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Equibles

TSM 6-K

Taiwan Semiconductor Manufacturing Co Ltd (TSM)

6-K 2025-08-14 For: 2025-06-30
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Added on April 07, 2026

1934 Act Registration No. 1-14700

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

FORM 6-K

_____________________________

REPORT OF FOREIGN PRIVATE ISSUER

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

THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 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: August 14, 2025 By /s/ Wendell Huang
Wendell Huang
Senior Vice President and Chief Financial Officer

Exhibits

Exhibit Number Exhibit Description
99.1 Consolidated Financial Statements for theSixMonths EndedJune30, 2025 and 2024 and Independent Auditors’ Review Report pursuant to International Financial Reporting Standards adopted by ROC ("Taiwan-IFRSs")

Document

English Translation of Financial Statements Originally Issued in Chinese

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

Consolidated Financial Statements for the

Six Months Ended June 30, 2025 and 2024 and

Independent Auditors’ Review Report

勤業眾信

勤業眾信聯合會計師事務所

110016 台北市信義區松仁路100號20樓

Deloitte & Touche

20F, Taipei Nan Shan Plaza

No. 100, Songren Rd.,

Xinyi Dist., Taipei 110016, Taiwan

Tel :+886 (2) 2725-9988

Fax:+886 (2) 4051-6888

www.deloitte.com.tw

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Shareholders

Taiwan Semiconductor Manufacturing Company Limited

Introduction

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

Scope of Review

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

Conclusion

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

  • 1 -

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

image.jpg

Deloitte & Touche

Taipei, Taiwan

Republic of China

August 12, 2025

Notice to Readers

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

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

  • 2 -

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)
June 30, 2025 December 31, 2024 June 30, 2024
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Amount % Amount % Amount %
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 6) 2,364,524,340 34 2,127,627,043 32 1,799,127,351 30
Financial assets at fair value through profit or loss (Note 7) 1,765,904 - 207,700 - 114,366 -
Financial assets at fair value through other comprehensive income (Note 8) 163,637,740 2 192,202,657 3 185,232,206 3
Financial assets at amortized cost (Note 9) 104,501,262 2 101,971,322 1 64,160,285 1
Hedging financial assets (Note 10) - - 10,959 - 1,409 -
Notes and accounts receivable, net (Note 11) 233,407,179 3 270,683,235 4 209,120,757 3
Receivables from related parties (Note 31) 2,277,792 - 1,404,473 - 1,089,662 -
Other receivables from related parties (Note 31) 2,567,972 - 251 - 2,403,027 -
Inventories (Note 12) 304,193,716 4 287,868,810 4 272,490,587 5
Other financial assets (Notes 28, 29 and 32) 49,202,958 1 63,138,316 1 35,624,485 1
Other current assets 38,838,612 1 43,237,354 1 22,293,958 -
Total current assets 3,264,917,475 47 3,088,352,120 46 2,591,658,093 43
NONCURRENT ASSETS
Financial assets at fair value through profit or loss (Note 7) 13,831,497 - 15,199,842 - 14,714,867 -
Financial assets at fair value through other comprehensive income (Note 8) 7,605,736 - 7,822,884 - 7,223,448 -
Financial assets at amortized cost (Note 9) 81,827,491 1 88,596,542 1 88,680,794 2
Investments accounted for using equity method (Note 13) 34,162,043 1 37,421,105 1 29,600,356 1
Property, plant and equipment (Notes 14 and 28) 3,386,206,352 48 3,234,980,070 48 3,105,860,057 52
Right-of-use assets (Note 15) 43,857,918 1 40,128,391 1 39,512,949 1
Intangible assets (Note 16) 24,707,294 - 26,282,520 1 22,430,599 -
Deferred income tax assets (Note 4) 64,996,327 1 65,943,300 1 65,160,047 1
Refundable deposits 4,854,963 - 5,495,862 - 4,473,796 -
Other noncurrent assets (Notes 28 and 29) 79,382,453 1 81,715,364 1 13,049,008 -
Total noncurrent assets 3,741,432,074 53 3,603,585,880 54 3,390,705,921 57
TOTAL 7,006,349,549 100 6,691,938,000 100 5,982,364,014 100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Financial liabilities at fair value through profit or loss (Note 7) 220,702 - 466,539 - 509,210 -
Hedging financial liabilities (Notes 10 and 29) 2,384 - - - 3,524 -
Accounts payable 83,495,172 1 72,800,558 1 62,763,059 1
Payables to related parties (Note 31) 1,276,538 - 1,426,001 - 1,184,013 -
Salary and bonus payable 46,014,993 1 47,451,509 1 29,412,298 -
Accrued profit sharing bonus to employees and compensation to directors (Note 27) 116,534,813 2 70,871,150 1 79,199,148 1
Payables to contractors and equipment suppliers 161,416,417 2 192,635,173 3 136,744,351 2
Cash dividends payable (Note 19) 246,672,182 4 220,418,821 3 194,600,069 3
Income tax payable (Note 4) 182,884,380 3 147,438,423 2 110,302,021 2
Long-term liabilities - current portion (Notes 17, 18 and 29) 94,213,641 1 59,857,879 1 23,075,426 -
Accrued expenses and other current liabilities (Notes 15, 20 and 29) 444,583,112 6 451,158,911 7 411,122,561 8
Total current liabilities 1,377,314,334 20 1,264,524,964 19 1,048,915,680 17
NONCURRENT LIABILITIES
Bonds payable (Notes 17 and 29) 848,534,856 12 926,604,506 14 965,313,898 16
Long-term bank loans (Notes 18 and 29) 35,136,246 1 31,824,386 - 9,029,765 -
Deferred income tax liabilities (Note 4) 3,954,595 - 3,988,482 - 57,243 -
Lease liabilities (Notes 15 and 29) 31,363,997 - 28,755,342 - 28,221,881 1
Net defined benefit liability (Note 4) 5,355,403 - 7,580,657 - 7,702,315 -
Guarantee deposits 714,229 - 845,581 - 953,045 -
Others (Note 20) 87,344,039 1 104,238,217 2 102,021,982 2
Total noncurrent liabilities 1,012,403,365 14 1,103,837,171 16 1,113,300,129 19
Total liabilities 2,389,717,699 34 2,368,362,135 35 2,162,215,809 36
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
Capital stock (Note 19) 259,326,155 4 259,327,332 4 259,336,292 4
Capital surplus (Notes 19 and 26) 73,326,265 1 73,260,765 2 70,940,676 1
Retained earnings (Note 19)
Appropriated as legal capital reserve 311,146,899 4 311,146,899 4 311,146,899 5
Unappropriated earnings 4,119,740,394 59 3,606,105,124 54 3,127,527,816 52
4,430,887,293 63 3,917,252,023 58 3,438,674,715 57
Others (Notes 19 and 26) (182,465,738 ) (3 ) 38,705,047 - 25,540,368 1
Treasury stock (Note 19) - - - - (3,089,177 ) -
Equity attributable to shareholders of the parent 4,581,073,975 65 4,288,545,167 64 3,791,402,874 63
NON - CONTROLLING INTERESTS 35,557,875 1 35,030,698 1 28,745,331 1
Total equity 4,616,631,850 66 4,323,575,865 65 3,820,148,205 64
TOTAL 7,006,349,549 100 6,691,938,000 100 5,982,364,014 100

All values are in US Dollars.

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

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Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
For the Three Months Ended June 30 For the Six Months Ended June 30
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Amount % Amount % Amount % Amount %
NET REVENUE (Notes 20, 31 and 37) 933,791,869 100 673,510,177 100 1,773,045,533 100 1,266,154,378 100
COST OF REVENUE (Notes 12, 27, 31 and 34) 386,422,631 41 315,385,699 47 732,281,219 41 593,524,631 47
GROSS PROFIT 547,369,238 59 358,124,478 53 1,040,764,314 59 672,629,747 53
OPERATING EXPENSES (Notes 27 and 31)
Research and development 61,279,719 7 48,057,704 7 117,827,212 7 94,166,640 7
General and administrative 18,955,373 2 19,290,282 3 43,839,121 3 35,427,368 3
Marketing 4,273,247 - 2,947,324 - 8,028,062 - 6,058,583 1
Total operating expenses 84,508,339 9 70,295,310 10 169,694,395 10 135,652,591 11
OTHER OPERATING INCOME AND EXPENSES, NET (Notes 14, 27 and 34) 562,739 - (1,273,626 ) - (565,473 ) - (1,403,308 ) -
INCOME FROM OPERATIONS (Note 37) 463,423,638 50 286,555,542 43 870,504,446 49 535,573,848 42
NON-OPERATING INCOME AND EXPENSES
Share of profits of associates 1,220,948 - 1,152,225 - 2,589,255 - 2,030,226 -
Interest income (Note 21) 25,191,998 3 20,979,233 3 50,051,310 3 40,338,405 3
Other income 412,043 - 203,256 - 463,552 - 275,135 -
Foreign exchange gain (loss), net (Note 35) (4,782,532 ) (1 ) 2,184,993 - (1,244,213 ) - 5,381,986 -
Finance costs (Note 22) (3,691,095 ) - (2,638,140 ) (1 ) (6,368,369 ) - (5,336,395 ) -
Other gains and losses, net (Note 23) 11,260,204 1 (2,126,534 ) - 7,934,635 - (5,409,426 ) -
Total non-operating income and expenses 29,611,566 3 19,755,033 2 53,426,170 3 37,279,931 3
INCOME BEFORE INCOME TAX 493,035,204 53 306,310,575 45 923,930,616 52 572,853,779 45
INCOME TAX EXPENSE (Notes 4 and 24) 95,541,780 10 58,649,137 8 165,704,531 9 99,971,078 8
NET INCOME 397,493,424 43 247,661,438 37 758,226,085 43 472,882,701 37
OTHER COMPREHENSIVE INCOME (LOSS) (Notes 19 and 24)
Items that will not be reclassified subsequently to profit or loss:
Unrealized gain on investments in equity instruments at fair value through other comprehensive income 1,982,348 - 760,248 - 1,608,828 - 5,663,581 1
Loss on hedging instruments (31,030 ) - - - (31,030 ) - - -
Share of other comprehensive loss of associates (27,249 ) - (802 ) - (95,903 ) - (2,360 ) -
Income tax expense related to items that will not be reclassified subsequently - - - - - - (9,996 ) -
1,924,069 - 759,446 - 1,481,895 - 5,651,225 1
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations (256,492,873 ) (28 ) 12,373,183 2 (226,272,181 ) (13 ) 49,178,567 4
Unrealized gain/(loss) on investments in debt instruments at fair value through other comprehensive income 812,218 - 291,082 - 2,865,452 - (267,207 ) -
Loss on hedging instruments (20,105 ) - (20,101 ) - (41,173 ) - (39,416 ) -
Share of other comprehensive income (loss) of associates (725,190 ) - 60,989 - (638,946 ) - 215,378 -
(256,425,950 ) (28 ) 12,705,153 2 (224,086,848 ) (13 ) 49,087,322 4
Other comprehensive income (loss), net of income tax (254,501,881 ) (28 ) 13,464,599 2 (222,604,953 ) (13 ) 54,738,547 5
TOTAL COMPREHENSIVE INCOME 142,991,543 15 261,126,037 39 535,621,132 30 527,621,248 42
NET INCOME ATTRIBUTABLE TO:
Shareholders of the parent 398,273,102 43 247,845,528 37 759,837,230 43 473,330,405 37
Non-controlling interests (779,678 ) - (184,090 ) - (1,611,145 ) - (447,704 ) -
397,493,424 43 247,661,438 37 758,226,085 43 472,882,701 37
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Shareholders of the parent 146,202,878 15 262,265,420 39 538,015,970 30 529,663,992 42
Non-controlling interests (3,211,335 ) - (1,139,383 ) - (2,394,838 ) - (2,042,744 ) -
142,991,543 15 261,126,037 39 535,621,132 30 527,621,248 42
EARNINGS PER SHARE (NT$, Note 25)
Basic earnings per share 15.36 9.56 29.31 18.25
Diluted earnings per share 15.36 9.56 29.30 18.25

