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, 2025By   /s/ Wendell Huang
  Wendell Huang
   Senior Vice President and Chief Financial Officer


Exhibits
Exhibit NumberExhibit Description
99.1



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.

- 1 -

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

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.
- 2 -

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)

54,369


-


207,700


-


253,275


-

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

189,928,311


3


192,202,657


3


175,880,463


3

Financial assets at amortized cost (Note 9)

118,298,376


2


101,971,322


1


48,326,607


1

Hedging financial assets (Note 10)

-


-


10,959


-


-


-

Notes and accounts receivable, net (Note 11)

241,682,270


3


270,683,235


4


201,500,334


3

Receivables from related parties (Note 31)

2,267,052


-


1,404,473


-


479,363


-

Other receivables from related parties (Note 31)

252


-


251


-


79,307


-

Inventories (Note 12)

293,387,615


4


287,868,810


4


267,123,339


5

Other financial assets (Notes 28, 29 and 32)

59,537,615


1


63,138,316


1


32,728,476


1

Other current assets

45,703,772


-


43,237,354


1


28,200,526


-




















Total current assets

3,345,663,882


47


3,088,352,120


46


2,452,767,394


42




















NONCURRENT ASSETS


















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

15,485,300


-


15,199,842


-


13,958,669


-

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

8,337,662


-


7,822,884


-


7,428,408


-

Financial assets at amortized cost (Note 9)

98,203,676


1


88,596,542


1


85,913,236


2

Investments accounted for using equity method (Note 13)

38,766,658


1


37,421,105


1


31,168,264


1

Property, plant and equipment (Notes 14 and 28)

3,400,806,154


48


3,234,980,070


48


3,051,847,989


53

Right-of-use assets (Note 15)

41,303,416


1


40,128,391


1


40,136,864


1

Intangible assets (Note 16)

25,450,343


-


26,282,520


1


22,238,925


-

Deferred income tax assets (Note 4)

66,666,777


1


65,943,300


1


63,729,274


1

Refundable deposits

5,583,601


-


5,495,862


-


6,124,127


-

Other noncurrent assets (Notes 28 and 29)

87,019,951


1


81,715,364


1


12,577,932


-




















Total noncurrent assets

3,787,623,538


53


3,603,585,880


54


3,335,123,688


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)

3,462


-


-


-


10,525


-

Accounts payable

75,637,284


1


72,800,558


1


56,424,812


1

Payables to related parties (Note 31)

1,216,344


-


1,426,001


-


1,185,196


-

Salary and bonus payable

40,951,448


-


47,451,509


1


25,281,769


1

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

92,607,250


1


70,871,150


1


64,246,239


1

Payables to contractors and equipment suppliers

199,087,045


3


192,635,173


3


127,179,414


2

Cash dividends payable (Note 19)

233,394,600


3


220,418,821


3


181,524,496


3

Income tax payable (Note 4)

217,332,999


3


147,438,423


2


139,222,213


3

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

61,771,648


1


59,857,879


1


12,500,151


-

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

475,731,629


7


451,158,911


7


417,663,868


7




















Total current liabilities

1,399,802,998


19


1,264,524,964


19


1,026,180,079


18




















NONCURRENT LIABILITIES


















Bonds payable (Notes 17 and 29)

948,256,974


13


926,604,506


14


955,540,142


17

Long-term bank loans (Notes 18 and 29)

38,726,925


1


31,824,386


-


10,020,132


-

Deferred income tax liabilities (Note 4)

3,968,524


-


3,988,482


-


42,863


-

Lease liabilities (Notes 15 and 29)

29,121,821


-


28,755,342


-


28,467,310


-

Net defined benefit liability (Note 4)

5,378,586


-


7,580,657


-


7,700,892


-

Guarantee deposits

854,533


-


845,581


-


940,585


-

Others (Note 20)

105,552,602


2


104,238,217


2


93,282,825


2




















Total noncurrent liabilities

1,131,859,965


16


1,103,837,171


16


1,095,994,749


19




















Total liabilities

2,531,662,963


35


2,368,362,135


35


2,122,174,828


37




















EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT


















Capital stock (Note 19)

259,326,155


4


259,327,332


4


259,336,292


4

Capital surplus (Notes 19 and 26)

73,307,187


1


73,260,765


2


70,940,489


2

Retained earnings (Note 19)


















Appropriated as legal capital reserve

311,146,899


4


311,146,899


4


311,146,899


5

Appropriated as special capital reserve

-


-


-


-


28,020,822


1

Unappropriated earnings

3,851,130,370


54


3,606,105,124


54


2,955,395,983


51



4,162,277,269


58


3,917,252,023


58


3,294,563,704


57

Others (Notes 19 and 26)

69,251,969


1


38,705,047


-


10,891,445


-




















Equity attributable to shareholders of the parent

4,564,162,580


64


4,288,545,167


64


3,635,731,930


63




















NON - CONTROLLING INTERESTS

37,461,877


1


35,030,698


1


29,984,324


-




















Total equity

4,601,624,457


65


4,323,575,865


65


3,665,716,254


63




















TOTAL

$
7,133,287,420



100


$
6,691,938,000



100


$
5,787,891,082



100






















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

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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



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)

345,858,588



41



278,138,932



47

















GROSS PROFIT

493,395,076



59



314,505,269



53

















OPERATING EXPENSES (Notes 27 and 31)















Research and development

56,547,493



7



46,108,936



8

General and administrative

24,883,748



3



16,137,086



3

Marketing

3,754,815



-



3,111,259



-

















Total operating expenses

85,186,056



10



65,357,281



11

















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

(1,128,212
)


-



(129,682
)


-

















INCOME FROM OPERATIONS (Note 37)

407,080,808



49



249,018,306



42

















NON-OPERATING INCOME AND EXPENSES















Share of profits of associates

1,368,307



-



878,001



-

Interest income (Note 21)

24,859,312



3



19,359,172



3

Other income

51,509



-



71,879



-

Foreign exchange gain, net (Note 35)

3,538,319



-



3,196,993



1

Finance costs (Note 22)

(2,677,274
)


-



(2,698,255
)


-

Other gains and losses, net (Note 23)

(3,325,569
)


(1
)


(3,282,892
)


(1
)
















Total non-operating income and expenses

23,814,604



2



17,524,898



3

















INCOME BEFORE INCOME TAX

430,895,412



51



266,543,204



45

















INCOME TAX EXPENSE (Notes 4 and 24)

70,162,751



8



41,321,941



7

















NET INCOME

360,732,661



43



225,221,263



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

(373,521
)


-



4,903,333



1

Share of other comprehensive loss of associates

(68,654
)


-



(1,558
)


-

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

-



-



(9,996
)


-

  

(442,175
)


-



4,891,779



1


(Continued)

- 4 -

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

%
  
            

            

            

            
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

2,053,235



-



(558,289
)


-

Loss on hedging instruments

(21,068
)


-



(19,315
)


-

Share of other comprehensive income of associates

86,244



-



154,389



-

  

32,339,103



4



36,382,169



6

  















Other comprehensive income, net of income tax

31,896,928



4



41,273,948



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

(831,467
)


-



(263,614
)


-

  















  
$
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

816,497



-



(903,361
)


