English Translation of Financial Statements Originally Issued in Chinese
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

Consolidated Financial Statements for the
Six Months Ended June 30, 2025 and 2024 and
Independent Auditors’ Review 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’ REVIEW REPORT


The Board of Directors and Shareholders
Taiwan Semiconductor Manufacturing Company Limited

Introduction

We have reviewed the accompanying consolidated balance sheets of Taiwan Semiconductor Manufacturing Company Limited and its subsidiaries (collectively, the “Company”) as of June 30, 2025 and 2024, the related consolidated statements of comprehensive income for the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, the consolidated statements of changes in equity and cash flows for the six months then ended, and the related notes to the consolidated financial statements, including material accounting policy information (collectively referred to as 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 International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with the Standards on Review Engagements of the Republic of China 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2025 and 2024, its consolidated financial performance for the three months ended June 30, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the six months ended June 30, 2025 and 2024 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.
- 1 -

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

August 12, 2025




















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 review such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ review 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’ review report and consolidated financial statements shall prevail.
- 2 -

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED BALANCE SHEETS
(In Thousands of New Taiwan Dollars)


June 30, 2025
December 31, 2024
June 30, 2024

Amount
%
Amount
%
Amount
%







ASSETS













CURRENT ASSETS
            
            
            
            
            
            
Cash and cash equivalents (Note 6)
$
2,364,524,340


34

$
2,127,627,043


32

$
1,799,127,351


30

Financial assets at fair value through profit or loss (Note 7)

1,765,904


-


207,700


-


114,366


-

Financial assets at fair value through other comprehensive income (Note 8)

163,637,740


2


192,202,657


3


185,232,206


3

Financial assets at amortized cost (Note 9)

104,501,262


2


101,971,322


1


64,160,285


1

Hedging financial assets (Note 10)

-


-


10,959


-


1,409


-

Notes and accounts receivable, net (Note 11)

233,407,179


3


270,683,235


4


209,120,757


3

Receivables from related parties (Note 31)

2,277,792


-


1,404,473


-


1,089,662


-

Other receivables from related parties (Note 31)

2,567,972


-


251


-


2,403,027


-

Inventories (Note 12)

304,193,716


4


287,868,810


4


272,490,587


5

Other financial assets (Notes 28, 29 and 32)

49,202,958


1


63,138,316


1


35,624,485


1

Other current assets

38,838,612


1


43,237,354


1


22,293,958


-




















Total current assets

3,264,917,475


47


3,088,352,120


46


2,591,658,093


43




















NONCURRENT ASSETS


















Financial assets at fair value through profit or loss (Note 7)

13,831,497


-


15,199,842


-


14,714,867


-

Financial assets at fair value through other comprehensive income (Note 8)

7,605,736


-


7,822,884


-


7,223,448


-

Financial assets at amortized cost (Note 9)

81,827,491


1


88,596,542


1


88,680,794


2

Investments accounted for using equity method (Note 13)

34,162,043


1


37,421,105


1


29,600,356


1

Property, plant and equipment (Notes 14 and 28)

3,386,206,352


48


3,234,980,070


48


3,105,860,057


52

Right-of-use assets (Note 15)

43,857,918


1


40,128,391


1


39,512,949


1

Intangible assets (Note 16)

24,707,294


-


26,282,520


1


22,430,599


-

Deferred income tax assets (Note 4)

64,996,327


1


65,943,300


1


65,160,047


1

Refundable deposits

4,854,963


-


5,495,862


-


4,473,796


-

Other noncurrent assets (Notes 28 and 29)

79,382,453


1


81,715,364


1


13,049,008


-




















Total noncurrent assets

3,741,432,074


53


3,603,585,880


54


3,390,705,921


57




















TOTAL

$
7,006,349,549



100


$
6,691,938,000



100


$
5,982,364,014



100




















LIABILITIES AND EQUITY





































CURRENT LIABILITIES


















Financial liabilities at fair value through profit or loss (Note 7)
$
220,702


-

$
466,539


-

$
509,210


-

Hedging financial liabilities (Notes 10 and 29)

2,384


-


-


-


3,524


-

Accounts payable

83,495,172


1


72,800,558


1


62,763,059


1

Payables to related parties (Note 31)

1,276,538


-


1,426,001


-


1,184,013


-

Salary and bonus payable

46,014,993


1


47,451,509


1


29,412,298


-

Accrued profit sharing bonus to employees and compensation to directors (Note 27)

116,534,813


2


70,871,150


1


79,199,148


1

Payables to contractors and equipment suppliers

161,416,417


2


192,635,173


3


136,744,351


2

Cash dividends payable (Note 19)

246,672,182


4


220,418,821


3


194,600,069


3

Income tax payable (Note 4)

182,884,380


3


147,438,423


2


110,302,021


2

Long-term liabilities - current portion (Notes 17, 18 and 29)

94,213,641


1


59,857,879


1


23,075,426


-

Accrued expenses and other current liabilities (Notes 15, 20 and 29)

444,583,112


6


451,158,911


7


411,122,561


8




















Total current liabilities

1,377,314,334


20


1,264,524,964


19


1,048,915,680


17




















NONCURRENT LIABILITIES


















Bonds payable (Notes 17 and 29)

848,534,856


12


926,604,506


14


965,313,898


16

Long-term bank loans (Notes 18 and 29)

35,136,246


1


31,824,386


-


9,029,765


-

Deferred income tax liabilities (Note 4)

3,954,595


-


3,988,482


-


57,243


-

Lease liabilities (Notes 15 and 29)

31,363,997


-


28,755,342


-


28,221,881


1

Net defined benefit liability (Note 4)

5,355,403


-


7,580,657


-


7,702,315


-

Guarantee deposits

714,229


-


845,581


-


953,045


-

Others (Note 20)

87,344,039


1


104,238,217


2


102,021,982


2




















Total noncurrent liabilities

1,012,403,365


14


1,103,837,171


16


1,113,300,129


19




















Total liabilities

2,389,717,699


34


2,368,362,135


35


2,162,215,809


36




















EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT


















Capital stock (Note 19)

259,326,155


4


259,327,332


4


259,336,292


4

Capital surplus (Notes 19 and 26)

73,326,265


1


73,260,765


2


70,940,676


1

Retained earnings (Note 19)


















Appropriated as legal capital reserve

311,146,899


4


311,146,899


4


311,146,899


5

Unappropriated earnings

4,119,740,394


59


3,606,105,124


54


3,127,527,816


52



4,430,887,293


63


3,917,252,023


58


3,438,674,715


57

Others (Notes 19 and 26)

(182,465,738
)

(3
)

38,705,047


-


25,540,368


1

Treasury stock (Note 19)

-


-


-


-


(3,089,177
)

-




















Equity attributable to shareholders of the parent

4,581,073,975


65


4,288,545,167


64


3,791,402,874


63




















NON - CONTROLLING INTERESTS

35,557,875


1


35,030,698


1


28,745,331


1




















Total equity

4,616,631,850


66


4,323,575,865


65


3,820,148,205


64




















TOTAL

$
7,006,349,549



100


$
6,691,938,000



100


$
5,982,364,014



100






















The accompanying notes are an integral part of the consolidated financial statements.
- 3 -

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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



For the Three Months Ended June 30
For the Six Months Ended June 30

2025202420252024

Amount

%
Amount

%
Amount

%

Amount

%












NET REVENUE (Notes 20, 31 and 37)

$
933,791,869


100


$
673,510,177


100


$
1,773,045,533


100

$
1,266,154,378


100





























COST OF REVENUE (Notes 12, 27, 31 and 34)


386,422,631


41



315,385,699


47



732,281,219


41


593,524,631


47





























GROSS PROFIT


547,369,238


59



358,124,478


53



1,040,764,314


59


672,629,747


53





























OPERATING EXPENSES (Notes 27 and 31)



























Research and development


61,279,719


7



48,057,704


7



117,827,212


7


94,166,640


7

General and administrative


18,955,373


2



19,290,282


3



43,839,121


3


35,427,368


3

Marketing


4,273,247


-



2,947,324


-



8,028,062


-


6,058,583


1





























Total operating expenses


84,508,339


9



70,295,310


10



169,694,395


10


135,652,591


11





























OTHER OPERATING INCOME AND EXPENSES, NET (Notes 14, 27 and 34)


562,739


-



(1,273,626
)

-



(565,473
)

-


(1,403,308
)

-





























INCOME FROM OPERATIONS (Note 37)


463,423,638


50



286,555,542


43



870,504,446


49


535,573,848


42





























NON-OPERATING INCOME AND EXPENSES



























Share of profits of associates


1,220,948


-



1,152,225


-



2,589,255


-


2,030,226


-

Interest income (Note 21)


25,191,998


3



20,979,233


3



50,051,310


3


40,338,405


3

Other income


412,043


-



203,256


-



463,552


-


275,135


-

Foreign exchange gain (loss), net (Note 35)


(4,782,532
)

(1
)


2,184,993


-



(1,244,213
)

-


5,381,986


-

Finance costs (Note 22)


(3,691,095
)

-



(2,638,140
)

(1
)


(6,368,369
)

-


(5,336,395
)

-

Other gains and losses, net (Note 23)


11,260,204


1



(2,126,534
)

-



7,934,635


-


(5,409,426
)

-





























Total non-operating income and expenses


29,611,566


3



19,755,033


2



53,426,170


3


37,279,931


3





























INCOME BEFORE INCOME TAX


493,035,204


53



306,310,575


45



923,930,616


52


572,853,779


45





























INCOME TAX EXPENSE (Notes 4 and 24)


95,541,780


10



58,649,137


8



165,704,531


9


99,971,078


8





























NET INCOME


397,493,424


43



247,661,438


37



758,226,085


43


472,882,701


37





























OTHER COMPREHENSIVE INCOME (LOSS) (Notes 19 and 24)



























Items that will not be reclassified subsequently to profit or loss:



























Unrealized gain on investments in equity instruments at fair value through other comprehensive income


1,982,348


-



760,248


-



1,608,828


-


5,663,581


1

Loss on hedging instruments


(31,030
)

-



-


-



(31,030
)

-


-


-

Share of other comprehensive loss of associates


(27,249
)

-



(802
)

-



(95,903
)

-


(2,360
)

-

Income tax expense related to items that will not be reclassified subsequently


-


-



-


-



-


-


(9,996
)

-

  


1,924,069


-



759,446


-



1,481,895


-


5,651,225


1

Items that may be reclassified subsequently to profit or loss:



























Exchange differences arising on translation of foreign operations


(256,492,873
)

(28
)


12,373,183


2



(226,272,181
)

(13
)

49,178,567


4

Unrealized gain/(loss) on investments in debt instruments at fair value through other comprehensive income


812,218


-



291,082


-



2,865,452


-


(267,207
)

-

Loss on hedging instruments


(20,105
)

-



(20,101
)

-



(41,173
)

-


(39,416
)

-

Share of other comprehensive income (loss) of associates


(725,190
)

-



60,989


-



(638,946
)

-


215,378


-

  


(256,425,950
)

(28
)


12,705,153


2



(224,086,848
)

(13
)

49,087,322


4

  



























Other comprehensive income (loss), net of income tax


(254,501,881
)

(28
)


13,464,599


2



(222,604,953
)

(13
)

54,738,547


5

  
































TOTAL COMPREHENSIVE INCOME

$
142,991,543



15


$
261,126,037



39


$
535,621,132



30


$
527,621,248



42





























NET INCOME ATTRIBUTABLE TO:



























Shareholders of the parent

$
398,273,102


43


$
247,845,528


37


$
759,837,230


43

$
473,330,405


37

Non-controlling interests


(779,678
)

-



(184,090
)

-



(1,611,145
)

-


(447,704
)

-

  



























  

$
397,493,424



43


$
247,661,438



37


$
758,226,085



43


$
472,882,701



37

  



























TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:



























Shareholders of the parent

$
146,202,878


15


$
262,265,420


39


$
538,015,970


30

$
529,663,992


42

Non-controlling interests


(3,211,335
)

-



(1,139,383
)

-



(2,394,838
)

-


(2,042,744
)

-

  



























  

$
142,991,543



15


$
261,126,037



39


$
535,621,132



30


$
527,621,248



42

  



























EARNINGS PER SHARE (NT$, Note 25)



























Basic earnings per share

$
15.36






$
9.56






$
29.31






$
18.25





Diluted earnings per share

$
15.36






$
9.56






$
29.30






$
18.25



































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

- 4 -



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

Unappropriated



Translation

Comprehensive

Hedging

Employee



Treasury



Non-controlling

Total
(In Thousands)
Amount
Capital Surplus

Reserve

Earnings

Total

Reserve

Income

Instruments

Compensation

Total

Stock

Total

Interests

Equity

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            
BALANCE, JANUARY 1, 2024

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





























































Appropriations of earnings



























































Cash dividends to shareholders

-



-



-



-



(194,496,765
)


(194,496,765
)


-



-



-



-



-



-



(194,496,765
)


-



(194,496,765
)
Total

-



-



-



-



(194,496,765
)


(194,496,765
)


-



-



-



-



-



-



(194,496,765
)


-



(194,496,765
)




























































Net income

-



-



-



-



473,330,405



473,330,405



-



-



-



-



-



-



473,330,405



(447,704
)


472,882,701





























































Other comprehensive income (loss), net of income tax

-



-



-



-



-



-



50,999,678



5,354,003



(20,094
)


-



56,333,587



-



56,333,587



(1,595,040
)


54,738,547





























































Total comprehensive income (loss)

-



-



-



-



473,330,405



473,330,405



50,999,678



5,354,003



(20,094
)


-



56,333,587



-



529,663,992



(2,042,744
)


527,621,248





























































Employee restricted shares retired

(1,402
)


(14,018
)


14,018



-



19,934



19,934



-



-



-



-



-



-



19,934



-



19,934





























































Share-based payment arrangements

2,960



29,600



1,049,113



-



-



-



-



-



-



(685,904
)


(685,904
)


