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Equibles

6-K

Taiwan Semiconductor Manufacturing Co Ltd (TSM)

6-K 2025-11-14 For: 2025-09-30
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Added on April 07, 2026

1934 Act Registration No. 1-14700

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

FORM 6-K

_____________________________

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2025

(Commission File Number: 001-14700)

_____________________________

Taiwan Semiconductor Manufacturing Company Limited

(Translation of Registrant’s Name Into English)

_____________________________

No. 8, Li-Hsin Road 6

Hsinchu Science Park

Hsinchu 300-096, Taiwan

Republic of China

(Address of Principal Executive Offices)

_____________________________

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x            Form 40-F  o

Indicate by check mark if the registrant is submitting the Form 6-K in papers as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in papers as permitted by Regulation S-T Rule 101(b)(7): o

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Taiwan Semiconductor Manufacturing Company Limited
--- --- ---
Date:   November 14, 2025 By /s/ Wendell Huang
Wendell Huang
Senior Vice President and Chief Financial Officer

Exhibits

Exhibit Number Exhibit Description
99.1 Consolidated Financial Statements for theNineMonths EndedSeptember30, 2025 and 2024 and Independent Auditors’ Review Report pursuant to International Financial Reporting Standards adopted by ROC ("Taiwan-IFRSs")

Document

English Translation of Financial Statements Originally Issued in Chinese

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

Consolidated Financial Statements for the

Nine Months Ended September 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 September 30, 2025 and 2024, the related consolidated statements of comprehensive income for the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, the consolidated statements of changes in equity and cash flows for the nine 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 September 30, 2025 and 2024, its consolidated financial performance for the three months ended September 30, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the nine months ended September 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.

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Deloitte & Touche

Taipei, Taiwan

Republic of China

November 11, 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) September 30, 2025 December 31, 2024 September 30, 2024
--- --- --- --- --- --- --- --- --- ---
Amount % Amount % Amount %
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 6) $ 2,470,759,384 34 $ 2,127,627,043 32 $ 1,886,780,555 31
Financial assets at fair value through profit or loss (Note 7) 20,955 - 207,700 - 971,386 -
Financial assets at fair value through other comprehensive income (Note 8) 171,753,602 2 192,202,657 3 189,649,314 3
Financial assets at amortized cost (Note 9) 108,521,394 2 101,971,322 1 90,197,355 1
Hedging financial assets (Note 10) 1,333 - 10,959 - 1,079 -
Notes and accounts receivable, net (Note 11) 305,477,496 4 270,683,235 4 249,570,573 4
Receivables from related parties (Note 31) 2,336,343 - 1,404,473 - 403,379 -
Other receivables from related parties (Note 31) 57,595 - 251 - 74,477 -
Inventories (Note 12) 288,689,063 4 287,868,810 4 292,883,930 5
Other financial assets (Notes 28, 29 and 32) 54,019,724 1 63,138,316 1 35,301,765 1
Other current assets 34,378,423 - 43,237,354 1 28,080,050 -
Total current assets 3,436,015,312 47 3,088,352,120 46 2,773,913,863 45
NONCURRENT ASSETS
Financial assets at fair value through profit or loss (Note 7) 14,502,121 - 15,199,842 - 14,594,649 -
Financial assets at fair value through other comprehensive income (Note 8) 8,365,833 - 7,822,884 - 7,502,973 -
Financial assets at amortized cost (Note 9) 90,093,165 1 88,596,542 1 74,266,804 1
Investments accounted for using equity method (Note 13) 36,016,415 - 37,421,105 1 30,967,916 1
Property, plant and equipment (Notes 14 and 28) 3,499,340,761 48 3,234,980,070 48 3,071,599,327 50
Right-of-use assets (Note 15) 43,268,856 1 40,128,391 1 39,698,749 1
Intangible assets (Note 16) 25,558,048 - 26,282,520 1 22,083,031 -
Deferred income tax assets (Note 4) 62,098,853 1 65,943,300 1 65,944,214 1
Refundable deposits 5,092,503 - 5,495,862 - 4,483,344 -
Other noncurrent assets (Notes 28 and 29) 133,755,209 2 81,715,364 1 60,603,306 1
Total noncurrent assets 3,918,091,764 53 3,603,585,880 54 3,391,744,313 55
TOTAL $ 7,354,107,076 100 $ 6,691,938,000 100 $ 6,165,658,176 100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Financial liabilities at fair value through profit or loss (Note 7) $ 1,184,622 - $ 466,539 - $ 34,277 -
Hedging financial liabilities (Notes 10 and 29) 2,868 - - - 1,875 -
Accounts payable 84,425,148 1 72,800,558 1 69,134,197 1
Payables to related parties (Note 31) 1,961,260 - 1,426,001 - 1,685,850 -
Salary and bonus payable 54,129,620 1 47,451,509 1 37,714,425 1
Accrued profit sharing bonus to employees and compensation to directors (Note 27) 74,537,336 1 70,871,150 1 49,399,323 1
Payables to contractors and equipment suppliers 175,430,503 2 192,635,173 3 125,132,085 2
Cash dividends payable (Note 19) 259,325,990 4 220,418,821 3 207,456,038 4
Income tax payable (Note 4) 116,731,894 2 147,438,423 2 77,422,729 1
Long-term liabilities - current portion (Notes 17, 18 and 29) 76,225,613 1 59,857,879 1 58,804,983 1
Accrued expenses and other current liabilities (Notes 15, 20 and 29) 431,951,770 6 451,158,911 7 453,613,317 7
Total current liabilities 1,275,906,624 18 1,264,524,964 19 1,080,399,099 18
NONCURRENT LIABILITIES
Bonds payable (Notes 17 and 29) 880,432,755 12 926,604,506 14 909,703,588 15
Long-term bank loans (Notes 18 and 29) 37,795,501 1 31,824,386 - 26,459,677 -
Deferred income tax liabilities (Note 4) 3,961,495 - 3,988,482 - 61,376 -
Lease liabilities (Notes 15 and 29) 30,978,996 - 28,755,342 - 28,208,721 -
Net defined benefit liability (Note 4) 5,306,777 - 7,580,657 - 7,704,373 -
Guarantee deposits 746,634 - 845,581 - 914,462 -
Others (Note 20) 83,400,492 1 104,238,217 2 90,284,589 2
Total noncurrent liabilities 1,042,622,650 14 1,103,837,171 16 1,063,336,786 17
Total liabilities 2,318,529,274 32 2,368,362,135 35 2,143,735,885 35
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
Capital stock (Note 19) 259,325,245 3 259,327,332 4 259,327,332 4
Capital surplus (Notes 19 and 26) 73,361,113 1 73,260,765 2 72,390,172 1
Retained earnings (Note 19)
Appropriated as legal capital reserve 311,146,899 4 311,146,899 4 311,146,899 5
Appropriated as special capital reserve 181,554,848 3 - - - -
Unappropriated earnings 4,260,828,797 58 3,606,105,124 54 3,346,232,342 55
4,753,530,544 65 3,917,252,023 58 3,657,379,241 60
Others (Notes 19 and 26) (87,909,930) (1) 38,705,047 - 922,408 -
Equity attributable to shareholders of the parent 4,998,306,972 68 4,288,545,167 64 3,990,019,153 65
NON - CONTROLLING INTERESTS 37,270,830 - 35,030,698 1 31,903,138 -
Total equity 5,035,577,802 68 4,323,575,865 65 4,021,922,291 65
TOTAL $ 7,354,107,076 100 $ 6,691,938,000 100 $ 6,165,658,176 100

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 September 30 For the Nine Months Ended September 30
--- --- --- --- --- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Amount % Amount % Amount % Amount %
NET REVENUE (Notes 20, 31 and 37) $ 989,918,318 100 $ 759,692,143 100 $ 2,762,963,851 100 $ 2,025,846,521 100
COST OF REVENUE (Notes 12, 27, 31 and 34) 401,375,489 41 320,346,477 42 1,133,656,708 41 913,871,108 45
GROSS PROFIT 588,542,829 59 439,345,666 58 1,629,307,143 59 1,111,975,413 55
OPERATING EXPENSES (Notes 27 and 31)
Research and development 63,742,245 6 52,783,826 7 181,569,457 7 146,950,466 7
General and administrative 20,048,234 2 22,890,591 3 63,887,355 2 58,317,959 3
Marketing 3,973,966 - 3,404,487 1 12,002,028 - 9,463,070 1
Total operating expenses 87,764,445 8 79,078,904 11 257,458,840 9 214,731,495 11
OTHER OPERATING INCOME AND EXPENSES, NET (Notes 14, 27 and 34) (93,566) - 499,527 - (659,039) - (903,781) -
INCOME FROM OPERATIONS (Note 37) 500,684,818 51 360,766,289 47 1,371,189,264 50 896,340,137 44
NON-OPERATING INCOME AND EXPENSES
Share of profits of associates 1,424,738 - 1,560,733 - 4,013,993 - 3,590,959 -
Interest income (Note 21) 26,180,345 2 22,601,654 3 76,231,655 3 62,940,059 3
Other income 80,218 - 40,921 - 543,770 - 316,056 -
Foreign exchange gain, net (Note 35) 6,761,013 1 202,642 - 5,516,800 - 5,584,628 -
Finance costs (Note 22) (2,958,568) - (2,635,790) - (9,326,937) (1) (7,972,185) -
Other gains and losses, net (Note 23) (6,803,541) (1) 1,650,403 1 1,131,094 - (3,759,023) -
Total non-operating income and expenses 24,684,205 2 23,420,563 4 78,110,375 2 60,700,494 3
INCOME BEFORE INCOME TAX 525,369,023 53 384,186,852 51 1,449,299,639 52 957,040,631 47
INCOME TAX EXPENSE (Notes 4 and 24) 73,613,661 7 59,106,682 8 239,318,192 8 159,077,760 8
NET INCOME 451,755,362 46 325,080,170 43 1,209,981,447 44 797,962,871 39
OTHER COMPREHENSIVE INCOME (LOSS) (Notes 19 and 24)
Items that will not be reclassified subsequently to profit or loss:
Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income (535,592) - (1,050,696) - 1,073,236 - 4,612,885 -
Gain (loss) on hedging instruments - - 5,041 - (31,030) - 5,041 -
Share of other comprehensive loss of associates (3,768) - (37,704) - (99,671) - (40,064) -
Income tax expense related to items that will not be reclassified subsequently - - - - - - (9,996) -
(539,360) - (1,083,359) - 942,535 - 4,567,866 -
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations 94,284,256 9 (25,381,768) (4) (131,987,925) (5) 23,796,799 1
Unrealized gain on investments in debt instruments at fair value through other comprehensive income 1,177,459 - 5,455,766 1 4,042,911 - 5,188,559 1
Loss on hedging instruments (19,563) - (20,291) - (60,736) - (59,707) -
Share of other comprehensive income (loss) of associates 299,144 - (26,626) - (339,802) - 188,752 -
95,741,296 9 (19,972,919) (3) (128,345,552) (5) 29,114,403 2
Other comprehensive income (loss), net of income tax 95,201,936 9 (21,056,278) (3) (127,403,017) (5) 33,682,269 2
TOTAL COMPREHENSIVE INCOME $ 546,957,298 55 $ 304,023,892 40 $ 1,082,578,430 39 $ 831,645,140 41
(Continued)
  • 4 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
For the Nine Months Ended September 30
--- --- --- --- --- --- --- --- --- --- --- ---
2024 2025 2024
% Amount % Amount % Amount %
NET INCOME ATTRIBUTABLE TO:
Shareholders of the parent 452,301,407 46 $ 325,257,571 43 $ 1,212,138,637 44 $ 798,587,976 39
Non-controlling interests - (177,401) - (2,157,190) - (625,105) -
451,755,362 46 $ 325,080,170 43 $ 1,209,981,447 44 $ 797,962,871 39
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Shareholders of the parent 546,571,990 55 $ 302,100,323 40 $ 1,084,587,960 39 $ 831,764,315 41
Non-controlling interests - 1,923,569 - (2,009,530) - (119,175) -
546,957,298 55 $ 304,023,892 40 $ 1,082,578,430 39 $ 831,645,140 41
EARNINGS PER SHARE (NT, Note 25)
Basic earnings per share 17.44 $ 12.55 $ 46.75 $ 30.80
Diluted earnings per share 17.44 $ 12.54 $ 46.75 $ 30.80
The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

All values are in US Dollars.

