0 〃 Jiangsu Win Boutique Agriculture 2 20,772,631 - - - - - Net equity 50%= Y - Y Development Co., Ltd. 20,772,631 0 〃 Jiangsu Win Sunlight Agriculture 2 20,772,631 - - - - - Net equity 50%= Y - Y Development Co., Ltd. 20,772,631 1 Chainwin Biotech and Agrotech (CaymanJiangsu CM/Chainwin Agriculture 6 527,178 231,011 231,011 - - 13.15% Net equity 50%= - - Y Islands) Co., Ltd. Development Co., Ltd. 16,773 ) ( USD 7,350 )( USD 7,350 )( USD 878,630 1 〃 Jiangsu Chainwin Kang Yuan Agricultural 2 527,178 76,375 38,187 20,225 42,431 2.17% Net equity 50%= - - Y Development Co., Ltd. 16,773 ) ( USD 2,430 )( USD 1,215 )( USD 644 )( USD 1,350 )( USD 878,630 1 〃 Jiangsu Win Yield Agriculture Development 2 527,178 36,773 18,387 15,012 20,430 1.05% Net equity 50%= - - Y Co., Ltd. 16,773 )( USD 1,170 )( USD 585 )( USD 478 )( USD 650 )( USD 878,630 Note 1: Company numbering as follows: 1. Issuer－0 2. Investee starts from 1 Note 2: The 7 types of relationship between the guarantee and the guarantor were as follows: 1. For entities the guarantor has business transaction with. 2. For entities in which the guarantor, directly or indirectly, owned more than 50% of their shares. 3. For entities who owned, directly or indirectly, more than 50% in total of the guarantor’s shares. 4. For entities in which the guarantor, directly or indirectly, owned more than 90% of their shares. 5. Fulfillment of contractual obligation by providing mutual endorsements and guarantees for peer or joint builders in order to undertake a construction project. 6. For entities who are guaranteed and endorsed by all capital contributing shareholders in proportion to each of their shareholder’s percentage. 7. Performance guarantee in which entities within the same industry provide among themselves joint and several securities by entering into sales agreement with each other for pre-construction project pursuant to Company Protection Act. Note 3: The Company’s operating procedures of guarantee and endorsement were as follows: 1. The guarantees and endorsements limit provided by the Company to other parties should not exceed 50% of its equity based on the most recent audited or reviewed financial statement by a certified accountant. The individual guarantee amount should not exceed 50% of its equity based on the most recent audited or reviewed financial statement by a certified accountant. 2. The guarantees and endorsements limit provided by the Company and its subsidiaries to other parties should not exceed 50% of its equity based on the most recent audited or reviewed financial statement by a certified accountant. The individual guarantee amount should not exceed 50% of its equity based on the most recent audited or reviewed financial statement by a certified accountant. 3.The Company endorses and guarantees the bank loans of its subsidiaries, including Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd., Jiangsu Chainwin Kang Y uan Agricultural Development Co., Ltd., Jiangsu Win Yield Agriculture Development Co., Ltd., Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd., Jiangsu Win Fortune Agriculture Development Co., Ltd., Jiangsu Win Boutique Agriculture Development Co., Ltd. and Jiangsu Win Sunlight Agriculture Development Co., Ltd. According to the provisions of the syndicated loans, any unused credit limit will be automatically canceled upon the expiration of the 30-month drawdown period, starting from the date of signing the contract from December 30, 2021. As of June 30, 2024, the actual amount drawn by the borrower was USD 265,000 thousand, with the endorsement guarantee of USD 265,000 thousand beginning on July 1, 2024. Note 4: Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd.’s operating procedures of guarantee and endorsement were as follows: Note 5: The aforementioned amount was translated at the exchange rate on the balance sheet date from USD to TWD and RMB to USD for TWD 31.43 and USD 0.143, respectively. Note 6: Fill in“Y” for those cases of provision of endorsements/ guarantees by listed parent company to subsidiary, provision by subsidiary to listed parent company, and provision to the party in mainland China. 