Mail Stop 6010
September 23, 2005
Mr. Wen Chung Lin
Chief Financial Officer
Siliconware Precision Industries Co., Ltd.
No. 123, Sec.3 Da Fong Road
Tantzu
Taichung, Taiwan, ROC
Re: Siliconware Precision Industries Co., Ltd.
Form 20-F for the Year Ended December 31, 2004
File No. 000-30702
Dear Mr. Lin:
We have reviewed your filing and have the following
comments.
We have limited our review of your filing to those items we have
addressed in our comments. Where indicated, we think you should
revise your documents in future filings in response to this
comment.
If you disagree, we will consider your explanation as to why our
comment is inapplicable or a revision is unnecessary. Please be
as
detailed as necessary in your explanation. In some of our
comments,
we may ask you to provide us with information so we may better
understand your disclosure. After reviewing this information, we
may
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 20-F for the year ended December 31, 2004
Item 5. Operating and Financial Review and Prospects, page 34
- -Summary of Unaudited Historical Quarterly Results of Operations,
page 44
1. In future filings, when presenting selected quarterly financial
data, please revise to fully comply with Item 302 of Regulation S-
K.
Item 15. Controls and Procedures, page 79
2. We note your statement that the chief executive officer and
chief
financial officer have concluded that the company`s disclosure
controls and procedures are effective "except as disclosed in the
following paragraphs below." Given the exceptions noted, it
remains
unclear whether your chief executive officer and chief financial
officer have concluded that your disclosure controls and
procedures
are effective. Please tell us and revise your future filings to
state, in clear and unqualified language, the conclusions reached
by
your chief executive officer and your chief financial officer on
the
effectiveness of your disclosure controls and procedures. For
example, if true, you can state that your disclosure controls and
procedures are effective including consideration of the identified
matters, so long as you provide appropriate disclosure explaining
how
the disclosure controls and procedures were determined to be
effective in light of the identified matters. Otherwise, you can
state that given the identified matters, your disclosure controls
and
procedures are not effective.
3. We note the language that appears after the word "effective"
does
not fully comply with the definition of disclosure controls and
procedures as contained in Rule 13a-15(e) of the Exchange Act.
Please revise your future filings to remove this language.
Alternatively, if you elect to retain the language appearing after
the word "effective," please revise your future filings to ensure
the
language complies with the definition of disclosure controls and
procedures contained in Rule 13a-15(e) of the Exchange Act.
4. Tell us and revise your future filings to disclose in detail
the
nature of the weaknesses identified in your disclosure. Within
your
discussion, clarify whether the weaknesses are material weaknesses
as
defined by AU Section 325. Disclose when the weaknesses were
identified, by whom it was identified and when the weaknesses
first
began. Include the specific steps that the company has taken, if
any,
to remediate the weaknesses and disclose whether the company
believes
that the weaknesses still exists at the end of the period covered
by
the report.
Notes to Consolidated Financial Statements, page F-13
Note 28: U.S. GAAP Reconciliation, page F-47
General
5. We note that you present "recovery of loss on obsolescence and
decline in market value of inventory" within your statement of
cash
flows on page F-9 and that you do not disclose this as a
reconciling
item within your ROC GAAP to U.S. GAAP reconciliation. Tell us
and
revise your future filings to disclose what events cause you to
record a recovery of loss on obsolescence and decline in market
value. Tell us how your U.S. GAAP accounting policies comply with
SAB Topic 5BB.
6. We see your disclosures on page F-16 and F-25 regarding your
convertible bonds. We note that each of the two sets of Euro
convertible bonds contain premium put options whereby the holder
may
redeem the bonds at certain dates for a premium over par value.
