43.

OPERATING SEGMENTS INFORMATION

The Group has the following reportable segments: Packaging, Testing and EMS. The Group packages bare semiconductors into finished semiconductors with enhanced electrical and thermal characteristics; provides testing services, including front-end engineering testing, wafer probing and final testing services; engages in the designing, assembling, manufacturing and sale of electronic components and telecommunications equipment motherboards. Information about other business activities and operating segments that are not reportable are combined and disclosed in “Others.” The Group engages in other activities such as substrate production as well as sale and leasing of real estate properties.

The accounting policies for segments are the same as those described in Note 4. The measurement basis for resources allocation and performance evaluation is based on profit before income tax.

Segment information for the years ended December 31, 2016, 2017 and 2018 was as follows:

Segment revenues and operation results

													Adjustments
	Packaging			Testing			EMS			Others			and Eliminations			Total
	NT$			NT$			NT$			NT$			NT$			NT$

For the year ended December 31, 2016

Revenue from external customers	$	125,282,829		$	27,031,750		$	115,395,130		$	7,174,398		$	-		$	274,884,107
Inter-segment revenue (Note 1)		4,929,897			243,980			47,721,424			9,186,359			(62,081,660	)		-
Segment revenue		130,212,726			27,275,730			163,116,554			16,360,757			-			336,965,767
Interest income		32,499			41,405			130,659			37,297			(11,793	)		230,067
Interest expense		(1,727,127	)		(5,980	)		(44,433	)		(451,790	)		11,793			(2,217,537	)
Depreciation and amortization		(18,706,891	)		(6,566,936	)		(2,759,298	)		(1,437,312	)		-			(29,470,437	)
Share of the profit of associates and joint ventures		1,513,394			(9,484	)		-			-			-			1,503,910
Impairment loss		(974,095	)		(4,136	)		(1,886	)		-			-			(980,117	)
Segment profit before income tax		13,921,640			7,226,531			4,626,263			2,194,271			-			27,968,705
Expenditures for segment assets		17,561,135			8,247,003			906,042			966,682			-			27,680,862

December 31, 2016

Investments accounted for using the equity method		49,597,195			227,495			-			-			-			49,824,690

For the year ended December 31, 2017

Revenue from external customers		126,225,119			26,157,277			133,948,016			4,110,796			-			290,441,208
Inter-segment revenue (Note 1)		4,911,026			184,707			47,119,404			8,383,640			(60,598,777	)		-
Segment revenue		131,136,145			26,341,984			181,067,420			12,494,436			-			351,039,985
Interest income		43,744			48,532			269,640			214,265			(269,310	)		306,871
Interest expense		(1,969,562	)		(11,920	)		-			(62,714	)		269,310			(1,774,886	)
Depreciation and amortization		(19,105,457	)		(6,476,743	)		(2,133,253	)		(1,489,731	)		-			(29,205,184	)
Share of the profit or loss of associates and joint ventures		568,291			(42,509	)		-			-			-			525,782
Impairment loss		(218,214	)		(72,798	)		-			(473,869	)		-			(764,881	)
Segment profit before income tax		12,065,304			6,904,067			6,883,327			5,167,965			-			31,020,663
Expenditures for segment assets		17,769,612			4,507,097			850,235			550,738			-			23,677,682

December 31, 2017

Investments accounted for using the equity method		48,566,333			187,418			-			-			-			48,753,751

													Adjustments
	Packaging			Testing			EMS			Others			and Eliminations			Total
	NT$			NT$			NT$			NT$			NT$			NT$

For the year ended December 31, 2018

Revenue from external customers	$	178,308,222		$	35,903,202		$	151,890,384		$	4,990,613		$	-		$	371,092,421
Inter-segment revenues (Note 1)		3,531,431			212,310			58,836,465			7,637,053			(70,217,259	)		-
Segment revenues		181,839,653			36,115,512			210,726,849			12,627,666			-			441,309,680
Interest income		166,761			55,108			354,343			352,232			(462,233	)		466,211
Interest expense		(3,647,601	)		(101,338	)		-			(249,180	)		462,233			(3,535,886	)
Depreciation and amortization		(29,491,977	)		(9,560,610	)		(2,065,590	)		(1,570,726	)		-			(42,688,903	)
Share of the profit or loss of associates and joint ventures		(456,846	)		(23,398	)		-			-			-			(480,244	)
Impairment loss		(654,081	)		-			-			-			-			(654,081	)
Segment profit before income tax		17,866,431			7,952,484			6,225,984			(107,221	)		-			31,937,678
Expenditures for segment assets		22,787,190			12,991,023			2,529,771			784,254			-			39,092,238

