We cannot assure you that a later change in law will not alter significantly the tax considerations that we describe in this  summary.  If a partnership holds our shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner  and the activities of the partnership. If you are a partner of a partnership holding our shares or ADSs, you should consult your tax  advisor.  In general, for U.S. federal income tax purposes, a U.S. holder who is the beneficial owner of an ADS will be treated as the  owner of the shares underlying such ADS. Deposits or withdrawals of shares, actually or constructively, by U.S. holders for ADSs  will not be subject to U.S. federal income tax.  The U.S. Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and  the issuer of the security underlying the ADS may be taking actions that are inconsistent with the claiming of foreign tax credits by  U.S. holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax, described in “—Taxation  of Dividends” below, applicable to dividends received by certain non-corporate holders. Accordingly, the analysis of the credibility  of Republic of China taxes and the availability of the reduced tax rate for dividends received by certain non-corporate holders,  each described in “—Taxation of Dividends” below, could be affected by actions taken by intermediaries in the chain of ownership  between the holder of the ADS and the issuer of the security underlying the ADS.  The gross amount of distributions (other than certain pro rata distributions of shares to all stockholders) you receive on your  shares or ADSs, including net amounts withheld in respect of Republic of China withholding taxes, will generally be treated as  dividend income to you to the extent the distributions are made from our current and accumulated earnings and profits as calculated  according to U.S. federal income tax principles. These amounts (including withheld taxes) will be includible in your gross income  as ordinary income on the day you actually or constructively receive the distributions, which in the case of an ADS will be the date  received by the depositary. You will not be entitled to claim a dividends-received deduction allowed to corporations under the Code  with respect to distributions you receive from us.  With respect to U.S. holders who are individuals, certain dividends received from a foreign corporation in taxable years  beginning before January 1, 2013, on shares (or ADSs backed by such shares) that are readily tradable on an established securities  market in the United States may be subject to reduced rates of taxation, provided further that the foreign corporation was not, in  the year prior to the year in which the dividends are paid, and is not, in the year in which the dividends are paid, a passive foreign  investment company (see “Passive Foreign Investment Company” below). Under current U.S. Treasury Department guidance,  our ADSs, which are listed on the New York Stock Exchange, but not our shares, are treated as readily tradable on an established  securities market in the United States. Thus, we do not believe that dividends that we pay on our shares that are not backed by  ADSs currently meet the conditions required for these reduced tax rates. There can be no assurance that our ADSs will continue to  be readily tradable on an established securities market in later years (or that our shares will be readily tradable on an established  securities market in any given year). Individuals that do not meet a minimum holding period requirement during which they are not  protected from the risk of loss, or that elect to treat the dividend income as “investment income” pursuant to Section 163(d)(4) of the  Code, will not be eligible for the reduced rates of taxation regardless of the trading status of our shares or ADSs. In addition, the rate  reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions  in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. You should  consult your own tax advisor regarding the application of these rules given your particular circumstances.  The amount of any dividend paid in NT dollars will equal the U.S. dollar value of the NT dollars you receive, calculated by  reference to the exchange rate in effect on the date you actually or constructively receive the dividend, which in the case of an ADS  118 Taxation of Dividends You should consult your own tax advisor concerning the particular U.S. federal income tax consequences to you of the  ownership and disposition of the shares or ADSs, as well as the consequences to you arising under the laws of any other taxing  jurisdiction. P AR T I