6-K - TSM - Equibles

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 May 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: May 15, 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 the Three Months Ended March 31, 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

Three Months Ended March 31, 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 March 31, 2025 and 2024, the related consolidated statements of comprehensive income, changes in equity and cash flows for the three 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 March 31, 2025 and 2024, its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 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.

The engagement partners on the reviews resulting in this independent auditors’ review report are Shih Tsung Wu and Shang Chih Lin.

Deloitte & Touche

Taipei, Taiwan

Republic of China

May 13, 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.

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)
	March 31, 2025				December 31, 2024				March 31, 2024
---	---	---	---	---	---	---	---	---	---	---	---	---
	Amount		%		Amount		%		Amount		%
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 6)		2,394,804,250		34		2,127,627,043		32		1,698,195,704		29
Financial assets at fair value through profit or loss (Note 7)				-				-				-
Financial assets at fair value through other comprehensive income (Note 8)				3				3				3
Financial assets at amortized cost (Note 9)				2				1				1
Hedging financial assets (Note 10)				-				-				-
Notes and accounts receivable, net (Note 11)				3				4				3
Receivables from related parties (Note 31)				-				-				-
Other receivables from related parties (Note 31)				-				-				-
Inventories (Note 12)				4				4				5
Other financial assets (Notes 28, 29 and 32)				1				1				1
Other current assets				-				1				-
Total current assets				47				46				42
NONCURRENT ASSETS
Financial assets at fair value through profit or loss (Note 7)				-				-				-
Financial assets at fair value through other comprehensive income (Note 8)				-				-				-
Financial assets at amortized cost (Note 9)				1				1				2
Investments accounted for using equity method (Note 13)				1				1				1
Property, plant and equipment (Notes 14 and 28)				48				48				53
Right-of-use assets (Note 15)				1				1				1
Intangible assets (Note 16)				-				1				-
Deferred income tax assets (Note 4)				1				1				1
Refundable deposits				-				-				-
Other noncurrent assets (Notes 28 and 29)				1				1				-
Total noncurrent assets				53				54				58
TOTAL		7,133,287,420		100		6,691,938,000		100		5,787,891,082		100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Financial liabilities at fair value through profit or loss (Note 7)		2,069,289		-		466,539		-		941,396		-
Hedging financial liabilities (Notes 10 and 29)				-				-				-
Accounts payable				1				1				1
Payables to related parties (Note 31)				-				-				-
Salary and bonus payable				-				1				1
Accrued profit sharing bonus to employees and compensation to directors (Note 27)				1				1				1
Payables to contractors and equipment suppliers				3				3				2
Cash dividends payable (Note 19)				3				3				3
Income tax payable (Note 4)				3				2				3
Long-term liabilities - current portion (Notes 17, 18 and 29)				1				1				-
Accrued expenses and other current liabilities (Notes 15, 20 and 29)				7				7				7
Total current liabilities				19				19				18
NONCURRENT LIABILITIES
Bonds payable (Notes 17 and 29)				13				14				17
Long-term bank loans (Notes 18 and 29)				1				-				-
Deferred income tax liabilities (Note 4)				-				-				-
Lease liabilities (Notes 15 and 29)				-				-				-
Net defined benefit liability (Note 4)				-				-				-
Guarantee deposits				-				-				-
Others (Note 20)				2				2				2
Total noncurrent liabilities				16				16				19
Total liabilities				35				35				37
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
Capital stock (Note 19)				4				4				4
Capital surplus (Notes 19 and 26)				1				2				2
Retained earnings (Note 19)
Appropriated as legal capital reserve				4				4				5
Appropriated as special capital reserve				-				-				1
Unappropriated earnings				54				54				51
				58				58				57
Others (Notes 19 and 26)				1				-				-
Equity attributable to shareholders of the parent				64				64				63
NON - CONTROLLING INTERESTS				1				1				-
Total equity				65				65				63
TOTAL		7,133,287,420		100		6,691,938,000		100		5,787,891,082		100

All values are in US Dollars.

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

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
	Three Months Ended March 31
---	---	---	---	---	---	---	---	---	---	---	---	---
	2025						2024
	Amount			%			Amount			%
NET REVENUE (Notes 20, 31 and 37)		839,253,664			100			592,644,201			100
COST OF REVENUE (Notes 12, 27, 31 and 34)					41						47
GROSS PROFIT					59						53
OPERATING EXPENSES (Notes 27 and 31)
Research and development					7						8
General and administrative					3						3
Marketing					-						-
Total operating expenses					10						11
OTHER OPERATING INCOME AND EXPENSES, NET (Notes 14, 27 and 34)			)		-				)		-
INCOME FROM OPERATIONS (Note 37)					49						42
NON-OPERATING INCOME AND EXPENSES
Share of profits of associates					-						-
Interest income (Note 21)					3						3
Other income					-						-
Foreign exchange gain, net (Note 35)					-						1
Finance costs (Note 22)			)		-				)		-
Other gains and losses, net (Note 23)			)		(1	)			)		(1	)
Total non-operating income and expenses					2						3
INCOME BEFORE INCOME TAX					51						45
INCOME TAX EXPENSE (Notes 4 and 24)					8						7
NET INCOME					43						38
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			)		-						1
Share of other comprehensive loss of associates			)		-				)		-
Income tax expense related to items that will not be reclassified subsequently					-				)		-
			)		-						1

All values are in US Dollars.

(Continued)

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

---	---	---	---	---	---	---	---	---	---
					2024
			%		Amount			%
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations	30,220,692			4		36,805,384			6
Unrealized gain(loss) on investments in debt instruments at fair value through other comprehensive income				-			)		-
Loss on hedging instruments		)		-			)		-
Share of other comprehensive income of associates				-					-
				4					6
Other comprehensive income, net of income tax				4					7
TOTAL COMPREHENSIVE INCOME	392,629,589			47		266,495,211			45
NET INCOME ATTRIBUTABLE TO:
Shareholders of the parent	361,564,128			43		225,484,877			38
Non-controlling interests		)		-			)		-
	360,732,661			43		225,221,263			38
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Shareholders of the parent	391,813,092			47		267,398,572			45
Non-controlling interests				-			)		-
	392,629,589			47		266,495,211			45
EARNINGS PER SHARE (NT, Note 25)
Basic earnings per share	13.95					8.70
Diluted earnings per share	13.94					8.70

All values are in US Dollars.

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

(Concluded)

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
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---






	Capital Stock - Common Stock
	Shares
	(In Thousands)
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
Special capital reserve		-				-				-				-			28,020,822			(28,020,822		)		-				-				-				-				-					-				-				-				-
Cash dividends to shareholders		-				-				-				-			-			(90,762,248		)		(90,762,248		)		-				-				-				-					-				(90,762,248		)		-				(90,762,248		)
Total		-				-				-				-			28,020,822			(118,783,070		)		(90,762,248		)		-				-				-				-					-				(90,762,248		)		-				(90,762,248		)
Net income		-				-				-				-			-			225,484,877				225,484,877				-				-				-				-					-				225,484,877				(263,614		)		225,221,263
Other comprehensive income (loss), net of income tax		-				-				-				-			-			-				-				37,613,901				4,301,593				(1,799		)		-					41,913,695				41,913,695				(639,747		)		41,273,948
Total comprehensive income (loss)		-				-				-				-			-			225,484,877				225,484,877				37,613,901				4,301,593				(1,799		)		-					41,913,695				267,398,572				(903,361		)		266,495,211
Retirement of employee restricted stock		(1,402		)		(14,018		)		14,018				-			-			19,934				19,934				-				-				-				-					-				19,934				-				19,934
Share-based payment arrangements		2,960				29,600				1,049,113				-			-			-				-				-				-				-				(916,859		)			(916,859		)		161,854				-				161,854
Disposal of investments in equity instruments at fair value through other comprehensive income		-				-				-				-			-			1,790,349				1,790,349				-				(1,790,349		)		-				-					(1,790,349		)		-				-				-
Basis adjustment for loss on hedging instruments		-				-				-				-			-			-				-				-				-				(786		)		-					(786		)		(786		)		-				(786		)
Adjustments to share of changes in equities of associates		-				-				2,735				-			-			-				-				-				-				-				-					-				2,735				-				2,735
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		-				-				(7,042		)		-			-			-				-				-				-				-				-					-				(7,042		)		6,538,904				6,531,862
Increase in non-controlling interests		-				-				-				-			-			-				-				-				-				-				-					-				-				3,824				3,824
BALANCE, MARCH 31, 2024			25,933,629				259,336,292				70,940,489				311,146,899			28,020,822			2,955,395,983				3,294,563,704				12,297,132				(1,588,684	)			1,393,290				(1,210,293	)				10,891,445				3,635,731,930				29,984,324				3,665,716,254
BALANCE, JANUARY 1, 2025			25,932,733				259,327,332				73,260,765				311,146,899			-			3,606,105,124				3,917,252,023				40,262,995				(1,160,176	)			1,310,307				(1,708,079		)			38,705,047				4,288,545,167				35,030,698				4,323,575,865
Appropriations of earnings
Cash dividends to shareholders		-				-				-				-			-			(116,697,300		)		(116,697,300		)		-				-				-				-					-				(116,697,300		)		-				(116,697,300		)
Total		-				-				-				-			-			(116,697,300		)		(116,697,300		)		-				-				-				-					-				(116,697,300		)		-				(116,697,300		)
Net income		-				-				-				-			-			361,564,128				361,564,128				-				-				-				-					-				361,564,128				(831,467		)		360,732,661
Other comprehensive income (loss), net of income tax		-				-				-				-			-			(35		)		(35		)		28,659,020				1,596,114				(6,135		)		-					30,248,999				30,248,964				1,647,964				31,896,928
Total comprehensive income (loss)		-				-				-				-			-			361,564,093				361,564,093				28,659,020				1,596,114				(6,135		)		-					30,248,999				391,813,092				816,497				392,629,589
Retirement of employee restricted stock		(118		)		(1,177		)		1,177				-			-			2,459				2,459				-				-				-				-					-				2,459				-				2,459
Share-based payment arrangements		-				-				-				-			-			-				-				-				-				-				452,782					452,782				452,782				-				452,782
Disposal of investments in equity instruments at fair value through other comprehensive income		-				-				-				-			-			155,994				155,994				-				(155,994		)		-				-					(155,994		)		-				-				-
Basis adjustment for gain on hedging instruments		-				-				-				-			-			-				-				-				-				1,135				-					1,135				1,135				-				1,135
Adjustments to share of changes in equities of associates		-				-				57,046				-			-			-				-				-				-				-				-					-				57,046				-				57,046
From share of changes in equities of subsidiaries		-				-				(11,801		)		-			-			-				-				-				-				-				-					-				(11,801		)		4,837				(6,964		)
Increase in non-controlling interests		-				-				-				-			-			-				-				-				-				-				-					-				-				1,609,845				1,609,845
BALANCE, MARCH 31, 2025		25,932,615					259,326,155				73,307,187				311,146,899			-			3,851,130,370				4,162,277,269				68,922,015				279,944				1,305,307				(1,255,297	)				69,251,969				4,564,162,580				37,461,877				4,601,624,457

