Untitled - Mitac

A. Letter to Shareholders
1
A. Letter to Shareholders
Contents
A.Letter to Shareholders ....................................................................................................................1
B.Company Overview
1.Company Profile ..................................................................................................................................4
2.Company Organization ..........................................................................................................................9
3.Capital and Shares, Corporate Bonds, Special Shares, Global Depositary Receipts,
Employee Stock Subscription Voucher, and Mergers ....................................................................................19
C.Operations Overview
1.Business ..........................................................................................................................................30
2.Market and Manufacturing Sales ............................................................................................................40
3.Workforce ........................................................................................................................................48
4.Expenses Incurred To Address Environmental Protection Issues .....................................................................48
5.Labor/Management Relations ................................................................................................................49
6.Major Contracts .................................................................................................................................51
D. Financial Standing
1.Most Recent Five-Year Concise Financial Information ..................................................................................52
2.Financial Analysis for Most Recent Five Years ............................................................................................54
E.MiTAC International Corp. Consolidated Financial Statements and Report
of Independent Accountants
1.Report of Independent Accountants .........................................................................................................56
2.MiTAC International Corp. and Subsidiaries Consolidated Balance Sheet ..........................................................58
3.MiTAC International Corp. and Subsidiaries Consolidated Statement of Income ..................................................59
4.MiTAC International Corp. and Subsidiaries Consolidated Statement of Changes in
Stockholders' Equity ...........................................................................................................................60
5.MiTAC International Corp. and Subsidiaries Consolidated Statement of Cash Flows ..............................................61
F.Financial Condition and Business Results-Analysis and Risk Management
1.Balance Sheet .................................................................................................................................112
2.Analysis of Business Results ...............................................................................................................113
3.Cash Flow Analysis ..........................................................................................................................114
4. Influence on Finances of Major Capital Expenditures in the Most Recent Year .................................................115
5.Investment Policy in the Most Recent Year, Major Reasons for Gains or Losses Thereof, Plans
for Improvement, and Investment Plans for the Next Year .........................................................................115
6.Risk Management ............................................................................................................................115
7.Other Important Events .....................................................................................................................118
MiTAC International Corporation is committed to a spirit of continual innovation and a sustainable
business. In an era in which the IT industry is as volatile as it is, MiTAC is continuing to aggressively
implement plans to reinvent itself by building on the foundations it has already established, investing
in new products with greater development potential-a strategy that paid off handsomely in 2004. In
2004, operational revenues reached NT$50.503 billion, for an increase of 28% over the NT$39.576
billion recorded in 2003. At the same time, after-tax earnings were NT$2.142 billion, rising by 104%
over the NT$1.051 billion achieved in 2003. 2004 EPS was NT$2.11. In 2004, finances remained
sound with a debt-to-asset ratio of 52.91% and turnover of 124.51%. Furthermore, return-on-equity
rose(ROE)rise from 6.3% in the last period (2003) to 12.28%, demonstrating that the company
has been able to increase profitability after making appropriate adjustments in the relative shares of
its products.
Although the global economy in 2004 was affected by such factors as the fluctuations in the
value of the dollar and rises in the cost of raw materials, making the recovery weaker than anticipated,
the IT industry continued to see the emergence of new opportunities. Digital convergence has become
the main driver behind the next wave of growth in the IT sector, while multimedia entertainment and
digital consumerism are the concepts behind various new directions for product applications such as
the digital home, mobile lifestyles, and mobile commerce. These applications are creating the impetus
for consumer-led demand that is driving development of the global IT industry.
MiTAC made striking advances in its three major product lines during 2004. In desktop computers
and digital home products, it designed a series of computers around processor-based architectures,
while it combined Web AV content services and high-speed digital AV content streaming technology
for the home to realize the digital home vision. In servers, the company continued to develop highdensity
servers and high-performance workstations, rounding out the midrange, high-end, and entrylevel
product lines. Wireless communications products saw a focus on diversifying offerings of Pocket
PCs, GPS devices, and smartphones to target different markets.
MiTAC has placed great stock in innovation and sustained R&D, and for years has worked
continually to strengthen its development capabilities. Each year, the company spends 2% to 3% of
revenues on R&D, and possessed more than 1,290 patents worldwide at the end of 2004. The
company made applications for 270 patents during 2004, ranking it 12th in Taiwan. In addition,
during the year 287 such applications were approved, making the company 8th in Taiwan for the

2 A. Letter to Shareholders
A. Letter to Shareholders
3
number of patents awarded. In 2005, MiTAC's goal for patent applications and approvals is 500.
Another indicator of MiTAC's attention to and achievement in R&D and intellectual property is its
winning of a Taiwan Symbol of Excellence award for all five of the mobile communications products
that it entered in the competition.
Looking to 2005, the company has made forecasts based on its plans for the year and assessments
of likely business conditions. The company foresees strong growth for motherboards, servers, mobile
phones, and wireless communications products. The company will also introduce a number of novel
GPS products and smartphones, and anticipates strong sales will result from building on the solid
foundations it has already built.
The company will implement the following measures this year in order to further strengthen
its competitiveness:
1. Continue devoting resources to software R&D and increasing value: Mobile communications and digital
home products will be central to future development. If in addition to strengthening industrial design
for its hardware, web-based services and application content can be integrated, this will enhance the
value of the products themselves and more firmly establish their position in the market. Therefore, the
company will aggressively target related software development efforts, continuing to expand its R&D
workforce to provide high value-added multi-functional consumer IT products.
2. Enhance quality, global service: Besides moving aggressively to expand market share for wireless
communications products, the company will strengthen its mold R&D and design capabilities to increase
quality and enhance service. Additionally, the company's global manufacturing infrastructure and
customer service system are more complete, enabling the company to provide top-flight quality and
services by maximizing efficiency, cost-effectiveness, and flexibility, thereby establishing a longer-lasting
and mutually beneficial partnership with its customers.
3. Lead the way in promoting "green" plan: After completing digital supply chain projects (Plan B), cash
flow integration plan (Plan C), joint logistics plan (Plan D), and joint design plan (Plan E) in 2003 and
2004, MiTAC has greatly enhanced its operational infrastructure and competitiveness. It has achieved
a leadership position in supply chain and material flow management, and is continuing to participate
in the "green" plan (Plan G) promoted by the Ministry of Economic Affairs' Department of Industrial
Technology. Plan G was developed in response to the European Union's requirements regarding
environmental standards for products sold within the EU, with the hope that the product development
process beginning with raw materials can be environmentally friendly and thereby reduce the risk of
damage to the environment. Because of MiTAC's outstanding results in implementing Plan G, it has
become a benchmark company within the industry, also enabling it to maintain its leadership position
into the future. MiTAC hopes to establish an information exchange platform and formulate certification
standards to inculcate the concept of environmentalism in allied industries.
4. Establish roots on school campuses, actively cultivate R&D talent: The company jointly created an
R&D scholarship with the Y.S. Education Foundation to encourage and cultivate R&D talent for
the communications and electronics fields. In addition, as Taiwan business gradually shifts from
being manufacturing-oriented towards being design and R&D-oriented, MiTAC is again working
with the Foundation to offer the Industrial Design Award this year (2005). It is hoped that the Y.S. Cup
Creativity Fair can stimulate industrial design ideas from students, and facilitate a closer coordination
between on-campus education and commercial applications.
MiTAC International Corporation is grateful for the support of all its shareholders. Looking to 2005,
we are confident that despite the highly competitive business environment, MiTAC can maintain solid
growth and obtain even greater results by taking advantage of the customer satisfaction that it has
cultivated, its excellent operational and MIS infrastructure, and its richly experienced R&D and
management teams-and thereby contribute to the welfare of every shareholder and to society at large.
Best wishes,
Matthew Miau, Chairman
Francis Tsai, Vice Chairman
Billy Ho, President

4 B. Company Overview
B. Company Overview
5
B. Company Overview
1.Company Profile
1.1 Date of Establishment
December 8, 1982
1.2 Address and Telephone Number:
Headquarters and Factory
1 R&D 2nd Road, Hsinchu Science-Based Industrial Park, Hsinchu County
Telephone:(03)577-9250
Linkou Branch Office
200 Wenhua 2nd Road, Gueishan Township, Taoyuan County
Telephone:(03)396-2888
Neihu Office
6/F, 187 Dading Boulevard Section 2, Neihu District, Taipei
Telephone:(02) 2627-1188
1.3 Company Milestones
1982 - In November, the company's headquarters was established in the Hsinchu Science-Based
Industrial Park at 5-1 Technology Road, with registered capital of NT$20 million, as a
designer and manufacturer of computers and associated hardware and software.
1984 -In July, the first capital increase was made, bringing total capital to NT$50 million.
1985 - The company moved to 1 R&D 2nd Road in April.To accommodate business growth and
the first phase of factory expansion, profits were reinvested, bringing capital to NT$70
million. After expansion, floor space at production facility reached 5,398 square meters.
1986 - To meet business needs, a second phase of factory and production equipment expansion
was commenced in July (adding a facility with a floor area of 4,937 square meters).
For this purpose, a cash infusion of NT$50 million was made, bringing total capital to
NT$120 million. In addition, to accommodate business expansion, a Taipei office was
established at 8/F 585 Minsheng East Road for product display and sales meetings.
1986 - Profits were used to increase capitalization by NT$17 million in December, bringing total
paid-in capital to NT$137 million.A cash infusion of NT$60 million was made in December,
bringing total paid-in capital to NT$197 million. The Company expanded its business
scope, adding external investments and trading in related products.
1988 - Due to rapid business expansion, a cash infusion of NT$300 million and reinvestment of
NT$40.34 million was used to increase operating funds and finance a third phase of
factory expansion (floor area of 2,074 square meters). After the increase, total paid-in
capital amounted to NT$540.34 million.PC product series won four Outstanding Product
Design awards at the Hannover IT exhibition.
1989 - Was the first Taiwanese manufacturer to adopt SMT technology, raising product quality
and reducing product sizes.Selected as an Outstanding Vendor by the Ministry of Economic
Affairs. Received Hsinchu Science-Based Industrial Park Product Outstanding Vendor
Product Innovation Award.Developed the world's fastest 80386-based personal computer.
Was the only vendor other than IBM able to field a complete PC product line with
286, 386, and 486-based products
1990 - In response to rapid business expansion, and to finance equipment purchases, the
establishment of MiTAC Technology Corporation, and the fourth phase of factory
expansion (with floor area of 33,884 square meters), a cash infusion of NT$297,558,000
and profit reinvestment of NT$162,102,000 were made, bringing total paid-in capital to
NT$1 billion.To meet the need for additional funds to strengthen the Company's financial
structure during a period of rapid development of the Company's business, a cash infusion
of NT$123,229,250 was made, bringing paid-in capital to NT$1,123,229,250.The
Company's shares were publicly listed for sale on August 15.To accommodate future
business growth, and service medium-and long-term loans to finance factory expansion
and equipment purchases, NT$224,645,850 from accumulated surpluses was used for
capitalization, bringing total paid-in capital to NT$1,347,875,100. Fourth phase of factory
expansion completed.Selected by the Ministry of Economic Affairs as an Outstanding
Import /Export Vendor and Outstanding Contribution to New Market Development Award.
1991 - Surpluses were used to increase capitalization by NT$134,787,510. After doing so, total
paid-in capital amounted to NT$1,482,662,610.The Company's first convertible debenture
bonds, worth NT$450 million, were issued.
1992 - The Company's first issue of convertible debenture bonds were publicly listed for sale.
Capital surplus of NT$148,266,260 was used to increase capital, bringing total paid-in
capital to NT$1,630,928,870.Listed as an A-level outstanding vendor for environmental
protection in an assessment of Taiwan's 500 largest manufacturers by the Environmental
Protection Agency. Received award for outstanding import/export performance from the
Ministry of Economic Affairs. MiTAC International quickened the pace of internationalization
, expanding its production facilities in the UK, in order meet demand in
the European market.
1993 - Awarded ISO9001 certification.Acquired American subsidiary and Compac (now Synnex
Information Technologies, Inc.), increasing MiTAC International's competitiveness in
the US market. Established subsidiaries in Mexico and New Zealand. MiTAC Shunde in
China officially commenced operations, speeding MiTAC's move to integrate its global

6 B. Company Overview
B. Company Overview
7
sales and manufacturing resources.
1994 - In finance business expansion and to strengthen the Company's operational and financial
structure, a cash infusion of NT$400 million was made, bringing total paid-in capital to
NT$2,101,066,210.MiTAC International's production arm in China, MiTAC Shunde,
received ISO9002 certification. MiTAC International's computers won an award for export
market diversification (Japan region) and Bureau of Foreign Trade's Director's award.
MiTAC International's SuperGreen 4068 power-saving PC received a Taiwan Symbol of
Excellence award.
1995 - MiTAC Group celebrated its 20th anniversary, embarking on a new era.MiTAC
International's 4023 notebook computer and 1766PD monitor received Taiwan Symbol
of Excellence awards.MiTAC Internationalsigned a formal agreement with Compaq to
establish a strategic alliance. Cash infusion of NT$750 million was made, bringing total
paid-in capital to NT$1,852,485,000.Received Outstanding Vendor Award for 1995 from
the Hsinchu Science-Based Industrial Park (#3 in productivity, #5 in number of patents
awarded) .
1996 - MiTAC International made adjustments to its global organizational structure, creating the
Channel Business Group, Logistics Business Group, and Manufacturing Business Group
, in order to enhance utilization and integration of resrouces.Cash infusion of NT
$1,250,000,000 and capital surplus reinvestment of NT$285,248,540 made, bringing
total paid-in capital to NT$4,387,734,020.MiTAC International's notebook computers,
desktop computers, monitors won Taiwan Symbol of Excellence awards.Won Ministry of
Economic Affairs' gold medal for applications of corporate EDI.Received Ministry of
Economic Affairs' gold medal award for 1996.
1997 - MiTAC International's US subsidiary Synnex successfully acquired well-known American
distribution channel vendor Computer-Land. MiTAC Internation's Hsinchu factory
received ISO 14001 certification. Received bronze medal at sixth annual National
Invention Awards, demonstrating recognition of research capabilities in patentable
technologies.Essentia desktop and 5027 notebook computer won Best System and Best
Portable prizes in the Best of Computex awards organized by professional computer industry
publication Byte magazine.1784FDW monitor won a Taiwan Symbol of Excellence award.
MiTAC International marked the fifteenth anniversary of its founding, setting a corporate
direction summarized by its slogan "Global Resources Serving Individual Needs".
1998 - MiTAC International issued its second series of unsecured convertible debenture bonds,
raising NT$2 billion.LCD PC, Essential View LCD monitor, and 6031 notebook computer
won Taiwan Symbol of Excellence awards.Listed by the Ministry of Economic Affairs'
Bureau of Foreign Trade as #10 for import/export performance, and ranked #17 among
the Top 20 Private Sector Manufacturers for 1998, as published in the Ministry of
Economic Affair's yearbook.
1999 - Announced taking of a stake in well-known American computer mainboard design house
Tyan, thereby entering the market for high-end mainboards. A cash infusion of NT
$500,000, surplus reinvesment of NT$1,270,857, and employee dividend recapitalization
of NT$49,545 brought total paid-in capital to NT$7,674,597.MiTAC International and
its invested subsidiaries were integrated to create the MiTAC International Group, setting
a new objective of becoming one of the "Global Ten" business groups.The Essentia 6731
slim desktop won a Taiwan Symbol of Excellence award.Received recognition from the
Hsinchu County Government as an Outstanding Corporate Taxpayer.
2000 - Established MiTAC Computer (Shanghai) Ltd., MiTAC Computer (Kunshan) Ltd., and
Shanghai MiTAC Research Ltd. to expand production scale and respond to strategic
deployments.Six products, including an LCD monitor, WebPAD, PDA, router won Taiwan
Symbol of Excellence awards.Was ranked number 14 for number of patent applications
in 2000. Was chosen by the Ministry of Economic Affairs' Bureau of Foreign Trade as
Outstanding Import/Export Vendor for 2000.
2001 - Received a silver medal at the tenth annual National Invention Awards, the second time
it had been so honored. Ranked #7 among corporate entities in Taiwan for patent
applications in 2001, a large advance from its #14 ranking in 2000. It was ranked #8 in
terms of patent approvals. MiTAC International's US subsidiary Synnex USA completed
acquisition of all shares of Merisel Canada, Inc.Slim server, home router, CF card received
Taiwan Symbol of Excellence awards.
2002 - MiTAC International Group celebrated its twentieth anniversary, establishing its business
operations headquarters in Taiwan.MiTAC International became the first domestic vendor
in Taiwan to apply for and complete certification under the government's B Plan, and
received an award from theMinistry of Economic Affairs' Department of Industrial
Technology.Received Supplier Meritorous Performance Award from Sun Microsystems,
Inc. for the second time.Selected by the Institute for Information Industry as one of six
companies in 2002 with the richest portfolios of intellectual property assets, and was ranked
#7 for the number of patent approvals. MiTAC InternationalGroup added a new member-
Tyan Computer, a specialist in the design of high-end motherboards. Tyan formally
established its business headquarters in Taiwan. The addition of Tyan's resources enabled
MiTAC International's high-end product line to be more comprehensive, and allowing both
sides could work jointly to expand their customer basesJointly established Y.S. Educational
Foundation with member companies in the MiTAC Incorporated Group.

8 B. Company Overview
B. Company Overview
9
2003 - Announced the world's first flip smartphone. Launched the world's first dual-wireless dualslot
Pocket PC, and the first Pocket PC with an integrated digital camera. Debuted the world's
first product to combine a GPS navigation system and PDA functionality for cars.Won a
Symbol of Excellence awards.Group company Synnex Corporation of the United States had
2.Company Organization
2.1 Organizational Structure
2.1.1 Organizational Chart
its IPO on the New York Stock Exchange.
2004 - Mitac's Book "Vitamin Plan" published, shares Mitac's experience in digitalizing its operations.
The book receives a Golden Book Prize for 2004 awarded by the Ministry of Economic
Affairs.Won Service Excellence Award for 2004, jointly awarded by marketing consultancy
Accenture and local Commonwealth magazine.Launched Taiwan's first smartphone based
on Microsoft's newest operating system, Windows Mobile? 2003 Software for Smartphone;
launched widescreen, easy-to-use GPS navigation system with built-in exclusive travel e-
book.Won a Symbol of Excellence award.Shipments of GPS navigation products climb to
1.4 Other a world #3 ranking.
In the most recent year and current year to the date of publication of this report, the Company
Shareholders
Board of Directors
Chairman
Vice Chairman
President
Supervisors
has not experienced the following:
(1) Acquisition of another company.
(2) Major transfers or exchanges of stakes in the Company by directors, supervisors, or
shareholders with a greater than 10% share of the Company.
(3) Changes in executive-level management.
(4) Other relevant events that could affect stockholder equity or influence the Company.
Audit Office
Finance Center
Technical Service
Center
Resource Development
Center
Advanced Technology
R&D Center
Legal Affairs Center
MIS Center
Global Product Quality
Management Office
Brand Marketing
Department
Corporate Planning
Office
Project R&D Center
Public Relations Office
Performance System
Business Unit
Mobile Communication
Product Business Unit
Desktop Products
Business Unit
Hsinchu Operations Unit
New Product Introduction
Center

10 B. Company Overview
B. Company Overview
11
2.1.2 Responsibilities of Major Departments
Audit Office
Public Relations Office
Finance Center
Resource Development
Center
Advanced Technologies
R&D Center
Project R&D Center
Technical Service Center
Legal Affairs Center
Brand Marketing
Department
MIS Center
Corporate Planning
Office
Global Product
Quality Management Office
Desktop Products
Business Unit
Performance System
Business Unit
Mobile Communications
Products Business Unit
Hsinchu Operations Unit
New Product Introduction
R&D Center
Examine and evaluate effectiveness of internal control
mechanisms to ensure they are thorough and effective; provide
analysis, evaluations, and recommendations
Promote effective control of quality at reasonable cost and provide
assessments of quality levels
Handle investor and media relations, public relations activities
Financial operations and planning
Financial management and operations for overseas subsidiaries
Perform research to assess domestic and overseas investment
opportunities
Capital planning; handling of accounting and tax procedures
Coordination of board or directors and shareholder meetings
Strategic management of human resources
Management of domestic and overseas branch companies
In charge of research and development for future product
technologies
Provides safety certification, PC engineering, and EM
compatibility support
After-sales customer service
Overseas technical support
Product compatibility testing
Draft and review contracts
Provide legal consulting services and support, handle
other legal matters
Responsible for global OEM/ODM sales promotions and
marketing activities
Promotion of digitalization of operations at global branches
and headquartersE Overseas technical support
Administration and maintenance of the Company's internal
IT system and network environment
e-Commerce
Improvement of workflows
In charge of promoting product quality management system at
global branches and headquarters
In charge of R&D, sales, and promotion for desktop computer
products
In charge of R&D, sales, and promotion for professional systems
products
In charge of R&D, sales, and promotion for mobile and wireless
communications products
Management of import/export procedures
Inventory management for finished products and materials
Management and control of production materials
Product quality testing and control
In charge of production process design and setting of product
quality testing standards for products from various business
units before commencement of mass production.
2.2 Information on Directors, Supervisors, General Manager, Vice General Manager
2.2.1Directors and Supervisors
April 4, 2005
Spouse or Kin
Within Two
Degrees of
Consanguinity
Who Is Executive,
Director,
Supervisor
Positions Currently Held at Other
Companies
Education and Experience
Shares Held
Under Other
Name
Shares Currently
Held by Spouse or
Dependents
Number of Shares
Held
Shares Held At Time of
Election
Date First
Elected
Term
Date
Elected
Title Name
Title Name Relati
onship
Shares Stake Shares Stake Shares Stake Shares Stake
- - -
Chairman, Mitac Inc.
CEO, Mitac International Corp.
75.05.17 12,193,073 1.14% 14,586,073 1.34% 0 0% 0 0% Santa Clara University, EMBA
3
years
2004.05.
18
Chairman Matthew Miau
- - -
Chairman, Mitac Technology Corp.
President, Mitac International Corp.
Dept. of Computer and Control
Engineering, National Chiao
Tung University
Vice GM,
VP for Operations, Mitac Corp.
81.06.09 2,077,578 0.20% 4,527,578 0.42% 243,630 0.02% 0 0%
3
years
2004.05.
18
Francis Tsai
Vice
Chairman
- - -
Director, Mitac Precision Technology
Corp.
Director, Harbinger Venture
Management
Director, Probe Technologies, Inc.
Director, Tyan Computer Corp.
MS in Computer Science,
Farleigh-Dickinson University
Masters, UC San Diego
93.05.18 1,062,655 0.10% 3,092,655 0.28% 0 0% 0 0%
3
years
2004.05.
18
Director Billy Ho
- - -
Vice Chairman & GM, Mitac Inc.
Director, Synnex International Corp.
Director, Harbinger Venture
Management
Graduate, Industrial College of
the Armed Forces (U.S.)
Vice Chairman and CEO,
Institute for Information Industry
Executive Secretary, NII Team,
Executive Yuan
Director, US-based Arms
Purchase Team, Ministry of
National Defense
President, National Defense
Management College
Executive Director, Institute for
Information Industry
Deputy Commander, Army
Command
Director, Defense Management
Center,MinistryofNational
Defense
Director, Air Force Command
71.11.24 97,178,884 9.12% 97,178,884 8.92% 0 0% 0 0%
3
years
2004.05.
18
Mitac Inc.
Rep.:Yun Kuo
Director
Assistant Manager, UPC Technology - - -
and Control Center
MBA, University of Dallas
CFO, Acer Group affiliated
company
Executive VP for Finance, Best
Power Technology (U.S.)
MSEE and researcher in
Business Administration,
Washington University
Department of Business
Administration, National Taiwan
University
78.02.29 102,870,098 9.66% 102,870,098 9.44% 0 0% 0 0%
3
years
2004.05.
18
UPC Technology
Corp.
Rep.:Simon Wu
Director
- - -
Chairman, Walsin Lihwa Corp.
Chairman, Winbond Electronics Corp.
93.05.18 0 0% 0 0% 0 0% 0 0%
3
years
2004.05.
18
Supervisor Arthur Chiao
Chairman, Pao Hwa Trading Co., Ltd. - - -
75.06.17 72,711,862 6.83% 72,711,862 6.67% 0 0% 0 0%
3
years
2004.05.
18
Lien Hwa Industrial
Corp.
Rep. Arthur Chiao
Supervisor

12 B. Company Overview
B. Company Overview
13
Major Institutional Shareholders
Information on Directors and Supervisors
Name of Institutional Shareholder
UPC Technology Corp.
April 4, 2005
Primary Shareholder of Institutional Shareholder (see note)
Lien Hwa Industrial Corp.
Qualifications
Five or More Years of
Work Experience
Required for Business,
Law, or Corporate
Meets Requirements for
Independence (see note)
Remarks
Mitac Inc.
Synnex International Corp.
Lien Hwa Industrial Corp.
Name
Operations 1 2 3 4 5 6 7
Lien Hwa Industrial Corp.
UPC Technology Corp.
Note: The major shareholder with a stake in excess of 10% or among the ten largest.
Major Shareholder in Institutional Shareholders
April 4, 2005
Matthew Miau
Francis Tsai
Billy Ho
Arthur Chiao
Lien Hwa Industrial Corp.
Mitac Inc.
UPC Technology Corp.
Notes : A checkmark ( ) is placed in the column for each condition met by a given
director or supervisor.
Name of Institution
Major Shareholder in the Institution(see note )
Lien Hwa Industrial Corp.
UPC Technology Corp.
Synnex International Corp.
Mitac Inc.
UPC Technology Corp.
Lien Hwa Industrial Corp.
Note: Lists the name of a major shareholder in this institution with a stake in excess of 10% or among the ten largest.
1. Not an employee of the Company, nor a director, supervisor, or employee of any of the
Company's affiliates.
2. Not an individual shareholder owning more than 1% of the Company's outstanding
shares nor one of the Company's ten largest shareholders.
3. Not the spouse or relative within two degrees of lineal consanguinity with any person
described by conditions (1) or (2).
4. Not a director, supervisor, or employee of a institutional shareholder of the Company
directly or indirectly owning more than 5% of the Company's outstanding shares or one
of the Company's five largest institutional investors.
5. Not a director, supervisor, or manager of, nor a shareholder owning more than 5% of the
outstanding shares of, any companies or institutions that have a financial or business
relationship with the Company.
6. Not an individual who has provided financial, business, or legal services or consultancy
to the Company during the past year, nor the owner, partner, director, supervisor, or
manager (or spouse of any of the foregoing) of any sole proprietor, partner, company, or
institution that has provided financial, business, or legal services or consultancy to the
Company during the past year.
7. Not a legal entity (instituition) or representative as defined by Section 27 of the
Company Law, Republic of China.

