Contents - MiTAC

Contents
A.Report To Shareholders........................................................................................... 1
B.Company Overview
1.Company Profile........................................................................................................................ 5
2.Company Organization.............................................................................................................. 9
3.Capital and Shares, Corporate Bonds, Special Shares, Global Depositary Receipts,
Employee Stock Subscription Voucher, and Mergers............................................................... 16
C.Operations Overview
1.Business..................................................................................................................................... 23
2.Market and Manufacturing Sales .............................................................................................. 30
3.Employed Staff.......................................................................................................................... 37
4.Expenses Incurred To Address Environmental Protection Issues............................................. 37
5.Labor/Management Relations ................................................................................................... 38
6.Major Agreements..................................................................................................................... 39
7.Litigation Proceedings............................................................................................................... 39
8.Acquisition or Disposition of Assets......................................................................................... 40
D.Financial Standing
1.Most Recent Five-Year Concise Financial Information............................................................ 41
2.Financial Analysis for Most Recent Five Years........................................................................ 43
E.MiTAC International Corp. Consolidated Financial Statements and Report of
Independent Accountants
1.Report of Independent Accountants........................................................................................... 45
2.MiTAC International Corp. and Subsidiaries Consolidated Balance Sheet .............................. 46
3.MiTAC International Corp. and Subsidiaries Consolidated Statement of Changes in
Stockholders' Equity................................................................................................................... 47
4.MiTAC International Corp. and Subsidiaries Consolidated Statement of Cash Flows............. 48
5.MiTAC International Corp. and Subsidiaries Consolidated Statement of Income.................... 49
F.Financial Condition and Business Results—Analysis and Risk Management
1.Balance Sheet............................................................................................................................. 89
2.Analysis of Business Results ..................................................................................................... 90
3.Cash Flow Analysis ................................................................................................................... 91
4.Influence on Finances of Major Capital Expenditures in the Most Recent Year ...................... 91
5. Investment Policy in the Most Recent Year, Major Reasons for Gains or Losses, Plans
for Improvement, and Investment Plans for the Next Year....................................................... 91
6.Risk Management ...................................................................................................................... 92
7.Other Important Events.............................................................................................................. 94
G.Corporate Governance.............................................................................................95
H. Special Events of Record........................................................................................98

A.Report to Shareholders
In 2003, the global economy suffered from the effects of the SARS outbreak and international
terrorism. As it gradually recovered, growth began to pick up once more in the second half of the
year. National governments proposed fiscal policies to stimulate economic recovery, while
consumer sentiment also improved, and business spending resumed slow growth. In the second half
of 2003, evidence that companies in the global IT industry were replacing outdated equipment
emerged. Demand from corporate users for network equipment showed steady growth, while
interest from individuals and families in multimedia entertainment and digital lifestyles emerged as
a driving force behind growth in demand for PC products. Development trends favoring the digital
home, mobile lifestyles, and mobile commerce created new opportunities for the global IT industry.
Despite the slowdown in the global IT industry, MiTAC continued to aggressively puruse
product R&D and process innovation. By the end of 2003, these efforts had made an impact on the
approach used by MiTAC's three major business units. Regarding product R&D innovation,
MiTAC not only continued to work with its partners in implementing the JDM (joint design
manufacturing) operational model, but also implemented the IDM (innovative design
manufacturing) concept in the organization. Besides continuing to strengthen its hardware R&D
capabilities (mold R&D, industrial design, and architecture design), it also increased staffing for
software and hardware engineering operations in both Taiwan and China to provide design services
for customized software and hardware. In terms of general product design, development trends
emphasize miniaturization, digitalization, mobility, integration, and diversification. The new
generation of products includes consumer and business-oriented electronic devices that provide
information, communications, entertainment and lifestyle enhancements, satisfying the varying
needs of the market. In 2003, MiTAC won 279 patents, ranking it 8th in Taiwan. MiTAC's
hardware and software design and manufacturing prowess, complemented by its expanding
portfolio of intellectual property, have dramatically strengthened MiTAC's overall competitiveness.
Turning to process innovation, MiTAC very early on began implementing global logistics
management, an approach that integrates material flows and manufacturing operations. Attuned to
epochal changes as well as an evolving competitive environment, MiTAC has already developed a
complete value chain that is built on innovation in areas ranging from design, manufacturing, and
shipping to after-sales service. In addition to innovative design and manufacturing, MiTAC has
defined Taiwan as its global R&D center and operational headquarters, while continuing to expand
its production base. At the same time, it is making plans to set up global logistics and customer
service centers. Additionally, in 2003 and continuing into the first half of this year (2004), it
successfully completed work began in 2001 as part of Ministry of Economic Affairs' online supply
chain project (Plan B), monetary flow integration project (Plan C), and joint logistics project (Plan
D). At the end of 2003, it began implementing the joint design project (Plan E). The implementation
of this series of projects has not only strengthened MiTAC's project development capabilities and
speed, improved product quality and control over delivery times, raised the level of integration in
the global supply chain, and increased the efficiency of its global repair services, but even more
importantly, has made the company's operations more transparent. It is expected that in a short time,
MiTAC's design R&D, production costs, capital management, delivery turnarounds, and human
resource utilization will all see dramatic improvements, strengthening MiTAC's business
fundamentals and competitiveness from the ground up.
- 1 -

Innovations in product R&D and workflow drove significant advances in both the products and
sales performance at MiTAC's three main business units. MiTAC's desktop computer product series
was strengthened by PCs built for multimedia entertainment and drawing on the digital home
concept, designs stressing diverse form factors and applications, and wireless networking product
applications. MiTAC also developed next-generation products such as media center PCs and home
gateway servers. For our server product series, we solidified our existing customer base and
continued to expand our reach to large customers, while our R&D teams in the US, China and
Taiwan continued to develop next-generation servers, workstations and storage equipment. As for
wireless communications products, we firmed up Pocket PCs, handheld GPS devices, smartphones,
and wireless networking cards (802.11 and Bluetooth) as our four main product lines, which enable
us to meet customer needs and accommodate market trends. The wireless communications business
unit not only had a number of products awarded the Taiwan Symbol of Excellence in 2003, but its
Mio 168 wireless navigation system was honored with a number of IT product awards in Korea and
China. In the second half of 2003, this business unit introduced the world's first Chinese-langauge
smartphone based on a Microsoft OS, and shortly thereafter at the beginning of this year (2004)
debuted its second smartphone, which received a great deal of favorable notice from large
international mobile phone companies and channel vendors.
1.Operations during 2003:
(1) Operational results and financial analysis:
MiTAC International's operating income in 2003 amounted to NT$39.576 billion, an
increase of 57% compared to the NT$25.178 recorded in 2002. The main factors behind this
increase were the recovery in the global economy and strong OEM orders. After-tax profits
for 2003 were NT$1.05 billion, for an EPS of NT$1.03. In addition, the company's finances
remained sound and well-managed. For 2003, the Company's debt-to-asset ratio was 46.77%,
while turnover ratio was 141.58%--both indicating sound financial fundamentals.
(2) R&D operations:
Over the years, MiTAC has never ceased in its efforts to strengthen its R&D capabilities
and aggressively develop core technologies. These efforts have paid off with concrete results.
Following on its winning of a bronze medal in the National Invention Awards in 1997—the
first year in which it entered the competition—and the silver award it won in 2001, MiTAC in
2003 received the R&D Achievement Prize given by the Hsinchu Science-Based Industrial
Park Administration. MiTAC has also achieved success with patents, ranking seventh
nationally in terms of number of patents awarded in 2001, eighth in 2003, pushing the total
number of patents it holds to 279. MiTAC was also named by the Institute for Information
Industry as one of the six Taiwan vendors with the richest portfolios of intellectual property
assets. In 2003, MiTAC entered five of its mobile communications products in the Symbol of
Excellence competition, with all five winning a prize. The Mio 168 handheld GPS navigation
device won a Best New Product in 2003 award from Korea's Hankookilbo newspaper,
demonstrating that MiTAC's overall business capabilities and R&D innovation strengths have
already opened a considerable lead over other vendors.
- 2 -

2.Higlights of the 2004 business plan:
MiTAC's overall development strategy is to fully implement a value chain-based operational
model linking together upstream and downstream business processes. This entails using software
and hardware R&D to establish our own core technologies, and leveraging these in a complete
series—from high end to entry level—of diversified and individualized communications and
information products. These efforts will be backed up by a vertically integrated production
process and digitalized supply chain management. Such measures will allow effective cost
control, simplify sourcing, increase the transparency of the production process, and shorten the
times needed to bring products to market. Global logistics management and a global repair center
network completes the value chain, allowing us to provide value, velocity, and visibility as the
means to attain customer satisfaction. Following is an overview of sales forecasts and various
measures under consideration for this year:
(1) Sales volume forecasts and the basis for these forecasts:
Based on management's plans for this year (2004) and assessments of future business
conditions, besides setting a sales target of 10 million-plus motherboards, substantial growth
is seen in servers, mobile phones, and wireless communications products.
(2) Ongoing measures:
1.Implementation of the BCDEG project (the "vitamin plan") to strengthen overall company
competitiveness: After completing requirements in 2001 for the online industry supply chain
project (Plan B) promoted by the Ministry of Economic Affairs, in 2002 MiTAC began
working to implement Plan C and Plan D. Plan C aims to integrate banks with supply chain
companies, to create an online payment system, and to provide links to billing and checking
information, allowing suppliers to perform queries using a shared platform. Plan D aims to
set up a joint logistics network between domestic system vendors and component
distributors, which will not only smooth information sharing, but also allow for optimized
management of shipping charges. This plan will also help achieve the objective of enabling
overseas inventory management, and allow reliable on-time delivery of product to
customers. Implmentation of Plan C and D was begun in 2003, and completed at the
beginning of this year (2004). Work on implementation of Plan E (for joint design system
for system vendors and their upstream and downstream partners) and Plan G (for more
environment-friendly manufacturing) as part of the BCDEG plan will enhance operational
soundness and competitiveness.
2.Nurture talent internally, aggressively develop R&D talent: Working with the Yushou
Education Foundation to establish a scholarship for technology development, open to
graduate students in electrical engineering, electronics, computer science, and
communications technologies. We have also requested that R&D managers, graduate
students and faculty advisors jointly set research directions, while at the same time
encouraging graudate students to seek employment at MiTAC after obtaining their degrees.
3.Expand efforts for patent applications, management and utilization: Besides increasing
proportional expenditures for research and development annually, and increasing the total
number of R&D workers, MiTAC is stressing the close coordination of R&D work and the
patent application process. In addition, it plans to inaugurate the patent portal, an internal
network site where R&D workers can access patent data, information on how to apply for
patents, and educational materials on intellectual property rights. A catalog of patents that
MiTAC has obtained worldwide will also be compiled, to encourage re-use of
MiTAC-developed technology and licensing of technology, as well as for use in seeking
legal redress for patent violations.
- 3 -

4.Integrate Group resources, continue strategic investments in key areas of the IT and
communications industries: MiTAC has combined its own and the Group's resources to
establish a strong position for itself in the industry areas in which it is involved, moves
whose benefits are already becoming evident. Continuing investment in MiTAC Precision
Technology, which develops and manufactures precision molds, has enabled MiTAC to use
its control over mold technology to more quickly offer the products that customers require,
increasing design flexibility, and thereby winning attention from additional customers.
Furthermore, MiTAC has expanded its investment in MiTAC Computer (KunShan) Co., Ltd.
in the Kunshan Industrial Park in China's Jiangsu Province, strengthening its manufacturing
capabilities in the communications products field. The software R&D arm in which it has
invested, MiTAC Research (ShangHai) Ltd., has achieved excellent results in operating
systems, applications, R&D testing, and production testing. Besides taking advantage of the
R&D successes described above in its internal production testing, MiTAC's Pocket PC and
smart phones also utilize the applications developed by MiTAC Research (ShangHai) Ltd.
for wireless communications and networking products. MiTAC-invested Synnex
Corporation went public on the New York Stock Exchange in November 2003, solidifying
MiTAC's overall competitiveness.
Looking at the new year, it can foreseen that the industry will continue to change rapidly and
competition will remain intense. However, stable growth will prevail in the markets for digital
entertainment, mobile communications, and corporate networking. MiTAC will use the strategies
and actions described above, and our hope is that this year (2004) will see excellent results
achieved. Through increased customer satisfaction, strengthened operational soundness, and by
taking advantage of our experience executive team, devising flexible and making effective use of
responsive strategic planning, we should achieve excellent results in furtur competition.
MiTAC International thanks its shareholders for their support, and hopes that they will
continue to offer encouragement and guidance during 2004.
Best wishes,
Matthew Miau, Chairman
Francis Tsai, Corp. President
Billy Ho, General Manager
- 4 -

B.Company Overview
1.Company Profile
1.1 Date of Establishment
August 12, 1982
1.2 Company Addresses and Telephone Numbers:
Headquarters and Factory
1 R&D 2nd Road, Hsinchu Science-Based Industrial Park
Telephone: (03)577-9250
Linkou Branch Office
200 Wenhua 2nd Road, Kueishan Village
Telephone: (03)396-2888
Neihu Office
6th Floor, 187 Tiding 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
- 5 -

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 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) .
- 6 -

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.
- 7 -

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.
Launched Pocket PC product, introducing the Mio DigiWalker brand for the entire
product series, returning to the brand-name market. Within six months, Mio
DigiWalker was among the top three best-selling PDA brands in the Asia-Pacific
region.
Mio DigiWalker Pocket PC products Mio 338 and Mio 728 won Taiwan Symbol of
Excellence awards.
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 bases
Jointly established Y.S. Educational Foundation with member companies in the
MiTAC Incorporated Group.
2003 - Announced the world's first flip smartphone, the Mio 8380. Launched the world's
first dual-wireless dual-slot Pocket PC, the Mio 558, and the first Pocket PC with an
integrated digital camera, the Mio 339. Debuted the world's first product to combine
a GPS navigation system and PDA functionality, the Mio 168 handheld GPS system
for cars.
The Mio DigiWalker series—Mio 339, Mio 558, Mio 336, Mio 168 GPS, Mio
8390—received Symbol of Excellence awards.
The Mio 168 GPS received a Product of the Year award from the Korea Times.
Group company Synnex Corporation of the United States had its IPO on the New
York Stock Exchange.
2004 - Announced the Mio 8390, Taiwan's first smart phone based on Microsoft's latest
operating system. Established Mio Technology Corporation and promoted the Mio
DigiWalker brand.
Aggressively expanded market share in the Greater China region (Taiwan, Hong
Kong, mainland China) for the Mio brand. Also entered other markets such as
Australia and Canada, while teaming with Dangaard Telecom, the world's
third-largest mobile phone channel vendor to break into the European market.
New book 98/2: MiTAC's Vitamin Plan is published. The book shares MiTAC's
experiences with the digitalization of its operations.
- 8 -

1.4 Other
In the most recent year and current year to the date of publication of this report, the Company
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.
2 Company Organization
2.1 Organizational Structure
2.1.1 Organizational Chart
Audit Office Public Relations Department
Finance Center Resource Development Center
System Architecture R&D Center Project R&D and Development Center
Technical Service Center
- 9 -
Legal Affairs Office
Brand Management Department MIS Center
Corporate Planning Office Global Quality Management Office
Desktop Product Business Unit
Chairman
General Manager
Professional System Product Business Unit
Mobile Communication Product Business Unit Hsinchu Operations Unit
New Product Introduction Center

2.1.2 Responsibilities of Major Departments
Audit Office - Examine and evaluate effectiveness of internal control
mechanisms to ensure they are intact, effective; provide
analysis, evaluations, and recommendations.
- Promote effective control of quality at reasonable cost and
provide assessments of quality levels
PR Department - Investor relations, Media relations and Corp. PR affairs
Finance Center - Financial operations and planning
- Financial management and operations for overseas
subsidiaries
- Research domestic and overseas investment opportunities
- Capital planning; handling of accounting and tax procedures
- Coordination of board and shareholder meetings
Resource Development - Strategic management of human resources
Center
- Management of domestic and overseas branch companies
System Architectures - In charge of research and development for future product
R&D Center
Engineering Research
and Development
Center
Technical Service
Center
technologies
- Provide safety certifications and PC engineering support for
all types of products
- After-sales customer service
- Overseas technical support
- Product compatibility testing
Legal Affairs Office - Draft and review contracts
- Provide legal consulting services and support; manage other
legal affairs
Brand Marketing - Responsible for global promotion of the MiTAC brand and
Department
marketing activities
MIS Center - Promotion of digitalization of operational system at global
branches and headquarters
- Administration and maintenance of the Company's internal
IT system and network environment
Corporate Planning - e-Commerce
Office
- Improvement of workflow
Global Product Quality - In charge of promoting product quality management system
Management Office at global branches and headquarters
Desktop Product - In charge of R&D, sales, and promotion for desktop
Business Unit
computer products
Professional Systems - In charge of R&D, sales, and promotion for professional
Product Business Unit
Mobile Communication
Product Business Unit
Hsinchu Operations
Unit
New Product
Introduction R&D
Center
systems products
- Take production of high profit margin products as its
imperative
- In charge of R&D, sales, and promotion for information
appliance products
- Import/Export management
- Inventory management for finished products and materials
- Management and control of production materials
- Product quality testing and control
- In charge production process design and setting of product
quality testing standards for products from various business
units before commencement of mass production.
- 10 -

2.2 Director, Supervisor, General Manager, Vice General Manager
2.2.1 Directors and Supervisors
Title Name Date
Date of Initial
Elected Term
Appointment
Chairman
Shares Held
Directly at Time
of Election
#
Number of
Shares Currently
Held
#
Shares
Currently
Held By
Spouse or
Minors
- 11 -
Shares Held
Under Other
Name
%
%
% %
Total
Total
Total
Matthew Miau 2001.05.25 3 years 75.05.17 9,963,892 1.12% 12,193,073 1.14% 0 0% 0 0% Santa Clara University, EMBA MiTAC Inc Group, Chairman
#
Total #
Education and Experience
Other Positions Held at the
Company or Other Companies
April 1, 2004
Spouse or Kin
Renumeration
Within Two
and Other
Degrees of
Payments
Consanguinity
Made in the
Who Is Executive,
Most Recent
Director,
Calendar Year
Supervisor
Units:
Title Name Relation NT$1000s
- - - 1,120
Vice Chairman Francis Tsai 2001.05.25 3 years 81.06.09 1,530,788 0.17% 2,077,578 0.20% 243,630 0.02% 0 0% Chiao-Tung U,
Computer/Control Eng Dept;
MiTAC International Corp., CEO
MiTAC Technology, Chairman - - - 1,072
Micro Electronic Computer, MiTAC International Corp.,
Vice GM; MiTAC Inc, Vice
GM for Operations
Corporate President
Director Lienhwa
Industrial Corp.
Rep: Jason Chou
2001.05.25 3 years 75.06.17 63,559,32
0
7.12% 72,711,862 6.83% 0 0% 0 0% Master's, General Manager BOC Lienhwa Industrial
Co.,Ltd.,Vice GM; United
Industrial Gases Co.,
Supervisor;Lienhwa
Commonwelth Corp., Supervisor
- - - 472
Director MiTAC Inc 2001.05.25 3 years 71.11.24 84,946,57 9.52% 97,178,884 9.12% 0 0% 0 0% Institute for Information MiTAC Inc ,Vice Chairman/ - - - 472
Rep: Yun Kuo
8
Industry, Vice Chairman &
CEO; Executive Yuan NII,
Exec Scty
GM
Director UPC Technology 2001.05.25
Corp.
Rep: Simon Wu
3 years 78.02.29 89,921,41
5
10.08
%
102,870,09 9.66%
8
0 0% 0 0% U of Dallas, MBA;
Acer Group, CFO
UPC Technology Corp., Asst GM - - - 472
Supervisor MiTAC Inc
Rep: Arthur
2001.05.25 3 years 71.11.24 84,946,57
8
9.52% 97,178,884 9.12% 0 0% 0 0% Washington U, MSEE Winbond Group,Chairman; - - - 472
Chiao
Winbond Electronic Co., Ltd.,
Chairman
Supervisor Lienhwa
Industrial Corp.
Rep: Sunny Sun
2001.05.25 3 years 75.06.17 63,559,32
0
7.12% 72,711,862 6.83% 0 0% 0 0% Natl Taiwan U, Business
Administration
Paohwa Industrial Co., Ltd.,
Chairman
- - - 472

Major Institutional Shareholders
April 1, 2004
Name of Institutional Shareholders Primary Shareholders of Institutional Shareholders(See note.)
UPC Technology Corp. Lienhwa Industrial Corp.
Synnex Technology International Corp., Lienhwa Industrial
MiTAC Incorporated
Corp.
Lienhwa Industrial Corp. UPC Technology Corp.
Note: Names of institutional shareholders holding a stake higher than 10% or whose stake is
among the ten largest.
Major shareholders of instutional shareholders
April 1, 2004
Name of Institutional Shareholders Primary Shareholders of Institutional Shareholders(See note.)
Lienhwa Industrial Corp. UPC Technology Corp.
Synnex Technology International
MiTAC Incorporated
Corp.
UPC Technology Corp. Lienhwa Industrial Corp.
Note: Names of institutional shareholders holding a stake higher than 10% or whose stake is
among the ten largest.
Name
Terms
Directors and Supervisors
Five-Plus Years of Work
Experience Required for
Business, Law, or
Corporate Operations
- 12 -
Meets Requirements for
Independence(See note.)
1 2 3 4 5 6 7
Remarks:
Matthew Miau ˇ ˇ ˇ ˇ ˇ Director
Francis Tsai ˇ ˇ ˇ ˇ ˇ ˇ Director
Director, one seat
Lienhwa Industrial Corp.
Supervisor, one seat
Director, one seat
MiTAC Incorporated
Supervisor, one seat
UPC Technology Corp. Director, one seat
Notes : A checkmark () is placed in the column for each condition met by a given director or supervisor.
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.

2.2.2 Key Managers
Title Name
Date Took
Office
Shares Held
Directly
#
%
Total
Shares Held By
Spouse or Minor
#
%
Total
Shares Held
By Agent
#
%
Total
Education and Experience
- 13 -
Positions Currently Held at Other
Companies
Spouse or Kin Within Two
Degrees of Consanguinity
Who Is Executive, Director,
Supervisor
Title Name Relation
CEO Matthew Miau 1998.09.01 12,193,0 1.14%
73
0 0% 0 0% Santa Clara University, EMBA MiTAC Inc Group, Chairman - - -
Corporate Francis Tsai 2000.06.01 2,077,57 0.20% 243,630 0.02% 0 0% Chiao-Tung U, Computer/Control Eng Mitac Technology, Chairman - - -
President
8
Dept; Micro Electronic Computer, Vice
GM; MiTAC Inc, Vice GM for
Operations
General Billy Ho 2000.03.27 1,062,65 0.10% 0 0% 0 0% Farleigh-Dickinson U, MS Comp Sci; MiTAC Precision Technology Co., - - -
Manager
5
UCSD Master's
Ltd.,
Director;
Harbinger Venture Capital Corp.,
Director;
3-Probe Technologies Co., Ltd.,
Director;
Lian Jie Investment Co., Ltd.,
Director;
- - -
Vice GM C.J. Lin 2000.03.27 675,825 0.06% 0 0% 0 0% Natl Taiwan U, Dept of Computer
Science; Kui-mao Elec., Manager;
Vice GM C.S. Chen 1996.03.27 186,797 0.02% 27 0% 0 0% Soochow U, Dept of Accounting;
Price Waterhouse Coopers
Vice GM C.H. Wang 1997.03.20 461,314 0.04% 0 0% 0 0% Chengkong U, Dept of Eng Science;
Vice GM Percy Chen 1997.03.20 639,608 0.06% 20,000 0% 0 0% Taipei Inst Of Tech, Electronics Dept;
Mitac Inc, Manager
Vice GM Gino Chang 1997.03.20 455,240 0.04% 0 0% 0 0% Chungyuan U, BSEE; Kui-mao Elec.,
Mgr; AMPEX, Head;
Tyan Computer Co.,
Supervisor;
3-Probe Technologies Co.,
Ltd., Supervisor;
MiTAC Precision Technology
Co., Ltd., Supervisor;
Linous Technology Co., Ltd.,
Supervisor;
Mio Technology Corp.,
Supervisor;
- - -
- - -
Mio Technology Corp., - - -
Director;
3-Probe Technologies Co.,
Ltd., Director;
- - -
Salary, Expense
Account, Bonuses
Received by GM or
Vice GM in Most
Recent Year
Units: NT$1000s
Salary 19,580
Use of car 6,777
Salary 56,728
Use of car 6,750
April 1, 2004
Option Vouchers
Obtained By
Executives
Units: Shares
8,500,000
9,380,000

Title Name
Date Took
Office
Shares Held
Directly
#
%
Total
Shares Held By
Spouse or Minor
#
%
Total
Shares Held
By Agent
#
%
Total
Education and Experience
- 14 -
Positions Currently Held at Other
Companies
Spouse or Kin Within Two
Degrees of Consanguinity
Who Is Executive, Director,
Supervisor
Title Name Relation
Vice GM James Yuan 1997.06.06 70,038 0.01% 0 0% 0 0% Rutgers U, JD; Baker & McKenzie Asia-Pacific Technology & - - -
Intellectual Property Services
Inc., Director
Vice GM Samuel Wang 1999.07.01 473,989 0.04% 0 0% 0 0% Natl Taiwan U, Dept of Comp Sci; Trumpion Microelectronics - - -
Longshine Electronics Corp., Sen Inc., Director;
Engineer
Actrans System Inc., Director;
Vice GM Tod Chang 1999.09.01 170,017 0.02% 0 0% 0 0% Natl Taiwan U, Dept of Comp Sci;
- - -
Longshine
Engineer
Electronics Corp., Sen
Vice GM Stone Chen 2002.07.01 253,056 0.02% 0 0% 0 0% Chiao-Tung U, BSEE; Natl Chengchih
U, MBA;
NEXCOM International Co., Ltd., Office
Mgr; TeleSynergy Corp., Mgr
- - -
Vice GM Michael Lin 2002.07.01 237,398 0.02% 39.564 0% 0 0% Natl Taiwan U, BS Comp Sci - - -
Vice GM Stone Lin 2002.03.27 576,684 0.05% 960 0% 0 0% Ming-Hsin Institute of Technology,
- - -
Vice GM Raymond Lee 2002.03.27 262,080 0.02% 0 0% 0
Industrial Mgmt Dept
0% Chungyuan U, Industrial Eng Dept;
Taiwan, US Wireless Comms Mfg
Engineer
- - -
Vice GM Jack Kuo 2002.03.27 124,880 0.01% 0 0% 0 0% Natl Taiwan Institute of Technology,
MSEE; Clevo, Vice GM
- - -
Vice C.P.Lee 2004.02.25 102,832 0.01% 0 0% 0 0% Chiao Tung University, graduate
- - -
GM
degree;
Mininstry of National Defense
Institute of Management, instructor;
MiTAC Inc., sales director
MiTAC International Corp
KunShan Business Unit , General
Manager;
Salary, Expense
Account, Bonuses
Received by GM or
Vice GM in Most
Recent Year
Units: NT$1000s
Option Vouchers
Obtained By
Executives
Units: Shares