-



392,809



-



392,809





























































Treasury stock acquired

-



-



-



-



-



-



-



-



-



-



-



(3,089,177
)


(3,089,177
)


-



(3,089,177
)




























































Disposal of investments in equity instruments at fair value through other comprehensive income

-



-



-



-



1,790,349



1,790,349



-



(1,790,349
)


-



-



(1,790,349
)


-



-



-



-





























































Basis adjustment for loss on hedging instruments

-



-



-



-



-



-



-



-



(2,710
)


-



(2,710
)


-



(2,710
)


-



(2,710
)




























































Adjustments to share of changes in equities of associates

-



-



5,375



-



-



-



-



-



-



-



-



-



5,375



-



5,375





























































From difference between the consideration received and the carrying amount of the subsidiaries' net assets during actual disposal

-



-



5,284



-



-



-



-



-



-



-



-



-



5,284



(4,263
)


1,021





























































From share of changes in equities of subsidiaries

-



-



(9,495
)


-



-



-



-



-



-



-



-



-



(9,495
)


6,541,357



6,531,862





























































Decrease in non-controlling interests

-



-



-



-



-



-



-



-



-



-



-



-



-



(98,239
)


(98,239
)




























































BALANCE, JUNE 30, 2024


25,933,629


$
259,336,292


$
70,940,676


$
311,146,899


$
3,127,527,816


$
3,438,674,715


$
25,682,909


$
(536,274
)

$
1,373,071


$
(979,338
)

$
25,540,368


$
(3,089,177
)

$
3,791,402,874


$
28,745,331


$
3,820,148,205





























































BALANCE, JANUARY 1, 2025

25,932,733


$
259,327,332


$
73,260,765


$
311,146,899


$
3,606,105,124


$
3,917,252,023


$
40,262,995


$
(1,160,176
)

$
1,310,307


$
(1,708,079
)

$
38,705,047


$
-


$
4,288,545,167


$
35,030,698


$
4,323,575,865





























































Appropriations of earnings



























































Cash dividends to shareholders

-



-



-



-



(246,360,378
)


(246,360,378
)


-



-



-



-



-



-



(246,360,378
)


-



(246,360,378
)
Total

-



-



-



-



(246,360,378
)


(246,360,378
)


-



-



-



-



-



-



(246,360,378
)


-



(246,360,378
)




























































Net income

-



-



-



-



759,837,230



759,837,230



-



-



-



-



-



-



759,837,230



(1,611,145
)


758,226,085





























































Other comprehensive income (loss), net of income tax

-



-



-



-



(35
)


(35
)


(226,127,300
)


4,360,969



(54,894
)


-



(221,821,225
)


-



(221,821,260
)


(783,693
)


(222,604,953
)




























































Total comprehensive income (loss)

-



-



-



-



759,837,195



759,837,195



(226,127,300
)


4,360,969



(54,894
)


-



(221,821,225
)


-



538,015,970



(2,394,838
)


535,621,132





























































Employee restricted shares retired

(118
)


(1,177
)


1,177



-



2,459



2,459



-



-



-



-



-



-



2,459



-



2,459





























































Share-based payment arrangements

-



-



-



-



-



-



-



-



-



797,188



797,188



-



797,188



-



797,188





























































Disposal of investments in equity instruments at fair value through other comprehensive income

-



-



-



-



155,994



155,994



-



(155,994
)


-



-



(155,994
)


-



-



-



-





























































Basis adjustment for gain on hedging instruments

-



-



-



-



-



-



-



-



9,246



-



9,246



-



9,246



-



9,246





























































Adjustments to share of changes in equities of associates

-



-



79,432



-



-



-



-



-



-



-



-



-



79,432



-



79,432





























































From share of changes in equities of subsidiaries

-



-



(15,109
)


-



-



-



-



-



-



-



-



-



(15,109
)


8,146



(6,963
)




























































Increase in non-controlling interests

-



-



-



-



-



-



-



-



-



-



-



-



-



2,913,869



2,913,869





























































BALANCE, JUNE 30, 2025


25,932,615


$
259,326,155


$
73,326,265


$
311,146,899


$
4,119,740,394


$
4,430,887,293


$
(185,864,305
)

$
3,044,799


$
1,264,659


$
(910,891
)

$
(182,465,738
)

$
-


$
4,581,073,975


$
35,557,875


$
4,616,631,850































































The accompanying notes are an integral part of the consolidated financial statements.
- 5 -


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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


Six Months Ended June 30
2025

2024




CASH FLOWS FROM OPERATING ACTIVITIES
            

            
Income before income tax
$
923,930,616


$
572,853,779

Adjustments for:







Depreciation expense

359,012,194



319,626,411

Amortization expense

4,184,797



4,563,345

Expected credit losses recognized (reversal) on investments in debt instruments

(25,220
)


18,755

Finance costs

6,368,369



5,336,395

Share of profits of associates

(2,589,255
)


(2,030,226
)
Interest income

(50,051,310
)


(40,338,405
)
Share-based compensation

799,647



412,787

Loss on disposal or retirement of property, plant and equipment, net

1,235,418



1,267,199

Loss on disposal or retirement of intangible assets, net

2,071



-

Impairment loss on property, plant and equipment

1,670,522



1,150,485

Loss (gain) on financial instruments at fair value through profit or loss, net

(204,315
)


184,681

Loss on disposal of investments in debt instruments at fair value through other comprehensive income, net

82,845



205,086

Loss from disposal of subsidiaries

167,986



-

Loss (gain) on foreign exchange, net

(17,895,105
)


4,119,804

Dividend income

(463,552
)


(275,135
)
Others

583,464



(137,311
)
Changes in operating assets and liabilities:







Financial instruments at fair value through profit or loss

(1,796,243
)


1,081,788

Notes and accounts receivable, net

37,276,056



(7,806,910
)
Receivables from related parties

(873,319
)


(465,211
)
Other receivables from related parties

(10,235
)


(19,586
)
Inventories

(16,324,906
)


(21,493,499
)
Other financial assets

(9,975,826
)


(5,606,448
)
Other current assets

3,428,197



3,561,403

Other noncurrent assets

(2,609,468
)


(2,525,072
)
Accounts payable

10,694,614



7,036,302

Payables to related parties

(149,463
)


(382,287
)
Salary and bonus payable

(1,436,516
)


(3,788,265
)
Accrued profit sharing bonus to employees and compensation to directors

45,663,663



28,482,204

Accrued expenses and other current liabilities

(29,100,990
)


26,805,039

Other noncurrent liabilities

(7,848,202
)


12,851,565

Net defined benefit liability

(2,225,254
)


(1,554,909
)
Cash generated from operations

1,251,521,280



903,133,764

Income taxes paid

(128,883,523
)


(89,154,446
)








Net cash generated by operating activities

1,122,637,757



813,979,318

(Continued)

- 6 -


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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


Six Months Ended June 30
2025

2024




CASH FLOWS FROM INVESTING ACTIVITIES
            

            
Acquisitions of:
            

            
Financial instruments at fair value through profit or loss
$
(128,359
)

$
(458,776
)
Financial assets at fair value through other comprehensive income

(37,351,763
)


(43,780,180
)
Financial assets at amortized cost

(95,249,939
)


(64,823,727
)
Hedging financial instruments

(631,620
)


-

Property, plant and equipment

(628,052,531
)


(386,979,486
)
Intangible assets

(4,616,458
)


(5,061,779
)
Proceeds from disposal or redemption of:







Financial assets at fair value through other comprehensive income

49,745,299



28,414,789

Financial assets at amortized cost

77,925,126



66,310,102

Property, plant and equipment

245,283



492,765

Intangible assets

-



49,293

Proceeds from return of capital of investments in equity instruments at fair value through other comprehensive income

4,976



117,483

Derecognition of hedging financial instruments

574,700



52,303

Interest received

50,443,657



36,605,013

Proceeds from government grants - property, plant and equipment

67,128,197



7,956,413

Proceeds from government grants - others

-



267

Other dividends received

438,461



241,872

Dividends received from investments accounted for using equity method

747,006



653,631

Increase in prepayments for leases

(17,174
)


(28,193
)
Refundable deposits paid

(282,366
)


(122,271
)
Refundable deposits refunded

396,772



2,946,160









Net cash used in investing activities

(518,680,733
)


(357,414,321
)








CASH FLOWS FROM FINANCING ACTIVITIES







Increase (decrease) in hedging financial liabilities - bank loans

430,085



(26,496,570
)
Proceeds from issuance of bonds

33,300,000



34,300,000

Repayment of bonds

(13,400,000
)


-

Proceeds from long-term bank loans

5,395,000



6,378,000

Repayment of long-term bank loans

(1,438,333
)


(1,055,556
)
Payments for transaction costs attributable to the issuance of bonds

(34,820
)


(35,581
)
Treasury stock acquired

-



(3,089,177
)
Repayment of the principal portion of lease liabilities

(1,645,424
)


(1,473,137
)
Interest paid

(9,738,700
)


(8,419,668
)
Guarantee deposits received

1,000



2,573

Guarantee deposits refunded

(41,853
)


(20,528
)
Cash dividends

(220,418,821
)


(168,558,461
)
Disposal of ownership interests in subsidiaries (without losing control)

-



1,021

Increase in non-controlling interests

3,225,673



6,536,884









Net cash used in financing activities

(204,366,193
)


(161,930,200
)
(Continued)
- 7 -


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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


Six Months Ended June 30
2025

2024

            

            
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
$
(162,693,534
)

$
39,064,801









NET INCREASE IN CASH AND CASH EQUIVALENTS

236,897,297



333,699,598









CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

2,127,627,043



1,465,427,753









CASH AND CASH EQUIVALENTS, END OF PERIOD
$
2,364,524,340


$
1,799,127,351











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

- 8 -

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED June 30, 2025 and 2024
(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 August 12, 2025.


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)

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”).

b.    The IFRS Accounting Standards issued by International Accounting Standards Board (IASB) and endorsed by the FSC with effective date starting 2026

New, Amended and Revised Standards and Interpretations

Effective Date Issued
by IASB



Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” - the amendments to the application guidance of classification of financial assets

January 1, 2026
Annual Improvements to IFRS Accounting Standards - Volume 11

January 1, 2026
Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”

January 1, 2026


- 9 -

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
IFRS 18 “Presentation and Disclosure in Financial Statements”
January 1, 2027

IFRS 18 “Presentation and Disclosure in Financial Statements”

IFRS 18 will supersede IAS 1“ Presentation of Financial Statements”. The main changes comprise:

•Items of income and expenses included in the statement of profit or loss shall be classified into the operating, investing, financing, income taxes and discontinued operations categories.

•The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss.

•Provides guidance to enhance the requirements of aggregation and disaggregation: The Company shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The Company shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Company labels items as “other” only if it cannot find a more informative label.

Except for the above impact, as of the date the accompanying consolidated financial statements were issued, the Company continues in evaluating other impacts of the above amended standards and 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

Except for the following, the accounting policies applied in these consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended December 31, 2024.

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 IAS 34, “Interim Financial Reporting,” endorsed and issued into effect by the FSC. The consolidated financial statements do not present all the disclosures required for a complete set of annual consolidated financial statements prepared under the IFRS Accounting Standards endorsed and issued into effect by the FSC (collectively, the “Taiwan-IFRS Accounting Standards”).

- 10 -


Basis of Consolidation

The basis of preparation and the basis for the consolidated financial statements

The basis of preparation and the basis for the consolidated financial statements applied in these consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended December 31, 2024.

The subsidiaries in the consolidated financial statements

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

EstablishmentPercentage of Ownership
Name of InvestorName of InvesteeMain Businesses and Products
and Operating
Location
June 30,
2025
December 31,
2024
June 30,
2024
Note











TSMC

TSMC North America

Sales and marketing of integrated circuits and other semiconductor devices

San Jose, California, U.S.A.

100%

100%

100%

-


TSMC Europe B.V. (TSMC Europe)

Customer service and supporting activities

Amsterdam, the Netherlands

100%

100%

100%

a)


TSMC Japan Limited (TSMC Japan)

Customer service and supporting activities

Yokohama, Japan

100%

100%

100%

a)


TSMC Design Technology Japan, Inc. (TSMC JDC)

Engineering support activities

Yokohama, Japan

100%

100%

100%

a)


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

Engineering support activities

Yokohama, Japan

100%

100%

100%

a)


TSMC Korea Limited (TSMC Korea)

Customer service and supporting activities

Seoul, Korea

100%

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%

100%

-


TSMC Global Ltd. (TSMC Global)

Investment activities

Tortola, British Virgin Islands

100%

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%

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%

100%

-


VisEra Technologies Company Ltd. (VisEra Tech)

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

Hsinchu, Taiwan

67%

67%

67%

c)


TSMC Arizona Corporation (TSMC Arizona)

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

Phoenix, Arizona, U.S.A.

100%

100%

100%

-


Japan Advanced Semiconductor Manufacturing, Inc. (JASM)

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

Kumamoto, Japan

73%

73%

71%

d)


European Semiconductor Manufacturing Company (ESMC) GmbH (ESMC)

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

Dresden, Germany

70%

70%

70%

-


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

Investing in technology start-up companies

Cayman Islands

-

98%

98%

b), e)


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

Investing in technology start-up companies

Cayman Islands

-

98%

98%

b), e)


Emerging Fund, L.P. (Emerging Fund)

Investing in technology start-up companies

Cayman Islands

99.9%

99.9%

99.9%

b)
TSMC Partners

TSMC Development, Inc. (TSMC Development)

Investing in companies involved in semiconductor manufacturing

Delaware, U.S.A.

100%

100%

100%

-


TSMC Technology, Inc. (TSMC Technology)

Engineering support activities

Delaware, U.S.A.

100%

100%

100%

a)


TSMC Design Technology Canada Inc. (TSMC Canada)

Engineering support activities

Ontario, Canada

100%

100%

100%

a)
VTAF III

Growth Fund Limited (Growth Fund)

Investing in technology start-up companies

Cayman Islands

-

100%

100%

b), e)
TSMC Development

TSMC Washington, LLC (TSMC Washington)

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

Washington, U.S.A.