14 B. Company Overview
B. Company Overview
15
Information on Key Managers
April 4, 2005
CEO
Title Name
Matthew
Miau
Date Took
Position
Shares Held
Shares Held By Spouse
or Dependents
Shares Held
Under Other
Name
Shares Stake Shares Stake Shares Stake
87.09.01 14,586,073 1.34% 0 0% 0 0%
President Francis Tsai 89.06.01 4,527,578 0.42% 243,630 0.02% 0 0%
General
Manager
Senior Vice
GM
Billy Ho 89.03.27 3,092,655 0.28% 0 0% 0 0%
Samuel
Wang
88.07.01 1,623,989 0.15% 0 0% 0 0%
Education and Experience Positions Currently Held at Other
Companies
Spouse or Kin Within Two Degrees of
Consanguinity Who Is A Manager
Title Name Relationship
Santa Clara University, EMBA Chairman, Mitac Inc. - - -
Dept. of Computer and Control
Engineering, National Chiao Tung
University
Vice GM for Operations, Mitac Inc.
MS in Computer Science,
Farleigh-Dickinson University
Master’s, UC San Diego
Dept. of Electrical Engineering, National
Taiwan University
Senior Engineer, Longshine Electronics
Corp.
Chairman, Mitac Technology Corp.
President, Mitac International Corp.
Director, Mitac Precision Technology
Corp.
Director, Harbinger Venture
Management
Director, Probe Technologies, Inc.
Director, Trumpion Microelectronics
Inc
Director, Actrans System Inc.
- - -
- - -
- - -
Vice GM Percy Chen 86.03.20 469,608 0.04% 0 0% 0 0% Manager, Mitac Inc. Director, Probe Technologies, Inc. - - -
Vice GM Gino Chang 86.03.20 382,240 0.04% 0 0% 0 0%
Vice GM James Yuan 86.06.06 82,038 0.01% 0 0% 0 0%
Vice GM Tod Chang 88.09.01 35,017 0% 0 0% 0 0%
Vice GM Stone Chen 91.07.01 973,056 0.09% 0 0% 0 0%
Vice GM Michael Lin 91.07.01 457,398 0.04% 39,064 0% 0 0%
Vice GM Stone Lin 91.03.27 406,684 0.04% 960 0% 0 0%
Vice GM Jack Kuo 91.03.27 384,880 0.04% 0 0% 0 0%
Vice GM C.S. Chen 85.03.27 296,797 0.03% 27 0% 0 0%
Dept. of Electrical Engineering, Chung
Yuan University
Manager, Kwei Mou Co.
J.D., School of Law, Rutgers University Director, Asia-Pacific Technology &
Intellectual Property Services Inc.
Dept. of Medical Engineering, Chung
Yuan Christian University
B.S., Dept. of Electrical Engineering,
National Chiao Tung University
MBA, National Chengchi University
Office Manager, Nexcom International
Co., Ltd.
Manager, TeleSynergy Research Inc.
Dept. of Electrical Engineering, National
Taiwan University
Dept. of Industrial Management, Ming
Hsin University of Science & Technology
Master’s in Electrical Engineering,
National Taiwan University of Science &
Technology
Vice President, Clevo Computer Co.
Dept. of Accounting, Soochow University
PricewaterhouseCoopers Taiwan
Supervisor, Probe Technologies, Inc.
Supervisor, Mitac Precision
Technology Corp.
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
Title Name
Date Took
Position
Shares Held
Shares Held By Spouse
or Dependents
Shares Held
Under Other
Name
Shares Stake Shares Stake Shares Stake
Vice GM C.P.Lee 93.02.25 162,832 0.01% 0 0% 0 0%
Vice GM James Wu 93.11.04 10,000 0% 0 0% 0 0%
Vice GM King, Chen 94.02.23 556,779 0.05% 0 0% 0 0%
Vice GM Alice Fang 94.02.03 185,538 0.02% 0 0% 0 0%
Education and Experience Positions Currently Held at Other
Companies
Graduate School, National Chiao Tung
University
Lecturer, National Defense Management
College
Sales Director, Mitac Inc.
General Manager, KunShan Business
Unit, Mitac International Corp.
Master’s in Electrical Engineering,
Tatung University
Two years of Ph.D. research, Dept. of
Electrical Engineering, Tatung University
Qualified in Electrical Engineering,
National Professionals and
Technologists Examination
Office Manager, Departments of R&D,
Marketing, and Product Planning, Tatung
Corp.
Dept. of Electrical Engineering, National
Taiwan University
Engineer, Behavior Tech Computer Corp.
Supervisor, Management Office, Mobile
Communications Product Business Unit,
Mitac International Corp.
Graduate School of Technology
Management, National Chengchi
University
Supervisor, Resource Development
Center, Mitac International Corp.
Spouse or Kin Within Two Degrees of
Consanguinity Who Is A Manager
Title Name Relationship
- - -
- - -
- - -
- - -

16 B. Company Overview
B. Company Overview
17
Name
Name
Salary
26,995,000
Incidental
Expenses and
Compensation
Director
Compensatio
nfrom
Allocated
Earnings
Employee Bonuses from Allocated
Earnings
Stock Bonuses
Cash
Bonuses
Shares
Market
Price
Value
Total of
Previous 3
Items
Total as a
Share of
After-Tax
Earnings
December 31, 2004
Unit: Thousands of NT$
Number of
Shares
Obtained as
Employee
Stock Options
Other
Compensation
1,378,000 2,200,000 0 0 0 0 3,578,000 0.17% 0 0
Incidental
Expenses &
Compensation
Performance
Bonuses,
Special
Expenses
Director Compensation
Supervisor Compensation
Supervisor
Compensation from
Allocated Earnings
Total of Previous 2
Items
Total as a Share of
After-Tax Earnings
December 31, 2004
Unit: Thousands of NT$
Other Compensation
140,000 804,000 944,000 0.04% 0
Compensation for General Managers and Vice General Managers
Employee Bonuses from Allocated Earnings
Stock Bonuses
Cash
Market
Bonuses Shares
Value
Price
Total of
Previous 3
Items
Total as a
Share of
After-Tax
Earnings
26,595,000 4,346,000 0 0 0 57,936,000 2.70% 17,839,000
December 31, 2004
Unit: Thousands of NT$
Number of
Shares Acquired
Other
through
Compensation
Employee Stock
Options
Use of Vehicle
11,151,000
Managers Receiving Employee Bonuses
Title
Name
Matthew Miau
Francis Tsai
Billy Ho
Samuel Wang
Percy Chen
Gino Chang
James Yuan
Tod Chang
Stone Chen
Michael Lin
Stone Lin
Jack Kuo
C.S. Chen
C.P.Lee
James Wu
Stock Bonuses
Cash Bonuses
Shares Market Price Value Value
Total
December 31, 2004
Unit: Thousands of NT$
Total as a Share of
After-Tax Earnings
0 0 0 4,346,000 4,346,000 0.20%
2.2.3 Changes in Share Positions Among Directors, Supervisors,
Managers, and Large Shareholders
Chairman Matthew Miau 2,307,000
Vice
2,407,000
Francis Tsai
Chairman
(50,000)
Director Billy Ho 1,965,000
Director Mitac Inc. 0
Director
UPC Technology
0
Corp.
Supervisor Arthur Chiao
0
Supervisor
Lien Hwa
Industrial Corp.
Senior Vice Samuel Wang 155,000
GM
Vice GM Percy Chen 80,000
(160,000)
Vice GM Gino Chang 75,000
(74,000)
Vice GM James Yuan 25,000
(23,000)
Vice GM Tod Chang 35,000
(170,000)
Vice GM Stone Chen 655,000
Vice GM Michael Lin 155,000
Vice GM Stone Lin 90,000
(150,000)
Vice GM Jack Kuo 240,000
Vice GM C.S. Chen 65,000
Vice GM C.P.Lee 50,000
Vice GM James Wu 0
Vice GM King Chen --
Vice GM Alice Fang --

18 B. Company Overview
B. Company Overview
19
Invested
Businesses
(see note)
Mitac
Technology
Corp.
Tyan Computer
Corp.
Tung Da
Investment Co.,
Ltd.
Silver Star
Developments
Ltd.
Tsu Fong
Investment Co.,
Ltd.
Probe
Technologies,
Inc.
Mitac Precision
Technology
Corp.
Lain Jie
Investment Co.,
Ltd.
Channel
Overseas Corp.
Vate
Technology
Corp., Ltd.
Mitac Inc.
Overseas
Investment &
Development
Corp.
Lien Hwa
Industrial Corp.
UPC
Technology
Corp.
Gemtek
Technology
Co., Ltd.
Harbinger
Venture
Management
Actrans System
Inc.
Trumpion
Microelectronics
Inc.
Asia-Pacific
Technology &
Intellectual
Property
Services Inc.
Quantway Corp.
Investment by the Company
Investment by Directors,
Supervisors, Managers, and
Businesses Controlled Directly or
Indirectly by the Company
March 31, 2005
Units: Shares,%
Total Investment
Shares Stake Shares Stake Shares Stake
93,426,408 37.79% 17,153,777 6.94% 110,580,185 44.72%
4,650,720 8.82% 5,282,600 10.02% 9,933,320 18.83%
37,963,076 49.997% 0 0.00% 37,963,076 49.997%
127,875,404 100.00% 0 0.00% 127,875,404 100.00%
16,500,000 100.00% 0 0.00% 16,500,000 100.00%
1,080,000 23.13% 0 0.00% 1,080,000 23.13%
42,569,341 46.62% 7,991,541 8.75% 50,560,882 55.37%
12,995,000 49.98% 0 0.00% 12,995,000 49.98%
5,500,000 5.00% 0 0.00% 5,500,000 5.00%
397,191 0.27% 0 0.00% 397,191 0.27%
24,825,752 8.92% 71,613,970 25.72% 96,439,722 34.64%
1,000,000 1.11% 0 0.00% 1,000,000 1.11%
20,475,398 3.08% 116,326,678 17.48% 136,802,076 20.56%
11,107,267 1.53% 173,537,489 23.88% 184,644,756 25.41%
3,803,578 2.92% 0 0.11% 3,803,578 2.92%
28,099,000 14.05% 32,401,000 16.20% 60,500,000 30.25%
2,000,000 6.67% 0 0.00% 2,000,000 6.67%
916,300 2.93% 0 0.00% 916,300 2.93%
140,000 0.93% 0 0.00% 140,000 0.93%
1,385,000 49.73% 0 0.00% 1,385,000 49.73%
3.Capital and Stock, Corporate Bonds, Preferred Stock, Overseas Depositary Receipts,Employee Stock Options, and Acquisitions
March 31, 2005
Unit: Shares;NT$
3.1 Sources of Capital Stock
Authorized Capital Stock Paid-in Capital Remarks
Date Capital Increase
Took Effect (Received
Authorization), and
Documentation Number
Cases Where
Assets Other
Than Cash
Used for Stock
Calls
Issue
Price Shares Value Shares Value Sources
Year &
Month
June 9, 1998
(1998) Securities and
Futures Commission (I)
directive #49977
Recapitalization of capital reserves, surplus, certificates of
entitlement for corporate debenture bonds into
497,723,730, 273,747,860, 27,077,520 shares,
respectively
5,775,786,480
577,578,648
900,000,000
900,000,000
10
1998.
08
Recapitalization of certificates of entitlement for corporate
debenture bonds into 78,499,320 shares
5,854,285,800
585,428,580
900,000,000
900,000,000
10
1998.
09
November 6, 1998
(1998) Securities and
Futures Commission (I)
directive #93004
Cash recapitalization of 500,000,000
6,354,285,800
635,428,580
900,000,000
900,000,000
10
1999.
02
June 22, 1999
(1999) Securities and
Futures Commission (I)
directive #56780
Recapitalization of surplus and employee stock bonuses of
1,270,857 and 49,454,250 shares
7,674,597,210
767,459,721
1,360,000,000
1,360,000,000
10
1999.
08
Conversion of certificates of entitlement for corporate
debenture bonds into 16,490,780 shares
7,691,087,990
769,108,799
1,360,000,000
1,360,000,000
10
1999.
02
June 3, 2000
(2000) Securities and
Futures Commission (I)
directive #47983
Recapitalization of surplus and employee stock bonuses,
and conversion of certificates of entitlement for corporate
debenture bonds into 1,153,663,180, 78,956,480, and
569,620 shares, respectively.
8,924,277,270
892,427,727
1,360,000,000
1,360,000,000
10
2000.
07
June 7, 2001
(2001) Securities and
Futures Commission (I)
directive #136070
Recapitalization of surplus and employee stock bonuses
into 892,427,720 and 128,428,000 shares, respectively
9,945,132,990
994,513,299
1,710,000,000
1,710,000,000
10
2001.
07
June 18, 2002
Securities and Futures
Commission (I) directive
#0910132851
Recapitalization of surplus and employee stock bonuses
into 397,729,310 and 72,824,000 shares, respectively
10,415,686,300
1,041,568,630
1,710,000,000
1,710,000,000
10
2002.
07
January 29, 2004
Industrial Park Vendor
directive #0930001436
Employee redemption of stock option vouchers valued at
NT$148,125,800 during Q4 2003
10,563,812,100
1,056,381,210
1,710,000,000
1,710,000,000
10
2003.
12
Mitac
Development
Corp.
1,403,700 46.79% 0 0.00% 1,403,700 46.79%
Note: A long-term investment of the Company.

20 B. Company Overview
B. Company Overview
21
3.2 Shareholding Structure
Authorized Capital Stock Paid-in Capital Remarks
Date Capital Increase
Took Effect (Received
Authorization), and
Documentation Number
Cases Where
Assets Other
Than Cash
Used for Stock
Calls
Issue
Price Shares Value Shares Value Sources
Year &
Month
April 22, 2004
Industrial Park Vendor
directive #0930010105
Employee redemption of stock option vouchers valued at
NT$86,532,500 during Q1 2004
10,650,344,600
1,065,034,460
1,710,000,000
1,710,000,000
10
2004.
03
July 19, 2004
Industrial Park Vendors
directive #0930019167
Employee redemption of stock option vouchers valued at
NT$10,560,900 during Q2 2004
10,660,905,500
1,066,090,550
1,710,000,000
1,710,000,000
10
2004.
06
October 26, 2004
Industrial Park Vendor
directive #9300029491
Employee redemption of stock option vouchers valued at
NT$12,955,800 during Q3 2004
10,673,861,300
1,067,386,130
1,710,000,000
1,710,000,000
10
2004.
09
January 25, 2005
Industrial Park Vendor
directive #0940001540
Employee redemption of stock option vouchers valued at
NT$140,899,250 during Q4 2004
10,814,760,550
1,081,476,055
1,710,000,000
1,710,000,000
10
2004.
12
Employee redemption of stock option vouchers valued at
NT$79,825,000 during Q1 2005
10,894,585,550
1,089,458,555
1,710,000,000
1,710,000,000
10
2005.
03
March 31, 2005
Unit: shares
Remarks
Total
Authorized Capital Stock
Unissued Shares
Stock Type
Outstanding Shares
Of authorized capital stock:
200,000,000 shares are reserved for conversion of corporate
debenture bonds;
150,000,000 shares are reserved for redemption of stock
option vouchers by employees;
200,000,000 shares are reserved for conversion of corporate
debenture bonds with warrant
1,710,000,000
Common Stock 1,089,458,555 620,541,445
Number
Type of
Shareholder
Shareholders
Shares Held
Stake
Government
Institutions
3.3 Distribution of Holdings
Financial
Institutions
Other
Institutions
Foreign
Institutions &
Individuals
Individuals
Reserved
Shares
April 4, 2005
Total
8 26 185 89 100,626 1 100,935
7,526,671 32,368,016 503,430,938 59,745,405 451,209,525 35,178,000 1,089,458,555
0.69% 2.97% 46.21% 5.48% 41.42% 3.23% 100.00%
Par Value of NT$10 for Each Share
April 4, 2005
Level of Holdings Number of Shareholders Shares Held Proportion of Total
1-999 44,139 14,643,520 1.34%
1,000-5,000 40,243 91,278,809 8.38%
5,001-10,000 8,843 64,028,772 5.88%
10,001-15,000 2,964 36,006,436 3.30%
15,001-20,000 1,520 27,239,996 2.50%
20,001-30,000 1,287 31,892,952 2.93%
30,001-40,000 517 18,098,202 1.66%
40,001-50,000 337 15,596,634 1.43%
50,001-100,000
545 39,048,026 3.58%
100,001-200,000
253 36,580,758 3.36%
200,001-400,000
122 35,685,831 3.28%
400,001-600,000
41 20,479,400 1.88%
600,001-800,000
25 17,725,214 1.63%
800,001-1000,000
16 14,693,056 1.35%
1,000,001 or more
83 626,460,949 57.50%
Total 100,935 1,089,458,555 100.00%
3.4 Major Shareholders
Names of
Major Shareholders
UPC Technology Corp.
Mitac Inc.
Stock
Lien Hwa Industrial Corp.
Shares Held
Stake
102,870,098 9.44%
97,178,884 8.92%
72,711,862 6.67%

22 B. Company Overview
B. Company Overview
23
3.5 Market Price-per-Share, Net Value, Earnings, Dividends, and Related Data
3.6 Dividend Policy and Implementation
3.6.1 Company Dividend Policy
Item
Highest
Year
2003 2004
15.70
18.20
Uint:NT$
Current Year to
March 31
(see note 1)
24.70
The Company is part of an industry that is in a growth phase, and the Company it is growing along
with this industry. In consideration of the industry environment in which the Company operates, longterm
financial planning needs, and future financing requirements, as well as to satisfy shareholder
demand for cash inflows, the Company shall, after payment of taxes and covering losses occurred in past
Market Price Per
Share
Lowest
10.50
11.70
16.40
years, allocate 10% of earnings as a legal reserve. Moreover, it shall after deducting interest paid to
shareholders allocate at least 5% as an employee dividend, with the means of distribution of the
Average
13.29
14.93
20.55
remainder, together with any undistributed earnings from the previous year, to be proposed by the Board
Net Value Per
Share
Before distribution
After distribution
16.70
16.09
17.50
18.01
of Directors for approval at the shareholder's meeting.
If the employee dividend described above is distributed as stock shares, employees of
Company subsidiaries who meet specified conditions are also eligible to receive such shares.
Earnings Per
Share
Weighted Average Shares
(1000s)
Earnings Per Share
(see note 3)
1,021,545
1.03
1,015,283
2.11
1,029,382
0.84
The Chairman is authorized to set the relevant conditions.
The earnings allocations and shareholder cash dividend rates described above are to be set
by the Board of Directors giving due consideration to the Company's financial condition, future
financing requirements, and profitability, with cash dividends not less than 10% of total stock
Cash Dividend
0.5454
dividends, and subject to adjustments approved at the shareholder's meeting.
Dividend Per Share
Stock
Grants
From Earnings
From Capital Reserves
3.6.2 Dividend Distribution Proposal for Consideration at Shareholder's Meeting
In accordance with the above principles, the Company's Board of Directors drafted a proposal for
Accumulated Unpaid
Dividends
dividend distribution at its meeting on April 1, 2005. This proposal covers dividends for the 2004 fiscal
year, and calls for a per-share dividend of NT$0.6 and NT$0.4 in cash and stock, respectively. The
P/E Ratio (see note 2)
12.90
7.08
6.12
proposal will be presented for approval at the shareholder's meeting on May 19, 2005.
Return on
Investment
Dividend Yield (see note 3)
24.37
Cash Dividend Yield
(see note 4)
0.04
* The Company has not yet held a shareholder's meeting to determine allocation of earnings for 2004.
1. To the last quarter prior to publication of this report.
2. Price/Earnings Ratio = (Year-End Share Price) / (Earnings Per Share)
3. Price/Dividend Ratio = (Year-End Share Price) / (Cash Dividend Per Share)
4. Cash Dividend Yield Rate = (Cash Dividend Per Share) / (Average Closing Share Price for Year)

24 B. Company Overview
B. Company Overview
25
3.7 Impact on Company Performance and Earnings Per Share of Stock Grants Set for
Consideration at This Year's Shareholder's Meeting
Item
Initial paid-in
capital
Dividends for
Current Year
Changes in
operating
performance
Changes in
operating
performance
Presumptive
EPS and P/E
Ratio
Increase (decrease) in after-tax net
earnings compared to previous year
Earnings per share
Increase (decrease) in earnings per
share compared to previous year
Average yearly return on investment
(inverse of yearly P/E ratio)
If recapitalization of earnings replaced
entirely by cash dividend
If recapitalization of capital
reserves not instituted
If capital reserves not used for
recapitalization and
recapitalization of earnings
replaced by cash dividend
Proposed EPS
Proposed
average yearly
return on
investment
Proposed EPS
Proposed
average yearly
return on
investment
Proposed EPS
Proposed
average yearly
return on
investment
Not applicable
(see note 1)
1. As stipulated by "Regulations Governing the Publication of Financial Forecasts of Public
Companies", MiTAC need not reveal projections for 2005 as it has not made public complete
financial forecasts.
3.8 Employee Bonuses and Remuneration for Directors and Supervisors
3.8.1 Scale or Scope of Employee Bonuses and Remuneration for Directors
and Supervisors As Set Forth in Company Charter
(1) Employee Bonus: Where the Company has earnings at the end of the business year, after paying
all relevant taxes, deducting accumulated deficits from past years, and setting aside a legal reserve
of ten percent, it shall in accordance with the law appropriate a special earnings surplus. After
payment of interest on stocks, a minimum of 5% of the remainder shall be appropriated for
employee bonuses.
Cash dividend per share
Number ofshares distributed as
recapitalization of earnings
Number ofshares distributed as
recapitalization of capital reserves
Operating profits
Increase (decrease) in operating
profits compared to previous year
After-tax net earnings
Units: Thousands of New Taiwan Dollars
Year 2005 (projected)
$ 10,814,761
0.60
0.04
(2) Scale or Scope of Remuneration for Directors and Supervisors: Not specified in company charter.
3.8.2 Information on the Proposed Scheme for Distribution of Employee Bonuses as
Approved by the Board of Directors
On April 1, 2005, the Board of Directors passed a resolution on the distribution of the Company's
earnings in 2004 as follows:
(1) Distribute to employees cash bonuses totaling NT$115,491,612, and remuneration totaling
NT$4,000,000 to directors and supervisors.
(2) Proposed number of shares to be distributed as employee stock bonuses: 7,699,440, or 4% of
capitalized earnings.
(3) After-tax basic earnings per share is NT$1.92 after accounting for employee bonuses and
remuneration for directors and supervisors.
3.8.3 Use of Previous-Year Earnings for Employee Bonuses and for Director,
Supervisor Compensation
1) Distribution:
Employee cash bonuses
Employee stock bonuses
A. Number of shares
B. Value
C. Share of total outstanding shares
Director, supervisor compensation
2) EPS -related information
Original EPS
Projected EPS (see note 1)
2003
Actual Figures Resolved Upon At
Shareholder and Board Meetings
NT$94,632,000
-
-
-
NT$4,000,000
NT$1.03
NT$0.93
1. Projected EPS = (Net profits for the current period - Employee bonuses - Director,
supervisor compensation) / Weighted average of outstanding share volume for the
current calendar year

26 B. Company Overview
B. Company Overview
27
3.10 Corporate Bond Issues
3.9 Treasury Stock (Stock Buybacks)
Unit:Thousands of NT$;Shares
Fifth Sixth Sev enth Eighth Ninth Tenth
Sequence First Second Third Fourth
Transf er to
employ ees
Transf er to
employ ees
Transf er to
employ ees
Transf er to
employ ees
Transf er to
employ ees
Transf er to
employ ees
Transfer to
employees
Transfer to
employees
Transfer to employees Transfer to
employees
Purpose of
Buyback
12/3/2004~
2/2/2005
5/7/2004~
6/16/2004
3/12/2004~
4/12/2004
2/25/2004~
3/10/2004
12/8/2003~
12/24/2003
9/17/2003~
10/20/2003
9/1/2003~
9/16/2003
8/7/2003~
8/25/2003
5/30/2003~
7/29/2003
9/17/2001~
11/16/2001
Purpose of
Buyback
NT$10~13 NT$10.5~12 NT$10.5~14 NT$10.5~14 NT$10.5~14 NT$10.5~15 NT$15~17 NT$15~17.5 NT$13.5~15 NT$14~16.5
Buyback Price
Range
Common stock,
1,000,000 shares
Common stock,
10,000,000 shares
Common stock,
10,000,000 shares
Common stock,
5,000,000 shares
Common stock,
5,000,000 shares
Common stock,
10,000,000 shares
Common stock,
5,000,000 shares
Common stock,
5,000,000 shares
Common stock, no
shares
Common stock,
190,000 shares
Type & Quantity
of Shares
Purchased
NT$2,212,143 NT$0 NT$69,111,879 NT$68,079,339 NT$137,834,108 NT$72,424,882 NT$84,065,197 NT$153,556,885 NT$146,533,488 NT$1,6071,856
Value of
Buyback
190,000 0 5,000,000 5,000,000 5,822,000 0 0 0 0 0
Void and
Distributed
Shares
0 0 0 0 4,178,000 9,178,000 14,178,000 24,178,000 34,178,000 35,178,000
Accumulated
Shares
0.00% 0.00% 0.00% 0.00% 0.38% 0.84% 1.30% 2.22% 3.14% 3.23%
Accumulated
Shares as
Percentage of
Issued Shares
Date of Issue
Par Value
Issue Price
Total Value
Interest Rate
Term
Category
Guarantor Institution
Trustee
Underwriter
Certifying Attorneys
Certifying Accountant
Terms of Repayment
Outstanding Principal
Terms of Redemption or Early
Repayment
Restrictions
Credit Rating Agency Name, Rating
Date, Company Debt Rating Result
Auxiliary
Rights
Amount of common
shares, GDRs, or other
securities as of the
publication date of the
annual report
Method of Issue and
Conversion (Swap or
Redemption)
Conditions on Issuance and
Conversion, Swap or Stock
Redemption, Effect of Issuing
Conditions on Possible Dilution of
Stock Rights and Stockholder's
Current Rights and Interests
Name of Custodial Institution for Swap
Instrument
First Domestic Secured Corporate
Bond
11/17/2000~12/13/2000
NT$1,000,000
At full par value
NT$2,500,000,000
Annualized 5.82% of par value
Five-year
Date of Maturity:
11/27/2005~12/13/2005
None
Chinatrust Commercial Bank, Trust
Division
None
George C.H. Lin, Ching-kuen Ueng
Wen Fang-Yu
Principal repaid upon maturity
NT$2,500,000,000
None
Not applicable
Not applicable
Not applicable
Not applicable
April 4, 2005
First Domestic Secured Corporate
Bond
5/25/2004~5/26/2004
NT$5,000,000
At full par value
NT$2,000,000,000
Divided into issue 1 and issue 2
shares depending on the guarantor
bank, with these issues further divided
into sub-issues 1A, 1B, 2A, and 2B.
The value of each sub-issue of shares
is NT$500,000,000.
1A, 2A, 2B: Annualized 1.60% of par
value
1B: When the floating interest rate is
2.00%, the par value interest rate is
4.50% minus the floating interest rate,
subject to the condition that the
interest rate cannot fall below 0%.
Five-year
Date of Maturity:
5/25/2009~5/26/2009
Issue 1 shares: TaipeiBank Co., Ltd.
Issue 2 shares: Chiao Tung Bank
(formerly Bank of Communications)
Bank SinoPac, Trust Division
None
Kuo Yan-ji
Wen Fang-YuBLiu Ying-fei
Group 1: One-time repayment from
issue date to maturity
Group 2: 50% of principal repaid after
fourth and fifth full years after issue
date
NT$2,000,000,000
None
=
Not applicable
Not applicable
Not applicable
Not applicable
=

28 B. Company Overview
B. Company Overview
29
3.13 Issue of Employee Stock Options
3.13.1 Overview of Employee Stock Options
Category
Date of Approval by Regulatory
Authority
Issue Date
Issued Lots
Number of Shares Issued as Options as
a Proportion of Total Outstanding
Shares
Exercise Period
Method of Provision
Period and Proportional Limitations on
Exercise of Options (%)
Number of Shares Already Acquired
Through Exercised Options
Value of Stocks in Exercised Options
Number of Shares In Unexercised
Options
Per-Share Exercise Price of
Unexercised Options
Number of Shares In Unexercised
Options as Share of Total Issued
Shares
Value of Stocks in Exercised Options
Impact on Stock holder Rights
March 31, 2005
Unit:Thousands of NT$;Thousands of Shares
First Issue of Employee Stock Option Vouche
September 13, 2001
September 13, 2001
October 18, 2001
99,000 lots
9.09%
6years
Issue of new shares
Persons exercising stock options, as stipulated by law,
must cease such exercise during a period beginning at
least three business days prior to the book closure period
and from the ex-rights reporting date on which the
Company's makes arrangements with the Taiwan Stock
Exchange for stock dividend book closure, the ex-dividend
reporting date for cash dividend book closure, or
ex-dividend reporting date for book closure on cash
recapitalization through stock option redemption until the
date of record for rights assignment. In addition, such
persons must as legally prescribed, make such exercise
according to the timetable described in the second item in
the fifth article of these procedures, completing the relevant
application form for stock option redemption and making
application to the Company's securities handling institution.
47,890
433,783
41,776
NT$8.8
3.83%
Persons with stock option rights conferred by the Company
may only exercise such rights in accordance with the
timetable specified in these regulations, and only after a
period of two years has elapsed since the option voucher
was issued to the employee. Therefore, there will be no
significant dilution of earnings per share, nor compromises
to stockholder equity.
3.13.2. Names of Managers Obtaining Employee Stock Option Vouchers and Employees
Obtaining Stock Option Vouchers Among the Ten Largest in Size and Redeemable
for More Than NT$30 Million,Options So Acquired, As Their Status April 4, 2005
Unit:Thousands of NT$;Shares
Already Exercised Unexercised
Pr ic e Value Number of
Shares as
Share of Total
Outsta nd ing
Shares
Number of
Shares
Pr ic e Value Number of
Shares as
Share of
Tot al
Outstanding
Shares
Nu mber of
Shares
Nu mber of
Shares in
Opt ions As
Share of
Tot al
Outsta nd ing
Shares
Number of
Shares
Acquired as
Opt ions
Title Na me
Matthew
Miau
Francis
CEO
President
Tsai
Billy Ho
General
Manager
C.S. Chen
Percy
Vice GM
Vice GM
Manager
Chen
Gino
Chang
Vice GM
James
Yuan
Vice GM
17,839,000 1.64% 8,625,000 8.84 76,262,500 0.79% 9,214,000 8.80 81,083,200 0.85%
Samuel
Wang
Senior Vice
GM
Tod
Chang
Vice GM
Stone
Chen
Vice GM
Michael
Lin
Vice GM
Stone Lin
Vice GM
Jack Kuo
Vice GM
C.P.Lee
James
Wu
King Chen
Vice GM
Vice GM
Vice GM
Alice
Fang
Vice GM
C.J. Lin
Vice GM
(no longer
serving)
C.H.Wang
1,660,000 0.15% 390,000 9.22 3.597.000 0.04% 1,270,000 8.80 11,176,000 0.12%
Vice GM
(no longer
serving)
Raymond
Lee
Vice GM
(no longer
serving)
3.14 Acquisitions or Issue of Other Companies' Equity as New Shares: None