2.3 Change in Share Ownership by Directors, Supervisors, Managers, and Major Shareholders
2003 2004 to April 1
I n c r e a s e I n c r e a s e I n c r e a s e I n c r e a s e
Title Name
(Decrease) of (Decrease) of (Decrease) of (Decrease) of
Number of Shares Number of Shares Number of Number of Shares
H e l d MortgagedShares
Held Mortgaged
Chairman Matthew Miau 0 (4,200,000) 57,000 0
Vice
Chairman
Francis Tsai 0 0 57,000 0
Director
Supervisor
Jason Chou
Sunny Sun
Lienhwa Industrial Corp.
Representative
0 25,500,000 0 (25,500,000)
Director
Supervisor
Yun Kuo Mitac Incorporated
Arthur Chiao Representative
0 20,000,000 0 0
Director Simon Wu
UPC Technology Corp.
Representative
0 (42,286,000) 0 30,000,000
General
Manager
Billy Ho 0 0 65,000 0
Vice GM C.J. Lin 0 0 45,000 0
Vice GM Tod Chang 150,000 0 20,000 0
Vice GM Stone Chen 0 0 55,000 0
Vice GM Samuel Wang 0 0 55,000 0
Vice GM James Yuan (20,000) 0 10,000 0
Vice GM Raymond Lee 0 0 120,000 0
Vice GM Percy Chen 200,000 0 30,000 0
Vice GM Michael Lin (135,000) 0 55,000 0
Vice GM C.H. Wang 0 0 15,000 0
Vice GM Stone Lin 200,000 0 40,000 0
Vice GM Gino Chang 175,000 0 30,000 0
Vice GM Jack Kuo 0 0 10,000 0
Vice GM C.P. Lee - - 0 0
Vice GM C.S. Chen (20,000) 0 15,000 0
2.4 Consolidated Stock Holdings
Invested Companies
(See note.)
The Company's Holdings
Holdings of Directors, Supervisors,
Managers, and Others Directly or
Indirectly Controlling the Company
Number of
Shares
Percentage of
Number of Shares
Total Shares
Percentage of
Total Shares
- 15 -
April 1, 2004 Units:Shares;%
Consolidated Holdings
Number of
Shares
Percentage of
Total Shares
Mitac Technology Corp. 93,426,408 37.79% 17,366,287 7.02% 110,792,695 44.81%
Tyan Computer Co. 7,348,916 16.74% 6,903,333 15.73% 14,252,249 32.47
Tung Da Investment Co., Ltd. 37,963,076 49.99% 0 0% 37,963,076 49.99%
Silver Star Developments Ltd. 127,875,404 100.00% 0 0% 127,875,404 100%
Tsu Fong Investment Co., Ltd. 16,500,000 100.00% 0 0% 16,500,000 100%
3-Probe Technologies Co., Ltd. 1,080,000 23.13% 6,000 0.13% 1,086,000 23.25%
MiTAC Precision Technology Corp. 33,491,150 42.77% 8,190,313 10.46% 41,681,463 53.23%
Lian Jie Investment Co., Ltd. 12,995,000 49.98% 0 0% 12,995,000 49.98%
Sinfotek Information Technology Co. 509,091 36.36% 509,233 36.37% 1,018,324 72.74%
Channel Overseas Corp. 5,500,000 5.00% 3,850,000 3.50% 9,350,000 8.50%
Vate Technology Co., Ltd. 397,191 0.26% 0 0% 397,191 0.26%
Mitac Inc. 24,825,752 8.97% 71,251,880 25.75% 96,077,632 34.72%
Overseas Investment and
Development Corp. 1,000,000 1.11% 0 0% 1,000,000 1.11%
Lien Hwa Industrial Corp. 20,475,398 3.10% 86,545,450 13.09% 107,020,848 16.18%
UPC Technology Corp. 11,107,267 1.54% 169,713,591 23.72% 180,820,858 25.27%
Gemtek Technology Co., Ltd. 3,194,679 3.33% 3,709,296 3.86% 6,903,975 7.19%
Harbinger Venture Capital Corp. 26,099,000 13.05% 32,401,000 16.20% 58,500,000 29.25%
Actrans System Inc. 2,000,000 6.67% 0 0% 2,000,000 6.67%
Trumpion Microelectronics Inc. 916,300 2.93% 238,700 0.76% 1,155,000 3.70%
Quantway Corp. 1,385,000 49.73% 0 0% 1,385,000 49.73%
Note: Investees are accounted for as long-term investments.

3. Capital and Shares, Corporate Bonds, Special Shares, Global Depositary Receipts, Employee Stock Subscription Voucher,
and Mergers:
3.1 Capital Sources
Units: New Taiwan Dollars
Date
1998.08
1998.09
1999.02
1999.08
2000.02
2000.07
2001.07
2002.07
2003.12
2004.03
Issue
Price Per
Share
10
10
10
10
10
10
10
10
10
10
Authorized Common Stock Outstanding Common Stock Remarks
Number of
Shares
900,000,000
900,000,000
900,000,000
1,360,000,000
1,360,000,000
1,360,000,000
1,710,000,000
1,710,000,000
1,710,000,000
1,710,000,000
Amount
9,000,000,000
9,000,000,000
9,000,000,000
13,600,000,000
13,600,000,000
13,600,000,000
17,100,000,000
17,100,000,000
17,100,000,000
17,100,000,000
Number of
Shares
577,578,648
585,428,580
635,428,580
767,459,721
769,108,799
892,427,727
994,513,299
1,041,568,630
1,056,381,210
1,065,034,460
Amount Source of Capital
5,775,786,480 Capitalization of capital reserve, retained earnings, and
conversion of entitled stock certificates for 497,723,730、
273,747,860 and 27,077,520 , respectively.
5,854,285,800 Conversion of entitled stock certificates for 78,499,320
6,354,285,800 Capital injection in cash of 500,000,000
7,674,597,210 Capitalization of profits, and employee dividend for
1,270,857,160 and 49,454,250, respectively
7,691,087,990 Conversion of entitled stock certificates for 16,490,780
8,924,277,270 Capitalization of profits, employee dividends, conversion
of entitled stock certificates for 1,153,663,180,
78,956,480, and 569,620, respectively
9,945,132,990 Capitalization of profits, employee dividends for
892,427,720 and 128,428,000, respectively
10,415,686,300
10,563,812,100
10,650,344,600
Shares by
Authorized Capital
Categories Outstanding Shares Unissued Shares Total
Common
Stock
1,065,034,460 644,965,540 1,710,000,000
Capitalization of profits and employee dividend
for397,729,310 and 72,824,000, respectively
In Q4 2003, employees redeemed NT$148,125,800 of
stock vouchers
In Q1 2004, employees redeemed NT$86,532,500 of stock
vouchers
- 16 -
Property Other
than Cash Taken
for Investment
-
-
-
-
-
-
-
-
-
-
Remarks
Date and Document Number for
Activation (Approval) of
Capitalization
1998.06.09
(87)-Tai-Tsai-Cheng-(1)-49977
-
1998.11.06
(87)-Tai-Tsai(1) -Cheng-93004
1999.06.22
(88)-Tai-Tsai(1) -Cheng-56780
-
2000.06.03
(89)-Tai-Tsai(1) -Cheng-47983
2001.06.07
(90)-Tai-Tsai-Cheng-
(1)-136070
2002.06.18
Tai-Tsai-Cheng-
(1)-0910132851
2004.01.29
Yun-Shun-Tsi0930001436
單位:股
Of authorized shares:
200,000,000 are reserved for company convertible bonds;
150,000,000 are reserved for employee stock options;
200,000,000 are reserved for company bonds with warrant.

3.2 Shareholding Structure
Number
Category
Government
Institutions
Financial
Institutions
Other
Institutions
- 17 -
Qualified Foreign
Institutional and
Individual Investors
Individuals Reserved
Shares
April 1, 2004
Number of
Shareholders 5 9 130 94 115,311 1 115,550
Number of Shares
Held 2,275 3,699,016 384,289,089 54,253,276 595,043,804 27,747,000 1,065,034,460
Percentage of Total
Shares 0.00% 0.35% 36.08% 5.09% 55.87% 2.61% 100.00%
3.3 Distribution of Shareholdings
Share/Per Value of NT$10
April 1, 2004
Range of Shares Held
Number of
Shareholders
Total Number of
Shares Held
Percentage of
Total Shares
1-999 43,281 14,548,411 1.36%
1,000-5,000 48,567 111,918,063 10.51%
5,001-10,000 12,308 89,330,289 8.39%
10,001-15,000 4,405 53,105,828 4.99%
15,001-20,000 2,238 40,378,155 3.79%
20,001-30,000 1,963 48,211,790 4.53%
30,001-40,000 839 29,382,071 2.76%
40,001-50,000 506 23,433,510 2.20%
50,001-100,000 862 60,851,729 5.71%
100,001-200,000 346 47,900,212 4.50%
200,001-400,000 126 35,044,292 3.29%
400,001-600,000 36 17,981,575 1.69%
600,001-800,000 18 12,171,145 1.14%
800,001-1,000,000 9 8,401,686 0.79%
More than 1,000,001 46 472,375,704 44.35%
Total 115,550 1,065,034,460 100.00%
3.4 List of Major Shareholders
Shares
Name of Shareholder
Total
Number of Shares Held Percentage of Total Shares
UPC Technology Corp. 102,870,098 9.66%
Mitac Incorporated 97,178,884 9.12%
Lienhwa Industrial Corp. 72,711,862 6.83%

3.5 Market Price, Net Value, Earnings, and Dividends for the Most Recent Two Years
Units: New Taiwan Dollars
Item
Year
2002 2003
April 1, 2004
(See note 1.)
Market Price
Per Share
Highest
Lowest
Average
24.5
11.4
16.5
15.70
10.5
13.29
18.2
13.8
16.0
Net Worth Before Distribution 15.76 16.07 16.32
Per Share After Distribution 15.49 * -
Weighted Average Number of
Earnings Per Shares(in Thousand Shares)
Share Earnings Before Adjustments
1,024,966
0.84
1,021,545
1.03
1,017,595
0.44
Per Share After Adjustments 0.84 * -
Dividend Per
Share
Cash Dividend 0.2 * -
From Retained Earnings - * -
Stock
Dividend From Capital Reserve - * -
Accumulated Unpaid Dividends
Declared
- * -
Price/Earnings Ratio (See note 2.) 19.64 12.90 8.00
Return On Price/Dividend Ratio (See note 3.) 82.5 * -
Investment Cash Dividend Yield Rate (See
0.012 * -
note 4.)
* The Company has not yet held a shareholder's meeting to determine allocation of earnings for 2003.
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)*
3.6 Dividend Policy and Implementation:
3.6.1 Company Dividend Policy
The Company is part of an industry that is in a growth stage, and the Company it is
growing along with this industry. In consideration of the industry environment in
which the Company operates, long-term financial planning, 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 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 distribution of the
remainder, together with any undistributed earnings from the previous year, to be
proposed by the Board of Directors for approval at the shareholder's meeting.
If the employee dividend described above is distributed as stock shares, employees
of subsidiaries of the Company who meet specified conditions are also eligible to
receive such shares. The Chairman is authorized to set the relevant conditions.
- 18 -

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 profit status, with cash dividends not less
than 10% of total stock dividends, and subject to adjustments approved at the
shareholder's meeting.
3.6.2 Proposal for Dividend Distribution
In accordance with the above principles, the Company's Board of Directors on
April 1, 2004 drafted a proposal for dividend distribution for the current year (2004),
with a cash dividend for each share of NT$0.5. The proposal will be presented for
approval at the shareholder's meeting on May 18, 2004.
3.7 Employee Bonuses and Renumeration for Directors, Supervisors
3.7.1 Scale and Scope of Employee Bonuses and Renumeration for Directors and Supervisors
As Set Forth in Company Regulations
(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.
(2) Scale and Scope of Renumeration for Directors and Supervisors: Not specified in
company regulations.
3.7.2 Information on the Proposed Scheme for Distribution of Employee Bonuses as Passed
by the Board of Directors
On Apri l, 2004, the Board of Directors passed a resolution on the distribution of
the Company's earnings in 2003 as follows:
(1) Distribute to employees cash bonuses totaling NT$94,632,585, and renumeration
totaling NT$4,000,000 to directors and supervisors.
(2) Proposed number of shares to be distributed as employee stock bonuses: None. Share
of capitalized earnings: 0%.
(3) Consider using for discussion an after-tax basic earnings per share figure of NT$0.93
after distribution of employee bonuses and renumeration for directors and
supervisors.
3.7.3 Resolution of Employee Bonuses and Renumeration to Directors and Supervisors Last
Year
Actual Figures Resolved Upon at
2002 Shareholder's Meeting and by
the Board of Directors
(1)Dividend Distribution
Employee cash bonus
Employee stock bonus
A. Number of Shares
B. Value
C. Share of total shares in circulation at year-end
Remuneration to directors, supervisors
(2)Information on Earnings Per Share
Earnings Per Share
Set Earnings Per Share (See note 1.)
- 19 -
NT$ 77,841,000
-
-
-
NT$ 4,000,000
NT$ 0.84
NT$ 0.76
Notes: 1. Calculated based on the following formula: (Earnings Per Share) = ((Net Profit for the
Period) – (Employee Bonus) – (Renumeration for Directors and Supervisors)) /
(Weighted Average Number of Shares in Circulation During That Year)

3.8 Treasury Stock
Aapril 1, 2004
Sequence First (period) Second(period) Third(period) Fourth(period) Fifth(period) Sixth(period) Seventh(period) Eighth(period)
Purpose
To transfer to
employees
To transfer to
employees
To transfer to
employees
To transfer to
employees
To transfer to
employees
To transfer to
employees
To transfer to
employees
To transfer to
employees
Period
Price Range
Type and
Quantity
Bought Back
Value of Shares
Bought Back
Shares
Cancelled or
Transferred
Accumulated
Shares
Accumulated
Held Shares As
Percentage of
Total Issued
Shares(%)
September 7,
2001 to
November 16,
2001
Between
NT$10 and
NT$13
190,000 shares
of common
stock
NT$
2,212,143
May 30, 2003 to
July 29, 2003
Between
NT$10.5 and
NT$12
0 share of
common stock
NT$
0
August 7, 2003
to October 6,
2003
Between
NT$10.5 and
NT$14
5,000,000 shares
of common
stock
NT$
69,111,879
September 1,
2003 to
October 31, 2003
Between
NT$10.5 and
NT$14
5,000,000 shares
of common
stock
NT$
68,079,339
- 20 -
September 17,
2003 to
November 16,
2003
Between
NT$10.5 and
NT$14
10,000,000
shares of
common stock
NT$
137,834,108
December 8 ,
2003 to
February 7, 2004
Between
NT$10.5 and
NT$15
5,000,000 shares
of common
stock
NT$
72,424,882
February 25,
2004 to April 24,
2004
Between
NT$15 and
NT$17
5,000,000 shares
of common
stock
NT$
84,065,197
March 12, 2004
to
May 11, 2004
Between
NT$15 and
NT$17.5
6,760,000 shares
of common
stock
NT$
103,300,497
190,000 shares 0 4,503,000 shares 0 0 0 0 0
0 0 497,000 shares 5,497,000 shares
15,497,000
shares
20,497,000
shares
25,497,000
shares
32,257,000
shares
0.00% 0.00% 0.05% 0.52% 1.46% 1.93% 2.40% 3.03%

3.9 Corporate Bond Issues
Category
April 1, 2004
Secured Convertible Debenture Bonds
– First Series
Date of Issue
From November 11, 2000 to December 13,
2000
Par Value NT$1,000,000
Issue Price 100% at par value
Total Amount NT$2,500,000 thousand
Interest Rate Annualized 5.82% at par value
Five Years
Duration
Date of Maturity: November 11, 2005 ~
December 13, 2005
Guarantor None
Trustee
Chinatrust
Division
Commercial Bank, Trust
Underwriter None
Underwriting Attorney-At-Law George Lin and Weng Chin-Kun
Auditing CPA Wen Fang-Yu
Terms of Repayment Principal and interest paid upon maturity
Outstanding Principal NT$2,500,000 thousand
Terms of Redemption or Repayment in Advance -
Restrictive Terms -
Credit Assessing Results None
Amount of common shares, GDR, or
other securities as of the publication Not applicable
Auxiliary
date of the annual report.
Rights
Terms of Issuance and Conversion
Not applicable
(swap or subscriptions)
Clauses of Issuance and Conversion, Swap or
Stock Subscription, Effect of Issuing Conditions
Not applicable
on Possible Dilution of Stock Rights and
Stockholder's Current Rights and Interests
Name of Custodian or Subject of Swap Not applicable
- 21 -

3.10 Employee Stock Options
3.10.1 Overview of Employee Stock Options
Category 2001, First Issue of Employee Stock Options
Executive Approval Date September 13, 2001
Issuance Date October 18, 2001
Issuance Units 99,000
Number of Shares for Purchase as
Proportion of Total Shares Issued
9.50%
Shareholding Period 6 years
Method of Provision Issuance of new shares
Period and Proportional Limitations
on Exercise of Options (%)
Note: To the quarter completed prior to the printing date of this annual report.
- 22 -
April 1, 2003
3.10.2 Names of Managers With Employee Stock Option Vouchers and Employees Among
Top Ten In Terms of Number of Shares For Which Options are Held and Whose
Purchase Value is at Least NT$30 Million, Options Acquired, Status of Options
Title Name
No. of shares
acquired
Option
Persons exercising stock options must do so in accordance with the timing
specified by item 2 under the Article 5 of these procedures exercise these
rights, and complete an application form for doing so, presenting this to the
company's stock agency for processing, with right to exercise suspended
during a period commencing at least three business days prior to a legal
transfer or rights, the date of declaration by the Company to the Taiwan
Securities Exchange of intent to disburse a stock dividend or cash interest
on stock, until the day appointed for disbursement of the same.
Number of Shares Already Acquired
23,466,000 shares
Through Exercised Options
Value of Stocks in Exercised Options NT$ 218,232,000
Number of Shares In Unexercised
75,534,000 shares
Options
Exercise Price of Unexercised
NT$ 9.3/share
Options
Number of Shares In Unexercised
Options as Share of Total Issued 7.1%
Shares
Persons with stock option rights conferred by the Company may only
exercise such rights in accordance with the timetable specified in these
Impact on Stockholder equity
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.
No. of Shares
in Acquired
Options as
No. of Shares Price Amount
Percentage of
Total Shares
April 1, 2003
Already Exercised Not Exercised
No. of Shares
as % of Total
Issued Shared
No. of
Shares
Price Amount
No. of Shares
as % of Total
Issued Shared
CEO Matthew Miau
Corporate
President
Francis Tsai
8,500,000 0.80% 0 -- 0 0.00% 8,500,000 9.3 79,050,000 0.80%
General
Manager
Billy Ho
Vice GM C.J. Lin
Vice GM C.S. Chen
Vice GM C.H. Wang
Vice GM Percy Chen
Vice GM Gino Chang
Vice GM James Yuan
Vice GM
Vice GM
Samuel Wang
Tod Chang
9,380,000 0.88% 845,000 9.3 7,858,500 0.74% 8,535,000 9.3 79,375,500 0.80%
Vice GM Stone Chen
Vice GM Michael Lin
Vice GM Stone Lin
Vice GM Raymond Lee
Vice GM Jack Kuo
Vice GM C.P. Lee
Note: To the quarter completed prior to the printing date of this annual report.

C. Operations Overview
1 Business
1.1 Business Scope
1.1.1 Main lines of business and products
MiTAC International's three core businesses are: (1) desktop computer products;
(2) server product series, including workstations, servers, and data storage equipment; (3)
wireless communications product series, including handheld computers (includes
products with wireless connectivity and multimedia capabilities), handheld GPS
navigation devices, smartphones, wireless networking cards (802.11 and Bluetooth), and
the associated technical support and services for the above-mentioned mobile
communications products.
Following are descriptions of current products:
(1)Desktop Computer Products
-Consumer-oriented multimedia computers
-High-performance business computers
-High-performance network computers
-Small form factor multimedia personal computers
-LCD computers
-High-resolution display cards
-High-performance computer mainboards
-Entry-level and midrange workstations
-High-performance power supplies
(2)Server product series
-High-performance workstations
-General-use servers
-Rack-mounted servers
-Ultra-dense servers
-Telecommunications servers
-Blade storage
(3) Wireless Communications Products
- Handheld computers (includes products with wireless connectivity and multimedia
capabilities)
- Handheld GPS navigation devices
- Smart phones
- Wireless networking cards (802.11 and Bluetooth)and the associated technical
support and services for the above-mentioned mobile communications products.
Technical support and after-sales services for the above products.
1.1.2 Shares of Revenue
Units: Thousands of NT Dollars
Product
Year
2003 Share
Desktop Computer Products 23,731,656 59.96
Server product series 11,095,186 28.04
LCD Computer Products 376,684 0.95
Wireless Communications Products 3,602,150 9.10
Peripherals and Other Products 770,278 1.95
Total 39,575,954 100.00
- 23 -

1.1.3 New Products and Technologies Planned for Development
(1) Desktop Computer Products
- Personal computers with integrated digital AV capabilities, diversified styling and
applications
- Personal computers integrating home electronics products
- Personal computers integrating wired and wireless networking capabilities
- High-performance low-cost dual-processor workstations
(2) Server product series
- High-performance workstations based on RISC/CISC processors
- Development of high-performance servers
- Development of ultra-dense servers
- Development of telecommunications servers
- Development of storage device technologies
(3) Wireless Communications Products
- Technologies for integrating computers and telecommunications
- Integrate data retrieval, voice, and wireless broadband communications
- Extensions of Internet-centric devices merging PCs and information appliances,
with integrated telecommunications and storage technologies
- Technology related to multimedia applications
- Development of wireless communications and networking technologies
- Research in wireless communications equipment technology
- Research in the developments in new digital media, seeking in the process new
business opportunities and development of related products
- R&D for operating systems and application software
- Development and application of virtual reality software
(4) Other
- Ultra-dense, high-frequency electronic architectures and associated automated
production and testing technologies.
- Defect-free manufacturing (DFM) product design.
- Product design and manufacturing technologies for satisfying environmental
protection requirements and ISO standards.
- High-speed PC architectures and heat flow technologies.
1.2 State of the industry: the discussion below is limited to the three main product lines
1.2.1 Desktop computer product series
(1) Due to the effect of replacement by notebook computers, desktop computer growth
has slowed somewhat.
(2) The corporate market is saturated, with weak growth potential. The home market has
far greater potential for growth.
(3)Desktop computers for the home market are being repositioned, with less emphasis
on computing power and increased stress on their suitability for multimedia
entertainment and digital home applications. This has spurred the closer integration
of regular PCs with the digital images, video, audio, and data on home electronics
equipment, sparking a new wave of rapid growth.
(4) With the difficulty of achieving substantial growth in global demand for desktop
computers, price competition has become an important weapon for maintaining or
expanding market share.
(5) Pricing pressures are increasing on brand vendors. Taiwan vendors' low-cost contract
manufacturing capabilities have been much in their favor, with the proportion of
manufacturing outsourced by major brand vendors continuing to rise. Shipments by
Taiwan vendors are likely to benefit as a result.
- 24 -

1.2.2 Server product series
Servers are used primarily for running corporate information systems, and
represent an essential investment that companies make in basic infrastructure. Because
computer systems are a critical tool for sustaining the business of modern corporations,
companies place a great deal of importance on total cost of ownership (TCO) when
considering server purchases. TCO includes the cost of downtime when the system is
not functional, as well as regular maintenance costs. Therefore, server customers
demand system reliability, availability, serviceability, usability, manageability—known
collectively by the acronym RASUM. Servers with strong RASUM require a longer
product development and testing cycle, and such products also carry a higher product
margin and long product lifespan. 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.
1.2.3 Wireless communications product series
(1) Industry status and development:
a. PDA
According to IDC estimates, in 2005 market share for Windows Mobile
operating systems will catch up to the market share for Palm OS, and go on to
surpass it. Together, the two largest PDA OSes will account for 80% of the market.
Windows Mobile OSes can be expected to appeal to the large number of Windows
users in the PC market, because of such advantages as user familiarity with the
interface, file-level compatibility, full-color multimedia functionality, and fast data
transfer speeds. However, growth in the traditional PDA market slowed after 2002,
entering a transitional period. Although still expanding, the growth stems from
increasing sales of wireless PDA products rather than traditional PDAs. According
to forecasts by Taiwan's Market Intelligence Center, wireless PDAs will account
for close to half of the overall PDA market in the second half of 2004, becoming a
mainstream product.
b. Smart phone
According to IDC statistics, the market for mobile phones in 2003 was
roughly 440 million units, with growth of 10% for the year. In 2004, the size of
the market should increase to over 500 million, with most of the demand
stemming from users replacement of older phones. Numerous products with
extremely appealing new features are being introduced. Such "killer app" features
include color screens, MMS, Java, and polyphonic ring tones are a key driving
force behind market demand for phones. IDC points out that since 2000, smart
phone shipments have been doubling or even tripling yearly. Global shipments of
smart phones reached 13.08 million in 2003 [I think the 13.08 is wrong, since it is
more than the volume predicted for 2007], 3.6 times as many as were shipped in
the previous year. Over the next five years, IDC forecasts that growth in the smart
phone segment will be twice as rapid as for other types of mobile phones. In 2007,
sales volumes are set to reach 8 million. Microsoft's smart phone platform is
strongly supported by Taiwanese contract manufacturers, and products based on
- 25 -

this platform are being aggressively launched by system operators in Europe and
the United States. The Market Intelligence Center stated that in Q4 of 2003,
Taiwan's shipments of smart phones surpassed 1 million for the first time, and
made evident rapid growth over the mere 70,000 Microsoft OS-based smart
phones that were shipped during the entire second half of 2002. Another trend that
bears watching is that with the increasing use of mobile phones by consumers to
send text messages and manage personal information, the market for phones with
handwritten input is gradually emerging, and is particularly evident in Asia.
(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) State of competition:
a. Competition between operating systems
IDC reports point out the strong growth in WinCE operating systems in the
PDA segment. It forecasts that WinCE will likely take a 35% of the market in
2004, closing in on the 45% share of Palm OS, while it predicts that WinCE will
overtake Palm in 2005, with a 41% versus 40.2% share. From these projections, it
can be seen that WinCE will in all probability become the mainstream OS choice
for PDAs.
As for smart phones, 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 and Taiwanese smart phone
vendors will put pressure on Symbian. The report projects that Symbian's market
share will decline to 58% in 2008, while Microsoft's share will rise from 13% to
36%. IDC 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%.
- 26 -