-

  















  
$
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























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

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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


Equity Attributable to Shareholders of the Parent









Others











Unrealized














Gain (Loss) on














Financial














Assets at Fair













Foreign
Value Through

Unearned




Capital Stock - Common Stock

Retained Earnings
Currency
Other
Gain (Loss) on
Stock-Based




Shares


Legal Capital
Special Capital
Unappropriated

Translation
Comprehensive
Hedging
Employee


Non-controlling
Total
(In Thousands)
Amount
Capital Surplus
Reserve
Reserve
Earnings
Total
Reserve
Income
Instruments
Compensation
Total
Total
Interests
Equity















BALANCE, JANUARY 1, 2024

25,932,071

$
259,320,710


$
69,876,381


$
311,146,899


$
-


$
2,846,883,893


$
3,158,030,792


$
(25,316,769
)

$
(4,099,928
)

$
1,395,875


$
(293,434
)

$
(28,314,256
)

$
3,458,913,627


$
24,349,220


$
3,483,262,847




























































Appropriations of earnings


























































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






























































The accompanying notes are an integral part of the consolidated financial statements.
- 6 -


Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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


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

173,004,927



156,697,101

Amortization expense

2,134,152



2,326,061

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

(8,360
)


6,573

Finance costs

2,677,274



2,698,255

Share of profits of associates

(1,368,307
)


(878,001
)
Interest income

(24,859,312
)


(19,359,172
)
Share-based compensation

455,241



181,831

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

781,375



294,092

Impairment loss on property, plant and equipment

1,297,218



-

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

(21,700
)


752

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

50,240



102,504

Loss from disposal of subsidiaries

167,986



-

Loss on foreign exchange, net

3,884,055



3,336,832

Dividend income

(51,509
)


(71,879
)
Others

247,618



(134,755
)
Changes in operating assets and liabilities:







Financial instruments at fair value through profit or loss

1,763,120



1,506,824

Notes and accounts receivable, net

29,000,965



(186,469
)
Receivables from related parties

(862,579
)


145,088

Other receivables from related parties

(1
)


(7,436
)
Inventories

(5,518,805
)


(16,126,251
)
Other financial assets

(14,480,808
)


(796,912
)
Other current assets

(1,692,072
)


(1,432,213
)
Other noncurrent assets

(2,483,523
)


(2,387,734
)
Accounts payable

2,836,726



698,055

Payables to related parties

(209,657
)


(381,104
)
Salary and bonus payable

(6,500,061
)


(7,918,794
)
Accrued profit sharing bonus to employees and compensation to directors

21,736,100



13,529,295

Accrued expenses and other current liabilities

14,097,144



33,179,302

Other noncurrent liabilities

2,340,161



7,353,616

Net defined benefit liability

(2,202,071
)


(1,556,332
)
Cash generated from operations

627,110,949



437,362,333

Income taxes paid

(1,537,277
)


(1,051,225
)








Net cash generated by operating activities

625,573,672



436,311,108

(Continued)

- 7 -


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

(23,341,809
)


(25,389,232
)
Financial assets at amortized cost

(47,339,382
)


(20,411,240
)
Property, plant and equipment

(330,826,730
)


(181,304,802
)
Intangible assets

(2,285,615
)


(2,042,120
)
Proceeds from disposal or redemption of:







Financial assets at fair value through other comprehensive income

29,048,286



12,604,731

Financial assets at amortized cost

24,877,973



37,619,382

Property, plant and equipment

127,764



336,637

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

1,112



2,260

Derecognition of hedging financial instruments

(29,621
)


8,585

Interest received

24,418,735



17,409,793

Proceeds from government grants - property, plant and equipment

35,149,257



183,484

Other dividends received

94,878



90,172

Increase in prepayments for leases

(11,212
)


(12,873
)
Refundable deposits paid

(47,164
)


(111,770
)
Refundable deposits refunded

31,337



1,210,002









Net cash used in investing activities

(290,192,426
)


(159,806,991
)








CASH FLOWS FROM FINANCING ACTIVITIES







Decrease in hedging financial liabilities - bank loans

-



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

19,200,000



22,800,000

Repayment of bonds

(3,000,000
)


-

Proceeds from long-term bank loans

5,395,000



6,378,000

Repayment of long-term bank loans

(719,167
)


(512,500
)
Payments for transaction costs attributable to the issuance of bonds

(20,246
)


(23,708
)
Repayment of the principal portion of lease liabilities

(891,185
)


(775,428
)
Interest paid

(2,516,219
)


(1,778,846
)
Guarantee deposits received

1,000



87

Guarantee deposits refunded

(3,099
)


(17,102
)
Cash dividends

(103,721,521
)


(77,796,213
)
Disposal of ownership interests in subsidiaries (without losing control)

-



1,021

Increase in non-controlling interests

1,609,845



6,535,642









Net cash used in financing activities

(84,665,592
)


(71,685,617
)
(Continued)
- 8 -


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

267,177,207



232,767,951









CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

2,127,627,043



1,465,427,753









CASH AND CASH EQUIVALENTS, END OF PERIOD
$
2,394,804,250


$
1,698,195,704











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

- 9 -

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
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
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:

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


March 31,
2025

December 31,
2024

March 31,
2024






Cash and deposits in banks
$
2,373,616,720


$
2,120,674,818


$
1,691,973,216

Money market funds

17,984,089



2,826,701



2,979,055

Repurchase agreements

2,107,626



2,126,975



2,245,250

Commercial paper

1,095,815



1,998,549



998,183













    
$
2,394,804,250


$
2,127,627,043


$
1,698,195,704


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


March 31,
2025

December 31,
2024

March 31,
2024






Financial assets











Mandatorily measured at FVTPL





Convertible preferred stocks
$
14,370,972


$
14,181,839


$
13,848,154

Mutual funds

981,508



886,931



110,515

Simple agreement for future equity

132,820



131,072



-

Forward exchange contracts

54,369



207,700



17,236

Convertible bonds

-



-



236,039













    
$
15,539,669


$
15,407,542


$
14,211,944

(Continued)

- 13 -



March 31,
2025

December 31,
2024

March 31,
2024






Current
$
54,369


$
207,700


$
253,275

Noncurrent

15,485,300



15,199,842



13,958,669













    
$
15,539,669


$
15,407,542


$
14,211,944













Financial liabilities























Held for trading











Forward exchange contracts
$
2,069,289


$
466,539


$
941,396

(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 JPYJanuary 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


March 31,
2025

December 31,
2024

March 31,
2024






Investments in debt instruments at FVTOCI
        

        


Corporate bonds

$
98,352,454


$
108,612,082


$
94,649,200

Agency mortgage-backed securities


51,252,453



46,611,373



41,321,721

Government bonds/Agency bonds


25,701,271



20,645,877



21,659,666

Asset-backed securities


10,622,969



11,490,511



11,110,574

    


185,929,147



187,359,843



168,741,161

(Continued)

- 14 -



March 31,
2025

December 31,
2024

March 31,
2024






Investments in equity instruments at FVTOCI






Non-publicly traded equity investments

$
8,337,662


$
7,822,884


$
7,428,408

Publicly traded stocks


3,999,164



4,842,814



7,139,302

    