30 C. Operations Overview
C. Operations Overview
31
C. Operations Overview
1.Business
1.1 Business Scope
1.1.1Main Lines of Business and Products
MiTAC International's three core businesses are:
(1) desktop computer products and digital home products;
(2) server products, including workstations, servers, and storage equipment;
(3) wireless communications products, including handheld computers (including products
integrating wireless communications and multimedia functionality), handheld GPS
systems, smartphones, wireless networking cards (IEEE 802.11 and Bluetooth), and
technical support and services related to the above mobile communications products.
Following are descriptions of products that are currently offered:
(1) Desktop computer and digital home products
High-performance business computers
High-performance network computers
Small form factor multimedia personal computers
LCD computers
High-performance computer motherboards
Entry-level and midrange workstations
High-performance computer barebones systems
Wireless digital media adapters (DMA)
Wireless networked DVD player
Entertainment PC / media server
and other digital appliances
(2) Server products
High-performance workstations
General-purpose servers
Rack-mounted servers
Communications servers
Blade server
Blade storage
NAS (network storage server)
(3) Wireless communications products
Handheld computers (including products with integrated wireless communications
and multimedia functionality)
GPS (Global Positioning Satellite system)
Smartphones
802.11 & Bluetooth solutions
and related technical support and services for the above mobile communications
products. Technical support and after-sales service for the above products
1.1.2 Contributions to Revenue
Product
Units: Thousands of New Taiwan Dollars
Year
2004 Share (%)
Computers and peripherals 42,387,479 83.93
Wireless communications
products
7,421,831 14.70
Other 693,924 1.37
Total 50,503,234 100
1.1.3 New Products and Technologies Under Development
(1) Desktop computer and digital home products
personal computers incorporating digital AV capabilities, and designs emphasizing
diverse styling and applications.
personal computers integrating home electronics devices.
personal computers incorporating wired and wireless networking capabilities.
high-performance, low-cost dual-processor workstations.
hardware integration R&D for Web AV content services platform
integrated development of high-performance AV transmission
technologies for the digital home
R&D for high-performance highly integrated digital home multimedia server
(2) Server products
high performance workstations based on RISC/CISC processors.
development of high-performance servers.
development of ultra-dense servers.
development of communications servers.
storage equipment technologies and development.
(3) Wireless communications products
technologies for integrating computers and communications capabilities.
Integration of data retrieval, voice communications, and broadband
communications capabilities
Internet-centric technologies for integrating personal computers, information

32 C. Operations Overview
C. Operations Overview
33
appliance products, communications, and storage
technology for multimedia applications.
development of wireless communications and networking technologies
research in wireless communications equipment technologies
research on new developments in new digital media, with the aim of seeking new
business opportunities and development of related products
R&D for operating systems and application software.
software development and applications for virtual reality solutions.
VOIP communications products
GPS and electronic navigation technologies.
(4) Other
Ultra-dense, high-frequency electronic architectures and associated production
and testing technologies.
defect-free manufacturing (DFM) product design approaches.
product design and manufacturing technologies for satisfying environmental
protection requirements and ISO 14000 standards.
high-speed personal computer architectures and heat flow technologies.
1.2 Industry overview: The following describes only those facets of the industry related to
MiTAC's three main product lines
1.2.1 Desktop computers and digital home products
(1) The market for desktop computers grew by approximately 10% in 2004, while
according to Institute for Information Industry projections, the growth rate for
2005 will be in the area of 3 to 4%. The market for digital home products is
emerging, and offers vast potential for growth.
(2) Desktop computers have been re-positioned in the home market, with less
emphasis on computing performance, and a greater stress on multimedia
entertainment and digital home concept. This shift has given rise to a closer
integration of digital imaging, video, audio, and data on personal computers and
home electronics devices, creating a new wave of high growth.
(3) With rapid growth in global demand for desktop computers unlikely, MiTAC is
providing total solutions for customers by shipping barebones or full systems.
(4) With pricing pressures increasing for major brand vendors, Taiwanese vendors'
ability to provide low-cost contract manufacturing has given them an advantage.
As brand vendors continue to increase the share of their outsourced manufacturing,
Taiwanese vendors will see increases in their shipments.
1.2.2 Server products
Servers are utilized primarily for building corporate information systems, making
them an essential investment in basic business infrastructure. In addition, because
information systems are an essential tool for modern businesses in continuing operations,
companies place great importance on total cost of ownership (TCO) in selecting servers
for purchase (reliability, availability, serviceability, usability). In order to provide servers
strong in the RASUM metrics, more time for product development and testing is necessary.
Such servers correspondingly yield greater profits and possess longer product lifecycles
after they are introduced on the market. Major international server vendors are
correspondingly cautious in outsourcing manufacturing and design for their products,
as establishing the necessary close working relationship requires more time. Besides
hardware, software is another key facet of a server solution.
From the perspective of server types, shipments of traditional pedestal servers
in the US market have already begun a gradual decline. Such servers are being replaced
by rack mount models, which have become the mainstream choice. This trend will
become evident in the Europe and Asia markets over the next one or two years. Rack
mount servers are likely to be succeeded by even more compute-intensive blade servers.
The high compute-intensity of rack mount and blade servers entails more stringent
system cooling measures. Vendors will be increasing the share of R&D resources and
investment allocated to these types of servers compared to traditional pedestal servers.
In the storage equipment market, Microsoft's introduction Windows Storage
Server (WSS) has provided a breakthrough in interoperability among divergent storage
platforms. Market projections call for reductions in the price of individual storage
equipment systems, and a concurrent rise in sales volumes. These trends will lead to a
rise in the proportion of production outsourced by major storage equipment vendors.
In such an eventuality, Taiwan vendors will be the largest beneficiaries,
1.2.3 Wireless communication products
(1) Current state and development trends in the industry
a. PDA
Based on shipments of the world's five largest vendors, PDAs running the Windows
Mobile operating system surpassed those running the Palm OS for the first time in the
third quarter of 2004, with 42.7% and 34.7% of the market, respectively. The two
operating systems together accounted for nearly 80% of the market. Because of
Windows already boasts a broad user base in the PC market, its derivative Windows
Mobile can draw on such advantages as user familiarity with its interface and file-level
compatibility, as well as full-color multimedia capabilities and fast data transfer rates

34 C. Operations Overview
C. Operations Overview
35
to increase its appeal to consumers. However, traditional PDAs have shown a slowdown
in growth that began in 2002, and have entered a transitional period. Volume growth
during 2004 derived from wireless PDAs and PDAs incorporating GPS capabilities.
b. Smartphones
Due to replacement sales driven by color-screen mobile phones and camera phones, the
global mobile phone market surpassed the 600 million unit threshold for the first time in
2004. The global market is expected to further expand in 2005 to 660 to 679 million in
2005, for a growth rate falling to 7%. The Market Intelligence Center (MIC) points out
that since 2000, the smartphone market has been growing by 200 to 300% yearly. At the
end of 2003, global smartphone shipments reached 13.08 million units, 360% more than
the previous year. In 2005, shipments are projected to hit 25 million. Because multimedia
services for mobile phones are becoming increasingly widespread, while camera phones
and MP3 phones should see a new wave of growth, in the next five years, it is projected
that the smartphone market will grow at rates triple that of other mobile phones. By 2008
, such phones will comprise a market of 238 million units, or roughly one-fourth of entire
market for mobile phones. As for 3G phones, Topology Research Institute (TRI) predicts
that the fourth quarter of 2005 will see the introduction of phones with broad appeal that
will win 10% of the overall market.
(2) Relationship among upstream, midstream, downstream industry segments
The PDA industry specializes in products that emphasize compact size and portability.
In handling everything from product development and design to testing and manufacturing,
vendors must have the capability to create embedded system devices with a high level of
hardware/software integration. Upstream vendors run the gamut from suppliers of key
hardware components such as microprocessors, displays, touch screen panels, memory,
driver ICs, batteries, connectors, and buttons to suppliers of operating system (which may
be developed in-house). Also included as upstream vendors are multimedia application
developers and suppliers of other software. Downstream vendors mainly include OEM/
ODM customers and channel vendors.
(3) Product development trends
PDA products offer "information portability", combining Internet applications and
wireless communications technologies. Advances in these areas enable convenient access
to personal data and communications at any time and in any place. Value-added niche
products can be targeted at specific markets or different classes of business users-such as
those in the financial industry, insurance, health care, or distribution. Product development
trends for PDAs include the following:
Continuation of the trend toward more compact size, lighter weight, and greater
individualization.
High-resolution color displays.
Thinner, extended-life batteries.
Modularization and expandability, and support for connection to peripheral
devices to enable personalized applications.
Integration of multimedia and wireless broadband communications.
Consumer orientation and market segmentation in an effort to satisfy varying
market requirements.
Provision of solutions and applications for specialized vertical markets.
(4) Competitive landscape
a. Operating system competition
The Windows Mobile OS has exhibited strong growth, surpassing Palm OS
in the handheld market for the first time in the third quarter of 2004 to become
the mainstream PDA platform.
As for smartphones, an MIC report indicates that although the Symbian
OS still dominates with a current market share of 67%, the adoption by
telecommunications network operators of Microsoft OS-based smart phones
manufactured by major mobile phone vendors. The report projects that Symbian's
market share will decline to 58% in 2008, while Microsoft's share will rise from
13% to 36%. A research report is more aggressive in its forecast, predicting that
2007 will see the two platforms taking an identical 39% share of the market.
Microsoft's internal estimates see Microsoft's share of the mobile phone software
market climbing as high as 60%.
From the foregoing, it can be seen that the richer multimedia environment,
and more robust Internet connectivity and data transfer (between the phone and
a PC) capabilities of Microsoft's operating systems, as well as the abundance of
applications designed for them, make their market prospects extremely favorable.
b. Vendor competition
The continuing decline in global shipments of PDA is largely attributable to
consumer preference for phones with schedulers and phonebooks. Therefore, the
perceived value of traditional PDAs with their functionality restricted to personal
information management, has shrunk, hindering growth and leading to the exit
by many vendors from the market. MiTAC developed and manufactured the
world's first Microsoft OS platform-based PDA with built-in GPS capabilities,

36 C. Operations Overview
C. Operations Overview
37
and successfully developed a market. Since their launch at the end of 2003, MiTAC's GPS
-enabled PDAs have been well received in the European market, with shipments repeatedly
hitting new highs. Product positioning will continue to highlight this GPS functionality, with
design efforts focused on products that meet consumer needs to pioneer and nurture niche
markets. As for the smartphone market, though it remains a niche market, shipment volumes
are growing rapidly and therefore smartphones represent an enormous business opportunity.
Currently, there are few smartphones carrying a domestic brand; however, MiTAC has already
introduced to Microsoft OS-based smartphones, demonstrating its aggressive stance. MiTAC's
smartphones incorporate not only personal information management features, but also
provide the ability to send and receive e-mail, manage files, browse the Web, and take digital
photographs, making them a suitable mobile information platform for business users. MiTAC
has not only established partnerships with well-known European telecoms vendors to promote
sales of its Microsoft OS platform-based smartphones and PDAs, but its mobile communications
business unit continues to build on its competitive advantage through R&D innovation,
production quality, and cost management, developing niche products that take into account
market trends, customer satisfaction, and the ability to create customer demand. Though
strategic alliances with major international vendors in the areas of software, hardware, and
communications services, as well as through sustained product innovation, creation of new
markets, and winning of new orders, this business unit will make a highly significant
contribution to MiTAC's continuing growth.
1.3 Technology & R&D Overview:
1.3.1 R&D Expenditures
Units: Thousands of NT Dollars
Year
2005 to March 31
Item
2004
(see note)
R&D expenditures 1,171,145 351,002
Note: To the end of the last complete quarter prior to printing of this report.
1.3.2 Technologies and Products Successfully Developed Last Year and the Current Year
to the Date of Publication
To keep abreast of global market trends for wireless communications, mobile
communications, and networking products, ensure timely development of new
technologies and products, and coordinate R&D resources in Taiwan, China, and the
US to rapidly introduce technology products-this is MiTAC International's main R&D
strategy. Adopting the product standards promoted by mainstream technology leaders
such as Intel, Sun, and Microsoft, while developing exclusive technologies, and then
launching product at an opportune time to meet market demand will allow MiTAC
International to take advantage of business opportunities. Product diversification,
comprehensive product lines, complete upstream and downstream supplier network,
and globalized production infrastructure are our competitive strengths.
(1) Key Achievements
A.Allied with world-leading vendors in servers, workstations, and storage equipment
to develop and manufacture servers, workstations based on high-performance
processors, allowing MiTAC International to achieve a leading position in the
professional server and workstation segment.
B.Adopted Microsoft's wireless PDA software technology in developing wireless
networking products, while simultaneously pursuing joint development of PDAs
and Pocket PCs with large world-class vendors.
C.Successfully incorporated GPS chip in a handheld device, utilizing GPS-related
software integration to develop an all-in-one GPS PDA and beat rivals to the market.
D. Allied with major well-known European cellular communications vendors to
develop and manufacture smartphones based on Microsoft's platform, receiving
certification from Europe's major telecoms companies.
E.Took advantage of MiTAC International's development of globally integrated
division of labor system, as well as its overall engineering, production, and
distribution logistical capabilities. Worked with world-leading vendors to jointly
develop leading-edge wireless networking and personal computer technologies.
Became a key personal computer supplier for individual and home-use computers
that integrate multiple capabilities such as video, audio, graphics, and wireless
communications.
(2) Products
A. Desktop computer and digital home products
(a) Business and home PCs: Computers based on the latest processors, with
PCI-Express graphics cards and high-definition audio, wireless networking,
and high-efficiency thermal designs.
(b) Entry-level and midrange workstations: single- and dual-processor machines
based on Intel and AMD x86 processors
(c) Built a home wireless networking environment, using high-performance
data transmission technology for the digital home to take advantage of Webbased
AV content services and make the digital home theater concept a reality.
B. Servers
(a) Workstations and related products: Expanded joint development efforts with
world-leading vendors; design, manufacture, and market high-performance
single- and multi-processor workstations. Became one of the few vendors to

38 C. Operations Overview
C. Operations Overview
39
offer both Unix and Windows-based workstations.
(b) MiTAC International has accumulated many years of experience in developing multiprocessor
multi-function servers. In response to growing global market and strong demand
for servers and data storage equipment, MiTAC International 's R&D team has created single-,
dual- and quad-processor servers, utilizing high-density system integration technologies to
develop ultra-dense servers.
(c) MiTAC International has responded to the increasing size of the data storage device market
by devoting R&D teams to the development of data storage device technologies and products.
(d) Blade storage
C. Wireless communications products
(a) Wireless communications and networking products: Through strategic alliances and investments,
developed Bluetooth and IEEE 802.11b, IEEE 802.11a, and IEEE 802.11g wireless networking
cards and wireless communications-capable PDAs.
(b) PDAs: Allied with Intel and Microsoft, using Intel's latest generation of processors and Microsoft's
Windows Mobile OS to develop the world's most compact Pocket PC handheld computer. In
addition, MiTAC International beat rivals to the market with its introduction of PDA products
with built-in cameras, WiFi connectivity, Bluetooth, and GPS capabilities.
(c) Mobile communications modules: To satisfy demand for mobile devices with voice and data
communications capabilities, MiTAC leveraged the advantages of world-class mobile
communications components vendors to develop 2.5-G GSM/GPRS and CDMA 1X-RTT
mobile communications modules.
(d) Handheld smart client devices: Allied with Intel and Microsoft, integrating PDA technologies
and mobile communications module technologies to develop PDA products with mobile
communications capabilities , and introduced handheld smart client devices with built-in
digital cameras, multimedia functionality, and wireless Internet connectivity.
(e) Communications software: To meet demand for mobile communications products, developed
video camera, phone book, MMS, Java applet and J2ME MIDP-compliant communications
application software for bundling with handheld smart client devices.
(3) Long- and short-term business development plans:
1. Desktop computer and digital home products
The US, Europe, and Japan are the world's main PC markets, and in past times, MiTAC's
sales efforts were focused on these markets. In the future, MiTAC will continue to develop even
more OEM/ODM business in these markets. In 2004, growth in shipments in the Asia-Pacific
region were tops in the world, and the share of shipments to the Asia-Pacific region have already
surpassed those to Japan, with the China market being the largest individual market among them.
Therefore, in terms of long-term development, MiTAC's growth focus will be on
expansion in the Asia-Pacific, and specifically the Chinese, market. As the emerging
digital home market is seeing a rise in demand, sales resources will be devoted
specifically to the consumer products market.
2. Server products
MiTAC will continue to jointly develop workstations and various types of servers
with existing Unix customers, as well produce this hardware and provide repair services.
It will also devote human resources to development of a full lineup of Intel architecture
single-processor and dual-processor servers in order to expand its product base and
revenues. It will also continue its development and sales of rack-mount servers and
general-purpose servers, which together with the development of blade servers and
network storage equipment will drive sales growth over the next three years.
In terms of sales strategy, MiTAC will expand cooperation with the world's major
server vendors. This long-term cooperation will encompass everything from module
shipments to complete system shipments, entry-level to high-end, cooperation on a
single product line to cooperation on multiple product lines, with the aim of achieving
a stable long-term cooperative relationship. To achieve these goals, MiTAC must
continue to strengthen its product development capabilities and speed, production
quality and ability to control turnaround, its ability to integrate a global supply chain,
its global logistics and service infrastructure-all serving to reinforce MiTAC position as
a major OEM/ODM for server systems.
3.Wireless communications products
(1) Short-term sales development plans: Maintain an orientation toward market
demand, developing competitive mobile communications products; provide
customers with high value-added service through innovative and professional
product planning, R&D design and production capabilities; strengthen overall
efficiency, to raise the level of customer satisfaction in order to cultivate and
expand on the current customer base, and use niche products to aggressively
nurture customers in different segments and thereby expand overall sales.
(2) Long-term sales development plans: Building on the current global logisticsbacked
sales/manufacturing cooperation and service network, drawing on MiTAC
Synnex Group's global channels synergy and products with highly integrated
product planning and high added value, to cultivate a more diverse customer base
and expand the ranks of first-tier international vendors among its customers.

40 C. Operations Overview
C. Operations Overview
41
2.Market and Manufacturing Sales
2.1 Market Analysis
2.1.1 Breakdown by Region for Sales of Main Products
2.1.2 Market Share
(1) Desktop computers
According to Market Intelligence Center statistics, global sales of desktop computers
reached 120 million in 2004. MiTAC's entry-level and midrange workstations, desktop
computers, and motherboard sales together accounted for 10 million units, for a market
share of roughly 8%.
MiTAC's OEM customers remain concentrated among the world's top ten PC brand
vendors. As these customers are aggressively seeking to expand market share, and the
global economic recovery takes hold, MiTAC is projected to achieve high growth during
2005, and further increase its own market share.
(2) Server products
As most of its products in this category are manufactured on a ODM/OEM basis, it
is more difficult to calculate actual market share. After several years of strenuous effort,
Taiwan's major IT vendors have developed the ability to provide integrated global logistics
management, and the ability to accommodate customer market launch timetables in
everything from design, testing, manufacturing, assembly, and distribution. They are thus
able to give customers the best possible competitive edge in the market. Therefore, in
view of the trend of international brand vendors continuing to seek Taiwanese partners,
it is evident that the manufacture of an ever-greater numbers of non-PC products will be
outsourced to Taiwanese companies. For most Taiwanese vendors, including MiTAC, this
type of alliance will serve to increase market competitiveness and lead to further expansion
of market share.
Region 2004
Northern Europe 22,863,185
Europe 15,703,942
Asia 11,385,298
Domestic 550,809
Total 50,503,234
(3) Wireless communications products
According to MIC statistics, in 2004 PDA shipments reached 13 million units. MiTAC's
midrange, high-end, entry-level, and wireless-capable PDAs not only comprised a
comprehensive product lineup, but with built-in GPS capabilities provided a high level
of market differentiation, more thoroughly integrating handheld computers in mobile
lifestyle applications and successfully establishing a new market. With shipments
hitting all-time highs, in 2003 MiTAC PDA sales reached 550,000 units for a global
market share of 4.8%. In 2004, MiTAC's PDA sales nearly doubled to nearly
1 million units, with global market skyrocketing to over 10%. MiTAC's smartphones
have also done well in the European market. With smartphones projected to show
rates of market growth rates double that of other types of mobile phones over the
next five years, MiTAC's positioning for its mobile phones-which mirrors powerful
market demand for integration of voice calling and multimedia, increasing opportunities
for consumers to use phones to send text messages and manage personal information,
and applications that require handwritten input-abetted by its sustained product
innovation, creation of new markets, and winning of new orders will be of great help
to future revenue growth and increases in market share.
2.1.3 Future Supply and Demand, and Growth Prospects for the Market
(1) Desktop computers and digital home products
The global PC industry is now more than twenty years old. Products are largely
in a mature phase of development, with the major markets of the USA, Europe, and
Japan quite saturated, limiting potential for future growth. As for emerging markets
such as China, India, and Latin America, due to the relatively level of penetration for
PCs compared to the previously mentioned markets, they present a much brighter
picture for strong growth in the future. However, the market for digital home products
is a new one, and growth that will see this market double or even triple can be expected
over the next three years. And in fact, digital home electronics products are the
development focus for this product area.
(2) Servers
As the economic recovery gains momentum, businesses are becoming more
willing to make IT investments. As a result, demand in the server market is recovering,
and major international server vendors are increasing their orders for outsourced
manufacturing to Taiwan. In 2003, the value of Taiwan's server shipment was much
higher than in 2002.
In order to reduce production costs, increase competitiveness, and expand
market share, major international server vendors have been increasing their
reliance on outsourced manufacturing. Therefore, Taiwanese vendors with
their competitiveness in cost, R&D speed, and order turnaround times, have been
direct beneficiaries. The scope of Taiwan's server industry has been continued to
expand in line with the increase in OEM orders. Although the OEM orders placed

42 C. Operations Overview
C. Operations Overview
43
by major international server vendors remains concentrated in entry-level machines and
low-end products, the increase in the number of orders and increasing share of shipments
taken by high-priced rack-optimized and blade server products are partially offsetting the
effects of price declines for components and contract manufacturing. Shipment values
will therefore continue to grow.
Looking at Taiwan's server industry in 2004, with businesses largely bullish on the
strength of the global economic recovery and consequently increasing IT expenditures and
expanding equipment purchases, it is forecast that major international server vendors will
continue to increase their reliance on manufacturing outsourced to Taiwanese companies.
As a result, Taiwan's server industry is likely to continue to see growth in shipments and
reach more all-time highs.
(3) Wireless communications products
Wireless communications technologies are increasingly mature, and are stimulating
consumer demand for mobile information access. As a consequence, the outlook for
various wireless web products is seen as bright. Taking converged wireless handheld devices
as an example, according to statistical data, in 2003 shipments amounted to roughly 94.7
million units, and are forecast to reach 130 million by 2008, for an annual compound
growth rate of 60.6%.
Smartphones, which bring computing concepts to wireless communications hold
powerful appeal to consumers because they combine voice and data communications
capabilities, and offer an advantage of functionality (such as multimedia, games, personal
information management, and PC data exchange), industrial design, and pricing over
other solutions. With smartphone expected to grow at double the speed of other mobile
phones over the next five years, they are set to be a star product during the next phase
of industry development. MiTAC is leveraging continual product innovation, strategic
alliances with world-class vendors, and the pioneering of new markets to obtain new orders.
This approach will greatly benefit MiTAC's business growth and increase its market share.
2.1.4 Competitive Advantage and Development ProspectsPositive and Negative Factors,
Strategic Responses
In order to overcome the effects of global economic stagnation, MiTAC International
shall take advantage of the Joint Development Manufacturing (JDM) approach. JDM
integrates global R&D, engineering, manufacturing design, engineering design, sales and
technology, and after-sales service in a new operational model that achieves higher
customer satisfaction and delivers a competitive advantage.
(1) Competitive Advantage
Competitive advantage in the wireless communications industry and products
lies chiefly in: sales development, R&D capabilities, cost control, stable product
quality and high-yield production process, rapid ramp-up to mass production, inventory
management and components purchasing, strong back-end operational support, and
solid financials. MiTAC International's competitive advantages are as follows:
A.Grasp of customer requirements and market conditions: With the growth of the
market for wireless communications-enabled handheld devices, MiTAC International
is working with customers to develop the market. In addition, it is negotiating joint
projects with world-class IT vendors, in the process attaining a grasp of market trends
and developing new products in response.
B.Work with the world's first-rank software and hardware vendors to ensure supply:
Includes support from software vendors for software development, as well as sources
for key components.
C.R&D innovation: Numerous products have continued to win various awards and
establish a sterling record.
D.Continuing advance in product quality and production capacity: Many years of
accumulated experience in PC and embedded systems product technologies are a
big advantage in design and manufacturing. Production capacity has increased in
tandem.
E.Utilizing established channel markets and the Group's global logistics and service
network, MiTAC can provide more complete customer service.
(2) Development Prospects-Positive Factors
A. Integrate supply chain for basic Internet equipment
The development and implementation of distribution and sales model with
global e-commerce mechanisms, along with MiTAC International's having already
developed high-end products for direct production and sales approach have allowed
it to dramatically increase efficiency, while also reducing costs and increasing
customer satisfaction.
B. Global e-Manufacturing Model
With the benefit of several years' experience with a globalized logistical model,
MiTAC International's e-manufacturing infrastructure is nearing completion.
Operations in Taiwan and the USA handling R&D and design, while facilities in
China and Taiwan produce modules and assembly kits. BTO/CTO assembly centers
in the USA, Australia, and UK complete a global manufacturing model based on a

44 C. Operations Overview
C. Operations Overview
45
coordinated division of labor. Based chiefly on the sophistication of the product's
underlying technology, production costs, transport times, and tax considerations, a
determination will be made as to the manufacturing network system that best accommodates
delivery requirements specified by the order. Taiwan is largely responsible for high-end
motherboards, workstations, servers, and storage devices. Components and systems that
are less sophisticated technologically and are less time-sensitive are manufactured in China.
High-priced key components are sourced at the location of global production sites. This
globally integrated division of labor has already enabled MiTAC International to grow from
a local organization into a internationalized e-manufacturing company with global R&D,
engineering, manufacturing, and sales distribution infrastructure.
C. Expand development of high value-added products:
In response to emerging development trends favoring the integration of wireless
Internet access capabilities in computers, MiTAC International will continue to ally with
world-leading vendors to jointly develop markets. MiTAC International will pursue
development of several products in this category, such as Windows CE-based handheld
computer products (including products with wireless communications capabilities), and
smartphones.
In addition, in view of the Internet's future development and growth in market
demand for servers and data storage equipment, MiTAC International will continue to
develop Intel architecture-based servers and data storage devices.
D. Balanced development including Asia-Pacific and Emerging Markets
Besides continuing to develop the key North American and European markets,
China and Japan will be the focus of market development efforts.
E.Total digitalization of the supply chain
In view of MiTAC International's global production requirements, and in response
to the product localization needs, MiTAC has not only modularized design of key
components, but has also integrated the e-commerce capabilities of upstream vendors to
achieve global real-time delivery. It can thereby reduce operational risks, reduce inventories,
and provide customers with on-time delivery of orders.
(3) Development Prospects-Negative Factors
A.Intense competition: After the entry of major vendors into the development and
manufacturing of handheld computer products, it can be expected that products will
become more diversified and product life cycles shortened, with industry competition
even fiercer.
Strategic Response
(a) Stress R&D innovation, strengthen R&D capabilities, shorten product development
cycles, maintain the ability to launch new models. Use product differentiation,
manufacturing scale to maintain leadership in product competitiveness and profitability.
(b) Increase levels of customer satisfaction in areas from upstream design, mass
manufacturing, and follow-up support. Seek strategic alliances with world-leading vendors.
(c) Take strong advantage of the global logistics and manufacturing sales approach to
create comprehensive material planning, value chain, and follow-up support capabilities.
B.Key Components Remain Under the Control of Foreign Vendors
Strategic Response
(a) Diversify key component supply channels: Seek additional suppliers to ensure
adequate supply and competitive pricing. In addition, establish good working relationship
with domestic vendors that have already or are planning to produce key components
in order to increase flexibility.
(b) Use scale to obtain support advantage: Deliver strong-selling products to obtain
further orders from large OEM/ODM customers, and use the pricing leverage provided
by large purchases to reduce overall costs.
2.2 Major Applications and Production Process for Main Products
2.2.1 Major Product Applications:
Product Type
Workstations
Servers
Storage Equipment
Desktop PCs
Digital Home Products
Handheld computers (including
products with wireless
communications features)
Smartphones
Servers
Important Users and Features
Graphical computing tool needed by design workers
Data computing tool for businesses
Data storage tool for businesses
Essential productivity, educational, entertainment tool for
individuals, families, schools, and companies
Wireless transmission and sharing of AV entertainment for
the home
An essential tool for individuals in a home, work, or school
setting (with PIM applications including task scheduling,
name card management, and meeting notes, as well as
sending and receiving of e-mail, and multimedia
communications and entertainment)
Wireless data transmission, voice, video, multimedia
applications
802.11 & Bluetooth wireless networking cards

