TSMC
Annual Report
2024
Printed on March 12, 2025
TSE: 2330
NYSE: TSM
Taiwan Stock Exchange Market Observation Post System: https://mops.twse.com.tw
TSMC annual report is available at https://investor.tsmc.com/english/annual-reports
TSMC
Vision,
Mission &
Core Values
TSMC’s Vision
Our vision is to be the most advanced and largest
technology and foundry services provider to fabless
companies and IDMs, and in partnership with them,
to forge a powerful competitive force in the semicon-
ductor industry. To realize our vision, we must have a
trinity of strengths:
1. Be a technology leader, competitive with the
leading IDMs
2. Be the manufacturing leader
3. Be the most reputable, service-oriented and maxi-
mum-total-benefits silicon foundry
TSMC’s Mission
Our mission is to be the trusted technology and ca-
pacity provider of the global logic IC industry for years
to come.
TSMC’s Core Values
Integrity
Integrity is our most basic and most important core
value. We tell the truth. We believe the record of
our accomplishments is the best proof of our merit.
Hence, we do not brag. We do not make commit-
ments lightly. Once we make a commitment, we de-
vote ourselves completely to meeting that commit-
ment. We compete to our fullest within the law, but we
do not slander our competitors and we respect the
intellectual property rights of others. With vendors,
we maintain an objective, consistent, and impartial
attitude. We do not tolerate any form of corrupt be-
havior or politicking. When selecting new employees,
we place emphasis on the candidates’ qualifications
and character, not connections or access.
Commitment
TSMC is committed to the welfare of customers, sup-
pliers, employees, shareholders, and society. These
stakeholders all contribute to TSMC’s success, and
TSMC is dedicated to serving their best interests. In
return, TSMC hopes all these stakeholders will make
a mutual commitment to the Company.
Innovation
Innovation is the wellspring of TSMC’s growth, and is
a part of all aspects of our business, from strategic
planning, marketing and management, to technology
and manufacturing. At TSMC, innovation means more
than new ideas, it means putting ideas into practice.
Customer Trust
At TSMC, customers come first. Their success is our
success, and we value their ability to compete as we
value our own. We strive to build deep and enduring
relationships with our customers, who trust and rely
on us to be part of their success over the long term.
Table of
Contents
1
5
2
6
3
7
4
8
Company Profile
2.1 An Introduction to TSMC - 014
2.2 Market/Business Summary - 014
2.3 Board Members - 020
2.4 Management Team - 030
Financial Highlights and Analysis
6.1 Financial Status and Operating Results - 122
6.2 Risk Management - 127
Corporate Governance
3.1 Overview - 042
3.2 Board of Directors - 042
3.3 Major Decisions of Shareholders’ Meeting
and Board Meetings - 054
3.4 Corporate Governance Implementation Status
as Required by Taiwan Financial Supervisory
Commission - 056
3.5 Code of Ethics and Business Conduct - 059
Corporate Sustainability (ESG)
7.1 Overview - 148
7.2 Environmental, Safety and Health (ESH) Management - 152
7.3 TSMC Education and Culture Foundation - 166
7.4 TSMC Charity Foundation - 168
7.5 TSMC i-Charity Platform - 169
7.6 Sustainability Development Implementation Status as Required by Tai-
wan Financial Supervisory Commission - 170
7.7 Climate-related Information of Listed Companies - 172
Capital and Shares
4.1 Capital and Shares - 070
4.2 Issuance of Corporate Bonds - 076
4.3 Preferred Shares - 082
4.4 Issuance of American Depositary
Shares - 082
Subsidiary Information and Other Special Notes
8.1 Subsidiaries - 176
8.2 Special Notes - 180
Letter to
shareholders
Operational Highlights
5.1 Business Activities - 096
5.2 Technology Leadership - 098
5.3 Manufacturing Excellence - 105
5.4 Customer Trust - 109
5.5 Information Security Management - 111
5.6 Human Capital - 112
5.7 Material Contracts - 119
3.6 Regulatory Compliance - 064
3.7 Internal Control System Execution
Status - 066
3.8 Status of Personnel Responsible for the
Company’s Financial Operation - 067
3.9 Information Regarding TSMC’s Indepen-
dent Auditor - 067
4.5 Status of Employee Stock Option Plan - 084
4.6 Status of Employee Restricted Stock - 084
4.7 Status of New Share Issuance in Connection
with Mergers and Acquisitions - 092
4.8 Funding Plans and Implementation - 093
068
174
012
120
040
146
004
094
1
TSMC’s Mission
Our mission is to be the trusted technology and capacity
provider of the global logic IC industry for years to come.
Letter to
Shareholders
006
007
Part of this strategy includes expanding our global manufacturing footprint based on our customers’ needs, as they value
geographic flexibility, and a necessary level of government support. This is to maximize the value for our shareholders.
We have made significant progress in our overseas expansion in 2024. In Arizona, our first fab entered high-volume
production utilizing N4 process technology in 4Q’24, earlier than scheduled. The yields are comparable to our fabs in Taiwan,
and with our manufacturing capability and execution, we are confident to deliver the same level of manufacturing quality
and reliability as our fabs in Taiwan.
In Japan, our first specialty technology fab in Kumamoto began volume production at the end of 2024, with very good yield.
In Europe, we held a ground-breaking ceremony in Dresden, Germany in August, and are progressing smoothly with our
plans to build a specialty technology fab, focusing on automotive and industrial applications.
In Taiwan, we continue to invest in and expand our advanced technology and packaging capacities, including 3nm, 2nm and
CoWoS® technology capacities, across several locations.
As the world’s most reliable and effective capacity provider, TSMC will continue to play a critical and integral role in the
global semiconductor industry, while supporting our customers’ growth.
Highlights of TSMC’s accomplishments in 2024:
●Total wafer shipments were 12.9 million 12-inch equivalent wafers as compared to 12.0 million 12-inch equivalent wafers
in 2023.
●Advanced technologies (7-nanometer and beyond) accounted for 69 percent of total wafer revenue, up from 58 percent in
2023.
●We deployed 288 distinct process technologies, and manufactured 11,878 products for 522 customers.
●TSMC represented 34 percent of the Foundry 2.0 industry, which we define as all logic wafer manufacturing, packaging,
testing, mask-making and others, output value in 2024, as compared to 28 percent in the previous year.
2024 Financial Performance
Consolidated revenue reached NT$2,894.31 billion, an increase of 33.9 percent over NT$2,161.74 billion in 2023. Net
income was NT$1,173.27 billion and diluted earnings per share were NT$45.25. Both increased 39.9 percent from the 2023
level of NT$838.50 billion net income and NT$32.34 diluted EPS.
In US dollar terms, TSMC generated net income of US$36.52 billion on consolidated revenue of US$90.08 billion, which
increased 35.9 percent and 30.0 percent respectively from the 2023 level of US$26.88 billion net income and US$69.30
billion consolidated revenue.
Dear Shareholders,
2024 was an outstanding year for TSMC. Supported by our strong technology leadership and broad customer base, we
observed robust AI-related demand from our customers throughout 2024. Other applications experienced only a very mild
recovery, as macroeconomic conditions continued to weigh on consumer sentiment. Fueled by strong demand for our
leading-edge logic and advanced packaging technologies, TSMC’s revenue increased 30% year-over-year in US dollar terms,
outperforming the Foundry industry’s 6% growth, and both our revenue and EPS reached record highs.
We continued to invest in R&D and technology development to support our customers’ growth. In its second year of volume
ramp, demand for our industry-leading 3-nanometer technology continued to be robust, driven by smartphone and High
Performance Computing (HPC) applications, and represented 18% of our total wafer revenue in 2024.
Our 2-nanometer technology leads the industry in addressing our customers’ insatiable need for energy-efficient computing,
and almost all the IC innovators are working with TSMC. Our N2 process technology is on track for volume production in the
second half of 2025. We also introduced A16 as a separate offering that features an innovative, best-in-class backside power
delivery solution best-suited for High Performance Computing (HPC) products. Volume production of A16 is scheduled for
the second half of 2026.
We are also developing advanced packaging and 3D chip stacking technologies, including CoWoS®, InFO, TSMC-SoIC®
(System on Integrated Chips) and silicon photonics, to enable large-scale interconnectivity for lower power consumption at
affordable costs to support our customers’ needs.
On mature nodes, we are working closely with strategic customers to develop specialty technology solutions that meet their
specific requirement. These partnerships enable us to create technology differentiation and provide long-lasting value to
customers.
We believe N3, N2, A16 and their derivatives, our specialty technologies, and our advanced packaging and chip stacking
solutions, will further extend our technology leadership position, and enable TSMC to capture the growth opportunities well
into the future.
Our customers look to TSMC not only for the most advanced technologies, but also for the most efficient and cost-effective
manufacturing, at scale. To address the structural increase in the long-term market demand profile, TSMC is working closely
with our customers to plan our capacity, and investing in leading edge, specialty and advanced packaging technologies to
support their demand.
We employ a disciplined and thorough capacity planning system to evaluate and judge the structural increase in the
long-term market demand profile, to determine the appropriate capacity to build.
At the same time, we are committed to earning a sustainable and healthy return that enables us to continue to invest to
support our customers’ growth, while delivering profitable growth for our shareholders.
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009
Gross profit margin was 56.1 percent as compared with 54.4 percent in 2023, while operating profit margin was 45.7
percent compared with 42.6 percent a year earlier. Net profit margin was 40.5 percent, an increase of 1.7 percentage points
from 2023’s 38.8 percent.
In 2024, the Company further raised its total cash dividend payments to NT$14.0 per share, up from NT$11.25 a year ago.
Outlook
Entering 2025, we expect the overall foundry industry to continue a sustaining and mild recovery, even as macroeconomic
uncertainties persist. At the same time, we expect 2025 to be another healthy growth year for TSMC, as our technology
leadership enables TSMC to win business, and further enables our customers to win business in their end markets.
Continued AI-related demand in 2025 supports our already-strong conviction that the structural demand for energy-efficient
computing will accelerate, as everything around us becomes more intelligent and connected.
We are entering an AI-empowered world, where artificial intelligence not only runs in datacenters, but will run in PCs,
smartphones, automobiles, and even Internet-of-Things devices in the future.
AI also comes in many different forms, including but not limited to Generative AI applications such as ChatGPT, which
consumers have become familiar with thanks to its ease of use and expansive range of potential applications.
Enterprise is another driver of AI demand. Many companies, including TSMC, are using AI to create more value by driving
greater productivity, efficiency, speed and quality gains. As a direct user of AI in our fab and R&D operations, we are deriving
tangible ROI benefits from our investments in AI and machine learning. TSMC is by no means the only company in the world
doing this, so Enterprise AI is another source of AI demand to support the multi-year structural trends.
AI technology is evolving to use ever-increasingly complex AI models, which needs to be supported by more powerful
semiconductor hardware.
Thus, the value of our technology platform is increasing,
as customers rely on TSMC to provide the most advanced
process and packaging technologies at scale, in the most
efficient and cost-effective manner.
By upholding our Trinity of Strengths of Technology
Leadership, Manufacturing Excellence, and Customer Trust,
we can cast a wide net and work with all the IC innovators,
and enable our customers to unleash their innovations in
their end markets.
Thus, we are well-positioned to address the growth from
the industry megatrends of 5G, AI and HPC, with our
differentiated technologies.
TSMC’s mission is to be the trusted technology and capacity
provider for the global logic IC industry for years to come.
Our success is predicated on our unwavering dedication
to the pure-play foundry business model, and our job is to
serve our customers and enable them to be successful.
As the world’s most reliable and effective capacity
provider, we understand our responsibility as critical and
integral player in the global semiconductor industry.
We will continue to invest in technology and capacity to
support our customers’ growth, while ensuring we earn a
sustainable and healthy return for our shareholders.
It is TSMC’s core values of Integrity, Commitment, Innovation, and Customer Trust that have earned our customers’
confidence to grow and prosper together. We hope to earn the same confidence from our shareholders, by continuing to
deliver profitable growth and maximizing the value for our shareholders in the years to come.
C.C. Wei
Chairman and Chief Executive Officer
Annual Growth Rate
Capacity: million 12-inch equivalent wafers
2023
16-17
6%
2024
16-17
6%
2025
4%
17-18
Capacity Plan
2024
69%
31%
58%
2023
2025
70-80%
20-30%
> 7nm
≤ 7nm
2025 wafer shipment is expected to be 14-15 million 12-inch
equivalent wafers.
Wafer Sales Plan
42%
Consolidated revenue
reached a record high of
NT$2,894.31 billion,
marking an increase of 33.9%
compared to 2023
Diluted earnings per share
reached a record high of
NT$45.25.
Net income was
NT$1,173.27 billion,
up 39.9% from 2023.
Total cash dividend
payments raised to
NT$14.0
per share, up from
NT$11.25 a year ago.
Taichung Zero Waste
Manufacturing Center became
Taiwan's first demonstration
site for implementing membrane
carbon capture technology.
Selected to the Dow Jones
Sustainability Indices once
again, becoming the only
semiconductor company to
be included for
24 consecutive
years.
Subsidized suppliers for
carbon reduction, driving green
investments worth
NT$5.5 billion.
Advanced technologies
(7-nanometer and beyond)
accounted for 69%
of total wafer revenue
TSMC’s total wafer
shipments were
12.9 million
12-inch equivalent wafers.
Manufactured
11,878
different products
using 288 distinct
technologies for 522
different customers.
TSMC represented
34%
of the Foundry
2.0 Note industry.
Investment in R&D reached
US$6.361 billion
Net Zero
by 2050
Carbon
reduction
performance
as a key supplier
selection criterion to
accelerate supply chain
decarbonization
Gross profit
margin was
56.1%
FINANCIAL RESULTS
SUSTAINABILITY PERFORMANCE
OPERATIONAL ACHIEVEMENTS
TSMC Financial, Operational, and
Sustainability Performance Highlights
Note: Foundry 2.0 includes packaging, testing, mask-making and others, and all IDM excluding memory manufacturing.
013
2
TSMC’s total wafer shipments were 12.9 million 12-inch
equivalent wafers in 2024.
Company
Profile
014
015
2.1 An Introduction to TSMC
Established in 1987 and headquartered in Hsinchu Science
Park, Taiwan, TSMC pioneered the pure-play foundry business
model with an exclusive focus on manufacturing its customers’
products. By choosing not to design, manufacture or market
any semiconductor products under its own name, the
Company ensures that it never competes with its customers.
Based on this founding principle, the key to TSMC’s success has
always been to enable its customers’ success. TSMC’s foundry
business model has led to the rise of the global fabless industry
and, since its inception, TSMC has been a world-leading
semiconductor foundry. In 2024, the Company manufactured
11,878 different products using 288 distinct technologies for
522 different customers.
TSMC-made semiconductors serve a global customer base that
is large and diverse, entailing a wide range of applications.
These semiconductor products are used in a variety of end
markets including high performance computing (HPC),
smartphones, the Internet of Things (IoT), automotive, and
digital consumer electronics. Such strong diversification helps
to smooth fluctuations in demand, which in turn allows TSMC
to maintain high levels of capacity utilization and profitability,
and generate healthy returns for future investment.
The annual capacity of the manufacturing facilities managed
by TSMC and its subsidiaries approximately 17 million 12-inch
equivalent wafers in 2024. These facilities include four 12-inch
wafer GIGAFAB® fabs, four 8-inch wafer fabs, and one 6-inch
wafer fab – all in Taiwan – as well as two 12-inch wafer fabs
at two wholly owned subsidiaries – TSMC Nanjing Company
Limited and TSMC Arizona Corporation, one 12-inch wafer fab
at a TSMC’s majority-owned manufacturing subsidiary – Japan
Advanced Semiconductor Manufacturing, Inc. (JASM), and two
8-inch wafer fabs at two wholly owned subsidiaries – TSMC
Washington and TSMC China Company Limited.
TSMC Arizona’s first fab has entered volume production of
4nm technology in fourth quarter of 2024. The construction of
the second fab is already completed. This fab is in the process
of installing facility systems and will utilize 3-nanometer
process technologies. In 2024, TSMC announced plans to
build a third fab at TSMC Arizona to meet strong customer
demand leveraging the most advanced semiconductor process
technology in the United States. The third fab will produce
chips using 2nm or more advanced processes.
In addition to its leadership in advanced process and specialty
technologies, TSMC offers TSMC 3DFabric®, a comprehensive
family of 3D silicon stacking and advanced packaging
technologies to complement its process technology offerings.
TSMC 3DFabric® provides customers greater chip design
flexibility to unleash innovation and is another differentiating
competitive advantage for the Company.
2.2.2 Market Overview
TSMC estimates that the worldwide semiconductor market
excluding memory reached US$514 billion in revenue in 2024,
representing a 7% increase from 2023. As for foundry, TSMC
expands our original definition of foundry industry to “Foundry
2.0”, which also includes packaging, testing, mask-making,
and other related technologies, as well as all integrated device
manufacturing (IDMs) excluding memory. In the subsequence,
all instances of “foundry” will refer to the new definition of
“Foundry 2.0” as this new definition more accurately reflects
TSMC’s addressable market opportunities going forward.
Under this new definition, the size of the foundry industry
was close to US$250 billion in 2023 as compared to US$150
billion under the previous definition, and the growth in 2024 is
forecasted to be approximately 6% year-over-year.
2.2.3 Industry Outlook, Opportunities and Threats
Foundry Industry Demand and Supply Outlook
In 2024, TSMC’s revenues in the foundry segment rebounded
strongly from the decline in 2023. The rapid growth of artificial
intelligence (AI) deployments drove strong increases in demand
for advanced node semiconductor chips, benefitting foundry
player like TSMC with leadership in advanced technologies.
In addition, end demand from smartphones and personal
computers (PCs) showed a mild recovery from declines in
previous year, although other markets such as the Internet of
Things (IoT), automotive and industrial remained weak. At the
same time, after the widespread severe inventory correction in
2023, the supply chain started to rebuild inventory for some
markets like AI and smartphone, which also contributed to the
recovery in the foundry segment.
Looking ahead to 2025, the global trade war and
protectionism are intensifying, incurring risks and uncertainties
to the end demand of electronic equipment. However,
TSMC expects the strong demand for AI to continue, while
smartphone and PC to mildly recovering. TSMC expects
inventory correction to continue in the IoT, automotive and
industrial sectors, impacting demand for more mature nodes of
semiconductors. For the longer term, driven by the megatrends
such as AI, 5G, digital transformation, and increasing
semiconductor content in most electronic equipment, TSMC
projects a high single-digit compound annual growth rate
for the worldwide semiconductor market excluding memory
through 2029.
As an upstream supplier in the semiconductor supply chain,
the foundry segment is tightly correlated with the market
health of all major platforms including high performance
computing (HPC), smartphones, IoT, automotive, and digital
consumer electronics (DCE).
●High Performance Computing (HPC)
The HPC platform includes PCs, tablets, game consoles, servers,
base stations and more. Major HPC unit shipments grew by 1%
in 2024 due to a slow recovery in PCs and continued inventory
correction for game consoles, both reflecting weak demand on
the consumer side. Meanwhile, demand for servers and data
centers equipped with AI accelerators was relatively healthy,
helped by the proliferation of AI applications, especially
generative AI.