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. Competition among vendors
Global shipments of PDAs declined for the eighth straight quarter, with the
main reason being that consumers favor phones that incorporate task schedulers
and phone books. Therefore, the value of traditional PDAs is seen as shrinking,
placing constraints on their growth, and leading to the exit of many PDA vendors
from the market. MiTAC's Mio 168 GPS is the world's first Microsoft OS -based
handheld device, taking the PDA into the realm of mobile lifestyle applications.
The Mio 168 has proved successful in developing this market, receiving favorable
market response in Asia since its launch at the end of 2003 and setting new highs
for shipments volumes. Looking to the future, in terms of product positioning,
MiTAC will continue to follow the successful approach of the Mio 168 GPS,
designing consumer-oriented devices to expand and cultivate this market.
As for smart phones, though they remain a niche market, shipments are
growing rapidly and they represent an enormous business opportunity. Currently,
there are few Taiwanese brands for smart phones, but MiTAC has already
introduced the Mio 8380 and 8390 in this segment, indicating its aggressive stance.
Besides personal information management, the Mio 8380 and 8390 provide the
capabilities that define a smart phone—the ability to send and receive e-mail,
manage files, browse the Web, and take photographs with an integrated digital
camera—making them highly suited for mobile business users. As for other major
Taiwanese vendors, their second smart phone models will not appear on the
domestic market until the first quarter of 2004 at the earliest. MiTAC's Microsoft
OS-based smart phones and wireless PDAs have not only been adopted by major
telecommunications network operators in Europe and Asia, but MiTAC's mobile
data department is continually strengthening the company's competitive advantage
through R&D innovation, manufacturing quality, and cost controls. It is focused
on developing competitive products based on consideration of market trends,
customer satisfaction, and creation of customer demand. Utilizing strategic
alliances with major international vendors in the areas of software, hardware, and
communications services, as well as continual product innovation, development of
new markets, and winning of new orders, make MiTAC confident that smart
phones will make a substantial contribution to the company's continuing growth.
1.3 Technology and R&D:
1.3.1 R&D Expenditures
Item
Year
2003
Units: Thousands of NT$
2004 to March 31 (See note.)
R&D Expenditures 1,110,001 264,755
Note: To the end of the last complete quarter prior to printing of this report.
- 27 -

1.3.2 Technologies and Products Successfully Developed in the Last Year
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 Results:
A.Allied with world-leading vendors in servers, workstations, and storage equipment
to develop and manufacture servers, workstations based on high-peformance
processors, allowing MiTAC International to achieve a leading position in the
professional server and workstation segment.
B.Integrating software technologies such as Microsoft's wireless PDA capabilities,
developed wireless networking products, while at the same time jointly developing
products with world-class vendors for the PDA and Pocket PC segments.
C.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 Computers
(a) Business and home PCs: Designed a series of computers with a basic
architecure utilizing CPUs with the newest technologies, AGP graphics cards,
3D sound capabilities, wireless networking, and a system design providing
superior heat dissipation.
(b) Media center PC, home gateway server
(c) Entry-level and midrange workstations: Single- and dual-processor Intel x86
processor-based.
B.Server Product Series
(a) Workstations and related products: Expanded cooperation with world-leading
vendors to develop, design, manufacture, and market high-performance single-
and multiple-processor workstations, becoming one of the few companies able
to develop and provide both Unix and Windows workstations.
(b)Servers: MiTAC International has accumulated many years of experience in
developing multi-processor 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) Data Storage Devices: 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
- 28 -

C.Wireless Communications Products
(a) Wireless communications and networking products: Through strategic alliances
and investments, developed Bluetooth and IEEE 802.11b/IEEE 802.11a/IEEE
802.11g,a wireless communications computer interface cards and PDAs.
(b) PDA: Formed an alliance with Intel and Microsoft, using Intel's newest
generation of microprocessors together with Microsoft's Pocket PC 2003
operating system in developing the world's lightest and most compact Pocket
PC product. Launched PDA products integrating digital photography
capabilities, WiFi connectivity, Bluetooth connectivity, and GPS navigation
capabilities ahead of rivals.
(c) Mobile telecommunications modules: To meet demand for products with voice
and data communications capabilities, exploited the advantages of a
world-class mobile telecommunications components vendor to develop 2.5-G
GSM/GPRS and CDMA 1X-RTT mobile telecommunications modules.
(d) Handheld smart terminals: Allied with Intel and Microsoft, combining PDA
technology and mobile communications module technology to develop a
hybrid product with both PDA functionality and mobile connectivity. Also
introduced a smart terminal product with integrated digital photography
capabilities, multimedia functionality, and wireless networking.
(e) Communications software products: While meeting the requirements of mobile
communications devices, developed video camera, phone book, MMS, Java,
and J2ME MIDP applications, as well as software to enhance the friendliness
of the interface, such as a world clock and call alerts with photographs for use
in spurring sales of handheld smart teminal products.
1.4 Long- and short-term business development plans:
1.4.1 Desktop computer product series
The US, Europe and Japan are the world's major PC markets. MiTAC's business
has been concentrated in these markets in the past, and in the future, it will continue to
develop even further OEM/ODM business in these markets. In 2003, shipments in the
Asia-Pacific region grew at the highest rates in the world, and total shipments for this
region surpassed those for the Japanese market, with the China market being the largest
single national market. Therefore, in terms of a long-term business plan, market
development efforts will center on the Asia-Pacific region and China.
1.4.2. Server product series
In terms of product strategy, MiTAC will continue its joint development and
manufacturing efforts with existing Unix customers, as well as repair services, for
workstations and various types of servers. In addition it will devote manpower to the
development of a complete lnieup of Intel architecture single-processor and
dual-processor servers in order to expand its customer base and revenues. The three
major drivers for business growth in this area over the next three years will be: (1)
continued development and sales of rack mount and pedestal servers, (2) development
of next-generation blade servers, and (3) development of network storage equipment.
Business strategies will focus on expanding cooperation with major server
customers, in areas ranging from module shipments to shipments of complete systems,
from entry-level to high-end, from cooperation on a single product line to cooperation
on multiple product lines. We will seek stable long-term cooperative relationships,
conntuing to strengthen our product development capabilities and speed, improve
production quality and control over delivery times, raise the level of integration of our
global supply chain, enhance our global logistics service network, and solidify MiTAC's
position as a major server system OEM/ODM vendor.
- 29 -

1.4.3. Wireless communications product series
(1) Near-term business development plan: Take a market demand-driven approach, and
develop competitive mobile communications products. Take advantage of
innovation and professional product planning, R&D, design, and manufacturing
capabilities to provide high value-added services to customers. Strengthen overall
performance, increasing customer satisfaction and expanding the existing customer
base through niche products that appeal to different customer segments.
(2) Long-term business development plans: Build on established global manufacturing
and sales logistical cooperation and service network, leveraging the synergies of
MiTAC Synnex Group in global channels, and add highly integrated product
planning and high value-added products to develop a diverse range of customers,
and expand the presence of first-tier vendors in our customer base.
2. Market and Manufacturing Sales
2.1 Market Analysis
2.1.1 Sales of major products, by region
Region 2003 Sales
North America 20,841,548
Europe 8,636,868
Asia & Australia 9,634,577
Taiwan 462,961
Total 39,575,954
2.1.2 Market Share:
(1) Desktop computer product series
According to statistics from the Institute for Information Industry, global sales
of desktop computers reached 110 million units in 2003. MiTAC sold roughly 8
million entry-level and mid-range servers, and desktop PCs and motherboards, for a
market share of 7.3%.
MiTAC's OEM customers are drawn mainly from the world's top ten PC brand
vendors. Due to the fight for market share among such vendors and with the recovery
in the global economy, MiTAC is projected to continue high rates of growth in 2004,
and further increase its own market share.
(2) Server product series
As the bulk of server products are manufactured on an ODM/OEM basis, it is
more difficult to calculate actual market share. Taiwan's major IT vendors, after
many years of effort, are now able to offer global logistics management, able to
provide design, testing, manufacturing, assembly, and distribution according the
customer's launch timetable, and thereby provide customers with the best possible
competitive position in their markets. Therefore, as seen from continuing trend of
major international brand vendors seeking partners in Taiwan, an increasing number
of non-PC products will be outsourced to Taiwanese companies for design and
manufacturing. For most Taiwanese companies, including MiTAC, these types of
alliances will increase market competitiveness, and furthermore expand market
share.
- 30 -

(3) Wireless communications product series
According to Gartner Group statistics, global PDA sales in 2003 amounted to
11.45 million units. As for smart phones, Market Intelligence Center statistics show
that shipments in 2003 reached 14.33 million units. With entry-level, mid-range,
high-end and wireless-capable PDAs, MiTAC's PDA product line is not only
comprehensive, but includes a device with GPS capabilities that has opened up new
markets by adding mobile lifestyle applications to handheld computers. MiTAC's
shipments for PDAs reached a new high in 2003, hitting 550,000 units, and reaching
a global market share of 4.8%. MiTAC's smart phones achieved good results in the
European and Asian markets as well. With the smart phone market forecast to grow
at double the pace of the market for other types of mobile phones, the opportunities
for applications that support messaging that combines voice and multimedia, that
allow users to manage personal information on their phones, and that enable
handwritten input will show strong demand growth. With MiTAC's product
positioning ideally suited to take advantage, these trends are very favorable for our
growth prospects and expansion in market share through development of new
markets and the winning of new orders.
2.1.3 Future Supply and Demand, and Growth Prospects for the Market
(1) Desktop Computers
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.
(2)Server Product Series
As economic recovery gains strength, corporations' willingness to renew IT
spending is rising, spurring demand in the server market. Major international server
vendors are placing an increasing number of orders with Taiwanese companies. Due
to these factors, Taiwan's server shipments in 2003 showed substantial growth over
2002.
In recent times, major international server vendors have increased their levels of
outsourced manufacturing in order to reduce production costs, increase product
competitiveness and expand market share. With their advantages in cost, R&D speed,
and delivery times, Taiwanese server vendors have been a direct beneficiary of this
trend. The scale of Taiwan's server industry is expanding in step with increases in
contract manufacturing orders. Although most outsourced server manufacturing is
restricted to entry-level, low-end products, with the volume of orders increasing, the
proportion of relatively high-priced rack-optimized and blade server product
shipments is rising, and this is compensating for the declining prices of some
components and contract manufacturing fees. Shipment values are therefore manage
to show growth.
Looking at Taiwan's server industry in 2004, with various countries' companies
generally bullish on the strength of the global economy's recovery, and subsequent
increases in spending on IT equipment, major international server vendors can be
expected to continue increasing the proportion of their products outsourced to
Taiwan for manufacturing. Therefore, Taiwan server industry shipments will likely
continue growth, and once again record historic highs.
- 31 -

(3) Wireless Communications Products
With the continuing spread of Internet usage, demand for various types of
networking equipment is growing rapidly, even though growth was slowed by the
bursting of the dot-com bubble. However, from a long-term perspective, Web
applications will become an important development trend, and the potential for
growth remains excellent. Additionally, due to the maturing state of wireless
communications technologies, which are driving consumer demand for mobile
communications, the market for various types of wireless web-enabled products is
very promising. According to studies done by a number of market research firms,
production volumes of information appliances may well reach 170 million in 2005,
with production value of over US$40 billion—a huge market. Taking handheld
devices as an example, IDC statistical data show that shipments of smart handheld
devices were approximately 12.99 million units in 2001, while they are forecast to
reach 63.42 million in 2004, for a compound annual growth rate of 48.6%. The value
of this market has increased from US$8.24 billion in 2000 to 2004's US$26.64
billion, representing 34.1% compound annual growth, which could be fairly
characterized as stunning.
Regarding PDAs, IDC statistical data show that the global market for these
products in 2001 was around 10 million, with shipments increasing to 15 million in
2002. In 2004, shipments grew to 33.62 million units, for a compound annual growth
rate of 38.1%. The value of this market increased from US$3.65 billion in 2000 to
US$10.76 billion in 2004. Turning to the operating system side, the Institute for
Information Industry pointed out that Pocket PCs may challenge the 50% mark for
global market share in 2004, achieving a compound annual growth rate of 70.9%,
with 2004 shipments forcast to rise to 13 million units.
The fruits of Taiwanese PDA vendors' efforts are gradually becoming evident.
Beginning in 2003, overall volume shipments have shown high rates of growth,
reaching 6 million units in that year for a 50% increase over the 4 million units in
2002. These 6 million units account for close to 50% of total global shipments of 13
million. In 2004, Taiwan's shipments will reach 8 million units, achieving a 50%
share of total global shipments of 16 million.
By integrating computing concepts into smart phones, voice and data
communications capabilities can be combined in a single device. These products will
be extremely appealing in terms of functionality (such as multimedia, games,
personal information management, data exchange with PCs, and so forth), industrial
design and pricing, leading to rapid expansion of this market. Shipment volumes
increased from 480,000 in 2000 to a projected 23.19 million in 2004, for 163.7%
compound annual growth rate. In 2006, the smart phone market is projected to reach
61.04 million units for a compound annual growth rate of 106.6% over the period
from 2001 to 2006. The value of this market is projected to increase from the
US$269 million recorded for 2000 to US$8.44 billion in 2004. These products are
sure to be a star product in the next phase of the industry's evolution.
2.1.4 Competitive Advantage and Development Prospects—Positive 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.
- 32 -

(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
Internaitonal 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.By leveraging our existing channels, the Group's global logistics management, and
its service network, provide more comprehensive 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 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.
- 33 -

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 smart phones.
In addition, in view of the Internet's future development and growth in
market demand for servrs and data storage equipment, MiTAC International will
cotinue to develop Intel architecture-based servers and data storage devices.
Besides continuing to develop the key North American and European
markets, China and Japan will be the focus of market development efforts.
E. Total digitialization 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 product compeititiveness and
profits.
(b)Increase levels of customer satisfaction in areas from upstream design, mass
manufacturing, and followup 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 followup 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.
- 34 -

2.2 Major Applications and Production Process for Main Products
2.2.1 Major Product Applications
Product Type Major Applications and Functionalities
Workstations Graphical computing tool needed by designers
Servers Data handling for businesses
Data Storage Equipment Data storage for businesses
Desktop PCs
Productivity, educational, entertainment tool for individuals,
families, schools, and businesses
Personal and business applications for individuals, business users,
Handheld Computers enterprises, families, schools, etc. (PIM applications such as
(including products with scheduling, business card management, meeting notes, sending
wireless communications and receiving e-mail, communications, multimedia, entertainment
capabilities)
tools, etc) PIM, wireless data connectivity, multimedia
Smart Phone
applications as needed by the user.
Wireless data connectivity, voice, video, multimedia applications
Wireless networking cards 802.11 and Bluetooth wireless networking cards
(802.11 and Bluetooth)
2.2.2 Production Process
Electronic
SMT Automated
ICT Testing
Manual Assembly
Substrate Soldering
Substrate
Substrate Burn
ATE Automated
Functional Testing
System Assembly
Functional Testing
Packaging
Random Testing
Finished Product
- 35 -

2.3 Supply of Key Components
Component Name Source Supply Status
CPU Original vendors: US, Korea Excellent
Hard disk drives Original vendors: US, Japan, Korea Excellent
DRAM Original vendors: US, Japan, Germany, Korea Excellent
Printed circuit boards Original vendors: Taiwan, Korea, US, China Excellent
LCD Original vendors: Korea, Japan, Taiwan Excellent
CHIPSET Original vendors: US, Taiwan Excellent
CDROM Original vendors: Korea, Taiwan, Japan Excellent
MODEM Original vendors: Taiwan Excellent
Camera Module Original vendors: Taiwan, Japan Excellent
Battery Pack Original vendors: Taiwan, Japan Excellent
2.4 Main Customers and Suppliers for the Most Recent Two Years
2.4.1 Main customers
Units: New Taiwan dollars
2002 2003
Item Customer
Name
Amount
Share of total
net sales
Customer Name Amount
Share of total
net sales
1 "B" 5,468,085 21.72 "E" 12,995,701 32.84
2 "E" 3,380,332 13.43 SYNNEX 5,743,416 14.51
3 SYNNEX 3,095,247 12.29 "B" 5,526,924 13.97
Other 13,233,898 52.56 Other 15,309,913 38.68
Net Sales 25,177,562 100.00 Net Sales 39,575,954 100.00
The various increases and decreases are the result of company's consideration of
market rends, product demand, industry outlook, R&D technology, sales profits, and
customer contracts.
2.4.2 Main suppliers
2002
Units: New Taiwan dollars
2003
Item
Supplier Name Amount
Share of Net
Purchases Supplier Name Amount
Net Purchases
as Percentage of
Total Sales (%)
1 MiTAC Shunde 18,600,087 50.74 MiTAC Shunde 22,915,952 46.87
Other 18,063,543 49.26 Other 25,979,058 53.13
Net Purchases 36,663,630 100.00 Net Purchases 48,895,010 100.00
The various increases and decreases are the result of the company's consideraton of
yearly sales strategy, component demand, supplier prices, delivery terms, and product
quality.
- 36 -

2.5 Production Volumes and Value for the Last Two Years
Units: Thousands of NT Dollars, Units
2002 2003
Major Products Capacity Volume Value Capacity Volume Value
Desktop Computers 5,000,000 1,808,947 12,142,649 6,500,000 3,093,616 22,978,536
Server Product Series 630,000 203,309 5,334,850 800,000 349,194 9,804,303
LCD PCs 800,000 417,325 3,974,079 100,000 54,338 444,502
Wireless Communications Products 70,000 53,137 378,794 1,500,000 551,588 3,143,797
Peripherals and Other Products 1,302,769 562,129
Total 23,133,141 36,933,267
Note: The production capacity figures listed above include overseas processing work.
2.6 Sales Volumes and Value for the Last Two Years
2002
Units: Thousands of NT Dollars/Units
2003
Major Products
Domestic Sales Foreign Sales Domestic Sales Foreign Sales
Volume Value Volume Value Volume Value Volume Value
Desktop Computers 832 5,792 1,821,538 13,061,702 530 3,511 3,075,585 23,728,145
Server Product Series 0 0 203,309 6,148,363 3,158 100,778 344,998 10,994,408
LCD PCs 58,552 616,796 358,773 3,262,903 14,867 103,069 39,471 273,615
Wireless Communications Products 4,016 36,622 49,121 363,317 30,656 200,626 519,713 3,401,524
Peripherals and Other Products 13,596 1,668,471 54,977 715,301
Total 672,806 24,504,756 462,961 39,112,993
3. Employed Staff
Year 2002 2003 2003 to April 1
Number of
Employees
Indirect
Direct
Total
1,077
195
1,272
1,033
228
1,261
1,034
219
1,253
Average Age 35.93 35.7 35.9
Average Years of Employment 5.56 5.67 5.85
PhD 5 6 6
Level of Master's 181 179 184
Education College 850 821 826
High School 135 130 132
Less than High School 101 125 105
4. Expenses Incurred To Address Environmental Protection Issues
In the last 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:
- 37 -

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 an 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.
5. Labor/Management Relations
The company is an information technology company, and its staff is suitably composed. 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. Following is an overview of the company's policy in the area:
5.1 Communication and Incentives
The Company greatly values the views of its employees, and has designated a dedicated
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
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 comprhensive exectuvie 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
directly express their views. In addition, in consideraton of employees, the Company invested
more than NT$4 million to set up a videoconferencing system linking offices in Hsinchu,
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
not hold inter-office meetings without needing to leave their own offices, but the company's
internal communications have been greatly enhanced.
The company has also implemented an electronic bulletin board to regularly promulgate
the Company's business ideals, announce business performance, and publish useful
information from the outside world. In order to provide an effective encouragement to
employees and enhance morale, the Company selected an outstanding employee at the end of
each year, and also honors senior employees who have completed five, ten, fifteen, and
twenty years of service. At the Company's year-end weiya party, the chairman and president
present gold commemorative plaques and monetary prizes. The company's main business unit
in the Taipei suburb of Linkou was moved to the Hwa-Ya Technology Park during August
2001. In order to minimize any inconvenience for employees during the moving process, a
shuttle bus was provided to transport them between the Park and Taipei. At the new location,
a sufficient number of spaces in a parking garage were allotted to those employees driving to
work. These measures were undertaken to give employees a more convenient and comfortable
working environment.
- 38 -

5.2 Benefits and Training
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,
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.
Severeal years of effort in this area, have yielded results.
5.3 Retirement system
The Company has established, in accordance with applicable labor laws, a
comprehensive retirement system compliant with all legal stipulations. In addition to creating
individual pension accounts for employees as required by law, the Company has also
established a steering committee composed of representiatives from both labor and
management to jointly monitor the handling of these accounts. Moreover, an amount
calculated by a neutral third party is distributed into each account from the pension fund on a
monthly basis. To date, no irregularities have occurred in operation of this system.
5.4 Labor/management relations
The Company has negotiated a As current labor/management relations at the Company
are harmonious, the possibility of losses stemming from disputes in this area are exceedingly
low. The Compnay will remain faithful to principles of humane management and continuing
building a system of multiple channels of communication, not only to maintain the current
harmonious state of relations between labor and management, but also in the hope of
advancing these relations even further.
6. Major Agreements
Contract Type Party Period of Validity Major Content Limiting Terms
OEM
DELL From 1 August 2002 to Arranges for product None
1 August 2005, can be manufacture, delivery,
automatically extended warranties, etc.
Purchase Agreement HP From 16 October 2003 Arranges for computer
product manufacture,
delivery, warranties, etc.
None
7. Litigation Proceedings
7.1 The Company has not been involved in lawsuits or other legal action that might influence
shareholder interests or securities prices as defined by the relevant laws in the Republic of
China (Taiwan).
7.2 None of the Company's directors, supervisors, general manager, actual person in charge, or
major shareholders holding a stake in excess of 10% or the companies to which these
shareholders belong, have in the most recent two calendar years and the current year to the
publication date of this annual report been involved in any lawsuits or other legal action.
- 39 -

8. Acquisition or Disposition of Assets
8.1 Major Asset Acquisitions
January 1, 2003 – March 31, 2004
Units: Thousands of NT Dollars
Asset Name Acquired in Acquiring
Price
Seller
Relationship
with Company
Conditions Of Use
GRAND CATHAY BOND FUND 92.011-93.02 3,552,077
Grand Cathay Securities Investment
Trust Co.,Ltd.
None Short-Term Investment
JIH SUN BOND FUND 92.02-93.02 2,880,118
JIH SUN SECURITIES
INVESTMENT TRUST CO. LTD
None Short-Term Investment
KGI Victory Fund 92.05-92.11 757,405
KGI Securities Investment Trust Co.
Ltd.
None Short-Term Investment
THE WAN PAO FUND 92.03-93.03 1,047,068
International Invertment Trust
Co.,Ltd.
None Short-Term Investment
NT$ HIGH YIELD FUND 92.08-93.03 2,369,100
Shin kong Investment Trust Co.,
Ltd.
None Short-Term Investment
FAR EASTERN ALLIANCE TAIWAN
BOND FUND
92.01-92.09 1,259,500
Far Eastern Alliance Asset
Management Co.
None Short-Term Investment
THE FIRST GLOBAL INVESTMENT
TRUST DUO LI BOND FUND
92.04-93.03 300,000
First Global Investment Trust Co.,
Ltd.
None Short-Term Investment
THE FIRST GLOBAL INVESTMENT
TRUST DUO LI-2 BOND FUND
92.02-93.03 2,147,500
First Global Investment Trust Co.,
Ltd.
None Short-Term Investment
PCA BOND FUND 92.02-93.03 1,463,232
PCA Securities Investment Trust
Co,Ltd
None Short-Term Investment
PCA WELL POOL FUND 92.01-92.12 1,820,926
PCA Securities Investment Trust
Co,Ltd
None Short-Term Investment
PITC HOME RUN BOND FUND 92.01-93.03 1,230,566 President Investment Trust Corp. None Short-Term Investment
En Trust Phoenix Bond Fund 92.05-93.03 1,869,678 EnTrust Investment Trust Corp. None Short-Term Investment
EnTrust Kirin Bond Fund 92.07-92.12 941,621 EnTrust Investment Trust Corp. None Short-Term Investment
Sheng Hua 1699 Bond Fund 92.08-93.03 713,940
Sheng Hua Securities Investment
Trust Co.,Ltd
None Short-Term Investment
Sheng Hua 5599 Bond Fund 92.04-92.12 1,299,627
Sheng Hua Securities Investment
Trust Co.,Ltd
None Short-Term Investment
FUBON JU-I FUND 92.01-92.04 450,000
Fubon Securities Investment Trust
Co., Ltd.
None Short-Term Investment
Note 1: Assets obtained at a cost amounting to 20% or more of paid-in capital, or NT$300 million or more are listed.
Recepients of funds are shown in consolidated form.
Note 2: To the date one month previous to the printing of this annual report.
8.2 Major Assest Disposition
Asset Name
Date
Obtained
Date of
Disposal
Disposal
Price
Remaining
Amount
(non-depreciated)
- 40 -
Gain from
Disposal
January 1, 2003 – March 31, 2004
Units: Thousands of NT Dollars
Buyer
Relationship
to Company
GRAND CATHAY BOND
92.01-93.02 92.01-93.02 3,764,164
FUND
-
Grand Cathay Securities Investment
2,111
Trust Co.,Ltd.
None
JIH SUN BOND FUND 91.12-93.02 92.02-93.02 3,047,834 -
JIH SUN SECURITIES
2,437
INVESTMENT TRUST CO. LTD
None
KGI Victory Fund 92.05-92.11 92.06-92.11 758,754 -
KGI Securities Investment Trust Co.
1,349
Ltd.
None
THE WAN PAO FUND 92.03-92.12 92.04-92.12 487,821 - 821 International Invertment Trust Co.,Ltd. None
NT$ HIGH YIELD FUND 92.08-93.03 92.09-93.03 2,358,456 - 1,115 Shin kong Investment Trust Co., Ltd. None
FAR EASTERN
ALLIANCE TAIWAN
BOND FUND
THE FIRST GLOBAL
91.12-92.09 92.01-92.09 1,351,455 -
Far Eastern Alliance Asset
1,955
Management Co.
None
INVESTMENT TRUST
DUO LI-2 BOND FUND
92.02-93.03 92.02-93.03 2,029,277 - 747 First Global Investment Trust Co., Ltd. None
PCA BOND FUND 91.12-92.12 92.03-93.03 1,167,365 -
PCA Securities Investment Trust
3,045
Co,Ltd
None
PCA WELL POOL FUND 92.01-92.12 92.01-92.12 1,823,210 -
PCA Securities Investment Trust
2,285
Co,Ltd
None
PITC HOME RUN BOND
92.01-93.03 92.01-93.03 1,176,715
FUND
- 1,408 President Investment Trust Corp. None
En Trust Phoenix Bond
Fund
92.05-92.12 92.06-92.12 1,009,881 - 3,062 EnTrust Investment Trust Corp. None
EnTrust Kirin Bond Fund 92.07-92.12 92.09-92.12 702,621 - 2,532 EnTrust Investment Trust Corp. None
Sheng Hua 1699 Bond
Fund
92.08-93.03 92.09-93.03 442,939 -
Sheng Hua Securities Investment Trust
1,278
Co.,Ltd
None
Sheng Hua 5599 Bond
Fund
92.04-93.03 92.06-93.03 1,611,978 -
Sheng Hua Securities Investment Trust
4,265
Co.,Ltd
None
FUBON JU-I FUND 92.01-92.04 92.02-92.05 450,419 -
Fubon Securities Investment Trust
419
Co., Ltd.
None