46 C. Operations Overview
C. Operations Overview
47
2.2.2 Production Process
Electronic Components
2.4 Ten Largest Customers and Suppliers for the Most Recent Two Years
2.4.1 Listing of Major Customers
Units: Thousands of New Taiwan Dollars
SMT Automated
ICT Testing
Item
1
"E"
2003 2004
Customer Amount ShareofGlobal Customer
Net Sales (%)
12,995,701
32.84
"E"
Amount
16,045,705
Share of Global
Net Sales(%)
31.77
Manual Assembly
2
3
SYNNEX
"B"
8,426,980
5,526,924
21.29
13.97
SYNNEX
"B"
12,748,758
4,896,360
25.24
9.70
Substrate Soldering
Other
Net Sales
12,626,349
39,575,954
31.90
100.00
Other
Net Sales
16,812,411
50,503,234
33.29
100.00
Substrate Touch-Up
Substrate Burn
Note:Increases and decreases in purchase amounts reflect the Company's considerations of market trends,
product demand, business prospects, R&D technology, sales profits, and customer contracts.
2.4.2 Listing of Major Suppliers
ATE Automated Testing
Functional Testing
Item
Units: Thousands of New Taiwan Dollars
2003 2004
Supplier Name Value
Share of Year's
Net Purchases
(%)
Supplier Name Value
Share of Year's
Net Purchases
(%)
System Assembly
Functional Testing
Packaging
Random Testing
Finished Product
1 Mitac Shunde
Other
Net Purchases
22,711,375
26,183,635
48,895,010
46.45
53.55
100.00
Mitac Shunde
Other
Net Purchases
26,138,521
37,596,596
63,735,117
41.01
58.99
100.00
Note:Increases and decreases in purchase amounts reflect the Company's considerations of yearly sales
strategy,material requirements, vendor supply prices, delivery terms, and product quality.
2.5 Production Volume and Value for the Last Two Years
Units: Thousands of New Taiwan Dollars, Units
2003 2004
2.3 Supply of Key Components
Major Products
Capacity Volume Value Capacity Volume Value
Computers and Peripherals 7,400,000
3,497,148
33,227,341
8,400,000
5,689,274
39,513,703
Name Origin Supply Status
CPU
Original Manufacturer: US, Korea
Excellent
Hard Disk Drives
Original Manufacturer: US, Japan,
Korea
Excellent
DRAM
Original Manufacturer: US, Japan,
Germany, Korea
Excellent
Printed Circuit Boards
Original Manufacturer: Taiwan,
Korea, US, China
Excellent
LCD Panels
Original Manufacturer: Korea, Japan,
Taiwan
Excellent
CHIPSET Chipsets
Original Manufacturer: US, Taiwan
Excellent
CDROM Optical Drives Original Manufacturer: Korea,
Taiwan, Japan
Excellent
MODEM Modems
Original Manufacturer: Taiwan
Excellent
Camera Modules
Original Manufacturer: Taiwan,
Japan
Excellent
Battery Pack
Original Manufacturer: Taiwan,
Japan
Excellent
Wireless Communications
Products
Other
Total
1,500,000
551,588
3,143,797
562,129
1,600,000
1,044,049
Note: The production capacity figures listed above include overseas processing work
6,014,336
715,809
36,933,267 46,243,848

48 C. Operations Overview
C. Operations Overview
49
2.6 Sales Volume and Value for the Last Two Years
5.Labor/Management Relations
Units: Thousands of New Taiwan Dollars, Units
The Company is an information technology company, and its staff is suitably composed.
Major Products
Computers and
Peripherals
Wireless
Communications
Products
Value
Volume Value
18,555 207,358
30,656 200,626
3,460,054 34,996,168
519,713
2003 2004
Domestic Foreign Value
Domestic Foreign Domestic Foreign Volume Value
3,401,524
868
68,429
6,525
487,597
5,639,892
972,580
42,380,954
6,934,234
In order to pursue a business philosophy based on humane management principles, the
Company has actively sought to create various communication channels, and respects the views
of its employees. Employees are able to actively participate in affairs related to labor/management
relations.
5.1 Communication and Incentives
Other
54,977
715,301
56,687
637,237
The Company greatly values the views of its employees, and has designated a dedicated
Total
462,961
39,112,993
550,809
49,952,425
Note: The production capacity figures listed above include overseas processing work
staff members to be in charge of employee relations. It has also created a post office box,
encouraging employees to provide their opinions and respond to problems. Each year, an
3.Workforce
Year 2003 2004 2005 to April 4
Indirect 32.84
1068
1137
Number of Direct
21.29
199
195
Employees
Total
13.97
1267
1332
Average Age
Average Years of
Employment
31.90
100.00
35.96
6.29
35.97
5.82
PhD
Master's
6
179
6
184
9
217
Level of
Education College
821
849
893
employee meeting is held, better allowing employees to directly communicate with executives.
In the hope that employee needs could be better met, every six months, departmental
satisfaction surveys are conducted, as well as a comprehensive executive survey. At the end
of each year, an employee satisfaction survey is conducted in order to ensure that employee
concerns are understood.
The Company has spared no effort to establish internal communication channels. At
present, the e-mail system is already in general use by employees, reducing paper waste and
a proliferation of reports-and increasing communication efficiency. At the same time, the
Company has created an internal "speak-out mailbox" e-mail address where employees can
High school
Less than
high school
130
125
114
114
113
100
directly express their views. In addition, in consideration of employees, the Company invested
more than NT$4 million to set up a videoconferencing system linking offices in Hsinchu,
4.Expenses Incurred To Address Environmental Protection Issues
Last year and in the current year to the publication date of this report, the Company has
not suffered losses or subjected to any fines stemming from environmental contamination. The
Company's policy regarding environment protection are as follows:
As a professional computer assembly vendor, the production process consists of assembly
operations. Therefore, the production process does not give rise to any regulated air pollution,
water pollution, or toxic wastes. In addition, in 1992 the Company received recognition from the
Environmental Protection Agency as an outstanding vendor in the Agency's first environmental
protection assessment. It achieved ISO14000 certification in 1997, and maintains a commitment
to preventing pollution. In 1999, it won a two-year mark of distinction after passing a safety and
hygiene system evaluation conducted by the Council of Labor Affairs.
The Company shall continue to promote environmental protection and worker safety, with
the aim of attaining sustained zero-pollution, zero-injury business operations.
Linkou, and Taipei, thereby reducing the need to travel between these locations for work
purposes. Since this system was implemented, employees in Hsinchu, Linkou, and Taipei
can hold inter-office meetings without needing to leave their own offices, while the efficacy
of the Company's internal communications has been greatly enhanced.
5.2 Benefits and Training
5.2.1 Benefits
The Company considers its employees to be one of its most important assets. In
addition to providing employee insurance in conformance with relevant labor laws, the
Company has also joined group life and overseas travel insurance plans, with the
Company covering the full amount of insurance fees.
A well-organized employee benefits committee with members selected by
individual departments not only holds regular meetings to coordinate the Company's
worker benefits measures and programs, but also organizes intra-company clubs to promote
leisure and recreational activities that can build camaraderie among employees.
The Company has established a reference library that is open to employees all day,

50 C. Operations Overview
C. Operations Overview
51
stocking it with materials on CD-ROM and participating in the Sci-Tech Interlibrary Cooperation
Association so that employees can easily access information pertinent to their work. The Company
also provides comprehensive training programs to stimulate employees' potential and allow them
to continuously learn and grow as they work-making work a home and a school. Each year, the
Company disburses substantial funds for employee education. Several years of effort in this area,
have yielded results.
5.2.2 Employee Education and Training
(1) Education and Training Efforts in 2004
The Company invested a total of more NT$10 million on education and training in
2004. Approximately 15,000 people received training (13,500 in classroom courses, and
1,500 in online courses).
(2) Education system
In order to accommodate the Company's business philosophy, long-term talent
cultivation plans, and integrate the Company's education and training resources, the
Company provides the following approaches: required and elective employee training,
instructor regulations, approach for encouraging the internal development of instructional
materials, regulations on managing outside training, approach for managing instructional
materials, approach for executive training, awarding of degrees by MiTAC University.
5.2.3 Retirement System
The Company has in accordance with the basic labor laws of the Republic of China,
established a comprehensive and legally sanctioned retirement system. Besides setting up
a dedicated trust fund account for employee retirement, the Company has also established
an oversight committee composed for representatives of both labor and management.
This committee monitors use of this trust fund account, and transfers pension funds to
this account on a monthly basis, at a rate determined by a neutral third party.
5.2.4 Labor/management Agreements
The Company brings a spirit of protecting employees and sharing gains to its
interaction with employees, with the hope of maintain excellent labor/management
relations. As current relations are harmonious, the risk of future labor/management
disputes and consequent losses is seen as extremely small. In the future, the management
will remain committed to humane management, and the establishment a system
of multiple communication channels. Besides maintaining the current harmonious relations
between employees and management, the hope is that this relationship can be further
advanced in the future.
5.2.5 Work Environment and Worker Safety Measures
In order to raise the quality of the work environment and worker safety measures,to
prevent worker injuries, deaths, or protests, the Company implemented practices that
enabled it to obtain OHSAS-18001 certification on November 6, 2003, and continues to
actively promote these practices.
5.2.6 Standards for Employee Behavior
In order to ensure that there are consistent standards for employee behavior, these
standards have been formalized(with a total of 27 articles).These articles are grouped into
four main categories:
(1) service principles,
(2) confidentiality agreements and ban on employment at competitors,
(3) use of the Internet in the workplace and data security, and
(4) interaction with suppliers. In addition, the "Employee Reward and Penalty Guidelines"
6.Major Contracts
has also been drafted to serve as the basis for determining employee rewards and penalties.
Type Party Period of Validity Main Terms Limitations
OEM Customer “E” From August 1,
2002 to July 31,
2005, can be
automatically
extended for one
year
Sets the terms for
the manufacture,
delivery, and
warranty of
computer product
None
Purchase
Agreement
Customer “J” From October 16,
2003
Sets the terms for
manufacture,
delivery and
warranty of
computer products.
None

52 D. Financial Standing
D. Financial Standing
53
D. Financial Standing
1. Most Recent Five-Year Balance Sheet and Profit/Loss Statement
1.1 Most Recent Five-Year Balance Sheet
Most Recent Five-Year Financial Data
Units: Thousands of NT Dollars
3/31/2005(
Not audited
by
accountant)
(see note)
Year
Item
2000 2001 2002 2003 2004
Current Assets
17,457,550 9,530,651 11,866,398 16,018,538 20,874,292 20,197,876
Funds and Long-Term
Investments
8,460,554 10,454,496 11,193,389 11,966,267 13,727,485 14,205,078
Fixed Assets
3,912,890 3,158,165 2,788,135 2,667,533 2,516,750 2,494,240
Intangible Assets
-
- - - -
-
Other Assets 799,107 1,253,624 1,325,485 1,210,913 936,419 963,070
Total Assets
30,630,101 24,396,936 27,173,407 31,881,751 38,073,446 37,860,264
Current
Liabilities
12,803,922 4,303,710 7,760,571 11,313,864 16,764,510 15,535,692
Long-term Liabilities
Other Liabilities
Total
Liabilities
Common Stock
Capital Reserve
Retained
Earnings
distribution
Long-term Equity
Investments
Unrealized Losses from
Price Drops
Translation Adjustment
Stockholder
Equity
Total Amount
Before
distribution
After
distribution
Before
distribution
After
distribution
Before
distribution
After
Before
distribution
After
distribution
13,260,136
2,662,500
430,831
15,897,253
16,353,467
8,924,277
3,381,120
2,351,114
874,044
(352,072)
428,409
14,732,848
4,413,142
4,149,758
425,570
8,879,038
1,305,508
(431,178)
781,369
15,517,898
8,050,689 11,930,789
2,500,000 3,000,000
10,753,676
8,988,470
9,945,133
3,339,293
1,885,493
11,043,794
10,415,686
3,110,806
2,374,734
15,527,045
10,563,812
3,086,493
3,136,089
2,084,617
(4,081)
771,092
16,419,731
14,910,120
2,519,164
(8,801)
765,441
16,971,631
14,276,634 15,408,466 16,129,615 16,354,706
Note: To the end of quarter prior to the publication date of this annual report.
Not yet
distributed
2,500,000
20,144,818
Not yet
distributed
10,814,761
3,072,497
4,658,273
Not yet
distributed
(7,439)
232,288
17,928,628
Not yet
distributed
2,500,000
493,105 596,256 880,308 842,187
Not yet
distributed
18,877,879
Not yet
distributed
10,894,586
3,059,877
5,545,201
Not yet
distributed
(7,439)
232,288
18,982,385
Not yet
distributed
1.2 Concise Profit / Loss Statement
Units: Thousands of NT Dollars
Financial Data for the Most Recent Five Years March 31, 2005
(Not audited by
Year
an accountant)
2000 2001 2002 2003 2004
(see note)
Item
Operating Revenues
Gross Profits
Operating Profit/Loss
Non-Operating Revenue
Non-Operating Expenses
47,311,663
3,462,283
1,051,226
1,507,138
(433,757)
28,447,707
2,199,047
222,073
1,238,231
(409,483)
25,177,562
2,055,723
278,468
1,166,688
(567,572)
39,575,954
2,979,345
555,300
1,006,878
(491,528)
50,503,234
4,106,483
1,145,074
1,540,410
(409,298)
17,673,141
1,491,390
679,915
386,583
(79,570)
Pre-Tax Profit/Loss from
Continuing Operations 2,124,607 1,050,821 877,584 1,070,650 2,276,186 986,928
Profit/Loss from
Continuing Operations
Profit/Loss from
Discontinued Operations
Extraordinary Losses
Accumulated Effect of
Changes in Accounting
Principles
Profit/Loss for Period
Earnings
Per Share
Pre-retrospe
ction
Pre-retrospe
ction
1,803,419
1,803,419
2.02
1.73
1,010,821
1,010,821
1.02
0.97
864,904
864,904
0.84
0.84
1,070,650
1,051,473
1.03
1.03
2,276,186
2,142,499
2.11
2.11
986,928
- - - -
- -
- - - -
- -
- - - -
- -
Note: To the end of the quarter preceding the publication date of this annual report.
886,928
1.3 Names of Certifying Accountants and Their Recommendations for the Most Recent
Year
2004
2003
2002
2001
Five Years:
Name of Accounting Firm
PricewaterhouseCoopers
Taiwan
PricewaterhouseCoopers
Taiwan
PricewaterhouseCoopers
Taiwan
PricewaterhouseCoopers
Taiwan
Name of Certifying Accountant
Liu Ying-fei, Wang Wei-chen
Chen Yong-Ching, Wen Fang-Yu
Chen Yong-Ching, Wen Fang-Yu
Chen Yong-Ching, Wen Fang-Yu
Audit
Recommendations
Unqualified
Unqualified
Unqualified
Unqualified
0.84
0.84
2000
PricewaterhouseCoopers
Taiwan
Chen Yong-Ching, Wen Fang-Yu
Unqualified

54 D. Financial Standing
D. Financial Standing
55
2. Financial Analysis for Most Recent Five Years
Financial
Structure
(%)
Solvency
(%)
Operational
Capabilities
Profitability
Cash Flow
Leverage
Most Recent Five-Year Financial Data 3/31/2005(
Not audited
Year
by
Item
2000 2001 2002 2003 2004
accountant)
(see note)
Debt Ratio
Share of long-term funds
in fixed assets
Current ratio
Quick ratio
Times interest earned ratio
51.90
444.57
136.35
91.50
6.16
36.39
622.76
221.45
175.85
3.72
39.57
678.58
152.88
113.36
3.83
46.77
748.69
141.58
107.13
5.13
52.91
811.71
124.51
91.60
10.76
49.86
861.28
130.01
100.26
14.40
Turnover rate
of receivables (times)
5.88 3.54 3.73 4.76 4.86 5.98
Day sales in receivables
Inventory turnover (times)
Turnover rate of payables
(times)
Turnover rate of total
assets (times)
Return on assets(%)
Return on shareholder
equity(%)
Income ratio (%)
Simple
EPS
(NT Dollars)
Note 1: To the last completed quarter prior to the publication date of this annual report.
Note 2: For convenience in making comparisons, the operational capability for the first quarter of 2005 has been
converted to a yearly figure.
2.1 Financial Structure
62
11.09
10.51
Days to sell inventory 33 48
Turnover rate of fixed
assets (times)
Percent of
paid-in
capital
Operating
profit
Pre-tax
income
Cash flow ratio (%)
Pre-retrosp
ection
Post-retros
pection
Cash flow adequacy ratio
(%)
Cash reinvestment ratio
(%)
Operating leverage
Financial leverage
12.51
1.76
7.87
12.89
11.78
23.81
3.81
2.02
1.73
(1) Debt ratio = Total liabilities / Total assets
(2) Ratio of long-term funds to property and equipment = (Net shareholders' equity +
Long-term debts) / Net fixed assets
-
103
7.65
8.54
8.05
1.03
4.73
6.68
2.23
10.57
130.32
98
9.38
39
8.47
0.98
4.26
5.42
2.67
8.43
-
77
10.54
10.54 11.16
35
14.51
1.34
4.42
6.30
5.26
10.14
3.55 3.44 2.66
1.02 0.84 1.03
0.97 0.84 1.03
1.21
75
9.80
7.94
19.48
1.44
6.75
12.28
10.59
21.05
4.24
61
12.82
1.45 37.63 63.70 60.39 81.89 129.59
37
2.11
2.11
13.33
9.30
29
28.22
1.86
2.51
4.81
6.24
9.06
5.02
0.84
0.84
0.30
- 24.00 - - 7.57 0.20
26.53 95.03 73.91 59.26 37.16 22.09
1.64 - - 1.88 1.26 1.12
2.2 Solvency
(1) Current ratio = Current assets / Current liabilities
(2) Quick ratio= (Current assets - Inventory - Prepaid expenses) / Current liabilities
(3) Times-Interest-earned Ratio = Net income before income tax and interest expenses /
Interest expenses
2.3 Operational Capability
(1) Turnover rate of receivables (including accounts receivable and notes receivable from
operations) = Net sales / Average receivables balance (including accounts receivable
and notes receivable from operations) in various terms
(2) Days sales in receivable = 365 / Turnover rate of receivables
(3) Inventory turnover = Cost of goods sold / Average value of inventory
(4) Turnover rate of payables (including accounts payable and notes payable from
operations) = Cost of goods sold / Average accounts payable balance (including accounts
payable and notes payable from operations) in various terms
(5) Days to sell inventories = 365 / Inventory turnover
(6) Turnover rate of property and equipment = Net sales) / Net fixed assets
(7) Turnover rate of overall assets = Net sales / Total assets
2.4 Profitability
(1) Return on assets = [Profit after tax + (Interest expenses) x (1 - (tax rate)] / Average of
total assets
(2) Return on shareholders' equity = Profit after tax / Average net equity
(3) Net profit rate = Profit after tax / Net sales
(4) EPS = (Profit after tax - Dividend from preferred stock) / Weighted average of
outstanding shares
2.5 Cash Flow
(1) Cash flow ratio = Cash flow from operations / Current liabilities
(2) Cash flow adequacy ratio = Most recent five-year cash flow from operations / Most
recent five-year sum of capital expenditures, increases in inventory, cash dividends
(3) Cash reinvestment ratio = (Cash flow from operating activities - Cash dividend) / (
Gross fixed assets + Long-term investment + Other assets + Working capital)
2.6 Leverage
(1) Operating leverage = (Net revenue - Variable cost of goods sold and operating expenses
) / Operating income
(2) Financial leverage = Operating income / (Operating income - Interest expenses)

56 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp.
Consolidated Financial Statements and Report
of Independent Accountants
Report of Independent Accountants
To the Board of Directors and Shareholders of MITAC International Corp
We have audited the consolidated balance sheets of MITAC International Corp. and its subsidiaries
as of December 31, 2004 and 2003, and the related consolidated statements of income, of changes
in stockholders' equity and of cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the"Rules Governing the Examination of Financial
Statements by Certified Public Accountants"and generally accepted auditing standards in the Republic
of China. Those standards and rules require that we plan and perform the audits to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall consolidated financial
statements presentation. We believe that our audits provide a reasonable basis for an opinion.
In our opinion, the accompanying consolidated financial statements audited by us present fairly,
in all material respects, the consolidated financial position of MITAC International Corp. and its
subsidiaries as of December 31, 2004 and 2003, and the results of their operations and their cash
flows for the years then ended in conformity with the "Rules Governing the Preparation of Financial
Statements of Securities Issuers and generally accepted accounting principles in the Republic of China.
As described in Note 3 (1) to the consolidated financial statements, the Company's ownership in
a subsidiary was increased to over 50% in 2004, accordingly the subsidiary which was not included in
the 2003 consolidated financial statements was included in the 2004 consolidated financial statements.
For comparison purpose, the 2003 consolidated financial statements were restated to include the
subsidiary.
As described in Note 3 (2) to the consolidated financial statements, the Company adopted R.O.C.
Financial Accounting Standard No.35 "Accounting Standard for Impairment of Assets" from the fourth
quarter of 2004.
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
The accompanying consolidated financial statements are not intended to present the financial
position and results of operations and cash flows in accordance with accounting principles generally
accepted in countries and jurisdictions other than the Republic of China. The standards, procedures
and practices in the Republic of China governing the audit of such consolidated financial statements
may differ from those generally accepted in countries and jurisdictions other than the Republic of
China. Accordingly, the accompanying consolidated financial statements and report of independent
accountants are not intended for use by those who are not informed about the accounting principles
or auditing standards generally accepted in the Republic of China, and their applications in practice.
57
March 16, 2005

58 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
59
MITAC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
2004 2003 2004 2003
ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY
Current Assets Current Liabilities
Cash and cash equivalents (Note 4 (1)) $ 2,760,564 $ 1,854,434 Short-term loans (Notes 4 (8) and 6) $ 5,598,502 $ 7,894,054
Marketable securities (Note 4 (2)) 1,403,559 2,641,605 Commercial paper payable (Note 4 (9)) - 379,377
Notes receivable – net 94,500 1,014 Notes payable 6,659 7,259
Notes receivable – related parties (Note 5) 38,806 - Accounts payable 14,366,254 10,930,955
Accounts receivable – net (Note 4 (3)) 9,195,307 5,475,806 Accounts payable – related parties (Note 5) 304,279 247,942
Accounts receivable – related parties (Note 4 (3)
4,387,064 3,608,765 Income tax payable (Note 4 (17)) 99,511 34,658
and 5)
Other receivables 571,154 781,398 Accrued expenses 2,160,229 1,723,398
Inventories - net (Note 4 (4)) 8,919,307 7,945,826 Other payables 1,153,386 393,760
Prepayments 544,996 500,981 Receipts in advance 422,774 614,826
Deferred income tax assets – current 479,678 302,150 Current portion of long-term debts (Notes 4 (10) and 6) 2,500,000 -
Other current assets 10,591 2,318 Provision for product warranty 435,598 277,821
28,405,526 23,114,297 Other current liabilities 418,636 204,833
27,465,828 22,708,883
Long-term investments (Note 4 (5)) Long-term Liabilities
Equity method 7,741,461 7,146,288 Bonds payable (Notes 4 (10) and 6) 2,000,000 2,500,000
Cost method 1,765,912 1,897,375 Long-term debts (Notes 4 (10) and 6) 871,776 895,127
9,507,373 9,043,663 2,871,776 3,395,127
Other financial assets – non current 37,917 35,212 Other Liabilities
Accrued pension payable (Note 4 (12)) 39,736 18,163
Property, plant and equipment - net Deposit in 180 180
(Notes 4 (6) and 6) 10,857,655 10,642,461 Deferred income tax liability (Note 4 (17)) 860,330 577,139
Others (Note 4 (11)) 1,088,259 908,844
Intangible Assets 1,988,505 1,504,326
Other intangible assets 373,040 429,304 Total Liabilities 32,326,109 27,608,336
Deferred pension cost 1,510 -
374,550 429,304 Stockholders' Equity
Other Assets Common stock (Note 4 (13)) 10,814,761 10,563,812
Refundable deposits 15,486 9,369 Capital reserve (Note 4 (14)) 3,072,497 3,086,493
Deferred charges 265,105 250,769 Retained earnings (Note 4 (15))
Other assets (Notes 4 (7) and 6) 791,125 1,054,892 Legal reserve 914,302 809,154
1,071,716 1,315,030 Unappropriated earnings 3,743,971 2,326,935
Unrealized long-term investment loss ( 7,439 ) ( 8,801 )
Cumulative translation adjustments 232,288 765,441
Unrecognized pension cost - ( 256 )
Treasury stock (Note 4 (16)) ( 841,752 ) ( 571,147 )
Total Stockholders' Equity 17,928,628 16,971,631
Commitments and Contingent Liabilities (Note 7)
TOTAL ASSETS $ 50,254,737 $ 44,579,967 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 50,254,737 $ 44,579,967
The accompanying notes are an integral part of the consolidated financial statements.
See report of independent accountants dated March 16, 2005
MITAC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31,
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,
EXCEPT EARNINGS PER SHARE)
2004 2003
Operating Revenues-net $ 59,444,222 $ 46,013,678
Operating Cost ( 54,268,155 ) ( 42,425,233 )
Gross Profit 5,176,067 3,588,445
Operating Expenses
Selling expenses ( 1,383,007 ) ( 1,022,605 )
Administrative expenses ( 819,844 ) ( 765,431 )
Research and development expenses ( 1,333,908 ) ( 1,246,196 )
( 3,536,759 ) ( 3,034,232 )
Operating income 1,639,308 554,213
Non-operating Income and gains
Interest income 21,501 8,630
Investment income accounted for under equity
method
970,013 687,631
(Note 4 (5))
Dividend income 61,563 47,403
Gain on disposal of property, plant and equipment 2,672 2,089
Gain on disposal of investment 23,674 150,564
Exchange gain, net 189,170 79,622
Other income 329,254 189,370
1,597,847 1,165,309
Non-operating Expenses and Losses
Interest expenses ( 302,723 ) ( 330,976 )
Other investment loss (Note 4 (5)) ( 131,364 ) ( 66,903 )
Loss on disposal of property, plant and equipment ( 43,013 ) ( 20,762 )
Loss on physical count of inventories ( 242 ) ( 1,050 )
Impairment loss ( 112,536 ) -
Other losses ( 89,791 ) ( 122,124 )
( 679,669 ) ( 541,815 )
Income Before Income Tax and minority interest 2,557,486 1,177,707
Income Tax Expense (Note 4 (17)) ( 251,546 ) ( 73,911 )
Minority interest income ( 163,441 ) ( 52,323 )
Net Income $ 2,142,499 $ 1,051,473
Before
income tax
After
income tax
Before
income tax
After
income tax
Basic Earnings Per Share (in dollars) (Note 4 (18))
Income before income tax and minority interest $ 2.52 $ 2.27 $ 1.15 $ 1.08
Minority interest ( 0.16 ) ( 0.16 ) ( 0.05 ) ( 0.05 )
Net income $ 2.36 $ 2.11 $ 1.10 $ 1.03
Diluted Earnings Per Share (in dollars)
Income before income tax and minority interest $ 2.37 $ 2.14 $ 1.07 $ 1.01
Minority Interest ( 0.16 ) ( 0.16 ) ( 0.05 ) ( 0.05 )
Net income $ 2.21 $ 1.98 $ 1.02 $ 0.96
Pro forma information of net income and earnings
per share disclosed as if the Company’s stock held
by subsidiaries was not recorded as treasury
stock
Net income
$2.574,324 $2,322,778 $1,110,434 $1,036,523
Basic earnings per share (in dollars) $ 2.34 $ 2.10 $ 1.02 $ 0.95
Diluted earnings per share (in dollars) $ 2.19 $ 1.97 $ 0.94 $ 0.88
The accompanying notes are an integral part of the consolidated financial statements.
See report of independent accountants dated March 16, 2005

