[RESERVED] CAPITALIZATION AND INDEBTEDNESS Not applicable. REASON FOR THE OFFER AND USE OF PROCEEDS Not applicable. RISK FACTORS Below please find a summary of the principal risks we face, organized under relevant headings. Risks Relating to Our Business • Since we are dependent on the highly cyclical semiconductor and electronics industries and conditions in the markets for the end-use applications of our products, our revenues and net income may fluctuate significantly. • A reversal or slowdown in the outsourcing trend for semiconductor packaging and testing services and EMS could adversely affect our growth prospects and profitability. • If we are unable to compete favorably in the highly competitive markets of semiconductor packaging and testing and EMS, our revenues and net income may decrease. • Our profitability depends on our ability to respond to rapid technological changes in the semiconductor industry. • Our operating results are subject to significant fluctuations, which could adversely affect the market value of our Common Shares and ADSs. • Due to our high percentage of fixed costs, we may be unable to maintain our gross margin at past levels if we are unable to achieve relatively high capacity utilization rates. • We may not be successful in pursuing mergers and acquisitions. Any mergers or acquisitions we make may lead to a diversion of management resources. • The loss of a large customer or disruption of our strategic alliance or other commercial arrangements with semiconductor foundries and providers of other complementary semiconductor manufacturing services may result in a decline in our revenues and profitability. • We rely on a limited number of key customers in certain products for our revenues, and our results of operations may be adversely affected by a reduction of our key customers’ business. • Our revenues and profitability may decline if we are unable to obtain adequate supplies of raw materials and energy in a timely manner and at a reasonable price. 6 Table of Contents • If we are unable to manage our expansion or investments effectively, our growth prospects may be limited, and our future profitability and core business operations may be adversely affected. • If we are unable to obtain sufficient funding in a timely manner or on acceptable terms, our results of operations and financial conditions may be materially and adversely affected. • Any global political, economic, or financial crisis, as well as trade barriers, could adversely affect our business, financial condition, and results of operations. • Inflation and fluctuations in interest rates could adversely affect our business, financial condition, results of operations, and cash flows. • Fluctuations in exchange rates could adversely affect our business, results of operations, or financial condition. • Any impairment charges may have a material adverse effect on our financial results or condition. • Cyber-attacks could harm our business, financial condition, and results of operations. • A reversal or slowdown in AI-driven demand within the semiconductor industry could adversely affect our growth prospects and profitability. • Failure to grasp the future development or application of AI could adversely affect our business, financial condition, and results of operations. Risks Relating to Taiwan, R. O. C. • Strained relations between the R.O.C. and the P.R.C. and disruptions in Taiwan’s political environment caused by domestic political events could negatively affect our business and the market value of our Common Shares and ADSs. • As a substantial portion of our business and operations are located in Taiwan, we are vulnerable to natural disasters including earthquakes, typhoons, droughts, as well as power outages and other industrial incidents, which could severely disrupt the normal operation of our business and adversely affect our results of operations. Risks Relating to Ownership of Our Common Shares and ADSs • The market for our Common Shares and ADSs may not be liquid. • If a non-R.O.C. holder of ADSs withdraws and holds Common Shares, such holder of ADSs will be required to appoint a tax guarantor, local agent, and custodian in the R.O.C. and register with the TWSE or the Taipei Exchange in order to buy and sell securities on the TWSE. • We may not continue to declare cash dividends in any particular amount. • Holders of Common Shares and ADSs may experience dilution if we issue stock bonuses, share options, or restricted stocks to employees or sell additional equity or equity-linked securities. Below please find the detailed analysis of the principal risks we face. Risks Relating to Our Business Since we are dependent on the highly cyclical semiconductor and electronics industries and conditions in the markets for the end-use applications of our products, our revenues and net income may fluctuate significantly. Our business is affected by market conditions in the highly cyclical semiconductor and electronics industries. Most of our customers operate in this industry, and variations in order levels from our customers and service fee rates may result in volatility in our revenues and net income. From time to time, the semiconductor and electronics industries experience significant, and sometimes prolonged, downturns. As our business is, and will continue to be, dependent on the requirements for independent packaging, testing and EMS, any future downturn in the industry would reduce demand for our services. If we cannot reduce our costs or adjust our product mix to sufficiently offset any decline in sales volumes, our profitability will suffer, and we may incur losses. 7 Table of Contents Market conditions in the semiconductor and electronics industries depend to a large degree on conditions in the markets for the end-use applications of various products, such as communications, computing, and consumer electronics products. Any deterioration of conditions in the markets for the end-use applications would reduce demand for our services and would likely have a material adverse effect on our financial condition and results of operations. In 2025, approximately 45.8%, 24.0% and 30.2% of our operating revenues from packaging and testing of semiconductors were attributed to communications, computing and consumer electronics/industrial/automotive/other applications, respectively. In the same year, approximately 31.0%, 10.2%, 35.7%, 12.8% and 10.3% of our operating revenues from EMS were attributed to communications, computing, consumer electronics applications, industrial, and automotive applications and others, respectively. Across end-use applications, our customers face intense competition and significant shifts in demand, which could put pricing pressure on our services and may adversely affect our revenues and net income. A reversal or slowdown in the outsourcing trend for semiconductor packaging and testing services and EMS could adversely affect our growth prospects and profitability. Semiconductor manufacturers with internal packaging and testing capabilities, including integrated device manufacturers (IDMs), foundries and original equipment manufacturers (OEMs), have increasingly outsourced stages of the production process, such as packaging and testing and EMS to third-party providers. This trend has been driven by the need to reduce costs, eliminate product complexity, and meet fast-to-market requirements. In addition, the availability of advanced independent semiconductor manufacturing services has also enabled the growth of “fabless” semiconductor companies that outsource their manufacturing, packaging, and testing requirements to third-party providers. We cannot ensure that these entities will continue to outsource their packaging, testing, and manufacturing requirements to third parties like us. Furthermore, during an economic downturn, these manufacturers typically rely more on their own in-house packaging and testing capabilities, therefore decreasing their need to outsource. A reversal of, or a slowdown in, this outsourcing trend could result in reduced demand for our services and adversely affect our growth prospects and profitability. Global economic uncertainty could adversely affect the demand for our products and services, and a protracted global economic crisis would have a material adverse effect on us. Global economic growth in recent years has faced more uncertainty. Our revenue and net income are impacted to a significant extent by economic and financial conditions in Asia and globally, as well as economic and financial conditions specific to our business. The global economy, markets and levels of spending by businesses and consumers are influenced by many factors beyond our control, including political instability, military conflicts (such as the ongoing Russia-Ukraine conflict and the U.S.-Israeli-Iran conflict), pandemics (such as coronaviruses and flu) and natural disasters (such as earthquakes, floods, and droughts). There have been concerns about the relationships among the P.R.C. and other Asian countries, the relationship between the P.R.C. and the U.S., as well as the relationship between the U.S. and certain other Asian countries such as North Korea, which may result in or intensify potential conflicts in relation to territorial, regional security and trade disputes. As of the date of this annual report, our business, results of operations, and financial condition have not been materially affected by the global trade tensions, military conflicts, pandemics or natural disasters. Nevertheless, any economic downturn or other future conflicts may cause our customers to cancel or reduce planned expenditures for our products and services. Any uncertainty or significant volatility in global economic conditions, including inflation, interest rates, and fluctuations in exchange rates, may negatively affect our business, results of operations, and financial condition. 8 Table of Contents If we are unable to compete favorably in the highly competitive markets of semiconductor packaging and testing and EMS, our revenues and net income may decrease. The markets of semiconductor packaging and testing and EMS are very competitive. We face competition from many sources, including other independent semiconductor packaging and testing companies, IDMs, and other EMS providers with large-scale manufacturing capabilities who can quickly react to market changes. In addition, some foundry players have actively invested and expanded their advanced packaging capacity and gained some customer bases with their services and solutions. We believe that the principal competitive factors in our industry are: • technological expertise; • ability to provide total solutions to our customers, including integrated design, manufacturing, packaging and testing and EMS; • ability to offer interconnect technologies at an optimal scale for our businesses; • range of package types and testing platforms available; • ability to work closely with our customers at the product development stage; • responsiveness and flexibility; • fast-to-market product development; • capacity; • diversity in facility locations; • production yield; and • prices. We face increasing competition, as most of our customers obtain services from more than one source. Rapid technological advancements and aggressive pricing strategies by our competitors may continue to increase the level of competition. Our ability to successfully compete depends on factors both within and outside of our control and may be constrained by the distinct characteristics and production requirements of individual products. We cannot ensure that we will be able to continue to improve production efficiency and maintain reasonable profit for all our products. In addition, some of our competitors may have superior financial, marketing, manufacturing, research and development and technological resources than we do. For example, the P.R.C. government has supported its domestic companies in the semiconductor industry. Similarly, our customers may face competition from their competitors in the P.R.C., and such competitors may also receive significant subsidies from the P.R.C. government. As we are upstream providers, the impact of such government policies on competition and price pressure of our customers may negatively impact our business. Increasing competition may lead to declines in product prices and profitability and could have a material adverse effect on our business, financial condition, results of operations, and future prospects. Our profitability depends on our ability to respond to rapid technological changes in the semiconductor industry. The semiconductor industry is characterized by rapid increases in the diversity and complexity of semiconductors. As a result, we expect that we will need to continually offer more sophisticated packaging and testing technologies and processes in order to respond to competitive industry conditions and customer requirements. 