D. Financial Standing
1. Most Recent Five-Year Concise Financial Information
1.1 Most Recent Five-Year Balance Sheet
Units: Thousands of NT Dollars
Year
Most Recent Five-Year Financial Information
March 31, 2004
(Unaudited by CPA)
Item 1999 2000 2001 2002 2003 (See Note)
Current Assets
Fund and Long-Term Equity
13,102,826 17,457,550 9,530,651 11,866,398 16,018,538 15,725,752
Investments 5,887,927 8,460,554 10,454,496 11,193,389 11,966,267 12,209,735
Net Property, Plant and
Equipment 3,651,997 3,912,890 3,158,165 2,788,135 2,667,533 2,651,512
Intangible Assets - - - - - -
Other Assets 371,522 799,107 1,253,624 1,325,485 1,210,913 1,183,310
Total Assets 23,014,272 30,630,101 24,396,936 27,173,407 31,881,751 31,770,309
Current
Before
Distribution 7,875,288 12,803,922 4,303,710 7,760,571 11,313,864 10,897,435
Liabilities After
Distribution 8,269,842 13,260,136 4,413,142 8,050,689 Not distributed Not distributed
Long-Term Liabilities 1,741,753 2,662,500 4,149,758 2,500,000 3,000,000 3,000,000
Other Liabilities
Before
148,032 430,831 425,570 493,105 596,256 487,865
Total Distribution 9,765,073 15,897,253 8,879,038 10,753,676 14,910,120 14,385,300
Liabilities After
Distribution 10,159,627 16,353,467 8,988,470 11,043,794 Not distributed Not distributed
Common Stock 7,675,922 8,924,277 9,945,133 10,415,686 10,563,812 10,650,345
Capital reserve
Before
3,175,857 3,381,120 3,339,293 3,110,806 3,086,493 3,080,257
Retained Distribution 2,194,572 2,351,114 1,885,493 2,374,734 3,136,089 2,778,004
Earnings After
Distribution
Unrealized Loss on
567,398 874,044 1,305,508 2,084,617 Not distributed Not distributed
Long-Term Investments - (352,072) (431,178) (4,081) (8,801) (8,801)
Translation Adjustments
Before
202,848 428,409 781,369 771,092 765,441 765,441
Stockholder Distribution 13,249,199 14,732,848 15,517,898 16,419,731 16,971,631 17,385,009
Equity After
Distribution 12,854,645 14,276,634 15,408,466 16,129,615 Not distributed Not distributed
Note: To the last quarter prior to publication of this report.
- 41 -

1.2 Concise Profit/Loss Statment
Units: Thousands of NT Dollars
Year
Financial Data for the Most Recent Five Years Mar. 31, 2004
(Unaudited by
Item 1999 2000 2001 2002 2003 CPA)(See Note)
Operating Revenues 30,260,023 47,311,663 28,447,707 25,177,562 39,575,954 11,131,941
Gross Profits 2,792,327 3,462,283 2,199,047 2,055,723 2,979,345 844,703
Operating Profit 1,056,904 1,051,226 222,073 278,468 555,300 230,047
Non-Operating Revenue 1,182,021 1,507,138 1,238,231 1,166,688 1,006,878 303,391
Non-Operating Expenses (193,163) (433,757) (409,483) (567,572) (491,528) (65,997)
Pre-Tax Profit for
Continuing Operations
2,045,762 2,124,607 1,050,821 877,584 1,070,650 467,441
Profit for Continuing
Operations
Profit for Discontinued
1,734,943 1,803,419 1,010,821 864,904 1,070,650 451,069
Operations - - - - - -
Extraordinary Profitability - - - - - -
Influence of change in
-
Accounting Principles - - - - -
Net Profit 1,734,943 1,803,419 1,010,821 864,904 1,051,473 451,069
Earnings Pre-retrospection 2.27 2.02 1.02 0.84 1.03 0.44
per Share Post-retrospection 1.67 1.73 0.97 0.84 1.03 0.44
Note: To the last quarter prior to publication of this report.
1.3 Names of Certifying Accountants and Their Recommendations for the Most Recent Five
Years:
Year Name of Accounting Firm Name of Certifying Accountant Opinion
2003 Price Waterhouse Coopers Liu Yin-Fei, Wen Fang-Yu Unqualified
2002 Price Waterhouse Coopers Chen Yong-Ching, Wen Fang-Yu Unqualified
2001 Price Waterhouse Coopers Chen Yong-Ching, Wen Fang-Yu Unqualified
2000 Price Waterhouse Coopers Chen Yong-Ching, Wen Fang-Yu Unqualified
1999 Price Waterhouse Coopers Chen Yong-Ching, Wen Fang-Yu Unqualified
- 42 -

2.Financial Analysis for Most Recent Five Years
YearFinancial
Analysis for Most Recent Five Years Mar. 31, 2004
Particulars
(Unaudited by
of Analysis 1999 2000 2001 2002 2003 CPA)(See Note)
Financial Debt ratio 42.43 51.9 36.39 39.57 46.77 45.28
Structure Ratio of long-term funds to
(%) property and equipment 410.49 444.57 622.76 678.58 748.69 768.81
Solvency
(%)
Current Ratio
Quick Ratio
Times-Interest-earned Ratio
Turnover rate of receivables
166.38
114.12
12.01
136.35
91.5
6.16
221.45 152.88 141.58
175.85 113.36 107.13
3.72 3.83 5.13
144.31
108.48
9.3
(times) 5.18 5.88 3.54 3.73 4.76 5.25
Days sales in receivable 70 62 103 98 77 69
Inventory Turnover (times) 10.25 11.09 7.65 9.38 10.54 11.35
Turnover rate of payables
Operational
(times)
Ability
Days to sell inventories
Turnover rate of property and
7.25
36
10.51
33
8.54
48
10.54
39
11.16
35
10.03
32
equipment (times)
Turnover rate of overall assets
9.72 12.51 8.05 8.47 14.51 16.79
(times) 1.49 1.76 1.03 0.98 1.34 1.4
Profitability
Return on assets(%)
Return on shareholders’ equity
9.4 7.87 4.73 4.26 4.42 1.55
(%) 14.99 12.89 6.68 5.42 6.3 2.63
% of paid-in
capital
Operating profit 13.77 11.78 2.23 2.67 5.26 2.16
Net profit before
tax 26.66 23.81 10.57 8.43 10.14 4.39
Net profit rate (%)
Before
5.73 3.81 3.55 3.44 2.66 4.05
EPS distribution 2.27 2.02 1.02 0.84 1.03 0.44
After distribution 1.67 1.73 0.97 0.84 1.03 0.44
Cash
Flow
Cash flow ratio (%)
Cash flow adequacy ratio (%)
Cash reinvestment ratio (%)
2.11
28.77
-
-
1.45
-
130.32
37.63
24
-
63.7
-
1.21
60.39
-
8.91
89.26
4.39
Leverage
Operating Leverage
Financial Leverage
13.52
1.21
26.53
1.64
95.03
-
73.91
-
59.26
1.88
40.78
1.32
Notes: 1.To the last quarter prior to publication of this report.
2. Based on business performance for the first quarter of 2004, with figures annualized for
convenience in comparisons.
- 43 -

2.1 Financial Structure
(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
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 Ability
(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) Turnver 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)
- 44 -

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, 2003 and 2002, 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, 2003 and 2002, 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, effective January 1, 2002,
the Company adopted R.O.C. Financial Accounting Standard No. 30〝Accounting Standard
for Treasury Stock〞. This standard No. 30 requires that the Company’s stock held by
subsidiaries should be recorded as treasury stock, and no gain or loss can be recognized into
profit and loss accounts. As a result of the adoption of this standard, total assets decreased by
$328,241 as of December 31, 2003 and net income decreased by $82,966 for the year ended
December 31, 2003.
As described in Note 3 (3) to the consolidated financial statements, some of the Company’s
subsidiaries included in 2002 consolidated financial statements were excluded from those in
2003 since the Company’s ownership had declined to below 50%. For the changes in
consolidated entities, financial statements for 2002 have been restated to be comparable to the
2003 consolidated financial statements.
March 15, 2004
-----------------------------------------------------------------------------------------------------------------
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 statement and report of the 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.
- 45 -

MITAC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
2003 2002 2003 2002
ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY
Current Assets Current Liabilities
Cash and cash equivalents (Note 4(1)) $ 1,748,343 $ 791,172 Short-term loans (Notes 4(8) and 6) $ 5,904,860 $ 2,509,177
Marketable securities (Note 4(2)) 1,749,607 183,518 Commercial paper payable (Note 4(9)) 379,377 -
Notes receivable – net - 702 Notes payable 7,259 -
Accounts receivable – net (Notes 4(3)) 5,479,597 5,557,540 Accounts payable 9,304,799 7,771,950
Accounts receivable – related parties (Note 4(3) and 5) 3,669,333 1,777,539 Accounts payable – related parties (Note 5) 1,583,860 1,329,394
Other receivables 626,851 369,535 Income tax payable (Note 4(17)) 434 4,012
Other financial assets – current - 1,343 Accrued expenses 1,558,478 824,163
Inventories - net (Note 4(4)) 7,429,636 6,908,826 Other payables 159,652 529,988
Prepayments 29,283 342,990 Receipts in advance 614,826 788,755
Deferred income tax assets – current 300,569 233,704 Current portion of long-term debts (Notes 4(10) and 6) - 1,781,739
Other current assets 1,957 5,762 Provision for product warranty 277,821 159,321
21,035,176 16,172,631 Other current liabilities 204,436 210,077
19,995,802 15,908,576
Long-term investments (Note 4(5)) Long-term Liabilities
Equity method 7,676,428 6,970,414 Bonds payable (Notes 4 (10) and 6) 2,500,000 2,500,000
Cost method 2,058,875 2,298,512 Long-term debts (Notes 4(10) and 6) 793,194 13,985
9,735,303 9,268,926 3,293,194 2,513,985
Other financial assets – non current 32,494 108,324 Other Liabilities
Accrued pension payable (Note 4 (12)) 18,163 1,181
Property, plant and equipment - net Deposit in 180 80
(Notes 4(6) and 6) 8,706,638 8,565,748 Deferred income tax liability (Note 4 (17)) 579,213 493,896
Others (Note 4 (11)) 203,162 358,881
Intangible Assets 800,178 854,038
Other intangible assets 291,594 164,811 Total Liabilities 24,089,714 19,276,599
Other Assets Stockholders' Equity
Refundable deposits 11,337 10,923 Common stock (Note 4 (13)) 10,563,812 10,415,686
Deferred charges 191,382 253,981 Capital reserve (Note 4(14)) 3,086,493 3,110,806
Other assets (Notes 4(7) and 6) 1,057,421 1,150,986 Retained earnings (Note 4(15))
1,260,140 1,415,890 Legal reserve 809,154 702,232
Unappropriated earnings 2,326,935 1,672,502
Unrealized long-term investment loss ( 8,801 ) ( 4,081 )
Cumulative translation adjustments 765,441 771,092
Unrecognized pension cost ( 256 ) -
Treasury stock (Note 4 (16)) ( 571,147 ) ( 248,506 )
Total Stockholders' Equity 16,971,631 16,419,731
Commitments and Contingent Liabilities (Note 7)
TOTAL ASSETS $ 41,061,345 $ 35,696,330 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 41,061,345 $ 35,696,330
The accompanying notes are an integral part of the consolidated financial statements.
See report of independent accountants dated March 15, 2004.
- 46 -

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)
2003 2002
Operating Revenues-net $ 45,514,663 $ 35,622,333
Operating Cost ( 42,343,444 ) ( 33,008,871 )
Gross Profit
Operating Expenses
3,171,219 2,613,462
Selling expenses ( 984,098 ) ( 762,808 )
Administrative expenses ( 626,065 ) ( 944,804 )
Research and development expenses ( 1,190,664 ) ( 874,246 )
( 2,800,827 ) ( 2,581,858 )
Operating Income
Non-operating Income and gains
370,392 31,604
Interest income
Investment income accounted for under equity method
7,699 5,003
(Note 4 (5))
- 47 -
754,099
1,081,684
Dividend income 47,403 35,642
Gain on disposal of property, plant and equipment 1,208 7,282
Gain on disposal of investment 144,103 400,574
Exchange gain, net 82,467 111,000
Other income 160,005 116,862
Non-operating Expenses and Losses
1,196,984 1,758,047
Interest expenses ( 298,465 ) ( 328,712 )
Other investment loss (Note 4 (5)) ( 66,903 ) ( 122,009 )
Loss on disposal of property, plant and equipment ( 18,121 ) ( 58,264 )
Loss on physical count of inventories
Loss on market value decline and obsolescence of
( 1,050 ) ( 1,947 )
inventories
-
( 160,372 )
Other losses ( 121,236 ) ( 252,334 )
( 505,775 ) ( 923,638 )
Income Before Income Tax and minority interest 1,061,601 866,013
Income Tax Expense (Note 4 (17)) ( 34,907 ) ( 7,847 )
Minority interest 24,779 6,738
Net Income $ 1,051,473 $ 864,904
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 $ 1.04 $ 1.01 $ 0.84 $ 0.83
Minority interest 0.02 0.02 0.01 0.01
Net income $ 1.06 $ 1.03 $ 0.85 $ 0.84
Diluted Earnings Per Share (in dollars)
Income before income tax and minority interest 0.96 0.94 0.76 0.77
Minority Interest 0.02 0.02 0.01 0.01
Net income $ 0.98 $ 0.96 $ 0.77 $ 0.78
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 $ 994,328 $ 959,421 $ 948,979 $ 941,132
Basic earnings per share (in dollars) $ 0.98 $ 0.95 $ 0.92 $ 0.91
Diluted earnings per share (in dollars) $ 0.90 $ 0.88 $ 0.84 $ 0.84
The accompanying notes are an integral part of the consolidated financial statements.
See report of independent accountants dated March 15, 2004.

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
Unrealized
Long-term Cumulative
Common
Capital
Legal Unappropriated Investment Translation Unrecognized Treasury
2002
Stock
Reserve
Reserve Earnings
Loss Adjustments Pension cost Stock
Total
Balance at January 1, 2002
Distribution of 2001 earnings:
$ 9,945,133 $ 3,339,293 $ 601,087 $ 1,284,406 ( $ 431,178 ) $ 781,369 $ - ( $ 2,212 ) $ 15,517,898
Appropriation for legal reserve - - 101,145 ( 101,145 ) - - - - -
Issuance of employee bonus stock 72,824 - - ( 72,824 ) - - - - -
Issuance of stock dividends 397,729 - - ( 397,729 ) - - - - -
Cash dividends declared - - - ( 99,432 ) - - - - ( 99,432 )
Directors’ and supervisors’ remuneration - - - ( 10,000 ) - - - - ( 10,000 )
Net income in 2002
Transfer capital reserve resulted from gain on disposal of fixed assets to
- - - 864,904 - - - - 864,904
unappropriated earnings
- ( 204,322 )
-
204,322
-
-
-
-
-
Capital reserve due to change in ownership of long-term investments - ( 13,712 ) - - - - - - ( 13,712 )
Capital reserve adjustment due to disposal of long-term investments - ( 11,472 ) - - - - - - ( 11,472 )
Translation adjustment for 2002
Transfer of gain on disposal of the Company’s stock traded by subsidiaries to
- - - - - ( 10,277 ) - - ( 10,277 )
capital reserve
-
1,019
-
-
-
-
-
-
1,019
Reversal of unrealized loss on market value decline of long-term investments - - - - 427,097 - - - 427,097
Treasury stock purchased-net - - - - - - - ( 246,294 ) ( 246,294 )
Balance at December 31, 2002
2003
$ 10,415,686 $ 3,110,806 $ 702,232 $ 1,672,502 ( $ 4,081 ) $ 771,092 $ - ( $ 248,506 ) $ 16,419,731
Balance at January 1, 2003
Distribution of 2002 earnings:
$ 10,415,686 $ 3,110,806 $ 702,232 $ 1,672,502 ( $ 4,081 ) $ 771,092 $ - ( $ 248,506 ) $ 16,419,731
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
Capital reserve due to change in subsidiaries ownership of long-term
- ( 20,926 ) - - - - - - ( 20,926 )
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
Recognition of subsidiaries’ unrealized loss on market value decline of
- - - - - - - 22,597 22,597
long-term investments
-
-
-
- ( 4,720 )
-
-
- ( 4,720 )
Treasury stock sold-net - ( 15 ) - - - - - 2,212 2,197
Treasury stock purchased-net - - - - - - - ( 347,450 ) ( 347,450 )
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
The accompanying notes are an integral part of the consolidated financial statements.
See report of independent accountants dated March 15, 2004.
- 48 -

MITAC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
2003 2002
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash
Provided (used in) by operating activities:
$ 1,051,473 $ 864,904
Bad debt expenses 16,093 ( 7,665 )
Depreciation 830,395 775,416
Amortization
(Reversal of provision) provision for market value decline and
300,185 141,150
obsolete inventories
( 20,268 )
160,372
Long-term investment income accounted for under equity method ( 754,099 ) ( 1,082,642 )
Loss on impairment of long-term investments 66,903 122,009
Gain on disposal of investments
Cash dividends from long-term investments accounted for under
( 144,103 ) ( 400,574 )
the equity method
91,022
114,818
Loss on disposal of property, plant and equipment, net 16,913 50,983
Loss on disposal of other financial assets
Payment of compensation interest payable recognized in
671 -
prior years
( 535,739 )
-
Effects of changes in exchange rates 399,599 65,691
Minority interest in net income
Changes in assets and liabilities
(Increase) decrease in:
( 24,779 ) ( 6,738 )
Notes receivable 702 89,537
Accounts receivable ( 1,867,311 ) ( 4,609,211 )
Other receivables ( 266,315 ) ( 158,151 )
Receivable on forward exchange contracts, net 8,999 96,375
Inventories ( 615,993 ) ( 1,963,059 )
Prepayments 313,707 ( 16,720 )
Other current assets 3,805 10,985
Deferred income tax assets
Increase (decrease) in:
( 66,865 ) ( 48,157 )
Notes payable 7,259 ( 18,090 )
Accounts payable 1,787,315 4,228,593
Income tax payable ( 3,578 ) ( 47,430 )
Accrued expenses 734,315 128,639
Payable on forward exchange contracts, net ( 5,004 ) ( 154,704 )
Other payables ( 365,314 ) 357,700
Compensation interest payable - 131,981
Receivable in advance ( 173,929 ) ( 192,590 )
Other current liabilities ( 5,641 ) 187,121
Deferred income tax liabilities 85,317 65,262
Accrued pension payable 16,982 1,181
Provision for product warranty 118,500 ( 54,360 )
Net cash provided (used in) by operating activities 1,001,217 ( 1,167,374 )
(CONTINUED)
- 49 -

MITAC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31,
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
2003 2002
Cash flows from investing activities:
(Increase) decrease in marketable securities, net ( $ 1,541,814 ) $ 57,296
Increase in long-term investments ( 373,976 ) ( 272,409 )
Proceeds from disposal of long-term investments 510,584 681,150
Acquisition of property, plant and equipment ( 1,311,416 ) ( 2,011,103 )
Proceeds from disposal of other financial assets 1,859 -
Proceeds from disposal of property, plant and equipment 203,971 741,413
(Increase) decrease in other financial assets ( 7,866 ) 504
Increase in deferred charges ( 370,006 ) ( 360,868 )
(Increase) decrease in refundable deposits, net ( 414 ) 2,136
Decrease in limited assets 82,343 31,657
Decrease (increase) in other assets, net 73,925 ( 116,058 )
Net cash used in investing activities
Cash flows from financing activities:
( 2,732,810 ) ( 1,246,282 )
Increase in short-term debts, net 3,395,683 1,681,768
Increase in commercial paper payable, net 379,377 -
Proceeds from long-term loans 794,186 -
Repayments of long-term loans ( 13,720 ) ( 210,024 )
Redemption of convertible bonds payable ( 1,246,000 ) -
Increase in deposit-in 100 -
Directors’ and supervisors’ remuneration ( 4,000 ) ( 10,000 )
Employee stock warranty exercised 137,757 -
Cash dividends paid ( 208,276 ) ( 99,393 )
Employee bonuses paid ( 77,842 ) -
Sales of treasury stock 2,197 -
Acquisition of treasury stock ( 347,450 ) -
(Decrease) increase in minority interest ( 123,248 ) 169,359
Net cash provided by (used in) financing activities 2,688,764 1,531,710
Net increase (decrease) in cash and cash equivalents 957,171 ( 881,946 )
Cash and cash equivalents at beginning of year 791,172 1,673,118
Cash and cash equivalents at end of year
Supplemental disclosures of cash flow information:
$ 1,748,343 $ 791,172
Cash paid for interest $ 235,378 $ 300,364
Cash paid for compensation interest of convertible bond $ 584,748 $ -
Cash paid for income tax $ 601,180 $ 640,229
The accompanying notes are an integral part of the consolidated financial statements.
See report of independent accountants dated March 15, 2004.
- 50 -

MITAC INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
1. HISTORY AND ORGANIZATION
1) MITAC International Corp. (〝the Company〞) 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, 2003,
there were 10,314 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
Silver Star Developments Ltd.
(SSDL) and its subsidiaries
Holding shares more
than 50% interest
3) Majority owned subsidiaries excluded in the consolidation
- 51 -
2003 2002
Investment 100% 100%
Company name
Rates of direct and
indirect ownership
Reasons for exclusion
2003 2002
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% 〃
MITAC Precision Technology Corp.
(MPT) and its subsidiaries
49.37% 57.50% Rates of ownership is less than 50% in 2003.
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.
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 gain or losses for known foreign currency transactions
are recognized in current year’s earnings but unrealized gain 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 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 gain or losses for known foreign currency transactions are recognized in
current year’s earnings but unrealized gain 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
- 52 -

eceivable, 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
consoliated subsidiaries are stated at cost using the weighted average method or
the average method.
B. Inventories of the Company and subsidiary companies are valued at the lower of
cost or market value at balance sheet date.
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 2 – 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.
- 53 -

11) Deferred charges
A. Telephone installation expenditure are amortized on a straight-line method over
5 years.
B. Mold expenses are amortized on a straight-line method over 2 years.
C. Convertible bond issuance costs are deferred and amortized on a straight-line
method over the life of the bonds.
D. Software is amortized on a straight-line method over 5 years.
12) Convertible bonds
A. When bonds are redeemed before maturity, the excess of the stated redemption
price over the par value is recognized as interest expense and compensation
interest payable using the effective interest method during the period from the
issue date to the last day of redemption period.
B. When an investor exercises his/her conversion right, the book value of bonds is
credited to common stock at an amount equal to the par value of the stock and
the excess is credited to capital reserve; no gain or loss is recognized on bond
conversion.
C. For convertible bonds with redemption options, the right of redemption becomes
invalid if the investor failed to exercise his/her redemption right during the
redemption period. The balance of the compensation interest payable is
amortized over the period from the date following the redemption period to the
maturity date using the effective interest method.
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. A valuation allowance on deferred
income tax assets is provided to the extent that it is more likely than not that the
future tax benefit will not be realized. Over or under provisions of prior years’
income tax liabilities are included in the current year's income tax expense.
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 additional 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.
- 54 -

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, 2003, 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) Prior to January 1, 2001, the Company’s stocks traded by subsidiaries was recorded as
investments. Effective January 1, 2002, pursuant to the regulations of R.O.C. Securities
and Futures Commission (“SFC”) and Financial Accounting Standard (“SFAS”) No. 30,
“Accounting Standard for Treasury Stock,” the Company’s stock traded by subsidiaries
should be recorded as treasury stock, and no gain or loss can be recognized in profit and
loss accounts. As a result of this change of accounting principle, long-term investment
decreased $328,241, treasury stock increased $246,094, capital reserve-treasury stock
transaction increased $1,019 as of December 31, 2002 and net income decreased
$82,966 for the year ended December 31, 2002.
2) Effective January 2002, the Company adopted revised R.O.C. SFAS No.24, “Earnings
per share” under which the calculation of diluted earnings per share is changed. The
change in accounting principle did not have any impact on the assets and liabilities as of
December 31, 2002 or on the profit and loss for the year ended December 31, 2002.
- 55 -

3) Mitac Precision Technology Co., Ltd. (MPT) and its subsidiaries, as well as Tsu Fung
Corp., which is one of MPT’s shareholders, had been included in the consolidated
financial statements in 2002. In 2003, the ownership in MPT declined to below 50%,
and MPT was accordingly excluded from the consolidated financial statements in 2003.
Additionally, the 2002 consolidation financial statements of SSDL were restated for the
changes in consolidated entities. Because of the changes in consolidated entities
described above, the Company has restated its 2002 consolidation financial statements.
As a result of the restatement, total assets and operating revenue as of and for the year
ended December 31, 2002 decreased by $19,877,451 and $123,968,617, respectively,
and the decreased amount were 56% and 348%, of the restated consolidated total assets
and operating revenue respectively.
4. CONTENTS OF SIGNIFICANT ACCOUNTS
1) CASH AND CASH EQUIVALENTS
- 56 -
December 31,
2003 2002
Cash:
Petty cash $ 2,272 $ 4,030
Checking and savings accounts 1,516,671 702,373
Time deposits 229,400 30,769
1,748,343 737,172
Cash equivalents:
Repurchase bonds - 54,000
$ 1,748,343 $ 791,172
2) MARKETABLE SECURITIES
December 31,
2003 2002
Mutual funds $ 1,749,607 $ 179,350
Listed equity securities - stock - 4,168
$ 1,749,607 $ 183,518
3) ACCOUNTS RECEIVABLE - NET
December 31,
2003 2002
Third parties $ 5,517,638 $ 5,579,566
Less: Allowance for doubtful accounts ( 38,041 ) ( 22,026 )
5,479,597 5,557,540
Related parties 3,669,333 1,777,539
$ 9,148,930 $ 7,335,079
4) INVENTORIES - NET
December 31,
2003 2002
Materials $ 5,816,781 $ 4,967,113
Work in process 221,027 668,653
Finished goods 1,900,703 1,612,582
Inventories in transit 1,815 92,746
7,940,326 7,341,094
Less: Inventory reserve ( 510,690 ) ( 432,268 )
$ 7,429,636 $ 6,908,826