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

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Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)
Equity Attributable to Shareholders of the Parent
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Others
Unrealized
Gain (Loss) on
Financial
Assets at Fair
Foreign Value Through Unearned
Capital Stock - Common Stock Retained Earnings Currency Other Gain (Loss) on Stock-Based
Shares Legal Capital Unappropriated Translation Comprehensive Hedging Employee Treasury Non-controlling Total
(In Thousands) Amount Capital Surplus Reserve Earnings Total Reserve Income Instruments Compensation Total Stock Total Interests Equity
BALANCE, JANUARY 1, 2024 25,932,071 259,320,710 69,876,381 311,146,899 2,846,883,893 3,158,030,792 (25,316,769 ) (4,099,928 ) 1,395,875 (293,434 ) (28,314,256 ) - 3,458,913,627 24,349,220 3,483,262,847
Appropriations of earnings
Cash dividends to shareholders - - - - (194,496,765 ) (194,496,765 ) - - - - - - (194,496,765 ) - (194,496,765 )
Total - - - - (194,496,765 ) (194,496,765 ) - - - - - - (194,496,765 ) - (194,496,765 )
Net income - - - - 473,330,405 473,330,405 - - - - - - 473,330,405 (447,704 ) 472,882,701
Other comprehensive income (loss), net of income tax - - - - - - 50,999,678 5,354,003 (20,094 ) - 56,333,587 - 56,333,587 (1,595,040 ) 54,738,547
Total comprehensive income (loss) - - - - 473,330,405 473,330,405 50,999,678 5,354,003 (20,094 ) - 56,333,587 - 529,663,992 (2,042,744 ) 527,621,248
Employee restricted shares retired (1,402 ) (14,018 ) 14,018 - 19,934 19,934 - - - - - - 19,934 - 19,934
Share-based payment arrangements 2,960 29,600 1,049,113 - - - - - - (685,904 ) (685,904 ) - 392,809 - 392,809
Treasury stock acquired - - - - - - - - - - - (3,089,177 ) (3,089,177 ) - (3,089,177 )
Disposal of investments in equity instruments at fair value through other comprehensive income - - - - 1,790,349 1,790,349 - (1,790,349 ) - - (1,790,349 ) - - - -
Basis adjustment for loss on hedging instruments - - - - - - - - (2,710 ) - (2,710 ) - (2,710 ) - (2,710 )
Adjustments to share of changes in equities of associates - - 5,375 - - - - - - - - - 5,375 - 5,375
From difference between the consideration received and the carrying amount of the subsidiaries' net assets during actual disposal - - 5,284 - - - - - - - - - 5,284 (4,263 ) 1,021
From share of changes in equities of subsidiaries - - (9,495 ) - - - - - - - - - (9,495 ) 6,541,357 6,531,862
Decrease in non-controlling interests - - - - - - - - - - - - - (98,239 ) (98,239 )
BALANCE, JUNE 30, 2024 25,933,629 259,336,292 70,940,676 311,146,899 3,127,527,816 3,438,674,715 25,682,909 (536,274 ) 1,373,071 (979,338 ) 25,540,368 (3,089,177 ) 3,791,402,874 28,745,331 3,820,148,205
BALANCE, JANUARY 1, 2025 25,932,733 259,327,332 73,260,765 311,146,899 3,606,105,124 3,917,252,023 40,262,995 (1,160,176 ) 1,310,307 (1,708,079 ) 38,705,047 - 4,288,545,167 35,030,698 4,323,575,865
Appropriations of earnings
Cash dividends to shareholders - - - - (246,360,378 ) (246,360,378 ) - - - - - - (246,360,378 ) - (246,360,378 )
Total - - - - (246,360,378 ) (246,360,378 ) - - - - - - (246,360,378 ) - (246,360,378 )
Net income - - - - 759,837,230 759,837,230 - - - - - - 759,837,230 (1,611,145 ) 758,226,085
Other comprehensive income (loss), net of income tax - - - - (35 ) (35 ) (226,127,300 ) 4,360,969 (54,894 ) - (221,821,225 ) - (221,821,260 ) (783,693 ) (222,604,953 )
Total comprehensive income (loss) - - - - 759,837,195 759,837,195 (226,127,300 ) 4,360,969 (54,894 ) - (221,821,225 ) - 538,015,970 (2,394,838 ) 535,621,132
Employee restricted shares retired (118 ) (1,177 ) 1,177 - 2,459 2,459 - - - - - - 2,459 - 2,459
Share-based payment arrangements - - - - - - - - - 797,188 797,188 - 797,188 - 797,188
Disposal of investments in equity instruments at fair value through other comprehensive income - - - - 155,994 155,994 - (155,994 ) - - (155,994 ) - - - -
Basis adjustment for gain on hedging instruments - - - - - - - - 9,246 - 9,246 - 9,246 - 9,246
Adjustments to share of changes in equities of associates - - 79,432 - - - - - - - - - 79,432 - 79,432
From share of changes in equities of subsidiaries - - (15,109 ) - - - - - - - - - (15,109 ) 8,146 (6,963 )
Increase in non-controlling interests - - - - - - - - - - - - - 2,913,869 2,913,869
BALANCE, JUNE 30, 2025 25,932,615 259,326,155 73,326,265 311,146,899 4,119,740,394 4,430,887,293 (185,864,305 ) 3,044,799 1,264,659 (910,891 ) (182,465,738 ) - 4,581,073,975 35,557,875 4,616,631,850

All values are in US Dollars.

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

  • 5 -

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)
Six Months Ended June 30
--- --- --- --- --- --- --- ---
2025 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax 923,930,616 572,853,779
Adjustments for:
Depreciation expense 359,012,194 319,626,411
Amortization expense 4,184,797 4,563,345
Expected credit losses recognized (reversal) on investments in debt instruments (25,220 ) 18,755
Finance costs 6,368,369 5,336,395
Share of profits of associates (2,589,255 ) (2,030,226 )
Interest income (50,051,310 ) (40,338,405 )
Share-based compensation 799,647 412,787
Loss on disposal or retirement of property, plant and equipment, net 1,235,418 1,267,199
Loss on disposal or retirement of intangible assets, net 2,071 -
Impairment loss on property, plant and equipment 1,670,522 1,150,485
Loss (gain) on financial instruments at fair value through profit or loss, net (204,315 ) 184,681
Loss on disposal of investments in debt instruments at fair value through other comprehensive income, net 82,845 205,086
Loss from disposal of subsidiaries 167,986 -
Loss (gain) on foreign exchange, net (17,895,105 ) 4,119,804
Dividend income (463,552 ) (275,135 )
Others 583,464 (137,311 )
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss (1,796,243 ) 1,081,788
Notes and accounts receivable, net 37,276,056 (7,806,910 )
Receivables from related parties (873,319 ) (465,211 )
Other receivables from related parties (10,235 ) (19,586 )
Inventories (16,324,906 ) (21,493,499 )
Other financial assets (9,975,826 ) (5,606,448 )
Other current assets 3,428,197 3,561,403
Other noncurrent assets (2,609,468 ) (2,525,072 )
Accounts payable 10,694,614 7,036,302
Payables to related parties (149,463 ) (382,287 )
Salary and bonus payable (1,436,516 ) (3,788,265 )
Accrued profit sharing bonus to employees and compensation to directors 45,663,663 28,482,204
Accrued expenses and other current liabilities (29,100,990 ) 26,805,039
Other noncurrent liabilities (7,848,202 ) 12,851,565
Net defined benefit liability (2,225,254 ) (1,554,909 )
Cash generated from operations 1,251,521,280 903,133,764
Income taxes paid (128,883,523 ) (89,154,446 )
Net cash generated by operating activities 1,122,637,757 813,979,318

All values are in US Dollars.

(Continued)

  • 6 -

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)
Six Months Ended June 30
--- --- --- --- --- --- --- ---
2025 2024
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Financial instruments at fair value through profit or loss (128,359 ) (458,776 )
Financial assets at fair value through other comprehensive income (37,351,763 ) (43,780,180 )
Financial assets at amortized cost (95,249,939 ) (64,823,727 )
Hedging financial instruments (631,620 ) -
Property, plant and equipment (628,052,531 ) (386,979,486 )
Intangible assets (4,616,458 ) (5,061,779 )
Proceeds from disposal or redemption of:
Financial assets at fair value through other comprehensive income 49,745,299 28,414,789
Financial assets at amortized cost 77,925,126 66,310,102
Property, plant and equipment 245,283 492,765
Intangible assets - 49,293
Proceeds from return of capital of investments in equity instruments at fair value through other comprehensive income 4,976 117,483
Derecognition of hedging financial instruments 574,700 52,303
Interest received 50,443,657 36,605,013
Proceeds from government grants - property, plant and equipment 67,128,197 7,956,413
Proceeds from government grants - others - 267
Other dividends received 438,461 241,872
Dividends received from investments accounted for using equity method 747,006 653,631
Increase in prepayments for leases (17,174 ) (28,193 )
Refundable deposits paid (282,366 ) (122,271 )
Refundable deposits refunded 396,772 2,946,160
Net cash used in investing activities (518,680,733 ) (357,414,321 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in hedging financial liabilities - bank loans 430,085 (26,496,570 )
Proceeds from issuance of bonds 33,300,000 34,300,000
Repayment of bonds (13,400,000 ) -
Proceeds from long-term bank loans 5,395,000 6,378,000
Repayment of long-term bank loans (1,438,333 ) (1,055,556 )
Payments for transaction costs attributable to the issuance of bonds (34,820 ) (35,581 )
Treasury stock acquired - (3,089,177 )
Repayment of the principal portion of lease liabilities (1,645,424 ) (1,473,137 )
Interest paid (9,738,700 ) (8,419,668 )
Guarantee deposits received 1,000 2,573
Guarantee deposits refunded (41,853 ) (20,528 )
Cash dividends (220,418,821 ) (168,558,461 )
Disposal of ownership interests in subsidiaries (without losing control) - 1,021
Increase in non-controlling interests 3,225,673 6,536,884
Net cash used in financing activities (204,366,193 ) (161,930,200 )

All values are in US Dollars.

(Continued)

  • 7 -

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)
Six Months Ended June 30
--- --- --- --- --- --- --- ---
2025 2024
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (162,693,534 ) 39,064,801
NET INCREASE IN CASH AND CASH EQUIVALENTS 236,897,297 333,699,598
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,127,627,043 1,465,427,753
CASH AND CASH EQUIVALENTS, END OF PERIOD 2,364,524,340 1,799,127,351

All values are in US Dollars.

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

(Concluded)

  • 8 -

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED June 30, 2025 and 2024

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

1.GENERAL

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

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

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

2.THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on August 12, 2025.

3.APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

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

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

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

New, Amended and Revised Standards and Interpretations Effective Date Issued<br>by IASB
Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” - the amendments to the application guidance of classification of financial assets January 1, 2026
Annual Improvements to IFRS Accounting Standards - Volume 11 January 1, 2026
Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity” January 1, 2026
  • 9 -

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

New, Amended and Revised Standards and Interpretations Effective Date Issued<br>by IASB
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” To be determined by IASB
IFRS 18 “Presentation and Disclosure in Financial Statements” January 1, 2027

IFRS 18 “Presentation and Disclosure in Financial Statements”

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

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

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

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

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

4.SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

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

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

Statement of Compliance

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

  • 10 -

Basis of Consolidation

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

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

The subsidiaries in the consolidated financial statements

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

Establishment Percentage of Ownership
Name of Investor Name of Investee Main Businesses and Products and Operating<br><br>Location June 30,<br><br>2025 December 31,<br><br>2024 June 30,<br><br>2024 Note
TSMC TSMC North America Sales and marketing of integrated circuits and other semiconductor devices San Jose, California, U.S.A. 100% 100% 100% -
TSMC Europe B.V. (TSMC Europe) Customer service and supporting activities Amsterdam, the Netherlands 100% 100% 100% a)
TSMC Japan Limited (TSMC Japan) Customer service and supporting activities Yokohama, Japan 100% 100% 100% a)
TSMC Design Technology Japan, Inc. (TSMC JDC) Engineering support activities Yokohama, Japan 100% 100% 100% a)
TSMC Japan 3DIC R&D Center, Inc. (TSMC 3DIC) Engineering support activities Yokohama, Japan 100% 100% 100% a)
TSMC Korea Limited (TSMC Korea) Customer service and supporting activities Seoul, Korea 100% 100% 100% a)
TSMC Partners, Ltd. (TSMC Partners) Investing in companies involved in the semiconductor design and manufacturing, and other investment activities Tortola, British Virgin Islands 100% 100% 100% -
TSMC Global Ltd. (TSMC Global) Investment activities Tortola, British Virgin Islands 100% 100% 100% -
TSMC China Company Limited (TSMC China) Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices Shanghai, China 100% 100% 100% -
TSMC Nanjing Company Limited (TSMC Nanjing) Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices Nanjing, China 100% 100% 100% -
VisEra Technologies Company Ltd. (VisEra Tech) Research, design, development, manufacturing, sales, packaging and test of color filter Hsinchu, Taiwan 67% 67% 67% c)
TSMC Arizona Corporation (TSMC Arizona) Manufacturing, sales and testing of integrated circuits and other semiconductor devices Phoenix, Arizona, U.S.A. 100% 100% 100% -
Japan Advanced Semiconductor Manufacturing, Inc. (JASM) Manufacturing, sales and testing of integrated circuits and other semiconductor devices Kumamoto, Japan 73% 73% 71% d)
European Semiconductor Manufacturing Company (ESMC) GmbH (ESMC) Manufacturing, sales and testing of integrated circuits and other semiconductor devices Dresden, Germany 70% 70% 70% -
VentureTech Alliance Fund II, L.P. (VTAF II) Investing in technology start-up companies Cayman Islands - 98% 98% b), e)
VentureTech Alliance Fund III, L.P. (VTAF III) Investing in technology start-up companies Cayman Islands - 98% 98% b), e)
Emerging Fund, L.P. (Emerging Fund) Investing in technology start-up companies Cayman Islands 99.9% 99.9% 99.9% b)
TSMC Partners TSMC Development, Inc. (TSMC Development) Investing in companies involved in semiconductor manufacturing Delaware, U.S.A. 100% 100% 100% -
TSMC Technology, Inc. (TSMC Technology) Engineering support activities Delaware, U.S.A. 100% 100% 100% a)
TSMC Design Technology Canada Inc. (TSMC Canada) Engineering support activities Ontario, Canada 100% 100% 100% a)
VTAF III Growth Fund Limited (Growth Fund) Investing in technology start-up companies Cayman Islands - 100% 100% b), e)
TSMC Development TSMC Washington, LLC (TSMC Washington) Manufacturing, sales and testing of integrated circuits and other semiconductor devices Washington, U.S.A. 100% 100% 100% -

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

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

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

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

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

  • 11 -

Retirement Benefits

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

Taxation

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

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

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

6.CASH AND CASH EQUIVALENTS

June 30,2025 December 31,2024 June 30,2024
Cash and deposits in banks 2,333,623,182 2,120,674,818 1,788,609,195
Money market funds 28,123,554 2,826,701 3,124,436
Government bonds/Agency bonds 1,728,061 - -
Repurchase agreements 1,049,543 2,126,975 1,654,599
Commercial paper - 1,998,549 5,739,121
2,364,524,340 2,127,627,043 1,799,127,351

All values are in US Dollars.