For 2025, TSMC projects a flattish outlook for both PC and
server unit shipments, driven by normalized inventory levels,
pent-up PC replacement demand caused by the pandemic, and
the ongoing AI arms race, while offsetting by macro-economic
uncertainty. Longer term, an increasingly intelligent and more
connected 5G world will create demand for massive computing
power as well as increasingly energy-efficient computing. Both
require higher performance and more power-efficient central
processing units (CPUs), graphics processor units (GPUs),
network processing units (NPUs), AI accelerators and related
application-specific integrated circuits (ASICs), which will drive
the overall HPC platform towards richer silicon content, more
advanced process technologies and advanced 3D packaging.
These trends are all favorable to TSMC given its technology
leadership in these areas.
●Smartphones
With gradual recovery of the global economy and the end
of the supply chain inventory correction, smartphone unit
shipments grew by 4% in 2024, reflecting continued 5G
commercialization worldwide and rising demand from
emerging countries, as well as cyclical recovery. Smartphone
growth is expected to show marginal growth in 2025
considering macro-economic uncertainty. Over the longer
term, however, the inevitable migration to 5G along with the
Also in 2024, TSMC, along with minority investors Sony
Semiconductor Solutions (SSS), DENSO, and Toyota,
announced further investment into JASM to build a second
fab, which is planned to commence construction in 2025.
Together with its first fab, which began volume production
at the end of 2024, the overall investment in JASM will
exceed US$20 billion. With both fabs, JASM’s Kumamoto site
plans to offer 40, 22/28, 12/16 and 6/7 nanometer process
technologies for automotive, industrial, consumer electronics
and HPC-related applications.
The Company began construction on a specialty technology
fab in Dresden, Germany, in 2024. This facility will manufacture
TSMC’s 28/22 nanometer planar CMOS and 16/12 nanometer
FinFET process technologies.
Outside of Taiwan, TSMC provides customer support, account
management and engineering services through its offices in
North America, Europe, Japan, China, and South Korea. At the
end of 2024, the Company and its subsidiaries employed more
than 83,000 people worldwide.
The Company is listed on the Taiwan Stock Exchange (TWSE)
under ticker number 2330, and its American Depositary Shares
(ADSs) are traded on the New York Stock Exchange (NYSE)
under the symbol TSM.
2.2 Market/Business Summary
2.2.1 TSMC Achievements
In 2024, TSMC maintained its leading position in the IC
manufacturing segment of the global semiconductor industry
by accounting for 34% of the “Foundry 2.0” industry, which
TSMC defines as all logic wafer manufacturing, packaging,
testing, mask-making and others, an increase from 28% in
2023.
The Company’s strong market position stems in great part
from its leadership in advanced process technologies. In
2024, 69% of TSMC’s wafer revenue came from advanced
manufacturing processes – defined as geometries of 7nm and
smaller – up from 58% in 2023.
TSMC offers a comprehensive technology portfolio and
continues to expand its advanced technologies, specialty
technologies, and advanced silicon stacking and packaging
technologies, to meet customer demand and provide more
added value.
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017
need for improved performance, longer battery life, biosensors
and more edge AI features, will all continue to fuel smartphone
sales growth.
High performance and power efficient IC technologies are
essential requirements among handset manufacturers, and
highly integrated chips and advanced 3D packaging designs
are the preferred solutions to optimize cost, power and form
factor (IC footprint and thickness). The migration to advanced
process technologies will certainly continue, spurred by the
need for higher performance chips to run edge AI applications
and various complex software computations as well as higher
resolution images and video. TSMC is an acknowledged leader
in process technology for manufacturing highly integrated
chips and advanced 3D packaging designs and, as such, is very
well positioned to serve the evolving needs of the smartphone
market.
●Internet of Things (IoT)
The IoT platform includes various types of smart, connected
devices ranging from wearables and health monitors to
home appliances and industrial automation devices. Since the
pandemic, digital transformation has been the main growth
driver of IoT, offset to a large degree by continued destocking
in the industrial market. As a result, IoT device shipments in
2024 grew a modest 3% with smart wearable, health and
retail devices leading the way.
As IoT devices incorporate more AI features, the IoT industry
is expected to achieve solid long-term growth. Momentum
continues for consumer devices, but industrial demand is
expected to remain soft in the first half of 2025 with some
improvement in the second half. Overall, TSMC projects IoT
unit shipments will continue a mid-single-digit growth in
2025. As IoT devices become smarter with the integration of
AI, they will require more chips with higher performance and
lower power consumption. TSMC offers various manufacturing
processes to support these needs, including cost-effective
advanced technology, ultra-low power (ULP) and various
special process technologies to support customers in providing
innovative and competitive products, and fulfill requirements of
sustainability development.
●Automotive
The global automotive market was soft in 2024, reflecting
the fulfilment of prior pent-up demand and a downturn in
macroeconomic conditions. Worldwide car unit production
declined by 1% due to reduced demand and higher inventory
levels among Original Equipment Manufacturer (OEMs)
and dealers. The global automotive market is expected
to face continued challenges in 2025 from inflation and
macroeconomic uncertainty, TSMC projects a low-to-mid-
single-digit decline in car unit production.
The megatrends in the automotive industry today are “greener,
safer and smarter,” which will accelerate the adoption of
electric vehicles (EVs), advanced driver assistance systems
(ADAS) and smart cockpit/infotainment systems, along with
new electrical/electronic (E/E) architecture. All these will further
boost demand for application processor (AP), microcontroller
unit (MCU), ASIC processors, in-car networking, sensors, and
power management ICs (PMICs), thus continuously increasing
the silicon content per car. TSMC is well-positioned to support
the automotive industry’s transition by providing advanced
process technologies and manufacturing solutions that enable
customers to develop competitive products. In addition,
TSMC also offers a range of automotive-grade manufacturing
processes, including those with AEC-Q100 and ISO 26262
certification, to ensure the highest levels of quality and
reliability for automotive applications.
●Digital Consumer Electronics (DCE)
The global DCE market experienced a 2% decline in 2024,
primarily due to weakened demand for set-top boxes (STBs)
and other consumer products following the pandemic-induced
demand surge. In contrast, TV shipments increased by 4%
year-over-year, driven by subsidies in China.
Looking ahead to 2025, the DCE market in Europe is expected
to recover gradually, potentially following the end of the war
in Ukraine. Meanwhile, in China, recovery is also anticipated as
the government injects more stimulus through initiatives such
as the “Swap Old for New” subsidy. However, macro-economic
uncertainty could create headwinds likely leading to moderate
decline in 2025. Regardless of the timing of market recovery,
TSMC’s advanced technologies will continue to empower
DCE customers to develop and differentiate their innovative
products.
Supply Chain
The electronics industry features a long and complex supply
chain, the elements of which are correlated and highly
interdependent. At the upstream manufacturing level, IC
vendors need to have sufficient and flexible supply deliveries to
cope with fluctuating demand dynamics. Foundry vendors play
an important role in maintaining the health and effectiveness
of the supply chain. As a leader in the foundry segment, TSMC
provides advanced technologies and large-scale capacity to
complement the innovations created in the downstream chain.
2.2.4 TSMC Position, Differentiation and Strategy
Position
TSMC is a global semiconductor foundry leader in advanced
and specialty technologies and in advanced packaging
technologies. In 2024, TSMC accounted for 34% of the
Foundry 2.0 industry, which TSMC defined as all logic wafer
manufacturing, packaging, testing, mask-making and others
output value, an increase from 28% in 2023. Net revenue
by geography, calculated mainly on the country in which
customer companies are headquartered, was: 70% from
North America; 11% from China; 10% from the Asia Pacific
region, excluding China and Japan; 5% from Japan; and 4%
from Europe, the Middle East and Africa. Net revenue by
platform was: 51% HPC; 35% smartphones; 6% the IoT; and
5% automotive. In addition, 1% came from DCE, while other
segments accounted for the remaining 2%.
Differentiation
TSMC’s leadership position is based on three defining
competitive strengths and a business strategy rooted in the
Company’s heritage. The Company distinguishes itself from the
competition through its technology leadership, manufacturing
excellence, and customer trust.
As a technology leader, TSMC is consistently first among
dedicated foundries to provide leading-edge, next-generation
technologies. The Company also maintains a leadership
position in more mature technologies by applying the lessons
learned in developing advanced technologies to enrich its
specialty technologies. Beyond process technology, TSMC has
established frontend and backend integration capabilities to
create the optimum power/performance/area “sweet spot” to
help customers achieve faster time to production.
TSMC, well recognized for industry-leading manufacturing
capabilities, further extends its leadership through its Open
Innovation Platform® (OIP) and Grand Alliance initiatives. The
Company’s OIP initiative accelerates the pace of innovation
in the semiconductor design community and among the
Company’s ecosystem partners, as well as in its own IP, design
and technology co-optimization (DTCO) capabilities, process
technology and backend services. A key element is a set of
ecosystem interfaces and collaborative components initiated
and supported by the Company to more efficiently empower
innovation throughout the supply chain and drive the creation
and sharing of new revenue and profits. The TSMC Grand
Alliance is one of the most powerful forces for innovation in
the semiconductor industry, bringing together customers,
electronic design automation (EDA) partners and IP partners,
along with the partners in the new TSMC 3DFabric® Alliance,
and key equipment and material suppliers – all to achieve
new, higher levels of collaboration. Through this collaboration,
the Grand Alliance’s objective is to help customers, Alliance
members and TSMC improve competitiveness and win
business.
The foundation for customer trust is a commitment TSMC
made when it opened for business in 1987 to never compete
with its customers. In keeping this commitment, the Company
has never designed, manufactured or marketed any integrated
circuits or IC devices under its own name, but instead has
focused all of its efforts and resources on becoming the trusted
foundry for its customers.
Strategy
TSMC is confident that its competitive advantages will enable
it to prosper from the foundry segment’s many attractive
growth opportunities. For the five major markets, namely
high performance computing, smartphones, the Internet of
Things, automotive, and digital consumer electronics, and
in response to the fact that the focus of customer demand
is shifting from a process-technology-centric to a product-
application-centric approach, the Company has constructed
five corresponding technology platforms to provide customers
with comprehensive, competitive logic process technologies,
specialty technologies, IPs and packaging and testing
technologies to shorten customers’ time to design and time to
market. These five platforms are:
High Performance Computing (HPC): Driven by data explosion
and AI application innovation, HPC has become the key
growth driver for TSMC’s business. TSMC provides customers,
including both fabless IC design companies and system
companies, with leading-edge logic process technologies
such as 2nm nanosheet (N2), 3nm FinFET (N3), 4nm FinFET
(N4), 5nm FinFET (N5), 6nm FinFET (N6), and 7nm FinFET
(N7), as well as comprehensive IPs including high-speed
018
019
interconnect IPs, to meet customers’ product requirements
for transferring and processing vast amounts of data
anywhere at any time. Specifically, the Company introduced
its HPC-focused technologies, N4X and N3X, representing
the ultimate performance and maximum clock frequencies
in TSMC’s 5nm and 3nm families, respectively. Based on
advanced process nodes, a variety of HPC products have been
launched, such as AI accelerators, including AI GPUs and AI
ASICs, PC CPUs, consumer GPUs, field programmable gate
arrays (FPGAs), server processors, and high-speed networking
chips, etc. These products can be used in current and
future 5G/6G infrastructures, AI, Cloud, and enterprise data
centers. The Company also offers multiple TSMC 3DFabric®
advanced silicon stacking and packaging technologies, such as
TSMC-SoIC® manufacturing service, and Integrated Fan-Out
(InFO) and CoWoS® advanced packaging services, to enable
homogeneous and heterogeneous chip integration to meet
customer requirements for high performance, high compute
density and high energy efficiency, low latency, and high
integration. TSMC will continue to optimize its HPC platform
and strengthen collaboration with customers to help them
capture market growth in HPC markets.
Smartphones: For customers’ premium product applications,
TSMC offers leading logic process technologies such as N2
Plus (N2P), N3 Enhanced (N3E), N3, N4 Plus (N4P), N4,
N5 Plus (N5P), N5, as well as comprehensive IPs to further
enhance chip performance, reduce power consumption, and
decrease chip size. For mainstream product applications, the
Company offers a broad range of logic process technologies,
including N4 Compact (N4C), N6, 7nm FinFET Plus (N7+), N7,
12nm FinFET Compact Plus (12FFC+), 12nm FinFET Compact
(12FFC), 16nm FinFET Compact Plus (16FFC+), 16nm FinFET
Compact (16FFC), 28nm High Performance Compact Plus
(28HPC+), 28nm High Performance Compact (28HPC), and
22nm Ultra-Low Power (22ULP), in addition to comprehensive
IPs, to satisfy customer needs for high performance and low
power chips. Furthermore, for both premium and mainstream
product applications, the Company offers leading-edge,
highly competitive specialty technologies to deliver specialty
companion chips for customers’ logic application processors,
including radio frequency (RF), RF front-end, embedded
non-volatile memory, power management ICs, sensors,
and display chips, as well as TSMC 3DFabric® advanced
packaging technologies, such as TSMC’s industry-leading InFO
technology.
Internet of Things: Following the three megatrends of the IoT
segment, “Everything Connected, Smart and Green,” TSMC not
only provides customers with solid logic technologies, including
5nm, 6nm, 7nm, 12nm, 16nm, and 28nm, but also builds
a leading, complete and highly integrated ULP technology
platform based on its logic technologies to enable customers’
product innovations for the artificial intelligence of things
(AIoT).
TSMC’s industry-leading ULP technologies, including its
new FinFET-based 6nm technology – N6e® and 12nm
technology – N12e® feature both energy efficiency and high
performance. These technologies provide more computing
power and AI inferencing capability while reducing system
power consumption. In addition, the planar transistor based
mainstream technologies, such as 22nm ultra-low leakage
(ULL), 28nm ULP, 40nm ULP, and 55nm ULP technologies,
have been widely adopted by various IoT system-on-a-chip
(SoC) and battery-powered products to extend battery life.
TSMC’s ULP technology platform also provides customers
with comprehensive specialty technologies, covering RF,
enhanced analog devices, embedded non-volatile memory,
sensors, display devices and PMICs. For extreme low power
product application requirements, TSMC has also extended its
low operating voltage (Low Vdd) offerings and has provided
simulation program with integrated circuit emphasis (SPICE)
models with wide-range operating voltages and design
guidelines to lower the adoption barrier and reduce lead time
to help customers successfully launch innovative products.
Automotive: TSMC offers a comprehensive spectrum of
technologies and services to support the automotive industry’s
three megatrends – building vehicles that are “Safer, Smarter
and Greener.” The Company is also an industry leader in
providing a robust automotive IP ecosystem, which covers
5nm FinFET, 7nm FinFET, and 16nm FinFET technologies
for ADAS, advanced in-vehicle infotainment (IVI), as well as
zonal controllers for new E/E architectures in next-generation
vehicles, including internal combustion engines (ICEs) and
electric vehicles (EVs). In 2023, TSMC introduced its N3 Auto
Early (N3AE) program, providing automotive process design
kits (PDKs) to support automotive customers. N3AE has since
migrated to N3A with V0.9 PDK released in 2024 to support
customers to design automotive application products early on.
In addition to its advanced logic platform, TSMC offers
a broad array of competitive automotive-grade specialty
technologies including 28nm embedded flash memory, 28nm,
22nm, and 16nm mmWave RF, high dynamic range (HDR),
high sensitivity CMOS image sensor (CIS)/light detection and
ranging (LiDAR) sensors, and PMICs. The emerging technology
of magnetoresistive random access memory (MRAM)
demonstrated automotive Grade-1 capability on 22nm and
passed automotive Grade-1 requirements on 16nm in 2023.
All these technologies have been applied to TSMC’s automotive
process qualification standards based on AEC-Q100 standards
of Automotive Electronic Council (AEC) and/or meeting
customers’ technology specifications.
Digital Consumer Electronics (DCE): TSMC provides customers
with leading, comprehensive technologies to deliver AI-enabled
smart devices for DCE applications, including smart digital TVs
(DTVs), set-top boxes (STBs), AI-embedded smart cameras and
associated wireless local area networks (WLANs), PMICs, and
timing controllers (T-CONs). The Company’s leading N6, N7,
16FFC/12FFC, 22ULP/22ULL and 28HPC+ technologies have
been widely adopted by leading global makers of 8K/4K DTVs
and STBs, 4K streaming media devices (SMDs)/over-the-top
(OTT), digital single-lens reflex (DSLR) cameras, and so
on. TSMC will continue to make these technologies more
competitive through DTCO for customers’ digital intensive
chip designs and to drive lower power consumption for more
cost-effective packaging.
TSMC continually strengthens its core competitiveness and
deploys both short- and long-term plans for technology
and business development and assists customers in tackling
the challenges posed by short product cycles and intense
competition in the electronic products market to achieve return
on investment (ROI) and growth objectives.
●Short-Term Semiconductor Business Development Plan
1. Substantially ramp up the business and sustain advanced
technology market segment share by continually increasing
capacity and R&D investments.
2. Maintain mainstream technology market segment share by
expanding business to new customers and market segments.
3. Continue to enhance the competitive advantages of the
Company’s technology platforms in HPC, smartphones,
IoT, automotive, and digital consumer electronics to
expand TSMC’s dedicated foundry services in these product
applications.
4. Further expand TSMC’s business and service infrastructure
into emerging and developing markets.
●Long-Term Semiconductor Business Development Plan
1. Continue developing leading-edge technologies at a
predictable pace to achieve greater energy-efficient
computing.
2. Broaden specialty business contributions by further
developing derivative technologies.
3. Provide more integrated services, covering system-level
integration design, design technology definition, design tool
preparation, wafer processing, TSMC 3DFabric® advanced
silicon stacking and packaging technologies, and testing
services, etc., all of which deliver more value to customers
through optimized solutions.
020
021
2.3 Board Members
2.3.1 Information Regarding Board Members (Note 1)
Title/Name
Gender
Age
Nationality or
Place of
Registration
Date Elected
Term Expires
Date First
Elected
Shares Held When Elected
Shares Currently Held
Shares Currently Held by
Spouse & Minors
Selected Education and Professional Qualification
Past Positions
Current Positions at Non-profit Organizations
Selected Current Positions at TSMC and
Other Companies
Shares (Note 2)
%
Shares (Note 2)
%
Shares (Note 2)
%
Chairman
C.C. Wei
Male
71-75
R.O.C.
06/04/2024
06/03/2027
06/08/2017
6,392,834
0.02%
6,392,834
0.02%
700,261
0.00%
Selected Education and Professional Qualification
Bachelor and Master Degrees in Electrical Engineering, National Chiao Tung University
Ph.D. in Electrical Engineering, Yale University, U.S.
Honorary Ph.D., National Yang Ming Chiao Tung University
Laureate, Industrial Technology Research Institute (ITRI)
Past Positions
Senior Vice President, Technology, Chartered Semiconductor Manufacturing Ltd., Singapore
Senior Vice President, Mainstream Technology Business, TSMC
Senior Vice President, Business Development, TSMC
Executive Vice President and Co-Chief Operating Officer, TSMC
President and Co-CEO, TSMC
Vice Chairman, TSMC
Chairman, Taiwan Semiconductor Industry Association (TSIA)
Chief Executive Officer, TSMC
Director
F.C. Tseng
Male
76-80
R.O.C.