12,336,826



12,665,698



14,567,710














        

$
198,265,973


$
200,025,541


$
183,308,871













Current

$
189,928,311


$
192,202,657


$
175,880,463

Noncurrent


8,337,662



7,822,884



7,428,408














    

$
198,265,973


$
200,025,541


$
183,308,871

(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


March 31,
2025

December 31,
2024

March 31,
2024






Corporate bonds

$
200,156,770


$
172,091,958


$
115,656,411

Commercial paper


12,034,516



14,221,737



12,150,361

Government bonds/Agency bonds


4,440,747



4,379,527



6,516,785

Less: Allowance for impairment loss


(129,981
)


(125,358
)


(83,714
)













    

$
216,502,052


$
190,567,864


$
134,239,843














Current

$
118,298,376


$
101,971,322


$
48,326,607

Noncurrent


98,203,676



88,596,542



85,913,236














    

$
216,502,052


$
190,567,864


$
134,239,843


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,
2025

December 31,
2024

March 31,
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
(US$ in Thousands)
Maturity

Interest rate futures contracts - US Treasury futures
US$    14,800
June 2025

Hedged ItemsAsset Carrying Amount
Accumulated Amount of
Fair Value Hedge
Adjustments

Financial assets at FVTOCI
$    1,596,110

$    3,462

December 31, 2024

Hedging Instruments
Contract Amount
(US$ in Thousands)
Maturity

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


- 16 -


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

$    (10,959)

March 31, 2024

Hedging Instruments
Contract Amount
(US$ in Thousands)
Maturity

Interest rate futures contracts - US Treasury futures
US$    62,700
June 2024

Hedged ItemsAsset Carrying Amount
Accumulated Amount of
Fair Value Hedge
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


44,044



(42,953
)









    

$
-


$
-


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
Value Used for
Calculating
Hedge
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


March 31,
2025

December 31,
2024

March 31,
2024






At amortized cost





Notes and accounts receivable
$
234,443,474


$
265,223,660


$
192,053,049

Less: Loss allowance

(415,051
)


(453,009
)


(545,182
)
    

234,028,423



264,770,651



191,507,867

At FVTOCI

7,653,847



5,912,584



9,992,467












        
$
241,682,270


$
270,683,235


$
201,500,334


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

March 31,
2025

December 31,
2024

March 31,
2024






Not past due

$
231,331,692


$
255,669,647


$
192,621,474

Past due












Past due within 30 days


10,751,604



15,464,122



9,421,699

Past due over 31 days


14,025



2,475



2,343

Less: Loss allowance


(415,051
)


(453,009
)


(545,182
)













    

$
241,682,270


$
270,683,235


$
201,500,334


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)


(37,966
)


13,579

Effect of exchange rate changes


8



49










Balance, end of period

$
415,051


$
545,182


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


March 31,
2025

December 31,
2024

March 31,
2024






Finished goods
$
34,263,618


$
35,177,009


$
36,548,899

Work in process

187,068,666



181,198,808



168,204,862

Raw materials

46,880,887



46,449,249



39,860,657

Supplies and spare parts

25,174,444



25,043,744



22,508,921












    
$
293,387,615


$
287,868,810


$
267,123,339


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
Held by the Company
Name of AssociatePrincipal Activities
Incorporation
and Operation
March 31,
2025
December 31,
2024
March 31,
2024
March 31,
2025
December 31,
2024
March 31,
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

11,768,652



11,387,185


10,273,652


39%


39%


39%

(Continued)

- 19 -


Place of
Carrying Amount
% of Ownership and Voting Rights
Held by the Company
Name of AssociatePrincipal Activities
Incorporation
and Operation
March 31,
2025
December 31,
2024
March 31,
2024
March 31,
2025
December 31,
2024
March 31,
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

3,605,302



3,512,938


2,909,328


35%


35%


35%














    





$
38,766,658


$
37,421,105


$
31,168,264













(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,
2025

December 31,
2024

March 31,
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


March 31,
2025
December 31,
2024
March 31,
2024







Assets used by the Company

$
3,400,609,937


$
3,234,778,389


$
3,051,622,167

Assets subject to operating leases


196,217



201,681



225,822














    

$
3,400,806,154


$
3,234,980,070


$
3,051,847,989


Assets used by the Company


Land and Land
Improvements

Buildings

Machinery and
Equipment

Office
Equipment

Equipment under
Installation and
Construction in
Progress

Total












Cost























Balance at January 1, 2025
$
13,054,161


$
959,133,864


$
5,852,202,689


$
105,434,750


$
1,080,284,237


$
8,010,109,701

Additions (deductions)

45,793



236,932,128



249,090,469



10,529,881



(173,113,992
)


323,484,279

Disposals or retirements

-


(26,520
)

(8,360,693
)

(618,534
)

-


(9,005,747
)
Effect of exchange rate changes

382,170



7,763,994



7,526,228



421,100



5,568,357



21,661,849

























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
  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

5,017



14,980,174



153,758,437



3,282,424



-



172,026,052

Disposals or retirements

-



(23,144
)


(7,454,933
)


(618,211
)


-



(8,096,288
)
(Continued)

- 20 -



Land and Land
Improvements

Buildings

Machinery and
Equipment

Office
Equipment

Equipment under
Installation and
Construction in
Progress

Total












Impairment
$
-

$
-

$
1,297,218

$
-

$
-

$
1,297,218

Effect of exchange rate changes

8,165



692,224



4,270,774



110,688



-



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)

2,148,342



10,158,016



175,322,957



2,665,376



(62,664,290
)


127,630,401

Disposals or retirements

(278,309
)

(10,791
)

(6,833,544
)

(6,903,029
)

-


(14,025,673
)
Transfers to assets subject to operating leases

-



(197,752
)


-



-



-



(197,752
)
Effect of exchange rate changes

149,902



958,229



6,451,970



173,054



14,247,322



21,980,477

























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
  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

332



12,723,286



140,063,488



2,927,524



-



155,714,630

Disposals or retirements

-



(10,698
)


(6,476,418
)


(6,902,942
)


-



(13,390,058
)
Transfers to assets subject to operating leases

-


(14,367
)

-


-


-


(14,367
)
Effect of exchange rate changes

22,694



761,101



4,961,016



134,529



-



5,879,340

























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

(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

March 31,
2025

December 31,
2024

March 31,
2024





Carrying amounts










Land
$
38,057,144


$
36,980,971


$
37,082,709

Buildings

3,204,286



3,103,902



3,012,048

Office equipment

41,986



43,518



42,107













    
$
41,303,416


$
40,128,391


$
40,136,864


- 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

277,637



352,302

Office equipment

5,424



5,929








    
$
973,411


$
974,183


b.    Lease liabilities


March 31,
2025

December 31,
2024

March 31,
2024





Carrying amounts











Current portion (classified under accrued expenses and other current liabilities)
$
3,147,525


$
3,049,032


$
2,934,686

Noncurrent portion

29,121,821



28,755,342



28,467,310













    
$
32,269,346


$
31,804,374


$
31,401,996


Ranges of discount rates for lease liabilities are as follows:


March 31,
2025
December 31,
2024
March 31,
2024


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


Goodwill

Technology
License Fees

Software and
System Design
Costs

Patent and
Others



Total










Cost



















Balance at January 1, 2025

$
6,070,864


$
28,566,518


$
53,279,044


$
13,133,519


$
101,049,945

Additions

-



17,298



1,111,089



96,214



1,224,601

Disposals or retirements

-



(82,471
)


(94,300
)


(41,460
)


(218,231
)
Effect of exchange rate changes

59,339



722



70,283



3,411



133,755





















Balance at March 31, 2025

$
6,130,203


$
28,502,067


$
54,366,116


$
13,191,684


$
102,190,070





















Accumulated amortization and
  impairment                                







































Balance at January 1, 2025

$
-


$
23,186,748


$
40,100,685


$
11,479,992


$
74,767,425

Additions

-



378,751



1,512,273



243,128



2,134,152

Disposals or retirements

-



(82,471
)


(94,300
)


-



(176,771
)
Effect of exchange rate changes


-



722



12,999



1,200



14,921




















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

-



250,603



1,315,453



155,720



1,721,776

Disposals or retirements

-



-



(4,363,709
)


(100,681
)


(4,464,390
)
Effect of exchange rate changes

169,734



1,000



17,393



18,111



206,238





















Balance at March 31, 2024

$
5,966,172


$
26,472,954


$
46,286,168


$
12,420,584


$
91,145,878





















Accumulated amortization and
  impairment                                







































Balance at January 1, 2024

$
-


$
20,490,070


$
39,846,671


$
10,578,769


$
70,915,510

Additions

-



684,489



1,407,420



234,152



2,326,061

Disposals or retirements


-



-



(4,363,709
)


-



(4,363,709
)
Effect of exchange rate changes


-



931



11,622



16,538



29,091




















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


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
March 31,
2025

December 31,
2024

March 31,
2024






Domestic unsecured bonds
$
495,610,000


$
478,536,000


$
472,494,000

Overseas unsecured bonds

514,677,500



507,904,000



495,953,500

Less: Discounts on bonds payable


(2,639,433
)


(2,687,615
)


(2,909,429
)
Less: Current portion


(59,391,093
)


(57,147,879
)


(9,997,929
)












    
$
948,256,974


$
926,604,506


$
955,540,142



- 23 -

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

Issuance

Tranche
Issuance PeriodTotal AmountCoupon RateRepayment and Interest Payment






NT$ unsecured
  bonds                











114-1
(Green bond)

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

1.90%
Bullet repayment; interest payable annually


B
March 2025 to March 2035

7,200,000

2.05%
The same as above

The major terms of overseas unsecured bonds are as follows:

Issuance Period

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




September 2020 to September 2025

US$
1,000,000

0.75%
Bullet repayment (callable at any time, in whole or in part, at the relevant redemption price according to relevant agreements); interest payable semi-annually
September 2020 to September 2027


750,000

1.00%
The same as above
September 2020 to September 2030


1,250,000

1.375%

The same as above
April 2021 to April 2026


1,100,000

1.25%
The same as above
April 2021 to April 2028


900,000

1.75%
The same as above
April 2021 to April 2031


1,500,000

2.25%
The same as above
October 2021 to October 2026


1,250,000

1.75%
The same as above
October 2021 to October 2031


1,250,000

2.50%
The same as above
October 2021 to October 2041


1,000,000

3.125%
The same as above
October 2021 to October 2051


1,000,000

3.25%
The same as above
April 2022 to April 2027


1,000,000

3.875%
The same as above
April 2022 to April 2029


500,000

4.125%
The same as above
April 2022 to April 2032


1,000,000

4.25%
The same as above
April 2022 to April 2052


1,000,000

4.50%
The same as above
July 2022 to July 2027


400,000

4.375%
The same as above
July 2022 to July 2032


600,000

4.625%
The same as above


- 24 -

18.    LONG-TERM BANK LOANS

March 31,
2025

December 31,
2024

March 31,
2024






NT$ unsecured loans
$
3,691,666


$
4,410,833


$
6,193,889

JPY unsecured loans

37,416,600



30,124,800



6,351,000

Less: Discounts on government grants

(786
)


(1,247
)


(22,535
)
Less: Current portion


(2,380,555
)


(2,710,000
)


(2,502,222
)












    

$
38,726,925


$
31,824,386


$
10,020,132












Loan content











Annual interest rate

0.13%-1.78%



0.13%-1.78%



0.39%-1.48%

Maturity date

Due by December 2030



Due by December 2030



Due by December 2030


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

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


19.    EQUITY

a.    Capital stock

March 31,
2025

December 31,
2024

March 31,
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:


March 31,
2025

December 31,
2024

March 31,
2024






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











Additional paid-in capital
$
25,586,161


$
24,809,704


$
24,812,813

From merger

22,800,434



22,800,434



22,803,291

From convertible bonds

8,891,257



8,891,257



8,892,371

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

8,411,566



8,411,566



8,411,566

Donations - donated by shareholders

11,275



11,275



11,275












May only be used to offset a deficit























From share of changes in equities of subsidiaries

4,097,157



4,108,958



4,192,894

From share of changes in equities of associates

1,229,442



1,172,396



305,131

Donations - unclaimed dividend

78,976



78,976



70,093













May not be used for any purpose























Employee restricted shares

2,200,919



2,976,199



1,441,055













    
$
73,307,187


$
73,260,765


$
70,940,489


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

28,572,776



-



-



-



28,572,776

Unrealized gain (loss) on financial assets at FVTOCI



















Equity instruments

-



(373,569
)


-



-



(373,569
)
Debt instruments

-



2,014,432



-



-



2,014,432

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


-



(155,994
)


-



-



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


-



50,240



-



-



50,240

Loss allowance adjustments from debt instruments


-



(11,437
)


-



-



(11,437
)
Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss


-



-



(21,068
)


-



(21,068
)
Transferred to initial carrying amount of hedged items


-



-



1,135



-



1,135

Share-based payment expenses recognized


-



-



-



452,782



452,782

Share of other comprehensive income (loss) of associates


86,244



(83,552
)


14,933



-



17,625






















Balance, end of period

$
68,922,015


$
279,944


$
1,305,307


$
(1,255,297
)

$
69,251,969




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

36,665,682



-



-



-



36,665,682

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

793,830



-



-



-



793,830

Unrealized gain (loss) on financial assets at FVTOCI



















Equity instruments

-



4,888,952



-



-



4,888,952

Debt instruments

-



(669,090
)


-



-



(669,090
)
Disposal of investments in equity instruments at fair value through other comprehensive income

-



(1,790,349
)


-



-



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

-



102,504



-



-



102,504

Loss allowance adjustments from debt instruments

-



8,297



-



-



8,297

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

-



-



(19,315
)


-



(19,315
)
Transferred to initial carrying amount of hedged items

-



-



(786
)


-



(786
)
(Continued)

- 28 -




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


-



-



-



161,854



161,854

Share of other comprehensive income (loss) of associates


154,389



(19,074
)


17,516



-



152,831

Income tax effect


-



(9,996
)


-



-



(9,996
)





















Balance, end of period

$
12,297,132


$
(1,588,684
)

$
1,393,290


$
(1,210,293
)