December 31, 2018

Investments accounted for using the equity method		9,152,290			160,018			-			-			-			9,312,308
Contract assets		3,488,372			1,000,128			-			-			-			4,488,500

													Adjustments
	Packaging			Testing			EMS			Others			and Eliminations			Total
	US$ (Note 4)			US$ (Note 4)			US$ (Note 4)			US$ (Note 4)			US$ (Note 4)			US$ (Note 4)

For the year ended December 31, 2018

Revenue from external customers	$	5,825,163		$	1,172,924		$	4,962,116		$	163,039		$	-		$	12,123,242
Inter-segment revenues (Note 1)		115,369			6,936			1,922,132			249,495			(2,293,932	)		-
Segment revenues		5,940,532			1,179,860			6,884,248			412,534			-			14,417,174
Interest income		5,448			1,801			11,576			11,507			(15,101	)		15,231
Interest expense		(119,164	)		(3,311	)		-			(8,140	)		15,101			(115,514	)
Depreciation and amortization		(963,475	)		(312,336	)		(67,481	)		(51,315	)		-			(1,394,607	)
Share of the profit or loss of associates and joint ventures		(14,925	)		(764	)		-			-			-			(15,689	)
Impairment loss		(21,368	)		-			-			-			-			(21,368	)
Segment profit before income tax		583,680			259,800			203,397			(3,503	)		-			1,043,374
Expenditures for segment assets		744,436			424,404			82,645			25,621			-			1,277,106

December 31, 2018

Investments accounted for using the equity method		298,996			5,228			-			-			-			304,224
Contract assets		113,962			32,673			-			-			-			146,635

Note 1: Inter-segment revenues were eliminated upon consolidation.

Note 2: Refer to the table above for information about disaggregation of revenue.

Revenue from major products and services

	For the Year Ended December 31
	2016		2017		2018
	NT$		NT$		NT$		US$ (Note 4)

Packaging service	$	125,282,829	$	126,225,119	$	178,308,222	$	5,825,163
Testing service		27,031,750		26,157,277		35,903,202		1,172,924
Electronic components manufacturing service		115,395,130		133,948,016		151,890,384		4,962,116
Others		7,174,398		4,110,796		4,990,613		163,039

	$	274,884,107	$	290,441,208	$	371,092,421	$	12,123,242

Geographical information

Geographical information about revenue from external customers and noncurrent assets are reported based on the country where the external customers are headquartered and noncurrent assets are located, respectively.

Net revenues from external customers

	For the Year Ended December 31
	2016		2017		2018
	NT$		NT$		NT$		US$ (Note 4)

United States	$	180,745,837	$	196,462,345	$	230,791,164	$	7,539,731
Taiwan		38,868,679		35,413,647		45,630,792		1,490,715
Asia		29,896,304		30,201,332		56,031,108		1,830,484
Europe		23,275,732		26,445,240		36,844,258		1,203,668
Others		2,097,555		1,918,644		1,795,099		58,644

	$	274,884,107	$	290,441,208	$	371,092,421	$	12,123,242

Non-current assets, excluding financial instruments, post-employment benefit assets and deferred tax assets

	December 31
	2017		2018
	NT$		NT$		US$ (Note 4)

Taiwan	$	93,350,839	$	229,944,505	$	7,512,071
China		45,376,164		59,058,239		1,929,377
Others		25,025,498		25,686,256		839,146

	$	163,752,501	$	314,689,000	$	10,280,594

Major customers

Except one customer from which the operating revenues generated from packaging and EMS segments was NT$66,554,659 thousand, NT$83,873,393 thousand and NT$92,117,839 thousand (US$3,009,403 thousand) in 2016, 2017 and 2018, respectively, the Group did not have other single customer to which the operating revenues exceeded 10% of operating revenues for the years ended December 31, 2016, 2017 and 2018.