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

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

June 30,2025 December 31,2024 June 30,2024
Financial assets
Mandatorily measured at FVTPL
Convertible preferred stocks 12,617,717 14,181,839 14,061,522
Forward exchange contracts 1,765,904 207,700 9,787
Mutual funds 1,097,164 886,931 523,385
Simple agreement for future equity 116,616 131,072 129,960
Convertible bonds - - 104,579
15,597,401 15,407,542 14,829,233

All values are in US Dollars.

(Continued)

  • 12 -
June 30,2025 December 31,2024 June 30,2024
Current 1,765,904 207,700 114,366
Noncurrent 13,831,497 15,199,842 14,714,867
15,597,401 15,407,542 14,829,233
Financial liabilities
Held for trading
Forward exchange contracts 220,702 466,539 509,210

All values are in US Dollars.

(Concluded)

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

Outstanding forward exchange contracts consisted of the following:

Contract Amount
Maturity Date (In Thousands)
June 30, 2025
Sell US$ July 2025 to September 2025 US$ 4,220,500
Sell JPY July 2025 JPY 39,505,545
December 31, 2024
Sell US$ January 2025 to March 2025 US$ 3,331,445
Sell JPY January 2025 JPY 45,233,963
June 30, 2024
Sell US$ July 2024 to August 2024 US$ 4,008,000

8.FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

June 30,2025 December 31,2024 June 30,2024
Investments in debt instruments at FVTOCI
Corporate bonds 80,137,883 108,612,082 98,654,521
Agency mortgage-backed securities 46,016,814 46,611,373 43,121,977
Government bonds/Agency bonds 23,173,091 20,645,877 22,784,341
Asset-backed securities 9,019,262 11,490,511 12,305,253
158,347,050 187,359,843 176,866,092
Investments in equity instruments at FVTOCI
Non-publicly traded equity investments 7,605,736 7,822,884 7,223,448
Publicly traded stocks 5,290,690 4,842,814 8,366,114
12,896,426 12,665,698 15,589,562
171,243,476 200,025,541 192,455,654

All values are in US Dollars.

(Continued)

  • 13 -
June 30,2025 December 31,2024 June 30,2024
Current 163,637,740 192,202,657 185,232,206
Noncurrent 7,605,736 7,822,884 7,223,448
171,243,476 200,025,541 192,455,654

All values are in US Dollars.

(Concluded)

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

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

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

9.FINANCIAL ASSETS AT AMORTIZED COST

June 30,2025 December 31,2024 June 30,2024
Corporate bonds 176,321,657 172,091,958 124,079,577
Commercial paper 6,209,030 14,221,737 21,758,780
Government bonds/Agency bonds 3,901,492 4,379,527 7,098,457
Less: Allowance for impairment loss (103,426 ) (125,358 ) (95,735 )
186,328,753 190,567,864 152,841,079
Current 104,501,262 101,971,322 64,160,285
Noncurrent 81,827,491 88,596,542 88,680,794
186,328,753 190,567,864 152,841,079

All values are in US Dollars.

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

10.HEDGING FINANCIAL INSTRUMENTS

June 30,2025 December 31,2024 June 30,2024
Financial assets - current
Fair value hedges
Interest rate futures contracts - 10,959 1,409
Financial liabilities - current
Fair value hedges
Interest rate futures contracts 2,384 - 3,524

All values are in US Dollars.

  • 14 -

Fair value hedge

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

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

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

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

June 30, 2025

Hedging Instruments Contract Amount<br><br>(US$ in Thousands) Maturity
Interest rate futures contracts - US Treasury futures US$ 7,600 September 2025
Hedged Items Asset Carrying Amount Accumulated Amount of Fair Value Hedge Adjustments
--- --- ---
Financial assets at FVTOCI 766,126 $ 2,384

All values are in US Dollars.

December 31, 2024

Hedging Instruments Contract Amount<br><br>(US$ in Thousands) Maturity
Interest rate futures contracts - US Treasury futures US$ 40,400 March 2025
Hedged Items Asset Carrying Amount Accumulated Amount of Fair Value Hedge Adjustments
--- --- ---
Financial assets at FVTOCI 3,129,235 $ (10,959)

All values are in US Dollars.

June 30, 2024

Hedging Instruments Contract Amount<br><br>(US$ in Thousands) Maturity
Interest rate futures contracts - US Treasury futures US$ 18,000 September 2024
Hedged Items Asset Carrying Amount Accumulated Amount of Fair Value Hedge Adjustments
--- --- ---
Financial assets at FVTOCI 1,721,119 $ 2,115

All values are in US Dollars.

  • 15 -

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

Change in Value Used for Calculating Hedge Ineffectiveness
Six Months Ended June 30
Hedging Instruments/Hedged Items 2025 2024
Hedging Instruments
Interest rate futures contracts - US Treasury futures (39,615 ) 95,204
Hedged Items
Financial assets at FVTOCI 39,615 (95,204 )
- -

All values are in US Dollars.

Cash flow hedge

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

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

The main source of hedge ineffectiveness in these hedging relationships is driven by the effect of the counterparty’s own credit risk on the fair value of foreign currency deposits. No other sources of ineffectiveness have emerged from these hedging relationships during the hedging period. Refer to Note 19 (d) for gain or loss arising from changes in the fair value of hedging instruments and hedged item affects profit or loss, and the amount transferred to initial carrying amount of hedged items.

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

Change in Value Used for Calculating HedgeIneffectiveness
Hedging Instruments/Hedged Items Six Months Ended June 30, 2025
Hedging Instruments
Foreign currency deposits (31,030 )
Hedged Items
Forecast transaction (capital expenditures) 31,030

All values are in US Dollars.

Hedges of net investments in foreign operations

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

The main source of hedge ineffectiveness in these hedging relationships is driven by the material difference between the notional amount of bank loans denominated in foreign currency and the net investment in foreign operations. No other sources of ineffectiveness have emerged from these hedging relationships during the

  • 16 -

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

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

Change in Value Used for Calculating HedgeIneffectiveness
Six Months Ended June 30
Hedging Instruments/Hedged Items 2025 2024
Hedging Instruments
Bank loans 430,085 793,830
Hedged Items
Net investments in foreign operations (430,085 ) (793,830 )

All values are in US Dollars.

11.NOTES AND ACCOUNTS RECEIVABLE, NET

June 30,2025 December 31,2024 June 30,2024
At amortized cost
Notes and accounts receivable 226,439,255 265,223,660 204,140,555
Less: Loss allowance (399,415 ) (453,009 ) (454,497 )
226,039,840 264,770,651 203,686,058
At FVTOCI 7,367,339 5,912,584 5,434,699
233,407,179 270,683,235 209,120,757

All values are in US Dollars.

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

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

Aging analysis of notes and accounts receivable

June 30,2025 December 31,2024 June 30,2024
Not past due 219,476,668 255,669,647 192,620,963
Past due
Past due within 30 days 14,329,911 15,464,122 16,953,864
Past due over 31 days 15 2,475 427
Less: Loss allowance (399,415 ) (453,009 ) (454,497 )
233,407,179 270,683,235 209,120,757

All values are in US Dollars.

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

  • 17 -

Movements of the loss allowance for accounts receivable

Six Months Ended June 30
2025 2024
Balance, beginning of period 453,009 531,554
Reversal (53,527 ) (77,124 )
Effect of exchange rate changes (67 ) 67
Balance, end of period 399,415 454,497

All values are in US Dollars.

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

12.INVENTORIES

June 30,2025 December 31,2024 June 30,2024
Finished goods 32,076,396 35,177,009 33,454,131
Work in process 198,740,785 181,198,808 174,849,778
Raw materials 47,907,755 46,449,249 41,416,081
Supplies and spare parts 25,468,780 25,043,744 22,770,597
304,193,716 287,868,810 272,490,587

All values are in US Dollars.

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

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Net inventory losses (reversal of write-down of inventories) 103,900 (2,268,761 ) 2,630,365 (2,036,276 )

All values are in US Dollars.

13.INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Associates consisted of the following:

Place of Carrying Amount % of Ownership and Voting Rights<br><br>Held by the Company
Name of Associate Principal Activities Incorporation and Operation June 30,2025 December 31,2024 June 30,2024 June 30,<br><br>2025 December 31,<br><br>2024 June 30,<br><br>2024
Vanguard International Semiconductor Corporation (VIS) Manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks Hsinchu, Taiwan 16,599,832 18,300,373 12,577,096 28% 28% 28%
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC) Manufacturing and sales of integrated circuits and other semiconductor devices Singapore 10,699,204 11,387,185 10,625,033 39% 39% 39%

All values are in US Dollars.

(Continued)

  • 18 -
Place of Carrying Amount % of Ownership and Voting Rights<br><br>Held by the Company
Name of Associate Principal Activities Incorporation and Operation June 30,2025 December 31,2024 June 30,2024 June 30,<br><br>2025 December 31,<br><br>2024 June 30,<br><br>2024
Xintec Inc. (Xintec) Wafer level chip size packaging and wafer level post passivation interconnection service Taoyuan, Taiwan 4,109,929 4,220,609 3,797,975 41% 41% 41%
Global Unichip Corporation (GUC) Researching, developing, manufacturing, testing and marketing of integrated circuits Hsinchu, Taiwan 2,753,078 3,512,938 2,600,252 35% 35% 35%
34,162,043 37,421,105 29,600,356

All values are in US Dollars.

(Concluded)

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

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

Name of Associate June 30,2025 December 31,2024 June 30,2024
GUC 60,927,656 63,495,488 74,934,014
VIS 50,924,287 50,620,261 60,116,942
Xintec 16,414,084 22,033,821 20,030,747

All values are in US Dollars.

14.PROPERTY, PLANT AND EQUIPMENT

June 30,2025 December 31,2024 June 30,2024
Assets used by the Company 3,384,953,044 3,234,778,389 3,105,642,523
Assets subject to operating leases 1,253,308 201,681 217,534
3,386,206,352 3,234,980,070 3,105,860,057

All values are in US Dollars.

Assets used by the Company

Land and Land Improvements Buildings Machinery and Equipment Office Equipment Equipment under Installation and Construction in Progress Total
Cost
Balance at January 1, 2025 13,054,161 959,133,864 5,852,202,689 105,434,750 1,080,284,237 8,010,109,701
Additions (deductions) 121,919 248,872,681 339,781,756 14,465,762 (24,819,915 ) 578,422,203
Disposals or retirements - (96,094 ) (19,975,634 ) (873,885 ) - (20,945,613 )
Transfers to assets subject to operating leases - (1,197,245 ) - - - (1,197,245 )
Effect of exchange rate changes (508,290 ) (32,289,583 ) (45,682,789 ) (1,620,552 ) (13,358,251 ) (93,459,465 )
Balance at June 30, 2025 12,667,790 1,174,423,623 6,126,326,022 117,406,075 1,042,106,071 8,472,929,581
Accumulated depreciation<br><br>and impairment________
Balance at January 1, 2025 608,531 440,369,241 4,262,882,850 70,679,950 790,740 4,775,331,312
Additions 9,756 34,372,332 315,655,919 6,962,695 - 357,000,702
Disposals or retirements - (69,575 ) (18,535,834 ) (869,223 ) - (19,474,632 )
Transfers to assets subject to operating leases - (129,702 ) - - - (129,702 )
Impairment - - 1,670,522 - - 1,670,522
Effect of exchange rate changes (67,973 ) (3,765,303 ) (22,007,529 ) (580,860 ) - (26,421,665 )
Balance at June 30, 2025 550,314 470,776,993 4,539,665,928 76,192,562 790,740 5,087,976,537
Carrying amounts at January 1, 2025 12,445,630 518,764,623 1,589,319,839 34,754,800 1,079,493,497 3,234,778,389
Carrying amounts at June 30, 2025 12,117,476 703,646,630 1,586,660,094 41,213,513 1,041,315,331 3,384,953,044

All values are in US Dollars.