  • 5 -
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
Capital Stock - Common Stock Retained Earnings Foreign<br>Currency<br>Translation<br>Reserve Unrealized<br>Gain (Loss) on<br>Financial<br>Assets at Fair<br>Value Through<br>Other<br>Comprehensive<br>Income Gain (Loss) on<br>Hedging<br>Instruments Unearned <br>Stock-Based<br>Employee<br>Compensation
Shares Legal Capital Special Capital Unappropriated Total Treasury <br>Stock Total Non-controlling<br>Interests Total<br>Equity
(In Thousands) Amount Capital Surplus Reserve Reserve Earnings Total
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 - - - - - (298,218,286) (298,218,286) - - - - - - (298,218,286) - (298,218,286)
Total - - - - - (298,218,286) (298,218,286) - - - - - - (298,218,286) - (298,218,286)
Net income - - - - - 798,587,976 798,587,976 - - - - - - 798,587,976 (625,105) 797,962,871
Other comprehensive income (loss), net of income tax - - - - - - - 23,487,853 9,734,732 (46,246) - 33,176,339 - 33,176,339 505,930 33,682,269
Total comprehensive income (loss) - - - - - 798,587,976 798,587,976 23,487,853 9,734,732 (46,246) - 33,176,339 - 831,764,315 (119,175) 831,645,140
Employee restricted shares retired (1,402) (14,018) 14,018 - - 19,934 19,934 - - - - - - 19,934 - 19,934
Share-based payment arrangements 5,313 53,130 2,584,257 - - - - - - - (1,921,617) (1,921,617) - 715,770 - 715,770
Treasury stock acquired - - - - - - - - - - - - (3,089,177) (3,089,177) - (3,089,177)
Treasury stock retired (3,249) (32,490) (7,080) - - (3,049,607) (3,049,607) - - - - - 3,089,177 - - -
Disposal of investments in equity instruments at fair value through other comprehensive income - - - - - 2,008,432 2,008,432 - (2,008,432) - - (2,008,432) - - - -
Basis adjustment for loss on hedging instruments - - - - - - - - - (9,626) - (9,626) - (9,626) - (9,626)
Adjustments to share of changes in equities of associates - - 3,433 - - - - - - - - - - 3,433 - 3,433
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 - - (86,121) - - - - - - - - - - (86,121) 6,913,938 6,827,817
Increase in non-controlling interests - - - - - - - - - - - - - - 763,418 763,418
BALANCE, SEPTEMBER 30, 2024 25,932,733 $ 259,327,332 $ 72,390,172 $ 311,146,899 $ - $ 3,346,232,342 $ 3,657,379,241 $ (1,828,916) $ 3,626,372 $ 1,340,003 $ (2,215,051) $ 922,408 $ - $ 3,990,019,153 $ 31,903,138 $ 4,021,922,291
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
Special capital reserve - - - - 181,554,848 (181,554,848) - - - - - - - - - -
Cash dividends to shareholders - - - - - (376,023,291) (376,023,291) - - - - - - (376,023,291) - (376,023,291)
Total - - - - 181,554,848 (557,578,139) (376,023,291) - - - - - - (376,023,291) - (376,023,291)
Net income - - - - - 1,212,138,637 1,212,138,637 - - - - - - 1,212,138,637 (2,157,190) 1,209,981,447
Other comprehensive income (loss), net of income tax - - - - - (35) (35) (132,475,092) 4,996,842 (72,392) - (127,550,642) - (127,550,677) 147,660 (127,403,017)
Total comprehensive income (loss) - - - - - 1,212,138,602 1,212,138,602 (132,475,092) 4,996,842 (72,392) - (127,550,642) - 1,084,587,960 (2,009,530) 1,082,578,430
Employee restricted shares retired (209) (2,087) 2,087 - - 4,007 4,007 - - - - - - 4,007 - 4,007
Share-based payment arrangements - - (21,859) - - - - - - - 1,082,645 1,082,645 - 1,060,786 - 1,060,786
Disposal of investments in equity instruments at fair value through other comprehensive income - - - - - 159,203 159,203 - (159,203) - - (159,203) - - - -
Basis adjustment for gain on hedging instruments - - - - - - - - - 12,223 - 12,223 - 12,223 - 12,223
Adjustments to share of changes in equities of associates - - 135,229 - - - - - - - - - - 135,229 - 135,229
From share of changes in equities of subsidiaries - - (15,109) - - - - - - - - - - (15,109) 8,146 (6,963)
Increase in non-controlling interests - - - - - - - - - - - - - - 4,241,516 4,241,516
BALANCE, SEPTEMBER 30, 2025 25,932,524 $ 259,325,245 $ 73,361,113 $ 311,146,899 $ 181,554,848 $ 4,260,828,797 $ 4,753,530,544 $ (92,212,097) $ 3,677,463 $ 1,250,138 $ (625,434) $ (87,909,930) $ - $ 4,998,306,972 $ 37,270,830 $ 5,035,577,802

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

  • 6 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars) Nine Months Ended September 30
--- --- --- --- ---
2025 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax $ 1,449,299,639 $ 957,040,631
Adjustments for:
Depreciation expense 519,704,707 485,541,546
Amortization expense 6,279,555 6,876,767
Expected credit losses recognized (reversal) on investments in debt instruments (25,482) 35,268
Finance costs 9,326,937 7,972,185
Share of profits of associates (4,013,993) (3,590,959)
Interest income (76,231,655) (62,940,059)
Share-based compensation 1,073,063 735,748
Loss on disposal or retirement of property, plant and equipment, net 1,486,709 1,965,956
Loss on disposal or retirement of intangible assets, net 2,071 -
Impairment loss on property, plant and equipment 1,671,981 1,150,485
Loss (gain) on financial instruments at fair value through profit or loss, net (356,143) 139,280
Loss on disposal of investments in debt instruments at fair value through other comprehensive income, net 99,615 286,502
Loss from disposal of subsidiary 167,986 -
Loss (gain) on foreign exchange, net (9,352,900) 2,239,835
Dividend income (543,770) (316,056)
Others 925,282 (294,299)
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss 912,510 (349,840)
Notes and accounts receivable, net (34,794,261) (48,256,709)
Receivables from related parties (931,870) 221,072
Other receivables from related parties (57,344) (2,606)
Inventories (820,253) (41,886,842)
Other financial assets (12,624,018) (2,927,759)
Other current assets 9,036,020 (1,139,833)
Other noncurrent assets (3,243,804) (2,513,775)
Accounts payable 11,624,590 13,407,440
Payables to related parties 535,262 119,550
Salary and bonus payable 6,678,111 4,513,862
Accrued profit sharing bonus to employees and compensation to directors 3,666,186 (1,317,621)
Accrued expenses and other current liabilities (57,909,169) 61,336,839
Other noncurrent liabilities (3,695,024) 11,927,551
Net defined benefit liability (2,273,880) (1,552,851)
Cash generated from operations 1,815,616,658 1,388,421,308
Income taxes paid (266,149,820) (182,449,523)
Net cash generated by operating activities 1,549,466,838 1,205,971,785
(Continued)
  • 7 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars) Nine Months Ended September 30
--- --- --- --- ---
2025 2024
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Financial instruments at fair value through profit or loss $ (162,015) $ (1,097,618)
Financial assets at fair value through other comprehensive income (53,615,896) (64,117,242)
Financial assets at amortized cost (129,397,259) (98,056,800)
Hedging financial instruments (631,620) -
Property, plant and equipment (915,504,525) (594,058,374)
Intangible assets (5,594,917) (5,827,476)
Proceeds from disposal or redemption of:
Financial assets at fair value through other comprehensive income 65,603,469 43,454,000
Financial assets at amortized cost 111,261,850 85,696,380
Property, plant and equipment 314,781 639,042
Intangible assets - 49,293
Proceeds from return of capital of investments in equity instruments at fair value through other comprehensive income 96,363 319,518
Derecognition of hedging financial instruments 570,358 28,704
Interest received 72,794,719 57,961,207
Proceeds from government grants - property, plant and equipment 71,897,986 16,043,072
Proceeds from government grants - others - 267
Other dividends received 587,139 334,348
Dividends received from investments accounted for using equity method 3,304,492 2,965,201
Increase in prepayments for leases (30,060) (87,426)
Refundable deposits paid (347,234) (253,793)
Refundable deposits refunded 419,019 3,083,455
Net cash used in investing activities (778,433,350) (552,924,242)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in hedging financial liabilities - bank loans 430,085 (26,496,570)
Proceeds from issuance of bonds 63,400,000 34,300,000
Repayment of bonds (52,560,000) (5,250,000)
Proceeds from long-term bank loans 7,626,900 23,442,000
Repayment of long-term bank loans (2,157,500) (1,659,722)
Payments for transaction costs attributable to the issuance of bonds (83,646) (35,681)
Treasury stock acquired - (3,089,177)
Repayment of the principal portion of lease liabilities (2,612,337) (2,212,890)
Interest paid (13,778,562) (12,804,370)
Guarantee deposits received 3,000 2,573
Guarantee deposits refunded (44,383) (36,155)
Cash dividends (337,116,122) (259,320,708)
Disposal of ownership interests in subsidiaries (without losing control) - 1,021
Increase in non-controlling interests 4,233,246 7,591,192
Net cash used in financing activities (332,659,319) (245,568,487)
(Continued)
  • 8 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars) Nine Months Ended September 30
--- --- --- --- ---
2025 2024
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS $ (95,241,828) $ 13,873,746
NET INCREASE IN CASH AND CASH EQUIVALENTS 343,132,341 421,352,802
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,127,627,043 1,465,427,753
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,470,759,384 $ 1,886,780,555
The accompanying notes are an integral part of the consolidated financial statements. (Concluded)
  • 9 -

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br><br>FOR THE NINE MONTHS ENDED September 30, 2025 and 2024<br><br>(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.

  1. THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on November 11, 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<br><br>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
  • 10 -

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<br><br>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 (Note)

Note : On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC.

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.

  1. 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

  • 11 -

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”).

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:

Establishment Percentage of Ownership
Name of Investor Name of Investee Main Businesses and Products and Operating Location September 30,<br>2025 December 31,<br>2024 September 30,<br>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% -
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% 73% -
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), c)
VentureTech Alliance Fund III, L.P. (VTAF III) Investing in technology start-up companies Cayman Islands - 98% 98% b), c)
Emerging Fund, L.P. (Emerging Fund) Investing in technology start-up companies Cayman Islands 99.9% 99.9% 99.9% b)
(Continued)
  • 12 -
Establishment Percentage of Ownership
Name of Investor Name of Investee Main Businesses and Products and Operating Location September 30,<br>2025 December 31,<br>2024 September 30,<br>2024 Note
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), c)
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% -
(Concluded)

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

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.

