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6-K 1 tsm-fsx20240229x6k.htm 6-K Document

1934 Act Registration No. 1-14700
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM 6-K
_____________________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2024
(Commission File Number: 001-14700)
_____________________________
Taiwan Semiconductor Manufacturing Company Ltd.
(Translation of Registrant’s Name Into English)
_____________________________
No. 8, Li-Hsin Rd. 6,
Hsinchu Science Park,
Taiwan, R.O.C.
(Address of Principal Executive Offices)
_____________________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F  x            Form 40-F  o
Indicate by check mark if the registrant is submitting the Form 6-K in papers as permitted by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in papers as permitted by Regulation S-T Rule 101(b)(7): o


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Taiwan Semiconductor Manufacturing Company Ltd.
Date:   February 29, 2024 By    /s/ Wendell Huang
  Wendell Huang
   Senior Vice President and Chief Financial Officer


Exhibits
EX-99.1 2 a-workivaxtsmc2023q4consol.htm EX-99.1 Document
English Translation of Financial Statements Originally Issued in Chinese
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

Consolidated Financial Statements for the
Years Ended December 31, 2023 and 2022 and
Independent Auditors’ Report



REPRESENTATION LETTER



The entities that are required to be included in the combined financial statements of Taiwan Semiconductor Manufacturing Company Limited as of and for the year ended December 31, 2023, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements”. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries do not prepare a separate set of combined financial statements.


Very truly yours,


TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED

By






MARK LIU 
Chairman

February 6, 2024

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勤業眾信
勤業眾信聯合會計師事務所
110016 台北市信義區松仁路100號20樓

Deloitte & Touche
20F, Taipei Nan Shan Plaza
No. 100, Songren Rd.,
Xinyi Dist., Taipei 110016, Taiwan

Tel :+886 (2) 2725-9988
Fax:+886 (2) 4051-6888
www.deloitte.com.tw

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders
Taiwan Semiconductor Manufacturing Company Limited

Opinion

We have audited the accompanying consolidated financial statements of Taiwan Semiconductor Manufacturing Company Limited and its subsidiaries (the “Company”), which comprise the consolidated balance sheets as of December 31, 2023 and 2022, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.



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Key audit matter for the Company’s consolidated financial statements for the year ended December 31, 2023 is stated as follows:

Property, plant and equipment (PP&E) – commencement of depreciation related to PP&E classified as equipment under installation and construction in progress (EUI/CIP)

Refer to Notes 4, 5 and 14 to the consolidated financial statements.

The Company’s evaluation of when to commence depreciation of EUI/CIP involves determining when the assets are available for their intended use. The criteria the Company uses to determine whether EUI/CIP are available for their intended use involves subjective judgments and assumptions about the conditions necessary for the assets to be capable of operating in the intended manner. Changes in these assumptions could have a significant impact on when depreciation is recognized.

Given the subjectivity in determining the date to commence depreciation of EUI/CIP, performing audit procedures to evaluate the reasonableness of the Company’s judgments and assumptions required a high degree of auditor judgment. Consequently, the validity of commencement of depreciation related to PP&E classified as EUI/CIP is identified as a key audit matter.

Our audit procedures related to the evaluation of when to commence depreciation of EUI/CIP included the following, among others:

1.    We read the Company’s policy and understood the criteria used to determine when to commence depreciation.

2.    We tested the effectiveness of the controls over the evaluation of when to commence depreciation of EUI/CIP.

3.    We sampled the year-end balance of EUI/CIP and performed the following for each selection:

a.    Evaluated whether the selection did not meet the criteria specified by the Company for commencement of depreciation.

b.    Observed the assets and evaluated their status.

4.    We sampled and evaluated whether the selection of EUI/CIP met the criteria specified by the Company for commencement of depreciation during the year.

5.    We sampled and evaluated whether the selection of EUI/CIP met the criteria specified by the Company for commencement of depreciation subsequent to year end.

Other Matter

We have also audited the parent company only financial statements of Taiwan Semiconductor Manufacturing Company Limited as of and for the years ended December 31, 2023 and 2022 on which we have issued an unmodified opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the Audit and Risk Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1.Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4.Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5.Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.



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6.Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2023 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Shih Tsung Wu and Shang Chih Lin.
x.jpg
Deloitte & Touche
Taipei, Taiwan
Republic of China

February 6, 2024








Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

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Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED BALANCE SHEETS
(In Thousands of New Taiwan Dollars)


December 31, 2023 December 31, 2022
Amount % Amount %

CURRENT ASSETS
Cash and cash equivalents (Note 6)
 $ 1,465,427,753 26 $ 1,342,814,083 27
Financial assets at fair value through profit or loss (Note 7)
 924,636 - 1,070,398 -
Financial assets at fair value through other comprehensive income (Note 8)
 154,530,830 3 122,998,543 2
Financial assets at amortized cost (Note 9)
 66,761,221 1 94,600,219 2
Hedging financial assets (Note 10)
 - - 2,329 -
Notes and accounts receivable, net (Note 11)
 201,313,914 4 229,755,887 5
Receivables from related parties (Note 33)
 624,451 - 1,583,958 -
Other receivables from related parties (Note 33)
 71,871 - 68,975 -
Inventories (Notes 5 and 12)
 250,997,088 5 221,149,148 4
Other financial assets (Note 34)
 27,158,766 1 25,964,428 1
Other current assets
26,222,380 - 12,888,776 -

Total current assets
 2,194,032,910 40 2,052,896,744 41

NONCURRENT ASSETS
Financial assets at fair value through profit or loss (Note 7)
 13,417,457 - - -
Financial assets at fair value through other comprehensive income (Note 8)
 7,208,655 - 6,159,200 -
Financial assets at amortized cost (Note 9)
 79,199,367 2 35,127,215 1
Investments accounted for using equity method (Note 13)
 29,616,638 1 27,641,505 1
Property, plant and equipment (Notes 5 and 14)
 3,064,474,984 55 2,693,836,970 54
Right-of-use assets (Notes 5 and 15)
 40,424,830 1 41,914,136 1
Intangible assets (Notes 5 and 16)
 22,766,744 - 25,999,155 1
Deferred income tax assets (Notes 5 and 25)
 64,175,787 1 69,185,842 1
Refundable deposits
7,044,420 - 4,467,022 -
Other noncurrent assets
10,009,423 - 7,551,089 -

Total noncurrent assets
 3,338,338,305 60 2,911,882,134 59

TOTAL
 $ 5,532,371,215 100 $ 4,964,778,878 100

LIABILITIES AND EQUITY

CURRENT LIABILITIES
Financial liabilities at fair value through profit or loss (Note 7)
 $ 121,412 - $ 116,215 -
Hedging financial liabilities (Notes 10 and 30)
 27,334,164 - 813 -
Accounts payable
55,726,757 1 54,879,708 1
Payables to related parties (Note 33)
 1,566,300 - 1,642,637 -
Salary and bonus payable
33,200,563 1 36,435,509 1
Accrued profit sharing bonus to employees and compensation to directors (Note 28)
 50,716,944 1 61,748,574 1
Payables to contractors and equipment suppliers
171,484,616 3 213,499,613 4
Cash dividends payable (Note 20)
 168,558,461 3 142,617,093 3
Income tax payable (Notes 5 and 25)
 98,912,902 2 120,801,814 3
Long-term liabilities - current portion (Notes 17, 18 and 30)
 9,293,266 - 19,313,889 -
Accrued expenses and other current liabilities (Notes 5, 15, 21, 30 and 33)
 296,667,931 5 293,170,952 6

Total current liabilities
 913,583,316 16 944,226,817 19

NONCURRENT LIABILITIES
Bonds payable (Notes 17 and 30)
 913,899,843 17 834,336,439 17
Long-term bank loans (Notes 18 and 30)
 4,382,965 - 4,760,047 -
Deferred income tax liabilities (Notes 5 and 25)
 53,856 - 1,031,383 -
Lease liabilities (Notes 5, 15 and 30)
 28,681,835 1 29,764,097 -
Net defined benefit liability (Note 19)
 9,257,224 - 9,321,091 -
Guarantee deposits
 923,164 - 892,021 -
Others (Note 21)
 178,326,165 3 179,958,116 4

Total noncurrent liabilities
 1,135,525,052 21 1,060,063,194 21

Total liabilities
 2,049,108,368 37 2,004,290,011 40

EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
Capital stock (Note 20)
 259,320,710 5 259,303,805 5
Capital surplus (Notes 20 and 27)
 69,876,381 1 69,330,328 1
Retained earnings (Note 20)
Appropriated as legal capital reserve
 311,146,899 6 311,146,899 6
Appropriated as special capital reserve
 - - 3,154,310 -
Unappropriated earnings
 2,846,883,893 51 2,323,223,479 47

3,158,030,792 57 2,637,524,688 53
Others (Notes 20 and 27)
 (28,314,256 ) - (20,505,626 ) -

Equity attributable to shareholders of the parent
 3,458,913,627 63 2,945,653,195 59

NON - CONTROLLING INTERESTS
 24,349,220 - 14,835,672 1

Total equity
 3,483,262,847 63 2,960,488,867 60

TOTAL
$ 5,532,371,215 100 $ 4,964,778,878 100



The accompanying notes are an integral part of the consolidated financial statements.

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Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)



 2023 2022

Amount % Amount %

NET REVENUE (Notes 5, 21, 33 and 38)
 $ 2,161,735,841 100 $ 2,263,891,292 100

COST OF REVENUE (Notes 5, 12, 28 and 33)
 986,625,213 46 915,536,486 40

GROSS PROFIT
 1,175,110,628 54 1,348,354,806 60

OPERATING EXPENSES (Notes 5, 28 and 33)
Research and development
 182,370,170 8 163,262,208 7
General and administrative
 60,872,841 3 53,524,898 2
Marketing
 10,590,705 - 9,920,446 1

Total operating expenses
 253,833,716 11 226,707,552 10

OTHER OPERATING INCOME AND EXPENSES, NET (Notes 14 and 28)
 188,694 - (368,403 ) -

INCOME FROM OPERATIONS (Note 38)
 921,465,606 43 1,121,278,851 50

NON-OPERATING INCOME AND EXPENSES
Share of profits of associates
 4,655,098 - 7,798,359 -
Interest income (Note 22)
 60,293,901 3 22,422,209 1
Other income
 479,984 - 947,697 -
Foreign exchange gain (loss), net (Note 36)
 (2,685,484 ) - 4,505,784 -
Finance costs (Note 23)
 (11,999,360 ) (1 ) (11,749,984 ) -
Other gains and losses, net (Note 24)
 6,961,579 - (1,012,198 ) -

Total non-operating income and expenses
 57,705,718 2 22,911,867 1

INCOME BEFORE INCOME TAX
 979,171,324 45 1,144,190,718 51

INCOME TAX EXPENSE (Notes 5 and 25)
 141,403,807 6 127,290,203 6

NET INCOME
 837,767,517 39 1,016,900,515 45

OTHER COMPREHENSIVE INCOME (LOSS) (Notes 5, 19, 20 and 25)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit obligation
 (623,356 ) - (823,060 ) -
Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income
 1,954,563 - (263,749 ) -
Gain on hedging instruments
 39,898 - - -
Share of other comprehensive income of associates
 42,554 - 154,457 -
Income tax benefit related to items that will not be reclassified subsequently
 124,646 - 733,956 -
  
 1,538,305 - (198,396 ) -
(Continued)


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Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)



 2023 2022

Amount % Amount %
  
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations
 $ (14,464,353 ) (1 ) $ 50,845,614 2
Unrealized gain/(loss) on investments in debt instruments at fair value through other comprehensive income
 4,123,201 - (10,102,658 ) -
Gain (loss) on hedging instruments
 (74,735 ) - 1,329,231 -
Share of other comprehensive income of associates
 63,938 - 550,338 -
Income tax benefit related to items that may be reclassified subsequently
 - - 6,036 -
  
 (10,351,949 ) (1 ) 42,628,561 2
  
Other comprehensive income (loss), net of income tax
 (8,813,644 ) (1 ) 42,430,165 2
  
TOTAL COMPREHENSIVE INCOME
 $ 828,953,873 38 $ 1,059,330,680 47
  
NET INCOME ATTRIBUTABLE TO:
Shareholders of the parent
 $ 838,497,664 39 $ 1,016,530,249 45
Non-controlling interests
 (730,147 ) - 370,266 -
  
  
 $ 837,767,517 39 $ 1,016,900,515 45
  
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Shareholders of the parent
 $ 830,509,542 38 $ 1,059,124,890 47
Non-controlling interests
 (1,555,669 ) - 205,790 -
  
  
 $ 828,953,873 38 $ 1,059,330,680 47
  
EARNINGS PER SHARE (NT$, Note 26)
Basic earnings per share
 $ 32.34 $ 39.20
Diluted earnings per share
 $ 32.34 $ 39.20



The accompanying notes are an integral part of the consolidated financial statements.    
(Concluded)

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Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In Thousands of New Taiwan Dollars)


Equity Attributable to Shareholders of the Parent
Others
Unrealized
Gain (Loss) on
Financial
Assets at Fair
Foreign Value Through Unearned
Capital Stock - Common Stock Retained Earnings Currency Other Gain (Loss) on Stock-Based
Shares Legal Capital Special Capital Unappropriated Translation Comprehensive Hedging Employee Treasury Non-controlling Total
(In Thousands) Amount Capital Surplus Reserve Reserve Earnings Total Reserve Income Instruments Compensation Total Stock Total Interests Equity


BALANCE, JANUARY 1, 2022
 25,930,380 $ 259,303,805 $ 64,761,602 $ 311,146,899 $ 59,304,212 $ 1,536,378,550 $ 1,906,829,661 $ (63,303,361 ) $ 574,310 $ 120,536 $ - $ (62,608,515 ) $ - $ 2,168,286,553 $ 2,446,652 $ 2,170,733,205

Appropriations of earnings
Special capital reserve
 - - - - (56,149,902 ) 56,149,902 - - - - - - - - - -
Cash dividends to shareholders
 - - - - - (285,234,185 ) (285,234,185 ) - - - - - - (285,234,185 ) - (285,234,185)
Total
 - - - - (56,149,902 ) (229,084,283 ) (285,234,185 ) - - - - - - (285,234,185 ) - (285,234,185)

Net income
- - - - - 1,016,530,249 1,016,530,249 - - - - - - 1,016,530,249 370,266 1,016,900,515

Other comprehensive income (loss), net of income tax
 - - - - - (49,572 ) (49,572 ) 51,560,060 (10,327,421 ) 1,411,574 - 42,644,213 - 42,594,641 (164,476 ) 42,430,165

Total comprehensive income (loss)
 - - - - - 1,016,480,677 1,016,480,677 51,560,060 (10,327,421 ) 1,411,574 - 42,644,213 - 1,059,124,890 205,790 1,059,330,680

Share-based payment arrangements
 1,387 13,870 438,029 - - - - - - - (185,153 ) (185,153 ) - 266,746 - 266,746

Treasury stock acquired
 - - - - - - - - - - - - (871,566 ) (871,566 ) - (871,566)

Treasury stock retired
 (1,387 ) (13,870 ) (2,989 ) - - (854,707 ) (854,707 ) - - - - - 871,566 - - -

Disposal of investments in equity instruments at fair value through other comprehensive income
 - - - - - 303,242 303,242 - (303,242 ) - - (303,242 ) - - - -

Basis adjustment for loss on hedging instruments
 - - - - - - - - - (52,929 ) - (52,929 ) - (52,929 ) - (52,929)

Adjustments to share of changes in equities of associates
 - - 4,541 - - - - - - - - - - 4,541 - 4,541

From share of changes in equities of subsidiaries
 - - 4,115,940 - - - - - - - - - - 4,115,940 12,350,219 16,466,159

Donation from shareholders
- - 13,205 - - - - - - - - - - 13,205 20 13,225

Decrease in non-controlling interests
 - - - - - - - - - - - - - - (167,009 ) (167,009)

BALANCE, DECEMBER 31, 2022
 25,930,380 259,303,805 69,330,328 311,146,899 3,154,310 2,323,223,479 2,637,524,688 (11,743,301 ) (10,056,353 ) 1,479,181 (185,153 ) (20,505,626 ) - 2,945,653,195 14,835,672 2,960,488,867

Appropriations of earnings
Special capital reserve
 - - - - (3,154,310 ) 3,154,310 - - - - - - - - - -
Cash dividends to shareholders
 - - - - - (317,663,220 ) (317,663,220 ) - - - - - - (317,663,220 ) - (317,663,220)
Total
 - - - - (3,154,310 ) (314,508,910 ) (317,663,220 ) - - - - - - (317,663,220 ) - (317,663,220)

Net income
- - - - - 838,497,664 838,497,664 - - - - - - 838,497,664 (730,147 ) 837,767,517

Other comprehensive income (loss), net of income tax
 - - - - - (484,898 ) (484,898 ) (13,573,468 ) 6,108,369 (38,125 ) - (7,503,224 ) - (7,988,122 ) (825,522 ) (8,813,644)

Total comprehensive income (loss)
 - - - - - 838,012,766 838,012,766 (13,573,468 ) 6,108,369 (38,125 ) - (7,503,224 ) - 830,509,542 (1,555,669 ) 828,953,873

Disposal of investments accounted for using equity method
 - - (18,112 ) - - - - - - - - - - (18,112 ) (370 ) (18,482)

Employee restricted shares retired
 (419 ) (4,195 ) 4,195 - - 4,614 4,614 - - - - - - 4,614 - 4,614

Share-based payment arrangements
 2,110 21,100 564,868 - - - - - - - (108,281 ) (108,281 ) - 477,687 - 477,687

Disposal of investments in equity instruments at fair value through other comprehensive income
 - - - - - 151,944 151,944 - (151,944 ) - - (151,944 ) - - - -

Basis adjustment for loss on hedging instruments
 - - - - - - - - - (45,181 ) - (45,181 ) - (45,181 ) - (45,181)

Adjustments to share of changes in equities of associates
 - - (43 ) - - - - - - - - - - (43 ) - (43)

From share of changes in equities of subsidiaries
 - - (21,268 ) - - - - - - - - - - (21,268 ) 11,265,933 11,244,665

Donation from shareholders
- - 16,413 - - - - - - - - - - 16,413 35 16,448

Decrease in non-controlling interests
 - - - - - - - - - - - - - - (196,381 ) (196,381)

BALANCE, DECEMBER 31, 2023
 25,932,071 $ 259,320,710 $ 69,876,381 $ 311,146,899 $ - $ 2,846,883,893 $ 3,158,030,792 $ (25,316,769 ) $ (4,099,928 ) $ 1,395,875 $ (293,434 ) $ (28,314,256 ) $ - $ 3,458,913,627 $ 24,349,220 $ 3,483,262,847



The accompanying notes are an integral part of the consolidated financial statements.

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Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)


2023 2022

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
 $ 979,171,324 $ 1,144,190,718
Adjustments for:
Depreciation expense
 522,932,671 428,498,179
Amortization expense
 9,258,250 8,756,094
Expected credit losses recognized on investments in debt instruments
 35,745 52,351
Finance costs
 11,999,360 11,749,984
Share of profits of associates
 (4,655,098 ) (7,798,359 )
Interest income
 (60,293,901 ) (22,422,209 )
Share-based compensation
 483,050 302,348
Loss (gain) on disposal or retirement of property, plant and equipment, net
 369,140 (98,856 )
Loss (gain) on disposal or retirement of intangible assets, net
 (3,045 ) 6,004
Impairment loss on property, plant and equipment
 - 790,740
Gain on financial instruments at fair value through profit or loss, net
 (12,355 ) -
Loss on disposal of investments in debt instruments at fair value through other comprehensive income, net
 473,897 410,076
Gain on disposal of investments accounted for using equity method, net
 (15,758 ) -
Loss (gain) on foreign exchange, net
 (246,695 ) 10,342,706
Dividend income
 (464,094 ) (266,767 )
Others
 (337,935 ) 138,827
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss
 289,570 (1,354,359 )
Notes and accounts receivable, net
 28,441,987 (32,169,853 )
Receivables from related parties
 959,507 (868,634 )
Other receivables from related parties
 (2,896 ) (7,444 )
Inventories
 (29,847,940 ) (28,046,827 )
Other financial assets
 1,878,712 (1,680,611 )
Other current assets
 (12,530,880 ) (4,450,883 )
Other noncurrent assets
 (720,278 ) -
Accounts payable
 847,049 7,594,105
Payables to related parties
 (76,337 ) 205,451
Salary and bonus payable
 (3,234,946 ) 12,633,409
Accrued profit sharing bonus to employees and compensation to directors
 (11,031,630 ) 25,223,833
Accrued expenses and other current liabilities
 (44,466,734 ) 46,578,784
Other noncurrent liabilities
 13,329,895 101,390,476
Net defined benefit liability
 (687,223 ) (2,538,848 )
Cash generated from operations
 1,401,842,412 1,697,160,435
Income taxes paid
 (159,875,065 ) (86,561,247 )

Net cash generated by operating activities
 1,241,967,347 1,610,599,188

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Financial instruments at fair value through profit or loss
 (14,142,072 ) (125,540 )
Financial assets at fair value through other comprehensive income
 (62,752,002 ) (54,566,725 )
Financial assets at amortized cost
 (149,387,898 ) (183,125,920 )
Property, plant and equipment
 (949,816,825 ) (1,082,672,130 )
Intangible assets
 (5,518,414 ) (6,954,326 )
(Continued)


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Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)


2023 2022

Proceeds from disposal or redemption of:
Financial assets at fair value through other comprehensive income
 $ 35,698,575 $ 44,963,367
Financial assets at amortized cost
 134,605,822 62,329,674
Property, plant and equipment
703,904 983,358
Intangible assets
 3,078 12,636
Proceeds from return of capital of investments in equity instruments at fair value through other comprehensive income
 127,963 2,938
Derecognition of hedging financial instruments
 68,237 1,684,430
Interest received
 55,887,164 18,083,755
Proceeds from government grants - property, plant and equipment
 47,544,746 7,046,136
Proceeds from government grants - others
 1,152 5,296
Other dividends received
 445,129 266,767
Dividends received from investments accounted for using equity method
 3,076,482 2,749,667
Increase in prepayments for leases
(63,153 ) -
Refundable deposits paid
 (4,056,496 ) (2,117,041 )
Refundable deposits refunded
 1,454,012 505,423

Net cash used in investing activities
 (906,120,596 ) (1,190,928,235 )

CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term loans
 - (111,959,992 )
Increase in hedging financial liabilities - bank loans
 27,908,580 -
Proceeds from issuance of bonds
 85,700,000 198,293,561
Repayment of bonds
 (18,100,000 ) (4,400,000 )
Proceeds from long-term bank loans
 2,450,000 2,670,000
Repayment of long-term bank loans
 (1,756,944 ) (166,667 )
Payments for transaction costs attributable to the issuance of bonds
 (88,681 ) (414,307 )
Treasury stock acquired
 - (871,566 )
Repayment of the principal portion of lease liabilities
 (2,854,344 ) (2,428,277 )
Interest paid
 (17,358,981 ) (12,218,659 )
Guarantee deposits received
 230,116 271,387
Guarantee deposits refunded
 (367,375 ) (62,100 )
Cash dividends
 (291,721,852 ) (285,234,185 )
Donation from shareholders
 16,448 13,225
Increase in non-controlling interests
 11,048,781 16,263,548

Net cash used in financing activities
 (204,894,252 ) (200,244,032 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
 (8,338,829 ) 58,396,970

NET INCREASE IN CASH AND CASH EQUIVALENTS
 122,613,670 277,823,891

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
 1,342,814,083 1,064,990,192

CASH AND CASH EQUIVALENTS, END OF YEAR
 $ 1,465,427,753 $ 1,342,814,083



The accompanying notes are an integral part of the consolidated financial statements.    
(Concluded)



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Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


1.    GENERAL

Taiwan Semiconductor Manufacturing Company Limited (TSMC), a Republic of China (R.O.C.) corporation, was incorporated on February 21, 1987. TSMC is a dedicated foundry in the semiconductor industry which engages mainly in the manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing of masks.

On September 5, 1994, TSMC’s shares were listed on the Taiwan Stock Exchange (TWSE). On October 8, 1997, TSMC listed some of its shares of stock on the New York Stock Exchange (NYSE) in the form of American Depositary Shares (ADSs).

The address of its registered office and principal place of business is No. 8, Li-Hsin Rd. 6, Hsinchu Science Park, Taiwan. The principal operating activities of TSMC’s subsidiaries are described in Note 4.


2.    THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on February 6, 2024.


3.    APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

a.    Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, “IFRS Accounting Standards”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, the initial application of the amendments to the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have a material impact on the accounting policies of TSMC and its subsidiaries (collectively as the “Company”):

Amendments to IAS 12 “International Tax Reform - Pillar Two Model Rules”

The amendments introduce a temporary exception to the requirements in IAS 12 by stipulating that the Company should neither recognize nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. The amendments also require the Company to disclose that it has applied the exception and separately disclose its current tax expense (income) related to Pillar Two income taxes. In addition, for periods in which Pillar Two legislation is enacted or substantively enacted but not yet in effect, the Company should disclose qualitative and quantitative information that helps users of financial statements understand the Company’s exposure to Pillar Two income taxes. The requirement that the Company applies the exception and the requirement to disclose that fact is applied immediately upon issuance of the amendments in May 2023. The remaining disclosure requirements are applied for annual reporting periods beginning on or after January 1, 2023, but not for any interim period ending on or before December 31, 2023.



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b.    The IFRS Accounting Standards issued by International Accounting Standards Board (IASB) and endorsed by the FSC with effective date starting 2024

New, Amended and Revised Standards and Interpretations

Effective Date Issued
by IASB



Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” and “Non-current Liabilities with Covenants”

January 1, 2024

c.    The IFRS Accounting Standards issued by IASB, but not yet endorsed and issued into effect by the FSC

New, Amended and Revised Standards and Interpretations

Effective Date Issued
by IASB



Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”
To be determined by IASB

As of the date the accompanying consolidated financial statements were authorized for issue, the Company continues in evaluating the impact on its financial position and financial performance from the initial adoption of the aforementioned standards or interpretations and related applicable period. The related impact will be disclosed when the Company completes its evaluation.


4.    SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

For the convenience of readers, the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the R.O.C. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language consolidated financial statements shall prevail.

Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS Accounting Standards endorsed by the FSC with the effective dates (collectively, “Taiwan-IFRS Accounting Standards”).

Basis of Preparation

The accompanying consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for the assets.

Basis of Consolidation

The basis for the consolidated financial statements

The consolidated financial statements incorporate the financial statements of TSMC and entities controlled by TSMC (its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

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All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to shareholders of the parent.

When the Company loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between:

a.    the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and

b.    the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interest.

The Company shall account for all amounts recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the Company had directly disposed of the related assets and liabilities.

The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the cost on initial recognition of an investment in an associate.

The subsidiaries in the consolidated financial statements

The detail information of the subsidiaries at the end of reporting period was as follows:

Establishment Percentage of Ownership
Name of Investor Name of Investee Main Businesses and Products and Operating Location
December 31,
2023
December 31,
2022
 Note








TSMC

TSMC North America

Sales and marketing of integrated circuits and other semiconductor devices

San Jose, California, U.S.A.

100%

100%

-


TSMC Europe B.V. (TSMC Europe)

Customer service and supporting activities

Amsterdam, the Netherlands

100%

100%

a)


TSMC Japan Limited (TSMC Japan)

Customer service and supporting activities

Yokohama, Japan

100%

100%

a)


TSMC Design Technology Japan, Inc. (TSMC JDC)

Engineering support activities

Yokohama, Japan

100%

100%

a)


TSMC Japan 3DIC R&D Center, Inc. (TSMC 3DIC)

Engineering support activities

Yokohama, Japan

100%

100%

a)


TSMC Korea Limited (TSMC Korea)

Customer service and supporting activities

Seoul, Korea

100%

100%

a)


TSMC Partners, Ltd. (TSMC Partners)

Investing in companies involved in the semiconductor design and manufacturing, and other investment activities

Tortola, British Virgin Islands

100%

100%

-


TSMC Global, Ltd. (TSMC Global)

Investment activities

Tortola, British Virgin Islands

100%

100%

-


TSMC China Company Limited (TSMC China)

Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices

Shanghai, China

100%

100%

-


TSMC Nanjing Company Limited (TSMC Nanjing)

Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices

Nanjing, China

100%

100%

-


VisEra Technologies Company Ltd. (VisEra Tech)

Research, design, development, manufacturing, sales, packaging and test of color filter

Hsin-Chu, Taiwan

67%

68%

b)


TSMC Arizona Corporation (TSMC Arizona)

Manufacturing, sales and testing of integrated circuits and other semiconductor devices

Phoenix, Arizona, U.S.A.

100%

100%

c)


Japan Advanced Semiconductor Manufacturing, Inc. (JASM)

Manufacturing, sales, testing and computer aided design of integrated circuits and other semiconductor devices

Kumamoto, Japan

71%

71%

d)


European Semiconductor Manufacturing Company (ESMC) GmbH (ESMC)

Manufacturing, sales and testing of integrated circuits and other semiconductor devices

Dresden, Germany

100%

100%

a), e)
(Continued)


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Establishment

Percentage of Ownership

Name of Investor

Name of Investee

Main Businesses and Products

and Operating Location

December 31,
2023

December 31,
2022

Note












TSMC

VentureTech Alliance Fund II, L.P. (VTAF II)

Investing in technology start-up companies

Cayman Islands

98%

98%

-


VentureTech Alliance Fund III, L.P. (VTAF III)

Investing in technology start-up companies

Cayman Islands

98%

98%

-


Emerging Fund L.P. (Emerging Fund)

Investing in technology start-up companies

Cayman Islands

99.9%

99.9%

-
TSMC Partners

TSMC Development, Inc. (TSMC Development)

Investing in companies involved in semiconductor manufacturing

Delaware, U.S.A.

100%

100%

-


TSMC Technology, Inc. (TSMC Technology)

Engineering support activities

Delaware, U.S.A.

100%

100%

a)


TSMC Design Technology Canada Inc. (TSMC Canada)

Engineering support activities

Ontario, Canada

100%

100%

a)
VTAF III

Growth Fund Limited (Growth Fund)

Investing in technology start-up companies

Cayman Islands

100%

100%

-
TSMC Development

TSMC Washington, LLC (TSMC Washington)

Manufacturing, sales and testing of integrated circuits and other semiconductor devices

Washington, U.S.A.

100%

100%

f)
(Concluded)

Note a:    This is an immaterial subsidiary for which the consolidated financial statements are not audited by the Company’s independent auditors.

Note b:     As VisEra's employees continue to exercise their employee share options, TSMC’s ownership in VisEra continues to decline. This transaction was accounted for as an equity transaction since the transaction did not change TSMC’s control over VisEra.

Note c:    Under the terms of the development agreement entered into between TSMC Arizona and the City of Phoenix, the City of Phoenix commits approximately US$205 million toward various public infrastructure projects in the area of the proposed manufacturing facility, conditioned on TSMC Arizona’s achieving a minimum project scale with defined spending and job-creation thresholds.

Note d:    TSMC’s shareholding and the proportion of voting rights in JASM are 71% and 81%, respectively.

Note e:     ESMC was established in June 2023. TSMC sold its 10% shares to Robert Bosch GmbH, Infineon Technologies AG and NXP Semiconductors N.V. in January 2024, respectively. After selling shares, TSMC’s shareholding in ESMC decreased from 100% to 70%. This transaction was accounted for as an equity transaction since the transaction did not change TSMC’s control over ESMC.

Note f:     WaferTech, LLC was renamed to TSMC Washington, LLC in December 2023.

Foreign Currencies

The financial statements of each individual consolidated entity were expressed in the currency which reflected its primary economic environment (functional currency). The functional currency of TSMC and presentation currency of the consolidated financial statements are both New Taiwan Dollars (NT$). In preparing the consolidated financial statements, the operating results and financial positions of each consolidated entity are translated into NT$.

In preparing the financial statements of each individual consolidated entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Such exchange differences are recognized in profit or loss in the year in which they arise. Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income. Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.

For the purposes of presenting consolidated financial statements, the assets and liabilities of the Company’s foreign operations are translated into NT$ using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate).

Classification of Current and Noncurrent Assets and Liabilities

Current assets are assets held for trading purposes and assets expected to be converted to cash, sold or consumed within one year from the end of the reporting period. Current liabilities are obligations incurred for trading purposes and obligations expected to be settled within one year from the end of the reporting period. Assets and liabilities that are not classified as current are noncurrent assets and liabilities, respectively.



- 15 -



Cash Equivalents

Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial Instruments

Financial assets and liabilities shall be recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and liabilities are initially recognized at fair values. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial Assets

The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Regular way purchases or sales of financial assets are recognized and derecognized on a trade date or settlement date basis for which financial assets were classified in the same way, respectively. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

a.    Category of financial assets and measurement

Financial assets are classified into the following categories: financial assets at FVTPL, investments in debt instruments and equity instruments at FVTOCI, and financial assets at amortized cost.

1)    Financial asset at FVTPL

For certain financial assets which include debt instruments that do not meet the criteria of amortized cost or FVTOCI, it is mandatorily required to measure them at FVTPL. Any gain or loss arising from remeasurement is recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest earned on the financial asset.

2)    Investments in debt instruments at FVTOCI

Debt instruments with contractual terms specifying that cash flows are solely payments of principal and interest on the principal amount outstanding, together with objective of collecting contractual cash flows and selling the financial assets, are measured at FVTOCI.

Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment gains or losses on investments in debt instruments at FVTOCI are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when these debt instruments are disposed.

3) Investments in equity instruments at FVTOCI 4) Measured at amortized cost

On initial recognition, the Company may irrevocably designate investments in equity investments that is not held for trading as at FVTOCI.



- 16 -



Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity.

Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the Company’s rights clearly represent a recovery of part of the cost of the investment.


Cash and cash equivalents, commercial paper, debt instrument investments, notes and accounts receivable (including related parties), other receivables, refundable deposits and temporary payments (including those classified under other current assets and other noncurrent assets) are measured at amortized cost.

Debt instruments with contractual terms specifying that cash flows are solely payments of principal and interest on the principal amount outstanding, together with objective of holding financial assets in order to collect contractual cash flows, are measured at amortized cost.

Subsequent to initial recognition, financial assets measured at amortized cost are measured at amortized cost, which equals to carrying amount determined by the effective interest method less any impairment loss.

b.    Impairment of financial assets

At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable) and for investments in debt instruments that are measured at FVTOCI.

The loss allowance for accounts receivable is measured at an amount equal to lifetime expected credit losses. For financial assets at amortized cost and investments in debt instruments that are measured at FVTOCI, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from possible default events of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.

The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.

c.    Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another entity.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

- 17 -




Financial Liabilities and Equity Instruments

Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities are subsequently measured either at amortized cost using effective interest method or at FVTPL.

Financial liabilities are classified as at fair value through profit or loss when the financial liability is either held for trading or is designated as at fair value through profit or loss.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss.

Financial liabilities other than those held for trading purposes and designated as at FVTPL are subsequently measured at amortized cost at the end of each reporting period.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Derivative Financial Instruments

Derivative financial instruments are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative financial instrument is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

Hedge Accounting

a.    Fair value hedge

The Company designates certain hedging instruments, such as interest rate futures contracts, to partially hedge against the fair value change caused by interest rates fluctuation in the Company’s fixed income investments. Changes in the fair value of hedging instruments that are designated and qualify as fair value hedges are recognized in profit or loss immediately, together with any changes in the fair value of the hedged items that are attributable to the hedged risk.



- 18 -



b.    Cash flow hedge

The Company designates certain hedging instruments, such as forward contracts, to partially hedge its foreign exchange rate risks or interest rate risks associated with certain highly probable forecast transactions (capital expenditures or issuance of debts). The effective portion of changes in the fair value of hedging instruments is recognized in other comprehensive income. When forecast transactions actually take place, the accumulated gains or losses that were recognized in other comprehensive income are transferred from equity to the initial cost of the hedged items, or reclassified to finance costs of hedged items in the same period or periods during which the hedged expected future cash flows affect profit or loss. The gains or losses from hedging instruments relating to the ineffective portion are recognized immediately in profit or loss.

The Company prospectively discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised.

c.    Hedges of net investments in foreign operations

The Company designates certain hedging instruments, such as bank loans denominated in foreign currency, as a hedge of net investments in foreign operations to manage the exchange differences arising on translation of foreign operations due to currency fluctuations. Any gains or losses on the hedging instrument relating to the effective portion of the hedge are recognized in other comprehensive income and accumulated under the heading of foreign currency translation reserve. The gains or losses relating to the ineffective portion are recognized immediately in profit or loss.

The gains and losses on the hedging instrument relating to the effective portion of the hedge, which were accumulated in the foreign currency translation reserve, are reclassified to profit or loss on the disposal or partial disposal of a foreign operation.

Inventories

Inventories are stated at the lower of cost or net realizable value. Inventories are recorded at standard cost and adjusted to approximate weighted-average cost at the end of the reporting period. Net realizable value represents the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale.

Investments Accounted for Using Equity Method

Investments accounted for using the equity method are investments in associates.

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The operating results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognized in the consolidated statements of financial position at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associate as well as the distribution received. The Company also recognizes its share in the changes in the equities of associates.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.



- 19 -



When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Company discontinues the use of the equity method from the date when the Company ceases to have significant influence over an associate. When the Company retains an interest in the former associate, the Company measures the retained interest at fair value at that date. The difference between the carrying amount of the associate at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate is included in the determination of the gain or loss on disposal of the associate. In addition, the Company shall account for all amounts recognized in other comprehensive income in relation to that associate on the same basis as would be required if the associate had directly disposed of the related assets or liabilities. If the Company’s ownership interest in an associate is reduced as a result of disposal, but the investment continues to be an associate, the Company should reclassify to profit or loss only a proportionate amount of the gain or loss previously recognized in other comprehensive income.

When the Company subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the net assets of the associate. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the Company’s ownership interest is reduced due to the additional subscription to the shares of associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate shall be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

When a consolidated entity transacts with an associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s consolidated financial statements only to the extent of interests in the associate that are not owned by the Company.

Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment. Costs include any incremental costs that are directly attributable to the construction, acquisition of the item of property, plant and equipment or borrowing costs eligible for capitalization.

Property, plant and equipment in the course of construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss. Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other identical categories of property, plant and equipment, commences when the assets are available for their intended use.

Depreciation is recognized so as to write off the cost of the assets less their residual values over their useful lives, and it is computed using the straight-line method mainly over the following estimated useful lives: land improvements - 20 years; buildings (assets used by the Company and assets subject to operating leases) - 10 to 20 years; machinery and equipment (assets used by the Company and assets subject to operating leases) - 5 years; and office equipment - 5 years. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis. Land is not depreciated.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.




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Leases

For a contract that contains a lease component and non-lease component, the Company may elect to account for the lease and non-lease components as a single lease component.

The Company as lessor

Rental income from operating lease is recognized on a straight-line basis over the term of the lease.

The Company as lessee

Except for payments for low-value asset leases and short-term leases (leases of machinery and equipment and others) which are recognized as expenses on a straight-line basis, the Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of the lease.

Right-of-use assets are measured at cost. The cost of right-of-use assets comprises the initial measurement of lease liabilities adjusted for lease payments and initial direct costs made at or before the commencement date, plus an estimate of costs needed to restore the underlying assets. Subsequent measurement is calculated as cost less accumulated depreciation and accumulated impairment loss and adjusted for changes in lease liabilities as a result of lease term modifications or other related factors. Right-of-use assets are presented separately in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. If the lease transfers ownership of the underlying assets to the Company by the end of the lease terms or if the cost of right-of-use assets reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use assets from the commencement dates to the end of the useful lives of the underlying assets.

Lease liabilities are measured at the present value of the lease payments. Lease payments comprise fixed payments, variable lease payments which depend on an index or a rate and the exercise price of a purchase option if the Company is reasonably certain to exercise that option. The lease payments are discounted using the lessee’s incremental borrowing rates.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in future lease payments resulting from a change in an index or a rate used to determine those payments, or a change in the assessment of an option to purchase an underlying asset, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. Lease liabilities are presented on a separate line in the consolidated balance sheets.

Intangible Assets

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

Other intangible assets

Other separately acquired intangible assets with finite useful lives are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized using the straight-line method over the following estimated useful lives: Technology license fees - the estimated life of the technology or the term of the technology transfer contract; software and system design costs - 3 years or contract period; patent and others - the economic life or contract period. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

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Impairment of Tangible Assets, Right-of-use Assets and Intangible Assets

Goodwill

Goodwill is not amortized and instead is tested for impairment annually, or more frequently when there is an indication that the cash generating unit may be impaired. For the purpose of impairment testing, goodwill is allocated to each of the Company’s cash-generating units or groups of cash-generating units that are expected to benefit from the synergies of the combination. If the recoverable amount of a cash-generating unit is less than its carrying amount, the difference is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to the other assets of the cash generating unit pro rata based on the carrying amount of each asset in the cash generating unit. Any impairment loss for goodwill is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

Tangible assets, right-of-use assets and other intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible assets (property, plant and equipment), right-of-use assets and other intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is increased to the revised estimate of its recoverable amount, but the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Revenue Recognition

The Company recognizes revenue when performance obligations are satisfied. The performance obligations are satisfied when customers obtain control of the promised goods, which is generally when the goods are delivered to the customers’ specified locations.

Revenue from sale of goods is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Estimated sales returns and other allowances is generally made and adjusted based on historical experience and the consideration of varying contractual terms to recognize refund liabilities, which is classified under accrued expenses and other current liabilities.



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In principle, payment term granted to customers is due 30 days from the invoice date or 15-30 days from the end of the month of when the invoice is issued. Due to the short term nature of the receivables from sale of goods with the immaterial discounted effect, the Company measures them at the original invoice amounts without discounting.

Employee Benefits

Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for service rendered by employees.

Retirement benefits

For defined contribution retirement benefit plans, payments to the benefit plan are recognized as an expense when the employees have rendered service entitling them to the contribution. For defined benefit retirement benefit plans, the cost of providing benefit is recognized based on actuarial calculations.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost (including current service cost), and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability represents the actual deficit in the Company’s defined benefit plan.

Treasury Stock

Treasury stock represents the outstanding shares that the Company buys back from market, which is stated at cost and shown as a deduction in shareholders’ equity. When the Company retires treasury stock, the treasury stock account is reduced and the common stock as well as the capital surplus - additional paid-in capital are reversed on a pro rata basis. When the book value of the treasury stock exceeds the sum of the par value and additional paid-in capital, the difference is charged to capital surplus - treasury stock transactions and to retained earnings for any remaining amount.

Share-based payment arrangements

a.    Equity-settled share-based payment arrangements

Restricted shares for employees are expensed on a straight-line basis over the vesting period, based on the fair value at the grant date and the Company’s best estimate of the number expected to ultimately vest, with a corresponding increase in other equity - unearned employee benefits.

When restricted shares for employees are issued, other equity - unearned employee benefits is recognized on the grant date, with a corresponding increase in capital surplus - restricted shares for employees. Dividends paid to employees on restricted shares which do not need to be returned if employees resign in the vesting period are recognized as expenses upon the dividend declaration with a corresponding adjustment in retained earnings.

At the end of each reporting period, the Company revises its estimate of the number of restricted shares for employees that are expected to vest. The impact from such revision is recognized in profit or loss so that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus - restricted shares for employees.




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b.    Cash-settled share-based payment arrangements

For cash-settled share-based payments, a liability is recognized for the services acquired, measured at the fair value of the liability incurred. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognized in profit or loss.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

Income tax on unappropriated earnings (excluding earnings from foreign consolidated subsidiaries) is expensed in the year the shareholders approved the appropriation of earnings which is the year subsequent to the year the earnings are generated.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, net operating loss carryforwards and tax credits for research and development expenses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized is also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.



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Government Grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire noncurrent assets (mainly including land use right and depreciable assets) are recognized as a deduction from the carrying amount of the related assets and recognized as a reduced depreciation or amortization charge in profit or loss over the contract period or useful lives of the related assets. Government grants that are receivables as compensation for expenses already incurred are deducted from incurred expenses in the period in which they become receivables.


5.    MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

In the application of the aforementioned Company’s accounting policies, the Company is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Material Accounting Judgments

Revenue Recognition

The Company recognizes revenue when the conditions described in Note 4 are satisfied.

Commencement of Depreciation Related to Property, Plant and Equipment Classified as Equipment under Installation and Construction in Progress (EUI/CIP)

As described in Note 4, commencement of depreciation related to EUI/CIP involves determining when the assets are available for their intended use. The criteria the Company uses to determine whether EUI/CIP are available for their intended use involves subjective judgments and assumptions about the conditions necessary for the assets to be capable of operating in the intended manner.

Judgments on Lease Terms

In determining a lease term, the Company considers all facts and circumstances that create an economic incentive to exercise or not to exercise an option, including any expected changes in facts and circumstances from the commencement date until the exercise date of the option. Main factors considered include contractual terms and conditions covered by the optional periods, and the importance of the underlying asset to the lessee’s operations, etc. The lease term is reassessed if a significant change in circumstances that are within the control of the Company occurs.

Key Sources of Estimation and Uncertainty

Estimation of Sales Returns and Allowances

Sales returns and other allowance is estimated and recorded based on historical experience and in consideration of different contractual terms. The amount is deducted from revenue in the same period the related revenue is recorded. The Company periodically reviews the reasonableness of the estimates.



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Valuation of Inventory

Inventories are stated at the lower of cost or net realizable value, and the Company uses estimate to determine the net realizable value of inventory at the end of each reporting period.

The Company estimates the net realizable value of inventory for normal waste, obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is determined mainly based on assumptions of future demand within a specific time horizon.

Impairment of Tangible Assets, Right-of-use Assets and Intangible Assets Other than Goodwill

In the process of evaluating the potential impairment of tangible assets, right-of-use assets and intangible assets other than goodwill, the Company determines the independent cash flows, useful lives, expected future revenue and expenses related to the specific asset groups with the consideration of the nature of semiconductor industry. Any change in these estimates based on changed economic conditions or business strategies could result in significant impairment charges or reversal in future years.

Realization of Deferred Income Tax Assets

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred tax assets can be utilized. Assessment of the realization of the deferred tax assets requires subjective judgment and estimate, including the future revenue growth and profitability, tax holidays, the amount of tax credits can be utilized and feasible tax planning strategies. Any changes in the global economic environment, the industry trends and relevant laws and regulations could result in significant adjustments to the deferred tax assets.

Determination of Lessees’ Incremental Borrowing Rates

In determining a lessee’s incremental borrowing rate used in discounting lease payments, the Company mainly takes into account the market risk-free rates, the estimated lessee’s credit spreads and secured status in a similar economic environment.


6.    CASH AND CASH EQUIVALENTS
December 31,
2023
December 31,
2022

Cash and deposits in banks
 $ 1,453,101,566 $ 1,327,884,602
Money market funds
 10,898,720 1,406,792
Repurchase agreements
 1,346,719 1,133,310
Government bonds/Agency bonds
 50,787 2,451,570
Commercial paper
 29,961 9,566,430
Corporate bonds
 - 371,379

$ 1,465,427,753 $ 1,342,814,083

Deposits in banks consisted of highly liquid time deposits that were readily convertible to known amounts of cash and were subject to an insignificant risk of changes in value.



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7.    FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
December 31,
2023
December 31,
2022

Financial assets

Mandatorily measured at FVTPL
Convertible preferred stocks
 $ 13,307,160 $ -
Forward exchange contracts
 701,182 947,546
Convertible bonds
 223,454 122,852
Mutual funds
 110,297 -


$ 14,342,093 $ 1,070,398

Current
 $ 924,636 $ 1,070,398
Noncurrent
 13,417,457 -


$ 14,342,093 $ 1,070,398

Financial liabilities

Held for trading
Forward exchange contracts
 $ 121,412 $ 116,215

The Company entered into forward exchange contracts to manage exposures due to fluctuations of foreign exchange rates. These forward exchange contracts did not meet the criteria for hedge accounting. Therefore, the Company did not apply hedge accounting treatment for these forward exchange contracts.

Outstanding forward exchange contracts consisted of the following:

Contract Amount
Maturity Date (In Thousands)
December 31, 2023
Sell NT$ January 2024 NT$ 26,251,763
Sell US$ January 2024 to March 2024 US$ 1,112,000
Sell JPY January 2024 JPY 20,000,000
December 31, 2022
Sell NT$ January 2023 to March 2023 NT$ 79,610,590
Sell US$ January 2023 to March 2023 US$ 752,486
Sell RMB January 2023 to March 2023 RMB 1,448,371



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8.    FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
December 31,
2023
December 31,
2022

Investments in debt instruments at FVTOCI
Corporate bonds
 $ 79,605,567 $ 66,116,166
Agency mortgage-backed securities
 37,959,691 28,367,926
Government bonds/Agency bonds
 22,338,901 18,961,888
Asset-backed securities
 9,898,766 9,274,697
    
 149,802,925 122,720,677
Investments in equity instruments at FVTOCI
Non-publicly traded equity investments
 7,208,655 6,159,200
Publicly traded stocks
 4,727,905 277,866
    
 11,936,560 6,437,066

        
 $ 161,739,485 $ 129,157,743

Current
 $ 154,530,830 $ 122,998,543
Noncurrent 7,208,655 6,159,200
$ 161,739,485 $ 129,157,743

These investments in equity instruments are held for medium to long-term purposes and therefore are accounted for as FVTOCI. For dividends recognized from these investments, please refer to consolidated statements of cash flows. All of the dividends are mainly from investments held at the end of the reporting period.

For the years ended December 31, 2023 and 2022, as the Company adjusted its investment portfolio, equity investments designated at FVTOCI were divested for NT$271,983 thousand and NT$561,600 thousand, respectively. The related other equity-unrealized gain/loss on financial assets at FVTOCI of NT$151,944 thousand and NT$303,242 thousand were transferred to increase retained earnings, respectively.

As of December 31, 2023 and 2022, the cumulative loss allowance for expected credit loss of NT$ 47,311 thousand and NT$37,783 thousand was recognized under investments in debt instruments at FVTOCI, respectively. Refer to Note 32 for information relating to the credit risk management and expected credit loss.


9.    FINANCIAL ASSETS AT AMORTIZED COST
December 31,
2023
December 31,
2022

Corporate bonds
 $ 113,851,856 $ 81,041,056
Commercial paper
 18,387,835 48,742,817
Government bonds/Agency bonds
 13,803,559 -
Less: Allowance for impairment loss
 (82,662 ) (56,439 )

    
 $ 145,960,588 $ 129,727,434

Current
 $ 66,761,221 $ 94,600,219
Noncurrent
 79,199,367 35,127,215

    
 $ 145,960,588 $ 129,727,434

Refer to Note 32 for information relating to credit risk management and expected credit loss for financial assets at amortized cost.




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10.    HEDGING FINANCIAL INSTRUMENTS
December 31,
2023
December 31,
2022

Financial assets- current

Fair value hedges
Interest rate futures contracts
$ - $ 2,329

Financial liabilities- current

Fair value hedges
Interest rate futures contracts
$ 43,764 $ 813
Hedges of net investments in foreign operations
Bank loans
 27,290,400 -


$ 27,334,164 $ 813

Fair value hedge

The Company entered into interest rate futures contracts, which are used to partially hedge against the fair value changes caused by interest rate fluctuation in the Company’s fixed income investments. The hedge ratio is adjusted in response to the changes in the financial market and capped at 100%.

On the basis of economic relationships, the value of the interest rate futures contracts and the value of the hedged financial assets change in opposite directions in response to movements in interest rates.

The main source of hedge ineffectiveness in these hedging relationships is the credit risk of the hedged financial assets, which is not reflected in the fair value of the interest rate futures contracts. No other sources of ineffectiveness emerged from these hedging relationships during the hedging period. Amount of hedge ineffectiveness recognized in profit or loss is classified under other gains and losses, net.

The following tables summarize the information relating to the hedges of interest rate risks.

December 31, 2023

Hedging Instruments
Contract Amount
(US$ in Thousands)
 Maturity
Interest rate futures contracts - US Treasury futures
 US$    48,600 March 2024

Hedged Items Asset Carrying Amount Accumulated Amount of Fair Value Hedge Adjustments
Financial assets at FVTOCI
 $    3,959,523
$    43,764



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December 31, 2022

Hedging Instruments
Contract Amount
(US$ in Thousands)
 Maturity
Interest rate futures contracts - US Treasury futures
 US$    74,300 March 2023

Hedged Items Asset Carrying Amount Accumulated Amount of Fair Value Hedge Adjustments
Financial assets at FVTOCI
 $    4,008,179 $    (1,516)

The effect for the years ended December 31, 2023 and 2022 is detailed below:

Hedging Instruments/Hedged Items Change in Value Used for Calculating Hedge Ineffectiveness
Years Ended December 31
2023 2022
Hedging Instruments
Interest rate futures contracts - US Treasury futures
 $ 20,478 $ 283,995
Hedged Items
Financial assets at FVTOCI
 (20,478 ) (283,995 )

    
 $ - $ -

Cash flow hedge

The Company entered into forward contracts to partially hedge foreign exchange rate risks or interest rate risks associated with certain highly probable forecast transactions (capital expenditures or issuance of debts). The hedge ratio is adjusted in response to the changes in the financial market and capped at 100%. The forward contracts have maturities of 12 months or less.

On the basis of economic relationships, the Company expects that the value of forward contracts and the value of hedged transactions will change in opposite directions in response to movements in foreign exchange rates or interest rates.

The main source of hedge ineffectiveness in these hedging relationships is driven by the effect of the counterparty’s own credit risk on the fair value of forward contracts. No other sources of ineffectiveness emerged from these hedging relationships during the hedging period. For the years ended December 31, 2023 and 2022, refer to Note 20(d) for gain or loss arising from changes in the fair value of hedging instruments, the amount transferred to initial carrying amount of hedged items and the amount reclassified to finance costs of hedged items.



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The effect for the years ended December 31, 2023 and 2022 is detailed below:

Hedging Instruments/Hedged Items
Change in Value Used for Calculating Hedge
Ineffectiveness
Years Ended December 31
2023
2022
Hedging Instruments
Forward exchange contracts (capital expenditures)
 $ 39,898 $ -
Forward interest rate contracts (issuance of debts)
 $ - $ 1,379,119
Hedged Items
Forecast transaction (capital expenditures)
 $ (39,898 ) $ -
Forecast transaction (issuance of debts)
 $ - $ (1,379,119 )

Hedges of net investments in foreign operations

TSMC has designated the bank loans denominated in foreign currency as a hedge of net investments in foreign operations to manage its foreign currency risk arising from investment in overseas subsidiaries.

The main source of hedge ineffectiveness in these hedging relationships is driven by the material difference between the notional amount of bank loans denominated in foreign currency and the net investment in foreign operations. No other sources of ineffectiveness have emerged from these hedging relationships during the hedging period. For the year ended December 31, 2023, refer to Note 20 (d) for gain or loss arising from changes in the fair value of hedging instruments.

The following tables summarize the information relating to the hedges of net investments in foreign operations.

December 31, 2023

Hedging Instruments
Contract Amount
(In Thousands)
 Annual Interest Rate Maturity
Balance in
Other Equity (Continuing Hedges)
Bank loans
 JPY    124,500,000 0%
Due by April 2024
 $618,180

The effect for the years ended December 31, 2023 is detailed below:

Change in Value Used for Calculating Hedge
Ineffectiveness
Hedging Instruments/Hedged Items Year Ended December 31, 2023
Hedging Instruments
Bank loans
 $ 618,180


Hedged Items

Net investments in foreign operations

$ (618,180 )



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11.    NOTES AND ACCOUNTS RECEIVABLE, NET
December 31,
2023
December 31,
2022

At amortized cost
Notes and accounts receivable $ 196,434,151 $ 222,761,927
Less: Loss allowance (531,554 ) (331,646 )
    
 195,902,597 222,430,281
At FVTOCI 5,411,317 7,325,606
    
 $ 201,313,914 $ 229,755,887

The Company signed a contract with the bank to sell certain accounts receivable without recourse and transaction cost required. These accounts receivable are classified as at FVTOCI because they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

In principle, the payment term granted to customers is due 30 days from the invoice date or 15-30 days from the end of the month when the invoice is issued. Aside from recognizing impairment loss for credit-impaired accounts receivable, the Company recognizes loss allowance based on the expected credit loss ratio of customers by different risk levels with consideration of factors of historical loss ratios and customers’ financial conditions, competitiveness and business outlook. For accounts receivable past due over 90 days without collaterals or guarantees, the Company recognizes loss allowance at full amount.

Aging analysis of notes and accounts receivable

December 31,
2023
December 31,
2022

Not past due $ 183,188,499 $ 205,053,142
Past due
Past due within 30 days 18,641,148 24,516,277
Past due over 31 days 15,821 518,114
Less: Loss allowance
 (531,554 ) (331,646 )

    
 $ 201,313,914 $ 229,755,887

All of the Company’s accounts receivable classified as at FVTOCI were not past due.

Movements of the loss allowance for accounts receivable


 Years Ended December 31

2023 2022

Balance, beginning of year
 $ 331,646 $ 347,020
Provision (Reversal)
 199,922 (15,449 )
Effect of exchange rate changes
 (14 ) 75

Balance, end of year
 $ 531,554 $ 331,646

For the years ended December 31, 2023 and 2022, the changes in loss allowance were mainly due to the variations in the balance of accounts receivable of different risk levels.



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12.    INVENTORIES
December 31,
2023
December 31,
2022

Finished goods
 $ 34,511,032 $ 54,818,402
Work in process
 156,498,469 125,661,912
Raw materials
 38,818,273 20,389,115
Supplies and spare parts
 21,169,314 20,279,719
    
 $ 250,997,088 $ 221,149,148

Write-down of inventories to net realizable value and reversal of write-down of inventories resulting from the increase in net realizable value were included in the cost of revenue. The amounts are illustrated below:


 Years Ended December 31

2023 2022

Net inventory losses
 $ 3,494,638 $ 4,689,112


13.    INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Associates consisted of the following:

Place of Carrying Amount % of Ownership and Voting Rights Held by the Company
Name of Associate Principal Activities Incorporation and Operation
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022



Vanguard International Semiconductor Corporation (VIS)

Manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks
Hsinchu, Taiwan
 $ 13,590,430 $ 13,492,653 28% 28%
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC)

Manufacturing and sales of integrated circuits and other semiconductor devices
Singapore
 9,728,801 8,934,731 39% 39%
Xintec Inc. (Xintec)

Wafer level chip size packaging and wafer level post passivation interconnection service
Taoyuan, Taiwan
 3,759,701 3,528,417 41% 41%
Global Unichip Corporation (GUC)

Researching, developing, manufacturing, testing and marketing of integrated circuits
Hsinchu, Taiwan
 2,537,706 1,666,651 35% 35%
Mutual-Pak Technology Co., Ltd. (Mutual-Pak)

Manufacturing of electronic parts, wholesaling and retailing of electronic materials, and researching, developing and testing of RFID
New Taipei, Taiwan
 - 19,053 - 28%




    



$ 29,616,638 $ 27,641,505

Due to the decrease in shareholding to 17%, the Company consequently ceased to have significant influence over Mutual-Pak. Therefore, the investment in Mutual-Pak was classified as financial assets at FVTOCI starting November 2023.

As of December 31, 2023 and 2022, no investments in associates are individually material to the Company. Please refer to the consolidated statements of comprehensive income for recognition of share of both profit (loss) and other comprehensive income (loss) of associates that are not individually material.

The market prices of the associates’ ownership held by the Company in publicly traded stocks calculated by the closing price are summarized as follows. The closing price represents the quoted price in active markets, the level 1 fair value measurement.



- 33 -




Name of Associate
December 31,
2023
December 31,
2022
GUC
 $ 81,236,875 $ 29,926,918
VIS
 $ 37,834,215 $ 35,977,321
Xintec
 $ 14,188,445 $ 10,716,449


14.    PROPERTY, PLANT AND EQUIPMENT
December 31,
2023
December 31,
2022

Assets used by the Company
 $ 3,064,424,259 $ 2,693,815,688
Assets subject to operating leases
 50,725 21,282

    
 $ 3,064,474,984 $ 2,693,836,970

Assets used by the Company


 Land and Land Improvements Buildings Machinery and Equipment
Office
Equipment
 Equipment under Installation and Construction in Progress Total

Cost

Balance at January 1, 2023 $ 7,661,817 $ 637,046,949 $ 4,295,942,530 $ 85,028,040 $ 1,336,842,608 $ 6,362,521,944
Additions (deductions) - 182,033,268 1,120,848,716 18,205,541 (423,568,764 ) 897,518,761
Disposals or retirements - (585,487 ) (28,525,908 ) (3,325,297 ) - (32,436,692 )
Transfers from right-of-use assets
 - - 4,444 - - 4,444
Transfers from assets subject to operating leases
 - - 80,370 - - 80,370
Transfers to assets subject to operating leases
 - - (71,078 ) - - (71,078 )
Effect of exchange rate changes
 (39,820 ) (671,755 ) (3,293,426 ) (83,200 ) (4,984,093 ) (9,072,294 )

Balance at December 31, 2023
 $ 7,621,997 $ 817,822,975 $ 5,384,985,648 $ 99,825,084 $ 908,289,751 $ 7,218,545,455
Accumulated depreciation
  and impairment                

Balance at January 1, 2023 $ 556,161 $ 342,938,359 $ 3,264,880,880 $ 59,540,116 $ 790,740 $ 3,668,706,256
Additions 1,315 45,052,891 463,825,315 10,586,695 - 519,466,216
Disposals or retirements - (582,993 ) (27,407,731 ) (3,324,247 ) - (31,314,971 )
Transfers from right-of-use assets
 - - 1,851 - - 1,851
Transfers from assets subject to operating leases
 - - 53,537 - - 53,537
Transfers to assets subject to operating leases
 - - (45,731 ) - - (45,731 )
Effect of exchange rate changes
 598 (394,346 ) (2,299,629 ) (52,585 ) - (2,745,962 )

Balance at December 31, 2023
 $ 558,074 $ 387,013,911 $ 3,699,008,492 $ 66,749,979 $ 790,740 $ 4,154,121,196

Carrying amounts at December 31, 2023
 $ 7,063,923 $ 430,809,064 $ 1,685,977,156 $ 33,075,105 $ 907,499,011 $ 3,064,424,259

Cost

Balance at January 1, 2022 $ 6,488,230 $ 576,597,777 $ 3,984,749,236 $ 76,154,170 $ 593,155,733 $ 5,237,145,146
Additions 816,366 59,443,801 330,782,690 10,325,337 738,523,914 1,139,892,108
Disposals or retirements - (236,765 ) (25,846,536 ) (1,709,151 ) - (27,792,452 )
Transfers to assets subject to operating leases
 - - (65,779 ) - - (65,779 )
Effect of exchange rate changes
 357,221 1,242,136 6,322,919 257,684 5,162,961 13,342,921

Balance at December 31, 2022
 $ 7,661,817 $ 637,046,949 $ 4,295,942,530 $ 85,028,040 $ 1,336,842,608 $ 6,362,521,944
(Continued)

- 34 -



Land and Land Improvements Buildings Machinery and Equipment
Office
Equipment
 Equipment under Installation and Construction in Progress Total
Accumulated depreciation
  and impairment                

Balance at January 1, 2022 $ 499,826 $ 306,165,242 $ 2,903,539,441 $ 51,826,663 $ - $ 3,262,031,172
Additions 1,402 35,982,373 380,216,160 9,216,278 - 425,416,213
Disposals or retirements - (225,637 ) (24,706,719 ) (1,708,639 ) - (26,640,995 )
Transfers to assets subject to operating leases
 - - (40,266 ) - - (40,266 )
Impairment
 - - - - 790,740 790,740
Effect of exchange rate changes
 54,933 1,016,381 5,872,264 205,814 - 7,149,392

Balance at December 31, 2022 $ 556,161 $ 342,938,359 $ 3,264,880,880 $ 59,540,116 $ 790,740 $ 3,668,706,256

Carrying amounts at December 31, 2022
 $ 7,105,656 $ 294,108,590 $ 1,031,061,650 $ 25,487,924 $ 1,336,051,868 $ 2,693,815,688
(Concluded)

The significant part of the Company’s buildings includes main plants, mechanical and electrical power equipment and clean rooms, and the related depreciation is calculated using the estimated useful lives of 20 years, 10 years and 10 years, respectively.