All values are in US Dollars.

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

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)
	Three Months Ended March 31
---	---	---	---	---	---	---
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax		430,895,412			266,543,204
Adjustments for:
Depreciation expense
Amortization expense
Expected credit losses recognized (reversal) on investments in debt instruments			)
Finance costs
Share of profits of associates			)			)
Interest income			)			)
Share-based compensation
Loss on disposal or retirement of property, plant and equipment, net
Impairment loss on property, plant and equipment
Loss (gain) on financial instruments at fair value through profit or loss, net			)
Loss on disposal of investments in debt instruments at fair value through other comprehensive income, net
Loss from disposal of subsidiaries
Loss on foreign exchange, net
Dividend income			)			)
Others						)
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss
Notes and accounts receivable, net						)
Receivables from related parties			)
Other receivables from related parties			)			)
Inventories			)			)
Other financial assets			)			)
Other current assets			)			)
Other noncurrent assets			)			)
Accounts payable
Payables to related parties			)			)
Salary and bonus payable			)			)
Accrued profit sharing bonus to employees and compensation to directors
Accrued expenses and other current liabilities
Other noncurrent liabilities
Net defined benefit liability			)			)
Cash generated from operations
Income taxes paid			)			)
Net cash generated by operating activities

All values are in US Dollars.

(Continued)

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)
	Three Months Ended March 31
---	---	---	---	---	---	---
	2025			2024
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Financial instruments at fair value through profit or loss		(60,235	)		-
Financial assets at fair value through other comprehensive income			)			)
Financial assets at amortized cost			)			)
Property, plant and equipment			)			)
Intangible assets			)			)
Proceeds from disposal or redemption of:
Financial assets at fair value through other comprehensive income
Financial assets at amortized cost
Property, plant and equipment
Proceeds from return of capital of investments in equity instruments at fair value through other comprehensive income
Derecognition of hedging financial instruments			)
Interest received
Proceeds from government grants - property, plant and equipment
Other dividends received
Increase in prepayments for leases			)			)
Refundable deposits paid			)			)
Refundable deposits refunded
Net cash used in investing activities			)			)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in hedging financial liabilities - bank loans						)
Proceeds from issuance of bonds
Repayment of bonds			)
Proceeds from long-term bank loans
Repayment of long-term bank loans			)			)
Payments for transaction costs attributable to the issuance of bonds			)			)
Repayment of the principal portion of lease liabilities			)			)
Interest paid			)			)
Guarantee deposits received
Guarantee deposits refunded			)			)
Cash dividends			)			)
Disposal of ownership interests in subsidiaries (without losing control)
Increase in non-controlling interests
Net cash used in financing activities			)			)

All values are in US Dollars.

(Continued)

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)
	Three Months Ended March 31
---	---	---	---	---
	2025		2024
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		16,461,553		27,949,451
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD		2,394,804,250		1,698,195,704

All values are in US Dollars.

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

(Concluded)

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

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

1. GENERAL

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

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

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

2. THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on May 13, 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>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

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>by IASB
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
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”	To be determined by IASB
IFRS 18 “Presentation and Disclosure in Financial Statements”	January 1, 2027

IFRS 18 “Presentation and Disclosure in Financial Statements”

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

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

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

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

Except for the above impact, as of the date the accompanying consolidated financial statements were issued, the Company continues in evaluating other impacts of the above amended standards and on its financial position and financial performance from the initial adoption of the aforementioned standards or interpretations and related applicable period. The related impact will be disclosed when the Company completes its evaluation.

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

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

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

Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34, “Interim Financial Reporting,” endorsed and issued into effect by the FSC. The consolidated financial statements do not present all the disclosures required for a complete set of annual consolidated financial statements prepared under the IFRS Accounting Standards endorsed and issued into effect by the FSC (collectively, the “Taiwan-IFRS Accounting Standards”).

11 -

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<br><br>Location	March 31,<br><br>2025		December 31,<br><br>2024		March 31,<br><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%		c)
	TSMC Arizona Corporation (TSMC Arizona)	Manufacturing, sales and testing of integrated circuits and other semiconductor devices	Phoenix, Arizona, U.S.A.		100%		100%		100%		-
	Japan Advanced Semiconductor Manufacturing, Inc. (JASM)	Manufacturing, sales and testing of integrated circuits and other semiconductor devices	Kumamoto, Japan		73%		73%		71%		d)
	European Semiconductor Manufacturing Company (ESMC) GmbH (ESMC)	Manufacturing, sales and testing of integrated circuits and other semiconductor devices	Dresden, Germany		70%		70%		70%		-
	VentureTech Alliance Fund II, L.P. (VTAF II)	Investing in technology start-up companies	Cayman Islands		-		98%		98%		b), e)
	VentureTech Alliance Fund III, L.P. (VTAF III)	Investing in technology start-up companies	Cayman Islands		-		98%		98%		b), e)
	Emerging Fund, L.P. (Emerging Fund)	Investing in technology start-up companies	Cayman Islands		99.9%		99.9%		99.9%		b)
TSMC Partners	TSMC Development, Inc. (TSMC Development)	Investing in companies involved in semiconductor manufacturing	Delaware, U.S.A.		100%		100%		100%		-
	TSMC Technology, Inc. (TSMC Technology)	Engineering support activities	Delaware, U.S.A.		100%		100%		100%		a)
	TSMC Design Technology Canada Inc. (TSMC Canada)	Engineering support activities	Ontario, Canada		100%		100%		100%		a)
VTAF III	Growth Fund Limited (Growth Fund)	Investing in technology start-up companies	Cayman Islands		-		100%		100%		b), e)
TSMC Development	TSMC Washington, LLC (TSMC Washington)	Manufacturing, sales and testing of integrated circuits and other semiconductor devices	Washington, U.S.A.		100%		100%		100%		-

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

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

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

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

Note e: VTAF II and VTAF III have completed the liquidation procedures in the first quarter of 2025. Growth Fund ceased operations in January 2025 and submitted its final liquidation report. The liquidation process will be completed as of May 2025.

12 -

Retirement Benefits

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

Taxation

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

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

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

6. CASH AND CASH EQUIVALENTS


Cash and deposits in banks	2,373,616,720	2,120,674,818	1,691,973,216
Money market funds
Repurchase agreements
Commercial paper
	2,394,804,250	2,127,627,043	1,698,195,704

All values are in US Dollars.

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

7. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS


Financial assets
Mandatorily measured at FVTPL
Convertible preferred stocks	14,370,972	14,181,839	13,848,154
Mutual funds
Simple agreement for future equity
Forward exchange contracts
Convertible bonds
	15,539,669	15,407,542	14,211,944

All values are in US Dollars.

(Continued)

13 -


Current	54,369	207,700	253,275
Noncurrent
	15,539,669	15,407,542	14,211,944
Financial liabilities
Held for trading
Forward exchange contracts	2,069,289	466,539	941,396

All values are in US Dollars.

(Concluded)

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

Outstanding forward exchange contracts consisted of the following:

		Contract Amount
	Maturity Date	(In Thousands)
March 31, 2025
Sell US$	April 2025 to June 2025	US$	6,977,081
Sell JPY	April 2025	JPY	54,982,913
December 31, 2024
Sell US$	January 2025 to March 2025	US$	3,331,445
Sell JPY	January 2025	JPY	45,233,963
March 31, 2024
Sell US$	April 2024 to May 2024	US$	3,141,500

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME


Investments in debt instruments at FVTOCI
Corporate bonds	98,352,454	108,612,082	94,649,200
Agency mortgage-backed securities
Government bonds/Agency bonds
Asset-backed securities

All values are in US Dollars.