  1. 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.

  1. CASH AND CASH EQUIVALENTS
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Cash and deposits in banks $ 2,465,848,661 $ 2,120,674,818 $ 1,879,710,837
Government bonds/Agency bonds 1,905,441 - -
Money market funds 1,829,838 2,826,701 4,455,181
Repurchase agreements 1,175,444 2,126,975 2,614,537
Commercial paper - 1,998,549 -
$ 2,470,759,384 $ 2,127,627,043 $ 1,886,780,555

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.

  • 13 -
  1. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Financial assets
Mandatorily measured at FVTPL
Convertible preferred stocks $ 13,213,676 $ 14,181,839 $ 13,692,780
Mutual funds 1,166,321 886,931 775,317
Simple agreement for future equity 122,124 131,072 126,552
Forward exchange contracts 20,955 207,700 971,386
14,523,076 15,407,542 15,566,035
Current $ 20,955 $ 207,700 $ 971,386
Noncurrent 14,502,121 15,199,842 14,594,649
$ 14,523,076 $ 15,407,542 $ 15,566,035
Financial liabilities
Held for trading
Forward exchange contracts $ 1,184,622 $ 466,539 $ 34,277

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)
September 30, 2025
Sell US$ October 2025 to December 2025 US$ 7,355,500
Sell JPY October 2025 JPY 19,774,990
December 31, 2024
Sell US$ January 2025 to March 2025 US$ 3,331,445
Sell JPY January 2025 JPY 45,233,963
September 30, 2024
Sell NT$ October 2024 to November 2024 NT$ 5,984,214
Sell US$ October 2024 to December 2024 US$ 2,608,500
  • 14 -
  1. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Investments in debt instruments at FVTOCI
Corporate bonds $ 85,961,547 $ 108,612,082 $ 106,675,983
Agency mortgage-backed securities 47,912,969 46,611,373 43,708,974
Government bonds/Agency bonds 23,585,011 20,645,877 20,873,108
Asset-backed securities 9,345,202 11,490,511 11,539,314
166,804,729 187,359,843 182,797,379
Investments in equity instruments at FVTOCI
Non-publicly traded equity investments 8,365,833 7,822,884 7,502,973
Publicly traded stocks 4,948,873 4,842,814 6,851,935
13,314,706 12,665,698 14,354,908
$ 180,119,435 $ 200,025,541 $ 197,152,287
Current $ 171,753,602 $ 192,202,657 $ 189,649,314
Noncurrent 8,365,833 7,822,884 7,502,973
$ 180,119,435 $ 200,025,541 $ 197,152,287

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 nine months ended September 30, 2025 and 2024, as the Company adjusted its investment portfolio, equity investments designated at FVTOCI were divested for NT$291,852 thousand and NT$3,486,190 thousand, respectively. The related other equity-unrealized gain/loss on financial assets at FVTOCI of NT$159,203 thousand and NT$2,008,432 thousand were transferred to increase retained earnings, respectively.

As of September 30, 2025 and 2024, the cumulative loss allowance for expected credit loss of NT$43,420 thousand and NT$61,721 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.

  1. FINANCIAL ASSETS AT AMORTIZED COST
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Corporate bonds $ 190,907,285 $ 172,091,958 $ 137,366,565
Government bonds/Agency bonds 4,088,441 4,379,527 4,225,749
Commercial paper 3,727,099 14,221,737 22,978,287
Less: Allowance for impairment loss (108,266) (125,358) (106,442)
$ 198,614,559 $ 190,567,864 $ 164,464,159
(Continued)
  • 15 -
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Current $ 108,521,394 $ 101,971,322 $ 90,197,355
Noncurrent 90,093,165 88,596,542 74,266,804
$ 198,614,559 $ 190,567,864 $ 164,464,159
(Concluded)

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

  1. HEDGING FINANCIAL INSTRUMENTS
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Financial assets - current
Fair value hedges
Interest rate futures contracts $ 1,333 $ 10,959 $ 1,079
Financial liabilities - current
Fair value hedges
Interest rate futures contracts $ 2,868 $ - $ 1,875

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.

September 30, 2025

Hedging Instruments Contract Amount(US in Thousands) Maturity
Interest rate futures contracts - US Treasury futures US December 2025

All values are in US Dollars.

  • 16 -
Hedged Items Asset Carrying Amount Accumulated Amount of<br>Fair Value Hedge <br>Adjustments
Financial assets at FVTOCI $ 1,349,734 $ 1,535

December 31, 2024

Hedging Instruments Contract Amount(US in Thousands) Maturity
Interest rate futures contracts - US Treasury futures US March 2025

All values are in US Dollars.

Hedged Items Asset Carrying Amount Accumulated Amount of<br>Fair Value Hedge <br>Adjustments
Financial assets at FVTOCI $ 3,129,235 $ (10,959)

September 30, 2024

Hedging Instruments Contract Amount(US in Thousands) Maturity
Interest rate futures contracts - US Treasury futures US December 2024

All values are in US Dollars.

Hedged Items Asset Carrying Amount Accumulated Amount of<br>Fair Value Hedge <br>Adjustments
Financial assets at FVTOCI $ 3,881,468 $ 796

The effect for the nine months ended September 30, 2025 and 2024 is detailed below:

Change in Value Used for <br>Calculating Hedge Ineffectiveness
Nine Months Ended September 30
Hedging Instruments/Hedged Items 2025 2024
Hedging Instruments
Interest rate futures contracts - US Treasury futures $ (43,015) $ 72,897
Hedged Items
Financial assets at FVTOCI 43,015 (72,897)
$ - $ -
  • 17 -

Cash flow hedge

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

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

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 nine months ended September 30, 2025 and 2024 is detailed below:

Hedging Instruments/Hedged Items Change in Value Used for<br><br>Calculating Hedge<br><br>Ineffectiveness
Nine Months Ended September 30
2025 2024
Hedging Instruments
Forward exchange contracts $ - $ 5,042
Foreign currency deposits $ (31,030) $ -
Hedged Items
Forecast transaction (capital expenditures) $ 31,030 $ (5,042)

Hedges of net investments in foreign operations

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

The main source of hedge ineffectiveness in these hedging relationships is driven by the material difference between the notional amount of bank loans denominated in foreign currency and the net investment in foreign operations. No other sources of ineffectiveness have emerged from these hedging relationships during the hedging period. Refer to Note 19 (d) for gain or loss arising from changes in the fair value of hedging instruments.

The effect for the nine months ended September 30, 2025 and 2024 is detailed below:

  • 18 -
Change in Value Used for <br>Calculating Hedge<br>Ineffectiveness
Nine Months Ended September 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)
  1. NOTES AND ACCOUNTS RECEIVABLE, NET
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
At amortized cost
Notes and accounts receivable $ 298,433,599 $ 265,223,660 $ 244,095,134
Less: Loss allowance (522,987) (453,009) (496,026)
297,910,612 264,770,651 243,599,108
At FVTOCI 7,566,884 5,912,584 5,971,465
$ 305,477,496 $ 270,683,235 $ 249,570,573

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

September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Not past due $ 293,721,132 $ 255,669,647 $ 236,368,821
Past due
Past due within 30 days 12,278,981 15,464,122 13,695,921
Past due over 31 days 370 2,475 1,857
Less: Loss allowance (522,987) (453,009) (496,026)
$ 305,477,496 $ 270,683,235 $ 249,570,573

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

  • 19 -

Movements of the loss allowance for accounts receivable

Nine Months Ended September 30
2025 2024
Balance, beginning of period $ 453,009 $ 531,554
Provision (Reversal) 70,017 (35,578)
Effect of exchange rate changes (39) 50
Balance, end of period $ 522,987 $ 496,026

For the nine months ended September 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.

  1. INVENTORIES
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Finished goods $ 32,716,509 $ 35,177,009 $ 34,782,721
Work in process 183,297,640 181,198,808 190,951,410
Raw materials 46,789,075 46,449,249 43,402,647
Supplies and spare parts 25,885,839 25,043,744 23,747,152
$ 288,689,063 $ 287,868,810 $ 292,883,930

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 September 30 Nine Months Ended September 30
2025 2024 2025 2024
Net inventory losses (reversal of write-down of inventories) $ 707,417 $ 137,620 $ 3,337,782 $ (1,898,656)
  1. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Associates consisted of the following:

Place of Carrying Amount % of Ownership and Voting Rights Held by the Company
Name of Associate Principal Activities Incorporation and Operation September 30,<br>2025 December 31,<br>2024 September 30,<br>2024 September 30,<br>2025 December 31,<br>2024 September 30,<br>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 $ 17,386,164 $ 18,300,373 $ 13,105,023 28 % 28 % 28 %
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC) Manufacturing and sales of integrated circuits and other semiconductor devices Singapore $ 11,682,245 $ 11,387,185 $ 10,713,507 39 % 39 % 39 %
(Continued)
  • 20 -
Place of Carrying Amount % of Ownership and Voting Rights Held by the Company
Name of Associate Principal Activities Incorporation and Operation September 30,<br>2025 December 31,<br>2024 September 30,<br>2024 September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Xintec Inc. (Xintec) Wafer level chip size packaging and wafer level post passivation interconnection service Taoyuan, Taiwan $ 4,287,621 $ 4,220,609 $ 4,028,681 41 % 41 % 41 %
Global Unichip Corporation (GUC) Researching, developing, manufacturing, testing and marketing of integrated circuits Hsinchu, Taiwan 2,660,385 3,512,938 3,120,705 35 % 35 % 35 %
$ 36,016,415 $ 37,421,105 $ 30,967,916
(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 September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
GUC $ 62,561,731 $ 63,495,488 $ 51,356,645
VIS $ 51,684,351 $ 50,620,261 $ 48,047,132
Xintec $ 15,968,956 $ 22,033,821 $ 22,868,436
  1. PROPERTY, PLANT AND EQUIPMENT
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Assets used by the Company $ 3,498,121,683 $ 3,234,778,389 $ 3,071,391,628
Assets subject to operating leases 1,219,078 201,681 207,699
$ 3,499,340,761 $ 3,234,980,070 $ 3,071,599,327

Assets used by the Company

Land and Land Improvements Buildings Machinery and Equipment Office <br>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 140,379 243,974,901 378,504,685 16,727,174 185,398,611 824,745,750
Disposals or retirements - (106,771) (34,071,281) (1,295,584) - (35,473,636)
Transfers to assets subject to operating leases - (1,181,470) - - - (1,181,470)
Effect of exchange rate changes (125,157) (19,743,628) (26,104,559) (942,459) (6,584,796) (53,500,599)
Balance at September 30, 2025 $ 13,069,383 $ 1,182,076,896 $ 6,170,531,534 $ 119,923,881 $ 1,259,098,052 $ 8,744,699,746
(Continued)
  • 21 -
Land and Land Improvements Buildings Machinery and Equipment Office <br>Equipment Equipment under Installation and Construction in Progress Total
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 14,845 52,758,706 453,415,862 10,370,450 - 516,559,863
Disposals or retirements - (80,177) (32,188,216) (1,289,887) - (33,558,280)
Transfers to assets subject to operating leases - (127,932) - - - (127,932)
Impairment - 1,459 1,670,522 - - 1,671,981
Effect of exchange rate changes (41,876) (1,829,773) (11,124,107) (303,125) - (13,298,881)
Balance at September 30, 2025 $ 581,500 $ 491,091,524 $ 4,674,656,911 $ 79,457,388 $ 790,740 $ 5,246,578,063
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 September 30, 2025 $ 12,487,883 $ 690,985,372 $ 1,495,874,623 $ 40,466,493 $ 1,258,307,312 $ 3,498,121,683
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 5,484,191 48,758,424 377,421,855 8,643,558 35,057,655 475,365,683
Disposals or retirements (278,309) (91,915) (26,826,751) (7,421,476) - (34,618,451)
Transfers from assets subject to operating leases - - 39,825 - - 39,825
Transfers to assets subject to operating leases - (197,752) - - - (197,752)
Effect of exchange rate changes 312,178 1,909,176 10,202,055 249,669 14,508,576 27,181,654
Balance at September 30, 2024 $ 13,140,057 $ 868,200,908 $ 5,745,822,632 $ 101,296,835 $ 957,855,982 $ 7,686,316,414
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 8,647 38,602,180 435,226,444 8,941,089 - 482,778,360
Disposals or retirements - (89,743) (24,295,865) (7,420,365) - (31,805,973)
Transfers from assets subject to operating leases - - 37,614 - - 37,614
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 15,996 1,110,773 7,357,006 173,696 - 8,657,471
Balance at September 30, 2024 $ 582,717 $ 426,670,293 $ 4,118,436,637 $ 68,444,399 $ 790,740 $ 4,614,924,786
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 September 30, 2024 $ 12,557,340 $ 441,530,615 $ 1,627,385,995 $ 32,852,436 $ 957,065,242 $ 3,071,391,628
(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.