5) LONG-TERM INVESTMENTS
A. The details of long-term investments are summarized as follows:
December 31,
2003 2002
Percentage Percentage
of direct of direct
Amount ownership Amount ownership
Cost method:
Channel Overseas Corporation $ 11,000 5.00% $ 55,000 5.00%
Wyse Technology (Taiwan) Co., Ltd. - - 9,895 0.25%
Vate Technology Co., Ltd. 5,022 0.26% 7,535 0.79%
MITAC Inc. 645,051 8.97% 645,051 9.01%
Overseas Investment & Development
Corp.
10,000 1.11%
10,000 1.11%
Eversilk Enterprise - - 12,480 1.74%
Lien Hwa Industrial Corp. 281,480 3.25% 281,480 3.25%
Union Petrochemical Corp. 189,340 1.55% 326,025 2.67%
Gemtek Technology Co., Ltd. 36,007 3.42% 36,007 3.63%
Harbinger Venture Capital Corp. 260,990 13.05% 260,990 13.05%
Jon An Technology Co., Ltd. - - 930 3.72%
Actrans System Inc. 20,000 9.38% 40,000 9.38%
Trumption Microelectronics Inc. 24,157 3.67% 24,157 4.63%
Gapura Inc. 26,992 5.55% 27,608 5.55%
Budworth Investments Ltd. 150,319 13.83% 153,747 13.83%
Pacific Metal Development Ltd. 161,500 (Note2) 165,184 (Note2)
Global Strategic Investment Inc. 33,978 1.26% 34,753 1.26%
Panasas Inc. 45,384 1.63% 46,420 1.63%
Synnex International Corp. 157,655 (Note1) 161,250 (Note 1)
2,058,875 2,298,512
Equity method:
MITAC Technology Corp. 1,309,769 37.79% 1,387,548 38.78%
Tyan Computer Corp. 193,691 22.62% 174,497 22.51%
Tung Da Investment Co., Ltd. 415,495 49.99% 394,374 49.99%
Tsu Fung Corp. 288,547 100.00% 124,008 100.00%
Sinfotek Information Technology Co. 4,997 36.36% 16,834 36.36%
3 Probe Technology Co., Ltd. 11,503 23.13% 12,813 23.13%
Mitac Precision Technology Corp. 530,140 42.77% 458,365 50.27%
Proconn Technology Co., Ltd. - - 43,569 39.49%
Lian Jie Investment Co., Ltd. 130,864 49.98% 49,636 49.95%
Synnex Corp. 4,502,023 45.54% 4,056,809 55.24%
Brilliant Star Holding Ltd. 240,634 35.52% 214,108 43.04%
Mitac Corporation (ShenZhen) Ltd.
Harbinger II (BVI) Venture Capital
- - 9,596 100.00%
Corp.
48,765 49.96%
24,359 49.92%
Shenyang Heda Computer Co., Ltd. - - 3,898 34.00%
Sub-total 7,676,428 6,970,414
$ 9,735,303 $ 9,268,926
Note 1: Invested in GDR.
Note 2: Invested in non-cumulative, convertible preferred stock without right of voting.
B. The total investment income and loss recognized by the Company and its
subsidiaries for investees accounted for under the equity method for the years
2003 and 2002 based on the financial statements of the investee companies were
$754,099 and $1,082,642, respectively. The financial statements of the investee
companies were audited, except 3-Probe Technology Co., Ltd., Mitac Computer
(ShenZhen) Ltd. and Shenyany Heda Computer Co., Ltd. for the years 2003 and
2002.
C. The Jon An Technology Co., Ltd., Vate Technology Co., Channel Overseas
Corporation, Actrans System Inc. and Vate Technology Co., Ltd., Lineo Inc.,
Converge Inc. have suffered on impairment in value and the chance of recovery
is minimal, so the Company and it’s subsidiaries recognized impairment loss for
the years 2003 and 2002 of $66,903 and $122,009, respectively.
- 57 -

D. Tsu Fung Investment Corp. was not included in the Company’s consolidated
financial statements since its total assets and total operating revenue for the
current year were less than 10% of the Company’s non-consolidated total assets
and operating revenues.
6) PROPERTY, PLANT AND EQUIPMENT - NET
December 31,
2003 2002
Cost
Land $ 1,154,105 $ 1,155,109
Buildings 4,141,769 3,931,943
Machinery 4,831,509 4,232,625
Computer and communication equipment 693,250 643,986
Transportation equipment 90,645 87,397
Furniture and fixtures 489,160 484,002
Leasehold improvements 55,471 65,535
Other equipment 62,294 42,698
11,518,203 10,643,295
Accumulated depreciation ( 2,832,391 ) ( 2,272,106 )
8,685,812 8,371,189
Construction in progress and prepayments for equipment 20,826 194,559
Net book value $ 8,706,638 $ 8,565,748
7) OTHER ASSETS
December 31,
2003 2002
Land $ 726,918 $ 725,191
Building 136,984 143,706
Rental buildings and machinery, net 151,674 162,173
Others 41,845 119,916
$ 1,057,421 $ 1,150,986
The Company owns a piece of agricultural land, located at Treasure Mountain, Hsin
Chu Hsien, with a total area of 285,181.09 square meters. The land will be
developed for employees' housing projects. A portion of the land, totaling 138,685.10
square meters, is currently registered under a nominee's name and pledged to the
Company.
8) SHORT-TERM LOANS
December 31,
2003 2002
Unsecured bank loans $ 5,317,772 $ 407,400
Secured bank loans 587,088 2,101,777
$ 5,904,860 $ 2,509,177
Interest rates 0.65%~2.11% 1.67%~5.85%
9) COMMERCIAL PAPER PAYABLE
December 31,
2003 2002
Commercial paper $ 380,000 $ -
Less: Prepaid interest expense ( 623 ) -
$ 379,377 $ -
Interest rates 0.9%~1.1% -
- 58 -

10) LONG-TERM DEBTS
a) Long-term loans
December 31,
2003 2002
Long-term unsecured loans-from bank $ 500,000 $ 13,985
Long-term secured loans-from bank 293,194 -
$ 793,194 $ 13,985
Interest rates 1.55~1.98% 5.58%
As of December 31, 2003, long-term loans are payable in installments with final
payment due in 2008.
b) Bonds payable
December 31,
2003 2002
Convertible bonds payable $ - $ 1,246,000
Add: Compensation interest payable - 535,739
- 1,781,739
Secured bonds payable 2,500,000 2,500,000
2,500,000 4,281,739
Current portion - ( 1,781,739 )
$ 2,500,000 $ 2,500,000
A. On May 13, 1998, the Company issued unsecured convertible bonds. The main
terms of the issue are as follows:
(a) Total amount: $2,000,000
(b) Interest rate: zero
(c) Maturity date: May 12, 2005
(d) Conversion terms: The convertible bonds converted into common stock any
time during the period starting 1 month after the bond issuance date and
ending 10 days before maturity date.
(e) Redemption at the option of the Company: The Company may redeem the
bonds at any time beginning 2 years after the issue date in accordance with
the agreement.
(f) Redemption at the option of the bondholders: Bondholders may request the
Company to redeem the bonds in cash equal to par value of the bond plus
interest of 23.36% and 46.93% of the par value on May 12, 2002 and May 12,
2003, respectively. In May, 2003, the bondholders had requested the
Company to redeem the bonds in $1,830,748 which is 146.93% of the bond’s
par value.
B. 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: 5.28% per annum net of witholding tax
(c) Maturity date: November 27, 2005~December 13, 2005.
(d) Collateral: buildings and land.
- 59 -

11) OTHER LIABILITIES
December 31,
2003 2002
Minority interest $ 123,432 $ 277,333
Deferred credit-unrealized inter-company gains 79,730 81,548
$ 203,162 $ 358,881
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 2003 and 2002, the discount rate are
3.5% and 4%, expected rate of return on plan assets are 2.75% and 3.25%,
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
- 60 -
31, 2003
December
31, 2002
Vested benefit obligation ( $ 9,473 ) ( $ 3,923 )
Non-vested benefit obligation ( 158,848 ) ( 140,978 )
Accumulated benefit obligation ( 168,321 ) ( 144,901 )
Effect of projected salary increase ( 79,602 ) ( 71,419 )
Projected benefit obligation ( 247,923 ) ( 216,320 )
Market-related value of plan assets 190,973 176,681
Funded status ( 56,950 ) ( 39,639 )
Unrecognized transition obligation ( 7,348 ) ( 8,398 )
Unrecognized loss 46,136 46,856
Prepaid pension cost ( $ 18,162 ) ( $ 1,181 )
Vested benefit $ 11,384 $ 5,816
b. Net periodic pension cost
2003 2002
Service cost $ 24,955 $ 20,287
Interest cost 8,653 9,672
Expected return on plan assets ( 5,742 ) ( 8,559 )
Amortization of unrecognized gain
Amortization of net transition
( 1,050 ) ( 1,050 )
obligation
1,949
1,102
Net periodic pension cost $ 28,765 $ 21,452
13) CAPITAL
A. The Company has authorized capital of 1,710,000 thousand shares (of which
200,000 thousand shares are reserved for convertible bonds issued, 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, 2003, the total issued and outstanding
common shares amounted to $10,563,812.

B. Based on the resolution of the shareholders’ meeting on June 5, 2002, the
Company issued 47,055 thousand new shares from the capitalization of retained
earnings of $397,729 and employees’ bonus of $72,824. The Company completed
the amendment procedures for registration in 2003.
C. 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. Options granted vest ratably over a four-years
period and expire in six years.
A summary of the activity under the Company’s stock option plans is set forth
below:
For the year ended December 31, 2003 For the year ended December 31, 2002
In thousands of
shares
Weighted average
exercisable price
(in NT dollars)
- 61 -
In thousands of
shares
Outstanding at the
beginning of the year 99,000 $ 9.5
99,000
Option granted
Stock dividends or
adjustment of
- -
number of options
-
-
Option exercised ( 14,813 ) 9.3 -
Option confiscated
Outstanding at the
- -
end of the year
Exercisable options at
84,187
9.3
99,000
the end of the year
Approved and not yet
34,687
-
issued options at the
end of the year
-
-
Weighted average
exercisable price
(in NT dollars)
$ 9.5
D. As of December 31, 2003, 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 Exercisable options at the end of the year
In thousands
of shares
Expected
weighted
average
residual years
Weighted
average
exercise price
(in NT dollars)
In thousands
of shares
9.5
Weighted average
exercise price
(in NT dollars)
$ 9.3 84,187 3.75 $ 9.3 34,687 $ 9.3
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) In accordance with the Company's Articles of Incorporation, the annual net
income after transferring the gain on disposal of fixed assets to capital reserve,
shall be first used to pay all taxes and dues, and offset prior operating losses,
then 10% of the remaining balance, if any, shall be set aside as legal reserve.
Additionally, the Company may also set aside a special reserve. The
remaining net income after legal and special reserve plus the prior years'
undistributed earnings shall be appropriated according to the resolution
adopted by the Board of Director's and the annual Stockholders' meeting. At
least 5% of net income, after deducting the appropriation for the legal reserve
and dividend, shall be set aside for employees’ bonus.
(b) The Company has not yet held the meeting of board of directors to discuss the
earnings distribution proposal for the fiscal year 2003 by March 15, 2004; 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.
(c) The information on the 2002 earnings distribution for employees’ bonuses
and directors’ and supervisors’ remuneration are as follows:
Approved in the Stockholders
Meeting
(1) Distribution
a. Employee cash bonuses
b. Employee stock dividends
(a) Shares (in thousands of shares)
(b) Amount
(c) Percentage of outstanding shares in 2002
c. Directors’ and supervisors’ remuneration
(2) Information about earnings per share (in dollars)
a. Original EPS
b. Imputed EPS(Note)
- 62 -
$ 77,842
-
$ -
-
$ 4,000
$ 0.84
$ 0.76
Note: Imputed EPS=(Net income-employees’ bonuses-directors’ and
supervisors’ remunerations) /weighted average outstanding common
shares for 2002.
(d) The Company had resolved to distribute cash dividends $0.2 and $0.1 (in
dollar) per share, and stock dividends $0 and $0.4 (in dollar) per share at
2003 and 2002’s meetings of board of shareholders.
16) TREASURY STOCK
2003
(in thousands of shares)
Reason for reacquisition Beginning shares Addition Reduction Ending shares
Transfer shares to employees 190 25,000 190 25,000
Company’s common shares held by 17,959 2,013 4,850
15,122
SSDL and its subsidiaries, TFC and
So Fung Investment Co., Ltd.
(Note) (Note)
Note: The addition 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.

2002
(in thousands of shares)
Reason for reacquisition Beginning shares Addition Reduction Ending shares
Transfer shares to employees 190 - - 190
Company’s common shares held by 15,040 3,435 516 17,959
SSDL and its subsidiaries, TFC and
So Fang Investment Co., Ltd.
(Note)
Note: The 3,435 thousand shares resulted from stock dividends and acquisitions by
SSDL’s subsidiary for employee deferred compensation plan.
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 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, 2003, the Company’s
treasury stock amounted to $347,450.
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, 2003, 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 $14.528 dollars per share.
17) INCOME TAX
A. Income tax expense and payable:
2003 2002
Tax on pretax income at statutory tax rate $ 284,427 $ 238,060
Tax effect of permanent differences ( 65,695 ) ( 260,625 )
Investment tax credits ( 160,377 ) ( 94,170 )
Loss carryforwards 62,010 ( 84,943 )
Valuation allowance of deferred income tax assets ( 83,254 ) 218,337
Adjustment of prior year’s income tax expense ( 2,204 ) ( 8,812 )
Income tax expense 34,907 7,847
Net effect of deferred income tax assets (liabilities) ( 19,177 ) ( 17,105 )
Adjustment of prior year’s income tax expense 2,204 12,370
Prepaid income tax
Tax which is subjected to separate withholding
( 12,901 ) -
income tax and income tax paid by subsidiary
- 63 -
( 4,539 )
Translation adjustment ( 60 ) 900
Income tax payable $ 434 $ 4,012
B. The deferred income tax assets and liabilities:
December December
31, 2003 31, 2002
Deferred income tax assets – current $ 313,336 $ 236,957
Deferred income tax assets – non-current $ 484,713 $ 511,324
Deferred income tax liabilities – current $ 12,767 $ 3,253
Deferred income tax liabilities-non-current $ 684,439 $ 542,479
Valuation allowance on deferred tax assets $ 379,487 $ 462,741
-

C. Components of deferred income tax assets and liabilities:
December 31, 2003 December 31, 2002
Amount Tax Effect Amount Tax Effect
Current (shown in other current assets):
Temporary differences
Provision for loss on obsolete
inventories
$ 320,849 $ 80,212 $ 200,018 $ 50,004
Unrealized warranty 273,709 68,427 153,581 38,395
Compensation interest payable - - 535,739 133,935
Others 125,499 31,375 45,480 11,370
Investment tax credit 120,555 -
$ 300,569 $ 233,704
Non-current:
Temporary differences
Unrealized investment gain ( $2,732,560 ) ( $ 683,140 ) ( $2,161,706 ) ( $ 540,427 )
Others 37,212 9,303 41,028 10,257
Loss carryforward 80,863 20,216 339,770 84,943
Investment tax credit 453,895 414,072
Valuation allowance ( 379,487 ) ( 462,741 )
( $ 579,213 ) ( $ 493,896 )
D. As of December 31, 2003, 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 $ 212,611 $ 97,366 2004
expenditure
〞 139,803 93,562 2005
〞 164,769 164,769 2006
〞 192,464 192,464 2007
548,161
Machinery Equipment 23,189 23,189 2004
〞 123 123 2005
23,312
Employee training expenditure 1,512 1,512 2005
〞 1,465 1,465 2006
2,977
$ 574,450
E. As of December 31, 2003, the Company’s unused loss carryforward was $80,863
and will expire in 2007.
F. The Company's income tax returns for the years through 2000 have been assessed
and approved by the Tax Authority.
G.
December 31, 2003 December 31, 2002
Unappropriated earnings:
Earnings earned before 1997 $ 323,371 $ 323,371
Earnings earned after 1998 2,003,564 1,349,131
$ 2,326,935 $ 1,672,502
H. As of December 31, 2003 and 2002, the balance of stockholders’ tax credit
account was approximately $90,051 and $52,359. The estimated ratio of
deductible tax credit for the appropriation of the 2003 earnings is 4.49%. The
ratio of deductible tax credit for the appropriation of 2002 earnings was 6.90%.
- 64 -

18) EARNINGS PER SHARE
For the period ended December 31, 2003
Amount
Outstanding
Common
Shares
Income per share (in dollars)
Income before
(in thousands Income before
income tax Net income of shares) income tax Net income
Primary earnings
per share:
Net income
Less: effect of
dilutive
potential
common stocks
issued by
investee
companies
under equity
$ 1,086,380 $ 1,051,473 1,021,545 $ 1.06 $ 1.03
method
Effect of dilutive
potential
common stocks:
Employee stock
( 58,439 ) ( 44,169 )
options
Diluted earnings
-
- 29,123
per share $ 1,027,941 $ 1,007,304 1,050,668 $ 0.98 $ 0.96
For the period ended December 31, 2002
Amount
Outstanding
Common
Shares
Income per share (in dollars)
Income before
(in thousands Income before
income tax Net income of shares) income tax Net income
Primary earnings
per share:
Net income
Less: effect of
dilutive
potential
common stocks
issued by
investee
companies
under equity
$ 872,751 $ 864,904 1,024,966 $ 0.85 $ 0.84
method
Effect of dilutive
potential
common stocks:
Employee stock
( 47,010 ) ( 35,258 )
options
Diluted earnings
-
- 40,941
per share $ 825,741 $ 829,646 1,065,907 $ 0.77 $ 0.78
A. The convertible bonds are anti-dilutive and are excluded when calculating diluted
earnings per share.
B. The retroactively adjusted weighted average outstanding common stock for 2003
and 2002 excluded treasury stock.
- 65 -

19) PERSONNEL EXPENSES, DEPRECIATION, DEPLETION AND AMORTIZATION
EXPENSES
The personnel expenses, depreciation, depletion and amortization expenses for 2003
and 2002 were as follows:
- 66 -
For the period ended December 31, 2003
Shown in
operating
Shown in
non-operating
expenses Total
Shown in cost
of sales
expenses
Personnel expenses $ 664,369 $ 1,479,259 $ 1,225 $ 2,144,853
Salaries 372,283 1,208,508 - 1,580,791
Labor and health insurance 38,883 63,234 - 102,117
Pension 4,374 43,347 - 47,721
Others 248,829 164,170 1,225 414,224
Depreciation 485,303 305,957 39,140 830,400
Depletion - - - -
Amortization 254,299 45,900 - 300,199
For the period ended December 31, 2003
Shown in
operating
Shown in
non-operating
expenses Total
Shown in cost
of sales
expenses
Personnel expenses $ 692,268 $ 1,533,259 $ 19,958 $ 2,245,485
Salaries 394,706 968,800 - 1,363,506
Labor and health insurance 29,206 105,109 - 134,315
Pension 2,345 37,051 - 39,396
Others 266,011 422,299 19,958 708,268
Depreciation 443,968 275,966 49,041 768,975
Depletion - - - -
Amortization 106,471 34,659 - 141,130
5. RELATED PARTY TRANSACTIONS
1) Names and Relationship with Related Parties
Names of the related parties The relationship with the Company
MITAC Inc. The major investor of the Company.
Tyan Computer Corp. Investee Company accounted for under the equity method.
MITAC Precision Technology Corp. (MPT) Investee Company accounted for under the equity method.
Tsu Fung investment Corp. Investee Company accounted for under the equity method.
So Fong Investment Co., Ltd. Subsidiary
Synnex International Corp. (SIC) Common board chairman.
MITAC Technology Corp. (MTC) Investee Company accounted for under the equity method.
Mio Technology Corp. (Note1) Indirect Investee Company accounted for under the equity
method.
Linpus Technology Corp. Indirect Investee Company accounted for under the equity
method.
Wisdom Investment Co., Ltd. Indirect Investee Company accounted for under the equity
method.
United Industrial Gas Corp. The Company’s chairman is vice director
Harbinger Venture Management Co., Ltd. Common board chairman.
BOC LianHwa Industrial Gas Corp. Common board chairman.
3Probe Technologies Corp. Investee Company accounted for under the equity method.
Union Petrochemical Corp. The Company’s chairman is vice director
Lien Hwa Industrial Corp. Common board chairman.
Harbinger Venture Capital Ltd. Common board chairman.
Lian Jie Investment Co., Ltd. Common board chairman.
Gemteck Technology Co., Ltd. The Company is Gemteck’s director
Integration Technology Ltd. (ITL) Indirect Investee Company accounted for under the equity
method.
Pacific Royale Ltd. Indirect Investee Company accounted for under the equity
method.
Getac Inc. Indirect Investee Company accounted for under the equity
method.
Tyan Computer Corp. (TYAN) Indirect Investee Company accounted for under the equity
method.
Top Windom Corp. Indirect Investee Company accounted for under the equity
method.
Hot Link Technology Ltd. Indirect Investee Company accounted for under the equity
method.
Pacific Metal Developments Ltd. Indirect Investee Company accounted for under the equity
method.
Master China Ltd. Indirect Investee Company accounted for under the equity
method.
Mitac Computers System (Shunde) Ltd. Indirect Investee Company accounted for under the equity

Names of the related parties The relationship with the Company
method.
Mitac Precision Technology (Kunshan) Co., Ltd. Indirect Investee Company accounted for under the equity
Synnex Corp. and its subsidiaries (SYNNEX)
(Note 2)
method.
Indirect Investee Company accounted for under the equity
method.
Note 1: Renamed from My Outlet Corp. in June 2003.
Note 2: One of SSDL’s subsidiaries before SSDL changed its ownership to below 50% in
December 2003.
2) Significant Related Party Transactions
A. Purchases from
2003 2002
MPT $ 5,663,091 $ 2,699,199
MTC 252,985 421,818
Others 234,134 155,626
$ 6,150,210 $ 3,276,643
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
2003 2002
MTC $ 5,542,316 $ 4,518,929
ITL - 1,601,320
SYNNEX 8,428,719 6,420,684
TYAN 1,117,326 564,044
Others 1,245,399 856,198
$ 16,333,760 $ 13,961,175
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
December 31,
2003 2002
MTC $ 429,153 $ 730,019
SYNNEX 2,993,856 748,405
TYAN 124,818 $ 94,555
Others 121,506 204,560
$ 3,669,333 $ 1,777,539
D. Other receivable
December 31,
2003 2002
MTC $ 70,452 $ 93,563
MPT 5,258 21,210
Others 22,968 64,617
$ 98,678 $ 179,390
- 67 -

E. Accounts payable
December 31,
2003 2002
MTC $ 190,436 $ 220,537
MPT 1,335,919 1,089,615
Others 57,505 19,242
$ 1,583,860 $ 1,329,394
F. Accounts payable
December 31,
2003 2002
MPT $ 35,800 $ 65,968
PRL 23 74,743
MTC - 49,921
Others 7,415 46,623
$ 43,238 $ 237,255
G. In 2003 and 2002, the Company bought equipment from related parties at the price of
$88,389 and $98,590, respectively.
H. As of December 31, 2003 and 2002, the Company guaranteed and endorsed the bank
loans of Top Wisdom Corp. amounting to $120,700 and $147,442, respectively.
As of December 31, 2003 and 2002, the Company guaranteed and endorsed certain
contracts entered into by MITAC Inc. amounting to $1,828,521 and $1,828,666,
respectively. Guarantee is secured by 4,066 thousand shares of listed stock in 2002 and
2003 (market value at December 31, 2003 was approximately $187,036).
As of December 31, 2003 and 2002, the Company provided guarantees of rent to
MITAC Technology Co., Ltd. amounting to $9,667 and $14,267, respectively.
As of December 31, 2003 and 2002, the Company guaranteed and endorsed the bank
loans of Tsu Fung Investment Co., Ltd. amounting to $420,000 and $430,000.
As of December 31, 2003 and 2002, the Company guaranteed and endorsed the bank
loans of Mitac Precision Technology Corp. amounting to $400,000 and $1,150,000.
As of December 31, 2003 and 2002, the Company guaranteed and endorsed the bank
loans of So Fung Investment Co., Ltd. amounting to $220,000 and $290,000,
respectively.
As of December 31, 2003 and 2002, MITAC Technology Corp. provided guarantees of
rent to the Company amounting to $6,311 and $3,450, respectively.
I. In 2003 and 2002, the Company earned rent revenue from related party amounted to
$38,663 and $21,954, respectively.
6. ASSETS PLEDGED AS COLLATERAL
December 31,
ASSETS 2003 2002 Subject of collateral
Other current assets and
other assets:
Time deposit $ - $ 82,343 Long-term debts, guarantee of
performing contract and bonds payable
Land $ 1,339,947 $ 1,339,947 Bonds payable
Building 1,812,369 2,151,100 Bonds payable and long-term debts
Machinery and Equipment - 38,421 Long-term debts
$ 3,152,316 $ 3,529,468
Land usage right $ - $ 135,297 Short-term loans
7. COMMITMENTS AND CONTINGENT LIABILITIES
1) The Company has outstanding letters of credit for inventory purchases of
approximately $23,818 and $206,664 at December 31, 2003 and 2002, respectively.
2) The Company has credit lines for guarantee of customs duties in 2003 and 2002. As
of December 31, 2003 and 2002, the amount of customs duties guaranteed by the bank
was $6,000 and $5,500, respectively.
- 68 -

