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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income (Loss) Before Income Taxes by Geographic Location

Income (loss) before income taxes by geographic location is as follows:

(in US$ thousands )		2017				2018				2019
Taiwan operations		$	893			$	(3,146	)		$	(2,191	)
Non-Taiwan operations			(1,478	)			(47	)			532
		$	(585	)		$	(3,193	)		$	(1,659	)

Components of Income Tax Benefit Expense by Taxing Jurisdiction

The components of income tax benefit (expense) by taxing jurisdiction are as follows:

( in US$ thousands )		2017				2018				2019
Taiwan:
Current		$	—			$	—			$	—
Deferred			—				—				—
		$	—			$	—			$	—
Non-Taiwan:
Current		$	(1	)		$	—			$	—
Deferred			1,672				—				—
		$	1,671			$	—			$	—
Total current income tax benefit (expense)		$	(1	)		$	—			$	—
Total deferred income tax benefit		$	1,672			$	—			$	—
Total income tax benefit		$	1,671			$	—			$	—

Reconciliation of Effective Tax Rate Related to Statutory Taiwan Federal Tax Rate

A reconciliation of our effective tax rate related to the statutory tax rate in Taiwan, where our major operations are based, is as follows:

		2017				2018				2019
Taiwan statutory rate, including taxes on income and    retained earnings			23.85	%			24.00	%			24.00	%
Foreign tax differential			1.10	%			3.43	%			10.14	%
Reversal of deferred withholding tax liabilities			285.84	%			—				—
Tax-exempt income			—				—				—
Non-deductible items - bad debts			—				(0.22	)%			—
Other non-deductible expenses			(44.79	)%			(3.50	)%			(7.01	)%
Changes in unrecognized tax benefits			—				17.17	%			—
Cumulative effect of initially applying new accounting standards			—				—				13.13	%
Change in deferred tax assets and valuation allowance			13.43	%			(42.02	)%			(43.38	)%
Change in tax rate			—				0.15	%			—
Other			6.33	%			0.99	%			3.12	%
Effective rate			285.76	%			—				—

Reconciliation of Beginning and Ending Amounts of Valuation Allowance on Deferred Tax Assets

A reconciliation of the beginning and ending amounts of our valuation allowance on deferred tax assets for the years ended December 31, 2017, 2018 and 2019 are as follows:

(in US$ thousands)		2017				2018				2019
Balance at beginning of year		$	11,852			$	9,928			$	11,765
Subsequent reversal and utilization of valuation allowance			(3,352	)			—				(17	)
Additions to valuation allowance			745				2,107				723
Exchange differences			683				(270	)			261
Balance at end of year		$	9,928			$	11,765			$	12,732

Net Operating Loss Carryforwards Available to Offset Future Income

As of December 31, 2019, we had net operating loss carryforwards available to offset future taxable income, shown below by major jurisdictions:

Jurisdiction		Amount				Expiring year
Hong Kong		$	15,759			indefinite
Taiwan			39,189			2020~2029
		$	54,948

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits Excluding Effects of Accrued Interest

A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding the effects of accrued interest) for the years 2017, 2018 and 2019 are as follows:

(in US$ thousands)		2017				2018				2019
Balance at beginning of year		$	1,024			$	1,110			$	—
Increase related to prior year tax positions			—				—				—
Decrease related to prior year tax positions			—				—				—
Settlement of intercompany charge adjustments			—				(1,095	)			—
Expiration of statute of limitations			—				—				—
Exchange differences			86				(15	)			—
Balance at end of year		$	1,110			$	—			$	—

Deferred Tax Assets

Significant Components of Deferred Tax Assets and Liabilities

The significant components of our deferred tax assets consist of the following:

(in US$ thousands)		December 31
		2018				2019
Net operating loss carryforwards		$	11,136			$	12,005
Share-based compensation			292				299
Investments			131				134
Lease right-of-use assets			—				122
Intangible assets and goodwill			119				64
Other			87				108
			11,765				12,732
Less: valuation allowance			(11,765	)			(12,732	)
Deferred tax assets - net		$	—			$	—

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