  • 22 -

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.

  1. LEASE ARRANGEMENTS

a.Right-of-use assets

September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Carrying amounts
Land $ 39,249,022 $ 36,980,971 $ 36,725,766
Buildings 3,977,997 3,103,902 2,929,760
Office equipment 41,837 43,518 43,223
$ 43,268,856 $ 40,128,391 $ 39,698,749 Nine Months Ended September 30
--- --- --- --- ---
2025 2024
Additions to right-of-use assets $ 7,306,149 $ 3,214,068 Three Months Ended September 30 Nine Months Ended September 30
--- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Depreciation of right-of-use assets
Land $ 780,747 $ 639,841 $ 2,199,872 $ 1,874,273
Buildings 326,573 242,627 891,618 846,997
Office equipment 5,805 5,822 17,211 17,716
$ 1,113,125 $ 888,290 $ 3,108,701 $ 2,738,986
  • 23 -

b.Lease liabilities

September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Carrying amounts
Current portion (classified under accrued expenses and other current liabilities) $ 3,651,294 $ 3,049,032 $ 2,899,784
Noncurrent portion 30,978,996 28,755,342 28,208,721
$ 34,630,290 $ 31,804,374 $ 31,108,505

Ranges of discount rates for lease liabilities are as follows:

September 30,<br>2025 December 31,<br>2024 September 30,<br>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%-6.45%

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

Nine Months Ended September 30
2025 2024
Total cash outflow for leases $ 3,150,723 $ 2,613,735
  1. 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 - 840,059 4,837,781 300,521 5,978,361
Disposals or retirements - (82,470) (633,847) (74,922) (791,239)
Effect of exchange rate changes (303,756) (2,119) (67,726) (8,572) (382,173)
Balance at September 30, 2025 $ 5,767,108 $ 29,321,988 $ 57,415,252 $ 13,350,546 $ 105,854,894
(Continued)
  • 24 -
Goodwill Technology License Fees Software and System Design Costs Patent and Others Total
Accumulated amortization and<br><br>impairment
Balance at January 1, 2025 $ - $ 23,186,748 $ 40,100,685 $ 11,479,992 $ 74,767,425
Additions - 1,055,555 4,771,901 452,099 6,279,555
Disposals or retirements - (82,470) (631,776) - (714,246)
Effect of exchange rate changes - (2,119) (30,994) (2,775) (35,888)
Balance at September 30, 2025 $ - $ 24,157,714 $ 44,209,816 $ 11,929,316 $ 80,296,846
Carrying amounts at January 1, 2025 $ 6,070,864 $ 5,379,770 $ 13,178,359 $ 1,653,527 $ 26,282,520
Carrying amounts at September 30, 2025 $ 5,767,108 $ 5,164,274 $ 13,205,436 $ 1,421,230 $ 25,558,048
Cost
Balance at January 1, 2024 $ 5,796,438 $ 26,221,351 $ 49,317,031 $ 12,347,434 $ 93,682,254
Additions - 764,988 4,424,018 949,425 6,138,431
Disposals or retirements - (32,460) (4,420,290) (202,681) (4,655,431)
Effect of exchange rate changes 120,986 585 54,399 19,900 195,870
Balance at September 30, 2024 $ 5,917,424 $ 26,954,464 $ 49,375,158 $ 13,114,078 $ 95,361,124
Accumulated amortization and <br>impairment
Balance at January 1, 2024 $ - $ 20,490,070 $ 39,846,671 $ 10,578,769 $ 70,915,510
Additions - 2,078,442 4,068,778 729,547 6,876,767
Disposals or retirements - (32,460) (4,420,290) (102,000) (4,554,750)
Effect of exchange rate changes - 488 22,532 17,546 40,566
Balance at September 30, 2024 $ - $ 22,536,540 $ 39,517,691 $ 11,223,862 $ 73,278,093
Carrying amounts at January 1, 2024 $ 5,796,438 $ 5,731,281 $ 9,470,360 $ 1,768,665 $ 22,766,744
Carrying amounts at September 30, 2024 $ 5,917,424 $ 4,417,924 $ 9,857,467 $ 1,890,216 $ 22,083,031
(Concluded)

The Company’s goodwill has been tested for impairment at the end of the annual reporting period and the recoverable amount is determined based on the value in use. The value in use was calculated based on the cash flow forecast from the financial budgets covering the future five-year period, and the Company used annual discount 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.

  • 25 -
  1. BONDS PAYABLE
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Domestic unsecured bonds $ 514,812,000 $ 478,536,000 $ 478,026,000
Overseas unsecured bonds 442,699,500 507,904,000 490,389,000
Less: Discounts on bonds payable (2,318,688) (2,687,615) (2,699,763)
Less: Current portion (74,760,057) (57,147,879) (56,011,649)
$ 880,432,755 $ 926,604,506 $ 909,703,588

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

Issuance Issuance Period Total Issue Amount Coupon Rate Repayment and <br>Interest Payment
NT unsecured bonds
114-1 (Green bond) March 2025 to March 2030 $ 12,000,000 1.90% Bullet repayment; interest payable annually
March 2025 to March 2035 7,200,000 2.05% The same as above
114-2 (Green bond) June 2025 to June 2030 12,500,000 1.92% The same as above
June 2025 to June 2035 1,600,000 2.05% The same as above
114-3 (Green bond) July 2025 to July 2030 8,300,000 1.92% The same as above
July 2025 to July 2035 4,000,000 2.05% The same as above
114-4 September 2025 to September 2030 13,800,000 1.66% The same as above
September 2025 to September 2035 4,000,000 1.73% The same as above

All values are in US Dollars.

  • 26 -

The major terms of overseas unsecured bonds are as follows:

Issuance Period Total Issue Amount (US in Thousands) Coupon <br>Rate Repayment and Interest Payment
September 2020 to September 2025 US 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
April 2021 to April 2031 1,500,000 2.25% The same as above
October 2021 to October 2026 1,250,000 1.75% The same as above
October 2021 to October 2031 1,250,000 2.50% The same as above
October 2021 to October 2041 1,000,000 3.125% The same as above
October 2021 to October 2051 1,000,000 3.25% The same as above
April 2022 to April 2027 1,000,000 3.875% The same as above
April 2022 to April 2029 500,000 4.125% The same as above
April 2022 to April 2032 1,000,000 4.25% The same as above
April 2022 to April 2052 1,000,000 4.50% The same as above
July 2022 to July 2027 400,000 4.375% The same as above
July 2022 to July 2032 600,000 4.625% The same as above

All values are in US Dollars.

  • 27 -
  1. LONG-TERM BANK LOANS
September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
NT$ unsecured loans $ 2,253,334 $ 4,410,833 $ 5,046,667
JPY unsecured loans 37,008,000 30,124,800 24,219,800
Less: Discounts on government grants (277) (1,247) (13,456)
Less: Current portion (1,465,556) (2,710,000) (2,793,334)
$ 37,795,501 $ 31,824,386 $ 26,459,677
Loan content
Annual interest rate 0.78%-1.78% 0.13%-1.78% 0.13%-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.

  1. EQUITY

a.Capital stock

September 30,<br>2025 December 31,<br>2024 September 30,<br>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 25,932,733
Shares awaiting retirement (in thousands) (91) - -
Capital stock (in thousands) 25,932,524 25,932,733 25,932,733
Issued capital $ 259,326,155 $ 259,327,332 $ 259,327,332
Share capital awaiting retirement (910) - -
Capital stock $ 259,325,245 $ 259,327,332 $ 259,327,332

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.

  • 28 -

During the third quarter of 2025, TSMC reclaimed 91 thousand employee restricted shares which were unvested (classified under share capital awaiting retirement). On November 11, 2025, TSMC’s Board of Directors resolved to cancel the aforementioned shares.

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 September 30, 2025, TSMC’s total issued and outstanding ADSs were 1,062,719 thousand units, representing 5,313,593 thousand common shares.

b.Capital surplus

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

September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
May be used to offset a deficit, distributed as cash dividends, or transferred to share capital
Additional paid-in capital $ 26,343,550 $ 24,809,704 $ 24,809,704
From merger 22,800,434 22,800,434 22,800,434
From convertible bonds 8,891,257 8,891,257 8,891,257
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
May only be used to offset a deficit
From share of changes in equities of subsidiaries 4,093,849 4,108,958 4,113,816
From share of changes in equities of associates 1,307,625 1,172,396 305,828
Donations - unclaimed dividend 78,976 78,976 70,093
May not be used for any purpose
Employee restricted shares 1,422,581 2,976,199 2,976,199
$ 73,361,113 $ 73,260,765 $ 72,390,172

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.

  • 29 -

c.Retained earnings and dividend policy

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

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

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

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

The appropriations of 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:

Third Quarter Second Quarter First Quarter
Resolution Date of TSMC’s of 2025 of 2025 of 2025
Board of Directors in its November 11, August 12, May 13,
meeting 2025 2025 2025
Special capital reserve $ (94,270,352) $ 181,554,848 $ -
Cash dividends to shareholders $ 155,595,147 $ 129,662,913 $ 129,663,078
Cash dividends per share (NT$) $ 6.00 $ 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
  • 30 -
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:

Nine Months Ended September 30, 2025
Foreign <br>Currency <br>Translation <br>Reserve Unrealized <br>Gain (Loss) on <br>Financial <br>Assets at <br>FVTOCI Gain (Loss) on <br>Hedging <br>Instruments Unearned <br>Stock-Based <br>Employee <br>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 (132,565,375) - - - (132,565,375)
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 - 1,072,941 - - 1,072,941
Debt instruments - 3,959,541 - - 3,959,541
Disposal of investments in equity instruments at FVTOCI - (159,203) - - (159,203)
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal - 99,615 - - 99,615
Loss allowance adjustments from debt instruments - (16,245) - - (16,245)
Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss - - (91,766) - (91,766)
Transferred to initial carrying amount of hedged items - - 12,223 - 12,223
Share-based payment expenses recognized - - - 1,082,645 1,082,645
Share of other comprehensive income (loss) of associates (339,802) (119,010) 19,374 - (439,438)
Balance, end of period $ (92,212,097) $ 3,677,463 $ 1,250,138 $ (625,434) $ (87,909,930)
  • 31 -
Nine Months Ended September 30, 2024
Foreign <br>Currency <br>Translation <br>Reserve Unrealized <br>Gain (Loss) on <br>Financial <br>Assets at <br>FVTOCI Gain (Loss) on <br>Hedging <br>Instruments Unearned <br>Stock-Based<br>Employee <br>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 22,505,271 - - - 22,505,271
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 - 4,604,652 - - 4,604,652
Debt instruments - 4,888,979 - - 4,888,979
Disposal of investments in equity instruments at FVTOCI - (2,008,432) - - (2,008,432)
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal - 286,502 - - 286,502
Loss allowance adjustments from debt instruments - 13,079 - - 13,079
Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss - - (54,666) - (54,666)
Transferred to initial carrying amount of hedged items - - (9,626) - (9,626)
Issuance of employee restricted stock - - - (2,637,387) (2,637,387)
Share-based payment expenses recognized - - - 715,770 715,770
Share of other comprehensive income (loss) of associates 188,752 (48,484) 8,420 - 148,688
Income tax effect - (9,996) - - (9,996)
Balance, end of period $ (1,828,916) $ 3,626,372 $ 1,340,003 $ (2,215,051) $ 922,408

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.