1. The individual guarantee amount should not exceed 30% of its equity based on the most recent audited or reviewed financial statement by a certified accountant. 2. The guarantees and endorsements limit provided by Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. to other parties should not exceed 50% of its equity based on the most recent audited or reviewed financial statement by a certified accountant. Relationship with the Company (Note 2) WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Limitation on amount of guarantees and endorsements for a specific enterprise (Note 3)(Note 4) Parent company endorsements/ guarantees to subsidiary (Note 6) Number (Note 1) Subsidiary endorsements/ guarantees to parent company (Note 6) Endorsements/ guarantees to the companies in mainland China (Note 6) Highest balance of guarantees and endorsements during the period (Note 5) Balance of guarantees and endorsements as of reporting date Actual usage amount Property pledged for guarantees and endorsements (Amount) Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements Maximum amount for guarantees and endorsements (Note 3)(Note 4) Name of guarantor Counter-party of guarantee and endorsement Name ～92～
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Schedule C Material securities held as of December 31, 2025 (excluding investment in subsidiaries, associates and joint ventures): (In thousands of New Taiwan Dollars) Shares/ Units (in thousands)Carrying valuePercentage of ownership (%) Fair value None Current financial assets at fair value through profit or loss 55 21,821 0.07 21,821 0.07 〃 〃 4,745 81,005 - 81,005 - 〃 〃 1,283 21,901 - 21,901 - 〃 〃 4,202 71,739 - 71,739 - 〃 〃 2,630 30,635 - 30,635 - 227,101 227,101 〃 Non‑current financial assets at fair value through profit or loss - 210,234 5.81 210,234 5.81 〃 〃 - 97,988 3.30 97,988 3.30 〃 〃 - 49,136 1.61 49,136 1.61 〃 〃 15,000 23,880 - 23,880 - 〃 〃 12,000 - - - - 〃 〃 - 32,281 12.47 32,281 12.47 〃 〃 - 255,092 32.88 255,092 32.88 〃 〃 - 24,053 5.77 24,053 5.77 (Note 3 ) 〃 〃 - 104,056 12.82 104,056 12.82 〃 〃 - 346,867 10.23 346,867 10.23 〃 〃 - 175,149 19.90 175,149 19.90 Client 〃 484 81,994 0.11 81,994 0.42 1,400,730 1,400,730 None Non‑current financial assets at fair value through other comprehensive income 529 56,339 0.08 56,339 0.08 〃 〃 34,000 - 10.51 - 10.51 (Note 1 ) 〃 〃 2,717 11,220 3.33 11,220 3.33 (Note 2 ) 〃 〃 452 7,003 18.28 7,003 18.28 〃 〃 8,900 76,540 15.87 76,540 15.87 〃 〃 2,258 61,440 1.10 61,440 1.10 〃 〃 16,200 227,098 15.00 227,098 15.00 〃 〃 3,550 273,322 10.04 273,322 11.09 Client 〃 750 8,158,442 0.02 8,158,442 0.02 None 〃 90 - 0.23 - 0.23 〃 〃 820 - 8.20 - 11.71 〃 〃 72 219 18.65 219 18.65 8,871,623 8,871,623 〃 Current financial assets at amortized cost - 21,852 - 21,852 - 〃 〃 - 19,695 - 19,695 - 〃 〃 - 54,957 - 54,957 - 96,504 96,504 Note 1 : Inventec Solar Energy Corporation obtained dissolution registration from the Ministry of Economic Affairs on September 12, 2025. As of January 13, 2026, the company had completed the procedure of liquidation. Note 3 : Foryou Venture Capital L.P. obtained dissolution registration from the Ministry of Economic Affairs on February 5, 2026. However, the company had not completed the procedure of liquidation. Relationship with the company Account name Ending balance Name of holder Category and name of security The highest percentage of the periods WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Remark The Company WIN Venture Capital Corp. WIN Chance Investment Corp. WIN Earn Investment Corp. Chainwin Biotech & Agrotech (Cayman Islands) Co., Ltd. The Company 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 Win Semiconductors Cayman Islands Co., Ltd. The Company 〃 Phalanx Biotech Group, Inc. Winresp INC./Stock BioGenius Biotech, Co., Ltd./Stock Bank of America 51/Bond 〃 〃 Chainwin Biotech & Agrotech (Cayman Islands) Co., Ltd. Note 2 : CDIB Capital Creative Industries Limited obtained dissolution registration from the Ministry of Economic Affairs on January 24, 2024. As of December 31, 2025, the company had not completed the procedure of liquidation. Lin BioScience, Inc./Stock Capital Money