In the first quarter of 2022, the Company recognized an impairment loss of NT$790,740 thousand for certain machinery and equipment that were assessed to have no future use, and the recoverable amount of the aforementioned assets were nil. Such impairment loss was recognized in other operating income and expenses.

Information about capitalized interest is set out in Note 23.


15.    LEASE ARRANGEMENTS

a.    Right-of-use assets
December 31,
2023
December 31,
2022
Carrying amounts
Land $ 37,437,179 $ 38,525,856
Buildings 2,946,008 3,356,700
Machinery and equipment - 2,965
Office equipment 41,643 28,615

    
 $ 40,424,830 $ 41,914,136


Years Ended December 31

2023 2022

Additions to right-of-use assets
 $ 2,145,431 $ 12,610,664

Depreciation of right-of-use assets
Land
 $ 2,459,068 $ 2,119,828
Buildings
 976,097 928,726
Machinery and equipment
 369 863
Office equipment
 23,434 23,588

    
 $ 3,458,968 $ 3,073,005



- 35 -



b.    Lease liabilities


December 31,
2023
December 31,
2022
Carrying amounts

Current portion (classified under accrued expenses and other current liabilities)
 $ 2,810,551 $ 2,603,504
Noncurrent portion 28,681,835 29,764,097

    
 $ 31,492,386 $ 32,367,601

Ranges of discount rates for lease liabilities are as follows:
December 31,
2023
December 31,
2022

Land
 0.39%-2.30% 0.39%-2.30%
Buildings 0.57%-6.52% 0.39%-5.63%
Machinery and equipment - 0.71%
Office equipment 0.28%-7.13% 0.28%-4.71%

c.    Material terms of right-of-use assets

The Company leases land and buildings mainly for the use of plants and offices with lease terms of 1 to 36 years. The lease contracts for land located in the R.O.C. specify that lease payments will be adjusted every 2 years on the basis of changes in announced land value prices. The Company does not have purchase options to acquire the leasehold land and buildings at the end of the lease terms.

d.    Other lease information


 Years Ended December 31

2023 2022

Expenses relating to short-term leases $ 1,215,147 $ 4,731,087

Total cash outflow for leases $ 4,916,886 $ 7,618,290


16.    INTANGIBLE ASSETS

Goodwill Technology License Fees Software and System Design Costs Patent and Others


Total

Cost

Balance at January 1, 2023 $ 5,791,821 $ 25,759,019 $ 48,675,794 $ 11,701,892 $ 91,928,526
Additions - 461,089 4,947,364 621,312 6,029,765
Disposals or retirements - - (4,289,185 ) - (4,289,185 )
Effect of exchange rate changes 4,617 1,243 (16,942 ) 24,230 13,148

Balance at December 31, 2023 $ 5,796,438 $ 26,221,351 $ 49,317,031 $ 12,347,434 $ 93,682,254
(Continued)


- 36 -



Goodwill Technology License Fees Software and System Design Costs Patent and Others


Total
Accumulated amortization and
  impairment                            

Balance at January 1, 2023 $ - $ 17,696,437 $ 38,838,394 $ 9,394,540 $ 65,929,371
Additions - 2,792,353 5,308,109 1,157,788 9,258,250
Disposals or retirements - - (4,289,152 ) - (4,289,152 )
Effect of exchange rate changes - 1,280 (10,680 ) 26,441 17,041
Balance at December 31, 2023 $ - $ 20,490,070 $ 39,846,671 $ 10,578,769 $ 70,915,510
Carrying amounts at December 31, 2023
 $ 5,796,438 $ 5,731,281 $ 9,470,360 $ 1,768,665

$ 22,766,744

Cost

Balance at January 1, 2022 $ 5,379,164 $ 23,533,959 $ 43,650,957 $ 11,497,309 $ 84,061,389
Additions - 2,253,095 5,078,967 203,030 7,535,092
Disposals or retirements - (29,991 ) (66,261 ) - (96,252 )
Effect of exchange rate changes 412,657 1,956 12,131 1,553 428,297

Balance at December 31, 2022 $ 5,791,821 $ 25,759,019 $ 48,675,794 $ 11,701,892 $ 91,928,526
Accumulated amortization and
  impairment                            

Balance at January 1, 2022 $ - $ 14,912,293 $ 34,121,578 $ 8,205,821 $ 57,239,692
Additions - 2,793,539 4,774,522 1,188,033 8,756,094
Disposals or retirements - (11,351 ) (66,261 ) - (77,612 )
Effect of exchange rate changes - 1,956 8,555 686 11,197
Balance at December 31, 2022 $ - $ 17,696,437 $ 38,838,394 $ 9,394,540 $ 65,929,371
Carrying amounts at December 31, 2022
 $ 5,791,821 $ 8,062,582 $ 9,837,400 $ 2,307,352

$ 25,999,155
(Concluded)

The Company’s goodwill has been tested for impairment at the end of the annual reporting period and the recoverable amount is determined based on the value in use. The value in use was calculated based on the cash flow forecast from the financial budgets covering the future five-year period, and the Company used annual discount rates of 9.0% and 8.7% in its test of impairment as of December 31, 2023 and 2022, respectively, to reflect the relevant specific risk in the cash-generating unit.

For the years ended December 31, 2023 and 2022, the Company did not recognize any impairment loss on goodwill.


17.    BONDS PAYABLE
December 31,
2023
December 31,
2022
Domestic unsecured bonds $ 447,194,000 $ 379,526,000
Overseas unsecured bonds 476,578,500 476,051,500
Less: Discounts on bonds payable (2,874,947 ) (3,141,061 )
Less: Current portion (6,997,710 ) (18,100,000 )

$ 913,899,843 $ 834,336,439



- 37 -



The major terms of domestic unsecured bonds are as follows:

Issuance

Tranche
 Issuance Period Total Amount Coupon Rate
Repayment and
Interest Payment




NT$ unsecured bonds







101-3

-
October 2012 to October 2022
 $ 4,400,000 1.53%
Bullet repayment; interest payable annually
101-4

C
January 2013 to January 2023
 3,000,000 1.49%
The same as above
102-1

C
February 2013 to February 2023
 3,600,000 1.50%
The same as above
102-2

B
July 2013 to July 2023
 3,500,000 1.70%
The same as above
102-4

E
September 2013 to March 2023
 5,400,000 2.05%
The same as above

F
September 2013 to September 2023
 2,600,000 2.10%
The same as above
109-1

A
March 2020 to March 2025
 3,000,000 0.58%
The same as above

B
March 2020 to March 2027
 10,500,000 0.62%
The same as above

C
March 2020 to March 2030
 10,500,000 0.64%
The same as above
109-2

A
April 2020 to April 2025
 5,900,000 0.52%
The same as above

B
April 2020 to April 2027
 10,400,000 0.58%
The same as above

C
April 2020 to April 2030
 5,300,000 0.60%
The same as above
109-3

A
May 2020 to May 2025
 4,500,000 0.55%
The same as above

B
May 2020 to May 2027
 7,500,000 0.60%
The same as above

C
May 2020 to May 2030
 2,400,000 0.64%
The same as above
109-4

A
July 2020 to July 2025
 5,700,000 0.58%
Two equal installments in last two years; interest payable annually

B
July 2020 to July 2027
 6,300,000 0.65%
The same as above

C
July 2020 to July 2030
 1,900,000 0.67%
The same as above
109-5

A
September 2020 to September 2025
 4,800,000 0.50%
The same as above
(Continued)

- 38 -



Issuance

Tranche
Issuance Period
 Total Amount Coupon Rate
Repayment and
Interest Payment




109-5

B
September 2020 to September 2027
 $ 8,000,000 0.58%
Two equal installments in last two years; interest payable annually

C
September 2020 to September 2030
 2,800,000 0.60%
The same as above
109-6
(Green bond)

A
December 2020 to December 2025
 1,600,000 0.40%
The same as above


B
December 2020 to December 2027
 5,600,000 0.44%
The same as above

C
December 2020 to December 2030
 4,800,000 0.48%
The same as above
109-7

A
December 2020 to December 2025
 1,900,000 0.36%
The same as above

B
December 2020 to December 2027
 10,200,000 0.41%
The same as above

C
December 2020 to December 2030
 6,400,000 0.45%
The same as above
110-1

A
March 2021 to March 2026
 4,800,000 0.50%
Bullet repayment; interest payable annually


B
March 2021 to March 2028
 11,400,000 0.55%
The same as above


C
March 2021 to March 2031
 4,900,000 0.60%
The same as above
110-2

A
May 2021 to May 2026
 5,200,000 0.50%
The same as above


B
May 2021 to May 2028
 8,400,000 0.58%
The same as above


C
May 2021 to May 2031
 5,600,000 0.65%
The same as above
110-3

A
June 2021 to June 2026
 6,900,000 0.52%
The same as above


B
June 2021 to June 2028
 7,900,000 0.58%
The same as above


C
June 2021 to June 2031
 4,900,000 0.65%
The same as above
110-4

A
August 2021 to August 2025
 4,000,000 0.485%
The same as above


B
August 2021 to August 2026
 8,000,000 0.50%
The same as above


C
August 2021 to August 2028
 5,400,000 0.55%
The same as above


D
August 2021 to August 2031
 4,200,000 0.62%
The same as above
110-6

A
October 2021 to April 2026
 3,200,000 0.535%
The same as above


B
October 2021 to October 2026
 6,900,000 0.54%
The same as above


C
October 2021 to October 2028
 4,600,000 0.60%
The same as above


D
October 2021 to October 2031
 1,600,000 0.62%
The same as above
(Continued)

- 39 -



Issuance

Tranche
Issuance Period
 Total Amount Coupon Rate
Repayment and
Interest Payment





110-7

A
December 2021 to December 2026
 $ 7,700,000 0.65%
Bullet repayment; interest payable annually


B
December 2021 to June 2027
 3,500,000 0.675%
The same as above


C
December 2021 to December 2028
 5,500,000 0.72%
The same as above
111-1
(Green bond)

A
January 2022 to January 2027
 2,100,000 0.63%
The same as above


B
January 2022 to January 2029
 3,300,000 0.72%
The same as above
111-2

A
March 2022 to September 2026
 3,000,000 0.84% The same as above


B
March 2022 to March 2027
 9,600,000 0.85%
The same as above


C
March 2022 to March 2029
 1,600,000 0.90%
The same as above
111-3
(Green bond)

-
May 2022 to May 2027
 6,100,000 1.50%
The same as above
111-4
(Green bond)

A
July 2022 to July 2026
 1,200,000 1.60%
The same as above


B
July 2022 to July 2027
 10,100,000 1.70%
The same as above


C
July 2022 to July 2029
 1,200,000 1.75%
The same as above


D
July 2022 to July 2032
 1,400,000 1.95%
The same as above
111-5

A
August 2022 to June 2027
 2,000,000 1.65%
The same as above


B
August 2022 to August 2027
 8,900,000 1.65%
The same as above


C
August 2022 to August 2029
 2,200,000 1.65%
The same as above


D
August 2022 to August 2032
 2,500,000 1.82%
The same as above
111-6
(Green bond)

A
October 2022 to October 2027
 5,700,000 1.75% The same as above


B
October 2022 to October 2029
 1,000,000 1.80%
The same as above


C
October 2022 to October 2032
 3,500,000 2.00%
The same as above
112-1
(Green bond)

A
March 2023 to March 2028
 12,200,000 1.54%
The same as above


B
March 2023 to March 2030
 2,300,000 1.60%
The same as above


C
March 2023 to March 2033
 4,800,000 1.78%
The same as above
(Continued)

- 40 -



Issuance

Tranche
Issuance Period
 Total Amount Coupon Rate
Repayment and
Interest Payment





112-2
(Green bond)

A
May 2023 to May 2028
 $ 13,100,000 1.60%
Bullet repayment; interest payable annually


B
May 2023 to May 2030
 2,300,000 1.65%
The same as above


C
May 2023 to May 2033
 5,300,000 1.82%
The same as above
112-3

A
June 2023 to June 2028
 11,400,000 1.60%
The same as above


B
June 2023 to June 2030
 2,600,000 1.65%
The same as above


C
June 2023 to June 2033
 6,000,000 1.80%
The same as above
112-4

A
August 2023 to August 2028
 7,300,000 1.60%
The same as above


B
August 2023 to August 2030
 700,000 1.65%
The same as above


C
August 2023 to August 2033
 7,900,000 1.76%
The same as above
112-5

A
October 2023 to October 2028
 4,300,000 1.62%
The same as above


B
October 2023 to October 2033
 5,500,000 1.76%
The same as above
(Concluded)

Issuance

Tranche
 Issuance Period
Total Amount
(US$
in Thousands)
 Coupon Rate
Repayment and
Interest Payment




US$ unsecured bonds












109-1


-
September 2020 to September 2060
US$
            1,000,000
 2.70%
Bullet repayment (callable on the 5th anniversary of the issue date and every anniversary thereafter); interest payable annually
110-5


-
September 2021 to September 2051
            1,000,000
 3.10%
The same as above

The major terms of overseas unsecured bonds are as follows:
Issuance Period

Total Amount
(US$
in Thousands)
Coupon
Rate
Repayment and
Interest Payment




September 2020 to September 2025

US$ 1,000,000 0.75%
Bullet repayment (callable at any time, in whole or in part, at the relevant redemption price according to relevant agreements); interest payable semi-annually
(Continued)

- 41 -



Issuance Period

Total Amount
(US$
in Thousands)
Coupon
Rate
Repayment and
Interest Payment




September 2020 to September 2027

US$ 750,000 1.00%
Bullet repayment (callable at any time, in whole or in part, at the relevant redemption price according to relevant agreements); interest payable semi-annually
September 2020 to September 2030

1,250,000 1.375%
The same as above
April 2021 to April 2026

1,100,000 1.25%
The same as above
April 2021 to April 2028

900,000 1.75%
The same as above
April 2021 to April 2031

1,500,000 2.25%
The same as above
October 2021 to October 2026

1,250,000 1.75%
The same as above
October 2021 to October 2031

1,250,000 2.50%
The same as above
October 2021 to October 2041

1,000,000 3.125%
The same as above
October 2021 to October 2051

1,000,000 3.25%
The same as above
April 2022 to April 2027

1,000,000 3.875%
The same as above
April 2022 to April 2029

500,000 4.125%
The same as above
April 2022 to April 2032

1,000,000 4.25%
The same as above
April 2022 to April 2052

1,000,000 4.50%
The same as above
July 2022 to July 2027

400,000 4.375%
The same as above
July 2022 to July 2032

600,000 4.625%
The same as above
(Concluded)


18.    LONG-TERM BANK LOANS

December 31,
2023
December 31,
2022

Unsecured loans
 $ 6,706,389 $ 6,013,333
Less: Discounts on government grants (27,868 ) (39,397 )
Less: Current portion (2,295,556 ) (1,213,889 )
$ 4,382,965 $ 4,760,047
Loan content
Annual interest rate
 1.15%-1.35% 1.03%-1.23%
Maturity date

Due by December 2027


Due by December 2027


The long-term bank loans of the Company are with preferential interest rates subsidized by the government, and the loans are used to fund capital expenditure qualifying for the subsidy.




- 42 -




19.    RETIREMENT BENEFIT PLANS

a.    Defined contribution plans

The plan under the R.O.C. Labor Pension Act (the “Act”) is deemed a defined contribution plan. Pursuant to the Act, TSMC and VisEra Tech have made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts. Furthermore, TSMC North America, TSMC Europe, TSMC Japan, TSMC JDC, TSMC 3DIC, TSMC China, TSMC Nanjing, TSMC Arizona, JASM, TSMC Technology and TSMC Canada also make monthly contributions at certain percentages of the basic salary of their employees. Accordingly, the Company recognized expenses of NT$5,365,458 thousand and NT$4,550,387 thousand for the years ended December 31, 2023 and 2022, respectively.

b.    Defined benefit plans

TSMC has defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by the government’s designated authorities; as such, the Company does not have any right to intervene in the investments of the Funds.

Amounts recognized in respect of these defined benefit plans were as follows:

Years Ended December 31
2023 2022
Current service cost $ 139,101 $ 134,376
Net interest expense 142,291 74,265
Components of defined benefit costs recognized in profit or loss 281,392 208,641
Remeasurement on the net defined benefit liability:
Return on plan assets (excluding amounts included in net interest expense)
 (16,252 ) (429,948 )
Actuarial loss arising from experience adjustments
 68,342 1,413,760
Actuarial (gain) loss arising from changes in financial assumptions
 571,266 (160,752 )
Components of defined benefit costs recognized in other comprehensive income
 623,356 823,060
Total
 $ 904,748 $ 1,031,701

The pension costs of the aforementioned defined benefit plans were recognized in profit or loss by the following categories:
Years Ended December 31
2023 2022

Cost of revenue $ 182,333 $ 135,125
Research and development expenses 76,120 55,632
General and administrative expenses 19,248 15,129
Marketing expenses 3,691 2,755
$ 281,392 $ 208,641


- 43 -



The amounts arising from the defined benefit obligation of the Company were as follows:

December 31,
2023
December 31,
2022

Present value of defined benefit obligation
 $ 17,995,066 $ 17,483,951
Fair value of plan assets
 (8,737,842 ) (8,162,860 )

Net defined benefit liability
 $ 9,257,224 $ 9,321,091

Movements in the present value of the defined benefit obligation were as follows:

Years Ended December 31
2023 2022

Balance, beginning of year $ 17,483,951 $ 16,585,442
Current service cost 139,101 134,376
Interest expense 303,970 120,791
Remeasurement:
Actuarial loss arising from experience adjustments
 68,342 1,413,760
Actuarial (gain) loss arising from changes in financial assumptions
 571,266 (160,752 )
Benefits paid from plan assets (556,455 ) (585,343 )
Benefits paid directly by the Company (15,109 ) (24,323 )
Balance, end of year $ 17,995,066 $ 17,483,951

Movements in the fair value of the plan assets were as follows:

Years Ended December 31
2023 2022

Balance, beginning of year $ 8,162,860 $ 5,548,563
Interest income 161,679 46,526
Remeasurement:
Return on plan assets (excluding amounts included in net interest expense)
 16,252 429,948
Contributions from employer 953,506 2,723,166
Benefits paid from plan assets (556,455 ) (585,343 )
Balance, end of year $ 8,737,842 $ 8,162,860

The fair value of the plan assets by major categories at the end of reporting period was as follows:

December 31,
2023
December 31,
2022
Cash
 $ 1,351,744 $ 1,337,893
Equity instruments
 4,998,919 4,696,909
Debt instruments
 2,387,179 2,128,058

    
 $ 8,737,842 $ 8,162,860



- 44 -



The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions of the actuarial valuation were as follows:

Measurement Date

December 31,
2023
December 31,
2022

Discount rate
 1.40% 1.80%
Future salary increase rate 4.00% 4.00%

Through the defined benefit plans under the R.O.C. Labor Standards Law, the Company is exposed to the following risks:

1) Investment risk: The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government’s designated authorities or under the mandated management. However, under the R.O.C. Labor Standards Law, the rate of return on assets shall not be less than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return.

2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.

Assuming a hypothetical decrease in interest rate at the end of the reporting period contributed to a decrease of 0.5% (and not below 0.0%) in the discount rate and all other assumptions were held constant, the present value of the defined benefit obligation would increase by NT$757,663 thousand and NT$766,692 thousand as of December 31, 2023 and 2022, respectively.

3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

Assuming the expected salary rate increases by 0.5% at the end of the reporting period and all other assumptions were held constant, the present value of the defined benefit obligation would increase by NT$735,167 thousand and NT$746,933 thousand as of December 31, 2023 and 2022, respectively.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability.

The Company expects to make contributions of NT$991,646 thousand to the defined benefit plans in the next year starting from December 31, 2023. The weighted average duration of the defined benefit obligation is 8 years.




- 45 -




20.    EQUITY

a.    Capital stock
December 31,
2023
December 31,
2022

Authorized shares (in thousands)
 28,050,000 28,050,000
Authorized capital
 $ 280,500,000 $ 280,500,000
Issued and paid shares (in thousands)
 25,932,071 25,930,380
Issued capital
 $ 259,320,710 $ 259,303,805

The par value of issued common shares is NT$10 per share. A holder of common shares has one vote for each common share and is entitled to receive dividends.

The authorized shares include 500,000 thousand shares allocated for the exercise of employee stock options.

On March 1, 2023 and March 1, 2022, the Company issued employee restricted stock awards (RSAs) for its employees in a total of 2,110 thousand shares and 1,387 thousand shares, respectively, with a par value of NT$10 per share. The aforementioned issuance of new shares was approved by the relevant authority and the registration has been completed.

During the first quarter of 2023, TSMC reclaimed 419 thousand employee restricted shares that were unvested. On May 9, 2023, TSMC’s Board of Directors resolved to cancel the aforementioned shares. Subsequently, TSMC completed the registration for share cancellation. Refer to Note 27 for information on RSAs.

On May 10, 2022, TSMC’s Board of Directors resolved to cancel 1,387 thousand treasury shares. Refer to Note 20 (e) for information.

As of December 31, 2023, TSMC’s total issued and outstanding ADSs were 1,063,103 thousand units, representing 5,315,513 thousand common shares.

b.    Capital surplus

The categories of uses and the sources of capital surplus based on regulations were as follows:
December 31,
2023
December 31,
2022

May be used to offset a deficit, distributed as cash dividends, or
  transferred to share capital                                                        

Additional paid-in capital
 $ 24,406,854 $ 24,183,645
From merger
 22,803,291 22,803,291
From convertible bonds
 8,892,371 8,892,371
From difference between the consideration received and the carrying amount of the subsidiaries’ net assets during actual disposal
 8,406,282 8,406,282
Donations - donated by shareholders
 11,275 11,275
(Continued)


- 46 -
December 31,
2023
December 31,
2022

May only be used to offset a deficit

From share of changes in equities of subsidiaries
 $ 4,199,936 $ 4,229,892
From share of changes in equities of associates
302,396 311,863
Donations - unclaimed dividend
 70,093 53,680
May not be used for any purpose
Employee restricted shares 783,883 438,029
$ 69,876,381 $ 69,330,328
(Concluded)

If such capital surplus is distributed as transferred to share capital, it is limited to a certain percentage of the Company’s paid-in capital each year.

c.    Retained earnings and dividend policy

TSMC’s Articles of Incorporation provide that, earnings distribution may be made on a quarterly basis after the close of each quarter. Distribution of earnings by way of cash dividends should be approved by TSMC’s Board of Directors and reported to TSMC’s shareholders in its meeting. When allocating earnings, TSMC shall first estimate and reserve the taxes to be paid, offset its losses, set aside a legal capital reserve at 10% of the remaining earnings (until the accumulated legal capital reserve equals TSMC’s paid-in capital), then set aside a special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge. Any balance left over shall be allocated according to relevant laws and TSMC’s Articles of Incorporation.

TSMC’s Articles of Incorporation also provide that profits of TSMC may be distributed by way of cash dividend and/or stock dividend. However, distribution of earnings shall be made preferably by way of cash dividend. Distribution of earnings may also be made by way of stock dividend, provided that the ratio for stock dividend shall not exceed 50% of the total distribution.

The legal capital reserve may be used to offset a deficit, or be distributed as dividends in cash or stocks for the portion in excess of 25% of the paid-in capital if the Company incurs no loss.

Pursuant to existing regulations, the Company is required to set aside an additional special capital reserve equivalent to the net debit balance of the other components of stockholders’ equity, such as the accumulated balance of the foreign currency translation reserve, the effectiveness of hedges of net investments in foreign operations, unrealized valuation gain or loss from fair value through other comprehensive income financial assets, gain or loss from changes in fair value of hedging instruments in cash flow hedges, etc. For the subsequent decrease in the deduction amount to stockholders’ equity, any special reserve appropriated may be reversed to the extent that the net debit balance reverses.

The appropriations of 2023, 2022 and 2021 quarterly earnings have been approved by TSMC’s Board of Directors in its meeting, respectively. The appropriations and cash dividends per share were as follows:


 Fourth Quarter Third Quarter Second Quarter First Quarter
Resolution Date of TSMC’s
of 2023 of 2023 of 2023 of 2023
  Board of Directors in its
 February 6, November 14, August 8, May 9,
  meeting
 2024 2023 2023 2023
Special capital reserve $ 28,020,822 $ (17,228,363 ) $ (6,365,562 ) $ 3,273,452
Cash dividends to shareholders $ 90,762,248 $ 90,762,248 $ 77,796,213 $ 77,796,213
Cash dividends per share (NT$) $ 3.50 $ 3.50 $ 3.00 $ 3.00


- 47 -





 Fourth Quarter Third Quarter Second Quarter First Quarter
Resolution Date of TSMC’s
of 2022 of 2022 of 2022 of 2022
  Board of Directors in its
 February 14, November 8, August 9, May 10,
  meeting
 2023 2022 2022 2022
Special capital reserve $ 17,166,163 $ (31,910,353 ) $ (12,002,798 ) $ (15,541,054 )
Cash dividends to shareholders $ 71,308,546 $ 71,308,547 $ 71,308,546 $ 71,308,546
Cash dividends per share (NT$) $ 2.75 $ 2.75 $ 2.75 $ 2.75


Fourth Quarter Third Quarter Second Quarter First Quarter
Resolution Date of TSMC’s
of 2021 of 2021 of 2021 of 2021
  Board of Directors in its
 February 15, November 9, August 10, June 9,
  meeting
 2022 2021 2021 2021
Special capital reserve $ 3,304,303 $ 710,169 $ 10,201,220 $ (6,287,050 )
Cash dividends to shareholders $ 71,308,546 $ 71,308,547 $ 71,308,546 $ 71,308,546
Cash dividends per share (NT$) $ 2.75 $ 2.75 $ 2.75 $ 2.75

The special capital reserve for 2023 is to be presented for approval in TSMC’s shareholders’ meeting to be held on June 4, 2024 (expected).

The quarterly cash dividends per share is affected by the subsequent number of outstanding ordinary shares, the information of the actual payout is available at the Market Observation Post System website.

d.    Others

Changes in others were as follows:


 Year Ended December 31, 2023

Foreign Currency Translation Reserve Unrealized Gain (Loss) on Financial Assets at FVTOCI Gain (Loss) on Hedging Instruments
Unearned Stock-Based
Employee Compensation
 Total

Balance, beginning of year
 $ (11,743,301 ) $ (10,056,353 ) $ 1,479,181 $ (185,153 ) $ (20,505,626 )
Exchange differences arising on translation of foreign operations
 (14,255,586 ) - - - (14,255,586 )
Gain (Loss) on hedging instruments designated as hedges of net investments in foreign operations
 618,180 - - - 618,180
Unrealized gain (loss) on financial assets at FVTOCI
Equity instruments
 - 1,953,138 - - 1,953,138
Debt instruments
 - 3,639,779 - - 3,639,779
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal
 - (151,944 ) - - (151,944 )
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal
 - 473,897 - - 473,897
Loss allowance adjustments from debt instruments
- 9,525 - - 9,525
Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss
 - - (34,837 ) - (34,837 )
Transferred to initial carrying amount of hedged items
 - - (45,181 ) - (45,181 )
Issuance of shares
 - - - (585,968 ) (585,968 )
Share-based payment expenses recognized
 - - - 477,687 477,687
Share of other comprehensive income (loss) of associates
 63,938 32,055 (3,288 ) - 92,705
Income tax effect
 - (25 ) - - (25 )

Balance, end of year
 $ (25,316,769 ) $ (4,099,928 ) $ 1,395,875 $ (293,434 ) $ (28,314,256 )


- 48 -





 Year Ended December 31, 2022

Foreign Currency Translation Reserve Unrealized Gain (Loss) on Financial Assets at FVTOCI Gain (Loss) on Hedging Instruments
Unearned Stock-Based
Employee Compensation
 Total

Balance, beginning of year
 $ (63,303,361 ) $ 574,310 $ 120,536 $ - $ (62,608,515 )
Exchange differences arising on translation of foreign operations
 51,009,722 - - - 51,009,722
Unrealized gain (loss) on financial assets at FVTOCI
Equity instruments
 - (263,380 ) - - (263,380 )
Debt instruments
 - (10,513,643 ) - - (10,513,643 )
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal
 - (303,242 ) - - (303,242 )
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal
 - 410,076 - - 410,076
Loss allowance adjustments from debt instruments
- 909 - - 909
Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss
 - - 1,329,231 - 1,329,231
Transferred to initial carrying amount of hedged items
 - - (52,929 ) - (52,929 )
Issuance of shares
 - - - (451,899 ) (451,899 )
Share-based payment expenses recognized
 - - - 266,746 266,746
Share of other comprehensive income (loss) of associates
 550,338 38,696 76,307 - 665,341
Income tax effect
 - (79 ) 6,036 - 5,957

Balance, end of year
 $ (11,743,301 ) $ (10,056,353 ) $ 1,479,181 $ (185,153 ) $ (20,505,626 )

The aforementioned other equity includes the changes in other equities of TSMC and TSMC’s share of its subsidiaries and associates.

e.    Treasury stock

For TSMC’s shareholders’ interests, TSMC’s Board of Directors approved a share buyback program on February 15, 2022 to repurchase 1,387 thousand shares. TSMC has completed the aforementioned share buyback program during the first quarter of 2022. On May 10, 2022, TSMC’s Board of Directors resolved to cancel the 1,387 thousand shares. Subsequently, TSMC completed the registration for share cancellation.


21.    NET REVENUE

a.    Disaggregation of revenue from contracts with customers


 Years Ended December 31
Product
 2023 2022

Wafer
 $ 1,882,518,080 $ 1,991,855,947
Others 279,217,761 272,035,345
$ 2,161,735,841 $ 2,263,891,292



- 49 -





 Years Ended December 31
Geography
 2023 2022

Taiwan $ 149,777,343 $ 210,470,783
United States
 1,408,841,921 1,493,328,765
China
 267,154,140 245,168,746
Japan
 132,072,000 119,099,336
Europe, the Middle East and Africa
 117,348,237 123,767,140
Others 86,542,200 72,056,522
$ 2,161,735,841 $ 2,263,891,292

The Company categorized the net revenue mainly based on the countries where the customers are headquartered.

Years Ended December 31
Platform 2023 2022

High Performance Computing $ 934,768,625 $ 932,383,729
Smartphone 814,914,287 888,879,250
Internet of Things 161,916,543 196,114,987
Automotive 133,654,276 116,380,987
Digital Consumer Electronics 46,999,803 56,158,772
Others 69,482,307 73,973,567
$ 2,161,735,841 $ 2,263,891,292


Years Ended December 31
Resolution
 2023 2022

3-nanometer $ 108,045,275 $ -
5-nanometer 629,300,387 508,689,881
7-nanometer 357,247,365 535,153,763
10-nanometer 23,332 24,871
16-nanometer 191,306,073 258,544,274
20-nanometer 10,359,042 8,853,291
28-nanometer 186,924,916 206,611,955
40/45-nanometer 114,667,360 145,546,243
65-nanometer 107,425,400 93,288,614
90-nanometer 25,642,010 40,184,169
0.11/0.13 micron 47,149,333 57,992,328
0.15/0.18 micron 86,614,213 110,571,222
0.25 micron and above 17,813,374 26,395,336
Wafer revenue $ 1,882,518,080 $ 1,991,855,947

b.    Contract balances
December 31,
2023
December 31,
2022
January 1,
2022

Contract liabilities (classified under accrued expenses and other current liabilities)
 $ 52,736,430 $ 70,806,617 $ 39,762,588



- 50 -



The changes in the contract liability balances primarily result from the timing difference between the satisfaction of performance obligation and the customer’s payment.

The Company recognized revenue from the beginning balance of contract liability, which amounted to NT$69,598,265 thousand and NT$38,433,111 thousand for the years ended December 31, 2023 and 2022, respectively.

c.    Temporary receipts from customers
December 31,
2023
December 31,
2022

Current portion (classified under accrued expenses and other current liabilities)
 $ 114,639,514 $ 107,723,580
Noncurrent portion (classified under other noncurrent liabilities)
 163,655,128 168,399,207
$ 278,294,642 $ 276,122,787

The Company’s temporary receipts from customer are payments made by customers to the Company to retain the Company’s capacity. When the terms and conditions set forth in the agreements are subsequently satisfied, the treatment of temporary receipts, either by refund or by accounts receivable offsetting, will be determined by mutual consent.

d.    Refund liabilities

Estimated sales returns and other allowances is made and adjusted based on historical experience and the consideration of varying contractual terms. As of December 31, 2023 and 2022, the aforementioned refund liabilities amounted to NT$37,847,605 thousand and NT$53,078,351 thousand (classified under accrued expenses and other current liabilities), respectively.


22.    INTEREST INCOME

Years Ended December 31
2023 2022

Interest income
Cash and cash equivalents
 $ 49,740,006 $ 17,831,257
Financial assets at amortized cost
 6,363,684 2,008,611
Financial assets at FVTOCI
4,190,211 2,582,341

    
 $ 60,293,901 $ 22,422,209


23.    FINANCE COSTS
Years Ended December 31
2023 2022

Interest expense
Corporate bonds
 $ 17,848,916 $ 14,116,112
Lease liabilities
 382,041 267,050
Bank loans
 95,366 32,017
Others
 2,755 1,673
Less: Capitalized interest under property, plant and equipment
 (6,329,718 ) (2,666,868 )

    
 $ 11,999,360 $ 11,749,984



- 51 -



Information about capitalized interest is as follows:

Years Ended December 31
2023 2022

Capitalization rate
1.08%-3.36%
 0.56%-3.36%


24.    OTHER GAINS AND LOSSES, NET


 Years Ended December 31

2023 2022

Loss on disposal of financial assets, net
Investments in debt instruments at FVTOCI
 $ (473,897 ) $ (410,076 )
Gain on disposal of investments accounted for using equity method, net
 15,758 -
Gain (loss) on financial instruments at FVTPL, net
Mandatorily measured at FVTPL
 6,523,084 (622,537 )
The accrual of expected credit loss of financial assets
Investments in debt instruments at FVTOCI
 (9,525 ) (909 )
Financial assets at amortized cost
 (26,220 ) (51,442 )
Other gains, net
 932,379 72,766
 
    
 $ 6,961,579 $ (1,012,198 )


25.    INCOME TAX

a.    Income tax expense recognized in profit or loss

Income tax expense consisted of the following:

Years Ended December 31
2023 2022
Current income tax expense
Current tax expense recognized in the current year
 $ 136,931,127 $ 147,685,403
Income tax adjustments on prior years
 92,331 (563,555 )
Other income tax adjustments
 244,358 206,136
    
 137,267,816 147,327,984
Deferred income tax expense (benefit)
The origination and reversal of temporary differences
 3,210,032 (24,714,488 )
Investment tax credits
 925,959 4,676,707
    
 4,135,991 (20,037,781 )
Income tax expense recognized in profit or loss
 $ 141,403,807 $ 127,290,203



- 52 -



A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:


 Years Ended December 31

2023 2022

Income before tax $ 979,171,324 $ 1,144,190,718
Income tax expense at the statutory rate $ 197,906,699 $ 231,799,774
Tax effect of adjusting items:
Nondeductible (deductible) items in determining taxable income
(7,613,159 ) 12,286,136
Tax-exempt income
 - (157,955,934 )
Additional income tax under the Alternative Minimum Tax Act
 - 61,578,020
Additional income tax on unappropriated earnings 9,468,943 -
The origination and reversal of temporary differences 3,210,032 (24,714,488 )
Income tax credits (61,905,397 ) 4,654,114
    
 141,067,118 127,647,622
Income tax adjustments on prior years
 92,331 (563,555 )
Other income tax adjustments
 244,358 206,136

Income tax expense recognized in profit or loss
 $ 141,403,807 $ 127,290,203

For the years ended December 31, 2023 and 2022, the Company applied a tax rate of 20% for entities subject to the R.O.C. Income Tax Law; for other jurisdictions, taxes are calculated using the applicable tax rate for each individual jurisdiction.

b.    Deferred income tax balance

The analysis of deferred income tax assets and liabilities was as follows:
December 31,
2023
December 31,
2022

Deferred income tax assets

Temporary differences
Depreciation
 $ 41,094,712 $ 45,299,310
Refund liability
 9,414,971 12,089,451
Unrealized exchange losses
 7,100,019 5,782,345
Unrealized loss on inventories
 2,771,188 2,305,328
Net defined benefit liability
 1,729,672 1,722,005
Deferred compensation cost
 489,609 361,241
Investment tax credits
 19,079 945,038
Others
1,556,537 681,124

    
 $ 64,175,787 $ 69,185,842



Deferred income tax liabilities




Temporary differences


Others
 $ (53,856 )

$ (1,031,383 )



- 53 -





 Year Ended December 31, 2023

Recognized in

Balance, Beginning of Year Profit or Loss Other Comprehensive Income Effect of Exchange Rate Changes Balance, End of Year

Deferred income tax assets

Temporary differences
Depreciation
 $ 45,299,310 $ (4,197,221 ) $ - $ (7,377 ) $ 41,094,712
Refund liability
 12,089,451 (2,673,474 ) - (1,006 ) 9,414,971
Unrealized exchange losses
 5,782,345 1,317,674 - - 7,100,019
Unrealized loss on inventories
 2,305,328 466,186 - (326 ) 2,771,188
Net defined benefit liability
 1,722,005 (117,004 ) 124,671 - 1,729,672
Deferred compensation cost
 361,241 129,852 - (1,484 ) 489,609
Investment tax credits
 945,038 (925,959 ) - - 19,079
Others
 681,124 887,134 (25 ) (11,696 ) 1,556,537

    
 $ 69,185,842 $ (5,112,812 ) $ 124,646 $ (21,889 ) $ 64,175,787

Deferred income tax liabilities

Temporary differences
Others
 $ (1,031,383 ) $ 976,821 $ - $ 706 $ (53,856 )


Year Ended December 31, 2022

Recognized in

Balance, Beginning of Year Profit or Loss Other Comprehensive Income Effect of Exchange Rate Changes Balance, End of Year

Deferred income tax assets

Temporary differences
Depreciation
 $ 34,720,661 $ 10,552,264 $ - $ 26,385 $ 45,299,310
Refund liability
 5,986,173 6,100,849 - 2,429 12,089,451
Unrealized exchange losses
 - 5,782,345 - - 5,782,345
Unrealized loss on inventories
 898,998 1,402,241 - 4,089 2,305,328
Net defined benefit liability
 1,237,086 (249,116 ) 734,035 - 1,722,005
Investment tax credits
 5,621,745 (4,676,707 ) - - 945,038
Deferred compensation cost
 373,983 (48,180 ) - 35,438 361,241
Others
 315,240 334,801 (79 ) 31,162 681,124

    
 $ 49,153,886 $ 19,198,497 $ 733,956 $ 99,503 $ 69,185,842

Deferred income tax liabilities

Temporary differences
Unrealized exchange gains
 $ (706,311 ) $ 706,311 $ - $ - $ -
Others
 (1,167,566 ) 132,973 6,036 (2,826 ) (1,031,383 )

    
 $ (1,873,877 ) $ 839,284 $ 6,036 $ (2,826 ) $ (1,031,383 )

c.    The deductible temporary differences for which no deferred income tax assets have been recognized

As of December 31, 2023 and 2022, the aggregate deductible temporary differences for which no deferred income tax assets have been recognized amounted to NT$52,686,244 thousand and NT$26,790,935 thousand, respectively.

d.    Unused tax-exemption information

As of December 31, 2022, the profits generated from the following project of TSMC are exempt from income tax for a five-year period:

Tax-exemption Period
Construction and expansion of 2009 by TSMC 2018 to 2022



- 54 -



e.    The information of unrecognized deferred income tax liabilities associated with investments

As of December 31, 2023 and 2022, the aggregate taxable temporary differences associated with investments in subsidiaries not recognized as deferred income tax liabilities amounted to NT$254,182,901 thousand and NT$222,682,649 thousand, respectively.

f.    Income tax examination

The tax authorities have examined income tax returns of TSMC through 2021. All investment tax credit adjustments assessed by the tax authorities have been recognized accordingly.


26.    EARNINGS PER SHARE

Years Ended December 31
2023 2022
Basic EPS
 $ 32.34 $ 39.20
Diluted EPS
 $ 32.34 $ 39.20

EPS is computed as follows:


 Years Ended December 31
2023 2022

Basic EPS
Net income available to common shareholders of the parent
 $ 838,497,664 $ 1,016,530,249
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands)
 25,929,223 25,929,190
Basic EPS (in dollars) $ 32.34 $ 39.20
Diluted EPS
Net income available to common shareholders of the parent
 $ 838,497,664 $ 1,016,530,249
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands)
 25,929,223 25,929,190
Effects of all dilutive potential common shares (in thousands)
 44 193
Weighted average number of common shares used in the computation of diluted EPS (in thousands)
 25,929,267 25,929,383
Diluted EPS (in dollars) $ 32.34 $ 39.20


27.    SHARE-BASED PAYMENT ARRANGEMENTS

a.Equity-settled share-based payment- RSAs

The RSAs in each year are as follows:

2023 RSAs
2022 RSAs 2021 RSAs







Resolution Date of TSMC’s shareholders in its meeting

June 6, 2023
 June 8, 2022 July 26, 2021
Resolution Date of TSMC’s Board of Directors in its meeting

February 6, 2024 February 14, 2023 February 15, 2022
Issuance of stocks (in thousands)

2,960 2,110 1,387
Eligible employees

Executive officers Executive officers Executive officers
Grant date/Issuance date

March 1, 2024 March 1, 2023 March 1, 2022



- 55 -



Vesting conditions of the aforementioned arrangement are as follow:

1) The RSAs granted to eligible employees can only be vested if

•the employee remains employed by the Company on the last date of each vesting period;

•during the vesting period, the employee may not breach any agreement with the Company or violate the Company’s work rules; and

•certain employee performance metrics and TSMC’s business performance metrics are met.

2) The maximum percentage of granted RSAs that may be vested each year shall be as follows: one-year anniversary of the grant: 50%; two-year anniversary of the grant: 25%; and three-year anniversary of the grant: 25%; provided that the actual percentage and number of the RSAs to be vested in each year will be calculated based on the achievement of TSMC’s business performance metrics.

3) For eligible executive officers of TSMC: The maximum number of RSAs that may be vested in each year will be set as 110%, among which 100% will be subject to a calculation based on TSMC’s relative Total Shareholder Return (”TSR”, including capital gains and dividends) achievement to determine the number of RSAs to be vested; this number will be further subject to a modifier to increase or decrease up to 10% based on the Compensation and People Development Committee evaluation of TSMC’s Environmental, Social, and Governance (”ESG”) achievements. The number of shares so calculated should be rounded down to the nearest integral.

TSMC’s TSR relative to the
TSR of S&P 500 IT Index
 Ratio of Shares to be Vested
Above the Index by X percentage points
50% + X * 2.5%, with the maximum of 100%
Equal to the Index
50%
Below the Index by X percentage points
50% - X * 2.5%, with the minimum of 0%

4) Restrictions imposed on the employees’ rights in the RSAs before the vesting conditions are fulfilled:

•During each vesting period, no employee granted RSAs, except for inheritance, may sell, pledge, transfer, give to another person, create any encumbrance on, or otherwise dispose of, any shares under the unvested RSAs.

•Before the vesting conditions are fulfilled, the attendance, proposal rights, speech rights, voting rights and etc. shall be exercised by the engaged trustee/custodian on the employee’s behalf. Any other shareholder rights including but not limited to the entitlement to any distribution regarding dividends, bonuses and capital reserve, and the subscription right of the new shares issued for any capital increase, are the same as those of holders of common shares of TSMC.

5) Details of granted RSAs in each year are as follows:

 2022 RSAs 2021 RSAs

Number of Shares
(In Thousands)
Number of Shares
(In Thousands)





Balance, beginning of year

- 1,387
Issuance of stocks

2,110 -
Vested shares

- (274 )
Canceled shares

- (419 )

Balance, end of year

2,110 694

Weighted-average fair value of RSAs (in dollars)

$ 277.71 $ 325.81



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The RSAs in each year are measured at fair value at grant date by using the binominal tree approach. Relevant information is as follows:


 2022 RSAs 2021 RSAs

March 1, 2023 March 1, 2022





Stock price at measurement date (in dollars)
 $ 511 $ 604
Expected price volatility
 29.34%-32.11% 25.34%-28.28%
Expected life
 1-3 years 1-3 years
Risk-free interest rate
 1.06% 0.57%

Refer to Note 28 for the compensation costs of the RSAs recognized by TSMC.

On February 6, 2024, TSMC’s Board of Directors approved the issuance of RSAs for year 2024 of no more than 4,185 thousand common shares. The grants will be made free of charge. The actual number of shares to be issued will be resolved by the Board of Directors after the RSAs is approved at the shareholders’ meeting and by the competent authority.

b.    Cash-settled share-based payment arrangements

The cash-settled share-based payment arrangements in each year are as follows:

2023 Plan 2022 Plan 2021 Plan







Resolution Date of TSMC’s Board of Directors in its meeting

February 6, 2024 February 14, 2023 February 15, 2022
Issuance of units (in thousands) (Note)

550 400 236
Grant date

March 1, 2024 March 1, 2023 March 1, 2022

Note:    One unit of the right represents a right to the market value of one TSMC’s common share when vested.

The vesting conditions and the ratio of units to be vested for key management personnel of the plan are the same as the aforementioned RSAs.

The fair value of compensation costs for the cash-settled share-based payment was measured by using binominal tree approach and will be measured at each reporting period until settlement. Relevant information is as follows:


 Years Ended December 31

2023 2022


2022 Plan 2021 Plan 2021 Plan







Stock price at measurement date (in dollars)

$ 593 $ 593 $ 451
Expected price volatility

24.76%-29.05% 24.76%-29.05% 28.80%-32.19%
Residual life

1-3 years 1-2 years 1-3 years
Risk-free interest rate

1.15% 1.14% 1.09%

Refer to Note 28 for the compensation costs of the cash-settled share-based payment recognized by TSMC. As of December 31, 2023 and 2022, the liabilities under cash-settled share-based payment arrangement amounted to NT$62,695 thousand and NT$30,757 thousand, respectively.




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28.    ADDITIONAL INFORMATION OF EXPENSES BY NATURE


Years Ended December 31

2023 2022

a.    Depreciation of property, plant and equipment and right-of-use assets

Recognized in cost of revenue
 $ 492,827,379 $ 399,638,755
Recognized in operating expenses
 30,097,805 28,850,463
Recognized in other operating income and expenses
 7,487 8,961

    
 $ 522,932,671 $ 428,498,179

b.    Amortization of intangible assets

Recognized in cost of revenue
$
6,538,107

$
6,086,246

Recognized in operating expenses
 2,720,143 2,669,848

    
 $ 9,258,250 $ 8,756,094

c.    Employee benefits expenses

Post-employment benefits
Defined contribution plans
 $ 5,365,458 $ 4,550,387
Defined benefit plans
 281,392 208,641

5,646,850 4,759,028
Share-based payments
Equity-settled
 483,050 302,348
Cash-settled
 61,329 32,704
    
 544,379 335,052

Other employee benefits
 233,517,335 234,367,880

        
 $ 239,708,564 $ 239,461,960

Employee benefits expense summarized by function
Recognized in cost of revenue
 $ 133,334,667 $ 139,361,369
Recognized in operating expenses
 106,373,897 100,100,591

    
 $ 239,708,564 $ 239,461,960

According to TSMC’s Articles of Incorporation, TSMC shall allocate compensation to directors and profit sharing bonus to employees of TSMC not more than 0.3% and not less than 1% of annual profits during the period, respectively.

TSMC accrued profit sharing bonus to employees based on a percentage of net income before income tax, profit sharing bonus to employees and compensation to directors during the period; compensation to directors was expensed based on estimated amount payable. If there is a change in the proposed amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in accounting estimate. Accrued profit sharing bonus to employees is illustrated below:


 Years Ended December 31

2023 2022

Profit sharing bonus to employees
 $ 50,090,533 $ 60,702,047



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TSMC’s profit sharing bonus to employees and compensation to directors for 2023, 2022 and 2021 had been approved by the Board of Directors of TSMC, as illustrated below:


 Years Ended December 31

2023 2022 2021
Resolution Date of TSMC’s Board of
 February 6, February 14, February 15,
Directors in its meeting 2024 2023 2022

Profit sharing bonus to employees
 $ 50,090,533 $ 60,702,047 $ 35,601,449
Compensation to directors
 $ 551,955 $ 690,128 $ 487,537

There is no significant difference between the aforementioned approved amounts and the amounts charged against earnings of 2023, 2022 and 2021, respectively.

The information about the appropriations of TSMC’s profit sharing bonus to employees and compensation to directors is available at the Market Observation Post System website.


29.    GOVERNMENT GRANTS

Subsidiaries such as JASM and TSMC Nanjing received subsidies from the governments of Japan and China, respectively, for local plants setup and operation, which were mainly used to subsidize the purchase costs of property, plant and equipment as well as partial costs and expenses incurred from plant construction and production. For the years ended December 31, 2023 and 2022, TSMC received a total of NT$47,545,898 thousand and NT$7,051,432 thousand as government grants respectively.


30.    CASH FLOW INFORMATION

a.    Non-cash transactions

Years Ended December 31
2023 2022
Additions of financial assets at FVTOCI
 $ 62,779,060 $ 45,126,181
Discontinuation of significant influence from investment accounted for using the equity method
 (10,728 ) -
Conversion of convertible bonds into equity securities
 (145,144 ) -
Changes in accrued expenses and other current liabilities
 128,814 9,440,544

Payments for acquisition of financial assets at FVTOCI
 $ 62,752,002 $ 54,566,725

Disposal of financial assets at FVTOCI
 $ 35,346,897 $ 43,130,926
Changes in other financial assets
 351,678 1,832,441

Proceeds from disposal of financial assets at FVTOCI
 $ 35,698,575 $ 44,963,367

Additions of property, plant and equipment
 $ 897,557,179 $ 1,139,892,108
Changes in other financial assets
 44,431 5,730,104
Exchange of assets
 (78,034 ) (275,564 )
Changes in payables to contractors and equipment suppliers
 40,750,228 (60,638,244 )
Changes in accrued expenses and other current liabilities
 17,832,841 630,594
Transferred to initial carrying amount of hedged items
 39,898 -
Capitalized interests
 (6,329,718 ) (2,666,868 )

Payments for acquisition of property, plant and equipment
 $ 949,816,825 $ 1,082,672,130



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b.    Reconciliation of liabilities arising from financing activities

Non-cash Changes
Balance as of January 1, 2023 Financing Cash Flow Foreign Exchange Movement Leases Modifications
Other Changes
(Note)
 Balance as of December 31, 2023
Hedging financial liabilities- bank loans
 $ - $ 27,908,580 $ (618,180 ) $ - $ - $ 27,290,400
Bonds payable
 852,436,439 67,511,319 587,758 - 362,037 920,897,553
Long-term bank loans
 5,973,936 693,056 - - 11,529 6,678,521
Lease liabilities
 32,367,601 (3,228,219 ) (31,765 ) 2,002,728 382,041 31,492,386

Total
 $ 890,777,976 $ 92,884,736 $ (62,187 ) $ 2,002,728 $ 755,607 $ 986,358,860

Non-cash Changes
Balance as of January 1, 2022 Financing Cash Flow Foreign Exchange Movement Leases Modifications
Other Changes
(Note)
 Balance as of December 31, 2022
Short-term loans
 $ 114,921,333 $ (111,959,992 ) $ (2,372,053 ) $ - $ (589,288 ) $ -
Bonds payable
 614,470,652 193,479,254 44,183,113 - 303,420 852,436,439
Long-term bank loans
 3,475,798 2,503,333 - - (5,195 ) 5,973,936
Lease liabilities
 22,940,665 (2,690,784 ) 137,196 11,713,474 267,050 32,367,601

Total
 $ 755,808,448 $ 81,331,811 $ 41,948,256 $ 11,713,474 $ (24,013 ) $ 890,777,976

Note:    Other changes include amortization of bonds payable, amortization of long-term bank loan interest subsidy, financial cost of lease liabilities and discounts on short-term loans.


31.    CAPITAL MANAGEMENT

The objective of the Company’s capital management is to maintain a capital structure that ensures liquidity and supports a solid investment grade credit rating. The capital structure includes both debt and equity. The Company adjusts its capital structure mainly through changes in the level of debt and adjustments of dividend payout to shareholders.

The Company’s capital management policy remained unchanged in 2023. TSMC’s current credit ratings are AA- from Standard & Poor’s and Aa3 from Moody’s, same as those as of December 31, 2022.


32.    FINANCIAL INSTRUMENTS

a.    Categories of financial instruments
December 31,
2023
December 31,
2022

Financial assets
FVTPL (Note 1)
 $ 14,342,093 $ 1,070,398
FVTOCI (Note 2)
 167,150,802 136,483,349
Hedging financial assets
 - 2,329
Amortized cost (Note 3)
 1,842,412,631 1,727,306,556

    
 $ 2,023,905,526 $ 1,864,862,632

Financial liabilities
FVTPL (Note 4)
 $ 121,412 $ 116,215
Hedging financial liabilities
 27,334,164 813
Amortized cost (Note 5)
 1,741,356,555 1,669,270,659

    
 $ 1,768,812,131 $ 1,669,387,687



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Note 1: Financial assets mandatorily measured at FVTPL.

Note 2: Including notes and accounts receivable (net), equity and debt investments.

Note 3: Including cash and cash equivalents, financial assets at amortized cost, notes and accounts receivable (including related parties), other receivables, refundable deposits and temporary payments (including those classified under other current assets and other noncurrent assets).

Note 4: Held for trading.

Note 5: Including accounts payable (including related parties), payables to contractors and equipment suppliers, cash dividends payable, accrued expenses and other current liabilities, bonds payable, long-term bank loans, guarantee deposits and other noncurrent liabilities.

b.    Financial risk management objectives

The Company manages its exposure to foreign currency risk, interest rate risk, equity price risk, credit risk and liquidity risk with the objective to reduce the potentially adverse effects the market uncertainties may have on its financial performance.

The plans for material treasury activities are reviewed by the Audit and Risk Committee and/or Board of Directors in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, the Company must comply with certain treasury procedures that provide guiding principles for overall financial risk management and segregation of duties.

c.    Market risk

The Company is exposed to the financial market risks, primarily changes in foreign currency exchange rates, interest rates and equity investment prices. A portion of these risks is hedged.

Foreign currency risk

Substantially all the Company’s sales are denominated in U.S. dollars and over half of its capital expenditures and equity investments are denominated in currencies other than NT dollars, primarily in U.S. dollars, Japanese yen and Euros. As a result, any significant fluctuations to its disadvantage in the exchanges rate of NT dollar against such currencies, in particular a weakening of U.S. dollar against NT dollar, would have an adverse impact on the revenue and operating profit as expressed in NT dollars. The Company uses foreign currency derivative contracts and non-derivative financial instruments, such as currency forwards, currency swaps and bank loans denominated in foreign currency, to protect against currency exchange rate risks associated with non-NT dollar-denominated assets and liabilities, certain forecasted transactions, and net investments in foreign operations. These hedges reduce, but do not entirely eliminate, the effect of foreign currency exchange rate movements on the assets and liabilities.

Based on a sensitivity analysis performed on the Company’s total monetary assets and liabilities for the years ended December 31, 2023 and 2022, a hypothetical adverse foreign currency exchange rate change of 10% would have decreased its net income by NT$891,039 thousand and NT$1,704,553 thousand, respectively, after taking into account hedges and offsetting positions.

Interest rate risk

The Company is exposed to interest rate risks primarily in relation to its investment portfolio and outstanding debt. Changes in interest rates affect the interest earned on the Company’s cash and cash equivalents and fixed income securities, the fair value of those securities, as well as the interest paid on its debt.



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The majority of the Company’s fixed income investments are fixed-rate securities, which are classified as financial assets at FVTOCI and amortized cost. Those classified as FVTOCI may have their fair value adversely affected due to an increase in interest rates, but for those classified as amortized cost, their carrying amount will not be affected by changes in interest rates. At the same time, if interest rates fall, cash and cash equivalents may generate less interest income than expected. The Company has entered and may in the future enter into interest rate derivatives to partially hedge the interest rate risk on its fixed income investments and anticipated debt issuance. However, these hedges can offset only a limited portion of the financial impact from movements in interest rates.

Based on a sensitivity analysis performed on the Company’s fixed income investments at the end of the reporting period, interest rates increase of 100 basis points (1.00%) across all maturities would have decreased the Company’s other comprehensive income by NT$3,841,994 thousand and NT$3,831,326 thousand for the years ended December 31, 2023 and 2022, respectively.

The majority of the Company’s debt is fixed-rate and measured at amortized cost and as such, changes in interest rates would not affect future cash flows or the carrying amount.

Other price risk

The Company is exposed to mutual funds and equity price risk arising from financial assets at FVTPL and FVTOCI.

Assuming a hypothetical decrease of 10% in prices of the mutual funds and equity investments at the end of the reporting period, the net income would have decreased by NT$1,073,397 thousand for the year ended December 31, 2023, and the other comprehensive income would have decreased by NT$954,925 thousand and NT$631,530 thousand for the years ended December 31, 2023 and 2022, respectively.

d.    Credit risk management

Credit risk refers to the risk that a counterparty may default on its contractual obligations resulting in financial losses to the Company. The Company is exposed to credit risks from operating activities, primarily accounts receivable, and from investing activities, primarily deposits, fixed-income investments and other financial instruments with banks. Credit risk is managed separately for business related and financial related exposures. As of the end of the reporting period, the Company’s maximum credit risk exposure is equal to the carrying amount of financial assets.

Business related credit risk

The Company’s accounts receivable are from its customers worldwide. The majority of the Company’s outstanding accounts receivable are not covered by collaterals or guarantees. While the Company has procedures to monitor and manage credit risk exposure on accounts receivable, there is no assurance such procedures will effectively eliminate losses resulting from its credit risk. This risk is heightened during periods when economic conditions worsen.

As of December 31, 2023 and 2022, the Company’s ten largest customers accounted for 91% and 82% of accounts receivable, respectively. The Company considers the concentration of credit risk for the remaining accounts receivable not material.

Financial credit risk

The Company mitigates its financial credit risk by selecting counterparties with investment grade credit ratings and by limiting the exposure to any individual counterparty. The Company regularly monitors and reviews the limit applied to counterparties and adjusts the limit according to market conditions and the credit standing of the counterparties.

The objective of the Company’s investment policy is to achieve a return that will allow the Company to preserve principal and support liquidity requirements. The policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer.

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The Company assesses whether there has been a significant increase in credit risk in the invested securities since initial recognition by reviewing changes in external credit ratings, financial market conditions and material information of the issuers.

The Company assesses the 12-month expected credit loss and lifetime expected credit loss based on the probability of default and loss given default provided by external credit rating agencies. The current credit risk assessment policies are as follows:

Category Description Basis for Recognizing Expected Credit Loss Expected Credit Loss Ratio
Performing

Credit rating is investment grade on valuation date

12 months expected credit loss
0-0.1%
Doubtful

Credit rating is non-investment grade on valuation date

Lifetime expected credit loss-not credit impaired
 -
In default

Credit rating is CC or below on valuation date

Lifetime expected credit loss-credit impaired
 -
Write-off

There is evidence indicating that the debtor is in severe financial difficulty and the Company has no realistic prospect of recovery

Amount is written off
 -

For the years ended December 31, 2023 and 2022, the expected credit loss increased NT$35,751 thousand and NT$57,936 thousand, respectively. The changes were mainly due to increased investment amount and adjusted investment portfolio.

e.    Liquidity risk management

The objective of liquidity risk management is to ensure the Company has sufficient liquidity to fund its business operations over the next 12 months. The Company manages its liquidity risk by maintaining adequate cash and cash equivalents, financial assets at FVTOCI-current, financial assets at amortized cost-current and sufficient cost-efficient funding.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments, including principal and interest.