  1. NET REVENUE

a.Disaggregation of revenue from contracts with customers

Three Months Ended September 30 Nine Months Ended September 30
Product 2025 2024 2025 2024
Wafer $ 860,962,390 $ 645,121,210 $ 2,370,425,365 $ 1,763,258,801
Others 128,955,928 114,570,933 392,538,486 262,587,720
$ 989,918,318 $ 759,692,143 $ 2,762,963,851 $ 2,025,846,521
  • 32 -
Three Months Ended September 30 Nine Months Ended September 30
Geography 2025 2024 2025 2024
Taiwan $ 75,824,352 $ 72,582,081 $ 215,874,263 $ 201,443,281
United States 745,326,314 497,682,699 2,071,977,068 1,310,631,705
China 77,406,656 92,849,486 226,957,819 254,781,394
Japan 40,579,110 40,162,106 111,762,957 112,382,966
Europe, the Middle East and Africa 32,339,528 27,310,571 86,572,534 74,295,603
Others 18,442,358 29,105,200 49,819,210 72,311,572
$ 989,918,318 $ 759,692,143 $ 2,762,963,851 $ 2,025,846,521

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

Three Months Ended September 30 Nine Months Ended September 30
Platform 2025 2024 2025 2024
High Performance Computing $ 558,592,346 $ 389,309,409 $ 1,612,970,845 $ 1,015,474,913
Smartphone 296,745,654 257,495,611 780,316,588 705,071,120
Internet of Things 53,250,285 50,255,327 136,271,873 122,922,544
Automotive 50,586,157 35,671,522 136,643,620 101,556,018
Digital Consumer Electronics 12,023,942 11,404,721 38,573,991 37,261,882
Others 18,719,934 15,555,553 58,186,934 43,560,044
$ 989,918,318 $ 759,692,143 $ 2,762,963,851 $ 2,025,846,521 Three Months Ended September 30 Nine Months Ended September 30
--- --- --- --- --- --- --- --- ---
Resolution 2025 2024 2025 2024
3-nanometer $ 198,608,328 $ 129,922,709 $ 546,040,622 $ 265,482,929
5-nanometer 323,170,791 205,265,439 867,248,267 605,528,724
7-nanometer 117,257,604 110,118,632 334,505,513 311,614,860
16-nanometer 57,307,151 50,836,959 160,961,379 151,990,234
20-nanometer 1,293,465 671,100 3,109,111 3,147,487
28-nanometer 59,227,140 47,499,161 166,553,917 141,075,995
40/45-nanometer 26,220,755 29,856,699 71,751,921 84,557,230
65-nanometer 32,568,409 24,121,011 86,947,200 66,126,266
90-nanometer 5,554,045 5,217,346 15,672,205 16,322,736
0.11/0.13 micron 12,245,896 13,443,588 37,413,695 38,139,676
0.15/0.18 micron 22,707,019 23,941,303 65,878,572 67,669,341
0.25 micron and above 4,801,787 4,227,263 14,342,963 11,603,323
Wafer revenue $ 860,962,390 $ 645,121,210 $ 2,370,425,365 $ 1,763,258,801
  • 33 -

b.Contract balances

September 30,<br>2025 December 31,<br>2024 September 30,<br>2024 January 1, 2024
Contract liabilities (classified under accrued expenses and other current liabilities) $ 45,916,467 $ 89,435,361 $ 86,939,340 $ 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$3,693,898 thousand and NT$2,522,193 thousand for the three months ended September 30, 2025 and 2024, respectively; and NT$56,877,009 thousand and NT$51,163,255 thousand for the nine months ended September 30, 2025 and 2024, respectively.

c.Temporary receipts from customers

September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Current portion (classified under accrued expenses and other current liabilities) $ 165,676,003 $ 198,602,570 $ 188,664,298
Noncurrent portion (classified under other noncurrent liabilities) 57,623,053 92,499,262 79,332,925
$ 223,299,056 $ 291,101,832 $ 267,997,223

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.

  1. INTEREST INCOME
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Interest income
Cash and cash equivalents $ 22,078,267 $ 18,702,813 $ 63,307,303 $ 52,156,310
Financial assets at amortized cost 2,362,945 2,184,078 7,472,367 6,087,876
Financial assets at FVTOCI 1,739,133 1,714,763 5,451,985 4,695,873
$ 26,180,345 $ 22,601,654 $ 76,231,655 $ 62,940,059
  • 34 -
  1. FINANCE COSTS
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Interest expense
Corporate bonds $ 4,802,807 $ 4,885,516 $ 14,585,091 $ 14,394,417
Lease liabilities 116,483 92,551 335,371 277,012
Bank loans 87,925 47,208 277,415 97,255
Others 1,256 4,594 3,779 14,296
Less: Capitalized interest under property, plant and equipment (2,049,903) (2,394,079) (5,874,719) (6,810,795)
$ 2,958,568 $ 2,635,790 $ 9,326,937 $ 7,972,185

Information about capitalized interest is as follows:

Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Capitalization rate 1.32%-3.34% 1.32%-3.34% 1.32%-3.34% 1.20%-3.34%
  1. OTHER GAINS AND LOSSES, NET
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Loss on disposal of financial assets, net
Investments in debt instruments at FVTOCI $ (16,770) $ (81,416) $ (99,615) $ (286,502)
Loss on disposal of subsidiaries - - (167,986) -
Gain (loss) on financial instruments at FVTPL, net
Mandatorily measured at FVTPL (7,059,168) 1,702,731 993,558 (3,730,753)
Reversal of (provision for) expected credit loss of financial assets
Investments in debt instruments at FVTOCI 436 (3,472) 16,245 (13,079)
Financial assets at amortized cost (174) (13,041) 9,237 (22,189)
Other gains, net 272,135 45,601 379,655 293,500
$ (6,803,541) $ 1,650,403 $ 1,131,094 $ (3,759,023)
  • 35 -
  1. INCOME TAX

a.Income tax expense recognized in profit or loss

Income tax expense consisted of the following:

Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Current income tax expense
Current tax expense recognized in the current period $ 70,584,542 $ 59,666,969 $ 249,610,543 $ 167,602,133
Income tax adjustments on prior years (66,165) (108) (13,944,735) (7,142,581)
Other income tax adjustments (41,717) 91,862 145,992 227,823
70,476,660 59,758,723 235,811,800 160,687,375
Deferred income tax expense (benefit)
The origination and reversal of temporary differences 4,046,127 738,844 7,174,333 554,069
Operating loss carryforward (909,126) (1,390,885) (3,667,941) (2,163,684)
3,137,001 (652,041) 3,506,392 (1,609,615)
Income tax expense recognized in profit or loss $ 73,613,661 $ 59,106,682 $ 239,318,192 $ 159,077,760

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.

  1. EARNINGS PER SHARE
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Basic EPS $ 17.44 $ 12.55 $ 46.75 $ 30.80
Diluted EPS $ 17.44 $ 12.54 $ 46.75 $ 30.80
  • 36 -

EPS is computed as follows:

Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Basic EPS
Net income available to common shareholders of the parent $ 452,301,407 $ 325,257,571 $ 1,212,138,637 $ 798,587,976
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands) 25,928,614 25,926,018 25,927,893 25,928,074
Basic EPS (in dollars) $ 17.44 $ 12.55 $ 46.75 $ 30.80
Diluted EPS
Net income available to common shareholders of the parent $ 452,301,407 $ 325,257,571 $ 1,212,138,637 $ 798,587,976
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands) 25,928,614 25,926,018 25,927,893 25,928,074
Effects of all dilutive potential common shares (in thousands) 1,429 2,206 1,966 1,637
Weighted average number of common shares used in the computation of diluted EPS (in thousands) 25,930,043 25,928,224 25,929,859 25,929,711
Diluted EPS (in dollars) $ 17.44 $ 12.54 $ 46.75 $ 30.80
  1. SHARE-BASED PAYMENT ARRANGEMENTS

a.Equity-settled share-based payment-RSAs

The RSAs in each year are as follows:

2024 RSAs 2023 RSAs 2022 RSAs 2021 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
  • 37 -

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

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

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

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

  • 38 -

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

2024 RSAs 2023 RSAs 2022 RSAs 2021 RSAs
Number of Shares<br>(In Thousands) Number of Shares<br>(In Thousands) Number of Shares<br>(In Thousands) Number of Shares<br>(In Thousands)
Balance, beginning of period 2,353 2,960 1,055 347
Vested shares (1,102) (1,406) (501) (330)
Canceled shares - (74) (27) (17)
Shares awaiting retirement (91) - - -
Balance, end of period 1,160 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 RSAs 2023 RSAs 2022 RSAs 2021 RSAs
September 1, 2024 March 1, 2024 March 1, 2023 March 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,<br>2024 February 14,<br>2023 February 15,<br>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:

  • 39 -
Nine Months Ended September 30
2025 2024
2023 Plan 2022 Plan 2023 Plan 2022 Plan 2021 Plan
Stock price at measurement date (in dollars) $ 1,300 $ 1,300 $ 1,000 $ 1,000 $ 1,000
Expected price volatility 25.07%-32.21% 25.07%-32.21% 25.77%-30.55% 25.77%-30.55% 25.77%-30.55%
Residual life 1-2 years 1 year 1-3 years 1-2 years 1 year
Risk-free interest rate 1.26 % 1.31 % 1.39 % 1.37 % 1.36 %

Refer to Note 27 for the compensation costs of the cash-settled share-based payment recognized by TSMC. As of September 30, 2025, December 31, 2024 and September 30, 2024, the liabilities under cash-settled share-based payment arrangement amounted to NT$189,904 thousand, NT$455,728 thousand and NT$312,357 thousand, respectively.