9 Table of Contents We dedicate substantial efforts to research and development and continue to develop new products in anticipation of future demand. However, there is no assurance that the launch of any new product will be successful or that we will be able to produce enough of these products to meet market demand. If we fail to develop, or obtain access to, advances technologies or processes or respond effectively to industry developments, we may become less competitive and less profitable. In addition, advances in technology typically lead to declining average selling prices for semiconductors packaged or tested with older technologies or processes. As a result, if we cannot reduce the costs associated with our services, the profitability of a given service and our overall profitability may decrease over time. Our operating results are subject to significant fluctuations, which could adversely affect the market value of our Common Shares and ADSs. Our operating results have varied significantly from period to period and may continue to vary in the future. Downward fluctuations in our operating results may result in decreases in the market price of our Common Shares and ADSs. Among the more important factors affecting our quarterly and annual operating results are the following: • changes in general economic and business conditions, particularly the cyclical nature of the semiconductor and electronics industries and the markets served by our customers; • our ability to quickly adjust to unanticipated declines or shortfalls in demand and market prices; • changes in prices for our products or services; • volume of orders relative to our packaging, testing and manufacturing capacity; • changes in costs and availability of raw materials, equipment and labor; • our ability to obtain or develop substitute raw materials with lower cost; • our ability to successfully develop or market new products or services; • our ability to successfully manage product mix in response to changes in market demand and differences in margin associated with different products; • timing of capital expenditures in anticipation of future orders; • our ability to acquire, or design and produce, cost-competitive interconnect materials, and provide integrated solutions for EMS; • fluctuations in the exchange rate; • fluctuations in interest rates; • international trade disputes, geopolitical tensions, leading to increasing export control restrictions and sanctions, trade barriers, tariffs and other changes in trade policy; and • typhoons, earthquakes, droughts, epidemics, tsunamis and other natural disasters, as well as industrial and other incidents such as fires and power outages. Due to the factors listed above, our future operating results or growth rates may be below the expectations of research analysts and investors. If so, the market price of our Common Shares and ADSs, and thus the market value of your investment, may fall. Due to our high percentage of fixed costs, we may be unable to maintain our gross margin at past levels if we are unable to achieve relatively high capacity utilization rates. Our operations, in particular our testing operations and leading-edge advanced packaging, are characterized by relatively high fixed costs. We expect to continue to incur substantial depreciation and other expenses in connection with our acquisitions of equipment and facilities. Our profitability depends not only on the pricing levels for our services or products, but also on utilization rates for our machinery and equipment, commonly referred to as “capacity utilization rates.” Increases or decreases in our capacity utilization rates can significantly affect gross margins since the unit cost generally decreases as fixed costs are spread over a larger number of units. In periods of low demand, we experience relatively low capacity utilization rates in our operations, which lead to reduced margins. We cannot ensure that we will be able to maintain or surpass our past gross margin levels if we cannot consistently achieve or maintain relatively high capacity utilization rates. 10 Table of Contents We may not be successful in pursuing mergers and acquisitions. Any mergers or acquisitions we make may lead to a diversion of management resources. Our future success may depend on acquiring businesses and technologies, making investments, or forming joint ventures that complement, enhance, or expand our current product offerings or otherwise offer growth opportunities. In pursuing such acquisitions, we may face competition from other companies in the semiconductor industry. Mergers and acquisitions involve certain integration risks and uncertainties, including the difficulty in integrating technologies, systems, products, policies and operations, coordinating geographically separate organizations and combining different corporate cultures, utilizing capital and other resources in an optimal manner and addressing unanticipated costs or liabilities. Furthermore, our ability to acquire or invest in suitable targets may be limited by applicable laws and regulations in the R.O.C., P.R.C., U.S., European countries, and other jurisdictions where we do business. Even if the businesses we acquire are successfully integrated with our existing business, the benefits of such transactions may not be realized within the anticipated time frame or at all. Each of these risks could have a material adverse effect on our business, financial condition, and results of operations. The loss of a large customer or disruption of our strategic alliance or other commercial arrangements with semiconductor foundries and providers of other complementary semiconductor manufacturing services may result in a decline in our revenues and profitability. Although we have a large customer base, we have derived, and expect to continue to derive, a large portion of our revenues from a small group of customers during any particular period due in part to the concentration of market share in the semiconductor and electronics industries. The demand for our services from a customer is directly dependent upon that customer’s level of business activity, which could vary significantly from year to year. Our key customers typically operate in the cyclical semiconductor and electronic business and order levels have significantly varied from period to period in the past and may vary in the future. Some of these companies are relatively small, have limited operating histories and financial resources, and are highly exposed to the cyclicality of the industry. We cannot ensure that these customers or any other customers will continue to place orders with us in the future at the same levels as in past periods. The loss of one or more of our significant customers, or reduced orders by any one of them, and our inability to replace these customers or make up for such orders, could adversely affect our revenues and profitability. In addition, we have in the past reduced, and may in the future be requested to reduce, our prices to limit the level of order cancellations. Any price reduction would likely reduce our margins and profitability. Since 1997, we have maintained a strategic alliance with Taiwan Semiconductor Manufacturing Company Limited, or TSMC, one of the largest dedicated semiconductor foundries in the world. TSMC designates us as its non-exclusive preferred provider of packaging and testing services for semiconductors manufactured by TSMC. Such strategic alliances, as well as our other commercial arrangements with providers of other complementary semiconductor manufacturing services, enable us to offer total semiconductor manufacturing solutions to our customers. These strategic alliances and other commercial arrangements may not achieve their anticipated commercial benefits and may be terminated at any time. Any failure in successfully maintaining such alliances, any termination of such alliances or our failure to enter substantially similar strategic alliances or commercial arrangements may adversely affect our competitiveness, revenues, and profitability. We rely on a limited number of key customers in certain products for our revenues, and our results of operations may be adversely affected by a reduction of our key customers’ business. Our results of operations also depend on the performance and business of our key customers. Accordingly, risks that could seriously harm our key customers—including their loss of market share, a recession in their respective end-markets, failure of their products to achieve widespread commercial acceptance, or our key customers’ inability to manage their operations efficiently and effectively—could harm us as well. 11 Table of Contents The launch and market acceptance of our individual key customers’ products could significantly impact our product and customer mix, resulting in significant volatility in the demand for the solutions we offer and our results of operations. It is also possible that a key customer’s market share with respect to its product may decline as its competitors introduce new products, which could adversely affect our results of operations, particularly if we are unable to sell our solutions to such competitors. Furthermore, sales of our key customers’ products are subject to seasonal fluctuation. Our revenues and profitability may decline if we are unable to obtain adequate supplies of raw materials and energy in a timely manner and at a reasonable price. Our operations, such as packaging operations, substrate operations, and EMS require that we obtain adequate supplies of raw materials on a timely basis. Shortages in the supply of raw materials have in the past resulted in occasional price increases and delivery delays. In addition, the operations of some of our suppliers are vulnerable to natural disasters, such as earthquakes and typhoons, the occurrences of which may deteriorate and prolong the shortage or increase the uncertainty of the supply of raw materials. Raw materials such as IC substrates are prone to supply shortages since such materials are produced by a limited number of suppliers, such as Kinsus Interconnect Technology Corporation, Nan Ya Printed Circuit Board Corporation, and Unimicron Technology Corporation. The growing demand for high-performance computing (HPC) driven by artificial intelligence (or “AI”), and the supporting infrastructure such as servers, data centers, and networking equipment has resulted in increased demand for semiconductor chips. However, this demand has also led to greater complexity in chip and substrate design. Specifically, the Ajinomoto Build-up Film (ABF) substrate, a crucial component for manufacturing high-performance chips, may face a higher risk of supply shortages or extended lead times due to potential strong demand for AI, elevated manufacturing difficulty, and heavy capital requirements for capacity expansion. Operations conducted through our wholly owned subsidiaries, ASE Electronics and ASE Shanghai, have improved our ability to obtain IC substrates on a timely basis and at a reasonable cost. In 2025, our interconnect materials operations supplied approximately 8.7% of our consolidated substrate requirements by value. We