3) The Company leased certain land (from 1987 to 2008), factories and offices (to
September 2005) under operating leases. Annual rental payments are approximately
$16,967.
8. SIGNIFICANT DISASTER LOSS
None.
9.SIGNIFICANT SUBSEQUENT EVENT
The Company has resolved to purchase 5,000 and 10,000 thousand of its outstanding
common stocks for transferring to its employees at the meetings of the board of directors on
February 24 and March 11, 2004 respectively. The planned acquisition periods are from
February 25 to April 24, 2004, and from March 12 to May 11, 2004. The acquisition prices
ranged from $15 to $17 and from $15 to $17.5, respectively, to the date of this report before
March 15, 2004, the Company had bought back 5,000 and 1,500 thousand shares, and the
total costs were $84,065 and $25,415, respectively.
10. OTHER INFORMATION
1) FAIR VALUE OF FINANCIAL INSTRUMENTS
December 31, 2003 December 31, 2002
Financial Assets Book value Fair value Book value Fair value
Short-term financial assets with fair
value equal to book value
$ 11,508,412 $ 11,508,412 $ 8,548,536 $ 8,548,536
Marketable securities 1,749,607 1,749,777 183,518 183,597
Long-term investments 9,735,303 10,140,152 9,282,515 10,188,596
$ 22,993,322 $ 23,398,341 $ 18,014,569 $ 18,920,729
Sale of forward foreign exchange $ 20,704 $ 20,704 $ 790 $ 790
Buy US$ Put option $ 38,839 $ 38,839 $ 59,209 $ 59,209
Buy US$ SWAP $ - $ - $ 8,543 $ 8,543
December 31, 2003 December 31, 2002
Financial Liabilities
Financial liabilities with fair value equal
Book value Fair value Book value Fair value
to book value
$ 20,162,803
- 69 -
$ 20,162,803
$ 13,318,614
$ 13,318,614
Bonds payable 2,500,000 2,608,983 4,281,739 4,414,797
$ 22,662,803 $ 22,771,786 $ 17,600,353 $ 17,733,411
Purchase of forward foreign exchange $ 24,583 $ 24,583 $ 24,324 $ 24,324
Sell US$ Swap $ 4,319 $ 4,319 $ 8,720 $ 8,720
Sell Interest rate Swap $ 808 $ 808 $ 1,670 $ 1,670
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 2003 2002
1.Write-off of long-term investments and MITAC
$ 7,721,679 $ 6,974,554
stockholders’ equity
International Corp.
and its subsidiaries
2.Write-off of inter-company AR and AP " 1,895,672 2,314,213
3.Write-off of inter-company purchases and sales " 17,737,525 9,882,377
4.Write-off of inter-company unrealized gain " 57,778 11,482
5.Write-off of other inter-company transactions " 785,768 512,872

11. SPECIAL DISCLOSURE ITEMS
A. Information of Significant Transactions:
(1) Loans to others attributed to financial activities as of December 31, 2003: None.
(2) The endorsements and guarantees provided by the Company to others as of December 31, 2003:
Guarantor company Company being guaranteed
Name Name
MITAC
International Corp.
〃
〃
Relationship with
the Company
MITAC Inc. Business
relationship
MITAC
Technology Corp.
So Fung
Investment Co.,
Ltd.
〃 Tsu Fung
Investment Co.
〃
〃
〃
MITAC Precision
Technology Co.,
Ltd.
Silver Star
Developments Ltd.
MITAC Japan
Corp.
The limit of
guarantee for such
party
The highest
outstanding
guarantee amount
during 2003
- 70 -
The outstanding
guarantee amount
at Dec.31, 2003
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
$ 12 $ 1,828,666 $1,828,521 - 11.12% $16,443,699
〃 200,262 14,266 9,667 - 0.06% 〃
Subsidiary 8,221,850 290,000 220,000 - 1.34% 〃
〃 8,221,850 470,000 420,000 - 2.55% 〃
Business
relationship
451,017 1,190,000 400,000 - 2.43% 〃
Subsidiary 8,221,850 848,325 848,325 - 5.16% 〃
〃 8,221,850 146,000 116,000 - 0.71% 〃
〃 MITAC U.S.A Inc. 〃 8,221,850 59,093 59,093 - 0.36% 〃
〃 MITAC U.K. Ltd. 〃 8,221,850 477,570 - - - 〃
〃 MITAC Computer
(Shunde) Corp.
〃 8,221,850 20,100 - - - 〃
〃 Top Wisdom Corp. Joint venture
investee Company
8,221,850 149,779 120,700 - 0.73% 〃

(3) Marketable securities held as of December 31, 2003:
Investor Types
MITAC
International
Corp.
Name of marketable
securities
Common Stocks MITAC Technology
Corp.
Relationship of the issue
with the Company
Investee Company
accounted for under the
equity method.
General ledger
account
Long-term
investment
- 71 -
Number of shares Book value
December 31, 2003
Percentage
ownership
Market value (Note1)
93,426,408 $1,322,689 37.79% $1,491,553
〃 〃 Silver Star Developments
Ltd.
〃 〃 127,875,404 7,721,679 100.00% 7,721,679
〃 〃 Tyan Computer Corp. 〃 〃 7,348,916 126,790 16.74% 126,790
〃 〃 Tung Da Investment Co.,
Ltd.
〃 〃 37,963,076 415,495 49.99% 415,495
〃 〃 Tsu Fong Investment Co.
(Note 2)
〃 〃 16,500,000 305,181 100.00% 528,878
〃 〃 3-Prode Technologies
Co., Ltd.
〃 〃 1,080,000 11,503 23.13% 10,235
〃 〃 MITAC Precision
Technology Co., Ltd.
〃 〃 33,491,150 530,140 42.77% 530,140
〃 〃 Lian Jie Investment Co.,
Ltd.
〃 〃 12,995,000 130,864 49.98% 130,864
〃 〃 Sinfotek Information
Technology Co.
〃 〃 3,600,000 4,997 36.36% 4,997
〃 〃 Channel Overseas
Corporation
None 〃 5,500,000 11,000 5.00% 11,000
〃 〃 Vate Technology Co., Ltd. 〃 〃 397,191 5,022 0.26% 3,436
〃 〃 MITAC Inc. The major investor of
the Company
〃 24,825,752 645,051 8.97% 645,051
〃 〃 Overseas Investment &
Development Corp.
None 〃 1,000,000 10,000 1.11% 10,000
〃 〃 Union Petrochemical
Corp.
〃 〃 Lien Hwa Industrial
Corp.
〃 〃 Gemtek Technology Co.,
Ltd.
〃 〃 Harbinger Venture
Capital Corp.
The major investor of
the Company.
Common board
chairman
Board member of
Gemtek
Common board
chairman
〃 11,107,267 189,340 1.55% 175,195
〃 21,475,398 281,480 3.25% 202,427
〃 3,194,679 36,007 3.42% 252,795
〃 26,099,000 260,990 13.05% 260,990
〃 〃 Actrans System Inc. None 〃 4,000,000 20,000 9.38% 20,000

Investor Types
Name of marketable
securities
〃 〃 Trumption
Microelectronics Inc.
MITAC
International
Corp.
Relationship of the issue
with the Company
General ledger
account
Mutual funds Grand Cathay Bond Fund None Short-term
investment
- 72 -
Number of shares Book value
December 31, 2003
Percentage
ownership
Market value (Note1)
〃 〃 916,300 24,157 3.67% 24,157
3,223,328 40,100 - 40,104
〃 〃 Fuh-Hwa Bond Fund 〃 〃 3,150,123 40,066 - 40,074
〃 〃 Jih Sun Bond Fund 〃 〃 12,846,618 168,148 - 168,165
〃 〃 The Wan Pao Fund 〃 〃 4,123,286 60,034 - 60,040
〃 〃 PCA Bond Fund 〃 〃 20,082,036 299,849 - 299,873
〃 〃 President Home Run
Bond Fund
〃 〃 15,251,593 205,306 - 205,328
〃 〃 PHOENIX 〃 〃 19,876,063 287,223 - 287,251
〃 〃 Entrust Kirin Bond Fund 〃 〃 22,779,760 241,532 - 241,554
〃 〃 Sheng Hua 1699 Bond
Fund
〃 〃 12,738,868 151,498 - 151,512
〃 〃 Sheng Hua 5599 Bond
Fund
〃 〃 23,814,873 255,851 - 255,877
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 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.

Investor
MITAC
International
Corp.
(4) Marketable securities for which total buying or selling exceeded $100,000 or 20 percent of capital stock for the year ended December 31, 2003:
Types and names
of marketable
securities
Common
stocks-Tsu Fong
Investment Corp.
〃 Common
Stocks-Union
Petrochemical
Corp.
General
ledger
account
Long-term
investment
Counter
Party
Relationship
with Counter
Party
Beginning balance Additions Disposals Ending balance
Number of
shares
Amount
Number of
shares
- 73 -
Amount
Number of
shares
Selling
price
Cost
Gain/Loss
from
disposal
Number of
shares
Amount
(Note 1)
6,500,000 $146,363 10,000,000 $100,000 - $ - $ - $ - 16,500,000 $305,181
〃 18,749,478 326,025 - - 7,860,000 146,830 136,685 10,145 11,107,267 189,340
〃 Common
stocks-Silver Star
Developments Ltd.
〃 SSDL Subsidiary 122,425,404 6,974,554 5,450,000 187,916 - - - - 127,875,404 7,721,679
〃 Grand Cathay Short-term 〃 - - 206,802,099 2,554,077 203,578,771 2,515,716 2,513,977 1,739 3,223,328 40,100
Bond Fund investment
〃 The first global
investment
〃 〃 - - 6,331,438 100,000 6,331,438 100,088 100,000 88 - -
〃 The first global
investment
〃 〃 - - 85,216,217 1,186,500 85,216,217 1,186,958 1,186,500 458 - -
〃 Jih Sun Bond Fund 〃 〃 5,088,327 65,279 189,681,980 2,461,118 181,923,688 2,360,276 2,358,249 2,027 12,846,618 168,149
〃 PAC Bond Fund 〃 〃 1,646,039 24,071 76,786,083 1,140,249 58,350,086 866,382 864,471 1,911 20,082,036 299,849
〃 PCA Well Pool
Fund
〃 〃 - - 152,692,777 1,820,926 152,692,777 1,823,210 1,820,926 2,285 - -
〃 The Wan Pao Fund 〃 〃 - - 37,828,830 547,034 33,705,544 487,821 487,000 821 4,123,286 60,034
〃 NITC Bond Fund 〃 〃 - - 786,950 122,000 786,950 122,104 122,000 104 - -
〃 President Home
Run Bond Fund
〃 〃 - - 44,832,229 600,307 29,580,636 395,467 395,000 467 15,251,593 205,306
〃 Fubon Ju-I Fund 〃 〃 - - 29,912,218 450,000 29,912,218 450,419 450,000 419 - -
〃 Far Eastern
Alliance Taiwan
〃 〃 8,793,958 90,000 122,296,061 1,259,500 131,090,019 1,351,455 1,349,500 1,955 - -
〃 KGI Victory Fund 〃 〃 - - 73,791,333 757,405 73,791,333 758,754 757,405 1,349 - -
〃 Sheng HUA 1699
Bond Fund
〃 〃 - - 32,629,086 386,662 19,890,218 235,662 235,164 498 12,738,868 151,498
〃 Sheng HUA 5599
Bond Fund
〃 〃 - - 121,757,200 1,299,627 97,942,327 1,046,415 1,043,776 2,638 23,814,873 255,851
〃 PHOENIX 〃 〃 - - 90,151,181 1,294,043 70,275,118 1,009,881 1,006,820 3,062 19,876,063 287,223
〃 Entrust Kirin Bond 〃 〃 - - 89,194,969 941,621 66,415,209 702,621 700,089 2,532 22,779,760 241,532
Fund
〃 NT$ High Yield
Fund
〃 〃 - - 77,047,341 1,223,100 77,047,341 1,223,769 1,223,100 669 - -
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, 2003: 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, 2003: None.

The company
buying /selling
products
MITAC
International Corp.
(7) Purchases or sales transactions with related parties exceeding $100,000 or 20 percent of capital for the ended December 31, 2003:
Name of related
parties
Silver Star
Developments
Ltd. and its
subsidiaries
Relationship with
the Company
Investee company
accounted for
under the equity
method.
Transactions The reason and situation of having different Accounts & notes receivable
transaction terms between related parties
(payable)
Purchase
(Sales)
Amount
Percentage of
(purchase)
sales
Credit Term Unit price Credit Term Balance
Percentage of
account
Footnote
Sales $285,919 1% Note 1 Note 2 Note 1 $529,284 6%
〃 〃 〃 Purchase 17,451,606 48% Note 3 〃 Note 3 ( 1,113,368 ) 28%
〃 Tyan Computer Indirect investee Sales 1,107,934 3% Note 1 〃 Note 1 124,818 1%
Corp. (USA) company
accounted for
under the equity
method.
〃 〃 〃 Purchase 157,326 - Note 3 〃 Note 3 - -
〃 MITAC Precision Indirect investee Sales 477,233 1% Note 1 〃 Note 1 75,548 1%
Technology company
(Shunde) Corp. accounted for
under the equity
method.
〃 MITAC Precision Investee company Purchase 1,405,642 4% Note 3 〃 Note 3 ( 176,807 ) 4%
Technology Co., accounted for
Ltd.
under the equity
method.
〃 Tyan Computer Investee company Sales 173,211 - Note 1 〃 Note 1 58,012 1%
Corp.
accounted for
under the equity
method.
〃 〃 〃 Purchase 108,831 - Note 3 〃 Note 3 - -
〃 Synnex
Common board Sales 215,446 - Note 1 〃 Note 1 - -
International
Corp.
chairman.
〃 〃 〃 Purchase 193,991 1% Note 3 〃 Note 3 29,871 -
〃 Synnex Corp. Indirect investee Sales 8,426,980 21% Note 1 〃 Note 1 2,932,251 32%
and its
company
subsidiaries accounted for
under the equity
method.
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:The selling price to related parties is based on market value.
Note 3: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. And the payment period of ordinary customers is approximately 90 days after purchase date.
- 74 -

Company Name
MITAC
International Corp.
(8) Receivables from related parties exceeding $100,000 or 20 percent of capital as of December 31, 2003:
Name of the counter
party
Silver Star
Developments Ltd. and
its subsidiaries
〃 Synnex Corp. and its
subsidiaries
〃 Tyan Computer Corp.
(USA)
Relationship with the
counter party
Investee company
accounted for under
the equity method
Indirect investee
company accounted
for under the equity
method
Balance of receivable from related party Overdue receivable
Notes/Accounts
receivable
(9) Information on derivative transactions.
To hedge existing assets denominated in foreign currencies:
For year 2003:
Item
Sales of forward
foreign exchange
Buy of forward foreign
exchange
Notional Amount
(in thousands)
Other
receivables
- 75 -
Total
Turnover rate
(times)
Amount
Collection
method
Subsequent
received amount
Bad debt allowance
provided
$529,284 $217,483 $746,767 0.26 $ - N/A $476,663 $ -
2,932,251 8,921 2,941,172 4.58 - N/A 846,023 -
〃 124,818 115 124,933 10.10 - N/A 53,660 -
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$ 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 )
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 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 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 )

Item
Sales of forward
foreign exchange
Buy of forward foreign
exchange
For year 2002:
Notional Amount
(in thousands)
Fair Market Value
(in thousands)
Contract Terms
Trade date Strike Price Settlement Date
- 76 -
Hedged Assets
(in thousands)
Hedged
Liabilities (in
thousands)
Gain/(Loss)Recognized
(in thousands)
US$ 65,000 (NT$ 24,324) 2002.06.28~2002.11.08 33.400~35.123 2003.01.02~2003.05.12 US$65,000 - (NT$ 24,324 )
JPY 180,450 NT$ 790 2002.12.24 120.3 2003.01.23 - JPY180,450 NT$ 790
Buy NT$ put option US$ 54,000 NT$ 25,147 2002.02.06~2002.10.11 35.021~35.520 2003.01.13~2003.04.16 US$54,000 - NT$ 25,147
Sell NT$ call option US$ 54,000 - 2002.02.06~2002.10.11 35.021~35.520 2003.01.13~2003.04.16 US$54,000 - -
Buy US$ call option US$ 32,000 NT$ 34,062 2002.06.28~2002.11.15 33.063~33.718 2003.1.02~2003.05.12 - US$32,000 NT$ 34,062
Sell US$ put option US 32,000 - 2002.06.28~2002.11.15 33.063~33.719 2003.1.02~2003.05.12 - US$32,000 -
Sales of currency
SWAP
Buy of currency
SWAP
US$ 61,000 NT$ 8,543 2002.09.16~2002.12.27 34.683~35.179 2003.01.13~2003.04.15 US$61,000 - NT$ 8,543
US$ 46,000 (NT$ 8,720) 2002.02.06~2003.04.12 34.817~35.055 2003.01.09~2003.04.14 - US$46,000 (NT$ 8,720 )
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 receive (pay) cash or sale (purchase) contracts on settlement dates.

B. Information of Subsidiaries:
(1) Related information of Subsidiaries as of December 31, 2003:
Investor
MITAC
International
Corp.
Investee
Company
MITAC
Technology
Corp.
〃 Tyan Computer
Corp.
〃 Tung Da
Investment Co.,
Ltd.
〃 Silver Star
Developments
Ltd.
〃 Tsu Fung
Investment Co.
〃 3 Probe
Technologies
〃 Sinfotek
Information
Technology Ltd.
〃 MITAC
Precision
Technology Co.,
Ltd.
Location
(Country)
The main
business
operations
Taiwan Manufacturing
and sale of
notebook
computer,
military and
industrial
computer
systems, etc.
〃 Manufacturing
and sale of
computers and
electronic parts,
etc.
British Virgin
Islands
Ending
balance
Original amount Shares held by the Company
Beginning
balance
- 77 -
Number of shares
Percentage
owned
Book value
Income (loss) of the
investee company
Gain/Loss
recognized by
the company
$721,964 $807,236 93,426,408 37.79% $1,322,689 $109,301 $40,777 Investee
accounted for
under equity
method
99,204 98,454 7,348,916 16.74% 126,790 104,579 17,468 〃
〃 Investment 299,985 299,985 37,963,076 49.99% 415,495 35,032 17,512 〃
〃 3,828,523 3,640,607 127,875,404 100.00% 7,721,679 540,926 540,926 Subsidiary
Taiwan 〃 550,000 450,000 16,500,000 100.00% 305,181 57,209 59,041 〃
〃 Information
process service,
sale of software
and international
trading.
〃 Sales of
information
software and
service,
corporation
management
consulting.
〃 Manufacturing
and sale of mold,
electronic
connectors.
16,800 16,800 1,080,000 23.13% 11,503 (186) (1,309) Investee
accounted for
under equity
method
36,000 36,000 3,600,000 36.36% 4,997 (32,554) (11,837) 〃
298,376 304,465 33,491,150 42.77% 530,140 143,893 66,791 〃
Note

Investor
Investee
Company
〃 Proconn
Technology Co.,
Ltd.
〃 Lian Jie
Investment Co.,
Ltd.
Silver Star
Developments
Ltd. (SSDL)
Tyan Computer
Corp.
Location
(Country)
The main
business
operations
Ending
balance
Original amount Shares held by the Company
Beginning
balance
- 78 -
Number of shares
Percentage
owned
Book value
Income (loss) of the
investee company
Gain/Loss
recognized by
the company
〃 Researching and
manufacturing of
elecronic
connectors.
- 38,500 - - - 4,860 1,919 (Note)
〃 Investment 129,950 49,750 12,995,000 49.98% 130,864 2,057 1,028 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 Cayman
Holdings Ltd. Islands
〃 Harbinger II
(BVI) Venture
Capital Corp.
〃 Shenyang Heda
Computer Co.,
Ltd.
Tsu Fung
Investment
Corp.
So Fung
Investment
Co., Ltd.
So Fung
Investment Co.,
Ltd.
Mio Technology
Corp.
British Virgin
Islands
Mainland
China
65,811 65,811 2,583,333 5.88% 66,901 104,579 - Investee
accounted for
under equity
method by
SSDL
1,165,896 1,243,462 11,697,024 45.54% 4,502,023 1,022,654 〃
Investment 249,018 249,018 7,115,000 35.52% 240,634 61,065 - 〃
〃 50,730 24,722 1,457,850 49.96% 48,765 (1,057) - 〃
Design and
manufacturing of
computer
accessories
4,550 4,550 N/A 34.21% - - - 〃
Taiwan Investment 460,000 460,000 36,000,000 100.00% 444,211 26,388 - Subsidiary of
Tsu Fung
Investment
Corp.
〃 Information
process services
and sale of
software.
5,000 5,000 500,000 100.00% 17,709 3,241 - Subsidiary of So
Fung Investment
Co., Ltd.
Note: The Company had disposed all of its investments in Proconn Technology Co., Ltd in July 2003. The gain recognized was calculated on the basis of the investee’s
income up to July 31, 2003.
Note

(2) Loans to others attributed to financial activities as of December 31, 2003:
Names of
lending
company
Silver Star
Developments
Limited.
Name of the
borrowers
System Glory
Int’l Ltd.
〃 Pacific China
Corp.
〃 MITAC
Pacific
(H.K.) Ltd.
〃 MITAC
Computer
(Kunshan)
Co., Ltd.
Accounts
name
Affiliated
loans
receivable
The credit limit
set up by the
Company for its
respective
borrower
The highest
balance
during 2003
The ending
balance
Interest
rate
- 79 -
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
borrower
The ceiling of
fund financing
for the
borrower
N/A $33,594 $21,542 - Note 1 - operations $ - None $ - $ - $7,016,480
(Note 2)
〃 〃 2,215,599 2,215,599 - 〃 - 〃 - 〃 - - 〃
〃 〃 232,116 14,848 - 〃 - 〃 - 〃 - - 〃
〃 〃 214,061 214,061 - 〃 - 〃 - 〃 - - 〃
Note 1: The borrowers required short-term capital.
Note 2: Equal to the net worth of Silver Star Developments Limited in 2002.
(3) Endorsements and guarantees provided to others as of December 31, 2003 :
Guarantor company Company being guaranteed
Name Name
Silver Star Developments Ltd. MITAC Computer
(Shunde) Corp.
〃 MITAC Computer
(Kunshan) CO., Ltd.
MITAC Computer (Shunde) MITAC Computer
Corp.
(Kunshan) Co., LTd.
〃 MITAC Computer
(Shang Hai) Co.,
Ltd.
〃 MITAC Precision
Technology (Shunde)
LTD.
Relationship with the
Company
The limit of
guarantee for such
party
The highest
outstanding
guarantee amount
during 2003
The outstanding
guarantee amount at
Dec.31, 2003
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 3,508,420 575,700 575,700 - 8.20% 7,016,480
〞 3,508,420 272,625 272,625 - 3.89% 7,016,480
Business relationship 858,270 840,320 830,220 - 48.37% 1,716,539
〞 858,270 42,100 - - - 1,716,539
〞 858,270 627,000 616,500 - 35.92% 1,716,539

(4) The detail of marketable securities as of December 31, 2003:
December 31, 2003
Investor Type
Name of marketable
securities
Relationship with the issuer General ledger account
Number of
shares
Book value Percentage
Market value
(Note1)
Tsu Fung
Investment Corp.
Common Stocks So Fung Investment Co.,
Ltd.
Common Board chairman Long-term investment 36,000,000 $444,211 100.00% $444,211
〃 〃 MITAC Precision 〃 〃 2,401,647 22,478 3.07% 22,478
Technology Co., Ltd.
〃 〃 Trumption
None 〃 238,700 4,718 1.21% 4,718
Microelectronics Inc.
〃 〃 Tyan Computer Corp. Common board chairman 〃 2,100,000 31,500 4.78% 31,500
〃 〃 Synnex International
Corp.
None Short-term investment 940,000 38,985 0.13% 44,421
〃 〃 Union Petrochemical
Corp.
〃 〃 24,268 386 - 383
〃 〃 Lien Hwa Industrial
Corp.
〃 〃 4,215,171 55,938 0.64% 39,732
〃 〃 MITAC International The company’s vice chairman is
〃 8,333,010
230,539 0.80% 121,062
Corp.
Tsu Fung’s chairman
(Note 2)
〃 Convertible Bonds Gemtek Technology Co.,
Ltd.
None 〃 482,000 48,200 - 63,103
So Fung
Investment Co.,
Ltd.
Common Stocks Linpus Technology Corp. 〃 Long-term investment 417,213 2,397 18.54% 2,397
〃 〃 MITAC Precision Common board chairman 〃 2,768,447 33,442 3.54% 33,442
Technology Co., Ltd.
〃 〃 Harbinger Venture
Investment Co., Ltd
None 〃 18,000 180 17.82% 180
〃 〃 3 Probe Technologies
Corp.
〃 〃 6,000 30 0.13% 30
〃 〃 Mio Technology Corp. Investee company accounted for
under the equity method.
〃 500,000 11,709 100.00% 11,709
〃 〃 Tyan Computer Corp. Common board chairman 〃 2,150,000 32,250 4.90% 32,250
〃 〃 Lien Yung Investment None 〃 7,198,000 71,980 19.99% 71,980
Corp.
〃 〃 Synnex International None Short-term investment 2,033,102
139,105 0.28% 96,076
Corp.
(Note 3)
〃 〃 MITAC Technology
Corp.
Common board chairman 〃 11,675,994 133,471 4.72% 186,407
〃 〃 MITAC International The company’s vice chairman is So
〃 6,788,496
183,109 0.65% 98,623
Corp.
Fung’s chairman
(Note 4)
〃 〃 Union Petrochemical
Corp.
None 〃 987,521 12,336 0.14% 15,576
〃 〃 Others 〃 〃 1,139 - 673
〃 Convertible Bonds MITAC Technology
Corp.
Common board chairman 〃 200,000 20,000 - 19,940
〃 〃 Yang Ming Marine
Transport Corp.
None 〃 40,000 4,000 - 5,043
〃 〃 Ichia Technolgies, Inc. 〃 〃 200 6,974 - 7,866
〃 〃 Shinkong Chi-Shun Fund 〃 〃 568,837 8,015 - 7,892
Common stock Brilliant Star Holdings SSDL’s investee company
Long-term investment 7,115,000 240,634 35.52% 240,634
Silver Star
Developments
Ltd. and its
subsidiaries
Ltd.
accounted for under the equity
method
〃 〃 Tyan Computer Corp. 〃 〃 2,583,333 66,901 5.88% 66,901
- 80 -

December 31, 2003
Investor Type
Name of marketable
securities
Relationship with the issuer General ledger account
Number of
shares
Book value Percentage
Market value
(Note1)
〃 〃 Harbinger II (BVI)
Venture Capital Corp.
〃 〃 1,457,850 48,765 49.96% 48,765
〃 〃 Gapura Inc. None 〃 850,000 26,992 5.55% 26,992
〃 〃 Budworth Investments
Ltd.
〃 〃 4,424,000 150,319 13.83% 150,319
〃 〃 Global Strategic
〃 〃 1,000,000 33,978 1.26% 33,978
Investment Inc.
〃 〃 Pacific Metal
Developments Ltd.
〃 〃 5,100,000 161,500
(Note 5) 161,396
〃 〃 Panasas Inc. 〃 〃 1,391,354 45,384 1.63% 45,384
〃 〃 Synnex Corp SSDL’s investee company
accounted for under the equity
method
〃 11,697,024 4,502,023 45.54% 5,616,224
〃 GDR Synnex International
Corp.
Synnex’s chairman is SSDL’s
director
〃 853,706 157,655 - 160,954
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 2,500 thousand shares as collateral.
Note 3: The investor provided 1,398 thousand shares as collateral.
Note 4: The investor provided 5,813 thousand shares as collateral.
Note 5: Investing in non-cumulative, convertible preferred stock without right of voting.
(5) Marketable securities for which total buying or selling exceeded $100,000 or 20 percent of capital for the year ended December 31, 2003:
Investor
Tsu Fung
Investment
Corp.
Silver Star
Development
Ltd. and its
subsidiaries
Name of the
securities
So Fung
Investment Co.,
Ltd.
Star Well
Technology Ltd.
General
ledger
Counter The relationship
party with the Company
Cash
issuance of
capital
Tsu Fung’s
investee company
accounted for
stock under the equity
method
〃 Pacific
Royale
Ltd.
The Company’s
investee company
accounted for
under the equity
method.
account
Long-term
investment
Beginning balance Additions Disposals Ending balance
Number of
Number of
Number of Selling
Gain/Loss
from Number of
shares Amount shares Amount shares price Cost disposal shares Amount
26,000 $309,213 10,000 $100,000 - $ - $ - $ - 36,000 $444,211
(Note)
5,000,000 172,150 4,900,000 127,213 - - - - 9,900,000 295,609
Note: Including the investment gain or loss of the investee companies, investment revenues, cumulative translation adjustments or adjustments of capital reserve due to
change in equities in long-term investments.
(6) Real estate acquired exceeding $100,000 or 20 percent of the Company’s capital for the year ended December 31, 2003: None.
(7) Real estate disposed exceeding $100,000 or 20 percent of the Company’s capital for the year ended December 31, 2003: None.
- 81 -