(Continued)

14 -


Investments in equity instruments at FVTOCI
Non-publicly traded equity investments	8,337,662	7,822,884	7,428,408
Publicly traded stocks

	198,265,973	200,025,541	183,308,871
Current	189,928,311	192,202,657	175,880,463
Noncurrent
	198,265,973	200,025,541	183,308,871

All values are in US Dollars.

(Concluded)

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

For the three months ended March 31, 2025 and 2024, as the Company adjusted its investment portfolio, equity investments designated at FVTOCI were divested for NT$284,890 thousand and NT$3,200,608 thousand, respectively. The related other equity-unrealized gain/loss on financial assets at FVTOCI of NT$155,994 thousand and NT$1,790,349 thousand were transferred to increase retained earnings, respectively.

As of March 31, 2025 and 2024, the cumulative loss allowance for expected credit loss of NT$52,383 thousand and NT$57,689 thousand was recognized under investments in debt instruments at FVTOCI, respectively. Refer to Note 30 for information relating to the credit risk management and expected credit loss.

9. FINANCIAL ASSETS AT AMORTIZED COST


Corporate bonds	200,156,770		172,091,958		115,656,411
Commercial paper
Government bonds/Agency bonds
Less: Allowance for impairment loss		)		)		)
	216,502,052		190,567,864		134,239,843
Current	118,298,376		101,971,322		48,326,607
Noncurrent
	216,502,052		190,567,864		134,239,843

All values are in US Dollars.

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

15 -

10. HEDGING FINANCIAL INSTRUMENTS

	March 31,<br><br>2025		December 31,<br><br>2024		March 31,<br><br>2024
Financial assets - current
Fair value hedges
Interest rate futures contracts	$	-	$	10,959	$	-
Financial liabilities - current
Fair value hedges
Interest rate futures contracts	$	3,462	$	-	$	10,525

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.

March 31, 2025

Hedging Instruments	Contract Amount<br><br>(US$ in Thousands)	Maturity
Interest rate futures contracts - US Treasury futures	US$ 14,800	June 2025
Hedged Items	Asset Carrying Amount	Accumulated Amount of<br><br>Fair Value Hedge<br><br>Adjustments
---	---	---
Financial assets at FVTOCI	$ 1,596,110	$ 3,462

December 31, 2024

Hedging Instruments	Contract Amount<br><br>(US$ in Thousands)	Maturity
Interest rate futures contracts - US Treasury futures	US$ 40,400	March 2025

16 -

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

March 31, 2024

Hedging Instruments	Contract Amount<br><br>(US$ in Thousands)	Maturity
Interest rate futures contracts - US Treasury futures	US$ 62,700	June 2024
Hedged Items	Asset Carrying Amount	Accumulated Amount of<br><br>Fair Value Hedge<br><br>Adjustments
---	---	---
Financial assets at FVTOCI	$ 5,114,745	$ 10,525

The effect for the three months ended March 31, 2025 and 2024 is detailed below:

	Change in Value Used for Calculating Hedge Ineffectiveness
	Three Months Ended March 31
Hedging Instruments/Hedged Items	2025			2024
Hedging Instruments
Interest rate futures contracts - US Treasury futures		(44,044	)		42,953
Hedged Items
Financial assets at FVTOCI						)
		-			-

All values are in US Dollars.

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.

17 -

The effect for the three months ended March 31, 2024 is detailed below:

	Change in<br><br>Value Used for<br><br>Calculating<br><br>Hedge<br><br>Ineffectiveness
Hedging Instruments/Hedged Items	Three Months Ended March 31, 2024
Hedging Instruments
Bank loans	$	793,830
Hedged Items
Net investments in foreign operations	$	(793,830	)

11. NOTES AND ACCOUNTS RECEIVABLE, NET


At amortized cost
Notes and accounts receivable	234,443,474		265,223,660		192,053,049
Less: Loss allowance		)		)		)

At FVTOCI
	241,682,270		270,683,235		201,500,334

All values are in US Dollars.

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


Not past due	231,331,692		255,669,647		192,621,474
Past due
Past due within 30 days
Past due over 31 days
Less: Loss allowance		)		)		)
	241,682,270		270,683,235		201,500,334

All values are in US Dollars.

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

18 -

Movements of the loss allowance for accounts receivable

	Three Months Ended March 31
	2025			2024
Balance, beginning of period		453,009			531,554
Provision (Reversal)			)
Effect of exchange rate changes
Balance, end of period		415,051			545,182

All values are in US Dollars.

For the three months ended March 31, 2025 and 2024, the changes in loss allowance were mainly due to the variations in the balance of accounts receivable of different risk levels.

12. INVENTORIES


Finished goods	34,263,618	35,177,009	36,548,899
Work in process
Raw materials
Supplies and spare parts
	293,387,615	287,868,810	267,123,339

All values are in US Dollars.

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 March 31
	2025		2024
Net inventory losses	$	2,526,465	$	232,485

13. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Associates consisted of the following:

		Place of	Carrying Amount						% of Ownership and Voting Rights<br><br>Held by the Company
Name of Associate	Principal Activities	Incorporation<br><br>and Operation	March 31,2025		December 31,2024		March 31,2024		March 31,<br><br>2025		December 31,<br><br>2024		March 31,<br><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		19,031,412		18,300,373		14,098,132		28%		28%		28%
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC)	Manufacturing and sales of integrated circuits and other semiconductor devices	Singapore								39%		39%		39%

All values are in US Dollars.

(Continued)

19 -

		Place of	Carrying Amount						% of Ownership and Voting Rights<br><br>Held by the Company
Name of Associate	Principal Activities	Incorporation<br><br>and Operation	March 31,2025		December 31,2024		March 31,2024		March 31,<br><br>2025		December 31,<br><br>2024		March 31,<br><br>2024
Xintec Inc. (Xintec)	Wafer level chip size packaging and wafer level post passivation interconnection service	Taoyuan, Taiwan		4,361,292		4,220,609		3,887,152		41%		41%		41%
Global Unichip Corporation (GUC)	Researching, developing, manufacturing, testing and marketing of integrated circuits	Hsinchu, Taiwan								35%		35%		35%
				38,766,658		37,421,105		31,168,264

All values are in US Dollars.

(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	March 31,<br><br>2025		December 31,<br><br>2024		March 31,<br><br>2024
GUC	$	49,022,252	$	63,495,488	$	58,126,384
VIS	$	47,174,638	$	50,620,261	$	39,691,109
Xintec	$	15,857,674	$	22,033,821	$	13,798,959

14. PROPERTY, PLANT AND EQUIPMENT


Assets used by the Company	3,400,609,937	3,234,778,389	3,051,622,167
Assets subject to operating leases
	3,400,806,154	3,234,980,070	3,051,847,989

All values are in US Dollars.

Assets used by the Company


Cost
Balance at January 1, 2025	13,054,161	959,133,864		5,852,202,689		105,434,750		1,080,284,237		8,010,109,701
Additions (deductions)									)
Disposals or retirements			)		)		)				)
Effect of exchange rate changes
Balance at March 31, 2025	13,482,124	1,203,803,466		6,100,458,693		115,767,197		912,738,602		8,346,250,082
Accumulated depreciation<br><br>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
Disposals or retirements			)		)		)				)

All values are in US Dollars.

(Continued)

20 -


Impairment	-		-		1,297,218		-		-		1,297,218
Effect of exchange rate changes											5,081,851
Balance at March 31, 2025	621,713		456,018,495		4,414,754,346		73,454,851		790,740		4,945,640,145
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 March 31, 2025	12,860,411		747,784,971		1,685,704,347		42,312,346		911,947,862		3,400,609,937
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 (deductions)										)
Disposals or retirements		)		)		)		)				)
Transfers to assets subject to operating leases				)								)
Effect of exchange rate changes
Balance at March 31, 2024	9,641,932		828,730,677		5,559,927,031		95,760,485		859,872,783		7,353,932,908
Accumulated depreciation<br><br>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
Disposals or retirements				)		)		)				)
Transfers to assets subject to operating leases				)								)
Effect of exchange rate changes
Balance at March 31, 2024	581,100		400,473,233		3,837,556,578		62,909,090		790,740		4,302,310,741
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 March 31, 2024	9,060,832		428,257,444		1,722,370,453		32,851,395		859,082,043		3,051,622,167

All values are in US Dollars.

(Concluded)

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

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

Information about capitalized interest is set out in Note 22.

15. LEASE ARRANGEMENTS

a. Right-of-use assets


Carrying amounts
Land	38,057,144	36,980,971	37,082,709
Buildings
Office equipment
	41,303,416	40,128,391	40,136,864

All values are in US Dollars.

21 -

	Three Months Ended March 31
	2025		2024
Additions to right-of-use assets		2,190,130		1,493,046
Depreciation of right-of-use assets
Land		690,350		615,952
Buildings
Office equipment
		973,411		974,183

All values are in US Dollars.

b. Lease liabilities


Carrying amounts
Current portion (classified under accrued expenses and other current liabilities)	3,147,525	3,049,032	2,934,686
Noncurrent portion
	32,269,346	31,804,374	31,401,996

All values are in US Dollars.