Market Fund Capital Money Market Fund Capital Money Market Fund Foryou Venture Capital L.P. CTBC Hua Win Money Market Fund MagiCapital Fund II L.P. CDIB Capital Growth Partners L.P. CDIB Capital Healthcare Ventures II L.P. Fuh Hwa Oriental Fund Fuh Hwa Smart Energy Fund LeaSun Winion L.P. NFC Fund II L.P. Renaissance Capital Limited Partnership Lian Ding Capital Investments Limited Partnership NFC Fund III, L.P. Vanchip (Tianjin) Technology Co., Ltd./Stock Sino-American Silicon Products Inc./Stock Inventec Solar Energy Corporation/Stock CDIB Capital Creative Industries Limited/Stock MagiCap Venture Capital Co., Ltd./Preferred Stock A Beiley Biofund Inc./Stock 〃 Win Semiconductors Cayman Islands Co., Ltd. NFC I Renewable Power Co., Ltd./Stock New Future Capital Co., Ltd./Stock Gogolook Co., Ltd./Stock Broadcom Ltd./Stock MOAI Green Power Corporation/Stock China Exim Bank 47/Bond Mizuho Group 35/ Bond 〃 WIN Venture Capital Corp. ～93～
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Schedule D Information regarding purchase and sale from related-parties exceeding the lower of NT$100 million or 20% of the Company’s paid-in capital: (In thousands of New Taiwan Dollars) Jiangsu Win Yield Agriculture Development Co., Ltd. Affiliates Purchases 161,213 34.34% Payment term 30 days - - (44,815) (Note) Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. Affiliates Sales (161,213) 67.06% Payment term 30 days - - 44,815 (Note) Note: The amount of the transaction had been offset in the consolidated financial statements. Schedule E Information regarding receivables from related-parties exceeding the lower of NT$100 million or 20% of the Company’s paid-in capital: (In thousands of New Taiwan Dollars) Turnover rate Amount Action taken Affiliate 637,637 (Note 1) - - - (Note 2) Affiliate 119,765 (Note 1) - - - (Note 2) Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. Affiliate 273,137 (Note 1) - - - (Note 2) Note 1: The ending balance was other receivables, which was not applicable for the calculation of turnover rate. Note 2: The amount of the transaction had been offset in the consolidated financial statements. Schedule F Business relationships and significant inter-company transactions: (In thousands of New Taiwan Dollars) 1 Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. 3 637,637 2 Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. 3 637,637 1 Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. 3 119,765 3 Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. 3 119,765 4 Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. 3 273,137 2 Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. Jiangsu Chainwin Ariculture and Animal Technology Co., Ltd 3 273,137 2 Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. Jiangsu Win Yield Agriculture Development Co., Ltd. 3 161,213 3 Jiangsu Win Yield Agriculture Development Co., Ltd. Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. 3 161,213 Note 1: Company numbering as follows: Parent company－0 Subsidiary starts from 1 Note 2: The numbering of the relationship between transaction parties as follows: Parent company to subsidiary－1 Subsidiary to parent company－2 Subsidiary to subsidiary－3 Note 3: The amount of the transaction had been offset in the consolidated financial statements. 0.45% 0.97% 0.45% Other payables due to related parties Other payables due to related parties Purchases Sales Other receivables due from related parties Number (Note 1) Name of company Name of counter-party Nature of relationship (Note 2) Account name Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. 56.47% Jiangsu Win Yield Agriculture Development Co., Ltd. 98.42% Overdue Amounts received in subsequent period Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. Name of company Name of counter-party Relationship Ending balance Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd. 