do not expect that these internal interconnect materials operations will be able to meet all our interconnect materials requirements for the foreseeable future. Consequently, we will remain dependent on market supply and demand for our substrates. In addition, recent fluctuations in prices of precious metals, such as gold, have affected the price at which we have been able to purchase the principal raw materials we use in our packaging processes. We cannot guarantee that we will not experience shortages in the future or that we will be able to obtain adequate supplies of raw materials in a timely manner or at a reasonable price. Our revenues and net income could also decline under these circumstances, or if there are significant increases in the costs of raw materials that we cannot pass on to our customers. Moreover, energy prices fluctuate based on events outside of our control. Rising global energy prices in recent years pose a significant challenge to our operations. As AI becomes more prevalent and developed, we expect the demand for and consumption of electricity to further increase. Any energy price increases may raise our costs and lower our margins. Although we may be able to pass through the impact of some energy price charges to some of our customers, we may not be able to pass all of these cost increases on to our customers. As a result, our results of operations and financial performance may be adversely impacted by such cost increases. If we are unable to manage our expansion or investments effectively, our growth prospects may be limited, and our future profitability and core business operations may be adversely affected. We have significantly expanded our operations through strategic acquisitions and joint ventures in recent years. We anticipate that further expansion will be required as we adapt to the changing needs of customers. Expansion in general increases the complexity of operations and places significant strains on our management, operational, and financial resources. We also face uncertainties in creating strategic and operational synergies as we combine existing operations with the new sites. Furthermore, we may have limited experience in operating business in certain new countries or regions. As a result of our expansion, we may incur additional costs and expenses, such as hiring and training additional employees, devoting more of management’s attention to operations and compliance, and allocating additional resources in dealing with potential disputes relating to its operations. The expected growth and expansion of our business will place significant demands on our management and operations teams and require significant additional resources to meet our needs, which may not be available at a reasonable price. If we cannot effectively manage our expansion or investments, we may not be able to execute our business plan, respond to competitive pressures, take advantage of market opportunities, satisfy customer requirements, or maintain high-quality product offerings, any of which could lead to inefficiencies, redundancies, and result in reduced growth prospects and profitability. We cannot ensure that we will be able to deploy and manage new business initiatives successfully or effectively. 12 Table of Contents If we are unable to obtain sufficient funding in a timely manner or on acceptable terms, our results of operations and financial conditions may be materially and adversely affected. Our businesses regularly require significant capital investments in order to support the expansion of our facilities both domestically and globally. If we are required to rapidly increase our current geographical footprint to fulfill our customers’ needs, our capital requirements may increase suddenly and significantly. In addition to capacity expansion, we will also need increasing levels of resources to fund our research and development activities in order to remain competitive, and to support operations outside of our existing footprint. We believe that our existing cash and cash equivalents, marketable securities, expected cash flow from operations, and existing credit lines under our loan facilities will be sufficient to meet our capital expenditures, working capital, and cash obligations under our existing debt and lease arrangements, and other requirements for at least the next twelve months. Our ability to obtain external financing in the future is subject to a variety of uncertainties, including: • our future financial condition, results of operations, and cash flows; • general market conditions for financing activities by semiconductor or electronics companies; and • economic, political, and other conditions in Taiwan and elsewhere. If we are unable to obtain new or additional land or land use rights, additional equipment, or facilities in a timely manner and at a reasonable cost, our competitiveness and future profitability may be adversely affected. In order to meet customer demand, we need to expand existing facilities or obtain suitable land for construction of new facilities. Both expansion and construction projects are currently underway or being contemplated. Such expansion or construction may require us to obtain land use or development rights. If we are unable to obtain new or additional land or land use rights in a timely manner, we could experience significant fulfillment delays in our customers’ orders, resulting in negative impacts on our results of operations. In addition, semiconductor businesses are capital intensive and require significant investment in expensive equipment manufactured by a limited number of vendors. The market for semiconductor equipment is characterized by intense demand, limited supply, and long delivery cycles. Our operations and expansion plans depend on our ability to obtain a significant amount of such equipment from a limited number of vendors. From time to time, we have also leased equipment. We have no binding supply agreements with any of our vendors and acquire our equipment on a purchase order basis, which exposes us to changing market conditions and other substantial risks. For example, shortages of capital equipment could result in an increase in the price of equipment and longer delivery times. Semiconductor products and services also require sizeable facilities. If we are unable to obtain equipment or facilities in a timely manner, we may be unable to fulfill our customers’ orders, which could adversely affect our growth prospects as well as financial condition and results of operations. See “Item 4. Information on the Company—Business Overview—Equipment.” Our global manufacturing and sales activities subject us to risks associated with legal, political, economic, or other conditions which could negatively affect our business, financial status, and the market value of our Common Shares and ADSs. Our principal executive office and production facilities are in the R.O.C, and the majority of our net revenues are derived from our operations in the R.O.C. and the P.R.C. In addition, we have operations worldwide and a significant percentage of our revenue comes from sales to overseas locations. Changes in policies and laws, including environmental regulations, as well as general political and economic conditions, security risks, health conditions, and possible disruptions in transportation networks in the various countries in which we operate, could adversely affect our business, and negatively impact our results of operations as well as the market price and liquidity of our Common Shares and ADSs. 13 Table of Contents Any global political, economic, or financial crisis, as well as trade barriers, could adversely affect our business, financial condition, and results of operations. In recent years, several major political, economic and financial crises have negatively affected global business and financial markets, including the semiconductor industry. For example, since 2018, the U.S. and the P.R.C. have imposed tariffs on certain of each other’s exports. The imposition of trade tariffs globally, particularly between the U.S. and the P.R.C., may adversely affect economic conditions. The U.S. government’s recent imposition of additional tariffs on numerous countries, and the potential for trade disputes with other countries, have created increased uncertainty in international trade. These measures include semiconductor-specific tariffs, which the U.S. government intends to increase over time, as well as elevated baseline and country-specific tariffs. The U.S. government’s international trade policy and its implementation of tariffs continues to evolve in light of U.S. judicial decisions and negotiations with global trading partners. The imposition of such tariffs could increase our costs, which we may not be able to pass on to our customers, and could adversely affect our business, financial condition, and results of operations. Furthermore, the broader political environment or international trade policies could lead to further revisions in laws or regulations, changes in their interpretation and enforcement, increased taxation, trade sanctions, import or export duties and tariffs, or restrictions on trade, all of which may adversely affect our results of operations. The U.S. government has also enacted trade measures, including licensing requirements on exporting certain advanced computing and semiconductor manufacturing items, as well as AI-related items to the P.R.C. or other designated countries. On the other hand, in response to U.S. trade restrictions, the P.R.C. government has intensified its efforts to support domestic semiconductor companies through financial incentives and policy measures aimed at achieving self-sufficiency in semiconductor production and reduce reliance on foreign suppliers amid its heightened rivalry with the U.S. These measures further increase the uncertainty of our business operations related to the P.R.C. supply chain. The increasing economic uncertainty and the related investment risk in the P.R.C. resulting from trade tensions have heightened customers’ concerns. We build flexible and resilient supply chains to address shifts in market conditions and to satisfy customer needs, broadening our markets through expansion of overseas operations, joint ventures, acquisitions, and other strategic investments. While we strive to maintain a cost-competitive manufacturing and attract customers through supply chain diversification, fragmented operations may increase our vulnerability to market disruptions and adversely affect our results of operations. We do business within the P.R.C. This may expose us to additional political, regulatory, economic, and foreign investment risks. We have packaging, testing, EMS, and real estate subsidiaries in the P.R.C. that require approval and compliance with regulatory requirements. However, P.R.C. laws and regulations are often subject to varying interpretations, means of enforcement, and additional approvals from the relevant governmental authorities, which may be delayed or denied. The P.R.C. government holds significant discretion in matters relating to foreign investment, which may adversely affect our operations. In addition, our controlling interest in USI Shanghai, an entity currently listed on the Shanghai Stock Exchange under the symbol “601231,” makes us vulnerable to extreme price and volume fluctuations in the P.R.C. stock market that may indirectly affect the market price of our Common Shares and ADSs. Furthermore, we have made several investments in the real estate development businesses in the P.R.C. The P.R.C. property market is volatile and may experience undersupply or oversupply, as well as property price fluctuations. Central and local governments frequently adjust monetary and other fiscal policies to prevent or curtail the overheating of the economy. Such policies may lead to changes in market conditions, including price instability, and imbalance of supply and demand with respect to office, residential, retail, entertainment, cultural, and intellectual properties. Our exposure to risks related to real estate development may also increase over time as a result of our expansion into such a business. We may continue to make investments in this area in the future and our diversification in this industry may put pressure on our managerial, financial, operational, and other resources. There can be no assurance that our investments in such a business will yield the anticipated returns and that our expansion into such a business, including the resulting diversion of management’s attention, will not adversely affect our core business operations. 