Ranges of discount rates for lease liabilities are as follows:


Land	0.39%-3.30%	0.39%-2.30%	0.39%-2.30%
Buildings	0.40%-6.52%	0.40%-6.52%	0.57%-6.52%
Office equipment	0.28%-6.46%	0.28%-6.46%	0.47%-7.13%

c. Material terms of right-of-use assets

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

d. Other lease information

	Three Months Ended March 31
	2025		2024
Total cash outflow for leases	$	1,088,662	$	886,511

22 -

16. INTANGIBLE ASSETS


Cost
Balance at January 1, 2025	6,070,864	28,566,518		53,279,044		13,133,519		101,049,945
Additions
Disposals or retirements			)		)		)		)
Effect of exchange rate changes
Balance at March 31, 2025	6,130,203	28,502,067		54,366,116		13,191,684		102,190,070
Accumulated amortization and<br><br>impairment
Balance at January 1, 2025	-	23,186,748		40,100,685		11,479,992		74,767,425
Additions
Disposals or retirements			)		)				)
Effect of exchange rate changes
Balance at March 31, 2025	-	23,483,750		41,531,657		11,724,320		76,739,727
Carrying amounts at January 1, 2025	6,070,864	5,379,770		13,178,359		1,653,527		26,282,520
Carrying amounts at March 31, 2025	6,130,203	5,018,317		12,834,459		1,467,364		25,450,343
Cost
Balance at January 1, 2024	5,796,438	26,221,351		49,317,031		12,347,434		93,682,254
Additions
Disposals or retirements					)		)		)
Effect of exchange rate changes
Balance at March 31, 2024	5,966,172	26,472,954		46,286,168		12,420,584		91,145,878
Accumulated amortization and<br><br>impairment
Balance at January 1, 2024	-	20,490,070		39,846,671		10,578,769		70,915,510
Additions
Disposals or retirements					)				)
Effect of exchange rate changes
Balance at March 31, 2024	-	21,175,490		36,902,004		10,829,459		68,906,953
Carrying amounts at January 1, 2024	5,796,438	5,731,281		9,470,360		1,768,665		22,766,744
Carrying amounts at March 31, 2024	5,966,172	5,297,464		9,384,164		1,591,125		22,238,925

All values are in US Dollars.

The Company’s goodwill has been tested for impairment at the end of the annual reporting period and the recoverable amount is determined based on the value in use. The value in use was calculated based on the cash flow forecast from the financial budgets covering the future five-year period, and the Company used annual discount rate of 9.3% in its test of impairment as of December 31, 2024 to reflect the relevant specific risk in the cash-generating unit.

17. BONDS PAYABLE


Domestic unsecured bonds	495,610,000		478,536,000		472,494,000
Overseas unsecured bonds
Less: Discounts on bonds payable		)		)		)
Less: Current portion		)		)		)
	948,256,974		926,604,506		955,540,142

All values are in US Dollars.

23 -

The Company issued domestic unsecured bonds for the three months ended March 31, 2025. The major terms are as follows:

Issuance	Issuance Period			Repayment and 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		2.05%	The same as above

All values are in US Dollars.

The major terms of overseas unsecured bonds are as follows:

Issuance Period	Total Amount (US in Thousands)			Repayment and Interest Payment
September 2020 to September 2025	US	1,000,000	0.75%	Bullet repayment (callable at any time, in whole or in part, at the relevant redemption price according to relevant agreements); interest payable semi-annually
September 2020 to September 2027			1.00%	The same as above
September 2020 to September 2030			1.375%	The same as above
April 2021 to April 2026			1.25%	The same as above
April 2021 to April 2028			1.75%	The same as above
April 2021 to April 2031			2.25%	The same as above
October 2021 to October 2026			1.75%	The same as above
October 2021 to October 2031			2.50%	The same as above
October 2021 to October 2041			3.125%	The same as above
October 2021 to October 2051			3.25%	The same as above
April 2022 to April 2027			3.875%	The same as above
April 2022 to April 2029			4.125%	The same as above
April 2022 to April 2032			4.25%	The same as above
April 2022 to April 2052			4.50%	The same as above
July 2022 to July 2027			4.375%	The same as above
July 2022 to July 2032			4.625%	The same as above

All values are in US Dollars.

24 -

18. LONG-TERM BANK LOANS


NT unsecured loans	3,691,666		4,410,833		6,193,889
unsecured loans
Less: Discounts on government grants		)		)		)
Less: Current portion		)		)		)
	38,726,925		31,824,386		10,020,132
Loan content
Annual interest rate
Maturity date

All values are in Japanese Yen.

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.

19. EQUITY

a. Capital stock

	March 31,<br><br>2025			December 31,<br><br>2024		March 31,<br><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)		25,932,733			25,932,733		25,935,031
Shares awaiting retirement (in thousands)		(118	)		-		(1,402	)
Capital stock (in thousands)		25,932,615			25,932,733		25,933,629
Issued capital	$	259,327,332		$	259,327,332	$	259,350,310
Share capital awaiting retirement		(1,177	)		-		(14,018	)
Capital stock	$	259,326,155		$	259,327,332	$	259,336,292

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

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

On September 1, 2024 and March 1, 2024, TSMC issued employee restricted stock awards (RSAs) for its employees in a total of 2,353 thousand shares and 2,960 thousand shares, respectively, with a par value of NT$10 per share. The aforementioned issuance of new shares was approved by the relevant authority and the registration has been completed.

25 -

During the first quarter of 2025, TSMC reclaimed 118 thousand employee restricted shares which were unvested (classified under share capital awaiting retirement). On May 13, 2025, TSMC’s Board of Directors resolved to cancel the aforementioned shares.

During the first quarter of 2024, TSMC reclaimed 1,402 thousand employee restricted shares. On 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 March 31, 2025, TSMC’s total issued and outstanding ADSs were 1,062,722 thousand units, representing 5,313,612 thousand common shares.

b. Capital surplus

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


May be used to offset a deficit, distributed as<br><br>cash dividends, or transferred to share<br><br>capital
Additional paid-in capital	25,586,161	24,809,704	24,812,813
From merger
From convertible bonds
From difference between the consideration received and the carrying amount of the subsidiaries’ net assets during actual disposal
Donations - donated by shareholders
May only be used to offset a deficit
From share of changes in equities of subsidiaries
From share of changes in equities of associates
Donations - unclaimed dividend
May not be used for any purpose
Employee restricted shares
	73,307,187	73,260,765	70,940,489

All values are in US Dollars.

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

c. Retained earnings and dividend policy

TSMC’s Articles of Incorporation provide that, earnings distribution may be made on a quarterly basis after the close of each quarter. Distribution of earnings by way of cash dividends should be approved by TSMC’s Board of Directors and reported to TSMC’s shareholders in its meeting. When allocating

26 -

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:

	First Quarter
Resolution Date of TSMC’s	of 2025
Board of Directors in its	May 13,
meeting	2025
Cash dividends to shareholders	$	129,663,078
Cash dividends per share (NT$)	$	5.00
	Fourth Quarter		Third Quarter		Second Quarter		First Quarter
---	---	---	---	---	---	---	---	---	---
Resolution Date of TSMC’s	of 2024		of 2024		of 2024		of 2024
Board of Directors in its	February 12,		November 12,		August 13,		May 10,
meeting	2025		2024		2024		2024
Special capital reserve	$	-	$	-	$	-	$	(28,020,822	)
Cash dividends to shareholders	$	116,697,300	$	116,697,300	$	103,721,521	$	103,734,517
Cash dividends per share (NT$)	$	4.50	$	4.50	$	4.00	$	4.00
	Fourth Quarter		Third Quarter			Second Quarter			First Quarter
---	---	---	---	---	---	---	---	---	---	---
Resolution Date of TSMC’s	of 2023		of 2023			of 2023			of 2023
Board of Directors in its	February 6,		November 14,			August 8,			May 9,
meeting	2024		2023			2023			2023
Special capital reserve	$	28,020,822	$	(17,228,363	)	$	(6,365,562	)	$	3,273,452
Cash dividends to shareholders	$	90,762,248	$	90,762,248		$	77,796,213		$	77,796,213
Cash dividends per share (NT$)	$	3.50	$	3.50		$	3.00		$	3.00

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

27 -

d. Others

Changes in others were as follows:

	Three Months Ended March 31, 2025
	Foreign Currency Translation Reserve		Unrealized Gain (Loss) on Financial Assets at FVTOCI			Gain (Loss) on Hedging Instruments			Unearned Stock-Based Employee Compensation			Total
Balance, beginning of period		40,262,995		(1,160,176	)		1,310,307			(1,708,079	)		38,705,047
Exchange differences arising on translation of foreign operations
Unrealized gain (loss) on financial assets at FVTOCI
Equity instruments					)									)
Debt instruments
Disposal of investments in equity instruments at fair value through other comprehensive income					)									)
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal
Loss allowance adjustments from debt instruments					)									)
Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss								)						)
Transferred to initial carrying amount of hedged items
Share-based payment expenses recognized
Share of other comprehensive income (loss) of associates					)
Balance, end of period		68,922,015		279,944			1,305,307			(1,255,297	)		69,251,969

All values are in US Dollars.

	Three Months Ended March 31, 2024
	Foreign Currency Translation Reserve			Unrealized Gain (Loss) on Financial Assets at FVTOCI			Gain (Loss) on Hedging Instruments			Unearned Stock-Based Employee Compensation			Total
Balance, beginning of period		(25,316,769	)		(4,099,928	)		1,395,875			(293,434	)		(28,314,256	)
Exchange differences arising on translation of foreign operations
Gain (loss) on hedging instruments designated as hedges of net investments in foreign operations
Unrealized gain (loss) on financial assets at FVTOCI
Equity instruments
Debt instruments						)									)
Disposal of investments in equity instruments at fair value through other comprehensive income						)									)
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal
Loss allowance adjustments from debt instruments
Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss									)						)
Transferred to initial carrying amount of hedged items									)						)

All values are in US Dollars.