06/04/2024
06/03/2027
05/13/1997
29,472,675
0.11%
29,472,675
0.11%
5,132,855
0.02%
Selected Education and Professional Qualification
Bachelor Degree in Electrical Engineering, National Cheng Kung University
Master Degree in Electrical Engineering, National Chiao Tung University
Ph.D. in Electrical Engineering, National Cheng Kung University
Honorary Ph.D., National Chiao Tung University
Honorary Ph.D., National Tsing Hua University
Past Positions
President, Vanguard International Semiconductor Corp.
President, TSMC
Deputy CEO, TSMC
Vice Chairman, TSMC
Independent Director, Chairman of Audit Committee & Compensation Committee Member, Acer Inc.
Director, National Culture and Arts Foundation, R.O.C.
Current Positions at Non-profit Organizations
Chairman, TSMC Education and Culture Foundation
Director, Cloud Gate Culture and Arts Foundation
Director, Chu-Ming Medical Foundation
Chairman, TSMC China Company Ltd. (a non-public
company)
Chairman, Global UniChip Corp.
Vice Chairman, Vanguard International
Semiconductor Corp.
Director, eMemory Technology, Inc.
Director
National Development Fund, Executive Yuan
(Note 3)
Representative:
Chin-Ching Liu
Male
61-65
R.O.C.
06/04/2024
06/03/2027
12/10/1986
06/06/2024
(Note 4)
1,653,709,980
-
6.38%
-
1,653,709,980
-
6.38%
-
-
-
-
-
Selected Education and Professional Qualification
Bachelor Degree in Mathematics, Chung Yuan University
Master Degree in Business Administration, National Taiwan University
Past Positions
SCM Consultant leader of IBM Greater China
Executive of IBM Manufacturing Consultant Service
General Manager of IBM Global Business Service
General Manager of IBM General Business Group
Partner/Vice Chairman of PwC Consultant
Chairman of Tax and Finance Committee Chinese National Federation of Industries
Professor level Technical Expert, Depart of Accounting, National ChengChi University
Chairman, PwC Consultant Service, Taiwan
Chairman, PwC Business Consultant Service, Taiwan
Chairman, PwC Group Taiwan
Current Positions at Non-profit Organizations
Minister without Portfolio, Executive Yuan & concurrently Minister, National Development Council
The Convener of National Development Fund, Executive Yuan
None
As of 02/28/2025
(Continued)
022
023
Title/Name
Gender
Age
Nationality or
Place of
Registration
Date Elected
Term Expires
Date First
Elected
Shares Held When Elected
Shares Currently Held
Shares Currently Held by
Spouse & Minors
Selected Education and Professional Qualification
Past Positions
Current Positions at Non-profit Organizations
Selected Current Positions at TSMC and
Other Companies
Shares (Note 2)
%
Shares (Note 2)
%
Shares (Note 2)
%
Independent Director
Sir Peter L. Bonfield
Male
76-80
UK
06/04/2024
06/03/2027
05/07/2002
-
-
-
-
-
-
Selected Education and Professional Qualification
Bachelor Degree in Engineering, Loughborough University
Honorary Doctorate of Technology, Loughborough University
Fellow of the Royal Academy of Engineering
Knighted, 1996
Awarded Commander of the Order of the British Empire (CBE), 1989
Awarded the Order of the Lion of Finland
Awarded the Gold Medal from the Institute of Management
Awarded the Mountbatten Medal from the National Electronics Council
Awarded the FT ODX Outstanding Director Award, 2019
11 Honorary Doctorate Degrees in total
Awarded Commander of the Order of Orange Nassau, 2024
Past Positions
Semiconductor Engineer, Texas Instruments Inc. (T.I.), U.S.
Chairman, NXP Semiconductors N.V., the Netherlands
Chairman and CEO, ICL Plc, UK
CEO and Chairman of the Executive Committee, British Telecommunications Plc
Chairman, GlobalLogic Inc., U.S.
Vice President, the British Quality Foundation
Director, Mentor Graphics Corp., U.S.
Director, Sony Corp., Japan
Director, L.M. Ericsson, Sweden
Senior Independent Director, AstraZeneca, UK
Chair of Council and Senior Pro-Chancellor, Loughborough University, UK
Board Member, EastWest Institute, New York
Senior Advisor, Alix Partners LLP, London
Advisory Board Member, The Longreach Group Ltd., HK
Member of the International Advisory Board, Citigroup, U.S.
Board Mentor, Chairman Mentors International (CMi) Ltd., London
Non-Executive Director, Darktrace Plc, UK
Non-Executive Director, Imagination Technologies
Group Ltd., UK (a non-public company)
Independent Director
Michael R. Splinter
Male
71-75
U.S.
06/04/2024
06/03/2027
06/09/2015
-
-
-
-
-
-
Selected Education and Professional Qualification
Bachelor and Master Degrees in Electrical Engineering, University of Wisconsin-Madison
Honorary Ph.D. in Engineering, University of Wisconsin-Madison
Awarded 2013 Robert N. Noyce Award by Semiconductor Industry Association
Member of the National Academy of Engineering
Recognized as NACD (National Association of Corporate Directors) Directorship CertifiedTM, 2020
Past Positions
Executive Vice President of Technology and Manufacturing Group, Intel Corp.
Executive Vice President of Sales and Marketing, Intel Corp.
CEO, Applied Materials, Inc.
Chairman, Applied Materials, Inc.
Director, The NASDAQ OMX Group, Inc.
Director, Silicon Valley Leadership Group
Director, SEMI
Director, Meyer Burger Technology Ltd., Switzerland
Chairman of the Board, NASDAQ, Inc.
Director, Pica8 Inc., U.S.
Director, University of Wisconsin Foundation, U.S.
Chairman of the Board, US-Taiwan Business Council
Independent Director and Compensation Committee Chair, Gogoro Inc., Cayman Islands
Chair of Industrial Advisory Committee, National Institute of Standards and Technology, Department
of Commerce, U.S.
Current Positions at Non-profit Organizations
Chair, Board of Trustees, Natcast, U.S.
Lead Independent Director, NASDAQ, Inc.
Independent Director, Compensation Committee
Chair, and Nominating and Corporate Governance
Committee Member, Tigo Energy, Inc., U.S.
Independent Director, Kioxia Holdings Corp., Japan
(a non-public company)
General Partner, WISC Partners LP, U.S.
General Partner, MRS Business and Technology
Advisors, U.S. (a non-public company)
Independent Director
Moshe N. Gavrielov
Male
66-70
U.S.
06/04/2024
06/03/2027
06/05/2019
-
-
-
-
-
-
Selected Education and Professional Qualification
Bachelor Degree in Electrical Engineering, Technion - Israel Institute of Technology
Master Degree in Computer Science, Technion - Israel Institute of Technology
Past Positions
In a variety of engineering and engineering management positions, National Semiconductor Corp. and Digital
Equipment Corp., U.S.
In a variety of executive management positions, LSI Logic Corp. for nearly 10 years, U.S.
CEO, Verisity, Ltd., U.S.
Executive Vice President and General Manager of the Verification Division, Cadence Design Systems, Inc., U.S.
President and CEO, Xilinx, Inc., U.S.
Director, Xilinx, Inc., U.S.
Executive Chairman, Wind River Systems, Inc., U.S.
Director, San Jose Institute of Contemporary Art, U.S.
Advisor, Matrix Capital Management Company LP, U.S.
Chairman, SiMa Technologies, Inc., U.S. (a non-public
company)
Chairman, Foretellix, Ltd., Israel (a non-public
company)
Independent Director, NXP Semiconductors N.V.,
the Netherlands
Independent Director, Cadence Design Systems,
Inc., U.S.
(Continued)
024
025
Title/Name
Gender
Age
Nationality or
Place of
Registration
Date Elected
Term Expires
Date First
Elected
Shares Held When Elected
Shares Currently Held
Shares Currently Held by
Spouse & Minors
Selected Education and Professional Qualification
Past Positions
Current Positions at Non-profit Organizations
Selected Current Positions at TSMC and
Other Companies
Shares (Note 2)
%
Shares (Note 2)
%
Shares (Note 2)
%
Independent Director
L. Rafael Reif
Male
71-75
U.S.
06/04/2024
06/03/2027
07/26/2021
-
-
-
-
-
-
Selected Education and Professional Qualification
Ingeniero Eléctrico Degree, Universidad de Carabobo, Valencia, Venezuela
Master Degree and Ph.D. in Electrical Engineering, Stanford University
Honorary Doctor of Laws Degree, The Chinese University of Hong Kong (2015)
Honorary Doctorates from Tsinghua University (2016), the Technion (2017), Arizona State University (2018)
and University of Miami (2022)
Member of Tau Beta Pi, the Engineering Honor Society
Member of the Electrochemical Society
Fellow of the Institute of Electrical and Electronics Engineers (IEEE)
Member of the American Academy of Arts and Sciences, the National Academy of Engineering and the
Chinese Academy of Engineering
Fellow of the National Academy of Inventors
Awarded with United States Presidential Young Investigator Award (1984)
Awarded with the Semiconductor Research Corporation’s Aristotle Award (2000)
Awarded the Tribeca Disruptive Innovation Award (2012)
Awarded the Frank E. Taplin, Jr. Public Intellectual Award by the Woodrow Wilson National Fellowship
Foundation (2015)
Awarded with Engineer of the Year from Great Minds in STEM (2018)
Awarded the Simon Ramo Founders Award by the U.S. National Academy of Engineering (2022)
Inventor or co-inventor on 13 patents, editor or co-editor of 5 books, and supervisor to 38 doctoral theses
Past Positions
Assistant Professor, Universidad Simón Bolívar, Caracas, Venezuela
Visiting Assistant Professor of Electrical Engineering, Stanford University
Faculty, Massachusetts Institute of Technology (MIT), since 1980
IBM Faculty Fellowship, MIT Center for Materials Science and Engineering
Analog Devices Career Development Professorship, MIT Electrical Engineering
Fariborz Maseeh Professor of Emerging Technology, MIT (2004-2012)
Director of Microsystems Technology Laboratories, MIT
Associate Department Head of Electrical Engineering, MIT
Head of the Department of Electrical Engineering and Computer Science (EECS), MIT
Provost, MIT
Independent Director, Alcoa Corp., U.S.
Director, Arconic Inc., U.S.
Director, Schlumberger Ltd., U.S.
President, MIT (2012-2022)
Current Positions at Non-profit Organizations
President Emeritus, MIT, since 2023
Ray and Maria Stata Professor of Electrical Engineering and Computer Science, MIT, since 2023
Member, Board of Trustees, Carnegie Endowment for International Peace, U.S.
Director, Council on Foreign Relations, U.S.
Director, Waverley Street Foundation, U.S.
Member, Board of Trustees, Instituto Tecnológico de Monterrey, Mexico
Member, Board of Trustees, Massachusetts General Hospital, U.S.
Co-Chair of Growth Technical Advisory Board, Applied
Materials, Inc.
Director, Engine No. 1 LP, U.S. (a non-public company)
Independent Director
Ursula M. Burns
Female
66-70
U.S.
06/04/2024
06/03/2027
06/04/2024
-
-
-
-
-
-
Selected Education and Professional Qualification
Bachelor Degree in Mechanical Engineering, Polytechnic Institute of New York University
Master Degree in Mechanical Engineering, Columbia University
Member, National Academy of Engineering
Member, American Academy of Arts and Sciences
Member, Royal Academy of Engineering
Past Positions
Chairwoman, CEO and President, Xerox Corp., U.S.
Chairwoman and CEO, VEON Ltd., the Netherlands
Director, Boston Scientific Corp., U.S.
Director, American Express Company
Director, Nestlé S.A., Switzerland
Director, ExxonMobil Corp., U.S.
Executive Chairwoman, Plum Acquisition Corp. I, U.S.
Leader, White House National Program on Science, Technology, Engineering and Math (STEM)
Chair, President’s Export Council
Member, G7 Gender Equality Advisory Council
Director, Endeavor Group Holdings, Inc., U.S.
Vice Chair, Advisory Council on Supply Chain Competitiveness (ACSCC), U.S. Department of Commerce
(2022-2024)
Current Positions at Non-profit Organizations
Member, Board of Trustees, Ford Foundation, U.S.
Member, Board of Trustees, Massachusetts Institute of Technology (MIT) Corp.
Member, Board of Trustees, Metropolitan Museum of Art, U.S.
Member, Board of Trustees, Mayo Clinic, U.S.
Non-Executive Chairwoman, Teneo Holdings LLC, U.S.
(a non-public company)
Independent Non-Executive Director, IHS Holding Ltd.,
Cayman Islands
Director, Uber Technologies Inc., U.S.
Founding Partner, Integrum Holdings LP, U.S.
(a non-public company)
(Continued)
026
027
Note 1: TSMC shareholders elected TSMC’s 16th Board of Directors at its 2024 Annual Shareholders’ Meeting on June 4, 2024. The ten Directors (including seven Independent Directors) are: Dr. C.C. Wei, Dr. F.C. Tseng,
Dr. Ming-Hsin Kung (Representative of the National Development Fund, Executive Yuan), Sir Peter Leahy Bonfield (Independent Director), Mr. Michael R. Splinter (Independent Director), Mr. Moshe N. Gavrielov
(Independent Director), Dr. L. Rafael Reif (Independent Director), Ms. Ursula M. Burns (Independent Director), Ms. Lynn L. Elsenhans (Independent Director), and Dr. Chuan Lin (Independent Director). After the
Annual Shareholders’ Meeting, TSMC held the first meeting of the 16th Board of Directors, where the Board unanimously elected Dr. C.C. Wei as Chairman and Chief Executive Officer.
Note 2: Does not include shares held in the form of ADSs.
Note 3: Major Shareholders of the Institutional Shareholder
Institutional Shareholder
Major Shareholders (Top 10 Shareholders) of the Institutional Shareholder
National Development Fund, Executive Yuan
Not Applicable
Note 4: Mr. Chin-Ching Liu was appointed as the representative of the National Development Fund succeeding Mr. Ming-Hsin Kung on June 6, 2024.
Title/Name
Gender
Age
Nationality or
Place of
Registration
Date Elected
Term Expires
Date First
Elected
Shares Held When Elected
Shares Currently Held
Shares Currently Held by
Spouse & Minors
Selected Education and Professional Qualification
Past Positions
Current Positions at Non-profit Organizations
Selected Current Positions at TSMC and
Other Companies
Shares (Note 2)
%
Shares (Note 2)
%
Shares (Note 2)
%
Independent Director
Lynn L. Elsenhans
Female
66-70
U.S.
06/04/2024
06/03/2027
06/04/2024
-
-
-
-
-
-
Selected Education and Professional Qualification
Bachelor Degree in Applied Mathematics, Rice University
Master Degree in Business Administration, Harvard University
Past Positions
Chairwoman, President and CEO, Sunoco Inc., U.S.
Chairwoman and CEO, Sunoco Logistics Partners L.P., U.S.
Executive Vice President of Global Manufacturing, Shell Downstream Inc., U.S.
President and CEO, Shell Oil Products, U.S.
President of Shell Oil Company and US Country Chair
Independent Director, International Paper Company, U.S.
Independent Director, Flowserve Corporation, U.S.
Independent Director, GlaxoSmithKline plc, UK
Current Positions at Non-profit Organizations
Advisory Board Member of Whiting School of Engineering, Johns Hopkins University
Independent Director and Governance & Corporate
Responsibility Committee Chair, Baker Hughes
Company, U.S.
Independent Non-Executive Director, Audit Committee
Member, and Nomination Committee Member,
Saudi Arabian Oil Co., Kingdom of Saudi Arabia
Independent Director, Peter Kiewit and Sons Inc., U.S.
(a non-public company)
Independent Director
Chuan Lin
Male
71-75
R.O.C.
06/04/2024
06/03/2027
06/04/2024
126,826
0.00%
126,826
0.00%
16,003
0.00%
Selected Education and Professional Qualification
Bachelor Degree in Economics, Fu Jen Catholic University
Master Degree in Public Finance, National Chengchi University
Ph.D. in Economics, University of Illinois Urbana-Champaign, U.S.
Past Positions
Research Fellow, Chung-Hua Institution for Economic Research
Professor and Department Chair, Public Finance, National Chengchi University
Director General, Bureau of Finance, Taipei City Government
Minister, Directorate General of Budget, Accounting and Statistics of Executive Yuan
Minister of Finance
Premier of Executive Yuan
Chairman, Vanguard International Semiconductor Corporation
Independent Director, Casetek Holdings Limited
Independent Director, Inotera Memories, Inc.
Director, PharmaEngine, Inc.
Director, Chartis Taiwan Insurance Co., Ltd.
Chief Executive Officer, New Frontier Foundation
Current Positions at Non-profit Organizations
Senior Advisor to the President
Chairman, TTY Biopharm Company Limited
Chairman,TSH Biopharm Corporation Limited
(Representative of TTY Biopharm Company Limited)
Independent Director, Pegatron Corporation
Remarks:
1. No member of the Board of Directors held TSMC shares by nominee arrangement.
2. Managers or Directors who are spouses or within second-degree relative of consanguinity to the directors: None.
3. Rationale for electing the same person as Chairman and Chief Executive Officer (CEO): To navigate the rapidly changing landscape of the highly competitive semiconductor industry, TSMC’s Board of Directors
elected Dr. C.C. Wei as the Chairman and CEO following the Board’s re-election at the Annual Shareholders’ Meeting on June 4, 2024. With Dr. Wei at the helm, the alignment between the Board of Directors and
the management team is expected to be more effective, enhancing efficiency in decision-making and execution and maximizing shareholder value. The Company currently has seven independent directors,
accounting for 70% of the total board seats. The remaining directors do not hold managerial or employee roles within the Company, ensuring the Board’s independence in decision-making while enabling
professional oversight and guidance that meet shareholder and market expectations for the Company’s stability and long-term value.
028
029
2.3.2 Remuneration of Directors and Independent Directors (Note 1)
Unit: NT$
Note 1: Directors and Independent Directors’ remuneration policies, procedures, standards and structure, as well as the linkage to responsibilities, risks and time spent:
1. According to TSMC’s Articles of Incorporation, the Board of Directors is authorized to determine the salary for the Chairman, Vice Chairman and Directors, taking into account the extent and value of the
services provided for the management of the Corporation and the standards of the industry within the R.O.C. and overseas.
2. The Articles of Incorporation also provide that the compensation to directors shall be no more than 0.3% of annual profits and directors who also serve as executive officers of TSMC are not entitled
to receive compensation to directors. According to TSMC’s Compensation and People Development Committee Charter, the distribution of compensation to directors shall be made in accordance
with TSMC’s “Rules for Distribution of Compensation to Directors” based on the following principles: (1) directors who also serve as executive officers of the Company are not entitled to receive
compensation; (2) the compensation for independent directors may be higher than other directors because they serve on multiple Committees, requiring their participation in discussions and
resolutions according to each Committee’s charter; and (3) the compensation for overseas independent directors may be higher than domestic independent directors, as they require additional time to
attend quarterly meetings in Taiwan.
Note 2: Former Chairman Dr. Mark Liu retired after the Annual Shareholders’ Meeting on June 4, 2024.
Note 3: Dr. C.C. Wei was elected as Chairman and Chief Executive Officer (CEO), effective June 4, 2024.
Note 4: Mr. Chin-Ching Liu was appointed as the representative of the National Development Fund succeeding Mr. Ming-Hsin Kung on June 6, 2024.