14 Table of Contents The escalation of tensions between South Korea and North Korea could have an adverse effect on our operations in South Korea and the market value of our shares. The political relationship between South Korea and North Korea has been tense throughout Korea’s modern history. The level of tension between the two countries has heightened and may increase abruptly as a result of current or future events. In recent years, there have been increasing security concerns stemming from North Korea’s nuclear weapons and long-range missile testing, and uncertainty regarding North Korea’s actions and potential responses from the international community. Although we do not derive any revenue from, nor sell any products in, North Korea, any further rising tension on the Korean Peninsula could affect our business, financial condition, results of operations, and the market value of our Common Shares and ADSs. We depend on selected personnel and could be negatively affected by the loss of their services. We depend on the continued service of our executive officers and skilled technical personnel. Our business could suffer if we lose the services of any of these personnel and cannot adequately replace them. Although some of these management personnel have entered into employment agreements with us, they may nevertheless leave before the expiration of these agreements. We are not insured against the loss of the services of any of our personnel. In addition, the resulting disruption may shift these and other employees’ attention from our business operations. We may be required to increase substantially the number of employees as a result of our expansion plans, and there is intense recruiting and hiring competition in this industry. We may not be able to retain our present personnel or attract additional necessary qualified personnel. In addition, we may need to increase employee compensation levels in order to retain our existing officers and employees and attract the additional personnel that we expect to require. Recently, some companies have accelerated efforts to maliciously poach talented Taiwan semiconductor experts by offering high-level positions with substantial salaries. If the number of malicious acts involving technology theft increase, Taiwan’s semiconductor industry would be seriously affected and our business would be adversely jeopardized. Furthermore, a portion of the workforce at our facilities in Taiwan is foreign workers employed under work permits, which are subject to government regulations on renewal and other terms. Consequently, our business could suffer if Taiwan’s regulations relating to the employment of foreign workers were to become significantly more restrictive or if we are otherwise unable to attract or retain these workers at a reasonable cost. The ongoing legal proceeding involving Dr. Tien Wu may have an adverse impact on our business and cause our Common Shares and ADS price to decline. On December 31, 2024 (the “December 31 judgment”), the Taiwan High Court Kaohsiung Branch Court issued a ruling in a criminal proceeding brought by the Taiwan Kaohsiung District Prosecutors Office, finding Dr. Tien Wu, our director and chief operating officer, guilty on certain charges and not guilty on others and sentencing him to 22 months of judicial custody. Dr. Tien Wu subsequently filed an appeal against the portion of the judgment finding him guilty. The Taiwan Kaohsiung District Prosecutors Office did not appeal the portion finding him not guilty, which therefore became final and non-appealable. Following Dr. Tien Wu’s appeal, the Supreme Court of the R.O.C. reversed the guilty portion of the December 31 judgment finding him guilty and remanded that portion of the case to the Taiwan High Court Kaohsiung Branch Court on July 10, 2025, on the grounds that Taiwan High Court Kaohsiung Branch Court failed to investigate evidence that should have been examined during the trial of the December 31 judgment. On February 11, 2026, the Taiwan High Court Kaohsiung Branch Court rejected the appeal filed by the Taiwan Kaohsiung District Prosecutors Office and affirmed the February 5, 2020 judgment by the Taiwan Kaohsiung District Court that found Dr. Tien Wu NOT guilty (the “February 11 Judgment”). On March 2, 2026, the Taiwan Kaohsiung District Prosecutors Office filed an appeal against the February 11 Judgment. The final outcome of the remanded proceedings remains pending and uncertain. 15 Table of Contents The case arises from an indictment filed in 2017 that alleged that Dr. Tien Wu violated Article 157-1 of the R.O.C. Securities and Exchange Act for insider trading activities involving SPIL’s common shares conducted during the Initial SPIL Tender Offer, the Second SPIL Tender Offer, and negotiations of the memorandum of understanding in connection with the SPIL Acquisition. Dr. Tien Wu was accused of informing a friend about the aforementioned tender offers and negotiation ahead of the public announcements. After an investigation spanning over two years, the Taiwan Kaohsiung District Court, on February 5, 2020, found Dr. Tien Wu not guilty. On March 20, 2020, the Taiwan Kaohsiung District Prosecutors Office filed an appeal against the February 5, 2020 judgment, and the appeal was rejected by the Taiwan High Court Kaohsiung Branch Court on June 9, 2021 (the “June 9 judgment”). On July 2, 2021, the Kaohsiung Branch, Taiwan High Prosecutors Office filed another appeal against the June 9 judgment. The Supreme Court of the R.O.C. reversed the June 9 judgment and remanded this case to the Taiwan High Court Kaohsiung Branch Court on January 6, 2022. Upon remand, a trial was conducted, leading to the December 31 judgment. We have strengthened internal control measures after this incident, and no other directors were parties nor are expected to become a party to any current or future litigation in connection with this matter. On October 26, 2018, the R.O.C. Securities and Futures Investors Protection Center (the “SFIPC”) filed a civil lawsuit against Dr. Tien Wu and ASEH, requesting the court to remove Dr. Tien Wu from ASEH’s board of directors based on Article 10-1 of the R.O.C. Securities Investor and Futures Trader Protection Act (the “Director Removal Case”). On August 25, 2020, the Taiwan Ciaotou District Court ruled in favor of Dr. Tien Wu. SFIPC filed an appeal against the August 25, 2020 judgment and the appeal was rejected by the Taiwan High Court Kaohsiung Branch Court on September 29, 2021 (the “September 29 judgment”). On October 20, 2021, SFIPC filed another appeal against the September 29 judgment. The Supreme Court of the R.O.C. reversed the September 29 judgment and remanded this case to the Taiwan High Court Kaohsiung Branch Court on May 25, 2022. On January 8, 2025, SFIPC’s appeal was rejected by the Taiwan High Court Kaohsiung Branch Court (the “January 8 Judgment”). SFIPC then filed an appeal against the January 8 Judgment. The Supreme Court of the R.O.C. reversed the January 8 Judgment and remanded this case to the Taiwan High Court Kaohsiung Branch Court on December 17, 2025, where it is now being tried. In addition to the Director Removal Case, on July 8, 2021, SFIPC filed an additional class action to request Dr. Tien Wu and other three defendants of the aforementioned criminal proceeding of insider trading to be jointly liable for the damages caused by the alleged insider trading activities. The Intellectual Property and Commercial Court of the R.O.C. ruled in favor of SFIPC and portion of the damages was awarded on August 18, 2022, and all defendants of this class action filed appeals against the August 18 judgment. The Supreme Court of the R.O.C. reversed the August 18 judgment and remanded the case to the Intellectual Property and Commercial Court on March 14, 2024, where it is now being tried. The proceedings in connection with this incident, or potential regulatory scrutiny, might attract further media attention. Any negative publicity in connection with the legal proceedings may adversely affect our brand and reputation, which might result in a material adverse impact on our business operations and prospects. As we depend on the continuing service of our directors and executive officers, and we are not insured against the loss of service of any of our personnel, our business operations could suffer from the loss of services of any director or executive officer, including Dr. Tien Wu. There are no assurances that we will be able to find suitable replacement directors or executive officers. Our insurance coverage may be inadequate to cover all our business risks. Although we seek to obtain insurance for some of our primary operational risks, the amount of our insurance coverage may not be adequate to cover all potential claims or liabilities, and we may be forced to bear substantial costs resulting from the risks and uncertainties of our business. Especially in light of our increased focus on our automotive semiconductor business, there is also no guarantee that we will be able to obtain insurance coverage when desired or that insurance will be available on commercially attractive terms. Any failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition, and results of operations. Inflation and fluctuations in interest rates could adversely affect our business, financial condition, results of operations, and cash flows. We are exposed to economic and political conditions in the countries and regions where we operate. We are also affected by governmental policies regarding spending and investment, exchange controls, regulatory and taxation changes, and other adverse political, economic, or social developments in the countries and regions in which we operate. Like all companies with extensive operations, we are exposed to risks from fluctuations in inflation. 