Less Than
1 Year		 1-3 Years 3-5 Years
More Than
5 Years
 Total
December 31, 2023
Non-derivative financial liabilities

Hedging financial liabilities-bank loans
 $ 27,290,400 $ - $ - $ - $ 27,290,400
Accounts payable (including related parties)
 57,293,057 - - - 57,293,057
Payables to contractors and equipment suppliers
 171,484,616 - - - 171,484,616
Accrued expenses and other current liabilities
 241,118,948 - - - 241,118,948
Bonds payable
 24,890,500 224,062,937 303,525,276 583,364,167 1,135,842,880
Long-term bank loans
 2,371,296 3,889,029 585,094 - 6,845,419
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note)
 3,181,651 5,248,337 4,662,868 21,754,375 34,847,231
Others
 - 165,188,432 6,303,135 2,908,666 174,400,233
    
 527,630,468 398,388,735 315,076,373 608,027,208 1,849,122,784
(Continued)


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Less Than
1 Year		 1-3 Years 3-5 Years
More Than
5 Years
 Total
Derivative financial instruments

Forward exchange contracts
Outflows
 $ 64,826,427 $ - $ - $ - $ 64,826,427
Inflows
 (65,384,000 ) - - - (65,384,000 )
    
 (557,573 ) - - - (557,573 )

        
 $ 527,072,895 $ 398,388,735 $ 315,076,373 $ 608,027,208 $ 1,848,565,211
December 31, 2022
Non-derivative financial liabilities

Accounts payable (including related parties)
 $ 56,522,345 $ - $ - $ - $ 56,522,345
Payables to contractors and equipment suppliers
 213,499,613 - - - 213,499,613
Accrued expenses and other current liabilities
 219,587,908 - - - 219,587,908
Bonds payable
 34,668,909 94,869,159 320,211,460 625,049,539 1,074,799,067
Long-term bank loans
 1,278,130 3,533,152 1,360,549 - 6,171,831
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note)
 2,999,840 5,367,809 4,754,007 22,589,117 35,710,773
Others
 - 166,266,718 10,518,481 783,182 177,568,381
    
 528,556,745 270,036,838 336,844,497 648,421,838 1,783,859,918

Derivative financial instruments

Forward exchange contracts
Outflows
 103,617,399 - - - 103,617,399
Inflows
 (104,600,085 ) - - - (104,600,085 )
    
 (982,686 ) - - - (982,686 )

        
 $ 527,574,059 $ 270,036,838 $ 336,844,497 $ 648,421,838 $ 1,782,877,232
(Concluded)

Note:    Information about the maturity analysis for lease liabilities more than 5 years:

5-10 Years 10-15 Years 15-20 Years
More Than
20 Years
 Total
December 31, 2023
Lease liabilities
 $ 10,197,521 $ 7,121,539 $ 4,117,107 $ 318,208 $ 21,754,375
December 31, 2022
Lease liabilities
 $ 10,241,734 $ 7,329,012 $ 4,233,886 $ 784,485 $ 22,589,117

f.    Fair value of financial instruments

1)    Fair value measurements recognized in the consolidated balance sheets

Fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

•Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

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•Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

•Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The timing of transfers between levels within the fair value hierarchy is at the end of reporting period.

2)    Fair value of financial instruments that are measured at fair value on a recurring basis

Fair value hierarchy

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis:


 December 31, 2023

Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Mandatorily measured at FVTPL
Convertible preferred stocks
 $ - $ - $ 13,307,160 $ 13,307,160
Forward exchange contracts
 - 701,182 - 701,182
Convertible bonds
 - - 223,454 223,454
Mutual funds
 - - 110,297 110,297

    
 $ - $ 701,182 $ 13,640,911 $ 14,342,093

Financial assets at FVTOCI

Investments in debt instruments
Corporate bonds
 $ - $ 79,605,567 $ - $ 79,605,567
Agency mortgage-backed securities
 - 37,959,691 - 37,959,691
Government bonds/Agency bonds
 22,091,087 247,814 - 22,338,901
Asset-backed securities
 - 9,898,766 - 9,898,766
Investments in equity instruments
Non-publicly traded equity investments
 - - 7,208,655 7,208,655
Publicly traded stocks
 4,727,905 - - 4,727,905
Notes and accounts receivable, net
 - 5,411,317 - 5,411,317

    
 $ 26,818,992 $ 133,123,155 $ 7,208,655 $ 167,150,802
Financial liabilities at FVTPL
Held for trading
Forward exchange contracts
 $ - $ 121,412 $ - $ 121,412

Hedging financial liabilities

Fair value hedges
Interest rate futures contracts
 $ 43,764 $ - $ - $ 43,764



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 December 31, 2022

Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Mandatorily measured at FVTPL
Forward exchange contracts
$ - $ 947,546 $ - $ 947,546
Convertible bonds
 - - 122,852 122,852


$ - $ 947,546 $ 122,852 $ 1,070,398

Financial assets at FVTOCI

Investments in debt instruments
Corporate bonds
 $ - $ 66,116,166 $ - $ 66,116,166
Agency mortgage-backed securities
 - 28,367,926 - 28,367,926
Government bonds/Agency bonds
 18,845,577 116,311 - 18,961,888
Asset-backed securities
 - 9,274,697 - 9,274,697
Investments in equity instruments
Non-publicly traded equity investments
 - - 6,159,200 6,159,200
Publicly traded stocks
 277,866 - - 277,866
Notes and accounts receivable, net
 - 7,325,606 - 7,325,606

    
 $ 19,123,443 $ 111,200,706 $ 6,159,200 $ 136,483,349

Hedging financial assets
Fair value hedges
Interest rate futures contracts
 $ 2,329 $ - $ - $ 2,329

Financial liabilities at FVTPL
Held for trading
Forward exchange contracts
 $ - $ 116,215 $ - $ 116,215

Hedging financial liabilities

Fair value hedges
Interest rate futures contracts
 $ 813 $ - $ - $ 813

Reconciliation of Level 3 fair value measurements of financial assets

The financial assets measured at Level 3 fair value were equity investments classified as financial assets at FVTOCI and financial assets at FVTPL. Reconciliations for the years ended December 31, 2023 and 2022 are as follows:

 Years Ended December 31
2023 2022
Balance, beginning of year $ 6,282,052 $ 5,887,892
Additions 14,887,187 715,612
Recognized in profit or loss 12,355 -
Recognized in other comprehensive income or loss 262,380 (373,263 )
Disposals and proceeds from return of capital of investments (127,963 ) (359,506 )
Transfers out of level 3 (Note) - (139,770 )
Effect of exchange rate changes (466,445 ) 551,087
Balance, end of year $ 20,849,566 $ 6,282,052

Note:    The transfer from level 3 to level 1 is because quoted prices (unadjusted) in active markets data became available for the equity investments.


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Valuation techniques and assumptions used in Level 2 fair value measurement

The fair values of financial assets and financial liabilities are determined as follows:

•The fair values of corporate bonds, agency bonds, agency mortgage-backed securities, asset-backed securities and government bonds are determined by quoted market prices provided by third party pricing services.

•The fair values of forward contracts are measured using forward rates and discount rates derived from quoted market prices.

•The fair value of accounts receivable classified as at FVTOCI is determined by the present value of future cash flows based on the discount rate that reflects the credit risk of counterparties.

Valuation techniques and assumptions used in Level 3 fair value measurement

The fair values of mutual funds and non-publicly traded equity investments (excluding those trading on the Emerging Stock Board) are mainly determined by using the asset approach and market approach.

The asset approach takes into account the net asset value measured at the fair value by independent parties. On December 31, 2023 and 2022, the Company uses unobservable inputs derived from discount for lack of marketability of 10%. When other inputs remain equal, the fair value will decrease by NT$52,704 thousand and NT48,704 thousand, respectively, if discounts for lack of marketability increase by 1%.

For the remaining few investments, the market approach is used to arrive at their fair values, for which the recent financing activities of investees, the market transaction prices of the similar companies and market conditions are considered.

In addition, the fair values of convertible preferred stocks and convertible bonds are prior transaction prices.

3)    Fair value of financial instruments that are not measured at fair value

Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments in the consolidated financial statements that are not measured at fair value approximate their fair values.

Fair value hierarchy

The table below sets out the fair value hierarchy for the Company’s financial assets and liabilities which are not required to be measured at fair value:


 December 31, 2023

Carrying Fair Value

Amount Level 1 Level 2 Total

Financial assets

Financial assets at amortized costs
Corporate bonds
 $ 113,785,324 $ - $ 113,694,397 $ 113,694,397
Commercial paper
 18,371,705 - 18,385,329 18,385,329
Government bonds/Agency bonds
 13,803,559 2,751,893 11,053,234 13,805,127


$ 145,960,588 $ 2,751,893 $ 143,132,960 $ 145,884,853
(Continued)

- 67 -





 December 31, 2023

Carrying Fair Value

Amount Level 1 Level 2 Total

Financial liabilities

Financial liabilities at amortized costs
Bonds payable
 $ 920,897,553 $ - $ 849,236,882 $ 849,236,882
(Concluded)


 December 31, 2022

Carrying Fair Value

Amount Level 1 Level 2 Total

Financial assets

Financial assets at amortized costs
Corporate bonds
 $ 80,994,958 $ - $ 80,236,142 $ 80,236,142
Commercial paper
 48,732,476 - 48,882,028 48,882,028


$ 129,727,434 $ - $ 129,118,170 $ 129,118,170

Financial liabilities

Financial liabilities at amortized costs
Bonds payable
 $ 852,436,439 $ - $ 765,301,535 $ 765,301,535

Valuation techniques and assumptions used in Level 2 fair value measurement

The fair values of corporate bonds, the Company’s bonds payable and agency bonds are determined by quoted market prices provided by third party pricing services.

The fair value of commercial paper is determined by the present value of future cash flows based on the discounted curves that are derived from the quoted market prices.


33.    RELATED PARTY TRANSACTIONS

Intercompany balances and transactions between TSMC and its subsidiaries, which are related parties of TSMC, have been eliminated upon consolidation; therefore, those items are not disclosed in this note. The following is a summary of significant transactions between the Company and other related parties:

a.    Related party name and categories

Related Party Name Related Party Categories


GUC
 Associates
VIS
 Associates
SSMC
 Associates
Xintec
 Associates



- 68 -




b.    Net revenue

Years Ended December 31
2023 2022

Item
 Related Party Categories

Net revenue from sale of goods
Associates
 $ 13,406,049 $ 15,351,465

c.    Purchases


 Years Ended December 31

2023 2022

Related Party Categories

Associates
 $ 4,562,206 $ 6,423,913

d.    Receivables from related parties

December 31,
2023
December 31,
2022

Item
 Related Party Name

Receivables from related
GUC
 $ 514,819 $ 1,471,351
parties
Xintec
 109,632 112,607



$ 624,451 $ 1,583,958

Other receivables from related
SSMC
 $ 58,093 $ 68,277
parties
VIS
 13,778 669


Others
 - 29


$ 71,871 $ 68,975

e.    Payables to related parties

December 31,
2023
December 31,
2022

Item
 Related Party Name

Payables to related parties
Xintec
 $ 1,020,226 $ 1,047,452

SSMC
457,348 385,979

VIS
 66,653 190,587

Others
 22,073 18,619



    
 $ 1,566,300 $ 1,642,637



- 69 -




f.    Accrued expenses and other current liabilities

December 31,
2023
December 31,
2022

Item
 Related Party Categories

Contract liabilities
Associates
 $ 1,666,113 $ 1,075,659

g.    Others

Years Ended December 31
2023 2022

Item
 Related Party Categories

Manufacturing expenses
Associates
 $ 5,043,545 $ 6,011,522

The sales prices and payment terms to related parties were not significantly different from those of sales to third parties. For other related party transactions, price and terms were determined in accordance with mutual agreements.

The Company leased factory and office from associates. The lease terms and prices were both determined in accordance with mutual agreements. The rental expenses were paid to associates monthly; the related expenses were both classified under manufacturing expenses.

h.    Compensation of key management personnel

The compensation to directors and other key management personnel were as follows:


 Years Ended December 31

2023 2022
Short-term employee benefits $ 3,492,258 $ 4,369,097
Post-employment benefits 3,870 3,013
Share-based payments
 525,808 286,227

$ 4,021,936 $ 4,658,337

The compensation to directors and other key management personnel were determined by the Compensation and People Development Committee of TSMC in accordance with the individual performance and market trends.


34.    PLEDGED ASSETS

The Company provided certificate of deposits recorded in other financial assets as collateral mainly for building lease agreements. As of December 31, 2023 and 2022, the aforementioned other financial assets amounted to NT$124,302 thousand and NT$129,138 thousand, respectively.




- 70 -




35.    SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Significant contingent liabilities and unrecognized commitments of the Company as of the end of the reporting period, excluding those disclosed in other notes, were as follows:

a.Under a technical cooperation agreement with Industrial Technology Research Institute, the R.O.C. Government or its designee approved by TSMC can use up to 35% of TSMC’s capacity provided TSMC’s outstanding commitments to its customers are not prejudiced. The term of this agreement is for five years beginning from January 1, 1987 and is automatically renewed for successive periods of five years unless otherwise terminated by either party with one year prior notice. As of the end of reporting period, the R.O.C. Government did not invoke such right.

b.Under a Shareholders Agreement entered into with Philips and EDB Investments Pte Ltd. on March 30, 1999, the parties formed a joint venture company, SSMC, which is an integrated circuit foundry in Singapore. TSMC’s equity interest in SSMC was 32%. Nevertheless, in September 2006, Philips spun-off its semiconductor subsidiary which was renamed as NXP B.V. Further, TSMC and NXP B.V. purchased all the SSMC shares owned by EDB Investments Pte Ltd. pro rata according to the Shareholders Agreement on November 15, 2006. After the purchase, TSMC and NXP B.V. currently own approximately 39% and 61% of the SSMC shares, respectively. TSMC and NXP B.V. are required, in the aggregate, to purchase at least 70% of SSMC’s capacity, but TSMC alone is not required to purchase more than 28% of the capacity. If any party defaults on the commitment and the capacity utilization of SSMC falls below a specific percentage of its capacity, the defaulting party is required to compensate SSMC for all related unavoidable costs. There was no default from the aforementioned commitment as of the end of reporting period.

c.In September 2022, Daedalus Prime LLC (“Daedalus”) filed complaints in the U.S. International Trade Commission (“ITC”) and the U.S. District Court for the Eastern District of Texas alleging that TSMC, TSMC North America, and other companies infringe four U.S. patents. The ITC instituted an investigation in October 2022. In June 2023, Daedalus dropped two of the asserted patents in the ITC. Also in June 2023, Daedalus filed another complaint in the Eastern District of Texas alleging that TSMC infringes five U.S. patents. In September 2023, the ITC granted the parties’ joint motion to suspend the procedural schedule while the parties finalize the settlement agreement and then request termination of the ITC Investigation and related litigations. In October 2023, the parties jointly requested the ITC to terminate the investigation and Eastern District of Texas to dismiss the related litigations. In November 2023, the ITC investigation was terminated and the related litigations in the Eastern District of Texas were dismissed.

d.TSMC entered into long-term purchase agreements of materials and supplies and agreements of waste disposal with multiple suppliers. The relative minimum fulfillment quantity and price are specified in the agreements.

e.TSMC entered into a long-term purchase agreement of equipment. The relative fulfillment quantity and price are specified in the agreement.

f.TSMC entered into long-term energy purchase agreements with multiple suppliers. The relative fulfillment period, quantity and price are specified in the agreements.

g.Amounts available under unused letters of credit as of December 31, 2023 and 2022 were NT$433,994 thousand and NT$383,974 thousand, respectively.

h.The Company entrusted financial institutions to provide performance guarantees mainly for import and export of goods, lease agreement and energy purchase agreement. As of December 31, 2023 and 2022, the aforementioned guarantee amounted to NT$8,012,973 thousand and NT$7,623,262 thousand, respectively.



- 71 -




36.    EXCHANGE RATE INFORMATION OF FOREIGN-CURRENCY FINANCIAL ASSETS AND LIABILITIES

The following information was summarized according to the foreign currencies other than the functional currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies were as follows:
Foreign Currencies
(In Thousands)
Exchange Rate
(Note 1)
Carrying Amount
(In Thousands)
December 31, 2023

Financial assets
Monetary items
USD
 $ 14,756,970 30.747 $ 453,732,565
EUR
 432,124 34.175 14,767,835
EUR
 484,580 1.111 (Note 2) 16,560,515
JPY
 13,320,705 0.2192 2,919,899
Financial liabilities
Monetary items
USD
 14,121,653 30.747 434,198,454
EUR
 803,472 34.175 27,458,643
EUR
 482,869 1.111 (Note 2) 16,502,044
JPY
 199,911,305 0.2192 43,820,558



December 31, 2022

Financial assets
Monetary items
USD
 15,214,896 30.713 467,295,097
EUR
 8,375 32.838 275,006
EUR
 29,161 7.432 (Note 3) 957,587
JPY
 133,034,271 0.2331 31,010,288
Financial liabilities
Monetary items
USD
 15,190,659 30.713 466,550,704
EUR
 2,375,378 32.838 78,002,647
JPY
 134,608,488 0.2331 31,377,239

Note 1:    Except as otherwise noted, exchange rate represents the number of NT dollar for which one foreign currency could be exchanged.

Note 2:    The exchange rate represents the number of U.S. dollar for which one Euro could be exchanged.

Note 3:    The exchange rate represents the number of RMB for which one Euro could be exchanged.

Please refer to the consolidated statements of comprehensive income for the total of realized and unrealized foreign exchange gain and loss for the years ended December 31, 2023 and 2022, respectively.

- 72 -



Since there were varieties of foreign currency transactions and functional currencies within the subsidiaries of the Company, the Company was unable to disclose foreign exchange gain (loss) towards each foreign currency with significant impact.


37.    ADDITIONAL DISCLOSURES

Following are the additional disclosures required by the Securities and Futures Bureau for TSMC:

a.    Financings provided: See Table 1 attached;

b.    Endorsement/guarantee provided: See Table 2 attached;

c.    Marketable securities held (excluding investments in subsidiaries and associates): See Table 3 attached;

d.    Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: See Table 4 attached;

e.    Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: See Table 5 attached;

f.    Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: None;

g.    Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: See Table 6 attached;

h.    Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 7 attached;

i.    Information about the derivative financial instruments transaction: See Notes 7 and 10;

j.    Others: The business relationship between the parent and the subsidiaries and significant transactions between them: See Table 8 attached;

k.    Names, locations, and related information of investees over which TSMC exercises significant influence (excluding information on investment in mainland China): See Table 9 attached;

l.    Information on investment in mainland China

1) The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: See Table 10 attached.

2) Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: See Table 8 attached.

m.    Information of major shareholders

List of all shareholders with ownership of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder: See Table 11 attached.



- 73 -




38.    OPERATING SEGMENTS INFORMATION

a.    Operating segments, segment revenue and operating results

TSMC’s chief operating decision makers periodically review operating results, focusing on operating income generated by foundry segment. Operating results are used for resource allocation and/or performance assessment. As a result, the Company has only one operating segment, the foundry segment. The foundry segment engages mainly in the manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing of masks.

The basis for the measurement of income from operations is the same as that for the preparation of financial statements. Please refer to the consolidated statements of comprehensive income for the related segment revenue and operating results.

b.    Geographic and major customers’ information were as follows:

1)    Geographic information


 December 31, December 31,
Noncurrent Assets 2023 2022
Taiwan $ 2,525,608,435 $ 2,510,238,722
United States
 420,093,092 153,137,833
China 97,268,882 90,349,673
Japan
 94,558,890 15,432,491
Europe, the Middle East and Africa
 146,247 140,709
Others 435 1,922
$ 3,137,675,981 $ 2,769,301,350

Noncurrent assets include property, plant and equipment, right-of-use assets, intangible assets and other noncurrent assets.

2)    Major customers representing at least 10% of net revenue

Years Ended December 31
2023 2022
Amount % Amount %
Customer A $ 546,550,925 25 $ 529,649,200 23
Customer B 241,152,357 11 NA (Note ) NA

Note:    Revenue less than 10% of the Company’s net revenue.


- 74 -

TABLE 1


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

FINANCINGS PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


No. Financing Company Counterparty Financial Statement Account Related Party
Maximum
Balance for the Period (Foreign Currencies in Thousands) (Note 3)
Ending Balance
(Foreign Currencies in Thousands)
(Note 3)
Amount Actually Drawn
(Foreign Currencies in Thousands)
 Interest Rate Nature for Financing Transaction Amounts Reason for Financing Allowance for Bad Debt Collateral
Financing Limits for Each Borrowing Company
(Notes 1 and 2)
Financing Company’s Total Financing Amount Limits
(Notes 1 and 2)
Item Value





0
TSMC
 TSMC Arizona
Other receivables from related parties
 Yes
$
(US$
92,241,000
3,000,000
$
)
$
(US$
92,241,000
3,000,000
$
)
 $ - -
The need for short-term financing
$ -
Capacity installation and working capital
 $ - - $ - $ 345,891,363 $ 691,782,725
1
TSMC China
 TSMC Nanjing
Other receivables from related parties
 Yes
$
(RMB
(US$
73,510,570
8,800,000
1,150,000
$
)&
)
$
(RMB
(US$
51,987,670
8,800,000
450,000
$
)&
)
$
(RMB
38,151,520
8,800,000
$
)
 1.30%-1.50%
The need for short-term and long-term financing
-
Operating capital
 - - - 95,757,396 95,757,396





Note 1:    The amount available for lending to TSMC Arizona from TSMC shall not exceed ten percent (10%) of the net worth of TSMC, and the total amount available for lending from TSMC to borrowers shall not exceed twenty percent (20%) of the net worth of TSMC.

Note 2:    The aggregate amount available for lending to TSMC Nanjing from TSMC China shall not exceed the net worth of TSMC China.

Note 3:    The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.


- 75 -

TABLE 2


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


No.
Endorsement/
Guarantee Provider
 Guaranteed Party
Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party
(Notes 1 and 2)
Maximum Balance
for the Period
(Foreign Currencies in Thousands)
(Note 3)
Ending Balance
(Foreign Currencies in Thousands)
(Note 3)
Amount Actually Drawn
(US$ in Thousands)
 Amount of Endorsement/ Guarantee Collateralized by Properties Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements
Maximum Endorsement/ Guarantee Amount Allowable
(Notes 1 and 2)
Guarantee
Provided by
Parent Company
Guarantee
Provided by
A Subsidiary
Guarantee
Provided to Subsidiaries in Mainland China
Name Nature of Relationship





0
TSMC
TSMC North America
 Subsidiary $ 1,383,565,451
$
(US$
2,558,559
83,213
$
)
$
(US$
2,558,559
83,213
$
)
$
(US$
2,558,559
83,213
$
)
 $ -
0.07%
 $ 1,383,565,451
Yes
No
No

TSMC Global
 Subsidiary 1,383,565,451
$
(US$
230,602,500
7,500,000
$
)
$
(US$
230,602,500
7,500,000
$
)
$
(US$
230,602,500
7,500,000
$
)
 -
6.67%
 1,383,565,451
Yes
No
No

TSMC Arizona
 Subsidiary 1,383,565,451
$
(US$
369,960,818
12,032,420
$
)
$
(US$
369,960,818
12,032,420
$
)
$
(US$
246,972,818
8,032,420
$
)
 - 10.70% 1,383,565,451
Yes
No
No

TSMC Development
 Subsidiary 1,383,565,451
$
(US$
13,307,302
432,800
$
)
 - - - - 1,383,565,451
Yes
No
No
1 TSMC Japan TSMC JDC
The same parent company
 326,007
$
(JPY
289,344
1,320,000
$
)
$
(JPY
289,344
1,320,000
$
)
$
(JPY
289,344
1,320,000
$
)
 - 0.01% 326,007
No
No
No










Note 1:    The total amount of the endorsement/guarantee provided by TSMC to TSMC North America, TSMC Global, TSMC Arizona and TSMC Development shall not exceed forty percent (40%) of TSMC’s net worth.

Note 2:    The total amount of the endorsement/guarantee provided by TSMC Japan to TSMC JDC shall not exceed two hundred and fifty percent (250%) of TSMC Japan’s net worth.

Note 3:    The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.


- 76 -

TABLE 3


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

MARKETABLE SECURITIES HELD
December 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC
Non-publicly traded equity investments




Shin-Etsu Handotai Taiwan Co., Ltd.
-
Financial assets at fair value through other comprehensive income
 10,500 $ 430,500 7 $ 430,500


United Industrial Gases Co., Ltd.
-
〃
 21,230 421,211 10 421,211


Global Investment Holding Inc.
-
〃
 10,442 109,239 6 109,239


Crimson Asia Capital
-
〃
 - - 1 -







Commercial paper




Cathay Financial Holding Co., Ltd.
-
Financial assets at amortized cost
 697 6,924,665 N/A 6,929,220


Nan Ya Plastics Corporation
-
〃
 600 5,976,677 N/A 5,982,726


China Steel Corporation
-
〃
 200 1,985,094 N/A 1,986,400


Formosa Plastics Corporation
-
〃
 100 996,260 N/A 997,268


CPC Corporation, Taiwan
-
〃
 100 995,553 N/A 995,420


Formosa Chemicals & Fibre Corporation
-
〃
 100 994,540 N/A 995,374


Taiwan Power Company
-
〃
 50 498,916 N/A 498,921






TSMC Partners
Fund




Matter Venture Partners Fund I, L.P.
-
Financial assets at fair value through Profit or Loss
 - US$ 3,587 7 US$ 3,587







Non-publicly traded equity investments




Shanghai Walden Venture Capital Enterprise
-
Financial assets at fair value through other comprehensive income
 - US$ 28,969 6 US$ 28,969


Walden Technology Ventures Investments II, L.P.
-
〃
 - US$ 18,187 9 US$ 18,187


Walden Technology Ventures Investments III, L.P.
-
〃
 - US$ 13,458 4 US$ 13,458


Tela Innovations
-
〃
 6,942 - 22 -







Publicly traded stocks




ARM Holdings plc
-
Financial assets at fair value through other comprehensive income
 1,961 US$ 147,353 - US$ 147,353


Movella Holdings Inc.
-
〃
 3,095 US$ 1,873 6 US$ 1,873






TSMC Global
Corporate bond




Bank of America Corporation
-
Financial assets at fair value through other comprehensive income
 - US$ 86,588 N/A US$ 86,588


Morgan Stanley
-
〃
 - US$ 76,777 N/A US$ 76,777


The Goldman Sachs Group, Inc.
-
〃
 - US$ 58,554 N/A US$ 58,554


Wells Fargo & Company
-
〃
 - US$ 58,351 N/A US$ 58,351


JPMorgan Chase & Co.
-
〃
 - US$ 58,153 N/A US$ 58,153


Citigroup Inc.
-
〃
 - US$ 50,436 N/A US$ 50,436


Sumitomo Mitsui Financial Group, Inc.
-
〃
 - US$ 45,172 N/A US$ 45,172


Mitsubishi UFJ Financial Group, Inc.
-
〃
 - US$ 36,903 N/A US$ 36,903


Barclays PLC
-
〃
 - US$ 35,277 N/A US$ 35,277


HSBC Holdings plc
-
〃
 - US$ 30,124 N/A US$ 30,124


Banco Santander, S.A.
-
〃
 - US$ 29,015 N/A US$ 29,015






(Continued)


- 77 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
AbbVie Inc.
-
Financial assets at fair value through other comprehensive income
 - US$ 26,895 N/A US$ 26,895


Royal Bank of Canada
-
〃
 - US$ 25,469 N/A US$ 25,469


CVS Health Corporation
-
〃
 - US$ 24,591 N/A US$ 24,591


Lloyds Banking Group plc
-
〃
 - US$ 24,131 N/A US$ 24,131


BPCE SA
-
〃
 - US$ 23,875 N/A US$ 23,875


Oracle Corporation
-
〃
 - US$ 23,751 N/A US$ 23,751


The Toronto-Dominion Bank
-
〃
 - US$ 22,568 N/A US$ 22,568


Capital One Financial Corporation
-
〃
 - US$ 21,572 N/A US$ 21,572


Credit Agricole SA London Branch
-
〃
 - US$ 20,395 N/A US$ 20,395


BNP Paribas SA
-
〃
 - US$ 20,345 N/A US$ 20,345


Athene Global Funding
-
〃
 - US$ 20,297 N/A US$ 20,297


Fédération des caisses Desjardins du Québec
-
〃
 - US$ 19,320 N/A US$ 19,320


Equitable Financial Life Global Funding
-
〃
 - US$ 18,910 N/A US$ 18,910


National Securities Clearing Corporation
-
〃
 - US$ 18,429 N/A US$ 18,429


AIG Global Funding
-
〃
 - US$ 18,428 N/A US$ 18,428


Metropolitan Life Global Funding I
-
〃
 - US$ 18,299 N/A US$ 18,299


ABN AMRO Bank N.V.
-
〃
 - US$ 18,247 N/A US$ 18,247


Principal Life Global Funding II
-
〃
 - US$ 17,932 N/A US$ 17,932


Nationwide Building Society
-
〃
 - US$ 17,760 N/A US$ 17,760


Sumitomo Mitsui Trust Bank, Limited
-
〃
 - US$ 17,286 N/A US$ 17,286


Guardian Life Global Funding
-
〃
 - US$ 17,140 N/A US$ 17,140


U.S. Bancorp.
-
〃
 - US$ 16,962 N/A US$ 16,962


Danske Bank A/S
-
〃
 - US$ 16,698 N/A US$ 16,698


Société Générale Société anonyme
-
〃
 - US$ 16,589 N/A US$ 16,589


The Bank of Nova Scotia
-
〃
 - US$ 16,474 N/A US$ 16,474


Volkswagen Group of America Finance, LLC
-
〃
 - US$ 16,251 N/A US$ 16,251


The Bank of New York Mellon Corporation
-
〃
 - US$ 16,064 N/A US$ 16,064


Nomura Holdings, Inc.
-
〃
 - US$ 15,719 N/A US$ 15,719


Banque Fédérative du Crédit Mutuel
-
〃
 - US$ 14,439 N/A US$ 14,439


UBS Group AG
-
〃
 - US$ 14,328 N/A US$ 14,328


Standard Chartered PLC
-
〃
 - US$ 14,304 N/A US$ 14,304


Protective Life Global Funding
-
〃
 - US$ 14,155 N/A US$ 14,155


American Express Company
-
〃
 - US$ 13,685 N/A US$ 13,685


UnitedHealth Group Incorporated
-
〃
 - US$ 13,673 N/A US$ 13,673


Hyundai Capital America
-
〃
 - US$ 13,567 N/A US$ 13,567


NTT Finance Corporation
-
〃
 - US$ 13,544 N/A US$ 13,544


Amgen Inc.
-
〃
 - US$ 13,330 N/A US$ 13,330


AerCap Ireland Capital Designated Activity Company
-
〃
 - US$ 13,278 N/A US$ 13,278


Enel Finance International N.V.
-
〃
 - US$ 13,139 N/A US$ 13,139


Penske Truck Leasing Co., L.P.
-
〃
 - US$ 13,095 N/A US$ 13,095


Intuit Inc.
-
〃
 - US$ 12,686 N/A US$ 12,686


Pfizer Investment Enterprises Pte. Ltd.
-
〃
 - US$ 12,590 N/A US$ 12,590


Apple Inc.
-
〃
 - US$ 12,489 N/A US$ 12,489


Coöperatieve Rabobank U.A.
-
〃
 - US$ 12,434 N/A US$ 12,434


New York Life Global Funding
-
〃
 - US$ 12,343 N/A US$ 12,343


Santander UK Group Holdings plc
-
〃
 - US$ 12,277 N/A US$ 12,277


NatWest Markets Plc
-
〃
 - US$ 11,873 N/A US$ 11,873


ING Groep N.V.
-
〃
 - US$ 11,773 N/A US$ 11,773


Nordea Bank Abp
-
〃
 - US$ 11,677 N/A US$ 11,677






(Continued)


- 78 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Mizuho Financial Group, Inc.
-
Financial assets at fair value through other comprehensive income
 - US$ 11,665 N/A US$ 11,665


ASB Bank Limited
-
〃
 - US$ 11,504 N/A US$ 11,504


Northwestern Mutual Global Funding
-
〃
 - US$ 11,332 N/A US$ 11,332


Amazon.com, Inc.
-
〃
 - US$ 11,317 N/A US$ 11,317


ONEOK, Inc.
-
〃
 - US$ 11,048 N/A US$ 11,048


Bank of Montreal
-
〃
 - US$ 11,032 N/A US$ 11,032


NextEra Energy Capital Holdings, Inc.
-
〃
 - US$ 10,970 N/A US$ 10,970


Southern California Edison Company
-
〃
 - US$ 10,796 N/A US$ 10,796


Ryder System, Inc.
-
〃
 - US$ 10,588 N/A US$ 10,588


Verizon Communications Inc.
-
〃
 - US$ 10,584 N/A US$ 10,584


S&P Global Inc.
-
〃
 - US$ 10,556 N/A US$ 10,556


Deutsche Bank AG - New York Branch
-
〃
 - US$ 10,454 N/A US$ 10,454


Equifax Inc.
-
〃
 - US$ 10,338 N/A US$ 10,338


Macquarie Group Limited
-
〃
 - US$ 10,206 N/A US$ 10,206


AT&T Inc.
-
〃
 - US$ 9,879 N/A US$ 9,879


Svenska Handelsbanken AB (publ)
-
〃
 - US$ 9,866 N/A US$ 9,866


John Deere Capital Corporation
-
〃
 - US$ 9,776 N/A US$ 9,776


Truist Financial Corporation
-
〃
 - US$ 9,513 N/A US$ 9,513


Haleon US Capital LLC
-
〃
 - US$ 9,332 N/A US$ 9,332


Roper Technologies, Inc.
-
〃
 - US$ 9,177 N/A US$ 9,177


Exelon Corporation
-
〃
 - US$ 9,100 N/A US$ 9,100


Thermo Fisher Scientific Inc.
-
〃
 - US$ 9,049 N/A US$ 9,049


Florida Power & Light Company
-
〃
 - US$ 9,042 N/A US$ 9,042


RGA Global Funding
-
〃
 - US$ 8,977 N/A US$ 8,977


Merck & Co., Inc.
-
〃
 - US$ 8,951 N/A US$ 8,951


Equinor ASA
-
〃
 - US$ 8,866 N/A US$ 8,866


Honeywell International Inc.
-
〃
 - US$ 8,759 N/A US$ 8,759


The PNC Financial Services Group, Inc.
-
〃
 - US$ 8,451 N/A US$ 8,451


Macquarie Bank Limited
-
〃
 - US$ 8,390 N/A US$ 8,390


Rabobank Nederland - New York Branch
-
〃
 - US$ 8,173 N/A US$ 8,173


Lowe's Companies, Inc.
-
〃
 - US$ 8,065 N/A US$ 8,065


Cox Communications, Inc.
-
〃
 - US$ 7,964 N/A US$ 7,964


TORONTO-DOMINION BANK/THE
-
〃
 - US$ 7,955 N/A US$ 7,955


Constellation Energy Generation, LLC
-
〃
 - US$ 7,903 N/A US$ 7,903


Lockheed Martin Corporation
-
〃
 - US$ 7,863 N/A US$ 7,863


KfW
-
〃
 - US$ 7,860 N/A US$ 7,860


Intel Corporation
-
〃
 - US$ 7,820 N/A US$ 7,820


International Bank for Reconstruction and Development
-
〃
 - US$ 7,770 N/A US$ 7,770


Great-West Lifeco U.S. Finance 2020, Lp
-
〃
 - US$ 7,631 N/A US$ 7,631


RTX Corporation
-
〃
 - US$ 7,603 N/A US$ 7,603


Inter-American Development Bank
-
〃
 - US$ 7,511 N/A US$ 7,511


Suncorp-Metway Limited
-
〃
 - US$ 7,453 N/A US$ 7,453


AstraZeneca Finance LLC
-
〃
 - US$ 7,185 N/A US$ 7,185


Chevron Corporation
-
〃
 - US$ 7,032 N/A US$ 7,032


Daimler Trucks Finance North America LLC
-
〃
 - US$ 7,013 N/A US$ 7,013


The East Ohio Gas Company
-
〃
 - US$ 6,978 N/A US$ 6,978


Philip Morris International Inc.
-
〃
 - US$ 6,807 N/A US$ 6,807


AstraZeneca PLC
-
〃
 - US$ 6,798 N/A US$ 6,798


Fiserv, Inc.
-
〃
 - US$ 6,745 N/A US$ 6,745






(Continued)


- 79 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Pacific Life Global Funding II
-
Financial assets at fair value through other comprehensive income
 - US$ 6,726 N/A US$ 6,726


UBS AG, London Branch
-
〃
 - US$ 6,595 N/A US$ 6,595


WEC Energy Group, Inc.
-
〃
 - US$ 6,555 N/A US$ 6,555


Met Tower Global Funding
-
〃
 - US$ 6,550 N/A US$ 6,550


Roche Holdings, Inc.
-
〃
 - US$ 6,539 N/A US$ 6,539


MPLX LP
-
〃
 - US$ 6,514 N/A US$ 6,514


Fidelity National Information Services, Inc.
-
〃
 - US$ 6,498 N/A US$ 6,498


The Charles Schwab Corporation
-
〃
 - US$ 6,437 N/A US$ 6,437


NatWest Group plc
-
〃
 - US$ 6,360 N/A US$ 6,360


Ameren Corporation
-
〃
 - US$ 6,304 N/A US$ 6,304


Take-Two Interactive Software, Inc.
-
〃
 - US$ 6,237 N/A US$ 6,237


Eaton Corporation
-
〃
 - US$ 6,218 N/A US$ 6,218


Georgia Power Company
-
〃
 - US$ 6,090 N/A US$ 6,090


Huntington Bancshares Incorporated
-
〃
 - US$ 5,985 N/A US$ 5,985


Elevance Health, Inc.
-
〃
 - US$ 5,914 N/A US$ 5,914


Intercontinental Exchange, Inc.
-
〃
 - US$ 5,906 N/A US$ 5,906


Ameriprise Financial, Inc.
-
〃
 - US$ 5,837 N/A US$ 5,837


National Bank of Canada
-
〃
 - US$ 5,783 N/A US$ 5,783


Fifth Third Bancorp
-
〃
 - US$ 5,777 N/A US$ 5,777


ERAC USA Finance LLC
-
〃
 - US$ 5,722 N/A US$ 5,722


Scentre Group Trust 1
-
〃
 - US$ 5,685 N/A US$ 5,685


Stryker Corporation
-
〃
 - US$ 5,630 N/A US$ 5,630


Medtronic Global Holdings S.C.A.
-
〃
 - US$ 5,572 N/A US$ 5,572


NBN Co Limited
-
〃
 - US$ 5,537 N/A US$ 5,537


WPP Finance 2010
-
〃
 - US$ 5,537 N/A US$ 5,537


Discover Bank (New Castle, Delaware)
-
〃
 - US$ 5,440 N/A US$ 5,440


DNB Bank ASA
-
〃
 - US$ 5,421 N/A US$ 5,421


Comcast Corporation
-
〃
 - US$ 5,369 N/A US$ 5,369


Exxon Mobil Corporation
-
〃
 - US$ 5,369 N/A US$ 5,369


Alabama Power Company
-
〃
 - US$ 5,348 N/A US$ 5,348


Fox Corporation
-
〃
 - US$ 5,320 N/A US$ 5,320


McKesson Corporation
-
〃
 - US$ 5,316 N/A US$ 5,316


Sydney Airport Finance Company Pty Ltd
-
〃
 - US$ 5,160 N/A US$ 5,160


Virginia Electric and Power Company
-
〃
 - US$ 5,075 N/A US$ 5,075


Siemens Financieringsmaatschappij N.V.
-
〃
 - US$ 5,063 N/A US$ 5,063


Southwest Airlines Co.
-
〃
 - US$ 5,021 N/A US$ 5,021


Ventas Realty, Limited Partnership
-
〃
 - US$ 5,010 N/A US$ 5,010


NiSource Inc.
-
〃
 - US$ 4,918 N/A US$ 4,918


CGI Inc.
-
〃
 - US$ 4,842 N/A US$ 4,842


Brookfield Finance Inc.
-
〃
 - US$ 4,812 N/A US$ 4,812


HEICO Corporation
-
〃
 - US$ 4,786 N/A US$ 4,786


ANZ New Zealand (Int'l) Limited
-
〃
 - US$ 4,689 N/A US$ 4,689


Bristol-Myers Squibb Company
-
〃
 - US$ 4,604 N/A US$ 4,604


HP Inc.
-
〃
 - US$ 4,603 N/A US$ 4,603


Nutrien Ltd.
-
〃
 - US$ 4,564 N/A US$ 4,564


Enbridge Inc.
-
〃
 - US$ 4,535 N/A US$ 4,535


CenterPoint Energy, Inc.
-
〃
 - US$ 4,505 N/A US$ 4,505


W. P. Carey Inc.
-
〃
 - US$ 4,457 N/A US$ 4,457


Pioneer Natural Resources Company
-
〃
 - US$ 4,455 N/A US$ 4,455






(Continued)


- 80 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Otis Worldwide Corporation
-
Financial assets at fair value through other comprehensive income
 - US$ 4,442 N/A US$ 4,442


ITC Holdings Corp.
-
〃
 - US$ 4,411 N/A US$ 4,411


Citizens Bank, National Association
-
〃
 - US$ 4,363 N/A US$ 4,363


Skandinaviska Enskilda Banken AB (publ)
-
〃
 - US$ 4,343 N/A US$ 4,343


State Street Corporation
-
〃
 - US$ 4,313 N/A US$ 4,313


Toyota Motor Credit Corporation
-
〃
 - US$ 4,261 N/A US$ 4,261


Dollar General Corporation
-
〃
 - US$ 4,188 N/A US$ 4,188


Brighthouse Financial Global Funding
-
〃
 - US$ 4,132 N/A US$ 4,132


F&G Global Funding
-
〃
 - US$ 4,120 N/A US$ 4,120


JPMORGAN CHASE & CO
-
〃
 - US$ 4,114 N/A US$ 4,114


Public Service Enterprise Group Incorporated
-
〃
 - US$ 4,044 N/A US$ 4,044


Korea Electric Power Corporation
-
〃
 - US$ 4,036 N/A US$ 4,036


Schlumberger Investment SA
-
〃
 - US$ 4,028 N/A US$ 4,028


AvalonBay Communities, Inc.
-
〃
 - US$ 4,006 N/A US$ 4,006


Element Fleet Management Corp.
-
〃
 - US$ 4,004 N/A US$ 4,004


CNO Global Funding
-
〃
 - US$ 3,967 N/A US$ 3,967


Lincoln National Corporation
-
〃
 - US$ 3,948 N/A US$ 3,948


Monongahela Power Company
-
〃
 - US$ 3,946 N/A US$ 3,946


Public Storage
-
〃
 - US$ 3,934 N/A US$ 3,934


Walmart Inc.
-
〃
 - US$ 3,875 N/A US$ 3,875


Citibank, N.A.
-
〃
 - US$ 3,858 N/A US$ 3,858


Anheuser-Busch Companies, LLC
-
〃
 - US$ 3,857 N/A US$ 3,857


B.A.T. International Finance p.l.c.
-
〃
 - US$ 3,792 N/A US$ 3,792


Fortinet, Inc.
-
〃
 - US$ 3,667 N/A US$ 3,667


Norsk Hydro ASA
-
〃
 - US$ 3,666 N/A US$ 3,666


Appalachian Power Company
-
〃
 - US$ 3,661 N/A US$ 3,661


AutoZone, Inc.
-
〃
 - US$ 3,646 N/A US$ 3,646


Eversource Energy
-
〃
 - US$ 3,568 N/A US$ 3,568


Parker-Hannifin Corporation
-
〃
 - US$ 3,565 N/A US$ 3,565


Jackson National Life Global Funding
-
〃
 - US$ 3,563 N/A US$ 3,563


The Israel Electric Corporation Ltd
-
〃
 - US$ 3,554 N/A US$ 3,554


GA Global Funding Trust
-
〃
 - US$ 3,552 N/A US$ 3,552


CenterPoint Energy Resources Corp.
-
〃
 - US$ 3,539 N/A US$ 3,539


Baxter International Inc.
-
〃
 - US$ 3,486 N/A US$ 3,486


Kimco Realty Corporation
-
〃
 - US$ 3,468 N/A US$ 3,468


Advocate Health & Hospitals Corporation
-
〃
 - US$ 3,444 N/A US$ 3,444


Meta Platforms, Inc.
-
〃
 - US$ 3,430 N/A US$ 3,430


Sempra
-
〃
 - US$ 3,429 N/A US$ 3,429


BorgWarner Inc.
-
〃
 - US$ 3,426 N/A US$ 3,426


Morgan Stanley Bank, N.A.
-
〃
 - US$ 3,416 N/A US$ 3,416


B.A.T Capital Corporation
-
〃
 - US$ 3,325 N/A US$ 3,325


Highmark Inc.
-
〃
 - US$ 3,283 N/A US$ 3,283


Pfizer Inc.
-
〃
 - US$ 3,281 N/A US$ 3,281


Realty Income Corporation
-
〃
 - US$ 3,271 N/A US$ 3,271


Ross Stores, Inc.
-
〃
 - US$ 3,267 N/A US$ 3,267


Republic Services, Inc.
-
〃
 - US$ 3,212 N/A US$ 3,212


Verisk Analytics, Inc.
-
〃
 - US$ 3,191 N/A US$ 3,191


Truist Bank
-
〃
 - US$ 3,173 N/A US$ 3,173


Corebridge Financial, Inc.
-
〃
 - US$ 3,120 N/A US$ 3,120






(Continued)


- 81 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Lundin Energy Finance BV
-
Financial assets at fair value through other comprehensive income
 - US$ 3,099 N/A US$ 3,099


Wells Fargo Bank, National Association
-
〃
 - US$ 3,098 N/A US$ 3,098


Atmos Energy Corporation
-
〃
 - US$ 3,068 N/A US$ 3,068


EIDP, Inc.
-
〃
 - US$ 3,059 N/A US$ 3,059


Mutual Of Omaha Companies Global Funding
-
〃
 - US$ 3,057 N/A US$ 3,057


Nestlé Holdings, Inc.
-
〃
 - US$ 3,040 N/A US$ 3,040


CMS Energy Corporation
-
〃
 - US$ 3,017 N/A US$ 3,017


Johnson & Johnson
-
〃
 - US$ 3,015 N/A US$ 3,015


CNA Financial Corporation
-
〃
 - US$ 2,978 N/A US$ 2,978


Prologis, L.P.
-
〃
 - US$ 2,974 N/A US$ 2,974


Southern California Gas Company
-
〃
 - US$ 2,929 N/A US$ 2,929


Rio Tinto Finance (USA) Limited
-
〃
 - US$ 2,900 N/A US$ 2,900


Xcel Energy Inc.
-
〃
 - US$ 2,894 N/A US$ 2,894


Canadian Imperial Bank of Commerce
-
〃
 - US$ 2,891 N/A US$ 2,891


BHP Billiton Finance (USA) Limited
-
〃
 - US$ 2,865 N/A US$ 2,865


Diageo Capital plc
-
〃
 - US$ 2,847 N/A US$ 2,847


Novartis Capital Corporation
-
〃
 - US$ 2,810 N/A US$ 2,810


Baxalta Incorporated
-
〃
 - US$ 2,750 N/A US$ 2,750


Dominion Energy, Inc.
-
〃
 - US$ 2,746 N/A US$ 2,746


7-Eleven, Inc.
-
〃
 - US$ 2,737 N/A US$ 2,737


Oncor Electric Delivery Company LLC
-
〃
 - US$ 2,716 N/A US$ 2,716


Simon Property Group, L.P.
-
〃
 - US$ 2,692 N/A US$ 2,692


Weyerhaeuser Company
-
〃
 - US$ 2,687 N/A US$ 2,687


National Australia Bank Limited, New York Branch
-
〃
 - US$ 2,647 N/A US$ 2,647


Eastern Energy Gas Holdings, LLC
-
〃
 - US$ 2,643 N/A US$ 2,643


Chevron Phillips Chemical Company LLC
-
〃
 - US$ 2,636 N/A US$ 2,636


O'Reilly Automotive, Inc.
-
〃
 - US$ 2,610 N/A US$ 2,610


The Estée Lauder Companies Inc.
-
〃
 - US$ 2,609 N/A US$ 2,609


Masco Corporation
-
〃
 - US$ 2,601 N/A US$ 2,601


The Southern Company
-
〃
 - US$ 2,575 N/A US$ 2,575


Avangrid, Inc.
-
〃
 - US$ 2,574 N/A US$ 2,574


Bank of New Zealand
-
〃
 - US$ 2,563 N/A US$ 2,563


Air Products and Chemicals, Inc.
-
〃
 - US$ 2,531 N/A US$ 2,531


Nuveen Finance, LLC
-
〃
 - US$ 2,460 N/A US$ 2,460


Coca-Cola Europacific Partners PLC
-
〃
 - US$ 2,433 N/A US$ 2,433


American Electric Power Company, Inc.
-
〃
 - US$ 2,431 N/A US$ 2,431


Entergy Texas, Inc.
-
〃
 - US$ 2,427 N/A US$ 2,427


Workday, Inc.
-
〃
 - US$ 2,406 N/A US$ 2,406


CRH America, Inc.
-
〃
 - US$ 2,400 N/A US$ 2,400


Swedbank AB (publ)
-
〃
 - US$ 2,399 N/A US$ 2,399


Air Lease Corporation
-
〃
 - US$ 2,360 N/A US$ 2,360


Chevron U.S.A. Inc.
-
〃
 - US$ 2,349 N/A US$ 2,349


Westpac Banking Corporation
-
〃
 - US$ 2,346 N/A US$ 2,346


Texas Instruments Incorporated
-
〃
 - US$ 2,344 N/A US$ 2,344


Yara International ASA
-
〃
 - US$ 2,316 N/A US$ 2,316


Magellan Midstream Partners, L.P.
-
〃
 - US$ 2,314 N/A US$ 2,314


GE HealthCare Technologies Inc.
-
〃
 - US$ 2,277 N/A US$ 2,277


Empower Finance 2020, LP
-
〃
 - US$ 2,268 N/A US$ 2,268


Cardinal Health, Inc.
-
〃
 - US$ 2,266 N/A US$ 2,266






(Continued)


- 82 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
ONE Gas, Inc.
-
Financial assets at fair value through other comprehensive income
 - US$ 2,265 N/A US$ 2,265


Mitsubishi HC Capital Inc.
-
〃
 - US$ 2,249 N/A US$ 2,249


Alliant Energy Finance, LLC
-
〃
 - US$ 2,230 N/A US$ 2,230


The Western Union Company
-
〃
 - US$ 2,187 N/A US$ 2,187


Georgia-Pacific LLC
-
〃
 - US$ 2,160 N/A US$ 2,160


Health Care Service Corporation, a Mutual Legal Reserve Company
-
〃
 - US$ 2,130 N/A US$ 2,130


American Honda Finance Corporation
-
〃
 - US$ 2,087 N/A US$ 2,087


Phillips 66
-
〃
 - US$ 2,057 N/A US$ 2,057


Bank of America, National Association
-
〃
 - US$ 2,036 N/A US$ 2,036


Pricoa Global Funding I
-
〃
 - US$ 2,019 N/A US$ 2,019


KODIT Global 2023-1 Co., Ltd.
-
〃
 - US$ 1,996 N/A US$ 1,996


Public Service Electric and Gas Company
-
〃
 - US$ 1,986 N/A US$ 1,986


Mead Johnson Nutrition Company
-
〃
 - US$ 1,973 N/A US$ 1,973


Magna International Inc.
-
〃
 - US$ 1,967 N/A US$ 1,967


UBS Group Funding (Jersey) Ltd.
-
〃
 - US$ 1,951 N/A US$ 1,951


Tucson Electric Power Company
-
〃
 - US$ 1,948 N/A US$ 1,948


Olympus Corporation
-
〃
 - US$ 1,943 N/A US$ 1,943


Welltower Inc.
-
〃
 - US$ 1,930 N/A US$ 1,930


Gulf Power Company
-
〃
 - US$ 1,916 N/A US$ 1,916


CSX Corporation
-
〃
 - US$ 1,911 N/A US$ 1,911


Shinhan Financial Group Co., Ltd.
-
〃
 - US$ 1,856 N/A US$ 1,856


Mitsubishi Corporation
-
〃
 - US$ 1,823 N/A US$ 1,823


Sprint Spectrum Co Llc
-
〃
 - US$ 1,812 N/A US$ 1,812


NBK SPC Limited
-
〃
 - US$ 1,809 N/A US$ 1,809


Berkshire Hathaway Energy Company
-
〃
 - US$ 1,792 N/A US$ 1,792


CenterPoint Energy Houston Electric, LLC
-
〃
 - US$ 1,785 N/A US$ 1,785


Mondelez International, Inc.
-
〃
 - US$ 1,759 N/A US$ 1,759


Kentucky Utilities Company
-
〃
 - US$ 1,750 N/A US$ 1,750


SMBC Aviation Capital Finance DAC
-
〃
 - US$ 1,747 N/A US$ 1,747


USAA Capital Corp.
-
〃
 - US$ 1,747 N/A US$ 1,747


Evergy Kansas Central, Inc.
-
〃
 - US$ 1,692 N/A US$ 1,692


DTE Energy Company
-
〃
 - US$ 1,685 N/A US$ 1,685


University of California
-
〃
 - US$ 1,631 N/A US$ 1,631


CSL Finance plc
-
〃
 - US$ 1,601 N/A US$ 1,601


Gulfstream Natural Gas System, L.L.C.
-
〃
 - US$ 1,598 N/A US$ 1,598


eBay Inc.
-
〃
 - US$ 1,594 N/A US$ 1,594


Emerson Electric Co.
-
〃
 - US$ 1,576 N/A US$ 1,576


International Business Machines Corporation
-
〃
 - US$ 1,570 N/A US$ 1,570


Burlington Northern Santa Fe, LLC
-
〃
 - US$ 1,566 N/A US$ 1,566


Glencore Funding LLC
-
〃
 - US$ 1,556 N/A US$ 1,556


Jefferies Financial Group Inc.
-
〃
 - US$ 1,543 N/A US$ 1,543


Duke Energy Corporation
-
〃
 - US$ 1,538 N/A US$ 1,538


T-Mobile USA, Inc.
-
〃
 - US$ 1,526 N/A US$ 1,526


Zoetis Inc.
-
〃
 - US$ 1,517 N/A US$ 1,517


APA Infrastructure Limited
-
〃
 - US$ 1,511 N/A US$ 1,511


Kinder Morgan, Inc.
-
〃
 - US$ 1,510 N/A US$ 1,510


Phillips 66 Company
-
〃
 - US$ 1,495 N/A US$ 1,495


American International Group, Inc.
-
〃
 - US$ 1,479 N/A US$ 1,479






(Continued)


- 83 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Essex Portfolio, L.P.
-
Financial assets at fair value through other comprehensive income
 - US$ 1,477 N/A US$ 1,477


Microchip Technology Incorporated
-
〃
 - US$ 1,477 N/A US$ 1,477


Amcor Flexibles North America Inc.
-
〃
 - US$ 1,473 N/A US$ 1,473


Wipro IT Services LLC
-
〃
 - US$ 1,471 N/A US$ 1,471


NSTAR Electric Company
-
〃
 - US$ 1,455 N/A US$ 1,455


Duke Energy Florida, LLC
-
〃
 - US$ 1,448 N/A US$ 1,448


National Rural Utilities Cooperative Finance Corporation
-
〃
 - US$ 1,445 N/A US$ 1,445


Alimentation Couche-Tard Inc.
-
〃
 - US$ 1,442 N/A US$ 1,442


The Cigna Group
-
〃
 - US$ 1,340 N/A US$ 1,340


Eastern Gas Transmission and Storage, Inc.
-
〃
 - US$ 1,319 N/A US$ 1,319


Caterpillar Financial Services Corporation
-
〃
 - US$ 1,300 N/A US$ 1,300


The Williams Companies, Inc.
-
〃
 - US$ 1,259 N/A US$ 1,259


Andrew W. Mellon Foundation, The
-
〃
 - US$ 1,247 N/A US$ 1,247


Union Pacific Corporation
-
〃
 - US$ 1,227 N/A US$ 1,227


Ecolab Inc.
-
〃
 - US$ 1,205 N/A US$ 1,205


Sysco Corporation
-
〃
 - US$ 1,198 N/A US$ 1,198


Mondelez International Holdings Netherlands B.V.
-
〃
 - US$ 1,115 N/A US$ 1,115


Ferguson Finance PLC
-
〃
 - US$ 1,113 N/A US$ 1,113


Reliance Standard Life Global Funding II
-
〃
 - US$ 1,112 N/A US$ 1,112


Nucor Corporation
-
〃
 - US$ 1,072 N/A US$ 1,072


AIB Group plc
-
〃
 - US$ 1,065 N/A US$ 1,065


Enterprise Products Operating LLC
-
〃
 - US$ 1,034 N/A US$ 1,034


Lennox International Inc.
-
〃
 - US$ 1,026 N/A US$ 1,026


New York State Electric & Gas Corporation
-
〃
 - US$ 1,026 N/A US$ 1,026


Sabine Pass Liquefaction, LLC
-
〃
 - US$ 1,018 N/A US$ 1,018


Scottish Power Limited
-
〃
 - US$ 1,004 N/A US$ 1,004


Suntory Holdings Limited
-
〃
 - US$ 973 N/A US$ 973


Canadian Pacific Railway Company
-
〃
 - US$ 959 N/A US$ 959


AIA Group Limited
-
〃
 - US$ 956 N/A US$ 956


LYB Finance Company B.V.
-
〃
 - US$ 942 N/A US$ 942


Piedmont Natural Gas Company, Inc.
-
〃
 - US$ 932 N/A US$ 932


Juniper Networks, Inc.
-
〃
 - US$ 926 N/A US$ 926


Lennar Corporation
-
〃
 - US$ 923 N/A US$ 923


Amcor Finance (USA), Inc.
-
〃
 - US$ 917 N/A US$ 917


BAE Systems Finance Inc.
-
〃
 - US$ 917 N/A US$ 917


The Interpublic Group of Companies, Inc.
-
〃
 - US$ 916 N/A US$ 916


AEP Texas Inc.
-
〃
 - US$ 914 N/A US$ 914


Assurant, Inc.
-
〃
 - US$ 914 N/A US$ 914


Unilever Capital Corporation
-
〃
 - US$ 890 N/A US$ 890


Reynolds American Inc.
-
〃
 - US$ 889 N/A US$ 889


County of Palm Beach, Florida
-
〃
 - US$ 825 N/A US$ 825


TransCanada PipeLines Limited
-
〃
 - US$ 819 N/A US$ 819


CubeSmart, L.P.
-
〃
 - US$ 784 N/A US$ 784


Southwest Gas Corporation
-
〃
 - US$ 771 N/A US$ 771


Zimmer Biomet Holdings, Inc.
-
〃
 - US$ 771 N/A US$ 771


BP Capital Markets America, Inc.
-
〃
 - US$ 770 N/A US$ 770


Niagara Mohawk Power Corporation
-
〃
 - US$ 761 N/A US$ 761


Veralto Corporation
-
〃
 - US$ 759 N/A US$ 759


The Brooklyn Union Gas Company
-
〃
 - US$ 755 N/A US$ 755






(Continued)


- 84 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Mars, Incorporated
-
Financial assets at fair value through other comprehensive income
 - US$ 754 N/A US$ 754


Manufacturers and Traders Trust Company
-
〃
 - US$ 751 N/A US$ 751


Consolidated Edison Company of New York, Inc.
-
〃
 - US$ 750 N/A US$ 750


Oklahoma Gas and Electric Company
-
〃
 - US$ 749 N/A US$ 749


Voya Financial, Inc.
-
〃
 - US$ 749 N/A US$ 749


Marsh & McLennan Companies, Inc.
-
〃
 - US$ 747 N/A US$ 747


TELUS Corporation
-
〃
 - US$ 745 N/A US$ 745


Waste Management, Inc.
-
〃
 - US$ 744 N/A US$ 744


Visa Inc.
-
〃
 - US$ 739 N/A US$ 739


PACCAR Financial Corp.
-
〃
 - US$ 738 N/A US$ 738


Sky Limited
-
〃
 - US$ 691 N/A US$ 691


Hyundai Capital Services, Inc.
-
〃
 - US$ 689 N/A US$ 689


The Allstate Corporation
-
〃
 - US$ 675 N/A US$ 675


QNB Finance Ltd.
-
〃
 - US$ 673 N/A US$ 673


Sodexo, Inc.
-
〃
 - US$ 672 N/A US$ 672


Automatic Data Processing, Inc.
-
〃
 - US$ 649 N/A US$ 649


L3Harris Technologies, Inc.
-
〃
 - US$ 617 N/A US$ 617


Southern Power Company
-
〃
 - US$ 612 N/A US$ 612


Burlington Resources Inc.
-
〃
 - US$ 600 N/A US$ 600


Starbucks Corporation
-
〃
 - US$ 594 N/A US$ 594


Florida Hurricane Catastrophe Fund Finance Corporation
-
〃
 - US$ 593 N/A US$ 593


Infor, Inc.
-
〃
 - US$ 589 N/A US$ 589


Columbia Pipelines Holding Company, LLC
-
〃
 - US$ 566 N/A US$ 566


American Water Capital Corp.
-
〃
 - US$ 562 N/A US$ 562


Columbia Pipelines Operating Co. LLC
-
〃
 - US$ 538 N/A US$ 538


Shell International Finance B.V.
-
〃
 - US$ 536 N/A US$ 536


Arizona Public Service Company
-
〃
 - US$ 520 N/A US$ 520


State of Hawaii
-
〃
 - US$ 515 N/A US$ 515


Intesa Sanpaolo S.p.A.
-
〃
 - US$ 512 N/A US$ 512


ConocoPhillips Company
-
〃
 - US$ 510 N/A US$ 510


Mississippi Power Company
-
〃
 - US$ 510 N/A US$ 510


MassMutual Global Funding II
-
〃
 - US$ 506 N/A US$ 506


Westpac New Zealand Limited
-
〃
 - US$ 499 N/A US$ 499


Deutsche Telekom International Finance B.V.
-
〃
 - US$ 496 N/A US$ 496


Haleon UK Capital plc
-
〃
 - US$ 488 N/A US$ 488


Commonwealth Bank of Australia
-
〃
 - US$ 487 N/A US$ 487


Trane Technologies Luxembourg Finance S.A.
-
〃
 - US$ 486 N/A US$ 486


Genuine Parts Company
-
〃
 - US$ 480 N/A US$ 480


Altria Group, Inc.
-
〃
 - US$ 477 N/A US$ 477


McCormick & Company, Incorporated
-
〃
 - US$ 477 N/A US$ 477


DENSO Corporation
-
〃
 - US$ 453 N/A US$ 453


Brazos Higher Education Authority Inc
-
〃
 - US$ 444 N/A US$ 444


Pernod Ricard International Finance LLC
-
〃
 - US$ 435 N/A US$ 435


Aker BP ASA
-
〃
 - US$ 433 N/A US$ 433


The Home Depot, Inc.
-
〃
 - US$ 416 N/A US$ 416


Target Corporation
-
〃
 - US$ 412 N/A US$ 412


National Australia Bank Limited
-
〃
 - US$ 410 N/A US$ 410


Entergy Corporation
-
〃
 - US$ 395 N/A US$ 395


GlaxoSmithKline Capital Inc.
-
〃
 - US$ 394 N/A US$ 394






(Continued)


- 85 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Aflac Incorporated
-
Financial assets at fair value through other comprehensive income
 - US$ 392 N/A US$ 392