Note 5: The tenures of Independent Directors Ms. Kok-Choo Chen and Mr. Yancey Hai expired on June 4, 2024.
Note 6: Ms. Ursula M. Burns, Ms. Lynn L. Elsenhans, and Mr. Chuan Lin were elected as TSMC’s independent director at TSMC’s Annual Shareholders’ Meeting on June 4, 2024.
Note 7: Pensions funded according to applicable law.
Note 8: The compensation of directors was expensed based on the estimated payment amounts. If the actual amounts subsequently paid differ from the above estimated amounts, the differences will be recorded in the
year fully paid as a change in accounting estimate.
Note 9: The above-mentioned figures include expenses for Company cars and related reimbursements, but do not include compensation of Company drivers (totaled NT$3,666,280).
Note 10: Total remuneration of the directors from TSMC and from all consolidated entities in 2023, including their employee compensation, both accounted for 0.1411% of 2023 net income.
Title/Name
Director’s Remuneration
Sum of (A+B+C+D) and
Ratio to Net Income
Compensation to a Director Who is an Employee of TSMC or
of TSMC’s Consolidated Entities
Sum of (A+B+C+D+E+F+G)
and Ratio to Net Income
(Note 10)
Compensation
to Directors from
Non-consolidated
Affiliates or Parent
Company
Base Compensation (A)
Severance Pay and
Pensions (B)
(Note 7)
Compensation to
Directors (C)
(Note 8)
Allowances (D) (Note 9)
Base Compensation,
Bonuses, and Allowances (E)
(Note 9)
Severance Pay and
Pensions (F) (Note 7)
Profit Sharing (G)
From TSMC
From All
Consolidated
Entities
From TSMC
From All
Consolidated
Entities
From TSMC
From All
Consolidated
Entities
From TSMC
From All
Consolidated
Entities
From TSMC
From All
Consolidated
Entities
From TSMC
From All
Consolidated
Entities
From TSMC
From All
Consolidated
Entities
From TSMC
From All Consolidated Entities
From TSMC
From All
Consolidated
Entities
Cash
Stock (Fair
Market Value)
Cash
Stock (Fair
Market Value)
Former Chairman
Mark Liu (Note 2)
146,109,128
146,109,128
116,599
116,599
199,558,100
199,558,100
808,030
808,030
346,591,857
0.0296%
346,591,857
0.0296%
-
-
-
-
-
-
-
-
346,591,857
0.0296%
346,591,857
0.0296%
-
Chairman & CEO
C.C. Wei (Note 3)
-
-
-
-
-
-
-
-
-
-
628,180,752
628,180,752
288,458
288,458
317,893,824
-
317,893,824
-
946,363,034
0.0807%
946,363,034
0.0807%
-
Director
F.C. Tseng
-
-
-
-
13,337,425
13,337,425
1,086,975
1,086,975
14,424,400
0.0012%
14,424,400
0.0012%
-
-
-
-
-
-
-
-
14,424,400
0.0012%
14,424,400
0.0012%
18,715,133
Director
National Development Fund, Executive
Yuan
Representative:
Chin-Ching Liu (Note 4)
-
-
-
-
13,337,425
13,337,425
-
-
13,337,425
0.0011%
13,337,425
0.0011%
-
-
-
-
-
-
-
-
13,337,425
0.0011%
13,337,425
0.0011%
-
Independent Director
Sir Peter L. Bonfield
-
-
-
-
21,397,147
21,397,147
-
-
21,397,147
0.0018%
21,397,147
0.0018%
-
-
-
-
-
-
-
-
21,397,147
0.0018%
21,397,147
0.0018%
-
Independent Director
Kok-Choo Chen (Note 5)
-
-
-
-
7,949,011
7,949,011
-
-
7,949,011
0.0007%
7,949,011
0.0007%
-
-
-
-
-
-
-
-
7,949,011
0.0007%
7,949,011
0.0007%
-
Independent Director
Michael R. Splinter
-
-
-
-
21,397,147
21,397,147
-
-
21,397,147
0.0018%
21,397,147
0.0018%
-
-
-
-
-
-
-
-
21,397,147
0.0018%
21,397,147
0.0018%
-
Independent Director
Moshe N. Gavrielov
-
-
-
-
21,397,147
21,397,147
-
-
21,397,147
0.0018%
21,397,147
0.0018%
-
-
-
-
-
-
-
-
21,397,147
0.0018%
21,397,147
0.0018%
-
Independent Director
Yancey Hai (Note 5)
-
-
-
-
7,949,011
7,949,011
-
-
7,949,011
0.0007%
7,949,011
0.0007%
-
-
-
-
-
-
-
-
7,949,011
0.0007%
7,949,011
0.0007%
-
Independent Director
L. Rafael Reif
-
-
-
-
21,397,147
21,397,147
-
-
21,397,147
0.0018%
21,397,147
0.0018%
-
-
-
-
-
-
-
-
21,397,147
0.0018%
21,397,147
0.0018%
-
Independent Director
Ursula M. Burns (Note 6)
-
-
-
-
11,276,780
11,276,780
-
-
11,276,780
0.0010%
11,276,780
0.0010%
-
-
-
-
-
-
-
-
11,276,780
0.0010%
11,276,780
0.0010%
-
Independent Director
Lynn L. Elsenhans (Note 6)
-
-
-
-
11,276,780
11,276,780
-
-
11,276,780
0.0010%
11,276,780
0.0010%
-
-
-
-
-
-
-
-
11,276,780
0.0010%
11,276,780
0.0010%
-
Independent Director
Chuan Lin (Note 6)
-
-
-
-
8,715,989
8,715,989
-
-
8,715,989
0.0007%
8,715,989
0.0007%
-
-
-
-
-
-
-
-
8,715,989
0.0007%
8,715,989
0.0007%
-
Total
146,109,128
146,109,128
116,599
116,599
358,989,109
358,989,109
1,895,005
1,895,005
507,109,841
0.0432%
507,109,841
0.0432%
628,180,752
628,180,752
288,458
288,458
317,893,824
0
317,893,824
0
1,453,472,875
0.1239%
1,453,472,875
0.1239%
18,715,133
*Other than disclosure in the above table, Directors remunerations earned by providing services (e.g. providing consulting services as a non-employee of parent company/all consolidated entities/non-consolidated
affiliates) to TSMC and all consolidated entities in the 2024 financial statements: Dr. F.C. Tseng for NT$18,944,515.
030
031
2.4 Management Team
2.4.1 Information Regarding Management Team
As of 02/28/2025
Title
Name
Gender
Nationality
On-board Date
(Note 1)
Shares Held
Shares Held by Spouse
& Minors
Shares Held in the Name
of Others
Education and Selected Past Positions
Selected Current Positions at Other
Companies
Managers Who Are Spouses or within Second-degree
Relative of Consanguinity to Each Other
Shares
(Note 2)
%
Shares
(Note 2)
%
Shares
(Note 2)
%
Title
Name
Relation
Chairman & Chief Executive Officer
C.C. Wei (Note 3)
Male
R.O.C.
02/01/1998
6,392,834
0.02%
700,261
0.00%
-
-
Ph.D., Electrical Engineering, Yale University, U.S.
Chief Executive Officer, TSMC
President and Co-Chief Executive Officer, TSMC
Executive Vice President and Co-Chief Operating Officer, TSMC
Senior Vice President, Business Development, TSMC
Senior Vice President, Mainstream Technology Business, TSMC
Senior Vice President, Chartered Semiconductor Manufacturing Ltd.
None
None
None
None
Executive Vice President and Co-Chief Operating
Officer
Co-COO Office & Operations
Y.P. Chyn (Note 4)
Male
R.O.C.
01/01/1987
4,932,964
0.02%
4,190,107
0.02%
-
-
Master, Electrical Engineering, National Cheng Kung University, Taiwan
Senior Vice President, Operations & Overseas Operations Office, TSMC
Senior Vice President, Product Development, TSMC
Vice President, Advanced Technology and Business, TSMC
Director, TSMC subsidiaries
None
None
None
Executive Vice President and Co-Chief Operating
Officer
Co-COO Office & Research and Development
Y.J. Mii (Note 4)
Male
R.O.C.
11/14/1994
1,016,273
0.00%
-
-
-
-
Ph.D., Electrical Engineering, University of California, Los Angeles, U.S.
Senior Vice President, Research and Development, TSMC
Vice President, Technology Development, TSMC
Senior Director, Platform I Division, TSMC
None
None
None
None
Senior Vice President and Deputy Co-Chief Operating
Officer
Chief Information Security Officer
Cliff Hou (Note 5 and Note 6)
Male
R.O.C.
12/15/1997
447,117
0.00%
60,802
0.00%
-
-
Ph.D., Electrical Engineering, Syracuse University, U.S.
Senior Vice President, Europe & Asia Sales and Research & Development/Corporate
Research, TSMC
Senior Vice President, Technology Development, TSMC
Vice President, Design and Technology Platform, TSMC
Senior Director, Design and Technology Platform, TSMC
Director, TSMC subsidiary
None
None
None
Senior Vice President and Deputy Co-Chief Operating
Officer
Business Development & Global Sales
Kevin Zhang (Note 5)
Male
U.S.
11/01/2016
115,867
0.00%
-
-
-
-
Ph.D., Electrical Engineering, Duke University, U.S.
Senior Vice President, Business Development & Overseas Operations Office, TSMC
Vice President, Design and Technology Platform, TSMC
Vice President, Technology and Manufacturing Group, Intel Corp.
None
None
None
None
Senior Vice President
Human Resources
Lora Ho
Female
R.O.C.
06/01/1999
4,414,753
0.02%
2,059,530
0.01%
-
-
Master, Business Administration, National Taiwan University, Taiwan
Senior Vice President, Europe and Asia Sales, TSMC
Senior Vice President, Chief Financial Officer/Spokesperson, TSMC
Senior Director, Accounting, TSMC
Vice President & CFO, TI-Acer Semiconductor Manufacturing Corp.
Director and/or Supervisor, TSMC subsidiaries
None
None
None
Senior Vice President
Corporate Strategy Development
Wei-Jen Lo
Male
R.O.C.
07/01/2004
1,282,328
0.00%
-
-
-
-
Ph.D., Solid State Physics and Surface Chemistry, University of California, Berkeley, U.S.
Senior Vice President, Research and Development, TSMC
Vice President, Technology Development, TSMC
Vice President, Manufacturing Technology, TSMC
Vice President, Advanced Technology Business, TSMC
Vice President, Operations II, TSMC
Director, Advanced Technology Development and CTM Plant Manager, Intel Corp.
None
None
None
None
Senior Vice President
Corporate Strategy Development
Chairman
TSMC AZ
Rick Cassidy
Male
U.S.
11/14/1997
-
-
-
-
-
-
Bachelor, Engineering Technology, United States Military Academy at West Point, U.S.
Senior Vice President, Corporate Strategy Office & Overseas Operations Office, TSMC
Chief Executive Officer, TSMC North America
President, TSMC North America
Vice President, TSMC North America
Director, TSMC subsidiary
None
None
None
Senior Vice President
Corporate Strategy Development
Former Chief Information Security Officer
J.K. Lin (Note 6)
Male
R.O.C.
01/01/1987
12,660,501
0.05%
1,219,961
0.00%
-
-
Bachelor, Science, National Changhua University of Education, Taiwan
Senior Vice President, Information Technology and Materials Management & Risk
Management, TSMC
Vice President, Mainstream Fabs and Manufacturing Technology, TSMC
Senior Director, Mainstream Fabs, TSMC
None
None
None
None
Senior Vice President and General Counsel
Corporate Governance Officer
Legal
Sylvia Fang
Female
R.O.C.
03/20/1995
707,793
0.00%
67,906
0.00%
384,000
0.00%
Master, Comparative Law, School of Law, University of Iowa, U.S.
Attorney-at-law, Taiwan
Vice President and General Counsel Corporate Governance Officer, Legal, TSMC
Associate General Counsel, TSMC
Senior Associate, Taiwan International Patent and Law Office (TIPLO)
Director and/or Supervisor, TSMC subsidiaries
None
None
None
Senior Vice President and Chief Financial Officer
Spokesperson
Finance
Wendell Huang
Male
R.O.C.
05/03/1999
1,660,221
0.01%
-
-
-
-
Master, Business Administration, Cornell University, U.S.
Vice President and Chief Financial Officer, Finance, TSMC
Deputy Chief Financial Officer, TSMC
Senior Director, Finance Division, TSMC
Vice President, Corporate Finance, ING Barings
Vice President, Corporate Finance, Chase Manhattan Bank
Vice President, Corporate Finance, Bankers Trust Company
Director, Supervisor, and/or President, TSMC
subsidiaries
Director, TSMC affiliate
None
None
None
(Continued)
032
033
Title
Name
Gender
Nationality
On-board Date
(Note 1)
Shares Held
Shares Held by Spouse
& Minors
Shares Held in the Name
of Others
Education and Selected Past Positions
Selected Current Positions at Other
Companies
Managers Who Are Spouses or within Second-degree
Relative of Consanguinity to Each Other
Shares
(Note 2)
%
Shares
(Note 2)
%
Shares
(Note 2)
%
Title
Name
Relation
Vice President
Operations/Fab Operations I
CEO
TSMC AZ
Y.L. Wang
Male
R.O.C.
06/01/1992
226,043
0.00%
1,135,529
0.00%
-
-
Ph.D., Electrical Engineering, National Chiao Tung University, Taiwan
Vice President, Fab Operations, TSMC
Vice President, Technology Development, TSMC
Vice President, Fab 14B, TSMC
Senior Director, Fab 14B, TSMC
Director, TSMC subsidiary
None
None
None
Vice President and TSMC Distinguished Fellow
Research and Development/Pathfinding for System
Integration
Douglas Yu
Male
R.O.C.
12/28/1994
258,496
0.00%
-
-
-
-
Ph.D., Materials Engineering, Georgia Institute of Technology, U.S.
Vice President, Integrated Interconnect & Packaging, TSMC
Senior Director, Integrated Interconnect & Packaging Division, TSMC
None
None
None
None
Vice President and TSMC Fellow
Operations/Advanced Technology and Mask
Engineering
T.S. Chang
Male
R.O.C.
02/06/1995
181,289
0.00%
-
-
-
-
Ph.D., Electrical Engineering, National Tsing Hua University, Taiwan
Vice President, Product Development, TSMC
Vice President, Fab 12B, TSMC
Senior Director, Fab 12B, TSMC
None
None
None
None
Vice President
Research and Development/Platform Technology
Research and Development/Technology Development
Effectiveness Office
Michael Wu
Male
R.O.C.
12/09/1996
493,404
0.00%
198,943
0.00%
-
-
Ph.D., Electrical Engineering, University of Wisconsin-Madison, U.S.
Senior Director, Platform Development, TSMC
None
None
None
None
Vice President
Research and Development/Corporate Research
Research and Development/Pathfinding
Min Cao
Male
U.S.
07/29/2002
371,055
0.00%
34,470
0.00%
-
-
Ph.D., Physics, Stanford University, U.S.
Senior Director, Pathfinding Division, TSMC
None
None
None
None
Vice President
Operations/Fab Operations II
CEO
JASM
Y.H. Liaw
Male
R.O.C.
08/03/1988
375,532
0.00%
-
-
430,000
0.00%
Master, Chemical Engineering, National Tsing Hua University, Taiwan
Vice President, Fab Operations, TSMC
Vice President, Fab 15B, TSMC
Senior Director, Fab 15B, TSMC
Director, TSMC subsidiaries
Director, TSMC affiliate
None
None
None
Vice President
Research and Development/Advanced Tool and
Module Development
Simon Jang
Male
R.O.C.
09/01/1993
356,832
0.00%
2,000
0.00%
-
-
Ph.D., Materials Science & Engineering, Massachusetts Institute of Technology, U.S.
Senior Director, Advanced Tool and Module Development Division, TSMC
None
Deputy Director
Sharon Jang
Sister
Vice President
Research and Development/More than Moore
Technologies
C.S. Yoo
Male
R.O.C.
06/16/1988
1,709,617
0.01%
219,924
0.00%
851,908
0.00%
Ph.D., Chemical Engineering, Worcester Polytech. Institute, U.S.
Vice President, Europe & Asia Sales, TSMC
Senior Director, Office of Strategy Customer Program, TSMC
Senior Director, E-Beam Operation Division, TSMC
Director, TSMC affiliate
None
None
None
Vice President
Operations/Advanced Packaging Technology and
Service
Jun He
Male
R.O.C.
05/22/2017
33,310
0.00%
-
-
-
-
Ph.D., Materials Science and Engineering, University of California, Santa Barbara, U.S.
Vice President, Quality and Reliability, TSMC
Senior Director, Quality and Reliability, TSMC
Senior Director, Head of Quality and Reliability for Technology & Manufacturing Group,
Intel Corp.
Director, TSMC subsidiaries
None
None
None
Vice President
Research and Development/Platform Technology
Geoffrey Yeap
Male
U.S.
03/21/2016
79,532
0.00%
-
-
-
-
Ph.D., Electrical and Computer Engineering, University of Texas-Austin, U.S.
Senior Director, Platform Development, TSMC
Senior Director, Advanced Technology, TSMC
Vice President, Engineering, Silicon Technology, Qualcomm
None
None
None
None
Vice President and Chief Information Officer
Corporate Information Technology
Chris Horng-Dar Lin
Male
U.S.
01/04/2021
41,137
0.00%
15,000
0.00%
-
-
Ph.D., Electrical Engineering and Computer Science, University of California, Berkeley, U.S.
Vice President, Information Technology, Mozilla
Director, Enterprise Platform Infrastructure, Facebook
None
None
None
None
Vice President
Corporate Planning Organization
Jonathan Lee
Male
R.O.C.
05/28/2007
404,120
0.00%
6,000
0.00%
-
-
Master, Business Administration, City University of New York, Baruch College, U.S.
Senior Director, Strategic Planning Division, TSMC
None
None
None
None
Vice President
Operations /Facility
Arthur Chuang
Male
R.O.C.
01/17/1989
2,608,118
0.01%
1,993,140
0.01%
-
-
Ph.D., Civil Engineering, National Taiwan University, Taiwan
Senior Director, Facility Division, TSMC
None
Technical
Manager
Gavin Chuang
Brother
Vice President and TSMC Fellow
Research and Development/Design & Technology
Platform
L.C. Lu
Male
R.O.C.
08/01/2000
180,957
0.00%
15,000
0.00%
-
-
Ph.D., Computer Science, Yale University, U.S.
Senior Director, Digital IPs Solution Division, TSMC
Director, and/or President, TSMC subsidiaries
Director, TSMC affiliate
None
None
None
(Continued)
034
035
Note 1: On-board date means the official date joining TSMC.
Note 2: Dose not include shares held in the form of ADSs.
Note 3: Rationale for electing the same person as Chief Executive Officer (CEO) and Chairman: To navigate the rapidly changing landscape of the highly competitive semiconductor industry, TSMC’s Board of Directors
elected Dr. C.C. Wei as the Chairman and CEO following the Board’s re-election at the Annual Shareholders’ Meeting on June 4, 2024. With Dr. Wei at the helm, the alignment between the Board of Directors
and the management team is expected to be more effective, enhancing efficiency in decision-making and execution and maximizing shareholder value. The Company currently has seven independent directors,
accounting for 70% of the total board seats. The remaining directors do not hold managerial or employee roles within the Company, ensuring the Board’s independence in decision-making while enabling
professional oversight and guidance that meet shareholder and market expectations for the Company’s stability and long-term value.
