(Disclosure Progress) Notice Regarding Share Buyback and Cancellation Based on Profit Compensation Agreement by Our Chinese Subsidiary (FTSVA)

Profit Compensation Agreement and Background

Our consolidated subsidiary FTSVA entered into a profit compensation agreement with FTS, related to the performance results of its power semiconductor substrate manufacturing subsidiary FLH. Since FLH’s realized net income fell below the previously agreed accepted net income amount, FTS will repurchase and cancel shares of FTSVA it holds. The number of compensated shares is 63,070,203, and the repurchase price is 1.00 Chinese Yuan per share. The compensation calculation is based on the actual results for fiscal year 2025.

Overview of Share Buyback and Cancellation and Future Procedures

FTSVA plans to execute the share repurchase and cancellation around June 2026 following shareholder meeting resolution and completion of procedures with Chinese authorities. This will reduce FTS’s ownership ratio in FTSVA from 52.67% to 48.28%. This transaction is a share transfer between subsidiaries and will have no impact on our consolidated profit or loss. There is no change to the group’s asset disposal policy or its share buyback policy.