Schedule of income tax expense (benefit) recognized in profit or loss

(a)

Income tax expense (benefit) recognized in profit or loss for the years ended December 31, 2019, 2020 and 2021 consists of the following:


	Year ended December 31,
	2019		2020	2021

	(in thousands)
Current tax expense
Current period	$	1,461	13,599	102,297
Adjustment for prior periods		(126)	(363)	12
		1,335	13,236	102,309

Deferred tax expense
Origination and reversal of temporary differences		247	370	310
Investment tax credits and operating loss carryforward		(1,166)	(1,894)	8,038
		(919)	(1,524)	8,348
Total income tax expense	$	416	11,712	110,657

Schedule of reconciliation of the expected income tax expense computed based on the ROC statutory income tax rate, compared with the actual income tax expense as reported in the consolidated statements of profit or loss

(c)

Reconciliation of the expected income tax expense computed based on the ROC statutory income tax rate of 20% compared with the actual income tax expense as reported in the consolidated statements of profit or loss for the years ended December 31, 2019, 2020 and 2021 are summarized as follows:


	Years ended December 31,
	2019				2020				2021
	Rate		Amount		Rate		Amount		Rate		Amount
			(in thousands)				(in thousands)				(in thousands)
Profit (loss) before income taxes			$	(15,768)			$	56,872			$	544,592
Income tax expense calculated at the statutory rate	20.0	%		(3,154)	20.0	%		11,374	20.0	%		108,919
Tax on undistributed earnings	8.0	%		(1,261)	3.0	%		1,727	4.2	%		22,648
Tax benefit resulting from setting aside legal reserve from prior year’s income	0.3	%		(51)	-			-	-			(267)
Tax benefit resulting from offsetting prior year’s undistributed earning tax with current year’s loss	2.8	%		(443)	-			-	-			-
Tax benefit resulting from actual investment from prior year’s undistributed earnings	-			-	-			-	-			(161)
Increase in tax credits	17.1	%		(2,698)	(12.1)	%		(6,895)	(3.3)	%		(17,934)
Effect of change of unrecognized deductible temporary differences, tax losses carryforwards and investment tax credits	(40.9)	%		6,455	8.7	%		4,954	0.7	%		3,668
Net of non-taxable income and non-deductible expense	(2.2)	%		343	0.2	%		129	(2.0)	%		(10,680)
Changes in unrecognized tax benefits related to prior year tax positions, net of its impact to tax-exempted income	(1.2)	%		194	(1.2)	%		(709)	0.5	%		2,763
Foreign tax rate differential	(3.5)	%		548	1.5	%		881	0.2	%		837
Variance from audits, amendments and examinations of prior years’ income tax filings	(2.3)	%		368	(0.6)	%		(363)	-			440
Others	(0.7)	%		115	1.1	%		614	-			424
Income tax expense			$	416			$	11,712			$	110,657
Effective tax rate	(2.6)	%			20.6	%			20.3	%

Schedule of changes in deferred tax assets and liabilities

(e)

Changes in deferred tax assets and liabilities were as follows:


				Recognized			Recognized
			Recognized	in other		Recognized	in other
	January 1,		in profit or	comprehensive	December	in profit or	comprehensive	December
	2020		loss	income	31, 2020	loss	income	31, 2021

	(in thousands)
Inventory	$	5,089	(663)	-	4,426	(1,471)	-	2,955
Tax credit carryforwards		5,645	2,135	-	7,780	(7,780)	-	-
Operating loss carryforward		1,254	(241)	-	1,013	(258)	-	755
Accrued compensated absences		588	147	-	735	166	-	901
Allowance for sales discounts		576	(165)	-	411	309	-	720
Depreciation		521	40	-	561	40	-	601
Unrealized foreign exchange loss		102	60	-	162	(233)	-	(71)
Remeasurement of defined benefit plans		(139)	(6)	38	(107)	(4)	(27)	(138)
Acquired intangible assets		(1,255)	241	-	(1,014)	258	-	(756)
Others		658	(24)	-	634	625	-	1,259
Total	$	13,039	1,524	38	14,601	(8,348)	(27)	6,226

Schedule of unrecognized deferred tax assets of unused operating loss carry forwards

As of December 31, 2021, the expiration period for abovementioned unrecognized deferred tax assets of unused operating loss carryforwards for statutory tax were as follows:


			Unrecognized
	Deductible amount		deferred tax assets		Expiration year

	(in thousands)
Taiwan operations	$	103,870	$	20,774	2022~2026
		107,909		21,582	2027~2031
Hong Kong operations		1,818		150	Indefinitely
US operations		12,451		3,510	2024~2041
Israel operations		19,975		4,594	Indefinitely
			$	50,610