(Continued)

  • 19 -
Land and Land Improvements Buildings Machinery and Equipment Office Equipment Equipment under Installation and Construction in Progress Total
Cost
Balance at January 1, 2024 7,621,997 817,822,975 5,384,985,648 99,825,084 908,289,751 7,218,545,455
Additions 5,464,469 41,128,292 287,100,670 6,210,996 2,507,446 342,411,873
Disposals or retirements (278,309 ) (56,649 ) (14,645,243 ) (7,112,608 ) - (22,092,809 )
Transfers to assets subject to operating leases - (197,752 ) - - - (197,752 )
Effect of exchange rate changes 144,132 1,216,813 9,106,652 232,471 17,182,196 27,882,264
Balance at June 30, 2024 12,952,289 859,913,679 5,666,547,727 99,155,943 927,979,393 7,566,549,031
Accumulated depreciation<br><br>and impairment___________
Balance at January 1, 2024 558,074 387,013,911 3,699,008,492 66,749,979 790,740 4,154,121,196
Additions 3,715 25,532,552 286,350,894 5,871,978 - 317,759,139
Disposals or retirements - (56,540 ) (13,125,143 ) (7,111,497 ) - (20,293,180 )
Transfers to assets subject to operating leases - (14,367 ) - - - (14,367 )
Impairment - 47,539 1,102,946 - - 1,150,485
Effect of exchange rate changes 31,663 1,079,719 6,885,795 186,058 - 8,183,235
Balance at June 30, 2024 593,452 413,602,814 3,980,222,984 65,696,518 790,740 4,460,906,508
Carrying amounts at January 1, 2024 7,063,923 430,809,064 1,685,977,156 33,075,105 907,499,011 3,064,424,259
Carrying amounts at June 30, 2024 12,358,837 446,310,865 1,686,324,743 33,459,425 927,188,653 3,105,642,523

All values are in US Dollars.

(Concluded)

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

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

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

Information about capitalized interest is set out in Note 22.

15.LEASE ARRANGEMENTS

a. Right-of-use assets

June 30,2025 December 31,2024 June 30,2024
Carrying amounts
Land 39,936,860 36,980,971 37,005,246
Buildings 3,874,921 3,103,902 2,463,830
Office equipment 46,137 43,518 43,873
43,857,918 40,128,391 39,512,949

All values are in US Dollars.

  • 20 -
Six Months Ended June 30
2025 2024
Additions to right-of-use assets 6,147,227 2,108,125

All values are in US Dollars.

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Depreciation of right-of-use assets
Land 728,775 618,480 1,419,125 1,234,432
Buildings 287,408 252,068 565,045 604,370
Office equipment 5,982 5,965 11,406 11,894
1,022,165 876,513 1,995,576 1,850,696

All values are in US Dollars.

b. Lease liabilities

June 30,2025 December 31,2024 June 30,2024
Carrying amounts
Current portion (classified under accrued expenses and other current liabilities) 3,723,801 3,049,032 2,620,895
Noncurrent portion 31,363,997 28,755,342 28,221,881
35,087,798 31,804,374 30,842,776

All values are in US Dollars.

Ranges of discount rates for lease liabilities are as follows:

June 30,<br><br>2025 December 31,<br><br>2024 June 30,<br><br>2024
Land 0.39%-3.30% 0.39%-2.30% 0.39%-2.30%
Buildings 0.40%-6.52% 0.40%-6.52% 0.40%-6.52%
Office equipment 0.28%-6.46% 0.28%-6.46% 0.28%-7.13%

c. Material terms of right-of-use assets

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

d. Other lease information

Six Months Ended June 30
2025 2024
Total cash outflow for leases 2,018,618 1,704,827

All values are in US Dollars.

  • 21 -

16.INTANGIBLE ASSETS

Goodwill Technology License Fees Software and System Design Costs Patent and Others Total
Cost
Balance at January 1, 2025 6,070,864 28,566,518 53,279,044 13,133,519 101,049,945
Additions - 88,794 2,848,922 295,787 3,233,503
Disposals or retirements - (82,471 ) (157,972 ) (53,741 ) (294,184 )
Effect of exchange rate changes (490,735 ) (3,562 ) (131,973 ) (14,418 ) (640,688 )
Balance at June 30, 2025 5,580,129 28,569,279 55,838,021 13,361,147 103,348,576
Accumulated amortization and<br><br>impairment____________________
Balance at January 1, 2025 - 23,186,748 40,100,685 11,479,992 74,767,425
Additions - 731,359 3,104,746 348,692 4,184,797
Disposals or retirements - (82,471 ) (155,901 ) - (238,372 )
Effect of exchange rate changes - (3,562 ) (63,193 ) (5,813 ) (72,568 )
Balance at June 30, 2025 - 23,832,074 42,986,337 11,822,871 78,641,282
Carrying amounts at January 1, 2025 6,070,864 5,379,770 13,178,359 1,653,527 26,282,520
Carrying amounts at June 30, 2025 5,580,129 4,737,205 12,851,684 1,538,276 24,707,294
Cost
Balance at January 1, 2024 5,796,438 26,221,351 49,317,031 12,347,434 93,682,254
Additions - 704,176 2,719,877 673,288 4,097,341
Disposals or retirements - (32,460 ) (4,363,944 ) (202,681 ) (4,599,085 )
Effect of exchange rate changes 236,677 1,213 8,121 19,098 265,109
Balance at June 30, 2024 6,033,115 26,894,280 47,681,085 12,837,139 93,445,619
Accumulated amortization and<br><br>impairment____________________
Balance at January 1, 2024 - 20,490,070 39,846,671 10,578,769 70,915,510
Additions - 1,375,944 2,718,152 469,249 4,563,345
Disposals or retirements - (32,460 ) (4,363,944 ) (102,000 ) (4,498,404 )
Effect of exchange rate changes - 1,116 16,399 17,054 34,569
Balance at June 30, 2024 - 21,834,670 38,217,278 10,963,072 71,015,020
Carrying amounts at January 1, 2024 5,796,438 5,731,281 9,470,360 1,768,665 22,766,744
Carrying amounts at June 30, 2024 6,033,115 5,059,610 9,463,807 1,874,067 22,430,599

All values are in US Dollars.

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

17.BONDS PAYABLE

June 30,2025 December 31,2024 June 30,2024
Domestic unsecured bonds 491,208,000 478,536,000 484,980,000
Overseas unsecured bonds 451,887,000 507,904,000 503,595,000
Less: Discounts on bonds payable (2,269,558 ) (2,687,615 ) (2,864,009 )
Less: Current portion (92,290,586 ) (57,147,879 ) (20,397,093 )
848,534,856 926,604,506 965,313,898

All values are in US Dollars.

  • 22 -

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

Issuance Tranche Issuance Period Total Issue Amount Coupon Rate Repayment and Interest Payment
NT$ unsecured<br><br>bonds____________
114-1<br>(Green bond) A March 2025 to March 2030 12,000,000 1.90% Bullet repayment; interest payable annually
B March 2025 to March 2035 7,200,000 2.05% The same as above
114-2<br>(Green bond) A June 2025 to June 2030 12,500,000 1.92% The same as above
B June 2025 to June 2035 1,600,000 2.05% The same as above

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

Issuance Tranche Issuance Period Total Issue Amount Coupon Rate Repayment and Interest Payment
NT$ unsecured<br><br>bonds____________
114-3<br>(Green bond) A July 2025 to July 2030 8,300,000 1.92% Bullet repayment; interest payable annually
B July 2025 to July 2035 4,000,000 2.05% The same as above

The major terms of overseas unsecured bonds are as follows:

Issuance Period Total Issue Amount( in Thousands) Coupon Rate Repayment and Interest Payment
September 2020 to September 2025 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

All values are in US Dollars.

(Continued)

  • 23 -
Issuance Period Total Issue Amount( in Thousands) Coupon Rate Repayment and Interest Payment
April 2021 to April 2031 1,500,000 2.25% Bullet repayment (callable at any time, in whole or in part, at the relevant redemption price according to relevant agreements); interest payable semi-annually
October 2021 to October 2026 1,250,000 1.75% The same as above
October 2021 to October 2031 1,250,000 2.50% The same as above
October 2021 to October 2041 1,000,000 3.125% The same as above
October 2021 to October 2051 1,000,000 3.25% The same as above
April 2022 to April 2027 1,000,000 3.875% The same as above
April 2022 to April 2029 500,000 4.125% The same as above
April 2022 to April 2032 1,000,000 4.25% The same as above
April 2022 to April 2052 1,000,000 4.50% The same as above
July 2022 to July 2027 400,000 4.375% The same as above
July 2022 to July 2032 600,000 4.625% The same as above

All values are in US Dollars.

(Concluded)

18.LONG-TERM BANK LOANS

June 30,2025 December 31,2024 June 30,2024
NT$ unsecured loans 2,972,500 4,410,833 5,650,833
JPY unsecured loans 34,087,300 30,124,800 6,075,000
Less: Discounts on government grants (499 ) (1,247 ) (17,735 )
Less: Current portion (1,923,055 ) (2,710,000 ) (2,678,333 )
35,136,246 31,824,386 9,029,765
Loan content
Annual interest rate 0.78%-1.78% 0.13%-1.78% 0.39%-1.48%
Maturity date Due by December 2030 Due by December 2030 Due by December 2030

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

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

  • 24 -

19.EQUITY

a. Capital stock

June 30,2025 December 31,2024 June 30,2024
Authorized shares (in thousands) 28,050,000 28,050,000 28,050,000
Authorized capital 280,500,000 280,500,000 280,500,000
Issued and paid shares (in thousands) 25,932,615 25,932,733 25,933,629
Issued capital 259,326,155 259,327,332 259,336,292

All values are in US Dollars.

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

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

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

During the first quarter of 2025 and 2024, TSMC reclaimed 118 thousand and 1,402 thousand employee restricted shares, respectively, that were unvested. On May 13, 2025 and June 5, 2024, TSMC’s Board of Directors resolved to cancel the aforementioned shares. Subsequently, TSMC completed the registration for share cancellation. Refer to Note 26 for information on RSAs.

On August 13, 2024, TSMC’s Board of Directors resolved to cancel 3,249 thousand treasury shares. Refer

to Note 19(e) for further information.

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

b. Capital surplus

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

June 30,2025 December 31,2024 June 30,2024
May be used to offset a deficit, distributed as<br><br>cash dividends, or transferred to share<br><br>capital_______________________________________________________
Additional paid-in capital 25,586,161 24,809,704 24,812,813
From merger 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

All values are in US Dollars.

(Continued)

  • 25 -
June 30,2025 December 31,2024 June 30,2024
May only be used to offset a deficit
From share of changes in equities of subsidiaries 4,093,849 4,108,958 4,190,441
From share of changes in equities of associates 1,251,828 1,172,396 307,771
Donations - unclaimed dividend 78,976 78,976 70,093
May not be used for any purpose
Employee restricted shares 2,200,919 2,976,199 1,441,055
73,326,265 73,260,765 70,940,676

All values are in US Dollars.