100%

100%

100%

-

Note a:    This is an immaterial subsidiary for which the consolidated financial statements are neither reviewed nor audited by the Company’s independent auditors.

Note b:    This is an immaterial subsidiary for which the consolidated financial statements for the year ended, are audited by the Company’s independent auditors.

Note c:    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 d:    JASM has increased its capital and converted its preferred shares to common shares in July 2024. The increase in capital resulted in changes in shareholding rights from 71% to 73% and voting rights from 81% to 73%, respectively.

Note e:    VTAF II/VTAF III and the Growth Fund have completed the liquidation procedures respectively in the first quarter and the second quarter of 2025.


- 11 -

Retirement Benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. The interim period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim period.


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

The same material accounting judgments and key sources of estimates and uncertainty have been followed in these consolidated financial statements as were applied in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2024.


6.CASH AND CASH EQUIVALENTS


June 30,
2025

December 31,
2024

June 30,
2024






Cash and deposits in banks
$
2,333,623,182


$
2,120,674,818


$
1,788,609,195

Money market funds

28,123,554



2,826,701



3,124,436

Government bonds/Agency bonds

1,728,061



-



-

Repurchase agreements

1,049,543



2,126,975



1,654,599

Commercial paper

-



1,998,549



5,739,121













    
$
2,364,524,340


$
2,127,627,043


$
1,799,127,351


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


June 30,
2025

December 31,
2024

June 30,
2024






Financial assets











Mandatorily measured at FVTPL





Convertible preferred stocks
$
12,617,717


$
14,181,839


$
14,061,522

Forward exchange contracts

1,765,904



207,700



9,787

Mutual funds

1,097,164



886,931



523,385

Simple agreement for future equity

116,616



131,072



129,960

Convertible bonds

-



-



104,579













    
$
15,597,401


$
15,407,542


$
14,829,233

(Continued)

- 12 -



June 30,
2025

December 31,
2024

June 30,
2024






Current
$
1,765,904


$
207,700


$
114,366

Noncurrent

13,831,497



15,199,842



14,714,867













    
$
15,597,401


$
15,407,542


$
14,829,233













Financial liabilities























Held for trading











Forward exchange contracts
$
220,702


$
466,539


$
509,210

(Concluded)

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)
June 30, 2025
Sell US$
July 2025 to September 2025
        US$    4,220,500
Sell JPYJuly 2025
        JPY    39,505,545

December 31, 2024


Sell US$January 2025 to March 2025
        US$    3,331,445
Sell JPYJanuary 2025
        JPY    45,233,963

June 30, 2024


Sell US$
July 2024 to August 2024
        US$    4,008,000


8.FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME


June 30,
2025

December 31,
2024

June 30,
2024






Investments in debt instruments at FVTOCI
        

        


Corporate bonds

$
80,137,883


$
108,612,082


$
98,654,521

Agency mortgage-backed securities


46,016,814



46,611,373



43,121,977

Government bonds/Agency bonds


23,173,091



20,645,877



22,784,341

Asset-backed securities


9,019,262



11,490,511



12,305,253

    


158,347,050



187,359,843



176,866,092

Investments in equity instruments at FVTOCI












Non-publicly traded equity investments


7,605,736



7,822,884



7,223,448

Publicly traded stocks


5,290,690



4,842,814



8,366,114

    


12,896,426



12,665,698



15,589,562














        

$
171,243,476


$
200,025,541


$
192,455,654

(Continued)
- 13 -


June 30,
2025

December 31,
2024

June 30,
2024






Current

$
163,637,740


$
192,202,657


$
185,232,206

Noncurrent


7,605,736



7,822,884



7,223,448














    

$
171,243,476


$
200,025,541


$
192,455,654

(Concluded)

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 six months ended June 30, 2025 and 2024, as the Company adjusted its investment portfolio, equity investments designated at FVTOCI were divested for NT$284,890 thousand and NT$3,200,608 thousand, respectively. The related other equity-unrealized gain/loss on financial assets at FVTOCI of NT$155,994 thousand and NT$1,790,349 thousand were transferred to increase retained earnings, respectively.

As of June 30, 2025 and 2024, the cumulative loss allowance for expected credit loss of NT$41,888 thousand and NT$59,894 thousand was recognized under investments in debt instruments at FVTOCI, respectively. Refer to Note 30 for information relating to the credit risk management and expected credit loss.


9.FINANCIAL ASSETS AT AMORTIZED COST

June 30,
2025

December 31,
2024

June 30,
2024






Corporate bonds

$
176,321,657


$
172,091,958


$
124,079,577

Commercial paper


6,209,030



14,221,737



21,758,780

Government bonds/Agency bonds


3,901,492



4,379,527



7,098,457

Less: Allowance for impairment loss


(103,426
)


(125,358
)


(95,735
)













    

$
186,328,753


$
190,567,864


$
152,841,079














Current

$
104,501,262


$
101,971,322


$
64,160,285

Noncurrent


81,827,491



88,596,542



88,680,794














    

$
186,328,753


$
190,567,864


$
152,841,079


Refer to Note 30 for information relating to credit risk management and expected credit loss for financial assets at amortized cost.


10.HEDGING FINANCIAL INSTRUMENTS

June 30,
2025

December 31,
2024

June 30,
2024
Financial assets - current













Fair value hedges






Interest rate futures contracts

$
-


$
10,959


$
1,409













Financial liabilities - current

























Fair value hedges












Interest rate futures contracts

$
2,384


$
-


$
3,524


- 14 -


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.

June 30, 2025
Hedging Instruments
Contract Amount
(US$ in Thousands)
Maturity

Interest rate futures contracts - US Treasury futures
US$    7,600
September 2025

Hedged ItemsAsset Carrying AmountAccumulated Amount of Fair Value Hedge Adjustments

Financial assets at FVTOCI
$ 766,126

$ 2,384

December 31, 2024
Hedging Instruments
Contract Amount
(US$ in Thousands)
Maturity

Interest rate futures contracts - US Treasury futures
US$    40,400
March 2025

Hedged ItemsAsset Carrying Amount Accumulated Amount of Fair Value Hedge Adjustments
Financial assets at FVTOCI
$ 3,129,235

$ (10,959)

June 30, 2024
Hedging Instruments
Contract Amount
(US$ in Thousands)
Maturity

Interest rate futures contracts - US Treasury futures
US$    18,000
September 2024

Hedged ItemsAsset Carrying Amount Accumulated Amount of Fair Value Hedge Adjustments



Financial assets at FVTOCI
$ 1,721,119

$ 2,115


- 15 -

The effect for the six months ended June 30, 2025 and 2024 is detailed below:

Change in Value Used for Calculating Hedge Ineffectiveness
Six Months Ended June 30
Hedging Instruments/Hedged Items
2025

2024



Hedging Instruments



Interest rate futures contracts - US Treasury futures

$
(39,615
)

$
95,204

Hedged Items








Financial assets at FVTOCI


39,615



(95,204
)









    

$
-


$
-


Cash flow hedge

The Company has designated the bank deposits denominated in foreign currency 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 foreign currency deposits have maturities of 12 months or less.

On the basis of economic relationships, the Company expects that the value of foreign currency deposits 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 foreign currency deposits. No other sources of ineffectiveness have emerged from these hedging relationships during the hedging period. Refer to Note 19 (d) for gain or loss arising from changes in the fair value of hedging instruments and hedged item affects profit or loss, and the amount transferred to initial carrying amount of hedged items.

The effect for the six months ended June 30, 2025 is detailed below:



Change in Value Used for Calculating Hedge
Ineffectiveness
Hedging Instruments/Hedged Items

Six Months Ended June 30, 2025



Hedging Instruments



Foreign currency deposits



$
(31,030
)







Hedged Items






Forecast transaction (capital expenditures)

        

$
31,030


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
- 16 -

hedging period. Refer to Note 19 (d) for gain or loss arising from changes in the fair value of hedging instruments.

The effect for the six months ended June 30, 2025 and 2024 is detailed below:

Change in Value Used for Calculating Hedge
Ineffectiveness
Six Months Ended June 30
    Hedging Instruments/Hedged Items
2025
2024



Hedging Instruments



Bank loans

$
430,085


$
793,830










Hedged Items








Net investments in foreign operations

$
(430,085
)

$
(793,830
)


11.NOTES AND ACCOUNTS RECEIVABLE, NET


June 30,
2025

December 31,
2024

June 30,
2024






At amortized cost





Notes and accounts receivable
$
226,439,255


$
265,223,660


$
204,140,555

Less: Loss allowance

(399,415
)


(453,009
)


(454,497
)
    

226,039,840



264,770,651



203,686,058

At FVTOCI

7,367,339



5,912,584



5,434,699












        
$
233,407,179


$
270,683,235


$
209,120,757


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 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

June 30,
2025

December 31,
2024

June 30,
2024






Not past due

$
219,476,668


$
255,669,647


$
192,620,963

Past due












Past due within 30 days


14,329,911



15,464,122



16,953,864

Past due over 31 days


15



2,475



427

Less: Loss allowance


(399,415
)


(453,009
)


(454,497
)













    

$
233,407,179


$
270,683,235


$
209,120,757


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

- 17 -


Movements of the loss allowance for accounts receivable


Six Months Ended June 30

2025
2024





Balance, beginning of period

$
453,009


$
531,554

Reversal


(53,527
)


(77,124
)
Effect of exchange rate changes


(67
)


67










Balance, end of period

$
399,415


$
454,497


For the six months ended June 30, 2025 and 2024, the changes in loss allowance were mainly due to the variations in the balance of accounts receivable of different risk levels.


12.INVENTORIES


June 30,
2025

December 31,
2024

June 30,
2024






Finished goods
$
32,076,396


$
35,177,009


$
33,454,131

Work in process

198,740,785



181,198,808



174,849,778

Raw materials

47,907,755



46,449,249



41,416,081

Supplies and spare parts

25,468,780



25,043,744



22,770,597












    
$
304,193,716


$
287,868,810


$
272,490,587


Write-down of inventories to net realizable value (excluding earthquake losses) and reversal of write-down of inventories resulting from the increase in net realizable value were included in the cost of revenue, which were as follows. Please refer to related earthquake losses in Note 34.



Three Months Ended June 30

Six Months Ended June 30


2025

2024

2025

2024
Net inventory losses (reversal of write-down of inventories)

$
103,900


$
(2,268,761
)

$
2,630,365


$
(2,036,276
)


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 AssociatePrincipal ActivitiesIncorporation and Operation
June 30,
2025
December 31,
2024
June 30,
2024
June 30,
2025
December 31,
2024
June 30,
2024









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
$
16,599,832


$
18,300,373

$
12,577,096

28%28%28%
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC)

Manufacturing and sales of integrated circuits and other semiconductor devices
Singapore

10,699,204



11,387,185


10,625,033

39%39%39%
(Continued)
- 18 -

Place of
Carrying Amount
% of Ownership and Voting Rights
Held by the Company
Name of AssociatePrincipal ActivitiesIncorporation and Operation
June 30,
2025
December 31,
2024
June 30,
2024
June 30,
2025
December 31,
2024
June 30,
2024









Xintec Inc. (Xintec)

Wafer level chip size packaging and wafer level post passivation interconnection service
Taoyuan, Taiwan
$
4,109,929


$
4,220,609

$
3,797,975

41%
41%41%
Global Unichip Corporation (GUC)

Researching, developing, manufacturing, testing and marketing of integrated circuits
Hsinchu, Taiwan

2,753,078



3,512,938


2,600,252

35%
35%35%














    





$
34,162,043


$
37,421,105


$
29,600,356







(Concluded)

The Company increased its investment in VIS for the amount of NT$3,738,753 thousand in 2024.

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
June 30,
2025

December 31,
2024

June 30,
2024






GUC
$
60,927,656


$
63,495,488


$
74,934,014

VIS
$
50,924,287


$
50,620,261


$
60,116,942

Xintec
$
16,414,084


$
22,033,821


$
20,030,747



14.PROPERTY, PLANT AND EQUIPMENT

June 30,
2025
December 31,
2024
June 30,
2024







Assets used by the Company

$
3,384,953,044


$
3,234,778,389


$
3,105,642,523

Assets subject to operating leases


1,253,308



201,681



217,534














    

$
3,386,206,352


$
3,234,980,070


$
3,105,860,057


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, 2025
$
13,054,161


$
959,133,864


$
5,852,202,689


$
105,434,750


$
1,080,284,237


$
8,010,109,701

Additions (deductions)

121,919



248,872,681



339,781,756



14,465,762



(24,819,915
)


578,422,203

Disposals or retirements

-


(96,094
)

(19,975,634
)

(873,885
)

-


(20,945,613
)
Transfers to assets subject to operating leases

-



(1,197,245
)


-



-



-



(1,197,245
)
Effect of exchange rate changes

(508,290
)


(32,289,583
)


(45,682,789
)


(1,620,552
)


(13,358,251
)


(93,459,465
)
























Balance at June 30, 2025

$
12,667,790


$
1,174,423,623


$
6,126,326,022


$
117,406,075


$
1,042,106,071


$
8,472,929,581
























Accumulated depreciation
  and impairment________















































Balance at January 1, 2025
$
608,531


$
440,369,241


$
4,262,882,850


$
70,679,950


$
790,740


$
4,775,331,312

Additions

9,756



34,372,332



315,655,919



6,962,695



-



357,000,702

Disposals or retirements

-



(69,575
)


(18,535,834
)


(869,223
)


-



(19,474,632
)
Transfers to assets subject to operating leases

-


(129,702
)

-


-


-


(129,702
)
Impairment

-



-



1,670,522



-



-



1,670,522

Effect of exchange rate changes

(67,973
)


(3,765,303
)


(22,007,529
)


(580,860
)


-



(26,421,665
)
























