Significant Related Party Transactions

12 Months Ended

Dec. 31, 2019

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Significant Related Party Transactions

7. SIGNIFICANT RELATED PARTY TRANSACTIONS

a. Significant intercompany transactions between consolidated entities were as follows:

For the year ended December 31, 2017

Entity	Counterparty	Transactions (Note A)
		Account	Amount			Terms (Note B)
			NT$
			(In Thousands)
UMC	UMC-USA	Sales	$	59,968,172		Net 60 days
UMC	UMC-USA	Accounts receivable		6,737,723		—
UMC	UMC GROUP JAPAN	Sales		4,212,523		Net 60 days
UMC	UMC GROUP JAPAN	Accounts receivable		659,488		—
UMC	USCXM	Sales		998,899 (Note C	)	Net 30 days
UMC	USCXM	Accounts receivable		4,790,930		—
UMC	USCXM	Loan receivable		3,924,360		—
HJ	UMC-USA	Sales		214,147		Net 60 days
HJ	UMC-USA	Accounts receivable		35,498		—
HJ	UMC GROUP JAPAN	Sales		223,740		Net 60 days
HJ	UMC GROUP JAPAN	Accounts receivable		43,332		—
USCXM	UMC-USA	Sales		241,220		Net 60 days
USCXM	UMC-USA	Accounts receivable		141,272		—

For the year ended December 31, 2018

Entity	Counterparty	Transactions (Note A)
		Account	Amount			Terms (Note B)
			NT$
			(In Thousands)
UMC	UMC-USA	Sales	$	57,107,585		Net 60 days
UMC	UMC-USA	Accounts receivable		7,312,272		—
UMC	UMC GROUP JAPAN	Sales		4,159,637		Net 60 days
UMC	UMC GROUP JAPAN	Accounts receivable		905,048		—
UMC	USCXM	Sales		1,356,567 (Note C	)	Net 30 days
UMC	USCXM	Accounts receivable		48,163		—
USCXM	UMC-USA	Sales		698,988		Net 60 days
USCXM	UMC-USA	Accounts receivable		120,678		—
HJ	UMC-USA	Sales		307,471		Net 60 days
HJ	UMC-USA	Accounts receivable		35,161		—
HJ	UMC GROUP JAPAN	Sales		272,218		Net 60 days
HJ	UMC GROUP JAPAN	Accounts receivable		61,971		—

For the year ended December 31, 2019

Entity	Counterparty	Transactions (Note A)
		Account	Amount			Terms (Note B)
			NT$
			(In Thousands)
UMC	UMC-USA	Sales	$	47,736,335		Net 60 days
UMC	UMC-USA	Accounts receivable		5,937,706		—
UMC	UMC GROUP JAPAN	Sales		3,933,964		Net 60 days
UMC	UMC GROUP JAPAN	Accounts receivable		608,622		—
UMC	USCXM	Sales		1,209,310 (Note C	)	Net 30 days
UMC	USCXM	Accounts receivable		31,334		—
UMC	USCXM	Loan receivable		1,201,200		—
USCXM	UMC-USA	Sales		745,226		Net 60 days
USCXM	UMC-USA	Accounts receivable		33,242		—
HJ	UMC-USA	Sales		152,012		Net 60 days
HJ	UMC-USA	Accounts receivable		21,138		—
HJ	UMC GROUP JAPAN	Sales		250,736		Net 60 days
HJ	UMC GROUP JAPAN	Accounts receivable		51,150		—

Note A: The significant intercompany transactions listed above include downstream transactions.

Note B: The sales price to the above related parties was determined through mutual agreement in reference to market conditions.

Note C: UMC authorized technology licenses to its subsidiary, USCXM, in the amount of US$0.35 billion, which was recognized as deferred revenue to be realized over time.

b. Significant transactions between the Company and other related parties were as follows:

(i) Name and Relationship of Related Parties

Name of related parties	Relationship with the Company
FARADAY TECHNOLOGY CORP. and its Subsidiaries	Associate
HSUN CHIEH CAPITAL CORP.	Associate
TRIKNIGHT CAPITAL CORPORATION	Associate
HSUN CHIEH INVESTMENT CO., LTD.	Associate
JINING SUNRICH SOLARENERGY CORPORATION	Joint venture’s subsidiary
SILICON INTEGRATED SYSTEMS CORP.	The Company’s director
PHOTRONICS DNP MASK CORPORATION	Other related parties
UNITEDVISION SEMICONDUCTOR CO., LTD.	Other related parties
UNISTARS CORPORATION	Other related parties
UPI SEMICONDUCTOR CORP.	Other related parties
CHUAN-FANG ZHUAN	Subsidiary’s director