Gilead Sciences, Inc.
-
〃
 - US$ 391 N/A US$ 391


University of Massachusetts Building Authority
-
〃
 - US$ 388 N/A US$ 388


Banco del Estado de Chile
-
〃
 - US$ 386 N/A US$ 386


Sierra Pacific Power Company
-
〃
 - US$ 381 N/A US$ 381


PepsiCo, Inc.
-
〃
 - US$ 364 N/A US$ 364


The Norinchukin Bank
-
〃
 - US$ 362 N/A US$ 362


Cargill, Incorporated
-
〃
 - US$ 359 N/A US$ 359


Mid-America Apartments, L.P.
-
〃
 - US$ 308 N/A US$ 308


Electricité de France S.A.
-
〃
 - US$ 304 N/A US$ 304


Consumers Energy Company
-
〃
 - US$ 302 N/A US$ 302


Aptiv PLC
-
〃
 - US$ 290 N/A US$ 290


National Grid plc
-
〃
 - US$ 289 N/A US$ 289


Nordson Corporation
-
〃
 - US$ 286 N/A US$ 286


QatarEnergy
-
〃
 - US$ 275 N/A US$ 275


Marriott International, Inc.
-
〃
 - US$ 271 N/A US$ 271


KBC Group NV
-
〃
 - US$ 239 N/A US$ 239


Pennsylvania Electric Company
-
〃
 - US$ 235 N/A US$ 235


Humana Inc.
-
〃
 - US$ 214 N/A US$ 214


Hoover Alabama Board Of Education
-
〃
 - US$ 104 N/A US$ 104


Beth Israel Deaconess Medical Center, Inc.
-
〃
 - US$ 88 N/A US$ 88


Metropolitan Edison Company
-
〃
 - US$ 81 N/A US$ 81


County of Pima, Arizona
-
〃
 - US$ 79 N/A US$ 79


State of Wisconsin
-
〃
 - US$ 64 N/A US$ 64


Aon Corporation
-
〃
 - US$ 52 N/A US$ 52


County of Nueces, Texas
-
〃
 - US$ 25 N/A US$ 25


Bank of America Corporation
-
Financial assets at amortized cost
 - US$ 799,449 N/A US$ 800,590


Wells Fargo & Company
-
〃
 - US$ 619,830 N/A US$ 626,602


Morgan Stanley
-
〃
 - US$ 566,880 N/A US$ 570,092


The Goldman Sachs Group, Inc.
-
〃
 - US$ 432,811 N/A US$ 418,343


JPMorgan Chase & Co.
-
〃
 - US$ 391,868 N/A US$ 394,331


Citigroup Inc.
-
〃
 - US$ 251,481 N/A US$ 252,491


Citigroup Global Markets Inc.
-
〃
 - US$ 149,951 N/A US$ 149,628


Citigroup Global Markets Holdings Inc.
-
〃
 - US$ 99,968 N/A US$ 99,424


Goldman Sachs Finance Corp International Ltd
-
〃
 - US$ 99,905 N/A US$ 99,281


Citigroup
-
〃
 - US$ 19,981 N/A US$ 20,156


Nationwide Building Society
-
〃
 - US$ 10,338 N/A US$ 10,153


Daimler Trucks Finance North America LLC
-
〃
 - US$ 9,685 N/A US$ 9,633


Great-West Lifeco U.S. Finance 2020, Lp
-
〃
 - US$ 9,550 N/A US$ 9,419


Mizuho Financial Group, Inc.
-
〃
 - US$ 9,446 N/A US$ 9,562


BNP Paribas SA
-
〃
 - US$ 9,265 N/A US$ 9,233


Fédération des caisses Desjardins du Québec
-
〃
 - US$ 9,185 N/A US$ 9,088


UBS Group AG
-
〃
 - US$ 9,172 N/A US$ 9,095


Nomura Holdings, Inc.
-
〃
 - US$ 9,155 N/A US$ 9,031


NongHyup Bank
-
〃
 - US$ 8,839 N/A US$ 8,799


Banque Fédérative du Crédit Mutuel
-
〃
 - US$ 8,435 N/A US$ 8,442


Canadian Imperial Bank of Commerce
-
〃
 - US$ 8,417 N/A US$ 8,360


Banco Santander, S.A.
-
〃
 - US$ 8,301 N/A US$ 8,251


Ventas Realty, Limited Partnership
-
〃
 - US$ 8,279 N/A US$ 8,206






(Continued)


- 86 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Enel Finance International N.V.
-
Financial assets at amortized cost
 - US$ 8,250 N/A US$ 8,188


Protective Life Global Funding
-
〃
 - US$ 7,983 N/A US$ 7,896


CRH America, Inc.
-
〃
 - US$ 7,954 N/A US$ 7,849


Mercedes-Benz Finance North America LLC
-
〃
 - US$ 7,916 N/A US$ 7,894


BPCE SA
-
〃
 - US$ 7,874 N/A US$ 7,794


Sydney Airport Finance Company Pty Ltd
-
〃
 - US$ 7,727 N/A US$ 7,672


Sumitomo Mitsui Financial Group, Inc.
-
〃
 - US$ 7,538 N/A US$ 7,515


AIG Global Funding
-
〃
 - US$ 7,480 N/A US$ 7,421


Banco Bilbao Vizcaya Argentaria, S.A.
-
〃
 - US$ 7,042 N/A US$ 7,006


Southern California Edison Company
-
〃
 - US$ 5,913 N/A US$ 5,924


NatWest Markets Plc
-
〃
 - US$ 5,515 N/A US$ 5,483


F&G Global Funding
-
〃
 - US$ 5,511 N/A US$ 5,440


ING Groep N.V.
-
〃
 - US$ 5,244 N/A US$ 5,307


Athene Global Funding
-
〃
 - US$ 5,122 N/A US$ 5,032


Hyundai Capital Services, Inc.
-
〃
 - US$ 5,007 N/A US$ 4,964


Svenska Handelsbanken AB (publ)
-
〃
 - US$ 4,723 N/A US$ 4,755


QNB Finance Ltd.
-
〃
 - US$ 4,421 N/A US$ 4,423


Sumitomo Mitsui Trust Bank, Limited
-
〃
 - US$ 4,165 N/A US$ 4,120


Lloyds Banking Group plc
-
〃
 - US$ 3,979 N/A US$ 3,949


Deutsche Bank AG - New York Branch
-
〃
 - US$ 3,974 N/A US$ 3,944


Volkswagen Group of America Finance, LLC
-
〃
 - US$ 3,853 N/A US$ 3,803


Mitsubishi UFJ Financial Group, Inc.
-
〃
 - US$ 3,747 N/A US$ 3,725


Jackson National Life Global Funding
-
〃
 - US$ 3,345 N/A US$ 3,276


ANZ New Zealand (Int'l) Limited
-
〃
 - US$ 3,251 N/A US$ 3,216


Scottish Power Limited
-
〃
 - US$ 3,188 N/A US$ 3,197


Spectra Energy Partners, LP
-
〃
 - US$ 2,851 N/A US$ 2,812


National Bank of Canada
-
〃
 - US$ 2,091 N/A US$ 2,088


Georgia-Pacific LLC
-
〃
 - US$ 1,254 N/A US$ 1,253


GA Global Funding Trust
-
〃
 - US$ 1,174 N/A US$ 1,175


Reliance Standard Life Global Funding II
-
〃
 - US$ 1,083 N/A US$ 1,075


Barclays Bank PLC
-
〃
 - US$ 745 N/A US$ 744


AIA Group Limited
-
〃
 - US$ 585 N/A US$ 587







Agency mortgage-backed securities




FEDERAL NATIONAL MORTGAGE ASSOCIATION
-
Financial assets at fair value through other comprehensive income
 - US$ 658,944 N/A US$ 658,944


Federal Home Loan Mortgage Corporation
-
〃
 - US$ 350,328 N/A US$ 350,328


Government National Mortgage Association
-
〃
 - US$ 225,310 N/A US$ 225,310







Government bond/Agency bonds




United States Department of The Treasury
-
Financial assets at fair value through other comprehensive income
 - US$ 718,479 N/A US$ 718,479


Federal Home Loan Mortgage Corporation
-
〃
 - US$ 6,995 N/A US$ 6,995


FEDERAL NATIONAL MORTGAGE ASSOCIATION
-
〃
 - US$ 1,065 N/A US$ 1,065


Federal Home Loan Banks
-
Financial assets at amortized cost
 - US$ 225,000 N/A US$ 224,645


Federal Home Loan Mortgage Corporation
-
〃
 - US$ 135,000 N/A US$ 134,845


United States Department of The Treasury
-
〃
 - US$ 88,940 N/A US$ 89,501







Asset-backed securities




Wells Fargo Commercial Mortgage Trust 2016-Bnk1
-
Financial assets at fair value through other comprehensive income
 - US$ 9,941 N/A US$ 9,941


JPMBB Commercial Mortgage Securities Trust 2014-C24
-
〃
 - US$ 9,818 N/A US$ 9,818






(Continued)


- 87 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Toyota Auto Receivables 2022-B Owner Trust
-
Financial assets at fair value through other comprehensive income
 - US$ 9,665 N/A US$ 9,665


Gm Financial Consumer Automobile Receivables Trust 2023-3
-
〃
 - US$ 9,033 N/A US$ 9,033


Ford Credit Auto Owner Trust 2021-Rev2
-
〃
 - US$ 7,674 N/A US$ 7,674


Hyundai Auto Receivables Trust 2021-C
-
〃
 - US$ 7,388 N/A US$ 7,388


Toyota Auto Loan Extended Note Trust 2023-1
-
〃
 - US$ 7,351 N/A US$ 7,351


Citigroup Commercial Mortgage Trust 2015-GC33
-
〃
 - US$ 7,069 N/A US$ 7,069


Ford Credit Auto Owner Trust 2020-REV2
-
〃
 - US$ 6,861 N/A US$ 6,861


Hyundai Auto Receivables Trust 2023-B
-
〃
 - US$ 6,280 N/A US$ 6,280


BBCMS Mortgage Trust 2020-C8
-
〃
 - US$ 6,135 N/A US$ 6,135


Morgan Stanley Bank America Merrill Lynch Trust 2016-C30
-
〃
 - US$ 6,131 N/A US$ 6,131


Honda Auto Receivables 2023-2 Owner Trust
-
〃
 - US$ 6,028 N/A US$ 6,028


Morgan Stanley Capital I Trust 2021-L6
-
〃
 - US$ 5,902 N/A US$ 5,902


Bank 2020-BNK26
-
〃
 - US$ 5,840 N/A US$ 5,840


Hudson Yards 2016-10HY Mortgage Trust
-
〃
 - US$ 5,805 N/A US$ 5,805


Benchmark 2019-B11 Mortgage Trust
-
〃
 - US$ 5,699 N/A US$ 5,699


Citigroup Commercial Mortgage Trust 2021-PRM2
-
〃
 - US$ 5,502 N/A US$ 5,502


Bank 2021-bnk33
-
〃
 - US$ 5,496 N/A US$ 5,496


Benchmark 2019-B12 Mortgage Trust
-
〃
 - US$ 5,351 N/A US$ 5,351


Bank 2023-BNK46
-
〃
 - US$ 5,244 N/A US$ 5,244


Benchmark 2023-B39 Mortgage Trust
-
〃
 - US$ 5,208 N/A US$ 5,208


MSWF Commercial Mortgage Trust 2023-1
-
〃
 - US$ 5,172 N/A US$ 5,172


BBCMS 2018-Tall Mortgage Trust
-
〃
 - US$ 5,101 N/A US$ 5,101


Wells Fargo Commercial Mortgage Trust 2016-C35
-
〃
 - US$ 5,027 N/A US$ 5,027


Wells Fargo Commercial Mortgage Trust 2021-C59
-
〃
 - US$ 4,815 N/A US$ 4,815


CSAIL 2018-CX11
-
〃
 - US$ 4,777 N/A US$ 4,777


Bank 2017-Bnk6
-
〃
 - US$ 4,772 N/A US$ 4,772


Morgan Stanley Capital I Trust 2016 - BNK2 Fund
-
〃
 - US$ 4,676 N/A US$ 4,676


GM Financial Revolving Receivables Trust 2021-1
-
〃
 - US$ 4,526 N/A US$ 4,526


Bank 2017-BNK9
-
〃
 - US$ 4,162 N/A US$ 4,162


Benchmark 2023-V3 Mortgage Trust
-
〃
 - US$ 4,119 N/A US$ 4,119


Bank 2017 - BNK7
-
〃
 - US$ 4,063 N/A US$ 4,063


MRCD 2019-Prkc Mortgage Trust
-
〃
 - US$ 4,025 N/A US$ 4,025


Msbam 2016-C29
-
〃
 - US$ 4,010 N/A US$ 4,010


Five 2023-V1 Mortgage Trust
-
〃
 - US$ 4,002 N/A US$ 4,002


Citigroup Commercial Mortgage Trust 2014-GC21
-
〃
 - US$ 3,779 N/A US$ 3,779


JPMCC 2017-JP7
-
〃
 - US$ 3,738 N/A US$ 3,738


Bmw Vehicle Owner Trust 2023-A
-
〃
 - US$ 3,636 N/A US$ 3,636


Citigroup Commercial Mortgage Trust 2019-Gc43
-
〃
 - US$ 3,214 N/A US$ 3,214


BANK 2017-BNK5
-
〃
 - US$ 3,132 N/A US$ 3,132


Honda Auto Receivables 2021 - 4 Owner Trust
-
〃
 - US$ 3,081 N/A US$ 3,081


Bank 2019-Bnk22
-
〃
 - US$ 3,057 N/A US$ 3,057


Msbam 2016-C31
-
〃
 - US$ 3,023 N/A US$ 3,023


Commerce 2015-CCRE24 Mortgage Trust
-
〃
 - US$ 2,991 N/A US$ 2,991


WFRBS Commercial Mortgage Trust 2014-C25
-
〃
 - US$ 2,932 N/A US$ 2,932


Bmo 2023-C5 Mortgage Trust
-
〃
 - US$ 2,806 N/A US$ 2,806


Sreit Commercial Mortgage Trust 2021-Mfp
-
〃
 - US$ 2,729 N/A US$ 2,729


Benchmark 2019-B15 Mortgage Trust
-
〃
 - US$ 2,574 N/A US$ 2,574


DCENT_23-2
-
〃
 - US$ 2,521 N/A US$ 2,521


Toyota Auto Receivables 2023-C Owner Trust
-
〃
 - US$ 2,519 N/A US$ 2,519






(Continued)


- 88 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Benchmark 2018-B3 Commercial Mortgage Trust
-
Financial assets at fair value through other comprehensive income
 - US$ 2,462 N/A US$ 2,462


Ford Credit Auto Owner Trust 2020-Rev1
-
〃
 - US$ 2,415 N/A US$ 2,415


JPMDB 2017-C7
-
〃
 - US$ 2,415 N/A US$ 2,415


GS Mortgage Securities Trust 2015-GC32
-
〃
 - US$ 2,368 N/A US$ 2,368


Citigroup Commercial Mortgage Trust 2016-C1
-
〃
 - US$ 2,304 N/A US$ 2,304


Citigroup Commercial Mortgage Trust 2015-P1
-
〃
 - US$ 2,174 N/A US$ 2,174


Wells Fargo Commercial Mortgage Trust 2020-C55
-
〃
 - US$ 2,110 N/A US$ 2,110


Citigroup Commercial Mortgage Trust 2015-GC27
-
〃
 - US$ 2,107 N/A US$ 2,107


Mhc Commercial Mortgage Trust 2021-Mhc
-
〃
 - US$ 2,090 N/A US$ 2,090


Ford Credit Auto Owner Trust 2023-A
-
〃
 - US$ 1,992 N/A US$ 1,992


Benchmark 2018-B4 Mortgage Trust
-
〃
 - US$ 1,930 N/A US$ 1,930


Morgan Stanley Capital I Trust
-
〃
 - US$ 1,844 N/A US$ 1,844


Dolp Trust 2021-NYC
-
〃
 - US$ 1,821 N/A US$ 1,821


CGCMT 2017-P8 Mortgage Trust
-
〃
 - US$ 1,630 N/A US$ 1,630


Wells Fargo Commercial Mortgage Trust 2015-C30
-
〃
 - US$ 1,574 N/A US$ 1,574


JPMBB Commercial Mortgage Securities Trust 2015-C27
-
〃
 - US$ 1,527 N/A US$ 1,527


Hyundai Auto Receivables Trust 2022-A
-
〃
 - US$ 1,524 N/A US$ 1,524


Honda Auto Receivables 2023-1 Owner Trust
-
〃
 - US$ 1,518 N/A US$ 1,518


UBS Commercial Mortgage Trust 2018-C11
-
〃
 - US$ 1,495 N/A US$ 1,495


COMM 2020-CBM Mortgage Trust
-
〃
 - US$ 1,476 N/A US$ 1,476


Morgan Stanley Capital I Trust 2021-L5
-
〃
 - US$ 1,369 N/A US$ 1,369


Wells Fargo Commercial Mortgage Trust 2018-C44
-
〃
 - US$ 1,305 N/A US$ 1,305


Wells Fargo Commercial Mortgage Trust 2015-C29
-
〃
 - US$ 1,243 N/A US$ 1,243


Ford Credit Auto Owner Trust 2022-C
-
〃
 - US$ 1,242 N/A US$ 1,242


Bank 2019-Bnk17
-
〃
 - US$ 1,237 N/A US$ 1,237


GM Financial Consumer Automobile Receivables Trust 2023-1
-
〃
 - US$ 1,219 N/A US$ 1,219


FORD CREDIT AUTO OWNER TRUST 2023-REV2
-
〃
 - US$ 1,124 N/A US$ 1,124


American Express Credit Account Master Trust
-
〃
 - US$ 1,016 N/A US$ 1,016


Morgan Stanley Capital I Trust 2015 - UBS8
-
〃
 - US$ 962 N/A US$ 962


Wells Fargo Commercial Mortgage Trust 2016-LC24
-
〃
 - US$ 939 N/A US$ 939


Ford Credit Auto Owner Trust 2022-A
-
〃
 - US$ 887 N/A US$ 887


Bank 2023-Bnk45
-
〃
 - US$ 865 N/A US$ 865


Nissan Auto Receivables 2023-A Owner Trust
-
〃
 - US$ 829 N/A US$ 829


Toyota Auto Receivables 2021-D Owner Trust
-
〃
 - US$ 824 N/A US$ 824


Benchmark 2021-B24 Mortgage Trust
-
〃
 - US$ 818 N/A US$ 818


JPMBB Commercial Mortgage Securities Trust 2015-C28
-
〃
 - US$ 791 N/A US$ 791


COMM Mortgage Trust Series 2015-LC19
-
〃
 - US$ 778 N/A US$ 778


Honda Auto Receivables 2022-2 Owner Trust
-
〃
 - US$ 733 N/A US$ 733


Citigroup Commercial Mortgage Trust 2015-GC35
-
〃
 - US$ 685 N/A US$ 685


Wells Fargo Commercial Mortgage Trust 2017-C40
-
〃
 - US$ 642 N/A US$ 642


JPMCC Commercial Mortgage Securities Trust 2016 - JP3
-
〃
 - US$ 581 N/A US$ 581


JPMBB Commercial Mortgage Securities Trust 2016-C1
-
〃
 - US$ 574 N/A US$ 574


Wells Fargo Commercial Mortgage Trust 2015-C28
-
〃
 - US$ 529 N/A US$ 529


Ford Credit Auto Owner Trust 2022-B
-
〃
 - US$ 444 N/A US$ 444


Honda Auto Receivables 2021-2 Owner Trust
-
〃
 - US$ 427 N/A US$ 427


Citigroup Commercial Mortgage Trust 2018-C5
-
〃
 - US$ 425 N/A US$ 425


Toyota Auto Receivables 2021-C Owner Trust
-
〃
 - US$ 387 N/A US$ 387


Wells Fargo Commercial Mortgage Trust 2015-NXS3
-
〃
 - US$ 255 N/A US$ 255


Benchmark 2019-B14 Mortgage Trust
-
〃
 - US$ 239 N/A US$ 239






(Continued)


- 89 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
JPMCC 2015 - JP1
-
Financial assets at fair value through other comprehensive income
 - US$ 176 N/A US$ 176


COMM 2015-CCRE22 Mortgage Trust
-
〃
 - US$ 151 N/A US$ 151


GS Mortgage Securities Trust 2014-GC24
-
〃
 - US$ 149 N/A US$ 149


Morgan Stanley Capital I Trust 2019-H6
-
〃
 - US$ 133 N/A US$ 133


Wells Fargo Commercial Mortgage Trust 2015-LC20
-
〃
 - US$ 124 N/A US$ 124


Morgan Stanley Capital I Trust 2019-H7
-
〃
 - US$ 120 N/A US$ 120


JPMDB Commercial Mortgage Securities Trust 2019-COR6
-
〃
 - US$ 114 N/A US$ 114


Morgan Stanley Capital I Trust 2018-H3
-
〃
 - US$ 104 N/A US$ 104


Bank 2019-BNK23
-
〃
 - US$ 97 N/A US$ 97


Citigroup Commercial Mortgage Trust 2014-GC23
-
〃
 - US$ 83 N/A US$ 83


GS Mortgage Securities Trust 2014-GC26
-
〃
 - US$ 64 N/A US$ 64


CF 2019-CF1 Mortgage Trust
-
〃
 - US$ 50 N/A US$ 50


BBCMS Mortgage Trust 2020-C7
-
〃
 - US$ 37 N/A US$ 37







Non-publicly traded equity investments




Primavera Capital Fund II L.P.
-
Financial assets at fair value through other comprehensive income
 - US$ 86,515 4 US$ 86,515






VTAF II
Non-publicly traded equity investments




5V Technologies, Inc.
-
Financial assets at fair value through other comprehensive income
 1 - - -


Aether Systems, Inc.
-
〃
 1,085 - 20 -







Publicly traded stocks




Sentelic Corporation
-
Financial assets at fair value through other comprehensive income
 913 US$ 2,757 3 US$ 2,757






VTAF III
Non-publicly traded equity investments




LiquidLeds Lighting Corp.
-
Financial assets at fair value through other comprehensive income
 1,952 US$ 800 14 US$ 800


Mutual-Pak
-
〃
 1,701 US$ 337 17 US$ 337


Neoconix, Inc.
-
〃
 4,147 US$ 174 - US$ 174






Emerging Fund
Convertible bonds




Movandi Corporation
-
Financial assets at fair value through Profit or Loss
 - US$ 4,168 N/A US$ 4,168


Encharge AI, Inc.
-
〃
 - US$ 3,099 N/A US$ 3,099







Non-publicly traded equity investments




Astera Labs, Inc.
-
Financial assets at fair value through other comprehensive income
 1,487 US$ 9,680 - US$ 9,680


Ayar Labs, Inc.
-
〃
 345 US$ 5,000 1 US$ 5,000


Ethernovia Inc.
-
〃
 1,021 US$ 5,000 3 US$ 5,000


Empower Semiconductor, Inc.
-
〃
 868 US$ 5,000 3 US$ 5,000


Lyte AI, Inc.
-
〃
 1,128 US$ 5,000 4 US$ 5,000


EdgeQ, Inc.
-
〃
 1,176 US$ 4,771 2 US$ 4,771


SiMa Technologies, Inc.
-
〃
 564 US$ 4,000 1 US$ 4,000


NeuReality Ltd.
-
〃
 122 US$ 3,194 2 US$ 3,194


Kinara, Inc.
-
〃
 2,015 US$ 3,000 2 US$ 3,000


xMEMS Labs, Inc.
-
〃
 3,000 US$ 3,000 3 US$ 3,000


RiVos, Inc.
-
〃
 1,455 US$ 2,833 1 US$ 2,833






(Continued)


- 90 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Development
Convertible preferred stocks




IMS Nanofabrication Global, LLC
-
Financial assets at fair value through Profit or Loss
 - US$ 432,795 10 US$ 432,795






Growth Fund
Non-publicly traded equity investments




Astera Labs, Inc.
-
Financial assets at fair value through other comprehensive income
 637 US$ 4,146 - US$ 4,146


CNEX Labs, Inc.
-
〃
 33 US$ 133 - US$ 133







Publicly traded stocks




Marvell Technology Group Ltd.
-
Financial assets at fair value through other comprehensive income
 30 US$ 1,786 - US$ 1,786






(Concluded)



- 91 -

TABLE 4


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Company Name Marketable Securities
Type and Name		 Financial Statement Account Counterparty Nature of Relationship Beginning Balance Acquisition Disposal
Ending Balance (Note 1)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Carrying Value
(Foreign
Currencies in
Thousands)
Gain/Loss on Disposal
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)





TSMC
Non-publicly traded equity investments




TSMC Arizona
Investments accounted for using equity method
-
-
 1,270 $ 25,639,079 9,230 $ 292,649,510 - $ - $ - $ - 10,500 $ 298,604,975

JASM
〃
-
-
 1,020 23,330,125 1,249 28,062,957 - - - - 2,269 47,087,140

ESMC
〃
-
-
 - - 100
4,814,293
(Note 2)
 - - - - 100 4,768,013

Emerging Fund
〃
-
-
 - 1,760,885 - 641,536 - - (244,376 ) - - 1,901,742






Commercial paper




Cathay Financial Holding Co., Ltd.
Financial assets at amortized cost
-
-
 - - 1,687 16,771,708 990 9,900,000 9,900,000 - 697 6,924,665

Nan Ya Plastics Corporation
〃
-
-
 450 4,476,301 1,850 18,413,604 1,700 17,000,000 17,000,000 - 600 5,976,677

China Steel Corporation
〃
-
-
 - - 200 1,985,566 - - - - 200 1,985,094

Formosa Plastics Corporation
〃
-
-
 200 1,990,459 100 994,402 200 2,000,000 2,000,000 - 100 996,260

CPC Corporation, Taiwan
〃
-
-
 750 7,458,936 150 1,491,352 800 8,000,000 8,000,000 - 100 995,553

Formosa Chemicals & Fibre Corporation
〃
-
-
 250 2,485,666 600 5,969,662 750 7,500,000 7,500,000 - 100 994,540

Taiwan Power Company
〃
-
-
 2,950 29,335,729 550 5,473,392 3,450 34,500,000 34,500,000 - 50 498,916

Formosa Petrochemical Corporation
〃
-
-
 300 2,985,385 - - 300 3,000,000 3,000,000 - - -





TSMC Partners
Fund




Matter Venture Partners Fund I, L.P. (Note 3)
Financial assets at fair value through Profit or Loss
-
-
 - US$ - - US$ 4,200 - US$ - US$ - US$ - - US$ 3,587






Publicly traded stocks




ARM Holdings plc
Financial assets at fair value through other comprehensive income
-
-
 - US$ - 1,961 US$ 100,000 - US$ - US$ - US$ - 1,961 US$ 147,353





TSMC Global
Corporate bond




Bank of America Corporation
Financial assets at fair value through other comprehensive income
-
-
 - US$ 76,626 - US$ 32,499 - US$ 25,548 US$ 25,685 US$ (137 ) - US$ 86,588

Morgan Stanley
〃
-
-
 - US$ 83,242 - US$ 19,579 - US$ 28,500 US$ 28,612 US$ (112 ) - US$ 76,777

The Goldman Sachs Group, Inc.
〃
-
-
 - US$ 51,439 - US$ 19,457 - US$ 14,080 US$ 14,166 US$ (86 ) - US$ 58,554

Wells Fargo & Company
〃
-
-
 - US$ 59,735 - US$ 11,895 - US$ 14,783 US$ 14,824 US$ (41 ) - US$ 58,351

JPMorgan Chase & Co.
〃
-
-
 - US$ 50,629 - US$ 24,942 - US$ 19,193 US$ 19,343 US$ (150 ) - US$ 58,153

Citigroup Inc.
〃
-
-
 - US$ 61,493 - US$ 18,408 - US$ 31,203 US$ 31,317 US$ (114 ) - US$ 50,436

Sumitomo Mitsui Financial Group, Inc.
〃
-
-
 - US$ 27,658 - US$ 22,091 - US$ 5,907 US$ 6,079 US$ (172 ) - US$ 45,172





(Continued)

- 92 -

Company Name Marketable Securities
Type and Name		 Financial Statement Account Counterparty Nature of Relationship Beginning Balance Acquisition Disposal
Ending Balance (Note 1)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Carrying Value
(Foreign
Currencies in
Thousands)
Gain/Loss on Disposal
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)





TSMC Global
Mitsubishi UFJ Financial Group, Inc.
Financial assets at fair value through other comprehensive income
-
-
 - US$ 32,949 - US$ 14,983 - US$ 12,237 US$ 12,291 US$ (54 ) - US$ 36,903

Barclays PLC
〃
-
-
 - US$ 11,263 - US$ 26,220 - US$ 3,124 US$ 3,150 US$ (26 ) - US$ 35,277

HSBC Holdings plc
〃
-
-
 - US$ 32,402 - US$ 7,361 - US$ 10,731 US$ 10,586 US$ 145 - US$ 30,124

CVS Health Corporation
〃
-
-
 - US$ 4,750 - US$ 26,311 - US$ 7,017 US$ 7,086 US$ (69 ) - US$ 24,591

Lloyds Banking Group plc
〃
-
-
 - US$ 10,533 - US$ 13,842 - US$ 717 US$ 729 US$ (12 ) - US$ 24,131

BPCE SA
〃
-
-
 - US$ 14,691 - US$ 14,478 - US$ 5,840 US$ 5,850 US$ (10 ) - US$ 23,875

Oracle Corporation
〃
-
-
 - US$ 21,865 - US$ 15,752 - US$ 14,576 US$ 14,653 US$ (77 ) - US$ 23,751

Capital One Financial Corporation
〃
-
-
 - US$ 14,125 - US$ 11,035 - US$ 4,232 US$ 4,259 US$ (27 ) - US$ 21,572

Credit Agricole SA London Branch
〃
-
-
 - US$ 11,611 - US$ 10,744 - US$ 2,624 US$ 2,627 US$ (3 ) - US$ 20,395

AIG Global Funding
〃
-
-
 - US$ 8,209 - US$ 12,370 - US$ 2,660 US$ 2,699 US$ (39 ) - US$ 18,428

Metropolitan Life Global Funding I
〃
-
-
 - US$ 24,408 - US$ 4,577 - US$ 11,143 US$ 11,199 US$ (56 ) - US$ 18,299

ABN AMRO Bank N.V.
〃
-
-
 - US$ - - US$ 17,900 - US$ - US$ - US$ - - US$ 18,247

Danske Bank A/S
〃
-
-
 - US$ 6,149 - US$ 17,235 - US$ 7,452 US$ 7,260 US$ 192 - US$ 16,698

The Bank of New York Mellon Corporation
〃
-
-
 - US$ 11,282 - US$ 9,795 - US$ 5,326 US$ 5,250 US$ 76 - US$ 16,064

Amgen Inc.
〃
-
-
 - US$ 310 - US$ 18,377 - US$ 5,611 US$ 5,568 US$ 43 - US$ 13,330

AerCap Ireland Capital Designated Activity Company
〃
-
-
 - US$ - - US$ 12,899 - US$ - US$ - US$ - - US$ 13,278

Pfizer Investment Enterprises Pte. Ltd.
〃
-
-
 - US$ - - US$ 12,584 - US$ - US$ - US$ - - US$ 12,590

ONEOK, Inc.
〃
-
-
 - US$ - - US$ 10,733 - US$ - US$ - US$ - - US$ 11,048

Credit Suisse AG, New York Branch
〃
-
-
 - US$ 12,688 - US$ - - US$ 12,569 US$ 14,369 US$ (1,800 ) - US$ -

Bank of America Corporation
Financial assets at amortized cost
-
-
 - US$ 324,757 - US$ 669,940 - US$ 202,000 US$ 201,456 US$ 544 US$ 799,449

Wells Fargo & Company
〃
-
-
 - US$ 274,713 - US$ 499,184 - US$ 159,000 US$ 158,626 US$ 374 US$ 619,830

Morgan Stanley
〃
-
-
 - US$ 60,207 - US$ 502,595 - US$ - US$ - US$ - US$ 566,880

The Goldman Sachs Group, Inc.
〃
-
-
 - US$ 440,655 - US$ 261,083 - US$ 270,500 US$ 270,500 US$ - US$ 432,811

JPMorgan Chase & Co.
〃
-
-
 - US$ 280,213 - US$ 426,264 - US$ 322,000 US$ 321,685 US$ 315 US$ 391,868

Citigroup Inc.
〃
-
-
 - US$ 174,540 - US$ 232,386 - US$ 159,000 US$ 158,612 US$ 388 US$ 251,481

Citigroup Global Markets Inc.
〃
-
-
 - US$ 349,886 - US$ - - US$ 200,000 US$ 200,000 US$ - US$ 149,951

Citigroup Global Markets Holdings Inc.
〃
-
-
 - US$ 149,951 - US$ - - US$ 50,000 US$ 50,000 US$ - US$ 99,968

Goldman Sachs Finance Corp International Ltd
〃
-
-
 - US$ 149,870 - US$ - - US$ 50,000 US$ 50,000 US$ - US$ 99,905

Citigroup
〃
-
-
 - US$ - - US$ 20,000 - US$ - US$ - US$ - US$ 19,981

Jpmorgan LLC
〃
-
-
 - US$ 49,984 - US$ - - US$ 50,000 US$ 50,000 US$ - US$ -






Agency mortgage-backed securities




FEDERAL NATIONAL MORTGAGE ASSOCIATION
Financial assets at fair value through other comprehensive income
-
-
 - US$ 463,645 - US$ 258,497 - US$ 71,635 US$ 72,541 US$ (906 ) - US$ 658,944

Federal Home Loan Mortgage Corporation
〃
-
-
 - US$ 284,933 - US$ 121,863 - US$ 60,277 US$ 60,692 US$ (415 ) - US$ 350,328

Government National Mortgage Association
〃
-
-
 - US$ 175,067 - US$ 70,079 - US$ 23,182 US$ 23,871 US$ (689 ) - US$ 225,310





(Continued)


- 93 -

Company Name Marketable Securities
Type and Name		 Financial Statement Account Counterparty Nature of Relationship Beginning Balance Acquisition Disposal
Ending Balance (Note 1)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Carrying Value
(Foreign
Currencies in
Thousands)
Gain/Loss on Disposal
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)





TSMC Global
Government bond/Agency bonds




United States Department of The Treasury
Financial assets at fair value through other comprehensive income
-
-
 - US$ 613,603 - US$ 263,657 - US$ 177,248 US$ 181,715 US$ (4,467 ) - US$ 718,479

Federal Home Loan Mortgage Corporation
〃
-
-
 - US$ - - US$ 9,993 - US$ 2,994 US$ 3,000 US$ (6 ) - US$ 6,995

Federal Home Loan Banks
Financial assets at amortized cost
-
-
 - US$ - - US$ 225,000 - US$ - US$ - US$ - US$ 225,000

Federal Home Loan Mortgage Corporation
〃
-
-
 - US$ - - US$ 160,000 - US$ 25,000 US$ 25,000 US$ - US$ 135,000

United States Department of The Treasury
〃
-
-
 - US$ - - US$ 88,826 - US$ - US$ - US$ - US$ 88,940






Asset-backed securities




BX Trust 2022-LBA6
Financial assets at fair value through other comprehensive income
-
-
 - US$ 9,655 - US$ - - US$ 9,794 US$ 10,000 US$ (206 ) - US$ -





TSMC
Convertible preferred stocks



  Development
IMS Nanofabrication Global, LLC
Financial assets at fair value through Profit or Loss
-
-
 - US$ - - US$ 432,795 - US$ - US$ - US$ - - US$ 432,795






Note 1:    The ending balance includes the realized gain/loss on equity investment, the amortization of premium/discount on bonds investments and other related adjustment.

Note 2:    Includes a prepayment for investment of EUR 139,930 thousand.

Note 3:    TSMC Partners expects to invest US$ 20,000 thousand in Matter Venture Partners Fund I based on the resolution of the board of directors. As of the end of this quarter, US$ 4,200 thousand has been remitted.
(Concluded)

- 94 -

TABLE 5


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

ACQUISITION OF INDIVIDUAL REAL ESTATE PROPERTIES AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount






TSMC
Real estate
 February 14, 2023 (Note) US$
1,881,000
(Note)
Based on the terms in the purchase order
65 counterparties(Note), including:
 - N/A N/A N/A N/A
Price comparison and price negotiation
Manufacturing purpose
 None




ABB Ltd.






Accudevice Co., Ltd.






Air Liquide Far Eastern Ltd.






Allis Electric Co., Ltd.






Am-Power Machine International Enterprise Co., Ltd.






Atlas Copco Taiwan Ltd.






Atlas Technology Corp.






Capital Machinery Limited






Chen Yuan International Co., Ltd.






Chenfull International Co., Ltd.






Cheng Deh Fire Protection Industrial Corp.






Cica-Huntek Chemical Technology Taiwan Co., Ltd.






Confederate Technology Co., Ltd.






Desiccant Technology Corporation






Exyte Taiwan Co., Ltd.






Fortune Electric Co., Ltd.






Hantech Engineering Co., Ltd.






Hsieh Kun Co., Ltd.






Hueng Luei Process Industry Co., Ltd.









(Continued)


- 95 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate


Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore)






JG Environmental Technology Co., Ltd.






JJmr-Clean-Air Solution Tech.Services Co., Ltd.






Jusun Instruments Co., Ltd.






Kinetics Technology Corporation






L&K Engineering Co., Ltd.






Marketech International Corp.






Mega Union Technology Incorporated






Organo Technology Co., Ltd.






Ovivo Taiwan Co., Ltd.






San Fu Chemical Co., Ltd.






Schneider Electric Taiwan Co., Ltd.






Shihlin Electric & Engineering Corporation






Siemens Limited






Solomon Technology Corporation






Swift Engineering Co., Ltd.






Taiwan Gleno Enterprise Co., Ltd.






Taiwan Puritic Corp.






Techgo Industrial Co., Ltd.






Trusval Technology Co., Ltd.






Uangyih-Tech Industrial Co., Ltd.






Unelectra International Corp.






United Integrated Services Co., Ltd.






Versum Materials Taiwan Co., Ltd.






Weltall Technology Corporation






Wholetech System Hitech Limited






Yangtech Engineering Co., Ltd.






Yankey Engineering Co., Ltd.






Ying Pao Technology Inc.









(Continued)

- 96 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate
May 9, 2023
(Note)
 US$
366,000
(Note)
Based on the terms in the purchase order
65 counterparties(Note), including:
 - N/A N/A N/A N/A
Price comparison and price negotiation
Manufacturing purpose
 None




ABB Ltd.






Accudevice Co., Ltd.






Air Liquide Far Eastern Ltd.






Allis Electric Co., Ltd.






Am-Power Machine International Enterprise Co., Ltd.






Atlas Copco Taiwan Ltd.






Atlas Technology Corp.






Capital Machinery Limited






Chen Yuan International Co., Ltd.






Chenfull International Co., Ltd.






Cheng Deh Fire Protection Industrial Corp.






Cica-Huntek Chemical Technology Taiwan Co., Ltd.






Confederate Technology Co., Ltd.






Desiccant Technology Corporation






Exyte Taiwan Co., Ltd.






Fortune Electric Co., Ltd.






Hantech Engineering Co., Ltd.






Hsieh Kun Co., Ltd.






Hueng Luei Process Industry Co., Ltd.






Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore)






JG Environmental Technology Co., Ltd.






JJmr-Clean-Air Solution Tech.Services Co., Ltd.






Jusun Instruments Co., Ltd.






Kinetics Technology Corporation






L&K Engineering Co., Ltd.









(Continued)


- 97 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate


Marketech International Corp.






Mega Union Technology Incorporated






Organo Technology Co., Ltd.






Ovivo Taiwan Co., Ltd.






San Fu Chemical Co., Ltd.






Schneider Electric Taiwan Co., Ltd.






Shihlin Electric & Engineering Corporation






Siemens Limited






Solomon Technology Corporation






Swift Engineering Co., Ltd.






Taiwan Gleno Enterprise Co., Ltd.






Taiwan Puritic Corp.






Techgo Industrial Co., Ltd.






Trusval Technology Co., Ltd.






Uangyih-Tech Industrial Co., Ltd.






Unelectra International Corp.






United Integrated Services Co., Ltd.






Versum Materials Taiwan Co., Ltd.






Weltall Technology Corporation






Wholetech System Hitech Limited






Yangtech Engineering Co., Ltd.






Yankey Engineering Co., Ltd.






Ying Pao Technology Inc.



Real estate
August 8, 2023
(Note)
 US$
4,363,000
(Note)

Based on the terms in the purchase order
90 counterparties(Note), including:
 - N/A N/A N/A N/A
Price comparison and price negotiation
Manufacturing purpose
 None




ABB Ltd.






Accudevice Co., Ltd.






Air Liquide Far Eastern Ltd.






All-Bau AG + Co. Gewerbepark KG









(Continued)


- 98 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate


Allis Electric Co., Ltd.






Am-Power Machine International Enterprise Co., Ltd.






Areal Holding Gesellschaft mbH, Dresden






Atlas Copco Taiwan Ltd.






Atlas Technology Corp.






Capital Machinery Limited






Chang Chun Petrochemical Co., Ltd.






Chen Yuan International Co., Ltd.






Chenfull International Co., Ltd.






Cheng Deh Fire Protection Industrial Corp.






Chien Kuo Construction Co., Ltd.






China Steel Structure Co., Ltd.






Chun Yuan Steel Industry Co., Ltd.






Chung-Lin General Contractors, Ltd.






Cica-Huntek Chemical Technology Taiwan Co., Ltd.






Confederate Technology Co., Ltd.






Da-Cin Construction Co., Ltd.






Desiccant Technology Corporation






Evergreen Steel Corporation






Exyte Taiwan Co., Ltd.






F6 Cigarettenfabrik GmbH & Co. KG






Fortune Electric Co., Ltd.






Fu Tsu Construction Co., Ltd.






Hantech Engineering Co., Ltd.






Hsieh Kun Co., Ltd.






Hueng Luei Process Industry Co., Ltd.









(Continued)

- 99 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate


Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore)






J.C. Yang Architect and Associates






JG Environmental Technology Co., Ltd.






JJmr-Clean-Air Solution Tech.Services Co., Ltd.






Jusun Instruments Co., Ltd.






Kedge Construction Co., Ltd.






Kinetics Technology Corporation






L&K Engineering Co., Ltd.






Lead-Fu Industrials Corporation






Lee Ming Construction Co., Ltd.






Li Jin Engineering Co., Ltd






Mandartech Interiors Inc.






Marketech International Corp.






Mega Union Technology Incorporated






Organo Technology Co., Ltd.






Ovivo Taiwan Co., Ltd.






Pan Asia (Engineers & Constructors) Corporation






Ruentex Engineering & Construction Co., Ltd.






San Fu Chemical Co., Ltd.






Schneider Electric Taiwan Co., Ltd.






Shihlin Electric & Engineering Corporation






Siemens Limited






Solomon Technology Corporation






Swift Engineering Co., Ltd.






Taiwan Gleno Enterprise Co., Ltd.






Taiwan Obayashi Corporation






TASA Construction Corporation









(Continued)


- 100 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate


Taiwan Puritic Corp.






Techgo Industrial Co., Ltd.






Trusval Technology Co., Ltd.






Tung Kang Steel Structure Corp.






Uangyih-Tech Industrial Co., Ltd.






Unelectra International Corp.






United Integrated Services Co., Ltd.






Versum Materials Taiwan Co., Ltd.






Wei Shung Technology Corporation






Weltall Technology Corporation






Wholetech System Hitech Limited






Yangtech Engineering Co., Ltd.






Yankey Engineering Co., Ltd.






Ying Pao Technology Inc.






Zhao-Cheng Corp.



Real estate
November 14, 2023
(Note)
 US$
464,000
(Note)
Based on the terms in the purchase order
27 counterparties(Note), including:
 - N/A N/A N/A N/A
Price comparison and price negotiation
Manufacturing purpose
 None




Hsinchu Science Park Bureau, Ministry of Science and Technology






Southern Taiwan Science Park Bureau, Ministry of Science and Technology










Note:    The disclosures are expected information based on the capital appropriation approved by the Board of Directors (Right-of-use assets are included). The actual information shall be subject to the final purchase order of TSMC.

(Concluded)


- 101 -

TABLE 6


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Company Name Related Party Nature of Relationships Transaction Details Abnormal Transaction Notes/Accounts Payable or Receivable Note
Purchases/
Sales
Amount
(Foreign Currencies in Thousands)
 % to Total Payment Terms Unit Price Payment Terms
Ending Balance
(Foreign Currencies in Thousands)
 % to Total






TSMC
TSMC North America
Subsidiary
 Sales $ 1,459,559,406

66

Net 30 days from invoice date (Note)
 - - $ 154,789,324

82


JASM
Subsidiary
 Sales 356,150

-

Net 30 days from the end of the month of when invoice is issued
 - - -

-


TSMC Arizona
Subsidiary
 Sales 145,150

-

Net 30 days from the end of the month of when invoice is issued
 - - -

-


GUC
Associate
 Sales 8,898,237

-

Net 30 days from invoice date
 - - 471,728

-


TSMC Nanjing
Subsidiary
 Purchases 62,252,516

35

Net 30 days from the end of the month of when invoice is issued
 - - (5,064,282 )

9


TSMC China
Subsidiary
 Purchases 25,643,202

14

Net 30 days from the end of the month of when invoice is issued
 - - (2,312,769 )

4


TSMC Washington
Indirect subsidiary
 Purchases 8,302,902

5

Net 30 days from the end of the month of when invoice is issued
 - - (199,158 )

-


SSMC
Associate
 Purchases 3,493,671

2

Net 30 days from the end of the month of when invoice is issued
 - - (457,348 )

1


VIS
Associate
 Purchases 1,068,535

1

Net 30 days from the end of the month of when invoice is issued
 - - (66,653 )

-











TSMC North America
GUC
Associate of TSMC
 Sales 3,859,301

-

Net 30 days from invoice date
 - - 43,091

-




(US$ 124,986 )




(US$ 1,401 )













VisEra Tech
Xintec
Associate of TSMC
 Sales 642,113

9

Net 60 days from the end of the month of when invoice is issued
 - - 109,632

12


Note:    The tenor is determined by the payment terms granted to its clients by TSMC North America.



- 102 -

TABLE 7


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
December 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Company Name Related Party Nature of Relationships
Ending Balance
(Foreign Currencies in Thousands)
 Turnover Days (Note 1) Overdue Amounts Received in Subsequent Period
Allowance for
Bad Debts
Amount Action Taken



TSMC
TSMC North America
Subsidiary
 $ 158,537,008 41 $ 114,137 - $ 81,336,750 $ -

JASM
Subsidiary
 416,139 Note 2 - - - -

GUC
Associate
 471,728 36 - - - -



TSMC North America
TSMC
Parent company
$
(US$
116,051
3,774
$
)
 Note 2 - - - -



TSMC JDC
TSMC
Parent company
 142,303 Note 2 - - - -



(JPY 649,192 )



TSMC China
TSMC
Parent company
 2,312,769 33 - - - -



(RMB 533,456 )

TSMC Nanjing
The same parent company
 38,395,507 Note 2 - - - -



(RMB 8,856,278 )



TSMC Nanjing
TSMC
Parent company
 5,064,282 27 - - - -



(RMB 1,168,110 )



VisEra Tech
Xintec
Associate of TSMC
 109,632 63 - - - -



TSMC Technology
TSMC
The ultimate parent of the Company
$
(US$
483,851
15,737
$
)
 Note 2 - - - -



TSMC Washington
TSMC
The ultimate parent of the Company
$
(US$
199,158
6,477
$
)
 23 - - - -




TSMC Development
Parent company
 342,004 Note 2 - - - -



(US$ 11,123 )

Note 1:    The calculation of turnover days excludes other receivables from related parties.

Note 2:    The ending balance is primarily consisted of other receivables, which is not applicable for the calculation of turnover days.



- 103 -

TABLE 8


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars)


No. Company Name Counterparty
Nature of Relationship
(Note 1)
 Intercompany Transactions
Financial Statements Item Amount
Terms
(Note 2)
 Percentage of Consolidated Net Revenue or Total Assets

0 TSMC TSMC North America 1
Net revenue from sale of goods
$ 1,459,559,406 - 68%
Receivables from related parties
 154,789,324 - 3%
Other receivables from related parties
 3,747,684 - -
Accrued expenses and other current liabilities
 101,055,004 - 2%
Other noncurrent liabilities
 134,052,101 - 2%
JASM 1
Other noncurrent assets
 12,132,766 - -
TSMC China 1
Purchases
 25,643,202 - 1%
TSMC Nanjing 1
Purchases
 62,252,516 - 3%
Payables to related parties
5,064,282 - -
TSMC Technology 1
Research and development expenses
 3,855,940 - -
TSMC Washington 1
Purchases
 8,302,902 - -
1 TSMC China TSMC Nanjing 3
Other receivables from related parties
 38,395,507 - 1%


Note 1:    No. 1 represents the transactions from parent company to subsidiary.

No. 3 represents the transactions between subsidiaries.

Note 2:    The sales prices and payment terms of intercompany sales are not significantly different from those to third parties. For other intercompany transactions, prices and terms are determined in accordance with mutual agreements.



- 104 -

TABLE 9


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA)
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Investor Company Investee Company Location Main Businesses and Products Original Investment Amount Balance as of December 31, 2023 Net Income (Losses) of the Investee
(Foreign Currencies in Thousands)
Share of Profits/Losses
of Investee
(Note 1)
(Foreign Currencies in Thousands)
 Note
December 31,
2023
(Foreign Currencies in Thousands)
December 31,
2022
(Foreign Currencies in Thousands)
 Shares (In Thousands) Percentage of Ownership
Carrying Value
(Foreign Currencies in Thousands)





TSMC
TSMC Global
Tortola, British Virgin Islands
Investment activities
 $ 355,162,309 $ 355,162,309 11 100 $ 441,225,883 $ 24,922,961 $ 24,922,961
Subsidiary

TSMC Arizona
Phoenix, Arizona, U.S.A.
Manufacturing, sales and testing of integrated circuits and other semiconductor devices
 329,665,310 37,015,800 10,500 100 298,604,975 (10,924,639 ) (10,924,639 )
Subsidiary

TSMC Partners
Tortola, British Virgin Islands
Investing in companies involved in the semiconductor design and manufacturing, and other investment activities
 31,456,130 31,456,130 988,268 100 68,143,719 2,776,792 2,776,792
Subsidiary

JASM
Kumamoto, Japan
Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices
 52,630,042 24,567,085 2,269 71 47,087,140 (2,965,675 ) (2,120,037 )
Subsidiary

VIS
Hsin-Chu, Taiwan
Manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks
 10,180,677 10,180,677 464,223 28 13,590,430 7,370,074 2,082,598
Associate

VisEra Tech
Hsin-Chu, Taiwan
Research, design, development, manufacturing, sales, packaging and test of color filter
 4,224,082 4,224,082 213,619 67 11,261,961 356,080 240,749
Subsidiary

SSMC
Singapore
Manufacturing and sales of integrated circuits and other semiconductor devices
 5,120,028 5,120,028 314 39 9,728,801 2,040,560 791,533
Associate

TSMC North America
San Jose, California, U.S.A
Sales and marketing of integrated circuits and other semiconductor devices
 333,718 333,718 11,000 100 6,278,751 836,066 836,066
Subsidiary

ESMC
Dresden, Germany
Manufacturing, sales and testing of integrated circuits and other semiconductor devices
4,814,293
(Note4)
 - 100 100 4,768,013 (17,570 ) (17,570 )
Subsidiary

Xintec
Taoyuan, Taiwan
Wafer level chip size packaging and wafer level post passivation interconnection service
 1,988,317 1,988,317 111,282 41 3,759,701 1,375,774 564,191
Associate

GUC
Hsin-Chu, Taiwan
Researching, developing, manufacturing, testing and marketing of integrated circuits
 386,568 386,568 46,688 35 2,537,706 3,507,885 1,222,121
Associate

Emerging Fund
Cayman Islands
Investing in technology start-up companies
 1,666,585 1,269,425 - 99.9 1,901,742 20,313 20,293
Subsidiary

TSMC 3DIC
Yokohama, Japan
Engineering support activities
 1,144,356 1,144,356 49 100 1,224,449 122,786 122,786
Subsidiary

TSMC Europe
Amsterdam, the Netherlands
Customer service and supporting activities
 15,749 15,749 - 100 592,499 42,865 42,865
Subsidiary

TSMC JDC
Yokohama, Japan
Engineering support activities
 410,680 410,680 15 100 394,191 40,787 40,787
Subsidiary

VTAF III
Cayman Islands
Investing in technology start-up companies
 1,242,679 1,239,621 - 98 257,540 6,619 6,487
Subsidiary

TSMC Japan
Yokohama, Japan
Customer service and supporting activities
 83,760 83,760 6 100 130,403 4,084 4,084
Subsidiary

VTAF II
Cayman Islands
Investing in technology start-up companies
 260,300 260,300 - 98 117,662 429 421
Subsidiary

TSMC Korea
Seoul, Korea
Customer service and supporting activities
 13,656 13,656 80 100 44,599 1,792 1,792
Subsidiary





TSMC Partners
TSMC Development
Delaware, U.S.A
Investing in companies involved in semiconductor manufacturing
$
(US$
18,046,607
586,939
$
)
$
(US$
18,046,607
586,939
$
)
 - 100
$
(US$
37,841,815
1,230,748
$
)
$
(US$
1,191,778
38,760
$
)
 Note 2
Subsidiary

TSMC Technology
Delaware, U.S.A
Engineering support activities
 439,129 439,129 - 100 1,126,524 130,938 Note 2
Subsidiary




(US$ 14,282 ) (US$ 14,282 ) (US$ 36,638 ) (US$ 4,284 )


TSMC Canada
Ontario, Canada
Engineering support activities
 70,718 70,718 2,300 100 378,925 49,846 Note 2
Subsidiary




(US$ 2,300 ) (US$ 2,300 ) (US$ 12,324 ) (US$ 1,596 )






(Continued)

- 105 -


Investor Company Investee Company Location Main Businesses and Products Original Investment Amount Balance as of December 31, 2023 Net Income (Losses) of the Investee
(Foreign Currencies in Thousands)
Share of Profits/Losses
of Investee
(Note 1)
(Foreign Currencies in Thousands)
 Note
December 31,
2023
(Foreign Currencies in Thousands)
December 31,
2022
(Foreign Currencies in Thousands)
 Shares (In Thousands) Percentage of Ownership
Carrying Value
(Foreign Currencies in Thousands)





VTAF III
Growth Fund
Cayman Islands
Investing in technology start-up companies
 $ 70,578 $ 67,504 - 100 $ 188,990 $ (996 ) Note 2
Subsidiary




(US$ 2,295 ) (US$ 2,195 ) (US$ 6,147 ) (US$ (32 ))


Mutual-Pak
New Taipei, Taiwan
Manufacturing of electronic parts, wholesaling and retailing of electronic materials, and researching, developing and testing of RFID
 Note 3
$
(US$
48,991
1,593
$
)
 Note 3 Note 3 Note 3 Note 3 Note 2
Note 3





TSMC Development
TSMC Washington
Washington, U.S.A
Manufacturing, sales and testing of integrated circuits and other semiconductor devices
 - - 293,637 100
$
(US$
5,829,197
189,586
$
)
$
(US$
171,187
6,053
$
)
 Note 2
Subsidiary






Note 1:    The share of profits/losses of investee includes the effect of unrealized gross profit on intercompany transactions.

Note 2:    The share of profits/losses of the investee company is not reflected herein as such amount is already included in the share of profits/losses of the investor company.

Note 3:    Due to the decrease in shareholding to 17%, the Company consequently ceased to have significant influence over Mutual-Pak. Therefore, the investment in Mutual-Pak was classified as financial assets at FVTOCI starting November 2023.

Note 4:    Includes a prepayment for investment of EUR 139,930 thousand.
(Concluded)

- 106 -

TABLE 10


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INFORMATION ON INVESTMENT IN MAINLAND CHINA
FOR YEAR ENDED DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Investee Company Main Businesses and Products
Total Amount of Paid-in Capital
(RMB in Thousands)
 Method of Investment
Accumulated Outflow of Investment from Taiwan as of January 1, 2023
(US$ in Thousands)
 Investment Flows
Accumulated Outflow of Investment from Taiwan as of
December 31, 2023 (US$ in Thousands)
 Net Income (Losses) of the Investee Company Percentage of Ownership Share of Profits/Losses
Carrying Amount
as of
Balance as of December 31, 2023
Accumulated Inward Remittance of Earnings as of
December 31, 2023
Outflow
(US$ in Thousands)
 Inflow


TSMC China
Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices
$
(RMB
18,939,667
4,502,080
$
)
 (Note 1)
$
(US$
18,939,667
596,000
$
)
 $ - $ -
$
(US$
18,939,667
596,000
$
)
 $ 10,118,593 100% $
10,210,745
(Note 2)
 $ 95,419,097 $ -


TSMC Nanjing
Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices
$
(RMB
30,521,412
6,650,119
$
)
 (Note 1)
$
(US$
30,521,412
1,000,000
$
)
 - -
$
(US$
30,521,412
1,000,000
$
)
 21,755,071 100%
21,762,378
(Note 2)
 87,625,830 -



Accumulated Investment in Mainland China as of December 31, 2023
(US$ in Thousands)
Investment Amounts Authorized by
Investment Commission, MOEA
(US$ in Thousands)
 Upper Limit on Investment
$    49,461,079
(US$    1,596,000)
$    119,412,667
(US$    3,596,000)
$    2,089,957,708
(Note 3)

Note 1:    TSMC directly invested US$596,000 thousand in TSMC China and US$1,000,000 thousands in TSMC Nanjing.

Note 2:    Amount was recognized based on the audited financial statements.

Note 3:    The upper limit on investment in mainland China is determined by sixty percent (60%) of the Company's consolidated net worth.



- 107 -

TABLE 11


Taiwan Semiconductor Manufacturing Company Limited

INFORMATION ON MAJOR SHAREHOLDERS
DECEMBER 31, 2023


Shareholders (Note 1) Shares
Total Shares Owned Ownership Percentage (Note 2)
ADR-Taiwan Semiconductor Manufacturing Company Ltd. 5,315,513,063 20.50%
National Development Fund, Executive Yuan 1,653,709,980 6.38%

Note1:    Major shareholders shows the list of all shareholders with ownership of 5 percent or greater.

Note2:    The calculation of ownership percentage is rounded to two decimal places.


- 108 -
EX-99.2 3 a-workivaxtsmc2023q4uncons.htm EX-99.2 Document
English Translation of Financial Statements Originally Issued in Chinese

Taiwan Semiconductor Manufacturing Company Limited

Parent Company Only Financial Statements for the
Years Ended December 31, 2023 and 2022 and
Independent Auditors’ Report



勤業眾信
勤業眾信聯合會計師事務所
110016 台北市信義區松仁路100號20樓

Deloitte & Touche
20F, Taipei Nan Shan Plaza
No. 100, Songren Rd.,
Xinyi Dist., Taipei 110016, Taiwan

Tel :+886 (2) 2725-9988
Fax:+886 (2) 4051-6888
www.deloitte.com.tw

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders
Taiwan Semiconductor Manufacturing Company Limited

Opinion

We have audited the accompanying parent company only financial statements of Taiwan Semiconductor Manufacturing Company Limited (the “Company”), which comprise the parent company only balance sheets as of December 31, 2023 and 2022, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent company only financial statements, including material accounting policy information.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the accompanying parent company only financial position of the Company as of December 31, 2023 and 2022, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter for the Company’s parent company only financial statements for the year ended December 31, 2023 is stated as follows:

Property, plant and equipment (PP&E) – commencement of depreciation related to PP&E classified as equipment under installation and construction in progress (EUI/CIP)

Refer to Notes 4, 5 and 13 to the parent company only financial statements.

The Company’s evaluation of when to commence depreciation of EUI/CIP involves determining when the assets are available for their intended use. The criteria the Company uses to determine whether EUI/CIP are available for their intended use involves subjective judgments and assumptions about the conditions necessary for the assets to be capable of operating in the intended manner.
- 1 -

Changes in these assumptions could have a significant impact on when depreciation is recognized.

Given the subjectivity in determining the date to commence depreciation of EUI/CIP, performing audit procedures to evaluate the reasonableness of the Company’s judgments and assumptions required a high degree of auditor judgment. Consequently, the validity of commencement of depreciation related to PP&E classified as EUI/CIP is identified as a key audit matter.

Our audit procedures related to the evaluation of when to commence depreciation of EUI/CIP included the following, among others:

1.    We read the Company’s policy and understood the criteria used to determine when to commence depreciation.

2.    We tested the effectiveness of the controls over the evaluation of when to commence depreciation of EUI/CIP.

3.    We sampled the year-end balance of EUI/CIP and performed the following for each selection:

a.    Evaluated whether the selection did not meet the criteria specified by the Company for commencement of depreciation.

b.    Observed the assets and evaluated their status.

4.    We sampled and evaluated whether the selection of EUI/CIP met the criteria specified by the Company for commencement of depreciation during the year.

5.    We sampled and evaluated whether the selection of EUI/CIP met the criteria specified by the Company for commencement of depreciation subsequent to year end.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the Audit and Risk Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

- 2 -

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1.Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4.Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5.Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6.Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2023 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.


