1.Kind of merger/acquisition (e.g.merger, consolidation, spin-off

 ,acquisition, or receiving assignment of shares):Share swap

2.Date of occurrence of the event:2014/06/30

3.Names of companies participating in the merger (e.g.name of the

  other company participating in the merger or consolidation, newly

  established company in a spin-off, acquired company, or company

  whose shares are taken assignment of):FORMOSA EPITAXY INCORPORATION

4.Counterparty (e.g.name of the other company participating in 

  the merger or consolidation, company taking assignment of the 

  spin-off, or counterparty to the acquisition or assignment of shares):

All shareholders of FORMOSA EPITAXY INCORPORATION

5.Relationship between the counterparty and the Company (investee

  company in which the Company has re-invested and has shareholding 

  of XX%), and explanation of the reasons for the decision to acquire, 

  or take assignment of the shares of, an affiliated enterprise or 

  related person, and whether it will affect shareholders' equity:NA

6.Purpose/objective of the merger/acquisitionation:

To integrate resources and increase economies of scales, and to lower

administration costs while improve operation efficiency and enhance

competitive advantages, shareholders’equity.

7.Anticipated benefits of the merger/acquisition:

To integrate resources, improve economies of scales, lower administration

costs, and while improve operation efficiency and enhance competitive

advantages, shareholders’equity.

8.Effect of the merger or consolidation on net worth per share and

  earnings per share:

Through the share swap, the two companies will integrate Resources,

improve economies of scales, lower administration costs, and enhance

competitive advantages. Thus, synergy is expected from the merger

and it should be beneficial to both the net value and earnings per share

of the Company.

9.Share exchange ratio and basis of its calculation: 

(1)Share exchange ratio: 3.448 shares of FORMOSA EPITAXY INCORPORATION

could swap for one share of EPISTAR Corporation.

(2)The calculation basis: the audited financial reports as of March 31, 2014

of both companies, and considering both companies’ stock price, net worth

per share, issued options, new restricted employee shares ,and also

considering operation condition of both companies, other relevant factors

and fairness opinion of independent exerts.

10.Scheduled timetable for consummation:

Record date of the share swap is tentatively set on December 30, 2014.

11.Matters related to assumption by the existing company or new 

   company of rights and obligations of the extinguished (or spun-off) 

   company::NA

12.Basic information of companies participating in the merger:   

(1)EPISTAR corporation (2448)Business: AlGaInP EPI WAFER & CHIPS and

InGaN EPI WAFER & CHIPS

(2)FORMOSA EPITAXY INCORPORATION(3061)Business:AlGaInP EPI WAFER & CHIPS

and InGaN EPI WAFER & CHIPS

13.Matters related to the spin-off (including estimated value of

   the business and assets planned to be assigned to the existing

   company or new company; the total number and the types and

   volumesof the shares to be acquired by the split company or

   its shareholders; matters related to the reduction, if any, 

   in capital of the split company) (note: not applicable other 

   than where there is announcementof a spin-off):NA

14.Conditions and restrictions on future transfers of shares 

   resulting from the merger or acquisition:NA

15.Other important stipulations:NA

16.Do the directors have any objection to the present transaction?:No