Balance at June 30, 2025

$
550,314


$
470,776,993


$
4,539,665,928


$
76,192,562


$
790,740


$
5,087,976,537

























Carrying amounts at January 1, 2025

$
12,445,630


$
518,764,623


$
1,589,319,839


$
34,754,800


$
1,079,493,497


$
3,234,778,389

Carrying amounts at June 30, 2025

$
12,117,476


$
703,646,630


$
1,586,660,094


$
41,213,513


$
1,041,315,331


$
3,384,953,044

(Continued)
- 19 -


Land and Land Improvements

Buildings

Machinery and Equipment

Office
Equipment

Equipment under Installation and Construction in Progress

Total













Cost























Balance at January 1, 2024
$
7,621,997


$
817,822,975


$
5,384,985,648


$
99,825,084


$
908,289,751


$
7,218,545,455

Additions

5,464,469



41,128,292



287,100,670



6,210,996



2,507,446



342,411,873

Disposals or retirements

(278,309
)

(56,649
)

(14,645,243
)

(7,112,608
)

-


(22,092,809
)
Transfers to assets subject to operating leases

-



(197,752
)


-



-



-



(197,752
)
Effect of exchange rate changes

144,132



1,216,813



9,106,652



232,471



17,182,196



27,882,264

























Balance at June 30, 2024

$
12,952,289


$
859,913,679


$
5,666,547,727


$
99,155,943


$
927,979,393


$
7,566,549,031
























Accumulated depreciation
  and impairment___________















































Balance at January 1, 2024
$
558,074


$
387,013,911


$
3,699,008,492


$
66,749,979


$
790,740


$
4,154,121,196

Additions

3,715



25,532,552



286,350,894



5,871,978



-



317,759,139

Disposals or retirements

-



(56,540
)


(13,125,143
)


(7,111,497
)


-



(20,293,180
)
Transfers to assets subject to operating leases

-


(14,367
)

-


-


-


(14,367
)
Impairment

-



47,539



1,102,946



-



-



1,150,485

Effect of exchange rate changes

31,663



1,079,719



6,885,795



186,058



-



8,183,235

























Balance at June 30, 2024

$
593,452


$
413,602,814


$
3,980,222,984


$
65,696,518


$
790,740


$
4,460,906,508

























Carrying amounts at January 1, 2024

$
7,063,923


$
430,809,064


$
1,685,977,156


$
33,075,105


$
907,499,011


$
3,064,424,259

Carrying amounts at June 30, 2024

$
12,358,837


$
446,310,865


$
1,686,324,743


$
33,459,425


$
927,188,653


$
3,105,642,523

(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 2025 and second quarter of 2024, the Company recognized an impairment loss due to partial plant facilities and machinery and equipment damage caused by an earthquake, which rendered them unusable. Please refer to the related earthquake losses in Note 34.

In the second quarter of 2025, the Company recognized an impairment loss for certain machinery and equipment, which was assessed to have no future use and a recoverable amount of nil. This impairment loss was recorded under other operating income and expenses.

Information about capitalized interest is set out in Note 22.


15.LEASE ARRANGEMENTS

a.    Right-of-use assets


June 30,
2025

December 31,
2024

June 30,
2024





Carrying amounts










Land
$
39,936,860


$
36,980,971


$
37,005,246

Buildings

3,874,921



3,103,902



2,463,830

Office equipment

46,137



43,518



43,873













    
$
43,857,918


$
40,128,391


$
39,512,949



- 20 -



Six Months Ended June 30

2025
2024



Additions to right-of-use assets
$
6,147,227


$
2,108,125



Three Months Ended June 30

Six Months Ended June 30

2025

2024

2025

2024
Depreciation of right-of-use assets

        

        

    

        
Land

$
728,775


$
618,480


$
1,419,125


$
1,234,432

Buildings


287,408



252,068



565,045



604,370

Office equipment


5,982



5,965



11,406



11,894


















    

$
1,022,165


$
876,513


$
1,995,576


$
1,850,696


b.    Lease liabilities


June 30,
2025

December 31,
2024

June 30,
2024





Carrying amounts











Current portion (classified under accrued expenses and other current liabilities)
$
3,723,801


$
3,049,032


$
2,620,895

Noncurrent portion

31,363,997



28,755,342



28,221,881













    
$
35,087,798


$
31,804,374


$
30,842,776


Ranges of discount rates for lease liabilities are as follows:


June 30,
2025
December 31,
2024
June 30,
2024


Land
0.39%-3.30%

0.39%-2.30%
0.39%-2.30%
Buildings
0.40%-6.52%

0.40%-6.52%
0.40%-6.52%
Office equipment
0.28%-6.46%

0.28%-6.46%
0.28%-7.13%

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


Six Months Ended June 30

2025

2024




Total cash outflow for leases
$
2,018,618


$
1,704,827




- 21 -

16.INTANGIBLE ASSETS


Goodwill

Technology License Fees

Software and System Design Costs

Patent and Others



Total










Cost



















Balance at January 1, 2025

$
6,070,864


$
28,566,518


$
53,279,044


$
13,133,519


$
101,049,945

Additions

-



88,794



2,848,922



295,787



3,233,503

Disposals or retirements

-



(82,471
)


(157,972
)


(53,741
)


(294,184
)
Effect of exchange rate changes

(490,735
)


(3,562
)


(131,973
)


(14,418
)


(640,688
)




















Balance at June 30, 2025

$
5,580,129


$
28,569,279


$
55,838,021


$
13,361,147


$
103,348,576





















Accumulated amortization and
  impairment____________________







































Balance at January 1, 2025

$
-


$
23,186,748


$
40,100,685


$
11,479,992


$
74,767,425

Additions

-



731,359



3,104,746



348,692



4,184,797

Disposals or retirements

-



(82,471
)


(155,901
)


-



(238,372
)
Effect of exchange rate changes


-



(3,562
)


(63,193
)


(5,813
)


(72,568
)



















Balance at June 30, 2025

$
-


$
23,832,074


$
42,986,337


$
11,822,871


$
78,641,282




















Carrying amounts at January 1, 2025

$
6,070,864


$
5,379,770


$
13,178,359


$
1,653,527


$
26,282,520

Carrying amounts at June 30, 2025

$
5,580,129


$
4,737,205


$
12,851,684


$
1,538,276


$
24,707,294





















Cost







































Balance at January 1, 2024

$
5,796,438


$
26,221,351


$
49,317,031


$
12,347,434


$
93,682,254

Additions

-



704,176



2,719,877



673,288



4,097,341

Disposals or retirements

-



(32,460
)


(4,363,944
)


(202,681
)


(4,599,085
)
Effect of exchange rate changes

236,677



1,213



8,121



19,098



265,109





















Balance at June 30, 2024

$
6,033,115


$
26,894,280


$
47,681,085


$
12,837,139


$
93,445,619





















Accumulated amortization and
  impairment____________________







































Balance at January 1, 2024

$
-


$
20,490,070


$
39,846,671


$
10,578,769


$
70,915,510

Additions

-



1,375,944



2,718,152



469,249



4,563,345

Disposals or retirements

-



(32,460
)


(4,363,944
)


(102,000
)


(4,498,404
)
Effect of exchange rate changes


-



1,116



16,399



17,054



34,569




















Balance at June 30, 2024

$
-


$
21,834,670


$
38,217,278


$
10,963,072


$
71,015,020






















Carrying amounts at January 1, 2024

$
5,796,438


$
5,731,281


$
9,470,360


$
1,768,665


$
22,766,744

Carrying amounts at June 30, 2024

$
6,033,115


$
5,059,610


$
9,463,807


$
1,874,067


$
22,430,599


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 rate of 9.3% in its test of impairment as of December 31, 2024 to reflect the relevant specific risk in the cash-generating unit.


17.BONDS PAYABLE

June 30,
2025

December 31,
2024

June 30,
2024






Domestic unsecured bonds
$
491,208,000


$
478,536,000


$
484,980,000

Overseas unsecured bonds

451,887,000



507,904,000



503,595,000

Less: Discounts on bonds payable


(2,269,558
)


(2,687,615
)


(2,864,009
)
Less: Current portion


(92,290,586
)


(57,147,879
)


(20,397,093
)












    
$
848,534,856


$
926,604,506


$
965,313,898


- 22 -


The Company issued domestic unsecured bonds for the six months ended June 30, 2025. The major terms are as follows:

Issuance

Tranche
Issuance Period
Total Issue Amount
Coupon RateRepayment and Interest Payment






NT$ unsecured
  bonds____________











114-1
(Green bond)

A
March 2025 to March 2030
$
12,000,000

1.90%
Bullet repayment; interest payable annually


B
March 2025 to March 2035

7,200,000

2.05%
The same as above
114-2
(Green bond)

A
June 2025 to June 2030

12,500,000

1.92%
The same as above


B
June 2025 to June 2035

1,600,000

2.05%
The same as above

The Company issued domestic unsecured bonds during the period from July 1, 2025 to August 12, 2025, the major terms are as follows:

Issuance

Tranche
Issuance Period
Total Issue Amount
Coupon RateRepayment and Interest Payment






NT$ unsecured
  bonds____________











114-3
(Green bond)

A
July 2025 to July 2030
$
8,300,000

1.92%
Bullet repayment; interest payable annually


B
July 2025 to July 2035

4,000,000

2.05%
The same as above

The major terms of overseas unsecured bonds are as follows:

Issuance Period

Total Issue Amount
(US$ in Thousands)
Coupon RateRepayment 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
September 2020 to September 2027


750,000

1.00%
The same as above
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
(Continued)
- 23 -

Issuance Period

Total Issue Amount
(US$ in Thousands)
Coupon RateRepayment and Interest Payment




April 2021 to April 2031

US$
1,500,000

2.25%
Bullet repayment (callable at any time, in whole or in part, at the relevant redemption price according to relevant agreements); interest payable semi-annually
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

June 30,
2025

December 31,
2024

June 30,
2024






NT$ unsecured loans
$
2,972,500


$
4,410,833


$
5,650,833

JPY unsecured loans

34,087,300



30,124,800



6,075,000

Less: Discounts on government grants

(499
)


(1,247
)


(17,735
)
Less: Current portion


(1,923,055
)


(2,710,000
)


(2,678,333
)












    

$
35,136,246


$
31,824,386


$
9,029,765












Loan content











Annual interest rate

0.78%-1.78%



0.13%-1.78%



0.39%-1.48%

Maturity date

Due by December 2030



Due by December 2030



Due by December 2030


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

The Company is required to maintain certain financial covenants during the borrowing period, including the annual equity of the subsidiary receiving the partial loan not to fall below a specific amount; its debt-to-equity ratio must not exceed a certain ratio; and the ratio of the Company’s annual debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) not to exceed a certain multiple.

- 24 -

19.EQUITY

a.    Capital stock


June 30,
2025

December 31,
2024

June 30,
2024






Authorized shares (in thousands)

28,050,000



28,050,000



28,050,000

Authorized capital
$
280,500,000


$
280,500,000


$
280,500,000

Issued and paid shares (in thousands)

25,932,615



25,932,733



25,933,629

Issued capital
$
259,326,155


$
259,327,332


$
259,336,292


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 September 1, 2024 and March 1, 2024, TSMC issued employee restricted stock awards (RSAs) for its employees in a total of 2,353 thousand shares and 2,960 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 2025 and 2024, TSMC reclaimed 118 thousand and 1,402 thousand employee restricted shares, respectively, that were unvested. On May 13, 2025 and June 5, 2024, TSMC’s Board of Directors resolved to cancel the aforementioned shares. Subsequently, TSMC completed the registration for share cancellation. Refer to Note 26 for information on RSAs.

On August 13, 2024, TSMC’s Board of Directors resolved to cancel 3,249 thousand treasury shares. Refer
to Note 19(e) for further information.

As of June 30, 2025, TSMC’s total issued and outstanding ADSs were 1,062,722 thousand units, representing 5,313,612 thousand common shares.

b.    Capital surplus

The categories of uses and the sources of capital surplus based on regulations were as follows:


June 30,
2025

December 31,
2024

June 30,
2024






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











Additional paid-in capital
$
25,586,161


$
24,809,704


$
24,812,813

From merger

22,800,434



22,800,434



22,803,291

From convertible bonds

8,891,257



8,891,257



8,892,371

From difference between the consideration received and the carrying amount of the subsidiaries’ net assets during actual disposal

8,411,566



8,411,566



8,411,566

Donations - donated by shareholders

11,275



11,275



11,275

(Continued)
- 25 -




June 30,
2025

December 31,
2024

June 30,
2024





May only be used to offset a deficit











From share of changes in equities of subsidiaries
$
4,093,849


$
4,108,958


$
4,190,441

From share of changes in equities of associates

1,251,828



1,172,396



307,771

Donations - unclaimed dividend

78,976



78,976



70,093













May not be used for any purpose























Employee restricted shares

2,200,919



2,976,199



1,441,055













    
$
73,326,265


$
73,260,765


$
70,940,676

(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.