$
10,891,445

(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


125,224,737



70,747,230










    

$
839,253,664


$
592,644,201



Three Months Ended March 31
   Geography
2025

2024




Taiwan

$
66,493,510


$
68,315,426

United States


632,438,786



396,182,105

China


62,222,351



55,235,649

Japan


35,757,682



33,212,865

Europe, the Middle East and Africa


25,526,977



21,963,151

Others


16,814,358



17,735,005










    

$
839,253,664


$
592,644,201


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


233,611,388



225,032,139

Internet of Things


38,723,190



35,320,950

Automotive


43,028,245



32,136,633

Digital Consumer Electronics


11,552,466



11,737,785

Others


19,115,229



13,643,720










    

$
839,253,664


$
592,644,201



Three Months Ended March 31
   Resolution
2025

2024




3-nanometer
$
160,180,187


$
45,448,960

5-nanometer

254,408,255



190,695,754

7-nanometer


108,196,547



100,389,587

16-nanometer


47,336,847



48,472,211

20-nanometer


1,182,574



1,399,295

28-nanometer


52,743,689



43,019,318

40/45-nanometer


20,331,363



27,114,454

65-nanometer


26,550,958



21,277,009

90-nanometer


5,137,987



5,514,291

0.11/0.13 micron

12,269,773



12,802,349

0.15/0.18 micron

21,220,625



21,924,461

0.25 micron and above

4,470,122



3,839,282









Wafer revenue
$
714,028,927


$
521,896,971


b.    Contract balances

March 31,
2025
December 31,
2024
March 31,
2024
January 1,
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
March 31,
2025

December 31,
2024

March 31,
2024






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)


86,982,769



92,499,262



78,618,361














    

$
253,459,846


$
291,101,832


$
278,163,130


- 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


2,646,901



1,873,772

Financial assets at FVTOCI
    

1,952,663



1,377,270










    

$
24,859,312


$
19,359,172



22.    FINANCE COSTS



Three Months Ended March 31


2025

2024





Interest expense




Corporate bonds

$
4,950,966


$
4,645,197

Lease liabilities


109,217



93,489

Bank loans


81,083



21,620

Others


955



3,725

Less: Capitalized interest under property, plant and equipment


(2,464,947
)


(2,065,776
)









    

$
2,677,274


$
2,698,255


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

(167,986
)


-

Loss on financial instruments at FVTPL, net







Mandatorily measured at FVTPL

(3,091,058
)


(3,339,218
)
Reversal of (provision for) expected credit loss of financial assets







Investments in debt instruments at FVTOCI

11,437



(8,297
)
Financial assets at amortized cost

(3,077
)


1,724

Other gains (losses), net

(24,645
)


165,403

 








    
$
(3,325,569
)

$
(3,282,892
)


- 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

279,640



5,337

Other income tax adjustments

96,538



63,244

    

70,642,208



40,836,453

Deferred income tax expense (benefit)







The origination and reversal of temporary differences

1,270,276



1,061,704

Operating loss carryforward

(1,749,733
)


(576,216
)


(479,457
)


485,488









Income tax expense recognized in profit or loss
$
70,162,751


$
41,321,941


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)

25,926,789



25,929,267

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)

25,926,789



25,929,267

Effects of all dilutive potential common shares (in thousands)

2,010



490








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

25,928,799



25,929,757

Diluted EPS (in dollars)
$
13.94


$
8.70



- 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
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 RSAs2023 RSAs2022 RSAs2021 RSAs

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









Balance, beginning of period


2,353



2,960



1,055



347

Vested shares


-



(1,406
)


(501
)


(330
)
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 RSAs2023 RSAs2022 RSAs2021 RSAs

September 1, 2024March 1, 2024March 1, 2023March 1, 2022
Stock price at measurement date (in dollars)
$
944


$
689


$
511


$
604

Expected price volatility

25.51%-29.87%



24.77%-26.12%



29.34%-32.11%



25.34%-28.28%

Expected life

1-3 years



1-3 years



1-3 years



1-3 years

Risk-free interest rate

1.40%



1.16%



1.06%



0.57%


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

b.    Cash-settled share-based payment arrangements

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



2023 Plan

2022 Plan

2021 Plan







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

February 6,
2024

February 14,
2023

February 15,
2022
Issuance of units (in thousands) (Note)

550

400

236
Grant date

March 1, 2024

March 1, 2023

March 1, 2022

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

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

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

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


25.40%-31.02%



25.40%-31.02%



24.45%-26.42%



24.45%-26.42%



24.45%-26.42%

Residual life


1-2 years



1 years



1-3 years



1-2 years



1 year

Risk-free interest rate


1.43%



1.39%



1.33%



1.29%



1.26%


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
20252024




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

11,351,218



8,026,174

Recognized in other operating income and expenses

5,464



8,288









    
$
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

723,423



697,386









    
$
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

62,057



68,906

    

1,676,739



1,487,640

Share-based payments







Equity-settled

455,241



181,831

Cash-settled

69,962



21,801

    

525,203



203,632

Other employee benefits

86,097,562



61,770,279









        
$
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

40,292,739



28,839,343









        
$
88,299,504


$
63,461,551


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
20252024




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


210,029



(1,292,147
)









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


(206,871
)


(3,540,237
)









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


2,326,950



-

Changes in payables to contractors and equipment suppliers


(2,415,721
)


47,124,966

Changes in accrued expenses and other current liabilities


9,896,169



8,615,211

Capitalized interests


(2,464,947
)


(2,065,776
)









Payments for acquisition of property, plant and equipment

$
330,826,730


$
181,304,802



- 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


34,534,386



4,675,833



1,894,189



-



3,072



41,107,480

Lease liabilities


31,804,374



(997,855
)


43,580



1,310,030



109,217



32,269,346


























Total

$
1,050,091,145


$
19,857,732


$
9,553,410


$
1,310,030


$
212,576


$
1,081,024,893






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


920,897,553



22,776,292



21,770,410



-



93,816



965,538,071

Long-term bank loans


6,678,521



5,865,500



(27,000
)


-



5,333



12,522,354

Lease liabilities


31,492,386



(871,032
)


37,250



649,903



93,489



31,401,996


























Total

$
986,358,860


$
1,274,190


$
20,986,830


$
649,903


$
192,638


$
1,009,462,421


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


March 31,
2025

December 31,
2024

March 31,
2024






Financial assets






FVTPL (Note 1)

$
15,539,669


$
15,407,542


$
14,211,944

FVTOCI (Note 2)


205,919,820



205,938,125



193,301,338

Hedging financial assets


-



10,959



-

Amortized cost (Note 3)


2,973,250,822



2,721,319,255



2,063,572,260














    

$
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


3,462



-



10,525

Amortized cost (Note 5)


2,019,207,007



1,963,297,264



1,773,740,755














    

$
2,021,279,758


$
1,963,763,803


$
1,774,692,676


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
Expected Credit Loss

Expected
Credit Loss
Ratio




Performing

Credit rating is investment grade on valuation date

12 months expected credit loss

0-0.09%
Doubtful

Credit rating is non-investment grade on valuation date

Lifetime expected credit loss-not credit impaired

-
In default

Credit rating is CC or below on valuation date

Lifetime expected credit loss-credit impaired

-
Write-off

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

Amount is written off

-

For the 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.


