• Net revenue contribution from EMS operations for the full year of 2013 amounted to NT$78,540 million, up by 26% from 2012.
• Cost of revenues was NT$70,971 million, up by 29% from 2012.
  • Raw material cost totaled NT$62,112 million during the year, representing 79% of total net revenues, compared with NT$49,269 million and 79% of total net revenues in 2012.
  • Labor cost totaled NT$2,915 million during the year, representing 4% of total net revenues, compared with NT$2,541 million and 4% of total net revenues in 2012.
  • Depreciation, amortization and rental expenses totaled NT$1,075 million during the year, representing 1% of total net revenues, compared with NT$826 million and 1% of total net revenues in 2012.
• Gross margin decreased to 9.6% in 2013 from 12.1% in 2012.
• Total operating expenses during 2013 were NT$4,627 million, including NT$1,865 million in R&D and NT$2,762 million in SG&A. Total operating expenses as a percentage of net revenues was 6% in 2013, down from 7% in 2012.
• Operating income for the year was NT$2,942 million, compared to operating income of NT$3,085 million for the previous year. Operating margin decreased to 3.7% in 2013 from 4.9% in 2012.

LIQUIDITY AND CAPITAL RESOURCES

• As of December 31, 2013, our cash and current financial assets totaled NT$50,167 million, compared to NT$43,529 million as of September 30, 2013.
• Capital expenditures in 4Q13 totaled US$83 million, of which US$46 million was used for packaging, US$17 million for testing, US$12 million for EMS and US$8 million for interconnect materials.
• For the full year of 2013, we spent US$668 million for capital expenditures, including US$417 million for IC packaging, US$181 million for testing, US$41 million for EMS and US$29 million for interconnect materials.
• As of December 31, 2013, we had total bank debt of NT$100,801 million, compared to NT$100,154 million as of September 30, 2013. Total bank debt consisted of NT$44,618 million of revolving working capital loans, NT$6,017 million of the current portion of long-term debt, and NT$50,166 million of long-term debt. Total unused credit lines amounted to NT$111,199 million.
• Current ratio as of December 31, 2013 was 1.31, compared to 1.29 as of September 30, 2013. Net debt to equity ratio was 0.40 as of December 31, 2013.
• Total number of employees was 60,199 as of December 31, 2013, compared to 57,259 as of December 31, 2012 and 59,867 as of September 30, 2013.

BUSINESS REVIEW

Packaging Operations[3]

• Net revenues generated from our packaging operations were NT$30,929 million during the quarter, up by NT$3,219 million, or by 12% year-over-year, and up by NT$165 million, or by 1% sequentially.
• Net revenues from advanced packaging accounted for 33% of total packaging net revenues during the quarter, up by 5 percentage points from the previous quarter. Net revenues from IC wirebonding accounted for 57% of total packaging net revenues during the quarter, down by 4 percentage points from the previous quarter. Net revenues from discrete and others accounted for 10% of total packaging net revenues during the quarter, down by 1 percentage point from the previous quarter.
• Gross margin for our packaging operations during the quarter was 25.1%, up by 5.6 percentage points year-over-year and up by 2.8 percentage points from the previous quarter.
• Capital expenditures for our packaging operations amounted to US$46 million during the quarter, of which US$16 million was used for wafer bumping and flip chip packaging equipment, US$29 million for common equipment including SiP, and less than US$1 million for wirebond specific purposes.
• As of December 31, 2013, there were 15,692 wirebonders in operation. 6 wirebonders were added and 79 wirebonders were disposed of during the quarter.

Testing Operations

• Net revenues generated from our testing operations were NT$6,225 million, up by NT$189 million, or by 3% year-over-year, and down by NT$54 million, or by 1% sequentially.
• Final testing contributed 77% to total testing net revenues, which remained the same as the previous quarter. Wafer sort contributed 21% to total testing net revenues, up by 1 percentage point from the previous quarter. Engineering testing contributed 2% to total testing net revenues, down by 1 percentage point from the previous quarter.
• Depreciation, amortization and rental expense associated with our testing operations amounted to NT$1,693 million, up from NT$1,637 million in 4Q12 and down from NT$1,695 million in 3Q13.
• In 4Q13, gross margin for our testing operations was 36.5%, down by 1.2 percentage points year-over-year and down by 0.6 percentage points from the previous quarter.
• Capital expenditures for our testing operations amounted to US$17 million during the quarter.
• As of December 31, 2013, there were 3,117 testers in operation. 98 testers were added and 128 testers were disposed of during the quarter.

EMS Operations

• Net revenues generated from our EMS operations were NT$28,420 million, up by NT$8,279 million, or by 41% year-over-year, and up by NT$8,869 million, or by 45% sequentially.
• Communications products contributed 61% to total EMS net revenues, up by 14 percentage points from the previous quarter. Computing products contributed 16% to total EMS net revenues, down by 4 percentage points from the previous quarter. Consumer products contributed 8% to total EMS net revenues, down by 5 percentage points from the previous quarter. Industrial products contributed 9% to total EMS net revenues, down by 3 percentage points from the previous quarter. Automotive products contributed 5% to total EMS net revenues, down by 2 percentage points from the previous quarter.
• In 4Q13, gross margin for our EMS operations was 7.7%, down by 3.1 percentage points year-over-year and down by 2.0 percentage points from the previous quarter.
• Capital expenditures for our EMS operations amounted to US$12 million during the quarter.

Substrate Operations

• PBGA substrate manufactured by ASE amounted to NT$2,124 million during the quarter, up by NT$36 million, or by 2% year-over-year, and down by NT$329 million, or by 13% from the previous quarter. Of the total output of NT$ 2,124 million, NT$746 million was from sales to external customers.
• Gross margin for substrate operations was 17.9% during the quarter, up by 3.9 percentage points year-over-year and down by 0.8 percentage points from the previous quarter.
• In 4Q13, our internal substrate manufacturing operations supplied 29% (by value) of our total substrate requirements.

Customers