Quanta Computer Inc.

Annual Report 2014

Report to Shareholders

The worldwide personal computer industry faced minor shipment decline in 2014 from the

previous year, fortunately, the magnitude of decline was significantly smaller. The mild shipment

decline in 2014 signaled the market is gradually recovering and stablizing after recent sharp

corrections. However, the PC industry is still expected to see minor decline in 2015. During the

time of industry transition, Quanta should remain competitive and stay cautious to weather the

challenges ahead.

Looking back into 2014, Quanta Computer continued to promote the “Three-Five Year Plan”

led by the four Corporate principles of “Superior Quality”, “Superior Technology ”, “Superior

Management”, and “Superior Outcome”. These Corporate principles serve as guidance for

continuous improvement on overall operation followed by the ideology of “innovation is the core

motivation” and “change is the action model” to encourage innovative thinking and to implement

various enhancements. The Company strives to deliver superior outcome, continuously identify

innovation and breakthrough in every aspect of the business from production to management.

Quanta’s performance for FY2014 and outlook for FY2015 are as follow:

I. Revenue and Income

Consolidated revenue in year 2014 was NT$926.3BN, an increase of 5.2% from the previous

year. Net income after tax in FY2014 and FY2013 was NT$19.2BN and NT$19.1BN

respectively. Net income attributable to owners of parent in FY2014 and FY2013 was

NT$18.9BN and NT$18.6BN respectively. EPS in FY2014 was NT$4.90, an increase of 1.23%

from the previous year. Non-operating income was NT$10.4BN.

Quanta Computer was able to deliver stable growth in 2014 despite volatility in the PC

industry. To cope with changes in the industry, the Company’s effort to diversify into non-

notebook business is beginning to bear fruits, strong progress in Cloud Computing related

business is especially encouraging. The Company continues to invest in diversification in order to

find the right balance between revenue mix and profitability. Furthermore, higher degree of

automation is fully implemented in order to build stronger supply chain, to integrate seamless

logistics flow and to strengthen product development capability. The ultimate outcome is to boost

productivity per capita. Taking advantage of the Company’s strength in product delivery

efficiency and flexibility as well as large economy of scale, Quanta is able to sustain its

competitiveness through reinforcing its leading edge in research and development as well as

innovative design capability.

Furthermore, Quanta Computer proactively plays the role of a respectable corporate citizen

by taking responsibilities and obligations as a member of the global village. The Company is

dedicated to provide solutions that address user’s needs by integrating our expertise in both

software and hardware. Building on the spirit of creativity, innovation and entrepreneurship, the

Company continues to create value that brings human-centric value proposition to the society.

The Company has been publishing Corporate Social Responsibility Reports every year since year

2010. Third party validation was introduced in 2014 and onwards to improve reliability and

quality of the CSR reports and to further enhance the Company’s corporate governance and

information transparency.

II. Outlook in 2015

Quanta has been promoting the “Three Five-Year Plan” since year 2000 and year 2015 is the

last year of the plan. A strong foundation has been established after the Company invested ample

resources and efforts during the first four years of the third Five-Year Plan. The strong foundation

enables the Company to systematically operate overall business, to discover greater potential after

dedicated hardwork and to embrace stronger growth rate. Quanta continues to follow the four

Corporate principles of “Superior Quality”, “Superior Technology ”, “Superior Management”, and

“Superior Outcome” in all business conducts to deliver superior outcome. As the global economy

gradually recovers in year 2015, Quanta’s core notebook business will continue to grow and the

Company will further devote adequate resources to diversify into new business development.

Cloud related business and wearable devices are expected to lead the Company’s growth, to

accelerate revenue and to add fuel to the Company’s profitability.

To embrace the ever-changing challenges, Quanta must push our limits to think creatively

and to take new initiatives to ultimately achieve sustainability. The following four action plans

will lead the Company to embrace upcoming new challenges:

Identify opportunities ahead of competitions －

Gain insights into competitive landscape, foresee future trend, provide customer-driven

services, deliver innovative and breakthrough solutions, identify opportunities and act

ahead of competitions.

Acceleration －

Focus on delivering high quality and strong performance to elevate overall operation

performance.

Simplicity –

Review and simplify overall operation flow, focus on simplicity, reduce the variety of

component types and volume, simplify production and maximize efficiency.

Cost Savings －

Manage cost savings from material, labor, time, and space. Create the greatest value

through minimizing cost and delivering superior products.