60 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
61
MITAC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31,
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
Retained Earnings
Treasury
Stock Total
Unrecognized
Pension cost
Cumulative
Translation
Adjustments
Unrealized
Long-term
Investment
Loss
Unappropriated
Earnings
Legal
Reserve
Capital
Reserve
Common
Stock
2003
Balance at January 1, 2003 $10,415,686 $ 3,110,806 $ 702,232 $ 1,672,502 ( $ 4,081 ) $ 771,092 $ - ( $ 248,506 ) $16,419,731
Distribution of 2002 earnings:
Appropriation for legal reserve - - 106,922 ( 106,922 ) - - - - -
Employee bonuses - - - ( 77,842 ) - - - - ( 77,842)
Cash dividends declared - - - ( 208,276 ) - - - - ( 208,276 )
Directors’ and supervisors’ remuneration - - - ( 4,000 ) - - - - ( 4,000)
Employee stock purchase warrants exercised 148,126 ( 10,369 ) - - - - - - 137,757
Net income in 2003 - - - 1,051,473 - - - - 1,051,473
Capital reserve due to change in ownership of long-term investments - ( 20,926 ) - - - - - - ( 20,926)
Capital reserve due to change in subsidiaries ownership of long-term
investments - 6,997 - - - - - - 6,997
Recognition of subsidiaries’ unrecognized pension cost - - - - - - ( 256 ) - ( 256 )
Translation adjustment for 2003 - - - - - ( 5,651) - - ( 5,651)
Decrease in the Company’s stocks held by subsidiaries - - - - - - - 22,597 22,597
Recognition of subsidiaries’ unrealized loss on market value decline of
long-term investments - - - - ( 4,720 ) - - - ( 4,720)
Treasury stock transaction-net - ( 15 ) - - - - - ( 345,238 ) ( 345,253 )
Balance at December 31, 2003 10,563,812 3,086,493 809,154 2,326,935 ( 8,801 ) 765,441 ( 256 ) ( 571,147 ) 16,971,631
2004
Distribution of 2003 earnings:
Appropriation for legal reserve - - 105,148 ( 105,148 ) - - - - -
Employee bonuses - - - ( 94,632 ) - - - - ( 94,632)
Cash dividends declared - - - ( 518,293 ) - - - - ( 518,293 )
Directors’ and supervisors’ remuneration - - - ( 4,000 ) - - - - ( 4,000)
Employee stock purchase warrants exercised 250,949 ( 25,168 ) - - - - - - 225,781
Net income in 2004 - - - 2,142,499 - - - - 2,142,499
Capital reserve due to change i n ownership of long-term investments - ( 912 ) - - - - - - ( 912 )
Capital reserve due to change in subsidiaries ownership of long-term
investments - 13,184 - - - - - - 13,184
Recognition of subsidiaries’ unrecognized pension cost - - - - - - 256 - 256
Translation adjustment for 2004 - - - - - ( 533,153 ) - - ( 533,153 )
Recognition of subsidiaries’ unrealized loss on market value decline of
long-term investments - - - - 1,362 - - - 1,362
Capital reserve due to investee company treasury stock transaction - ( 1,002 ) - - - - - - ( 1,002)
Capital reserve due to disposal of long-term investment - 906 - - - - - - 906
Treasury stock transaction-net - ( 1,004 ) - ( 3,390 ) - - - ( 270,605 ) ( 274,999 )
Balance at December 31, 2004 $10,814,761 $ 3,072,497 $ 914,302 $ 3,743,971 ( $ 7,439 ) $ 232,288 $ - ( $ 841,752 ) $17,928,628
The accompanying notes are an integral part of the consolidated financial statements.
See report of independent accountants dated March 16, 2005.
MITAC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
2004 2003
Cash flows from operating activities:
Net income $ 2,142,499 $ 1,051,473
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Bad debt expenses 995 16,232
Depreciation 1,162,386 1,021,668
Amortization 388,782 357,210
Reversal of provision for market value decline and obsolete
inventories - ( 20,268 )
Long-term investment income accounted for under equity
method
( 970,013 ) ( 687,631 )
Loss on impairment of long-term investments 131,364 66,903
Gain on disposal of investments ( 23,674 ) ( 150,564 )
Cash dividends from long-term investments accounted for
under the equity method 36,629 91,022
Gain on disposal of other assets ( 73,017 ) -
Loss on disposal of property, plant and equipment, net 40,341 18,673
Loss on disposal of other financial assets - 671
Gain on disposal intangible assets ( 4,716 ) -
Impairment loss 112,536 -
Payment of compensation interest payable recognized in
prior years - ( 535,739 )
Effects of changes in exchange rates 280,536 415,243
Minority interest income 163,441 52,323
Changes in assets and liabilities
(Increase) decrease in:
Notes receivable ( 132,292 ) 10,354
Accounts receivable ( 4,498,795 ) ( 1,685,257 )
Other receivables 475,085 ( 239,067 )
Receivable on forward exchange contracts, net ( 264,841 ) ( 658 )
Inventories ( 973,481 ) ( 472,503 )
Prepayments ( 44,015 ) 13,169
Other current assets ( 8,273 ) 3,444
Deferred income tax assets ( 177,528 ) ( 65,310 )
Increase (decrease) in:
Notes payable ( 600 ) 7,259
Accounts payable 3,491,636 1,918,746
Income tax payable 64,853 ( 19,928 )
Accrued expenses 436,831 765,263
Payable on forward exchange contracts, net 195,331 ( 322 )
Other payables 564,371 ( 249,803 )
Receivable in advance ( 192,052 ) ( 173,934 )
Other current liabilities 213,803 ( 5,244 )
Deferred income tax liabilities 283,191 83,243
Accrued pension payable 20,063 16,982
Provision for product warranty 157,777 118,500
Net cash provided by operating activities 2,999,153 1,722,150
(CONTINUED)

62 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
63
MITAC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31,
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
2004 2003
Cash flows from investing activities:
Decrease (increase) in marketable securities, net $ 1,271,242 ( $ 2,427,352 )
Increase in long-term investments ( 66,081 ) ( 373,976 )
Proceeds from disposal of long-term investments 120,973 576,994
Liquidation income from long-term investments under
equity
7,358 -
method
Increase in intangible assets ( 703 ) -
Acquisition of property, plant and equipment ( 2,191,276 ) ( 1,994,609 )
Proceeds from disposal of other financial assets - 1,859
Proceeds from disposal of property, plant and equipment 129,438 213,704
Proceeds from disposal of other assets 233,693 -
Proceed from disposal of intangible assets 28,859 -
(Increase) decrease in other financial assets ( 3,895 ) 74,477
Increase in deferred charge ( 367,070 ) ( 603,933 )
(Increase) decrease in refundable deposits, net ( 6,117 ) 3,983
Decrease in other assets, net 28,458 73,925
Net cash used in investing activities ( 815,121 ) ( 4,454,928 )
Cash flows from financing activities:
(Decrease) increase in short -term debts, net ( 2,295,552 ) 4,166,162
(Decrease) increase in commercial paper payable, net ( 379,377 ) 264,484
Proceeds from long-term loans - 896,119
Repayments of long-term loans - ( 13,720 )
Redemption of convertible bonds payable - ( 1,246,000 )
Issuance of secured bonds 2,000,000 -
Increase in deposit-in - 100
Directors’ and supervisors’ remuneration ( 4,000 ) ( 4,000 )
Employee stock warranty exercised 225,781 137,757
Cash dividends paid ( 516,275 ) ( 208,276 )
Employee bonuses paid ( 94,632 ) ( 77,842 )
Sales of treasury stock 125,228 2,197
Acquisition of treasury stock ( 400,227 ) ( 347,450 )
Increase in minority interest 61,152 76,755
Net cash (used in) provided by financing activities ( 1,277,902 ) 3,646,286
Net increase in cash and cash equivalents 906,130 913,508
Cash and cash equivalents at beginning of year 1,854,434 940,926
Cash and cash equivalents at end of year $ 2,760,564 $ 1,854,434
Supplemental disclosures of cash flow information:
Cash paid for interest $ 282,304 $ 265,492
Cash paid for compensation interest of convertible bond $ - $ 584,748
Cash paid for income tax $ 79,218 $ 75,178
Secured bonds matured in one year $ 2,500,000 $ -
MITAC INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
1.HISTORY AND ORGANIZATION
(1) MITAC International Corp. (¡©the Company¡ª) was incorporated under the provisions of the
Company Law of the Republic of China (R.O.C) on December 8, 1982 and started its operation
on December 15, 1982. The main activities of the Company include the design, manufacture,
sales and services of micro-computers and related products as well as other related investments.
As of December 31, 2004, there were 21,307 employees in the Company and its subsidiaries.
(2) Consolidated subsidiaries
Relationship with
Rates of direct and
Company name related parties Main operating items indirect ownership
2004 2003
Silver Star Developments
Ltd. (SSDL) and its
subsidiaries
MITAC Precision Technology
Co., Ltd. and its
subsidiaries
Company name
Holding shares more
than 50% interest
Investment 100% 100%
" Manufacturing and sale of
mold
(3) Majority owned subsidiaries excluded in the consolidation
Rates of direct and
indirect ownership
2004 2003
Reasons for exclusion
52.17% 49.37%
Tsu Fung Investment Corp. (TFC) 100% 100% Total assets and operating revenue are less than
10% of the Company’s non -consolidated total
assets and operating revenue, and the combined
total assets or operating revenues of all such
non-consolidated subsidiaries are less than 30%
of the Company’s non -consolidated total assets
and operating revenue.
So Fung Investment Co., Ltd. 100% 100% "
Mio Technology Corp. 100% 100% "
(4) Adjustment for the effect of different accounting period adopted by the consolidation
subsidiaries and that of the Company:
Some of SSDL's subsidiaries adopted accounting period that are different from the Company's
accounting period. However as the difference is not over 3 months, the financial reports of
these subsidiaries are consolidated without any adjustment.
(5) Exceptional risks of foreign subordinate companies: None.
The accompanying notes are an integral part of the consolidated financial statements.
See report of independent accountants dated March 16, 2005.

64 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
65
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are prepared in accordance with the "Rules Governing the Preparation
of Financial Statements of Securities Issuers" and generally accepted accounting standards in the
Republic of China.
(1) Basis of consolidation
The financial statements of subsidiaries in which the Company owns more than 50% of the
subsidiaries' shares are included in consolidation except as noted below. All inter-company
accounts and transactions have been eliminated in the consolidated financial statements.
Pursuant to R.O.C Financial Accounting Standard ("FAS") 7 and the regulations of R.O.C.
Securities and Futures Commission ("SFC"), subsidiaries are consolidated, except as noted
below. Subsidiaries with negative stockholders equity or with total assets and total operating
revenue for the current year less than 10% of the Company's non-consolidated total assets
and operating revenues are not included in the consolidated financial statements. Irrespective
of the above test, if the combined total assets or operating revenues of all such non-consolidated
subsidiaries exceed 30% of the Company's non-consolidated total assets or operating revenue,
then each individual subsidiary with total assets or operating revenue of more than 3% of the
Company's non-consolidated total assets or operating revenues shall be consolidated.
(2) Translation of foreign currency transactions
The accounts of the Company and its consolidated subsidiaries are maintained in their
functional currencies. Transactions denominated in foreign currencies, except for forward
contracts, are translated into their functional currencies at the rates of exchange prevailing on
the transaction dates. Receivables, other monetary assets and liabilities denominated in foreign
currencies are translated into their functional currencies at the rates of exchange prevailing at
the balance sheet date. Exchange gains or losses are included in the current year's net income.
The financial statements of foreign subsidiaries are translated into New Taiwan dollars
using the exchange rates prevailing at balance sheet date for asset and liability accounts,
average exchange rates for profit and loss accounts and historical exchange rates for equity
accounts. The cumulative translation effects for subsidiaries using functional currencies other
than New Taiwan dollar are included in the cumulative translation adjustment in stockholders' equity.
(3) Derivative financial instruments
The foreign currency amounts on non-speculative forward contracts are translated into
New Taiwan dollars using the spot rate at the date of inception of the contract. The difference
between the contract forward rate and the spot rate is amortized over the life of the forward
contract. The foreign currency amounts of outstanding contracts are also translated into New
Taiwan dollars at the rates of exchange prevailing at the balance sheet date. Exchange gains
or losses are included in determining current year's net income. Exchange gains or losses
accounted for at the date when a forward contract has expired are also included in determining
net income for the current year.
Premiums on foreign currency options are translated into New Taiwan dollars using the
spot rate at the date of inception of the contract and are amortized over the life of the contract.
Unrealized gains or losses for known foreign currency transactions are recognized in current
year's earnings but unrealized gains or losses for foreign currency commitments are deferred
until the underlying transaction is recorded, unless deferral will result in recognizing losses in
later period.
The interest rate on non-speculative swap contracts are calculated based on the net
amounts of interest receivable and interest payable as adjustment of interest income (expense)
of hedge assets or liabilities according to the rate of contracts.
The foreign currency amounts on non-speculative swap contracts are translated into
New Taiwan dollars using the spot rate at the date of inception of the contract. Unrealized gains
or losses for known foreign currency transactions are recognized in current year's earnings but
unrealized gains or losses for foreign currency commitments are deferred until the underlying
transaction is recorded, unless deferral will result in recognizing losses in later period.
(4) Cash equivalents
Cash equivalents are short-term, highly liquid investment, which are readily convertible to
known amounts of cash and with maturity dates that do not present significant risk of changes in
value because of changes in interest rates.
(5) Marketable securities
Marketable securities are recorded at cost when acquired. The carrying amount of the
marketable securities portfolio is stated at the lower of its aggregate cost or market value at the
balance sheet date.
(6) Allowance for doubtful accounts
Allowance for doubtful accounts is provided based on the collectibility of accounts receivable,
notes receivable and other receivables.
(7) Inventories
A. Inventories of the Company are stated at standard cost, which is adjusted to actual cost
based on the weighted average method at year end. Inventories of the consolidated
subsidiaries are stated at cost using the weighted average method or the average method.
B. Inventories of the Company and its subsidiaries are valued at the lower of cost or market
value at balance sheet date.

66 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
67
(8) Long-term investments
A. Long-term investments in which the Company or its consolidated subsidiaries owns less than
20% of the investee company's voting rights and has no significant influence on operational
decisions of the investee company are accounted for at the lower of cost or market value for
listed companies and at cost for unlisted companies. The unrealized loss resulting from the
decline in market value of the investment, accounted for under the lower of cost or market
value method, is deducted from stockholders' equity. When it becomes evidently clear that
there has been a permanent impairment in value and the chance of recovery is minimal, loss
is recognized in the current years' income. For investments accounted for under the equity
methods, the difference between the Company's cost and underlying equity in the net assets
of the investee company at the date of investment is amortized over 5~10 years.
B. For investments accounted for under the equity methods, the Company recognizes
investment gains or losses by quarter. The unrealized profits and losses from intercompany
transactions between the Company and investee company during the current year shall be
eliminated.
C. Long-term investments in both listed and unlisted companies in which the Company and /
or its consolidated subsidiaries own at least 20% of the investee company's voting rights
are accounted for under the equity method, unless the Company is unable to exercise
significant influence over the investee.
D. The exchange difference arising from the translation of long-term investments denominated
in foreign currencies is included in the Company's stockholders' equity account as "
Cumulative Translation Adjustment".
(9) Property, plant and equipment
A. Property, plant and equipment are stated at cost. Interest incurred on loans used to finance
the construction of property and plant is capitalized and depreciated accordingly.
B. Depreciation is calculated on a straight-line basis over the assets estimated useful lives.
Residual values of fixed assets still in use at the end of the original service lives are
depreciated based on the newly estimated remaining service lives of the assets. The useful
lives of the fixed assets are 3 - 10 years, except for buildings, which are 3 - 55 years.
C. Maintenance and repairs are charged to expense as incurred. Significant renewals and
improvements are treated as capital expenditure and depreciated accordingly.
D. Idle assets are valued at the lower of book value or net realizable value (based on the
appraised value of real estate appraisal company) and classified as other assets. Rental
assets are valued at cost and classified as other assets; current depreciation is recorded
as non-operating expense.
(10) Intangible assets
Land usage rights are amortized on a straight-line method over 48~50 years.
(11) Deferred charges
A. Telephone installation expenditure is amortized on a straight-line method over 5 years.
B. Mold expenses are amortized on a straight-line method over 2 years.
C. Issuance costs of bonds are deferred and amortized on a straight-line method over the life
of the bonds.
D. Software cost is amortized on a straight-line method over 5 years.
(12) Impairment of asset
An impairment loss is identified and recognized when events or changes in circumstances
indicate that the recoverable amount is below the carrying amount of the Company's assets.
Recoverable amount is the higher of an asset's net fair value or it's value in use. Net fair value
is the selling price less cost in a fair dealing. Value in use is the present value of expected future
cash flows resulted from the use of the asset and its eventual disposition.
Impairment loss can be written back to income to the extent of the total amount been
recognized as losses previously when the circumstances and events that led to the write-down
or write-offs cease to exist. Nevertheless, the restoration of previously recognized impairment
loss of goodwill is not applied to.
(13) Retirement plan
The Company maintains defined benefit retirement plans covering all regular employees.
The contributions to an independent fund are deposited with the Central Trust of China, as the
custodian. Net pension cost is recognized, which includes service cost, interest cost, expected
return on plan assets and amortization of net asset or obligation at transition, based on an
actuarial valuation.
(14) Product service warranty
Product service warranty liability is based on past years' service cost records. Service warranty
expense is included in the current year's operating expense.
(15) Income tax
A. Provision for income tax includes deferred income tax resulting from items reported in
different periods for tax and financial reporting purposes, loss carryforwards and investment
tax credits. If it is more than 50% probable that a deferred tax asset will not be realized after
considering all evidence, then a valuation allowance account is needed. Over or under
provisions of prior years' income tax liabilities are included in the current year's income tax
expense.

68 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
69
B. Investment tax credits arising from the acquisition of machinery and equipment, research
and development expense, and employee training expenses are charged to deferred
income tax assets and credited to income tax expense in the year that the investment tax
credits arise.
C. Under the imputation tax system, the 10% additional income tax on undistributed earnings
is included in income tax-expense in the year that the shareholders resolved to retain the
earnings.
(16) Recognition of revenue, cost and expenses
Revenue is recognized when goods are shipped or installed. The related costs and expenses
are recognized as incurred.
(17) Treasury stock
A. Treasury stock is stated at cost using the weighted average method and is reported as a
deduction under stockholders' equity.
B. When treasury stock is disposed of, the related gain is credited to "capital reserve-treasury
stock transaction" and any loss is offset against this capital reserve account. However,
when the balance of this capital reserve account is insufficient to offset the loss, then the
remaining amount should be charged against retained earnings.
C. When treasury stock is retired, the treasury stock account is credited and all capital account
balance related to the treasury shares, including capital reserve from paid-in capital in
excess of par are debited on a proportionate basis. When the book value of treasury stock
is higher than capital account balance, including additional paid-in capital in excess of par,
the difference is debited to offset against this capital reserve from treasury stock. However,
when the balance of this capital reserve account is insufficient to offset the difference, then
the remaining amount should be charged against retained earnings. When the book value
of treasury stock is less than the capital account balance, including additional paid-in
capital in excess of par, the difference is credited to capital reserve from treasury stock.
D. Effective January 1, 2002, the Company's stock traded by subsidiaries was accounted for
as treasury stock when preparing financial statements, and the disclosure of pro forma
information for treating the treasury stocks described above as an investment is also
enclosed in the income statement.
(18) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements, and reported amounts of revenues and expenses during the reported
period. Actual results could differ from those estimates.
3.EFFECT OF CHANGE IN ACCOUNTING PRINCIPLES
(1) MITAC Precision Technology Co., Ltd. (MPT) was not a majority owned subsidiary and was
not included in the consolidated financial statements in 2003. In 2004, the Company's
ownership in MPT increased to over 50%, accordingly MPT was included in the consolidated
financial statements in 2004. For the comparison purpose, the consolidated financial statements
for 2003 were restated to include MPT. As a result of the restatement, total assets and
operating revenue as of and for the year ended December 31, 2003 increased by $3,518,622
and $499,015, respectively, and the increased amount were 7% and 0.8%, of the restated
consolidated total assets and operating revenue respectively.
(2) The Company adopted R.O.C. Financial Accounting Standard No.35 "Accounting Standard
for Impairment of Assets" from the fourth quarter of 2004. This change of accounting principle
resulted to a decrease in both Company's total assets and stockholders' equity by $112,536
as of December 31, 2004, and an increase in impairment loss by $112,536 in 2004.

70 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
71
4.CONTENTS OF SIGNIFICANT ACCOUNTS
(1) CASH AND CASH EQUIVALENTS
December 31,
2004 2003
Cash:
Petty cash $ 2,440 $ 2,322
Checking and savings accounts 1,727,661 1,622,712
Time deposits 501,236 229,400
2,231,337 1,854,434
Cash equivalents:
Government paper 529,227 -
$ 2,760,564 $ 1,854,434
(2) MARKETABLE SECURITIES
December 31,
2004 2003
Mutual funds $ 1,198,113 $ 2,641,605
Credit linked note 44,684 -
Convertible bonds 140,762 -
Convertible bonds asset swap 20,000 -
$ 1,403,559 $ 2,641,605
(3) ACCOUNTS RECEIVABLE - NET
December 31,
2004 2003
Third parties $ 9,218,052 $ 5,514,082
Less: Allowance for doubtful accounts ( 22,745 ) ( 38,276 )
9,195,307 5,475,806
Related parties 4,387,064 3,608,765
$ 13,582,371 $ 9,084,571
(4) INVENTORIES - NET
December 31,
2004 2003
Materials $ 7,996,605 $ 6,163,247
Work in process 75,427 271,697
Finished goods 1,680,376 2,037,337
Inventories in transit 3,725 1,815
9,756,133 8,474,096
Less: Inventory reserve ( 836,826 ) ( 528,270 )
$ 8,919,307 $ 7,945,826
(5) LONG-TERM INVESTMENTS
A. The details of long-term investments are summarized as follows:
December 31,
2004 2003
Percentage
Percentage
of direct
of direct
Amount ownership Amount ownership
Cost method:
Channel Overseas Corporation $ 8,626 5% $ 11,000 5%
Vate Technology Co., Ltd. 5,022 0.27% 5,022 0.26%
MITAC Inc. 645,051 8.92% 645,051 8.97%
Overseas Investment &
Development Corp. 10,000 1.11% 10,000 1.11%
Lien Hwa Industrial Corp. 268,373 3.09% 281,480 3.25%
Union Petrochemical Corp. 189,340 1.53% 189,340 1.55%
Gemtek Technology Co., Ltd. 36,007 2.98% 36,007 3.42%
Harbinger Venture Capital Corp. 280,990 14.05% 260,990 13.05%
Actrans System Inc. 20,000 6.68% 20,000 9.38%
Trumption Microelectronics Inc. - 2.93% 24,157 3.67%
Gapura Inc. 20,128 5.55% 26,992 5.55%
Budworth Investments Ltd. 99,174 14.83% 150,319 13.83%
Global Strategic Investment Inc. 31,918 1.26% 33,978 1.26%
Panasas Inc. - - 45,384 1.63%
Synnex International Corp. 148,092 (Note1) 157,655 (Note 1)
MQBD, LLC (U.S.) 3,191 - - -
1,765,912 1,897,375
Equity method:
MITAC Technology Corp. 1,445,939 37.79% 1,309,769 38.79%
Tyan Computer Corp. 149,866 19.38%
193,691 22.62%
(Note 2)
Tung Da Investment Co., Ltd. 445,164 49.99% 415,495 49.99%
Tsu Fung Corp. 357,335 100% 288,547 100%
Sinfotek Information Technology
- - 4,997 36.36%
Co.
3 Probe Technology Co., Ltd. 8,865 23.13% 11,503 23.13%
Lian Jie Investment Co., Ltd. 127,835 49.98% 130,864 49.98%
Quantway Corporation - 49.73% - -
Shen-Tong Construction &
14,022 46.79% - -
Development Co., Ltd.
Synnex Corp. 4,902,278 42.19% 4,502,023 45.54%
Brilliant Star Holding Ltd. 245,002 25.11% 240,634 35.52%
Harbinger II (BVI) Venture Capital
Corp. 45,155 49.96% 48,765 49.96%
Sub-total 7,741,461 7,146,288
$ 9,507,373 $ 9,043,663
Note 1: Invested in GDR.
Note 2: Rates of direct and indirect ownership is above 20%.

72 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
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73
A. The total investment income recognized by the Company and its subsidiaries for investees
accounted for under the equity method for the years 2004 and 2003 based on the financial
statements of the investee companies were $970,013 and $687,631, respectively. The financial
statements of the investee companies were audited, except Quantway Corporation, and Shen-
Tong Construction & Development Co., Ltd' as well as 3-Probe Technology Co., Ltd. for the
years 2004 and 2003, respectively, due to the financial statements of the investee companies
are not meet audit standards.
B. The Channel Overseas Corporation, Trumption Microelectronics Inc. Budworth Investments Ltd.
and Panasas Inc., as well as Jon An Technology Co., Ltd., Channel Overseas Corporation and
Vate Technology Co., Ltd., have suffered a impairment in value and the chance of recovery is
minimal, so the Company and its subsidiaries recognized impairment loss for the years 2004
and 2003 of $131,364 and $66,903, respectively.
C. The total impairment loss recognized by the Company and its subsidiaries for investees
accounted for under the equity method for the year 2004 was $9,346. Refer to Note 4(20) for
further information.
(6) PROPERTY, PLANT AND EQUIPMENT - NET
December 31,
2004 2003
Cost
Land $ 1,110,055 $ 1,154,105
Buildings 4,255,264 4,411,538
Machinery 7,023,720 6,199,103
Computer and communication equipment 542,455 699,696
Transportation equipment 117,417 93,654
Furniture and fixtures 747,097 509,557
Leasehold improvements 206,524 152,140
Other equipment 422,746 416,801
14,425,278 13,636,594
Accumulated depreciation ( 3,917,925 ) ( 3,127,420 )
Accumulated impairment (Note) ( 12,427 ) -
Construction in progress and prepayments for
equipment
362,729 133,287
Net book value $ 10,857,655 $ 10,642,461
(7) OTHER ASSETS
December 31,
2004 2003
Land $ 579,238 $ 726,918
Building 130,765 136,984
Rental buildings and machinery, net 162,126 151,674
Others 9,759 39,316
881,888 1,054,892
Less: Accumulated impairment ( 90,763) -
$ 791,125 $ 1,054,892
A. The Company owns a piece of agricultural land, located at Treasure Mountain, Hsin Chu
Hsien. To develop the employees' housing project, Company sold part of the land to
constructors at $233,693 and resulted in a disposal gain of $73,017. The Company remains
to own a total area of 128,825.93 square meters.
B. The Company recognized impairment loss from lands with decline in market value of $90,763.
Refer to Note 4(20) for further information.
(8) SHORT-TERM LOANS
December 31,
2004 2003
Unsecured bank loans $ 4,450,434 $ 7,700,621
Secured bank loans 1,148,068 193,433
$ 5,598,502 $ 7,894,054
Interest rates 1.51%~3.053% 0.65%~2.11%
(9) COMMERCIAL PAPER PAYABLE
December 31,
2004 2003
Commercial paper $ - $ 380,000
Less: Prepaid interest expense - ( 623)
$ - $ 379,377
Interest rates - 0.9%~1.1%
Note: Some of the property, plant and equipment have no value due to impairment losses.
The Company recognized impairment loss $12,427 for year 2004. Refer to Note 4(20) for further information.