- 26 -

The appropriations of 2025, 2024 and 2023 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:





Second Quarter

First Quarter
Resolution Date of TSMC’s



of 2025

of 2025
  Board of Directors in its


August 12,

May 13,
  meeting


2025

2025








Special capital reserve





$
181,554,848


$
-

Cash dividends to shareholders





$
129,662,913


$
129,663,078

Cash dividends per share (NT$)





$
5.00


$
5.00



Fourth Quarter
Third Quarter

Second Quarter

First Quarter
Resolution Date of TSMC’s
of 2024
of 2024

of 2024

of 2024
  Board of Directors in its
February 12,
November 12,

August 13,

May 10,
  meeting
2025
2024

2024

2024








Special capital reserve

$
-


$
-


$
-


$
(28,020,822
)
Cash dividends to shareholders

$
116,697,300


$
116,697,300


$
103,721,521


$
103,734,517

Cash dividends per share (NT$)

$
4.50


$
4.50


$
4.00


$
4.00



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


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:



Six Months Ended June 30, 2025


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 period
$
40,262,995


$
(1,160,176
)

$
1,310,307


$
(1,708,079
)

$
38,705,047

Exchange differences arising on translation of foreign operations

(225,918,439
)


-



-



-



(225,918,439
)
Gain (loss) on hedging instruments designated as hedges of net investments in foreign operations

430,085



-



-



-



430,085

Unrealized gain (loss) on financial assets at FVTOCI



















Equity instruments

-



1,608,693



-



-



1,608,693

Debt instruments

-



2,798,417



-



-



2,798,417

Disposal of investments in equity instruments at fair value through other comprehensive income


-



(155,994
)


-



-



(155,994
)
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal


-



82,845



-



-



82,845

Loss allowance adjustments from debt instruments


-



(15,809
)


-



-



(15,809
)
(Continued)
- 27 -



Six Months Ended June 30, 2025


Foreign Currency Translation Reserve

Unrealized Gain (Loss) on Financial Assets at FVTOCI

Gain (Loss) on Hedging Instruments

Unearned Stock-Based Employee Compensation

Total











Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss

$
-


$
-


$
(72,203
)

$
-


$
(72,203
)
Transferred to initial carrying amount of hedged items


-



-



9,246



-



9,246

Share-based payment expenses recognized


-



-



-



797,188



797,188

Share of other comprehensive income (loss) of associates


(638,946
)


(113,177
)


17,309



-



(734,814
)





















Balance, end of period

$
(185,864,305
)

$
3,044,799


$
1,264,659


$
(910,891
)

$
(182,465,738
)
(Concluded)



Six Months Ended June 30, 2024


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 period
$
(25,316,769
)

$
(4,099,928
)

$
1,395,875


$
(293,434
)

$
(28,314,256
)
Exchange differences arising on translation of foreign operations

49,990,470



-



-



-



49,990,470

Gain (loss) on hedging instruments designated as hedges of net investments in foreign operations

793,830



-



-



-



793,830

Unrealized gain (loss) on financial assets at FVTOCI



















Equity instruments

-



5,652,888



-



-



5,652,888

Debt instruments

-



(481,900
)


-



-



(481,900
)
Disposal of investments in equity instruments at fair value through other comprehensive income


-



(1,790,349
)


-



-



(1,790,349
)
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal


-



205,086



-



-



205,086

Loss allowance adjustments from debt instruments


-



9,607



-



-



9,607

Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss


-



-



(39,416
)


-



(39,416
)
Transferred to initial carrying amount of hedged items


-



-



(2,710
)


-



(2,710
)
Issuance of employee restricted stock


-



-



-



(1,078,713
)


(1,078,713
)
Share-based payment expenses recognized


-



-



-



392,809



392,809

Share of other comprehensive income (loss) of associates


215,378



(21,682
)


19,322



-



213,018

Income tax effect


-



(9,996
)


-



-



(9,996
)





















Balance, end of period

$
25,682,909


$
(536,274
)

$
1,373,071


$
(979,338
)

$
25,540,368


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 June 5, 2024 to repurchase 3,249 thousand shares. TSMC has completed this share buyback program during the second quarter of 2024. On August 13, 2024, TSMC’s Board of Directors resolved to cancel the 3,249 thousand shares and set September 1, 2024 as the record date for capital reduction. The registration for share cancellation was completed on September 11, 2024.


- 28 -

20.NET REVENUE

a.    Disaggregation of revenue from contracts with customers


Three Months Ended June 30

Six Months Ended June 30
   Product
2025

2024

2025

2024








Wafer

$
795,434,048


$
596,240,620


$
1,509,462,975


$
1,118,137,591

Others


138,357,821



77,269,557



263,582,558



148,016,787


















    

$
933,791,869


$
673,510,177


$
1,773,045,533


$
1,266,154,378



Three Months Ended June 30

Six Months Ended June 30
   Geography
2025

2024

2025

2024







Taiwan

$
73,556,401


$
60,545,774


$
140,049,911


$
128,861,200

United States


694,211,968



416,766,901



1,326,650,754



812,949,006

China


87,328,812



106,696,259



149,551,163



161,931,908

Japan


35,426,165



39,007,995



71,183,847



72,220,860

Europe, the Middle East and Africa


28,706,029



25,021,881



54,233,006



46,985,032

Others


14,562,494



25,471,367



31,376,852



43,206,372


















    

$
933,791,869


$
673,510,177


$
1,773,045,533


$
1,266,154,378


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


Three Months Ended June 30

Six Months Ended June 30
   Platform
2025

2024

2025

2024








High Performance Computing

$
561,155,353

$
351,392,530

$
1,054,378,499

$
626,165,504

Smartphone


249,959,546


222,543,370


483,570,934


447,575,509

Internet of Things


44,298,398



37,346,267


83,021,588


72,667,217

Automotive


43,029,218



33,747,863


86,057,463


65,884,496

Digital Consumer Electronics


14,997,583



14,119,376


26,550,049


25,857,161

Others


20,351,771



14,360,771


39,467,000


28,004,491







    

$
933,791,869


$
673,510,177


$
1,773,045,533


$
1,266,154,378



Three Months Ended June 30

Six Months Ended June 30
   Resolution
2025

2024

2025

2024








3-nanometer
$
187,252,107


$
90,111,260


$
347,432,294


$
135,560,220

5-nanometer

289,669,221



209,567,531



544,077,476



400,263,285

7-nanometer


109,051,362



101,106,641



217,247,909



201,496,228

16-nanometer


56,317,381



52,681,064



103,654,228



101,153,275

20-nanometer


633,072



1,077,092



1,815,646



2,476,387

28-nanometer


54,583,088



50,557,516



107,326,777



93,576,834

40/45-nanometer


25,199,803



27,586,077



45,531,166



54,700,531

65-nanometer


27,827,833



20,728,246



54,378,791



42,005,255

90-nanometer


4,980,173



5,591,099



10,118,160



11,105,390

0.11/0.13 micron


12,898,026



11,893,739



25,167,799



24,696,088

0.15/0.18 micron


21,950,928



21,803,577



43,171,553



43,728,038

0.25 micron and above


5,071,054



3,536,778



9,541,176



7,376,060





Wafer revenue

$
795,434,048


$
596,240,620


$
1,509,462,975


$
1,118,137,591



- 29 -

b.    Contract balances

June 30,
2025
December 31,
2024
June 30,
2024
January 1,
2024
Contract liabilities (classified under accrued expenses and other current liabilities)
$
56,799,375

$
89,435,361


$
67,450,001

$
52,736,430


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$9,527,546 thousand and NT$12,270,334 thousand for the three months ended June 30, 2025 and 2024, respectively; and NT$53,183,111 thousand and NT$48,641,062 thousand for the six months ended June 30, 2025 and 2024, respectively.

c.    Temporary receipts from customers
June 30,
2025

December 31,
2024

June 30,
2024







Current portion (classified under accrued expenses and other current liabilities)

$
155,973,239


$
198,602,570


$
177,138,527

Noncurrent portion (classified under other noncurrent liabilities)


65,942,034



92,499,262



88,350,446














    

$
221,915,273


$
291,101,832


$
265,488,973


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.


21.INTEREST INCOME

Three Months Ended June 30

Six Months Ended June 30

2025

2024

2025

2024
Interest income








Cash and cash equivalents

$
20,969,288


$
17,345,367


$
41,229,036


$
33,453,497

Financial assets at amortized cost


2,462,521



2,030,026



5,109,422



3,903,798

Financial assets at FVTOCI
    

1,760,189



1,603,840



3,712,852



2,981,110


















    

$
25,191,998


$
20,979,233


$
50,051,310


$
40,338,405



22.FINANCE COSTS

Three Months Ended June 30

Six Months Ended June 30

2025

2024

2025

2024
Interest expense








Corporate bonds
$
4,831,318


$
4,863,704


$
9,782,284


$
9,508,901

Lease liabilities

109,671



90,972



218,888



184,461

Bank loans

108,407



28,427



189,490



50,047

Others

1,568



5,977



2,523



9,702

Less: Capitalized interest under property, plant and equipment


(1,359,869
)


(2,350,940
)


(3,824,816
)


(4,416,716
)

















    
$
3,691,095


$
2,638,140


$
6,368,369


$
5,336,395


- 30 -


Information about capitalized interest is as follows:


Three Months Ended June 30

Six Months Ended June 30

2025

2024

2025

2024








Capitalization rate

1.32%-3.34%

1.32%-3.36%

1.32%-3.34%

1.20%-3.36%


23.OTHER GAINS AND LOSSES, NET


Three Months Ended June 30

Six Months Ended June 30

2025

2024

2025

2024








Loss on disposal of financial assets, net








Investments in debt instruments at FVTOCI
$
(32,605
)

$
(102,582
)

$
(82,845
)

$
(205,086
)
Loss on disposal of subsidiaries

-



-



(167,986
)


-

Gain (loss) on financial instruments at FVTPL, net















Mandatorily measured at FVTPL

11,143,784



(2,094,266
)


8,052,726



(5,433,484
)
Reversal of (provision for) expected credit loss of financial assets















Investments in debt instruments at FVTOCI

4,372



(1,310
)


15,809



(9,607
)
Financial assets at amortized cost

12,488



(10,872
)


9,411



(9,148
)
Other gains, net

132,165



82,496



107,520



247,899

 
















    
$
11,260,204


$
(2,126,534
)

$
7,934,635


$
(5,409,426
)


24.INCOME TAX

a.    Income tax expense recognized in profit or loss

Income tax expense consisted of the following:


Three Months Ended June 30

Six Months Ended June 30

2025

2024
2025

2024








Current income tax expense







Current tax expense recognized in the current period
$
108,759,971


$
67,167,292


$
179,026,001


$
107,935,164

Income tax adjustments on prior years

(14,158,210
)


(7,147,810
)


(13,878,570
)


(7,142,473
)
Other income tax adjustments

91,171



72,717



187,709



135,961

    

94,692,932



60,092,199



165,335,140



100,928,652

(Continued)
- 31 -


Three Months Ended June 30

Six Months Ended June 30

2025

2024
2025

2024
Deferred income tax expense (benefit)







The origination and reversal of temporary differences
$
1,857,930


$
(1,225,874
)

$
3,128,206


$
(164,170
)
Operating loss carryforward

(1,009,082
)


(217,188
)


(2,758,815
)


(793,404
)
    

848,848



(1,443,062
)


369,391



(957,574
)















Income tax expense recognized in profit or loss
$
95,541,780


$
58,649,137


$
165,704,531


$
99,971,078

(Concluded)

b.    Income tax examination

The tax authorities have examined income tax returns of TSMC through 2023. All investment tax credit adjustments assessed by the tax authorities have been recognized accordingly.


25.EARNINGS PER SHARE


Three Months Ended June 30

Six Months Ended June 30

20252024

20252024








Basic EPS
$
15.36


$
9.56


$
29.31


$
18.25

Diluted EPS
$
15.36


$
9.56


$
29.30


$
18.25


EPS is computed as follows:


Three Months Ended June 30

Six Months Ended June 30

20252024

20252024








Basic EPS







Net income available to common shareholders of the parent
$
398,273,102


$
247,845,528


$
759,837,230


$
473,330,405

Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands)

25,928,255



25,928,972



25,927,526



25,929,119

Basic EPS (in dollars)
$
15.36


$
9.56


$
29.31


$
18.25

















Diluted EPS















Net income available to common shareholders of the parent
$
398,273,102


$
247,845,528


$
759,837,230


$
473,330,405

Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands)

25,928,255



25,928,972



25,927,526



25,929,119

Effects of all dilutive potential common shares (in thousands)

622



1,840



1,245



1,215

















Weighted average number of common shares used in the computation of diluted EPS (in thousands)

25,928,877



25,930,812



25,928,771



25,930,334

Diluted EPS (in dollars)
$
15.36


$
9.56


$
29.30


$
18.25


- 32 -

26.SHARE-BASED PAYMENT ARRANGEMENTS

a.    Equity-settled share-based payment-RSAs

The RSAs in each year are as follows:


2024 RSAs2023 RSAs2022 RSAs2021 RSAs









Resolution Date of TSMC’s shareholders in its meeting
June 4, 2024
June 6, 2023

June 8, 2022
July 26, 2021
Resolution Date of TSMC’s Board of Directors in its meeting
August 13, 2024
February 6, 2024

February 14, 2023
February 15, 2022
Issuance of stocks (in thousands)
2,353
2,960

2,110
1,387
Available for issuance (in thousands)
1,832
-

-
-
Eligible employees
Executive officers
Executive officers

Executive officers
Executive officers
Grant date/Issuance date
September 1, 2024
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 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’s 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

- 33 -

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:


2024 RSAs
2023 RSAs

2022 RSAs

2021 RSAs

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

Number of Shares
(In Thousands)

Number of Shares
(In Thousands)









Balance, beginning of period


2,353



2,960



1,055



347

Vested shares


-



(1,406
)


(501
)


(330
)
Canceled shares


-



(74
)


(27
)


(17
)

















Balance, end of period


2,353



1,480



527



-


















Weighted-average fair value of RSAs (in dollars)

$
662.42


$
364.43


$
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:


2024 RSAs2023 RSAs2022 RSAs2021 RSAs

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








Stock price at measurement date (in dollars)
$
944


$
689


$
511


$
604

Expected price volatility

25.51%-29.87%



24.77%-26.12%



29.34%-32.11%



25.34%-28.28%

Expected life

1-3 years



1-3 years



1-3 years



1-3 years

Risk-free interest rate

1.40%



1.16%



1.06%



0.57%


Refer to Note 27 for the compensation costs of the RSAs recognized by TSMC.

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:


Six Months Ended June 30

2025

2024

2023 Plan

2022 Plan

2023 Plan

2022 Plan

2021 Plan










Stock price at measurement date (in dollars)

$
1,080


$
1,080


$
960


$
960


$
960

Expected price volatility


25.92%-32.48%



25.92%-32.48%



24.69%-27.15%



24.69%-27.15%



24.69%-27.15%

Residual life


1-2 years



1 year



1-3 years



1-2 years



1 year

Risk-free interest rate


1.33%



1.32%



1.51%



1.46%



1.40%


- 34 -


Refer to Note 27 for the compensation costs of the cash-settled share-based payment recognized by TSMC. As of June 30, 2025, December 31, 2024 and June 30, 2024, the liabilities under cash-settled share-based payment arrangement amounted to NT$117,847 thousand, NT$455,728 thousand and NT$197,719 thousand, respectively.


