Market Risks Our exposure to financial market risks relates primarily to changes in interest rates and foreign exchange rates. To mitigate these risks, we utilize derivative financial instruments, the application of which is primarily for hedging, and not for speculative purposes. Interest Rate Risks As of December 31, 2025, we had aggregate debts outstanding of NT$15,471 million (US$493 million), which was incurred for capital expenditure and general operating expenses. Of our outstanding debts as of December 31, 2025, 83% bear interest at variable rates. The interest rate for the majority of our variable rate debts varies based on a fixed percentage spread over the prime rate established by our lenders. Our variable rate debts had an annual interest rate between 1.525% to 1.975% as of December 31, 2025. Accordingly, we have cash flows and earnings exposure due to market interest rate changes for our variable rate debts. An increase in interest rates of 1% would increase our annual interest charge by NT$128 million (US$4 million) based on our outstanding floating rate indebtedness as of December 31, 2025. As of December 31, 2024 and 2025, we had no interest rate swap agreements outstanding. Foreign Currency Exchange Rate Risks Our foreign currency exposure gives rise to market risks associated with exchange rate movements against the NT dollar, the RMB, the Japanese yen and the US dollar. As of December 31, 2025, 29.5% of our monetary financial assets and 19.8% of our monetary financial liabilities are denominated in the RMB, Japanese yen and US dollar, respectively. We do not hold or issue any derivative for trading purposes or to hedge against fluctuations in foreign exchange rates. We mitigate this risk by conducting sales and purchases transactions in the same currency. These hedging transactions help to reduce, but do not eliminate, the impact of foreign currency exchange rate movements. An average appreciation of the NT dollar against all other relevant foreign currencies of 5% would decrease our exchange gain by NT$107 million (US$3 million) based on our outstanding assets and liabilities denominated in foreign currencies as of December 31, 2025. As of December 31, 2024 and 2025, we had no outstanding forward exchange or foreign currency option contracts. See Note 41 of our audited consolidated financial statements for additional information on financial risk management. 72