SALES & GROSS PROFIT

Cost of sales increased by 30.4% from US$943.6 million in 2020 to US$1,230.4 million in 2021. Gross profit increased by 43.6% from US$271.0 million in 2020 to US$389.2 million in 2021, and gross margin increased from 22.3% for 2020 to 24.0% for 2021.

Peripherals. Segment cost for Peripherals increased by 39.8% from US$565.1 million in 2020 to US$790.1 million in 2021, which was generally in line with the increase in our Peripherals revenue. Gross margin for our Peripherals segment increased slightly from 26.9% for 2020 to 27.1% for 2021.

Systems. Segment cost for Systems increased by 12.8% from US$300.1 million in 2020 to US$338.6 million in 2021, which was generally in line with the increase in our Systems revenue. Gross margin for our Systems segment increased from 3.3% for 2020 to 8.0% for 2021.

Software and Services. Segment cost for Software and Services increased by 38.7% from US$72.1 million in 2020 to US$100.0 million in 2021, which was in line with our increase in sales. Gross margin for our Software and Services segment decreased from 43.8% for 2020 to 38.5% for 2021, primarily due to higher service costs.

Others. Segment cost for Others decreased by 73.0% from US$6.3 million in 2020 to US$1.7 million in 2021. Gross margin for our Others segment increased from (153.7)% for 2020 to 63.0% for 2021 primarily due to higher provision recognized for slow moving stocks in 2020.