(ii) Operating revenues

	For the years ended December 31,
	2017		2018		2019
	NT$		NT$		NT$
	(In Thousands)		(In Thousands)		(In Thousands)
Associates	$	1,357,720	$	1,291,398	$	1,532,339
Joint ventures		12,465		4,277		—
Others		30,417		27,881		45,523
Total	$	1,400,602	$	1,323,556	$	1,577,862

(iii) Accounts receivable, net

	As of December 31,
	2018		2019
	NT$		NT$
	(In Thousands)		(In Thousands)
Associates	$	134,646	$	278,702
Others		4,266		11,243
Total	$	138,912	$	289,945

The sales price to the above related parties was determined through mutual agreement in reference to market conditions. The collection period for domestic sales to related parties was month-end 30~60 days, while the collection period for overseas sales was net 30~60 days.

(iv) Refund liabilities (classified under other current liabilities)

	As of December 31,
	2018		2019
	NT$		NT$
	(In Thousands)		(In Thousands)
Associates	$	1,287	$	7,880
Others		71		48
Total	$	1,358	$	7,928

(v) Significant asset transactions

Acquisition of financial assets at fair value through profit or loss – noncurrent

For the years ended December 31, 2017 and 2018: None.

					For the year ended December 31, 2019
	Trading Volume (In thousands of shares)		Transaction underlying		Purchase price
					NT$
					(In Thousands)
Associates		500		Stock of MATERIALS ANALYSIS TECHNOLOGY INC.	$	32,923
Associates		1,900		Stock of GEAR RADIO LTD.		37,211
Total					$	70,134

Acquisition of investments accounted for under the equity method

For the year ended December 31, 2017: None.

				For the year ended December 31, 2018
	Trading Volume (In thousands of shares)		Transaction underlying	Purchase price
				NT$
				(In Thousands)
Associates		84,000	Stock	$	840,000

				For the year ended December 31, 2019
	Trading Volume (In thousands of shares)		Transaction underlying	Purchase price
				NT$
				(In Thousands)
Associates		72,000	Stock	$	720,000

Acquisition of intangible assets

	Purchase price
	For the years ended December 31,
	2017		2018		2019
	NT$		NT$		NT$
	(In Thousands)		(In Thousands)		(In Thousands)
Associates	$	322,808	$	200,610	$	339,463

Disposal of subsidiary

For the years ended December 31, 2017 and 2019: None.

				For the year ended December 31, 2018
	Trading Volume (In thousands of shares)		Transaction underlying	Proceeds		Disposal (loss) gain
				NT$		NT$
				(In Thousands)		(In Thousands)
Others		46,168	Stock of UNISTARS CORPORATION	$	4,617	$	(31,856	)

Disposal of financial assets

				For the year ended December 31, 2017
	Trading Volume (In thousands of shares)		Transaction underlying	Proceeds		Disposal (loss) gain
				NT$		NT$
				(In Thousands)		(In Thousands)
Others		6,489	Stock of ASIA PACIFIC MICROSYSTEMS, INC.	$	50,745	$	(13,753	)

For the years ended December 31, 2018 and 2019: None.

(vi) Others

Mask expenditure

	For the years ended December 31,
	2017		2018		2019
	NT$		NT$		NT$
	(In Thousands)		(In Thousands)		(In Thousands)
Others	$	994,710	$	1,750,088	$	2,346,263

Other payables of mask expenditure

	As of December 31,
	2017		2018		2019
	NT$		NT$		NT$
	(In Thousands)		(In Thousands)		(In Thousands)
Others	$	580,789	$	571,036	$	683,892

c. Key management personnel compensation

	For the years ended December 31,
	2017		2018		2019
	NT$		NT$		NT$
	(In Thousands)		(In Thousands)		(In Thousands)
Short-term employee benefits	$	271,554	$	387,294	$	271,135
Post-employment benefits		3,478		4,660		2,406
Termination benefits		6,957		—		3,415
Share-based payment		68		293,857		62,203
Others		294		435		578
Total	$	282,351	$	686,246	$	339,737