Note 4: Mr. Y.P. Chyn and Dr. Y.J. Mii were appointed as Executive Vice Presidents and Co-Chief Operating Officers, effective March 1, 2024.
Note 5: Dr. Cliff Hou and Dr. Kevin Zhang were appointed as Senior Vice Presidents and Deputy Co-Chief Operating Officers, effective March 1, 2024.
Note 6: Dr. Cliff Hou was appointed as Chief Information Security Officer, effective January 1, 2025.
Note 7: Ms. Vanessa Lee was promoted to Vice President, effective August 13, 2024.
Note 8: Mr. P.H. Chen was promoted to Vice President, effective February 12, 2025.
Title
Name
Gender
Nationality
On-board Date
(Note 1)
Shares Held
Shares Held by Spouse
& Minors
Shares Held in the Name
of Others
Education and Selected Past Positions
Selected Current Positions at Other
Companies
Managers Who Are Spouses or within Second-degree
Relative of Consanguinity to Each Other
Shares
(Note 2)
%
Shares
(Note 2)
%
Shares
(Note 2)
%
Title
Name
Relation
Vice President
Research and Development/Integrated Interconnect
& Packaging
K.C. Hsu
Male
R.O.C.
11/01/2021
90,927
0.00%
10,000
0.00%
-
-
Master, Technology Management, National Chiao Tung University, Taiwan
Taiwan Country Manager, Micron Technology Inc.
President, WaferTech LLC
None
None
None
None
Vice President
Operations/Fab Operations I
Managing Director
ESMC
Ray Chuang
Male
R.O.C.
12/15/1997
180,318
0.00%
106,000
0.00%
-
-
Master, Materials Science & Engineering/Engineering Economics System,
Stanford University, U.S.
Senior Director, Fab 18A, TSMC
Director, Fab 12B, TSMC
Director, TSMC subsidiary
None
None
None
Vice President
Materials Management
Vanessa Lee (Note 7)
Female
R.O.C.
05/04/2022
9,310
0.00%
-
-
-
-
Master, Chemistry, National Taiwan University, Taiwan
Senior Director, Materials Management, TSMC
Global Commodity Manager, Google
Director of Procurement, Apple
Senior Sourcing Manager, Qualcomm
None
None
None
None
Vice President
Human Resources
P.H. Chen (Note 8)
Male
R.O.C.
08/01/1990
433,414
0.00%
83,143
0.00%
-
-
Master, Chemistry, National Sun Yat-sen University, Taiwan
Senior Director, Program Office, TSMC
Senior Fab Director, Fab 14A, TSMC
None
None
None
None
036
037
2.4.2 Compensation of CEO and Vice Presidents (Note 1)
Title
Name
Salary (A)
Severance Pay and Pensions (B)
(Note 7)
Bonuses and Allowances (C)
(Note 8)
Profit Sharing (D)
Sum of (A+B+C+D) and Ratio to
Net Income (Note 9)
Compensation from
Non-consolidated
Affiliates or Parent
Company
From TSMC
From All
Consolidated
Entities
From TSMC
From All
Consolidated
Entities
From TSMC
From All
Consolidated
Entities
From TSMC
From All Consolidated Entities
From TSMC
From All
Consolidated
Entities
Cash
Stock (Fair
Market Value)
Cash
Stock (Fair
Market Value)
Chairman & Chief Executive Officer
C.C. Wei (Note 2)
16,025,450
16,025,450
288,458
288,458
612,155,302
612,155,302
317,893,824
-
317,893,824
-
946,363,034
0.0807%
946,363,034
0.0807%
-
Senior Vice President, Chief Financial Officer/Spokesperson
Wendell Huang
6,601,500
6,601,500
118,827
118,827
112,897,199
112,897,199
70,738,960
-
70,738,960
-
190,356,486
0.0162%
190,356,486
0.0162%
-
Executive Vice President and Co-Chief Operating Officer
Y.P. Chyn (Note 3)
145,025,473
184,081,311
2,610,461
3,306,568
2,369,188,194
2,547,162,205
1,426,724,855
-
1,426,724,855
-
3,943,548,983
0.3361%
4,161,274,939
0.3547%
-
Executive Vice President and Co-Chief Operating Officer
Y.J. Mii (Note 3)
Senior Vice President and Deputy Co-Chief Operating Officer
Cliff Hou
(Note 4 and Note 5)
Senior Vice President and Deputy Co-Chief Operating Officer
Kevin Zhang (Note 4)
Senior Vice President
Lora Ho
Senior Vice President
Wei-Jen Lo
Senior Vice President/Chairman, TSMC Arizona
Rick Cassidy
Senior Vice President/Former Chief Information Security Officer
J.K. Lin
Senior Vice President and General Counsel/Corporate Governance
Officer
Sylvia Fang
Vice President/CEO, TSMC Arizona
Y.L. Wang
Vice President and TSMC Distinguished Fellow
Douglas Yu
Vice President and TSMC Fellow
T.S. Chang
Vice President
Michael Wu
Vice President
Min Cao
Vice President/CEO, JASM
Y.H. Liaw
Vice President
Simon Jang
Vice President
C.S. Yoo
Vice President
Jun He
Vice President
Geoffrey Yeap
Vice President and Chief Information Officer
Chris Horng-Dar Lin
Vice President
Jonathan Lee
Vice President
Arthur Chuang
Vice President and TSMC Fellow
L.C. Lu
Vice President
K.C. Hsu
Vice President/Managing Director, ESMC
Ray Chuang
Vice President
Vanessa Lee (Note 6)
Total
167,652,423
206,708,261
3,017,746
3,713,853
3,094,240,695
3,272,214,706
1,815,357,639
0
1,815,357,639
0
5,080,268,503
0.4330%
5,297,994,459
0.4516%
-
Unit: NT$
Note 1: The total compensation of the executive officers is based on their job responsibility, contribution, company performance, and effective risk management. This includes traditional financial measures like company
performance (revenue growth, return on equity, alongside risk-indicators). By maintaining a balanced perspective, the company is committed to achieve sustainable growth and risk-conscious performance. It is
reviewed by the Compensation and People Development Committee then submitted to the Board of Directors for approval.
Note 2: Dr. C.C. Wei was elected as Chairman and Chief Executive Officer (CEO), effective June 4, 2024.
Note 3: Mr. Y.P. Chyn and Dr. Y.J. Mii were appointed as Executive Vice Presidents and Co-Chief Operating Officers, effective March 1, 2024.
Note 4: Dr. Cliff Hou and Dr. Kevin Zhang were appointed as Senior Vice Presidents and Deputy Co-Chief Operating Officers, effective March 1, 2024.
Note 5: Dr. Cliff Hou was appointed as Chief Information Security Officer, effective January 1, 2025.
Note 6: Ms. Vanessa Lee was promoted to Vice President, effective August 13, 2024. These amounts did not include compensation for the period before his promotion.
Note 7: Pensions funded according to applicable law.
Note 8: The above-mentioned figures include the expense for the business performance bonuses distributed in May, August, November 2024 & February 2025, and Company cars and gasoline reimbursements.
Note 9: Total compensation of the executive officers from TSMC in 2023 accounted for 0.3768% of 2023 net income. Total compensation of the executive officers from all consolidated entities in 2023 accounted for
0.4033% of 2023 net income.
038
039
2.4.3 Employees’ Profit Sharing of Management Team
Title
Name
Stock
(Fair Market
Value)
Cash
Total
Total Profit
Sharing of
Management
Team as a % of
Net Income
Chairman & Chief Executive Officer
C.C. Wei (Note 1)
-
317,893,824
317,893,824
0.0271%
Senior Vice President, Chief Financial Officer/Spokesperson
Wendell Huang
-
70,738,960
70,738,960
0.0060%
Executive Vice President and Co-Chief Operating Officer
Y.P. Chyn (Note 2)
-
1,426,724,855
1,426,724,855
0.1216%
Executive Vice President and Co-Chief Operating Officer
Y.J. Mii (Note 2)
Senior Vice President and Deputy Co-Chief Operating Officer
Cliff Hou (Note 3 and Note 4)
Senior Vice President and Deputy Co-Chief Operating Officer
Kevin Zhang (Note 3)
Senior Vice President
Lora Ho
Senior Vice President
Wei-Jen Lo
Senior Vice President/Chairman, TSMC Arizona
Rick Cassidy
Senior Vice President/Former Chief Information Security Officer
J.K. Lin
Senior Vice President and General Counsel/Corporate Governance Officer
Sylvia Fang
Vice President/CEO, TSMC Arizona
Y.L. Wang
Vice President and TSMC Distinguished Fellow
Douglas Yu
Vice President and TSMC Fellow
T.S. Chang
Vice President
Michael Wu
Vice President
Min Cao
Vice President/CEO, JASM
Y.H. Liaw
Vice President
Simon Jang
Vice President
C.S. Yoo
Vice President
Jun He
Vice President
Geoffrey Yeap
Vice President and Chief Information Officer
Chris Horng-Dar Lin
Vice President
Jonathan Lee
Vice President
Arthur Chuang
Vice President and TSMC Fellow
L.C. Lu
Vice President
K.C. Hsu
Vice President/Managing Director, ESMC
Ray Chuang
Vice President
Vanessa Lee (Note 5)
Total
-
1,815,357,639
1,815,357,639
0.1547%
Unit: NT$
Note 1: Dr. C.C. Wei was elected as Chairman and Chief Executive Officer (CEO), effective June 4, 2024.
Note 2: Mr. Y.P. Chyn and Dr. Y.J. Mii were appointed as Executive Vice Presidents and Co-Chief Operating Officers, effective March 1, 2024.
Note 3: Dr. Cliff Hou and Dr. Kevin Zhang were appointed as Senior Vice Presidents and Deputy Co-Chief Operating Officers, effective March 1, 2024.
Note 4: Dr. Cliff Hou was appointed as Chief Information Security Officer, effective January 1, 2025.
Note 5: Ms. Vanessa Lee was promoted to Vice President, effective August 13, 2024. These amounts did not include compensation for the period before her promotion.
The Company’s Policy, Standards/Packages, Procedures for the Compensation of the CEO and Vice Presidents, and the
Linkage to Their Performance Evaluation and the Future Risk Exposure:
●The Company’s Policy, Standards/Packages
The compensation of the CEO and Vice Presidents takes into account, in a comprehensive manner, aspects of their experience,
professional capabilities, managerial skills, and the positions they hold. The said compensation is also closely linked to both
the financial and non-financial performance goals, so as to reflect the fulfillment of their responsibilities as well as their work
performance. Compensation includes salary, quarterly paid cash bonus, allowances, and profit sharing based on annual profits of
the Company. Moreover, since 2021, TSMC has begun to offer Employee Restricted Stock Awards to link their compensation with
shareholders’ interests and ESG achievements. The company places a greater emphasis on variable compensation constituting a
larger proportion of the total compensation versus fixed compensation, and prioritizes long-term incentive rewards to better align
the compensation of our CEO and executives with the company’s sustainable business performance, shareholder interests, and ESG
achievements. The Compensation and People Development Committee approves the compensation plan regularly, which is then
submitted to the Board of Directors for approval.
●The Procedures
Quarterly cash bonuses and profit-sharing are for the purpose of rewarding employee contributions, incentivizing employees to
continue to work hard, and aligning employee interests with those of TSMC’s shareholders. According to Articles of Incorporation,
if the Company is profitable for the year, at least 1% of the profits will be allocated as employee compensation. The frequency,
date, and conditions of the distribution of employee compensation will be determined according to the Company’s bonus policy.
The Company further determines the bonus and profit-sharing amounts based on operating results and common domestic industry
practice. The amount and distribution of the employee bonuses are recommended by the Compensation and People Development
Committee to the Board of Directors for approval. Cash bonuses are paid quarterly, and profit sharing are paid after approval at the
Board of Directors meeting and having reported the same at the Shareholders’ meeting.
TSMC established Employee Restricted Stock Awards to link the compensation for CEO and Vice Presidents with ESG achievements
and the interests of shareholders. The number of shares granted to the CEO and Vice Presidents will be determined by the Chairman
and CEO by taking into account the Company’s business performance, the individual’s job grade, performance, and other factors
as deemed appropriate and approved by Compensation and People Development Committee, and ultimately subject to Board of
Directors’ approval.
●The Linkage to The Performance Evaluation
The compensation of TSMC’s CEO and Vice Presidents is governed by the Company’s bonus policy, which covers the achievement
of both corporate operational goals and personal annual objectives. Corporate goals include financial indicators and non-financial
indicators. Personal annual objectives include operational goals and ESG achievements in focus areas: Drive Green Manufacturing,
Build a Sustainable Supply Chain, Create a Healthy and Inclusive Workplace, Develop Talent, and Care for the Disadvantaged.
The Employee Restricted Stock Awards provided has a vesting period of three years (for details, please refer to “4.6.1. Status of
Employee Restricted Stock” on page 84-91 of this Annual Report). The corporate performance indicators are the relative total
shareholder return (TSR) of the company compared to TSR of the S&P 500 IT Index, with the company’s ESG achievements as a
modifier. Through these two clear quantitative indicators, we strengthen management’s long-term and continuous creation of
shareholder value while improving ESG performance, which shows a strong correlation with the Company’s overall performance.
●The Future Risk Exposure
The compensation of TSMC’s CEO and Vice Presidents is based on the relevant industry benchmarks and the performance of the
Company. The standards, structure, and system of compensation are reviewed and adjusted as necessary in response to changes in
the Company’s actual operating conditions and relevant laws and regulations. The Company’s financial incentive programs are tied
to meeting risk-related goals and the pursue of Company’s objectives are within the Company’s risk appetite and tolerance.
●Clawback Policy
TSMC established the Clawback policy in 2023. (Disclosed on tsmc.com/Home/Investors/Corporate Governance/Major Internal
Policies/ TSMC Clawback Policy)
Compensation of CEO and Vice Presidents
2024
From TSMC
From All Consolidated Entities and Non-consolidated Affiliates
NT$0 ~ NT$999,999
Rick Cassidy
None
NT$1,000,000 ~ NT$1,999,999
None
None
NT$2,000,000 ~ NT$3,499,999
None
None
NT$3,500,000 ~ NT$4,999,999
None
None
NT$5,000,000 ~ NT$9,999,999
None
None
NT$10,000,000 ~ NT$14,999,999
None
None
NT$15,000,000 ~ NT$29,999,999
None
None
NT$30,000,000 ~ NT$49,999,999
Vanessa Lee
Vanessa Lee
NT$50,000,000 ~ NT$99,999,999
Jun He, Arthur Chuang, Ray Chuang
Jun He, Arthur Chuang, Ray Chuang
Over NT$100,000,000
C.C. Wei, Wendell Huang, Y.P. Chyn, Y.J. Mii, Cliff Hou, Kevin Zhang, Lora
Ho, Wei-Jen Lo, J.K. Lin, Sylvia Fang, Y.L. Wang, Douglas Yu, T.S. Chang,
Michael Wu, Min Cao, Y.H. Liaw, Simon Jang, C.S. Yoo, Geoffrey Yeap, Chris
Horng-Dar Lin, Jonathan Lee, L.C. Lu, K.C. Hsu
C.C. Wei, Wendell Huang, Y.P. Chyn, Y.J. Mii, Cliff Hou, Kevin Zhang, Lora
Ho, Wei-Jen Lo, Rick Cassidy, J.K. Lin, Sylvia Fang, Y.L. Wang, Douglas Yu,
T.S. Chang, Michael Wu, Min Cao, Y.H. Liaw, Simon Jang, C.S. Yoo, Geoffrey
Yeap, Chris Horng-Dar Lin, Jonathan Lee, L.C. Lu, K.C. Hsu
Total
28
28
040
041
3
It is TSMC’s core values of Integrity, Commitment, Innovation,
and Customer Trust that have earned our customers’
confidence to grow and prosper together.
Corporate
Governance
042
043
3.1 Overview
TSMC advocates and acts upon the principles of operational transparency and respect for shareholder rights. We believe that the
basis for successful corporate governance is a sound and effective Board of Directors. In line with this principle, TSMC Board of
Directors delegates various responsibilities and authority to three Board Committees, Audit and Risk Committee, Compensation
and People Development Committee, and Nominating, Corporate Governance and Sustainability Committee. Each Committee’s
chairperson regularly reports to the Board on its activities and recommendations.
3.2 Board of Directors
Board Structure
TSMC’s Chairman, Dr. Mark Liu, retired from the Company after the Annual Shareholders’ Meeting on June 4, 2024. At the
meeting, TSMC shareholders elected a new Board of Directors, which then convened to elect Dr. C.C. Wei as Chairman and Chief
Executive Officer (CEO).
TSMC’s Board of Directors consists of ten distinguished members with a great breadth of experience as world-class business
leaders or professionals. We deeply rely on them for their diverse knowledge, personal perspectives, and solid business judgment.
These professionals include citizens from Taiwan, Europe and the U.S. with world-class business operating experience. The current
board members are: Chairman Dr. C.C. Wei, Dr. F.C. Tseng, Mr. Chin-Ching Liu (Representative of the National Development Fund,
Executive Yuan), Sir Peter L. Bonfield (Independent Director), Mr. Michael R. Splinter (Independent Director), Mr. Moshe N. Gavrielov
(Independent Director), Dr. L. Rafael Reif (Independent Director), Ms. Ursula M. Burns (Independent Director), Ms. Lynn L Elsenhans
(Independent Director), and Dr. Chuan Lin (Independent Director).
Board Responsibilities
Inheriting the spirit of TSMC’s Founder, Dr. Morris Chang’s philosophy on corporate governance, under the leadership of Chairman
Dr. C.C. Wei, TSMC’s Board of Directors takes a serious and forthright approach to its duties and is a dedicated, competent and
independent Board.
The Board’s primary duty is to supervise the Company’s compliance with relevant laws and regulations, financial transparency,
timely disclosure of material information, and maintaining of the highest integrity. TSMC’s Board of Directors strives to perform
these responsibilities through its Audit and Risk Committee, Compensation and People Development Committee, Nominating,
Corporate Governance and Sustainability Committee, the hiring of a financial expert consultant for the Audit and Risk Committee,
and coordination with our Internal Audit department.
The second duty of the Board of Directors is to appoint and dismiss officers of the Company when necessary, to evaluate
management performance and to review the succession plan for senior executives. TSMC’s management has maintained a healthy
and functional communication with the Board of Directors, has been devoted in executing guidance of the Board, and is dedicated
in running the business operations, all to achieve the best interests for TSMC shareholders.
The third duty of the Board of Directors is to resolve critical matters, such as capital appropriations, investment activities, dividends,
etc.
The fourth duty of the Board of Directors is to provide guidance to the Company’s management team and risk management. In
each quarter, TSMC’s management reports to the Board on various subjects (including ESG programs) and strategies, and spends
substantial time and effort to communicate with the Board. The Board would comment on the risk and probabilities for success of
the proposed corporate strategies. The Board also periodically oversees those strategies’ implementation and outcomes, and may
suggest the management team to make adjustments to the strategic goals and objectives if necessary.