74 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
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75
(10) LONG-TERM DEBTS
A. Long-term loans
December 31,
2004 2003
Long-term unsecured loans-from bank $ 595,751 $ 601,933
Long-term secured loans-from bank 276,025 293,194
$ 871,776 $ 895,127
Interest rates 1.63%~1.98% 1.55%~1.98%
As of December 31, 2004, long-term loans are payable in installments with final
payment due in 2008.
B. Bonds payable
December 31,
2004 2003
Secured bonds payable $ 4,500,000 $ 2,500,000
Current portion ( 2,500,000 ) -
$ 2,000,000 $ 2,500,000
A. On November 27, 2000, the Company issued secured bonds. The main terms of the issue are
as follows:
(a) Total amount: $2,500,000
(b) Interest rate: 5.82 per annum net of withholding tax
(c) Maturity date: November 27, 2005¡ãDecember 13, 2005.
(d) Collateral: buildings and land. (Refer to Note 6)
B. On May 25, 2004, the Company issued secured bonds.
The main terms of the issue are as follows:
(a) Total amount: $2,000,000
(b) Interest rate: 1.60 per annum for par value $1,500,000. Floating rate with approximately
1.6% after hedging for par value $500,000.
(c) Maturity date: May 25, 2008 for par $500,000 and May 25, 2009 for par $1,500,000.
(d) Collateral: Equity securities. (Refer to Note 6)
(11) OTHER LIABILITIES
December 31,
2004 2003
Minority interest $ 1,017,075 $ 833,064
Deferred credit-unrealized inter-company
71,184 75,780
gains
$ 1,088,259 $ 908,844
(12) RETIREMENT FUND
A. All of the regular employees of the Company are covered by the pension plans. Under the
plans, the Company and its consolidated subsidiary company contribute each an amount
equal to 2% of total wages on a monthly basis to the pension fund deposited with the Central
Trust of China. Pension benefits are generally based on service years and are paid from
fund previously contributed.
B. Based on actuarial assumptions for the years 2004 and 2003, the discount rate are 3.5%
for both years, expected rate of return on plan assets are 3.5% and 2.75%, respectively,
and the rate of compensation increase is 3% for both years. The transition obligation is
amortized equally over 15 years.
The Company's funded status of pension plan is listed as follows:
(a) Reconciliation of plan funded status to balance sheet amounts
December
31, 2004
December
31, 2003
Vested benefit obligation ( $ 10,963 ) ( $ 9,473 )
Non-vested benefit obligation ( 220,198 ) ( 179,157 )
Accumulated benefit obligation ( 231,161 ) ( 188,630 )
Effect of projected salary increase ( 124,690 ) ( 90,566 )
Projected benefit obligation ( 355,851 ) ( 279,196 )
Market-related value of plan assets 206,181 190,973
Funded status ( 149,670 ) ( 88,223 )
Unrecognized transition obligation ( 6,298 ) ( 7,348 )
Unrecognized loss 117,848 77,408
Prepaid pension cost ( $ 38,120 ) ( $ 18,163 )
Vested benefit $ 13,594 $ 11,384
(b) Net periodic pension cost
2004 2003
Service cost $ 27,876 $ 24,955
Interest cost 9,772 8,653
Expected return on plan assets ( 5,251 ) ( 5,742 )
Amortization of unrecognized gain 4,612 ( 1,050 )
Amortization of net transition
obligation ( 1,050 ) 1,949
Net periodic pension cost $ 35,959 $ 28,765

76 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
77
(13) CAPITAL
A. The Company has authorized capital of 1,710,000 thousand shares (of which 150,000
thousand shares are reserved for employees' stock options and 200,000 thousand shares
are reserved for bonds with detachable warrants) with NT$10 (in dollar) par value per share.
As of December 31, 2004, the total issued common shares amounted to $10,814,761.
B. The exercise price of the Company's stock option incentive plan was based on the market price
of the Company's common stock on the issuance date. The exercise price can be adjusted
when the Company issues stock dividends or declares cash dividends after option granted.
Employees can exercise options ratably over a four-years period and expire in six years.
C. A summary of the activity under the Company's stock option plans is set forth below:
Outstanding at the
beginning of the
year
For the year ended December 31, 2004 For the year ended December 31, 2003
In thousands of
shares
Weighted average
exercisable price
(in NT dollars)
In thousands of
shares
Weighted average
exercisable price
(in NT dollars)
78,755 $ 9.3 99,000 $ 9.5
Option granted - -
Stock dividends or
adjustment of
number of options - -
Option exercised ( 25,094 ) 9.0 ( 14,813 ) 9.3
Option confiscated ( 3,902 ) ( 5,432 )
Outstanding at the
end of the year 49,759 8.8 78,755 9.3
Exercisable options
at the end of the year 25,009 29,255
Approved and not yet
issued options at
the end of the year - -
D. As of December 31, 2004, the summary of the outstanding stock option plan was as follows:
Range of
exercisable
price
(in NT dollars)
Number of options outstanding at the end of the
year
In thousands
of shares
Expected
weighted
average
residual
years
Weighted
average
exercise price
(in NT dollars)
Exercisable options at the end of the
year
In thousands
of shares
Weighted
average
exercise price
(in NT dollars)
$ 8.8 49,759 2.75 $ 8.8 25,009 $ 8.8
(14) CAPITAL RESERVE
According to the R.O.C. Company Law, capital reserve shall be exclusively used to offset
against accumulated deficit. However, capital reserve arising from paid-in capital in excess of
par and donation can be used to increase capital after covering accumulated deficit. The
capitalization of the paid-in capital in excess of par and donation is limited to 10% of the
Company's capital each year.
(15) RETAINED EARNINGS
A. Legal reserve
In accordance with the Company Law and the Company's Articles of Incorporation, the
annual net income should first be used to cover any accumulated deficit, thereafter, 10%
of the remaining balance shall be set aside as legal reserve until the legal reserve equals
the total paid in capital. The legal reserve shall only be used either to cover losses or to
increase share capital.
B. Undistributed earnings
(a) According to the Company's Articles of Incorporation, current year's earnings, if any,
shall be distributed in the following order:
(1) Paying all taxes and dues;
(2) Covering prior years' operating losses, if any;
(3) Setting aside 10% of the remaining amount, after deducting
(1) and (2), as legal reserve;
(4) Setting aside special retained earning reserve of the remaining amount, after
deducting (1), (2) and (3), by the resolution of shareholders' meeting.
(5) Allocating dividends and bonuses.
(6) Allocating at least 5% of the remaining amount, after deducting (1), (2), (3), (4)
and (5) as employees' bonus.
The distribution of the Company's undistributed earnings shall be proposed by the
Board of Directors and the resolved in the annual Stockholders' meeting.
(b) The Company has not yet held the meeting of board of directors to discuss the earnings
distribution proposal for the fiscal year 2004 by March 16, 2005; the related information
can be obtained from the "Market Observation Post System" website of Taiwan Stock
Exchange Corporation after the approval of the resolution adopted by the board of
directors and shareholders.

78 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
79
(c) The information on the 2003 earnings distribution for employees' bonuses and directors'
and supervisors' remuneration are as follows:
A. According to the R.O.C. Securities Exchange Act, the percentage of the number of shares
of treasury stock should not exceed 10% of the total shares of common stocks issued by
(1) Distribution
a. Employee cash bonuses
b. Employee stock dividends
(a) Shares (in thousands of shares)
(b) Amount
(c) Percentage of outstanding shares in 2003
c. Directors’ and supervisors’ remun eration
(2) Information about earnings per share (in dollars)
a. Original EPS
b. Imputed EPS(Note)
Approved in the Stockholders
Meeting
$ 94,632
$ -
-
$ 4,000
$ 1.03
$ 0.93
the Company and the total amount of treasury stock should not exceed the total amount
of retained earnings, paid-in capital in excess of par value of shares and realized capital
reserve. As of December 31, 2004, the Company's treasury stock amounted to $618,055.
B. According to the R.O.C. Securities Exchange Act, the treasury stock should not be pledged
and has no shareholder rights until transferred.
C. As of December 31, 2004, the Company's common shares held by TFC and So Fung
Investment Co., Ltd. are 15,122 thousands of shares, with average book value of $14.793
dollars per share and market value of $16.278 dollars per share.
(17) INCOME TAX
A. Income tax expense and payable:
Note: Imputed EPS¡×(Net income¡Ðemployees' bonuses¡Ðdirectors' and supervisors' remunerations)
/weighted average outstanding common shares for 2003.
(d) The Company had resolved to distribute cash dividends $0.5 and $0.2 (in dollar) per share
at 2004 and 2003's meetings of board of shareholders. In addition, an adjustment of cash
dividend from $0.5 to $0.5054 per share is made due to treasury stocks and stock option
exercised.
(16) TREASURY STOCK
Reason for reacquisition
Beginning
shares
2004
(in thousands of shares)
Addition Reduction Ending
shares
Transfer shares to employees 25,000 26,000 9,062 41,938
Company’s common shares held
by TFC and So Fung Investment
Co., Ltd.
Reason for reacquisition
Beginning
shares
15,122 - - 15,122
2003
(in thousands of shares)
Addition Reduction Ending
shares
2004 2003
Tax on pretax income at statutory tax rate $ 699,650 $ 330,141
Tax effect of permanent differences ( 124,871 ) ( 67,391 )
Additional 10% income tax on unappropriated
earnings 6,754 9,124
Investment tax credits ( 257,711 ) ( 165,966 )
Loss carryforwards ( 2,715 ) 62,010
Valuation allowance of deferred income tax ( 67,774 ) ( 87,918 )
assets
Adjustment of prior year’s income tax expense ( 1,787 ) ( 6,089 )
Income tax expense 251,546 73,911
Net effect of deferred income tax assets
( 105,663 ) ( 18,658 )
(liabilities)
Adjustment of prior year’s income tax expense 1,787 6,089
Prepaid income tax ( 45,721 ) ( 22,085 )
Tax which is subjected to separate withholding
income tax and income tax paid by subsidiary ( 638 ) ( 4,539 )
Translation adjustment ( 1,800 ) ( 60 )
Income tax payable $ 99,511 $ 34,658
Transfer shares to employees 190 25,000 190 25,000
Company’s common shares held
by SSDL and its subsidiaries, TFC
and So Fung Investment Co., Ltd.
17,959 2,013
(Note)
4,850
(Note)
15,122
Note: The additional shares resulted from acquisitions by SSDL's subsidiary for employee deferred compensation plan.
However SSDL's ownership of its subsidiary declining to below 50%, the shares are not belonging to treasury stock.

80 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
81
B. The deferred income tax assets and liabilities:
December December
31, 2004 31, 2003
Deferred income tax assets – current $ 479,678 $ 302,150
Deferred income tax assets – non-current $ 333,896 $ 483,421
Deferred income tax liabilities – current $ - $ -
Deferred income tax liabilities-non-current $ 882,512 $ 681,073
Valuation allowance on deferred tax
assets
C. Components of deferred income tax assets and liabilities:
Current (shown in other current
assets):
Temporary differences
Provision for loss on obsolete
inventories
$ 311,714 $ 379,487
December 31, 2004 December 31, 2003
Amount Tax Effect Amount Tax Effect
$ 311,783 $ 77,946 $ 320,849 $ 80,212
Unrealized warranty 396,640 99,160 273,709 68,427
Others 251,762 62,941 131,822 32,956
Investment tax credit 239,631 120,555
$ 479,678 $ 302,150
E. E. As of December 31, 2004, the Company's unused loss carryforward was $0.
F. The Company's income tax returns for the years through 2001 have been assessed and
approved by the Tax Authority. The Company has been assessed part of the research and
development for 2000 and 2001 did not qualify for tax credit. The Company has applied
for reinvestigation.
G. Unappropriated earnings
December 31, 2004 December 31, 2003
Earnings earned before $ 323,371 $ 323,371
1997
Earnings earned after 1998 3,420,600 2,003,564
$ 3,743,971 $ 2,326,935
H. As of December 31, 2004 and 2003, the balance of stockholders' tax credit account was
approximately $74,945 and $90,051. The estimated ratio of deductible tax credit for the
appropriation of the 2004 earnings is 3.5%. The ratio of deductible tax credit for the
appropriation of 2003 earnings was 4.69%.
Non-current:
Temporary differences
Unrealized investment gain ( $3,530,046) ( $ 882,512 ) ( $2,724,291) ( $ 681,073 )
Others 87,569 21,893 37,238 9,310
Loss carryforward - - 80,863 20,216
Investment tax credit 312,003 453,895
Valuation allowance ( 311,714 ) ( 379,487 )
( $ 860,330 ) ( $ 577,139 )
D. As of December 31, 2004, the Company's unused investment tax credits according to the
"Statute for Promotion of Industrial Upgrading" were as follows:
Item Total Amount Unused Amount Year of Expiry
Research and development $ 139,803 $ 95,490 2005
expenditure
164,689 164,689 2006
266,630 108,109 2007
172,582 172,582 2008
540,870
Machinery Equipment 123 123 2005
3,154 3,154 2008
3,277
Employee training expenditure 1,512 1,512 2006
3,168 3,168 2008
4,680
Investment in prosperous
7,154 2,807 2007
important strategic industry
$ 551,634

82 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
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83
(18) EARNINGS PER SHARE
Amount
Income before
income tax
For the period ended December 31, 2004
Net income
Outstanding
Common
Shares
(in thousands
of shares)
Income per share (in dollars)
Income before
income tax
Net income
Primary earnings
per share:
Net income $ 2,394,045 $ 2,142,499 1,015,283 $ 2.36 $ 2.11
Less: effect of
dilutive
potential
common
stocks issued
by investee
companies
under equity
method ( 96,143) ( 77,399)
Effect of dilutive
potential
common
stocks:
Employee stock
options - - 25,922
Diluted earnings
per share $ 2,297,902 $ 2,065,100 1,041,205 $ 2.21 $ 1.98
Amount
Income before
income tax
For the period ended December 31, 2003
Net income
Outstanding
Common
Shares
(in thousands
of shares)
Income per share (in dollars)
Income before
income tax
Net income
Primary earnings
per share:
Net income $ 1,125,384 $ 1,051,473 1,021,545 $ 1.10 $ 1.03
Less: effect of
dilutive
potential
common
stocks issued
by investee
companies
under equity
method ( 58,439) ( 44,169)
Effect of dilutive
potential
common
stocks:
Employee stock
options - - 29,123
Diluted earnings
per share $ 1,066,945 $ 1,007,304 1,050,668 $ 1.02 $ 0.96
Shown in cost
of sales
For the period ended December 31, 2004
Shown in
operating
expenses
Shown in
non-operating
expenses
Total
Personnel expenses $ 1,586,041 $ 1,559,584 $ - $ 3,145,625
Salaries 1,353,839 1,357,135 - 2,710,974
Labor and health insurance 52,420 73,304 - 125,724
Pension 54,273 54,427 - 108,700
Others 125,509 74,718 - 200,227
Depreciation 840,266 285,454 36,666 1,162,386
Depletion - - - -
Amortization 308,548 80,234 - 388,782
Shown in cost
of sales
For the period ended December 31, 2003
Shown in
operating
expenses
Shown in
non-operating
expenses
Total
Personnel expenses $ 1,130,768 $ 1,556,125 $ 1,225 $ 2,688,118
Salaries 792,600 1,277,945 - 2,070,545
Labor and health insurance 66,775 66,770 - 133,545
Pension 5,084 44,336 - 49,420
Others 266,309 167,074 1,225 434,608
Depreciation 651,718 330,810 39,140 1,021,668
Depletion - - - -
Amortization 310,929 46,281 - 357,210
Included in
Income Statement
Included in
Stockholders’
Equity
Impairment loss – Long-term investment $ 9,346 $ -
Impairment loss – Property, plant and
12,427 -
equipment
Impairment loss – Other assets (Land) 90,763 -
Total $ 112,536 $ -

84 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
85
Because of poor operating performance of some of the Company's investee company, as well
as idle property, plant, equipment and land, the Company evaluated that the net fair value had
declined to below the carrying amount of those assets listed above and, accordingly recognized
impairment losses.
5.RELATED PARTY TRANSACTIONS
(1) Names and Relationship with Related Parties
Names of the related parties
MITAC Inc.
MITAC Technology Corp. (MTC)
Tyan Computer Technology Corp. (TYAN)
Tsu Fung investment Corp.
3Probe Technologies Corp.
Quantway Corporation
Lian Jie Investment Co., Ltd.
Shen-Tong Construction & Development
Co., Ltd.
So Fong Investment Co., Ltd.
Mio Technology Corp.
Wisdom Investment Co., Ltd.
Tyan Computer Corp. (TYAN US)
Top Wisdom International Corp.
Getac Inc.
Synnex Corp. and its subsidiaries (SYNNEX)
(Note)
GETAC Technology (KUNSHAN) Co., Ltd.
(GTK)
Synnex International Corp. (SIC)
Harbinger Venture Management Co., Ltd.
Lien Hwa Industrial Corp.
Harbinger II (BVI) Venture Capital Corp.
United Industrial Gas Corp.
BOC Lien Hwa Industrial Gas Corp.
Union Petrochemical Corp.
Gemtek Technology Co., Ltd. (Gemtek)
Company
The major investor of the Company.
Investee Company accounted for under the equity method.
Investee Company accounted for under the equity method.
Investee Company accounted for under the equity method.
Indirect Investee Company accounted for under the equity
method.
Indirect Investee Company accounted for under the equity
method.
Indirect Investee Company accounted for under the equity
method.
Indirect Investee Company accounted for under the equity
method.
Indirect Investee Company accounted for under the equity
method.
Indirect Investee Company accounted for under the equity
method.
Common board chairman.
Common board chairman.
The relationship with the
Investee Company accounted for under the equity method.
Investee Company accounted for under the equity method.
Investee Company accounted for under the equity method.
Investee Company accounted for under the equity method.
Indirect Investee Company accounted for under the equity
method.
Indirect Investee Company accounted for under the equity
method.
Common board chairman.
Common board chairman.
Common board chairman.
The two Companies’ chairmen have blood relation.
The Company’s chairman is Union’s director
The Company is Gemtek’s director
Note: One of SSDL's subsidiaries before SSDL changed its ownership to below 50% in December 2003.
(2) Significant Related Party Transactions
A. Purchases from
2004 2003
MTC $ 73,731 $ 252,985
TYAN 296,994 181,115
Others 281,447 232,957
$ 652,172 $ 667,057
The purchase price to related parties is based on market value.
The payment period is 150 days and 90 days after offsetting certain receivable and payables
according to payment terms to overseas and domestic related parties, respectively. The
payment period for ordinary customers is approximately 90 days after purchase date.
B. Sales to
The selling price to related parties is based on market value.
The collection period is 150 days and 90 days after offsetting certain receivables and payables
according to payment terms to overseas and domestic related parties, respectively. The
collection period for ordinary customer is approximately 90 days after shipping date.
C. Accounts receivable
2004 2003
SYNNEX $ 12,765,429 $ 8,428,719
MTC 7,761,192 5,669,589
TYAN US 832,646 1,117,326
Gemtek 1,652,615 66,486
GTK 1,400,372 -
Others 1,077,932 495,557
$ 25,490,186 $ 15,777,677
December 31,
2004 2003
SYNNEX $ 2,309,537 $ 2,933,856
MTC 1,127,077 453,974
Gemtek 455,854 -
Others 494,596 220,935
$ 4,387,064 $ 3,608,765

86 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
87
D. Other receivable
December 31,
2004 2003
MTC $ 53,038 $ 70,452
Others 15,578 18,432
$ 68,616 $ 88,884
E. Accounts payable
December 31,
2004 2003
MTC $ 196,858 $ 190,436
Others 107,421 57,506
$ 304,279 $ 247,942
F. In 2004 and 2003, the Company paid expenses to related parties amounting to $29,745 and
$46,947, respectively.
G. As of December 31, 2004 and 2003, the Company guaranteed and endorsed the bank loans
of Top Wisdom International Corp. amounting to $131,722 and $120,700, respectively.
As of December 31, 2004 and 2003, the Company guaranteed and endorsed certain
contracts of MITAC Inc. amounting to $0 and $1,828,521, respectively. Guarantee is secured
by 4,066 thousand shares of listed stock in 2003 (market value at December 31, 2003 was
approximately $187,036).
As of December 31, 2004 and 2003, the Company provided guarantees of rent to MITAC
Technology Co., Ltd. amounting to $13,842 and $9,667, respectively.
As of December 31, 2004 and 2003, the Company guaranteed and endorsed the bank
loans of Tsu Fung Investment Co., Ltd. amounting to $260,000 and $420,000.
As of December 31, 2004 and 2003, the Company guaranteed and endorsed the bank
loans of So Fung Investment Co., Ltd. amounting to $220,000 and $220,000, respectively.
As of December 31, 2004 and 2003, MITAC Technology Corp. provided guarantees of
rent to the Company amounting to $3,450 and $6,311, respectively.
H. In 2004 and 2003, the Company earned rent revenue from related parties amounted to
$27,306 and $27,367, respectively.
6.ASSETS PLEDGED AS COLLATERAL
December 31,
ASSETS 2004 2003 Subject of collateral
Other current assets- other
assets:
Land $ 1,249,184 $ 1,339,947 Bonds payable
Building 2,405,339 2,264,133 Bonds payable short-term
debts and long-term debts
Long-term investment:
Marketable security 737,546 - Bonds payable
$ 4,392,069 $ 3,604,080
7.COMMITMENTS AND CONTINGENT LIABILITIES
(1) The Company has outstanding letters of credit for inventory purchases of approximately
$167,429 and $23,818 at December 31, 2004 and 2003, respectively.
(2) The Company has credit lines for guarantee of customs duties in 2004 and 2003. As of
December 31, 2004 and 2003, the amount of customs duties guaranteed by the bank was
$8,000 and $6,000, respectively.
(3) The Company leased certain land (from 1987 to 2008), factories and offices (to September
2005) under operating leases. Annual rental payments are approximately $14,035.
8.SIGNIFICANT DISASTER LOSS
None.
9.SIGNIFICANT SUBSEQUENT EVENT
None.
10.OTHER INFORMATION
(1) FAIR VALUE OF FINANCIAL INSTRUMENTS
December 31, 2004 December 31, 2003
Financial Assets Book value Fair value Book value Fair value
Short-term financial assets with fair
value equal to book value $ 16,763,729 $ 16,763,729 $ 11,606,088 $ 11,606,088
Marketable securities 1,403,559 1,405,900 2,641,605 2,641,605
Long-term investments 9,507,372 14,127,314 9,043,663 10,188,596
$ 27,674,660 $ 32,296,943 $ 23,291,356 $ 24,436,504
Sale of forward foreign exchange $ 270,610 $ 270,610 $ 26,736 $ 26,736
Buy US$ Put option $ - $ - $ 45,492 $ 45,492
Sell US$ SWAP $ 62,774 $ 62,774 $ - $ -
Interest rate SWAP $ 3,685 $ 3,685 $ - $ -
December 31, 2004 December 31, 2003
Financial Liabilities Book value Fair value Book value Fair value
Financial liabilities with fair value
equal to book value $ 25,224,964 $ 25,224,964 $ 22,973,076 $ 22,973,076
Bonds payable 4,500,000 4,525,946 2,500,000 2,608,983
$ 29,724,964 $ 29,750,910 $ 25,473,076 $ 25,582,059
Purchase of forward foreign
$ 128,541 $ 128,541 $ 28,703 $ 28,703
exchange
Sell US$ put Option $ 101,241 $ 101,241 $ 4,940 $ 4,940
Interest rate Swap $ - $ - $ 808 $ 808

88 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
89
The methods and assumptions used to measure the fair value of financial instruments are
as follows:
A. The carrying amounts of short-term financial assets and liabilities: approximate fair values
due to their short maturities.
B. The fair values of marketable securities and long-term investments are based on the
market value of the securities or, if market value is unavailable, the net equity of the
investee companies are used as fair value.
C. Fair value of bonds payable is estimated by the market value.
D. The book value of long-term loans is used as fair value as the loans bear floating interest
rates.
E. Derivative financial instruments: The estimated fair values are the expected cash flow
(using rates quoted by financial institutions) if the contracts are terminated at the balance
sheet date, including unrealized gains or losses generally. The quotes from financial
institutions are available for most of the Company's derivate financial instruments.
(2) Inter-company eliminate transactions:
Eliminate transactions Transaction parties 2004 2003
1.Write-off of long-term investments and
stockholders’ equity
MITAC
International
Corp. , MITAC
Precision
Technology Co.,
Ltd.and Silver Star
Developments Ltd.
and its
subsidiaries
$ 10,399,947 $ 8,413,318
2.Write-off of inter-company receivables and
" 5,983,720 3,362,301
payables
3.Write-off of inter-company purchases and
" 38,767,838 24,846,663
sales
4.Write-off of inter-company unrealized gain " 3,665 61,728
11. SPECIAL DISCLOSURE ITEMS
A. Information of Significant Transactions:
(1) Loans to others attributed to financial activities as of December 31, 2004: None.
(2) The endorsements and guarantees provided by the Company to others as of December 31, 2004:
Company being guaranteed
Guarantor
company
The ceiling of
the outstanding
guarantee for
the respective
party
The ratio of
accumulated
guarantee
amount to net
asset value of the
Company
The amount of
guarantee with
collateral placed
The outstanding
guarantee
amount at
Dec.31, 2004
The highest
outstanding
guarantee
amount during
2004
The limit of
guarantee for
such party
Relationship with
the Company
Name Name
$28,052 $1,828,521 $ - - - $17,738,452
MITAC Inc. Business
relationship
MITAC
International Corp.
" 82,522 13,842 13,842 - 0.08% "
" MITAC
Technology
Corp.
Subsidiary 8,869,226 400,000 395,000 - 2.23% "
" MITAC Precision
Technology Co.,
Ltd.
" 8,869,226 420,000 260,000 - 1.47% "
Subsidiary 8,869,226 220,000 220,000 - 1.24% "
" Tsu Fung
Investment Co.
" So Fung
Investment Co.,
Ltd.
" MITAC Japan
" 8,869,226 116,000 116,000 - 0.65% "
Corp.
" MITAC U.S.A
" 8,869,226 59,093 - - - "
Inc.
" MITAC U.K. Ltd. " 8,869,226 15,000 15,000 - 0.08% "
8,869,226 166,126 131,722 - 0.74% "
Joint venture
investee Company
" Top Wisdom
International
Corp.
Subsidiary 8,869,226 1,196,400 1,196,400 - 6.74% "
" Silver Star
Developments
Ltd.

