ASE Technology Holding(US:ASX)2024-04-03 10:10Financial Performance - The company recorded net foreign exchange gains of NT$998.1 million (US$32.6 million) in 2023, following net losses of NT$2,459.5 million in 2022 and gains of NT$1,395.1 million in 2021[89]. - Impairment charges for investments under the equity method were NT$61.2 million in 2022 and NT$146.6 million (US$4.8 million) in 2023, with no charges recorded in 2021[92][94]. - The company recognized total impairment charges of NT$126.8 million in 2021, NT$388.8 million in 2022, and NT$146.6 million (US$4.8 million) in 2023, primarily related to property, plant, and equipment[94]. - Future dividends may be affected by the company's financial condition, cash balances, and other relevant factors, with no assurance of continued cash dividends[141]. Environmental and Sustainability Initiatives - The company has established a wastewater reclamation recycling system and implemented strategies to reduce, reuse, and recycle water to address climate change risks[114]. - The company plans to negotiate renewable energy procurement through the Taiwan Renewable Energy Platform, focusing on solar and wind power[115]. - The company is subject to various laws and regulations regarding environmental compliance, which may lead to additional costs and impact financial performance[109]. Operational Risks - In 2023, one subsidiary failed to meet financial covenants under its loan agreement but obtained a waiver, with compliance restored by December 31, 2023[100]. - The company has experienced interruptions to its production schedule due to power outages caused by earthquakes, highlighting vulnerability to natural disasters[126]. - The company faces risks related to public health epidemics, natural disasters, and other disruptive events that could materially affect its business operations[119]. - The company has not experienced direct impacts from droughts, but future droughts could disrupt operations reliant on freshwater[129]. Market and Investment Risks - Fluctuations in exchange rates, particularly between the U.S. dollar and Japanese yen against the NT dollar, could significantly impact the company's financial condition[89]. - The trading price of the company's ADSs may be affected by the volatility of the R.O.C. securities market, which is smaller and more volatile than U.S. and European markets[140]. - Changes in exchange controls may adversely affect the value of investments in ADSs[154]. - Future sales of Common Shares or ADSs by major shareholders could depress market prices[158]. - The company cannot predict the effect of future sales of Common Shares or ADSs on market prices[158]. Corporate Governance and Shareholder Rights - The company’s internal control over financial reporting was deemed effective as of December 31, 2023, excluding the newly acquired HCC Group[98]. - As of December 31, 2023, approximately 217,205 thousand share options and restricted stocks were outstanding[146]. - The company may experience dilution if it issues stock bonuses, share options, or restricted stocks to employees[145]. - Holders of ADSs will not have the same voting rights as shareholders, which may affect the value of their ADSs[151]. - Holders of ADSs may experience dilution due to limitations on participation in rights offerings[152]. - The ability to deposit Common Shares into the ADS facility is restricted by R.O.C. law, potentially affecting liquidity and pricing[146]. - The company is subject to scrutiny and potential negative publicity related to short selling practices[160]. - Allegations against the company, whether true or false, could significantly impact the value of ADSs[161]. Strategic Expansion - The company is conducting evaluations for potential overseas plant expansions in Southeast Asia, Northeast Asia, Europe, and the Americas to mitigate regional political risks[125]. - The R.O.C. government currently restricts certain types of investments in the P.R.C., which may adversely affect the company's growth prospects and profitability[124]. - The company is investing in research and development of silicon photonics technology and Co-Packaged Optics, which are expected to be pivotal for the next generation of advanced packaging[120].