(Concluded)

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

c. Retained earnings and dividend policy

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

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

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

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

  • 26 -

The appropriations of 2025, 2024 and 2023 quarterly earnings have been approved by TSMC’s Board of Directors in its meeting, respectively. The appropriations and cash dividends per share were as follows:

Second Quarter First Quarter
Resolution Date of TSMC’s of 2025 of 2025
Board of Directors in its August 12, May 13,
meeting 2025 2025
Special capital reserve 181,554,848 -
Cash dividends to shareholders 129,662,913 129,663,078
Cash dividends per share (NT$) 5.00 5.00
Fourth Quarter Third Quarter Second Quarter First Quarter
--- --- --- --- --- --- --- --- --- --- --- --- ---
Resolution Date of TSMC’s of 2024 of 2024 of 2024 of 2024
Board of Directors in its February 12, November 12, August 13, May 10,
meeting 2025 2024 2024 2024
Special capital reserve - - - (28,020,822 )
Cash dividends to shareholders 116,697,300 116,697,300 103,721,521 103,734,517
Cash dividends per share (NT$) 4.50 4.50 4.00 4.00
Fourth Quarter Third Quarter Second Quarter First Quarter
--- --- --- --- --- --- --- --- --- --- --- --- ---
Resolution Date of TSMC’s of 2023 of 2023 of 2023 of 2023
Board of Directors in its February 6, November 14, August 8, May 9,
meeting 2024 2023 2023 2023
Special capital reserve 28,020,822 (17,228,363 ) (6,365,562 ) 3,273,452
Cash dividends to shareholders 90,762,248 90,762,248 77,796,213 77,796,213
Cash dividends per share (NT$) 3.50 3.50 3.00 3.00

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

d. Others

Changes in others were as follows:

Six Months Ended June 30, 2025
Foreign Currency Translation Reserve Unrealized Gain (Loss) on Financial Assets at FVTOCI Gain (Loss) on Hedging Instruments Unearned Stock-Based Employee Compensation Total
Balance, beginning of period 40,262,995 (1,160,176 ) 1,310,307 (1,708,079 ) 38,705,047
Exchange differences arising on translation of foreign operations (225,918,439 ) - - - (225,918,439 )
Gain (loss) on hedging instruments designated as hedges of net investments in foreign operations 430,085 - - - 430,085
Unrealized gain (loss) on financial assets at FVTOCI
Equity instruments - 1,608,693 - - 1,608,693
Debt instruments - 2,798,417 - - 2,798,417
Disposal of investments in equity instruments at fair value through other comprehensive income - (155,994 ) - - (155,994 )
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal - 82,845 - - 82,845
Loss allowance adjustments from debt instruments - (15,809 ) - - (15,809 )

All values are in US Dollars.

(Continued)

  • 27 -
Six Months Ended June 30, 2025
Foreign Currency Translation Reserve Unrealized Gain (Loss) on Financial Assets at FVTOCI Gain (Loss) on Hedging Instruments Unearned Stock-Based Employee Compensation Total
Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss - - (72,203 ) - (72,203 )
Transferred to initial carrying amount of hedged items - - 9,246 - 9,246
Share-based payment expenses recognized - - - 797,188 797,188
Share of other comprehensive income (loss) of associates (638,946 ) (113,177 ) 17,309 - (734,814 )
Balance, end of period (185,864,305 ) 3,044,799 1,264,659 (910,891 ) (182,465,738 )

All values are in US Dollars.

(Concluded)

Six Months Ended June 30, 2024
Foreign Currency Translation Reserve Unrealized Gain (Loss) on Financial Assets at FVTOCI Gain (Loss) on Hedging Instruments Unearned Stock-Based Employee Compensation Total
Balance, beginning of period (25,316,769 ) (4,099,928 ) 1,395,875 (293,434 ) (28,314,256 )
Exchange differences arising on translation of foreign operations 49,990,470 - - - 49,990,470
Gain (loss) on hedging instruments designated as hedges of net investments in foreign operations 793,830 - - - 793,830
Unrealized gain (loss) on financial assets at FVTOCI
Equity instruments - 5,652,888 - - 5,652,888
Debt instruments - (481,900 ) - - (481,900 )
Disposal of investments in equity instruments at fair value through other comprehensive income - (1,790,349 ) - - (1,790,349 )
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal - 205,086 - - 205,086
Loss allowance adjustments from debt instruments - 9,607 - - 9,607
Gain (loss) arising on changes in the fair value of hedging instruments and hedged item affects profit or loss - - (39,416 ) - (39,416 )
Transferred to initial carrying amount of hedged items - - (2,710 ) - (2,710 )
Issuance of employee restricted stock - - - (1,078,713 ) (1,078,713 )
Share-based payment expenses recognized - - - 392,809 392,809
Share of other comprehensive income (loss) of associates 215,378 (21,682 ) 19,322 - 213,018
Income tax effect - (9,996 ) - - (9,996 )
Balance, end of period 25,682,909 (536,274 ) 1,373,071 (979,338 ) 25,540,368

All values are in US Dollars.

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

e. Treasury stock

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

  • 28 -

20.NET REVENUE

a. Disaggregation of revenue from contracts with customers

Three Months Ended June 30 Six Months Ended June 30
Product 2025 2024 2025 2024
Wafer 795,434,048 596,240,620 1,509,462,975 1,118,137,591
Others 138,357,821 77,269,557 263,582,558 148,016,787
933,791,869 673,510,177 1,773,045,533 1,266,154,378

All values are in US Dollars.

Three Months Ended June 30 Six Months Ended June 30
Geography 2025 2024 2025 2024
Taiwan 73,556,401 60,545,774 140,049,911 128,861,200
United States 694,211,968 416,766,901 1,326,650,754 812,949,006
China 87,328,812 106,696,259 149,551,163 161,931,908
Japan 35,426,165 39,007,995 71,183,847 72,220,860
Europe, the Middle East and Africa 28,706,029 25,021,881 54,233,006 46,985,032
Others 14,562,494 25,471,367 31,376,852 43,206,372
933,791,869 673,510,177 1,773,045,533 1,266,154,378

All values are in US Dollars.

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

Three Months Ended June 30 Six Months Ended June 30
Platform 2025 2024 2025 2024
High Performance Computing 561,155,353 351,392,530 1,054,378,499 626,165,504
Smartphone 249,959,546 222,543,370 483,570,934 447,575,509
Internet of Things 44,298,398 37,346,267 83,021,588 72,667,217
Automotive 43,029,218 33,747,863 86,057,463 65,884,496
Digital Consumer Electronics 14,997,583 14,119,376 26,550,049 25,857,161
Others 20,351,771 14,360,771 39,467,000 28,004,491
933,791,869 673,510,177 1,773,045,533 1,266,154,378

All values are in US Dollars.

Three Months Ended June 30 Six Months Ended June 30
Resolution 2025 2024 2025 2024
3-nanometer 187,252,107 90,111,260 347,432,294 135,560,220
5-nanometer 289,669,221 209,567,531 544,077,476 400,263,285
7-nanometer 109,051,362 101,106,641 217,247,909 201,496,228
16-nanometer 56,317,381 52,681,064 103,654,228 101,153,275
20-nanometer 633,072 1,077,092 1,815,646 2,476,387
28-nanometer 54,583,088 50,557,516 107,326,777 93,576,834
40/45-nanometer 25,199,803 27,586,077 45,531,166 54,700,531
65-nanometer 27,827,833 20,728,246 54,378,791 42,005,255
90-nanometer 4,980,173 5,591,099 10,118,160 11,105,390
0.11/0.13 micron 12,898,026 11,893,739 25,167,799 24,696,088
0.15/0.18 micron 21,950,928 21,803,577 43,171,553 43,728,038
0.25 micron and above 5,071,054 3,536,778 9,541,176 7,376,060
Wafer revenue 795,434,048 596,240,620 1,509,462,975 1,118,137,591

All values are in US Dollars.

  • 29 -

b. Contract balances

June 30,2025 December 31,2024 June 30,2024 January 1,2024
Contract liabilities (classified under accrued expenses and other current liabilities) 56,799,375 89,435,361 67,450,001 52,736,430

All values are in US Dollars.

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

The Company recognized revenue from the beginning balance of contract liability, which amounted to NT$9,527,546 thousand and NT$12,270,334 thousand for the three months ended June 30, 2025 and 2024, respectively; and NT$53,183,111 thousand and NT$48,641,062 thousand for the six months ended June 30, 2025 and 2024, respectively.

c. Temporary receipts from customers

June 30,2025 December 31,2024 June 30,2024
Current portion (classified under accrued expenses and other current liabilities) 155,973,239 198,602,570 177,138,527
Noncurrent portion (classified under other noncurrent liabilities) 65,942,034 92,499,262 88,350,446
221,915,273 291,101,832 265,488,973

All values are in US Dollars.

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

21.INTEREST INCOME

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Interest income
Cash and cash equivalents 20,969,288 17,345,367 41,229,036 33,453,497
Financial assets at amortized cost 2,462,521 2,030,026 5,109,422 3,903,798
Financial assets at FVTOCI 1,760,189 1,603,840 3,712,852 2,981,110
25,191,998 20,979,233 50,051,310 40,338,405

All values are in US Dollars.

22.FINANCE COSTS

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Interest expense
Corporate bonds 4,831,318 4,863,704 9,782,284 9,508,901
Lease liabilities 109,671 90,972 218,888 184,461
Bank loans 108,407 28,427 189,490 50,047
Others 1,568 5,977 2,523 9,702
Less: Capitalized interest under property, plant and equipment (1,359,869 ) (2,350,940 ) (3,824,816 ) (4,416,716 )
3,691,095 2,638,140 6,368,369 5,336,395

All values are in US Dollars.

  • 30 -

Information about capitalized interest is as follows:

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Capitalization rate 1.32%-3.34% 1.32%-3.36% 1.32%-3.34% 1.20%-3.36%

23.OTHER GAINS AND LOSSES, NET

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Loss on disposal of financial assets, net
Investments in debt instruments at FVTOCI (32,605 ) (102,582 ) (82,845 ) (205,086 )
Loss on disposal of subsidiaries - - (167,986 ) -
Gain (loss) on financial instruments at FVTPL, net
Mandatorily measured at FVTPL 11,143,784 (2,094,266 ) 8,052,726 (5,433,484 )
Reversal of (provision for) expected credit loss of financial assets
Investments in debt instruments at FVTOCI 4,372 (1,310 ) 15,809 (9,607 )
Financial assets at amortized cost 12,488 (10,872 ) 9,411 (9,148 )
Other gains, net 132,165 82,496 107,520 247,899
11,260,204 (2,126,534 ) 7,934,635 (5,409,426 )

All values are in US Dollars.

24.INCOME TAX

a. Income tax expense recognized in profit or loss

Income tax expense consisted of the following:

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Current income tax expense
Current tax expense recognized in the current period 108,759,971 67,167,292 179,026,001 107,935,164
Income tax adjustments on prior years (14,158,210 ) (7,147,810 ) (13,878,570 ) (7,142,473 )
Other income tax adjustments 91,171 72,717 187,709 135,961
94,692,932 60,092,199 165,335,140 100,928,652

All values are in US Dollars.

(Continued)

  • 31 -
Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Deferred income tax expense (benefit)
The origination and reversal of temporary differences 1,857,930 (1,225,874 ) 3,128,206 (164,170 )
Operating loss carryforward (1,009,082 ) (217,188 ) (2,758,815 ) (793,404 )
848,848 (1,443,062 ) 369,391 (957,574 )
Income tax expense recognized in profit or loss 95,541,780 58,649,137 165,704,531 99,971,078

All values are in US Dollars.

(Concluded)

b. Income tax examination

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

25.EARNINGS PER SHARE

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Basic EPS 15.36 9.56 29.31 18.25
Diluted EPS 15.36 9.56 29.30 18.25

All values are in US Dollars.

EPS is computed as follows:

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Basic EPS
Net income available to common shareholders of the parent 398,273,102 247,845,528 759,837,230 473,330,405
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands) 25,928,255 25,928,972 25,927,526 25,929,119
Basic EPS (in dollars) 15.36 9.56 29.31 18.25
Diluted EPS
Net income available to common shareholders of the parent 398,273,102 247,845,528 759,837,230 473,330,405
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands) 25,928,255 25,928,972 25,927,526 25,929,119
Effects of all dilutive potential common shares (in thousands) 622 1,840 1,245 1,215
Weighted average number of common shares used in the computation of diluted EPS (in thousands) 25,928,877 25,930,812 25,928,771 25,930,334
Diluted EPS (in dollars) 15.36 9.56 29.30 18.25

All values are in US Dollars.

  • 32 -

26.SHARE-BASED PAYMENT ARRANGEMENTS

a. Equity-settled share-based payment-RSAs

The RSAs in each year are as follows:

2024 RSAs 2023 RSAs 2022 RSAs 2021 RSAs
Resolution Date of TSMC’s shareholders in its meeting June 4, 2024 June 6, 2023 June 8, 2022 July 26, 2021
Resolution Date of TSMC’s Board of Directors in its meeting August 13, 2024 February 6, 2024 February 14, 2023 February 15, 2022
Issuance of stocks (in thousands) 2,353 2,960 2,110 1,387
Available for issuance (in thousands) 1,832 - - -
Eligible employees Executive officers Executive officers Executive officers Executive officers
Grant date/Issuance date September 1, 2024 March 1, 2024 March 1, 2023 March 1, 2022

Vesting conditions of the aforementioned arrangement are as follow:

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

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

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

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

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

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

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

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

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

•Before the vesting conditions are fulfilled, the attendance, proposal rights, speech rights, voting rights and etc. shall be exercised by the engaged trustee/custodian on the employee’s behalf. Any other shareholder rights including but not limited to the entitlement to any distribution regarding

  • 33 -

dividends, bonuses and capital reserve, and the subscription right of the new shares issued for any capital increase, are the same as those of holders of common shares of TSMC.