〃 Relationship Transaction details Unit price Transactions with terms different from others Remark Purchases/ Sales Amount Percentage of total purchases/ sales Payment terms Payment terms Ending balance Percentage of total notes/ accounts receivable (payable) Notes/ Accounts receivable (payable) Name of company Name of counter-party WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements RemarkAllowances for bad debts no difference with non‑related parties Percentage of the consolidated net revenue or total assetsTrading terms 1.05% 1.05% no difference with non‑related parties - - - Intercompany transactions Amount (Note 3) Other receivables due from related parties Other payables due to related parties Jiangsu Win Yield Agriculture Development Co., Ltd. 0.97% no difference with non‑related parties no difference with non‑related parties no difference with non‑related parties Other receivables due from related parties Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd. no difference with non‑related parties 0.20% 0.20%no difference with non‑related parties no difference with non‑related partiesJiangsu Win Yield Agriculture Development Co., Ltd. Jiangsu Win Yield Agriculture Development Co., Ltd. ～94～
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Schedule G Information on investments: The following is the information on investees for the year end December 31, 2025 (excluding information on investees in mainland China): (In thousands of New Taiwan Dollars) WIN SEMI. USA, INC. California USA Marketing 8,203 8,203 1,000 100.00% 1,715 100.00% 2,976 2,976 (Note 1) Win Semiconductors Cayman Islands Co., Ltd. Cayman Islands Investment activities 11,127,774 11,127,774 376,600 100.00% 10,002,527 100.00% (2,420,290) (2,420,290) (Note 1) WIN Venture Capital Corp. Taiwan Venture Investment 1,040,000 1,040,000 104,000 100.00% 1,064,547 100.00% 27,687 27,687 (Note 1) Phalanx Biotech Group, Inc. Taiwan Researching, manufacturing and selling of high-density 1,079,169 1,079,169 53,427 73.67% 89,390 73.67% (91,193) (67,178) (Note 1) gene chips and testing service WIN Chance Investment Corp. Taiwan Investment activities 830,000 830,000 87,350 100.00% 939,448 100.00% 25,583 25,583 (Note 1) WIN Earn Investment Corp. Taiwan Investment activities 580,000 580,000 58,000 100.00% 507,189 100.00% 16,240 16,240 (Note 1) ITEQ Corporation Taiwan Manufactures and sells mass lamination boards, 6,120,993 6,120,993 65,409 18.01% 7,949,145 18.02% 1,510,219 226,033 copper-clad laminates, prepreg, and electronic components Phalanx Biotech Group, Inc. Taiwan Researching, manufacturing and selling of high-density 39,600 39,600 1,116 1.54% 1,867 1.54% (91,193) (Note 2) (Note 1) gene chips and testing service ITEQ Corporation Taiwan Manufactures and sells mass lamination boards, 952,396 952,396 8,767 2.41% 981,853 2.42% 1,510,219 (Note 2) copper-clad laminates, prepreg, and electronic components Rainbow Star Group Limited British Virgin IslandsInvestment activities 62,920 62,920 38 49.30% - 49.30% (11,830) (Note 2) Chainwin Biotech and Agrotech Cayman Islands Investment activities 10,905,959 10,905,959 185,054 81.23% 1,427,360 81.23% (3,072,060) (Note 2) (Note 1) (Cayman Islands) Co., Ltd. Win Lux Biotech (Cayman Islands) Co., Ltd. Cayman Islands Investment activities 15,010 15,010 500 100.00% 11,443 100.00% (280) (Note 2) (Note 1) i-Chainwin Technology Co., Ltd. Taiwan Information software services 200,000 220,000 20,000 100.00% 3,495 100.00% (86,140) (Note 2) (Note 1) Win Lux Biotech Co., Ltd. Taiwan Biotechnology services and pharmaceutical testing 250,000 250,000 5,000 100.00% 16,565 100.00% (25,492) (Note 2) (Note 1) Phalanx Biotech Limited Hong Kong Investment activities 18,275 18,275 - 100.00% 3,701 100.00% 359 (Note 2) (Note 1) PhalanxBio, Inc. USA Selling of high-density gene chip and testing service 208,110 208,110 2,550 100.00% 16 100.00% - (Note 2) (Note 1) Guzip Biomarkers Corporation Taiwan Development and sales of test reagents for endometrial cancer81,727 81,727 14,238 100.00% 19,507 100.00% (2,069) (Note 2) (Note 1) Phalanx Genomics Inc. Taiwan Genetic testing services 80,000 - 8,000 57.14% 67,873 100.00% (21,215) (Note 2) (Note 1) ITEQ Corporation Taiwan Manufactures and sells mass lamination boards, 832,945 832,945 7,935 2.18% 917,745 2.19% 1,510,219 (Note 2) copper-clad laminates, prepreg, and electronic components ITEQ Corporation Taiwan Manufactures and sells mass lamination boards, 568,005 568,005 4,230 1.16% 435,633 1.17% 1,510,219 (Note 2) copper-clad laminates, prepreg, and electronic components Note 1: The amount of the transaction had been offset in the consolidated financial statements. Note 2: The share of profit (loss) of the investee company is not reflected herein as such amount is already included in the share of profit (loss) of the investor company. The highest percentage of the periods Net income (losses) of investee Investment income (losses) Remark 〃 The Company 〃 〃 〃 〃 〃 〃 WIN Venture Capital Corp. 