- 3 -

The engagement partners on the audits resulting in this independent auditors’ report are Shih Tsung Wu and Shang Chih Lin.

image.jpg
Deloitte & Touche
Taipei, Taiwan
Republic of China

February 6, 2024































Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.
- 4 -

Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY BALANCE SHEETS
(In Thousands of New Taiwan Dollars)

December 31, 2023 December 31, 2022

Amount % Amount %
ASSETS

CURRENT ASSETS
Cash and cash equivalents (Note 6)
 $ 718,703,712 15 $ 628,875,897 14
Financial assets at fair value through profit or loss (Note 7)
 624,685 - 552,255 -
Financial assets at amortized cost (Note 8)
 18,371,705 - 48,732,476 1
Notes and accounts receivable, net (Note 10)
 33,557,279 1 41,311,836 1
Receivables from related parties (Note 30)
 155,261,877 3 173,044,812 4
Other receivables from related parties (Note 30)
 4,360,322 - 6,357,925 -
Inventories (Notes 5 and 11)
 238,259,195 5 208,282,895 5
Other financial assets
 4,321,083 - 2,801,253 -
Other current assets
12,328,706 - 8,591,040 -

Total current assets
 1,185,788,564 24 1,118,550,389 25

NONCURRENT ASSETS
Financial assets at fair value through other comprehensive income
960,950 - 1,014,741 -
Investments accounted for using equity method (Note 12)
 1,094,695,092 23 727,947,169 16
Property, plant and equipment (Notes 5 and 13)
 2,453,465,322 50 2,432,675,050 55
Right-of-use assets (Notes 5 and 14)
 37,872,705 1 39,051,427 1
Intangible assets (Notes 5 and 15)
 17,684,064 - 21,456,104 1
Deferred income tax assets (Notes 5 and 23)
 62,356,061 1 67,708,061 2
Refundable deposits
3,433,404 - 2,095,656 -
Other noncurrent assets (Note 30)
 17,823,122 1 11,920,467 -

Total noncurrent assets
 3,688,290,720 76 3,303,868,675 75

TOTAL
 $ 4,874,079,284 100 $ 4,422,419,064 100

LIABILITIES AND EQUITY

CURRENT LIABILITIES
Financial liabilities at fair value through profit or loss (Note 7)
 $ 25,673 - $ 17,468 -
Hedging financial liabilities (Notes 9 and 27)
 27,290,400 1 - -
Accounts payable
47,643,493 1 48,732,542 1
Payables to related parties (Note 30)
 10,119,695 - 10,051,044 -
Salary and bonus payable
 27,754,742 1 31,308,620 1
Accrued profit sharing bonus to employees and compensation to directors (Note 26)
 50,642,488 1 61,392,175 1
Payables to contractors and equipment suppliers
84,146,173 2 200,046,018 5
Cash dividends payable (Note 18)
 168,558,461 3 142,617,093 3
Income tax payable (Notes 5 and 23)
 98,564,981 2 120,077,567 3
Long-term liabilities - current portion (Notes 16 and 27)
 6,997,710 - 18,100,000 -
Accrued expenses and other current liabilities (Notes 5, 14, 19, 27 and 30)
 241,858,508 5 266,903,073 6

Total current liabilities
 763,602,324 16 899,245,600 20

NONCURRENT LIABILITIES
Bonds payable (Notes 16 and 27)
 439,869,855 9 361,130,474 8
Deferred income tax liabilities (Notes 5 and 23)
 - - 908,273 -
Lease liabilities (Notes 5, 14 and 27)
 26,959,435 - 27,593,900 1
Net defined benefit liability (Note 17)
 9,257,224 - 9,321,091 -
Guarantee deposits
 915,344 - 885,273 -
Others (Notes 19 and 30)
 174,561,475 4 177,681,258 4

Total noncurrent liabilities
 651,563,333 13 577,520,269 13

Total liabilities
 1,415,165,657 29 1,476,765,869 33

EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
Capital stock (Note 18)
 259,320,710 5 259,303,805 6
Capital surplus (Note 18)
 69,876,381 2 69,330,328 2
Retained earnings (Note 18)
Appropriated as legal capital reserve
 311,146,899 6 311,146,899 7
Appropriated as special capital reserve
 - - 3,154,310 -
Unappropriated earnings
 2,846,883,893 59 2,323,223,479 53

3,158,030,792 65 2,637,524,688 60
Others (Note 18)
 (28,314,256 ) (1 ) (20,505,626 ) (1 )

Total equity
 3,458,913,627 71 2,945,653,195 67

TOTAL
$ 4,874,079,284 100 $ 4,422,419,064 100

The accompanying notes are an integral part of the parent company only financial statements.
- 5 -

Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)



 2023 2022

Amount % Amount %

NET REVENUE (Notes 5, 19 and 30)
 $ 2,153,285,095 100 $ 2,252,320,561 100

COST OF REVENUE (Notes 5, 11, 26 and 30)
 1,022,660,164 47 951,927,673 42

GROSS PROFIT
 1,130,624,931 53 1,300,392,888 58

OPERATING EXPENSES (Notes 5, 26 and 30)
Research and development
 178,725,098 9 160,813,633 7
General and administrative
 39,890,037 2 42,764,642 2
Marketing
 5,118,396 - 6,059,649 -

Total operating expenses
 223,733,531 11 209,637,924 9

OTHER OPERATING INCOME AND EXPENSES, NET (Notes 13 and 26)
 481,455 - (8,275 ) (1 )

INCOME FROM OPERATIONS
 907,372,855 42 1,090,746,689 48

NON-OPERATING INCOME AND EXPENSES
Share of profits of subsidiaries and associates (Note 12)
 52,587,403 2 42,415,408 2
Interest income (Note 20)
 17,825,551 1 5,957,864 1
Other income
 230,801 - 887,958 -
Foreign exchange gain (loss), net (Note 32)
 (3,238,713 ) - 853,022 -
Finance costs (Note 21)
 (4,600,793 ) - (3,240,406 ) -
Other gains and losses, net (Note 22)
 7,594,132 - 3,053,281 -

Total non-operating income and expenses
 70,398,381 3 49,927,127 3

INCOME BEFORE INCOME TAX
 977,771,236 45 1,140,673,816 51

INCOME TAX EXPENSE (Notes 5 and 23)
 139,273,572 6 124,143,567 6

NET INCOME
 838,497,664 39 1,016,530,249 45

OTHER COMPREHENSIVE INCOME (LOSS) (Notes 5, 12, 17, 18 and 23)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit obligation
 (623,356 ) - (823,060 ) -
Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income
 (53,665 ) - 18,979 -
Gain on hedging instruments
 39,898 - - -
Share of other comprehensive gain/(loss) of subsidiaries and associates
 2,049,357 - (127,903 ) -
Income tax benefit related to items that will not be reclassified subsequently
 124,646 - 733,956 -

1,536,880 - (198,028 ) -
(Continued)

- 6 -

Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)



 2023 2022

Amount % Amount %

Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations
 $ (13,645,829 ) - $ 51,030,928 2
Share of other comprehensive gain/(loss) of subsidiaries and associates
 4,120,827 - (8,244,295 ) -
Income tax benefit related to items that may be reclassified subsequently
 - - 6,036 -

(9,525,002 ) - 42,792,669 2

Other comprehensive income (loss), net of income tax
 (7,988,122 ) - 42,594,641 2

TOTAL COMPREHENSIVE INCOME
 $ 830,509,542
            39
 $ 1,059,124,890 47

EARNINGS PER SHARE (NT$, Note 24)
Basic earnings per share
 $ 32.34 $ 39.20
Diluted earnings per share
 $ 32.34 $ 39.20



The accompanying notes are an integral part of the parent company only financial statements.    
(Concluded)

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY
(In Thousands of New Taiwan Dollars)


Others
Unrealized
Gain (Loss) on
Financial
Assets at Fair
Foreign Value Through Unearned
Capital Stock - Common Stock Retained Earnings Currency Other Gain (Loss) on Stock-Based
Shares Legal Capital Special Capital Unappropriated Translation Comprehensive Hedging Employee Treasury Total
(In Thousands) Amount Capital Surplus Reserve Reserve Earnings Total Reserve Income Instruments Compensation Total Stock Equity
BALANCE, JANUARY 1, 2022
 25,930,380 $ 259,303,805 $ 64,761,602 $ 311,146,899 $ 59,304,212 $ 1,536,378,550 $ 1,906,829,661 $ (63,303,361 ) $ 574,310 $ 120,536 $ - $ (62,608,515 ) $ - $ 2,168,286,553

Appropriations of earnings
Special capital reserve
 - - - - (56,149,902 ) 56,149,902 - - - - - - - -
Cash dividends to shareholders
- - - - - (285,234,185 ) (285,234,185 ) - - - - - - (285,234,185 )
Total
 - - - - (56,149,902 ) (229,084,283 ) (285,234,185 ) - - - - - - (285,234,185 )
Net income
 - - - - - 1,016,530,249 1,016,530,249 - - - - - - 1,016,530,249
Other comprehensive income (loss), net of income tax
 - - - - - (49,572 ) (49,572 ) 51,560,060 (10,327,421 ) 1,411,574 - 42,644,213 - 42,594,641

Total comprehensive income (loss)
 - - - - - 1,016,480,677 1,016,480,677 51,560,060 (10,327,421 ) 1,411,574 - 42,644,213 - 1,059,124,890

Share-based payment arrangements
 1,387 13,870 438,029 - - - - - - - (185,153 ) (185,153 ) - 266,746

Treasury stock acquired
 - - - - - - - - - - - - (871,566 ) (871,566 )

Treasury stock retired
 (1,387 ) (13,870 ) (2,989 ) - - (854,707 ) (854,707 ) - - - - - 871,566 -

Disposal of investments in equity instruments at fair value through other comprehensive income
 - - - - - 303,242 303,242 - (303,242 ) - - (303,242 ) - -

Basis adjustment for loss on hedging instruments
 - - - - - - - - - (52,929 ) - (52,929 ) - (52,929 )

Adjustments to share of changes in equities of associates
 - - 4,541 - - - - - - - - - - 4,541

From share of changes in equities of subsidiaries
 - - 4,115,940 - - - - - - - - - - 4,115,940

Donation from shareholders
 - - 13,205 - - - - - - - - - - 13,205

BALANCE, DECEMBER 31, 2022
 25,930,380 259,303,805 69,330,328 311,146,899 3,154,310 2,323,223,479 2,637,524,688 (11,743,301 ) (10,056,353 ) 1,479,181 (185,153 ) (20,505,626 ) - 2,945,653,195
Appropriations of earnings
Special capital reserve
 - - - - (3,154,310 ) 3,154,310 - - - - - - - -
Cash dividends to shareholders
- - - - - (317,663,220 ) (317,663,220 ) - - - - - - (317,663,220 )
Total
 - - - - (3,154,310 ) (314,508,910 ) (317,663,220 ) - - - - - - (317,663,220 )
Net income
 - - - - - 838,497,664 838,497,664 - - - - - - 838,497,664

Other comprehensive income (loss), net of income tax
 - - - - - (484,898 ) (484,898 ) (13,573,468 ) 6,108,369 (38,125 ) - (7,503,224 ) - (7,988,122 )

Total comprehensive income (loss)
 - - - - - 838,012,766 838,012,766 (13,573,468 ) 6,108,369 (38,125 ) - (7,503,224 ) - 830,509,542

Employee restricted shares retired
 (419 ) (4,195 ) 4,195 - - 4,614 4,614 - - - - - - 4,614

Share-based payment arrangements
 2,110 21,100 564,868 - - - - - - - (108,281 ) (108,281 ) - 477,687

Disposal of investments in equity instruments at fair value through other comprehensive income
 - - - - - 151,944 151,944 - (151,944 ) - - (151,944 ) - -

Basis adjustment for loss on hedging instruments
 - - - - - - - - - (45,181 ) - (45,181 ) - (45,181 )

Adjustments to share of changes in equities of associates
 - - (18,155 ) - - - - - - - - - - (18,155 )

From share of changes in equities of subsidiaries
 - - (21,268 ) - - - - - - - - - - (21,268 )

Donation from shareholders
 - - 16,413 - - - - - - - - - - 16,413

BALANCE, DECEMBER 31, 2023
 25,932,071 $ 259,320,710 $ 69,876,381 $ 311,146,899 $ - $ 2,846,883,893 $ 3,158,030,792 $ (25,316,769 ) $ (4,099,928 ) $ 1,395,875 $ (293,434 ) $ (28,314,256 ) $ - $ 3,458,913,627


The accompanying notes are an integral part of the parent company only financial statements.
- 8 -

Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)


2023 2022

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
 $ 977,771,236 $ 1,140,673,816
Adjustments for:
Depreciation expense
 500,300,771 413,595,082
Amortization expense
 9,197,976 8,706,961
Expected credit losses recognized on investments in debt instruments
 5,789 10,341
Finance costs
 4,600,793 3,240,406
Share of profits of subsidiaries and associates
 (52,587,403 ) (42,415,408 )
Interest income
 (17,825,551 ) (5,957,864 )
Share-based compensation
 482,302 266,746
Loss (gain) on disposal or retirement of property, plant and equipment, net
 76,638 (436,567 )
Loss (gain) on disposal or retirement of intangible assets, net
 (3,045 ) 3,720
Impairment loss on property, plant and equipment
 - 790,740
Loss (gain) on foreign exchange, net
 183,093 9,965,603
Dividend income
 (214,911 ) (207,028 )
Others
 (317,394 ) 131,637
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss
 (24,326 ) (1,025,979 )
Notes and accounts receivable, net
 7,754,557 4,588,461
Receivables from related parties
 17,782,935 (34,692,438 )
Other receivables from related parties
 2,115,413 (1,074,087 )
Inventories
 (29,976,300 ) (23,123,047 )
Other financial assets
 (1,019,979 ) 1,894,328
Other current assets
 (7,799,552 ) (712,233 )
Other noncurrent assets
 (720,278 ) (8,532,751 )
Accounts payable
 (1,089,049 ) 7,528,120
Payables to related parties
 67,281 2,362,846
Salary and bonus payable
 (3,553,878 ) 10,494,186
Accrued profit sharing bonus to employees and compensation to directors
 (10,749,687 ) 25,303,189
Accrued expenses and other current liabilities
 (42,119,570 ) 47,110,082
Other noncurrent liabilities
 12,836,220 86,831,552
Net defined benefit liability
 (687,223 ) (2,538,848 )
Cash generated from operations
 1,364,486,858 1,642,781,566
Income taxes paid
 (157,403,955 ) (83,364,086 )

Net cash generated by operating activities
 1,207,082,903 1,559,417,480

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Financial assets at amortized cost
 (51,099,687 ) (97,748,105 )
Equity interest in subsidiary
 (3,359 ) -
Property, plant and equipment
 (634,971,543 ) (897,574,802 )
Intangible assets
 (4,898,499 ) (6,679,871 )
Proceeds from disposal or redemption of:
Financial assets at amortized cost
 81,900,000 49,190,000
Property, plant and equipment
1,369,856 1,665,212
Intangible assets
 3,078 3,750
Proceeds from return of capital of investments in equity instruments at fair value through other comprehensive income
 125 2,938
(Continued)

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)


2023 2022

Interest received
 $ 16,851,011 $ 4,889,786
Other dividends received
 214,911 207,028
Dividends received from investments accounted for using equity method
 3,849,295 3,248,044
Refundable deposits paid
 (1,703,523 ) (1,611,716 )
Refundable deposits refunded
 359,682 406,185

Net cash used in investing activities
 (588,128,653 ) (944,001,551 )

CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term loans
 - (111,959,992 )
Increase in hedging financial liabilities - bank loans
 27,908,580 -
Proceeds from issuance of bonds
 85,700,000 65,400,000
Repayment of bonds
 (18,100,000 ) (4,400,000 )
Payments for transaction costs attributable to the issuance of bonds
 (88,681 ) (69,528 )
Treasury stock acquired
 - (871,566 )
Repayment of the principal portion of lease liabilities
 (2,094,258 ) (1,848,257 )
Interest paid
 (4,724,074 ) (3,757,985 )
Guarantee deposits received
 187,164 216,589
Guarantee deposits refunded
 (286,036 ) (45,643 )
Cash dividends
 (291,721,852 ) (285,234,185 )
Payment of partial acquisition of interests in subsidiaries
(326,167,994 ) (40,421,374 )
Proceeds from partial disposal of interests in subsidiaries
 244,376 144,505
Donation from shareholders
 16,340 13,163

Net cash used in financing activities
 (529,126,435 ) (382,834,273 )

NET INCREASE IN CASH AND CASH EQUIVALENTS
 89,827,815 232,581,656

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
 628,875,897 396,294,241

CASH AND CASH EQUIVALENTS, END OF YEAR
 $ 718,703,712 $ 628,875,897



The accompanying notes are an integral part of the parent company only financial statements.
    (Concluded)
- 10 -


Taiwan Semiconductor Manufacturing Company Limited

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


1.    GENERAL

Taiwan Semiconductor Manufacturing Company Limited (the “Company” or “TSMC”), a Republic of China (R.O.C.) corporation, was incorporated on February 21, 1987. The Company is a dedicated foundry in the semiconductor industry which engages mainly in the manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing of masks.

On September 5, 1994, the Company’s shares were listed on the Taiwan Stock Exchange (TWSE). On October 8, 1997, the Company listed some of its shares of stock on the New York Stock Exchange (NYSE) in the form of American Depositary Shares (ADSs).

The address of its registered office and principal place of business is No. 8, Li-Hsin Rd. 6, Hsinchu Science Park, Taiwan.


2.    THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying parent company only financial statements were approved and authorized for issue by the Board of Directors on February 6, 2024.


3.    APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

a.    Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, “IFRS Accounting Standards”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, the initial application of the amendments to the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have a material impact on the accounting policies of the Company:

Amendments to IAS 12 “International Tax Reform - Pillar Two Model Rules”

The amendments introduce a temporary exception to the requirements in IAS 12 by stipulating that the Company should neither recognize nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. The amendments also require the Company to disclose that it has applied the exception and separately disclose its current tax expense (income) related to Pillar Two income taxes. In addition, for periods in which Pillar Two legislation is enacted or substantively enacted but not yet in effect, the Company should disclose qualitative and quantitative information that helps users of financial statements understand the Company’s exposure to Pillar Two income taxes. The requirement that the Company applies the exception and the requirement to disclose that fact is applied immediately upon issuance of the amendments in May 2023. The remaining disclosure requirements are applied for annual reporting periods beginning on or after January 1, 2023, but not for any interim period ending on or before December 31, 2023.


- 11 -

b.    The IFRS Accounting Standards issued by International Accounting Standards Board (IASB) and endorsed by the FSC with effective date starting 2024

New, Amended and Revised Standards and Interpretations

Effective Date Issued
by IASB



Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” and “Non-current Liabilities with Covenants”
January 1, 2024

c.    The IFRS Accounting Standards issued by IASB, but not yet endorsed and issued into effect by the FSC

New, Amended and Revised Standards and Interpretations

Effective Date Issued
by IASB



Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”
To be determined by IASB

As of the date the accompanying parent company only financial statements were authorized for issue, the Company continues in evaluating the impact on its financial position and financial performance from the initial adoption of the aforementioned standards or interpretations and related applicable period. The related impact will be disclosed when the Company completes its evaluation.

4.    SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

For the convenience of readers, the accompanying parent company only financial statements have been translated into English from the original Chinese version prepared and used in the R.O.C. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language parent company only financial statements shall prevail.

Statement of Compliance

The accompanying parent company only financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the “Accounting Standards Used in Preparation of the Parent Company Only Financial Statements”).

Basis of Preparation

The accompanying parent company only financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for the assets.

When preparing the parent company only financial statements, the Company account for subsidiaries and associates by using the equity method. In order to agree with the amount of net income, other comprehensive income and equity attributable to shareholders of the parent in the consolidated financial statements, the differences of the accounting treatment between the parent company only basis and the consolidated basis are adjusted under the heading of investments accounted for using equity method, share of profits of subsidiaries and associates and share of other comprehensive income of subsidiaries and associates in the parent company only financial statements.

Foreign Currencies

In preparing the parent company only financial statements, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Such exchange differences are recognized in profit or loss in the year in which they arise.
- 12 -

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income. Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.

For the purposes of presenting parent company only financial statements, the assets and liabilities of the Company’s foreign operations are translated into NT$ using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity.

Classification of Current and Noncurrent Assets and Liabilities

Current assets are assets held for trading purposes and assets expected to be converted to cash, sold or consumed within one year from the end of the reporting period. Current liabilities are obligations incurred for trading purposes and obligations expected to be settled within one year from the end of the reporting period. Assets and liabilities that are not classified as current are noncurrent assets and liabilities, respectively.

Cash Equivalents

Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial Instruments

Financial assets and liabilities shall be recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and liabilities are initially recognized at fair values. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial Assets

The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Regular way purchases or sales of financial assets are recognized and derecognized on a trade date or settlement date basis for which financial assets were classified in the same way, respectively. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

a.    Category of financial assets and measurement

Financial assets are classified into the following categories: financial assets at FVTPL, investments in equity instruments at FVTOCI and financial assets at amortized cost.

1)    Financial asset at FVTPL

For certain financial assets which include debt instruments that do not meet the criteria of amortized cost or FVTOCI, it is mandatorily required to measure them at FVTPL. Any gain or loss arising from remeasurement is recognized in profit or loss.
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The net gain or loss recognized in profit or loss incorporates any interest earned on the financial asset.

2)    Investments in equity instruments at FVTOCI

On initial recognition, the Company may irrevocably designate investments in equity investments that is not held for trading as at FVTOCI.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity.

Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the Company’s rights clearly represent a recovery of part of the cost of the investment.

3)    Measured at amortized cost

Cash and cash equivalents, commercial paper, notes and accounts receivable (including related parties), other receivables, refundable deposits and temporary payments (including those classified under other current assets and other noncurrent assets) are measured at amortized cost.

Subsequent to initial recognition, financial assets measured at amortized cost are measured at amortized cost, which equals to carrying amount determined by the effective interest method less any impairment loss.

b.    Impairment of financial assets

At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable).

The loss allowance for accounts receivable is measured at an amount equal to lifetime expected credit losses. For financial assets at amortized cost, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from possible default events of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.

The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

c.    Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another entity.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.


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Financial Liabilities and Equity Instruments

Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities are subsequently measured either at amortized cost using effective interest method or at FVTPL.

Financial liabilities are classified as at fair value through profit or loss when the financial liability is either held for trading or is designated as at fair value through profit or loss.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss.

Financial liabilities other than those held for trading purposes and designated as at FVTPL are subsequently measured at amortized cost at the end of each reporting period.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Derivative Financial Instruments

Derivative financial instruments are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative financial instrument is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

Hedge Accounting

a.    Cash flow hedge

The Company designates certain hedging instruments, such as forward exchange contracts, to partially hedge its foreign exchange rate risks associated with certain highly probable forecast transactions (capital expenditures). The effective portion of changes in the fair value of hedging instruments is recognized in other comprehensive income. When forecast transactions actually take place, the accumulated gains or losses that were recognized in other comprehensive income are transferred from equity to the initial cost of the hedged items. The gains or losses from hedging instruments relating to the ineffective portion are recognized immediately in profit or loss.


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The Company prospectively discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised.

b.    Hedges of net investments in foreign operations

The Company designates certain hedging instruments, such as bank loans denominated in foreign currency, as a hedge of net investments in foreign operations to manage the exchange differences arising on translation of foreign operations due to currency fluctuations. Any gains or losses on the hedging instrument relating to the effective portion of the hedge are recognized in other comprehensive income and accumulated under the heading of foreign currency translation reserve. The gains or losses relating to the ineffective portion are recognized immediately in profit or loss.

The gains and losses on the hedging instrument relating to the effective portion of the hedge, which were accumulated in the foreign currency translation reserve, are reclassified to profit or loss on the disposal or partial disposal of a foreign operation.

Inventories

Inventories are stated at the lower of cost or net realizable value. Inventories are recorded at standard cost and adjusted to approximate weighted-average cost at the end of the reporting period. Net realizable value represents the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale.

Investments Accounted for Using Equity Method

Investments accounted for using the equity method include investments in subsidiaries and associates.

Investment in subsidiaries

A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

When the Company loses control of a subsidiary, any retained investment of the former subsidiary is measured at the fair value at that date. A gain or loss is recognized in profit or loss and calculated as the difference between (a) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and (b) the previous carrying amount of the investments in such subsidiary. In addition, the Company shall account for all amounts previously recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the subsidiary had directly disposed of the related assets and liabilities.

When the Company transacts with its subsidiaries, profits and losses resulting from the transactions with the subsidiaries are recognized in the Company’s parent company only financial statements only to the extent of interests in the subsidiaries that are not owned by the Company.

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Investment in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The operating results and assets and liabilities of associates are incorporated in these parent company only financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognized in the statement of financial position at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associate as well as the distribution received. The Company also recognizes its share in the changes in the equities of associates.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

When the Company subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the net assets of the associate. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the Company’s ownership interest is reduced due to the additional subscription to the shares of associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate shall be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

When the Company transacts with an associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s parent company only financial statements only to the extent of interests in the associate that are not owned by the Company.

Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment. Costs include any incremental costs that are directly attributable to the construction, acquisition of the item of property, plant and equipment or borrowing costs eligible for capitalization.

Property, plant and equipment in the course of construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss. Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other identical categories of property, plant and equipment, commences when the assets are available for their intended use.

Depreciation is recognized so as to write off the cost of the assets less their residual values over their useful lives, and it is computed using the straight-line method mainly over the following estimated useful lives: buildings (assets used by the Company and assets subject to operating leases) - 10 to 20 years; machinery and equipment (assets used by the Company and assets subject to operating leases) - 5 years; and office equipment - 5 years. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis.
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Land is not depreciated.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

Leases

For a contract that contains a lease component and non-lease component, the Company may elect to account for the lease and non-lease components as a single lease component.

The Company as lessor

Rental income from operating lease is recognized on a straight-line basis over the term of the lease.

The Company as lessee

Except for payments for low-value asset leases and short-term leases (leases of machinery and equipment and others) which are recognized as expenses on a straight-line basis, the Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of the lease.

Right-of-use assets are measured at cost. The cost of right-of-use assets comprises the initial measurement of lease liabilities adjusted for lease payments and initial direct costs made at or before the commencement date, plus an estimate of costs needed to restore the underlying assets. Subsequent measurement is calculated as cost less accumulated depreciation and accumulated impairment loss and adjusted for changes in lease liabilities as a result of lease term modifications or other related factors. Right-of-use assets are presented separately in the parent company only balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. If the lease transfers ownership of the underlying assets to the Company by the end of the lease terms or if the cost of right-of-use assets reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use assets from the commencement dates to the end of the useful lives of the underlying assets.

Lease liabilities are measured at the present value of the lease payments. Lease payments comprise fixed payments, variable lease payments which depend on an index or a rate and the exercise price of a purchase option if the Company is reasonably certain to exercise that option. The lease payments are discounted using the lessee’s incremental borrowing rates.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in future lease payments resulting from a change in an index or a rate used to determine those payments, or a change in the assessment of an option to purchase an underlying asset, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. Lease liabilities are presented on a separate line in the parent company only balance sheets.

Intangible Assets

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

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Other intangible assets

Other separately acquired intangible assets with finite useful lives are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized using the straight-line method over the following estimated useful lives: Technology license fees - the estimated life of the technology or the term of the technology transfer contract; software and system design costs - 3 years or contract period; patent and others - the economic life or contract period. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Impairment of Tangible Assets, Right-of-use Assets and Intangible Assets

Goodwill

Goodwill is not amortized and instead is tested for impairment annually, or more frequently when there is an indication that the cash generating unit may be impaired. For the purpose of impairment testing, goodwill is allocated to each of the Company’s cash generating units or groups of cash-generating units that are expected to benefit. If the recoverable amount of a cash generating unit is less than its carrying amount, the difference is allocated first to reduce the carrying amount of any goodwill allocated to such cash-generating unit and then to the other assets of the cash generating unit pro rata based on the carrying amount of each asset in the cash generating unit. Any impairment loss for goodwill is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

Tangible assets, right-of-use assets and other intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible assets (property, plant and equipment), right-of-use assets and other intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is increased to the revised estimate of its recoverable amount, but the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Revenue Recognition

The Company recognizes revenue when performance obligations are satisfied. The performance obligations are satisfied when customers obtain control of the promised goods which is generally when the goods are delivered to the customers’ specified locations.

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Revenue from sale of goods is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Estimated sales returns and other allowances is generally made and adjusted based on historical experience and the consideration of varying contractual terms to recognize refund liabilities, which is classified under accrued expenses and other current liabilities.

In principle, payment term granted to customers is due 30 days from the invoice date or 15-30 days from the end of the month of when the invoice is issued. Due to the short term nature of the receivables from sale of goods with the immaterial discounted effect, the Company measures them at the original invoice amounts without discounting.

Employee Benefits

Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for service rendered by employees.

Retirement benefits

For defined contribution retirement benefit plans, payments to the benefit plan are recognized as an expense when the employees have rendered service entitling them to the contribution. For defined benefit retirement benefit plans, the cost of providing benefit is recognized based on actuarial calculations.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost (including current service cost), and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability represents the actual deficit in the Company’s defined benefit plan.

Treasury Stock

Treasury stock represents the outstanding shares that the Company buys back from market, which is stated at cost and shown as a deduction in shareholders’ equity. When the Company retires treasury stock, the treasury stock account is reduced and the common stock as well as the capital surplus - additional paid-in capital are reversed on a pro rata basis. When the book value of the treasury stock exceeds the sum of the par value and additional paid-in capital, the difference is charged to capital surplus - treasury stock transactions and to retained earnings for any remaining amount.

Share-based payment arrangements

a.    Equity-settled share-based payment arrangements

Restricted shares for employees are expensed on a straight-line basis over the vesting period, based on the fair value at the grant date and the Company’s best estimate of the number expected to ultimately vest, with a corresponding increase in other equity - unearned employee benefits.

When restricted shares for employees are issued, other equity - unearned employee benefits is recognized on the grant date, with a corresponding increase in capital surplus - restricted shares for employees. Dividends paid to employees on restricted shares which do not need to be returned if employees resign in the vesting period are recognized as expenses upon the dividend declaration with a corresponding adjustment in retained earnings.
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At the end of each reporting period, the Company revises its estimate of the number of restricted shares for employees that are expected to vest. The impact from such revision is recognized in profit or loss so that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus - restricted shares for employees.

b.    Cash-settled share-based payment arrangements

For cash-settled share-based payments, a liability is recognized for the services acquired, measured at the fair value of the liability incurred. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognized in profit or loss.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

Income tax on unappropriated earnings is expensed in the year the shareholders approved the appropriation of earnings which is the year subsequent to the year the earnings are generated.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the parent company only financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, net operating loss carryforwards and tax credits for research and development expenses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized is also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

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5.    MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

In the application of the aforementioned Company’s accounting policies, the Company is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Material Accounting Judgments

Revenue Recognition

The Company recognizes revenue when the conditions described in Note 4 are satisfied.

Commencement of Depreciation Related to Property, Plant and Equipment Classified as Equipment under Installation and Construction in Progress (EUI/CIP)

As described in Note 4, commencement of depreciation related to EUI/CIP involves determining when the assets are available for their intended use. The criteria the Company uses to determine whether EUI/CIP are available for their intended use involves subjective judgments and assumptions about the conditions necessary for the assets to be capable of operating in the intended manner.

Judgments on Lease Terms

In determining a lease term, the Company considers all facts and circumstances that create an economic incentive to exercise or not to exercise an option, including any expected changes in facts and circumstances from the commencement date until the exercise date of the option. Main factors considered include contractual terms and conditions covered by the optional periods, and the importance of the underlying asset to the lessee’s operations, etc. The lease term is reassessed if a significant change in circumstances that are within the control of the Company occurs.

Key Sources of Estimation and Uncertainty

Estimation of Sales Returns and Allowances

Sales returns and other allowance is estimated and recorded based on historical experience and in consideration of different contractual terms. The amount is deducted from revenue in the same period the related revenue is recorded. The Company periodically reviews the reasonableness of the estimates.

Valuation of Inventory

Inventories are stated at the lower of cost or net realizable value, and the Company uses estimate to determine the net realizable value of inventory at the end of each reporting period.

The Company estimates the net realizable value of inventory for normal waste, obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is determined mainly based on assumptions of future demand within a specific time horizon.


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Impairment of Tangible Assets, Right-of-use Assets and Intangible Assets Other than Goodwill

In the process of evaluating the potential impairment of tangible assets, right-of-use assets and intangible assets other than goodwill, the Company determines the independent cash flows, useful lives, expected future revenue and expenses related to the specific asset groups with the consideration of the nature of semiconductor industry. Any change in these estimates based on changed economic conditions or business strategies could result in significant impairment charges or reversal in future years.

Realization of Deferred Income Tax Assets

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred tax assets can be utilized. Assessment of the realization of the deferred tax assets requires subjective judgment and estimate, including the future revenue growth and profitability, tax holidays, the amount of tax credits can be utilized and feasible tax planning strategies. Any changes in the global economic environment, the industry trends and relevant laws and regulations could result in significant adjustments to the deferred tax assets.

Determination of Lessees’ Incremental Borrowing Rates

In determining a lessee’s incremental borrowing rate used in discounting lease payments, the Company mainly takes into account the market risk-free rates, the estimated lessee’s credit spreads and secured status in a similar economic environment.


6.    CASH AND CASH EQUIVALENTS
December 31,
2023
December 31,
2022

Cash and deposits in banks
$ 710,158,232 $ 618,449,503
Money market funds
 7,438,588 -
Repurchase agreements
 1,106,892 859,964
Commercial paper
 - 9,566,430

    
 $ 718,703,712 $ 628,875,897

Deposits in banks consisted of highly liquid time deposits that were readily convertible to known amounts of cash and were subject to an insignificant risk of changes in value.


7.    FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
December 31,
2023
December 31,
2022

Financial assets

Mandatorily measured at FVTPL
Forward exchange contracts
$ 624,685 $ 552,255

Financial liabilities

Held for trading
Forward exchange contracts $ 25,673 $ 17,468


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The Company entered into forward exchange contracts to manage exposures due to fluctuations of foreign exchange rates. These forward exchange contracts did not meet the criteria for hedge accounting. Therefore, the Company did not apply hedge accounting treatment for these forward exchange contracts.

Outstanding forward exchange contracts consisted of the following:

Contract Amount
Maturity Date (In Thousands)
December 31, 2023
Sell NT$
January 2024
NT$ 26,251,763
Sell US$ January 2024 US$ 829,000
December 31, 2022
Sell NT$ January 2023 to March 2023 NT$ 79,610,590


8.    FINANCIAL ASSETS AT AMORTIZED COST
December 31,
2023
December 31,
2022

Commercial paper
 $ 18,387,835 $ 48,742,817
Less: Allowance for impairment loss
 (16,130 ) (10,341 )

    
 $ 18,371,705 $ 48,732,476

Refer to Note 29 for information relating to the credit risk management and expected credit loss for financial assets at amortized cost.


9.    HEDGING FINANCIAL INSTRUMENTS
December 31,
2023

Financial liabilities- current

Hedges of net investments in foreign operations
Bank loans
 $ 27,290,400

Cash flow hedge

The Company entered into forward exchange contracts to partially hedge foreign exchange rate risks associated with certain highly probable forecast transactions (capital expenditures). The hedge ratio is adjusted in response to the changes in the financial market and capped at 100%. The forward exchange contracts have maturities of 12 months or less.


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On the basis of economic relationships, the Company expects that the value of forward exchange contracts and the value of hedged transactions will change in opposite directions in response to movements in foreign exchange rates.

The main source of hedge ineffectiveness in these hedging relationships is driven by the effect of the counterparty’s own credit risk on the fair value of forward exchange contracts. No other sources of ineffectiveness emerged from these hedging relationships during the hedging period. For the years ended December 31, 2023, refer to Note 18 (d) for gain or loss arising from changes in the fair value of hedging instruments and the amount transferred to initial carrying amount of hedged items.

The effect of hedging foreign currency risk for the years ended December 31, 2023 is detailed below:

Change in Value Used for Calculating Hedge Ineffectiveness
Hedging Instruments/Hedged Items Years Ended December 31, 2023
Hedging Instruments
Forward exchange contracts
 $ 39,898

Hedged Items
Forecast transaction
 $ (39,898 )

Hedges of net investments in foreign operations

The Company has designated the bank loans denominated in foreign currency as a hedge of net investments in foreign operations to manage its foreign currency risk arising from investment in overseas subsidiaries.

The main source of hedge ineffectiveness in these hedging relationships is driven by the material difference between the notional amount of bank loans denominated in foreign currency and the net investment in foreign operations. No other sources of ineffectiveness have emerged from these hedging relationships during the hedging period. For the year ended December 31, 2023, refer to Note 18 (d) for gain or loss arising from changes in the fair value of hedging instruments.

The following tables summarize the information relating to the hedges of net investments in foreign operations.

December 31, 2023

Hedging Instruments
Contract Amount
(In Thousands)
 Annual Interest Rate Maturity
Balance in
Other Equity (Continuing Hedges)
Bank loans
 JPY    124,500,000 0%
Due by April 2024
$ 618,180


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The effect for the year ended December 31, 2023 is detailed below:

Change in Value Used for Calculating Hedge Ineffectiveness
Hedging Instruments/Hedged Items Year Ended December 31, 2023
Hedging Instruments
Bank loans
 $ 618,180


Hedged Items

Net investments in foreign operations

$ (618,180 )


10.    NOTES AND ACCOUNTS RECEIVABLE, NET
December 31,
2023
December 31,
2022

At amortized cost
Notes and accounts receivable $ 28,676,101 $ 34,316,916
Less: Loss allowance
 (530,139 ) (330,686 )
    
 28,145,962 33,986,230
At FVTOCI
 5,411,317 7,325,606
$ 33,557,279 $ 41,311,836

The Company signed a contract with the bank to sell certain accounts receivable without recourse and transaction cost required. These accounts receivable are classified as at FVTOCI because they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

In principle, the payment term granted to customers is due 30 days from the invoice date or 15-30 days from the end of the month when the invoice is issued. Aside from recognizing impairment loss for credit-impaired accounts receivable, the Company recognizes loss allowance based on the expected credit loss ratio of customers by different risk levels with consideration of factors of historical loss ratios and customers’ financial conditions, competitiveness and business outlook. For accounts receivable past due over 90 days without collaterals or guarantees, the Company recognizes loss allowance at full amount.

Aging analysis of notes and accounts receivable

December 31,
2023
December 31,
2022

Not past due $ 33,618,149 $ 40,353,856
Past due
Past due within 30 days 469,269 1,268,778
Past due over 31 days
 - 19,888
Less: Loss allowance
 (530,139 ) (330,686 )

    
 $ 33,557,279 $ 41,311,836

- 26 -


All of the Company’s accounts receivable classified as at FVTOCI were not past due.

Movements of the loss allowance for accounts receivable


 Years Ended December 31

2023 2022

Balance, beginning of year
 $ 330,686 $ 345,905
Provision (Reversal)
 199,453 (15,219 )

Balance, end of year
 $ 530,139 $ 330,686

For the years ended December 31, 2023 and 2022, the changes in loss allowance were mainly due to the variations in the balance of accounts receivable of different risk levels.


11.    INVENTORIES
December 31,
2023
December 31,
2022

Finished goods
 $ 33,839,662 $ 52,318,299
Work in process
 153,362,168 120,893,772
Raw materials
 37,279,545 19,750,618
Supplies and spare parts
 13,777,820 15,320,206
    
 $ 238,259,195 $ 208,282,895

Write-down of inventories to net realizable value and reversal of write-down of inventories resulting from the increase in net realizable value were included in the cost of revenue. The amounts are illustrated below:
Years Ended December 31

2023 2022

Net inventory losses
 $ 3,526,480 $ 4,613,077


12.    INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investments accounted for using the equity method consisted of the following:
December 31,
2023
December 31,
2022

Subsidiaries
 $ 1,065,078,454 $ 700,324,717
Associates
 29,616,638 27,622,452
    
 $ 1,094,695,092 $ 727,947,169


- 27 -

a.    Investments in subsidiaries

Subsidiaries consisted of the following:

Place of Carrying Amount
Percentage of Ownership
Subsidiaries Principal Activities Incorporation and Operation
December 31,
2023
December 31,
2022
 December 31, 2023 December 31, 2022



TSMC Global Ltd. (TSMC Global)

Investment activities
Tortola, British Virgin Islands
 $ 441,225,883 $ 411,992,426
100%

100%
TSMC Arizona Corporation (TSMC Arizona)

Manufacturing, selling and testing of integrated circuits and other semiconductor devices
Phoenix, Arizona, U.S.A.
 298,604,975 25,639,079
100%

100%
TSMC China Company Limited (TSMC China)

Manufacturing, selling, testing and computer-aided design of integrated circuits and other semiconductor devices
Shanghai, China
 95,419,097 87,028,722
100%

100%
TSMC Nanjing Company Limited (TSMC Nanjing)

Manufacturing, selling, testing and computer-aided design of integrated circuits and other semiconductor devices
Nanjing, China
 87,625,830 67,385,300
100%

100%
TSMC Partners, Ltd. (TSMC Partners)

Investing in companies involved in the design, manufacture, and other related business in the semiconductor industry and other investment activities
Tortola, British Virgin Islands
 68,143,719 63,697,217
100%

100%
Japan Advanced Semiconductor Manufacturing, Inc. (JASM)

Manufacturing, sales, testing and computer aided design of integrated circuits and other semiconductor devices

Kumamoto, Japan
 47,087,140 23,330,125
71%

71%
VisEra Technologies Company Ltd. (VisEra Tech)

Research, design, development, manufacturing, sales, packaging and test of color filter

Hsinchu, Taiwan
 11,261,961 11,467,860
67%

68%
TSMC North America

Selling and marketing of integrated circuits and other semiconductor devices
San Jose, California, U.S.A.
 6,278,751 5,449,755
100%

100%
European Semiconductor Manufacturing Company (ESMC) GmbH (ESMC)

Manufacturing, sales and testing of integrated circuits and other semiconductor devices
Dresden, Germany
 4,768,013 -
100%

-
Emerging Fund L.P. (Emerging Fund)

Investing in technology start-up companies
Cayman Islands
 1,901,742 1,760,885
99.9%

99.9%
TSMC Japan 3DIC R&D Center, Inc. (TSMC 3DIC)

Engineering support activities
Yokohama, Japan
 1,224,449 1,172,706
100%

100%
TSMC Europe B.V. (TSMC Europe)

Customer service and supporting activities
Amsterdam, the Netherlands
 592,499 527,693
100%

100%
TSMC Design Technology Japan, Inc. (TSMC JDC)

Engineering support activities
Yokohama, Japan
 394,191 376,176
100%

100%
VentureTech Alliance Fund III, L.P. (VTAF III)

Investing in new start-up technology companies
Cayman Islands
 257,540 246,702
98%

98%
TSMC Japan Limited (TSMC Japan)

Customer service and supporting activities
Yokohama, Japan
 130,403 134,560
100%

100%
VentureTech Alliance Fund II, L.P. (VTAF II)

Investing in new start-up technology companies
Cayman Islands
 117,662 71,429
98%

98%
TSMC Korea Limited (TSMC Korea)

Customer service and supporting activities
Seoul, Korea
 44,599 44,082
100%

100%








    




$ 1,065,078,454 $ 700,324,717




The Company continually increased its investment in TSMC Arizona for the amount of NT$292,649,510 thousand and NT$15,372,500 thousand in both of 2023 and 2022, respectively. Under the terms of the development agreement entered into between TSMC Arizona and the City of Phoenix, the City of Phoenix commits approximately US$205 million toward various public infrastructure projects in the area of the proposed manufacturing facility, conditioned on TSMC Arizona’s achieving a minimum project scale with defined spending and job-creation thresholds.


- 28 -

The Company continually increased its investment in JASM for the amount of NT$28,062,957 thousand and NT$23,150,164 thousand in both of 2023 and 2022, respectively. The Company’s shareholding and the proportion of voting rights in JASM are 71% and 81%, respectively. The Company increased its investment in JASM for the amount of NT$11,144,154 thousand in January 2024.

As VisEra employees continue to exercise their employee share options, the Company’s ownership in VisEra continues to decline. This transaction was accounted for as an equity transaction since the transaction did not change the Company’s control over VisEra.

ESMC was established in June 2023, and the Company continually increased its investment in ESMC for the amount of NT$4,814,293 thousand. The Company sold its 10% shares to Robert Bosch GmbH, Infineon Technologies AG and NXP Semiconductors N.V. in January 2024. After selling shares, The Company’s shareholding in ESMC decreased from 100% to 70%. This transaction was accounted for as an equity transaction since the transaction did not change the Company’s control over ESMC.

b.    Investments in associates

Associates consisted of the following:

Place of Carrying Amount % of Ownership and Voting Rights Held by the Company
Name of Associate Principal Activities Incorporation and Operation December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022



Vanguard International Semiconductor Corporation (VIS)

Manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks
Hsinchu, Taiwan
 $ 13,590,430 $ 13,492,653
28%

28%
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC)

Manufacturing and selling of integrated circuits and other semiconductor devices
Singapore
 9,728,801 8,934,731
39%

39%
Xintec Inc. (Xintec)

Wafer level chip size packaging and wafer level post passivation interconnection service
Taoyuan, Taiwan
 3,759,701 3,528,417
41%

41%
Global Unichip Corporation (GUC)

Researching, developing, manufacturing, testing and marketing of integrated circuits
Hsinchu, Taiwan
 2,537,706 1,666,651
35%

35%







    



$ 29,616,638 $ 27,622,452




As of December 31, 2023 and 2022, no investments in associates are individually material to the Company. Please refer to the parent company only statements of comprehensive income for recognition of share of both profit (loss) and other comprehensive income (loss) of associates that are not individually material.

The market prices of the associates’ ownership held by the Company in publicly traded stocks calculated by the closing price are summarized as follows. The closing price represents the quoted price in active markets, the level 1 fair value measurement.

Name of Associate
December 31,
2023
December 31,
2022

GUC
$
81,236,875

$
29,926,918

VIS
$
37,834,215

$
35,977,321

Xintec
$
14,188,445

$
10,716,449



- 29 -


13.    PROPERTY, PLANT AND EQUIPMENT
December 31,
2023
December 31,
2022

Assets used by the Company
 $ 2,453,454,729 $ 2,432,657,698
Assets subject to operating leases
 10,593 17,352

    
 $ 2,453,465,322 $ 2,432,675,050

Assets used by the Company


 Land Buildings Machinery and Equipment
Office
Equipment
 Equipment under Installation and Construction in Progress Total

Cost

Balance at January 1, 2023 $ 3,212,000 $ 588,665,721 $ 4,073,634,985 $ 78,940,726 $ 1,157,545,820 $ 5,901,999,252
Additions (deductions)
 - 170,726,292 1,092,820,315 17,029,650 (760,754,707 ) 519,821,550
Disposals or retirements - (585,487 ) (34,652,800 ) (3,268,575 ) - (38,506,862 )
Transfers from assets subject to operating leases
 - - 80,370 - - 80,370
Transfers to assets subject to operating leases
 - - (71,078 ) - - (71,078 )

Balance at December 31, 2023
 $ 3,212,000 $ 758,806,526 $ 5,131,811,792 $ 92,701,801 $ 396,791,113 $ 6,383,323,232

Accumulated depreciation
  and impairment                

Balance at January 1, 2023 $ - $ 315,107,562 $ 3,098,295,994 $ 55,147,258 $ 790,740 $ 3,469,341,554
Additions - 42,097,968 445,570,821 9,840,540 - 497,509,329
Disposals or retirements - (582,993 ) (33,138,618 ) (3,268,575 ) - (36,990,186 )
Transfers from assets subject to operating leases
 - - 53,537 - - 53,537
Transfers to assets subject to operating leases
 - - (45,731 ) - - (45,731 )

Balance at December 31, 2023
 $ - $ 356,622,537 $ 3,510,736,003 $ 61,719,223 $ 790,740 $ 3,929,868,503

Carrying amounts at December 31, 2023
 $ 3,212,000 $ 402,183,989 $ 1,621,075,789 $ 30,982,578 $ 396,000,373 $ 2,453,454,729

Cost

Balance at January 1, 2022 $ 3,212,000 $ 536,912,374 $ 3,814,331,964 $ 71,312,061 $ 552,647,944 $ 4,978,416,343
Additions - 51,982,217 289,897,592 9,288,321 604,897,876 956,066,006
Disposals or retirements - (228,870 ) (30,528,791 ) (1,659,656 ) - (32,417,317 )
Transfers to assets subject to operating leases
 - - (65,780 ) - - (65,780 )

Balance at December 31, 2022
 $ 3,212,000 $ 588,665,721 $ 4,073,634,985 $ 78,940,726 $ 1,157,545,820 $ 5,901,999,252

Accumulated depreciation
  and impairment                

Balance at January 1, 2022 $ - $ 281,421,525 $ 2,758,724,265 $ 48,300,051 $ - $ 3,088,445,841
Additions - 33,911,674 368,684,999 8,506,391 - 411,103,064
Disposals or retirements
 - (225,637 ) (29,073,004 ) (1,659,184 ) - (30,957,825 )
Transfers to assets subject to operating leases
 - - (40,266 ) - - (40,266 )
Impairment
 - - - - 790,740 790,740

Balance at December 31, 2022
 $ - $ 315,107,562 $ 3,098,295,994 $ 55,147,258 $ 790,740 $ 3,469,341,554

Carrying amounts at December 31, 2022
 $ 3,212,000 $ 273,558,159 $ 975,338,991 $ 23,793,468 $ 1,156,755,080 $ 2,432,657,698

The significant part of the Company’s buildings includes main plants, mechanical and electrical power equipment and clean rooms, and the related depreciation is calculated using the estimated useful lives of 20 years, 10 years and 10 years, respectively.

In the first quarter of 2022, the Company recognized an impairment loss of NT$790,740 thousand for certain machinery and equipment that were assessed to have no future use, and the recoverable amount of the aforementioned assets were nil.
- 30 -

Such impairment loss was recognized in other operating income and expenses.

Information about capitalized interest is set out in Note 21.


14.    LEASE ARRANGEMENTS

a.    Right-of-use assets
December 31,
2023
December 31,
2022
Carrying amounts
Land $ 37,039,145 $ 38,121,835
Buildings 811,037 911,108
Office equipment 22,523 18,484
    
 $ 37,872,705 $ 39,051,427


Years Ended December 31

2023 2022

Additions to right-of-use assets
 $ 1,657,886 $ 11,808,591

Depreciation of right-of-use assets
Land
 $ 2,439,615 $ 2,102,934
Buildings
 330,361 365,167
Office equipment
 16,193 15,728

    
 $ 2,786,169 $ 2,483,829

b.    Lease liabilities
December 31,
2023
December 31,
2022
Carrying amounts

Current portion (classified under accrued expenses and other current liabilities)
 $ 2,122,132 $ 2,029,362
Noncurrent portion 26,959,435 27,593,900

    
 $ 29,081,567 $ 29,623,262

Ranges of discount rates for lease liabilities are as follows:
December 31,
2023
December 31,
2022

Land
 0.39%-2.30% 0.39%-2.30%
Buildings 0.57%-1.76% 0.39%-1.76%
Office equipment 0.28%-1.73% 0.28%-1.73%


- 31 -

c.    Material terms of right-of-use assets

The Company leases land and buildings mainly for the use of plants and offices with lease terms of 1 to 22 years. The lease contracts for land located in the R.O.C. specify that lease payments will be adjusted every 2 years on the basis of changes in announced land value prices. The Company does not have purchase options to acquire the leasehold land and buildings at the end of the lease terms.

d.    Other lease information


 Years Ended December 31

2023 2022

Expenses relating to short-term leases $ 1,212,080 $ 4,616,518
Total cash outflow for leases $ 4,128,092 $ 7,037,733


15.    INTANGIBLE ASSETS
Goodwill Technology License Fees Software and System Design Costs Patent and Others


Total

Cost

Balance at January 1, 2023 $ 1,567,756 $ 25,706,243 $ 47,821,483 $ 11,668,271 $ 86,763,753
Additions - 460,032 4,417,438 548,499 5,425,969
Disposals or retirements - - (4,289,185 ) - (4,289,185 )

Balance at December 31, 2023 $ 1,567,756 $ 26,166,275 $ 47,949,736 $ 12,216,770 $ 87,900,537

Accumulated amortization and
  impairment                            

Balance at January 1, 2023 $ - $ 17,643,661 $ 38,255,701 $ 9,408,287 $ 65,307,649
Additions - 2,792,353 5,244,804 1,160,819 9,197,976
Disposals or retirements - - (4,289,152 ) - (4,289,152 )
Balance at December 31, 2023 $ - $ 20,436,014 $ 39,211,353 $ 10,569,106 $ 70,216,473
Carrying amounts at December 31, 2023
 $ 1,567,756

$ 5,730,261 $ 8,738,383 $ 1,647,664

$ 17,684,064

Cost

Balance at January 1, 2022 $ 1,567,756 $ 23,483,138 $ 43,072,450 $ 11,465,356 $ 79,588,700
Additions - 2,253,096 4,815,294 202,915 7,271,305
Disposals or retirements - (29,991 ) (66,261 ) - (96,252 )

Balance at December 31, 2022 $ 1,567,756 $ 25,706,243 $ 47,821,483 $ 11,668,271 $ 86,763,753

Accumulated amortization and
  impairment                            

Balance at January 1, 2022 $ - $ 14,861,472 $ 33,599,582 $ 8,217,246 $ 56,678,300
Additions - 2,793,540 4,722,380 1,191,041 8,706,961
Disposals or retirements - (11,351 ) (66,261 ) - (77,612 )
Balance at December 31, 2022 $ - $ 17,643,661 $ 38,255,701 $ 9,408,287 $ 65,307,649
Carrying amounts at December 31, 2022
 $ 1,567,756

$ 8,062,582 $ 9,565,782 $ 2,259,984

$ 21,456,104

The Company’s goodwill has been tested for impairment at the end of the annual reporting period and the recoverable amount is determined based on the value in use. The value in use was calculated based on the cash flow forecast from the financial budgets covering the future five-year period, and the Company used annual discount rates of 9.0% and 8.7% in its test of impairment as of December 31, 2023 and 2022, respectively, to reflect the relevant specific risk in the cash-generating unit.

For the years ended December 31, 2023 and 2022, the Company did not recognize any impairment loss on goodwill.



- 32 -

16.    BONDS PAYABLE
December 31,
2023
December 31,
2022

Domestic unsecured bonds
 $ 447,194,000 $ 379,526,000
Less: Discounts on bonds payable
 (326,435 ) (295,526 )
Less: Current portion
 (6,997,710 ) (18,100,000 )

    
 $ 439,869,855 $ 361,130,474

The major terms of domestic unsecured bonds are as follows:

Issuance

Tranche
 Issuance Period Total Amount Coupon Rate
Repayment and
Interest Payment




NT$ unsecured bonds







101-3

-
October 2012 to October 2022
 $ 4,400,000 1.53%
Bullet repayment; interest payable annually
101-4

C
January 2013 to January 2023
 3,000,000 1.49%
The same as above
102-1

C
February 2013 to February 2023
 3,600,000 1.50%
The same as above
102-2

B
July 2013 to July 2023
 3,500,000 1.70%
The same as above
102-4

E
September 2013 to March 2023
 5,400,000 2.05%
The same as above


F
September 2013 to September 2023
 2,600,000 2.10%
The same as above
109-1

A
March 2020 to March 2025
 3,000,000 0.58%
The same as above


B
March 2020 to March 2027
 10,500,000 0.62%
The same as above


C
March 2020 to March 2030
 10,500,000 0.64%
The same as above
109-2

A
April 2020 to April 2025
 5,900,000 0.52%
The same as above


B
April 2020 to April 2027
 10,400,000 0.58%
The same as above


C
April 2020 to April 2030
 5,300,000 0.60%
The same as above
109-3

A
May 2020 to May 2025
 4,500,000 0.55%
The same as above


B
May 2020 to May 2027
 7,500,000 0.60%
The same as above


C
May 2020 to May 2030
 2,400,000 0.64%
The same as above
(Continued)
- 33 -

Issuance

Tranche
 Issuance Period Total Amount Coupon Rate
Repayment and
Interest Payment




109-4

A
July 2020 to July 2025
 $ 5,700,000 0.58%
Two equal installments in last two years; interest payable annually


B
July 2020 to July 2027
 6,300,000 0.65%
The same as above


C
July 2020 to July 2030
 1,900,000 0.67%
The same as above
109-5

A
September 2020 to September 2025
 4,800,000 0.50%
The same as above


B
September 2020 to September 2027
 8,000,000 0.58%
The same as above


C
September 2020 to September 2030
 2,800,000 0.60%
The same as above
109-6
(Green bond)

A
December 2020 to December 2025
 1,600,000 0.40%
The same as above


B
December 2020 to December 2027
 5,600,000 0.44%
The same as above


C
December 2020 to December 2030
 4,800,000 0.48%
The same as above
109-7

A
December 2020 to December 2025
 1,900,000 0.36%
The same as above


B
December 2020 to December 2027
 10,200,000 0.41%
The same as above


C
December 2020 to December 2030
 6,400,000 0.45%
The same as above
110-1

A
March 2021 to March 2026
 4,800,000 0.50%
Bullet repayment; interest payable annually


B
March 2021 to March 2028
 11,400,000 0.55%
The same as above


C
March 2021 to March 2031
 4,900,000 0.60%
The same as above
110-2

A
May 2021 to May 2026
 5,200,000 0.50%
The same as above


B
May 2021 to May 2028
 8,400,000 0.58%
The same as above


C
May 2021 to May 2031
 5,600,000 0.65%
The same as above
110-3

A
June 2021 to June 2026
 6,900,000 0.52%
The same as above


B
June 2021 to June 2028
 7,900,000 0.58%
The same as above


C
June 2021 to June 2031
 4,900,000 0.65%
The same as above
110-4

A
August 2021 to August 2025
 4,000,000 0.485%
The same as above


B
August 2021 to August 2026
 8,000,000 0.50%
The same as above


C
August 2021 to August 2028
 5,400,000 0.55%
The same as above


D
August 2021 to August 2031
 4,200,000 0.62%
The same as above
(Continued)
- 34 -

Issuance

Tranche
 Issuance Period Total Amount Coupon Rate
Repayment and
Interest Payment




110-6

A
October 2021 to April 2026
 $ 3,200,000 0.535%
Bullet repayment; interest payable annually


B
October 2021 to October 2026
 6,900,000 0.54%
The same as above


C
October 2021 to October 2028
 4,600,000 0.60%
The same as above


D
October 2021 to October 2031
 1,600,000 0.62%
The same as above
110-7

A
December 2021 to December 2026
 7,700,000 0.65%
The same as above


B
December 2021 to June 2027
 3,500,000 0.675%
The same as above


C
December 2021 to December 2028
 5,500,000 0.72%
The same as above
111-1
(Green bond)

A
January 2022 to January 2027
 2,100,000 0.63%
The same as above


B
January 2022 to January 2029
 3,300,000 0.72%
The same as above
111-2

A
March 2022 to September 2026
 3,000,000 0.84%
The same as above


B
March 2022 to March 2027
 9,600,000 0.85%
The same as above


C
March 2022 to March 2029
 1,600,000 0.90%
The same as above
111-3
(Green bond)

-
May 2022 to May 2027
 6,100,000 1.50%
The same as above
111-4
(Green bond)

A
July 2022 to July 2026
 1,200,000 1.60%
The same as above


B
July 2022 to July 2027
 10,100,000 1.70%
The same as above


C
July 2022 to July 2029
 1,200,000 1.75%
The same as above


D
July 2022 to July 2032
 1,400,000 1.95%
The same as above
111-5

A
August 2022 to June 2027
 2,000,000 1.65%
The same as above


B
August 2022 to August 2027
 8,900,000 1.65%
The same as above


C
August 2022 to August 2029
 2,200,000 1.65%
The same as above


D
August 2022 to August 2032
 2,500,000 1.82%
The same as above
111-6
(Green bond)

A
October 2022 to October 2027
 5,700,000 1.75%
The same as above


B
October 2022 to October 2029
 1,000,000 1.80%
The same as above


C
October 2022 to October 2032
 3,500,000 2.00%
The same as above
(Continued)
- 35 -

Issuance

Tranche
 Issuance Period Total Amount Coupon Rate
Repayment and
Interest Payment




112-1
(Green bond)

A
March 2023 to March 2028
 $ 12,200,000 1.54%
Bullet repayment; interest payable annually


B
March 2023 to March 2030
 2,300,000 1.60%
The same as above


C
March 2023 to March 2033
 4,800,000 1.78%
The same as above
112-2
(Green bond)

A
May 2023 to May 2028
 13,100,000 1.60%
The same as above


B
May 2023 to May 2030
 2,300,000 1.65%
The same as above


C
May 2023 to May 2033
 5,300,000 1.82%
The same as above
112-3

A
June 2023 to June 2028
 11,400,000 1.60%
The same as above


B
June 2023 to June 2030
 2,600,000 1.65%
The same as above


C
June 2023 to June 2033
 6,000,000 1.80%
The same as above
112-4

A
August 2023 to August 2028
 7,300,000 1.60%
The same as above


B
August 2023 to August 2030
 700,000 1.65%
The same as above


C
August 2023 to August 2033
 7,900,000 1.76%
The same as above
112-5

A
October 2023 to October 2028
 4,300,000 1.62%
The same as above


B
October 2023 to October 2033
 5,500,000 1.76%
The same as above
(Concluded)

Issuance

Tranche
 Issuance Period Total Amount
(US$ in Thousands)		 Coupon Rate
Repayment and
Interest Payment





US$ unsecured bonds












109-1


-
September 2020 to September 2060
        US$
    1,000,000
 2.70%
Bullet repayment (callable on the 5th anniversary of the issue date and every anniversary thereafter); interest payable annually
110-5


-
September 2021 to September 2051
            1,000,000
 3.10%
The same as above



- 36 -


17.    RETIREMENT BENEFIT PLANS

a.    Defined contribution plans

The plan under the R.O.C. Labor Pension Act (the “Act”) is deemed a defined contribution plan. Pursuant to the Act, the Company has made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts. Accordingly, the Company recognized expenses of NT$4,154,345 thousand and NT$3,663,757 thousand for the years ended December 31, 2023 and 2022, respectively.

b.    Defined benefit plans

The Company has defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by the government’s designated authorities; as such, the Company does not have any right to intervene in the investments of the Funds.