27.ADDITIONAL INFORMATION OF EXPENSES BY NATURE


Three Months Ended June 30

Six Months Ended June 30

20252024

20252024








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
















Recognized in cost of revenue
$
175,806,058

$
153,957,487


$
337,454,303


$
302,620,126

Recognized in operating expenses

10,190,757


8,963,535



21,541,975



16,989,709

Recognized in other operating income and expenses

10,452


8,288



15,916



16,576
















    
$
186,007,267

$
162,929,310


$
359,012,194


$
319,626,411



b.    Amortization of intangible assets






























Recognized in cost of revenue
$
1,321,247


$
1,538,400


$
2,731,976


$
3,167,075

Recognized in operating expenses

729,398



698,884



1,452,821



1,396,270


















$
2,050,645


$
2,237,284


$
4,184,797


$
4,563,345

















c.    Employee benefits expenses































Post-employment benefits















Defined contribution plans
$
1,661,208

$
1,461,039


$
3,275,890


$
2,879,773

Defined benefit plans

64,229


68,920



126,286



137,826

    

1,725,437


1,529,959



3,402,176



3,017,599

Share-based payments














Equity-settled

344,406


230,956



799,647



412,787

Cash-settled

17,627


117,608



87,589



139,409



362,033


348,564



887,236



552,196

Other employee benefits

93,369,582


67,351,555



179,467,144



129,121,834
















        
$
95,457,052

$
69,230,078


$
183,756,556


$
132,691,629
















Employee benefits expense summarized by function














Recognized in cost of revenue
$
57,897,171

$
37,838,878


$
105,903,936


$
72,461,086

Recognized in operating expenses

37,559,881


31,391,200



77,852,620



60,230,543
















    
$
95,457,052

$
69,230,078


$
183,756,556


$
132,691,629


- 35 -


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 (among which not less than 30% as profit sharing bonuses to entry-level employees).

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:


Three Months Ended June 30

Six Months Ended June 30

20252024

20252024








Profit sharing bonus to employees

$
23,896,380


$
14,825,285


$
45,590,230


$
28,298,154


TSMC’s accrued profit sharing bonus to employees and compensation to directors for 2024 and 2023 are illustrated below:


Years Ended December 31


2024

2023

Profit sharing bonus to employees
$
70,296,283


$
50,090,533

Compensation to directors
$
358,989


$
551,955


There is no significant difference between the aforementioned amounts and the amounts charged against earnings of 2024 and 2023, 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.


28.GOVERNMENT GRANTS

Subsidiaries such as TSMC Arizona, ESMC, JASM and TSMC Nanjing received subsidies from the governments of the United States, Germany, Japan and China, respectively, for local plant 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 six months ended June 30, 2025 and 2024, the Company received a total of NT$67,128,197 thousand and NT$7,956,680 thousand as government grants, respectively.

The aforementioned subsidiaries have signed grant agreements with the local government. The agreements include the construction timelines and other conditions that must be complied with. TSMC Arizona is also eligible to apply for a 25% investment grant for qualified investments.


29.CASH FLOW INFORMATION

a.    Non-cash transactions


Six Months Ended June 30


2025

2024





Additions of financial assets at FVTOCI

$
38,158,843


$
44,788,275

Changes in accrued expenses and other current liabilities


(807,080
)


(1,008,095
)









Payments for acquisition of financial assets at FVTOCI

$
37,351,763


$
43,780,180

(Continued)
- 36 -



Six Months Ended June 30


2025

2024





Disposal of financial assets at FVTOCI

$
50,269,584


$
28,770,436

Changes in other financial assets


(524,285
)


(355,647
)









Proceeds from disposal of financial assets at FVTOCI

$
49,745,299


$
28,414,789










Additions of property, plant and equipment

$
578,422,202


$
342,411,873

Changes in other receivables


22,794,692



-

Exchange of assets


-



(47,626
)
Changes in payables to contractors and equipment suppliers


18,923,594



37,665,813

Changes in accrued expenses and other current liabilities


11,767,889



11,366,142

Transferred to initial carrying amount of hedged items


(31,030
)


-

Capitalized interests


(3,824,816
)


(4,416,716
)









Payments for acquisition of property, plant and equipment

$
628,052,531


$
386,979,486

(Concluded)

b.    Reconciliation of liabilities arising from financing activities





Non-cash Changes


Balance as of January 1, 2025

Financing Cash Flow

Foreign Exchange Movement

Leases Modifications

Other Changes
(Note)

Balance as of June 30, 2025











Hedging financial liabilities- bank loans

$
-


$
430,085


$
(430,085
)

$
-


$
-


$
-

Bonds payable


983,752,385



19,865,180



(62,988,983
)


-



196,860



940,825,442

Long-term bank loans


34,534,386



3,956,667



(1,432,500
)


-



748



37,059,301

Lease liabilities


31,804,374



(1,856,892
)


(158,657
)


5,080,085



218,888



35,087,798


























Total

$
1,050,091,145


$
22,395,040


$
(65,010,225
)

$
5,080,085


$
416,496


$
1,012,972,541






Non-cash Changes


Balance as of January 1, 2024

Financing Cash Flow

Foreign Exchange Movement

Leases Modifications

Other Changes
(Note)

Balance as of June 30, 2024











Hedging financial liabilities- bank loans

$
27,290,400


$
(26,496,570
)

$
(793,830
)

$
-


$
-


$
-

Bonds payable


920,897,553



34,264,419



30,357,663



-



191,356



985,710,991

Long-term bank loans


6,678,521



5,322,444



(303,001
)


-



10,134



11,708,098

Lease liabilities


31,492,386



(1,688,181
)


(16,175
)


870,285



184,461



30,842,776


























Total

$
986,358,860


$
11,402,112


$
29,244,657


$
870,285


$
385,951


$
1,028,261,865


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


30.FINANCIAL INSTRUMENTS

a.    Categories of financial instruments


June 30,
2025

December 31,
2024

June 30,
2024






Financial assets






FVTPL (Note 1)

$
15,597,401


$
15,407,542


$
14,829,233

FVTOCI (Note 2)


178,610,815



205,938,125



197,890,353

Hedging financial assets


-



10,959



1,409

Amortized cost (Note 3)


2,888,647,577



2,721,319,255



2,194,376,187














    

$
3,082,855,793


$
2,942,675,881


$
2,407,097,182

(Continued)
- 37 -


June 30,
2025

December 31,
2024

June 30,
2024





Financial liabilities





FVTPL (Note 4)

$
220,702


$
466,539


$
509,210

Hedging financial liabilities


2,384



-



3,524

Amortized cost (Note 5)


1,923,984,698



1,963,297,264



1,832,194,099














    

$
1,924,207,784


$
1,963,763,803


$
1,832,706,833

(Concluded)

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 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 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, such as currency forwards or currency swaps, and non-derivative financial instruments, such as foreign currency denominated debts and foreign currency deposits, to protect against currency exchange rate risks associated with non-NT dollar-denominated monetary assets and liabilities, net investments in foreign operations, and certain forecasted transactions. These hedges reduce, but do not entirely eliminate, the effect of foreign currency exchange rate movements on the assets and liabilities.


- 38 -

Based on a sensitivity analysis performed on the Company’s total monetary assets and liabilities for the six months ended June 30, 2025 and 2024, a hypothetical adverse foreign currency exchange rate change of 10% would have decreased its net income by NT$5,619,499 thousand and NT$506,465 thousand, respectively.

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.

The majority of the Company’s fixed income investments are fixed-rate securities, which are classified as financial assets at FVTOCI or at amortized cost. For those fixed income investments classified as financial assets at FVTOCI, changes in their fair value are recognized through other comprehensive income; for those classified as financial assets at amortized cost, changes in their fair value are not reflected in the carrying amount. Both classifications recognized in profit or loss if the assets are sold.

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$3,865,424 thousand and NT$4,483,809 thousand for the six months ended June 30, 2025 and 2024, 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.

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.

Other price risk

The Company is exposed to convertible preferred stocks, equity instrument investments, and other investments price risk arising from financial assets at FVTPL and FVTOCI.

Assuming a hypothetical decrease of 10% in prices of the investments mentioned above at the end of the reporting period, the net income would have decreased by NT$1,106,520 thousand and NT$1,177,189 thousand for the six months ended June 30, 2025 and 2024, respectively, and the other comprehensive income would have decreased by NT$1,031,714 thousand and NT$1,247,165 thousand for the six months ended June 30, 2025 and 2024, 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

- 39 -

procedures will effectively eliminate losses resulting from its credit risk. This risk is heightened during periods when economic conditions worsen.

As of June 30, 2025, December 31, 2024 and June 30, 2024, the Company’s ten largest customers accounted for 83%, 93% and 88% 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. 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

0-0.09%
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 six months ended June 30, 2025 and 2024, the expected credit loss decreased NT$43,136 thousand and increased NT$25,656 thousand, respectively. The changes were mainly due to adjusted investment portfolio and fluctuations in exchange rates.

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.


- 40 -


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









June 30, 2025


















Non-derivative financial liabilities



















Accounts payable (including related parties)
$
84,771,710


$
-


$
-


$
-


$
84,771,710

Payables to contractors and equipment suppliers

161,416,417



-



-



-



161,416,417

Accrued expenses and other current liabilities

380,758,339



-



-



-



380,758,339

Bonds payable

110,351,218



353,568,731



149,283,960



514,258,504



1,127,462,413

Long-term bank loans

2,263,986



5,439,391



22,578,388



8,106,360



38,388,125

Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note)

4,212,515



6,235,143



5,555,966



22,816,058



38,819,682

Others

-



57,576,074



5,633,693



8,555,432



71,765,199

    

743,774,185



422,819,339



183,052,007



553,736,354



1,903,381,885





















Derivative financial instruments







































Forward exchange contracts



















Outflows

131,012,725



-



-



-



131,012,725

Inflows

(131,831,271
)


-



-



-



(131,831,271
)
    

(818,546
)


-



-



-



(818,546
)




















        

$
742,955,639


$
422,819,339


$
183,052,007


$
553,736,354


$
1,902,563,339




















December 31, 2024







































Non-derivative financial liabilities







































Accounts payable (including related parties)
$
74,226,559


$
-


$
-


$
-


$
74,226,559

Payables to contractors and equipment suppliers

192,635,173



-



-



-



192,635,173

Accrued expenses and other current liabilities

358,165,686



-



-



-



358,165,686

Bonds payable

76,460,812



335,240,849



197,389,127



587,602,550



1,196,693,338

Long-term bank loans

2,935,154



2,275,524



27,044,881



3,151,180



35,406,739

Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note)

3,483,523



5,794,816



4,826,752



20,782,694



34,887,785

Others

-



86,979,515



11,737,085



-



98,716,600

    

707,906,907



430,290,704



240,997,845



611,536,424



1,990,731,880




















Derivative financial instruments







































Forward exchange contracts



















Outflows

109,525,448



-



-



-



109,525,448

Inflows

(109,251,526
)


-



-



-



(109,251,526
)
    

273,922



-



-



-



273,922





















        

$
708,180,829


$
430,290,704


$
240,997,845


$
611,536,424


$
1,991,005,802






















June 30, 2024






































Non-derivative financial liabilities







































Accounts payable (including related parties)
$
63,947,072


$
-


$
-


$
-


$
63,947,072

Payables to contractors and equipment suppliers

136,744,351



-



-



-



136,744,351

(Continued)
- 41 -



Less Than
1 Year

1-3 Years

3-5 Years

More Than
5 Years

Total










Accrued expenses and other current liabilities
$
341,049,601


$
-


$
-


$
-


$
341,049,601

Bonds payable

39,688,142



302,271,090



263,054,483



601,849,110



1,206,862,825

Long-term bank loans

2,771,823



3,059,137



3,087,675



3,055,311



11,973,946

Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note)

3,014,361



5,243,981



4,684,375



20,932,256



33,874,973

Others

-



85,329,721



10,612,640



1,536,447



97,478,808

    

587,215,350



395,903,929



281,439,173



627,373,124



1,891,931,576





















Derivative financial instruments







































Forward exchange contracts



















Outflows

125,040,929



-



-



-



125,040,929

Inflows

(124,406,442
)


-



-



-



(124,406,442
)
    

634,487



-



-



-



634,487





















        

$
587,849,837


$
395,903,929


$
281,439,173


$
627,373,124


$
1,892,566,063

(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
June 30, 2025










Lease liabilities

$
10,904,753


$
7,502,665


$
4,081,986


$
326,654


$
22,816,058

December 31, 2024




















Lease liabilities

$
10,296,927


$
6,821,624


$
3,547,316


$
116,827


$
20,782,694

June 30, 2024




















Lease liabilities

$
10,182,792


$
6,888,802


$
3,706,678


$
153,984


$
20,932,256


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;

•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.