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

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

All values are in US Dollars.

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

2024 RSAs 2023 RSAs 2022 RSAs 2021 RSAs
September 1, 2024 March 1, 2024 March 1, 2023 March 1, 2022
Stock price at measurement date (in dollars) 944 689 511 604
Expected price volatility 25.51%-29.87% 24.77%-26.12% 29.34%-32.11% 25.34%-28.28%
Expected life 1-3 years 1-3 years 1-3 years 1-3 years
Risk-free interest rate 1.40% 1.16% 1.06% 0.57%

All values are in US Dollars.

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

b. Cash-settled share-based payment arrangements

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

2023 Plan 2022 Plan 2021 Plan
Resolution Date of TSMC’s Board of Directors in its meeting February 6, 2024 February 14, 2023 February 15, 2022
Issuance of units (in thousands) (Note) 550 400 236
Grant date March 1, 2024 March 1, 2023 March 1, 2022

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

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

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

Six Months Ended June 30
2025 2024
2023 Plan 2022 Plan 2023 Plan 2022 Plan 2021 Plan
Stock price at measurement date (in dollars) 1,080 1,080 960 960 960
Expected price volatility 25.92%-32.48% 25.92%-32.48% 24.69%-27.15% 24.69%-27.15% 24.69%-27.15%
Residual life 1-2 years 1 year 1-3 years 1-2 years 1 year
Risk-free interest rate 1.33% 1.32% 1.51% 1.46% 1.40%

All values are in US Dollars.

  • 34 -

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

27.ADDITIONAL INFORMATION OF EXPENSES BY NATURE

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
a. Depreciation of property, plant and equipment and right-of-use assets
Recognized in cost of revenue 175,806,058 153,957,487 337,454,303 302,620,126
Recognized in operating expenses 10,190,757 8,963,535 21,541,975 16,989,709
Recognized in other operating income and expenses 10,452 8,288 15,916 16,576
186,007,267 162,929,310 359,012,194 319,626,411
b. Amortization of intangible assets
Recognized in cost of revenue 1,321,247 1,538,400 2,731,976 3,167,075
Recognized in operating expenses 729,398 698,884 1,452,821 1,396,270
2,050,645 2,237,284 4,184,797 4,563,345
c. Employee benefits expenses
Post-employment benefits
Defined contribution plans 1,661,208 1,461,039 3,275,890 2,879,773
Defined benefit plans 64,229 68,920 126,286 137,826
1,725,437 1,529,959 3,402,176 3,017,599
Share-based payments
Equity-settled 344,406 230,956 799,647 412,787
Cash-settled 17,627 117,608 87,589 139,409
362,033 348,564 887,236 552,196
Other employee benefits 93,369,582 67,351,555 179,467,144 129,121,834
95,457,052 69,230,078 183,756,556 132,691,629
Employee benefits expense summarized by function
Recognized in cost of revenue 57,897,171 37,838,878 105,903,936 72,461,086
Recognized in operating expenses 37,559,881 31,391,200 77,852,620 60,230,543
95,457,052 69,230,078 183,756,556 132,691,629

All values are in US Dollars.

  • 35 -

According to TSMC’s Articles of Incorporation, TSMC shall allocate compensation to directors and profit sharing bonus to employees of TSMC not more than 0.3% and not less than 1% of annual profits during the period, respectively (among which not less than 30% as profit sharing bonuses to entry-level employees).

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

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Profit sharing bonus to employees 23,896,380 14,825,285 45,590,230 28,298,154

All values are in US Dollars.

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

All values are in US Dollars.

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

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

28.GOVERNMENT GRANTS

Subsidiaries such as TSMC Arizona, ESMC, JASM and TSMC Nanjing received subsidies from the governments of the United States, Germany, Japan and China, respectively, for local plant setup and operation, which were mainly used to subsidize the purchase costs of property, plant and equipment, as well as partial costs and expenses incurred from plant construction and production. For the six months ended June 30, 2025 and 2024, the Company received a total of NT$67,128,197 thousand and NT$7,956,680 thousand as government grants, respectively.

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

29.CASH FLOW INFORMATION

a. Non-cash transactions

Six Months Ended June 30
2025 2024
Additions of financial assets at FVTOCI 38,158,843 44,788,275
Changes in accrued expenses and other current liabilities (807,080 ) (1,008,095 )
Payments for acquisition of financial assets at FVTOCI 37,351,763 43,780,180

All values are in US Dollars.

(Continued)

  • 36 -
Six Months Ended June 30
2025 2024
Disposal of financial assets at FVTOCI 50,269,584 28,770,436
Changes in other financial assets (524,285 ) (355,647 )
Proceeds from disposal of financial assets at FVTOCI 49,745,299 28,414,789
Additions of property, plant and equipment 578,422,202 342,411,873
Changes in other receivables 22,794,692 -
Exchange of assets - (47,626 )
Changes in payables to contractors and equipment suppliers 18,923,594 37,665,813
Changes in accrued expenses and other current liabilities 11,767,889 11,366,142
Transferred to initial carrying amount of hedged items (31,030 ) -
Capitalized interests (3,824,816 ) (4,416,716 )
Payments for acquisition of property, plant and equipment 628,052,531 386,979,486

All values are in US Dollars.

(Concluded)

b. Reconciliation of liabilities arising from financing activities

Non-cash Changes
Balance as of January 1, 2025 Financing Cash Flow Foreign Exchange Movement Leases Modifications Other Changes(Note) Balance as of June 30, 2025
Hedging financial liabilities- bank loans - 430,085 (430,085 ) - - -
Bonds payable 983,752,385 19,865,180 (62,988,983 ) - 196,860 940,825,442
Long-term bank loans 34,534,386 3,956,667 (1,432,500 ) - 748 37,059,301
Lease liabilities 31,804,374 (1,856,892 ) (158,657 ) 5,080,085 218,888 35,087,798
Total 1,050,091,145 22,395,040 (65,010,225 ) 5,080,085 416,496 1,012,972,541

All values are in US Dollars.

Non-cash Changes
Balance as of January 1, 2024 Financing Cash Flow Foreign Exchange Movement Leases Modifications Other Changes(Note) Balance as of June 30, 2024
Hedging financial liabilities- bank loans 27,290,400 (26,496,570 ) (793,830 ) - - -
Bonds payable 920,897,553 34,264,419 30,357,663 - 191,356 985,710,991
Long-term bank loans 6,678,521 5,322,444 (303,001 ) - 10,134 11,708,098
Lease liabilities 31,492,386 (1,688,181 ) (16,175 ) 870,285 184,461 30,842,776
Total 986,358,860 11,402,112 29,244,657 870,285 385,951 1,028,261,865

All values are in US Dollars.

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

30.FINANCIAL INSTRUMENTS

a. Categories of financial instruments

June 30,2025 December 31,2024 June 30,2024
Financial assets
FVTPL (Note 1) 15,597,401 15,407,542 14,829,233
FVTOCI (Note 2) 178,610,815 205,938,125 197,890,353
Hedging financial assets - 10,959 1,409
Amortized cost (Note 3) 2,888,647,577 2,721,319,255 2,194,376,187
3,082,855,793 2,942,675,881 2,407,097,182

All values are in US Dollars.

(Continued)

  • 37 -
June 30,2025 December 31,2024 June 30,2024
Financial liabilities
FVTPL (Note 4) 220,702 466,539 509,210
Hedging financial liabilities 2,384 - 3,524
Amortized cost (Note 5) 1,923,984,698 1,963,297,264 1,832,194,099
1,924,207,784 1,963,763,803 1,832,706,833

All values are in US Dollars.

(Concluded)

Note 1: Financial assets mandatorily measured at FVTPL.

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

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

Note 4: Held for trading.

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

b. Financial risk management objectives

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

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

c. Market risk

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

Foreign currency risk

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

  • 38 -

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

Interest rate risk

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

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

Based on a sensitivity analysis performed on the Company’s fixed income investments at the end of the reporting period, interest rates increase of 100 basis points (1.00%) across all maturities would have decreased the Company’s other comprehensive income by NT$3,865,424 thousand and NT$4,483,809 thousand for the six months ended June 30, 2025 and 2024, respectively.

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

The Company has entered and may in the future enter into interest rate derivatives to partially hedge the interest rate risk on its fixed income investments and anticipated debt issuance. However, these hedges can offset only a limited portion of the financial impact from movements in interest rates.

Other price risk

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

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

d. Credit risk management

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

Business related credit risk

The Company’s accounts receivable are from its customers worldwide. The majority of the Company’s outstanding accounts receivable are not covered by collaterals or guarantees. While the Company has procedures to monitor and manage credit risk exposure on accounts receivable, there is no assurance such

  • 39 -

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

As of June 30, 2025, December 31, 2024 and June 30, 2024, the Company’s ten largest customers accounted for 83%, 93% and 88% of accounts receivable, respectively. The Company considers the concentration of credit risk for the remaining accounts receivable not material.

Financial credit risk

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

The objective of the Company’s investment policy is to achieve a return that will allow the Company to preserve principal and support liquidity requirements. The policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer. The Company assesses whether there has been a significant increase in credit risk in the invested securities since initial recognition by reviewing changes in external credit ratings, financial market conditions and material information of the issuers.

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

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

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

e. Liquidity risk management

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

  • 40 -

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

Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Total
June 30, 2025
Non-derivative financial liabilities
Accounts payable (including related parties) 84,771,710 - - - 84,771,710
Payables to contractors and equipment suppliers 161,416,417 - - - 161,416,417
Accrued expenses and other current liabilities 380,758,339 - - - 380,758,339
Bonds payable 110,351,218 353,568,731 149,283,960 514,258,504 1,127,462,413
Long-term bank loans 2,263,986 5,439,391 22,578,388 8,106,360 38,388,125
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note) 4,212,515 6,235,143 5,555,966 22,816,058 38,819,682
Others - 57,576,074 5,633,693 8,555,432 71,765,199
743,774,185 422,819,339 183,052,007 553,736,354 1,903,381,885
Derivative financial instruments
Forward exchange contracts
Outflows 131,012,725 - - - 131,012,725
Inflows (131,831,271 ) - - - (131,831,271 )
(818,546 ) - - - (818,546 )
742,955,639 422,819,339 183,052,007 553,736,354 1,902,563,339
December 31, 2024
Non-derivative financial liabilities
Accounts payable (including related parties) 74,226,559 - - - 74,226,559
Payables to contractors and equipment suppliers 192,635,173 - - - 192,635,173
Accrued expenses and other current liabilities 358,165,686 - - - 358,165,686
Bonds payable 76,460,812 335,240,849 197,389,127 587,602,550 1,196,693,338
Long-term bank loans 2,935,154 2,275,524 27,044,881 3,151,180 35,406,739
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note) 3,483,523 5,794,816 4,826,752 20,782,694 34,887,785
Others - 86,979,515 11,737,085 - 98,716,600
707,906,907 430,290,704 240,997,845 611,536,424 1,990,731,880
Derivative financial instruments
Forward exchange contracts
Outflows 109,525,448 - - - 109,525,448
Inflows (109,251,526 ) - - - (109,251,526 )
273,922 - - - 273,922
708,180,829 430,290,704 240,997,845 611,536,424 1,991,005,802
June 30, 2024
Non-derivative financial liabilities
Accounts payable (including related parties) 63,947,072 - - - 63,947,072
Payables to contractors and equipment suppliers 136,744,351 - - - 136,744,351

All values are in US Dollars.

(Continued)

  • 41 -
Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Total
Accrued expenses and other current liabilities 341,049,601 - - - 341,049,601
Bonds payable 39,688,142 302,271,090 263,054,483 601,849,110 1,206,862,825
Long-term bank loans 2,771,823 3,059,137 3,087,675 3,055,311 11,973,946
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note) 3,014,361 5,243,981 4,684,375 20,932,256 33,874,973
Others - 85,329,721 10,612,640 1,536,447 97,478,808
587,215,350 395,903,929 281,439,173 627,373,124 1,891,931,576
Derivative financial instruments
Forward exchange contracts
Outflows 125,040,929 - - - 125,040,929
Inflows (124,406,442 ) - - - (124,406,442 )
634,487 - - - 634,487
587,849,837 395,903,929 281,439,173 627,373,124 1,892,566,063

All values are in US Dollars.