Amounts recognized in respect of these defined benefit plans were as follows:

Years Ended December 31
2023 2022

Current service cost $ 139,101 $ 134,376
Net interest expense 142,291 74,265
Components of defined benefit costs recognized in profit or loss
 281,392 208,641
Remeasurement on the net defined benefit liability:
Return on plan assets (excluding amounts included in net interest expense)
 (16,252 ) (429,948 )
Actuarial loss arising from experience adjustments
 68,342 1,413,760
Actuarial (gain) loss arising from changes in financial assumptions
 571,266 (160,752 )
Components of defined benefit costs recognized in other comprehensive income
 623,356 823,060

Total
 $ 904,748 $ 1,031,701

The pension costs of the aforementioned defined benefit plans were recognized in profit or loss by the following categories:

Years Ended December 31
2023 2022

Cost of revenue $ 182,333 $ 135,125
Research and development expenses 76,120 55,632
General and administrative expenses 19,248 15,129
Marketing expenses 3,691 2,755
$ 281,392 $ 208,641


- 37 -

The amounts arising from the defined benefit obligation of the Company were as follows:
December 31,
2023
December 31,
2022

Present value of defined benefit obligation
 $ 17,995,066 $ 17,483,951
Fair value of plan assets
 (8,737,842 ) (8,162,860 )

Net defined benefit liability
 $ 9,257,224 $ 9,321,091

Movements in the present value of the defined benefit obligation were as follows:

Years Ended December 31
2023 2022

Balance, beginning of year $ 17,483,951 $ 16,585,442
Current service cost 139,101 134,376
Interest expense 303,970 120,791
Remeasurement:
Actuarial loss arising from experience adjustments
 68,342 1,413,760
Actuarial (gain) loss arising from changes in financial assumptions
 571,266 (160,752 )
Benefits paid from plan assets (556,455 ) (585,343 )
Benefits paid directly by the Company (15,109 ) (24,323 )
Balance, end of year $ 17,995,066 $ 17,483,951

Movements in the fair value of the plan assets were as follows:

Years Ended December 31
2023 2022

Balance, beginning of year $ 8,162,860 $ 5,548,563
Interest income 161,679 46,526
Remeasurement:
Return on plan assets (excluding amounts included in net interest expense)
 16,252 429,948
Contributions from employer 953,506 2,723,166
Benefits paid from plan assets (556,455 ) (585,343 )
Balance, end of year $ 8,737,842 $ 8,162,860

The fair value of the plan assets by major categories at the end of reporting period was as follows:

December 31,
2023
December 31,
2022
Cash
 $ 1,351,744 $ 1,337,893
Equity instruments
 4,998,919 4,696,909
Debt instruments
 2,387,179 2,128,058

    
 $ 8,737,842 $ 8,162,860


- 38 -


The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions of the actuarial valuation were as follows:

Measurement Date

December 31,
2023
December 31,
2022

Discount rate
1.40%
 1.80%
Future salary increase rate
4.00%
 4.00%

Through the defined benefit plans under the R.O.C. Labor Standards Law, the Company is exposed to the following risks:

1) Investment risk: The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government’s designated authorities or under the mandated management. However, under the R.O.C. Labor Standards Law, the rate of return on assets shall not be less than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return.

2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.

Assuming a hypothetical decrease in interest rate at the end of the reporting period contributed to a decrease of 0.5% (and not below 0.0%) in the discount rate and all other assumptions were held constant, the present value of the defined benefit obligation would increase by NT$757,663 thousand and NT$766,692 thousand as of December 31, 2023 and 2022, respectively.

3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

Assuming the expected salary rate increases by 0.5% at the end of the reporting period and all other assumptions were held constant, the present value of the defined benefit obligation would increase by NT$735,167 thousand and NT$746,933 thousand as of December 31, 2023 and 2022, respectively.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability.

The Company expects to make contributions of NT$991,646 thousand to the defined benefit plans in the next year starting from December 31, 2023. The weighted average duration of the defined benefit obligation is 8 years.




- 39 -

18.    EQUITY

a.    Capital stock
December 31,
2023
December 31,
2022

Authorized shares (in thousands)
 28,050,000 28,050,000
Authorized capital
 $ 280,500,000 $ 280,500,000
Issued and paid shares (in thousands)
 25,932,071 25,930,380
Issued capital
 $ 259,320,710 $ 259,303,805

The par value of issued common shares is NT$10 per share. A holder of common shares has one vote for each common share and is entitled to receive dividends.

The authorized shares include 500,000 thousand shares allocated for the exercise of employee stock options.

On March 1, 2023 and March 1, 2022, the Company issued employee restricted stock awards (RSAs) for its employees in a total of 2,110 thousand shares and 1,387 thousand shares, respectively, with a par value of NT$10 per share. The aforementioned issuance of new shares was approved by the relevant authority and the registration has been completed.

During the first quarter of 2023, the Company reclaimed 419 thousand employee restricted shares that were unvested. On May 9, 2023, the Company’s Board of Directors resolved to cancel the aforementioned shares. Subsequently, the Company completed the registration for share cancellation. Refer to Note 25 for information on RSAs.

On May 10, 2022, the Company’s Board of Directors resolved to cancel 1,387 thousand treasury shares. Refer to Note 18(e) for information.

As of December 31, 2023, the Company’s total issued and outstanding ADSs were 1,063,103 thousand units, representing 5,315,513 thousand common shares.

b.    Capital surplus

The categories of uses and the sources of capital surplus based on regulations were as follows:
December 31,
2023
December 31,
2022

May be used to offset a deficit, distributed as cash dividends,
  or transferred to share capital                                                

Additional paid-in capital
 $ 24,406,854 $ 24,183,645
From merger
 22,803,291 22,803,291
From convertible bonds
 8,892,371 8,892,371
From difference between the consideration received and the carrying amount of the subsidiaries’ net assets during actual disposal
 8,406,282 8,406,282
Donations - donated by shareholders
 11,275 11,275
(Continued)
- 40 -
December 31,
2023
December 31,
2022
May only be used to offset a deficit

From share of changes in equities of subsidiaries
 $ 4,199,936 $ 4,229,892
From share of changes in equities of associates
 302,396 311,863
Donations – unclaimed dividend
 70,093 53,680
May not be used for any purpose
Employee restricted shares 783,883 438,029
$ 69,876,381 $ 69,330,328
(Concluded)

If such capital surplus is distributed as transferred to share capital, it is limited to a certain percentage of the Company’s paid-in capital each year.

c.    Retained earnings and dividend policy

The Company’s Articles of Incorporation provide that, earnings distribution may be made on a quarterly basis after the close of each quarter. Distribution of earnings by way of cash dividends should be approved by the Company’s Board of Directors and reported to the Company’s shareholders in its meeting. When allocating earnings, the Company shall first estimate and reserve the taxes to be paid, offset its losses, set aside a legal capital reserve at 10% of the remaining earnings (until the accumulated legal capital reserve equals the Company’s paid-in capital), then set aside a special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge. Any balance left over shall be allocated according to relevant laws and the Company’s Articles of Incorporation.

The Company’s Articles of Incorporation also provide that profits of the Company may be distributed by way of cash dividend and/or stock dividend. However, distribution of earnings shall be made preferably by way of cash dividend. Distribution of earnings may also be made by way of stock dividend, provided that the ratio for stock dividend shall not exceed 50% of the total distribution.

The legal capital reserve may be used to offset a deficit, or be distributed as dividends in cash or stocks for the portion in excess of 25% of the paid-in capital if the Company incurs no loss.

Pursuant to existing regulations, the Company is required to set aside an additional special capital reserve equivalent to the net debit balance of the other components of stockholders’ equity, such as the accumulated balance of the foreign currency translation reserve, the effectiveness of hedges of net investments in foreign operations, unrealized valuation gain or loss from fair value through other comprehensive income financial assets and gain or loss from changes in fair value of hedging instruments in cash flow hedges, etc. For the subsequent decrease in the deduction amount to stockholders’ equity, any special reserve appropriated may be reversed to the extent that the net debit balance reverses.

The appropriations of 2023, 2022 and 2021 quarterly earnings have been approved by the Company’s Board of Directors in its meeting, respectively. The appropriations and cash dividends per share were as follows:


 Fourth Quarter Third Quarter Second Quarter First Quarter
Resolution Date of the
of 2023 of 2023 of 2023 of 2023
  Company’s Board of
February 6, November 14, August 8, May 9,
  Directors in its meeting
 2024 2023 2023 2023
Special capital reserve $ 28,020,822 $ (17,228,363 ) $ (6,365,562 ) $ 3,273,452
Cash dividends to shareholders $ 90,762,248 $ 90,762,248 $ 77,796,213 $ 77,796,213
Cash dividends per share (NT$) $ 3.50 $ 3.50 $ 3.00 $ 3.00

- 41 -
Fourth Quarter
 Third Quarter Second Quarter First Quarter
Resolution Date of the
of 2022
 of 2022 of 2022 of 2022
  Company’s Board of
February 14,
November 8, August 9, May 10,
  Directors in its meeting
 2023 2022 2022 2022
Special capital reserve $ 17,166,163 $ (31,910,353 ) $ (12,002,798 ) $ (15,541,054 )
Cash dividends to shareholders $ 71,308,546 $ 71,308,547 $ 71,308,546 $ 71,308,546
Cash dividends per share (NT$)
 $ 2.75 $ 2.75 $ 2.75 $ 2.75


Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Resolution Date of the
of 2021
 of 2021 of 2021 of 2021
  Company’s Board of
February 15,
November 9, August 10, June 9,
  Directors in its meeting
 2022 2021 2021 2021
Special capital reserve $ 3,304,303 $ 710,169 $ 10,201,220 $ (6,287,050 )
Cash dividends to shareholders $ 71,308,546 $ 71,308,547 $ 71,308,546 $ 71,308,546
Cash dividends per share (NT$)
 $ 2.75 $ 2.75 $ 2.75 $ 2.75

The special capital reserve for 2023 is to be presented for approval in the Company’s shareholders’ meeting to be held on June 4, 2024 (expected).

The quarterly cash dividends per share is affected by the subsequent number of outstanding ordinary shares, the information of the actual payout is available at the Market Observation Post System website.

d.    Others

Changes in others were as follows:


 Year Ended December 31, 2023

Foreign Currency Translation Reserve Unrealized Gain (Loss) on Financial Assets at FVTOCI Gain (Loss) on Hedging Instruments
Unearned Stock-Based
Employee Compensation
 Total

Balance, beginning of year
$ (11,743,301 ) $ (10,056,353 ) $ 1,479,181 $ (185,153 ) $ (20,505,626 )
Exchange differences arising on translation of foreign operations
 (14,264,009 ) - - - (14,264,009 )
Gain (Loss) on hedging instruments designated as hedges of net investments in foreign operations
 618,180 - - - 618,180
Unrealized gain (loss) on financial assets at FVTOCI
Equity instruments
 - (53,665 ) - - (53,665 )
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal
 - (151,944 ) - - (151,944 )
Gain (loss) arising on changes in the fair value of hedging instruments
 - - 39,898 - 39,898
Transferred to initial carrying amount of hedged items
 - - (45,181 ) - (45,181 )
Issuance of shares
 - - - (585,968 ) (585,968 )
Share-based payment expenses recognized
 - - - 477,687 477,687
Share of other comprehensive income (loss) of subsidiaries and associates
 72,361 6,162,059 (78,023 ) - 6,156,397
Income tax effect
 - (25 ) - - (25 )

Balance, end of year
 $ (25,316,769 ) $ (4,099,928 ) $ 1,395,875 $ (293,434 ) $ (28,314,256 )


- 42 -
Year Ended December 31, 2022

Foreign Currency Translation Reserve
Unrealized Gain (Loss) on Financial Assets at FVTOCI
 Gain (Loss) on Hedging Instruments
Unearned Stock-Based
Employee Compensation
 Total

Balance, beginning of year
$ (63,303,361 ) $ 574,310 $ 120,536 $ - $ (62,608,515 )
Exchange differences arising on translation of foreign operations
 51,030,928 - - - 51,030,928
Unrealized gain (loss) on financial assets at FVTOCI
Equity instruments
 - 18,979 - - 18,979
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal
 - (303,242 ) - - (303,242 )
Transferred to initial carrying amount of hedged items
 - - (52,929 ) - (52,929 )
Issuance of shares
 - - - (451,899 ) (451,899 )
Share-based payment expenses recognized
 - - - 266,746 266,746
Share of other comprehensive income (loss) of subsidiaries and associates
 529,132 (10,346,321 ) 1,405,538 - (8,411,651 )
Income tax effect
 - (79 ) 6,036 - 5,957

Balance, end of year
 $ (11,743,301 ) $ (10,056,353 ) $ 1,479,181 $ (185,153 ) $ (20,505,626 )

The aforementioned other equity includes the changes in other equities of the Company and the Company’s share of its subsidiaries and associates.

e.    Treasury stock

For the Company’s shareholders’ interests, the Company’s Board of Directors approved a share buyback program on February 15, 2022 to repurchase 1,387 thousand shares. The Company has completed the aforementioned share buyback program during the first quarter of 2022. On May 10, 2022, the Company’s Board of Directors resolved to cancel the 1,387 thousand shares. Subsequently, TSMC completed the registration for share cancellation.


19.    NET REVENUE

a.    Disaggregation of revenue from contracts with customers


 Years Ended December 31
Product
 2023 2022

Wafer
 $ 1,881,677,167 $ 1,989,174,117
Others 271,607,928 263,146,444
$ 2,153,285,095 $ 2,252,320,561


Years Ended December 31
Geography
 2023 2022

Taiwan $ 149,777,343 $ 210,470,783
United States
 1,404,615,395 1,488,848,778
China
 267,154,140 245,168,746
Japan
 132,072,000 119,099,336
Europe, the Middle East and Africa
 117,348,237 123,767,140
Others 82,317,980 64,965,778
$ 2,153,285,095 $ 2,252,320,561

- 43 -

The Company categorized the net revenue mainly based on the countries where the customers are headquartered.

Years Ended December 31
Platform
 2023 2022

High Performance Computing $ 931,334,614 $ 927,459,536
Smartphone 810,053,991 884,505,210
Internet of Things 161,685,797 194,878,453
Automotive 133,741,115 115,678,391
Digital Consumer Electronics 46,994,528 56,317,962
Others 69,475,050 73,481,009
$ 2,153,285,095 $ 2,252,320,561


Years Ended December 31
   Resolution
 2023 2022

3-nanometer
 $ 106,434,419 $ -
5-nanometer
 628,017,081 503,914,841
7-nanometer 357,624,994 536,730,486
10-nanometer 28,577 24,775
16-nanometer 191,789,213 258,793,242
20-nanometer 10,379,144 8,848,885
28-nanometer 187,423,174 206,578,337
40/45-nanometer 115,017,630 145,748,015
65-nanometer 107,582,277 93,292,327
90-nanometer 25,772,497 40,280,729
0.11/0.13 micron 47,043,623 57,915,290
0.15/0.18 micron 86,716,114 110,631,548
0.25 micron and above 17,848,424 26,415,642
Wafer revenue $ 1,881,677,167 $ 1,989,174,117

b.    Contract balances


 December 31, 2023
December 31, 2022
January 1, 2021

Contract liabilities (classified under accrued expenses and other current liabilities)
 $ 47,760,098 $ 62,380,554 $ 33,951,838

The changes in the contract liability balances primarily result from the timing difference between the satisfaction of performance obligation and the customer’s payment.

The Company recognized revenue from the beginning balance of contract liability, which amounted to NT$61,349,317 thousand and NT$33,365,181 thousand for the years ended December 31, 2023 and 2022, respectively.


- 44 -

c.    Temporary receipts from customers
December 31,
2023
December 31,
2022

Current portion (classified under accrued expenses and other current liabilities)
 $ 114,639,514 $ 107,723,580
Noncurrent portion (classified under other noncurrent liabilities)
 163,655,128 168,399,207
$ 278,294,642 $ 276,122,787

The Company’s temporary receipts from customer are payments made by customers to the Company to retain the Company’s capacity. When the terms and conditions set forth in the agreements are subsequently satisfied, the treatment of temporary receipts, either by refund or by accounts receivable offsetting, will be determined by mutual consent.

d.    Refund liabilities

Estimated sales returns and other allowances is made and adjusted based on historical experience and the consideration of varying contractual terms. As of December 31, 2023 and 2022, the aforementioned refund liabilities amounted to NT$36,144,370 thousand and NT$50,980,669 thousand (classified under accrued expenses and other current liabilities), respectively.


20.    INTEREST INCOME

Years Ended December 31
2023 2022

Interest income
Cash and cash equivalents
 $ 17,414,490 $ 5,644,170
Financial assets at amortized cost
 411,061 313,694

$ 17,825,551 $ 5,957,864


21.    FINANCE COSTS

Years Ended December 31
2023 2022

Interest expense
Corporate bonds
 $ 5,019,826 $ 3,888,669
Lease liabilities
 334,971 231,037
Bank loans
 262 279
Others
 2,103 1,228
Less: Capitalized interest under property, plant and equipment
 (756,369 ) (880,807 )

$ 4,600,793 $ 3,240,406

Information about capitalized interest is as follows:

Years Ended December 31
2023 2022





Capitalization rate

1.08%-1.20%

0.72%-1.20%


- 45 -

22.    OTHER GAINS AND LOSSES, NET

Years Ended December 31
2023 2022

Gain on financial instruments at FVTPL, net
Mandatorily measured at FVTPL
 $ 7,243,770 $ 2,518,506
The accrual of expected credit loss of financial assets
Financial assets at amortized cost
 (5,789 ) (10,341 )
Other gains, net
 356,151 545,116

    
 $ 7,594,132 $ 3,053,281


23.    INCOME TAX

a.    Income tax expense recognized in profit or loss

Income tax expense consisted of the following:
Years Ended December 31
2023 2022
Current income tax expense
Current tax expense recognized in the current year
 $ 134,436,152 $ 144,561,484
Income tax adjustments on prior years
34,145 (489,638 )
Other income tax adjustments
234,902 205,529
    
 134,705,199 144,277,375
Deferred income tax expense (benefit)
The origination and reversal of temporary differences
 3,623,335 (24,810,515 )
Investment tax credits
 945,038 4,676,707
4,568,373 (20,133,808 )
Income tax expense recognized in profit or loss
 $ 139,273,572 $ 124,143,567

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

 Years Ended December 31

2023 2022

Income before tax $ 977,771,236 $ 1,140,673,816
Income tax expense at the statutory rate $ 195,554,247 $ 228,134,763
Tax effect of adjusting items:
Nondeductible (deductible) items in determining taxable income
 (7,861,524 ) 12,804,635
Tax-exempt income
 - (157,955,934 )
Additional income tax under the Alternative Minimum Tax Act
 - 61,578,020
Additional income tax on unappropriated earnings 9,468,943 -
The origination and reversal of temporary differences 3,623,335 (24,810,515 )
Income tax credits (61,780,476 ) 4,676,707
    
 139,004,525 124,427,676
Income tax adjustments on prior years
 34,145 (489,638 )
Other income tax adjustments
 234,902 205,529

Income tax expense recognized in profit or loss
 $ 139,273,572 $ 124,143,567



- 46 -

For the years ended December 31, 2023 and 2022, the Company applied a tax rate of 20% subject to the R.O.C. Income Tax Law.

b.    Deferred income tax balance

The analysis of deferred income tax assets and liabilities was as follows:
December 31,
2023
 December 31,
2022

Deferred income tax assets
Temporary differences
Depreciation
 $ 40,726,261 $ 44,989,153
Refund liability
 9,348,138 12,002,094
Unrealized exchange losses
 7,096,229 5,779,739
Unrealized loss on inventories
 2,702,288 2,260,011
Net defined benefit liability
 1,729,672 1,722,005
Investment tax credits
 - 945,038
Others
 753,473 10,021

    
 $ 62,356,061 $ 67,708,061

Deferred income tax liabilities
Temporary differences
Others
 $ - $ (908,273 )


Year Ended December 31, 2023

Recognized in

Balance, Other

Beginning of Comprehensive Balance,

Year Profit or Loss Income End of Year

Deferred income tax assets
Temporary differences
Depreciation
 $ 44,989,153 $ (4,262,892 ) $ - $ 40,726,261
Refund liability
 12,002,094 (2,653,956 ) - 9,348,138
Unrealized exchange losses
 5,779,739 1,316,490 - 7,096,229
Unrealized loss on inventories
 2,260,011 442,277 - 2,702,288
Net defined benefit liability
 1,722,005 (117,004 ) 124,671 1,729,672
Investment tax credits
 945,038 (945,038 ) - -
Others
 10,021 743,477 (25 ) 753,473

    
 $ 67,708,061 $ (5,476,646 ) $ 124,646 $ 62,356,061

Deferred income tax liabilities
Temporary differences
Others
 $ (908,273 ) $ 908,273 $ - $ -


- 47 -


 Year Ended December 31, 2022

Recognized in

Balance, Other

Beginning of Comprehensive Balance,

Year Profit or Loss Income End of Year

Deferred income tax assets
Temporary differences
Depreciation
 $ 34,146,437 $ 10,842,716 $ - $ 44,989,153
Refund liability
 5,903,698 6,098,396 - 12,002,094
Unrealized exchange losses
 - 5,779,739 - 5,779,739
Unrealized loss on inventories
 861,924 1,398,087 - 2,260,011
Net defined benefit liability
 1,237,086 (249,116 ) 734,035 1,722,005
Investment tax credits
 5,621,745 (4,676,707 ) - 945,038
Others
 10,100 - (79 ) 10,021

    
 $ 47,780,990 $ 19,193,115 $ 733,956 $ 67,708,061

Deferred income tax liabilities
Temporary differences
Unrealized exchange gains
 $ (706,311 ) $ 706,311 $ - $ -
Others
 (1,142,655 ) 234,382 - (908,273 )

    
 $ (1,848,966 ) $ 940,693 $ - $ (908,273 )

c.    The deductible temporary differences for which no deferred income tax assets have been recognized

As of December 31, 2023 and 2022, the aggregate deductible temporary differences for which no deferred income tax assets have been recognized amounted to NT$52,686,244 thousand and NT$26,790,935 thousand, respectively.

d.    Unused tax-exemption information

As of December 31,2022, the profits generated from the following project of the Company are exempt from income tax for a five-year period:

Tax-exemption Period
Construction and expansion of 2009
2018 to 2022

e.    The information of unrecognized deferred income tax liabilities associated with investments

As of December 31, 2023 and 2022, the aggregate taxable temporary differences associated with investments in subsidiaries not recognized as deferred income tax liabilities amounted to NT$254,182,901 thousand and NT$222,682,649 thousand, respectively.

f.Income tax examination

The tax authorities have examined income tax returns of the Company through 2021. All investment tax credit adjustments assessed by the tax authorities have been recognized accordingly.


24.    EARNINGS PER SHARE

Years Ended December 31
2023 2022
Basic EPS
 $ 32.34 $ 39.20
Diluted EPS
 $ 32.34 $ 39.20


- 48 -

EPS is computed as follows:


 Years Ended December 31
2023 2022

Basic EPS
Net income available to common shareholders
 $ 838,497,664 $ 1,016,530,249
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands)
 25,929,223 25,929,190
Basic EPS (in dollars) $ 32.34 $ 39.20
Diluted EPS
Net income available to common shareholders
 $ 838,497,664 $ 1,016,530,249
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands)
 25,929,223 25,929,190
Effects of all dilutive potential common shares (in thousands)
 44 193
Weighted average number of common shares used in the computation of diluted EPS (in thousands)
 25,929,267 25,929,383
Diluted EPS (in dollars) $ 32.34 $ 39.20


25.    SHARE-BASED PAYMENT ARRANGEMENTS

a.    Equity-settled share-based payment- RSAs

The RSAs in each year are as follows:



2023 RSAs 2022 RSAs 2021 RSAs







Resolution Date of the Company’s shareholders in its meeting

June 6, 2023 June 8, 2022 July 26, 2021
Resolution Date of the Company’s Board of Directors in its meeting

February 6, 2024 February 14, 2023 February 15, 2022
Issuance of stocks (in thousands)

2,960
 2,110 1,387
Eligible employees

Executive officers Executive officers Executive officers
Grant date/Issuance date

March 1, 2024 March 1, 2023 March 1, 2022

Vesting conditions of the aforementioned arrangement are as follow:

1) The RSAs granted to eligible employees can only be vested if

•the employee remains employed by the Company or the subsidiaries on the last date of each vesting period;

•during the vesting period, the employee may not breach any agreement with the Company or the subsidiaries or violate the Company’s work rules; and

•certain employee performance metrics and the Company’s or the subsidiaries’ business performance metrics are met.

2) The maximum percentage of granted RSAs that may be vested each year shall be as follows: one-year anniversary of the grant: 50%; two-year anniversary of the grant: 25%; and three-year anniversary of the grant: 25%; provided that the actual percentage and number of the RSAs to be vested in each year will be calculated based on the achievement of the Company’s business performance metrics.


- 49 -

3) For eligible executive officers of the Company: The maximum number of RSAs that may be vested in each year will be set as 110%, among which 100% will be subject to a calculation based on the Company’s relative Total Shareholder Return (”TSR”, including capital gains and dividends) achievement to determine the number of RSAs to be vested; this number will be further subject to a modifier to increase or decrease up to 10% based on the Compensation and People Development Committee evaluation of the Company’s Environmental, Social, and Governance (”ESG”) achievements. The number of shares so calculated should be rounded down to the nearest integral.

The Company’s TSR relative to the
TSR of S&P 500 IT Index
 Ratio of Shares to be Vested
Above the Index by X percentage points
50% + X * 2.5%, with the maximum of 100%
Equal to the Index
50%
Below the Index by X percentage points
50% - X * 2.5%, with the minimum of 0%

4) Restrictions imposed on the employees’ rights in the RSAs before the vesting conditions are fulfilled:

•During each vesting period, no employee granted RSAs, except for inheritance, may sell, pledge, transfer, give to another person, create any encumbrance on, or otherwise dispose of, any shares under the unvested RSAs.
•Before the vesting conditions are fulfilled, the attendance, proposal rights, speech rights, voting rights and etc. shall be exercised by the engaged trustee/custodian on the employee’s behalf. Any other shareholder rights including but not limited to the entitlement to any distribution regarding dividends, bonuses and capital reserve, and the subscription right of the new shares issued for any capital increase, are the same as those of holders of common shares of the Company.

5) Details of granted RSAs in each year are as follows:


 2022 RSAs 2021 RSAs

Number of Shares
(In Thousands)
Number of Shares
(In Thousands)





Balance, beginning of year

- 1,387
Issuance of stocks

2,110 -
Vested shares

- (274 )
Canceled shares

- (419 )

Balance, end of year

2,110 694

Weighted-average fair value of RSAs (in dollars)

$ 277.71 $ 325.81

The RSAs in each year are measured at fair value at grant date by using the binominal tree approach. Relevant information is as follows:


 2022 RSAs 2021 RSAs

March 1, 2023 March 1, 2022





Stock price at measurement date (in dollars)
 $ 511 $ 604
Expected price volatility
 29.34%-32.11% 25.34%-28.28%
Expected life
 1-3 years 1-3 years
Risk-free interest rate
 1.06% 0.57%

Refer to Note 26 for the compensation costs of the RSAs recognized by the Company.


- 50 -

On February 6, 2024, the Company’s Board of Directors approved the issuance of RSAs for year 2024 of no more than 4,185 thousand common shares. The grants will be made free of charge. The actual number of shares to be issued will be resolved by the Board of Directors after the RSAs is approved at the shareholders' meeting and by the competent authority.

b.    Cash-settled share-based payment arrangements

The cash-settled share-based payment arrangements in each year are as follows:

2023 Plan 2022 Plan 2021 Plan







Resolution Date of the Company’s Board of Directors in its meeting

February 6, 2024 February 14, 2023 February 15, 2022
Issuance of units (in thousands) (Note)

550 400 236
Grant date

March 1, 2024
 March 1, 2023 March 1, 2022

Note:    One unit of the right represents a right to the market value of one the Company’s common share when vested.

The vesting conditions and the ratio of units to be vested for key management personnel of the plan are the same as the aforementioned RSAs.

The fair value of compensation costs for the cash-settled share-based payment was measured by using binominal tree approach and will be measured at each reporting period until settlement. Relevant information is as follows:


 Years Ended December 31

2023 2022


2022 Plan 2021 Plan 2021 Plan







Stock price at measurement date (in dollars)

$ 593 $ 593 $ 451
Expected price volatility

24.76%-29.05% 24.76%-29.05% 28.80%-32.19%
Residual life

1-3 years 1-2 years 1-3 years
Risk-free interest rate

1.15% 1.14% 1.09%

Refer to Note 26 for the compensation costs of the cash-settled share-based payment recognized by the Company. As of December 31, 2023 and 2022, the liabilities under cash-settled share-based payment arrangement amounted to NT$62,695 thousand and NT$30,757 thousand, respectively.


26.    ADDITIONAL INFORMATION OF EXPENSES BY NATURE


 Years Ended December 31

2023 2022

a.Depreciation of property, plant and equipment and right-of-use
assets

Recognized in cost of revenue
 $ 471,343,567 $ 385,647,215
Recognized in operating expenses
 28,951,931 27,939,678
Recognized in other operating income and expenses
 5,273 8,189

    
 $ 500,300,771 $ 413,595,082



- 51 -


 Years Ended December 31

2023 2022

b.    Amortization of intangible assets

Recognized in cost of revenue
 $ 6,515,540 $ 6,069,729
Recognized in operating expenses
 2,682,436 2,637,232

    
 $ 9,197,976 $ 8,706,961

c.    Employee benefits expenses

Post-employment benefits
Defined contribution plans
 $ 4,154,345 $ 3,663,757
Defined benefit plans
 281,392 208,641
    
 4,435,737 3,872,398
Share-based payments
Equity-settled
 482,302 266,746
Cash-settled
 61,329 32,704
    
 543,631 299,450

Other employee benefits
 195,611,221 209,410,863

        
 $ 200,590,589 $ 213,582,711

Employee benefits expense summarized by function
Recognized in cost of revenue
 $ 122,143,462 $ 128,714,551
Recognized in operating expenses
 78,447,127 84,868,160

    
 $ 200,590,589 $ 213,582,711

According to the Company’s Articles of Incorporation, the Company shall allocate compensation to directors and profit sharing bonus to employees of the Company not more than 0.3% and not less than 1% of annual profits during the period, respectively.

The Company accrued profit sharing bonus to employees based on a percentage of net income before income tax, profit sharing bonus to employees and compensation to directors during the period; compensation to directors was expensed based on estimated amount payable. If there is a change in the proposed amounts after the annual parent company only financial statements are authorized for issue, the differences are recorded as a change in accounting estimate. Accrued profit sharing bonus to employees is illustrated below:
Years Ended December 31

2023 2022

Profit sharing bonus to employees
 $ 50,090,533 $ 60,702,047

The Company’s profit sharing bonus to employees and compensation to directors for 2023, 2022 and 2021 had been approved by the Board of Directors of the Company, as illustrated below:


 Years Ended December 31

2023
 2022 2021
Resolution Date of the Company’s Board of
 February 6, February 14, February 15,
Directors in its meeting
2024
 2023 2022

Profit sharing bonus to employees
 $ 50,090,533 $ 60,702,047 $ 35,601,449
Compensation to directors
 $ 551,955 $ 690,128 $ 487,537


- 52 -

There is no significant difference between the aforementioned approved amounts and the amounts charged against earnings of 2023, 2022 and 2021, respectively.

The information about the appropriations of the Company’s profit sharing bonus to employees and compensation to directors is available at the Market Observation Post System website.


27.    CASH FLOW INFORMATION

a.    Non-cash transactions
Years Ended December 31

2023 2022

Additions of property, plant and equipment
 $ 519,821,550 $ 956,066,006
Exchange of assets (78,036 ) (275,564 )
Changes in payables to contractors and equipment suppliers
 115,944,500 (57,334,833 )
Transferred to initial carrying amount of hedged items 39,898 -
Capitalized interests (756,369 ) (880,807 )

Payments for acquisition of property, plant and equipment $ 634,971,543 $ 897,574,802

b.    Reconciliation of liabilities arising from financing activities

Non-cash Changes
Balance as of January 1, 2023
Financing Cash Flow
 Foreign Exchange Movement
Leases Modifications
Other Changes
(Note)
Balance as of December 31, 2023
Hedging financial liabilities- bank loans
 $ - $ 27,908,580 $ (618,180 ) $ - $ - $ 27,290,400
Bonds payable
 379,230,474 67,511,319 67,916 - 57,856 437,067,565
Lease liabilities
 29,623,262 (2,429,250 ) - 1,552,584 334,971 29,081,567

Total
 $ 408,853,736 $ 92,990,649 $ (550,264 ) $ 1,552,584 $ 392,827 $ 503,239,532

Non-cash Changes
Balance as of January 1, 2022 Financing Cash Flow Foreign Exchange Movement Leases Modifications
Other Changes
(Note)
 Balance as of December 31, 2022
Short-term loans
 $ 114,921,333 $ (111,959,992 ) $ (2,372,053 ) $ - $ (589,288 ) $ -
Bonds payable
 312,183,409 60,930,472 6,071,821 - 44,772 379,230,474
Lease liabilities
 20,333,476 (2,076,495 ) - 11,135,244 231,037 29,623,262

Total
 $ 447,438,218 $ (53,106,015 ) $ 3,699,768 $ 11,135,244 $ (313,479 ) $ 408,853,736

Note:    Other changes include discounts on short-term loans, amortization of bonds payable and financial cost of lease liabilities.


28.    CAPITAL MANAGEMENT

The objective of the Company’s capital management is to maintain a capital structure that ensures liquidity and supports a solid investment grade credit rating. The capital structure includes both debt and equity. The Company adjusts its capital structure mainly through changes in the level of debt and adjustments of dividend payout to shareholders.

The Company’s capital management policy remained unchanged in 2023. The Company’s current credit ratings are AA- from Standard & Poor’s and Aa3 from Moody’s, same as those as of December 31, 2022.

- 53 -


29.    FINANCIAL INSTRUMENTS

a.    Categories of financial instruments


 December 31, 2023 December 31, 2022

Financial assets
FVTPL (Note 1)
 $ 624,685 $ 552,255
FVTOCI (Note 2)
 6,372,267 8,340,347
Amortized cost (Note 3)
 944,953,016 903,070,406

    
 $ 951,949,968 $ 911,963,008
Financial liabilities
FVTPL (Note 4)
 $ 25,673 $ 17,468
Hedging financial liabilities
 27,290,400 -
Amortized cost (Note 5)
 1,124,627,242 1,161,623,982

    
 $ 1,151,943,315 $ 1,161,641,450

Note 1: Financial assets mandatorily measured at FVTPL.

Note 2: Including notes and accounts receivable (net) and equity investments.

Note 3: Including cash and cash equivalents, financial assets at amortized cost, notes and accounts receivable (including related parties), other receivables, refundable deposits, and temporary payments (including those classified under other current assets and other noncurrent assets).

Note 4: Held for trading.

Note 5: Including accounts payable (including related parties), payables to contractors and equipment suppliers, cash dividends payable, accrued expenses and other current liabilities, bonds payable, guarantee deposits and other noncurrent liabilities.

b.    Financial risk management objectives

The Company manages its exposure to foreign currency risk, interest rate risk, equity price risk, credit risk and liquidity risk with the objective to reduce the potentially adverse effects the market uncertainties may have on its financial performance.

The plans for material treasury activities are reviewed by the Audit and Risk Committee and/or Board of Directors in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, the Company must comply with certain treasury procedures that provide guiding principles for overall financial risk management and segregation of duties.

c.    Market risk

The Company is exposed to the financial market risks, primarily changes in foreign currency exchange rates, interest rates and equity investment prices. A portion of these risks is hedged.

Foreign currency risk

Substantially all the Company’s sales are denominated in U.S. dollars and over half of its capital expenditures and equity investments are denominated in currencies other than NT dollars, primarily in U.S. dollars, Japanese yen and Euros.
- 54 -

As a result, any significant fluctuations to its disadvantage in the exchanges rate of NT dollar against such currencies, in particular a weakening of U.S. dollar against NT dollars, would have an adverse impact on the revenue and operating profit as expressed in NT dollar. The Company uses foreign currency derivative contracts and non-derivative financial instruments, such as currency forwards, currency swaps and bank loans denominated in foreign currency, to protect against currency exchange rate risks associated with non-NT dollar-denominated assets and liabilities, certain forecasted transactions, and net investments in foreign operations. These hedges reduce, but do not entirely eliminate, the effect of foreign currency exchange rate movements on the assets and liabilities.

Based on a sensitivity analysis performed on the Company’s total monetary assets and liabilities for the years ended December 31, 2023 and 2022, a hypothetical adverse foreign currency exchange rate change of 10% would have decreased its net income by NT$726,145 thousand and NT$1,649,664 thousand, respectively, after taking into account hedges and offsetting positions.

Interest rate risk

The Company is exposed to interest rate risks primarily in relation to its bank deposits and bank loans. Changes in interest rates affect the interest earned on the Company’s bank deposits, as well as the interest paid on its bank loans. Because all of the Company’s bonds issued are fixed-rate and measured at amortized cost, changes in interest rates would not affect the future cash flows or the carrying amount.

Other price risk

The Company is exposed to equity price risk arising from financial assets at FVTOCI.

Assuming a hypothetical decrease of 10% in prices of the equity investments at the end of the reporting period for the years ended December 31, 2023 and 2022, the other comprehensive income would have decreased by NT$76,876 thousand and NT$89,297 thousand, respectively.

d.    Credit risk management

Credit risk refers to the risk that a counterparty may default on its contractual obligations resulting in financial losses to the Company. The Company is exposed to credit risks from operating activities, primarily accounts receivable, and from investing activities, primarily deposits, fixed-income investments and other financial instruments with banks. Credit risk is managed separately for business related and financial related exposures. As of the end of the reporting period, the Company’s maximum credit risk exposure is equal to the carrying amount of financial assets.

Business related credit risk

The Company’s accounts receivable are from its customers worldwide. The majority of the Company’s outstanding accounts receivable are not covered by collaterals or guarantees. While the Company has procedures to monitor and manage credit risk exposure on accounts receivable, there is no assurance such procedures will effectively eliminate losses resulting from its credit risk. This risk is heightened during periods when economic conditions worsen.

As of December 31, 2023 and 2022, the Company’s ten largest customers accounted for 85% and 69% of accounts receivable, respectively. The Company considers the concentration of credit risk for the remaining accounts receivable not material.

Financial credit risk

The Company mitigates its financial credit risk by selecting counterparties with investment grade credit ratings and by limiting the exposure to any individual counterparty. The Company regularly monitors and reviews the limit applied to counterparties and adjusts the limit according to market conditions and the credit standing of the counterparties.


- 55 -

The Company assesses the 12-month expected credit loss and lifetime expected credit loss based on the probability of default and loss given default provided by external credit rating agencies. The current credit risk assessment policies are as follows:
Category Description Basis for Recognizing Expected Credit Loss Expected Credit Loss Ratio
Performing

Credit rating is investment grade on valuation date

12 months expected credit loss
 0-0.1%
Doubtful

Credit rating is non-investment grade on valuation date

Lifetime expected credit loss-not credit impaired
 -
In default

Credit rating is CC or below on valuation date

Lifetime expected credit loss-credit impaired
 -
Write-off

There is evidence indicating that the debtor is in severe financial difficulty and the Company has no realistic prospect of recovery

Amount is written off
 -

For the years ended December 31, 2023 and 2022, the expected credit loss increased NT$5,789 thousand and NT$10,341 thousand, respectively. The changes were mainly due to increased investment amount and adjusted investment portfolio.

e.    Liquidity risk management

The objective of liquidity risk management is to ensure the Company has sufficient liquidity to fund its business operations over the next 12 months. The Company manages its liquidity risk by maintaining adequate cash and cash equivalents, financial assets at amortized cost-current and sufficient cost-efficient funding.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments, including principal and interest.

Less Than
1 Year		 1-3 Years 3-5 Years More Than
5 Years		 Total
December 31, 2023

Non-derivative financial liabilities

Hedging financial liabilities-bank loans
 $ 27,290,400 $ - $ - $ - $ 27,290,400
Accounts payable (including related parties)
 57,763,188 - - - 57,763,188
Payables to contractors and equipment suppliers
 84,146,173 - - - 84,146,173
Accrued expenses and other current liabilities
191,976,278 - - - 191,976,278
Bonds payable
 12,455,260 96,892,557 190,937,676 222,606,055 522,891,548
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note)
 2,457,570 4,475,101 4,203,205 21,136,670 32,272,546
Others
 - 165,188,432 6,303,135 2,908,666 174,400,233
    
 376,088,869 266,556,090 201,444,016 246,651,391 1,090,740,366

Derivative financial instruments

Forward exchange contracts
Outflows
 51,741,026 - - - 51,741,026
Inflows
 (52,317,678 ) - - - (52,317,678 )
    
 (576,652 ) - - - (576,652 )

        
 $ 375,512,217 $ 266,556,090 $ 201,444,016 $ 246,651,391 $ 1,090,163,714
(Continued)

- 56 -

Less Than
1 Year		 1-3 Years 3-5 Years More Than
5 Years		 Total
December 31, 2022

Non-derivative financial liabilities

Accounts payable (including related parties)
 $ 58,783,586 $ - $ - $ - $ 58,783,586
Payables to contractors and equipment suppliers
 200,046,018 - - - 200,046,018
Accrued expenses and other current liabilities
202,361,596 - - - 202,361,596
Bonds payable
 22,247,420 39,372,048 160,243,071 228,241,509 450,104,048
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note)
 2,356,314 4,358,739 4,163,558 21,795,680 32,674,291
Others
 - 166,266,719 10,518,481 783,181 177,568,381
    
 485,794,934 209,997,506 174,925,110 250,820,370 1,121,537,920

Derivative financial instruments

Forward exchange contracts
Outflows
 74,107,091 - - - 74,107,091
Inflows
 (74,837,641 ) - - - (74,837,641 )
    
 (730,550 ) - - - (730,550 )

        
 $ 485,064,384 $ 209,997,506 $ 174,925,110 $ 250,820,370 $ 1,120,807,370
(Concluded)

Note:    Information about the maturity analysis for lease liabilities more than 5 years:

5-10 Years 10-15 Years 15-20 Years
More Than
20 Years
 Total
December 31, 2023
Lease liabilities
 $ 9,629,306 $ 7,088,110 $ 4,101,046 $ 318,208 $ 21,136,670

December 31, 2022
Lease liabilities
 $ 9,497,599 $ 7,291,192 $ 4,222,404 $ 784,485 $ 21,795,680

f.    Fair value of financial instruments

1)    Fair value measurements recognized in the parent company only balance sheets

Fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

•Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
•Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
•Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).



- 57 -


2)    Fair value of financial instruments that are measured at fair value on a recurring basis

Fair value hierarchy

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis:


 December 31, 2023

Level 2 Level 3 Total

Financial assets at FVTPL

Mandatorily measured at FVTPL
Forward exchange contracts $ 624,685 $ - $ 624,685

Financial assets at FVTOCI

Investments in equity instruments
Non-publicly traded equity investments
 $ - $ 960,950 $ 960,950
Notes and accounts receivable, net
 5,411,317 - 5,411,317

    
 $ 5,411,317 $ 960,950 $ 6,372,267

Financial liabilities at FVTPL

Held for trading
Forward exchange contracts $ 25,673 $ - $ 25,673


December 31, 2022

Level 2 Level 3 Total

Financial assets at FVTPL

Mandatorily measured at FVTPL
Forward exchange contracts $ 552,255 $ - $ 552,255

Financial assets at FVTOCI

Investments in equity instruments
Non-publicly traded equity investments
 $ - $ 1,014,741 $ 1,014,741
Notes and accounts receivable, net
 7,325,606 - 7,325,606

    
 $ 7,325,606 $ 1,014,741 $ 8,340,347

Financial liabilities at FVTPL

Held for trading
Forward exchange contracts $ 17,468 $ - $ 17,468



- 58 -

Reconciliation of Level 3 fair value measurements of financial assets

The financial assets measured at Level 3 fair value were equity investments classified as financial assets at FVTOCI. Reconciliations for the years ended December 31, 2023 and 2022 were as follows:


 Years Ended December 31

2023 2022

Balance, beginning of year
 $ 1,014,741 $ 998,400
Recognized in other comprehensive income
 (53,666 ) 18,979
Disposals and proceeds from return of capital of investments
 (125 ) (2,638 )
Balance, end of year
 $ 960,950 $ 1,014,741

Valuation techniques and assumptions used in Level 2 fair value measurement

The fair values of financial assets and financial liabilities are determined as follows:

•Forward exchange contracts are measured using forward exchange rates and discount rates derived from quoted market prices.

•The fair value of accounts receivable classified as at FVTOCI is determined by the present value of future cash flows based on the discount rate that reflects the credit risk of counterparties.

Valuation techniques and assumptions used in Level 3 fair value measurement

The fair values of non-publicly traded equity investments are mainly determined by using the asset approach and market approach.

The asset approach takes into account the net asset value measured at the fair value by independent parties.

The market approach is used to arrive at their fair values, for which the recent financing activities of investees, the market transaction prices of the similar companies and market conditions are considered.

3)    Fair value of financial instruments that are not measured at fair value

Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments in the parent company only financial statements that are not measured at fair value approximate their fair values.

Fair value hierarchy

The table below sets out the fair value hierarchy for the Company’s financial assets and liabilities which are not required to be measured at fair value:


 December 31, 2023

Carrying Level 2

Amount Fair Value

Financial assets
Financial assets at amortized costs
Commercial paper
 $ 18,371,705 $ 18,385,329
(Continued)

- 59 -


 December 31, 2023

Carrying Level 2

Amount Fair Value
Financial liabilities
Financial liabilities at amortized costs
Bonds payable
 $ 446,867,565 $ 418,841,652
(Concluded)
December 31, 2022

Carrying Level 2

Amount Fair Value

Financial assets
Financial assets at amortized costs
Commercial paper
 $ 48,732,476 $ 48,882,028
Financial liabilities
Financial liabilities at amortized costs
Bonds payable
 $ 379,230,474 $ 349,956,767

Valuation techniques and assumptions used in Level 2 fair value measurement

The fair value of the Company’s bonds payable is determined by quoted market prices provided by third party pricing services.

The fair value of commercial paper is determined by the present value of future cash flows based on the discounted curves that are derived from the quoted market prices.


30.    RELATED PARTY TRANSACTIONS

The significant transactions between the Company and its related parties, other than those disclosed in other notes, are summarized as follows:

a.    Related party name and categories

Related Party Name Related Party Categories


TSMC China
 Subsidiaries
TSMC Nanjing
 Subsidiaries
TSMC Arizona
 Subsidiaries
VisEra Tech
 Subsidiaries
TSMC North America
 Subsidiaries
TSMC Europe
 Subsidiaries
TSMC JDC
 Subsidiaries
TSMC 3DIC
 Subsidiaries
JASM
 Subsidiaries
TSMC Japan
 Subsidiaries
TSMC Korea
 Subsidiaries
TSMC Design Technology Canada Inc. (TSMC Canada)
 Indirect Subsidiaries
(Continued)

- 60 -

Related Party Name Related Party Categories


TSMC Technology, Inc. (TSMC Technology)
 Indirect Subsidiaries
TSMC Washington, LLC (TSMC Washington) (Note)
 Indirect Subsidiaries
GUC
 Associates
VIS
 Associates
SSMC
 Associates
Xintec
 Associates
(Concluded)
Note: WaferTech, LLC was renamed to TSMC Washington, LLC in December 2023.

b.    Net revenue

Years Ended December 31

2023 2022

Item
 Related Party Name/Categories

Net revenue from sale of goods
TSMC North America
 $ 1,459,559,406 $ 1,538,849,403

Associates
 8,903,425 11,356,410

Other subsidiaries
 579,810 187,169



    
 $ 1,469,042,641 $ 1,550,392,982

c.    Purchases


 Years Ended December 31

2023 2022

Related Party Categories

Subsidiaries
 $ 96,198,620 $ 81,923,311
Associates
 4,562,206 6,422,831
    
 $ 100,760,826 $ 88,346,142

d.    Receivables from related parties
December 31,
2023
December 31,
2022

Item
 Related Party Name/Categories

Receivables from related
TSMC North America $ 154,789,324 $ 171,738,863
parties
Associates
 471,728 1,300,302

Other subsidiaries
 825 5,647



$ 155,261,877 $ 173,044,812

Other receivables from related
TSMC North America $ 3,747,684 $ 6,184,798
parties
 Other subsidiaries 540,767 104,640

Associates 71,871 68,487



    
 $ 4,360,322 $ 6,357,925


- 61 -

e.    Other noncurrent assets
December 31,
2023
December 31,
2022

Item
 Related Party Name

Temporary payments
 JASM $ 12,132,766 $ 6,925,782

f.    Payables to related parties
December 31,
2023
December 31,
2022

Item
 Related Party Name/Categories

Payables to related parties
TSMC Nanjing
 $ 5,064,282 $ 4,105,919

TSMC China 2,312,769 2,296,083

Xintec 1,020,153 1,047,374

Other subsidiaries
 1,176,420 2,006,484

Other associates
 546,071 595,184


$ 10,119,695 $ 10,051,044

g.    Accrued expenses and other current liabilities
December 31,
2023
December 31,
2022

Item
 Related Party Name/Categories

Other payables and other
Subsidiaries $ 1,150,882 $ 961,365
current liabilities
 Associates 1,666,113 111,834


$ 2,816,995 $ 1,073,199

Temporary receipts
TSMC North America $ 99,904,122 $ 97,634,360

Associates
 153,735 -


$ 100,057,857 $ 97,634,360

h.    Other noncurrent liabilities
December 31,
2023
December 31,
2022

Item
 Related Party Name

Temporary receipts
TSMC North America $ 134,052,101 $ 142,132,113

Associates
 153,735 -


$ 134,205,836 $ 142,132,113



- 62 -

i.    Others

Years Ended December 31

2023 2022

Item
 Related Party Categories

Manufacturing expenses
 Associates $ 5,032,445 $ 5,997,687

Subsidiaries 11,504 21,662
$ 5,043,949 $ 6,019,349
Research and development
 Subsidiaries $ 5,865,252 $ 5,264,358
expenses Associates 305,073 258,008


$ 6,170,325 $ 5,522,366

The sales prices and payment terms to related parties were not significantly different from those of sales to third parties. For other related party transactions, price and terms were determined in accordance with mutual agreements.

The Company leased factory and office from associates. The lease terms and prices were both determined in accordance with mutual agreements. The rental expenses were paid to associates monthly; the related expenses were both classified under manufacturing expenses.

The Company deferred the disposal gain or loss derived from sales of property, plant and equipment to related parties using equity method, and then recognized such gain or loss over the depreciable lives of the disposed assets.

j.    Compensation of key management personnel

The compensation to directors and other key management personnel were as follows:


 Years Ended December 31

2023 2022
Short-term employee benefits $ 3,271,057 $ 4,221,962
Post-employment benefits 3,208 2,618
Share-based payments
 525,808 286,227

$ 3,800,073 $ 4,510,807

The compensation to directors and other key management personnel were determined by the Compensation and People Development Committee of the Company in accordance with the individual performance and market trends.


31.    SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Significant contingent liabilities and unrecognized commitments of the Company as of the end of the reporting period, excluding those disclosed in other notes, were as follows:

a.Under a technical cooperation agreement with Industrial Technology Research Institute, the R.O.C. Government or its designee approved by the Company can use up to 35% of the Company’s capacity provided the Company’s outstanding commitments to its customers are not prejudiced. The term of this agreement is for five years beginning from January 1, 1987 and is automatically renewed for successive periods of five years unless otherwise terminated by either party with one year prior notice. As of the end of reporting period, the R.O.C. Government did not invoke such right.
- 63 -


b.Under a Shareholders Agreement entered into with Philips and EDB Investments Pte Ltd. on March 30, 1999, the parties formed a joint venture company, SSMC, which is an integrated circuit foundry in Singapore. The Company’s equity interest in SSMC was 32%. Nevertheless, in September 2006, Philips spun-off its semiconductor subsidiary which was renamed as NXP B.V. Further, the Company and NXP B.V. purchased all the SSMC shares owned by EDB Investments Pte Ltd. pro rata according to the Shareholders Agreement on November 15, 2006. After the purchase, the Company and NXP B.V. currently own approximately 39% and 61% of the SSMC shares, respectively. The Company and NXP B.V. are required, in the aggregate, to purchase at least 70% of SSMC’s capacity, but the Company alone is not required to purchase more than 28% of the capacity. If any party defaults on the commitment and the capacity utilization of SSMC falls below a specific percentage of its capacity, the defaulting party is required to compensate SSMC for all related unavoidable costs. There was no default from the aforementioned commitment as of the end of reporting period.

c.In September 2022, Daedalus Prime LLC (“Daedalus”) filed complaints in the U.S. International Trade Commission (“ITC”) and the U.S. District Court for the Eastern District of Texas alleging that the Company, TSMC North America, and other companies infringe four U.S. patents. The ITC instituted an investigation in October 2022. In June 2023, Daedalus dropped two of the asserted patents in the ITC. Also in June 2023, Daedalus filed another complaint in the Eastern District of Texas alleging that the Company infringes five U.S. patents. In September 2023, the ITC granted the parties’ joint motion to suspend the procedural schedule while the parties finalize the settlement agreement and then request termination of the ITC Investigation and related litigations. In October 2023, the parties jointly requested the ITC to terminate the investigation and Eastern District of Texas to dismiss the related litigations. In November 2023, the ITC investigation was terminated and the related litigations in the Eastern District of Texas were dismissed.

d.The Company entered into long-term purchase agreements of materials and supplies and agreements of waste disposal with multiple suppliers. The relative minimum fulfillment quantity and price are specified in the agreements.

e.The Company entered into a long-term purchase agreement of equipment. The relative fulfillment quantity and price are specified in the agreement.

f.The Company entered into long-term energy purchase agreements with multiple suppliers. The relative fulfillment period, quantity and price are specified in the agreements.

g.As of the end of reporting period, the Company provided endorsement guarantees of NT$2,558,559 thousand to its subsidiary, TSMC North America, in respect of providing endorsement guarantees for office leasing contract.

h.As of the end of reporting period, the Company provided a NT$230,602,500 thousand endorsement guarantee for its subsidiary, TSMC Global, in respect of its issuance of US dollar-denominated senior unsecured corporate bonds.

i.As of the end of reporting period, the Company provided a NT$369,960,818 thousand endorsement guarantee for its subsidiary, TSMC Arizona, in respect of its issuance of US dollar-denominated senior unsecured corporate bonds and operation needs.

j.The Company entrusted financial institutions to provide performance guarantees mainly for import and export of goods, lease agreement and energy purchase agreement. As of December 31, 2023 and 2022, the aforementioned guarantee amounted to NT$8,012,973 thousand and NT$7,623,262 thousand, respectively.



- 64 -

32.    EXCHANGE RATE INFORMATION OF FOREIGN-CURRENCY FINANCIAL ASSETS AND LIABILITIES

The following information was summarized according to the foreign currencies other than the functional currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies were as follows:
Foreign Currencies
(In Thousands)
 Exchange Rate (Note)
Carrying Amount
(In Thousands)


December 31, 2023

Financial assets
Monetary items
USD
 $ 13,930,953 30.747 $ 428,335,022
EUR
 408,480 34.175 13,959,812
JPY
 7,683,178 0.2192 1,684,153




Financial liabilities






Monetary items



USD
 13,381,760 30.747 411,448,963
EUR
 778,452 34.175 26,603,608
JPY
 194,498,358 0.2192 42,634,040
December 31, 2022

Financial assets
Monetary items
USD
 13,953,942

30.713

428,567,422
EUR
 7,863

32.838

258,211
JPY
 124,526,582

0.2331

29,027,146




Financial liabilities






Monetary items



USD
 14,450,017

30.713

443,803,373
EUR
 2,352,220

32.838

77,242,213
JPY
 125,984,842

0.2331

29,367,067

Note:    Exchange rate represents the number of NT dollar for which one foreign currency could be exchanged.

Please refer to the parent company only statements of comprehensive income for the total of realized and unrealized foreign exchange gain and loss for the years ended December 31, 2023 and 2022, respectively. Since there were varieties of foreign currency transactions of the Company, the Company was unable to disclose foreign exchange gain (loss) towards each foreign currency with significant impact.



- 65 -


33.    ADDITIONAL DISCLOSURES

Following are the additional disclosures required by the Securities and Futures Bureau for the Company:

a.    Financings provided: See Table 1 attached;

b.    Endorsement/guarantee provided: See Table 2 attached;

c.    Marketable securities held (excluding investments in subsidiaries and associates): See Table 3 attached;

d.    Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: See Table 4 attached;

e.    Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: See Table 5 attached;

f.    Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: None;

g.    Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: See Table 6 attached;

h.    Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 7 attached;

i.    Information about the derivative financial instruments transaction: See Notes 7 and 9;

j.    Names, locations, and related information of investees over which the Company exercises significant influence (excluding information on investment in mainland China): See Table 8 attached;

k.    Information on investment in mainland China

1) The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: See Table 9 attached.

2) Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: See Note 30.

l.    Information of major shareholder

List of all shareholders with ownership of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder: See Table 10 attached.


34.    OPERATING SEGMENTS INFORMATION

The Company has provided the operating segments disclosure in the consolidated financial statements.

- 66 -

TABLE 1


Taiwan Semiconductor Manufacturing Company Limited and Investees

FINANCINGS PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


No. Financing Company Counterparty Financial Statement Account Related Party
Maximum
Balance for the Period (Foreign Currencies in Thousands) (Note 3)
Ending Balance
(Foreign Currencies in Thousands)
(Note 3)
Amount Actually Drawn
(Foreign Currencies in Thousands)
 Interest Rate Nature for Financing Transaction Amounts Reason for Financing Allowance for Bad Debt Collateral
Financing Limits for Each Borrowing Company
(Notes 1 and 2)
Financing Company’s Total Financing Amount Limits
(Notes 1 and 2)
Item Value





0
TSMC
 TSMC Arizona
Other receivables from related parties
 Yes
$
(US$
92,241,000
3,000,000
$
)
$
(US$
92,241,000
3,000,000
$
)
 $ - -
The need for short-term financing
$ -
Capacity installation and working capital
 $ - - $ - $ 345,891,363 $ 691,782,725
1
TSMC China
 TSMC Nanjing
Other receivables from related parties
 Yes
$
(RMB
(US$
73,510,570
8,800,000
1,150,000
$
)&
)
$
(RMB
(US$
51,987,670
8,800,000
450,000
$
)&
)
$
(RMB
38,151,520
8,800,000
$
)
 1.30%-1.50%
The need for short-term and long-term financing
-
Operating capital
 - - - 95,757,396 95,757,396





Note 1:    The amount available for lending to TSMC Arizona from TSMC shall not exceed ten percent (10%) of the net worth of TSMC, and the total amount available for lending from TSMC to borrowers shall not exceed twenty percent (20%) of the net worth of TSMC.

Note 2:    The aggregate amount available for lending to TSMC Nanjing from TSMC China shall not exceed the net worth of TSMC China.

Note 3:    The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.

- 67 -

TABLE 2


Taiwan Semiconductor Manufacturing Company Limited and Investees

ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


No.
Endorsement/
Guarantee Provider
 Guaranteed Party
Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party
(Notes 1 and 2)
Maximum Balance
for the Period
(Foreign Currencies in Thousands)
(Note 3)
Ending Balance
(Foreign Currencies in Thousands)
(Note 3)
Amount Actually Drawn
(US$ in Thousands)
 Amount of Endorsement/ Guarantee Collateralized by Properties Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements
Maximum Endorsement/ Guarantee Amount Allowable
(Notes 1 and 2)
Guarantee
Provided by
Parent Company
Guarantee
Provided by
A Subsidiary
Guarantee
Provided to Subsidiaries in Mainland China
Name Nature of Relationship





0
TSMC
TSMC North America
 Subsidiary $ 1,383,565,451
$
(US$
2,558,559
83,213
$
)
$
(US$
2,558,559
83,213
$
)
$
(US$
2,558,559
83,213
$
)
 $ - 0.07% $ 1,383,565,451
Yes
No
No

TSMC Global
 Subsidiary 1,383,565,451
$
(US$
230,602,500
7,500,000
$
)
$
(US$
230,602,500
7,500,000
$
)
$
(US$
230,602,500
7,500,000
$
)
 - 6.67% 1,383,565,451
Yes
No
No

TSMC Arizona
 Subsidiary 1,383,565,451
$
(US$
369,960,818
12,032,420
$
)
$
(US$
369,960,818
12,032,420
$
)
$
(US$
246,972,818
8,032,420
$
)
 - 10.70% 1,383,565,451
Yes
No
No

TSMC Development
 Subsidiary 1,383,565,451
$
(US$
13,307,302
432,800
$
)
 - - - - 1,383,565,451
Yes
No
No
1 TSMC Japan TSMC JDC
The same parent company
 326,007
$
(JPY
289,344
1,320,000
$
)
$
(JPY
289,344
1,320,000
$
)
$
(JPY
289,344
1,320,000
$
)
 - 0.01% 326,007
No
No
No










Note 1:    The total amount of the endorsement/guarantee provided by TSMC to TSMC North America, TSMC Global, TSMC Arizona and TSMC Development shall not exceed forty percent (40%) of TSMC’s net worth.

Note 2:    The total amount of the endorsement/guarantee provided by TSMC Japan to TSMC JDC shall not exceed two hundred and fifty percent (250%) of TSMC Japan’s net worth.

Note 3:    The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.