16 Table of Contents High inflation rates may adversely affect our business by increasing the costs of the raw materials, energy, labor, and transportation. Current or future efforts by various governments to stimulate their economies may increase the risk of inflation. In the event of an increase in inflation, we may need to increase the sales prices of our services in order to maintain satisfactory profits; however, such increases may not be accepted by our customers and may not sufficiently compensate for the negative impacts of inflation. At a macro level, inflation might reduce households’ disposable income and reduce people’s savings, which may decrease discretionary spending and negatively impact the sales of our customers’ products and, correspondingly, their demand for our manufacturing services. If we are unable to fully offset the effects of increased inflation, we may have material adverse impacts on our business, financial condition, results of operations, and cash flows. As a result of inflationary pressure and macroeconomic instability, various governments may adopt monetary policies that will lead to higher interest rates. Higher interest rates may adversely affect our financing costs, including the costs of our current debt and leasing payments. There is no assurance that we will be able to effectively mitigate the interest rate risk, even after utilizing certain financing instruments. Further, in higher interest rate environments, our customers may reduce their overall investment in product development by cutting their capital expenditures and research and development expenses. Such reductions in capital expenditures and research and development expenses by our customers may reduce the amount of business that we receive from them and adversely affect our results of operations. Fluctuations in exchange rates could adversely affect our business, results of operations, or financial condition. Within our global operations, significant transactions and balances are denominated in currencies other than the NT dollar. A significant portion of our revenues and capital expenditures are denominated in U.S. dollars. In contrast, our operating costs and operating expenses are primarily incurred in NT dollars, U.S. dollars, RMB, Japanese yen, Korean won, and EUR. As a result, fluctuations in exchange rates will affect our financial condition and results of operations. These fluctuations could result in exchange losses in NT dollar and other local currency terms, even though we have implemented hedging and mitigating techniques. See “Item 11. Quantitative and Qualitative Disclosures about Market Risk— Market Risk—Foreign Currency Exchange Rate Risk.” The financial performance of our equity method investments could adversely affect our results of operations. As part of our business strategy, we have and may continue to pursue acquisitions of businesses and assets, strategic alliances, and investments in associates and joint ventures. We currently have equity investments in certain entities and the accounting treatment applied for these investments varies depending on several factors, including, but not limited to, our percentage of ownership, our percentage of membership of the investee’s board, and the level of influence we have over the relevant entity. Any losses experienced by these entities could adversely affect our results of operations and the value of our investment. In addition, if these entities were to fail and cease operations, we may lose the entire value of our investment and the stream of any shared profits. There can be no assurance that we will be able to maintain or enhance the value or performance of our investee companies or that we will achieve the returns or benefits sought from such investments. If our interests differ from those of other investors in our investee companies, we may not be able to enjoy synergies with the investee and it may adversely affect our financial results or condition. Any impairment charges may have a material adverse effect on our financial results or condition. Under IFRS Accounting Standards, we are required to evaluate our tangible assets, right-of-use assets, goodwill and other intangible assets for impairment whenever triggering events or changes in circumstances indicate that the assets may be impaired. If certain criteria are met, we are required to record an impairment charge. The determination of an impairment charge at any given time is based significantly on our expected results of operations over several years in the future. We are unable to estimate the extent and timing of any impairment charges for future years and we cannot give any assurance that impairment charges will not occur in periods subsequent to the date of this annual report. As a result, an impairment charge is more likely to occur during a period in which our operating results and outlook are otherwise already depressed. Any impairment charge could have a material adverse effect on our financial results or condition. 17 Table of Contents Any failure to achieve and maintain effective internal controls could have a material adverse effect on our business and results of operations. We are required to comply with various R.O.C. and the U.S. laws and regulations on internal controls, including but not limited to Section 404 of the Sarbanes-Oxley Act. However, internal controls over financial reporting may not prevent or detect misstatements because of its inherent limitations. Any failure to maintain effective internal control over financial reporting could harm our business, erode investor confidence in our financial statements, and negatively impact the trading price of our Common Shares and ADSs. Furthermore, we could be subject to criminal penalties or shareholder litigation if we fail to remedy any deficiencies or maintain the adequacy of our internal controls. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2025. See “Item 15. Controls and Procedures” for details. Restrictive covenants and broad default provisions in our existing debt agreements may materially restrict our operations as well as adversely affect our liquidity, financial condition, and results of operations. We are a party to numerous loans and other agreements relating to the incurrence of debt, which may include restrictive covenants and broad default provisions. Covenants in the agreements governing our existing debt, and debt we may incur in the future, may materially restrict our operations, including our ability to incur debt, pay dividends, and make certain investments and payments, other than in connection with restructurings of consolidated entities, and encumbering or disposing of assets. In addition, any global economic deterioration or ineffective expansion may cause us to incur significant net losses or force us to assume considerable liabilities. We cannot ensure that we will be able to remain in compliance with our financial covenants, which, as a result, may lead to a default. This may thereby restrict our ability to access unutilized credit facilities or the global capital markets to meet our liquidity needs. Furthermore, a default under any agreement by us or our subsidiaries may trigger cross-defaults under agreements. In the event of default, we may not be able to cure the default or obtain a waiver on a timely basis. An event of default under any agreement governing our existing or future debt, if not cured or waived, could have a material adverse effect on our liquidity, financial condition, and results of operations. As of December 31, 2025, we were not in breach of any of the financial covenants under our existing loan agreements. There is no assurance that we will not breach any such financial covenants under our loan agreements in the future or that we will obtain a waiver from the relevant bank for any future breaches in a timely manner. We could potentially face tax uncertainties arising from our decisions, activities, and operations or any changes in tax laws in jurisdictions in which we operate, which may adversely affect our operations. We have business operations in multiple countries and our worldwide operations are taxed under the laws of the jurisdictions in which we operate. However, the integrated nature of our worldwide operations can produce conflicting claims from revenue authorities in different countries as to the profits to be taxed in the individual countries, which could increase our effective tax rate and adversely affect our reputation and operations. There are many activities in our daily operations that may also give rise to tax issues, ranging from procurement, research and development activities, manufacturing to product storage and distribution, among others. Additional tax liabilities such as double taxation, inapplicability of tax incentives, tax adjustment, and related interest and penalties may arise if tax issues are not dealt with appropriately. Changes in the tax laws and regulations present considerable variations in interpretation and enforcement, which could result in more stringent compliance measures and tax audits in the jurisdictions in which we operate. Furthermore, our tax expenses and effective tax rates could be affected as a result of the base erosion and profit shifting project that was undertaken by the Organization for Economic Cooperation and Development (the “OECD”). Failure to comply with any change in tax laws could result in unfavorable tax consequences to us and have an adverse impact on our business, financial condition, and results of operations. We may be subject to intellectual property rights disputes, which could adversely affect our business. Our ability to compete successfully and achieve future growth depends in part on developing and safeguarding our proprietary technologies while securing commercially acceptable terms for non-owned technologies. Our failure to do so may seriously harm our competitive position. 18 Table of Contents Our ability to compete successfully also depends in part on operating without infringing others’ proprietary rights. In particular, the semiconductor and electronics industries are characterized by frequent litigation regarding patent and other intellectual property rights. We have received communication alleging infringement of others’ technologies and may receive more in the future. Infringement claims have resulted in, or could result in acquiring licenses, discontinuing certain technologies, paying damages or settlement payments, or unfeasibly seeking to develop alternative technologies, which could result in financial consequences. Any litigation, whether as plaintiff or defendant and regardless of the outcome, is costly and diverts company resources. Any of the foregoing could harm our competitive position and render us unable to fully provide our services operations. Regulations related to conflict minerals could adversely affect our business, financial condition and results of operations. In August 2012, the SEC adopted annual disclosure and reporting requirements, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, for companies that use conflict minerals in their products. These rules require companies that manufacture or contract to manufacture products for which conflict minerals are necessary for functionality or production to begin scrutinizing the origin of conflict minerals in their products. We filed a specialized disclosure report on Form SD in accordance with the requirements and we have retained an independent auditing firm to conduct audits on our due diligence framework to provide a private sector report for our specialized disclosure report on Form SD. There will be costs associated with complying with these disclosure requirements, including costs for diligence to determine the sources of conflict minerals used in our products and other potential changes to products, processes, or sources of supply as a consequence of the results of such verification activities. The implementation of these rules could adversely affect the sourcing, supply, and pricing of materials used in our products. As there may be only a limited number of suppliers offering “conflict free” minerals, we cannot be sure that we will be able to obtain necessary “conflict free” minerals from such suppliers in sufficient quantities or at competitive prices. Also, we may face adverse effects to our reputation if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to sufficiently verify the origins for all conflict minerals used in our products. Any environmental claims or failure to comply with any present or future environmental laws and regulations, as well as any fire or other industrial accident, may require us to spend additional funds and may materially and adversely affect our financial condition and results of operations. We are subject to various laws and regulations relating to the use, storage, discharge, and disposal of chemical by-products of, and water used in, our packaging and interconnect materials production processes, and the emission of volatile organic compounds and the discharge and disposal of solid industrial wastes. In recent years, we have been subject to environmental administrative actions and judicial proceedings related to certain wastewater discharge incidents that occurred at our facilities. As a result of these proceedings, we have been subject to monetary fines as well as sanctions, including orders to suspend or limit our operations and criminal charges against us. For further details, see “Item 4. Information on the Company—Business Overview—Environmental Matters,” and “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings.” In addition, increasing global efforts to combat climate change may lead to the enactment of stricter laws and regulations aimed at reducing carbon emissions. With an increasing number of governments likely to adopt carbon tax mechanisms, we may be forced to incur significant expenses to comply with applicable environmental and climate-related laws and regulations. These potential expenses include, but are not limited to, paying any incurred carbon taxes if our emission levels exceed applicable thresholds; obtaining renewable energy sources, renewable energy certificates or carbon credits; and substituting more environmentally friendly raw materials in our operations, which may be more costly or less readily available than our existing raw materials. Climate change, water shortages and other environmental concerns could negatively affect our business and financial planning. Anthropogenic greenhouse gas emissions could adversely and irreversibly affect the global economy if substantial remediation is not taken. Even a modest change in average global temperatures could result in increased coastal flooding, altered precipitation patterns, and increased risk of biodiversity loss for vulnerable species. Climate change can also cause extreme weather conditions, such as heat, droughts, and floods, that can impact business operations and financial performance. For example, our business operations depend on adequate supplies of water, so an extended drought may affect our ability to obtain sufficient amounts of water and threaten our production capability. 