To succeed in the dynamic competitive landscape, Quanta must utilize its strength in

innovative thinking and leverage breakthrough technology to achieve greater improvement

and to sustain its competitive edge. With strong efforts devoted by the entire organization

and its employees, together we can put creative thinking into action plans and to accelerate

overall business operation to the next level of success. Building on the superior corporate

value of Truthfulness, Kindness, Beauty, Honesty, Trust and Caring, Quanta will

undoubtedly create greater business value and continue to grow.

Chairman: Barry Lam

Vice Chairman: C.C. Leung

Chief Financial Officer: Elton Yang

* Note: ownership is 100% unless otherwise specified

（Ref. to Chart 1)

Gem-Tech

Precision

Metal Co.,

Ltd.

99.99%

24.81% 75.19% 0.44%

29.78% 37%

9% 9%

Quanta Computer Inc.

36.76%

0.81%

Quanta

Venture

Capital

Co., Ltd.

Quanta

Cloud

Techology

Inc.

RoyalTek

Company

Ltd.

Quanta Computer

Technology Investment

Corp.

TWDT

Precision

Co., Ltd.

Quanta Micro-

Systems

Inc.

CloudCast

Technology

Inc.

（Ref. to Chart 2)

Quanta

Int’l Ltd.

QCJ

Corp.

Quanta Cloud

Technology Japan

Quanta

Storage

Inc.

FaceVsion Technology

Inc.

DTG

(BVI)

Ltd. FaceVsion Technology

USA LLC

FaceVsion

(Changshu)

Trading

Co., Ltd.

FaceVsion

Techology

Hong Kong

Ltd.

Royaltek

Trading

(Changshu)

Co., Ltd.

Dragontech

Metallic

Industry

Co., Ltd.

Dragontech City

Metallic Changshu Co., Ltd.

Royaltek International Enterprises

Ltd.

Fly Dragon

Int’l

Ltd.

Dragon

Grand

Group

Ltd.

Chart 1

Quanta

Research

Int’l, Inc.

Quanta

Research

Cambridge

Inc.

(QRC)

Quanta

Manufact-

uring

Nashville

LLC

Quanta Manufac-turing Inc.

Quanta Computer Inc.

60%

19%

95%

Standard

(Shanghai)

Energy

Co., Ltd.

50%

Access

Int’l Co.

QCG

Computer

GMBH

Quanta Asia Ltd.

QCE Computer

BV

Quanta Capital

Manage-

ment Ltd.

Exmore

Services

Holding

Ltd.

Quanta Development

(Hong Kong)

Ltd.

ThinkTech Ind. E

Com. DE Informatica

SA

QCT

Inc.

QCT

LLC

Quanta Develop-ment Ltd.

QCT

Korea

Inc.

Quanta Int’l Ltd.

Tech Chain

(Hong

Kong)

Ltd.

Gem-Tech (Shanghai) Precision Mold Co.,

Ltd.

Tech

Chain

Ltd.

Quanta

Int’l

Technology

Ltd.

Q_Bus

Int’l

Ltd.

Exmore Services Holding (Hong

Kong) Ltd.

Quanta

Service

Nashville

LLC

Quanta

Computer

Nashville

LLC

QCH

Nashville

LLC

Zhan Yun

(Shanghai)

Electronics

Co., Ltd

Zhan Yun

(Chongqing)

Electronics

Co., Ltd

Changshu Zhan Yun

Electronics

Co., Ltd.

QCH Inc.

a Nashville

Corp.

Quanta

Computer

USA, Inc.

Quanta

Service

Inc.

Tech-Front

(ShangHai)

Computer

Ltd.

Tech-Com

(ShangHai)

Computer

Ltd.

Tech-Lead

(ShangHai)

Computer

Ltd.

Tech-Giant

(ShangHai)

Computer

Ltd.

Tech-Trend

(ShangHai)

Computer

Ltd.

Tech-Wave

(Shanghai)

Logistics

Co., Ltd.

Tech-Full

Computer

(Changshu)

Co., Ltd.

Tech-Front

(Chongqing)

Computer

Co., Ltd.

Tech-Wave

(Chongqing)

Logistics

Co., Ltd.

Kenseisha

Shanghai

P.M.P.

Co., Ltd.

CloudTech

（Beijing）

Technology

Co., Ltd.

CloudTech

(Shanghai)

Technology

Co., Ltd.

