Vanguard International Semiconductor : 8/1, 2Q23 Financial Statements

VANGUARD INTERNATIONAL SEMICONDUCTOR CORPORATION

CONSOLIDATED BALANCE SHEETS

As of Jun. 30, 2023 and 2022

(Figures in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD))*

				Jun. 30, 2023			Jun. 30, 2022			YoY
ASSETS		USD		NTD	%		NTD	%		Move	Inc(Dec)%
Cash and Cash Designated for Hedging	863	26,876	26.4	37,512	36.6	(10,636)		(28.4)
Investments in Marketable Financial Instruments	199	6,182	6.1	2,074	2.0	4,108		198.1
Accounts Receivable	205	6,385	6.3	10,318	10.1	(3,934)		(38.1)
Inventories	204	6,354	6.2	4,635	4.5	1,719		37.1
Other Current Assets	30		928	0.9		627	0.6		301		47.9
Total Current Assets	1,501		46,724	45.8		55,166	53.8		(8,442)		(15.3)
Investments	324	10,102	9.9	6,868	6.7	3,233		47.1
Property, Plant and Equipment	1,238	38,548	37.8	35,352	34.5	3,196		9.0
Right-of-use Assets and Other Assets	211	6,576	6.5	5,076	5.0	1,500		29.6
Total Assets		3,275		101,950	100.0		102,463	100.0		(513)		(0.5)
LIABILITIES
Accounts Payable & Other Current Liabilities	897	27,933	27.4	28,491	27.8	(558)		(2.0)
Other Long Term Liabilities	1,049		32,649	32.0		36,063	35.2		(3,414)		(9.5)
Total Liabilities	1,946	60,582	59.4	64,554	63.0	(3,972)		(6.2)
EQUITY
Capital Stock	526	16,390	16.1	16,390	16.0	0		0.0
Capital Surplus	29	917	0.9	904	0.9	14		1.5
Retained Earnings
- Legal Reserve	290	9,042	8.9	7,501	7.3	1,541		20.5
- Special Reserve	0	0	0.0	1,988	1.9	(1,988)		(100.0)
- Unappropriated Earnings	477	14,838	14.6	11,979	11.7	2,859		23.9
Other Equity	6		180	0.2		(853)	(0.8)		1,033		(121.1)
Total Equity	1,329	41,367	40.6	37,909	37.0	3,459		9.1
Total Liabilities & Equity		3,275		101,950	100.0		102,463	100.0		(513)		(0.5)

*Note: The exchange rate for the figures of Jun. 30, 2023 was NTD31.13.

VANGUARD INTERNATIONAL SEMICONDUCTOR CORPORATION

CONSOLIDATED BALANCE SHEETS

As of Jun. 30, 2023 and Mar. 31, 2023

(Figures in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD))*

			Jun. 30, 2023			Mar. 31, 2023			QoQ
ASSETS	USD		NTD	%		NTD	%		Move	Inc(Dec)%
Cash and Cash Designated for Hedging		863		26,876	26.4		28,428	27.9		(1,551)		(5.5)
Investments in Marketable Financial Instruments	199	6,182	6.1	5,500	5.4	682		12.4
Accounts Receivable	205	6,385	6.3	4,800	4.7	1,584		33.0
Inventories	204	6,354	6.2	6,160	6.1	194		3.2
Other Current Assets	30	928	0.9	741	0.7	187		25.2
Total Current Assets	1,501		46,724	45.8		45,629	44.8		1,095		2.4
Investments	324	10,102	9.9	10,521	10.3	(419)		(4.0)
Property, Plant and Equipment	1,238	38,548	37.8	39,271	38.6	(723)		(1.8)
Right-of-use Assets and Other Assets	211	6,576	6.5	6,360	6.2	216		3.4
Total Assets		3,275		101,950	100.0		101,780	100.0		169		0.2
LIABILITIES
Accounts Payable & Other Current Liabilities		897	27,933	27.4	21,398	21.0	6,535		30.5
Other Long Term Liabilities	1,049	32,649	32.0	33,769	33.2	(1,120)		(3.3)
Total Liabilities	1,946		60,582	59.4		55,167	54.2		5,415		9.8
EQUITY
Capital Stock		526	16,390	16.1	16,390	16.1	0		0.0
Capital Surplus	29	917	0.9	914	0.9	3		0.3
Retained Earnings
- Legal Reserve	290	9,042	8.9	7,501	7.4	1,541		20.5
- Special Reserve	0	0	0.0	1,988	2.0	(1,988)		(100.0)
- Unappropriated Earnings	477	14,838	14.6	19,772	19.4	(4,933)		(25.0)
Other Equity	6	180	0.2	49	0.0	131		269.8
Total Equity	1,329		41,367	40.6		46,613	45.8		(5,246)		(11.3)
Total Liabilities & Equity		3,275		101,950	100.0		101,780	100.0		169		0.2

*Note: The exchange rate for the figures of Jun. 30, 2023 was NTD31.13.