- 68 -

TABLE 3


Taiwan Semiconductor Manufacturing Company Limited and Investees

MARKETABLE SECURITIES HELD
December 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC
Non-publicly traded equity investments




Shin-Etsu Handotai Taiwan Co., Ltd.
-
Financial assets at fair value through other comprehensive income
 10,500 $ 430,500 7 $ 430,500


United Industrial Gases Co., Ltd.
-
〃
 21,230 421,211 10 421,211


Global Investment Holding Inc.
-
〃
 10,442 109,239 6 109,239


Crimson Asia Capital
-
〃
 - - 1 -







Commercial paper




Cathay Financial Holding Co., Ltd.
-
Financial assets at amortized cost
 697 6,924,665 N/A 6,929,220


Nan Ya Plastics Corporation
-
〃
 600 5,976,677 N/A 5,982,726


China Steel Corporation
-
〃
 200 1,985,094 N/A 1,986,400


Formosa Plastics Corporation
-
〃
 100 996,260 N/A 997,268


CPC Corporation, Taiwan
-
〃
 100 995,553 N/A 995,420


Formosa Chemicals & Fibre Corporation
-
〃
 100 994,540 N/A 995,374


Taiwan Power Company
-
〃
 50 498,916 N/A 498,921






TSMC Partners
Fund




Matter Venture Partners Fund I, L.P.
-
Financial assets at fair value through Profit or Loss
 - US$ 3,587 7 US$ 3,587







Non-publicly traded equity investments




Shanghai Walden Venture Capital Enterprise
-
Financial assets at fair value through other comprehensive income
 - US$ 28,969 6 US$ 28,969


Walden Technology Ventures Investments II, L.P.
-
〃
 - US$ 18,187 9 US$ 18,187


Walden Technology Ventures Investments III, L.P.
-
〃
 - US$ 13,458 4 US$ 13,458


Tela Innovations
-
〃
 6,942 - 22 -







Publicly traded stocks




ARM Holdings plc
-
Financial assets at fair value through other comprehensive income
 1,961 US$ 147,353 - US$ 147,353


Movella Holdings Inc.
-
〃
 3,095 US$ 1,873 6 US$ 1,873






TSMC Global
Corporate bond




Bank of America Corporation
-
Financial assets at fair value through other comprehensive income
 - US$ 86,588 N/A US$ 86,588


Morgan Stanley
-
〃
 - US$ 76,777 N/A US$ 76,777


The Goldman Sachs Group, Inc.
-
〃
 - US$ 58,554 N/A US$ 58,554


Wells Fargo & Company
-
〃
 - US$ 58,351 N/A US$ 58,351


JPMorgan Chase & Co.
-
〃
 - US$ 58,153 N/A US$ 58,153


Citigroup Inc.
-
〃
 - US$ 50,436 N/A US$ 50,436


Sumitomo Mitsui Financial Group, Inc.
-
〃
 - US$ 45,172 N/A US$ 45,172


Mitsubishi UFJ Financial Group, Inc.
-
〃
 - US$ 36,903 N/A US$ 36,903


Barclays PLC
-
〃
 - US$ 35,277 N/A US$ 35,277


HSBC Holdings plc
-
〃
 - US$ 30,124 N/A US$ 30,124


Banco Santander, S.A.
-
〃
 - US$ 29,015 N/A US$ 29,015






(Continued)

- 69 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
AbbVie Inc.
-
Financial assets at fair value through other comprehensive income
 - US$ 26,895 N/A US$ 26,895


Royal Bank of Canada
-
〃
 - US$ 25,469 N/A US$ 25,469


CVS Health Corporation
-
〃
 - US$ 24,591 N/A US$ 24,591


Lloyds Banking Group plc
-
〃
 - US$ 24,131 N/A US$ 24,131


BPCE SA
-
〃
 - US$ 23,875 N/A US$ 23,875


Oracle Corporation
-
〃
 - US$ 23,751 N/A US$ 23,751


The Toronto-Dominion Bank
-
〃
 - US$ 22,568 N/A US$ 22,568


Capital One Financial Corporation
-
〃
 - US$ 21,572 N/A US$ 21,572


Credit Agricole SA London Branch
-
〃
 - US$ 20,395 N/A US$ 20,395


BNP Paribas SA
-
〃
 - US$ 20,345 N/A US$ 20,345


Athene Global Funding
-
〃
 - US$ 20,297 N/A US$ 20,297


Fédération des caisses Desjardins du Québec
-
〃
 - US$ 19,320 N/A US$ 19,320


Equitable Financial Life Global Funding
-
〃
 - US$ 18,910 N/A US$ 18,910


National Securities Clearing Corporation
-
〃
 - US$ 18,429 N/A US$ 18,429


AIG Global Funding
-
〃
 - US$ 18,428 N/A US$ 18,428


Metropolitan Life Global Funding I
-
〃
 - US$ 18,299 N/A US$ 18,299


ABN AMRO Bank N.V.
-
〃
 - US$ 18,247 N/A US$ 18,247


Principal Life Global Funding II
-
〃
 - US$ 17,932 N/A US$ 17,932


Nationwide Building Society
-
〃
 - US$ 17,760 N/A US$ 17,760


Sumitomo Mitsui Trust Bank, Limited
-
〃
 - US$ 17,286 N/A US$ 17,286


Guardian Life Global Funding
-
〃
 - US$ 17,140 N/A US$ 17,140


U.S. Bancorp.
-
〃
 - US$ 16,962 N/A US$ 16,962


Danske Bank A/S
-
〃
 - US$ 16,698 N/A US$ 16,698


Société Générale Société anonyme
-
〃
 - US$ 16,589 N/A US$ 16,589


The Bank of Nova Scotia
-
〃
 - US$ 16,474 N/A US$ 16,474


Volkswagen Group of America Finance, LLC
-
〃
 - US$ 16,251 N/A US$ 16,251


The Bank of New York Mellon Corporation
-
〃
 - US$ 16,064 N/A US$ 16,064


Nomura Holdings, Inc.
-
〃
 - US$ 15,719 N/A US$ 15,719


Banque Fédérative du Crédit Mutuel
-
〃
 - US$ 14,439 N/A US$ 14,439


UBS Group AG
-
〃
 - US$ 14,328 N/A US$ 14,328


Standard Chartered PLC
-
〃
 - US$ 14,304 N/A US$ 14,304


Protective Life Global Funding
-
〃
 - US$ 14,155 N/A US$ 14,155


American Express Company
-
〃
 - US$ 13,685 N/A US$ 13,685


UnitedHealth Group Incorporated
-
〃
 - US$ 13,673 N/A US$ 13,673


Hyundai Capital America
-
〃
 - US$ 13,567 N/A US$ 13,567


NTT Finance Corporation
-
〃
 - US$ 13,544 N/A US$ 13,544


Amgen Inc.
-
〃
 - US$ 13,330 N/A US$ 13,330


AerCap Ireland Capital Designated Activity Company
-
〃
 - US$ 13,278 N/A US$ 13,278


Enel Finance International N.V.
-
〃
 - US$ 13,139 N/A US$ 13,139


Penske Truck Leasing Co., L.P.
-
〃
 - US$ 13,095 N/A US$ 13,095


Intuit Inc.
-
〃
 - US$ 12,686 N/A US$ 12,686


Pfizer Investment Enterprises Pte. Ltd.
-
〃
 - US$ 12,590 N/A US$ 12,590


Apple Inc.
-
〃
 - US$ 12,489 N/A US$ 12,489


Coöperatieve Rabobank U.A.
-
〃
 - US$ 12,434 N/A US$ 12,434


New York Life Global Funding
-
〃
 - US$ 12,343 N/A US$ 12,343


Santander UK Group Holdings plc
-
〃
 - US$ 12,277 N/A US$ 12,277


NatWest Markets Plc
-
〃
 - US$ 11,873 N/A US$ 11,873


ING Groep N.V.
-
〃
 - US$ 11,773 N/A US$ 11,773


Nordea Bank Abp
-
〃
 - US$ 11,677 N/A US$ 11,677






(Continued)

- 70 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Mizuho Financial Group, Inc.
-
Financial assets at fair value through other comprehensive income
 - US$ 11,665 N/A US$ 11,665


ASB Bank Limited
-
〃
 - US$ 11,504 N/A US$ 11,504


Northwestern Mutual Global Funding
-
〃
 - US$ 11,332 N/A US$ 11,332


Amazon.com, Inc.
-
〃
 - US$ 11,317 N/A US$ 11,317


ONEOK, Inc.
-
〃
 - US$ 11,048 N/A US$ 11,048


Bank of Montreal
-
〃
 - US$ 11,032 N/A US$ 11,032


NextEra Energy Capital Holdings, Inc.
-
〃
 - US$ 10,970 N/A US$ 10,970


Southern California Edison Company
-
〃
 - US$ 10,796 N/A US$ 10,796


Ryder System, Inc.
-
〃
 - US$ 10,588 N/A US$ 10,588


Verizon Communications Inc.
-
〃
 - US$ 10,584 N/A US$ 10,584


S&P Global Inc.
-
〃
 - US$ 10,556 N/A US$ 10,556


Deutsche Bank AG - New York Branch
-
〃
 - US$ 10,454 N/A US$ 10,454


Equifax Inc.
-
〃
 - US$ 10,338 N/A US$ 10,338


Macquarie Group Limited
-
〃
 - US$ 10,206 N/A US$ 10,206


AT&T Inc.
-
〃
 - US$ 9,879 N/A US$ 9,879


Svenska Handelsbanken AB (publ)
-
〃
 - US$ 9,866 N/A US$ 9,866


John Deere Capital Corporation
-
〃
 - US$ 9,776 N/A US$ 9,776


Truist Financial Corporation
-
〃
 - US$ 9,513 N/A US$ 9,513


Haleon US Capital LLC
-
〃
 - US$ 9,332 N/A US$ 9,332


Roper Technologies, Inc.
-
〃
 - US$ 9,177 N/A US$ 9,177


Exelon Corporation
-
〃
 - US$ 9,100 N/A US$ 9,100


Thermo Fisher Scientific Inc.
-
〃
 - US$ 9,049 N/A US$ 9,049


Florida Power & Light Company
-
〃
 - US$ 9,042 N/A US$ 9,042


RGA Global Funding
-
〃
 - US$ 8,977 N/A US$ 8,977


Merck & Co., Inc.
-
〃
 - US$ 8,951 N/A US$ 8,951


Equinor ASA
-
〃
 - US$ 8,866 N/A US$ 8,866


Honeywell International Inc.
-
〃
 - US$ 8,759 N/A US$ 8,759


The PNC Financial Services Group, Inc.
-
〃
 - US$ 8,451 N/A US$ 8,451


Macquarie Bank Limited
-
〃
 - US$ 8,390 N/A US$ 8,390


Rabobank Nederland - New York Branch
-
〃
 - US$ 8,173 N/A US$ 8,173


Lowe's Companies, Inc.
-
〃
 - US$ 8,065 N/A US$ 8,065


Cox Communications, Inc.
-
〃
 - US$ 7,964 N/A US$ 7,964


TORONTO-DOMINION BANK/THE
-
〃
 - US$ 7,955 N/A US$ 7,955


Constellation Energy Generation, LLC
-
〃
 - US$ 7,903 N/A US$ 7,903


Lockheed Martin Corporation
-
〃
 - US$ 7,863 N/A US$ 7,863


KfW
-
〃
 - US$ 7,860 N/A US$ 7,860


Intel Corporation
-
〃
 - US$ 7,820 N/A US$ 7,820


International Bank for Reconstruction and Development
-
〃
 - US$ 7,770 N/A US$ 7,770


Great-West Lifeco U.S. Finance 2020, Lp
-
〃
 - US$ 7,631 N/A US$ 7,631


RTX Corporation
-
〃
 - US$ 7,603 N/A US$ 7,603


Inter-American Development Bank
-
〃
 - US$ 7,511 N/A US$ 7,511


Suncorp-Metway Limited
-
〃
 - US$ 7,453 N/A US$ 7,453


AstraZeneca Finance LLC
-
〃
 - US$ 7,185 N/A US$ 7,185


Chevron Corporation
-
〃
 - US$ 7,032 N/A US$ 7,032


Daimler Trucks Finance North America LLC
-
〃
 - US$ 7,013 N/A US$ 7,013


The East Ohio Gas Company
-
〃
 - US$ 6,978 N/A US$ 6,978


Philip Morris International Inc.
-
〃
 - US$ 6,807 N/A US$ 6,807


AstraZeneca PLC
-
〃
 - US$ 6,798 N/A US$ 6,798


Fiserv, Inc.
-
〃
 - US$ 6,745 N/A US$ 6,745






(Continued)

- 71 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Pacific Life Global Funding II
-
Financial assets at fair value through other comprehensive income
 - US$ 6,726 N/A US$ 6,726


UBS AG, London Branch
-
〃
 - US$ 6,595 N/A US$ 6,595


WEC Energy Group, Inc.
-
〃
 - US$ 6,555 N/A US$ 6,555


Met Tower Global Funding
-
〃
 - US$ 6,550 N/A US$ 6,550


Roche Holdings, Inc.
-
〃
 - US$ 6,539 N/A US$ 6,539


MPLX LP
-
〃
 - US$ 6,514 N/A US$ 6,514


Fidelity National Information Services, Inc.
-
〃
 - US$ 6,498 N/A US$ 6,498


The Charles Schwab Corporation
-
〃
 - US$ 6,437 N/A US$ 6,437


NatWest Group plc
-
〃
 - US$ 6,360 N/A US$ 6,360


Ameren Corporation
-
〃
 - US$ 6,304 N/A US$ 6,304


Take-Two Interactive Software, Inc.
-
〃
 - US$ 6,237 N/A US$ 6,237


Eaton Corporation
-
〃
 - US$ 6,218 N/A US$ 6,218


Georgia Power Company
-
〃
 - US$ 6,090 N/A US$ 6,090


Huntington Bancshares Incorporated
-
〃
 - US$ 5,985 N/A US$ 5,985


Elevance Health, Inc.
-
〃
 - US$ 5,914 N/A US$ 5,914


Intercontinental Exchange, Inc.
-
〃
 - US$ 5,906 N/A US$ 5,906


Ameriprise Financial, Inc.
-
〃
 - US$ 5,837 N/A US$ 5,837


National Bank of Canada
-
〃
 - US$ 5,783 N/A US$ 5,783


Fifth Third Bancorp
-
〃
 - US$ 5,777 N/A US$ 5,777


ERAC USA Finance LLC
-
〃
 - US$ 5,722 N/A US$ 5,722


Scentre Group Trust 1
-
〃
 - US$ 5,685 N/A US$ 5,685


Stryker Corporation
-
〃
 - US$ 5,630 N/A US$ 5,630


Medtronic Global Holdings S.C.A.
-
〃
 - US$ 5,572 N/A US$ 5,572


NBN Co Limited
-
〃
 - US$ 5,537 N/A US$ 5,537


WPP Finance 2010
-
〃
 - US$ 5,537 N/A US$ 5,537


Discover Bank (New Castle, Delaware)
-
〃
 - US$ 5,440 N/A US$ 5,440


DNB Bank ASA
-
〃
 - US$ 5,421 N/A US$ 5,421


Comcast Corporation
-
〃
 - US$ 5,369 N/A US$ 5,369


Exxon Mobil Corporation
-
〃
 - US$ 5,369 N/A US$ 5,369


Alabama Power Company
-
〃
 - US$ 5,348 N/A US$ 5,348


Fox Corporation
-
〃
 - US$ 5,320 N/A US$ 5,320


McKesson Corporation
-
〃
 - US$ 5,316 N/A US$ 5,316


Sydney Airport Finance Company Pty Ltd
-
〃
 - US$ 5,160 N/A US$ 5,160


Virginia Electric and Power Company
-
〃
 - US$ 5,075 N/A US$ 5,075


Siemens Financieringsmaatschappij N.V.
-
〃
 - US$ 5,063 N/A US$ 5,063


Southwest Airlines Co.
-
〃
 - US$ 5,021 N/A US$ 5,021


Ventas Realty, Limited Partnership
-
〃
 - US$ 5,010 N/A US$ 5,010


NiSource Inc.
-
〃
 - US$ 4,918 N/A US$ 4,918


CGI Inc.
-
〃
 - US$ 4,842 N/A US$ 4,842


Brookfield Finance Inc.
-
〃
 - US$ 4,812 N/A US$ 4,812


HEICO Corporation
-
〃
 - US$ 4,786 N/A US$ 4,786


ANZ New Zealand (Int'l) Limited
-
〃
 - US$ 4,689 N/A US$ 4,689


Bristol-Myers Squibb Company
-
〃
 - US$ 4,604 N/A US$ 4,604


HP Inc.
-
〃
 - US$ 4,603 N/A US$ 4,603


Nutrien Ltd.
-
〃
 - US$ 4,564 N/A US$ 4,564


Enbridge Inc.
-
〃
 - US$ 4,535 N/A US$ 4,535


CenterPoint Energy, Inc.
-
〃
 - US$ 4,505 N/A US$ 4,505


W. P. Carey Inc.
-
〃
 - US$ 4,457 N/A US$ 4,457


Pioneer Natural Resources Company
-
〃
 - US$ 4,455 N/A US$ 4,455






(Continued)

- 72 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Otis Worldwide Corporation
-
Financial assets at fair value through other comprehensive income
 - US$ 4,442 N/A US$ 4,442


ITC Holdings Corp.
-
〃
 - US$ 4,411 N/A US$ 4,411


Citizens Bank, National Association
-
〃
 - US$ 4,363 N/A US$ 4,363


Skandinaviska Enskilda Banken AB (publ)
-
〃
 - US$ 4,343 N/A US$ 4,343


State Street Corporation
-
〃
 - US$ 4,313 N/A US$ 4,313


Toyota Motor Credit Corporation
-
〃
 - US$ 4,261 N/A US$ 4,261


Dollar General Corporation
-
〃
 - US$ 4,188 N/A US$ 4,188


Brighthouse Financial Global Funding
-
〃
 - US$ 4,132 N/A US$ 4,132


F&G Global Funding
-
〃
 - US$ 4,120 N/A US$ 4,120


JPMORGAN CHASE & CO
-
〃
 - US$ 4,114 N/A US$ 4,114


Public Service Enterprise Group Incorporated
-
〃
 - US$ 4,044 N/A US$ 4,044


Korea Electric Power Corporation
-
〃
 - US$ 4,036 N/A US$ 4,036


Schlumberger Investment SA
-
〃
 - US$ 4,028 N/A US$ 4,028


AvalonBay Communities, Inc.
-
〃
 - US$ 4,006 N/A US$ 4,006


Element Fleet Management Corp.
-
〃
 - US$ 4,004 N/A US$ 4,004


CNO Global Funding
-
〃
 - US$ 3,967 N/A US$ 3,967


Lincoln National Corporation
-
〃
 - US$ 3,948 N/A US$ 3,948


Monongahela Power Company
-
〃
 - US$ 3,946 N/A US$ 3,946


Public Storage
-
〃
 - US$ 3,934 N/A US$ 3,934


Walmart Inc.
-
〃
 - US$ 3,875 N/A US$ 3,875


Citibank, N.A.
-
〃
 - US$ 3,858 N/A US$ 3,858


Anheuser-Busch Companies, LLC
-
〃
 - US$ 3,857 N/A US$ 3,857


B.A.T. International Finance p.l.c.
-
〃
 - US$ 3,792 N/A US$ 3,792


Fortinet, Inc.
-
〃
 - US$ 3,667 N/A US$ 3,667


Norsk Hydro ASA
-
〃
 - US$ 3,666 N/A US$ 3,666


Appalachian Power Company
-
〃
 - US$ 3,661 N/A US$ 3,661


AutoZone, Inc.
-
〃
 - US$ 3,646 N/A US$ 3,646


Eversource Energy
-
〃
 - US$ 3,568 N/A US$ 3,568


Parker-Hannifin Corporation
-
〃
 - US$ 3,565 N/A US$ 3,565


Jackson National Life Global Funding
-
〃
 - US$ 3,563 N/A US$ 3,563


The Israel Electric Corporation Ltd
-
〃
 - US$ 3,554 N/A US$ 3,554


GA Global Funding Trust
-
〃
 - US$ 3,552 N/A US$ 3,552


CenterPoint Energy Resources Corp.
-
〃
 - US$ 3,539 N/A US$ 3,539


Baxter International Inc.
-
〃
 - US$ 3,486 N/A US$ 3,486


Kimco Realty Corporation
-
〃
 - US$ 3,468 N/A US$ 3,468


Advocate Health & Hospitals Corporation
-
〃
 - US$ 3,444 N/A US$ 3,444


Meta Platforms, Inc.
-
〃
 - US$ 3,430 N/A US$ 3,430


Sempra
-
〃
 - US$ 3,429 N/A US$ 3,429


BorgWarner Inc.
-
〃
 - US$ 3,426 N/A US$ 3,426


Morgan Stanley Bank, N.A.
-
〃
 - US$ 3,416 N/A US$ 3,416


B.A.T Capital Corporation
-
〃
 - US$ 3,325 N/A US$ 3,325


Highmark Inc.
-
〃
 - US$ 3,283 N/A US$ 3,283


Pfizer Inc.
-
〃
 - US$ 3,281 N/A US$ 3,281


Realty Income Corporation
-
〃
 - US$ 3,271 N/A US$ 3,271


Ross Stores, Inc.
-
〃
 - US$ 3,267 N/A US$ 3,267


Republic Services, Inc.
-
〃
 - US$ 3,212 N/A US$ 3,212


Verisk Analytics, Inc.
-
〃
 - US$ 3,191 N/A US$ 3,191


Truist Bank
-
〃
 - US$ 3,173 N/A US$ 3,173


Corebridge Financial, Inc.
-
〃
 - US$ 3,120 N/A US$ 3,120






(Continued)

- 73 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Lundin Energy Finance BV
-
Financial assets at fair value through other comprehensive income
 - US$ 3,099 N/A US$ 3,099


Wells Fargo Bank, National Association
-
〃
 - US$ 3,098 N/A US$ 3,098


Atmos Energy Corporation
-
〃
 - US$ 3,068 N/A US$ 3,068


EIDP, Inc.
-
〃
 - US$ 3,059 N/A US$ 3,059


Mutual Of Omaha Companies Global Funding
-
〃
 - US$ 3,057 N/A US$ 3,057


Nestlé Holdings, Inc.
-
〃
 - US$ 3,040 N/A US$ 3,040


CMS Energy Corporation
-
〃
 - US$ 3,017 N/A US$ 3,017


Johnson & Johnson
-
〃
 - US$ 3,015 N/A US$ 3,015


CNA Financial Corporation
-
〃
 - US$ 2,978 N/A US$ 2,978


Prologis, L.P.
-
〃
 - US$ 2,974 N/A US$ 2,974


Southern California Gas Company
-
〃
 - US$ 2,929 N/A US$ 2,929


Rio Tinto Finance (USA) Limited
-
〃
 - US$ 2,900 N/A US$ 2,900


Xcel Energy Inc.
-
〃
 - US$ 2,894 N/A US$ 2,894


Canadian Imperial Bank of Commerce
-
〃
 - US$ 2,891 N/A US$ 2,891


BHP Billiton Finance (USA) Limited
-
〃
 - US$ 2,865 N/A US$ 2,865


Diageo Capital plc
-
〃
 - US$ 2,847 N/A US$ 2,847


Novartis Capital Corporation
-
〃
 - US$ 2,810 N/A US$ 2,810


Baxalta Incorporated
-
〃
 - US$ 2,750 N/A US$ 2,750


Dominion Energy, Inc.
-
〃
 - US$ 2,746 N/A US$ 2,746


7-Eleven, Inc.
-
〃
 - US$ 2,737 N/A US$ 2,737


Oncor Electric Delivery Company LLC
-
〃
 - US$ 2,716 N/A US$ 2,716


Simon Property Group, L.P.
-
〃
 - US$ 2,692 N/A US$ 2,692


Weyerhaeuser Company
-
〃
 - US$ 2,687 N/A US$ 2,687


National Australia Bank Limited, New York Branch
-
〃
 - US$ 2,647 N/A US$ 2,647


Eastern Energy Gas Holdings, LLC
-
〃
 - US$ 2,643 N/A US$ 2,643


Chevron Phillips Chemical Company LLC
-
〃
 - US$ 2,636 N/A US$ 2,636


O'Reilly Automotive, Inc.
-
〃
 - US$ 2,610 N/A US$ 2,610


The Estée Lauder Companies Inc.
-
〃
 - US$ 2,609 N/A US$ 2,609


Masco Corporation
-
〃
 - US$ 2,601 N/A US$ 2,601


The Southern Company
-
〃
 - US$ 2,575 N/A US$ 2,575


Avangrid, Inc.
-
〃
 - US$ 2,574 N/A US$ 2,574


Bank of New Zealand
-
〃
 - US$ 2,563 N/A US$ 2,563


Air Products and Chemicals, Inc.
-
〃
 - US$ 2,531 N/A US$ 2,531


Nuveen Finance, LLC
-
〃
 - US$ 2,460 N/A US$ 2,460


Coca-Cola Europacific Partners PLC
-
〃
 - US$ 2,433 N/A US$ 2,433


American Electric Power Company, Inc.
-
〃
 - US$ 2,431 N/A US$ 2,431


Entergy Texas, Inc.
-
〃
 - US$ 2,427 N/A US$ 2,427


Workday, Inc.
-
〃
 - US$ 2,406 N/A US$ 2,406


CRH America, Inc.
-
〃
 - US$ 2,400 N/A US$ 2,400


Swedbank AB (publ)
-
〃
 - US$ 2,399 N/A US$ 2,399


Air Lease Corporation
-
〃
 - US$ 2,360 N/A US$ 2,360


Chevron U.S.A. Inc.
-
〃
 - US$ 2,349 N/A US$ 2,349


Westpac Banking Corporation
-
〃
 - US$ 2,346 N/A US$ 2,346


Texas Instruments Incorporated
-
〃
 - US$ 2,344 N/A US$ 2,344


Yara International ASA
-
〃
 - US$ 2,316 N/A US$ 2,316


Magellan Midstream Partners, L.P.
-
〃
 - US$ 2,314 N/A US$ 2,314


GE HealthCare Technologies Inc.
-
〃
 - US$ 2,277 N/A US$ 2,277


Empower Finance 2020, LP
-
〃
 - US$ 2,268 N/A US$ 2,268


Cardinal Health, Inc.
-
〃
 - US$ 2,266 N/A US$ 2,266






(Continued)

- 74 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
ONE Gas, Inc.
-
Financial assets at fair value through other comprehensive income
 - US$ 2,265 N/A US$ 2,265


Mitsubishi HC Capital Inc.
-
〃
 - US$ 2,249 N/A US$ 2,249


Alliant Energy Finance, LLC
-
〃
 - US$ 2,230 N/A US$ 2,230


The Western Union Company
-
〃
 - US$ 2,187 N/A US$ 2,187


Georgia-Pacific LLC
-
〃
 - US$ 2,160 N/A US$ 2,160


Health Care Service Corporation, a Mutual Legal Reserve Company
-
〃
 - US$ 2,130 N/A US$ 2,130


American Honda Finance Corporation
-
〃
 - US$ 2,087 N/A US$ 2,087


Phillips 66
-
〃
 - US$ 2,057 N/A US$ 2,057


Bank of America, National Association
-
〃
 - US$ 2,036 N/A US$ 2,036


Pricoa Global Funding I
-
〃
 - US$ 2,019 N/A US$ 2,019


KODIT Global 2023-1 Co., Ltd.
-
〃
 - US$ 1,996 N/A US$ 1,996


Public Service Electric and Gas Company
-
〃
 - US$ 1,986 N/A US$ 1,986


Mead Johnson Nutrition Company
-
〃
 - US$ 1,973 N/A US$ 1,973


Magna International Inc.
-
〃
 - US$ 1,967 N/A US$ 1,967


UBS Group Funding (Jersey) Ltd.
-
〃
 - US$ 1,951 N/A US$ 1,951


Tucson Electric Power Company
-
〃
 - US$ 1,948 N/A US$ 1,948


Olympus Corporation
-
〃
 - US$ 1,943 N/A US$ 1,943


Welltower Inc.
-
〃
 - US$ 1,930 N/A US$ 1,930


Gulf Power Company
-
〃
 - US$ 1,916 N/A US$ 1,916


CSX Corporation
-
〃
 - US$ 1,911 N/A US$ 1,911


Shinhan Financial Group Co., Ltd.
-
〃
 - US$ 1,856 N/A US$ 1,856


Mitsubishi Corporation
-
〃
 - US$ 1,823 N/A US$ 1,823


Sprint Spectrum Co Llc
-
〃
 - US$ 1,812 N/A US$ 1,812


NBK SPC Limited
-
〃
 - US$ 1,809 N/A US$ 1,809


Berkshire Hathaway Energy Company
-
〃
 - US$ 1,792 N/A US$ 1,792


CenterPoint Energy Houston Electric, LLC
-
〃
 - US$ 1,785 N/A US$ 1,785


Mondelez International, Inc.
-
〃
 - US$ 1,759 N/A US$ 1,759


Kentucky Utilities Company
-
〃
 - US$ 1,750 N/A US$ 1,750


SMBC Aviation Capital Finance DAC
-
〃
 - US$ 1,747 N/A US$ 1,747


USAA Capital Corp.
-
〃
 - US$ 1,747 N/A US$ 1,747


Evergy Kansas Central, Inc.
-
〃
 - US$ 1,692 N/A US$ 1,692


DTE Energy Company
-
〃
 - US$ 1,685 N/A US$ 1,685


University of California
-
〃
 - US$ 1,631 N/A US$ 1,631


CSL Finance plc
-
〃
 - US$ 1,601 N/A US$ 1,601


Gulfstream Natural Gas System, L.L.C.
-
〃
 - US$ 1,598 N/A US$ 1,598


eBay Inc.
-
〃
 - US$ 1,594 N/A US$ 1,594


Emerson Electric Co.
-
〃
 - US$ 1,576 N/A US$ 1,576


International Business Machines Corporation
-
〃
 - US$ 1,570 N/A US$ 1,570


Burlington Northern Santa Fe, LLC
-
〃
 - US$ 1,566 N/A US$ 1,566


Glencore Funding LLC
-
〃
 - US$ 1,556 N/A US$ 1,556


Jefferies Financial Group Inc.
-
〃
 - US$ 1,543 N/A US$ 1,543


Duke Energy Corporation
-
〃
 - US$ 1,538 N/A US$ 1,538


T-Mobile USA, Inc.
-
〃
 - US$ 1,526 N/A US$ 1,526


Zoetis Inc.
-
〃
 - US$ 1,517 N/A US$ 1,517


APA Infrastructure Limited
-
〃
 - US$ 1,511 N/A US$ 1,511


Kinder Morgan, Inc.
-
〃
 - US$ 1,510 N/A US$ 1,510


Phillips 66 Company
-
〃
 - US$ 1,495 N/A US$ 1,495


American International Group, Inc.
-
〃
 - US$ 1,479 N/A US$ 1,479






(Continued)

- 75 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Essex Portfolio, L.P.
-
Financial assets at fair value through other comprehensive income
 - US$ 1,477 N/A US$ 1,477


Microchip Technology Incorporated
-
〃
 - US$ 1,477 N/A US$ 1,477


Amcor Flexibles North America Inc.
-
〃
 - US$ 1,473 N/A US$ 1,473


Wipro IT Services LLC
-
〃
 - US$ 1,471 N/A US$ 1,471


NSTAR Electric Company
-
〃
 - US$ 1,455 N/A US$ 1,455


Duke Energy Florida, LLC
-
〃
 - US$ 1,448 N/A US$ 1,448


National Rural Utilities Cooperative Finance Corporation
-
〃
 - US$ 1,445 N/A US$ 1,445


Alimentation Couche-Tard Inc.
-
〃
 - US$ 1,442 N/A US$ 1,442


The Cigna Group
-
〃
 - US$ 1,340 N/A US$ 1,340


Eastern Gas Transmission and Storage, Inc.
-
〃
 - US$ 1,319 N/A US$ 1,319


Caterpillar Financial Services Corporation
-
〃
 - US$ 1,300 N/A US$ 1,300


The Williams Companies, Inc.
-
〃
 - US$ 1,259 N/A US$ 1,259


Andrew W. Mellon Foundation, The
-
〃
 - US$ 1,247 N/A US$ 1,247


Union Pacific Corporation
-
〃
 - US$ 1,227 N/A US$ 1,227


Ecolab Inc.
-
〃
 - US$ 1,205 N/A US$ 1,205


Sysco Corporation
-
〃
 - US$ 1,198 N/A US$ 1,198


Mondelez International Holdings Netherlands B.V.
-
〃
 - US$ 1,115 N/A US$ 1,115


Ferguson Finance PLC
-
〃
 - US$ 1,113 N/A US$ 1,113


Reliance Standard Life Global Funding II
-
〃
 - US$ 1,112 N/A US$ 1,112


Nucor Corporation
-
〃
 - US$ 1,072 N/A US$ 1,072


AIB Group plc
-
〃
 - US$ 1,065 N/A US$ 1,065


Enterprise Products Operating LLC
-
〃
 - US$ 1,034 N/A US$ 1,034


Lennox International Inc.
-
〃
 - US$ 1,026 N/A US$ 1,026


New York State Electric & Gas Corporation
-
〃
 - US$ 1,026 N/A US$ 1,026


Sabine Pass Liquefaction, LLC
-
〃
 - US$ 1,018 N/A US$ 1,018


Scottish Power Limited
-
〃
 - US$ 1,004 N/A US$ 1,004


Suntory Holdings Limited
-
〃
 - US$ 973 N/A US$ 973


Canadian Pacific Railway Company
-
〃
 - US$ 959 N/A US$ 959


AIA Group Limited
-
〃
 - US$ 956 N/A US$ 956


LYB Finance Company B.V.
-
〃
 - US$ 942 N/A US$ 942


Piedmont Natural Gas Company, Inc.
-
〃
 - US$ 932 N/A US$ 932


Juniper Networks, Inc.
-
〃
 - US$ 926 N/A US$ 926


Lennar Corporation
-
〃
 - US$ 923 N/A US$ 923


Amcor Finance (USA), Inc.
-
〃
 - US$ 917 N/A US$ 917


BAE Systems Finance Inc.
-
〃
 - US$ 917 N/A US$ 917


The Interpublic Group of Companies, Inc.
-
〃
 - US$ 916 N/A US$ 916


AEP Texas Inc.
-
〃
 - US$ 914 N/A US$ 914


Assurant, Inc.
-
〃
 - US$ 914 N/A US$ 914


Unilever Capital Corporation
-
〃
 - US$ 890 N/A US$ 890


Reynolds American Inc.
-
〃
 - US$ 889 N/A US$ 889


County of Palm Beach, Florida
-
〃
 - US$ 825 N/A US$ 825


TransCanada PipeLines Limited
-
〃
 - US$ 819 N/A US$ 819


CubeSmart, L.P.
-
〃
 - US$ 784 N/A US$ 784


Southwest Gas Corporation
-
〃
 - US$ 771 N/A US$ 771


Zimmer Biomet Holdings, Inc.
-
〃
 - US$ 771 N/A US$ 771


BP Capital Markets America, Inc.
-
〃
 - US$ 770 N/A US$ 770


Niagara Mohawk Power Corporation
-
〃
 - US$ 761 N/A US$ 761


Veralto Corporation
-
〃
 - US$ 759 N/A US$ 759


The Brooklyn Union Gas Company
-
〃
 - US$ 755 N/A US$ 755






(Continued)

- 76 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Mars, Incorporated
-
Financial assets at fair value through other comprehensive income
 - US$ 754 N/A US$ 754


Manufacturers and Traders Trust Company
-
〃
 - US$ 751 N/A US$ 751


Consolidated Edison Company of New York, Inc.
-
〃
 - US$ 750 N/A US$ 750


Oklahoma Gas and Electric Company
-
〃
 - US$ 749 N/A US$ 749


Voya Financial, Inc.
-
〃
 - US$ 749 N/A US$ 749


Marsh & McLennan Companies, Inc.
-
〃
 - US$ 747 N/A US$ 747


TELUS Corporation
-
〃
 - US$ 745 N/A US$ 745


Waste Management, Inc.
-
〃
 - US$ 744 N/A US$ 744


Visa Inc.
-
〃
 - US$ 739 N/A US$ 739


PACCAR Financial Corp.
-
〃
 - US$ 738 N/A US$ 738


Sky Limited
-
〃
 - US$ 691 N/A US$ 691


Hyundai Capital Services, Inc.
-
〃
 - US$ 689 N/A US$ 689


The Allstate Corporation
-
〃
 - US$ 675 N/A US$ 675


QNB Finance Ltd.
-
〃
 - US$ 673 N/A US$ 673


Sodexo, Inc.
-
〃
 - US$ 672 N/A US$ 672


Automatic Data Processing, Inc.
-
〃
 - US$ 649 N/A US$ 649


L3Harris Technologies, Inc.
-
〃
 - US$ 617 N/A US$ 617


Southern Power Company
-
〃
 - US$ 612 N/A US$ 612


Burlington Resources Inc.
-
〃
 - US$ 600 N/A US$ 600


Starbucks Corporation
-
〃
 - US$ 594 N/A US$ 594


Florida Hurricane Catastrophe Fund Finance Corporation
-
〃
 - US$ 593 N/A US$ 593


Infor, Inc.
-
〃
 - US$ 589 N/A US$ 589


Columbia Pipelines Holding Company, LLC
-
〃
 - US$ 566 N/A US$ 566


American Water Capital Corp.
-
〃
 - US$ 562 N/A US$ 562


Columbia Pipelines Operating Co. LLC
-
〃
 - US$ 538 N/A US$ 538


Shell International Finance B.V.
-
〃
 - US$ 536 N/A US$ 536


Arizona Public Service Company
-
〃
 - US$ 520 N/A US$ 520


State of Hawaii
-
〃
 - US$ 515 N/A US$ 515


Intesa Sanpaolo S.p.A.
-
〃
 - US$ 512 N/A US$ 512


ConocoPhillips Company
-
〃
 - US$ 510 N/A US$ 510


Mississippi Power Company
-
〃
 - US$ 510 N/A US$ 510


MassMutual Global Funding II
-
〃
 - US$ 506 N/A US$ 506


Westpac New Zealand Limited
-
〃
 - US$ 499 N/A US$ 499


Deutsche Telekom International Finance B.V.
-
〃
 - US$ 496 N/A US$ 496


Haleon UK Capital plc
-
〃
 - US$ 488 N/A US$ 488


Commonwealth Bank of Australia
-
〃
 - US$ 487 N/A US$ 487


Trane Technologies Luxembourg Finance S.A.
-
〃
 - US$ 486 N/A US$ 486


Genuine Parts Company
-
〃
 - US$ 480 N/A US$ 480


Altria Group, Inc.
-
〃
 - US$ 477 N/A US$ 477


McCormick & Company, Incorporated
-
〃
 - US$ 477 N/A US$ 477


DENSO Corporation
-
〃
 - US$ 453 N/A US$ 453


Brazos Higher Education Authority Inc
-
〃
 - US$ 444 N/A US$ 444


Pernod Ricard International Finance LLC
-
〃
 - US$ 435 N/A US$ 435


Aker BP ASA
-
〃
 - US$ 433 N/A US$ 433


The Home Depot, Inc.
-
〃
 - US$ 416 N/A US$ 416


Target Corporation
-
〃
 - US$ 412 N/A US$ 412


National Australia Bank Limited
-
〃
 - US$ 410 N/A US$ 410


Entergy Corporation
-
〃
 - US$ 395 N/A US$ 395


GlaxoSmithKline Capital Inc.
-
〃
 - US$ 394 N/A US$ 394






(Continued)

- 77 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Aflac Incorporated
-
Financial assets at fair value through other comprehensive income
 - US$ 392 N/A US$ 392


Gilead Sciences, Inc.
-
〃
 - US$ 391 N/A US$ 391


University of Massachusetts Building Authority
-
〃
 - US$ 388 N/A US$ 388


Banco del Estado de Chile
-
〃
 - US$ 386 N/A US$ 386


Sierra Pacific Power Company
-
〃
 - US$ 381 N/A US$ 381


PepsiCo, Inc.
-
〃
 - US$ 364 N/A US$ 364


The Norinchukin Bank
-
〃
 - US$ 362 N/A US$ 362


Cargill, Incorporated
-
〃
 - US$ 359 N/A US$ 359


Mid-America Apartments, L.P.
-
〃
 - US$ 308 N/A US$ 308


Electricité de France S.A.
-
〃
 - US$ 304 N/A US$ 304


Consumers Energy Company
-
〃
 - US$ 302 N/A US$ 302


Aptiv PLC
-
〃
 - US$ 290 N/A US$ 290


National Grid plc
-
〃
 - US$ 289 N/A US$ 289


Nordson Corporation
-
〃
 - US$ 286 N/A US$ 286


QatarEnergy
-
〃
 - US$ 275 N/A US$ 275


Marriott International, Inc.
-
〃
 - US$ 271 N/A US$ 271


KBC Group NV
-
〃
 - US$ 239 N/A US$ 239


Pennsylvania Electric Company
-
〃
 - US$ 235 N/A US$ 235


Humana Inc.
-
〃
 - US$ 214 N/A US$ 214


Hoover Alabama Board Of Education
-
〃
 - US$ 104 N/A US$ 104


Beth Israel Deaconess Medical Center, Inc.
-
〃
 - US$ 88 N/A US$ 88


Metropolitan Edison Company
-
〃
 - US$ 81 N/A US$ 81


County of Pima, Arizona
-
〃
 - US$ 79 N/A US$ 79


State of Wisconsin
-
〃
 - US$ 64 N/A US$ 64


Aon Corporation
-
〃
 - US$ 52 N/A US$ 52


County of Nueces, Texas
-
〃
 - US$ 25 N/A US$ 25


Bank of America Corporation
-
Financial assets at amortized cost
 - US$ 799,449 N/A US$ 800,590


Wells Fargo & Company
-
〃
 - US$ 619,830 N/A US$ 626,602


Morgan Stanley
-
〃
 - US$ 566,880 N/A US$ 570,092


The Goldman Sachs Group, Inc.
-
〃
 - US$ 432,811 N/A US$ 418,343


JPMorgan Chase & Co.
-
〃
 - US$ 391,868 N/A US$ 394,331


Citigroup Inc.
-
〃
 - US$ 251,481 N/A US$ 252,491


Citigroup Global Markets Inc.
-
〃
 - US$ 149,951 N/A US$ 149,628


Citigroup Global Markets Holdings Inc.
-
〃
 - US$ 99,968 N/A US$ 99,424


Goldman Sachs Finance Corp International Ltd
-
〃
 - US$ 99,905 N/A US$ 99,281


Citigroup
-
〃
 - US$ 19,981 N/A US$ 20,156


Nationwide Building Society
-
〃
 - US$ 10,338 N/A US$ 10,153


Daimler Trucks Finance North America LLC
-
〃
 - US$ 9,685 N/A US$ 9,633


Great-West Lifeco U.S. Finance 2020, Lp
-
〃
 - US$ 9,550 N/A US$ 9,419


Mizuho Financial Group, Inc.
-
〃
 - US$ 9,446 N/A US$ 9,562


BNP Paribas SA
-
〃
 - US$ 9,265 N/A US$ 9,233


Fédération des caisses Desjardins du Québec
-
〃
 - US$ 9,185 N/A US$ 9,088


UBS Group AG
-
〃
 - US$ 9,172 N/A US$ 9,095


Nomura Holdings, Inc.
-
〃
 - US$ 9,155 N/A US$ 9,031


NongHyup Bank
-
〃
 - US$ 8,839 N/A US$ 8,799


Banque Fédérative du Crédit Mutuel
-
〃
 - US$ 8,435 N/A US$ 8,442


Canadian Imperial Bank of Commerce
-
〃
 - US$ 8,417 N/A US$ 8,360


Banco Santander, S.A.
-
〃
 - US$ 8,301 N/A US$ 8,251


Ventas Realty, Limited Partnership
-
〃
 - US$ 8,279 N/A US$ 8,206






(Continued)

- 78 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Enel Finance International N.V.
-
Financial assets at amortized cost
 - US$ 8,250 N/A US$ 8,188


Protective Life Global Funding
-
〃
 - US$ 7,983 N/A US$ 7,896


CRH America, Inc.
-
〃
 - US$ 7,954 N/A US$ 7,849


Mercedes-Benz Finance North America LLC
-
〃
 - US$ 7,916 N/A US$ 7,894


BPCE SA
-
〃
 - US$ 7,874 N/A US$ 7,794


Sydney Airport Finance Company Pty Ltd
-
〃
 - US$ 7,727 N/A US$ 7,672


Sumitomo Mitsui Financial Group, Inc.
-
〃
 - US$ 7,538 N/A US$ 7,515


AIG Global Funding
-
〃
 - US$ 7,480 N/A US$ 7,421


Banco Bilbao Vizcaya Argentaria, S.A.
-
〃
 - US$ 7,042 N/A US$ 7,006


Southern California Edison Company
-
〃
 - US$ 5,913 N/A US$ 5,924


NatWest Markets Plc
-
〃
 - US$ 5,515 N/A US$ 5,483


F&G Global Funding
-
〃
 - US$ 5,511 N/A US$ 5,440


ING Groep N.V.
-
〃
 - US$ 5,244 N/A US$ 5,307


Athene Global Funding
-
〃
 - US$ 5,122 N/A US$ 5,032


Hyundai Capital Services, Inc.
-
〃
 - US$ 5,007 N/A US$ 4,964


Svenska Handelsbanken AB (publ)
-
〃
 - US$ 4,723 N/A US$ 4,755


QNB Finance Ltd.
-
〃
 - US$ 4,421 N/A US$ 4,423


Sumitomo Mitsui Trust Bank, Limited
-
〃
 - US$ 4,165 N/A US$ 4,120


Lloyds Banking Group plc
-
〃
 - US$ 3,979 N/A US$ 3,949


Deutsche Bank AG - New York Branch
-
〃
 - US$ 3,974 N/A US$ 3,944


Volkswagen Group of America Finance, LLC
-
〃
 - US$ 3,853 N/A US$ 3,803


Mitsubishi UFJ Financial Group, Inc.
-
〃
 - US$ 3,747 N/A US$ 3,725


Jackson National Life Global Funding
-
〃
 - US$ 3,345 N/A US$ 3,276


ANZ New Zealand (Int'l) Limited
-
〃
 - US$ 3,251 N/A US$ 3,216


Scottish Power Limited
-
〃
 - US$ 3,188 N/A US$ 3,197


Spectra Energy Partners, LP
-
〃
 - US$ 2,851 N/A US$ 2,812


National Bank of Canada
-
〃
 - US$ 2,091 N/A US$ 2,088


Georgia-Pacific LLC
-
〃
 - US$ 1,254 N/A US$ 1,253


GA Global Funding Trust
-
〃
 - US$ 1,174 N/A US$ 1,175


Reliance Standard Life Global Funding II
-
〃
 - US$ 1,083 N/A US$ 1,075


Barclays Bank PLC
-
〃
 - US$ 745 N/A US$ 744


AIA Group Limited
-
〃
 - US$ 585 N/A US$ 587







Agency mortgage-backed securities




FEDERAL NATIONAL MORTGAGE ASSOCIATION
-
Financial assets at fair value through other comprehensive income
 - US$ 658,944 N/A US$ 658,944


Federal Home Loan Mortgage Corporation
-
〃
 - US$ 350,328 N/A US$ 350,328


Government National Mortgage Association
-
〃
 - US$ 225,310 N/A US$ 225,310







Government bond/Agency bonds




United States Department of The Treasury
-
Financial assets at fair value through other comprehensive income
 - US$ 718,479 N/A US$ 718,479


Federal Home Loan Mortgage Corporation
-
〃
 - US$ 6,995 N/A US$ 6,995


FEDERAL NATIONAL MORTGAGE ASSOCIATION
-
〃
 - US$ 1,065 N/A US$ 1,065


Federal Home Loan Banks
-
Financial assets at amortized cost
 - US$ 225,000 N/A US$ 224,645


Federal Home Loan Mortgage Corporation
-
〃
 - US$ 135,000 N/A US$ 134,845


United States Department of The Treasury
-
〃
 - US$ 88,940 N/A US$ 89,501







Asset-backed securities




Wells Fargo Commercial Mortgage Trust 2016-Bnk1
-
Financial assets at fair value through other comprehensive income
 - US$ 9,941 N/A US$ 9,941


JPMBB Commercial Mortgage Securities Trust 2014-C24
-
〃
 - US$ 9,818 N/A US$ 9,818






(Continued)

- 79 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Toyota Auto Receivables 2022-B Owner Trust
-
Financial assets at fair value through other comprehensive income
 - US$ 9,665 N/A US$ 9,665


Gm Financial Consumer Automobile Receivables Trust 2023-3
-
〃
 - US$ 9,033 N/A US$ 9,033


Ford Credit Auto Owner Trust 2021-Rev2
-
〃
 - US$ 7,674 N/A US$ 7,674


Hyundai Auto Receivables Trust 2021-C
-
〃
 - US$ 7,388 N/A US$ 7,388


Toyota Auto Loan Extended Note Trust 2023-1
-
〃
 - US$ 7,351 N/A US$ 7,351


Citigroup Commercial Mortgage Trust 2015-GC33
-
〃
 - US$ 7,069 N/A US$ 7,069


Ford Credit Auto Owner Trust 2020-REV2
-
〃
 - US$ 6,861 N/A US$ 6,861


Hyundai Auto Receivables Trust 2023-B
-
〃
 - US$ 6,280 N/A US$ 6,280


BBCMS Mortgage Trust 2020-C8
-
〃
 - US$ 6,135 N/A US$ 6,135


Morgan Stanley Bank America Merrill Lynch Trust 2016-C30
-
〃
 - US$ 6,131 N/A US$ 6,131


Honda Auto Receivables 2023-2 Owner Trust
-
〃
 - US$ 6,028 N/A US$ 6,028


Morgan Stanley Capital I Trust 2021-L6
-
〃
 - US$ 5,902 N/A US$ 5,902


Bank 2020-BNK26
-
〃
 - US$ 5,840 N/A US$ 5,840


Hudson Yards 2016-10HY Mortgage Trust
-
〃
 - US$ 5,805 N/A US$ 5,805


Benchmark 2019-B11 Mortgage Trust
-
〃
 - US$ 5,699 N/A US$ 5,699


Citigroup Commercial Mortgage Trust 2021-PRM2
-
〃
 - US$ 5,502 N/A US$ 5,502


Bank 2021-bnk33
-
〃
 - US$ 5,496 N/A US$ 5,496


Benchmark 2019-B12 Mortgage Trust
-
〃
 - US$ 5,351 N/A US$ 5,351


Bank 2023-BNK46
-
〃
 - US$ 5,244 N/A US$ 5,244


Benchmark 2023-B39 Mortgage Trust
-
〃
 - US$ 5,208 N/A US$ 5,208


MSWF Commercial Mortgage Trust 2023-1
-
〃
 - US$ 5,172 N/A US$ 5,172


BBCMS 2018-Tall Mortgage Trust
-
〃
 - US$ 5,101 N/A US$ 5,101


Wells Fargo Commercial Mortgage Trust 2016-C35
-
〃
 - US$ 5,027 N/A US$ 5,027


Wells Fargo Commercial Mortgage Trust 2021-C59
-
〃
 - US$ 4,815 N/A US$ 4,815


CSAIL 2018-CX11
-
〃
 - US$ 4,777 N/A US$ 4,777


Bank 2017-Bnk6
-
〃
 - US$ 4,772 N/A US$ 4,772


Morgan Stanley Capital I Trust 2016 - BNK2 Fund
-
〃
 - US$ 4,676 N/A US$ 4,676


GM Financial Revolving Receivables Trust 2021-1
-
〃
 - US$ 4,526 N/A US$ 4,526


Bank 2017-BNK9
-
〃
 - US$ 4,162 N/A US$ 4,162


Benchmark 2023-V3 Mortgage Trust
-
〃
 - US$ 4,119 N/A US$ 4,119


Bank 2017 - BNK7
-
〃
 - US$ 4,063 N/A US$ 4,063


MRCD 2019-Prkc Mortgage Trust
-
〃
 - US$ 4,025 N/A US$ 4,025


Msbam 2016-C29
-
〃
 - US$ 4,010 N/A US$ 4,010


Five 2023-V1 Mortgage Trust
-
〃
 - US$ 4,002 N/A US$ 4,002


Citigroup Commercial Mortgage Trust 2014-GC21
-
〃
 - US$ 3,779 N/A US$ 3,779


JPMCC 2017-JP7
-
〃
 - US$ 3,738 N/A US$ 3,738


Bmw Vehicle Owner Trust 2023-A
-
〃
 - US$ 3,636 N/A US$ 3,636


Citigroup Commercial Mortgage Trust 2019-Gc43
-
〃
 - US$ 3,214 N/A US$ 3,214


BANK 2017-BNK5
-
〃
 - US$ 3,132 N/A US$ 3,132


Honda Auto Receivables 2021 - 4 Owner Trust
-
〃
 - US$ 3,081 N/A US$ 3,081


Bank 2019-Bnk22
-
〃
 - US$ 3,057 N/A US$ 3,057


Msbam 2016-C31
-
〃
 - US$ 3,023 N/A US$ 3,023


Commerce 2015-CCRE24 Mortgage Trust
-
〃
 - US$ 2,991 N/A US$ 2,991


WFRBS Commercial Mortgage Trust 2014-C25
-
〃
 - US$ 2,932 N/A US$ 2,932


Bmo 2023-C5 Mortgage Trust
-
〃
 - US$ 2,806 N/A US$ 2,806


Sreit Commercial Mortgage Trust 2021-Mfp
-
〃
 - US$ 2,729 N/A US$ 2,729


Benchmark 2019-B15 Mortgage Trust
-
〃
 - US$ 2,574 N/A US$ 2,574


DCENT_23-2
-
〃
 - US$ 2,521 N/A US$ 2,521


Toyota Auto Receivables 2023-C Owner Trust
-
〃
 - US$ 2,519 N/A US$ 2,519






(Continued)

- 80 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
Benchmark 2018-B3 Commercial Mortgage Trust
-
Financial assets at fair value through other comprehensive income
 - US$ 2,462 N/A US$ 2,462


Ford Credit Auto Owner Trust 2020-Rev1
-
〃
 - US$ 2,415 N/A US$ 2,415


JPMDB 2017-C7
-
〃
 - US$ 2,415 N/A US$ 2,415


GS Mortgage Securities Trust 2015-GC32
-
〃
 - US$ 2,368 N/A US$ 2,368


Citigroup Commercial Mortgage Trust 2016-C1
-
〃
 - US$ 2,304 N/A US$ 2,304


Citigroup Commercial Mortgage Trust 2015-P1
-
〃
 - US$ 2,174 N/A US$ 2,174


Wells Fargo Commercial Mortgage Trust 2020-C55
-
〃
 - US$ 2,110 N/A US$ 2,110


Citigroup Commercial Mortgage Trust 2015-GC27
-
〃
 - US$ 2,107 N/A US$ 2,107


Mhc Commercial Mortgage Trust 2021-Mhc
-
〃
 - US$ 2,090 N/A US$ 2,090


Ford Credit Auto Owner Trust 2023-A
-
〃
 - US$ 1,992 N/A US$ 1,992


Benchmark 2018-B4 Mortgage Trust
-
〃
 - US$ 1,930 N/A US$ 1,930


Morgan Stanley Capital I Trust
-
〃
 - US$ 1,844 N/A US$ 1,844


Dolp Trust 2021-NYC
-
〃
 - US$ 1,821 N/A US$ 1,821


CGCMT 2017-P8 Mortgage Trust
-
〃
 - US$ 1,630 N/A US$ 1,630


Wells Fargo Commercial Mortgage Trust 2015-C30
-
〃
 - US$ 1,574 N/A US$ 1,574


JPMBB Commercial Mortgage Securities Trust 2015-C27
-
〃
 - US$ 1,527 N/A US$ 1,527


Hyundai Auto Receivables Trust 2022-A
-
〃
 - US$ 1,524 N/A US$ 1,524


Honda Auto Receivables 2023-1 Owner Trust
-
〃
 - US$ 1,518 N/A US$ 1,518


UBS Commercial Mortgage Trust 2018-C11
-
〃
 - US$ 1,495 N/A US$ 1,495


COMM 2020-CBM Mortgage Trust
-
〃
 - US$ 1,476 N/A US$ 1,476


Morgan Stanley Capital I Trust 2021-L5
-
〃
 - US$ 1,369 N/A US$ 1,369


Wells Fargo Commercial Mortgage Trust 2018-C44
-
〃
 - US$ 1,305 N/A US$ 1,305


Wells Fargo Commercial Mortgage Trust 2015-C29
-
〃
 - US$ 1,243 N/A US$ 1,243


Ford Credit Auto Owner Trust 2022-C
-
〃
 - US$ 1,242 N/A US$ 1,242


Bank 2019-Bnk17
-
〃
 - US$ 1,237 N/A US$ 1,237


GM Financial Consumer Automobile Receivables Trust 2023-1
-
〃
 - US$ 1,219 N/A US$ 1,219


FORD CREDIT AUTO OWNER TRUST 2023-REV2
-
〃
 - US$ 1,124 N/A US$ 1,124


American Express Credit Account Master Trust
-
〃
 - US$ 1,016 N/A US$ 1,016


Morgan Stanley Capital I Trust 2015 - UBS8
-
〃
 - US$ 962 N/A US$ 962


Wells Fargo Commercial Mortgage Trust 2016-LC24
-
〃
 - US$ 939 N/A US$ 939


Ford Credit Auto Owner Trust 2022-A
-
〃
 - US$ 887 N/A US$ 887


Bank 2023-Bnk45
-
〃
 - US$ 865 N/A US$ 865


Nissan Auto Receivables 2023-A Owner Trust
-
〃
 - US$ 829 N/A US$ 829


Toyota Auto Receivables 2021-D Owner Trust
-
〃
 - US$ 824 N/A US$ 824


Benchmark 2021-B24 Mortgage Trust
-
〃
 - US$ 818 N/A US$ 818


JPMBB Commercial Mortgage Securities Trust 2015-C28
-
〃
 - US$ 791 N/A US$ 791


COMM Mortgage Trust Series 2015-LC19
-
〃
 - US$ 778 N/A US$ 778


Honda Auto Receivables 2022-2 Owner Trust
-
〃
 - US$ 733 N/A US$ 733


Citigroup Commercial Mortgage Trust 2015-GC35
-
〃
 - US$ 685 N/A US$ 685


Wells Fargo Commercial Mortgage Trust 2017-C40
-
〃
 - US$ 642 N/A US$ 642


JPMCC Commercial Mortgage Securities Trust 2016 - JP3
-
〃
 - US$ 581 N/A US$ 581


JPMBB Commercial Mortgage Securities Trust 2016-C1
-
〃
 - US$ 574 N/A US$ 574


Wells Fargo Commercial Mortgage Trust 2015-C28
-
〃
 - US$ 529 N/A US$ 529


Ford Credit Auto Owner Trust 2022-B
-
〃
 - US$ 444 N/A US$ 444


Honda Auto Receivables 2021-2 Owner Trust
-
〃
 - US$ 427 N/A US$ 427


Citigroup Commercial Mortgage Trust 2018-C5
-
〃
 - US$ 425 N/A US$ 425


Toyota Auto Receivables 2021-C Owner Trust
-
〃
 - US$ 387 N/A US$ 387


Wells Fargo Commercial Mortgage Trust 2015-NXS3
-
〃
 - US$ 255 N/A US$ 255


Benchmark 2019-B14 Mortgage Trust
-
〃
 - US$ 239 N/A US$ 239






(Continued)

- 81 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Global
JPMCC 2015 - JP1
-
Financial assets at fair value through other comprehensive income
 - US$ 176 N/A US$ 176


COMM 2015-CCRE22 Mortgage Trust
-
〃
 - US$ 151 N/A US$ 151


GS Mortgage Securities Trust 2014-GC24
-
〃
 - US$ 149 N/A US$ 149


Morgan Stanley Capital I Trust 2019-H6
-
〃
 - US$ 133 N/A US$ 133


Wells Fargo Commercial Mortgage Trust 2015-LC20
-
〃
 - US$ 124 N/A US$ 124


Morgan Stanley Capital I Trust 2019-H7
-
〃
 - US$ 120 N/A US$ 120


JPMDB Commercial Mortgage Securities Trust 2019-COR6
-
〃
 - US$ 114 N/A US$ 114


Morgan Stanley Capital I Trust 2018-H3
-
〃
 - US$ 104 N/A US$ 104


Bank 2019-BNK23
-
〃
 - US$ 97 N/A US$ 97


Citigroup Commercial Mortgage Trust 2014-GC23
-
〃
 - US$ 83 N/A US$ 83


GS Mortgage Securities Trust 2014-GC26
-
〃
 - US$ 64 N/A US$ 64


CF 2019-CF1 Mortgage Trust
-
〃
 - US$ 50 N/A US$ 50


BBCMS Mortgage Trust 2020-C7
-
〃
 - US$ 37 N/A US$ 37







Non-publicly traded equity investments




Primavera Capital Fund II L.P.
-
Financial assets at fair value through other comprehensive income
 - US$ 86,515 4 US$ 86,515






VTAF II
Non-publicly traded equity investments




5V Technologies, Inc.
-
Financial assets at fair value through other comprehensive income
 1 - - -


Aether Systems, Inc.
-
〃
 1,085 - 20 -







Publicly traded stocks




Sentelic Corporation
-
Financial assets at fair value through other comprehensive income
 913 US$ 2,757 3 US$ 2,757






VTAF III
Non-publicly traded equity investments




LiquidLeds Lighting Corp.
-
Financial assets at fair value through other comprehensive income
 1,952 US$ 800 14 US$ 800


Mutual-Pak
-
〃
 1,701 US$ 337 17 US$ 337


Neoconix, Inc.
-
〃
 4,147 US$ 174 - US$ 174






Emerging Fund
Convertible bonds




Movandi Corporation
-
Financial assets at fair value through Profit or Loss
 - US$ 4,168 N/A US$ 4,168


Encharge AI, Inc.
-
〃
 - US$ 3,099 N/A US$ 3,099







Non-publicly traded equity investments




Astera Labs, Inc.
-
Financial assets at fair value through other comprehensive income
 1,487 US$ 9,680 - US$ 9,680


Ayar Labs, Inc.
-
〃
 345 US$ 5,000 1 US$ 5,000


Ethernovia Inc.
-
〃
 1,021 US$ 5,000 3 US$ 5,000


Empower Semiconductor, Inc.
-
〃
 868 US$ 5,000 3 US$ 5,000


Lyte AI, Inc.
-
〃
 1,128 US$ 5,000 4 US$ 5,000


EdgeQ, Inc.
-
〃
 1,176 US$ 4,771 2 US$ 4,771


SiMa Technologies, Inc.
-
〃
 564 US$ 4,000 1 US$ 4,000


NeuReality Ltd.
-
〃
 122 US$ 3,194 2 US$ 3,194


Kinara, Inc.
-
〃
 2,015 US$ 3,000 2 US$ 3,000


xMEMS Labs, Inc.
-
〃
 3,000 US$ 3,000 3 US$ 3,000


RiVos, Inc.
-
〃
 1,455 US$ 2,833 1 US$ 2,833






(Continued)

- 82 -


Held Company Name Marketable Securities Type and Name Relationship with the Company Financial Statement Account December 31, 2023 Note
Shares/Units
(In Thousands)
Carrying Value
(Foreign Currencies in Thousands)
 Percentage of Ownership (%)
Fair Value
(Foreign Currencies in Thousands)





TSMC Development
Convertible preferred stocks




IMS Nanofabrication Global, LLC
-
Financial assets at fair value through Profit or Loss
 - US$ 432,795 10 US$ 432,795






Growth Fund
Non-publicly traded equity investments




Astera Labs, Inc.
-
Financial assets at fair value through other comprehensive income
 637 US$ 4,146 - US$ 4,146


CNEX Labs, Inc.
-
〃
 33 US$ 133 - US$ 133







Publicly traded stocks




Marvell Technology Group Ltd.
-
Financial assets at fair value through other comprehensive income
 30 US$ 1,786 - US$ 1,786






(Concluded)


- 83 -

TABLE 4


Taiwan Semiconductor Manufacturing Company Limited and Investees

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Company Name Marketable Securities
Type and Name		 Financial Statement Account Counterparty Nature of Relationship Beginning Balance Acquisition Disposal
Ending Balance (Note 1)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Carrying Value
(Foreign
Currencies in
Thousands)
Gain/Loss on Disposal
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)





TSMC
Non-publicly traded equity investments




TSMC Arizona
Investments accounted for using equity method
-
-
 1,270 $ 25,639,079 9,230 $ 292,649,510 - $ - $ - $ - 10,500 $ 298,604,975

JASM
〃
-
-
 1,020 23,330,125 1,249 28,062,957 - - - - 2,269 47,087,140

ESMC
〃
-
-
 - - 100
4,814,293
(Note 2)