19 Table of Contents We believe that we should play our part in the mitigation of man-made climate change. For example, we have incorporated green design standards and building concepts into the construction of our facilities. We have transformed existing facilities and built new facilities and offices that comply with international low carbon building standards. Through quantifying and analyzing the entire life cycle of building carbon emissions, carbon reduction was driven from the design stage and promoted along the value chain to build sustainable factories. Public expectations for reductions in greenhouse gas emissions could result in increased energy, transportation, and raw material costs. Changes in scientific findings, political attention, and regulations related to the existence and extent of man-made climate change may also result in increased production costs due to higher energy prices or the introduction of energy or carbon taxes, as described above. Regulations and further legislation aimed at reducing greenhouse gas emissions may require companies to purchase emission credits at higher cost, new equipment, or raw materials with lower carbon footprints, which could negatively affect our operations and financial performance. Additionally, changes in environmental regulations, such as those regarding the use of perfluorinated compounds (commonly known as the “PFCs”), could increase our production costs, which may adversely affect our results of operation and financial results. Stable water supply of sufficient amounts of good-quality freshwater plays a critical role for us. Taiwan is also susceptible to typhoons and droughts, which may cause damage and business interruptions to facilities. Since our business operations depend on adequate supplies of water, an extended drought may affect our ability to obtain sufficient water and threaten our production capability. Although we have not yet been directly affected by droughts, we are dependent upon water for our packaging and substrate operations and a drought could interrupt such operations. To address related risks, we have established a wastewater reclamation recycling system and implemented three water use strategies, including reduce, reuse, and recycle, to prevent water shortages. These actions will enable us to respond effectively to climate change. Considering the relatively high prices of renewable energy in Taiwan, transitioning towards net-zero emissions presents a significant challenge to us. However, in order to meet the demand for sustainable energy in our production processes and fulfill our commitments to our domestic and foreign customers, our major subsidiaries have established the Taiwan Renewable Energy Platform to negotiate renewable energy procurement. Through the platform, we plan to continue to purchase solar photovoltaic and onshore wind power, and negotiate with the government for purchases of Phase 3-1 and Phase 3-2 offshore wind power. We purchase green power certificates from overseas facilities to increase our use of renewable energy. We also enter into long-term corporate power purchase agreements with multiple suppliers. The implementation of these goals and initiatives may require considerable investments, and our goals, with all of their contingencies, dependencies, and in certain cases, reliance on third-party performance, are complex and may change. We cannot guarantee that our goals and initiatives will be fully realized in a timely manner or at all, and projects that are completed as planned may not achieve the results we anticipate. Any failure, or perceived failure, by us to adhere to our public statements, comply fully with developing interpretations of ESG laws and regulations, or meet evolving and varied stakeholder expectations and standards could harm our business, reputation, financial condition, and operating results. Cyber-attacks could harm our business, financial condition, and results of operations. As technology advances, cyberattacks become more frequent and sophisticated. Attackers are organized, well-funded, and are developing increasingly sophisticated systems to attack and evade detection. While we take strict measures to protect our trade secrets and customer data, a security breach or failure could expose us and our customers, dealers, and suppliers to risks such as unauthorized access to information technology systems, misuse and compromise of confidential information, and manipulation and destruction of data. Such incidents could potentially disrupt our business operations, harm our reputation, weaken our competitive position, and adversely affect our financial condition and results of operations. Additionally, security breaches could lead to litigation with third parties, regulatory actions, and higher costs of implementing additional data protection measures. Furthermore, geopolitical tensions or conflicts may increase the risk of cyberattacks. While we continuously review and strengthen our information security policies and procedures, we cannot guarantee that we will be immune to new and emerging risks and attacks in the constantly evolving landscape of cybersecurity threats. For further details, see “Item 4. Information on the Company—Business Overview—Information Security Management” and “Item 16K. Cybersecurity.” 20 Table of Contents A reversal or slowdown in AI-driven demand within the semiconductor industry could adversely affect our growth prospects and profitability. A significant portion of our recent growth and anticipated future revenue is tied to the rapid expansion of AI applications. The demand for our advanced packaging and testing services is increasingly driven by customers developing AI processors, HPC chips, and specialized AI accelerators. However, the AI market is characterized by rapid evolution and uncertainty. If the adoption of AI technologies by enterprises or consumers slows down, or if the anticipated return on investment for AI infrastructure fails to materialize for our customers, there could be a significant reduction in the volume of high-end semiconductor devices requiring our services. A significant reduction in AI-related demand would lead to lower utilization rates for our specialized equipment and facilities, potentially resulting in stranded assets, margin compression and a material adverse effect on our financial condition and results of operations. Failure to grasp the future development or application of AI could adversely affect our business, financial condition, and results of operations. As the markets for AI solutions continue to develop rapidly, demand for these products may be unpredictable and may vary significantly over time. These factors may adversely impact demand for our products that support AI solutions. We dedicate substantial efforts to research and development in order to meet customers’ evolving needs. We also make investments in AI technologies to drive greater efficiency and optimize manufacturing process in our AI-powered smart factories. However, the development and use of AI technologies are complex and involve significant costs and risks. AI systems may have limitations, including biases and inaccuracies, and are subject to risks of system failures or disruptions, as well as risks relating to cybersecurity, data protection, intellectual property and ethics. Costs associated with the implementation of AI technologies, including acquiring, deploying, maintaining and updating AI technologies, could significantly increase our operating costs. There is no assurance that these investments will be successful or will achieve the benefits we anticipated or will be more cost-effective. Any failure to respond effectively to industry developments may significantly impair our business operations. Negative publicity may adversely affect our brand and reputation, which may result in a material adverse impact on our business, results of operations and business prospects, and cause fluctuations in the trading price of our Common Shares and ADSs. In addition, any change in policy or the direction in which we carry our corporate social responsibility or sustainability activities may also have an adverse effect on our business reputation. In recent years, we have experienced and may continue to experience negative publicity in connection with administrative penalties and criminal charges related to alleged violations of environmental regulations and laws. For further details, see “Item 4. Information on the Company—Business Overview—Environmental Matters,” and “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings.” We face risks related to public health epidemics, natural disasters, and other disruptive events. Our business could be materially and adversely affected by widespread health epidemics, natural disasters or other events including wars, acts of terrorism, environmental accidents, power shortages, utility outages, or communication interruptions. Disruptive events may have a material adverse effect on our business, financial condition, and results of operations. For example, these events could cause a temporary closure of the facilities we use for our operations, significantly disrupt supply chains and logistics services, or severely impact consumer behaviors and the operations of merchants, business partners, and other participants in our ecosystem. Our operations could also be disrupted if any of our employees or employees of our business partners contract or are suspected of contracting an epidemic disease, since this could require us or our business partners to quarantine some or all these employees or disinfect the facilities used for operations. In addition, our revenue and profitability could be materially reduced to the extent that a natural disaster, health epidemic, or other outbreak harms the global economy in general. 