(Continued)

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	Three Months Ended March 31, 2024
	Foreign Currency Translation Reserve		Unrealized Gain (Loss) on Financial Assets at FVTOCI			Gain (Loss) on Hedging Instruments		Unearned Stock-Based Employee Compensation			Total
Issuance of employee restricted stock		-		-			-		(1,078,713	)		(1,078,713	)
Share-based payment expenses recognized
Share of other comprehensive income (loss) of associates					)
Income tax effect					)								)
Balance, end of period		12,297,132		(1,588,684	)		1,393,290		(1,210,293	)		10,891,445

All values are in US Dollars.

(Concluded)

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.

20. NET REVENUE

a. Disaggregation of revenue from contracts with customers

	Three Months Ended March 31
Product	2025		2024
Wafer		714,028,927		521,896,971
Others
		839,253,664		592,644,201

All values are in US Dollars.

	Three Months Ended March 31
Geography	2025		2024
Taiwan		66,493,510		68,315,426
United States
China
Japan
Europe, the Middle East and Africa
Others
		839,253,664		592,644,201

All values are in US Dollars.

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

29 -

	Three Months Ended March 31
Platform	2025		2024
High Performance Computing		493,223,146		274,772,974
Smartphone
Internet of Things
Automotive
Digital Consumer Electronics
Others
		839,253,664		592,644,201

All values are in US Dollars.

	Three Months Ended March 31
Resolution	2025		2024
3-nanometer		160,180,187		45,448,960
5-nanometer
7-nanometer
16-nanometer
20-nanometer
28-nanometer
40/45-nanometer
65-nanometer
90-nanometer
0.11/0.13 micron
0.15/0.18 micron
0.25 micron and above
Wafer revenue		714,028,927		521,896,971

All values are in US Dollars.

b. Contract balances

	March 31,<br><br>2025		December 31,<br><br>2024		March 31,<br><br>2024		January 1,<br><br>2024
Contract liabilities (classified under accrued expenses and other current liabilities)	$	102,047,887	$	89,435,361	$	75,431,720	$	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$43,655,565 thousand and NT$36,370,728 thousand for the three months ended March 31, 2025 and 2024, respectively.

c. Temporary receipts from customers


Current portion (classified under accrued expenses and other current liabilities)	166,477,077	198,602,570	199,544,769
Noncurrent portion (classified under other noncurrent liabilities)
	253,459,846	291,101,832	278,163,130

All values are in US Dollars.

30 -

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

21. INTEREST INCOME

	Three Months Ended March 31
	2025		2024
Interest income
Cash and cash equivalents		20,259,748		16,108,130
Financial assets at amortized cost
Financial assets at FVTOCI
		24,859,312		19,359,172

All values are in US Dollars.

22. FINANCE COSTS

	Three Months Ended March 31
	2025			2024
Interest expense
Corporate bonds		4,950,966			4,645,197
Lease liabilities
Bank loans
Others
Less: Capitalized interest under property, plant and equipment			)			)
		2,677,274			2,698,255

All values are in US Dollars.

Information about capitalized interest is as follows:

	Three Months Ended March 31
	2025	2024
Capitalization rate	1.32%-3.34%	1.20%-3.36%

23. OTHER GAINS AND LOSSES, NET

	Three Months Ended March 31
	2025			2024
Loss on disposal of financial assets, net
Investments in debt instruments at FVTOCI		(50,240	)		(102,504	)
Loss on disposal of subsidiaries			)
Loss on financial instruments at FVTPL, net
Mandatorily measured at FVTPL			)			)
Reversal of (provision for) expected credit loss of financial assets
Investments in debt instruments at FVTOCI						)
Financial assets at amortized cost			)
Other gains (losses), net			)
		(3,325,569	)		(3,282,892	)

All values are in US Dollars.

31 -

24. INCOME TAX

a. Income tax expense recognized in profit or loss

Income tax expense consisted of the following:

	Three Months Ended March 31
	2025			2024
Current income tax expense
Current tax expense recognized in the current period		70,266,030			40,767,872
Income tax adjustments on prior years
Other income tax adjustments

Deferred income tax expense (benefit)
The origination and reversal of temporary differences
Operating loss carryforward			)			)
			)
Income tax expense recognized in profit or loss		70,162,751			41,321,941

All values are in US Dollars.

b. Income tax examination

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

25. EARNINGS PER SHARE

	Three Months Ended March 31
	2025		2024
Basic EPS	$	13.95	$	8.70
Diluted EPS	$	13.94	$	8.70

EPS is computed as follows:

	Three Months Ended March 31
	2025		2024
Basic EPS
Net income available to common shareholders of the parent		361,564,128		225,484,877
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands)
Basic EPS (in dollars)		13.95		8.70
Diluted EPS
Net income available to common shareholders of the parent		361,564,128		225,484,877
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands)
Effects of all dilutive potential common shares (in thousands)
Weighted average number of common shares used in the computation of diluted EPS (in thousands)
Diluted EPS (in dollars)		13.94		8.70

All values are in US Dollars.

32 -

26. 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

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.

33 -

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

	2024 RSAs		2023 RSAs			2022 RSAs			2021 RSAs
	Number of Shares<br><br>(In Thousands)		Number of Shares<br><br>(In Thousands)			Number of Shares<br><br>(In Thousands)			Number of Shares<br><br>(In Thousands)
Balance, beginning of period		2,353		2,960			1,055			347
Vested shares		-		(1,406	)		(501	)		(330	)
Shares awaiting retirement		-		(74	)		(27	)		(17	)
Balance, end of period		2,353		1,480			527			-
Weighted-average fair value of RSAs (in dollars)	$	662.42	$	364.43		$	277.71		$	325.81

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

	2024 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
Expected life
Risk-free interest rate

All values are in US Dollars.

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><br>2024	February 14,<br><br>2023	February 15,<br><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:

	Three Months Ended March 31
	2025				2024
	2023 Plan		2022 Plan		2023 Plan		2022 Plan		2021 Plan
Stock price at measurement date (in dollars)		952		952		769		769		769
Expected price volatility
Residual life
Risk-free interest rate

All values are in US Dollars.

Refer to Note 27 for the compensation costs of the cash-settled share-based payment recognized by TSMC. As of March 31, 2025, December 31, 2024 and March 31, 2024, the liabilities under cash-settled share-based payment arrangement amounted to NT$101,908 thousand, NT$455,728 thousand and NT$82,942 thousand, respectively.

34 -

27. ADDITIONAL INFORMATION OF EXPENSES BY NATURE

	Three Months Ended March 31
	2025		2024
a. Depreciation of property, plant and equipment and right-of-use assets
Recognized in cost of revenue		161,648,245		148,662,639
Recognized in operating expenses
Recognized in other operating income and expenses
		173,004,927		156,697,101
b. Amortization of intangible assets
Recognized in cost of revenue		1,410,729		1,628,675
Recognized in operating expenses
		2,134,152		2,326,061
c. Employee benefits expenses
Post-employment benefits
Defined contribution plans		1,614,682		1,418,734
Defined benefit plans

Share-based payments
Equity-settled
Cash-settled

Other employee benefits
		88,299,504		63,461,551
Employee benefits expense summarized by function
Recognized in cost of revenue		48,006,765		34,622,208
Recognized in operating expenses
		88,299,504		63,461,551

All values are in US Dollars.

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

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

	Three Months Ended March 31
	2025		2024
Profit sharing bonus to employees	$	21,693,850	$	13,472,869

35 -

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

	Years Ended December 31
	2024		2023
Profit sharing bonus to employees	$	70,296,283	$	50,090,533
Compensation to directors	$	358,989	$	551,955

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

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

28. GOVERNMENT GRANTS

Subsidiaries such as TSMC Arizona, ESMC, JASM and TSMC Nanjing received subsidies from the governments of the United States, Germany, Japan and China, respectively, for local plant setup and operation, which were mainly used to subsidize the purchase costs of property, plant and equipment, as well as partial costs and expenses incurred from plant construction and production. For the three months ended March 31, 2025 and 2024, the Company received a total of NT$35,149,257 thousand and NT$183,484 thousand as government grants, respectively.

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

29. CASH FLOW INFORMATION

a. Non-cash transactions

	Three Months Ended March 31
	2025			2024
Additions of financial assets at FVTOCI		23,131,780			26,681,379
Changes in accrued expenses and other current liabilities						)
Payments for acquisition of financial assets at FVTOCI		23,341,809			25,389,232
Disposal of financial assets at FVTOCI		29,255,157			16,144,968
Changes in other financial assets			)			)
Proceeds from disposal of financial assets at FVTOCI		29,048,286			12,604,731
Additions of property, plant and equipment		323,484,279			127,630,401
Changes in other receivables
Changes in payables to contractors and equipment suppliers			)
Changes in accrued expenses and other current liabilities
Capitalized interests			)			)
Payments for acquisition of property, plant and equipment		330,826,730			181,304,802

All values are in US Dollars.

36 -

b. Reconciliation of liabilities arising from financing activities

						Non-cash Changes
	Balance as of January 1, 2025		Financing Cash Flow			Foreign Exchange Movement		Leases Modifications		Other Changes(Note)		Balance as of March 31, 2025
Bonds payable		983,752,385		16,179,754			7,615,641		-		100,287		1,007,648,067
Long-term bank loans
Lease liabilities					)
Total		1,050,091,145		19,857,732			9,553,410		1,310,030		212,576		1,081,024,893

All values are in US Dollars.

