• Cost of revenues for the full year of 2016 was NT$120,507 million, compared with NT$114,416 million in 2015.
  • Raw material cost totaled NT$36,472 million for the year, representing 23% of total net revenues.
  • Labor cost totaled NT$30,804 million for the year, representing 19% of total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$25,729 million for the year.
• Gross margin decreased to 24.9% in 2016 from 26.0% in 2015.
• Operating margin decreased to 12.9% in 2016 from 14.0% in 2015.

2016 Full-Year Results Highlights -- EMS

• Cost of revenues was NT$104,211 million, down by 19% from 2015.
  • Raw material cost totaled NT$88,971 million for the year, representing 77% of total net revenues.
  • Labor cost totaled NT$4,782 million for the year, representing 4% of total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$2,532 million for the year.
• Gross margin increased to 9.8% in 2016 from 7.5% in 2015.
• Operating margin increased to 3.5% in 2016 from 2.6% in 2015.

LIQUIDITY AND CAPITAL RESOURCES

• Capital expenditures in 4Q16 totaled US$127 million, of which US$87 million were used in packaging operations, US$30 million in testing operations, US$6 million in EMS operations and US$4 million in interconnect materials operations.
• For the full year of 2016, we spent US$683 million for capital expenditures, including US$397 million in packaging operations, US$241 million in testing operations, US$22 million in EMS operations and US$23 million in interconnect materials operations.
• As of December 31, 2016, total unused credit lines amounted to NT$176,185 million.
• Current ratio was 1.37 and net debt to equity ratio was 0.41 as of December 31, 2016.
• Total number of employees was 66,711 as of December 31, 2016, compared to 68,141 as of September 30, 2016.

BUSINESS REVIEW

Packaging Operations³

• Gross margin for our packaging operations during the quarter was 24.1%, up by 1.9 percentage points from 3Q16.
• Capital expenditures for our packaging operations amounted to US$87 million for the quarter, of which US$49 million were used in purchases of wafer bumping and flip chip packaging equipment, US$34 million were used in purchase common equipment including SiP equipment purchases, and US$4 million were used in wirebond packaging specific purposes.

Testing Operations

• Depreciation, amortization and rental expense associated with our testing operations amounted to NT$1,806 million during the quarter, up from NT$1,739 million in 3Q16.
• In 4Q16, gross margin for our testing operations was 38.4%, down by 0.5 percentage points from 3Q16.
• Capital expenditures for our testing operations amounted to US$30 million during the quarter.

EMS Operations

• In 4Q16, gross margin for our EMS operations was 10.4%, up by 0.4 percentage points from 3Q16.
• Capital expenditures for our EMS operations amounted to US$6 million during the quarter.

Substrate Operations

• PBGA substrate manufactured by ASE amounted to NT$2,171 million for the quarter, down by NT$173 million, or by 7% from 3Q16. Of the total output of NT$2,171 million, NT$806 million was from sales to external customers.
• Gross margin for substrate operations was 13.8% for the quarter, down by 1 percentage points from 3Q16.
• In 4Q16, our internal substrate manufacturing operations supplied 26% (by value) of our total substrate requirements.

Customers
IC ATM consolidated Basis

• Our five largest customers together accounted for approximately 33% of our total net revenues in 4Q16, compared to 34% in 3Q16.  One customer accounted for more than 10% of our total net revenues in 4Q16.
• Our top 10 customers contributed 50% of our total net revenues for the quarter, which remained the same as 3Q16.
• Our customers that are integrated device manufacturers or IDMs accounted for 35% of our total net revenues for the quarter, compared to 36% in 3Q16.

EMS Basis

• Our five largest customers together accounted for approximately 83% of our total net revenues in 4Q16, compared to 80% in 3Q16. One customer accounted for more than 10% of our total net revenues in 4Q16.
• Our top 10 customers contributed 91% of our total net revenues during the quarter, compared to 90% in 3Q16.

ASE-SPIL TRANSACTION UPDATE

• ASE and SPIL submitted the required materials to the Taiwan Fair Trade Commission (the "TFTC") on July 29, 2016 and the TFTC issued a no objection letter in respect of the transaction.
• ASE and SPIL submitted the required materials to the Ministry of Commerce of the People's Republic of China ("MOFCOM") on August 25, 2016. MOFCOM formally accepted the parties' notification materials on December 14, 2016, starting Phase I of the review process. On January 16, 2017, ASE received MOFCOM's notice extending its review to Phase II review.
• On January 17, 2017, ASE and SPIL each certified that it has complied with the U.S. Federal Trade Commission's ("FTC") requests for information. The parties are continuing to cooperate with the FTC's investigation, and are working toward a goal of successfully completing the investigation as soon as possible.

OUTLOOK
Based on our current business outlook and exchange rate assumptions, management projects overall performance for the first quarter of 2017 to be as follows:

• IC ATM 1Q/2017 business should get close to 2Q/2016 levels;
• IC ATM 1Q/2017 gross margin should be similar to 1H/2016 levels;
• EMS 1Q/2017 business and gross margin should be similar to the quarterly averages of 2016.

About ASE, Inc.
ASE, Inc. is among the leading providers of packaging services and testing services, including front-end engineering testing, wafer probing and final testing services. With advanced technological capabilities and a global presence spanning Taiwan, China, Korea, Japan, Singapore, Malaysia and the United States, ASE, Inc. has established a reputation for reliable, high quality products and services. For more information, please visit our website at http://www.aseglobal.com.

Safe Harbor Notice
This press release contains "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, including statements regarding our future results of operations and business prospects. Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release. The words "anticipate," "believe," "estimate," "expect," "intend," "plan" and similar expressions, as they relate to us, are intended to identify these forward-looking statements in this press release. Our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including risks associated with cyclicality and market conditions in the semiconductor or electronic industry; changes in our regulatory environment, including our ability to comply with new or stricter environmental regulations and to resolve environmental liabilities; demand for the outsourced semiconductor packaging, testing and electronic manufacturing services we offer and for such outsourced services generally; the highly competitive semiconductor or manufacturing industry we are involved in; our ability to introduce new technologies in order to remain competitive; international business activities; our business strategy; our future expansion plans and capital expenditures; the uncertainties as to whether we can complete the acquisition of 100% of Siliconware Precision Industries Co., Ltd. shares not otherwise owned by ASE; the strained relationship between the Republic of China and the People's Republic of China ; general economic and political conditions; the recent global economic crisis; possible disruptions in commercial activities caused by natural or human-induced disasters; fluctuations in foreign currency exchange rates; and other factors.  For a discussion of these risks and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our 2015 Annual Report on Form 20-F filed on April 29, 2016 .