Vanguard International Semiconductor Corporation

Consolidated Statements of Comprehensive Income

For the Three Months Ended Jun. 30, 2023, Mar. 31, 2023 and Jun. 30, 2022 (Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1) Except for Per Share Amounts and Shares Outstanding)

				Year over Year Comparison							Sequential Comparison
	2Q 2023			% of		2Q 2022		YoY		2Q 2023			% of		1Q 2023		QoQ
	USD			NTD		Sales		NTD		Inc(Dec) %		USD			NTD		Sales		NTD		Inc(Dec) %
Net Revenue	322			9,854	100.0	15,301	(35.6)	322			9,854	100.0	8,187	20.4
Cost of Revenue	(225)			(6,895)		(70.0)		(7,656)	(9.9)		(225)			(6,895)		(70.0)		(5,728)	20.4
Gross Profit	97			2,959	30.0	7,645	(61.3)	97			2,959	30.0	2,459	20.4
Operating Expenses
General and Administrative Expenses	(17)			(512)	(5.2)	(789)	(35.1)	(17)			(512)	(5.2)	(444)	15.2
Selling and Marketing Expenses	(3)			(106)	(1.1)	(199)	(46.7)	(3)			(106)	(1.1)	(87)	22.2
Research and Development Expenses	(17)			(536)		(5.4)		(746)	(28.2)		(17)			(536)		(5.4)		(562)	(4.7)
Total Operating Expenses	(38)			(1,154)		(11.7)		(1,734)	(33.5)		(38)			(1,154)		(11.7)		(1,093)	5.5
Income from Operations	59			1,806	18.3	5,912	(69.5)	59			1,806	18.3	1,365	32.3
Net Non-operating Income	13			402		4.1		197	103.9		13			402		4.1		335	20.2
Income before Income Tax	72			2,208	22.4	6,109	(63.9)	72			2,208	22.4	1,700	29.9
Income Tax Expense	(7)			(213)		(2.2)		(1,222)	(82.6)		(7)			(213)		(2.2)		(336)	(36.7)
Net Income	65			1,995	20.2	4,887	(59.2)	65			1,995	20.2	1,364	46.3
Other Comprehensive Income (Loss)	5			141		1.4		497	(71.6)		5			141		1.4		(98)	-
Comprehensive Income	70			2,136		21.7		5,384	(60.3)		70			2,136		21.7		1,266	68.8
Diluted Earnings Per Share (2)
0.039			1.21				2.94	(58.8)		0.039			1.21				0.82	47.6
Weighted Average Outstanding Shares('M) (2)				1,648			1,662							1,648			1,662

Note: (1) The exchange rate for the figures of three months ended Jun. 30, 2023 was NTD30.643.

(2) Total weighted average outstanding shares were 1,647,960K, 1,662,474K and 1,662,263K for 2Q23, 1Q23 and 2Q22, respectively.

Vanguard International Semiconductor Corporation

Consolidated Statements of Comprehensive Income

For the Six Months Ended Jun. 30, 2023 and 2022

(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1)

Except for Per Share Amounts and Shares Outstanding)

				Six Months Ended Jun. 30
	2023			% of	2022		YoY
	USD			NTD		Sales			NTD		Inc(Dec) %
Net Revenue	591			18,041	100.0			28,793	(37.3)
Cost of Revenue	(413)			(12,623)		(70.0)			(14,622)	(13.7)
Gross Profit	177			5,418	30.0			14,171	(61.8)
Operating Expenses
General and Administrative Expenses	(31)			(956)	(5.3)			(1,523)	(37.2)
Selling and Marketing Expenses	(6)			(192)	(1.1)			(340)	(43.4)
Research and Development Expenses	(36)			(1,098)		(6.1)			(1,409)	(22.1)
Total Operating Expenses	(74)			(2,247)		(12.5)			(3,272)	(31.3)
Income from Operations	104			3,171	17.6			10,899	(70.9)
Net Non-operating Income	24			737		4.1			281	162.7
Income before Income Tax	128			3,908	21.7			11,180	(65.0)
Income Tax Expense	(18)			(549)		(3.0)			(2,202)	(75.1)
Net Income	110			3,359	18.6			8,978	(62.6)
Other Comprehensive Income	1			43		0.2			1,208	(96.4)
Comprehensive Income	111			3,402	18.9			10,186	(66.6)
Diluted Earnings Per Share (2)
0.066			2.03					5.39	(62.3)
Weighted Average Outstanding Shares('M) (2)				1,658					1,666

Note: (1) The exchange rate for the figures of six months ended Jun. 30, 2023 was NTD30.537.

(2) Total weighted average outstanding shares were 1,657,892K and 1,666,406K for the six months ended Jun. 30, 2023 and 2022, respectively.

VANGUARD INTERNATIONAL SEMICONDUCTOR CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended Jun. 30, 2023 and 2022

(Figures in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD))*

	2023		2022
	USD	NTD		NTD
Cash Flows from Operating Activities
Income before income tax	128			3,908	11,180
Depreciation & Amortization	122			3,718	2,541
Income taxes paid	(77)			(2,347)	(1,532)
Changes of notes and accounts receivable	(52)			(1,578)	(994)
Changes in working capital & others	(21)			(638)	10,453
Net Cash Provided by Operating Activities	100			3,063		21,648
Cash Flows from Investing Activities
Increase in financial assets	(85)			(2,600)	(143)
Acquisitions of PP&E and intangible assets	(147)			(4,491)	(12,183)
Dividends received	1			29	32
Others	3			98	(1)
Net Cash Used in Investing Activities	(228)			(6,965)		(12,294)
Cash Flows from Financing Activities
Issuance of bonds	0			0	7,000
(Decrease) Increase in guarantee deposits	(0)			(11)	4,566
Decrease in lease liabilities	(4)			(107)	(123)
Others	(0)			(7)	18
Net Cash (Used in) Provided by Financing Activities	(4)			(125)		11,461
Net (Decrease) Increase in Cash and Cash Equivalents
(132)			(4,027)		20,815
Effect of Exchange Rate Changes	2			46	311
Cash and Cash Equivalents, Beginning of Period	1,010			30,857		16,387
Cash and Cash Equivalents, End of Period	880			26,876	37,512

*Note: The exchange rate for the figures of six months ended Jun. 30, 2023 was NTD30.537.