						Non-cash Changes
	Balance as of January 1, 2024		Financing Cash Flow			Foreign Exchange Movement			Leases Modifications		Other Changes(Note)		Balance as of March 31, 2024
Hedging financial liabilities- bank loans		27,290,400		(26,496,570	)		(793,830	)		-		-		-
Bonds payable
Long-term bank loans								)
Lease liabilities					)
Total		986,358,860		1,274,190			20,986,830			649,903		192,638		1,009,462,421

All values are in US Dollars.

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

30. FINANCIAL INSTRUMENTS

a. Categories of financial instruments


Financial assets
FVTPL (Note 1)	15,539,669	15,407,542	14,211,944
FVTOCI (Note 2)
Hedging financial assets
Amortized cost (Note 3)
	3,194,710,311	2,942,675,881	2,271,085,542
Financial liabilities
FVTPL (Note 4)	2,069,289	466,539	941,396
Hedging financial liabilities
Amortized cost (Note 5)
	2,021,279,758	1,963,763,803	1,774,692,676

All values are in US Dollars.

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.

37 -

b. Financial risk management objectives

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

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

c. Market risk

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

Foreign currency risk

Substantially all the Company’s sales are denominated in U.S. dollars and over half of its capital expenditures are denominated in currencies other than NT dollars, primarily in U.S. dollars, Japanese yen and Euros. As a result, any significant fluctuations to its disadvantage in the exchanges rate of NT dollar against such currencies, in particular a weakening of U.S. dollar against NT dollar, would have an adverse impact on the revenue and operating profit as expressed in NT dollars. The Company uses foreign currency derivative contracts, such as currency forwards or currency swaps, and non-derivative financial instruments, such as foreign currency denominated debts, 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 three months ended March 31, 2025 and 2024, a hypothetical adverse foreign currency exchange rate change of 10% would have decreased its net income by NT$889,382 thousand and NT$561,692 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$4,476,317 thousand and NT$4,279,174 thousand for the three months ended March 31, 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.

38 -

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$1,238,824 thousand and NT$1,116,694 thousand for the three months ended March 31, 2025 and 2024, respectively, and the other comprehensive income would have decreased by NT$986,946 thousand and NT$1,165,417 thousand for the three months ended March 31, 2025 and 2024, respectively.

d. Credit risk management

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

Business related credit risk

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

As of March 31, 2025, December 31, 2024 and March 31, 2024, the Company’s ten largest customers accounted for 84%, 93% and 87% 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.

39 -

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<br><br>Expected Credit Loss	Expected<br><br>Credit Loss<br><br>Ratio
Performing	Credit rating is investment grade on valuation date	12 months expected credit loss	0-0.09%
Doubtful	Credit rating is non-investment grade on valuation date	Lifetime expected credit loss-not credit impaired	-
In default	Credit rating is CC or below on valuation date	Lifetime expected credit loss-credit impaired	-
Write-off	There is evidence indicating that the debtor is in severe financial difficulty and the Company has no realistic prospect of recovery	Amount is written off	-

For the three months ended March 31, 2025 and 2024, the expected credit loss decreased NT$6,086 thousand and increased NT$11,430 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.


March 31, 2025
Non-derivative financial liabilities
Accounts payable (including related parties)	76,853,628		-	-	-	76,853,628
Payables to contractors and equipment suppliers
Accrued expenses and other current liabilities
Bonds payable
Long-term bank loans
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note)
Others

Derivative financial instruments
Forward exchange contracts
Outflows
Inflows		)					)

	731,075,073		449,072,551	240,875,198	616,261,456	2,037,284,278

All values are in US Dollars.

(Continued)

40 -


December 31, 2024
Non-derivative financial liabilities
Accounts payable (including related parties)	74,226,559		-	-	-	74,226,559
Payables to contractors and equipment suppliers
Accrued expenses and other current liabilities
Bonds payable
Long-term bank loans
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note)
Others

Derivative financial instruments
Forward exchange contracts
Outflows
Inflows		)					)

	708,180,829		430,290,704	240,997,845	611,536,424	1,991,005,802
March 31, 2024
Non-derivative financial liabilities
Accounts payable (including related parties)	57,610,008		-	-	-	57,610,008
Payables to contractors and equipment suppliers
Accrued expenses and other current liabilities
Bonds payable
Long-term bank loans
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note)
Others

Derivative financial instruments
Forward exchange contracts
Outflows
Inflows		)					)

	559,903,250		335,953,564	319,426,991	632,877,141	1,848,160,946

All values are in US Dollars.

(Concluded)

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

	5-10 Years		10-15 Years		15-20 Years		More Than<br><br>20 Years		Total
March 31, 2025
Lease liabilities	$	10,446,365	$	7,023,891	$	3,679,414	$	142,103	$	21,291,773
December 31, 2024
Lease liabilities	$	10,296,927	$	6,821,624	$	3,547,316	$	116,827	$	20,782,694
March 31, 2024
Lease liabilities	$	10,156,723	$	6,929,235	$	3,801,968	$	220,526	$	21,108,452

41 -

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:

	March 31, 2025
	Level 1		Level 2		Level 3		Total
Financial assets at FVTPL
Mandatorily measured at FVTPL
Convertible preferred stocks		-		-		14,370,972		14,370,972
Mutual funds
Simple agreement for future equity
Forward exchange contracts
		-		54,369		15,485,300		15,539,669
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds		-		98,352,454		-		98,352,454
Agency mortgage-backed securities
Government bonds/Agency bonds
Asset-backed securities
Investments in equity instruments
Non-publicly traded equity investments
Publicly traded stocks
Notes and accounts receivable, net
		29,470,956		168,111,202		8,337,662		205,919,820

All values are in US Dollars.

(Continued)

42 -

	March 31, 2025
	Level 1		Level 2		Level 3		Total
Financial liabilities at FVTPL
Held for trading
Forward exchange contracts	$	-	$	2,069,289	$	-	$	2,069,289
Hedging financial liabilities
Fair value hedges
Interest rate futures contracts	$	3,462	$	-	$	-	$	3,462

(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
Forward exchange contracts
Simple agreement for future equity
		-		207,700		15,199,842		15,407,542
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds		-		108,612,082		-		108,612,082
Agency mortgage-backed securities
Government bonds/Agency bonds
Asset-backed securities
Investments in equity instruments
Non-publicly traded equity investments
Publicly traded stocks
Notes and accounts receivable, net
		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

All values are in US Dollars.

	March 31, 2024
	Level 1		Level 2		Level 3		Total
Financial assets at FVTPL
Mandatorily measured at FVTPL
Convertible preferred stocks		-		-		13,848,154		13,848,154
Forward exchange contracts

All values are in US Dollars.

(Continued)

43 -

	March 31, 2024
	Level 1		Level 2		Level 3		Total
Convertible bonds		-		-		236,039		236,039
Mutual funds
		-		17,236		14,194,708		14,211,944
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds		-		94,649,200		-		94,649,200
Agency mortgage-backed securities
Government bonds/Agency bonds
Asset-backed securities
Investments in equity instruments
Non-publicly traded equity investments
Publicly traded stocks
Notes and accounts receivable, net
		28,605,029		157,267,901		7,428,408		193,301,338
Financial liabilities at FVTPL
Held for trading
Forward exchange contracts		-		941,396		-		941,396
Hedging financial liabilities
Fair value hedges
Interest rate futures contracts		10,525		-		-		10,525

All values are in US Dollars.

(Concluded)

Reconciliation of Level 3 fair value measurements of financial assets

The financial assets measured at Level 3 fair value were equity investments classified as financial assets at FVTOCI and financial assets at FVTPL. Reconciliations for the three months ended March 31, 2025 and 2024 are as follows:

	Three Months Ended March 31
	2025			2024
Balance, beginning of period		23,022,726			20,849,566
Additions
Recognized in profit or loss						)
Recognized in other comprehensive income or loss						)
Disposals and proceeds from return of capital of investments			)			)
Transfers out of level 3 (Note)						)
Effect of exchange rate changes
Balance, end of period		23,822,962			21,623,116

All values are in US Dollars.

44 -

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

Valuation techniques and assumptions used in Level 2 fair value measurement

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

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

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

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

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 March 31, 2025, December 31, 2024 and March 31, 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$59,454 thousand, NT$56,163 thousand and NT$53,739 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 March 31, 2025, December 31, 2024 and March 31, 2024, the Company mainly uses unobservable inputs, which include expected returns, discount rate of 8.8%, 8.6% and 10%, respectively, and discount for lack of marketability of 20%. With other inputs remain equal, if discount rate increases by 1%, the fair value will decrease by NT$586,129 thousand, NT$1,606,927 thousand and NT$1,606,831 thousand, respectively; if discount for lack of marketability increases by 1%, the fair value will decrease by NT$155,838 thousand, NT$140,819 thousand and NT$169,148 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.

45 -

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:

	March 31, 2025
	Carrying		Fair Value
	Amount		Level 1		Level 2		Total
Financial assets
Financial assets at amortized costs
Corporate bonds		200,037,909		-		200,927,445		200,927,445
Commercial paper
Government bonds/Agency bonds
		216,502,052		4,473,583		212,962,518		217,436,101
Financial liabilities
Financial liabilities at amortized costs
Bonds payable		1,007,648,067		-		930,273,718		930,273,718

All values are in US Dollars.

	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
Government bonds/Agency bonds
		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

All values are in US Dollars.

