Back2012/12/21
WIN Semi. Board Resolution Passed Changing Estimates of Service Life of M&E to 5 Years
Taipei, December 21, 2012– Today the board of directors of WIN Semiconductors Corp. (GreTai: 3105) passed a resolution to revise the estimates of service life of partial machinery and equipment assets from 5 to 10 years to 5 years. A disclosure of material information regarding such a change has been released on Taiwan’s Market Observation Post System today by the company.
The estimates of service life for partial machinery and equipment are changed in considering the regulatory requirement of financial statement in compliance with IFRS from 2013 and Guidelines for Preparation of Financial Statements by Securities Issuers amended as of December 22, 2011 as well as the prevailing circumstances of industry. While 6” GaAs wafer fabrication technology has been commercialized for more than 15 years, WIN Semiconductors was dedicated to developing advanced GaAs wafer manufacturing process for over 13 years, its technology is getting mature, and given advantages of booming smart phone and wireless communication business, it is expected GaAs manufacturing industry will be upgraded to more advanced wafer processing technologies in the future.
For past 10 years, WIN Semiconductors’ annual depreciation expense for machinery and equipment was computed by applying life time estimates based on then situation and real lifespan ranging from 5 to 10 years. To avoid the risk of one-time significant loss of disposal or obsolescence of the assets arising from the future fast improvement of manufacturing technology of the industry, it is considered that the original estimates of service life require revision. After reviewing status of existing machinery and equipment in its wafer fabs and characteristics of semiconductor industry, beginning 2013, WIN Semiconductors will reduce the estimated service life of its partial machinery and equipment to 5 years. The determination is made in an effort to reflect substantial cost effectiveness consideration and is consistent with evaluation principles of semiconductor industry.
As a result of the change of accounting estimate, the depreciation expense for 2013 will increase around NT$464 million and the impact on the earning per share will be around -NT$0.50.
The estimates of service life for partial machinery and equipment are changed in considering the regulatory requirement of financial statement in compliance with IFRS from 2013 and Guidelines for Preparation of Financial Statements by Securities Issuers amended as of December 22, 2011 as well as the prevailing circumstances of industry. While 6” GaAs wafer fabrication technology has been commercialized for more than 15 years, WIN Semiconductors was dedicated to developing advanced GaAs wafer manufacturing process for over 13 years, its technology is getting mature, and given advantages of booming smart phone and wireless communication business, it is expected GaAs manufacturing industry will be upgraded to more advanced wafer processing technologies in the future.
For past 10 years, WIN Semiconductors’ annual depreciation expense for machinery and equipment was computed by applying life time estimates based on then situation and real lifespan ranging from 5 to 10 years. To avoid the risk of one-time significant loss of disposal or obsolescence of the assets arising from the future fast improvement of manufacturing technology of the industry, it is considered that the original estimates of service life require revision. After reviewing status of existing machinery and equipment in its wafer fabs and characteristics of semiconductor industry, beginning 2013, WIN Semiconductors will reduce the estimated service life of its partial machinery and equipment to 5 years. The determination is made in an effort to reflect substantial cost effectiveness consideration and is consistent with evaluation principles of semiconductor industry.
As a result of the change of accounting estimate, the depreciation expense for 2013 will increase around NT$464 million and the impact on the earning per share will be around -NT$0.50.