Nomination and Election of Directors
TSMC envisions the membership of its esteemed Board of Directors to be composed of highly ethical professionals with the
necessary knowledge, experience as world-class business leaders and understanding from diverse backgrounds. TSMC’s Board
of Directors members are nominated via rigorous selection processes. The Company established the “Guidelines for Nomination
of Directors,” which detail the procedures and criteria for the nominating, qualifying and evaluating director candidates for
consideration by the Board of Directors. Additionally, the “Corporate Governance Guidelines” outline the criteria for evaluating
candidates for election by shareholders. These criteria include professional knowledge, experience, business judgment, commitment
to the Company’s core values, and reputation for ethical conduct and leadership. Diversity of backgrounds (including gender, age,
and culture) of Board members shall also be considered. The “Nominating, Corporate Governance and Sustainability Committee”
will recommend Independent Director candidates to the Board of Directors for nomination. The independence of each Independent
Director candidate is also considered and assessed under relevant laws.Directors shall be elected pursuant to the candidate
nomination system specified in Article 192-1 of the R.O.C. Company Law. The tenure of office for Directors shall be three years.
Under R.O.C. law, in which TSMC was incorporated, any shareholders holding one percent or more of our total outstanding
common shares may nominate their own candidate to stand for election as a Board member. This democratic mechanism allows
our shareholders to become involved in the selection and nomination process of Board candidates. The final slate of candidates is
put to the shareholders for voting at the relevant annual shareholders’ meeting.
Taking the position that directors who over time have developed increasing knowledge, experience and insight into the
semiconductor industry and deeper understanding of the operations of the Company can better perform their duties and provide
an increasing contribution and value to the shareholders of the Company. Except as otherwise provided in applicable regulations
regarding the tenure limits of independent directors, there are no limits on the number of terms that a director may serve. The
Board will, however, assess director tenure on an on-going basis to ensure the Board continues to benefit from new perspectives.
Directors’ Compensation
According to TSMC’s Articles of Incorporation, the Board of Directors is authorized to determine the salary for the Chairman, Vice
Chairman and Directors, taking into account the extent and value of the services provided for the management of the Corporation
and the standards of the industry within the R.O.C. and overseas.
TSMC’s Articles of Incorporation also state that not more than 0.3 percent of our annual profits may be distributed as compensation
to our directors. In addition, directors who also serve as executive officers of the Company are not entitled to receive any director
compensation. According to TSMC’s Compensation and People Development Committee Charter, the distribution of compensation
to directors shall be made in accordance with TSMC’s “Rules for Distribution of Compensation to Directors” based on the following
principles: (1) directors who also serve as executive officers of the Company are not entitled to receive compensation; (2) the
compensation for Independent Directors may be higher than other Directors because they serve on multiple Committees, requiring
their participation in discussions and resolutions according to each Committee’s charter; and (3) the compensation for overseas
Independent Directors may be higher than domestic Independent Directors, as they require additional time to attend quarterly
meetings in Taiwan.
044
045
Criteria
Name/Title
Professional Qualification and Experience
Independent Directors’ Independence Status
Number of Other
Taiwanese Public
Companies Concurrently
Serving as an Independent
Director
C.C. Wei
Chairman and Chief
Executive Officer
For Directors’ professional qualification and
experience, please refer to “2.3.1 Information
Regarding Board Members” on page 20-27 of this
Annual Report.
None of the Directors has been in or is under any
circumstances stated in Article 30 of the Company
Law. (Note 1)
Not Applicable
F.C. Tseng
Director
Chin-Ching Liu
Director
Sir Peter L. Bonfield
Independent Director
1. All Independent Directors meet the requirements outlined in Article 14-2 of
“Securities and Exchange Act” and “Regulations Governing Appointment of
Independent Directors and Compliance Matters for Public Companies” (Note 2) issued
by Taiwan’s Financial Supervisory Commission
2. For information on Independent Directors (or nominee arrangement) as well as his/
her spouse and minor children’s shareholding of TSMC common shares, please refer
to “2.3.1 Information Regarding Board Members” on page 20-27 of this Annual
Report
3. None of the Independent Directors have received compensation or benefits for
providing to the Company or its affiliates: (1) any audit service; or (2) commercial,
legal, financial, accounting services or other services within the recent two years
0
Michael R. Splinter
Independent Director
0
Moshe N. Gavrielov
Independent Director
0
L. Rafael Reif
Independent Director
0
Ursula M. Burns
Independent Director
0
Lynn L. Elsenhans
Independent Director
0
Chuan Lin
Independent Director
1
Directors’ Professional Qualifications and Independent Directors’ Independence Status
Note 1: 1. Having committed an offence as specified in the Statute for Prevention of Organizational Crimes and subsequently convicted of a crime, and has not started serving the sentence, has not completed serving
the sentence, or five years have not elapsed since completion of serving the sentence, expiration of the probation, or pardon;
2. Having committed the offence in terms of fraud, breach of trust or misappropriation and subsequently convicted with imprisonment for a term of more than one year, and has not started serving the
sentence, has not completed serving the sentence, or two years have not elapsed since completion of serving the sentence, expiration of the probation, or pardon;
3. Having committed the offense as specified in the Anti-corruption Act and subsequently convicted of a crime, and has not started serving the sentence, has not completed serving the sentence, or two years
have not elapsed since completion of serving the sentence, expiration of the probation, or pardon;
4. Having been adjudicated bankrupt or adjudicated of the commencement of liquidation process by a court, and having not been reinstated to his/her rights and privileges;
5. Having been dishonored for unlawful use of credit instruments, and the term of such sanction has not expired yet; or
6. Having no or only limited disposing capacity.
7. Having been adjudicated of the commencement of assistantship and such assistantship having not been revoked yet.
Note 2: 1. Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.
2. Not serving concurrently as an independent director on more than three other Taiwanese public companies in total.
3. During the two years before being elected and during the term of office, meet any of the following situations:
(1) Not an employee of the company or any of its affiliates;
(2) Not a director or supervisor of the company or any of its affiliates;
(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of one percent
or more of the total number of issued shares of the company or ranks as one of its top ten shareholders;
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the officer in the preceding (1) subparagraph, or of any of the above persons in the
preceding subparagraphs (2) and (3);
(5) Not a director, supervisor, or employee of a legal entity that directly holds five percent or more of the total number of issued shares of the company, ranks as of its top five shareholders, or has
representative director(s) serving on the company’s board based on Article 27 of the Company Law;
(6) Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company;
(7) Not a director, supervisor, or employee of a company of which the chairman or CEO (or equivalent) themselves or their spouse also serve as the company’s chairman or CEO (or equivalent);
(8) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the company; and
(9) Neither a director nor his/her spouse has, in any capacity whatsoever, whether as a professional individual, owner, partner, director, supervisor, or officer of a sole proprietorship or any type of legal entity,
provided to TSMC and its affiliates: (1) any audit service; or (2) commercial, legal, financial, accounting services or other services of which its total compensation exceeding NT$500,000 within the recent
two years.
Implementation of the Diversity Policy for Board Members
Title
Chairman
and CEO
Director
Independent Director
Name
C.C. Wei
F.C. Tseng
Chin-Ching
Liu
Sir Peter L.
Bonfield
Michael R.
Splinter
Moshe N.
Gavrielov
L. Rafael Reif
Ursula M.
Burns
Lynn L.
Elsenhans
Chuan
Lin
Gender
Male
Male
Male
Male
Male
Male
Male
Female
Female
Male
Nationality
R.O.C.
R.O.C.
R.O.C.
UK
U.S.
U.S.
U.S.
U.S.
U.S.
R.O.C.
Age
71-75
76-80
61-65
76-80
71-75
66-70
71-75
66-70
66-70
71-75
Employed by TSMC
V
Professional Knowledge and Expertise
Business
V
V
V
V
V
V
V
V
V
Technology/Innovation
V
V
V
V
V
V
V
V
Finance/Accounting
V
V
V
Sales and Marketing
V
V
V
V
V
V
V
V
V
Cybersecurity
V
V
Academia
V
V
V
Skills and Experience
Senior Leadership
Experience
V
V
V
V
V
V
V
V
V
V
Global Market Perspective
V
V
V
V
V
V
V
V
V
Semiconductor Industry
Experience
V
V
V
V
V
V
V
V
Legal or Corporate
Compliance
V
V
V
V
V
V
V
V
V
V
Financial
V
V
V
V
V
V
V
V
V
V
Operating and
Manufacturing
V
V
V
V
V
V
V
V
V
Business Development
V
V
V
V
V
V
V
V
V
Risk/Crisis Management
V
V
V
V
V
V
V
V
V
V
HR and Talent Development
V
V
V
V
V
V
V
V
V
V
Environmental Sustainability
V
V
V
V
V
V
V
V
V
V
Social Engagement
V
V
V
V
V
V
V
V
V
V
Board Diversity and Independence
TSMC’s Board of Directors members are nominated via rigorous selection processes. The Company established the “Guidelines
for Nomination of Directors,” which detail the procedures and criteria for the nominating, qualifying and evaluating director
candidates for consideration by the Board of Directors. Additionally, the “Corporate Governance Guidelines” outline the criteria for
evaluating candidates for election by shareholders. These criteria include professional knowledge, experience, business judgment,
commitment to the Company’s core values, and reputation for ethical conduct and leadership. The Board also considers diversity
in terms of gender, age, and cultural backgrounds.TSMC aims to achieve both diversity and independence on its Board. Currently,
the Board consists of ten members with varied backgrounds, including experience in different industries and academia. These
members represent various nationalities, including from Taiwan, Europe and the U.S., and have experience managing world-class
companies. Seven of these members are independent directors, accounting for 70% of the total board seats, ensuring the Board’s
independence. Furthermore, there are no marital or kinship relationships within the second degree among the directors, reinforcing
the Board’s independence.
The Company operates in the semiconductor industry, which traditionally has a predominantly male workforce. To enhance board
diversity, following the re-election at TSMC’s 2024 Annual Shareholders’ Meeting, the number of female directors increased from
one to two. Although this still falls short of one-third of the board seats, the Company remains committed to merit-based selection
and will actively seek qualified female candidates for future board positions. The following table demonstrates the implementation
of the board diversity policy:
046
047
Continuing Education/Training of Directors in 2024
The major training methods of Directors include:
●At quarterly Board meetings, TSMC management presents updates on the Company’s business, regulatory developments and
other information;
●The Company arranges speeches or training on politics, economics, and regulatory compliance, etc.;
●At quarterly Audit and Risk Committee meetings, TSMC’s General Counsel and the Company’s independent auditors provide
regulatory update reports and legal compliance status; and
●Directors participate in externally-provided training courses as needed.
In addition, from time to time, Directors are invited by other parties to give speeches on corporate governance and related topics.
Name
Date
Host by
Training/Speech Title
Duration
C.C. Wei
08/13
TSMC
Taiwan Corporate Governance Association
Governing Cyber Security Risks
1.5 hours
11/12
TSMC
Taiwan Corporate Governance Association
Antitrust and Competition Law Update
1.5 hours
F.C. Tseng
04/25
Global Unichip Corporation
Securities and Futures Institute
Protection of Trade Secrets
3 hours
08/13
TSMC
Taiwan Corporate Governance Association
Governing Cyber Security Risks
1.5 hours
11/12
TSMC
Taiwan Corporate Governance Association
Antitrust and Competition Law Update
1.5 hours
11/25
Vanguard International Semiconductor Corporation
Taiwan Corporate Governance Association
High-tech Cybersecurity Risk Management
3 hours
Chin-Ching Liu
08/13
TSMC
Taiwan Corporate Governance Association
Governing Cyber Security Risks
1.5 hours
09/11
Digital Governance Association
Gender issues that companies must know under the Me Too wave: Analysis of the
legislative trends of the Gender Equality Workplace Act and the responsibilities
of companies
3 hours
10/21
Digital Governance Association
AI’s new generation of multi-faceted transformation: AI-related talent,
information security and corporate governance
3 hours
11/12
TSMC
Taiwan Corporate Governance Association
Antitrust and Competition Law Update
1.5 hours
11/20
Securities & Futures Institute
Executive Yuan National Development Fund Management Committee
Commissioned Training: Directors and Supervisors (Including Independent)
Practical Advanced Seminar “How Directors and Supervisors Can Supervise
Companies to Perform Enterprise Risk Management and Crisis Management
(Including Gender Equality)”
3 hours
Sir Peter L. Bonfield
06/18
Darktrace
Cyber Risk Training Module
3 hours
08/13
TSMC
Taiwan Corporate Governance Association
Governing Cyber Security Risks
1.5 hours
11/12
TSMC
Taiwan Corporate Governance Association
Antitrust and Competition Law Update
1.5 hours
Michael R. Splinter
08/13
TSMC
Taiwan Corporate Governance Association
Governing Cyber Security Risks
1.5 hours
11/12
TSMC
Taiwan Corporate Governance Association
Antitrust and Competition Law Update
1.5 hours
Moshe N. Gavrielov
05/19-20
Matrix Capital Market Groups
Technology/HealthCare
16 hours
06/06
Barclays
Semiconductor Forum
8 hours
07/22-23
Goldman Sachs
Corporate Directors Forum
12 hours
08/13
TSMC
Taiwan Corporate Governance Association
Governing Cyber Security Risks
1.5 hours
09/18-20
Morgan Stanley
Semiconductor Executive and Board Members Forum
16 hours
10/02-04
McKinsey & Company
T-30 Semiconductor Forum
16 hours
11/12
TSMC
Taiwan Corporate Governance Association
Antitrust and Competition Law Update
1.5 hours
11/18-19
Silicon Catalyst
Malta Enterprise
ChipStart EU Program
16 hours
Name
Date
Host by
Training/Speech Title
Duration
L. Rafael Reif
08/13
TSMC
Taiwan Corporate Governance Association
Governing Cyber Security Risks
1.5 hours
11/12
TSMC
Taiwan Corporate Governance Association
Antitrust and Competition Law Update
1.5 hours
Ursula M. Burns
08/13
TSMC
Taiwan Corporate Governance Association
Governing Cyber Security Risks
1.5 hours
11/12
TSMC
Taiwan Corporate Governance Association
Antitrust and Competition Law Update
1.5 hours
Lynn L. Elsenhans
08/13
TSMC
Taiwan Corporate Governance Association
Governing Cyber Security Risks
1.5 hours
11/12
TSMC
Taiwan Corporate Governance Association
Antitrust and Competition Law Update
1.5 hours
11/21
Egon Zehnder in Houston
Board Chair’s and Nom/Gov Chairs Preparing Boards for the Future
1 hour
Chuan Lin
08/13
TSMC
Taiwan Corporate Governance Association
Governing Cyber Security Risks
1.5 hours
09/04
TTY Biopharm
Taiwan Corporate Governance Association
Corporate Legal Compliance, Ethical Corporate Management, and What Directors
Should Know regarding Legal Practice of the Labor Standards Act Friendly
Workplace and Gender Equality in Employment Act
3 hours
09/24
Pegatron Corporation
Taiwan Corporate Governance Association
The Roles of Directors and Supervisors in Company’s Risk and Crisis Management
(including the Latest Practical Developments in Gender Equality in Employment
Act)
3 hours
10/17
TTY Biopharm
Securities and Futures Institute
Artificial Intelligence Booming: Chatbot ChatGPT Flips New Industry Trends
3 hours
11/12
TSMC
Taiwan Corporate Governance Association
Antitrust and Competition Law Update
1.5 hours
11/13
Pegatron Corporation
Taiwan Corporate Governance Association
Trends and Risk Management of Digital Technology and Artificial Intelligence
3 hours
(Continued)
3.2.1 Audit and Risk Committee
The Audit and Risk Committee assists the Board in fulfilling its oversight of the quality and integrity of the accounting, auditing,
reporting, and financial control practices, as well as risk management of the Company.
The Audit and Risk Committee is responsible to review the following major matters:
●Financial reports;
●Auditing and accounting policies and procedures;
●Internal control systems and related policies and procedures;
●Material asset or derivatives transactions;
●Material lending funds, endorsements or guarantees;
●Offering or issuance of any equity-type securities;
●Derivatives and cash investments;
●Legal compliance;
●Related-party transactions and potential conflicts of interests involving executive officers and directors;
●Ombudsman reports;
●Fraud prevention and investigation reports;
●Corporate information security;
●Corporate risk management;
●Performance, independence, qualification of independent auditor;
●Hiring or dismissal of an attesting CPA, or the compensation given thereto;
●Appointment or discharge of financial, accounting, or internal auditing officers;
●Assessment of Committee Charter and fulfillment of Committee duties;
●Self-assessment of the Committee’s performance; and
●Any other matters that shall be reviewed by the Audit and Risk Committee Meeting as required by relevant laws and regulations or
its Committee Charter, or that are deemed to be material by the regulatory authorities.
048
049
3.2.3 Nominating, Corporate Governance and Sustainability Committee
The Nominating, Corporate Governance and Sustainability Committee assists the Board in strengthening the selection mechanism
for directors, building diversified and professional board, selecting candidates for nomination to be elected as independent directors
to the Board, and advising on corporate governance and sustainability matters.
According to its Charter, the Committee shall be composed of the Chairman of the Board and three to six independent directors.
Currently, the Committee consists of the Chairman of the Board and three Independent Directors.
The Nominating, Corporate Governance and Sustainability Committee is authorized by its Charter to hire independent legal,
financial and other advisors as it may deem necessary to fulfill its responsibilities.
3.2.4 Corporate Governance Officer
The Board of Directors appointed Ms. Sylvia Fang, the Senior Vice President and General Counsel of TSMC, as the Corporate
Governance Officer responsible for corporate governance matters, including handling of matters relating to Board, Audit and Risk
Committee, Compensation and People Development Committee, Nominating, Corporate Governance and Sustainability Committee,
and Shareholders’ meetings in compliance with law, assistance in onboarding and continuing education of directors, provision of
information required for performance of duties by directors, and assistance in directors’ compliance of law, etc.
For details on performance of duties by the Corporate Governance Officer, please refer to “3. Corporate Governance” on page
40-67 of this Annual Report.
Under R.O.C. law, the membership of audit committee shall consist of all independent directors. TSMC’s Audit and Risk Committee
satisfies this statutory requirement. The Committee also engaged a financial expert consultant in accordance with the rules of
the U.S. Securities and Exchange Commission. The Audit and Risk Committee annually conducts self-evaluation to assess the
Committee’s performance and identify areas for further attention.
TSMC’s Audit and Risk Committee is empowered by its Charter to conduct any study or investigation it deems appropriate to fulfill
its responsibilities. It has direct access to TSMC’s internal auditors, the Company’s independent auditors, and all employees of the
Company. The Committee is authorized to retain and oversee special legal, accounting, or other consultants as it deems appropriate
to fulfill its mandate.
3.2.2 Compensation and People Development Committee
The Compensation and People Development Committee assists the Board in discharging its responsibilities related to TSMC’s
compensation and benefits policies, plans and programs, in evaluation of compensation of TSMC’s directors of the Board and
executives, and the review of the pipeline planning of the Company’s senior executives to ensure the long-term sustainability of the
Company.
The members of the Compensation and People Development Committee are appointed by the Board as required by R.O.C. law.
According to its charter, the Committee shall consist of no fewer than three independent directors of the Board. The Chairman
of the Board and the Chief Executive Officer are invited by the Committee to attend all meetings and are excused from the
Committee’s discussion of their own compensation. Currently, the Committee consists of four Independent Directors.
TSMC’s Compensation and People Development Committee is authorized by its charter to retain an independent consultant to assist
in the evaluation of CEO’s or executive officer’s compensation.