90 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
91
(3) Marketable securities held as of December 31, 2004:
Investor Types
MITAC
International
Corp.
Common
Stocks
Name of marketable
securities
MITAC Technology
Corp.
" " Silver Star
Developments Ltd.
Relationship of the
issue with the
Company
Investee Company
accounted for under
the equity method.
General ledger
account
Long-term
investment
Number of shares Book value
December 31, 2004
Percentage
ownership
Market value (Note1)
93,426,408 $1,450,659 37.79% $1,331,326
(Note 2)
" " 160,195,404 9,082,936 100.00% 9,082,936
" " Tyan Computer Corp. " " 4,650,720 78,958 8.82% 78,958
" " Tung Da Investment
" " 37,963,076 445,164 49.99% 445,164
Co., Ltd.
" " Tsu Fong Investment
Co.
" " 16,500,000 373,969 100.00% 597,666
(Note 3)
" " 3-Prode Technologies
Co., Ltd.
" " MITAC Precision
Technology Co., Ltd.
" " Lian Jie Investment
Co., Ltd.
" " 1,080,000 8,865 23.13% 8,865
" " 42,569,341 798,255 46.62% 798,255
" " 12,995,000 127,835 49.98% 127,835
" " Quantway Corporation " " 1,385,000 - 49.73% -
" " Shen-Tong
" " 1,403,700 14,022 46.79% 14,022
Construction &
Development Co., Ltd.
" " Channel Overseas
None " 5,500,000 8,626 5.00% 8,626
Corporation
" " Vate Technology Co.,
" " 397,191 5,022 0.27% 1,219
Ltd.
" " MITAC Inc. The major investor of " 24,825,752 645,051 8.92% 645,051
" " Overseas Investment
& Development Corp.
" " Union Petrochemical
Corp.
" " Lien Hwa Industrial
Corp.
the Company
None " 1,000,000 10,000 1.11% 10,000
Common board
chairman
" 11,107,267 189,340 1.53% 144,061
" " 20,475,398 268,373 3.09% 250,619
" " Gemtek Technology Board member of
" 3,803,578 36,007 2.98% 301,738
Co., Ltd.
Gemtek
" " Harbinger II (BVI) Common board
" 28,099,000 280,990 14.05% 280,990
Venture Capital Corp. chairman
" " Actrans System Inc. None " 2,000,000 20,000 6.68% 20,000
" " Trumption
Microelectronics Inc.
" " 916,300 - 2.93% -
MITAC
International
Corp.
Mutual funds AB N AMRO SELECT
BOND FUND
" " ABN AMRO SELECT
BOND FUND
" " JF (Taiwan) First Bond
Fund
" " JF (Taiwan) Bond
Fund
" Credit linked
note
" Convertible
bonds
" Convertible
bonds assets
Swap
Mega Financial 0% 05
CLN
MITAC Technology
Corporation
TYNTEK CORP ISIN
TAIWAN
None Short-term
investment
20,607,200 302,232 - 302,264
" " 23,748,526 261,977 - 262,008
" " 22,053,959 302,040 - 302,060
" " 11,188,773 166,247 - 166,258
" " - 44,684 - 44,684
Investee company
accounted for under
the equity method
" 1,401 140,762 - 142,902
None " - 20,000 - 20,000
Note1: The market value of investments accounted for under equity method was based on the net asset value of the investee company, while the
market value of investments accounted for under cost method was based on acquisition cost if not listed or the average closing price during the
last month of the year if listed.
Note2: The investor provided 47,500 thousand shares as collateral.
Note3: The book value decreased $223,697 because the Company dealt with those shares held by Tsu Fung Investment Corp. and its subsidiaries
according to Statement of Financial Accounting Standards for treasury stocks.
(4) Marketable securities for which total buying or selling exceeded $100,000 or 20 percent of capital stock for the year ended December 31, 2004:
Beginning balance Additions Disposals Ending balance
Investor
Types and
names of
marketable
securities
General
ledger
account
Counter
Party
Relationship
with Counter
Party
Number of
shares
Amount
Number of
shares
Amount
Number of
shares
Selling
price
Cost
Gain/Loss
from
disposal
Number of
shares
Amount
(Note 1)
MITAC
International
Corp.
Common
stocks-MITAC
Precision
Technology Co.,
Ltd.
Long-term
investment
MPT Subsidiary $33,491,150 $530,140 $9,078,191 181,564 - - - - 42,569,341 798,255
" Common
stocks-Silver
Star
Developments
Ltd.
" SSDL Subsidiary 127,875,404 7,721,679 32,320,000 1,080,855 - - - - 160,195,404 9,082,936
" Grand Cathay
Bond Fund
Short-term
investment
Third
party
3,233,328 40,100 85,752,052 1,068,000 88,975,380 1,108,611 1,108,100 511 - -

92 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
93
Beginning balance Additions Disposals Ending balance
Investor
Types and
names of
marketable
securities
General
ledger
account
Counter
Party
Relationship
with Counter
Party
Number of
shares
Amount
Number of
shares
Amount
Number of
shares
Selling
price
Cost
Gain/Loss
from
disposal
Number of
shares
Amount
(Note 1)
" Jih Sun Bond
Fund
" " 12,846,618 168,149 31,963,717 419,000 44,810,335 587,410 587,149 261 - -
" KGI Victory Fund " " - - 99,067,645 1,029,186 99,067,645 1,029,671 1,029,186 485 - -
" The Wan Pao
Fund
" NT$ High Yield
Fund
" ShinKong
Chi-Shin Fund
" Far Eastern
Alliance Taiwan
Bond Security
Investment Trust
Fund
" The First Global
Investment Trust
Duo Li Bond
Fund
" The First Global
Investment Trust
Duo Li=2 Bond
Fund
" " 4,123,286 60,034 20,527,142 300,000 24,650,428 360,366 360,034 332 - -
" " - - 84,680,453 1,353,000 84,680,453 1,353,872 1,353,000 872 - -
" " - - 74,950,598 1,038,059 74,950,598 1,038,573 1,038,059 514 - -
" " - - 76,325,063 800,000 76,325,063 800,667 800,000 667 - -
" " - - 23,802,763 382,000 23,802,763 382,145 382,000 145 - -
" " - - 68,282,129 961,000 68,282,129 961,355 961,000 355 - -
" PAC Bond Fund " " 20,082,036 299,849 16,208,034 242,982 36,290,070 544,494 542,831 1,663 - -
" UPAMC
HOMERUN
Bond Fund
" UPAMC JAMES
Bond Fund
" EnTrust Phoenix
Bond Fund
" Entrust Kirin
Bond Fund
" Sheng Hua 1699
Bond Fund
" " 15,251,593 205,306 46,657,940 630,261 61,909,533 837,217 835,567 1,650 - -
" " - - 11,251,425 168,000 11,251,425 168,065 168,000 65 - -
" " 19,876,063 287,223 19,876,063 288,412 39,752,126 578,032 575,635 2,397 - -
" " 22,779,760 241,532 26,162,169 278,535 48,941,929 522,157 520,067 2,090 - -
" " 12,738,868 151,498 23,225,536 277,278 35,964,404 430,302 428,776 1,526 - -
Beginning balance Additions Disposals Ending balance
Investor
Types and
names of
marketable
securities
General
ledger
account
Counter
Party
Relationship
with Counter
Party
Number of
shares
Amount
Number of
shares
Amount
Number of
shares
Selling
price
Cost
Gain/Loss
from
disposal
Number of
shares
Amount
(Note 1)
" Sheng Hua 5599
Bond Fund
" ABN AMRO
Bond Fund
" ABNAMRO
Select Bond
Fund
" Invesco GP Bond
Fund
" " 23,814,873 255,851 18,338,884 197,713 42,153,757 454,901 453,564 1,337 - -
- - 82,428,799 1,203,630 61,821,599 903,630 901,398 2,232 20,607,000 302,232
" " - - 148,857,362 1,633,239 125,108,836 1,373,267 1,371,262 2,005 23,748,526 261,977
" " - - 9,730,723 140,000 9,730,723 140,035 140,000 35 - -
" Barits Bond Fund " " - - 14,753,288 173,000 14,753,288 173,252 173,000 252 - -
" JF (Taiwan) First
Bond Fund
" JF (Taiwan)
Bond Fund
" UBS Taiwan
Bond Fund
" UBS Soaring
Eagle Bond Fund
" Convertible
bond-MITAC
Technology
Corporation
" " - - 91,894,253 1,253,178 69,840,294 953,183 951,138 2,045 22,053,959 302,040
" " - - 65,073,872 962,034 53,885,099 797,037 795,787 1,250 11,188,773 166,247
" " - - 15,656,906 225,000 15,656,906 225,070 225,000 70 - -
" " - - 24,768,982 260,000 24,768,982 260,077 260,000 77 - -
" " - - 1,401 140,762 - - - - 1,401 140,762
Note 1: Including the investment gain or loss of the investee companies, cumulative translation adjustments of long-term investment,
adjustment of capital reserve due to change in equities in long-term investments.
(5)Real estate acquired amounting to over $100,000 or 20 percent of the Company's capital stock for the year ended December 31, 2004: None.
(6) Real estate disposed amounting to over $100,000 or 20 percent of the Company's capital stock for the year ended December 31, 2004:
Name of
seller
Name of
the
properties
Date of
transaction
Acquisition
date of the
properties Book value
Transaction
amount
Status of
payment
receiving
Gain/Loss
on disposal
Counter
party
The
relationship
with the
seller
Reason for
disposal
The bases or
reference used in
deciding the price
Other
commitments
MITAC
International
Corp.
Land at
Treasure
Mountain
2004.6 1989.12 $160,676 $233,693 The
Company
has received
notes
receivable
$73,017 8 people of
non related
parties
None Development Based on appraisal
by a professional
None

94 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
95
(7) Purchases or sales transactions with related parties exceeding $100,000 or 20 percent of capital for the ended December 31, 2004:
The company
buying /selling
products
MITAC
International
Corp.
Name of
related parties
Silver Star
Developments
Ltd. and its
subsidiaries
Relationship
with the
Company
Investee
company
accounted for
under the equity
method.
Purchase
(Sales)
Amount
Transactions The reason and situation of having different
transaction terms between related parties
Percentage
of
(purchase)
sales
Credit Term Unit price Credit Term Balance
Accounts & notes
receivable (payable)
Percentage
of account
Sales $740,835 1% Note 1 Note 2 Note 1 $96,993 1%
" " " Purchase 20,416,965 43% Note 3 " Note 3 ( 3,548,725) 46%
Sales 832,646 2% Note 1 " Note 1 78,758 1%
" Tyan Computer
Corp.
Indirect investee
company
accounted for
under the equity
method.
" MITAC Investee
Purchase 1,292,557 3% Note 3 " Note 3 ( 197,179 ) 3%
Precision company
Technology accounted for
Co., Ltd. under the equity
method.
" Tyan Computer Investee
Sales 513,168 1% Note 1 " Note 1 144,788 1%
Technology company
Corp.
accounted for
under the equity
method.
" " " Purchase 119,372 - Note 3 " Note 3 - -
Sales 411,535 1% Note 1 " Note 1 38,806 -
" Synnex
International
Corp.
Common board
chairman.
" " " Purchase 163,281 - Note 3 " Note 3 ( 37,758 ) -
Sales 12,748,758 25% Note 1 " Note 1 2,305,558 20%
" Synnex Corp.
and its
subsidiaries
" Gemtek Tech
Co., Ltd.
Indirect investee
company
accounted for
under the equity
method.
The Company is
Gemtek’s
director
Sales 1,652,615 5% Note 1 " Note 1 455,854 4%
Footnote
Note 1: The collection period is 150 days and 90 days after offsetting certain receivable and payables according to payment terms to overseas and
domestic related parties, respectively. And the collection period of ordinary customers is approximately 90 days after shipping date.
Note 2:GThe selling price to related parties is based on market value.
Note 3:GThe payment period is 150 days and 90 days after offsetting certain receivable and payables according to payment terms to overseas and
domestic related parties, respectively. And the payment period of ordinary customers is approximately 90 days after purchase date.
(8) Receivables from related parties exceeding $100,000 or 20 percent of capital as of December 31, 2004:
Company Name
MITAC
International
Corp.
Name of the counter
party
Silver Star
Developments Ltd.
and its subsidiaries
" Synnex Corp. and its
subsidiaries
" Tyan Computer
Technology Corp.
" Gemtek Tech Co.,
Ltd.
Relationship with
the counter party
Investee company
accounted for
under the equity
method
Indirect investee
company
accounted for
under the equity
method
Investee company
accounted for
under the equity
method
The Company is
Gemtek’s director
Balance of receivable from related party Overdue receivable
Notes/Accounts
receivable
Other
receivables
Total
Turnover
rate (times)
$96,993 $12,123 $109,116 2.37 $
Amount
-
Collection
method
Subsequent
received
amount
Bad debt
allowance
provided
N/A $96,993 $ -
2,305,558 19 2,305,577 4.87 - N/A 2,300,497 -
144,788 962 145,750 5.06 - N/A 55,043 -
455,854 124 455,978 6.38 - N/A 431,855 -
(9) Information on derivative transactions.
To hedge existing assets denominated in foreign currencies:
December 31, 2004:
Item
Sales of forward foreign
exchange
Notional Amount
(in thousands)
Fair Market Value
(in thousands)
Contract Terms
Trade date Strike Price Settlement Date
Hedged Assets
(in thousands)
Hedged
Liabilities (in
thousands)
Gain/(Loss)
Recognized
(in thousands)
US$ 228,000 NT$ 232,285 2004.08.10~2004.12.31 31.606~33.951 2005.01.03~2005.06.30 US$228,000 - NT$ 232,285
Buy of forward foreign
exchange
US$ 131,000 (NT$ 128,433) 2004.08.10~2004.12.30 31.666~33.851 2005.01.03~2005.06.24 - US$131,000 (NT$ 128,433 )
Buy of forward foreign
exchange
JPY$ 60,000 (NT$ 108) 2004.12.21 0.3113 2005.01.24 - JPY60,000 (NT$ 108 )
Sell US$ put option
(Note 3)
US$ 81,000 (NT$ 77,915) 2004.08.10~2004.12.31 31.426~33.801 2005.01.18~2005.06.30 - US$81,000 (NT 77,915 )
Buy US$ call option
(Note 3)
US$ 81,000 - 2004.08.10~2004.12.31 31.246~33.801 2005.01.18~2005.06.30 - US$81,000 -
Sell of currency SWAP US$ 74,000 NT$ 45,046 2004.10.28~2004.12.29 31.883~33.458 2005.01.05~2005.03.28 US$74,000 - NT$ 45,046
Interest rate SWAP NT$ 500,000 NT$ 3,685 2004.05.25 (Note 4) 2009.05.25 - NT$500,000 NT$ 3,685

96 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
97
December 31, 2003:
Contract Terms
Notional Amount
Item
(in thousands)
Fair Market Value
Trade date Strike Price Settlement Date
(in thousands)
Hedged Assets
(in thousands)
Hedged
Liabilities (in
thousands)
Gain/(Loss)
Recognized
(in thousands)
Sales of forward foreign
exchange
US$ 362,000 (NT$ 24,583) 2003.08.21~2003.12.31 33.48~34.137 2004.01.02~2004.07.06 US$362,000 - (NT$ 24,583 )
Buy of forward foreign
exchange
US$ 212,500 NT$ 20,704 2003.08.21~2003.12.31 32.985~34.025 2004.01.05~2004.07.06 - US$212,500 NT$ 20,704
Buy US$ call option
(Note 3)
US$ 145,000 NT$ 38,839 2003.09.03~2003.12.31 33.005~33.876 2004.01.05~2004.07.06 - US$145,000 NT$ 38,839
Sell US$ put option
(Note 3)
US$ 145,000 - 2003.09.03~2003.12.31 33.005~33.876 2004.01.05~2004.07.06 - US$145,000 -
Buy of currency SWAP US$ 53,500 (NT$ 4,319) 2003.10.06~2003.12.22 33.587~34.125 2004.01.05~2004.04.29 US$53,500 - (NT$ 4,319 )
Note 1: Credit risk: There is no significant credit risk with respect to the above transactions because the counter party banks are of good financial standing.
Note 2: Market risk: The main purpose of the transaction is to hedge exchange loss. Any change in the value of the instrument will be offset by
a corresponding change in the underlying commitment. Accordingly, no market risk is expected.
Note 3: Future cash flow: the Company will receive (pay) cash or sale (purchase) contracts on settlement dates.
Note 4: On exercise of SWAP, the amount of cash outflow is calculated at a fixed rate 1.6%, and the amount of cash inflow is calculated using a floating rate
(6-month USD-LIBOR-BBA), observed as follows:
If 6M LIBOR

98 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
99
Investor
Investee
Company
Location
(Country)
The main
business
operations
Original amount Shares held by the Company
Ending
balance
Beginning
balance
Number of
shares
Percentage
owned
Book value
Income (loss) of
the investee
company
Gain/Loss
recognized by
the company
Note
" LianJie
Investment
Co., Ltd.
Silver Star
Developments
Ltd. (SSDL)
Tsu Fung
Investment
Corp.
So Fung
Investment
Co., Ltd.
MITAC
Precision
Technology
Co., Ltd.
Tyan Computer
Technology
Corp.
" Investment 129,950 129,950 12,995,000 49.98% 127,835 (4,448) (2,223) Investee
accounted for
under equity
method
" Manufacturing
and sale of
computers and
electronic
parts, etc., etc.
" Synnex Corp. USA Information
process
services, sale
of computer
peripheral,
system and
network
products
" Brilliant Star
Holdings Ltd.
" Harbinger II
(BVI) Venture
Capital Corp.
" Shenyang
Heda
Computer Co.,
Ltd.
So Fung
Investment
Co., Ltd.
Mio
Technology
Corp.
HOT Link
Technology
Ltd.
Cayman
Islands
British Virgin
Islands
Mainland
China
65,811 65,811 3,048,332 5.78% 70,908 160,039 - Investee
accounted for
under equity
method by
SSDL
1,165,896 1,165,896 11,697,024 42.19% 4,977,703 1,556,505 "
Investment 249,018 249,018 7,115,000 25.11% 245,002 73,706 - "
Design and
manufacturing
of computer
accessories
" 50,730 50,730 1,457,850 49.96% 45,155 (1,368) - "
4,550 4,550 N/A 34.21% N/A N/A - "
Taiwan Investment 460,000 460,000 36,000,000 100.00% 459,134 14,924 - Subsidiary of
Tsu Fung
Investment
Corp.
" Information
process
services and
sale of
software.
5,000 5,000 500,000 100.00% 8,733 (2,976) - Subsidiary of
So Fung
Investment
Co., Ltd.
BVI Investment 318,371 184,297 9,319,260 100.00% 367,052 80,611 Subsidiary of
MITAC
Precision
Technology
Co., Ltd.
(2) Loans to others attributed to financial activities as of December 31, 2004:
Names of
lending
company
Silver Star
Developments
Limited.
Pacific China
Corp.
Name of the
borrowers
System Glory
Int’l Ltd.
" Pacific China
Corp.
" MITAC
Pacific (H.K.)
Ltd.
" MITAC
Computer
(Kunshan)
Co., Ltd.
" MITAC U.K.
Ltd.
MITAC Star
Service Ltd.
" Star Well
Technology
Ltd.
" Dynamic Star
Investment
Ltd.
Hot Link
Technology Ltd.
MITAC
Computer
(Kunshan) Co.,
Ltd.
Master China
Ltd.
Mio
International
Ltd.
Accounts
name
Affiliated
loans
receivable
The highest
balance
during 2004
The
ending
balance
Interest
rate
Type of
loan
Amount
of selling
each
other
Required
reason of
short-term
financing
The
valuation
of the
loans
Name
Collateral
Value of
collateral
The yearly amount of
sales to (purchase
from) the borrow er
The ceiling of
fund financing for
the borrower
$79,146 $74,001 - Note 1 - Operations $ - None $ - N/A $7,253,298
(Note 2)
" 3,102,552 3,102,552 - " - " - " - - "
" 14,917 - - " - " - " - - "
" 208,026 - - " - " - " - - "
" 53,107 53,107 - " - " - " - - "
" 383,004 383,004 - " - " - " - - "
" 638,340 638,340 - " - " - " - - "
" 31,331 31,331 - " - " - " - - "
" 15,293 14,363 - " - " - " - - 170,762
" 63,526 63,526 - " - " - " - - 185,615
Note 1: The borrowers required short-term capital.
Note 2: Equal to the net worth of Silver Star Developments Limited in 2003.

100 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
101
(3) Endorsements and guarantees provided to others as of December 31, 2004 :
Guarantor company Company being guaranteed
Name Name
Silver Star Developments
Ltd.
MITAC Computer
(Shunde) Corp.
" MITAC Computer
(Kunshan) CO.,
Ltd.
MITAC Computer (Shunde)
Corp.
MITAC Computer
(Kunshan) Co.,
LTd.
" MITAC Precision
Technology
(Shunde) LTD.
Relationship with the
Company
The limit of
guarantee for such
party
The highest
outstanding
guarantee amount
during 2004
The outstanding
guarantee amount
at Dec.31, 2004
The amount of
guarantee with
collateral placed
The ratio of
accumulated
guarantee amount
to net asset value
of the Company
The ceiling of the
outstanding
guarantee for the
respective party
Subsidiaries 7,253,298 853,940 841,540 - 11.60% 7,253,298
7,253,298 354,860 354,860 - 4.89% 7,253,298
Business
relationship
1,626,091 830,220 255,336 - 15.70% 1,626,091
1,626,091 616,500 308,480 - 18.97% 1,626,091
(4) The detail of marketable securities as of December 31, 2004:
Investor Type
Tsu Fung
Investment
Corp.
So Fung
Investment Co.,
Ltd.
Name of marketable
securities
Common Stocks So Fung Investment
Co., Ltd.
" " MITAC Precision
Technology Co., Ltd.
" " Trumption
Microelectronics Inc.
" " Tyan Computer
Technology Corp.
" " Synnex International
Corp.
" " Union Petrochemical
Corp.
" " Lien Hwa Industrial
Corp.
" " MITAC International
Corp.
" Convertible
Bonds
China Motor
Corporation
Common Stocks Linpus Technology
Corp.
" " MITAC Precision
Technology Co., Ltd.
" " Harbinger Venture
management Co., Ltd
" " 3 Probe Technologies
Corp.
Relationship with the issuer
General ledger
account
Number of
shares
December 31, 2004
Book value Percentage
Market value
(Note1)
Common Board chairman Long-term investment 36,000,000 $459,134 100.00% $459,134
" " 2,301,647 21,542 2.52% 21,542
None " 238,700 - 0.76% -
The company’s vice chairman
is Tsu Fung’s chairman
" " 2,478,000 31,500 4.70% 31,500
" Short-term investment 484,000 18,248 0.06% 22,796
" " 3,524,268 37,867 0.49% 45,710
" " 3,015,171 40,014 0.45% 36,906
" 8,333,010 230,539 0.78% 135,661
None " 100,000 10,150 - 9,898
" Long-term investment 417,213 2,397 18.54% 2,397
Common board chairman " 2,768,447 33,442 3.03% 33,442
None " 18,000 180 17.82% 180
" " 6,000 30 0.13% 30
Investor Type
Name of marketable
securities
Relationship with the issuer
General ledger
account
Number of
shares
December 31, 2004
Book value Percentage
Market value
(Note1)
Silver Star
Developments
Ltd.
" " Mio Technology Corp. Investee company accounted
for under the equity method.
" " Tyan Computer
Technology Corp.
" " Lien Yung Investment
Corp.
" " Synnex International
Corp.
" " MITAC Technology
Corp.
" " MITAC International
Corp.
" " Union Petrochemical
Corp.
" 500,000 8,733 100.00% 8,733
None " 2,537,000 32,250 4.81% 32,250
" " 7,198,000 71,980 19.99% 71,980
" Short-term investment 2,236,412
(Note 2)
139,105 0.27% 105,335
Common board chairman " 12,391,994 145,466 5.01% 176,586
The company’s vice chairman
is So Fung’s chairman
" 6,788,496
(Note 3)
183,109 0.64% 110,517
None " 987,521 12,336 0.14% 12,808
" " Others " " - 1,062 - 437
Common board chairman " 200,000 20,000 - 20,400
" Convertible
Bonds
MITAC Technology
Corp.
" " Shinkong Chi-Shun
Fund
Common stock Brilliant Star Holdings
Ltd.
" " Harbinger II (BVI)
Venture Capital Corp.
" " Tyan Computer
Technology Corp.
None 46,737 662 - 670
SSDL’s investee company
accounted for under the equity
method
" " Synnex Corp SSDL’s investee company
accounted for under the equity
method
" " Budworth Investments
Ltd.
Long-term investment 7,115,000 245,002 25.12% 245,474
None " 1,457,850 45,155 49.96% 45,163
" " 3,048,332 70,908 5.78% 52,783
" 11,697,024 4,977,703 42.19% 8,246,938
None " 4,744,000 99,174 14.83% 99,174
" " Gapura Inc. " " 630,634 20,128 5.55% 20,128
" " Global Strategic
" " 1,000,000 31,917 1.26% 31,917
Investment Inc.
" " Panasas Inc. " " 1,391,354 - 0.99% 4,171
" " MQbd LLC " " N/A 3,191 3,191
" " Pacific Metal
Developments Ltd.
" GDR Synnex International
Corp.
MITAC
Precision
Technology Co.,
Ltd.
Common stock Hot Link Technology
Limited
" Bond funds JF (TAIWAN) Bond
Fund
" " JF (TAIWAN) First
Bond Fund
" " ABN AMRO Select
Bond Fund
Synnex’s chairman is SSDL’s
director
" " 5,100,000 151,704 (Note 4) 151,702
MPT’s investee company
accounted for under the equity
method
" 939,076 148,092 - 171,809
" 9,319,260 367,052 100.00% 367,052
None " 2,255,109 33,489 - 33,510
" " 3,035,877 41,556 - 41,581
" " 8,214,987 90,572 - 90,633
Note 1: The market value of investments accounted for under the equity method was based on the net asset value of the investee company, while the market value
of investment accounted for under cost method was based on acquisition cost if not listed or the average closing price during the last month of the year if listed.
Note 2: The investor provided 1,398 thousand shares as collateral.
Note 3: The investor provided 5,813 thousand shares as collateral.
Note 4: Investing in non-cumulative, convertible preferred stock without right of voting.

102 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
103
(5) Marketable securities for which total buying or selling exceeded $100,000 or 20 percent of capital for the year ended December 31, 2004:
Investor
MITAC
Precision
Technology
Co., Ltd.
Name of the
securities
Capital ASFE
income Fund
" Capital ASFE
Bond Fund
" The Wan Pao
Fund
" PCA well Pool
Fund
" KGI Victory
Fund
" Sheng Hua
5599 Bond
Fund
" Sheng Hun
1699 Bond
Fund
" Grand Cathay
Bond Fund
" Jih Sun Bond
Fund
" JF (TAIWAN)
Bond Fund
" JF (TAIWAn)
First Bond
Fund
" ABN AMRO
Select Bond
Fund
General
ledger
account
Short-term
investment
Counter
party
Third
parties
The relationship
with the
Company
Beginning balance Additions Disposals Ending balance
Number of
shares Amount
Number of
shares Amount
Number of
shares
Selling
price Cost
Gain/Loss
from
disposal
Number of
shares Amount
None 4,102,192 58,051 4,102,192 58,490 8,204,384 117,203 116,541 662 - -
" " " 8,568,560 95,959 8,568,560 96,636 17,137,120 193,595 192,595 1,000 - -
" " " 14,737,493 214,584 8,074,366 118,000 22,811,859 333,741 332,584 1,157 - -
" " " 11,364,395 136,873 7,203,651 87,000 18,568,046 224,036 223,873 163 - -
" " " 5,422,032 56,027 33,130,920 344,000 38,552,952 400,274 400,027 247 - -
" " " 13,479,569 144,822 19,049,739 205,827 32,529,308 351,957 350,649 1,308 - -
" " " 8,496,353 101,050 14,361,009 171,799 22,857,362 273,819 272,849 970 - -
" " " 14,840,438 184,633 72,829,448 908,800 87,669,886 1,094,291 1,093,433 858 - -
" " " - - 24,248,720 318,000 24,248,720 318,922 318,000 922 - -
" " " - - 13,587,039 200,489 11,331,929 167,537 167,000 537 2,255,109 33,489
" " " - - 14,635,912 199,552 11,600,035 158,552 157,996 556 3,035,877 41,556
" " " - - 23,634,273 259,572 15,419,286 169,572 169,000 572 8,214,987 90,572
(6) Real estate acquired exceeding $100,000 or 20 percent of the Company’s capital for the year ended December 31, 2004: None.
(7) Real estate disposed exceeding $100,000 or 20 percent of the Company’s capital for the year ended December 31, 2004: None.
(8) Purchases or sales transactions with related parties exceeding $100,000 or 20 percent of capital for the year ended December 31, 2004:
The company
buying/selling
products
Silver Star
Developments
Ltd.
MITAC
Precision
Technology
Co., Ltd.
Name of
related parties
MITAC
International
Corp.
" MITAC
International
Corp.
" MITAC
Precision
Technology
Co., Ltd.
" Tyan
Computer
Technology
Corp.
" MITAC
Technology
Corp.
" Getac
Technology
(Kunshan)
Co., Ltd.
MITAC
International
Corp.
" MITAC
Technology
Corp.
" Silver Star
Developments
Ltd. (SSDL)
" Getac
Technology
(Kunshan)
Co., Ltd.
" MITAC
Precision
Technology
(Shun De)
Ltd.
" MITAC
Precision
Technology
Kunshan) Co.,
Ltd.
Relationship with
the Company
SSDL’s parent
company
Purchase
(Sales) Amount
Transactions
The reason and situation
of having different
transaction term between
related parties and others Accounts & notes receivable (payable)
Percentage
of (purchase)
sales Credit Term Unit price Credit Term Balance
Percentage of
account Note
Sales $20,416,965 68.05% Note 1 Note 3 Note 1 $3,548,725 67.06%
" Purchase 741,262 2.47% Note 2 Note 3 Note 2 (96,993) 1%
Affiliated company Purchase 5,811,408 20.61% Note 2 Note 3 Note 2 (1,180,879) 12.19%
Accented for the
Company under
equity method
" Purchase 177,622 0.63% Note 2 Note 3 Note 2 (58,717) 0.61%
" Sales 6,526,896 21.75% Note 1 Note 3 Note 1 999,698 18.89%
" Sale 1,097,491 3.66% Note 1 Note 3 Note 1 137,274 2.59%
Sales 1,292,557 14.36% Note 1 Note 3 Note 1 197,179 9.99%
Affiliated company Sales 161,481 1.79% Note 1 Note 3 Note 1 27,430 1.39%
" Sales 5,811,408 64.57% Note 1 Note 3 Note 1 1,180,879 59.85%
" Sales 302,881 3.37% Note 1 Note 3 Note 1 103,542 5.25%
Subsidiaries Purchase 8,015,607 93.00% Note 2 Note 3 Note 2 (51,420) 49.83%
" Purchase 528,339 6.00% Note 2 Note 3 Note 2 - -
Note 1: The collection period is 150 days and 90 days after offsetting certain receivables and payables according to payment terms to overseas and
domestic related parties, respectively. And the payment period of ordinary customers is approximately 90 days after purchase date.
Note 2:GThe payment period is 150 days and 90 days after offsetting certain receivables and payables according to payment terms to overseas and
domestic related parties, respectively. And the collection period of ordinary customers is approximately 90 days after shipping date.
Note 3:GThe selling price to overseas related parties is based on market value. The selling price to domestic related parties is based on common
domestic price.