- - - - 100 4,768,013

Emerging Fund
〃
-
-
 - 1,760,885 - 641,536 - - (244,376 ) - - 1,901,742






Commercial paper




Cathay Financial Holding Co., Ltd.
Financial assets at amortized cost
-
-
 - - 1,687 16,771,708 990 9,900,000 9,900,000 - 697 6,924,665

Nan Ya Plastics Corporation
〃
-
-
 450 4,476,301 1,850 18,413,604 1,700 17,000,000 17,000,000 - 600 5,976,677

China Steel Corporation
〃
-
-
 - - 200 1,985,566 - - - - 200 1,985,094

Formosa Plastics Corporation
〃
-
-
 200 1,990,459 100 994,402 200 2,000,000 2,000,000 - 100 996,260

CPC Corporation, Taiwan
〃
-
-
 750 7,458,936 150 1,491,352 800 8,000,000 8,000,000 - 100 995,553

Formosa Chemicals & Fibre Corporation
〃
-
-
 250 2,485,666 600 5,969,662 750 7,500,000 7,500,000 - 100 994,540

Taiwan Power Company
〃
-
-
 2,950 29,335,729 550 5,473,392 3,450 34,500,000 34,500,000 - 50 498,916

Formosa Petrochemical Corporation
〃
-
-
 300 2,985,385 - - 300 3,000,000 3,000,000 - - -





TSMC Partners
Fund




Matter Venture Partners Fund I, L.P. (Note 3)
Financial assets at fair value through Profit or Loss
-
-
 - US$ - - US$ 4,200 - US$ - US$ - US$ - - US$ 3,587






Publicly traded stocks




ARM Holdings plc
Financial assets at fair value through other comprehensive income
-
-
 - US$ - 1,961 US$ 100,000 - US$ - US$ - US$ - 1,961 US$ 147,353





TSMC Global
Corporate bond




Bank of America Corporation
Financial assets at fair value through other comprehensive income
-
-
 - US$ 76,626 - US$ 32,499 - US$ 25,548 US$ 25,685 US$ (137 ) - US$ 86,588

Morgan Stanley
〃
-
-
 - US$ 83,242 - US$ 19,579 - US$ 28,500 US$ 28,612 US$ (112 ) - US$ 76,777

The Goldman Sachs Group, Inc.
〃
-
-
 - US$ 51,439 - US$ 19,457 - US$ 14,080 US$ 14,166 US$ (86 ) - US$ 58,554

Wells Fargo & Company
〃
-
-
 - US$ 59,735 - US$ 11,895 - US$ 14,783 US$ 14,824 US$ (41 ) - US$ 58,351

JPMorgan Chase & Co.
〃
-
-
 - US$ 50,629 - US$ 24,942 - US$ 19,193 US$ 19,343 US$ (150 ) - US$ 58,153

Citigroup Inc.
〃
-
-
 - US$ 61,493 - US$ 18,408 - US$ 31,203 US$ 31,317 US$ (114 ) - US$ 50,436

Sumitomo Mitsui Financial Group, Inc.
〃
-
-
 - US$ 27,658 - US$ 22,091 - US$ 5,907 US$ 6,079 US$ (172 ) - US$ 45,172





(Continued)
- 84 -

Company Name Marketable Securities
Type and Name		 Financial Statement Account Counterparty Nature of Relationship Beginning Balance Acquisition Disposal
Ending Balance (Note 1)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Carrying Value
(Foreign
Currencies in
Thousands)
Gain/Loss on Disposal
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)





TSMC Global
Mitsubishi UFJ Financial Group, Inc.
Financial assets at fair value through other comprehensive income
-
-
 - US$ 32,949 - US$ 14,983 - US$ 12,237 US$ 12,291 US$ (54 ) - US$ 36,903

Barclays PLC
〃
-
-
 - US$ 11,263 - US$ 26,220 - US$ 3,124 US$ 3,150 US$ (26 ) - US$ 35,277

HSBC Holdings plc
〃
-
-
 - US$ 32,402 - US$ 7,361 - US$ 10,731 US$ 10,586 US$ 145 - US$ 30,124

CVS Health Corporation
〃
-
-
 - US$ 4,750 - US$ 26,311 - US$ 7,017 US$ 7,086 US$ (69 ) - US$ 24,591

Lloyds Banking Group plc
〃
-
-
 - US$ 10,533 - US$ 13,842 - US$ 717 US$ 729 US$ (12 ) - US$ 24,131

BPCE SA
〃
-
-
 - US$ 14,691 - US$ 14,478 - US$ 5,840 US$ 5,850 US$ (10 ) - US$ 23,875

Oracle Corporation
〃
-
-
 - US$ 21,865 - US$ 15,752 - US$ 14,576 US$ 14,653 US$ (77 ) - US$ 23,751

Capital One Financial Corporation
〃
-
-
 - US$ 14,125 - US$ 11,035 - US$ 4,232 US$ 4,259 US$ (27 ) - US$ 21,572

Credit Agricole SA London Branch
〃
-
-
 - US$ 11,611 - US$ 10,744 - US$ 2,624 US$ 2,627 US$ (3 ) - US$ 20,395

AIG Global Funding
〃
-
-
 - US$ 8,209 - US$ 12,370 - US$ 2,660 US$ 2,699 US$ (39 ) - US$ 18,428

Metropolitan Life Global Funding I
〃
-
-
 - US$ 24,408 - US$ 4,577 - US$ 11,143 US$ 11,199 US$ (56 ) - US$ 18,299

ABN AMRO Bank N.V.
〃
-
-
 - US$ - - US$ 17,900 - US$ - US$ - US$ - - US$ 18,247

Danske Bank A/S
〃
-
-
 - US$ 6,149 - US$ 17,235 - US$ 7,452 US$ 7,260 US$ 192 - US$ 16,698

The Bank of New York Mellon Corporation
〃
-
-
 - US$ 11,282 - US$ 9,795 - US$ 5,326 US$ 5,250 US$ 76 - US$ 16,064

Amgen Inc.
〃
-
-
 - US$ 310 - US$ 18,377 - US$ 5,611 US$ 5,568 US$ 43 - US$ 13,330

AerCap Ireland Capital Designated Activity Company
〃
-
-
 - US$ - - US$ 12,899 - US$ - US$ - US$ - - US$ 13,278

Pfizer Investment Enterprises Pte. Ltd.
〃
-
-
 - US$ - - US$ 12,584 - US$ - US$ - US$ - - US$ 12,590

ONEOK, Inc.
〃
-
-
 - US$ - - US$ 10,733 - US$ - US$ - US$ - - US$ 11,048

Credit Suisse AG, New York Branch
〃
-
-
 - US$ 12,688 - US$ - - US$ 12,569 US$ 14,369 US$ (1,800 ) - US$ -

Bank of America Corporation
Financial assets at amortized cost
-
-
 - US$ 324,757 - US$ 669,940 - US$ 202,000 US$ 201,456 US$ 544 US$ 799,449

Wells Fargo & Company
〃
-
-
 - US$ 274,713 - US$ 499,184 - US$ 159,000 US$ 158,626 US$ 374 US$ 619,830

Morgan Stanley
〃
-
-
 - US$ 60,207 - US$ 502,595 - US$ - US$ - US$ - US$ 566,880

The Goldman Sachs Group, Inc.
〃
-
-
 - US$ 440,655 - US$ 261,083 - US$ 270,500 US$ 270,500 US$ - US$ 432,811

JPMorgan Chase & Co.
〃
-
-
 - US$ 280,213 - US$ 426,264 - US$ 322,000 US$ 321,685 US$ 315 US$ 391,868

Citigroup Inc.
〃
-
-
 - US$ 174,540 - US$ 232,386 - US$ 159,000 US$ 158,612 US$ 388 US$ 251,481

Citigroup Global Markets Inc.
〃
-
-
 - US$ 349,886 - US$ - - US$ 200,000 US$ 200,000 US$ - US$ 149,951

Citigroup Global Markets Holdings Inc.
〃
-
-
 - US$ 149,951 - US$ - - US$ 50,000 US$ 50,000 US$ - US$ 99,968

Goldman Sachs Finance Corp International Ltd
〃
-
-
 - US$ 149,870 - US$ - - US$ 50,000 US$ 50,000 US$ - US$ 99,905

Citigroup
〃
-
-
 - US$ - - US$ 20,000 - US$ - US$ - US$ - US$ 19,981

Jpmorgan LLC
〃
-
-
 - US$ 49,984 - US$ - - US$ 50,000 US$ 50,000 US$ - US$ -






Agency mortgage-backed securities




FEDERAL NATIONAL MORTGAGE ASSOCIATION
Financial assets at fair value through other comprehensive income
-
-
 - US$ 463,645 - US$ 258,497 - US$ 71,635 US$ 72,541 US$ (906 ) - US$ 658,944

Federal Home Loan Mortgage Corporation
〃
-
-
 - US$ 284,933 - US$ 121,863 - US$ 60,277 US$ 60,692 US$ (415 ) - US$ 350,328

Government National Mortgage Association
〃
-
-
 - US$ 175,067 - US$ 70,079 - US$ 23,182 US$ 23,871 US$ (689 ) - US$ 225,310





(Continued)

- 85 -

Company Name Marketable Securities
Type and Name		 Financial Statement Account Counterparty Nature of Relationship Beginning Balance Acquisition Disposal
Ending Balance (Note 1)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)
Carrying Value
(Foreign
Currencies in
Thousands)
Gain/Loss on Disposal
(Foreign
Currencies in
Thousands)
Shares/Units
(In Thousands)
Amount
(Foreign
Currencies in
Thousands)





TSMC Global
Government bond/Agency bonds




United States Department of The Treasury
Financial assets at fair value through other comprehensive income
 - - - US$ 613,603 - US$ 263,657 - US$ 177,248 US$ 181,715 US$ (4,467 ) - US$ 718,479

Federal Home Loan Mortgage Corporation
〃
 - - - US$ - - US$ 9,993 - US$ 2,994 US$ 3,000 US$ (6 ) - US$ 6,995

Federal Home Loan Banks
Financial assets at amortized cost
 - - - US$ - - US$ 225,000 - US$ - US$ - US$ - US$ 225,000

Federal Home Loan Mortgage Corporation
〃
 - - - US$ - - US$ 160,000 - US$ 25,000 US$ 25,000 US$ - US$ 135,000

United States Department of The Treasury
〃
 - - - US$ - - US$ 88,826 - US$ - US$ - US$ - US$ 88,940




Asset-backed securities


BX Trust 2022-LBA6
Financial assets at fair value through other comprehensive income
 - - - US$ 9,655 - US$ - - US$ 9,794 US$ 10,000 US$ (206 ) - US$ -



TSMC
Convertible preferred stocks

  Development
IMS Nanofabrication Global, LLC
Financial assets at fair value through Profit or Loss
 - - - US$ - - US$ 432,795 - US$ - US$ - US$ - - US$ 432,795






Note 1:    The ending balance includes the realized gain/loss on equity investment, the amortization of premium/discount on bonds investments and other related adjustment.

Note 2:    Includes a prepayment for investment of EUR 139,930 thousand.

Note 3:    TSMC Partners expects to invest US$ 20,000 thousand in Matter Venture Partners Fund I based on the resolution of the board of directors. As of the end of this quarter, US$ 4,200 thousand has been remitted.
(Concluded)

- 86 -

TABLE 5


Taiwan Semiconductor Manufacturing Company Limited and Investees

ACQUISITION OF INDIVIDUAL REAL ESTATE PROPERTIES AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount






TSMC
Real estate
 February 14, 2023 (Note) US$
1,881,000
(Note)
Based on the terms in the purchase order
65 counterparties(Note), including:
 - N/A N/A N/A N/A
Price comparison and price negotiation
Manufacturing purpose
 None




ABB Ltd.






Accudevice Co., Ltd.






Air Liquide Far Eastern Ltd.






Allis Electric Co., Ltd.






Am-Power Machine International Enterprise Co., Ltd.






Atlas Copco Taiwan Ltd.






Atlas Technology Corp.






Capital Machinery Limited






Chen Yuan International Co., Ltd.






Chenfull International Co., Ltd.






Cheng Deh Fire Protection Industrial Corp.






Cica-Huntek Chemical Technology Taiwan Co., Ltd.






Confederate Technology Co., Ltd.






Desiccant Technology Corporation






Exyte Taiwan Co., Ltd.






Fortune Electric Co., Ltd.






Hantech Engineering Co., Ltd.






Hsieh Kun Co., Ltd.






Hueng Luei Process Industry Co., Ltd.









(Continued)

- 87 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate


Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore)






JG Environmental Technology Co., Ltd.






JJmr-Clean-Air Solution Tech.Services Co., Ltd.






Jusun Instruments Co., Ltd.






Kinetics Technology Corporation






L&K Engineering Co., Ltd.






Marketech International Corp.






Mega Union Technology Incorporated






Organo Technology Co., Ltd.






Ovivo Taiwan Co., Ltd.






San Fu Chemical Co., Ltd.






Schneider Electric Taiwan Co., Ltd.






Shihlin Electric & Engineering Corporation






Siemens Limited






Solomon Technology Corporation






Swift Engineering Co., Ltd.






Taiwan Gleno Enterprise Co., Ltd.






Taiwan Puritic Corp.






Techgo Industrial Co., Ltd.






Trusval Technology Co., Ltd.






Uangyih-Tech Industrial Co., Ltd.






Unelectra International Corp.






United Integrated Services Co., Ltd.






Versum Materials Taiwan Co., Ltd.






Weltall Technology Corporation






Wholetech System Hitech Limited






Yangtech Engineering Co., Ltd.






Yankey Engineering Co., Ltd.






Ying Pao Technology Inc.









(Continued)
- 88 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate
May 9, 2023
(Note)
 US$
366,000
(Note)
Based on the terms in the purchase order
65 counterparties(Note), including:
 - N/A N/A N/A N/A
Price comparison and price negotiation
Manufacturing purpose
 None




ABB Ltd.






Accudevice Co., Ltd.






Air Liquide Far Eastern Ltd.






Allis Electric Co., Ltd.






Am-Power Machine International Enterprise Co., Ltd.






Atlas Copco Taiwan Ltd.






Atlas Technology Corp.






Capital Machinery Limited






Chen Yuan International Co., Ltd.






Chenfull International Co., Ltd.






Cheng Deh Fire Protection Industrial Corp.






Cica-Huntek Chemical Technology Taiwan Co., Ltd.






Confederate Technology Co., Ltd.






Desiccant Technology Corporation






Exyte Taiwan Co., Ltd.






Fortune Electric Co., Ltd.






Hantech Engineering Co., Ltd.






Hsieh Kun Co., Ltd.






Hueng Luei Process Industry Co., Ltd.






Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore)






JG Environmental Technology Co., Ltd.






JJmr-Clean-Air Solution Tech.Services Co., Ltd.






Jusun Instruments Co., Ltd.






Kinetics Technology Corporation






L&K Engineering Co., Ltd.









(Continued)

- 89 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate


Marketech International Corp.






Mega Union Technology Incorporated






Organo Technology Co., Ltd.






Ovivo Taiwan Co., Ltd.






San Fu Chemical Co., Ltd.






Schneider Electric Taiwan Co., Ltd.






Shihlin Electric & Engineering Corporation






Siemens Limited






Solomon Technology Corporation






Swift Engineering Co., Ltd.






Taiwan Gleno Enterprise Co., Ltd.






Taiwan Puritic Corp.






Techgo Industrial Co., Ltd.






Trusval Technology Co., Ltd.






Uangyih-Tech Industrial Co., Ltd.






Unelectra International Corp.






United Integrated Services Co., Ltd.






Versum Materials Taiwan Co., Ltd.






Weltall Technology Corporation






Wholetech System Hitech Limited






Yangtech Engineering Co., Ltd.






Yankey Engineering Co., Ltd.






Ying Pao Technology Inc.



Real estate
August 8, 2023
(Note)
 US$
4,363,000
(Note)
Based on the terms in the purchase order
90 counterparties(Note), including:
 - N/A N/A N/A N/A
Price comparison and price negotiation
Manufacturing purpose
 None




ABB Ltd.






Accudevice Co., Ltd.






Air Liquide Far Eastern Ltd.






All-Bau AG + Co. Gewerbepark KG









(Continued)

- 90 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate


Allis Electric Co., Ltd.






Am-Power Machine International Enterprise Co., Ltd.






Areal Holding Gesellschaft mbH, Dresden






Atlas Copco Taiwan Ltd.






Atlas Technology Corp.






Capital Machinery Limited






Chang Chun Petrochemical Co., Ltd.






Chen Yuan International Co., Ltd.






Chenfull International Co., Ltd.






Cheng Deh Fire Protection Industrial Corp.






Chien Kuo Construction Co., Ltd.






China Steel Structure Co., Ltd.






Chun Yuan Steel Industry Co., Ltd.






Chung-Lin General Contractors, Ltd.






Cica-Huntek Chemical Technology Taiwan Co., Ltd.






Confederate Technology Co., Ltd.






Da-Cin Construction Co., Ltd.






Desiccant Technology Corporation






Evergreen Steel Corporation






Exyte Taiwan Co., Ltd.






F6 Cigarettenfabrik GmbH & Co. KG






Fortune Electric Co., Ltd.






Fu Tsu Construction Co., Ltd.






Hantech Engineering Co., Ltd.






Hsieh Kun Co., Ltd.






Hueng Luei Process Industry Co., Ltd.









(Continued)
- 91 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate


Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore)






J.C. Yang Architect and Associates






JG Environmental Technology Co., Ltd.






JJmr-Clean-Air Solution Tech.Services Co., Ltd.






Jusun Instruments Co., Ltd.






Kedge Construction Co., Ltd.






Kinetics Technology Corporation






L&K Engineering Co., Ltd.






Lead-Fu Industrials Corporation






Lee Ming Construction Co., Ltd.






Li Jin Engineering Co., Ltd






Mandartech Interiors Inc.






Marketech International Corp.






Mega Union Technology Incorporated






Organo Technology Co., Ltd.






Ovivo Taiwan Co., Ltd.






Pan Asia (Engineers & Constructors) Corporation






Ruentex Engineering & Construction Co., Ltd.






San Fu Chemical Co., Ltd.






Schneider Electric Taiwan Co., Ltd.






Shihlin Electric & Engineering Corporation






Siemens Limited






Solomon Technology Corporation






Swift Engineering Co., Ltd.






Taiwan Gleno Enterprise Co., Ltd.






Taiwan Obayashi Corporation






TASA Construction Corporation









(Continued)

- 92 -


Company Name
Types of
Property
 Transaction Date
Transaction Amount
(Foreign Currencies in Thousands)
 Payment Term Counterparty Nature of Relationships Prior Transaction of Related Counterparty Price Reference Purpose of Acquisition
Other
Terms
Owner Relationships Transfer Date Amount







TSMC
Real estate


Taiwan Puritic Corp.






Techgo Industrial Co., Ltd.






Trusval Technology Co., Ltd.






Tung Kang Steel Structure Corp.






Uangyih-Tech Industrial Co., Ltd.






Unelectra International Corp.






United Integrated Services Co., Ltd.






Versum Materials Taiwan Co., Ltd.






Wei Shung Technology Corporation






Weltall Technology Corporation






Wholetech System Hitech Limited






Yangtech Engineering Co., Ltd.






Yankey Engineering Co., Ltd.






Ying Pao Technology Inc.






Zhao-Cheng Corp.



Real estate
November 14, 2023
(Note)
 US$
464,000
(Note)
Based on the terms in the purchase order
27 counterparties(Note), including:
 - N/A N/A N/A N/A
Price comparison and price negotiation
Manufacturing purpose
 None




Hsinchu Science Park Bureau, Ministry of Science and Technology






Southern Taiwan Science Park Bureau, Ministry of Science and Technology










Note:    The disclosures are expected information based on the capital appropriation approved by the Board of Directors (Right-of-use assets are included). The actual information shall be subject to the final purchase order of TSMC.

(Concluded)

- 93 -

TABLE 6


Taiwan Semiconductor Manufacturing Company Limited and Investees

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Company Name Related Party Nature of Relationships Transaction Details Abnormal Transaction Notes/Accounts Payable or Receivable Note
Purchases/
Sales
Amount
(Foreign Currencies in Thousands)
 % to Total Payment Terms Unit Price Payment Terms
Ending Balance
(Foreign Currencies in Thousands)
 % to Total






TSMC
TSMC North America
Subsidiary
 Sales $ 1,459,559,406
66
Net 30 days from invoice date (Note)
 - - $ 154,789,324
82

JASM
Subsidiary
 Sales 356,150
-
Net 30 days from the end of the month of when invoice is issued
 - - -
-

TSMC Arizona
Subsidiary
 Sales 145,150
-
Net 30 days from the end of the month of when invoice is issued
 - - -
-

GUC
Associate
 Sales 8,898,237
-
Net 30 days from invoice date
 - - 471,728
-

TSMC Nanjing
Subsidiary
 Purchases 62,252,516
35
Net 30 days from the end of the month of when invoice is issued
 - - (5,064,282 )
9

TSMC China
Subsidiary
 Purchases 25,643,202
14
Net 30 days from the end of the month of when invoice is issued
 - - (2,312,769 )
4

TSMC Washington
Indirect subsidiary
 Purchases 8,302,902
5
Net 30 days from the end of the month of when invoice is issued
 - - (199,158 )
-

SSMC
Associate
 Purchases 3,493,671
2
Net 30 days from the end of the month of when invoice is issued
 - - (457,348 )
1

VIS
Associate
 Purchases 1,068,535
1
Net 30 days from the end of the month of when invoice is issued
 - - (66,653 )
-






TSMC North America
GUC
Associate of TSMC
 Sales 3,859,301
-
Net 30 days from invoice date
 - - 43,091
-



(US$ 124,986 )


(US$ 1,401 )







VisEra Tech
Xintec
Associate of TSMC
 Sales 642,113
9
Net 60 days from the end of the month of when invoice is issued
 - - 109,632
12

Note:    The tenor is determined by the payment terms granted to its clients by TSMC North America.


- 94 -

TABLE 7


Taiwan Semiconductor Manufacturing Company Limited and Investees

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
December 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Company Name Related Party Nature of Relationships
Ending Balance
(Foreign Currencies in Thousands)
 Turnover Days (Note 1) Overdue Amounts Received in Subsequent Period
Allowance for
Bad Debts
Amount Action Taken



TSMC
TSMC North America
Subsidiary
 $ 158,537,008 41 $ 114,137 - $ 81,336,750 $ -

JASM
Subsidiary
 416,139 Note 2 - - - -

GUC
Associate
 471,728 36 - - - -



TSMC North America
TSMC
Parent company
$
(US$
116,051
3,774
$
)
 Note 2 - - - -



TSMC JDC
TSMC
Parent company
 142,303 Note 2 - - - -



(JPY 649,192 )



TSMC China
TSMC
Parent company
 2,312,769 33 - - - -



(RMB 533,456 )

TSMC Nanjing
The same parent company
 38,395,507 Note 2 - - - -



(RMB 8,856,278 )



TSMC Nanjing
TSMC
Parent company
 5,064,282 27 - - - -



(RMB 1,168,110 )



VisEra Tech
Xintec
Associate of TSMC
 109,632 63 - - - -



TSMC Technology
TSMC
The ultimate parent of the Company
$
(US$
483,851
15,737
$
)
 Note 2 - - - -



TSMC Washington
TSMC
The ultimate parent of the Company
$
(US$
199,158
6,477
$
)
 23 - - - -




TSMC Development
Parent company
 342,004 Note 2 - - - -



(US$ 11,123 )

Note 1:    The calculation of turnover days excludes other receivables from related parties.

Note 2:    The ending balance is primarily consisted of other receivables, which is not applicable for the calculation of turnover days.


- 95 -

TABLE 8


Taiwan Semiconductor Manufacturing Company Limited and Investees

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA)
FOR THE YEAR ENDED DECEMBER 31, 2023
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Investor Company Investee Company Location Main Businesses and Products Original Investment Amount Balance as of December 31, 2023 Net Income (Losses) of the Investee
(Foreign Currencies in Thousands)
Share of Profits/Losses
of Investee
(Note 1)
(Foreign Currencies in Thousands)
 Note
December 31,
2023
(Foreign Currencies in Thousands)
December 31,
2022
(Foreign Currencies in Thousands)
 Shares (In Thousands) Percentage of Ownership
Carrying Value
(Foreign Currencies in Thousands)





TSMC
TSMC Global
Tortola, British Virgin Islands
Investment activities
 $ 355,162,309 $ 355,162,309 11 100 $ 441,225,883 $ 24,922,961 $ 24,922,961
Subsidiary

TSMC Arizona
Phoenix, Arizona, U.S.A.
Manufacturing, sales and testing of integrated circuits and other semiconductor devices
 329,665,310 37,015,800 10,500 100 298,604,975 (10,924,639 ) (10,924,639 )
Subsidiary

TSMC Partners
Tortola, British Virgin Islands
Investing in companies involved in the semiconductor design and manufacturing, and other investment activities
 31,456,130 31,456,130 988,268 100 68,143,719 2,776,792 2,776,792
Subsidiary

JASM
Kumamoto, Japan
Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices
 52,630,042 24,567,085 2,269 71 47,087,140 (2,965,675 ) (2,120,037 )
Subsidiary

VIS
Hsin-Chu, Taiwan
Manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks
 10,180,677 10,180,677 464,223 28 13,590,430 7,370,074 2,082,598
Associate

VisEra Tech
Hsin-Chu, Taiwan
Research, design, development, manufacturing, sales, packaging and test of color filter
 4,224,082 4,224,082 213,619 67 11,261,961 356,080 240,749
Subsidiary

SSMC
Singapore
Manufacturing and sales of integrated circuits and other semiconductor devices
 5,120,028 5,120,028 314 39 9,728,801 2,040,560 791,533
Associate

TSMC North America
San Jose, California, U.S.A
Sales and marketing of integrated circuits and other semiconductor devices
 333,718 333,718 11,000 100 6,278,751 836,066 836,066
Subsidiary

ESMC
Dresden, Germany
Manufacturing, sales and testing of integrated circuits and other semiconductor devices
4,814,293
(Note 4)
 - 100 100 4,768,013 (17,570 ) (17,570 )
Subsidiary

Xintec
Taoyuan, Taiwan
Wafer level chip size packaging and wafer level post passivation interconnection service
 1,988,317 1,988,317 111,282 41 3,759,701 1,375,774 564,191
Associate

GUC
Hsin-Chu, Taiwan
Researching, developing, manufacturing, testing and marketing of integrated circuits
 386,568 386,568 46,688 35 2,537,706 3,507,885 1,222,121
Associate

Emerging Fund
Cayman Islands
Investing in technology start-up companies
 1,666,585 1,269,425 - 99.9 1,901,742 20,313 20,293
Subsidiary

TSMC 3DIC
Yokohama, Japan
Engineering support activities
 1,144,356 1,144,356 49 100 1,224,449 122,786 122,786
Subsidiary

TSMC Europe
Amsterdam, the Netherlands
Customer service and supporting activities
 15,749 15,749 - 100 592,499 42,865 42,865
Subsidiary

TSMC JDC
Yokohama, Japan
Engineering support activities
 410,680 410,680 15 100 394,191 40,787 40,787
Subsidiary

VTAF III
Cayman Islands
Investing in technology start-up companies
 1,242,679 1,239,621 - 98 257,540 6,619 6,487
Subsidiary

TSMC Japan
Yokohama, Japan
Customer service and supporting activities
 83,760 83,760 6 100 130,403 4,084 4,084
Subsidiary

VTAF II
Cayman Islands
Investing in technology start-up companies
 260,300 260,300 - 98 117,662 429 421
Subsidiary

TSMC Korea
Seoul, Korea
Customer service and supporting activities
 13,656 13,656 80 100 44,599 1,792 1,792
Subsidiary





TSMC Partners
TSMC Development
Delaware, U.S.A
Investing in companies involved in semiconductor manufacturing
$
(US$
18,046,607
586,939
$
)
$
(US$
18,046,607
586,939
$
)
 - 100
$
(US$
37,841,815
1,230,748
$
)
$
(US$
1,191,778
38,760
$
)
 Note 2
Subsidiary

TSMC Technology
Delaware, U.S.A
Engineering support activities
 439,129 439,129 - 100 1,126,524 130,938 Note 2
Subsidiary




(US$ 14,282 ) (US$ 14,282 ) (US$ 36,638 ) (US$ 4,284 )


TSMC Canada
Ontario, Canada
Engineering support activities
 70,718 70,718 2,300 100 378,925 49,846 Note 2
Subsidiary




(US$ 2,300 ) (US$ 2,300 ) (US$ 12,324 ) (US$ 1,596 )






(Continued)
- 96 -


Investor Company Investee Company Location Main Businesses and Products Original Investment Amount Balance as of December 31, 2023 Net Income (Losses) of the Investee
(Foreign Currencies in Thousands)
Share of Profits/Losses
of Investee
(Note 1)
(Foreign Currencies in Thousands)
 Note
December 31,
2023
(Foreign Currencies in Thousands)
December 31,
2022
(Foreign Currencies in Thousands)
 Shares (In Thousands) Percentage of Ownership
Carrying Value
(Foreign Currencies in Thousands)





VTAF III
Growth Fund
Cayman Islands
Investing in technology start-up companies
 $ 70,578 $ 67,504 - 100 $ 188,990 $ (996 ) Note 2
Subsidiary




(US$ 2,295 ) (US$ 2,195 ) (US$ 6,147 ) (US$ (32 ))


Mutual-Pak
New Taipei, Taiwan
Manufacturing of electronic parts, wholesaling and retailing of electronic materials, and researching, developing and testing of RFID
 Note 3
$
(US$
48,991
1,593
$
)$
 Note 3 Note 3 Note 3 Note 3 Note 2
Note 3





TSMC Development
TSMC Washington
Washington, U.S.A
Manufacturing, sales and testing of integrated circuits and other semiconductor devices
 - - 293,637 100
$
(US$
5,829,197
189,586
$
)
$
(US$
171,187
6,053
$
)
 Note 2
Subsidiary






Note 1:    The share of profits/losses of investee includes the effect of unrealized gross profit on intercompany transactions.

Note 2:    The share of profits/losses of the investee company is not reflected herein as such amount is already included in the share of profits/losses of the investor company.

Note 3:    Due to the decrease in shareholding to 17%, the Company consequently ceased to have significant influence over Mutual-Pak. Therefore, the investment in Mutual-Pak was classified as financial assets at FVTOCI starting November 2023.

Note 4:    Includes a prepayment for investment of EUR 139,930 thousand.
(Concluded)

- 97 -

TABLE 9


Taiwan Semiconductor Manufacturing Company Limited and Investees

INFORMATION ON INVESTMENT IN MAINLAND CHINA
FOR YEAR ENDED DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Investee Company Main Businesses and Products
Total Amount of Paid-in Capital
(RMB in Thousands)
 Method of Investment
Accumulated Outflow of Investment from Taiwan as of January 1, 2023
(US$ in Thousands)
 Investment Flows
Accumulated Outflow of Investment from Taiwan as of
December 31, 2023 (US$ in Thousands)
 Net Income (Losses) of the Investee Company Percentage of Ownership Share of Profits/Losses
Carrying Amount
as of
Balance as of December 31, 2023
Accumulated Inward Remittance of Earnings as of
December 31, 2023
Outflow
(US$ in Thousands)
 Inflow


TSMC China
Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices
$
(RMB
18,939,667
4,502,080
$
)
 Note 1
$
(US$
18,939,667
596,000
$
)
 $ - $ -
$
(US$
18,939,667
596,000
$
)
 $ 10,118,593 100% $
10,210,745
(Note 2)
 $ 95,419,097 $ -


TSMC Nanjing
Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices
$
(RMB
30,521,412
6,650,119
$
)
 Note 1
$
(US$
30,521,412
1,000,000
$
)
 - -
$
(US$
30,521,412
1,000,000
$
)
 21,755,071 100%
21,762,378
(Note 2)
 87,625,830 -

Accumulated Investment in Mainland China as of December 31, 2023
(US$ in Thousands)
Investment Amounts Authorized by
Investment Commission, MOEA
(US$ in Thousands)
 Upper Limit on Investment
$    49,461,079
(US$    1,596,000)
$    119,412,667
(US$    3,596,000)
$    2,089,957,708
(Note 3)

Note 1:    TSMC directly invested US$596,000 thousand in TSMC China and US$1,000,000 thousands in TSMC Nanjing.

Note 2:    Amount was recognized based on the audited financial statements.

Note 3:    The upper limit on investment in mainland China is determined by sixty percent (60%) of the Company's consolidated net worth.


- 98 -

TABLE 10


Taiwan Semiconductor Manufacturing Company Limited

INFORMATION ON MAJOR SHAREHOLDERS
DECEMBER 31, 2023


Shareholders (Note 1) Shares
Total Shares Owned Ownership Percentage (Note 2)
ADR-Taiwan Semiconductor Manufacturing Company Ltd. 5,315,513,063 20.50%
National Development Fund, Executive Yuan 1,653,709,980 6.38%

Note1:    Major shareholders shows the list of all shareholders with ownership of 5 percent or greater.

Note2:    The calculation of ownership percentage is rounded to two decimal places.
- 99 -


THE CONTENTS OF STATEMENTS OF MAJOR
ACCOUNTING ITEMS

ITEM STATEMENT INDEX


MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY

STATEMENT OF CASH AND CASH EQUIVALENTS
1
STATEMENT OF NOTES AND ACCOUNTS RECEIVABLE, NET
2
STATEMENT OF RECEIVABLES FROM RELATED PARTIES
3
STATEMENT OF INVENTORIES
4
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD
5
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT
 Note 13
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION AND ACCUMULATED IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT
Note 13
STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS
 6
STATEMENT OF CHANGES IN INTANGIBLE ASSETS
Note 15
STATEMENT OF DEFERRED INCOME TAX ASSETS / LIABILITIES
Note 23
STATEMENT OF ACCOUNTS PAYABLES
7
STATEMENT OF PAYABLES TO RELATED PARTIES
8
STATEMENT OF PAYABLES TO CONTRACTORS AND EQUIPMENT SUPPLIERS
9
STATEMENT OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
10
STATEMENT OF BONDS PAYABLE
11
STATEMENT OF LEASE LIABILITIES
12
MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS

STATEMENT OF NET REVENUE
13
STATEMENT OF COST OF REVENUE
14
STATEMENT OF OPERATING EXPENSES
15
STATEMENT OF FINANCE COSTS
Note 21
STATEMENT OF LABOR, DEPRECIATION AND AMORTIZATION BY FUNCTION
16

- 100 -

STATEMENT 1


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF CASH AND CASH EQUIVALENTS
DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Item Description Amount


Cash

Petty cash

$ 400
Cash in banks

Checking accounts and demand deposits

4,044,596
Foreign currency deposits
Including US$1,572,022 thousand @30.747, JPY7,103,748 thousand @0.2192 and EUR7,299 thousand @34.175
 50,141,558
Time deposits
From 2023.08.02 to 2024.05.31, interest rates at 0.84%-5.99%, including NT$483,710,492 thousand, US$5,157,940 thousand @30.747 and EUR400,000 thousand @34.175
 655,971,678
Cash equivalents

Money market funds

7,438,588
Repurchase agreements
Expired by 2024.01.29, interest rates at 5.95%
 1,106,892


Total

$ 718,703,712




- 101 -


STATEMENT 2


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF NOTES AND ACCOUNTS RECEIVABLE, NET
DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Client Name
 Amount

Client A
 $ 13,304,349

Client B
 5,770,773

Client C
 2,393,706

Client D
 2,271,656

Others (Note)
 10,346,934


34,087,418

Less: Allowance for doubtful accounts
 (530,139 )

Total
 $ 33,557,279

Note:    The amount of individual client included in others does not exceed 5% of the account balance.

    

- 102 -

STATEMENT 3


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF RECEIVABLES FROM RELATED PARTIES
DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Client Name
 Amount

TSMC North America
 $ 154,789,324

Others (Note)
 472,553

Total
 $ 155,261,877

Note:    The amount of individual client included in others does not exceed 5% of the account balance.

    



- 103 -


STATEMENT 4


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF INVENTORIES
DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Amount
Item Cost Net Realizable Value

Finished goods
 $ 33,839,662 $ 98,436,995

Work in process
 153,362,168 592,888,207

Raw materials
 37,279,545 37,279,545

Supplies and spare parts
 13,777,820 13,777,820

Total
 $ 238,259,195 $ 742,382,567


    

- 104 -

STATEMENT 5


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD
FOR THE YEAR ENDED DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Increase
(Decrease)
in Using the Market Value or
Balance, January 1, 2023 Additions in Investment Decrease in Investment Equity Method Balance, December 31, 2023 Net Assets Value
Shares Shares Shares Amount Shares Unit Price
Investees (In Thousands) Amount (In Thousands) Amount (In Thousands) Amount (Note 2) (In Thousands) % Amount (NT$) Total Amount Collateral

Stocks
TSMC Global
 11 $ 411,992,426 - $ - - $ - $ 29,233,457 11
            100
 $ 441,225,883 $ - $ 441,225,883 Nil
TSMC Arizona
 1,270 25,639,079 9,230 292,649,510 - - (19,683,614 ) 10,500
            100
 298,604,975 - 298,642,301 Nil
TSMC Partners
 988,268 63,697,217 - - - - 4,446,502 988,268
            100
 68,143,719 - 68,199,776 Nil
JASM
 1,020 23,330,125 1,249 28,062,957 - - (4,305,942 ) 2,269
            71
 47,087,140 - 47,211,905 Nil
VIS
 464,223 13,492,653 - - - - 97,777 464,223
            28
 13,590,430 82(Note 1 ) 37,834,215 Nil
VisEra Tech
 213,619 11,467,860 - - - - (205,899 ) 213,619
            67
 11,261,961 277(Note 1 ) 59,065,654 Nil
SSMC
 314 8,934,731 - - - - 794,070 314
            39
 9,728,801 - 9,514,817 Nil
TSMC North America
 11,000 5,449,755 - - - - 828,996 11,000
            100
 6,278,751 - 6,278,751 Nil
ESMC
 - - 100
4,814,293
(Note 3)
 - - (46,280 ) 100
            100
 4,768,013 - 4,768,013 Nil
Xintec
 111,282 3,528,417 - - - - 231,284 111,282
            41
 3,759,701 128(Note 1 ) 14,188,445 Nil
GUC
 46,688 1,666,651 - - - - 871,055 46,688
            35
 2,537,706 1,740(Note 1 ) 81,236,875 Nil
TSMC 3DIC
 49 1,172,706 - - - - 51,743 49
            100
 1,224,449 - 1,224,449 Nil
TSMC Europe
 - 527,693 - - - - 64,806 -
            100
 592,499 - 592,499 Nil
TSMC JDC
 15 376,176 - - - - 18,015 15
            100
 394,191 - 394,191 Nil
TSMC Japan
 6 134,560 - - - - (4,157 ) 6
            100
 130,403 - 130,403 Nil
TSMC Korea
 80 44,082 - - - - 517 80
            100
 44,599 - 44,599 Nil
Subtotal
 571,454,131 325,526,760 - 12,392,330

909,373,221 1,070,552,776


Capital

TSMC China
 - 87,028,722 - - - - 8,390,375 -
            100
 95,419,097 - 95,757,396 Nil
TSMC Nanjing
 - 67,385,300 - - - - 20,240,530 -
            100
 87,625,830 - 87,656,880 Nil
Emerging Fund
 - 1,760,885 - 641,536 - (244,376 ) (256,303 ) -
            99.9
 1,901,742 - 1,901,742 Nil
VTAF III
- 246,702 - 3,058 - - 7,780 -
            98
 257,540 - 234,205 Nil
VTAF II
 - 71,429 - - - - 46,233 -
            98
 117,662 - 111,416 Nil
Subtotal
 156,493,038 644,594 (244,376 ) 28,428,615

185,321,871 185,661,639


Total
 $ 727,947,169 $ 326,171,354 $ (244,376 ) $ 40,820,945

$ 1,094,695,092 $ 1,256,214,415

Note 1:    The unit price is calculated by closing price of the Taipei Exchange or the TWSE as of December 29,2023.

Note 2:    Mainly including share of profit or loss of subsidiaries and associates, share of other comprehensive income of subsidiaries and associates, cash dividends received from subsidiaries and associates, etc.

Note 3:    Includes a prepayment for investment of EUR 139,930 thousand.


- 105 -

STATEMENT 6


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF RIGHT-OF-USE ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Item Land Buildings Office Equipment Total

Cost
Balance at January 1, 2023
 $ 44,197,961 $ 1,716,590 $ 51,851 $ 45,966,402
Additions
1,391,105 246,426 20,355 1,657,886
Deductions
 (34,180 ) (149,481 ) (14,023 ) (197,684 )

Balance at December 31, 2023
 $ 45,554,886 $ 1,813,535 $ 58,183 $ 47,426,604

Accumulated depreciation
Balance at January 1, 2023
 $ 6,076,126 $ 805,482 $ 33,367 $ 6,914,975
Additions
2,439,615 330,361 16,193 2,786,169
Deductions
 - (133,345 ) (13,900 ) (147,245 )

Balance at December 31, 2023
 $ 8,515,741 $ 1,002,498 $ 35,660 $ 9,553,899

Carrying amounts at December 31, 2023
 $ 37,039,145 $ 811,037 $ 22,523 $ 37,872,705


- 106 -

STATEMENT 7


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF ACCOUNTS PAYABLES
DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Vendor Name Amount


Vendor A

$ 2,483,914


Others (Note)

45,159,579


Total

$ 47,643,493

Note:    The amount of individual vendor included in others does not exceed 5% of the account balance    

- 107 -

STATEMENT 8


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF PAYABLES TO RELATED PARTIES
DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Vendor Name Amount

TSMC Nanjing
 $ 5,064,282

TSMC China
 2,312,769

Xintec
 1,020,153

Others (Note)
 1,722,491

Total
 $ 10,119,695

Note:    The amount of individual vendor in others does not exceed 5% of the account balance.



- 108 -

STATEMENT 9


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF PAYABLES TO CONTRACTORS AND EQUIPMENT SUPPLIERS
DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Vendor Name Amount

Vendor A
 $ 15,937,674

Vendor B
 5,751,033

Vendor C
 5,334,257

Others (Note) 57,123,209
Total
 $ 84,146,173

Note:    The amount of individual vendor included in others does not exceed 5% of the account balance.

- 109 -

STATEMENT 10


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Item Amount

Temporary receipts from customers
$ 114,639,514

Contract liabilities
 47,760,098

Refund liability
 36,144,370

Others (Note)
 43,314,526

Total
 $ 241,858,508

Note:    The amount of each item in others does not exceed 5% of the account balance.

- 110 -

STATEMENT 11


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF BONDS PAYABLE
DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Amount
Interest Coupon Repayment Balance, Premiums
Bonds Name Trustee Issuance Date Payment Date Rate (%) Total Amount Paid End of Year (Discounts) Carrying Value Unamortized Repayment Collateral


Domestic unsecured bonds-101-4

-C
Taipei Fubon Commercial Bank Co., Ltd.
 2013.01.04 On 01.04 annually 1.49 $ 3,000,000 $ 3,000,000 $ - $ - $ -
Bullet repayment
 Nil
Domestic unsecured bonds-102-1


-C
Taipei Fubon Commercial Bank Co., Ltd.
 2013.02.06 On 02.06 annually 1.50 3,600,000 3,600,000 - - -
Bullet repayment
 Nil
Domestic unsecured bonds-102-2


-B
Taipei Fubon Commercial Bank Co., Ltd.
 2013.07.16 On 07.16 annually 1.70 3,500,000 3,500,000 - - -
Bullet repayment
 Nil
Domestic unsecured bonds-102-4


-E
Taipei Fubon Commercial Bank Co., Ltd.
 2013.09.25 On 09.25 annually 2.05 5,400,000 5,400,000 - - -
Bullet repayment
 Nil
-F
Taipei Fubon Commercial Bank Co., Ltd.
 2013.09.25 On 09.25 annually 2.10 2,600,000 2,600,000 - - -
Bullet repayment
 Nil
Domestic unsecured bonds-109-1


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2020.03.23 On 03.23 annually 0.58 3,000,000 - 3,000,000 (764 ) 2,999,236
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2020.03.23 On 03.23 annually 0.62 10,500,000 - 10,500,000 (5,075 ) 10,494,925
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2020.03.23 On 03.23 annually 0.64 10,500,000 - 10,500,000 (6,844 ) 10,493,156
Bullet repayment
 Nil
Domestic unsecured bonds-109-2


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2020.04.15 On 04.15 annually 0.52 5,900,000 - 5,900,000 (1,570 ) 5,898,430
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2020.04.15 On 04.15 annually 0.58 10,400,000 - 10,400,000 (5,038 ) 10,394,962
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2020.04.15 On 04.15 annually 0.60 5,300,000 - 5,300,000 (3,447 ) 5,296,553
Bullet repayment
 Nil
Domestic unsecured bonds-109-3


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2020.05.29 On 05.29 annually 0.55 4,500,000 - 4,500,000 (1,333 ) 4,498,667
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2020.05.29 On 05.29 annually 0.60 7,500,000 - 7,500,000 (3,832 ) 7,496,168
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2020.05.29 On 05.29 annually 0.64 2,400,000 - 2,400,000 (1,624 ) 2,398,376
Bullet repayment
 Nil
Domestic unsecured bonds-109-4


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2020.07.14 On 07.14 annually 0.58 5,700,000 - 5,700,000 (1,374 ) 5,698,626
Two equal installments in last two years
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2020.07.14 On 07.14 annually 0.65 6,300,000 - 6,300,000 (3,093 ) 6,296,907
Two equal installments in last two years
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2020.07.14 On 07.14 annually 0.67 1,900,000 - 1,900,000 (1,277 ) 1,898,723
Two equal installments in last two years
 Nil
Domestic unsecured bonds-109-5


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2020.09.03 On 09.03 annually 0.50 4,800,000 - 4,800,000 (1,313 ) 4,798,687
Two equal installments in last two years
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2020.09.03 On 09.03 annually 0.58 8,000,000 - 8,000,000 (4,077 ) 7,995,923
Two equal installments in last two years
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2020.09.03 On 09.03 annually 0.60 2,800,000 - 2,800,000 (1,911 ) 2,798,089
Two equal installments in last two years
 Nil
Domestic unsecured bonds-109-6


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2020.12.02 On 12.02 annually 0.40 1,600,000 - 1,600,000 (575 ) 1,599,425
Two equal installments in last two years
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2020.12.02 On 12.02 annually 0.44 5,600,000 - 5,600,000 (3,342 ) 5,596,658
Two equal installments in last two years
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2020.12.02 On 12.02 annually 0.48 4,800,000 - 4,800,000 (3,688 ) 4,796,312
Two equal installments in last two years
 Nil
Domestic unsecured bonds-109-7


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2020.12.29 On 12.29 annually 0.36 1,900,000 - 1,900,000 (652 ) 1,899,348
Two equal installments in last two years
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2020.12.29 On 12.29 annually 0.41 10,200,000 - 10,200,000 (5,678 ) 10,194,322
Two equal installments in last two years
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2020.12.29 On 12.29 annually 0.45 6,400,000 - 6,400,000 (4,557 ) 6,395,443
Two equal installments in last two years
 Nil
Domestic US$ unsecured bonds-109-1
Mega International Commercial Bank Co., Ltd.
 2020.09.22 On 09.22 annually 2.70 30,747,000 - 30,747,000 (30,365 ) 30,716,635
Bullet repayment (callable on the 5th anniversary of the issue date and every anniversary thereafter)
 Nil
Domestic unsecured bonds-110-1


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2021.03.30 On 03.30 annually 0.50 4,800,000 - 4,800,000 (2,229 ) 4,797,771
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2021.03.30 On 03.30 annually 0.55 11,400,000 - 11,400,000 (7,163 ) 11,392,837
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2021.03.30 On 03.30 annually 0.60 4,900,000 - 4,900,000 (3,685 ) 4,896,315
Bullet repayment
 Nil
Domestic unsecured bonds-110-2


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2021.05.03 On 05.03 annually 0.50 5,200,000 - 5,200,000 (2,516 ) 5,197,484
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2021.05.03 On 05.03 annually 0.58 8,400,000 - 8,400,000 (5,402 ) 8,394,598
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2021.05.03 On 05.03 annually 0.65 5,600,000 - 5,600,000 (4,272 ) 5,595,728
Bullet repayment
 Nil
Domestic unsecured bonds-110-3


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2021.06.25 On 06.25 annually 0.52 6,900,000 - 6,900,000 (3,545 ) 6,896,455
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2021.06.25 On 06.25 annually 0.58 7,900,000 - 7,900,000 (5,246 ) 7,894,754
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2021.06.25 On 06.25 annually 0.65 4,900,000 - 4,900,000 (3,797 ) 4,896,203
Bullet repayment
 Nil
(Continued)
- 111 -

Amount
Interest Coupon Repayment Balance, Premiums
Bonds Name Trustee Issuance Date Payment Date Rate (%) Total Amount Paid End of Year (Discounts) Carrying Value Unamortized Repayment Collateral


Domestic unsecured bonds-110-4


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2021.08.19 On 08.19 annually 0.485 $ 4,000,000 $ - $ 4,000,000 $ (1,666 ) $ 3,998,334
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2021.08.19 On 08.19 annually 0.50 8,000,000 - 8,000,000 (4,299 ) 7,995,701
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2021.08.19 On 08.19 annually 0.55 5,400,000 - 5,400,000 (3,654 ) 5,396,346
Bullet repayment
 Nil
-D
Taipei Fubon Commercial Bank Co., Ltd.
 2021.08.19 On 08.19 annually 0.62 4,200,000 - 4,200,000 (3,289 ) 4,196,711
Bullet repayment
 Nil
Domestic US$ unsecured bonds-110-5
Mega International Commercial Bank Co., Ltd.
 2021.09.23 On 09.23 annually 3.10 30,747,000 - 30,747,000 (30,163 ) 30,716,837
Bullet repayment (callable on the 5th anniversary of the issue date and every anniversary thereafter)
 Nil
Domestic unsecured bonds-110-6


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2021.10.05 On 10.05 annually 0.535 3,200,000 - 3,200,000 (1,668 ) 3,198,332
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2021.10.05 On 10.05 annually 0.54 6,900,000 - 6,900,000 (3,963 ) 6,896,037
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2021.10.05 On 10.05 annually 0.60 4,600,000 - 4,600,000 (3,259 ) 4,596,741
Bullet repayment
 Nil
-D
Taipei Fubon Commercial Bank Co., Ltd.
 2021.10.05 On 10.05 annually 0.62 1,600,000 - 1,600,000 (1,292 ) 1,598,708
Bullet repayment
 Nil
Domestic unsecured bonds-110-7


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2021.12.09 On 12.09 annually 0.65 7,700,000 - 7,700,000 (4,709 ) 7,695,291
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2021.12.09 On 12.09 annually 0.675 3,500,000 - 3,500,000 (2,268 ) 3,497,732
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2021.12.09 On 12.09 annually 0.72 5,500,000 - 5,500,000 (4,056 ) 5,495,944
Bullet repayment
 Nil
Domestic unsecured bonds-111-1


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2022.01.12 On 01.12 annually 0.63 2,100,000 - 2,100,000 (1,570 ) 2,098,430
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2022.01.12 On 01.12 annually 0.72 3,300,000 - 3,300,000 (2,928 ) 3,297,072
Bullet repayment
 Nil
Domestic unsecured bonds-111-2


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2022.03.29 On 03.29 annually 0.84 3,000,000 - 3,000,000 (1,909 ) 2,998,091
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2022.03.29 On 03.29 annually 0.85 9,600,000 - 9,600,000 (6,505 ) 9,593,495
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2022.03.29 On 03.29 annually 0.90 1,600,000 - 1,600,000 (1,262 ) 1,598,738
Bullet repayment
 Nil
Domestic unsecured bonds-111-3
Taipei Fubon Commercial Bank Co., Ltd.
 2022.05.20 On 05.20 annually 1.50 6,100,000 - 6,100,000 (4,627 ) 6,095,373
Bullet repayment
 Nil
Domestic unsecured bonds-111-4


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2022.07.27 On 07.27 annually 1.60 1,200,000 - 1,200,000 (811 ) 1,199,189
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2022.07.27 On 07.27 annually 1.70 10,100,000 - 10,100,000 (7,574 ) 10,092,426
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2022.07.27 On 07.27 annually 1.75 1,200,000 - 1,200,000 (1,008 ) 1,198,992
Bullet repayment
 Nil
-D
Taipei Fubon Commercial Bank Co., Ltd.
 2022.07.27 On 07.27 annually 1.95 1,400,000 - 1,400,000 (1,267 ) 1,398,733
Bullet repayment
 Nil
Domestic unsecured bonds-111-5


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2022.08.25 On 08.25 annually 1.65 2,000,000 - 2,000,000 (1,504 ) 1,998,496
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2022.08.25 On 08.25 annually 1.65 8,900,000 - 8,900,000 (6,808 ) 8,893,192
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2022.08.25 On 08.25 annually 1.65 2,200,000 - 2,200,000 (1,873 ) 2,198,127
Bullet repayment
 Nil
-D
Taipei Fubon Commercial Bank Co., Ltd.
 2022.08.25 On 08.25 annually 1.82 2,500,000 - 2,500,000 (2,286 ) 2,497,714
Bullet repayment
 Nil
Domestic unsecured bonds-111-6


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2022.10.20 On 10.20 annually 1.75 5,700,000 - 5,700,000 (4,843 ) 5,695,157
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2022.10.20 On 10.20 annually 1.80 1,000,000 - 1,000,000 (934 ) 999,066
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2022.10.20 On 10.20 annually 2.00 3,500,000 - 3,500,000 (3,472 ) 3,496,528
Bullet repayment
 Nil
Domestic unsecured bonds-112-1


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2023.03.28 On 03.28 annually 1.54 12,200,000 - 12,200,000 (11,076 ) 12,188,924
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2023.03.28 On 03.28 annually 1.60 2,300,000 - 2,300,000 (2,191 ) 2,297,809
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2023.03.28 On 03.28 annually 1.78 4,800,000 - 4,800,000 (4,743 ) 4,795,257
Bullet repayment
 Nil
Domestic unsecured bonds-112-2


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2023.05.03 On 05.03 annually 1.60 13,100,000 - 13,100,000 (11,886 ) 13,088,114
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2023.05.03 On 05.03 annually 1.65 2,300,000 - 2,300,000 (2,174 ) 2,297,826
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2023.05.03 On 05.03 annually 1.82 5,300,000 - 5,300,000 (5,169 ) 5,294,831
Bullet repayment
 Nil
Domestic unsecured bonds-112-3


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2023.06.01 On 06.01 annually 1.60 11,400,000 - 11,400,000 (10,496 ) 11,389,504
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2023.06.01 On 06.01 annually 1.65 2,600,000 - 2,600,000 (2,480 ) 2,597,520
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2023.06.01 On 06.01 annually 1.80 6,000,000 - 6,000,000 (5,881 ) 5,994,119
Bullet repayment
 Nil
Domestic unsecured bonds-112-4


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2023.08.16 On 08.16 annually 1.60 7,300,000 - 7,300,000 (7,021 ) 7,292,979
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2023.08.16 On 08.16 annually 1.65 700,000 - 700,000 (692 ) 699,308
Bullet repayment
 Nil
-C
Taipei Fubon Commercial Bank Co., Ltd.
 2023.08.16 On 08.16 annually 1.76 7,900,000 - 7,900,000 (7,898 ) 7,892,102
Bullet repayment
 Nil
Domestic unsecured bonds-112-5


-A
Taipei Fubon Commercial Bank Co., Ltd.
 2023.10.16 On 10.16 annually 1.62 4,300,000 - 4,300,000 (4,327 ) 4,295,673
Bullet repayment
 Nil
-B
Taipei Fubon Commercial Bank Co., Ltd.
 2023.10.16 On 10.16 annually 1.76 5,500,000 - 5,500,000 (5,650 ) 5,494,350
Bullet repayment
 Nil

TOTAL

$ 465,294,000 $ 18,100,000 $ 447,194,000 $ (326,435 ) 446,867,565

Less: Current portion

(6,997,710 )


$ 439,869,855
(Concluded)
- 112 -

STATEMENT 12


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF LEASE LIABILITIES
DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Item Description Lease Term Discount Rate (%)
Balance,
End of Year

Land
Mainly for the use of plants and offices
 1 to 22 years 0.39-2.30 $ 28,270,257
Buildings
Mainly for the use of offices
 1 to 12 years 0.57-1.76 786,879
Office equipment
For operation use
 3 to 5 years 0.28-1.73 24,431



29,081,567
Less: Current portion (2,122,132 )
Noncurrent portion $ 26,959,435



- 113 -


STATEMENT 13


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF NET REVENUE
FOR THE YEAR ENDED DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Item
Shipments
(Piece) (Note)
Amount

Wafer
 12,002,177 $ 1,881,677,167
Other
 271,607,928

Net revenue
 $ 2,153,285,095

Note:    12-inch equivalent wafers.



- 114 -


STATEMENT 14


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF COST OF REVENUE
FOR THE YEAR ENDED DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Item Amount

Raw materials used
Balance, beginning of year
 $ 19,750,618
Raw material purchased
 77,523,097
Raw materials, end of year
 (37,279,545 )
Transferred to manufacturing or operating expenses
 (12,675,412 )
Others
 (298,749 )
Subtotal
 47,020,009
Direct labor
 22,193,265
Manufacturing expenses
 940,590,841
Manufacturing cost
 1,009,804,115
Work in process, beginning of year
 120,893,772
Work in process, end of year
 (153,362,168 )
Transferred to manufacturing or operating expenses
 (81,911,749 )
Cost of finished goods
 895,423,970
Finished goods, beginning of year
 52,318,299
Finished goods purchased
 102,104,249
Finished goods, end of year
 (33,839,662 )
Transferred to manufacturing or operating expenses
 (18,172,008 )
Scrapped
 (624,073 )
Subtotal
 997,210,775
Others
 25,449,389

Total
 $ 1,022,660,164




- 115 -


STATEMENT 15


Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2023
(In Thousands of New Taiwan Dollars)


Item
Research and Development Expenses
General and Administrative Expenses
Selling Expenses

Payroll and related expense
 $ 57,108,147 $ 17,846,942 $ 3,492,038

Consumables
 64,582,650 876,655 27

Depreciation expense
 26,887,243 2,037,370 27,318

Repair and maintenance expense
 8,650,513 2,725,617 5,899

Management fees of the Science Park Administration
 - 3,875,748 -

Patents
 - 3,133,290 -

Commission
 - - 1,285,238

Others (Note)
 21,496,545 9,394,415 307,876

Total
 $ 178,725,098 $ 39,890,037 $ 5,118,396

Note:    The amount of each item in others does not exceed 5% of the account balance.


- 116 -

STATEMENT 16

Taiwan Semiconductor Manufacturing Company Limited

STATEMENT OF LABOR, DEPRECIATION AND AMORTIZATION BY FUNCTION
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Year Ended December 31, 2023
Year Ended December 31, 2022
Classified as Classified as
Other Other
Classified as Operating Classified as Operating
Classified as Operating Income Classified as Operating Income
Cost of Revenue Expenses and Expenses Total Cost of Revenue Expenses and Expenses Total

Labor cost
Salary and bonus
 $ 110,396,275 $ 71,163,228 $ - $ 181,559,503 $ 118,078,587 $ 78,041,998 $ - $ 196,120,585
Labor and health insurance
 5,713,655 3,410,394 - 9,124,049 5,422,819 3,306,536 - 8,729,355
Pension
 2,874,410 1,561,049 - 4,435,459 2,507,996 1,364,188 - 3,872,184
Board compensation
 - 635,477 - 635,477 - 743,990 - 743,990
Others
 3,159,122 1,676,979 - 4,836,101 2,705,149 1,411,448 - 4,116,597


$ 122,143,462 $ 78,447,127 $ - $ 200,590,589 $ 128,714,551 $ 84,868,160 $ - $ 213,582,711

Depreciation
 $ 471,343,567 $ 28,951,931 $ 5,273 $ 500,300,771 $ 385,647,215 $ 27,939,678 $ 8,189 $ 413,595,082

Amortization
 $ 6,515,540 $ 2,682,436 $ - $ 9,197,976 $ 6,069,729 $ 2,637,232 $ - $ 8,706,961

Note 1: For the year of 2023 and 2022, the Company had average 66,336 and 61,777 employees, respectively, which included 9 non-employee directors for both years.

Note 2: Average labor cost for the years ended December 31, 2023 and 2022 were NT$3,015 thousand and 3,446 thousand, respectively.

Note 3: Average salary and bonus for the years ended December 31, 2023 and 2022 were NT$2,737 thousand and 3,175 thousand, respectively. The average salary and bonus decreased by 13.80% year over year.

Note 4: The Company did not have supervisors for the years ended December 31, 2023 and 2022. Therefore, there was no compensation to the supervisor.

Note 5: The Company’s compensation policies: The Company’s employees are entitled to a comprehensive compensation and benefits program above the industry average. The compensation program includes a monthly salary, business performance bonuses based on quarterly business results, a profit sharing bonus based on annual profits, and a subsidy based on Employee Stock Purchase Plan. The Company determines the amount of the business performance bonus and profit sharing based on operating results and industry practice in the R.O.C.. The amount and distribution of the bonus and profit sharing are recommended by the Compensation and People Development Committee to the Board of Directors for approval. Individual rewards are based on each employee’s job responsibility, contribution and performance.

Note 6: The total compensation paid to the executive officers is decided based on their job responsibility, contribution, company performance and projected future risks the Company will face. It is reviewed by the Compensation and People Development Committee then submitted to the Board of Directors for approval.

Note 7: According to the Company’s Articles of Incorporation, the Board of Directors is authorized to determine the salary for the Chairman, Vice Chairman and Directors, taking into account the extent and value of the services provided for the management of the Company and the standards of the industry within the R.O.C. and overseas. The Articles of Incorporation also provide that the compensation to directors shall be no more than 0.3% of annual profits and directors who also serve as executive officers of the Company are not entitled to receive compensation to directors. The distribution of compensation to directors shall be made in accordance with the Company’s “Rules for Distribution of Compensation to Directors” based on the following principles: (1) directors who also serve as executive officers of the Company are not entitled to receive compensation; (2) the compensation for independent directors may be higher than the other directors, as all independent directors also serve as members of the Audit and Risk Committee and the Compensation and People Development Committee and thus participate in the discussions as well as resolutions of related committee meetings in accordance with the charter of each committee; and (3) the compensation for overseas independent directors may be higher than domestic independent directors.

- 117 -