ASX

Business Context and Reporting Period

Company: Advanced Semiconductor Engineering, Inc. (ASE Technology Holding Co., Ltd.)
Filing Date: December 16, 2013
Reporting Period: Current events as of December 16, 2013
Business Overview: ASE is the world's largest semiconductor assembly and test service provider, headquartered in Kaohsiung, Taiwan. The filing addresses recent media reports and regulatory investigations concerning an isolated wastewater discharge incident at the Kaohsiung K7 facility.

Key Financial Metrics and Operational Status

Revenue, Profit, and Cash Flow: The filing text does not provide specific revenue, profit, cash flow, or margin figures for the reporting period.
Debt and Liquidity: The filing text does not provide specific debt or liquidity metrics.
Operational Status: The ASE Kaohsiung K7 facility remains in normal operation and adheres to national effluent guidelines. The company states it is unaffected in terms of receiving customer orders and has not seen customers transferring orders to other suppliers.

Material Changes and Events

• Regulatory Investigation: Public prosecutors and officers entered ASE's K1, K7, K9, K10, and K11 factories for investigation. The company states this is part of the legal process and details cannot be revealed publicly.
• Environmental Incident: An isolated case of industrial wastewater discharge occurred at the Kaohsiung K7 facility on October 1, 2013. ASE denies allegations of deliberate discharge or illegal underground piping installation.
• Media Reports: The filing responds to reports by Economic Daily News and Commercial Times suggesting customer order transfers and ongoing investigations.

Guidance, Outlook, and Management Commentary

Management Response: Chairman Chang and management firmly deny allegations of deliberate misconduct. The company apologizes for public concern but emphasizes full cooperation with the Taiwan Ministry of Economic Affairs and the Kaohsiung City Environment Protection Bureau.
Environmental Commitments and Investments:

• Water Recycling Plant: ASE will invest NTD 750 million to expedite a 20,000-ton-per-day water recycling plant at the K14 facility, scheduled for operation in Q2 2014.
• Historical Investment: From 2010 to 2013, ASE invested NTD 392 million in wastewater management.
• Future Expansion: Plans to invest NTD 72 billion in new green manufacturing facilities in the Nantze Export Processing Zone II, creating 16,000 jobs.
• Long-term Pledge: For its 30th anniversary, ASE pledges to contribute at least NTD 100 million annually for the next 30 years (minimum total NTD 3 billion) to Taiwan's environmental protection efforts. Note: Board approval is not yet required as the contribution has not been made.

Risks and Contingencies: The primary risk identified is reputational damage and regulatory scrutiny regarding the wastewater incident. The company notes that if personnel misconduct is proven, they will be handed over to the law.

Investor Verification Checklist

• Verify the status of the ongoing legal investigation by public prosecutors at K1, K7, K9, K10, and K11 facilities.
• Confirm whether any customer orders have been transferred to competitors despite management's denial.
• Monitor the timeline and budget adherence for the NTD 750 million water recycling plant at K14 (target: Q2 2014).
• Track potential fines or penalties resulting from the October 1, 2013, wastewater discharge incident.
• Review future financial reports for the impact of the NTD 72 billion expansion investment on cash flow and debt levels.