104 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
105
(9) Receivables from related parties totaling exceeding $100,000 or 20 percent of capital as of December 31, 2004:
Company Name
Silver Star
Developments
Ltd.
Name of the
counter party
MITAC
International
Corp.
" MITAC
Technology
Corp.
" Getac
Technology
(Kunshan) Co.,
MITAC Precision
Technology Co.,
Ltd.
Ltd.
NiTAC
International
Corp.
" Silver Star
" Getac
Developments
Ltd. (SSDL)
Technology
(Kunshan) Co.,
Ltd.
Relationship
with the counter
party
The Company
is SSDL’s
parent
company
Affiliated
company
Balance of receivables from related party Overdue receivable
Accounts
receivable
Other
receivables
Total
Turnover rate
(times)
Amount
Collection
method
Subsequent
received
amount
Bad debt
allowance
provided
$3,548,725 90,215 $3,638,940 8.76 $ - N/A $227,982 $ -
999,698 20,456 1,020,154 9.14 - " 948,830 -
" 137,274 - 137,274 15.99 - " 99,007 -
" 197,179 24,344 221,523 6.91 - " 197,179 -
" 1,180,879 - 1,180,879 4.88 - " 1,180,879 -
" 103,542 - 103,542 5.85 - " 103,092 -
(10) Information on derivative transactions:
December 31, 2004:
Item
MITAC Precision
Technology Co.,
Ltd.
Sales of forward
foreign exchange
Notional
Amount
(in thousands)
Fair Market
Value
(in thousands)
Contract Terms
Trade date Strike Price Settlement Date
Hedged Assets
(in thousands)
Hedged Liabilities
(in thousands)
Gain/(Loss)Recognized
US$ 48,000 NT$ 37,450 2004.08.11~2004.12.31 31.648~33.993 2005.01.03~2005.06.30 US$48,000 - NT$37,450
Buy of forward foreign
exchange JPY 141,600
NT$ 875
2004.02.06~2004.04.15 JPY104.43~106.46 2005.02.04~2005.04.15 - JPY141,600 NT$875
Buy US$ call option US$ 38,000 (NT$ 23,326 ) 2004.09.07~2004.12.31 31.58~33.489 2005.01.03~2005.06.30 - US$38,000 (NT$23,326)
Sell US$ put option US$ 38,000 - 2004.09.07~2004.12.31 31.58~33.489 2005.01.03~2005.06.30 - US$38,000 -
Buy of currency
SWAP
US$ 26,410 NT$ 17,728 2004.08.05~2004.12.31 31.83~34.144 2005.01.07~2005.06.28 US$26,140 - -
December 31, 2003:
Item
Silver Star
Developments Ltd.
Notional
Amount
(in thousands)
Interest rate SWAP JPY300,000
MITAC Precision
Technology Co., Ltd.
Sales of forward
foreign
exchange
Contract Terms
Fair Market
Value
(in thousands) Trade date Strike Price Settlement Date
(NT$808)
2002.03.27 2.95% 2004.09.27
Hedged Assets
(in thousands)
Hedged Liabilities
(in thousands) Gain/(Loss)Recognized
- JPY300,000
(NT$808)
USD 28,000 (NT$4,120) 2003.09.10~2003.12.31 33.604~34.03 2004.01.06~2004.07.06 USD28,000 - (NT$4,120)
Buy of forward foreign
exchange JPY433,800 NT$2,988 2003.11.05~2003.12.12 JPY108.1~109.46 2004.01.16~2004.11.08 - JPY433,800 NT$2,988
Buy of forward foreign
exchange JPY320,000 NT$3,044 2003.11.04 0.30965 2004.08.20 - JPY320,000 NT$3,044
Buy US$ call option USD24,000 NT$6,653 2003.09.10~2003.12.31 33.253~33.763 2004.01.06~2004.07.06 - USD24,000 NT$6,653
Sell US$ put option USD24,000 - 2003.09.10~2003.12.31 33.253~33.763 2004.01.06~2004.07.06 - USD24,000 -
Buy of currency
SWAP
USD 9,650 (NT$621) 2003.10.14~2003.12.18 33.678~34.079 2004.01.09~2004.04.28 USD9,650 - (NT$621)
a. Credit risk: There is no significant credit risk with respect to the above transactions because the counter party banks are of good financial standing.
b. Market risk: The main purpose of the transaction is to hedge exchange loss. Any change in the value of the instrument will be offset by a corresponding
change in the underlying commitment. Accordingly, no market risk is expected.
c. Future cash flow: the Company will rec eive (pay) cash or sale (purchase) contracts on settlement dates.

106 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
107
C. Relevant Information Regarding Investment In Mainland China
(a) Basic information, change in investment balance and profits/losses recognized from the direct investment:
Name of investee
in Mainland
China
MITAC Computer
(Shunde) Corp.
MITAC Computer
(Kunshan) Co.,
Ltd.
MITAC Precision
Technology
(Shunde) Ltd.
MITAC Research
(Shanghai) Ltd.
MITAC Computer
(Shanghai) Co.,
Ltd.
MITAC Service
(Shanghai) Co.,
Ltd.
MITAC
Technology
(Kunshan) Co.,
Ltd.
Main activities of
investee Capital
Manufacturing of
computer cases and
monitors, etc.
Sale and
manufacturing of
computer
accessories,
hardware, software
and related service.
Manufacturing of
mainborad, desktop
computers, interface
cards, etc.
Manufacturing and
selling of hardware,
software and related
service.
Research,
manufacturing and
sale of PC server,
mainboard, and
provide warranty
service.
Manufacturing,
assembling
computers and
provide test,
maintenance and
service for related
products.
Sale and
manufacturing of
computer
accessories,
hardware, software
and related service.
Method of
investment
$1,809,353 Invest in
Mainland
China through
investing
company in
third area
Beginning balance
of remittance in
2004
Amount of remittance
out in 2004
Remittance
out
Remittance
in
Ending balance
of remittance
from Taiwan on
December 31,
2004
Shares held by
the Company
(Direct indirect)
(Note)
Profit/loss
recognized in
2004
Ending balance of book
value on December 31,
2004
Ending balance of
profit remittance
into Taiwan
$1,536,341 $401,118 $ - $1,937,459 100.00% $79,090 $2,074,584 $ -
1,014,334 " 297,781 668,530 - 966,311 100.00% 24,464 848,139 -
478,528 " 161,188 - - 161,188 52.17% 24,233 264,447 -
34,435 " 29,155 - - 29,155 100.00% 3,927 18,493 -
193,290 " 103,632 - - 103,632 100.00% (3,950) (7,527) -
33,770 " 34,180 - - 34,180 100.00% 75 30,320 -
33,936 " 34,695 - - 34,695 100.00% 198 33,837 -
Name of investee
in Mainland
China
Main activities of
investee Capital
Method of
investment
Beginning balance
of remittance in
2004
Amount of remittance
out in 2004
Remittance
out
Remittance
in
Ending balance
of remittance
from Taiwan on
December 31,
2004
Shares held by
the Company
(Direct indirect)
(Note)
Profit/loss
recognized in
2004
Ending balance of book
value on December 31,
2004
Ending balance of
profit remittance
into Taiwan
MITAC Computer
(Shen Zhen) Co.,
Ltd.
Catac Electronic
(Zhong-Shan)
Co., Ltd.
Shenyang Heda
Computer Co.,
Ltd.
Trading and
warehousing service
of computer and
related accessories.
Sale and
manufacturing of
PCB.
Design and
manufacturing of
computers and
related accessories
13,548 " 13,548 - - 13,548 - - - -
955,095 " 240,901 - - 240,901 25.12% 20,325 241,428 -
13,120 " 4,260 - - 4,260 34.21% - - -
Note : Profit/Loss recognized based on the unaudited financial statements, except MITAC Computer (Shunde) Corp., MITAC Precision Technology (Shunde) Ltd., MITAC Research
(Shanghai) Co., Ltd., Catac Electronic (Zhong-Shan) Co., Ltd. and MITAC Computer (Kunshan) CO., Ltd.
Ending balance of investment from Taiwan
on December 31, 2004
Approved investment amount by Ministry of
Economic Affairs R.O.C.
The ceiling amount of the Company for investment in
Mainland China
$3,525,329 $3,669,178 $5,085,726

108 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
109
(b) Major transactions with the subsidiaries in third region and Mainland China:
(1) Purchases from
The Company's purchases from Mainland China subsidiaries:
2004 2003
MITAC Computer (Shunde) Corp. $ 26,138,521 $ 22,711,375
MITAC Computer (Kunshan) Co., Ltd. 7,718,646 4,007,714
Others - 537
$ 33,857,167 $ 26,719,626
The prices that the Company and third region subsidiaries purchase from Mainland China
subsidiaries are negotiated based on the material and manufacturing cost. The payment
period is 150 days after offsetting certain receivables and payables according to the payment
terms.
The prices that the Company and third region subsidiaries purchase from ordinary suppliers
are negotiated based on local market value. The payment period is approximately 90 days
from shipping date.
As of December 31, 2004, the unrealized inter-company gain due to up stream sales is $0.
(2) Sales to
The Company sales to Mainland China subsidiaries:
2004 2003
MITAC Computer (Shunde) Corp. $ 12,470,445 $ 9,706,148
MITAC Computer (Kunshan) Co., Ltd. 3,745,379 2,332,741
Others 534,333 484,568
$ 16,750,157 $ 12,523,457
The prices that the Company and third region subsidiaries sales to Mainland China
subsidiaries are negotiated based on the product cost. The collection period is 150 days after
offsetting certain receivables and payables according to the payment terms.
The prices that the Company and third region subsidiaries sales to ordinary suppliers are
negotiated based on local market value. The collection period is approximately 90 days from
shipping date.
As of December 31, 2004 and 2003, the unrealized inter-company gain due to down stream
sales is $972 and $0, respectively.
(3) Property transactions:
In 2004 and 2003, the Company sold equipments to third region subsidiaries amounted to
$3,352 and $1,902, respectively. The total disposal gain were $500 and $305, respectively.
In 2004 and 2003, the Company purchased equipments and molds from third region
subsidiaries amounted to $1,701 and $0, respectively.
(4) Accounts receivable:
2004 2003
MITAC Computer (Shunde) Corp. $ 27,572 $ 75,548
MITAC Computer (Kunshan) Co., Ltd. - 430,617
$ 27,572 $ 506,165
(5) Accounts payable:
The Company from Mainland China subsidiaries:
2004 2003
MITAC Computer (Shunde) Corp. $ 2,536,264 $ 803,537
MITAC Computer (Kunshan) Co., Ltd. 440,300 -
$ 2,976,564 $ 803,537
(6) Loans to third region and Mainland China subsidiaries: None.
(7) The endorsements and guarantees provided by the Company to Mainland China
subsidiaries:
(i) As of December 31, 2004 and 2003, the Company guaranteed and endorsed the bank
loans of MITAC Computer (Shunde) Corp. through Silver Star Developments Ltd.
amounted to $841,540 and $575,700, respectively.
(ii) As of December 31, 2004 and 2003, the Company guaranteed and endorsed the bank
loans of MITAC Computer (Kunshan) Co., Ltd. through Silver Star Developments Ltd.
amounted to $354,860 and $272,625, respectively.
(8) Other significant transactions which effect current income or financial conditions:
(i) In 2004 and 2003, the Company paid research expense to MITAC Research (Shanghai)
Ltd. amounted to $122,562 and $111,068, respectively.
(ii) In 2004 and 2003, the Company paid warranty expense to the subsidiaries in Mainland
China amounted to $78,619 and $65,235, respectively.
12. SEGMENT INFORMATION
(1) Operations in different industries:
The Company operates principally in one industry. The Company's major operation is the
design, manufacture, sales and services of micro-computers and related products.
(2) Operations in different geographic areas:

110 E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
E.MiTAC International Corp. Consolidated Financial Statements and Report of Independent Accountants
111
2004
North America Asia Other Taiwan
Adjustments
and
Consolidation
Eliminations
Revenue from third
party $ 4,725 $ 8,067,823 $ 932,462 $51,067,046 $ - $60,072,056
Revenue from parent
and consolidated
subsi diaries 205,359 63,303,942 127,398 8,359,544 ( 71,996,243 ) -
Total $ 210,084 $71,371,765 $ 1,059,860 $59,426,590 ( $ 71,966,243 ) $60,072,056
Income of area $ 5,478 $ 230,607 $ 52,407 $ 1,698,112 ( $ 96,408 ) $ 1,890,196
Interest expense ( 302,723 )
Investment income 970,013
Income before income
tax and minority
interest $ 2,557,486
Identifiable assets $ 112,146 $25,011,390 $ 479,109 $28,766,230 ( $ 11,855,599 ) $42,513,276
Long-term
7,741,461
investments
Total assets $50,254,737
In order to reconcile the amounts of segment information and the amounts shown on the consolidated
financial statements the following adjustments and eliminations have been made¡G
A. Revenue from parent and consolidated subsidiaries¡G$71,996,243.
B. Income from parent and consolidated subsidiaries¡G$96,408, which is equal to the revenues from the
parent and consolidated subsidiaries $71,996,243 minus the related costs and expenses $71,899,835.
2003
North America Asia Other Taiwan
Adjustments
and Consolidation
Eliminations
Revenue from third
party $ 7,590 $ 5,267,146 $ 1,370,619 $39,846,001 $ - $46,491,356
Revenue from parent
and consolidated
subsidiaries 217,885 23,642,015 96,145 6,609,309 ( 30,565,354 ) -
Total $ 225,475 $28,909,161 $ 1,466,764 $46,455,310 ( $ 30,565,354 ) $46,491,356
Income of area $ 7,800 $ 111,926 ( $ 89,498 ) $ 757,657 ( $ 33,167 ) $ 754,718
Interest expense ( 330,976 )
Investment income 687,631
Income before income
tax and minority
interest $ 1,111,373
Identifiable assets $ 139,876 $21,505,348 $ 706,466 $24,579,919 ( $ 9,497,930 ) $37,433,679
Long-term
7,146,288
investments
Total assets $44,579,967
In order to reconcile the amounts of segment information and the amounts shown on the consolidated
financial statement the following adjustments and eliminations have been made¡G
A. Revenue from parent and consolidated subsidiaries¡G$30,565,354.
B. Income from parent and consolidated subsidiaries¡G$33,167, which is equal to the revenues from the
parent and consolidated subsidiaries $30,565,354 minus the related costs and expenses $30,532,187.
(3) Export sales
(4) Major customer
2004 2003
North America $ 22,807,963 $ 20,821,921
Europe 15,705,466 8,483,564
Asia & Australia 11,233,027 9,827,529
$ 49,746,456 $ 39,133,014
In 2004 and 2003, list of customers accounted for more than 10% of total sales.
Customer name
For the period ended December 31, 2004
Percentage of
Sales amount total sales Sales department
E customer $ 16,045,705 27% Total company
A customer 12,748,758 21% Total company
Customer name
For the period ended December 31, 2003
Sales amount
Percentage of
total sales
Sales department
E customer $ 12,995,701 28% Total company
A customer 8,426,980 18% Total company
C customer 5,669,589 12% Total company
B customer 5,526,924 12% Total company

112 F.Financial Condition and Business Results-Analysis and Risk Management
F.Financial Condition and Business Results-
Analysis and Risk Management
1.Balance Sheet
Units: Thousands of NT Dollars
Year
Differential
Item 2003 2004 Amount %
Current Assets 16,018,538 20,874,292 4,855,754 30.31%
Fixed Assets 2,667,533 2,516,750 (150,783) -5.65%
Other Assets 1,210,913 936,419 (274,494) -22.67%
Total Assets 31,881,751 38,073,446 6,191,695 19.42%
Current Liabilities 11,313,864 16,764,510 5,450,646 48.18%
Long-Term Debt 3,000,000 2,500,000 (500,000) -16.67%
Total Liabilities 14,910,120 20,144,818 5,234,698 35.11%
Capital 10,563,812 10,814,761 250,949 2.38%
Capital Reserves 3,086,493 3,072,497 (13,996) -0.45%
Retained Earnings 3,136,089 4,658,273 1,522,184 48.54%
Total Stockholder
Equity 16,971,631 17,928,628 956,997 5.64%
1.1 Notes on Differential:
1.1.1 Current Assets
An increase in sales during the fourth quarter of 2004 and anticipated increase in sales in
the first quarter of 2005 led to an increase in accounts receivable and inventory levels at the
end of the period.
1.1.2 Current Liabilities
In order to pursue joint land development, land was sold to the joint developer, causing a
reduction in assets categorized as "Other Assets".
1.1.3 Current Liabilities and Total Debt
Sales in 2004 were excellent, leading to increases in associated costs and fees, with a
concomitant increase in accounts payable and fees payable, leading to an increase in total
debt.
1.1.4 Retained Earnings
Due to an increase in sales during this period, net profit for 2004 rose, leading to an increase
in retained earnings.
1.2 Major Reasons for Changes in Current Liabilities and Long-Term Debt Maturing Within One Year
in the Most Recent Two Years, Their Impact, and Future Strategic Response
As Mitac's sales performance in 2004 was excellent, associated costs and fees rose, leading to
an increase in accounts payable and fees payable. In addition, liabilities to some underwriting
companies will come due the next year, resulting in an increase in long-term debt coming due
within the next year. MiTAC has already negotiated terms with other financial institutions on
collection of company debt, and there will be no effect on the Company's financial condition.
F.Financial Condition and Business Results-Analysis and Risk Management
2.Analysis of Business Results
Units: Thousands of NT Dollars
Amount of Change
Year
Increase
Item 2003 2004 (Decrease) Percentage
Total Operating Revenue 40,321,138 51,186,415 10,865,277 26.95%
Less: Sales Return and Allowance (745,184) (683,181) (62,003) (8.32%)
Net Operating Revenue 39,575,954 50,503,234 10,927,280 27.61%
Operating Costs (36,596,609) (46,396,751) 9,800,142 26.78%
Gross Profit 2,979,345 4,106,483 1,127,138 37.83%
Operating Expenses (2,424,045) (2,961,409) 537,364 22.17%
Operating Income 555,300 1,145,074 589,774 106.21%
Non-Operating Income and Gains 1,006,878 1,540,410 533,532 52.99%
Non-Operating Expenses and
Losses (491,528) (409,298) (82,230) (16.73%)
Pre-Tax Net Income from
Continuing Operations 1,070,650 2,276,186 1,205,536 112.60%
Income Tax Expenses (19,177) (133,687) 114,510 597.12%
After-Tax Net Income from
Continuing Operations 1,051,473 2,142,499 1,091,026 103.76%
2.1 Analysis of changes in percentage increases/decreases.
(1) Operating Revenues: During the current period, due to increase in demand for IT products
and aggressive development of wireless networking products, orders showed an increase
over 2003, resulting in an increase in sales.
(2) Sales Returns and Allowance: Due to an increase in operating revenues, returns and
allowances showed a corresponding rise.
(3) Cost of Sales: Due to an increase in revenues in the current period compared to the previous,
cost of sales also increased.
(4) Gross Profits: Due to a large increase in sales compared to 2003, gross profits also rose.
(5) Operating Expenses: The increase in sales led to corresponding increases in associated
expenses, such as after-sales service.
(6) Net Operating Income: Due to an increase in gross profits, net operating income in the
current period also showed an increase.
(7) Income Tax Expenses: Due to the increase in pre-tax net income, income tax expenses for
the current period also increased.
2.2 Reasons for Changes in the Company's Major Businesses: The Company did not change its
major businesses.
2.3 Forecasts for Sales Volumes in the Next Year and Major Factors Affecting Their Growth or Decline
Based on the plans of the Company's management for 2005 and their assessment of future
business conditions, besides setting a sales target of 1.3 million units for motherboards, the
Company forecasts that server and wireless communications products will show substantial growth.
113

114 F.Financial Condition and Business Results-Analysis and Risk Management
F.Financial Condition and Business Results-Analysis and Risk Management
115
3. Cash Flow Analysis
Units: Thousands of New Taiwan Dollars
Measures for Rectifying
Cash
Initial Cash Net Cash Flow
Cash Surplus Cash Shortfall
Outflows for
Balance from Operations
(Shortfall)
the Full Year
Investment Financing
Plans Plans
657,623 2,234,322 (4,549,423) (1,657,478) 867,093 2,351,009
3.1 Analysis of Cash Flow for the Current Year
3.1.1 Operations: Due to revenue increases in the current period, and sound management of
operating funds, operations results in a net cash inflow.
3.1.2 Investment Activities: Due to an expansion in long-term investments.
3.1.3 Financing Activities: Due to repayment of short-term loans and issue of cash dividends and
employee bonuses.
3.2 Remedy for Cash Shortfalls and Liquidity Analysis:
3.2.1 Investment Plans: Sales of some short-term investments.
3.2.2 Financing Plans: Issue of guaranteed company debt.
3.3 Analysis of Cash Flow for the Next Year
Initial Cash
Balance
3.3.1 Analysis of changes in cash flow in the current year:
1. Business operations: It is forecast that revenues and profits for 2005 will show growth over
2004, with the result that in the next year there will be a net cash inflow from business
operations.
2. Investment Activities: Projected increases in long-term investments and purchases of molds
and fixed assets.
Full-Year Net
Cash Flow from
Operations
Full-Year Cash
Outflows
3. Financing Activities: Projected repayment of matured guaranteed company debenture bonds
and some short-term loans, and issue of cash dividends.
3.3.2 Remedies for Cash Shortfalls and Liquidity Analysis:
Investment Plans: Projected disposal of short-term investment.
Financing Plans: Projected transfer of some treasury shares to employees, employee
redemption of stock options, issue of corporate debenture bonds.
Units: Thousands of New Taiwan Dollars
Cash Surplus
(Shortfall)
Measures for Rectifying Cash
Shortfall
Investment
Financing Plans
Plans
1,560,624 2,016,388 (5,192,374) (1,615,362) 237,942 2,377,420
4. Influence of Major Capital Expenditures in the Most Recent Year
on Financial Condition: None.
5. Investment Policy in the Most Recent Year, Major Reasons for Gains or Losses Thereof,
Plans for Improvement, and Investment Plans for the Next Year:
Item
SILVER STAR
DEVELOPMENTS
LIMITED
6. Risk Management
6.1 Influence of Interest Rates in the Most Recent Year, Exchange Rate Fluctuations, Inflation on
the Company's Profits or Losses, and Future Responses
6.1.1 Impact of interest rates, exchange rate fluctuations, inflation on the Company's
profitability in 2004
Item
6.1.2 Future Responses
Investment in Policy
2004
1,080,855 Strategic
integration of
upstream and
downstream
industry
segments,
long-term holding,
to strengthen
overall
competitiveness
In order to reduce the impact of exchange rate fluctuations on the Company's profit/loss
performance, the Company has agreed with vendors and customers to as far as possible
use US dollars for sales and purchases. Moreover, the Company pursues foreign exchange
derivatives to hedge risks from foreign currency fluctuations, in accordance with "Procedures
of Trading in the Derivatives Products". In addition, the Company regularly evaluates
interest rates on bank loans, working closely with banks in order to obtain favorable terms
of loan interest, lessening the potential impact of interest rate fluctuations on the Company's
profit/loss performance.
2004 Total
(1000s of New Taiwan
Dollars)
6.2 For The Most Recent Year, Policies Regarding Participation In High-Risk, Highly Leveraged
Investments, Loans To Other Parties; Endorsements, Guarantees, and Derivatives; Major
Reasons For Gains Or Losses, And Future Responsive Measures
Units: Thousands of New Taiwan Dollars
Major Reasons Plan for Plans for Other
for Gain or Loss Improvement Investments
It invested Not
businesses are applicable.
growing steadily,
leading to
sustained gains.
In accordance
with the
Company’s
business
strategy,
coordinating with
global
investment
plans.
Share of Operating
Revenues (%)
Interest Expenses 233,276 0.46
Exchange Gains 171,139 0.34

116 F.Financial Condition and Business Results-Analysis and Risk Management
F.Financial Condition and Business Results-Analysis and Risk Management
117
6.2.1 In 2004, the Company did not pursue high-risk, highly leveraged investments, nor provide
loans to other parties. In compliance with relevant laws, the Company has already established
"Procedure for Lending Money to Other Parties".
6.2.2 Guaranties provided by the Company in 2004 were provided in conformance with "Procedures
for Guaranty of Outside Parties". The maximum for guaranties provided by the Company is
NT$17,738,452,000. As of Decembe 31, 2004 the Company's balance of guaranties
amounted to NT$2,347,964,000.
6.2.3 Derivatives transactions during 2004 were conducted according to "Procedure of Trading in
the Derivatives Products".
6.3 Future R&D Projects and Projected R&D Expenditures
6.3.1 In the current year (2005), R&D expenditures are projected to be NT$1,389,878,000.
6.3.2 R&D plans for the current year are:
(1) Desktop computers and digital home products:
Future products slated for development will integrate digital AV applications and the
Internet-for example, high-definition digital televisions, wireless network-capable digital
video recorders, optical storage devices, home servers, and wireless networking solutions.
Mass production of these products is expected in 2005. The key to success of these
development efforts is whether industry standards are unified.
On another front, due to the rapid increase in the speed of CPUs, demands stemming
from heat dissipation designs and safety regulations will become more important.
Beginning in 2003, development of small form factor chassis commenced, as well the
development of system architectures for personal computers with superior thermal
characteristics. Products have been introduced beginning in 2004. The key to the success
of these R&D efforts is lowering material costs.
Following the lead of major vendors of high-performance chips for workstations, the
Company made plans for the development and manufacture of high-end low-cost
workstations. Beginning in 2002, it has brought such products to mass production,
continuing R&D efforts and mass production of new products through 2003, 2004, and 2005.
(2) Servers
Development of ultra-dense blade servers has commenced, with mass production set to
begin by the end of this year. Development of high-performance servers is also in progress,
with mass production slated to start mid-year. The key to success of this R&D effort is an
adequate size of the R&D team. In response, R&D staffers in Shanghai and the USA have
joined product development work.
(3) Wireless communications products
The wireless communications products under development this year encompass three
major types: portable navigation equipment, smartphones, and mobile entertainment
devices. Several new portable navigation products have already been introduced this
year, while several smartphone and PDA phone products are set to be introduced later
this year. Mobile entertainment devices based on handheld computers are being
developed, and will be shipped later this year. Because a number of new products are
being developed, more than 200 engineers will be needed to complete design work.
Additionally, software engineers in Shanghai have been deployed to develop an easy-touse
interface and more complete graphical navigation data in order to increase product
competitiveness. Close cooperation with wireless networking chip and operating system
vendors has greatly reduced the development risks for smartphones.
6.4 The impact of major changes in domestic or foreign government policies and laws in recent
years on the Company's financial condition and business, and the Company's responsive
measures.
There has been no impact on the Company's financial condition or business from major policy
or legal changes in either Taiwan or foreign countries.
6.5 Technology Changes in the Most Recent Year-Their Influence on the Company's Finances
and Sales, and the Company's Responses
6.5.1 Desktop computer and digital home products
Due to rapid price declines and intense competition in computer hardware products,
profits are being squeezed despite growth in unit sales. Although digital home products
are a new industry segment, because they encroach on the consumer electronics
market, achieving necessary high quality and low cost are major challenges. The
appropriate response is develop lower-cost products and speed up their development,
create product differentiation, and shorten the time needed to ramp-up to mass
production.
6.5.2 Server products:
Due to the effects of an unfavorable economic environment, companies are investing
less in technology. As a result, the revenues that a single new product can contribute
are correspondingly diminished. In addition, vendors are cutting prices in order to obtain
orders, putting pressure on profit margins. Therefore, a greater number of R&D workers
must be assigned to a greater number of development projects for new products in
order to achieve the same level of revenues and profits. The advent of ultra-dense
server products should increase average per-unit prices and production value.

118 F.Financial Condition and Business Results-Analysis and Risk Management
6.5.3 Wireless communications products
Development trends for the embedded processors that play an important role in handheld
products are towards lower power consumption and integration of a greater range of
functionality onto the chip itself. The trend for wireless communications products, besides
lower power consumption, is toward ever-faster speeds for data communications. MiTAC
International is able to keep abreast of these trends due to its strategic alliances with Intel,
Microsoft, and world-famous telecommunications companies. The Company has therefore
been able to stay abreast of these development trends and be among the first to develop
a new generation of PDA products and smart client devices. Having achieved a favorable
response from the broader market, the Company's business and profitability have benefited.
6.6 The impact of changes in the Company's image during recent years on its crisis management
capabilities, and relevant responsive measures: None.
6.7 Projected benefits and possible risks of acquisitions: None.
6.8 Projected benefits and possible risks of factory expansion: No factory expansion was undertaken
in 2004, so that are no associated risks.
6.9 Risks faced in taking deliveries and making sales:
Taking deliveries: Most deliveries taken are finished products provided by the Company's
Chinese subsidiaries, and thus there are no administrative risks involved.
Sales: Numerical analysis of sales in 2004 showed no concentration of revenues from a single
customer, so that there are no relevant risks in this area.
6.10 Impact and risks associated with large transfers or conversions of equity by directors,
supervisors or major shareholders holding a stake in excess of 10%: No large transfer to
equity by the Company's directors, supervisors, or major shareholders with stakes in excess
of 10% occurred.
6.11 Impact and risks associated with a change in the Company's ownership: Not applicable.
6.12 Litigation and Non-Litigious Disputes
6.12.1 In the most recent two calendar years, and the present year to the publication date of
this annual report, the Company has not been involved in any litigation or non-litigious
disputes that might have a significant impact on shareholder rights or stock prices, as
defined in Article 26, Item 6, Part 12 in "Criteria Governing Information to be Published
in Annual Reports of Public Companies".
6.12.2 The Company's supervisor Lien Hwa Industrial Corporation is involved in a dispute with
Transmarine Navigation Corporation and MIC Chartering & Agency Co., Ltd. over a
contract to transport wheat, and is currently in the midst of filing suit against these two
companies. For further information, please refer to the attached response form.
7.Other Important Events: None