〃 Win Semiconductors Cayman Islands Co., Ltd. The ending balance at the beginning Shares (in thousands) Percentage of ownership The ending balance at this period Carrying value Name of investor Name of investee Location Main businesses and products The ending balance at the end Original investment amount WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements WIN Earn Investment Corp. 〃 〃 WIN Chance Investment Corp. Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. 〃 〃 Phalanx Biotech Group, Inc. 〃 ～95～
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Schedule H Information on investment in mainland China: (i) The names of investees in mainland China, the main businesses and products, and other information: (In thousands of New Taiwan Dollars) Outflow Inflow December 31, 2025 Jiangsu Chainwin Kang Yuan Agricultural Development Co., Ltd. Developing hog farming technology and trading 4,278,807 (Note 5) 3,309,022 - - 3,309,022 (659,289) 81.23% 81.23% (659,289) 881,490 - (Note 16) Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd. Farm feed developing and trading 3,020,421 (Note 1) 1,316,343 - - 1,316,343 (1,623,505) 81.23% 81.23% (1,623,505) 365,706 - (Note 16) Jiangsu CM/Chainwin Agriculture Development Co., Ltd. Developing hog farming technology and trading 2,059,210 (Note 1) 1,122,874 - - 1,122,874 (59,185) 39.80% 39.80% (29,001) 534,276 - Jiangsu Win Chance Agriculture Development Co., Ltd. Developing hog farming technology and trading - (Note 4) 651,142 - - 651,142 3,742 - 81.23% 3,742 - - (Note 14)(Note 16) Jiangsu Merit/Cofcojoycome Agriculture Development Co., Ltd. Developing hog farming technology and trading - (Note 1) 149,664 - - 149,664 - - - - - - (Note 11) Jiangsu Merit Runfu Agriculture Development Co., Ltd. Developing hog farming technology and trading - (Note 3) 41,009 - - 41,009 - - - - - - (Note 12) Jiangsu Win Yield Agriculture Development Co., Ltd. Developing hog farming technology and trading 2,932,630 (Note 6) 2,460,935 - - 2,460,935 (520,024) 81.23% 81.23% (520,024) 708,920 - (Note 16) Jiangsu Win Shine Agriculture Development Co., Ltd. Logistics management service 345,130 (Note 4) 85,170 - - 85,170 (28,376) 81.23% 81.23% (28,376) 233,050 - (Note 16) Jiangsu Win Boutique Agriculture Development Co., Ltd. Developing hog farming technology and trading 288,100 (Note 4) - - - - (43,780) 81.23% 81.23% (43,780) 180,180 - (Note 16) Jiangsu Win Sunlight Agriculture Development Co., Ltd. Developing hog farming technology and trading 288,100 (Note 4) 86,430 - - 86,430 (41,863) 81.23% 81.23% (41,863) 215,495 - (Note 16) Jiangsu Win Wonder Agriculture Development Co., Ltd. Developing farming technology and trading 88,173 (Note 4) - - - - (13,095) 81.23% 81.23% (13,095) 17,340 - (Note 16) Jiangsu Win Fortune Agriculture Development Co., Ltd. Developing hog farming technology and trading 276,400 (Note 4) 221,120 - - 221,120 (41,902) 81.23% 81.23% (41,902) 228,878 - (Note 16) Chainwin (Huaian) AIoT Co., Ltd. Information software services - (Note 4) 27,860 - - 27,860 - - - - - - (Note 13) Jiangsu Win Advance Bio-Assay Co., Ltd. Biotechnology testing service 111,560 (Note 4) - - - - (3,659) 81.23% 81.23% (3,659) (11,698) - (Note 16) Jiangsu Win Lux Biotech Co., Ltd. Biotech research and development and bioassay 27,680 (Note 1) 27,680 - - 27,680 (73) 81.23% 81.23% (73) 32,617 - (Note 16) Onearray Biotech (Kunshan) Co., Ltd. Selling of high density gene chip and testing service 18,275 (Note 2) 18,275 - - 18,275 364 75.21% 75.21% 364 3,630 - (Note 16) (ii) Limitation on investment in mainland China: (In thousands of Dollars) 