| 12. | OPERATING SEGMENT INFORMATION |
| (1) | The Company determined its operating segments based on business activities with discrete financial information regularly reported through the Company’s internal reporting protocols to the Company’s chief operating decision maker. The Company is organized into business units based on its products and services. As of December 31, 2017, the Company had the following segments: wafer fabrication and new business. There were no material differences between the accounting policies described in Note 4 and those applied by the operating segments. The primary operating activity of the wafer fabrication segment is the manufacture of chips to the design specifications of our customers by using our own proprietary processes and techniques. The Company maintains a diversified customer base across industries, including communication, consumer electronics, computer, memory and others, while continuing to focus on manufacturing for high growth, large volume applications, including networking, telecommunications, internet, multimedia, PCs and graphics. New business segment primarily includes researching, developing, manufacturing, and providing solar energy and new generation light-emitting diode (LED). |
Reportable segment information for the years ended December 31, 2015, 2016 and 2017 were as follows:
| For the year ended December 31, 2015 | ||||||||||||||||||||
| Wafer Fabrication |
New Business | Subtotal | Adjustment and Elimination (Note) |
Consolidated | ||||||||||||||||
| NT$ | NT$ | NT$ | NT$ | NT$ | ||||||||||||||||
| (In Thousands) | (In Thousands) | (In Thousands) | (In Thousands) | (In Thousands) | ||||||||||||||||
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Net revenue from external customers |
$ | 141,705,196 | $ | 3,125,225 | $ | 144,830,421 | $ | — | $ | 144,830,421 | ||||||||||
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Net revenue from sales among intersegments |
— | 15,725 | 15,725 | (15,725 | ) | — | ||||||||||||||
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Segment net income (loss), net of tax |
13,569,672 | (1,731,181 | ) | 11,838,491 | 802,607 | 12,641,098 | ||||||||||||||
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Capital expenditure |
60,386,300 | 117,849 | 60,504,149 | — | 60,504,149 | |||||||||||||||
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Depreciation |
42,833,022 | 639,986 | 43,473,008 | — | 43,473,008 | |||||||||||||||
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Share of profit or loss of associates and joint ventures |
(869,190 | ) | (58,513 | ) | (927,703 | ) | 932,397 | 4,694 | ||||||||||||
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Income tax expense (benefit) |
880,170 | (3,676 | ) | 876,494 | 151,006 | 1,027,500 | ||||||||||||||
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Impairment loss |
1,465,036 | 801,465 | 2,266,501 | — | 2,266,501 | |||||||||||||||
| For the year ended December 31, 2016 | ||||||||||||||||||||
| Wafer Fabrication |
New Business | Subtotal | Adjustment and Elimination (Note) |
Consolidated | ||||||||||||||||
| NT$ | NT$ | NT$ | NT$ | NT$ | ||||||||||||||||
| (In Thousands) | (In Thousands) | (In Thousands) | (In Thousands) | (In Thousands) | ||||||||||||||||
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Net revenue from external customers |
$ | 147,444,265 | $ | 425,859 | $ | 147,870,124 | $ | — | $ | 147,870,124 | ||||||||||
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Net revenue from sales among intersegments |
— | 6,547 | 6,547 | (6,547 | ) | — | ||||||||||||||
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Segment net income (loss), net of tax |
4,218,948 | (1,661,885 | ) | 2,557,063 | 1,611,499 | 4,168,562 | ||||||||||||||
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Capital expenditure |
91,542,436 | 18,203 | 91,560,639 | — | 91,560,639 | |||||||||||||||
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Depreciation |
49,288,201 | 402,834 | 49,691,035 | — | 49,691,035 | |||||||||||||||
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Share of profit or loss of associates and joint ventures |
(1,285,380 | ) | (210,746 | ) | (1,496,126 | ) | 1,180,460 | (315,666 | ) | |||||||||||
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Income tax expense (benefit) |
992,580 | (9,017 | ) | 983,563 | (431,039 | ) | 552,524 | |||||||||||||
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Impairment loss |
1,296,529 | 781,045 | 2,077,574 | — | 2,077,574 | |||||||||||||||
| For the year ended December 31, 2017 | ||||||||||||||||||||
| Wafer Fabrication |
New Business | Subtotal | Adjustment and Elimination (Note) |
Consolidated | ||||||||||||||||
| NT$ | NT$ | NT$ | NT$ | NT$ | ||||||||||||||||
| (In Thousands) | (In Thousands) | (In Thousands) | (In Thousands) | (In Thousands) | ||||||||||||||||
|
Net revenue from external customers |
$ | 148,939,836 | $ | 344,870 | $ | 149,284,706 | $ | — | $ | 149,284,706 | ||||||||||
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Net revenue from sales among intersegments |
— | 13,600 | 13,600 | (13,600 | ) | — | ||||||||||||||
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Segment net income (loss), net of tax |
6,728,620 | (665,895 | ) | 6,062,725 | 616,504 | 6,679,229 | ||||||||||||||