- 42 -

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:


June 30, 2025

Level 1

Level 2

Level 3

Total







Financial assets at FVTPL














Mandatorily measured at FVTPL







Convertible preferred stocks
$
-


$
-


$
12,617,717


$
12,617,717

Forward exchange contracts

-



1,765,904



-



1,765,904

Mutual funds

-



-



1,097,164



1,097,164

Simple agreement for future equity

-



-



116,616



116,616

















    

$
-


$
1,765,904


$
13,831,497


$
15,597,401

















Financial assets at FVTOCI































Investments in debt instruments















Corporate bonds
$
-


$
80,137,883


$
-


$
80,137,883

Agency mortgage-backed securities

-



46,016,814



-



46,016,814

Government bonds/Agency bonds

23,072,157



100,934



-



23,173,091

Asset-backed securities

-



9,019,262



-



9,019,262

Investments in equity instruments















Non-publicly traded equity investments

-



-



7,605,736



7,605,736

Publicly traded stocks

5,290,690



-



-



5,290,690

Notes and accounts receivable, net

-



7,367,339



-



7,367,339

















    

$
28,362,847


$
142,642,232


$
7,605,736


$
178,610,815
















Financial liabilities at FVTPL






























Held for trading















Forward exchange contracts

$
-


$
220,702


$
-


$
220,702
















Hedging financial liabilities






























Fair value hedges















Interest rate futures contracts

$
2,384


$
-


$
-


$
2,384



December 31, 2024

Level 1

Level 2

Level 3

Total







Financial assets at FVTPL














Mandatorily measured at FVTPL







Convertible preferred stocks
$
-


$
-


$
14,181,839


$
14,181,839

Mutual funds

-



-



886,931



886,931

Forward exchange contracts

-



207,700



-



207,700

Simple agreement for future equity

-



-



131,072



131,072

















    

$
-


$
207,700


$
15,199,842


$
15,407,542

(Continued)
- 43 -


December 31, 2024

Level 1

Level 2

Level 3

Total








Financial assets at FVTOCI















Investments in debt instruments







Corporate bonds
$
-


$
108,612,082


$
-


$
108,612,082

Agency mortgage-backed securities

-



46,611,373



-



46,611,373

Government bonds/Agency bonds

20,645,877



-



-



20,645,877

Asset-backed securities

-



11,490,511



-



11,490,511

Investments in equity instruments















Non-publicly traded equity investments

-



-



7,822,884



7,822,884

Publicly traded stocks

4,842,814



-



-



4,842,814

Notes and accounts receivable, net

-



5,912,584



-



5,912,584

















    

$
25,488,691


$
172,626,550


$
7,822,884


$
205,938,125
















Hedging financial assets






























Fair value hedges















Interest rate futures contracts

$
10,959


$
-


$
-


$
10,959


















Financial liabilities at FVTPL

































Held for trading
















Forward exchange contracts

$
-


$
466,539


$
-


$
466,539

(Concluded)


June 30, 2024

Level 1

Level 2

Level 3

Total







Financial assets at FVTPL














Mandatorily measured at FVTPL







Convertible preferred stocks
$
-


$
-


$
14,061,522


$
14,061,522

Mutual funds

-



-



523,385



523,385

Simple agreement for future equity

-



-



129,960



129,960

Convertible bonds

-



-



104,579



104,579

Forward exchange contracts

-



9,787



-



9,787

















    

$
-


$
9,787


$
14,819,446


$
14,829,233

















Financial assets at FVTOCI































Investments in debt instruments















Corporate bonds
$
-


$
98,654,521


$
-


$
98,654,521

Agency mortgage-backed securities

-



43,121,977



-



43,121,977

Government bonds/Agency bonds

22,623,211



161,130



-



22,784,341

Asset-backed securities

-



12,305,253



-



12,305,253

Investments in equity instruments















Publicly traded stocks

8,366,114



-



-



8,366,114

Non-publicly traded equity investments

-



-



7,223,448



7,223,448

Notes and accounts receivable, net

-



5,434,699



-



5,434,699

















    

$
30,989,325


$
159,677,580


$
7,223,448


$
197,890,353

(Continued)
- 44 -


June 30, 2024

Level 1

Level 2

Level 3

Total







Hedging financial assets














Fair value hedges







Interest rate futures contracts

$
1,409


$
-


$
-


$
1,409
















Financial liabilities at FVTPL






























Held for trading















Forward exchange contracts

$
-


$
509,210


$
-


$
509,210
















Hedging financial liabilities






























Fair value hedges















Interest rate futures contracts

$
3,524


$
-


$
-


$
3,524

(Concluded)

Reconciliation of Level 3 fair value measurements of financial assets

The financial assets measured at Level 3 fair value were financial assets at FVTPL and equity investments classified as financial assets at FVTOCI. Reconciliations for the six months ended June 30, 2025 and 2024 are as follows:



Six Months Ended June 30


2025

2024




Balance, beginning of period
$
23,022,726


$
20,849,566

Additions

386,930



1,040,085

Recognized in profit or loss

204,315



(184,681
)
Recognized in other comprehensive income or loss

327,837



(504,581
)
Disposals and proceeds from return of capital of investments

(4,976
)


(117,483
)
Transfers out of level 3 (Note)

-



(164,860
)
Effect of exchange rate changes

(2,499,599
)


1,124,848








Balance, end of period
$
21,437,233


$
22,042,894


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

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.


- 45 -

Valuation techniques and assumptions used in Level 3 fair value measurement

The fair values of convertible preferred stocks, convertible bonds, simple agreement for future equity, mutual funds and non-publicly traded equity investments are mainly determined by using the asset approach, income approach and market approach.

The asset approach takes into account the net asset value measured at the fair value by independent parties. On June 30, 2025, December 31, 2024 and June 30, 2024, 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$55,189 thousand, NT$56,163 thousand and NT$55,578 thousand, respectively, if discounts for lack of marketability increase by 1%.

The income approach utilizes discounted cash flows to determine the present value of the expected future economic benefits that will be derived from the investment. On June 30, 2025, December 31, 2024 and June 30, 2024, the Company mainly uses unobservable inputs, which include expected returns, discount rate of 9.0%, 8.6% and 10%, respectively, and discount for lack of marketability of 20%. With other inputs remain equal, if discount rate increases by 1%, the fair value will decrease by NT$510,947 thousand, NT$1,606,927 thousand and NT$1,869,542 thousand, respectively; if discount for lack of marketability increases by 1%, the fair value will decrease by NT$136,055 thousand, NT$140,819 thousand and NT$184,947 thousand, respectively.

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.

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:


June 30, 2025

Carrying

Fair Value

Amount

Level 1

Level 2

Total








Financial assets















Financial assets at amortized costs







Corporate bonds
$
176,223,968


$
-


$
177,126,610


$
177,126,610

Commercial paper

6,203,293



-



6,209,445



6,209,445

Government bonds/Agency bonds

3,901,492



3,950,111



-



3,950,111



















$
186,328,753


$
3,950,111


$
183,336,055


$
187,286,166

















Financial liabilities































Financial liabilities at amortized costs















Bonds payable

$
940,825,442


$
-


$
876,591,412


$
876,591,412




- 46 -


December 31, 2024

Carrying

Fair Value

Amount

Level 1

Level 2

Total








Financial assets















Financial assets at amortized costs







Corporate bonds
$
171,980,179


$
-


$
172,518,474


$
172,518,474

Commercial paper

14,208,158



-



14,222,713



14,222,713

Government bonds/Agency bonds

4,379,527



4,353,434



-



4,353,434



















$
190,567,864


$
4,353,434


$
186,741,187


$
191,094,621

















Financial liabilities































Financial liabilities at amortized costs















Bonds payable

$
983,752,385


$
-


$
900,344,663


$
900,344,663



June 30, 2024

Carrying

Fair Value

Amount

Level 1

Level 2

Total








Financial assets















Financial assets at amortized costs







Corporate bonds
$
124,000,198


$
-


$
123,533,581


$
123,533,581

Commercial paper

21,742,424



-



21,755,882



21,755,882

Government bonds/Agency bonds

7,098,457



4,302,069



2,756,301



7,058,370



















$
152,841,079


$
4,302,069


$
148,045,764


$
152,347,833

















Financial liabilities































Financial liabilities at amortized costs















Bonds payable

$
985,710,991


$
-


$
899,791,480


$
899,791,480


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.


31.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 NameRelated Party Categories


GUC and its subsidiaries (GUC)
Associates
VIS and its subsidiaries (VIS)
Associates
(Continued)
- 47 -

Related Party NameRelated Party Categories


SSMC
Associates
Xintec
Associates
TSMC Charity Foundation
Other related parties
TSMC Education and Culture Foundation
Other related parties
(Concluded)

b.    Net revenue




Three Months Ended June 30

Six Months Ended June 30



2025

2024

2025

2024
Item
Related Party Categories








Sales revenue
Associates

$
6,490,996


$
4,081,597


$
14,227,468


$
7,665,605


c.    Purchases


Three Months Ended June 30

Six Months Ended June 30

2025

2024

2025

2024
Related Party Categories







Associates
$
1,226,904


$
1,110,226


$
2,289,320


$
2,262,993


d.    Receivables from related parties



June 30,
2025

December 31,
2024

June 30,
2024








Item
Related Party Name















Receivables from

VIS

$
1,128,563


$
626,638


$
-

related parties

GUC


1,047,087



610,027



947,639



Xintec


44,731



104,766



142,023



Others


57,411



63,042



-


















    

$
2,277,792


$
1,404,473


$
1,089,662









































Other receivables

VIS

$
2,287,413


$
-


$
2,121,539

from related

Xintec


280,221



-



224,543

parties

SSMC


338



251



56,945


















    

$
2,567,972


$
251


$
2,403,027


e.    Payables to related parties



June 30,
2025

December 31,
2024

June 30,
2024








Item
Related Party Name















Payables to related

Xintec

$
788,255


$
987,992


$
786,801

parties

SSMC


361,668



308,424



330,982



Others


126,615



129,585



66,230


















    

$
1,276,538


$
1,426,001


$
1,184,013


- 48 -

f.    Accrued expenses and other current liabilities



June 30,
2025

December 31,
2024

June 30,
2024
Item
Related Party Categories






Temporary receipts

Associates

$
1,771,920


$
4,271,492


$
940,232


g.    Others




Three Months Ended June 30

Six Months Ended June 30



2025

2024

2025

2024
Item

Related Party Categories








Manufacturing expenses
Associates

$
1,215,870


$
1,037,312


$
2,278,294


$
2,097,783


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:


Three Months Ended June 30

Six Months Ended June 30

2025

2024

2025

2024








Short-term employee benefits
$
1,400,324


$
1,073,784


$
2,577,992


$
1,942,064

Post-employment benefits

959



1,136



1,960



2,246

Share-based payments

1,134,966



347,620



1,850,731



529,387

















    
$
2,536,249


$
1,422,540


$
4,430,683


$
2,473,697


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.


32.PLEDGED ASSETS

The Company provided certificate of deposits recorded in other financial assets as collateral mainly for building lease agreements. As of June 30, 2025, December 31, 2024 and June 30, 2024, the aforementioned other financial assets amounted to NT$120,669 thousand, NT$132,077 thousand and NT$130,054 thousand, respectively.

- 49 -



33.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 February 2025, Longitude Licensing Ltd. and Marlin Semiconductor Limited (collectively, “Marlin”) filed complaints with the U.S. International Trade Commission (“ITC”) and the U.S. District Court for the Eastern District of Texas alleging that TSMC and its customers infringe five U.S. patents. The ITC instituted an investigation on March 21, 2025 and the lawsuit in the Eastern District Court for Texas was statutorily stayed on April 23, 2025 pending the ITC investigation. The outcome cannot be determined, and we cannot make a reliable estimate of the contingent liability at this time.

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 long-term purchase agreement of equipment and maintenance service. The relative fulfillment period, 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 June 30, 2025, December 31, 2024 and June 30, 2024 were NT$435,852 thousand, NT$489,882 thousand and NT$485,726 thousand, respectively.

h.    The Company entrusted financial institutions to provide performance guarantees mainly for import and export of goods, lease agreement and apply for subsidy. As of June 30, 2025, December 31, 2024 and June 30, 2024, the aforementioned guarantee amounted to NT$16,695,014 thousand, NT$10,315,609 thousand, and NT$9,920,224 thousand, respectively.



- 50 -

34.SIGNIFICANT LOSS FROM DISASTER

In January 2025, several earthquakes struck Taiwan. The resulting damage was mostly to inventories, machinery and equipment. In the first quarter of 2025, the Company recognized related earthquake losses to be approximately NT$5.3 billion, net of insurance claim. Such losses were primarily included in the cost of revenue and other operating income and expenses in net amounts.

On April 3, 2024, an earthquake struck Taiwan. The resulting damage was mostly to inventories, plant facilities and machinery and equipment. In the second quarter of 2024, the Company recognized related earthquake losses to be approximately NT$3 billion, net of insurance claim. Such losses were primarily included in the cost of revenue and other operating income and expenses in net amounts.


35.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)
June 30, 2025













Financial assets













Monetary items






USD

$
16,150,439



29.154


$
470,849,904

EUR


1,553,439



34.215



53,150,932

JPY


141,178,705



0.2017



28,475,745














Financial liabilities






















Monetary items











USD

14,372,499



29.154



419,015,840

EUR

1,419,584



34.215



48,571,078

JPY

131,844,170



0.2017



26,592,969













December 31, 2024























Financial assets






















Monetary items











USD

18,726,635



32.768



613,634,377

EUR

596,978



34.102



20,358,132

EUR

169,266



1.041
(Note 2)


5,772,303

JPY

128,926,508



0.2092



26,971,425












Financial liabilities






















Monetary items











USD

16,255,804



32.768



532,670,186

EUR

821,105



34.102



28,001,335

EUR

168,550



1.041
(Note 2)


5,747,886

JPY

129,345,682



0.2092



27,059,117

(Continued)
- 51 -


Foreign Currencies
(In Thousands)

Exchange Rate
(Note 1)

Carrying Amount
(In Thousands)







June 30, 2024













Financial assets













Monetary items






USD

$
16,960,438



32.490


$
551,044,643

EUR


462,201



34.855



16,110,026

JPY


89,320,045



0.2025



18,087,309














Financial liabilities






















Monetary items











USD

13,263,571



32.490



430,933,410

EUR

435,647



34.855



15,184,487

JPY

88,563,688



0.2025



17,934,147

(Concluded)

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.

Please refer to the consolidated statements of comprehensive income for the total of realized and unrealized foreign exchange gain and loss for the three months and the six months ended June 30, 2025 and 2024, respectively. 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.


36.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): there are no significant securities that need to be listed separately;

d.    Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: See Table 3 attached;

e.    Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 4 attached;

f.    Others: The business relationship between the parent and the subsidiaries and significant transactions between them: See Table 5 attached;

g.    Names, locations, and related information of investees over which TSMC exercises significant influence (excluding information on investment in mainland China): See Table 6 attached;


- 52 -

h.    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 7 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 5 attached.