	March 31, 2024
	Carrying		Fair Value
	Amount		Level 1		Level 2		Total
Financial assets
Financial assets at amortized costs
Corporate bonds		115,583,344		-		115,309,905		115,309,905
Commercial paper
Government bonds/Agency bonds
		134,239,843		3,772,859		130,179,605		133,952,464
Financial liabilities
Financial liabilities at amortized costs
Bonds payable		965,538,071		-		886,157,453		886,157,453

All values are in US Dollars.

46 -

Valuation techniques and assumptions used in Level 2 fair value measurement

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

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

31. RELATED PARTY TRANSACTIONS

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

a. Related party name and categories

Related Party 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 March 31
		2025		2024
Item	Related Party Categories
Sales revenue	Associates	$	7,736,472	$	3,584,008

c. Purchases

	Three Months Ended March 31
	2025		2024
Related Party Categories
Associates	$	1,062,416	$	1,152,767

d. Receivables from related parties


Item	Related Party Name
Receivables from	GUC	1,092,244	610,027	400,523
related parties	VIS
	Others
		2,267,052	1,404,473	479,363

All values are in US Dollars.

(Continued)

47 -


Other receivables	SSMC	252	251	60,520
from related	VIS
parties
		252	251	79,307

All values are in US Dollars.

(Concluded)

e. Payables to related parties


Item	Related Party Name
Payables to related	Xintec	808,463	987,992	714,442
parties	SSMC
	Others
		1,216,344	1,426,001	1,185,196

All values are in US Dollars.

f. Accrued expenses and other current liabilities

		March 31,<br><br>2025		December 31,<br><br>2024		March 31,<br><br>2024
Item	Related Party Categories
Temporary receipts	Associates	$	4,380,204	$	4,271,492	$	1,213,065

g. Others

		Three Months Ended March 31
		2025		2024
Item	Related Party Categories
Manufacturing expenses	Associates	$	1,062,424	$	1,060,471

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 March 31
	2025		2024
Short-term employee benefits		1,177,668		868,280
Post-employment benefits
Share-based payments
		1,894,434		1,051,157

All values are in US Dollars.

48 -

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

32. PLEDGED ASSETS

The Company provided certificate of deposits recorded in other financial assets as collateral mainly for building lease agreements. As of March 31, 2025, December 31, 2024 and March 31, 2024, the aforementioned other financial assets amounted to NT$134,029 thousand, NT$132,077 thousand and NT$129,716 thousand, respectively.

33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

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

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

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

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

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

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

49 -

g.Amounts available under unused letters of credit as of March 31, 2025, December 31, 2024 and March 31, 2024 were NT$496,415 thousand, NT$489,882 thousand and NT$451,638 thousand, respectively.

h.The Company entrusted financial institutions to provide performance guarantees mainly for import and export of goods and lease agreement. As of March 31, 2025, December 31, 2024 and March 31, 2024, the aforementioned guarantee amounted to NT$8,687,244 thousand, NT$10,315,609 thousand, and NT$7,153,645 thousand, respectively.

34. SIGNIFICANT LOSS FROM DISASTER

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

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

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

The following information was summarized according to the foreign currencies other than the functional currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies were as follows:


March 31, 2025
Financial assets
Monetary items
	20,280,414	33.205	673,411,158
		35.928
		0.2214
Financial liabilities
Monetary items
		33.205
		35.928
		0.2214

All values are in Euros.

(Continued)

50 -


December 31, 2024
Financial assets
Monetary items
	18,726,635	32.768		613,634,377
		34.102
		1.041	(Note 2)
		0.2092
Financial liabilities
Monetary items
		32.768
		34.102
		1.041	(Note 2)
		0.2092
March 31, 2024
Financial assets
Monetary items
		31.997
		34.624
		1.082	(Note 2)
		0.2117
		0.0066	(Note 3)
Financial liabilities
Monetary items
		31.997
		34.624
		1.082	(Note 2)
		0.2117
		0.0066	(Note 3)

All values are in Euros.

(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.

Note 3: The exchange rate represents the number of U.S. dollar for which one Japanese yen 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 ended March 31, 2025 and 2024, respectively. Since there were varieties of foreign currency transactions and functional currencies within the subsidiaries of the

51 -

Company, the Company was unable to disclose foreign exchange gain (loss) towards each foreign currency with significant impact.

36. ADDITIONAL DISCLOSURES

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

a.Financings provided: See Table 1 attached;

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

c.Marketable securities held (excluding investments in subsidiaries and associates): there are no significant securities that need to be listed separately;

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

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

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

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

h.Information on investment in mainland China

1) The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: See Table 7 attached.

2) Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: See Table 5 attached.

37. OPERATING SEGMENTS INFORMATION

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

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

52 -

TABLE 1

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

FINANCINGS PROVIDED

FOR THE THREE MONTHS ENDED MARCH 31, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
No.		Financing<br><br>Company	Counterparty	Financial Statement<br><br>Account	Related<br><br>Party		Maximum<br><br>Balance for the Period<br><br>(Foreign Currencies<br><br>in Thousands)<br><br>(Note 3)			Ending Balance<br><br>(Foreign Currencies<br><br>in Thousands)<br><br>(Note 3)			Amount Actually<br><br>Drawn<br><br>(Foreign Currencies<br><br>in Thousands)			Interest Rate	Nature for Financing	Transaction Amounts		Reason for<br><br>Financing	Allowance for Bad Debt		Collateral				Financing Limits for Each Borrowing Company(Notes 1 to 2)		Financing Company’s Total Financing Amount Limits (Notes 1 to 2)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Item					Value
1		TSMC China	TSMC Nanjing	Other receivables from related parties	Yes		$<br><br>(RMB<br><br>(US$	42,414,450<br><br>6,000,000<br><br>450,000	$<br><br>)&<br><br>)	$<br><br>(RMB<br><br>(US$	37,835,750<br><br>5,000,000<br><br>450,000	$<br><br>)&<br><br>)	$<br><br>(RMB	22,893,500<br><br>5,000,000	$<br><br>)	1.30%-1.50%	The need for short-term and long-term financing		-	Operating capital		-		-		-		115,431,147		115,431,147
2		TSMC Development	TSMC Washington	Other receivables from related parties	Yes		$<br><br>(US$	1,992,300<br><br>60,000	$<br><br>)	$<br><br>(US$	1,992,300<br><br>60,000	$<br><br>)	$<br><br>(US$	996,150<br><br>30,000	$<br><br>)	-	The need for short-term financing			Operating capital				-

All values are in US Dollars.

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.

53 -

TABLE 2

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE THREE MONTHS ENDED MARCH 31, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
No.		Endorsement/<br><br>Guarantee<br><br>Provider		Guaranteed Party		Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party(Notes 1 and 2)		Maximum<br><br>Balance <br>for the Period<br>(Foreign<br><br>Currencies in<br><br>Thousands)<br><br>(Note 3)			Ending Balance(Foreign Currencies in Thousands)(Note 3)			Amount Actually Drawn(US in Thousands)			Amount of Endorsement/ Guarantee Collateralized by Properties		Ratio of<br><br>Accumulated<br><br>Endorsement/<br><br>Guarantee to Net<br><br>Equity per<br><br>Latest Financial<br><br>Statements	Maximum Endorsement/ Guarantee Amount Allowable(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<br><br>Relationship
0		TSMC		TSMC North America	Subsidiary		1,825,665,032	$<br><br>(US$	2,763,098<br><br>83,213	)	(US	2,763,098<br><br>83,213	)	(US	2,763,098<br><br>83,213	)		-	0.06%		1,825,665,032	Yes	No	No
				TSMC Global	Subsidiary			(US$	249,037,500<br><br>7,500,000	)	(US	249,037,500<br><br>7,500,000	)	(US	249,037,500<br><br>7,500,000	)			5.46%			Yes	No	No
				TSMC Arizona	Subsidiary			(US$	489,688,081<br><br>14,747,420	)	(US	489,580,430<br><br>14,744,178	)	(US	341,017,874<br><br>10,270,076	)			10.73%			Yes	No	No
1		TSMC Japan		TSMC JDC	The same parent company			(JPY	292,248<br><br>1,320,000	)									0.01%			No	No	No

All values are in US Dollars.

Note 1: TSMC's individual endorsement/guarantee limits for TSMC North America, TSMC Global, and TSMC Arizona, as well as the total external endorsement/guarantee limits for TSMC and its subsidiaries, shall not exceed forty percent (40%) of TSMC’s net worth.