Less Than
1 Year

1-3 Years

3-5 Years

More Than
5 Years

Total









March 31, 2025


















Non-derivative financial liabilities



















Accounts payable (including related parties)
$
76,853,628


$
-


$
-


$
-


$
76,853,628

Payables to contractors and equipment suppliers

199,087,045



-



-



-



199,087,045

Accrued expenses and other current liabilities

367,308,567



-



-



-



367,308,567

Bonds payable

79,180,865



355,977,247



199,574,108



586,060,547



1,220,792,767

Long-term bank loans

2,708,527



5,353,088



25,472,236



8,909,136



42,442,987

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

3,628,656



5,695,999



4,924,098



21,291,773



35,540,526

Others

-



82,046,217



10,904,756



-



92,950,973

    

728,767,288



449,072,551



240,875,198



616,261,456



2,034,976,493





















Derivative financial instruments







































Forward exchange contracts



















Outflows

231,869,244



-



-



-



231,869,244

Inflows

(229,561,459
)


-



-



-



(229,561,459
)
    

2,307,785



-



-



-



2,307,785





















        

$
731,075,073


$
449,072,551


$
240,875,198


$
616,261,456


$
2,037,284,278

(Continued)
- 40 -


Less Than
1 Year

1-3 Years

3-5 Years

More Than
5 Years

Total









December 31, 2024



















Non-derivative financial liabilities



















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


$
-


$
-


$
-


$
74,226,559

Payables to contractors and equipment suppliers

192,635,173



-



-



-



192,635,173

Accrued expenses and other current liabilities

358,165,686



-



-



-



358,165,686

Bonds payable

76,460,812



335,240,849



197,389,127



587,602,550



1,196,693,338

Long-term bank loans

2,935,154



2,275,524



27,044,881



3,151,180



35,406,739

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

3,483,523



5,794,816



4,826,752



20,782,694



34,887,785

Others

-



86,979,515



11,737,085



-



98,716,600

    

707,906,907



430,290,704



240,997,845



611,536,424



1,990,731,880




















Derivative financial instruments







































Forward exchange contracts



















Outflows

109,525,448



-



-



-



109,525,448

Inflows

(109,251,526
)


-



-



-



(109,251,526
)
    

273,922



-



-



-



273,922





















        

$
708,180,829


$
430,290,704


$
240,997,845


$
611,536,424


$
1,991,005,802




















March 31, 2024






































Non-derivative financial liabilities







































Accounts payable (including related parties)
$
57,610,008


$
-


$
-


$
-


$
57,610,008

Payables to contractors and equipment suppliers

127,179,414



-



-



-



127,179,414

Accrued expenses and other current liabilities

339,295,417



-



-



-



339,295,417

Bonds payable

28,846,265



248,882,668



302,594,013



606,301,279



1,186,624,225

Long-term bank loans

2,606,292



3,626,405



3,401,012



3,197,223



12,830,932

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

3,357,257



5,359,250



4,659,029



21,108,452



34,483,988

Others

-



78,085,241



8,772,937



2,270,187



89,128,365

    

558,894,653



335,953,564



319,426,991



632,877,141



1,847,152,349





















Derivative financial instruments







































Forward exchange contracts



















Outflows

89,801,321



-



-



-



89,801,321

Inflows

(88,792,724
)


-



-



-



(88,792,724
)
    

1,008,597



-



-



-



1,008,597





















        

$
559,903,250


$
335,953,564


$
319,426,991


$
632,877,141


$
1,848,160,946

(Concluded)

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



5-10 Years

10-15 Years

15-20 Years

More Than
20 Years

Total











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

-



-



981,508



981,508

Simple agreement for future equity

-



-



132,820



132,820

Forward exchange contracts

-



54,369



-



54,369

















    

$
-


$
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

-



51,252,453



-



51,252,453

Government bonds/Agency bonds

25,471,792



229,479



-



25,701,271

Asset-backed securities

-



10,622,969



-



10,622,969

Investments in equity instruments















Non-publicly traded equity investments

-



-



8,337,662



8,337,662

Publicly traded stocks

3,999,164



-



-



3,999,164

Notes and accounts receivable, net

-



7,653,847



-



7,653,847

















    

$
29,470,956


$
168,111,202


$
8,337,662


$
205,919,820

(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

-



-



886,931



886,931

Forward exchange contracts

-



207,700



-



207,700

Simple agreement for future equity

-



-



131,072



131,072

















    

$
-


$
207,700


$
15,199,842


$
15,407,542

















Financial assets at FVTOCI































Investments in debt instruments















Corporate bonds
$
-


$
108,612,082


$
-


$
108,612,082

Agency mortgage-backed securities

-



46,611,373



-



46,611,373

Government bonds/Agency bonds

20,645,877



-



-



20,645,877

Asset-backed securities

-



11,490,511



-



11,490,511

Investments in equity instruments















Non-publicly traded equity investments

-



-



7,822,884



7,822,884

Publicly traded stocks

4,842,814



-



-



4,842,814

Notes and accounts receivable, net

-



5,912,584



-



5,912,584

















    

$
25,488,691


$
172,626,550


$
7,822,884


$
205,938,125
















Hedging financial assets






























Fair value hedges















Interest rate futures contracts

$
10,959


$
-


$
-


$
10,959


















Financial liabilities at FVTPL

































Held for trading
















Forward exchange contracts

$
-


$
466,539


$
-


$
466,539



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

-



17,236



-



17,236

(Continued)

- 43 -



March 31, 2024

Level 1

Level 2

Level 3

Total







Convertible bonds
$
-


$
-


$
236,039


$
236,039

Mutual funds

-



-



110,515



110,515

















    

$
-


$
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

-



41,321,721



-



41,321,721

Government bonds/Agency bonds

21,465,727



193,939



-



21,659,666

Asset-backed securities

-



11,110,574



-



11,110,574

Investments in equity instruments















Non-publicly traded equity investments

-



-



7,428,408



7,428,408

Publicly traded stocks

7,139,302



-



-



7,139,302

Notes and accounts receivable, net

-



9,992,467



-



9,992,467

















    

$
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

(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

241,385



444,862

Recognized in profit or loss

21,700



(752
)
Recognized in other comprehensive income or loss

240,879



(310,335
)
Disposals and proceeds from return of capital of investments

(1,112
)


(2,260
)
Transfers out of level 3 (Note)

-



(164,860
)
Effect of exchange rate changes

297,384



806,895








Balance, end of period
$
23,822,962


$
21,623,116



- 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

12,023,396



-



12,035,073



12,035,073

Government bonds/Agency bonds

4,440,747



4,473,583



-



4,473,583



















$
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



December 31, 2024

Carrying

Fair Value

Amount

Level 1

Level 2

Total








Financial assets















Financial assets at amortized costs







Corporate bonds
$
171,980,179


$
-


$
172,518,474


$
172,518,474

Commercial paper

14,208,158



-



14,222,713



14,222,713

Government bonds/Agency bonds

4,379,527



4,353,434



-



4,353,434



















$
190,567,864


$
4,353,434


$
186,741,187


$
191,094,621

















Financial liabilities































Financial liabilities at amortized costs















Bonds payable

$
983,752,385


$
-


$
900,344,663


$
900,344,663



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

12,139,714



-



12,149,337



12,149,337

Government bonds/Agency bonds

6,516,785



3,772,859



2,720,363



6,493,222



















$
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



- 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 NameRelated 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