(Concluded)

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

5-10 Years 10-15 Years 15-20 Years More Than 20 Years Total
June 30, 2025
Lease liabilities 10,904,753 7,502,665 4,081,986 326,654 22,816,058
December 31, 2024
Lease liabilities 10,296,927 6,821,624 3,547,316 116,827 20,782,694
June 30, 2024
Lease liabilities 10,182,792 6,888,802 3,706,678 153,984 20,932,256

All values are in US Dollars.

f. Fair value of financial instruments

1)Fair value measurements recognized in the consolidated balance sheets

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

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

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

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

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

  • 42 -

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

Fair value hierarchy

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

June 30, 2025
Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Mandatorily measured at FVTPL
Convertible preferred stocks - - 12,617,717 12,617,717
Forward exchange contracts - 1,765,904 - 1,765,904
Mutual funds - - 1,097,164 1,097,164
Simple agreement for future equity - - 116,616 116,616
- 1,765,904 13,831,497 15,597,401
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds - 80,137,883 - 80,137,883
Agency mortgage-backed securities - 46,016,814 - 46,016,814
Government bonds/Agency bonds 23,072,157 100,934 - 23,173,091
Asset-backed securities - 9,019,262 - 9,019,262
Investments in equity instruments
Non-publicly traded equity investments - - 7,605,736 7,605,736
Publicly traded stocks 5,290,690 - - 5,290,690
Notes and accounts receivable, net - 7,367,339 - 7,367,339
28,362,847 142,642,232 7,605,736 178,610,815
Financial liabilities at FVTPL
Held for trading
Forward exchange contracts - 220,702 - 220,702
Hedging financial liabilities
Fair value hedges
Interest rate futures contracts 2,384 - - 2,384

All values are in US Dollars.

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

All values are in US Dollars.

(Continued)

  • 43 -
December 31, 2024
Level 1 Level 2 Level 3 Total
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds - 108,612,082 - 108,612,082
Agency mortgage-backed securities - 46,611,373 - 46,611,373
Government bonds/Agency bonds 20,645,877 - - 20,645,877
Asset-backed securities - 11,490,511 - 11,490,511
Investments in equity instruments
Non-publicly traded equity investments - - 7,822,884 7,822,884
Publicly traded stocks 4,842,814 - - 4,842,814
Notes and accounts receivable, net - 5,912,584 - 5,912,584
25,488,691 172,626,550 7,822,884 205,938,125
Hedging financial assets
Fair value hedges
Interest rate futures contracts 10,959 - - 10,959
Financial liabilities at FVTPL
Held for trading
Forward exchange contracts - 466,539 - 466,539

All values are in US Dollars.

(Concluded)

June 30, 2024
Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Mandatorily measured at FVTPL
Convertible preferred stocks - - 14,061,522 14,061,522
Mutual funds - - 523,385 523,385
Simple agreement for future equity - - 129,960 129,960
Convertible bonds - - 104,579 104,579
Forward exchange contracts - 9,787 - 9,787
- 9,787 14,819,446 14,829,233
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds - 98,654,521 - 98,654,521
Agency mortgage-backed securities - 43,121,977 - 43,121,977
Government bonds/Agency bonds 22,623,211 161,130 - 22,784,341
Asset-backed securities - 12,305,253 - 12,305,253
Investments in equity instruments
Publicly traded stocks 8,366,114 - - 8,366,114
Non-publicly traded equity investments - - 7,223,448 7,223,448
Notes and accounts receivable, net - 5,434,699 - 5,434,699
30,989,325 159,677,580 7,223,448 197,890,353

All values are in US Dollars.

(Continued)

  • 44 -
June 30, 2024
Level 1 Level 2 Level 3 Total
Hedging financial assets
Fair value hedges
Interest rate futures contracts 1,409 - - 1,409
Financial liabilities at FVTPL
Held for trading
Forward exchange contracts - 509,210 - 509,210
Hedging financial liabilities
Fair value hedges
Interest rate futures contracts 3,524 - - 3,524

All values are in US Dollars.

(Concluded)

Reconciliation of Level 3 fair value measurements of financial assets

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

Six Months Ended June 30
2025 2024
Balance, beginning of period 23,022,726 20,849,566
Additions 386,930 1,040,085
Recognized in profit or loss 204,315 (184,681 )
Recognized in other comprehensive income or loss 327,837 (504,581 )
Disposals and proceeds from return of capital of investments (4,976 ) (117,483 )
Transfers out of level 3 (Note) - (164,860 )
Effect of exchange rate changes (2,499,599 ) 1,124,848
Balance, end of period 21,437,233 22,042,894

All values are in US Dollars.

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

Valuation techniques and assumptions used in Level 2 fair value measurement

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

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

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

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

  • 45 -

Valuation techniques and assumptions used in Level 3 fair value measurement

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

The asset approach takes into account the net asset value measured at the fair value by independent parties. On June 30, 2025, December 31, 2024 and June 30, 2024, the Company uses unobservable inputs derived from discount for lack of marketability of 10%. When other inputs remain equal, the fair value will decrease by NT$55,189 thousand, NT$56,163 thousand and NT$55,578 thousand, respectively, if discounts for lack of marketability increase by 1%.

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

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

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

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

Fair value hierarchy

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

June 30, 2025
Carrying Fair Value
Amount Level 1 Level 2 Total
Financial assets
Financial assets at amortized costs
Corporate bonds 176,223,968 - 177,126,610 177,126,610
Commercial paper 6,203,293 - 6,209,445 6,209,445
Government bonds/Agency bonds 3,901,492 3,950,111 - 3,950,111
186,328,753 3,950,111 183,336,055 187,286,166
Financial liabilities
Financial liabilities at amortized costs
Bonds payable 940,825,442 - 876,591,412 876,591,412

All values are in US Dollars.

  • 46 -
December 31, 2024
Carrying Fair Value
Amount Level 1 Level 2 Total
Financial assets
Financial assets at amortized costs
Corporate bonds 171,980,179 - 172,518,474 172,518,474
Commercial paper 14,208,158 - 14,222,713 14,222,713
Government bonds/Agency bonds 4,379,527 4,353,434 - 4,353,434
190,567,864 4,353,434 186,741,187 191,094,621
Financial liabilities
Financial liabilities at amortized costs
Bonds payable 983,752,385 - 900,344,663 900,344,663

All values are in US Dollars.

June 30, 2024
Carrying Fair Value
Amount Level 1 Level 2 Total
Financial assets
Financial assets at amortized costs
Corporate bonds 124,000,198 - 123,533,581 123,533,581
Commercial paper 21,742,424 - 21,755,882 21,755,882
Government bonds/Agency bonds 7,098,457 4,302,069 2,756,301 7,058,370
152,841,079 4,302,069 148,045,764 152,347,833
Financial liabilities
Financial liabilities at amortized costs
Bonds payable 985,710,991 - 899,791,480 899,791,480

All values are in US Dollars.

Valuation techniques and assumptions used in Level 2 fair value measurement

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

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

31.RELATED PARTY TRANSACTIONS

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

a. Related party name and categories

Related Party Name Related Party Categories
GUC and its subsidiaries (GUC) Associates
VIS and its subsidiaries (VIS) Associates

(Continued)

  • 47 -
Related Party Name Related Party Categories
SSMC Associates
Xintec Associates
TSMC Charity Foundation Other related parties
TSMC Education and Culture Foundation Other related parties

(Concluded)

b. Net revenue

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Item Related Party Categories
Sales revenue Associates 6,490,996 4,081,597 14,227,468 7,665,605

All values are in US Dollars.

c. Purchases

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Related Party Categories
Associates 1,226,904 1,110,226 2,289,320 2,262,993

All values are in US Dollars.

d. Receivables from related parties

June 30,2025 December 31,2024 June 30,2024
Item Related Party Name
Receivables from VIS 1,128,563 626,638 -
related parties GUC 1,047,087 610,027 947,639
Xintec 44,731 104,766 142,023
Others 57,411 63,042 -
2,277,792 1,404,473 1,089,662
Other receivables VIS 2,287,413 - 2,121,539
from related Xintec 280,221 - 224,543
parties SSMC 338 251 56,945
2,567,972 251 2,403,027

All values are in US Dollars.

e. Payables to related parties

June 30,2025 December 31,2024 June 30,2024
Item Related Party Name
Payables to related Xintec 788,255 987,992 786,801
parties SSMC 361,668 308,424 330,982
Others 126,615 129,585 66,230
1,276,538 1,426,001 1,184,013

All values are in US Dollars.

  • 48 -

f. Accrued expenses and other current liabilities

June 30,2025 December 31,2024 June 30,2024
Item Related Party Categories
Temporary receipts Associates 1,771,920 4,271,492 940,232

All values are in US Dollars.

g. Others

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Item Related Party Categories
Manufacturing expenses Associates 1,215,870 1,037,312 2,278,294 2,097,783

All values are in US Dollars.

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

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

h. Compensation of key management personnel

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

Three Months Ended June 30 Six Months Ended June 30
2025 2024 2025 2024
Short-term employee benefits 1,400,324 1,073,784 2,577,992 1,942,064
Post-employment benefits 959 1,136 1,960 2,246
Share-based payments 1,134,966 347,620 1,850,731 529,387
2,536,249 1,422,540 4,430,683 2,473,697

All values are in US Dollars.

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

32.PLEDGED ASSETS

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

  • 49 -

33.SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

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

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

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

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

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

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

g. Amounts available under unused letters of credit as of June 30, 2025, December 31, 2024 and June 30, 2024 were NT$435,852 thousand, NT$489,882 thousand and NT$485,726 thousand, respectively.

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

  • 50 -

34.SIGNIFICANT LOSS FROM DISASTER

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

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

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

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

Foreign Currencies(In Thousands) Exchange Rate<br><br>(Note 1) Carrying Amount(In Thousands)
June 30, 2025
Financial assets
Monetary items
16,150,439 29.154 470,849,904
1,553,439 34.215 53,150,932
141,178,705 0.2017 28,475,745
Financial liabilities
Monetary items
14,372,499 29.154 419,015,840
1,419,584 34.215 48,571,078
131,844,170 0.2017 26,592,969
December 31, 2024
Financial assets
Monetary items
18,726,635 32.768 613,634,377
596,978 34.102 20,358,132
169,266 1.041 (Note 2) 5,772,303
128,926,508 0.2092 26,971,425
Financial liabilities
Monetary items
16,255,804 32.768 532,670,186
821,105 34.102 28,001,335
168,550 1.041 (Note 2) 5,747,886
129,345,682 0.2092 27,059,117

(Continued)

  • 51 -
Foreign Currencies(In Thousands) Exchange Rate<br><br>(Note 1) Carrying Amount(In Thousands)
June 30, 2024
Financial assets
Monetary items
16,960,438 32.490 551,044,643
462,201 34.855 16,110,026
89,320,045 0.2025 18,087,309
Financial liabilities
Monetary items
13,263,571 32.490 430,933,410
435,647 34.855 15,184,487
88,563,688 0.2025 17,934,147

(Concluded)

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

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

Please refer to the consolidated statements of comprehensive income for the total of realized and unrealized foreign exchange gain and loss for the three months and the six months ended June 30, 2025 and 2024, respectively. Since there were varieties of foreign currency transactions and functional currencies within the subsidiaries of the Company, the Company was unable to disclose foreign exchange gain (loss) towards each foreign currency with significant impact.

36.ADDITIONAL DISCLOSURES

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

a. Financings provided: See Table 1 attached;

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

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

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

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

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

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

  • 52 -

h. Information on investment in mainland China

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

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

37.OPERATING SEGMENTS INFORMATION

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

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

  • 53 -

TABLE 1

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

FINANCINGS PROVIDED

FOR THE SIX MONTHS ENDED JUNE 30, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
No. Financing Company Counterparty Financial Statement Account Related Party Maximum Balance for the Period (Foreign Currencies in Thousands)(Note 3) Ending Balance (Foreign Currencies in Thousands) (Note 3) Amount Actually Drawn(Foreign Currencies in Thousands) Interest Rate Nature for Financing Transaction Amounts Reason for Financing Allowance for Bad Debt Collateral Financing Limits for Each Borrowing Company(Notes 1 to 2) Financing Company’s Total Financing Amount Limits (Notes 1 to 2)
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Item Value
1 TSMC China TSMC Nanjing Other receivables from related parties Yes 37,535,700 26,955,260 13,835,960 1.50% The need for long-term financing - Operating capital - - - 105,309,752 105,309,752
(RMB 6,000,000 )& (RMB 3,400,000 )& (RMB 3,400,000 )
( 450,000 ) ( 450,000 )
2 TSMC Development TSMC Washington Other receivables from related parties Yes 1,749,240 1,749,240 1,749,240 - The need for short-term financing - Operating capital - - - 31,340,900 31,340,900
( 60,000 ) ( 60,000 ) ( 60,000 )

All values are in US Dollars.