  1. ADDITIONAL INFORMATION OF EXPENSES BY NATURE
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
a.Depreciation of property, plant and equipment and right-of-use assets
Recognized in cost of revenue $ 150,797,509 $ 156,176,635 $ 488,251,812 $ 458,796,761
Recognized in operating expenses 9,874,777 9,730,876 31,416,752 26,720,585
Recognized in other operating income and expenses 20,227 7,624 36,143 24,200
$ 160,692,513 $ 165,915,135 $ 519,704,707 $ 485,541,546
b.Amortization of intangible assets
Recognized in cost of revenue $ 1,316,056 $ 1,584,940 $ 4,048,032 $ 4,752,015
Recognized in operating expenses 778,702 728,482 2,231,523 2,124,752
$ 2,094,758 $ 2,313,422 $ 6,279,555 $ 6,876,767
c.Employee benefits expenses
Post-employment benefits
Defined contribution plans $ 1,691,989 $ 1,507,484 $ 4,967,879 $ 4,387,257
Defined benefit plans 64,218 68,908 190,504 206,734
1,756,207 1,576,392 5,158,383 4,593,991
Share-based payments
Equity-settled 273,416 322,961 1,073,063 735,748
Cash-settled 73,744 117,470 161,333 256,879
347,160 440,431 1,234,396 992,627
(Continued)
  • 40 -
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Other employee benefits $ 100,787,874 $ 78,378,403 $ 280,255,018 $ 207,500,237
$ 102,891,241 $ 80,395,226 $ 286,647,797 $ 213,086,855
Employee benefits expense summarized by function
Recognized in cost of revenue $ 62,742,208 $ 43,538,300 $ 168,646,144 $ 115,999,386
Recognized in operating expenses 40,149,033 36,856,926 118,001,653 97,087,469
$ 102,891,241 $ 80,395,226 $ 286,647,797 $ 213,086,855
(Concluded)

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 September 30 Nine Months Ended September 30
2025 2024 2025 2024
Profit sharing bonus to employees $ 27,138,090 $ 19,517,346 $ 72,728,320 $ 47,815,500

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.

  • 41 -
  1. 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 nine months ended September 30, 2025 and 2024, the Company received a total of NT$71,897,986 thousand and NT$16,043,339 thousand as government grants, respectively.

The aforementioned subsidiaries have signed grant agreements with the local governments. 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 its qualified investments.

  1. CASH FLOW INFORMATION

a.Non-cash transactions

Nine Months Ended September 30
2025 2024
Additions of property, plant and equipment $ 824,745,750 $ 475,365,683
Changes in other receivables 72,891,160 49,114,375
Exchange of assets (47,143) (109,273)
Changes in payables to contractors and equipment suppliers 11,357,968 49,519,008
Changes in accrued expenses and other current liabilities 12,462,539 26,974,334
Transferred to initial carrying amount of hedged items (31,030) 5,042
Capitalized interests (5,874,719) (6,810,795)
Payments for acquisition of property, plant and equipment $ 915,504,525 $ 594,058,374

b.Reconciliation of liabilities arising from financing activities

Non-cash Changes
Balance as of<br> January 1,<br>2025 Financing Cash <br>Flow Foreign<br><br>Exchange<br><br>Movement Other Changes<br>(Note) Balance as of <br>September 30,<br>2025
Hedging financial liabilities- bank loans $ - $ 430,085 $ (430,085) $ - $ -
Bonds payable 983,752,385 10,756,354 (39,606,872) 290,945 955,192,812
Long-term bank loans 34,534,386 5,469,400 (743,700) 971 39,261,057
Total $ 1,018,286,771 $ 16,655,839 $ (40,780,657) $ 291,916 $ 994,453,869 Non-cash Changes
--- --- --- --- --- --- --- --- ---
Balance as of<br>January 1,<br>2024 Financing Cash Flow Foreign<br><br>Exchange<br><br>Movement Other Changes<br>(Note) Balance as of <br>September 30,<br>2024
Hedging financial liabilities- bank loans $ 27,290,400 $ (26,496,570) $ (793,830) $ - $ -
Bonds payable 920,897,553 29,014,319 15,513,985 289,380 965,715,237
Long-term bank loans 6,678,521 21,782,278 777,800 14,412 29,253,011
Total $ 954,866,474 $ 24,300,027 $ 15,497,955 $ 303,792 $ 994,968,248

Note:    Other changes include amortization of bonds payable and amortization of long-term bank loan interest subsidy.

  • 42 -
  1. FINANCIAL INSTRUMENTS

a.Categories of financial instruments

September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Financial assets
FVTPL (Note 1) $ 14,523,076 $ 15,407,542 $ 15,566,035
FVTOCI (Note 2) 187,686,319 205,938,125 203,123,752
Hedging financial assets 1,333 10,959 1,079
Amortized cost (Note 3) 3,135,904,756 2,721,319,255 2,383,140,378
$ 3,338,115,484 $ 2,942,675,881 $ 2,601,831,244
Financial liabilities
FVTPL (Note 4) $ 1,184,622 $ 466,539 $ 34,277
Hedging financial liabilities 2,868 - 1,875
Amortized cost (Note 5) 1,960,309,130 1,963,297,264 1,848,994,088
$ 1,961,496,620 $ 1,963,763,803 $ 1,849,030,240

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.

  • 43 -

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.

Based on a sensitivity analysis performed on the Company’s total monetary assets and liabilities for the nine months ended September 30, 2025 and 2024, a hypothetical adverse foreign currency exchange rate change of 10% would have decreased its net income by NT$3,309,236 thousand and NT$4,748,405 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$4,001,866 thousand and NT$4,473,470 thousand for the nine months ended September 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$1,160,170 thousand and NT$1,167,572 thousand for the nine months ended September 30, 2025 and 2024, respectively, and the other comprehensive income would have decreased by NT$1,065,176 thousand and NT$1,148,393 thousand for the nine months ended September 30, 2025 and 2024, respectively.

  • 44 -

d.Credit risk management

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

Business related credit risk

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

As of September 30, 2025, December 31, 2024 and September 30, 2024, the Company’s ten largest customers accounted for 85%, 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 -
  • 45 -

For the nine months ended September 30, 2025 and 2024, the expected credit loss decreased NT$36,764 thousand and increased NT$38,190 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.

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

Less Than <br>1 Year 1-3 Years 3-5 Years More Than <br>5 Years Total
September 30, 2025
Non-derivative financial liabilities
Accounts payable (including related parties) $ 86,386,408 $ - $ - $ - $ 86,386,408
Payables to contractors and equipment suppliers 175,430,503 - - - 175,430,503
Accrued expenses and other current liabilities 379,082,313 - - - 379,082,313
Bonds payable 93,769,199 353,734,428 202,020,240 498,712,901 1,148,236,768
Long-term bank loans 1,821,124 5,922,129 22,545,917 10,303,971 40,593,141
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note) 4,175,286 6,280,461 5,522,295 22,290,768 38,268,810
Others - 50,557,177 5,798,883 8,525,375 64,881,435
740,664,833 416,494,195 235,887,335 539,833,015 1,932,879,378
Derivative financial instruments
Forward exchange contracts
Outflows 207,568,981 - - - 207,568,981
Inflows (206,196,102) - - - (206,196,102)
1,372,879 - - - 1,372,879
$ 742,037,712 $ 416,494,195 $ 235,887,335 $ 539,833,015 $ 1,934,252,257 Less Than <br>1 Year 1-3 Years 3-5 Years More Than<br><br>5 Years Total
--- --- --- --- --- --- --- --- --- --- ---
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
(Continued)
  • 46 -
Less Than <br>1 Year 1-3 Years 3-5 Years More Than<br><br>5 Years Total
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
(Concluded) Less Than <br>1 Year 1-3 Years 3-5 Years More Than <br>5 Years Total
--- --- --- --- --- --- --- --- --- --- ---
September 30, 2024
Non-derivative financial liabilities
Accounts payable (including related parties) $ 70,820,047 $ - $ - $ - $ 70,820,047
Payables to contractors and equipment suppliers 125,132,085 - - - 125,132,085
Accrued expenses and other current liabilities 363,772,111 - - - 363,772,111
Bonds payable 74,901,590 318,464,019 202,710,564 580,737,650 1,176,813,823
Long-term bank loans 2,968,389 2,658,030 20,989,844 3,351,665 29,967,928
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note) 3,292,322 5,704,657 4,689,825 20,497,138 34,183,942
Others - 73,705,993 11,474,863 748,159 85,929,015
640,886,544 400,532,699 239,865,096 605,334,612 1,886,618,951
Derivative financial instruments
Forward exchange contracts
Outflows 88,511,937 - - - 88,511,937
Inflows (89,233,704) - - - (89,233,704)
(721,767) - - - (721,767)
$ 640,164,777 $ 400,532,699 $ 239,865,096 $ 605,334,612 $ 1,885,897,184
  • 47 -

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

5-10 Years 10-15 Years 15-20 Years More Than <br>20 Years Total
September 30, 2025
Lease liabilities $ 10,818,977 $ 7,322,038 $ 3,876,604 $ 273,149 $ 22,290,768
December 31, 2024
Lease liabilities $ 10,296,927 $ 6,821,624 $ 3,547,316 $ 116,827 $ 20,782,694
September 30, 2024
Lease liabilities $ 10,174,011 $ 6,731,154 $ 3,523,977 $ 67,996 $ 20,497,138

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.

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:

September 30, 2025
Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Mandatorily measured at FVTPL
Convertible preferred stocks $ - $ - $ 13,213,676 $ 13,213,676
Mutual funds - - 1,166,321 1,166,321
Simple agreement for future equity - - 122,124 122,124
Forward exchange contracts - 20,955 - 20,955
$ - $ 20,955 $ 14,502,121 $ 14,523,076
(Continued)
  • 48 -
September 30, 2025
Level 1 Level 2 Level 3 Total
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds $ - $ 85,961,547 $ - $ 85,961,547
Agency mortgage-backed securities - 47,912,969 - 47,912,969
Government bonds/Agency bonds 23,585,011 - - 23,585,011
Asset-backed securities - 9,345,202 - 9,345,202
Investments in equity instruments
Non-publicly traded equity investments - - 8,365,833 8,365,833
Publicly traded stocks 4,948,873 - - 4,948,873
Notes and accounts receivable, net - 7,566,884 - 7,566,884
$ 28,533,884 $ 150,786,602 $ 8,365,833 $ 187,686,319
Hedging financial assets
Fair value hedges
Interest rate futures contracts $ 1,333 $ - $ - $ 1,333
Financial liabilities at FVTPL
Held for trading
Forward exchange contracts $ - $ 1,184,622 $ - $ 1,184,622
Hedging financial liabilities
Fair value hedges
Interest rate futures contracts $ 2,868 $ - $ - $ 2,868
(Concluded) 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)
  • 49 -
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) September 30, 2024
--- --- --- --- --- --- --- --- ---
Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Mandatorily measured at FVTPL
Convertible preferred stocks $ - $ - $ 13,692,780 $ 13,692,780
Forward exchange contracts - 971,386 - 971,386
Mutual funds - - 775,317 775,317
Simple agreement for future equity - - 126,552 126,552
$ - $ 971,386 $ 14,594,649 $ 15,566,035
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds $ - $ 106,675,983 $ - $ 106,675,983
Agency mortgage-backed securities - 43,708,974 - 43,708,974
Government bonds/Agency bonds 20,714,828 158,280 - 20,873,108
Asset-backed securities - 11,539,314 - 11,539,314
Investments in equity instruments
Non-publicly traded equity investments - - 7,502,973 7,502,973
Publicly traded stocks 6,851,935 - - 6,851,935
Notes and accounts receivable, net - 5,971,465 - 5,971,465
$ 27,566,763 $ 168,054,016 $ 7,502,973 $ 203,123,752
(Continued)
  • 50 -
September 30, 2024
Level 1 Level 2 Level 3 Total
Hedging financial assets
Fair value hedges
Interest rate futures contracts $ 1,079 $ - $ - $ 1,079
Financial liabilities at FVTPL
Held for trading
Forward exchange contracts $ - $ 34,277 $ - $ 34,277
Hedging financial liabilities
Fair value hedges
Interest rate futures contracts $ 1,875 $ - $ - $ 1,875
(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 nine months ended September 30, 2025 and 2024 are as follows:

Nine Months Ended September 30
2025 2024
Balance, beginning of period $ 23,022,726 $ 20,849,566
Additions 749,595 1,828,697
Recognized in profit or loss 356,143 (139,280)
Recognized in other comprehensive income or loss 454,685 (518,075)
Disposals and proceeds from return of capital of investments (96,363) (319,518)
Transfers out of level 3 (Note) (89,730) (164,860)
Effect of exchange rate changes (1,529,102) 561,092
Balance, end of period $ 22,867,954 $ 22,097,622

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.