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Capital expenditure |
44,229,488 | 6,788 | 44,236,276 | — | 44,236,276 | |||||||||||||||
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Depreciation |
50,737,240 | 227,880 | 50,965,120 | — | 50,965,120 | |||||||||||||||
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Share of profit or loss of associates and joint ventures |
(258,959 | ) | (32,619 | ) | (291,578 | ) | 449,415 | 157,837 | ||||||||||||
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Income tax expense |
1,167,154 | 3 | 1,167,157 | (174,676 | ) | 992,481 | ||||||||||||||
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Impairment loss |
632,207 | 318,128 | 950,335 | — | 950,335 | |||||||||||||||
| As of December 31, 2016 | ||||||||||||||||||||
| Wafer Fabrication |
New Business | Subtotal | Adjustment and Elimination (Note) |
Consolidated | ||||||||||||||||
| NT$ | NT$ | NT$ | NT$ | NT$ | ||||||||||||||||
| (In Thousands) | (In Thousands) | (In Thousands) | (In Thousands) | (In Thousands) | ||||||||||||||||
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Segment assets |
$ | 384,870,981 | $ | 3,213,397 | $ | 388,084,378 | $ | (3,857,663 | ) | $ | 384,226,715 | |||||||||
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Segment liabilities |
$ | 166,110,998 | $ | 1,857,130 | $ | 167,968,128 | $ | 1,312,213 | $ | 169,280,341 | ||||||||||
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| As of December 31, 2017 | ||||||||||||||||||||
| Wafer Fabrication |
New Business | Subtotal | Adjustment and Elimination (Note) |
Consolidated | ||||||||||||||||
| NT$ | NT$ | NT$ | NT$ | NT$ | ||||||||||||||||
| (In Thousands) | (In Thousands) | (In Thousands) | (In Thousands) | (In Thousands) | ||||||||||||||||
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Segment assets |
$ | 392,370,323 | $ | 3,030,057 | $ | 395,400,380 | $ | (4,268,160 | ) | $ | 391,132,220 | |||||||||
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Segment liabilities |
$ | 178,362,985 | $ | 1,700,045 | $ | 180,063,030 | $ | 1,448,192 | $ | 181,511,222 | ||||||||||
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Note: The adjustments primarily consisted of intragroup elimination entries and GAAP difference adjustments.
| (2) | Geographic information |
| a. | Revenue from external customers |
| For the years ended December 31, | ||||||||||||
| 2015 | 2016 | 2017 | ||||||||||
| NT$ | NT$ | NT$ | ||||||||||
| (In Thousands) | (In Thousands) | (In Thousands) | ||||||||||
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Taiwan |
$ | 46,015,882 | $ | 46,493,583 | $ | 48,952,219 | ||||||
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Singapore |
18,316,785 | 26,753,960 | 30,798,270 | |||||||||
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China (includes Hong Kong) |
11,722,585 | 13,732,391 | 18,971,866 | |||||||||
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Japan |
10,141,883 | 4,501,057 | 4,694,277 | |||||||||
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USA |
12,794,864 | 13,713,202 | 18,208,227 | |||||||||
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Europe |
33,882,327 | 29,253,755 | 14,329,730 | |||||||||
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Others |
11,956,095 | 13,422,176 | 13,330,117 | |||||||||
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Total |
$ | 144,830,421 | $ | 147,870,124 | $ | 149,284,706 | ||||||
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The geographic breakdown of the Company’s operating revenues was based on the location of the Company’s customers.
| b. | Non-current assets |
| As of December 31, | ||||||||
| 2016 | 2017 | |||||||
| NT$ | NT$ | |||||||
| (In Thousands) | (In Thousands) | |||||||
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Taiwan |
$ | 141,692,141 | $ | 114,047,141 | ||||
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Singapore |
22,891,986 | 18,501,088 | ||||||
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China (includes Hong Kong) |
69,461,494 | 80,180,759 | ||||||
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USA |
22,734 | 29,866 | ||||||
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Europe |
165,794 | 165,590 | ||||||
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Others |
113 | 60 | ||||||
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Total |
$ | 234,234,262 | $ | 212,924,504 | ||||
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Non-current assets include property, plant and equipment, intangible assets, prepayment for equipment and other noncurrent assets.
| (3) | Major customers |
Individual customers accounting for at least 10% of net sales for the years ended December 31, 2015, 2016 and 2017 were as follows:
| For the years ended December 31, | ||||||||||||
| 2015 | 2016 | 2017 | ||||||||||
| NT$ | NT$ | NT$ | ||||||||||
| (In Thousands) | (In Thousands) | (In Thousands) | ||||||||||
|
Customer A from wafer fabrication segment |
$ | 7,449,485 | $ | 13,324,560 | $ | 15,632,722 | ||||||
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Customer B from wafer fabrication segment |
20,761,648 | $ | 20,816,001 | 10,499,880 | ||||||||
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Total |
$ | 28,211,133 | $ | 34,140,561 | $ | 26,132,602 | ||||||
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