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

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

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

  • 54 -

TABLE 2

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE SIX MONTHS ENDED JUNE 30, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
No. Endorsement/<br><br>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( 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<br><br>Provided by<br><br>Parent Company Guarantee<br><br>Provided by<br><br>A Subsidiary Guarantee<br><br>Provided to Subsidiaries in Mainland China
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Name Nature of Relationship
0 TSMC TSMC North America Subsidiary 1,832,429,590 ( 2,426,001<br><br>83,213 ) ( 2,426,001<br><br>83,213 ) ( 2,426,001<br><br>83,213 ) - 0.05% 1,832,429,590 Yes No No
TSMC Global Subsidiary 1,832,429,590 ( 218,655,000<br><br>7,500,000 ) ( 218,655,000<br><br>7,500,000 ) ( 218,655,000<br><br>7,500,000 ) - 4.77% 1,832,429,590 Yes No No
TSMC Arizona Subsidiary 1,832,429,590 ( 437,234,783<br><br>14,997,420 ) ( 437,140,265<br><br>14,994,178 ) ( 318,703,831<br><br>10,931,736 ) - 9.54% 1,832,429,590 Yes No No
1 TSMC Japan TSMC JDC The same parent company 322,709 ( 266,244<br><br>1,320,000 ) - - - - 322,709 No No No

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

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

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

  • 55 -

TABLE 3

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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

FOR THE SIX MONTHS ENDED JUNE 30, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Company Name Related Party Nature of Relationships Transaction Details Abnormal Transaction Notes/Accounts Payable or Receivable Note
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Purchases/<br><br>Sales Amount(Foreign Currencies in Thousands) % to Total Payment Terms Unit Price Payment Terms Ending Balance(Foreign Currencies in Thousands) % to Total
TSMC TSMC North America Subsidiary Sales 1,390,718,145 79 Net 30 days from invoice date (Note) - - 163,066,366 78
TSMC Arizona Subsidiary Sales 1,214,089 - Net 30 days from the end of the month of when invoice is issued - - 11,914 -
JASM Subsidiary Sales 204,780 - Net 30 days from the end of the month of when invoice is issued - - 130,056 -
GUC Associate Sales 2,198,436 - Net 30 days from invoice date - - 339,234 -
VIS Associate Sales 764,213 - Net 30 days from the end of the month of when invoice is issued - - 1,128,563 1
SSMC Associate Sales 126,561 - Net 30 days from the end of the month of when invoice is issued - - 57,411 -
TSMC Nanjing Subsidiary Purchases 37,546,969 37 Net 30 days from the end of the month of when invoice is issued - - (6,063,930 ) 6
TSMC Arizona Subsidiary Purchases 22,794,851 22 Net 30 days from the end of the month of when invoice is issued - - (4,693,987 ) 4
TSMC China Subsidiary Purchases 13,008,501 13 Net 30 days from the end of the month of when invoice is issued - - (2,070,544 ) 2
TSMC Washington Indirect subsidiary Purchases 3,687,670 4 Net 30 days from the end of the month of when invoice is issued - - (482,732 ) -
SSMC Associate Purchases 1,903,045 2 Net 30 days from the end of the month of when invoice is issued - - (361,668 ) -
VIS Associate Purchases 386,275 - Net 30 days from the end of the month of when invoice is issued - - (68,432 ) -
TSMC North America GUC Associate of TSMC Sales ( 10,941,567<br><br>341,990 ) 1 Net 30 days from invoice date - - ( 707,854<br><br>24,280 ) -
VisEra Tech Xintec Associate of TSMC Sales 196,689 4 Net 60 days from the end of the month of when invoice is issued - - 44,731 4

All values are in US Dollars.

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

  • 56 -

TABLE 4

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

JUNE 30, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Company Name Related Party Nature of Relationships Ending Balance(Foreign Currencies in Thousands) Turnover Days<br>(Note 1) Overdue Amounts Received in Subsequent Period Allowance forBad Debts
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Amount Action Taken
TSMC TSMC North America Subsidiary 166,460,685 24 - - - -
VisEra Tech Subsidiary 644,192 Note 2 - - - -
JASM Subsidiary 266,969 Note 2 - - - -
VIS Associate 3,415,976 Note 2 - - - -
GUC Associate 339,234 32 - - - -
Xintec Associate 280,221 Note 2 - - - -
TSMC North America TSMC Parent company ( 424,646<br><br>14,566 ) Note 2 - - - -
GUC Associate of TSMC ( 707,854<br><br>24,280 ) 8 - - - -
TSMC Japan 3DIC R&D Center TSMC Parent company ( 161,194<br><br>799,177 ) Note 2 - - - -
TSMC China TSMC Parent company (RMB 2,070,544<br><br>508,808 ) 28 - - - -
TSMC Nanjing The same parent company (RMB 13,959,841<br><br>3,430,442 ) Note 2 - - - -
TSMC Nanjing TSMC Parent company (RMB 6,063,930<br><br>1,490,129 ) 27 - - - -
TSMC Arizona TSMC Parent company ( 4,693,987<br><br>161,007 ) 23 - - - -
TSMC Technology TSMC The ultimate parent of the Company ( 962,209<br><br>33,004 ) Note 2 - - - -
TSMC Development TSMC Washington Subsidiary ( 1,749,240<br><br>60,000 ) Note 2 - - - -
TSMC Washington TSMC The ultimate parent of the Company ( 482,732<br><br>16,558 ) 26 - - - -

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

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

  • 57 -

TABLE 5

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2025

(Amounts in Thousands of New Taiwan Dollars)
No. Company Name Counterparty Nature of Relationship<br><br>(Note 1) Intercompany Transactions
--- --- --- --- --- --- --- --- --- --- --- ---
Financial Statements Item Amount Terms<br><br>(Note 2) Percentage of Consolidated Net Revenue or Total Assets
0 TSMC TSMC North America 1 Sales revenue 1,390,718,145 - 78%
Receivables from related parties 163,066,366 - 2%
Accrued expenses and other current liabilities 101,556,100 - 1%
Other noncurrent liabilities 46,826,370 - 1%
TSMC China 1 Purchases 13,008,501 - 1%
TSMC Nanjing 1 Purchases 37,546,969 - 2%
TSMC Arizona 1 Purchases 22,794,851 - 1%

All values are in US Dollars.

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

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

  • 58 -

TABLE 6

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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

FOR THE SIX MONTHS ENDED JUNE 30, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Investor Company Investee Company Location Main Businesses and Products Original Investment Amount Balance as of June 30, 2025 Net Income (Losses) of the Investee(Foreign Currencies in Thousands) Share of Profits/Losses of Investee(Note 1)(Foreign Currencies in Thousands) Note
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
June 30, 2025(Foreign Currencies in Thousands) December 31, 2024(Foreign Currencies in Thousands) Shares (In Thousands) Percentage of Ownership Carrying Value (Foreign Currencies in Thousands)
TSMC TSMC Global Tortola, British Virgin Islands Investment activities 943,542,109 616,839,509 29 100 1,002,469,693 23,198,760 23,198,760 Subsidiary
TSMC Arizona Phoenix, Arizona, U.S.A. Manufacturing, sales and testing of integrated circuits and other semiconductor devices 648,608,510 565,786,810 20,450 100 564,309,467 4,728,433 4,515,390 Subsidiary
TSMC Partners Tortola, British Virgin Islands Investing in companies involved in the semiconductor design and manufacturing, and other investment activities 31,456,130 31,456,130 988,268 100 70,784,657 1,142,678 1,142,678 Subsidiary
JASM Kumamoto, Japan Manufacturing, sales and testing of integrated circuits and other semiconductor devices 68,384,148 68,384,148 3,011 73 50,731,461 (6,222,227 ) (4,520,448 ) Subsidiary
ESMC Dresden, Germany Manufacturing, sales and testing of integrated circuits and other semiconductor devices 25,628,016 18,112,326 770 70 24,561,425 (279,491 ) (195,644 ) Subsidiary
VIS Hsinchu, Taiwan Manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks 13,919,430 13,919,430 506,709 28 16,599,832 4,456,846 1,224,504 Associate
VisEra Tech Hsinchu, Taiwan Research, design, development, manufacturing, sales, packaging and test of color filter 4,224,082 4,224,082 213,619 67 11,424,461 542,545 356,782 Subsidiary
SSMC Singapore Manufacturing and sales of integrated circuits and other semiconductor devices 5,120,028 5,120,028 314 39 10,699,204 1,522,617 590,623 Associate
TSMC North America San Jose, California, U.S.A. Sales and marketing of integrated circuits and other semiconductor devices 333,718 333,718 11,000 100 7,317,434 342,952 342,952 Subsidiary
Xintec Taoyuan, Taiwan Wafer level chip size packaging and wafer level post passivation interconnection service 1,988,317 1,988,317 111,282 41 4,109,929 406,967 166,886 Associate
Emerging Fund Cayman Islands Investing in technology start-up companies 2,812,855 2,688,915 - 99.9 2,934,903 (2,749 ) (2,746 ) Subsidiary
GUC Hsinchu, Taiwan Researching, developing, manufacturing, testing and marketing of integrated circuits 386,568 386,568 46,688 35 2,753,078 1,743,033 607,242 Associate
TSMC 3DIC Yokohama, Japan Engineering support activities 1,144,356 1,144,356 49 100 1,389,963 101,045 101,045 Subsidiary
TSMC Europe Amsterdam, the Netherlands Customer service and supporting activities 15,749 15,749 - 100 684,663 51,278 51,278 Subsidiary
TSMC JDC Yokohama, Japan Engineering support activities 410,680 410,680 15 100 418,081 15,706 15,706 Subsidiary
TSMC Japan Yokohama, Japan Customer service and supporting activities 83,760 83,760 6 100 129,084 4,790 4,790 Subsidiary
TSMC Korea Seoul, Korea Customer service and supporting activities 13,656 13,656 80 100 43,024 655 655 Subsidiary
VTAF III (Note 3) Cayman Islands Investing in technology start-up companies - 561,975 - - - 445 436 Subsidiary
TSMC Partners TSMC Development Delaware, U.S.A. Investing in companies involved in semiconductor manufacturing ( 17,111,614<br><br>586,939 ) ( 17,111,614<br><br>586,939 ) - 100 ( 35,601,008<br><br>1,221,136 ) ( 43,212<br><br>1,311 ) Note 2 Subsidiary
TSMC Technology Delaware, U.S.A. Engineering support activities 416,378 416,378 - 100 1,544,747 170,402 Note 2 Subsidiary
( 14,282 ) ( 14,282 ) ( 52,986 ) ( 5,398 )
TSMC Canada Ontario, Canada Engineering support activities 67,054 67,054 2,300 100 415,826 21,373 Note 2 Subsidiary
( 2,300 ) ( 2,300 ) ( 14,263 ) ( 669 )
VTAF III Growth Fund (Note 3) Cayman Islands Investing in technology start-up companies - 36,031 - - - 445 Note 2 Subsidiary
( 1,236 ) ( 14 )
TSMC Development TSMC Washington Washington, U.S.A. Manufacturing, sales and testing of integrated circuits and other semiconductor devices - - 293,637 100 ( 4,401,509<br><br>150,974 ) ( (231,899<br><br>(7,293 )<br><br>)) Note 2 Subsidiary

All values are in US Dollars.

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

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

Note 3: VTAF III and the Growth Fund have completed the liquidation procedures respectively in the first quarter and the second quarter of 2025.

  • 59 -

TABLE 7

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR THE SIX MONTHS ENDED JUNE 30, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Investee 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( in Thousands) Investment Flows Accumulated Outflow of Investment from Taiwan as ofJune 30, 2025 ( in Thousands) Net Income (Losses) of the Investee Company Percentage of Ownership Share of Profits/Losses Carrying Amount as of Balance as of June 30, 2025 Accumulated Inward Remittance of Earnings as of June 30, 2025
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Outflow( in Thousands) Inflow
TSMC China Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices (RMB 18,939,667<br><br>4,502,080 ) (Note 1) ( 18,939,667<br><br>596,000 ) - - ( 18,939,667<br><br>596,000 ) 5,564,607 100% 5,596,898<br><br>(Note 2) 105,107,494 -
TSMC Nanjing Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices (RMB 30,521,412<br><br>6,650,119 ) (Note 1) ( 30,521,412<br><br>1,000,000 ) - - ( 30,521,412<br><br>1,000,000 ) 14,484,791 100% 14,439,434<br><br>(Note 2) 119,242,962 -

All values are in US Dollars.

Accumulated Investment in Mainland China as of June 30, 2025<br><br>(US$ in Thousands) Investment Amounts Authorized by<br><br>Investment Commission, MOEA<br><br>(US$ in Thousands) Upper Limit on Investment
$ 49,461,079<br><br>(US$ 1,596,000 ) $ 119,412,667<br><br>(US$ 3,596,000 ) $ 2,769,979,110<br><br>(Note 3)

Note 1: TSMC directly invested US$596,000 thousand in TSMC China and US$1,000,000 thousands in TSMC Nanjing.

Note 2: Amount was recognized based on the reviewed financial statements.

Note 3: The upper limit on investment in mainland China is determined by sixty percent (60%) of the Company's consolidated net worth.

  • 60 -

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