37.OPERATING SEGMENTS INFORMATION

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.
- 53 -

TABLE 1


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

FINANCINGS PROVIDED
FOR THE SIX MONTHS ENDED JUNE 30, 2025
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


No.Financing CompanyCounterpartyFinancial Statement AccountRelated 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 RateNature for FinancingTransaction AmountsReason for FinancingAllowance for Bad DebtCollateral
Financing Limits for Each Borrowing Company
(Notes 1 to 2)
Financing Company’s Total Financing Amount Limits
(Notes 1 to 2)
ItemValue















1
TSMC China
TSMC Nanjing
Other receivables from related parties
Yes
$
37,535,700

$
26,955,260

$
13,835,960

1.50%
The need for long-term financing
$
-

Operating capital
$
-

-
$
-

$
105,309,752

$
105,309,752

(RMB
6,000,000
)&
(RMB
3,400,000
)&
(RMB
3,400,000
)
(US$
450,000
)
(US$
450,000
)



2
TSMC Development
TSMC Washington
Other receivables from related parties
Yes

1,749,240


1,749,240


1,749,240

-
The need for short-term financing

-

Operating capital

-

-

-


31,340,900


31,340,900

(US$
60,000
)
(US$
60,000
)
(US$
60,000
)

































Note 1:    The aggregate amount available for lending to TSMC Nanjing from TSMC China and the aggregate amount of lending from TSMC China shall not exceed the net worth of TSMC China.

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

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

- 54 -

TABLE 2


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE SIX MONTHS ENDED JUNE 30, 2025
(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 PropertiesRatio 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
NameNature of Relationship











0
 TSMC
TSMC North America
Subsidiary
$
1,832,429,590

$
(US$
2,426,001
83,213

)
$
(US$
2,426,001
83,213

)
$
(US$
2,426,001
83,213

)
$
-


0.05%

$
1,832,429,590

Yes
No
No

TSMC Global
Subsidiary

1,832,429,590


(US$
218,655,000
7,500,000

)

(US$
218,655,000
7,500,000

)

(US$
218,655,000
7,500,000

)

-


4.77%


1,832,429,590

Yes
No
No

TSMC Arizona
Subsidiary

1,832,429,590


(US$
437,234,783
14,997,420

)

(US$
437,140,265
14,994,178

)

(US$
318,703,831
10,931,736

)

-


9.54%


1,832,429,590

Yes
No
No
1
 TSMC Japan
TSMC JDC
The same parent company

322,709


(JPY
266,244
1,320,000

)

-


-


-


-


322,709

No
No
No




























Note 1:    TSMC's individual endorsement/guarantee limits for TSMC North America, TSMC Global, and TSMC Arizona, as well as the total external endorsement/guarantee limits for TSMC and its subsidiaries, 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 and the total amount of the endorsement/guarantee provided by TSMC Japan 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.

- 55 -

TABLE 3


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 SIX MONTHS ENDED JUNE 30, 2025
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Company NameRelated PartyNature of RelationshipsTransaction DetailsAbnormal TransactionNotes/Accounts Payable or ReceivableNote
Purchases/
Sales
Amount
(Foreign Currencies in Thousands)
% to TotalPayment TermsUnit PricePayment Terms
Ending Balance
(Foreign Currencies in Thousands)
% to Total



            

            

TSMC
TSMC North America
Subsidiary
Sales
$
1,390,718,145


79

Net 30 days from invoice date (Note)
--
$
163,066,366


78


TSMC Arizona
Subsidiary
Sales

1,214,089


- 

Net 30 days from the end of the month of when invoice is issued
--

11,914


-


JASM
Subsidiary
Sales

204,780


- 

Net 30 days from the end of the month of when invoice is issued
--

130,056


-


GUC
Associate
Sales

2,198,436


- 

Net 30 days from invoice date
--

339,234


-


VIS
Associate
Sales

764,213


- 

Net 30 days from the end of the month of when invoice is issued
--

1,128,563


1


SSMC
Associate
Sales

126,561


- 

Net 30 days from the end of the month of when invoice is issued
--

57,411


-


TSMC Nanjing
Subsidiary
Purchases

37,546,969


37

Net 30 days from the end of the month of when invoice is issued
--

(6,063,930
)

6


TSMC Arizona
Subsidiary
Purchases

22,794,851


22

Net 30 days from the end of the month of when invoice is issued
--

(4,693,987
)

4


TSMC China
Subsidiary
Purchases

13,008,501


13

Net 30 days from the end of the month of when invoice is issued
--

(2,070,544
)

2


TSMC Washington
Indirect subsidiary
Purchases

3,687,670


4

Net 30 days from the end of the month of when invoice is issued
--

(482,732
)

-


SSMC
Associate
Purchases

1,903,045


2

Net 30 days from the end of the month of when invoice is issued
--

(361,668
)

-


VIS
Associate
Purchases

386,275


- 

Net 30 days from the end of the month of when invoice is issued
--

(68,432
)

-

TSMC North America
GUC
Associate of TSMC
Sales

(US$
10,941,567
341,990

)

1

Net 30 days from invoice date
--

(US$
707,854
24,280

)

-

VisEra Tech
Xintec
Associate of TSMC
Sales

196,689


4

Net 60 days from the end of the month of when invoice is issued
--

44,731


4


















Note:    The tenor is determined by the payment terms granted to its clients by TSMC North America.

- 56 -

TABLE 4


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
JUNE 30, 2025
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Company NameRelated PartyNature of Relationships
Ending Balance
(Foreign Currencies in Thousands)
Turnover Days
(Note 1)		OverdueAmounts Received in Subsequent Period
Allowance for
Bad Debts
AmountAction Taken








TSMC
TSMC North America
Subsidiary
$
166,460,685

24
$
-

-
$
-

$
-


VisEra Tech
Subsidiary

644,192

Note 2

-

-

-


-


JASM
Subsidiary

266,969

Note 2

-

-

-


-


VIS
Associate

3,415,976

Note 2

-

-

-


-


GUC
Associate

339,234

32

-

-

-


-


Xintec
Associate

280,221

Note 2

-

-

-


-

TSMC North America
TSMC
Parent company
 
(USD
424,646
14,566
 
)
Note 2

-

-

-


-


GUC
Associate of TSMC
 
(USD
707,854
24,280
 
)
8

-

-

-


-

TSMC Japan 3DIC R&D Center
TSMC
Parent company
 
(JPY
161,194
799,177
 
)
Note 2

-

-

-


-

TSMC China
TSMC
Parent company
 
(RMB
2,070,544
508,808
 
)
28

-

-

-


-


TSMC Nanjing
The same parent company
 
(RMB
13,959,841
3,430,442
 
)
Note 2

-

-

-


-

TSMC Nanjing
TSMC
Parent company
 
(RMB
6,063,930
1,490,129
 
)
27

-

-

-


-

TSMC Arizona
TSMC
Parent company
 
(USD
4,693,987
161,007
 
)
23

-

-

-


-

TSMC Technology
TSMC
The ultimate parent of the Company
 
(USD
962,209
33,004
 
)
Note 2

-

-

-


-

TSMC Development
TSMC Washington
Subsidiary
 
(USD
1,749,240
60,000
 
)
Note 2

-

-

-


-

TSMC Washington
TSMC
The ultimate parent of the Company
 
(USD
482,732
16,558
 
)
26

-

-

-


-


















Note 1:    The calculation of turnover days excludes other receivables from related parties.

Note 2:    The ending balance is primarily consisted of royalty receivables and other receivables, which is not applicable for the calculation of turnover days.

- 57 -

TABLE 5


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2025
(Amounts in Thousands of New Taiwan Dollars)


No.Company NameCounterparty
Nature of Relationship
(Note 1)
Intercompany Transactions
Financial Statements ItemAmount
Terms
(Note 2)
Percentage of Consolidated Net Revenue or Total Assets



0TSMCTSMC North America1
Sales revenue
$
1,390,718,145

-

78%

Receivables from related parties

163,066,366

-

2%

Accrued expenses and other current liabilities

101,556,100

-

1%

Other noncurrent liabilities

46,826,370

-

1%

TSMC China1
Purchases

13,008,501

-

1%

TSMC Nanjing1
Purchases

37,546,969

-

2%

TSMC Arizona1
Purchases

22,794,851

-

1%









Note 1:    No. 1 represents the transactions from parent company to subsidiary.

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.

- 58 -

TABLE 6


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 SIX MONTHS ENDED JUNE 30, 2025
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Investor CompanyInvestee CompanyLocationMain Businesses and Products
Original Investment Amount
Balance as of June 30, 2025
Net Income (Losses) of the Investee
(Foreign Currencies in Thousands)
Share of Profits/Losses
of Investee
(Note 1)
(Foreign Currencies in Thousands)
Note
June 30,
2025
(Foreign Currencies in Thousands)
December 31,
2024
(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
$
943,542,109

$
616,839,509


29


    100

$
1,002,469,693

$
23,198,760

$
23,198,760

Subsidiary

TSMC Arizona
Phoenix, Arizona, U.S.A.
Manufacturing, sales and testing of integrated circuits and other semiconductor devices

648,608,510


565,786,810


20,450


    100


564,309,467


4,728,433


4,515,390

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


70,784,657


1,142,678


1,142,678

Subsidiary

JASM
Kumamoto, Japan
Manufacturing, sales and testing of integrated circuits and other semiconductor devices

68,384,148


68,384,148


3,011


    73


50,731,461


(6,222,227
)

(4,520,448
)
Subsidiary

ESMC
Dresden, Germany
Manufacturing, sales and testing of integrated circuits and other semiconductor devices

25,628,016


18,112,326


770


    70


24,561,425


(279,491
)

(195,644
)
Subsidiary

VIS
Hsinchu, Taiwan
Manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks

13,919,430


13,919,430


506,709


    28


16,599,832


4,456,846


1,224,504

Associate

VisEra Tech
Hsinchu, Taiwan
Research, design, development, manufacturing, sales, packaging and test of color filter

4,224,082


4,224,082


213,619


    67


11,424,461


542,545


356,782

Subsidiary

SSMC
Singapore
Manufacturing and sales of integrated circuits and other semiconductor devices

5,120,028


5,120,028


314


    39


10,699,204


1,522,617


590,623

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


7,317,434


342,952


342,952

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


4,109,929


406,967


166,886

Associate

Emerging Fund
Cayman Islands
Investing in technology start-up companies

2,812,855


2,688,915


-


99.9

2,934,903


(2,749
)

(2,746
)
Subsidiary

GUC
Hsinchu, Taiwan
Researching, developing, manufacturing, testing and marketing of integrated circuits

386,568


386,568


46,688


    35


2,753,078


1,743,033


607,242

Associate

TSMC 3DIC
Yokohama, Japan
Engineering support activities

1,144,356


1,144,356


49


    100


1,389,963


101,045


101,045

Subsidiary

TSMC Europe
Amsterdam, the Netherlands
Customer service and supporting activities

15,749


15,749


-


    100


684,663


51,278


51,278

Subsidiary

TSMC JDC
Yokohama, Japan
Engineering support activities

410,680


410,680


15


    100


418,081


15,706


15,706

Subsidiary

TSMC Japan
Yokohama, Japan
Customer service and supporting activities

83,760


83,760


6


    100


129,084


4,790


4,790

Subsidiary

TSMC Korea
Seoul, Korea
Customer service and supporting activities

13,656


13,656


80


    100


43,024


655


655

Subsidiary

VTAF III (Note 3)
Cayman Islands
Investing in technology start-up companies

-


561,975


-


    -


-


445


436

Subsidiary
TSMC Partners
TSMC Development
Delaware, U.S.A.
Investing in companies involved in semiconductor manufacturing
 
(US$
17,111,614
586,939
 
)
 
(US$
17,111,614
586,939
 
)

-


    100

 
(US$
35,601,008
1,221,136
 
)
 
(US$
43,212
1,311
 
)

Note 2

Subsidiary

TSMC Technology
Delaware, U.S.A.
Engineering support activities

416,378


416,378


-


    100


1,544,747


170,402


Note 2

Subsidiary




(US$
14,282
)
(US$
14,282
)






(US$
52,986
)
(US$
5,398
)





TSMC Canada
Ontario, Canada
Engineering support activities

67,054


67,054


2,300


    100


415,826


21,373


Note 2

Subsidiary




(US$
2,300
)
(US$
2,300
)






(US$
14,263
)
(US$
669
)




VTAF III
Growth Fund (Note 3)
Cayman Islands
Investing in technology start-up companies

-


36,031


-


    -


-


445


Note 2

Subsidiary







(US$
1,236
)









(US$
14
)




TSMC Development
TSMC Washington
Washington, U.S.A.
Manufacturing, sales and testing of integrated circuits and other semiconductor devices

-


-


293,637


    100

 
(US$
4,401,509
150,974
 
)
 
(US$
(231,899
(7,293
)
))

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:    VTAF III and the Growth Fund have completed the liquidation procedures respectively in the first quarter and the second quarter of 2025.

- 59 -

TABLE 7


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INFORMATION ON INVESTMENT IN MAINLAND CHINA
FOR THE SIX MONTHS ENDED JUNE 30, 2025
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)


Investee CompanyMain 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, 2025
(US$ in Thousands)
Investment Flows
Accumulated Outflow of Investment from Taiwan as of
June 30, 2025 (US$ in Thousands)
Net Income (Losses) of the Investee CompanyPercentage of OwnershipShare of Profits/Losses
Carrying Amount
as of
Balance as of June 30, 2025
Accumulated Inward Remittance of Earnings as of
June 30, 2025
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
 
)
$
5,564,607

100%
$
5,596,898
(Note 2)

$
105,107,494

$
-

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
 
)

14,484,791

100%

14,439,434
(Note 2)


119,242,962


-

































Accumulated Investment in Mainland China as of June 30, 2025
(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    )
    $    2,769,979,110
     (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 reviewed 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.


- 60 -