  • 51 -

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

Valuation techniques and assumptions used in Level 3 fair value measurement

The fair values of 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 September 30, 2025, December 31, 2024 and September 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$57,703 thousand, NT$56,163 thousand and NT$53,470 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 September 30, 2025, December 31, 2024 and September 30, 2024, the Company mainly uses unobservable inputs, which include expected returns, discount rate of 8.9%, 8.6% and 7.9%, 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$525,016 thousand, NT$1,606,927 thousand and NT$590,127 thousand, respectively; if discount for lack of marketability increases by 1%, the fair value will decrease by NT$145,700 thousand, NT$140,819 thousand and NT$142,378 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:

September 30, 2025
Carrying Fair Value
Amount Level 1 Level 2 Total
Financial assets
Financial assets at amortized costs
Corporate bonds $ 190,802,463 $ - $ 191,819,327 $ 191,819,327
Government bonds/Agency bonds 4,088,441 4,146,748 - 4,146,748
Commercial paper 3,723,655 - 3,727,343 3,727,343
$ 198,614,559 $ 4,146,748 $ 195,546,670 $ 199,693,418
(Continued)
  • 52 -
September 30, 2025
Carrying Fair Value
Amount Level 1 Level 2 Total
Financial liabilities
Financial liabilities at amortized costs
Bonds payable $ 955,192,812 $ - $ 901,900,677 $ 901,900,677
(Concluded) 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 September 30, 2024
--- --- --- --- --- --- --- --- ---
Carrying Fair Value
Amount Level 1 Level 2 Total
Financial assets
Financial assets at amortized costs
Corporate bonds $ 137,277,630 $ - $ 138,689,936 $ 138,689,936
Commercial paper 22,960,780 - 22,979,686 22,979,686
Government bonds/Agency bonds 4,225,749 4,326,268 - 4,326,268
$ 164,464,159 $ 4,326,268 $ 161,669,622 $ 165,995,890
Financial liabilities
Financial liabilities at amortized costs
Bonds payable $ 965,715,237 $ - $ 900,337,602 $ 900,337,602
  • 53 -

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.

  1. RELATED PARTY TRANSACTIONS

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

a.Related party name and categories

Related Party Name Related Party Categories
GUC and its subsidiaries (GUC) Associates
VIS and its subsidiaries (VIS) Associates
SSMC Associates
Xintec Associates
TSMC Charity Foundation Other related parties
TSMC Education and Culture Foundation Other related parties

b.Net revenue

Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Item Related Party Categories
Sales revenue Associates $ 9,019,573 $ 3,729,245 $ 23,247,041 $ 11,394,850

c.Purchases

Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Related Party Categories
Associates $ 1,423,867 $ 1,282,865 $ 3,713,187 $ 3,545,858
  • 54 -

d.Receivables from related parties

September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Item Related Party Name
Receivables from related parties GUC $ 1,568,419 $ 610,027 $ 259,441
VIS 620,050 626,638 -
Xintec 79,084 104,766 143,938
Others 68,790 63,042 -
$ 2,336,343 $ 1,404,473 $ 403,379
Other receivables from related parties VIS $ 55,780 $ - $ 16,913
Others 1,815 251 57,564
$ 57,595 $ 251 $ 74,477

e.Payables to related parties

September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Item Related Party Name
Payables to related parties Xintec $ 1,350,754 $ 987,992 $ 1,165,016
SSMC 463,532 308,424 393,729
Others 146,974 129,585 127,105
$ 1,961,260 $ 1,426,001 $ 1,685,850

f.Accrued expenses and other current liabilities

September 30,<br>2025 December 31,<br>2024 September 30,<br>2024
Item Related Party Categories
Temporary receipts Associates $ 157,811 $ 4,271,492 $ 592,734

g.Others

Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Item Related Party Categories
Manufacturing expenses Associates $ 1,586,743 $ 1,683,167 $ 3,865,037 $ 3,780,950
  • 55 -

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 September 30 Nine Months Ended September 30
2025 2024 2025 2024
Short-term employee benefits $ 1,273,468 $ 1,086,604 $ 3,851,460 $ 3,028,668
Post-employment benefits 664 808 2,624 3,054
Share-based payments 1,070,108 322,017 2,920,839 851,404
$ 2,344,240 $ 1,409,429 $ 6,774,923 $ 3,883,126

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.

  1. PLEDGED ASSETS

The Company provided certificate of deposits recorded in other financial assets as collateral mainly for building lease agreements. As of September 30, 2025, December 31, 2024 and September 30, 2024, the aforementioned other financial assets amounted to NT$125,817 thousand, NT$132,077 thousand and NT$127,743 thousand, respectively.

  1. 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

  • 56 -

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. In October 2025, Marlin dropped one of the asserted patents in the ITC. 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 period 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 September 30, 2025, December 31, 2024 and September 30, 2024 were NT$456,438 thousand, NT$489,882 thousand and NT$472,988 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 September 30, 2025, December 31, 2024 and September 30, 2024, the aforementioned guarantee amounted to NT$20,432,892 thousand, NT$$10,315,609 thousand, and NT$10,144,487 thousand, respectively.

  1. 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.

  1. 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:

  • 57 -
Foreign <br>Currencies<br>(In Thousands) Exchange Rate <br>(Note 1) Carrying <br>Amount<br>(In Thousands)
September 30, 2025
Financial assets
Monetary items
USD $ 19,560,324 30.531 $ 597,196,242
EUR 1,842,846 35.834 66,036,538
JPY 126,293,924 0.2056 25,966,031
Financial liabilities
Monetary items
USD 13,909,929 30.531 424,684,030
EUR 1,485,728 35.834 53,239,594
JPY 120,586,625 0.2056 24,792,610
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
September 30, 2024
Financial assets
Monetary items
USD 16,643,822 31.638 526,577,229
EUR 846,618 35.412 29,980,440
EUR 124,264 1.119 (Note 2) 4,400,425
JPY 70,644,061 0.2222 15,697,110
(Continued)
  • 58 -
Foreign <br>Currencies<br>(In Thousands) Exchange Rate <br>(Note 1) Carrying <br>Amount<br>(In Thousands)
Financial liabilities
Monetary items
USD $ 15,476,747 31.638 $ 489,653,327
EUR 623,972 35.412 22,096,101
EUR 123,422 1.119 (Note 2) 4,370,625
JPY 74,865,167 0.2222 16,635,040
(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 nine months ended September 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.

  1. 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;

  • 59 -

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.

  1. 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.

  • 60 -

TABLE 1

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

| FINANCINGS PROVIDED<br><br>FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025<br><br>(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise) | | --- || No. | Financing Company | | | | | | Counterparty | | | | | Financial Statement <br>Account | Related Party | | Maximum<br><br>Balance for the<br><br>Period (Foreign<br><br>Currencies in<br><br>Thousands) (Note 3) | | Ending Balance<br><br>(Foreign Currencies<br><br>in Thousands)<br><br>(Note 3) | | Amount Actually<br><br>Drawn<br><br>(Foreign<br><br>Currencies in<br><br>Thousands) | | Interest Rate | Nature for Financing | Transaction <br>Amounts | | Reason for Financing | Allowance for Bad <br>Debt | | Collateral | Financing Limits<br><br>for Each<br><br>Borrowing<br><br>Company<br><br>(Notes 1 and 2) | | Financing<br><br>Company’s Total<br><br>Financing Amount<br><br>Limits<br><br>(Notes 1 and 2) | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | | | | Item | | | | Value | | | | | 1 | TSMC China | | | | | | TSMC Nanjing | | | | | Other receivables from related parties | Yes | | $ | 39,445,950 | $ | 28,306,250 | $ | 14,567,300 | 1.50% | The need for long-term financing | $ | - | Operating capital | $ | - | - | $ | - | $ | 113,960,371 | $ | 113,960,371 | | | | (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 | | 1,831,860 | | 1,831,860 | | 1,831,860 | | - | The need for short-term financing | - | | Operating capital | - | | - | - | | 32,836,078 | | 32,836,078 | | | | | (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. | | | | | | | | | | | | | | | | | | | | | | | | | |

  • 61 -

TABLE 2

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

ENDORSEMENTS/GUARANTEES PROVIDED<br><br>FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025<br><br>(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
No. Endorsement/<br><br>Guarantee<br><br>Provider Guaranteed Party Limits on<br><br>Endorsement/<br><br>Guarantee<br><br>Amount<br><br>Provided to Each<br><br>Guaranteed<br><br>Party<br><br>(Notes 1 and 2) Ending Balance<br>(Foreign<br><br>Currencies in<br><br>Thousands)<br><br>(Note 3) Amount Actually Drawn(US in Thousands) Amount of <br>Endorsement/ <br>Guarantee <br>Collateralized by <br>Properties Ratio of <br>Accumulated <br>Endorsement/ <br>Guarantee to Net <br>Equity per <br>Latest Financial <br>Statements Maximum<br><br>Endorsement/<br><br>Guarantee<br><br>Amount<br><br>Allowable<br><br>(Notes 1 and 2) Guarantee<br><br>Provided by<br><br>Parent<br><br>Company Guarantee<br><br>Provided by<br><br>A Subsidiary Guarantee<br><br>Provided to<br><br>Subsidiaries<br><br>in Mainland<br><br>China
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Name Nature of Relationship
0 TSMC TSMC North America $ 2,540,585 $ 2,540,585 $ 2,540,585 $ - 0.05% $ 1,999,322,789 Yes No No
(US$ 83,213 ) (US 83,213 ) (US$ 83,213 )
TSMC Global 1,999,322,789 228,982,500 198,451,500 198,451,500 - 3.97% 1,999,322,789 Yes No No
(US$ 7,500,000 ) (US 6,500,000 ) (US$ 6,500,000 )
TSMC Arizona 1,999,322,789 457,886,230 457,787,249 333,756,832 - 9.16% 1,999,322,789 Yes No No
(US$ 14,997,420 ) (US 14,994,178 ) (US$ 10,931,736 )
1 TSMC Japan TSMC JDC 333,479 271,392 - - - - 333,479 No No No
(JPY 1,320,000 )
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 <br>              (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 <br>              Japan’s net worth.
Note 3:    The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.

All values are in US Dollars.