(8) Purchases or sales transactions with related parties exceeding $100,000 or 20 percent of capital for the year ended December 31, 2003:
Transactions
The reason and situation of
having different transaction term
between related parties and
others Accounts & notes receivable (payable)
The company
Percentage of
buying/selling Name of Relationship with the
(purchase)
Percentage of
products related parties Company Purchase (Sales) Amount sales Credit Term Unit price Credit Term Balance account Note
Silver Star MITAC SSDL’s parent
Sales $17,451,606 73% Note 2 Note 3 Note 2 $1,113,368 45%
Developments International company
Ltd.
Corp.
〃 MITAC
International
Corp.
〃 Purchase 285,919 1% Note 1 Note 3 Note 1 (529,284) 6%
〃 MITAC
Precision
Technology
Co., Ltd.
Affiliated company Sales 252,985 - Note 2 Note 3 Note 2 7,422 -
〃 〃 〃 Purchase 4,257,449 19% Note 1 Note 3 Note 1 (1,159,112) 12%
〃 MITAC
Technology
Corp.
〃 Sales 5,542,416 23% Note 2 Note 3 Note 2 429,153 17%
〃 〃 〃 Purchase 192,004 1% Note 1 Note 3 Note 1 (190,436) 2%
Note 1:The 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 2: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 3:The selling price to overseas related parties is based on market value. The selling price to domestic related parties is based on common domestic price.
(9) Receivables from related parties totaling exceeding $100,000 or 20 percent of capital as of December 31, 2003:
Balance of receivables from related party Overdue receivable
Company Name
Silver Star
Developments Ltd.
Name of the
counter party
MITAC
International
Corp.
〃 MITAC
Technology Corp.
Relationship with
the counter party
The Company is
SSDL’s parent
company
Affiliated
company
Accounts
receivable
Other receivables Total
- 82 -
Turnover rate
(times)
Amount Collection method
Subsequent
received amount
Bad debt
allowance
provided
$1,113,368 $35,537 $1,148,905 26.15 $ - N/A $1,059,767 $ -
429,153 19,933 449,086 9.56 - 〃 - -

(10) Information on derivative transactions:
For year 2003:
Item
Silver Star Developments
Ltd.
Interest rate SWAP
For year 2002:
Item
Silver Star Developments
Ltd.
Buy of forward foreign
exchange
Buy of forward foreign
exchange
Buy of forward foreign
exchange
Interest rate SWAP
Notional Amount
(in thousands)
JPY 300,000
Notional Amount
(in thousands)
Fair Market Value
(in thousands)
(NT$ 808 )
Contract Terms
Trade date Strike Price Settlement Date
2002.03.27
Contract Terms
2.95%
- 83 -
2004.09.27
Fair Market Value
(in thousands) Trade date Strike Price Settlement Date
Hedged Assets
(in thousands)
Hedged Assets
(in thousands)
-
Hedged Liabilities (in
thousands)
JPY300,000
Gain/(Loss)Recognized
(NT$ 808)
Hedged Liabilities (in
thousands) Gain/(Loss)Recognized
US$ 50,200 (NT$ 5,910 ) 2002.10.28~2002.11.29 CAD1.5567~1.5876 2003.01.07~2003.02.04 - US$50,200 (NT$ 5,910)
US$ 2,600 NT$ 2,476
US$ 18,500
JPY 300,000
NT$ 2,670
(NT$ 1,670 )
2002.11.21 MXN10.2113~10.2453 2003.01.06~2003.01.21 - US$2,600 NT$ 2,476
2002.11.08~2002.11.21
2002.03.27
GBP1.5632~1.5854
2.95%
2003.01.10~2003.02.25
2004.09.27
-
-
US$18,500
JPY300,000
a. Credit risk: There is no significant credit risk with respect to the above transactions because the counter party banks are of good financial standing.
b. Market risk: The main purpose of the transaction is to hedge exchange loss. Any change in the value of the instrument will be offset by a corresponding change in
the underlying commitment. Accordingly, no market risk is expected.
c. Future cash flow: the Company will receive (pay) cash or sale (purchase) contracts on settlement dates.
NT$ 2,670
( NT$ 1,670 )

C. Relevant Information Regarding Investment In Mainland China:
a) Basic information, change in investment balance and profits/losses recognized from the direct investment:
Amount of remittance
Name of investee
in Mainland China
MITAC Computer
(Shunde) Corp.
MITAC Computers
System (Shunde)
Ltd.
MITAC Research
(Shanghai) Ltd.
Shenyang Heda
Computer Co., Ltd.
MITAC Computer
(Shang Hai) Co.,
Ltd.
Catac Electronic
(Zhong-Shan) Co.,
Ltd.
MITAC Computer
(Kunshan) Co.,
Ltd.
MITAC Service
(Shang Hai) Co.,
Ltd.
MITAC Computer
(Shen Zhen) Co.,
Ltd.
MiTAC
Technology
(KunShan) Co.,
Ltd.
Main activities of
investee
Manufacturing of
computer cases and
monitors, etc.
Manufacturing of
mainborad, desktop
computers, interface
cards, etc.
Manufacturing and
selling of hardware,
software and related
service.
Design and
manufacturing of
computers and related
accessories
Research,
manufacturing and
sale of PC server,
mainboard, and
provide warranty
service.
Sale and
manufacturing of
PCB.
Sale and
manufacturing of
computer accessories,
hardware, software
and related service.
Manufacturing,
assembling computers
and provide test,
maintenance and
service for related
products.
Trading and
warehousing service
of computer and
related accessories.
Sale and
manufacturing of
computer accessories,
hardware, software
and related service.
out in 2003
Ending balance of
(Note)
remittance from Shares held by Profit/loss
Method of Beginning balance of Remittance Remittance Taiwan on the Company recognized in
Ending balance of book value
Ending balance of
Capital investment remittance in 2003 out in December 31, 2003 (Direct indirect) 2003
on December 31, 2003
profit remittance into
Taiwan
$1,408,235 Invest in
$1,536,341 $175,000 $ - $1,536,341 100.00% $55,763 $1,729,195 $ -
Mainland
China through
investing
company in
third area
345,862 〃 161,188 - - 161,188 49.37% - 173,288 -
34,435 〃 29,155 - - 29,155 100.00% 621 19,049 -
13,120 〃 4,260 - - 4,260 34.21% - - -
193,290 〃 103,632 - - 103,632 100.00% (15,792) (3,985) -
678,739 〃 240,901 - - 240,901 35.52% 28,689 235,959 -
345,804 〃 170,568 127,213 - 297,781 100.00% (56,628) 197,362 -
33,770 〃 7,000 27,180 - 34,180 100.00% 33 32,128 -
13,548 〃 13,548 - - 13,548 - (9,412) - -
33,936 〃 - 34,695 - 34,695 100.00% 1,808 35,736 -
Note: Profit/Loss recognized based on the unaudited financial statements, except MITAC Computer (Shunde) Corp., MITAC Computers System (Shunde) Ltd., MITAC
Computer (Shang Hai) Co., Ltd., Catac Electronic (Zhong-Shan) Co., Ltd. and MITAC Computer (Kunshan) CO., Ltd.
Ending balance of investment from Taiwan on Approved investment amount by Ministry of The ceiling amount of the Company for investment in
December 31, 2003
Economic Affairs R.O.C.
Mainland China
$2,455,681 $2,478,101 $4,894,326
- 84 -

) Major transactions with the subsidiaries in third region and Mainland China:
1) Purchases from
Purchases from third region investee:
2003 2002
MITAC Pacific (H.K.) Ltd. $ - $ 3,620,006
Third region subsidiaries purchases from Mainland China subsidiaries:
2003 2002
MITAC Computer (Shunde) Corp. $ - $ 3,269,917
MITAC Computer (Shang Hai) Co., Ltd. - 176,532
$ - $ 3,446,449
The Company’s purchases from Mainland China subsidiaries:
2003 2002
MITAC Computer (Shunde) Corp. $ 22,711,375 $ 15,043,478
MITAC Computer (KunShan) Co., Ltd. 4,007,714 -
Others 537 1,675,003
$ 26,719,626 $ 16,718,481
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 price that the Company purchase from third region subsidiaries are negotiated
based on the product cost plus handling charges and other necessary costs. The
payment period is 150 days after offsetting certain receivable and payables according
to 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, 2003, the unrealized inter-company gain due to up
stream sales is $0.
2) Sales to
The Company sales to third region investee:
2003 2002
MITAC Pacific (H.K.) Ltd. $ - $ 3,078,385
Third region subsidiaries sales to Mainland China subsidiaries:
2003 2002
MITAC Computer (Shunde) Corp. $ - $ 3,033,610
MITAC Computer (Shang Hai) Co., Ltd. - 163,774
$ - $ 3,197,384
The Company sales to Mainland China subsidiaries:
2003 2002
MITAC Computer (Shunde) Corp. $ 9,706,148 $ 7,692,751
MITAC Computer (Kunshan) Co., Ltd. 2,332,741 1,384,649
Others 484,568 297,993
$ 12,523,457 $ 9,375,393
- 85 -

The prices that the Company and third region subsidiaries sales to Mainland China
subsidiaries are negotiated based on the product cost plus other necessary cost . The
collection period is 150 days after offsetting certain receivables and payables
according to the payment terms.
The prices that third region subsidiaries sales to Mainland China subsidiaries are
negotiated based on the product cost plus other necessary cost . The collection period
is 150 days after offsetting certain receivable and payables according to 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, 2003 and 2002, the unrealized inter-company gain due to down
stream sales is $0 and $45,488, respectively.
3) Property transactions:
In 2003 and 2002, the Company sold equipments to third region subsidiaries
amounted to $1,902 and $156,184, respectively. The total disposal gain was
$305 and $5,873, respectively.
4) Accounts receivable:
The Company from third region investees:
2003 2002
MITAC Pacific (H.K.) Ltd. $ - $ 55,380
Third region subsidiaries from Mainland China subsidiaries:
2003 2002
MITAC Computer (Shunde) Corp. $ - $ -
MITAC Computer (Shang Hai) Co., Ltd. - -
$ - $ -
The Company from Mainland China subsidiaries:
2003 2002
MITAC Computer (Shunde) Corp. $ - $ 401,804
MITAC Computer (Kunshan) Co., Ltd. 430,617 491,793
MITAC Computer (Shang Hai) Co., Ltd. - -
MITAC Computers System (Shunde) Ltd. 75,548 -
$ 506,165 $ 893,597
5) Accounts payable:
The Company from Mainland China subsidiaries:
2003 2002
MITAC Computer (Shunde) Corp. $ 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, 2003 and 2002, the Company guaranteed and endorsed the
bank loans of MITAC Computer (Shunde) Corp. through Silver Star
Developments Ltd. amounted to $575,700 and $594,600, respectively.
iii) As of December 31, 2003 and 2002, the Company guaranteed and endorsed the
bank loans of MITAC Computer (Kunshan) Co., Ltd. through Silver Star
Developments Ltd. amounted to $272,625 and $100,625, respectively.
- 86 -

8) Other significant transactions which effect current income or financial conditions:
i) In 2003 and 2002, the Company paid research expense to MITAC Research
(Shanghai) Ltd. through System Glory International Ltd. amounted to $111,068
and $103,184, respectively.
ii) In 2003 and 2002, the Company paid warranty expense to MITAC Computer
(Shang Hai) Co., Ltd. amounted to $65,235 and $58,220, 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:
2003
Adjustments and
North America Asia
Other
Taiwan Eliminations Consolidation
Revenue from third
party
Revenue from parent
and consolidated
$ 7,590 $ 5,172,260 $ 1,370,619 $ 39,407,078 $ - $ 45,957,547
subsidiaries
217,885 34,262,821 96,145 285,939 ( 34,862,790 )
-
Total $ 225,475 $ 39,435,081 $ 1,466,764 $ 39,693,017 ( $ 34,862,790 ) $ 45,957,547
Income of area $ 7,800 $ 16,532,674 ( $ 89,498 ) $ 561,218 ( $ 16,406,227 ) $ 605,967
Interest expense ( 298,465 )
Investment income
Income before income
tax and minority
754,099
interest
$ 1,061,601
Identifiable assets $ 139,876 $ 18,597,304 $ 706,466 $ 21,398,531 ( $ 7,457,260 ) $ 33,384,917
Long-term investments 7,676,428
Total assets $ 41,061,345
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:
A. Revenue from parent and consolidated subsidiaries:$34,862,790.
B. Income from parent and consolidated subsidiaries:$16,406,229, which is equal to
the revenues from the parent and consolidated subsidiaries $34,862,790 minus the
related costs and expenses $18,456,561.
2002
Adjustments and
North America Asia
Other
Taiwan Eliminations Consolidation
Revenue from third
party
Revenue from parent
and consolidated
$ 63,778 $ 8,354,676 $ 2,563,372 $ 25,315,870 $ - $ 36,297,696
subsidiaries
240,312 17,485,673 52,008 445,859 ( 18,223,852 )
-
Total $ 304,090 $ 25,840,349 $ 2,615,380 $ 25,761,729 ( $ 18,223,852 ) $ 36,297,696
Income of area ( $ 17,621 ) ( $ 421,967 ) ( $ 62,480 ) $ 604,623 $ 10,486 $ 113,041
Interest expense ( 328,712 )
Investment income
Income before income
tax and minority
1,081,684
interest
$ 866,013
Identifiable assets $ 216,141 $ 15,471,193 $ 1,442,407 $ 17,689,569 ( $ 6,093,394 ) $ 28,725,916
Long-term investments 6,970,414
Total assets $ 35,696,330
- 87 -

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:
A. Revenue from parent and consolidated subsidiaries:$18,223,852.
B. Income from parent and consolidated subsidiaries:$10,486, which is equal to the
revenues from the parent and consolidated subsidiaries $18,223,852 minus the
related costs and expenses $18,234,338.
3) Export sales
2003 2002
North America $ 20,821,921 $ 8,634,083
Europe 8,460,001 6,376,631
Asia & Australia 9,067,919 8,769,384
$ 38,349,841 $ 23,780,098
4) Major customer
In 2003 and 2002, list of customers accounted for more than 10% of total sales.
For the period ended December 31, 2003
Customer name
Percentage of
Sales amount
- 88 -
total sales
Sales department
E customer $ 12,995,701 29% Total company
A customer 5,743,416 13% Total company
C customer 5,542,316 12% Total company
B customer 5,526,924 12% Total company
Customer name
For the period ended December 31, 2002
Percentage of
Sales amount total sales Sales department
B customer $ 5,468,085 15% Total company
C customer 4,518,929 13% Total company

F. Financial Condition and Business
Results—Analysis and Risk Management
1. Balance Sheet
Year
Units:Thousands of NT Dollars
Differential
Item 2002 2003 Amount %
Current Assets 11,866,398 16,018,538 4,152,140 34.99
Fixed Assets 2,788,135 2,667,533 (120,602) -4.33
Other Assets 1,223,455 1,210,913 (12,542) -1.03
Total Assets 27,173,407 31,881,751 4,708,344 17.33
Current Liabilities 7,760,571 11,313,864 3,553,293 45.79
Long-Term Debt 2,500,000 3,000,000 500,000 20.00
Total Liabilities 10,753,676 14,910,120 4,156,444 38.65
Capital 10,415,686 10,563,812 148,126 1.42
Capital reserve 3,110,806 3,086,493 (24,313) -0.78
Retained Earnings 2,374,734 3,136,089 761,355 32.06
Total Stockholder Equity 16,419,731 16,971,631 551,900 3.36
1.1 Explanation of discrepancies:
1.1.1 Current Assets
Due to sales increases in Q4 2003 and projected sales increases in Q1 2004,
increases in end-of-quarter accounts receivable and value of inventory resulted.
Additionally, short-term investments were increased in order to provide financial
flexibility.
1.1.2 Total debt:
1.1.2.1 Current debt:
Sales performance for 2003 was excellent, leading to increases in
associated costs and expenditures. As a result, accounts receivable and
accounts payable both increased. Additionally, to meet the need for
operational and financial flexibility, short-term loans were increased.
1.1.2.2 Long-term debt:
During this period, long-term debt was taken on to pay convertible
corporate bonds, leading to an increase in debt at the end of the period.
1.1.3 Retained earnings
Due to sales increases during this period, leading to a rise in net profits, retained
earnings also increased.
1.2 Current debt taken on the most recent two calendar years and long-term debt coming due
within one year—main reasons for changes in their level, and planned response
Due to excellent sales performance in 2003, associated costs and expenditures
increased, causing increases in accounts payable and bills payable. In addition, to meet the
needs of operational and financial flexibility, the level of short-term loans was increased.
The Company is pursuing discussions with other financial institutions on raising funds
through issues of corporate debt, and no impact on the Company's financial condition is
foreseen.
- 89 -

2. Analysis of Business Results
Year
Item 2002 2003
- 90 -
Units:Thousands of NT Dollars
Amount of
Increase
(Decrease)
Percentage
Change
%
Operating Revenue 25,598,978 40,321,138 14,722,160 57.51
Less: Sales Return and Allowance (421,416) (745,184) (323,768) 76.83
Net Operating Revenue 25,177,562 39,575,954 14,398,392 57.19
Operating Costs (23,121,839) (36,596,609) (13,474,770) 58.28
Gross Profit 2,055,723 2,979,345 923,622 44.93
Operating Expenses (1,777,255) (2,424,045) (646,790) 36.39
Operating Income 278,468 555,300 276,832 99.41
Non-Operating Income and Gains 1,166,688 1,006,878 (159,810) -13.70
Non-Operating Expenses and Losses (567,572) (491,528) 76,044 -13.40
Net Income Before Tax 877,584 1,070,650 193,066 22.00
Income Tax (12,680) (19,177) (6,497) 51.24
Net Income 864,904 1,051,473 186,569 21.57
2.1 Analysis of proportional increases or decreases
2.1.1 Operating income: During this period, increases in demand for IT products and
aggressive development of new products, as well as growth in the volume of orders
compared to 2002, led to an increase in sales income.
2.1.2 Returned goods and depreciation: In line with increases in operating revenues,
adjustments for returned goods and depreciation correspondingly increased.
2.1.3 Cost of sales: In line with increased revenues compared to the previous period, cost of
sales in the current period increased.
2.1.4 Gross profits: Substantial growth in the value of sales compared to 2002 resulted in
increases in gross profits.
2.1.5 Operating expenses: In line with increases in sales volume, associated expenses such
as for after-sales service increased correspondingly.
2.1.6 Operating profits: A rise in gross profits led to increases in operating profits for this
period.
2.1.7 Tax expenses: Due to increases in pre-tax net profits, tax expenses for the current
period increased.
2.2 Reasons for changes in the Company's main businesses: The Company did not alter its main
lines of business.
2.3 Projected sales volume for the next calendar year and their basis; Main factors influencing
whether sales continue to expand or experience a decline:
Based on the executive team's plans for 2004 and assessments of future business
conditions, the Company has set a sales target of 10 million or more motherboards, and
expects substantial growth in sales of servers, mobile phones, and wireless communications
products.

3. Cash Flow Analysis
Initial Cash
Balance
Net Cash Flow
from Operations
Cash
Outflows
- 91 -
Cash Surplus
(Shortage) Investment
Units: Thousands of NT$
Measures for Remedying Cash
Shortage
Plans
Financial
Management Plans
329,740 137,463 (4,221,620) (3,754,417) 357,107 4,054,933
3.1 Analysis of changes in cash flow for this year:
3.1.1 Operating activities: As revenues increased and accounts receivable were well-managed,
cash inflows from operating activities increased.
3.1.2 Investment activities: The result of the utilization of short-term operating funds for
increased levels of short-term investments.
3.1.3 Financing activities: Buybacks of convertible corporate debt and issues of cash
dividends and employee bonuses.
3.2 Analysis of liquidity of and remedial measures for cash shortages:
3.2.1 Investment plans: Sales of a portion of long-term equity investments.
3.2.2 Financial management plans: Take out long- and short-term bank loans.
3.3 Analysis Of Cash Flow For The Next Year
Initial Cash
Balance
Projected net
cash flow from
operations
Projected net
cash outflows
Projected cash
surplus(Shortage) Investment
Plans
Units:Thousands of NT Dollars
Measures for Remedying Cash
Shortage
Financial
Management
Plans
657,623 404,738 (5,918,010) (4,855,649) 2,467,716 3,387,933
3.3.1 Analysis of changes in cash flow for this year:
3.3.1.1 Operating activities: Revenue are expected to increase 2004 while operational
turnaround times over the next calendar year are projected to be similar to
those for 2003. Therefore, for the next calendar year, net cash inflow is
expected from operating activities.
3.3.1.2 Investment activities: Projected disposal of short-term investments and a
portion of long-term investments.
3.3.1.3 Financing activities: Projected increases in long-term loans undertaken,
retirement of a portion of short-term loans, and distribution of cash dividends.
3.3.2 Analysis of liquidity of and remedial measures for cash shortages:
3.3.2.1 Investment plans: Projected disposal of short-term investments and a portion of
long-term investments.
3.3.2.2 Financial management plans: Projected issue of corporate debt.
4. Influence on Finances of Major Capital Expenditures in the Most Recent Year:
None
5. Investment Policy in the Most Recent Year, Major Reasons for Gains or Losses,
Plans for Improvement, and Investment Plans for the Next Year
Not applicable. In the current year, there has been no investment exceeding 5% of total
paid-in capital.

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 Influence Of Interest Rates, Exchange Rate Fluctuations, And Inflation On The
Company's Profits Or Losses In 2003
Item
Amount for 2003
(Thousands of NT Dollars)
As Percentage of Operating
Revenues
(%)
Interest Expenses 259,551 0.66
Foreign Exchange Gains 59,759 0.15
There was no significant inflation in 2003.
6.1.2 Future Responses
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 fluctations,
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.
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:
6.2.1 In 2003, the Company did not pursue high-risk, highly leveraged investments, nor
provide loans to other parties. In compliance with regulations, the Company has
already established policies delineated in "Procedure for Lending Money to Other
Parties".
6.2.2 Endorsements and guarantees provided by the Company in 2003 were in conformance
with polices delineated in "Procedures of Guaranty for Other Persons". The upper
limit for endorsements and guaranties by the Company is NT$16,443,699. As of
December 31, 2003, the Company's balance of endorsements or guaranties amounted
to NT$4,022,306.
6.2.3 Derivatives transactions during 2003 were conducted according to policies delineated
in "Procedure of Trading in the Derivatives Products".
6.3 R&D Projects in the Last Year, Current Status of R&D Projects in Progress, Additional
R&D Expenditures Required, Projected Time to Mass Production, Key Factors Affecting
Success of R&D Efforts
6.3.1 Desktop PCs
Future products slated for development will integrate digital audiovisual
applications and the Internet—for example, high-resolution digital televisions,
personal digital camcorders, optical storage devices, home servers, wireless
networking products. It is projected that these products will enter mass production in
the third quarter of 2004. The key to the success of this R&D effort will be whether
relevant industry standards are unified.
- 92 -

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 2002, 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 2003. The key to
the success of these R&D efforts is lowering material costs.
Coordinating with the efforts of major vendors of high-performance chips for
workstations, the company has initiated development and manufacture of high-end
low-cost workstations. Beginning in 2003, it has already begun mass producing these
workstation models, with full ramp-up expected in the third quarter of 2003. The key
to the success of these R&D efforts will be broad availability and maturity of the
chips for low-cost workstations.
6.3.2 Server Product Series:
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 main factor
influencing the success of this R&D effort is the capabilities of the R&D team. In
response, R&D staffers in Shanghai and the USA have joined product development
work.
6.3.3 Wireless Communications Products:
The wireless communications products developed during this year include:
handheld computers and smart phones. Within these two main categories, handheld
computers include several models of portable GPS devices and personal
entertainment centers slated for development and expected to be shipped this year. As
for smart phones, several new products will be introduced and shipped this year. As a
number of new products are to be developed, a total of 100 or more engineers will be
assigned to completion of design work.
Additionally, as handheld computer functionality is tending toward mass market
consumer applications, software development staff in Shanghai has been directed to
develop easy-to-use operating interfaces with the aim of increasing product
competitiveness. Development of wireless modules for smart phones has already been
completed, greatly reducing risks associated with product development for these
devices.
6.4 Major Changes in Governmental Policy and Laws—Effects on the Company's Financial
Status and Business, Strategic Responses
Currently under planning in accordance with the Company's governance principles.
The Company will conform to the law with a spirit of stregthening the systematization and
transparency of its operations as the guiding principle.
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 Products:
Due to rapid price declines and intense competition in computer hardware
products, profits are being squeezed despite growth in unit sales. The appropriate
response is develop lower-cost products and speed up their development and
ramp-up to mass production.
- 93 -

6.5.2 Server Product Series:
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 new development projects
in order to achieve the same level of revenues and profits. The appearance of
Ultra-dense serversproduct should increase average per-unit prices and production
value.
6.5.3 Wireless Communications Products:
The product technology development trend embedded systems devices that play
an important role in handheld products is toward lower power consumption and
greater functional integration in a single chip. The trend for wirless 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. This has enabled MiTAC International to develop a new generation of
PDA products and handheld smart client products. Receiving a favorable response
from the broader market, MiTAC's efforts in this area have contributed to sales and
profits.
6.6 Corporate Image Changes in the Most Recent Year—Their Influence on the Company's
Crisis Management Capabilities, and the Company's Response:None.
7. Other Important Events:None.
- 94 -

Item Status
1. The Company's equity structure
and shareholder interests
1.1 The Company's approach for
handling shareholder
recommendations or disputes
1.2 The Company's ability to
ascertain the major
shareholders with actual
controlof the company and to
access a list of the parties in
actual control of major
shareholders.
1.3 The approach that the
Company has established with
its affiliated companies
regarding risk management
mechanisms and firewall
policies .
2. Composition of the board of
directors, and responsibilities of
its members
2.1 Establishment of an
independent board.
2.2 Regular assessment of the
independence of financial
auditor.
G. Corporate Governance
1.1 The Company uses a spokesperson system to handle
shareholder recommendations, questions, and
disputes as appropriate.
1.2 The Company can ascertain the major shareholders
with actual control of the company and access a list of
the parties in actual control of major shareholders. In
accordance with securities trade law, each month the
number of shares held by the directors, supervisors,
and major shareholders is reported.
1.3 Relations with affiliated companies are based on
principles of fairness and reasonableness. Procedures
for handling financial and sales activities that involve
affiliates is described in written regulations.
2.1 The Company does not maintain an independent
board. Its directors act in accordance with the law,
company charter, and shareholder meeting resolutions
in fulfilling their responsibilities.
2.2 Evaluated yearly.
- 95 -
Differences from governance principles practiced
by publicly-traded companies, reasons for any
such differences
No substantive differences.。
2.1 The Company has not established an
independent board.
2.2 If there are necessary legal or practical
considerations, policies described in
"Corporate governance practices for publicly
listed companies" and relevant legislation will
be implemented.

