Issue Date：August 20, 2025
 

Impact of interest rate, exchange rate, and inflation on the company's earnings, and response measures:：
Variable Factors Impact on the Company's Profit and Loss Future Response Measures
Interest Rate Interest expenses accounted for 1.23% of net sales in 2024, hence interest rate changes do not have significant impact on the Company. However, if the interest rate were to change by 1%, the Company would incur additional interest expenses of NT$122,196 thousand. The Company maintains banking relationships with numerous financial institutions and has been able to secure borrowings at advantageous rates. The Company also has dedicated personnel assigned to interact closely with financial institutions.
Exchange Rate Gain on exchange and net gain on the valuation of financial assets totaled NT$318,273 thousand in 2024, which accounted for 1.24% of net sales. If the NTD strengthens against USD by 1%, the Company’s gross profit margin will be affected by approximately 0.09%. The Company has dedicated personnel assigned to monitor exchange rate changes and assess how these changes affect the Company.
Inflation A 1% rise in the inflation rate would result in an approximate NT$28,719 thousand in the Company's expenses. The Company constantly monitors market price changes and maintains sound interaction with suppliers and customers.

Policies on high-risk and highly leveraged investments, loans to external parties, endorsements / guarantees, and trading of derivatives; describe the main causes of profit or loss incurred and future response measures：
  • The Company did not engage in any transaction in 2024 that was characterized as high risk, high leverage or external party lending. The Company did, however, trade derivatives for hedging purpose, and assigned dedicated personnel and implemented systems to monitor, manage and assess risks on a regular basis.
  • The Company offered endorsements and guarantees mainly for its subsidiaries in 2024, with all transactions conducted in accordance with the “Lending, Endorsement, and Guarantee Procedures.” The Company may offer endorsements/guarantees up to a maximum of NT$24,479,831 thousand, with the outstanding balance at the end of 2024 amounted to NT$3,068,602 thousand.
  • For details on external party lending, endorsement, guarantee and derivative transactions conducted in 2024, please refer to the 2024 audited financial statements and footnote disclosures.

Financial impacts and response measures in the event of technological or industrial changes:
  • The demand for LCD panels is growing not only in volume but also in terms of technology and application. Since 2017, new technologies such as AMOLED and Mini /Micro LED have emerged, which will form direct competition to LCD in the future. In addition to aintaining stable operations relationships with panel manufacturers and brands, and targeting application markets such as NBs, TV, healthcare, and automotive sectors, the Company will also invest in the development of new markets and products to respond to the changing competitive landscape. Examples of these high-value, high-barrier products include irregularly combined video wall systems, the world's thinnest bezel video wall, commercial peep-proof display, curved gaming monitor, in-car head-up display modules, special-shaped backlight modules, energy-saving blue light display, HDR (Local Dimming) display and LCM module. These products aim to offer differentiated product combinations to customers and expand into new applications, ensuring the Company remains competitive in the fiercely competitive display market.
  • The rapid development of LCD and LED technology has allowed the size of LCD panels to extend upward and penetrate into certain market segmented for home use, education and enterprises. Meanwhile, the Company is actively 132 expanding its projection technology by exploring various light sources, 4K display technology, and smart projection systems. This allows the overall imaging solution to offer long lifespan, stability, ease of installation and adjustment, smart features, streaming capabilities, and environmentally-friendly green products for applications with screen sizes above 80 inches. In addition to providing high convenience for users, these products deliver high resolution, high brightness, and vibrant color performance, ensuring exceptional color and brightness in both personal and commercial applications.

Expected benefits and risks and associated with plant expansions:
The Company’s second plant in Vietnam officially started mass production in early 2024, and the operating results are in line with the company's expectations. The Company will continue to pay attention to changes in the industry and customer demand, assess risks related to business orders and operational activities, and formulate relevant response measures to mitigate any adverse impact on it's operations.

Risks associated with concentrated sales or purchases：
Purchases from the largest supplier accounted for 10.05% of total purchases for the Company and subsidiaries in 2024. In 2024, the Company maintained a 133 strong, long-term relationship with its key suppliers, mitigating the risk of concentrated purchasing. The largest seller of the Company and its subsidiaries accounted for 16.65% of the total sales in 2024. The change in sales proportion from major customers in 2024 was due to the increased production capacity at the second plant in Vietnam and a higher proportion of medium and large-sized shipments. With the growth in net sales and improved utilization rate, there is no risk of sales concentration.
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