CloudTech

(Chongqing)

Technology

Co., Ltd.

* Note: ownership is 100% unless otherwise specified

Quanta Storage Inc.

Quanta Storage

International Ltd.

（CAYMAN）

Techman Electronics

(Hong Kong) Ltd.

Quanta Storage

Investment Inc.

Quanta Storage

Holding Ltd.

E-Forward

Technology Ltd.

Quanta Storage

(BVI）Ltd.

Quanta Storage

Asia Ltd.

Quanta Storage

America, Inc.

Quanta Storage

(Changshu), Ltd.

Techman

Electronics

(Changshu), Ltd.

Quanta Storage

(Shanghai), Ltd.

Quanta Storage

Holding (Hong Kong) Ltd.

Techman Asia Ltd.

Chart 2

(English Translation of Financial Report Originally Issued In Chinese)

Independent Auditors' Report

The Board of Directors of Quanta Computer Inc.：

We have audited the accompanying parent company only balance sheets of Quanta Computer Inc. as of

December 31, 2014 and 2013, and the parent company only statements of comprehensive income, changes

in stockholders' equity, and cash flows for the years ended December 31, 2014 and 2013. The Company’s

management is responsible for the preparation and presentation of the parent company only financial

statements. Our responsibility is to issue a report on these financial statements based on our audits.

We conducted our audits in accordance with the "Rules Governing the Audit of Financial Statements by

Certified Public Accountants" and auditing standards generally accepted in the Republic of China. Those

rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made by management, as well as

evaluating the overall financial statement presentation. We believe that our audits provide a reasonable

basis for our opinion.

In our opinion, the parent company only financial statements referred to in the first paragraph present fairly,

in all material respects, the parent company only financial position of Quanta Computer Inc. as of

December 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended,

in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers.

KPMG

CPA： Chiang, Chung Yi

Yang, Leou Fong

Taipei, Taiwan, R.O.C.

March 30, 2015

Note to Readers

The accompanying financial statements are intended only to present the financial position, results of operations and

cash flows in accordance with the International Financial Reporting Standards approved by the R.O.C Financial

Supervisory Commissions and not those of any other jurisdictions. The standards, procedures, and practices to audit

such financial statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying financial statements are the English translation of the Chinese version

prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of,

the English and Chinese language auditors’ report and financial statements, the Chinese version shall prevail.

Note to Readers

The accompanying financial statements are intended only to present the financial position, results of operations and cash

flows in accordance with the International Financial Reporting Standards approved by the R.O.C Financial Supervisory

Commissions and not those of any other jurisdictions. The standards, procedures, and practices to audit such financial

statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying financial statements are the English translation of the Chinese version prepared

and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and

Chinese language auditors’ report and financial statements, the Chinese version shall prevail.

(English Translation of Financial Report Originally Issued In Chinese)

Independent Auditors’ Report

The Board of Directors of Quanta Computer Inc.：

We have audited the accompanying consolidated balance sheets of Quanta Computer Inc. and its subsidiaries

(“the Group”) as of December 31, 2014 and 2013, and the consolidated statements of comprehensive income,

changes in stockholders’ equity, and cash flows for the years ended December 31, 2014 and 2013. The

Company’s management is responsible for the preparation and presentation of the consolidated financial

statements. Our responsibility is to issue a report on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the “Rules Governing the Audit of Financial Statements by

Certified Public Accountants” and auditing standards generally accepted in the Republic of China. Those rules

and standards require that we plan and perform the audit to obtain reasonable assurance about whether the

consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the

accounting principles used and significant estimates made by management, as well as evaluating the overall

financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to in the first paragraph present fairly, in all

material respects, the consolidated financial position of Quanta Computer Inc. and its subsidiaries as of

December 31, 2014 and 2013, and the results of their consolidated operations and their consolidated cash flows

for the years then ended, in conformity with the Guidelines Governing the Preparation of Financial Reports by

Securities Issuers and with the International Financial Reporting Standards (IFRSs), International Accounting

Standards (IASs), interpretation as well as related guidance endorsed by the Financial Supervisory Commission

of the Republic of China.

Quanta Computer Inc. has additionally prepared the parent company only financial statements as of and for the

years ended December 31, 2014 and 2013, on which we have issued an unqualified opinion.

KPMG

CPA： Chiang, Chung Yi

Yang, Leou Fong

Taipei, Taiwan, R.O.C.

March 30, 2015