March 31,
2025

December 31,
2024

March 31,
2024








Item
Related Party Name















Receivables from

GUC

$
1,092,244


$
610,027


$
400,523

related parties

VIS


1,028,233



626,638



-



Others


146,575



167,808



78,840


















    

$
2,267,052


$
1,404,473


$
479,363

(Continued)

- 47 -



March 31,
2025

December 31,
2024

March 31,
2024








Other receivables

SSMC

$
252


$
251


$
60,520

from related

VIS


-



-



18,787

parties


















$
252


$
251


$
79,307

(Concluded)

e.    Payables to related parties


March 31,
2025

December 31,
2024
March 31,
2024








Item
Related Party Name















Payables to related

Xintec

$
808,463


$
987,992


$
714,442

parties

SSMC


314,804



308,424



330,709



Others


93,077



129,585



140,045


















    

$
1,216,344


$
1,426,001


$
1,185,196


f.    Accrued expenses and other current liabilities


March 31,
2025

December 31,
2024
March 31,
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

1,001



1,110

Share-based payments

715,765



181,767









    
$
1,894,434


$
1,051,157



- 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:


Foreign
Currencies
(In Thousands)

Exchange Rate
(Note 1)

Carrying
Amount
(In Thousands)







March 31, 2025













Financial assets













Monetary items






USD

$
20,280,414



33.205


$
673,411,158

EUR


795,560



35.928



28,582,881

JPY


143,636,004



0.2214



31,801,011


























Financial liabilities






















Monetary items











USD

14,011,933



33.205



465,266,251

EUR

937,784



35.928



33,692,689

JPY

147,104,858



0.2214



32,569,016

(Continued)

- 50 -

Foreign Currencies
(In Thousands)

Exchange Rate
(Note 1)

Carrying Amount
(In Thousands)





December 31, 2024











Financial assets










Monetary items





USD
$
18,726,635



32.768


$
613,634,377

EUR

596,978



34.102



20,358,132

EUR

169,266



1.041
(Note 2)


5,772,303

JPY

128,926,508



0.2092



26,971,425












Financial liabilities






















Monetary items











USD

16,255,804



32.768



532,670,186

EUR

821,105



34.102



28,001,335

EUR

168,550



1.041
(Note 2)


5,747,886

JPY

129,345,682



0.2092



27,059,117












March 31, 2024























Financial assets





















Monetary items











USD

16,759,684



31.997



536,259,605

EUR

273,770



34.624



9,479,016

EUR

125,598



1.082
(Note 2)


4,348,722

JPY

64,673,322



0.2117



13,691,342

JPY

15,947,106



0.0066
(Note 3)


3,376,002












Financial liabilities






















Monetary items











USD

13,741,692



31.997



439,692,919

EUR

274,465



34.624



9,503,081

EUR

123,731



1.082
(Note 2)


4,284,063

JPY

66,472,710



0.2117



14,072,273

JPY

15,863,507



0.0066
(Note 3)


3,358,304

(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
Company
Counterparty
Financial Statement
Account
Related
Party
Maximum
Balance for the Period
(Foreign Currencies
in Thousands)
(Note 3)
Ending Balance
(Foreign Currencies
in Thousands)
(Note 3)
Amount Actually
Drawn
(Foreign Currencies
in Thousands)
Interest RateNature for Financing
Transaction
Amounts
Reason for
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)
ItemValue















1
TSMC China
TSMC Nanjing
Other receivables from related parties
Yes
$
(RMB
(US$
42,414,450
6,000,000
450,000
$
)&
)
$
(RMB
(US$
37,835,750
5,000,000
450,000
$
)&
)
$
(RMB
22,893,500
5,000,000
$
)
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
$
(US$
1,992,300
60,000
$
)
$
(US$
1,992,300
60,000
$
)
$
(US$
996,150
30,000
$
)
-
The need for short-term financing

-

Operating capital

-


-


-


35,698,065


35,698,065




































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/
Guarantee
Provider
Guaranteed Party
Limits on
Endorsement/
Guarantee
Amount
Provided to Each
Guaranteed
Party
(Notes 1 and 2)
Maximum
Balance
for the Period
(Foreign
Currencies in
Thousands)
(Note 3)
Ending Balance
(Foreign
Currencies in
Thousands)
(Note 3)
Amount Actually
Drawn
(US$ in
Thousands)
Amount of
Endorsement/
Guarantee
Collateralized by
Properties
Ratio of
Accumulated
Endorsement/
Guarantee to Net
Equity per
Latest Financial
Statements
Maximum
Endorsement/
Guarantee
Amount
Allowable
(Notes 1 and 2)
Guarantee
Provided by
Parent
Company
Guarantee
Provided by
A Subsidiary
Guarantee
Provided to
Subsidiaries
in Mainland
China
Name
Nature of
Relationship











0
TSMC
TSMC North America
Subsidiary
$
1,825,665,032

$
(US$
2,763,098
83,213

)
$
(US$
2,763,098
83,213

)
$
(US$
2,763,098
83,213

)
$
-

0.06%
$
1,825,665,032

Yes
No
No

TSMC Global
Subsidiary

1,825,665,032


(US$
249,037,500
7,500,000

)

(US$
249,037,500
7,500,000

)

(US$
249,037,500
7,500,000

)

-

5.46%

1,825,665,032

Yes
No
No

TSMC Arizona
Subsidiary

1,825,665,032


(US$
489,688,081
14,747,420

)

(US$
489,580,430
14,744,178

)

(US$
341,017,874
10,270,076

)

-

10.73%

1,825,665,032

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

347,893


(JPY
292,248
1,320,000

)

-


-


-

0.01%

347,893

No
No
No


























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

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

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

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

1,161,829


-

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

75,643


-


GUC
Associate
Sales

1,358,790


-

Net 30 days from invoice date
--

342,939


-


VIS
Associate
Sales

412,340


-

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

1,028,233


-


TSMC Nanjing
Subsidiary
Purchases

17,396,671


35

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

(6,224,833
)

8


TSMC China
Subsidiary
Purchases

6,491,276


13

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

(1,990,713
)

2


TSMC Arizona
Subsidiary
Purchases

4,317,739


9

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

(1,672,730
)

2


TSMC Washington
Indirect subsidiary
Purchases

1,853,134


4

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

(609,988
)

1


SSMC
Associate
Purchases

885,988


2

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

(314,804
)

-


VIS
Associate
Purchases

176,427


-

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
176,207

)

1

Net 30 days from invoice date
--

(US$
749,305
22,566

)