21 Table of Contents Risks Relating to Taiwan, R.O.C. Strained relations between the R.O.C. and the P.R.C. and disruptions in Taiwan’s political environment caused by domestic political events could negatively affect our business and the market value of our Common Shares and ADSs. Our principal executive offices and facilities are located in Taiwan and approximately 55.4%, 55.1% and 58.9% of our operating revenues in 2023, 2024, and 2025, respectively, were derived from our operations in Taiwan. Accordingly, our business and financial condition may be affected by changes in local governmental policies and political and social instability. The R.O.C. has a unique international political status. Although significant economic and cultural relations have been established in recent years between the R.O.C. and the P.R.C., relations have often been strained. Any major change in the Taiwanese political environment, including the outcome of presidential or municipal elections, or potential shifts in government policy, may affect the direction of economic and political developments and negatively impact the economic and political environment in Taiwan. Past developments related to the interaction between the two governments, domestic political events, or election results have on occasion depressed the market prices of the securities of Taiwanese or Taiwan-related companies, including our own. Relations between the R.O.C. and the P.R.C. and other factors affecting the political or economic conditions in Taiwan could have a material adverse effect on our financial condition and results of operations, as well as the market price and the liquidity of our Common Shares and ADSs. We manufacture interconnect materials in the P.R.C. through our wholly owned subsidiary, ASE Shanghai. We also provide packaging and testing services, develop real estate, and manufacture computer peripherals and electronic components through our subsidiaries in the P.R.C. See “Item 4. Information on the Company—Organizational Structure—Our Consolidated Subsidiaries.” The R.O.C. government restricts certain types of investments in the P.R.C. We do not know when or if such laws and policies governing investment in the P.R.C. will be amended, and we cannot ensure that such R.O.C. investment laws and policies will permit us to make certain beneficial investments in the P.R.C. in the future. Our growth prospects and profitability may be adversely affected if we are restricted from making certain additional investments in the P.R.C. and are not able to fully capitalize on the growth of the semiconductor industry in the P.R.C. To address customer concerns regarding potential operational impacts in Taiwan stemming from regional political risks, we conduct evaluations and planning for possible overseas plant expansions. These potential expansion locations may encompass Southeast Asia, Northeast Asia, Europe and the Americas in order to better accommodate our customers’ needs. However, there is no assurance that any of these expansions would be as effective as expected. Our growth prospects and profitability may be adversely affected if we could not effectively adjust our plant expansion in a timely manner, or at all. Despite our efforts to uphold cost-competitive manufacturing standards and enhance customer appeal through supply chain diversification, fragmented operations could heighten our susceptibility to market disruptions. Any failure to mitigate these disruptions could adversely affect our business, financial condition, and results of operations. As a substantial portion of our business and operations are located in Taiwan, we are vulnerable to natural disasters including earthquakes, typhoons, droughts, as well as power outages and other industrial incidents, which could severely disrupt the normal operation of our business and adversely affect our results of operations. Taiwan is in a region that is prone to typhoons and earthquakes, and these natural disasters have caused significant property damage, business disruptions at operating facilities, and loss of life in the past. The semiconductor and electronics industries are particularly vulnerable to disruptions caused by earthquakes. While we have not experienced any structural damage to our facilities or damage to our machinery and equipment due to earthquakes, we have experienced interruptions to our production schedule in the past, primarily as a result of power outages caused by earthquakes. In the event of a major earthquake, we could experience significant disruptions to our operations, which could have a material adverse effect on our business, financial condition, and results of operations. We seek to continuously enhance our disaster preparedness and business continuity plans to minimize the impact of earthquakes and other natural disasters on our operations, but we cannot guarantee that such plans will be effective in all circumstances. 22 Table of Contents The supply of electrical power in Taiwan is susceptible to power disruptions that could be prolonged and frequent, caused by overload as a result of high demand or other reasons. Such power disruptions could further be exacerbated by the government’s increasingly strict energy management measures which could increase our manufacturing costs, thereby adversely impacting our financial condition and results of operations. Additionally, Taiwan has experienced severe droughts in the past and future droughts could significantly impact our operations. Our manufacturing process is heavily reliant on freshwater. We primarily recycle using ultra-filtration systems, chemical mechanical polishing wastewater recycling, and reverse osmosis water recycling. We also collect rainwater for scrubbing and cooling towers. We regularly monitor our water storage and recycling equipment, and prepare truckloads of water to meet future water demand. We also refine our manufacturing capacity in response to water allocation to minimize the impact of water risks. Although we have not experienced direct impacts from droughts, a drought could interrupt our packaging and substrate operations, which rely heavily on water. In addition, a drought could disrupt the manufacturing processes at other parts of the supply chain including our foundry partners, leading to potential production delays for our customers and a decline in demand for our services. While we are proactive in managing water risks and planning to mitigate their impact, we cannot guarantee that insufficient water storage will not affect our operations. In addition, we are also subject to the risk of industrial and workplace accidents that could lead to injury or loss of life, damages to our facilities, and adversely impact our business reputation, commercial prospects, and operations. Our production facilities, as well as many of our suppliers, customers, and providers of complementary semiconductor manufacturing services, including wafer foundries, are located in Taiwan. If our customers are impacted by natural disasters such as earthquakes, typhoons, droughts, or industrial incidents including power outage and labor strikes, these events could cause a decline in the demand for our services. If our suppliers or providers of complementary semiconductor manufacturing services are affected by such events, our production schedule could be interrupted, which might adversely impact our financial condition and results of operations. Risks Relating to Ownership of Our Common Shares and ADSs The market for our Common Shares and ADSs may not be liquid. Active, liquid trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors, compared to less active and less liquid markets. Liquidity of a securities market is often a function of the volume of the underlying shares that are publicly held by unrelated parties. There has been no trading market outside the R.O.C. for our Common Shares and the only trading market for our Common Shares is the TWSE. The outstanding ADSs are listed on the NYSE. There is no assurance that the market for our Common Shares or ADSs will be active or liquid. Although ADS holders are entitled to withdraw our Common Shares underlying ADSs from the depositary at any time, the R.O.C. law requires that our Common Shares be held in an account in the R.O.C. or sold for the benefit of the holder on the TWSE. In connection with any withdrawal of Common Shares from our ADS facility, ADSs evidencing these Common Shares will be canceled. Unless additional ADSs are issued, the effect of withdrawals will be to reduce the number of outstanding ADSs. If a significant number of withdrawals are affected, the liquidity of our ADSs will be substantially reduced. We cannot ensure that the ADS depositary will be able to arrange for a sale of deposited shares in a timely manner or at a specified price, particularly during periods of illiquidity or volatility. If a non-R.O.C. holder of ADSs withdraws and holds Common Shares, such holder of ADSs will be required to appoint a tax guarantor, local agent, and custodian in the R.O.C. and register with the TWSE or the Taipei Exchange in order to buy and sell securities on the TWSE. When a non-R.O.C. holder of ADSs elects to withdraw and hold Common Shares represented by ADSs, such holder of ADSs will be required to appoint an agent for filing tax returns and making tax payments in the R.O.C. Such agent will be required to meet the qualifications set by the R.O.C. Ministry of Finance and, upon appointment, becomes the guarantor of the withdrawing holder’s tax payment obligations. Evidence of the appointment of a tax guarantor, the approval of such appointment by the R.O.C. tax authorities, and tax clearance certificates or evidentiary documents issued by such tax guarantor may be required as conditions to such holder repatriating the profits derived from the sale of Common Shares. We cannot ensure that a withdrawing holder will be able to appoint, and obtain approval for, a tax guarantor in a timely manner. 23 Table of Contents In addition, under current R.O.C. law, such withdrawing holder is required to register with the TWSE or the Taipei Exchange and appoint a local agent in the R.O.C. to, among other things, open a bank account and open a securities trading account with a local securities brokerage firm, pay taxes, remit funds, and exercise such holder’s rights as a shareholder. Furthermore, such withdrawing holder must appoint a local bank or a local securities firm to act as custodian for confirmation and settlement of trades, safekeeping of securities and cash proceeds, and reporting and declaration of information. Without satisfying these requirements, non-R.O.C. withdrawing holders of ADSs would not be able to hold or otherwise subsequently sell our Common Shares on the TWSE or otherwise. Pursuant to P.R.C. Regulations, only QDIIs or persons that have otherwise obtained the approval from the DIR and registered with the TWSE are permitted to withdraw and hold our shares from a depositary receipt facility. In order to hold our shares, such QDIIs are required to appoint an agent and custodian as required by the P.R.C. Regulations. If the aggregate amount of our shares held by any QDII or shares received by any QDII upon a single withdrawal or in the aggregate accounts for 10.0% of our total issued and outstanding shares, such QDII must obtain the prior approval from the DIR. We cannot ensure that such approval would be granted. The market value of our ADSs may fluctuate due to the volatility of the R.O.C. securities market. The trading price of our ADSs may be affected by the trading price of our Common Shares on the TWSE. The R.O.C. securities market is smaller and more volatile than the securities markets in the U.S. and in many European countries. The TWSE has experienced substantial fluctuations in the prices and volumes of sales of listed securities and there are currently limits on the range of daily price movements on the TWSE. During 2025, the TWSE Weighted Index peaked at 28,963.60 on December 31, 2025, and reached a low of 17,391.76 on April 9, 2025, and the trading price of our Common Shares ranged from NT$115.0 per Share to NT$255.0 per Share. On March 18, 2026, the TWSE Weighted Index closed at 34,348.58 and the closing value of our Common Shares was NT$357.50 per Share. The TWSE is particularly volatile during times of political instability, including when relations between the R.O.C. and the P.R.C. are strained. Several investment funds affiliated with the R.O.C. government have also from time to time purchased securities from the TWSE to support the trading level of the TWSE. Moreover, the TWSE has experienced problems such as market manipulation, insider trading, and settlement defaults. The recurrence of these or similar problems could have an adverse effect on the market price and liquidity of the securities of R.O.C. companies, including our Common Shares and ADSs, in both the domestic and international markets. We may not continue to declare cash dividends in any particular amount. We intend to continue to pay dividends. However, future dividends may be affected by, among other things, the best interests of our Company and our shareholders, our results of operations, cash balances and future cash requirements, financial condition, investments and acquisitions, legal risks, and other factors that the board of directors may consider relevant. Our dividend payments may change occasionally, and we cannot ensure that we will continue to declare dividends in any particular amount. A reduction in, a delay of, or elimination of our dividend payments could adversely affect our share price. Our major shareholders may take actions that are not in, or may conflict with, our public shareholders’ best interests. Members of the Chang family own, directly or indirectly, a significant interest in our outstanding Common Shares. See “Item 7. Major Shareholders and Related Party Transactions— Major Shareholders.” Accordingly, these shareholders will continue to have the ability to exercise a significant influence over our business, including matters relating to: • our operation, management, and policies; • the timing and distribution of dividends; and • the election of our directors. 