We
further note that if the put option expires unexercised, the
holder
is only entitled to receive par value at the maturity date. We
also
note that there are also conversion terms associated with each of
the
two sets of Euro convertible bonds. Your ROC GAAP accounting
policy
indicates that you recognize the excess of the stated redemption
price and the par value as interest expense and compensation
interest
payable using the effective interest method during the period from
the issuance date the last redemption date. Following the latest
redemption date, for any redemption rights that have not been
exercised, you amortize the remaining compensation interest
payable
through the maturity date using the effective interest method.
Finally, we note there are no items relating to this debt on your
US
GAAP reconciliation. Please respond to the following questions:
* Based on your disclosures beginning on page F-25, it appears
that
the maturity date and the latest redemption date are essentially
the
same for both sets of Euro convertible bonds. Please tell us the
maturity dates for each of the outstanding sets of Euro
convertible
bonds and clarify your disclosures in future filings to clearly
state
the maturity dates for all outstanding debt.
* Tell us how your accounting under U.S. GAAP differs from your
accounting under ROC GAAP and explain why you did not present a
reconciling item to reflect that difference. Tell us the amount
of
any adjustments not presented and revise future filings to
disclose
your accounting policy under U.S. GAAP.
* Otherwise, explain how the accounting you describe under ROC
GAAP
is consistent with U.S. GAAP.
* Tell us how your U.S. GAAP accounting for the embedded put
option
together with the conversion terms complies with the provisions of
paragraphs 12-13 of SFAS 133, as amended, EITF 85-29 and
paragraphs
3(a)(2) and 7(a) of FIN 45.
* Tell us and revise your future filings to disclose how your
accounting for the conversion features of these bonds under U.S.
GAAP
complies with the provisions of EITF 98-5 and EITF 00-27. Please
address how your accounting considers the contingencies relating
to
the conversion features.
7. We note that you generate revenues from the sale of products
and
the provision of services. You state on page F-17 that you
recognize
revenue under ROC GAAP for your packaging arrangements when
services
are provided based upon transaction terms and when collectibility
is
reasonably assured. Your current disclosure does not appear to
clearly address product sales. Please tell us and revise your
future
filings to explain how you account for each material type of
revenue
transaction. Please also tell us if your policies are different
under U.S. GAAP. Refer to SAB Topic 13.
8. Further to the above, we note on page 38 that you record sales
allowances for pricing discounts and sales returns. Tell us and
revise your future filings to explain the nature of the pricing
discounts and the rights of return that you give to your customers
and how you account for these under U.S. GAAP. Refer to EITF 01-
09
and SFAS 48.
(1) Compensated Balances, page F-50
- -(ii) Employee Bonuses, page F-51
9. We note that you initially accrue employee bonus expense at the
end of the period when services are rendered. For bonuses to be
paid
in stock, you record such accruals based on the par value of the
shares to be issued and you record additional compensation expense
in
the subsequent period when you obtain shareholder approval for the
stock grants. This additional compensation expense is calculated
as
the difference between the par value and fair market value of the
shares granted to your employees. Please clarify to us when you
determine the stock award to be granted and why. Specifically,
tell
us how your accounting policy under U.S. GAAP complies with
question
18 (paragraphs 86-87) of FIN 44. Tell us why you believe it is
appropriate to record the par value portion of such grants in your
financial statements prior to the date of shareholder approval of
the
grants. Please also refer to Item 6 of Appendix A of the
International Reporting and Disclosures Issues in the Division of
Corporation Finance dated November 1, 2004, which can be found on
our
website at www.sec.gov.
As appropriate, please respond to this comment within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comment
and provides any requested information. Detailed cover letters
greatly facilitate our review. Please understand that we may have
additional comments after reviewing your responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Tara Harkins, Staff Accountant, at (202)
551-
3639, Kevin Vaughn, Staff Accountant at (202) 551-3643 or me at
(202)
551-3327 if you have questions regarding these comments.
Sincerely,
Michele Gohlke
Branch Chief
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Mr. Wen Chung Lin
Siliconware Precision Industries Co., Ltd.
September 23, 2005
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