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

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

54 -

TABLE 3

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE THREE MONTHS ENDED MARCH 31, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Company Name		Related Party		Nature of Relationships	Transaction Details								Abnormal Transaction			Notes/Accounts Payable or Receivable					Note
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Purchases/<br><br>Sales		Amount<br><br>(Foreign Currencies<br><br>in Thousands)					% to<br><br>Total		Payment Terms	Unit Price			Payment Terms	Ending Balance<br><br>(Foreign Currencies<br><br>in Thousands)			% to<br><br>Total
TSMC		TSMC North America		Subsidiary	Sales		666,187,440			80		Net 30 days from invoice date (Note)		-	-		172,592,216			79
		TSMC Arizona		Subsidiary	Sales					-		Net 30 days from the end of the month of when invoice is issued		-	-					-
		GUC		Associate	Sales					-		Net 30 days from invoice date		-	-					-
		VIS		Associate	Sales					-		Net 30 days from the end of the month of when invoice is issued		-	-					-
		TSMC Nanjing		Subsidiary	Purchases					35		Net 30 days from the end of the month of when invoice is issued		-	-				)	8
		TSMC China		Subsidiary	Purchases					13		Net 30 days from the end of the month of when invoice is issued		-	-				)	2
		TSMC Arizona		Subsidiary	Purchases					9		Net 30 days from the end of the month of when invoice is issued		-	-				)	2
		TSMC Washington		Indirect subsidiary	Purchases					4		Net 30 days from the end of the month of when invoice is issued		-	-				)	1
		SSMC		Associate	Purchases					2		Net 30 days from the end of the month of when invoice is issued		-	-				)	-
		VIS		Associate	Purchases					-		Net 30 days from the end of the month of when invoice is issued		-	-		(57,609		)	-
TSMC North America		GUC		Associate of TSMC	Sales	(US		5,793,350<br><br>176,207	)	1		Net 30 days from invoice date		-	-	(US		749,305<br><br>22,566	)	-
VisEra Tech		Xintec		Associate of TSMC	Sales					5		Net 60 days from the end of the month of when invoice is issued		-	-					8

All values are in US Dollars.

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

55 -

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

MARCH 31, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Company Name		Related Party	Nature of Relationships	Ending Balance(Foreign Currencies in Thousands)					Turnover Days <br>(Note 1)	Overdue			Amounts Received in Subsequent Period		Allowance forBad Debts
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Amount					Action Taken
TSMC		TSMC North America	Subsidiary		177,270,768				26		-	-		-		-
		JASM	Subsidiary						Note 3			-
		VIS	Associate						Note 3			-
		GUC	Associate						26			-
TSMC North America		GUC	Associate of TSMC	(			749,305<br><br>22,566	$<br><br>)	7			-
TSMC JDC		TSMC	Parent company	(			116,641<br><br>526,833	$<br><br>)	Note 2			-
TSMC China		TSMC	Parent company	(RMB			1,990,713<br><br>434,773	$<br><br>)	26			-
		TSMC Nanjing	The same parent company	(RMB			23,040,504<br><br>5,032,106	$<br><br>)	Note 2			-
TSMC Nanjing		TSMC	Parent company	(RMB			6,224,833<br><br>1,359,509	$<br><br>)	28			-
TSMC Arizona		TSMC	Parent company	(			1,672,730<br><br>50,376	$<br><br>)	24			-
TSMC Technology		TSMC	The ultimate parent of the Company	(			906,756<br><br>27,308	$<br><br>)	Note 2			-
TSMC Development		TSMC Washington	Subsidiary	(			996,150<br><br>30,000	$<br><br>)	Note 2			-
TSMC Washington		TSMC	The ultimate parent of the Company	(			609,988<br><br>18,370	$<br><br>)	28			-

All values are in US Dollars.

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

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

Note 3: The ending balance is primarily consisted of royalty receivables, collected in accordance with contractual terms, which is not applicable for the calculation of turnover days.

56 -

TABLE 5

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2025

(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><br>Consolidated Net Revenue<br><br>or Total Assets
0		TSMC		TSMC North America		1	Sales revenue			666,187,440		-	79%
							Receivables from related parties					-	2%
							Accrued expenses and other current liabilities					-	2%
							Other noncurrent liabilities					-	1%
				TSMC China		1	Purchases					-	1%
				TSMC Nanjing		1	Purchases					-	2%
				TSMC Arizona		1	Purchases					-	1%
1		TSMC China		TSMC Nanjing		3	Other receivables from related parties					-	-

All values are in US Dollars.

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

No. 3 represents the transactions between subsidiaries.

Note 2: The sales prices and payment terms of intercompany sales are not significantly different from those to third parties. For other intercompany transactions, prices and terms are determined in accordance with mutual agreements.

57 -

TABLE 6

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA)

FOR THE THREE MONTHS ENDED MARCH 31, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Investor Company		Investee Company	Location	Main Businesses and Products	Original Investment Amount																		Net Income (Losses) of the Investee(Foreign Currencies in Thousands)						Note
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	March 31,<br><br>2025<br><br>(Foreign<br><br>Currencies in<br><br>Thousands)						December 31,<br><br>2024<br><br>(Foreign<br><br>Currencies in<br><br>Thousands)					Shares (In<br><br>Thousands)			Percentage of<br><br>Ownership		Carrying Value<br><br>(Foreign<br><br>Currencies in<br><br>Thousands)
TSMC		TSMC Global	Tortola, British Virgin Islands	Investment activities		616,839,509					616,839,509					19		100		795,980,142				11,019,399			11,019,399		Subsidiary
		TSMC Arizona	Phoenix, Arizona, U.S.A.	Manufacturing, sales and testing of integrated circuits and other semiconductor devices												19,550		100										)	Subsidiary
		TSMC Partners	Tortola, British Virgin Islands	Investing in companies involved in the semiconductor design and manufacturing, and other investment activities												988,268		100											Subsidiary
		JASM	Kumamoto, Japan	Manufacturing, sales and testing of integrated circuits and other semiconductor devices												3,011		73								)		)	Subsidiary
		ESMC	Dresden, Germany	Manufacturing, sales and testing of integrated circuits and other semiconductor devices												753		70								)		)	Subsidiary
		VIS	Hsin-Chu, Taiwan	Manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks												506,709		28											Associate
		VisEra Tech	Hsin-Chu, Taiwan	Research, design, development, manufacturing, sales, packaging and test of color filter												213,619		67											Subsidiary
		SSMC	Singapore	Manufacturing and sales of integrated circuits and other semiconductor devices												314		39											Associate
		TSMC North America	San Jose, California, U.S.A.	Sales and marketing of integrated circuits and other semiconductor devices												11,000		100								)		)	Subsidiary
		Xintec	Taoyuan, Taiwan	Wafer level chip size packaging and wafer level post passivation interconnection service												111,282		41											Associate
		GUC	Hsin-Chu, Taiwan	Researching, developing, manufacturing, testing and marketing of integrated circuits												46,688		35											Associate
		Emerging Fund	Cayman Islands	Investing in technology start-up companies												-		99.9								)		)	Subsidiary
		TSMC 3DIC	Yokohama, Japan	Engineering support activities												49		100											Subsidiary
		TSMC Europe	Amsterdam, the Netherlands	Customer service and supporting activities												-		100											Subsidiary
		TSMC JDC	Yokohama, Japan	Engineering support activities												15		100											Subsidiary
		TSMC Japan	Yokohama, Japan	Customer service and supporting activities												6		100											Subsidiary
		TSMC Korea	Seoul, Korea	Customer service and supporting activities												80		100											Subsidiary
		VTAF III (Note 3)	Cayman Islands	Investing in technology start-up companies												-		-											Subsidiary
TSMC Partners		TSMC Development	Delaware, U.S.A.	Investing in companies involved in semiconductor manufacturing	(US			19,489,303<br><br>586,939	$<br><br>)	(US			19,489,303<br><br>586,939	)		-		100	(US		40,550,104<br><br>1,221,205	$<br><br>)	(US		45,338<br><br>1,379	)			Subsidiary
		TSMC Technology	Delaware, U.S.A.	Engineering support activities												-		100											Subsidiary
					(US			14,282	)	(US			14,282	)					(US		49,103	)	(US		1,515	)
		TSMC Canada	Ontario, Canada	Engineering support activities												2,300		100											Subsidiary
					(US			2,300	)	(US			2,300	)					(US		13,267	)	(US		322	)
VTAF III		Growth Fund (Note 3)	Cayman Islands	Investing in technology start-up companies												-		100											Subsidiary
					(US			1,222	)	(US			1,236	)									(US		14	)
TSMC Development		TSMC Washington	Washington, U.S.A.	Manufacturing, sales and testing of integrated circuits and other semiconductor devices												293,637		100	(US		5,156,303<br><br>155,287	$<br><br>)	(US		(97,978<br><br>(2,980	)))			Subsidiary

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 II and VTAF III have completed the liquidation procedures in the first quarter of 2025. Growth Fund ceased operations in January 2025 and submitted its final liquidation report. The liquidation process will be completed as of May 2025.

58 -

TABLE 7

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR THE THREE MONTHS ENDED MARCH 31, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Investee Company		Total Amount of<br><br>Paid-in Capital<br><br>(RMB in Thousands)			Method of<br><br>Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2025(US in Thousands)		Investment Flows				Accumulated Outflow of Investment from Taiwan as ofMarch 31, 2025 (US in Thousands)		Net Income (Losses) of the Investee Company		Percentage of<br><br>Ownership	Share of Profits/Losses		Carrying Amount as of Balance as of March 31, 2025		Accumulated Inward Remittance of Earnings as of March 31, 2025
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Outflow(US in Thousands)			Inflow
TSMC China		$<br><br>(RMB	18,939,667<br><br>4,502,080	)	(Note 1)	(US	)		-		-	(US	)		2,698,822	100%		2,714,131<br><br>(Note 2)		115,213,672		-
TSMC Nanjing		(RMB	30,521,412<br><br>6,650,119	)	(Note 1)	(US	)					(US	)			100%

All values are in US Dollars.

Accumulated Investment in Mainland China<br><br>as of March 31, 2025<br><br>(US$ in Thousands)	Investment Amounts Authorized by<br><br>Investment Commission, MOEA<br><br>(US$ in Thousands)	Upper Limit on Investment
$ 49,461,079<br><br>(US$ 1,596,000)	$ 119,412,667<br><br>(US$ 3,596,000)	$ 2,760,974,674<br><br>(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.

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