24 Table of Contents Members of the Chang family may take actions that public shareholders may not agree with or that are not in alignment with our or our public shareholders’ best interests. We are an R.O.C. company and, because the rights of shareholders under R.O.C. law differ from those under U.S. law and the laws of certain other countries, our shareholders may have difficulty protecting their shareholder rights. Our corporate affairs are governed by our Articles of Incorporation and by the laws governing corporations incorporated in the R.O.C. The rights of shareholders and the responsibilities of management and the members of the board of directors under R.O.C. law are different from those applicable to a corporation incorporated in the U.S. and certain other countries. As a result, public shareholders of R.O.C. companies may experience increased difficulty in protecting their interests in connection with actions taken by management or members of the board of directors than they would as public shareholders of a corporation in the U.S. or certain other countries. Holders of Common Shares and ADSs may experience dilution if we issue stock bonuses, share options, or restricted stocks to employees or sell additional equity or equity-linked securities. We periodically issue bonuses in the form of Common Shares. Bonuses in the form of our Common Shares are valued at the closing price of our Common Shares on the day prior to our meeting of the board of directors. Therefore, the issuance of our Common Shares pursuant to stock bonuses, share options and restricted stock awards may have a dilutive effect on the holders of outstanding Common Shares and ADSs. In addition, the issuance of additional equity or equity-linked securities may result in additional dilution to our shareholders. See “Item 6. Directors, Senior Management and Employees—Compensation—Share-Based Payment Arrangements.” Restrictions on the ability to deposit our Common Shares into our ADS facility may adversely affect the liquidity and price of our ADSs. The ability to deposit Common Shares into our ADS facility is restricted by R.O.C. law. A significant number of withdrawals of Common Shares underlying our ADSs would reduce the liquidity of ADSs by reducing the number of ADSs outstanding. As a result, the prevailing market price of our ADSs may differ from the prevailing market price of our Common Shares on the TWSE. Under current R.O.C. law, no person or entity, including shareholders and ourselves, may deposit our Common Shares in our ADS facility without specific approval of the FSC, unless: (1) we pay stock dividends on our Common Shares; (2) we make a free distribution of Common Shares; (3) holders of ADSs exercise preemptive rights in the event of capital increases; or (4) to the extent permitted under the deposit agreement and the relevant custody agreement and within the amount of depositary receipts which have been withdrawn, investors purchase our Common Shares, directly or through the depositary, on the TWSE, and deliver our Common Shares to the custodian for deposit into our ADS facility, or our existing shareholders deliver our Common Shares to the custodian for deposit into our ADS facility. With respect to item (4) above, the depositary may issue ADSs against the deposit of those Common Shares only if the total number of ADSs outstanding following the deposit will not exceed the number of ADSs previously approved by the FSC, plus any ADSs issued pursuant to the events described in items (1), (2) and (3) above. In addition, in the case of a deposit of our Common Shares requested under item (4) above, the depositary will refuse to accept deposit of our Common Shares if such deposit is not permitted under any legal, regulatory, or other restrictions notified by us to the depositary, which restrictions may include blackout periods during which deposits may not be made, minimum and maximum amounts, and frequency of deposits. The depositary will not offer holders of ADSs preemptive rights unless the distribution of both the rights and the underlying Common Shares to our ADS holders are either registered under the Securities Act or exempt from registration under the Securities Act. 25 Table of Contents Holders of ADSs will not have the same voting rights as our shareholders, which may affect the value of their ADSs. The voting rights of a holder of ADSs as to our Common Shares represented by its ADSs are governed by the deposit agreement. Holders of ADSs will not be able to exercise voting rights on an individual basis. If holders representing at least 51% of ADSs outstanding at the relevant record date instruct the depositary to vote in the same manner regarding a resolution, including the election of directors, the depositary will cause all Common Shares represented by ADSs to be voted in that manner. If the depositary does not receive timely instructions representing at least 51% of ADSs outstanding at the relevant record date to vote in the same manner for any resolution, including the election of directors, holders of ADSs will be deemed to have instructed the depositary or its nominee to authorize all our Common Shares represented by ADSs to be voted at the discretion of our chairman or his designee, which may not be in the interest of holders of ADSs. Moreover, while shareholders who own 1% or more of our outstanding shares are entitled to submit one proposal to be considered at our annual general meetings of shareholders, only holders representing at least 51% of our ADSs outstanding at the relevant record date are entitled to submit one proposal to be considered at our annual general meetings of shareholders. Hence, only one proposal may be submitted on behalf of all ADS holders. The right of holders of ADSs to participate in our rights offerings is limited, which could cause dilution to their holdings. We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement, the depositary will not offer holders of ADSs those rights unless both the distribution of the rights and the underlying securities to all our ADS holders are either registered under the Securities Act or exempt from registration under the Securities Act. Although we may be eligible to take advantage of certain exemptions under the Securities Act available to certain foreign issuers for rights offerings, we can give no assurances that we will be able to establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement for any of these rights. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings. If the depositary is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case holders of ADSs will receive no value for these rights. Changes in exchange controls, which restrict the conversion of proceeds received from ownership of ADSs, may have an adverse effect on the value of these investments. Under current R.O.C. law, the depositary, without obtaining approvals from the Central Bank of the Republic of China (Taiwan) or any other governmental authority or agency of the R.O.C., may convert NT dollars into other currencies, including U.S. dollars, for: • the proceeds of the sale of Common Shares represented by ADSs or received as stock dividends from our Common Shares and deposited into the depositary receipt facility; and • any cash dividends or distributions received from our Common Shares. In addition, the depositary may also convert into NT dollars incoming payments for purchases of Common Shares for deposit in the ADS facility against the creation of additional ADSs. The depositary may be required to obtain foreign exchange approval from the Central Bank of the Republic of China (Taiwan) on a payment-by-payment basis for conversion from NT dollars into foreign currencies of the proceeds from the sale of subscription rights for new Common Shares. Although it is expected that the Central Bank of the Republic of China (Taiwan) will grant this approval as a routine matter, we cannot ensure that in the future any approval will be obtained in a timely manner, or at all. Under the R.O.C. Foreign Exchange Control Act, the Executive Yuan of the R.O.C. government may, without prior notice but subject to subsequent legislative approval, impose foreign exchange controls in the event of, among other things, a material change in international economic conditions. We cannot ensure that foreign exchange controls or other restrictions will not be introduced in the future. 26 Table of Contents The value of our Common Shares or ADSs may be reduced by possible future sales of Common Shares or ADSs by us or our shareholders. While we are not aware of any plans by any major shareholders to dispose of significant numbers of Common Shares, we cannot ensure that one or more existing shareholders or owners of securities convertible or exchangeable into or exercisable for our Common Shares or ADSs will not dispose of significant numbers of Common Shares or ADSs. In addition, several of our subsidiaries and affiliates hold Common Shares, depositary shares representing Common Shares, and options to purchase Common Shares or ADSs. They may decide to sell those securities in the future. See “Item 7. Major Shareholders and Related Party Transactions—Major Shareholders” for a description of our significant shareholders and affiliates that hold our Common Shares. We cannot predict the effect, if any, that future sales of Common Shares or ADSs, or the availability of Common Shares or ADSs for future sales, will have on the market price of our Common Shares or ADSs at any time. Sales of substantial numbers of Common Shares or ADSs in the public market, or the perception that such sales may occur, could depress the prevailing market prices of our Common Shares or ADSs. Techniques employed by short sellers may drive down the trading price of ADSs. Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market. Public companies listed in the U.S. that have material operations in the P.R.C., among others, have on occasion been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto, and, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions. It is not clear what effect such negative publicity could have on us. If we were to become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we would have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would endeavor to defend against any such short seller attacks, we may be constrained in how we can oppose a relevant short seller by principles of freedom of speech, applicable state law, or issues of commercial confidentiality. Such a situation could be costly and time-consuming and could divert our management’s attention from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact ADSs and their value could be greatly reduced or rendered worthless.