Information Regarding Compensation and People Development Committee Members
Criteria
Name/Title
Professional Qualification and Experience
Independent Directors’ Independence Status
Number of Other
Taiwanese Public
Companies Concurrently
Serving as a Compensation
Committee Member
Michael R. Splinter (Chair)
Independent Director
TSMC’s Compensation and People Development
Committee is comprised of four Independent
Directors. For members professional qualification
and experience, please refer to “2.3.1 Information
Regarding Board Members” on page 20-27 of this
Annual Report.
1. All the Committee members meet the requirements of Article 14-6 of “Securities
and Exchange Act” and the requirements of “Regulations Governing the
Appointment and Exercise of Powers by the Compensation Committee of a
Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei
Exchange” (Note) issued by Taiwan’s Financial Supervisory Commission
2. For information on the Committee members (or nominee arrangement) as well
as his/her spouse and minor children’s shareholding of TSMC common shares,
please refer to “2.3.1 Information Regarding Board Members” on page 20-27 of
this Annual Report
3. None of the Committee members have received compensation or benefits
for providing to the Company or its affiliates: (1) any audit service; or (2)
commercial, legal, financial, accounting services or other services within the
recent two years
0
Sir Peter L. Bonfield
Independent Director
0
Moshe N. Gavrielov
Independent Director
0
Ursula M. Burns
Independent Director
0
Note: During the two years before being elected and during the term of office, meet any of the following situations:
(1) Not an employee of the company or any of its affiliates;
(2) Not a director or supervisor of the company or any of its affiliates;
(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of one percent or
more of the total number of issued shares of the company or ranks as one of its top ten shareholders;
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the officer in the preceding (1) subparagraph, or of any of the above persons in the
preceding subparagraphs (2) and (3);
(5) Not a director, supervisor, or employee of a legal entity that directly holds five percent or more of the total number of issued shares of the company, ranks as of its top five shareholders, or has representative
director(s) serving on the company’s board based on Article 27 of the Company Law;
(6) Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company;
(7) Not a director, supervisor, or employee of a company of which the chairman or CEO (or equivalent) themselves or their spouse also serve as the company’s chairman or CEO (or equivalent);
(8) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the company; and
(9) Neither a director nor his/her spouse has, in any capacity whatsoever, whether as a professional individual, owner, partner, director, supervisor, or officer of a sole proprietorship or any type of legal entity,
provided to TSMC and its affiliates: (1) any audit service; or (2) commercial, legal, financial, accounting services or other services of which its total compensation exceeding NT$500,000 within the recent two
years.
3.2.5 Director and Committees Members’ Attendance
Each Director is expected to attend every Board meeting and the Committees meeting on which he or she serves. In 2024, the
average Board Meeting attendance rate was 97.02% and the attendance rate for the Audit and Risk Committee, Compensation and
People Development Committee, and Nominating, Corporate Governance and Sustainability Committee’s Meetings were 100%,
100%, and 97.5% respectively.
Board of Directors Meeting Status
Tenures of the Board of Directors members are from June 4, 2024 to June 3, 2027. TSMC’s Chairman of the Board of Directors
convened four regular meetings and two special meetings in 2024. The directors’ attendance status is as follows.
Title
Name
Attendance in
Person
By Proxy
Attendance Rate
in Person (%)
Notes
Former Chairman
Mark Liu
3
0
100%
Term expired (Note)
Chairman and Chief Executive Officer
C.C. Wei
6
0
100%
Renewal of office (Note)
Director
Representative of National Development Fund, Executive
Yuan:
Ming-Hsin Kung
Chin-Ching Liu
3
2
1
0
75%
100%
Renewal of office (Note)
Mr. Chin-Ching Liu was appointed
as the representative of the National
Development Fund, succeeding Mr.
Ming-Hsin Kung on June 6, 2024.
Director
F.C. Tseng
6
0
100%
Renewal of office (Note)
Independent Director
Sir Peter L. Bonfield
6
0
100%
Renewal of office (Note)
Independent Director
Kok-Choo Chen
3
0
100%
Term expired (Note)
Independent Director
Michael R. Splinter
6
0
100%
Renewal of office (Note)
Independent Director
Moshe N. Gavrielov
6
0
100%
Renewal of office (Note)
Independent Director
Yancey Hai
3
0
100%
Term expired (Note)
Independent Director
L. Rafael Reif
5
0
83.33%
Renewal of office (Note)
(Continued)
050
051
Audit and Risk Committee
Meeting Date
Resolution
2024 3rd Regular Meeting
August 12
●2024 second quarter financial statements
●2024 second quarter business report
●2024 second quarter earnings distribution
●The subscription of new shares to be issued by Vanguard International Semiconductor Corporation (VIS)
●Capital injection of not more than US$7.5 billion to TSMC Arizona
●Ratification of TSMC’s security investments classified as non-current assets
●Related-party sale of existing TSMC equipment to JASM
●Issuance of total 2,353,000 shares of 2024 employee restricted stock awards
2024 4th Regular Meeting
November 11
●2024 third quarter financial statements
●2024 third quarter business report
●2024 third quarter earnings distribution
●NTD corporate bond issuance
●A 3rd investment in an amount of US$100 million to Emerging Fund and net proceeds from the transactions of its can be reinvested
●Ratification of the parent guarantee provided by TSMC to the United States Department of Commerce (“DOC”) for the obligations of TSMC Arizona under the
agreements that TSMC Arizona has entered into with the DOC for the receipt of CHIPS Incentives Awards pursuant to the CHIPS Act
●2025 service fees and out-of-pocket expenses for Deloitte
Independent Directors’ objections, reservations or major suggestions: None.
Resolution of the committee and the Company’s response to the committee’s opinion: The members of the Committee unanimously approved all the resolutions, and the Board of Directors approved all such
resolutions recommended by the Committee.
(2) There were no other resolutions which was not approved by the Committee but was approved by two thirds or more of all directors in 2024.
B. Recusals of Independent Directors due to conflicts of interests: Mr. Moshe N. Gavrielov, serving as an Independent Director of NXP Semiconductors N.V. (NXP), recused himself from participating in the discussion
and voting on the proposal regarding TSMC’s subscription to new shares to be issued by VIS for financing a joint venture 12-inch wafer fab with NXP.
C. Descriptions of the communications between the Independent Directors, the internal auditors, and the independent auditors in 2024 (which should include the material items, channels, and results of the audits
on the corporate finance and/or operations, etc.):
(1) The internal auditors have sent the audit reports to the members of the Committee periodically and presented the findings of all audit reports in the quarterly meetings of the Committee. The head of Internal
Audit will immediately report to the members of the Committee any material matters. During 2024, the head of Internal Audit did not report any such material matters. The communication channel between
the Committee and the internal auditor functioned well.
(2) The Company’s independent auditors have presented the findings of their quarterly review or audits on the Company’s financial results. Under applicable laws and regulations, the independent auditors
are also required to immediately communicate to the Committee any material matters that they have discovered. During 2024, the Company’s independent auditors did not report any irregularity. The
communication channel between the Committee and the independent auditors functioned well.
The communications between the Independent Directors, the internal auditors, and the independent auditors are listed in the table below.
Audit and Risk Committee
Meeting Date
Communications between the Independent Directors and
the Internal Auditors
Communications between the Independent Directors and the Independent
Auditors
2024 1st Regular Meeting
February 5
●Internal Auditor’s report (Closed Door Session)
●Report on SOX 404 self-testing results for the year 2023 (Closed
Door Session)
●2023 Statement of Internal Control System (Closed Door Session)
●External auditor relationship (i.e. qualification, performance and independence)
●Report of regulatory developments
●Any audit problems or difficulties and management’s response in connection with 2023
annual financial statements (Closed Door Session)
2024 2nd Special Meeting
May 10
-
●Any review problems or difficulties and management’s response in connection with 2024
first quarter financial statements (Closed Door Session)
2024 2nd Regular Meeting
June 4
●Internal Auditor’s report (Closed Door Session)
●Amendments to TSMC’s internal control related policies and
procedures (Closed Door Session)
●The result of 2023 CPA evaluation questionnaire
●Report of regulatory developments
●Annual audit plan (Closed Door Session)
2024 3rd Regular Meeting
August 12
●Internal Auditor’s report (Closed Door Session)
●Report of regulatory developments
●Any review problems or difficulties and management’s response in connection with 2024
second quarter financial statements (Closed Door Session)
2024 4th Regular Meeting
November 11
●Internal Auditor’s report (Closed Door Session)
●2025 internal audit plan (Closed Door Session)
●External auditor relationship (i.e. qualification, performance and independence)
●Report of regulatory developments
●Any review problems or difficulties and management’s response in connection with 2024
third quarter financial statements (Closed Door Session)
Result: all of the above matters were reviewed and/or approved by the Committee whereupon Independent Directors raised no objection.
Note: Sir Peter L. Bonfield, Mr. Michael R. Splinter, Mr. Moshe N. Gavrielov, Dr. L. Rafael Reif, Ms. Ursula M. Burns, Ms. Lynn L. Elsenhans and Dr. Chuan Lin were elected as TSMC’s independent director at Annual
Shareholders’ Meeting on June 4, 2024, and became member of the Audit and Risk Committee.
Title
Name
Attendance in
Person
By Proxy
Attendance Rate
in Person (%)
Notes
Independent Director
Ursula M. Burns
3
0
100%
New office assumed (Note)
Independent Director
Lynn L. Elsenhans
3
0
100%
New office assumed (Note)
Independent Director
Chuan Lin
3
0
100%
New office assumed (Note)
Annotations:
A. (1) Matters listed in the Securities and Exchange Act §14-3: The Securities and Exchange Act §14-3 is not be applicable because the Company has established the Audit and Risk Committee. For relevant
information, please refer to the “Audit and Risk Committee Meeting Status” in this Annual Report.
(2) There were no other written or otherwise recorded resolutions on which an Independent Director had an objection or reservation.
B. Recusals of Directors due to conflicts of interests: (1) Directors recused themselves from the discussion and voting of their compensation resolution; (2) Dr. F.C. Tseng as the Chairman of TSMC Education and
Culture Foundation recused himself from the discussion and voting of a donation to TSMC Education and Culture Foundation; (3) Dr. F.C. Tseng and Mr. Moshe N. Gavrielov, serving as the Vice Chairman of
Vanguard International Semiconductor Corporation (VIS) and an Independent Director of NXP Semiconductors N.V. (NXP), respectively, recused themselves from participating in the discussion and voting on the
proposal regarding TSMC’s subscription to new shares to be issued by VIS for financing a joint venture 12-inch fab with NXP.
C. Measures taken to strengthen the functionality of the Board:
– TSMC’s Directors are composed of diverse backgrounds, including professional backgrounds in different industries and academic, etc.; nationalities in different countries in Taiwan, Europe and the U.S.; world-
class business operating experience; and two Director are females. Our Board has seven Independent Directors who constitute 70% of the Board.
– TSMC’s 16th Board of Directors was elected at TSMC’s Annual Shareholders’ Meeting on June 4, 2024, including two female Directors and seven Independent Directors.
– TSMC arranged two training courses for the Directors: “Cybersecurity Risk Management” and “Antitrust and Competition Law Update”.
Note: TSMC’s 16th Board of Directors was elected at TSMC’s Annual Shareholders’ Meeting on June 4, 2024.
Audit and Risk Committee Meeting Status
Tenures of the Audit and Risk Committee members are from June 4, 2024 to June 3, 2027. The Chairman of the Audit and Risk
Committee, convened four regular meetings and one special meeting in 2024. In addition to these meetings, he also convened
one special meeting and three telephone conferences to review the Company’s Annual Report to be filed with the Taiwan and U.S.
authorities and investor conference materials. The Committee members’ and consultant’s attendance status is as follows.
Title
Name
Attendance in
Person
By Proxy
Attendance Rate in
Person (%)
Telephone
Conferences
Attendance Rate
of Telephone
Conferences (%)
Notes
Chair
Sir Peter L. Bonfield
6
0
100%
3
100%
Renewal of office (Note)
Member
Michael R. Splinter
6
0
100%
3
100%
Renewal of office (Note)
Member
Moshe N. Gavrielov
6
0
100%
3
100%
Renewal of office (Note)
Member
L. Rafael Reif
6
0
100%
0
0%
Renewal of office (Note)
Member
Ursula M. Burns
3
0
100%
2
100%
New office assumed (Note)
Member
Lynn L. Elsenhans
3
0
100%
2
100%
New office assumed (Note)
Member
Chuan Lin
3
0
100%
2
100%
New office assumed (Note)
Member
Kok-Choo Chen
3
0
100%
1
100%
Term expired (Note)
Member
Yancey Hai
3
0
100%
1
100%
Term expired (Note)
Financial Expert Consultant
Jan C. Lobbezoo
6
0
100%
3
100%
None
Annotations:
A. (1) Resolutions related to Securities and Exchange Act §14-5:
Audit and Risk Committee
Meeting Date
Resolution
2024 1st Regular Meeting
February 5
●2023 annual financial statements
●2023 business report
●2023 fourth quarter earnings distribution
●Capital injection of not more than US$5.262 billion to Japan Advanced Semiconductor Manufacturing, Inc. (JASM)
●If TSMC Arizona is able to receive CHIPS Incentive Awards pursuant to the CHIPS Act via entering into CHIPS Incentive Awards agreements with the United States
Department of Commerce (“DOC”), a parent guarantee is to be provided by TSMC to the DOC for the obligations of TSMC Arizona arising from the said agreements,
and the final amount of the parent guarantee is to be determined by the authority granted to the Chairman of the Board so long as it is within the authorized
amount, and is subject to subsequent ratification at the next Board meeting
●Capital injection of not more than US$5 billion to TSMC Arizona
●Capital injection of not more than US$3 billion to TSMC Global Ltd.
●Issuance of total 2,960,000 shares of 2023 employee restricted stock awards
●Issuance of 2024 employee restricted stock awards
●2023 Statement of Internal Control System
2024 2nd Special Meeting
May 10
●2024 first quarter financial statements
●2024 first quarter business report
●2024 first quarter earnings distribution
2024 2nd Regular Meeting
June 4
●Capital injection of not more than US$5 billion to TSMC Global Ltd.
●Related-party sale of existing TSMC equipment to TSMC Arizona
●Amendments to TSMC’s internal control related policies and procedures
(Continued)
052
053
Compensation and People Development Committee Meeting Status
Tenures of the Compensation and People Development Committee members are from June 4, 2024 to June 3, 2027. The Chairman
of the Compensation and People Development Committee, convened four regular meetings and one special meeting in 2024. The
Committee members’ qualification and attendance are as follows.
Title
Name
Attendance in Person
By Proxy
Attendance Rate in Person (%)
Notes
Chair
Michael R. Splinter
5
0
100%
Renewal of office (Note)
Member
Sir Peter L. Bonfield
5
0
100%
Renewal of office (Note)
Member
Moshe N. Gavrielov
5
0
100%
Renewal of office (Note)
Member
Ursula M. Burns
3
0
100%
New office assumed (Note)
Member
L. Rafael Reif
2
0
100%
Term expired (Note)
Member
Kok-Choo Chen
2
0
100%
Term expired (Note)
Member
Yancey Hai
2
0
100%
Term expired (Note)
Annotations:
A. In 2024, the Compensation and People Development Committee conducted four regular meetings on February 5, June 4, August 12 and November 11 and one special meeting on May 10. The discussion items
were as follows:
– Report on matters related to employee compensation
– Total amount of quarterly business performance bonus
– Total amount of annual profit sharing
–
The amount of quarterly business performance bonus for executive officers, CEO and Chairman
– The annual compensation of directors and executive officers, and the disclosure of same in the Annual Report
– Vest of Employee restricted stock awards for 2021 and 2022
– Grant of Employee restricted stock awards for 2023 and 2024
– Employee restricted stock awards rules for 2024
– 2025 Executive Equity Based Compensation Plan
– Organization and Executive Succession Discussion
All of the above matters were reviewed and/or approved by the Committee.
B. The Board of Directors adopted all recommendations of the Committee without modification.
C. There were no written or otherwise recorded resolutions on which any member of the Committee had an objection or reservation opinion.
Note: TSMC Board of Directors approved the appointment of Michael R. Splinter, Sir Peter L. Bonfield, Mr. Moshe N. Gavrielov, and Ms. Ursula M. Burns as members of the Compensation and People Development
Committee.
Information Regarding Nominating, Corporate Governance and Sustainability Committee Members and Committee’s
Meeting Status
According to its Charter, the Committee shall be composed of the Chairman of the Board and three to six independent directors.
The Nominating, Corporate Governance and Sustainability Committee assists the Board in strengthening the selection mechanism
for directors, building diversified and professional board, selecting candidates for nomination to be elected as independent directors
to the Board, and advising on corporate governance and sustainability matters.
TSMC’s Nominating, Corporate Governance and Sustainability Committee is comprised of four members. Tenures of the Committee
members are from June 4, 2024 to June 3, 2027. The Chairman of the Committee convened four meetings in 2024. The Committee
members’ professional qualification and experience, attendance status, and discussion items are as follows:
Criteria
Name/Title
Professional Qualification and Experience
Attendance
in Person
By Proxy (Note)
Attendance Rate in
Person (%)
Notes
Chuan Lin (Chair)
Independent Director
TSMC’s Nominating, Corporate Governance and
Sustainability Committee is comprised of the Chairman of
the Board and three independent directors. For members
professional qualification and experience, please refer to
“2.3.1 Information Regarding Board Members” on page
20-27 of this Annual Report.
3
0
100%
New office assumed
(Note)
C.C. Wei
Chairman of the Board
3
0
100%
New office assumed
(Note)
L. Rafael Reif
Independent Director
3
-
75%
Renewal of office (Note)
Lynn L. Elsenhans
Independent Director
3
0
100%
New office assumed
(Note)
Moshe N. Gavrielov
Independent Director
1
0
100%
Term expired (Note)
Mark Liu
Former Chairman of the
Board
1
0
100%
Retirement (Note)
Sir Peter L. Bonfield
Independent Director
1
0
100%
Term expired (Note)
Kok-Choo Chen
Independent Director
1
0
100%
Term expired (Note)
Michael R. Splinter
Independent Director
1
0
100%
Term expired (Note)
Yancey Hai
Independent Director
1
0
100%
Term expired (Note)
Annotations:
A. In 2024, the Nominating, Corporate Governance and Sustainability Committee conducted four meetings on February 5, June 4, August 12 and November 11. The discussion items were as follows:
– Committee’s operation
– Reviewing the press release for director candidates
– Reviewing the result of the Committee 2023 annual assessment questionnaire
– Reviewing the standing agenda for 2024 Committee meetings
– Amendments of the TSMC’s “Corporate Governance Guidelines” and “Nominating, Corporate Governance and Sustainability Committee Charter”
– Reviewing Quarterly ESG report
– Annual reviewing and assessing the fulfillment of Committee duties
All of the above matters were reviewed, discussed and/or approved by the Committee.
B. There were no resolutions on which any member of the Committee had an objection opinion.
C. The Board of Directors approved and adopted all recommendations of the Committee without modification.
Note: The Committee members shall attend the meetings in-person, and there is no proxy available for the Committee members who are unable to attend the meeting.