-

VisEra Tech
Xintec
Associate of TSMC
Sales

110,093


5

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

87,866


8


















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








TSMC
TSMC North America
Subsidiary
$
177,270,768

26
$
-

-
$
-

$
-


JASM
Subsidiary

327,765

Note 3

-

-

-


-


VIS
Associate

1,028,233

Note 3

-

-

-


-


GUC
Associate

342,939

26

-

-

-


-

TSMC North America
GUC
Associate of TSMC

(USD
749,305
22,566
$
)
7

-

-

-


-

TSMC JDC
TSMC
Parent company
$
(JPY
116,641
526,833
$
)
Note 2

-

-

-


-

TSMC China
TSMC
Parent company
$
(RMB
1,990,713
434,773
$
)
26

-

-

-


-


TSMC Nanjing
The same parent company
$
(RMB
23,040,504
5,032,106
$
)
Note 2

-

-

-


-

TSMC Nanjing
TSMC
Parent company
$
(RMB
6,224,833
1,359,509
$
)
28

-

-

-


-

TSMC Arizona
TSMC
Parent company

(USD
1,672,730
50,376
$
)
24

-

-

-


-

TSMC Technology
TSMC
The ultimate parent of the Company

(USD
906,756
27,308
$
)
Note 2

-

-

-


-

TSMC Development
TSMC Washington
Subsidiary

(USD
996,150
30,000
$
)
Note 2

-

-

-


-

TSMC Washington
TSMC
The ultimate parent of the Company

(USD
609,988
18,370
$
)
28

-

-

-


-


















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 NameCounterparty
Nature of
Relationship
(Note 1)
Intercompany Transactions
Financial Statements ItemAmount
Terms
(Note 2)
Percentage of
Consolidated Net Revenue
or Total Assets



0
TSMC
TSMC North America
1
Sales revenue
$
666,187,440

-

79%



Receivables from related parties

172,592,216

-

2%



Accrued expenses and other current liabilities

149,496,524

-

2%



Other noncurrent liabilities

66,598,852

-

1%


TSMC China
1
Purchases

6,491,276

-

1%


TSMC Nanjing
1
Purchases

17,396,671

-

2%


TSMC Arizona
1
Purchases

4,317,739

-

1%

1
TSMC China
TSMC Nanjing
3
Other receivables from related parties

23,040,504

-

-









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 CompanyInvestee CompanyLocationMain Businesses and Products
Original Investment Amount
Balance as of March 31, 2025
Net Income
(Losses) of the
Investee
(Foreign
Currencies in
Thousands)
Share of
Profits/Losses
of Investee
(Note 1)
(Foreign
Currencies in
Thousands)
Note
March 31,
2025
(Foreign
Currencies in
Thousands)
December 31,
2024
(Foreign
Currencies in
Thousands)
Shares (In
Thousands)
Percentage of
Ownership
Carrying Value
(Foreign
Currencies in
Thousands)












TSMC
TSMC Global
Tortola, British Virgin Islands
Investment activities
$
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

621,839,810


565,786,810


19,550


    100


606,122,562


496,040


(1,931,401
)
Subsidiary

TSMC Partners
Tortola, British Virgin Islands
Investing in companies involved in the semiconductor design and manufacturing, and other investment activities

31,456,130


31,456,130


988,268


    100


77,722,319


506,057


506,057

Subsidiary

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

68,384,148


68,384,148


3,011


    73


58,147,635


(3,249,126
)

(2,360,490
)
Subsidiary

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

21,861,351


18,112,326


753


    70


22,145,221


(102,977
)

(72,084
)
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

13,919,430


13,919,430


506,709


    28


19,031,412


2,413,826


663,786

Associate

VisEra Tech
Hsin-Chu, Taiwan
Research, design, development, manufacturing, sales, packaging and test of color filter

4,224,082


4,224,082


213,619


    67


12,381,208


269,350


181,285

Subsidiary

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

5,120,028


5,120,028


314


    39


11,768,652


590,917


229,217

Associate

TSMC North America
San Jose, California, U.S.A.
Sales and marketing of integrated circuits and other semiconductor devices

333,718


333,718


11,000


    100


7,863,067


(97,666
)

(97,666
)
Subsidiary

Xintec
Taoyuan, Taiwan
Wafer level chip size packaging and wafer level post passivation interconnection service

1,988,317


1,988,317


111,282


    41


4,361,292


342,265


140,363

Associate

GUC
Hsin-Chu, Taiwan
Researching, developing, manufacturing, testing and marketing of integrated circuits

386,568


386,568


46,688


    35


3,605,302


961,368


334,941

Associate

Emerging Fund
Cayman Islands
Investing in technology start-up companies

2,926,148


2,688,915


-


    99.9


3,542,498


(1,051
)

(1,050
)
Subsidiary

TSMC 3DIC
Yokohama, Japan
Engineering support activities

1,144,356


1,144,356


49


    100


1,469,109


46,199


46,199

Subsidiary

TSMC Europe
Amsterdam, the Netherlands
Customer service and supporting activities

15,749


15,749


-


    100


712,181


44,677


44,677

Subsidiary

TSMC JDC
Yokohama, Japan
Engineering support activities

410,680


410,680


15


    100


455,601


12,496


12,496

Subsidiary

TSMC Japan
Yokohama, Japan
Customer service and supporting activities

83,760


83,760


6


    100


139,157


2,334


2,334

Subsidiary

TSMC Korea
Seoul, Korea
Customer service and supporting activities

13,656


13,656


80


    100


44,604


253


253

Subsidiary

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

-


561,975


-


    -


-


445


436

Subsidiary
TSMC Partners
TSMC Development
Delaware, U.S.A.
Investing in companies involved in semiconductor manufacturing
$
(US$
19,489,303
586,939
$
)
$
(US$
19,489,303
586,939
$
)

-


    100

$
(US$
40,550,104
1,221,205
$
)
$
(US$
45,338
1,379
$
)

Note 2

Subsidiary

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

474,234


474,234


-


    100


1,630,451


49,813


Note 2

Subsidiary




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






(US$
49,103
)
(US$
1,515
)





TSMC Canada
Ontario, Canada
Engineering support activities

76,372


76,372


2,300


    100


440,543


10,577


Note 2

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

40,588


41,038


-


    100


-


445


Note 2

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
155,287
$
)
$
(US$
(97,978
(2,980
)
))

Note 2

Subsidiary




























Note 1:    The share of profits/losses of investee includes the effect of unrealized gross profit on intercompany transactions.

Note 2:    The share of profits/losses of the investee company is not reflected herein as such amount is already included in the share of profits/losses of the investor company.

Note 3:    VTAF 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
Main Businesses and
Products
Total Amount of
Paid-in Capital
(RMB in Thousands)
Method of
Investment
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2025
(US$ in Thousands)
Investment Flows
Accumulated
Outflow of
Investment from
Taiwan as of
March 31, 2025
(US$ in
Thousands)
Net Income
(Losses) of the
Investee
Company
Percentage of
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
Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices
$
(RMB
18,939,667
4,502,080

)
(Note 1)
$
(US$
18,939,667
596,000

)
$
-

$
-

$
(US$
18,939,667
596,000

)
$
2,698,822

100%
$
2,714,131
(Note 2)

$
115,213,672

$
-

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

(RMB
30,521,412
6,650,119

)
(Note 1)

(US$
30,521,412
1,000,000

)

-


-


(US$
30,521,412
1,000,000

)

6,173,387

100%

6,169,271
(Note 2)


125,397,830


-

































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

- 59 -