Contract analysis

1. Introduction and Purpose 1.1 Purpose of the Master File This Transfer Pricing Master File (the "Master File") has been prepared on behalf of Halcyon Semiconductor AG ("HSAG") and its worldwide group of affiliated companies (collectively, the "Halcyon Group" or the "Group") for the fiscal year ended December 31, 2024. The Master File is intended to serve as a comprehensive, high-level overview of the Halcyon Group'

2. Organizational Structure of the MNE Group 2.1 Legal and Ownership Structure 2.1.1 Ultimate Parent Entity The ultimate parent entity of the Halcyon Group is Halcyon Semiconductor AG ("HSAG"), an Aktiengesellschaft (stock corporation) organized and existing under the laws of the Federal Republic of Germany. HSAG is the sole and ultimate shareholder of all entities within the Halcyon Group and serves as the principal

3. Description of the MNE Group's Business(es) 3.1 Overview of Halcyon Group Business The Halcyon Group is a global semiconductor company engaged in the design, development, fabrication, and distribution of advanced-node semiconductor wafers and singulated die. HSAG is a vertically integrated semiconductor manufacturer, performing both the front-end wafer fabrication (foundry operations) and the back-end assembly, te

1. Tangible Goods (Wafer/Die Sales): HSAG sells finished semiconductor wafers and singulated die to HSI under the Master Intercompany Supply Agreement.

2. Royalties (IP License): HSI pays a running royalty to HSAG under the IP License Agreement for the right to use HSAG's proprietary semiconductor process technology, design libraries, and related intangibles in connection with HSI's US distribution and design support activities.

3. Cost-Sharing Contributions (R&D CSA): HSI makes cost-sharing contributions to HSAG under the Cost Sharing Arrangement in respect of joint development of next-generation 2nm and sub-2nm process technology. 3.4 Principal Geographic Markets Served The Halcyon Group serves customers in all major semiconductor end markets worldwide. The principal geographic markets, as defined by the location of the Group's third-party

4. MNE Group's Intangibles 4.1 General Description of the Group's Strategy for Development, Ownership, and Exploitation of Intangibles Intangible property is central to the Halcyon Group's competitive position and profitability. The Group's most valuable intangible assets consist of its proprietary semiconductor fabrication process technology, design libraries, patents, and trade secrets, all of which are developed,

5. MNE Group's Intercompany Financial Activities 5.1 Description of How the MNE Group Is Financed The Halcyon Group's financing structure reflects the central role of HSAG as the Group's principal operating entity and primary source of capital. HSAG raises capital through the public equity markets (as a company listed on the Frankfurt Stock Exchange/XETRA) and through the European debt capital markets. HSAG's access

6. MNE Group's Intercompany Transactions — Summary 6.1 Summary of Controlled Transactions (US-Germany) The following table summarizes the FY 2024 intercompany transaction flows between HSAG and HSI, which comprise the controlled transactions that are the focus of this Master File and the bilateral APA proceedings: The aggregate intercompany transaction volume of approximately €1.28 billion (approximately $1.28 billio

1. Master Intercompany Supply Agreement (HSAG–HSI): Effective January 1, 2019; amended July 1, 2022. This agreement governs the sale of semiconductor wafers and singulated die from HSAG to HSI, including pricing mechanisms, delivery terms, quality standards, warranty provisions, and settlement terms.

2. IP License Agreement (HSAG–HSI): Effective January 1, 2019. This agreement governs the license of proprietary semiconductor process technology, design libraries, and related intangibles from HSAG to HSI, including the royalty rate, the definition of IP-attributable revenues, payment terms, and the scope of the licensed rights.

3. Cost Sharing Arrangement (HSAG–HSI): Effective July 15, 2018. This agreement governs the joint development of next-generation 2nm and sub-2nm process technology, including the determination of anticipated benefit shares, the calculation and payment of cost-sharing contributions, the Platform Contribution Transaction, and the triennial review of benefit shares. Summaries of the key terms of each agreement are provi