Item Status
3. Designation of supervisors and
their responsibilities.
3.1 Designation of independent
supervisors
3.2 Communication between
supervisors and the company's
employees and shareholders
4. Establishment of communication
channels for parties whose
interests are affected
5. Information transparency
5.1 Set up of a website showing
information about the
Company's finances and
corporate governance policies.
5.2 The Company's use of other
means (for example, setup of
an English-language website,
designation of a specialist to
collect and disseminate
company information,
implement a spokesperson
system, publication of
procedures for institutional
investor meeting on company
website)
3.1 The Company has not designed independent
supervisors. Its supervisors act in accordance with the
law, company charter, and shareholder meeting
resolutions in fulfilling their responsibilities.
3.2 Communication channels are open.
Parties whose interests are affected by the actions of the
Company can contact the Company at any time.
5.1 The Company maintains a website at
http://www.mitac.com, and a section for investors
publishes financial and sales data.
5.2 Information about the Company is published on the
Market Observation Post System
- 96 -
Differences from governance principles practiced
by publicly-traded companies, reasons for any
such differences
3.1 The company has not designated independent
supervisors.
3.2 If there are necessary legal or practical
considerations, policies described in
"Corporate governance practices for publicly
listed companies" and relevant legislation will
be implemented.
No substantive differences.
No substantive differences.

Item Status
6. The Company's establishment of
an auditing committee
The Company does not currently maintain an auditing
committee
- 97 -
Differences from governance principles practiced
by publicly-traded companies, reasons for any
such differences
If there are necessary legal or practical
considerations, policies described in "Corporate
governance practices for publicly listed
companies" and relevant legislation will be
implemented. 。
7.If the Company has set corporate governance regulations in accordance with "Corporate governance practices for publicly listed companies",
please describe their implementation and any discrepancy with the regulations set.
The Company has not formally established corporate governance regulations.
8. Other important information that can aid in understanding the Company's corporate governance practices (such as study by directors and
supervisors, director attendance and supervisor status vis a vis the board, use of quantitiative standards for managing risk, implemenation of
consumer protection or customer policy measures, handling of potential conflicts of interest among directors, liability insurance purchased by
the Company for its directors and supervisors, fulfillment of social responsibilities)
8.1 The Company has not formally established regulations covering corporate governance practices. Its directors and supervisors conform to
"Corporate governance practices for publicly listed companies" in performing their duties.
8.2 The Company's directors and supervisors fulfill their responsibilities acting in good faith and in accordance with the principles of sound
management.

1. Information on Affiliates
1.1 Consolidated Operational Statement for Affiliates
1.1.1 Organization Chart of Affiliates
H. Special Events of Record
MiTAC International Corporation
100% 42.77% 100%
Tsu Fong
Investment Corp.
100%
So Fong
Investment Co.,
Ltd.
100.00%
Mio Technology
Corporation
Master China Ltd.
MiTAC Precision
Technology
(KunShan) Ltd.
MiTAC Precision .
Technology Co., Ltd.
100%
Hot Link
Technology Ltd.
100% 100% 100%
Pacific Metal
Developments Ltd.
100% 100%
MiTAC Precision
Technology (ShunDe)
Ltd.
- 98 -
ACE Continental
IndustriesLtd.
Silver Star
Developments
Ltd.
See next page

MiTAC
U.S.A.
Inc.
MiTAC International Corporation
- 99 -
100%
Silver Star Developments Ltd.
100% 100% 100% 100% 100% 100% 100% 100% 100%
MiTAC
Japan
Corp.
MiTAC
Benelux N.V.
Dynamic Star
Investments
Ltd.
MiTAC
Technology
(Kunshan) Co.
Ltd.
MS Hardware
Service GmbH
MiTAC U.K.
Ltd.
EC Land Ltd.
Pacific
China Corp.
System Glory
International Ltd.
100% 100% 100% 100% 100% 100%
Start Well
Technology
Ltd.
MiTAC Service
(Shanghai)
Ltd.
MiTAC Star
Service Ltd.
Software
Insights Ltd.
100% 100% 100% 100%
MiTAC
Computer
(KunShan)
Co., Ltd.
MiTAC
Computer
(ShunDe)
Ltd.
MiTAC
Research
Shanghai
MiTAC
Computers
(Shanghai) Ltd.
MiTAC Pacific
(H.K.) Ltd.

1.1.2 Affiliated Companies—Basic Data
Units: Thousands of NT Dollars
Company Name Date Established Address Paid-In Capital Main Business or Production Items
Tsu Fong Investment
Corp.
MiTAC Precision
Technology Corp.
Silver Star Developments
Ltd.
Feb. 16, 1998 10/F, 77 Minsheng East Road, Section 3, Taipei NT$165,000 General investment
Jun. 17, 2000
Jun. 05, 1990
202 Wenhua 2nd Road, Gueishan Township, Taoyuan
County
P.O. Box 71, Craigmuir Chambers, Road Town,
Tortola, British Virgin Islands
- 100 -
Manufacture, wholesale distribution, and
NT$783,099 retail sales of precision molds;
manufacture of electronic components
US$127,875 General investment
MiTAC U.S.A. Inc. Mar. 15, 1993 47988 Fremont Blvd, Fremont, CA 94538 U.S.A. US$1,332
Computer peripherals, software and
hardware, and associated products
MiTAC Japan Corp. Apr. 30, 1983 1-2-8 Showajima, Ohta-Ku, Tokyo, Japan 143-0004 YEN 249,000
Computer peripherals, software and
hardware, and associated products
MS Hardware Service
GmbH
Sept. 23, 1993 Muendelheimer Weg 51, 40472 Dusseldorf, Germany EUR 31
Computer peripherals, software and
hardware, and associated products
MiTAC Benelux N.V. Sept. 13, 1993 Brusselsesteenweg 307B, 1785 Brussegem, Belgium EUR 1,618
Computer peripherals, software and
hardware, and associated products
MiTAC (UK) Ltd. Dec. 29, 2000
Synnex House, Nedge Hill, Telford, Shropshire TF3
3AH, U.K.
£500
Computer peripherals, software and
hardware, and associated products
ECLand Ltd. Dec. 29, 2000
Synnex House, Nedge Hill, Telford, Shropshire TF3
3AH, U.K.
£0
Computer peripherals, software and
hardware, and associated products
MiTAC Pacific (H.K.) Ltd. Jun. 13, 1991 34/F The Lee Gardens, 33 Hysan Avenue, Hong Kong
Computer peripherals, software and
US$10
hardware, and associated products
System Glory International
Oct. 25, 1995
Ltd.
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands
US$0 General investment
Pacific China Corp. Dec. 27, 1996
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands
US$0 General investment
MiTAC Star Service Ltd. Jan. 12, 2001
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands
US$50,500 General investment
Software Insights Ltd. Dec. 26, 2000
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands
US$900 General investment
Produces computers and peripheral
MiTAC Computer
(KunShan) Co., Ltd.
Nov. 01, 2000
Kunshan Export Processing Zone, Jiangsu Province,
China
RMB 81,944
equipment, hardware and software and
related product; sales of own
manufactured product
Manufactures and assembles computers,
MiTAC Service
(Shanghai)Ltd.
Oct. 11, 2001
2 Fl, No. 129 Fute Rd. (N.), Waigaoqiao Free Trade
Zone, Shanghai, China
computer components; warehousing,
RMB8,277 distribution, testing, repairs, displays of
same; technical support and after-sales
service for related products
MiTAC Computer
(ShunDe) Ltd.
Jan. 18, 1993
No. 1 ShunDa Rd., Lunjiao Town, Shunde City,
Guangdong Province, China
RMB379,909
Manufactures computer mainboards,
interface cards, monitors, power

Company Name Date Established Address Paid-In Capital Main Business or Production Items
supplies, keyboards, related pressed
metal parts, plastic components;
motherboard repair services
MiTAC Research
(ShangHai) Ltd.
Mar. 10, 2000
Rm. 314, Technology Building, Shanghai University
Technology Park, No. 149, Yenchang Rd. (W.),
Shanghai, China
R&D and manufacture of computer
RMB8,279
software; sales of own manufactured
product and provision of related
technical support service
R&D, production of high-end PC
servers, notebook computers,
MiTAC Computers
(ShangHai) Ltd.
Jul. 12, 2000 4560 Cao An Rd., Shanghai 201804, China RMB51,000
motherboards, add-on cards and other
hardware products; software R&D; sales
of own manufactured products and
provision of after-sales service.
Computer cases and their components,
MiTAC Precision
Technology (ShunDe) Ltd.
Dec. 12, 1995
No. 1 Shunde Rd., Lunjiao Town, Shunde City,
Guangdong Province, China
precision injection molds, mold
RMB82,861 components, stamping part, mold
processing, design repair services, steel
sheet shearing
So Fong Investment Co.,
Ltd.
Apr. 8, 1999
10/F, 77 Minsheng East Road, Section 3, Taipei,
Taiwan
NT$360,000 General investment
Mio Technology Corp. Jan. 17, 2000
Suite 1, 11/F, 9 Chunghwa Rd., Sec. 3, Hsinchu City,
Taiwan
Data processing services, wholesales and
NT$5,000 retail sales of electronic communications
software
Hot Link Technology Ltd. May 10, 2000
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands
US$5,350 General investment
Pacific Metal
Developments Ltd.
Mar. 31, 2000
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands
US$10,000 General investment
Start Well Technology
Ltd.
Apr. 20, 2000
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands
US$9,900 General investment
Master China Ltd. Nov. 28, 2001
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands
US$0 General investment
Dynamic Star Investments
May 27,2003
Ltd.
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands
US$0 General investment
ACE Continental
Industries Ltd.
Nov. 28, 2001
P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands
US$0 General investment
MiTAC Precision
Technology (Kunshan)
Co., Ltd.
Jan. 28, 2002
Kunshan Export Processing Zone, Jiangsu Province,
China
Produces computer cases and their
RMB3,725
components, precision injection molds,
mold components, mold processing and
design
Testing, repair, exhibition of computer
MiTAC Technology
(Kunshan) Co. Ltd.
May 27,2003
Kunshan Export Processing Zone, Jiangsu Province,
China
RMB8,277
components and related products;
technical support and after-sales service
for related products
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1.1.3 Business and Inter-Relationships of Affiliates
Type of Business Named of Affiliated Company Relationship with Business of Affliliated Company
Manufacture and MiTAC Computer (KunShan) Co., Ltd. Production and sales of MiTAC International products, provision of after-sales service
sales of computer MiTAC Computer (ShunDe) Ltd. Production and sales of MiTAC International products, provision of after-sales service
products MiTAC Computer (Shanghai) Ltd. Production and sales of MiTAC International products, provision of after-sales service
Production and sales of MiTAC Precision Technology products, provision of after-sales
MiTAC Precision Technology (ShunDe) Ltd.
service
MiTAC Precision Technology (Kunshan) Production and sales of MiTAC Precision Technology products, provision of after-sales
Co., Ltd.
service
Holding Company
Silver Star Developments Ltd.
System Glory Int’l Ltd.
Pacific China Corp.
Software Insights Ltd.
Start Well Technology Ltd.
MiTAC Star Service Ltd.
Dynamic Star Investments Ltd.
Hot Link Technology Ltd.
Pacific Metal Developments Ltd.
Master China Ltd.
Investment in overseas subsidiaries, for production and sales of MiTAC International
products, provision of after-sales service
Investment in overseas subsidiaries, for production and sales of MiTAC International
products, provision of after-sales service
Investment in overseas subsidiaries, for production and sales of MiTAC International
products, provision of after-sales service
Investment in overseas subsidiaries, for production and sales of MiTAC International
products, provision of after-sales service
Investment in overseas subsidiaries, for production and sales of MiTAC International
products, provision of after-sales service
Investment in overseas subsidiaries, for production and sales of MiTAC International
products, provision of after-sales service
Investment in overseas subsidiaries, for production and sales of MiTAC International
products, provision of after-sales service
Investment in overseas subsidiaries, for production and sales of MiTAC Precision
Technology products, provision of after-sales service
Investment in MiTAC Precision Technology (ShunDe) Ltd., for production and sales of
MiTAC products, provision of after-sales service
Investment in overseas subsidiaries, for production and sales of MiTAC Precision
Technology products, provision of after-sales service
- 102 -

ACE Continental Industries Ltd.
Investment in overseas subsidiaries, for production and sales of MiTAC Precision
Technology products, provision of after-sales service
Investment Tsu Fong Investment Corp. General investment
Companies So Fong Investment Co., Ltd. General investment
Mold
Manufacturing
MiTAC Precision Technology Corp. Manufacture, wholesale distribution, retail sales of precision molds
Technical Services
MiTAC Research (ShangHai) Ltd.
Computer software R&D and production, sales of own products, provision of associated
technology query services
Trading MS Hardware Service GmbH Sales of MiTAC International products, provision of after-sales service
MiTAC Technology (Kunshan) co.,Ltd Sales of MiTAC International products, provision of after-sales service
MiTAC Technology (ShangHai) Co.,
Sales of MiTAC International products, provision of after-sales service
Ltd.
ECLand Ltd. Sales of MiTAC International products
MiTAC Pacific (H.K.) Ltd. Sales of MiTAC International products
Mio Technology Corp. Sales of MiTAC International products, provision of after-sales service
MiTAC U.S.A. Inc. Sales of MiTAC International products, provision of after-sales service
MiTAC Japan Corp. Sales of MiTAC products, provision of after-sales service
MiTAC Benelux N.V. Sales of MiTAC products, provision of after-sales service
MiTAC (UK) Ltd. Sales of MiTAC products, provision of after-sales service
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1.1.4 Directors, Supervisors, General Managers of Affiliated Companies
Units: Thousands of NT Dollars, shares, %
Company Name Title Name or Representative
Holdings
Shares Stake
Chairman MiTAC International Corp. representative Francis Tsai 16,500,000 100%
Tsu Fong Investment Corp.
Director
Director
MiTAC International Corp. representative Matthew
Miau
MiTAC International Corp. representative C.J.Lin
16,500,000
16,500,000
100%
100%
Supervisor MiTAC International Corp. representative C.S. Chen 16,500,000 100%
General Manager Francis Tsai 0 0%
Chairman MiTAC International Corp. representative Francis Tsai 33,491,150 42.77%
Director MiTAC International Corp. representative Billy Ho 33,491,150 42.77%
Director MiTAC International Corp. representative J.H.Chen 33,491,150 42.77%
MiTAC Precision Technology Corp.
Director
Supervisor
Harbinger Management Consultants Corp.
representative T.C. Chou
MiTAC Technology Corp.
representative C.S. Chen
165,000
33,491,150
0.21%
42.77%
Supervisor
MiTAC Technology Corp. representative James
Hwang
13,187,017 16.84%
General Manager Francis Tsai 379,500 0.48%
Director Matthew Miau 0 0%
Silver Star Developments Ltd.
Director
Director
Francis Tsai
Billy Ho
0
0
0%
0%
Director James Yuan 0 0%
MiTAC U.S.A. Inc.
Director
Director
Matthew Miau
Francis Tsai
0
0
0%
0%
Director Matthew Miau N/A 0%
MiTAC Japan Corp.
Director
Director
Francis Tsai
Iida
N/A
N/A
0%
0%
Supervisor Vicky Hsieh N/A 0%
MS Hardware Service GmbH
Director
Director
Matthew Miau
Francis Tsai
N/A
N/A
0%
0%
MiTAC Benelux N.V.
Director
Director
Matthew Miau
Francis Tsai
0
1
0%
0%
MiTAC (UK) Ltd.
Director
Director
Matthew Miau
Francis Tsai
0
0
0%
0%
ECLand Ltd.
Director
Director
Matthew Miau
Francis Tsai
0
0
0%
0%
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Company Name Title Name or Representative
Holdings
Shares Stake
MiTAC Pacific (H.K.) Ltd.
Director
Director
Matthew Miau
Francis Tsai
0
0
0%
0%
Director Matthew Miau 0 0%
System Glory International Ltd.
Director
Director
Francis Tsai
Billy Ho
0
0
0%
0%
Director James Yuan 0 0%
Director Matthew Miau 0 0%
Pacific China Corp.
Director
Director
Francis Tsai
Billy Ho
0
0
0%
0%
Director James Yuan 0 0%
Director Matthew Miau 0 0%
MiTAC Star Service Ltd.
Director
Director
Francis Tsai
Billy Ho
0
0
0%
0%
Director James Yuan 0 0%
Director Matthew Miau 0 0%
Software Insights Ltd.
Director
Director
Francis Tsai
Billy Ho
0
0
0%
0%
Director James Yuan 0 0%
Chairman Start Well Technology Ltd. representative Francis Tsai N/A 100%
MiTAC Computer (KunShan) Co., Ltd.
Director
Start Well Technology Ltd. representative James
Hwang
N/A 100%
Director/General
Manager
Start Well Technology Ltd. representative C.P.Lee N/A 100%
Chairman Pacific China Corp. representative Francis Tsai N/A 100%
MiTAC Service (ShangHai) Ltd.
Vice Chairman/General
Pacific China Corp. representative Percy Chen
Manager
N/A 100%
Director
Chairman
Pacific China Corp. representative C.P. Lee
MiTAC Star Service Ltd. representative Francis Tsai N/A
N/A 100%
100%
Vice Chairman Liaw Pang-Wen N/A 0%
Vice Chairman/General
MiTAC Star Service Ltd. representative D.L.Lin
Manager
N/A 100%
MiTAC Computer (ShunDe) Ltd. Director MiTAC Star Service Ltd. representative C.S. Chen N/A 100%
Director
MiTAC Star Service Ltd. representative Matthew
Miau
N/A 100%
Director MiTAC Star Service Ltd. representative James Yuan N/A 100%
Director Chang I-Dwen N/A 0%
- 105 -

Company Name Title Name or Representative
Holdings
Shares Stake
Chairman Software Insights Ltd. representative N.Y.Yeh N/A 100%
Director Software Insights Ltd. representative Francis Tsai N/A 100%
MiTAC Research (ShangHai) Ltd. Director Software Insights Ltd. representative C.S. Chen N/A 100%
Director Tsai Kuo-Jun N/A 0%
Director Lu Yin-Hai N/A 0%
Chairman Pacific China Corp. representative Francis Tsai N/A 51%
Vice Chairman Yang Bob N/A 0%
MiTAC Computers (ShangHai) Ltd.
Director
Director/General
Manager
Pacific China Corp. representative Billy Ho
Pacific China Corp. representative C.P. Lee
N/A
N/A
51%
51%
Director Chu Show-Quan N/A 0%
Chairman
Pacific Metal Developments Ltd. representative
Francis Tsai
N/A 100%
MiTAC Precision Technology (ShunDe)
Director
Ltd.
Pacific Metal Developments Ltd. representative Billy
Ho
N/A 100%
Vice Chairman/General Pacific Metal Developments Ltd. representative J.H.
Manager
Chen
N/A 100%
Chairman Tsu Fong Investment Corp. representative Francis Tsai 36,000,000 100%
So Fong Investment Co., Ltd.
Director
Director
Tsu Fong Investment Corp. representative Matthew
Miau
Tsu Fong Investment Corp. representative Vicky
Hsieh
36,000,000
36,000,000
100%
100%
Supervisor Tsu Fong Investment Corp. representative C.S. Chen 36,000,000 100%
Chairman So Fong Investment Co., Ltd. representative Billy Ho 500,000 100%
Director
So Fong Investment Co., Ltd. representative Francis
Tsai
500,000 100%
Mio Technology Corp.
Director
So Fong Investment Co., Ltd. representative Percy
Chen
500,000 100%
Supervisor So Fong Investment Co., Ltd. representative C.S. Chen 500,000 100%
General Manager Samuel Wang 0 0%
Director Francis Tsai 0 0%
Hot Link Technology Ltd.
Director
Director
Billy Ho
J.H. Chen
0
0
0%
0%
Director James Yuan 0 0%
- 106 -

Company Name Title Name or Representative
Holdings
Shares Stake
Director Francis Tsai 0 0%
Pacific Metal Developments Ltd.
Director
Director
Billy Ho
J.H. Chen
0
0
0%
0%
Director James Yuan 0 0%
Director Matthew Miau 0 0%
Start Well Technology Ltd.
Director
Director
Francis Tsai
Billy Ho
0
0
0%
0%
Director James Yuan 0 0%
Director Francis Tsai 0 0%
Master China Ltd.
Director
Director
Billy Ho
J.H. Chen
0
0
0%
0%
Director James Yuan 0 0%
Director Matthew Miau 0 0%
Dynamic Star Investments Ltd.
Director
Director
Francis Tsai
James Hwang
0
0
0%
0%
Director James Yuan 0 0%
ACE Continental Industries Ltd. Director M.S. Chen 0 0%
Chairman Master China Ltd. representative Francis Tsai N/A 100%
MiTAC Precision Technology (Kunshan) Vice Chairman Master China Ltd. representative J.H.Chen N/A 100%
Co., Ltd. Director/General
Manager
Master China Ltd. representative C.P.Lee N/A 100%
Chairman Dynamic Star Investments representative Francis Tsai N/A 100%
MiTAC Technology (Kunshan) Co., Ltd.
Director
Dynamic Star Investments representative James
Hwang
N/A 100%
Director/General
Manager
Dynamic Star Investments representative C.P. Lee N/A 100%
- 107 -

1.1.5 Operations Overview of Affliated Companies
Company Name Capital Total Assets Total Liabilities Net Value
Operating
Revenues
Operating
Profit
Profit/Loss
(after tax)
EPS (NT$)
(after tax)
Tsu Fong Investment Corp. 165,000 768,046 299,561 468,485 63,726 57,903 57,209 3.47
MiTAC Precision Technology Co., Ltd. 783,099 3,518,493 2,278,722 1,239,771 6,747,875 182,829 143,893 1.84
Silver Star Developments Ltd. Consolidated 4,344,937 21,559,201
13,837,521
(See Note1)
7,721,679 23,085,469 (180,501) 538,015 4.38
MiTAC U.S.A. Inc. 45,274 139,876 95,726 44,151 224,796 7,094 6,675 5.01
MiTAC Japan Corp. 79,132 957,069 958,146 (1,076) 3,109,860 (53,117) 2,932 N/A
MS Hardware Service GmbH 1,314 237,502 182,510 54,992 205,812 (22,587) 0 N/A
MiTAC Benelux N.V. 69,332 132,718 21,300 111,418 239,566 17,203 13,941 213.66
MiTAC(UK)Ltd. 30,230 336,240 324,787 11,452 952,445 (151,943) (109,468) (218.94)
ECLand Ltd. 5 6 0 6 0 0 0 0.00
MiTAC Pacific (H.K.) Ltd. 340 113,527 113,419 109 0 (123) 45,221 4,522.05
System Glory Int’l Ltd. 0 82,232 41,253 40,979 0 (31,553) (31,249) (31,249,405)
Pacific China Corp. 0 2,374,417 2,218,997 155,420 0 (20) 48,301 48,301,087
MiTAC Star Service Ltd. 1,715,889 1,734,577 0 1,734,577 0 0 0 0
Software Insights Ltd. 30,580 2,884 0 2,884 0 0 193 0.21
MiTAC Computer (KunShan) Co., Ltd. 335,971 3,083,045 2,885,684 197,361 4,332,598 (32,082) (56,625) N/A
MiTAC Service (Shanghai) Ltd. 33,937 75,511 43,384 32,128 97,438 146 35 N/A
MiTAC Computer (ShunDe) Ltd. 1,557,619 10,910,506 9,183,314 1,727,191 43,930,347 78,208 55,759 N/A
MiTAC Research (ShangHai) Ltd. 33,943 67,772 48,722 19,049 157,973 1,023 614 N/A
MiTAC Computers (ShangHai) Ltd. 209,100 164,180 65,666 98,514 84,619 (3,147) (15,785) N/A
MiTAC Precision Technology (ShunDe) Ltd. 339,732 2,444,236 2,057,242 386,993 5,702,840 65,396 57,135 N/A
So Fong Investment Co., Ltd. 360,000 598,028 153,817 444,211 47,277 36,734 35,220 0.98
Mio Technology Corporation 5,000 23,802 12,093 11,709 21,921 2,770 3,241 6.48
Hot Link Technology Ltd. 181,782 181,952 170 0 (10) (9) (0.00)
Pacific Metal Developments Ltd. 339,780 363,377 9,225 354,153 14,421 14,421 14,421 1.44
Start Well Technology Ltd. 336,382 375,236 38,876 336,360 0 (23) (23) (0.00)
Master China Ltd. 0 18,442 18,442 0 0 0 0 0
Dynamic Star Investment Ltd. 0 33,978 33,978 0 0 0 0 0
ACE Continental Industries Ltd. 0 0 0 0 0 0 0 0
MiTAC Precision Technology (Kunshan) Co., Ltd. 15,273 533,613 597,191 (63,578) 164,053 3,005 (57,542) N/A
MiTAC Technology (Kunshan) Co., Ltd. 33,936 43,614 7,876 35,738 11,012 1,773 1,807 N/A
Note 1:Includes a small amount of equity.
Note 2:If the affiliated enterprise is a foreign company, relevant figures are quoted in NT Dollars and are calculated based on the exchange rate on the day they were reported.
Note 3:Based on exchange rates at end of 2003 Month-end Average
US Dollars: 33.978 34.093
British Pounds: 60.460 59.575
Euros: 42.850 41.833
Japanese Yen: 0.318 0.315
People’s Republic of China Renminbi: 4.100 4.119
- 108 -