  • 62 -

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<br><br>FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025<br><br>(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise) | | --- || Company Name | Related Party | | Nature of Relationships | Transaction Details | | | | | | Abnormal Transaction | | Notes/Accounts Payable or <br>Receivable | | | Note | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Purchases/<br><br>Sales | | Amount<br><br>(Foreign Currencies<br><br>in Thousands) | | % to <br>Total | Payment Terms | | | Unit Price | Payment Terms | | Ending Balance<br><br>(Foreign Currencies<br><br>in Thousands) | | | % to <br>Total | | | TSMC | TSMC North America | | Subsidiary | Sales | | | $ | 2,152,156,909 | 78 | Net 30 days from invoice date (Note) | | - | - | | | | $ | 234,413,802 | 82 | | | TSMC Arizona | | Subsidiary | Sales | | | 1,346,202 | | - | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | 28,400 | | - | | | JASM | | Subsidiary | Sales | | | 631,083 | | - | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | 389,747 | | - | | | TSMC Nanjing | | Subsidiary | Sales | | | 133,827 | | - | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | 10,852 | | - | | | GUC | | Associate | Sales | | | 3,905,188 | | - | Net 30 days from invoice date | | - | - | | | | 243,381 | | - | | | VIS | | Associate | Sales | | | 1,080,682 | | - | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | 620,051 | | - | | | SSMC | | Associate | Sales | | | 197,984 | | - | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | 68,789 | | - | | | TSMC Nanjing | | Subsidiary | Purchases | | | 57,639,591 | | 38 | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | (6,463,296) | | 7 | | | TSMC Arizona | | Subsidiary | Purchases | | | 40,415,223 | | 26 | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | (5,607,942) | | 6 | | | TSMC China | | Subsidiary | Purchases | | | 19,686,587 | | 13 | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | (2,291,540) | | 2 | | | TSMC Washington | | Indirect subsidiary | Purchases | | | 5,337,492 | | 3 | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | (575,778) | | 1 | | | SSMC | | Associate | Purchases | | | 3,079,505 | | 2 | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | (463,532) | | - | | | VIS | | Associate | Purchases | | | 633,682 | | - | Net 30 days from the end of the month of when invoice is issued | | - | - | | | | (94,793) | | - | | TSMC North America | GUC | | Associate of TSMC | Sales | | | 17,759,272 | | 1 | Net 30 days from invoice date | | - | - | | | | 1,325,038 | | 1 | | | | | | | （US$ 569,931 | ） | | | | | | | | （US$ 43,400 | ） | | | | | | VisEra Tech | Xintec | | Associate of TSMC | Sales | | | 303,915 | | 5 | Net 60 days from the end of the month of when invoice is issued | | - | - | | | | 79,084 | | 6 |

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

  • 63 -

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<br><br>September 30, 2025<br><br>(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise) | | --- || Company Name | | Related Party | | Nature of Relationships | | | | | Ending Balance<br><br>(Foreign Currencies<br><br>in Thousands) | | | Turnover Days <br>(Note 1) | | | Overdue | | | | Amounts Received in <br>Subsequent Period | | Allowance for<br><br>Bad Debts | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | Amount | | | Action Taken | | | | | TSMC | | TSMC North America | | Subsidiary | | | | | $ | 238,015,628 | | 28 | | | $ | - | - | | $ | - | $ | - | | | | JASM | | Subsidiary | | | | | 393,271 | | | Note 2 | | | - | | - | | - | | - | | | | | VIS | | Associate | | | | | 675,831 | | | Note 2 | | | - | | - | | - | | - | | | | | GUC | | Associate | | | | | 243,381 | | | 24 | | | - | | - | | - | | - | | | TSMC North America | | TSMC | | Parent company | | | | | 156,010 | | | Note 2 | | | - | | - | | - | | - | | | | | | | | | | | | (US$ | 5,110 | ) | | | | | | | | | | | | | | | GUC | | Associate of TSMC | | | | | 1,325,038 | | | 12 | | | - | | - | | - | | - | | | | | | | | | | | | (US$ | 43,400 | ) | | | | | | | | | | | | | TSMC Japan 3DIC R&D Center | | TSMC | | Parent company | | | | | 108,492 | | | Note 2 | | | - | | - | | - | | - | | | | | | | | | | | | (JPY | 527,687 | ) | | | | | | | | | | | | | TSMC China | | TSMC | | Parent company | | | | | 2,291,540 | | | 28 | | | - | | - | | - | | - | | | | | | | | (RMB | 534,850 | ) | | | | | | | | | | | | | | | | | TSMC Nanjing | | The same parent company | | 14,646,617 | | | Note 2 | | | | | - | - | | - | | - | | | | | | | | | | (RMB | 3,418,513 | ) | | | | | | | | | | | | | | | | TSMC Nanjing | | TSMC | | Parent company | | | | | 6,463,296 | | | 26 | | | - | | - | | - | | - | | | | | | | | (RMB | 1,508,547 | ) | | | | | | | | | | | | | | | | TSMC Arizona | | TSMC | | Parent company | | | | | 5,607,942 | | | 21 | | | - | | - | | - | | - | | | | | | | | | | | | (US$ | 183,680 | ) | | | | | | | | | | | | | TSMC Technology | | TSMC | | The ultimate parent of the Company | | | | | 908,065 | | | Note 2 | | | - | | - | | - | | - | | | | | | | | | | | | (US$ | 29,742 | ) | | | | | | | | | | | | | TSMC Development | | TSMC Washington | | Subsidiary | | | | | 1,831,860 | | | Note 2 | | | - | | - | | - | | - | | | | | | | | | | | | (US$ | 60,000 | ) | | | | | | | | | | | | | TSMC Washington | | TSMC | | The ultimate parent of the Company | | | | | 575,778 | | | 28 | | | - | | - | | - | | - | | | | | | | | | | | | (US$ | 18,859 | ) | | | | | | | | | | | |

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.

  • 64 -

TABLE 5

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

| INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS<br><br>FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025<br><br>(Amounts in Thousands of New Taiwan Dollars) | | --- || No. | Company Name | | Counterparty | Nature of<br><br>Relationship<br><br>(Note 1) | | Intercompany Transactions | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Financial Statements Item | | | Amount | | Terms<br><br>(Note 2) | Percentage of <br>Consolidated Net Revenue <br>or Total Assets | | | 0 | TSMC | | TSMC North America | 1 | | Sales revenue | | | $ | 2,152,156,909 | － | 78% | | | | | | | | Receivables from related parties | | | 234,413,802 | | － | 3% | | | | | | | | Accrued expenses and other current liabilities | | | 91,574,175 | | － | 1% | | | | | | | | Other noncurrent liabilities | | | 38,030,023 | | － | 1% | | | | | TSMC China | 1 | | Purchases | | | 19,686,587 | | － | 1% | | | | | TSMC Nanjing | 1 | | Purchases | | | 57,639,591 | | － | 2% | | | | | TSMC Arizona | 1 | | Purchases | | | 40,415,223 | | － | 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.

  • 65 -

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)<br><br>FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025<br><br>(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Investor Company Investee Company Location Main Businesses and Products Original Investment Amount Balance as of September 30, 2025 Net Income <br>(Losses) of the <br>Investee<br>(Foreign <br>Currencies in <br>Thousands) Share of<br><br>Profits/Losses<br><br>of Investee<br><br>(Note 1)<br><br>(Foreign<br><br>Currencies in<br><br>Thousands) Note
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
September 30, <br>2025<br>(Foreign<br>Currencies in<br>Thousands) December 31, <br>2024<br>(Foreign<br>Currencies in<br>Thousands) Shares (In <br>Thousands) Percentage of <br>Ownership Carrying<br><br>Value<br><br>(Foreign<br><br>Currencies in<br><br>Thousands)
TSMC TSMC Global Tortola, British Virgin Islands Investment activities 33 100 $ 36,613,706 Subsidiary
TSMC Arizona Phoenix, Arizona, U.S.A. Manufacturing, sales and testing of integrated circuits and other semiconductor devices 672,616,510 565,786,810 21,250 100 615,398,407 4,769,007 4,521,065 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 73,923,422 1,643,467 1,643,467 Subsidiary
JASM Kumamoto, Japan Manufacturing, sales and testing of integrated circuits and other semiconductor devices 68,384,148 68,384,148 3,011 73 50,170,825 (8,379,826) (6,087,944) Subsidiary
ESMC Dresden, Germany Manufacturing, sales and testing of integrated circuits and other semiconductor devices 28,725,201 18,112,326 788 70 28,844,621 (474,336) (332,035) 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 17,386,164 6,159,998 1,692,498 Associate
SSMC Singapore Manufacturing and sales of integrated circuits and other semiconductor devices 5,120,028 5,120,028 314 39 11,682,245 2,753,223 1,067,975 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 11,659,903 888,890 566,946 Subsidiary
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 8,074,595 746,125 746,125 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 4,287,621 839,477 344,258 Associate
Emerging Fund Cayman Islands Investing in technology start-up companies 3,208,868 2,688,915 - 99.9 3,812,976 161,619 161,457 Subsidiary
GUC Hsinchu, Taiwan Researching, developing, manufacturing, testing and marketing of integrated circuits 386,568 386,568 46,688 35 2,660,385 2,609,908 909,262 Associate
TSMC 3DIC Yokohama, Japan Engineering support activities 1,144,356 1,144,356 49 100 1,467,236 150,781 150,781 Subsidiary
TSMC Europe Amsterdam, the Netherlands Customer service and supporting activities 15,749 15,749 - 100 731,346 65,204 65,204 Subsidiary
TSMC JDC Yokohama, Japan Engineering support activities 410,680 410,680 15 100 428,137 17,651 17,651 Subsidiary
TSMC Japan Yokohama, Japan Customer service and supporting activities 83,760 83,760 6 100 133,392 6,578 6,578 Subsidiary
TSMC Korea Seoul, Korea Customer service and supporting activities 13,656 13,656 80 100 44,147 1,575 1,575 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 17,919,829 17,919,829 - 100 37,297,391 57,788 Note 2 Subsidiary
（US 586,939） （US 586,939） （US 1,221,624） （US 1,798）
TSMC Technology Delaware, U.S.A. Engineering support activities 436,044 436,044 - 100 1,726,459 276,941 Note 2 Subsidiary
（US 14,282） （US 14,282） （US 56,548） （US 8,960）
TSMC Canada Ontario, Canada Engineering support activities 70,221 70,221 2,300 100 442,091 35,426 Note 2 Subsidiary
（US 2,300） （US 2,300） （US 14,480） （US 1,139）
VTAF III Growth Fund (Note 3) Cayman Islands Investing in technology start-up companies - 37,733 - - - 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 4,501,570 (337,536) Note 2 Subsidiary
（US 147,443） （US (10,824)）

All values are in US Dollars.

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.

  • 66 -

TABLE 7

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INFORMATION ON INVESTMENT IN MAINLAND CHINA<br><br>FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025<br><br>(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Investee Company Main Businesses and Products Method of <br>Investment Investment Flows Accumulated Outflow of Investment from Taiwan as of September 30, 2025 (US in Thousands) Net Income <br>(Losses) of the <br>Investee <br>Company Percentage of Ownership Share of Profits/Losses Carrying <br>Amount <br>as of <br>Balance as of September 30, 2025 Accumulated <br>Inward <br>Remittance of <br>Earnings as of September 30, 2025
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Outflow(US in Thousands) Inflow
TSMC China Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices 18,939,667 (Note 1) $ - $ - $ 8,571,747 100% $ 8,621,457 $ 113,776,566 $ -
(RMB       4,502,080 ) (US         596,000 ) (US     596,000 (Note 2)
TSMC Nanjing Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices (Note 1) - - 30,521,412 22,556,377 100% 22,388,826 133,723,614 -
(US$         6,650,119 ) (US       1,000,000 ) (US 1,000,000 (Note 2)

All values are in US Dollars.

Accumulated Investment in Mainland China <br>as of September 30, 2025 (US$ in Thousands) Investment Amounts Authorized by<br><br>Investment Commission, MOEA<br><br>(US$ in Thousands) Upper Limit on Investment
$49,461,079 $119,412,667 $3,021,346,681
（US$ 1,596,000） （US$ 3,596,000） (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.

  • 67 -

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