9,778,944 ( USD 331,954 ) Note 1: The Group invested in mainland China companies through Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd., which is established in a third region. Note 2: The Group invested in mainland China companies through Phalanx Biotech Limited, which is established in a third region. Note 3: The Company invested in mainland China companies through Jiansu Win Chance Agriculture Development Co., Ltd. Note 4: The Company invested in mainland China companies through Jiangsu Chainwin Agriculture and Animal Technology Co., Ltd. Note 5: The Group co-invested in a company in mainland China through Chainwin Biotech Agrotech (Cayman Islands) Co., Ltd., which was established in a third region, Jiangsu Win Sunlight Agriculture Development Co., Ltd. and Jiangsu Win Fortune Agriculture Development Co., Ltd. Note 6: The Group co-invested in a company in mainland China through Chainwin Biotech Agrotech (Cayman Islands) Co., Ltd., which was established in a third region, and Jiangsu Win Boutique Agriculture Development Co., Ltd. Note 7: The amount of net income (losses) was recognized based on the audited financial statements of the investee companies. Note 8: Carrying value as of December 31, 2025 was with reference to the amount recognized by the investment through subsidiaries to subsidiaries established in a third region. Note 9: Investment income (loss) recognized was translated into New Taiwan Dollars at the average exchange rate for the each month from January 1 to December 31, 2025. Note 10: The Group acquired Vanchip (Tianjin) Technology Co., Ltd. through a third region, wherein the outflow of investment from Taiwan amounted US$9,383 thousand (NT$261,420 thousand). Note 11: Jiansu Merit/Cofcojoycome Agriculture Development Co., Ltd. had been liquidated on January 25, 2019. However, according to the regulation of Investment Commission the remittance to mainland China amounting to US$4,872 thousand (NT$149,664 thousand) was included in the accumulated investment account. Note 12: Jiangsu Merit Runfu Agriculture Development Co., Ltd. had been liquidated on March 22, 2024. However, according to the regulation of Investment Commission the remittance to mainland China amounting to US$1,335 thousand (NT$41,009 thousand) was included in the accumulated investment account. Note 13: Chainwin (Huaian) AIoT Co., Ltd., had been liquidated on October 15, 2024. However, according to the regulation of Investment Commission the remittance to mainland China amounting to US$1,000 thousand (NT$27,860 thousand) was included in the accumulated investment account. Note 14: Jiangsu Win Chance Agriculture Development Co., Ltd. had been sold on December 1, 2025. However, according to the regulation of Investment Commission the remittance to mainland China amounting to US$21,569 thousand (NT$651,142 thousand) was included in the accumulated investment account. Note 15: Amount of upper limit on investment was the higher between sixty percentage of total equity or total consolidated equity. Note 16: The amount of the transaction and the ending balance had been offset in the consolidated financial statements. (iii) Significant transactions: Please refer Schedule A, Schedule B, Schedule D, Schedule E, and Schedule F. The highest percentage of the periods Accumulated outflow of investment from Taiwan at the Upper Limit on Investment (Note 15) The Company and subsidiaries 11,147,442 25,194,486( USD 354,675 ) Investor Company Name WIN Semiconductors Corp. and Subsidiaries Notes to the Consolidated Financial Statements Accumulated Investment in mainland China at the end (Note 10)(Note 11) (Note 12)(Note 13) Direct/Indirect percentage of ownership by the Company Investment flows Remark Accumulated remittance of earnings in current period Name of investee Main businesses and products Total amount of paid- in capital Method of investment Accumulated outflow of investment from Taiwan at the beginning of this year Net income (losses) of the investee Investment income (losses) (Note 7)(Note 9) Carrying value at the end of this period (Note 8) Investment Amounts Authorized by Investment Commission, MOEA (Note 14) ～96～