Note: TSMC Board approved the appointment of Dr. Chuan Lin, Dr. C.C. Wei, Dr. L. Rafael Reif and Ms. Lynn L. Elsenhans as members of Nominating, Corporate Governance and Sustainability Committee on June 4,
2024.
Board of Directors’ Performance Evaluation Implementation Status
Evaluation Cycle
Evaluation Period
Evaluation Scope
Evaluation Method
Evaluation Aspect
Annual
From January 1, 2024 to December
31, 2024
●The Board of Directors as a
whole
●The individual directors
●The Audit and Risk Committee
●The Compensation and People
Development Committee
●The Nominating, Corporate
Governance and Sustainability
Committee
●Internal assessment of the
Board
●Self-assessments by each
board member
●Internal assessment of each
committee
The Board of Directors are assessed on the following five aspects:
1. Involvement in the Company’s operations
2. Enhancement of the quality of the board’s decision-making
3. Makeup and structure of the board
4. Election of board members and continuing knowledge
development
5. Internal control
The individual directors are assessed on the following six aspects:
1. Understanding of the Company’s goals and mission
2. Awareness of director’s duties
3. Involvement in the Company’s operations
4. Internal relationship and communication
5. Director’s professionalism and continuing knowledge
development
6. Internal control
Each functional Committee is assessed on the following five aspects:
1. Involvement in the Company’s operations
2. Awareness of the committee’s duties
3. Enhancement of the quality of the committee’s decision-making
4. Makeup of the committee and election of its members
5. Internal control
054
055
The Company completed self-assessments of Board and each Committee performance in 2024 and reported the results to the Board
and each Committee at its first quarter meeting in 2025 for review and improvement. The weighted average score for the overall
performance of the Board of Directors is 4.73 out of 5, that included an average score of 4.78 on a particular assessment item “The
board has sufficient discussions over the Company’s involvement in the implementation of ESG programs”. The weighted average
score for the performance of the individual directors is 4.84 out of 5. As demonstrated, the overall board’s operation has been
effective. On a scale out of 5, the weighted average scores for self-assessed performance results of the Audit and Risk Committee,
the Compensation and People Development Committee and the Nominating, Corporate Governance and Sustainability Committee
are 4.79, 4.84 and 4.63, respectively. As demonstrated, each committee’s operation has been effective.
3.3 Major Decisions of Shareholders’ Meeting and Board Meetings
3.3.1 Major Resolutions of Shareholders’ Meeting and Implementation Status
TSMC held 2024 Annual Shareholders’ Meeting in Hsinchu, Taiwan on June 4, 2024. At the meeting, shareholders present in
person or by proxy approved the following resolutions:
(1) The 2023 Business Report and Financial Statements. Consolidated revenue totaled NT$2,161.74 billion and net income was
NT$838.50 billion, with diluted earnings per share of NT$32.34;
(2) The revisions to the Articles of Incorporation;
(3) The issuance of employee restricted stock awards for the year 2024; and
Directors Election: Election of ten Directors (including seven Independent Directors)
Implementation Status
All the resolutions of the Shareholders’ Meeting have been fully implemented in accordance with the resolutions.
The ten newly elected directors were Dr. C.C. Wei, Dr. F.C. Tseng, Dr. Ming-Hsin Kung (Representative of National Development
Fund, Executive Yuan), Sir Peter L. Bonfield (Independent Director), Mr. Michael R. Splinter (Independent Director), Mr. Moshe N.
Gavrielov (Independent Director), Dr. L. Rafael Reif (Independent Director), Ms. Ursula M. Burns (Independent Director), Ms. Lynn L.
Elsenhans (Independent Director), and Dr. Chuan Lin (Independent Director).
3.3.2 Major Resolutions of Board Meetings
During 2024 and as of the date of this Annual Report, major resolutions approved at Board meetings are summarized below:
(1) Regular Board Meeting of February 5 & 6, 2024:
●approving the 2023 Business Report and Financial Statements;
●approving the distribution of a NT$3.50 per share cash dividend for the fourth quarter of 2023, and setting June 19, 2024 as
the record date for common stock shareholders entitled to participate in this cash dividend distribution;
●approving distribution of employees’ business performance bonus and profit sharing for 2023;
●approving capital appropriations of approximately US$9,421.48 million for purposes including: 1. Installation of advanced
technology capacity; 2. Installation of advanced packaging, mature and/or specialty technology capacity; 3. Fab construction,
and installation of fab facility systems, including construction of the Zero Waste Manufacturing Center at the Southern Taiwan
Science Park; 4. Capitalized leased assets;
●approving the capital injection of not more than US$5,262 billion to Japan Advanced Semiconductor Manufacturing, Inc.
(JASM);
●approving the capital injection of not more than US$5 billion to TSMC Arizona, a wholly-owned subsidiary of TSMC;
●approving the capital injection of not more than US$3 billion to TSMC Global Ltd., a wholly-owned subsidiary of TSMC, for the
purpose of reducing foreign exchange hedging costs;
●approving the issuance of 2,960,000 shares of 2023 employee restricted stock awards (RSAs). In addition, approving the
issuance of no more than 4,185,000 common shares of RSAs for the year 2024, which will be submitted to the 2024 Annual
Shareholders’ Meeting for approval;
●convening the 2024 Annual Shareholders’ Meeting;
●approving the promotion of Vice President, Finance and Chief Financial Officer Mr. Wendell Huang to Senior Vice President;
and
●approving the promotion of Vice President, Legal and General Counsel Ms. Sylvia Fang to Senior Vice President.
(2) Special Board Meeting of February 29, 2024:
●approving the appointment of Senior Vice President of R&D Dr. Y.J. Mii and Senior Vice President of Operations Mr. Y.P. Chyn
as Executive Vice Presidents and Co-Chief Operating Officers of TSMC, effect March 1, 2024.
(3) Special Board Meeting of May 10, 2024:
●approving the 2024 first quarter Business Report and Financial Statements; and
●approving the distribution of a NT$4.00 per share cash dividend for the first quarter of 2024, and setting September 18, 2024
as the record date for common stock shareholders entitled to participate in this cash dividend distribution.
(4) Regular Board Meeting of June 4 & 5, 2024:
●electing Dr. C.C. Wei as Chairman and Chief Executive Officer (CEO);
●approving capital appropriations of approximately US$17,356.20 million for purposes including: 1. Installation and upgrade
of advanced technology capacity; 2. Installation and upgrade of advanced packaging, mature and/or specialty technology
capacity; 3. Fab construction, and installation of fab facility systems;
●approving the capital injection of not more than US$5 billion to TSMC Global Ltd., a wholly-owned subsidiary of TSMC, for the
purpose of reducing foreign exchange hedging costs;
●approving a total donation of not more than NT$4 billion to National Taiwan University (NTU), National Yang Ming Chiao
Tung University (NYCU), National Tsing Hua University (NTHU), National Cheng Kung University (NCKU) and selected senior
high schools and girls’ senior high schools in Taiwan to enhance long-term semiconductor research, education and talent
cultivation; and
●approving a share buyback program for TSMC to buy back 3,249,000 common shares on Taiwan Stock Exchange to offset the
dilution from the increase of outstanding shares due to Employee Restricted Stock Awards (RSAs) issuance.
(5) Regular Board Meeting of August 13, 2024:
●approving the 2024 second quarter Business Report and Financial Statements;
●approving the distribution of a NT$4.00 per share cash dividend for the second quarter of 2024, and setting December 18,
2024 as the record date for common stock shareholders entitled to participate in this cash dividend distribution;
●approving capital appropriations of approximately US$29,615.47 million for purposes including: 1. approving Installation
and upgrade of advanced technology capacity; 2. Installation and upgrade of advanced packaging, mature and/or specialty
technology capacity; 3. Fab construction, and installation of fab facility systems;
●approving the capital injection of not more than US$7.5 billion to TSMC Arizona, a wholly-owned subsidiary of TSMC;
●approving the issuance of 2,353,000 shares of 2024 employee restricted stock awards (RSAs); and
●approving the promotion of Materials Management Organization Senior Director Ms. Vanessa Lee to Vice President
(6) Regular Board Meeting of November 11 &12, 2024:
●approving the 2024 third quarter Business Report and Financial Statements;
●approving the distribution of a NT$4.50 per share cash dividend for the third quarter of 2024, and setting March 24, 2025 as
the record date for common stock shareholders entitled to participate in this cash dividend distribution;
●approving capital appropriations of approximately US$15,479.95 million for purposes including: 1. Fab construction, and
installation of fab facility systems; 2. Installation of advanced technology capacity, as well as 2025 R&D capital investments and
sustaining capital expenditures; 3. 2025 capitalized leased assets; and
●approving the issuance of unsecured corporate bonds in multiple offerings in the domestic market in an amount not to exceed
NT$60 billion to finance TSMC’s capacity expansion and/or pollution prevention related expenditures.
056
057
(7) Regular Board Meeting of February 12, 2025:
●approving the 2024 Business Report and Financial Statements;
●approving the distribution of a NT$4.50 per share cash dividend for the fourth quarter of 2024, and setting June 18, 2025 as
the record date for common stock shareholders entitled to participate in this cash dividend distribution;
●approving distribution of employees’ business performance bonus and profit sharing for 2024;
●approving capital appropriations of approximately US$17,141.40 million for purposes including: 1. Installation and upgrade
of advanced technology capacity; 2. Installation and upgrade of advanced packaging, mature and/or specialty technology
capacity; 3. Fab construction, and installation of fab facility systems;
●approved the capital injection of not more than US$10 billion to TSMC Global Ltd., a wholly-owned subsidiary of TSMC, for
the purpose of reducing foreign exchange hedging costs;
●approving the 2025 Annual Shareholders’ Meeting;
●approving the promotion of Human Resources Organization Senior Director Mr. P.H. Chen to Vice President.
3.3.3 Major Issues of Record or Written Statements Made by Any Director Dissenting to Important Resolutions Passed
by the Board of Directors in 2024 and as of the Date of this Annual Report: None.
3.4 Corporate Governance Implementation Status as Required by Taiwan Financial Supervisory
Commission
Assessment Item
Implementation Status
Non-
implementation
and Its Reason(s)
Yes
No
Explanation
1. Does Company follow “Taiwan Corporate Governance Implementation” to
establish and disclose its corporate governance practices?
V
The Board of Directors of the Company has approved the establishment of the
Corporate Governance Guidelines.
None
2. Shareholding Structure & Shareholders’ Rights
(1) Does Company have Internal Operation Procedures for handling
shareholders’ suggestions, concerns, disputes and litigation matters. If yes,
has these procedures been implemented accordingly?
(2) Does Company possess a list of major shareholders and beneficial owners
of these major shareholders?
(3) Has the Company built and executed a risk management system and
“firewall” between the Company and its affiliates?
(4) Has the Company established internal rules prohibiting insider trading on
undisclosed information?
V
V
V
V
(1) TSMC has designated appropriate departments, such as Investor Relations
Division, Public Relations Division, Shareholders Services & SEC Compliance
Department, Legal, etc., to handle shareholder suggestions, concerns, disputes
or litigation matters according to relevant internal procedures.
(2) TSMC tracks the shareholdings of directors, officers, and top ten shareholders.
(3) TSMC has set up internal rules in the Company’s Internal Control System and
Affiliated Corporations Management.
(4) TSMC has established its “Insider Trading Policy” that applies to all employees,
officers and members of the Board of Directors of the Company and to any
other person having a duty of trust or confidence, with respect to transactions
in the Company’s securities. This policy prohibits any insider trading and the
Company regularly provides internal training on this issue.
None
Assessment Item
Implementation Status
Non-
implementation
and Its Reason(s)
Yes
No
Explanation
3. Composition and Responsibilities of the Board of Directors
(1) Has the Board of Directors established a diversity policy, set goals, and
implemented them accordingly?
(2) Other than the compensation committee and the audit committee
which are required by law, does the Company plan to set up other Board
committees?
(3) Has the Company established methodology for evaluating the performance
of its Board of Directors, on an annual basis, reported the results of
performance to the Board of Directors, and use the results as reference for
directors’ remuneration and renewal?
(4) Does the Company regularly evaluate its external auditors’ independence?
V
V
V
V
(1) Please refer to “3.2 Board of Directors – Board Diversity and Independence” on
page 44-45 of this Annual Report.
(2) Audit and Risk Committee (Audit Committee is founded in 2002 and renamed
in 2023); Compensation and People Development Committee (Compensation
Committee is founded in 2003 and renamed in 2023); Nominating, Corporate
Governance and Sustainability Committee (founded in 2023); ESG Steering
Committee (founded in 2019): is formed by the Company’s management team
and chaired by Chairman; ESG Committee (founded in 2011): is formed by
the Company’s executive team and reports quarterly to the Board/Nominating,
Corporate Governance and Sustainability Committee on the implementation of
plans and results.
(3) As TSMC’s corporate governance concept, the Board of Director’s primary
responsibility is to supervise, evaluate the management’s performance and
dismiss officers of the Company when necessary, resolve the important,
concrete matters and provide guidance to the management team. TSMC’s
Board of Directors consists of distinguished members with a great breadth of
experience as world-class business leaders or professionals and adhere high
ethical standards and commitment to the Company. Each quarter’s Board
Meeting is last for two days. Company’s resolutions are determined in board
meeting, also business strategy and future orientation are discussed in the
meeting, in order to create best interest for shareholders. Based on TSMC’s
operating performance and local/international awards of best corporate
governance, it certainly proves the Company’s excellent performance of Board
of Directors.
Each year, TSMC conducts regular Board performance self-evaluation in form
of written questionnaires for the Board, individual directors, the Audit and Risk
Committee, the Compensation and People Development Committee, and the
Nominating, Corporate Governance and Sustainability Committee.
The Board of Directors are assessed on the following five aspects:
1. Involvement in the Company’s operations
2. Enhancement of the quality of the board’s decision-making
3. Makeup and structure of the board
4. Election of board members and continuing knowledge development
5. Internal control
The individual directors are assessed on the following six aspects:
1. Understanding of the Company’s goals and mission
2. Awareness of director’s duties
3. Involvement in the Company’s operations
4. Internal relationship and communication
5. Director’s professionalism and continuing knowledge development
6. Internal control
Each functional Committee is assessed on the following five aspects:
1. Involvement in the Company’s operation
2. Awareness of the committee’s duties
3. Enhancement of the quality of the committee’s decision-making
4. Makeup of the committee and election of its members
5. Internal control
The Company completed self-assessments of Board performance in 2024 and
reported the results to the Board of Directors at its first quarter meeting in
2025 for review and improvement. The weighted average score for the overall
performance of the Board of Directors is 4.73 out of 5, that included an
average score of 4.78 on a particular assessment item “The board has sufficient
discussions over the Company’s involvement in the implementation of ESG
programs”. The weighted average score for the performance of the individual
directors is 4.84 out of 5. As demonstrated, the overall board’s operation has
been effective. On a scale of 5, the weighted average scores for self-assessed
performance results of the Audit and Risk Committee, the Compensation and
People Development Committee and the Nominating, Corporate Governance
and Sustainability Committee are 4.79, 4.84 and 4.63, respectively. As
demonstrated, each committee’s operation has been effective.
(4) The Audit and Risk Committee annually evaluates the independence of external
auditors and reports the same to the Board of Directors. Please refer to “3.9.4
Evaluation of the External Auditor’s Independence and Suitability” on page 67
of this Annual Report.
None
(Continued)
(Continued)
058
059
Assessment Item
Implementation Status
Non-
implementation
and Its Reason(s)
Yes
No
Explanation
4. Does the Company appoint competent and appropriate corporate governance
personnel and corporate governance officer to be in charge of corporate
governance affairs (including but not limited to furnishing information
required for business execution by directors, assisting directors’ compliance of
law, handling matters related to board meetings and shareholders’ meetings
according to law, and recording minutes of board meetings and shareholders’
meetings)?
V
The Board of Directors appointed Ms. Sylvia Fang, the Senior Vice President and
General Counsel of TSMC as the Corporate Governance Officer. TSMC’s Corporate
& Compliance Legal Division, which directly reports to the General Counsel, is
in charge of assisting in related affairs, including handling of matters relating
to Board, Audit and Risk Committee, Compensation and People Development
Committee, Nominating, Corporate Governance and Sustainability Committee
and Shareholders’ meetings in compliance with law, assistance in onboarding
and continuing education of directors, provision of information required for
performance of duties by directors, and assistance in directors’ compliance of law,
etc.
None
5. Has the Company established a means of communicating with its
Stakeholders (including but not limited to shareholders, employees,
customers, suppliers, etc.) or created a Stakeholders Section on its Company
website? Does the Company respond to stakeholders’ questions on corporate
responsibilities?
V
Depending on the situation, the Company’s Investor Relations Division, Public
Relations Division, Shareholders Services & SEC Compliance Department, Human
Resources Organization, Customer Service Department, Procurement Department
and ESG will communicate with stakeholders. We also have publicly disclosed the
contact information of our corporate spokesperson and relevant departments.
Also, we have a stakeholder section on our corporate website to address our
sustainability and any other issues. For details, please refer to “7. Corporate
Sustainability (ESG)” on page 146-173 of this Annual Report and “Materiality
Analysis and Stakeholder Communication” of TSMC’s Sustainability Report.
None
6. Has the Company appointed a professional registrar for its Shareholders’
Meetings?
V
We have appointed China Trust as registrar for our Shareholders’ Meetings.
None
7. Information Disclosure
(1) Has the Company established a corporate website to disclose information
regarding its financials, business and corporate governance status?
(2) Does the Company use other information disclosure channels (e.g.
maintaining an English-language website, designating staff to handle
information collection and disclosure, appointing spokespersons,
webcasting investors conference etc.)?
(3) Does the Company announce and report the annual financial statements
within two months after the end of the fiscal year, and announce and
report the first, second, and third quarter financial statements as well as
the operating status of each month before the prescribed deadline?
V
V
V
(1) TSMC discloses its financials business and corporate governance status on its
website at http://www.tsmc.com (in Chinese and English). TSMC’s American
Depositary Receipt (ADR) is listed on the New York Stock Exchange (NYSE).
As a foreign issuer, TSMC must comply with NYSE’s rules. We have been
operating in accordance with NYSE listing standards, and have been disclosing
the major differences between our corporate governance practices and U.S.
corporate governance practices. Please see https://www.tsmc.com/download/ir/
NYSE_Section_303A.pdf.
(2) TSMC has designated appropriate departments (e.g. the Investor Relations
Division, Public Relations Division, Shareholders Services & SEC Compliance
Department, etc.) to handle the collection and disclosure of information as
required by the relevant laws and regulations of Taiwan and other jurisdictions.
TSMC has designated Spokesperson and Deputy Spokesperson as required by
relevant regulations.TSMC provides live audio webcasts and replays of investor
conferences on its website.
(3) TSMC follows relevant laws and regulations to announce and report the annual
financial statements within two months after the end of the fiscal year, and
announce and report the first, second, and third quarter financial statements
as well as the operating status of each month before the prescribed deadline.
Please refer to Market Observation Post System for the aforementioned
disclosure.
None
8. Has the Company disclosed other information to facilitate a better
understanding of its corporate governance practices (e.g. including but
not limited to employee rights, employee wellness, investor relations,
supplier relations, rights of stakeholders, directors’ training records, the
implementation of risk management policies and risk evaluation measures,
the implementation of customer relations policies, and purchasing insurance
for directors)?
V
(1) For employee rights and employee wellness, please refer to “5.6 Human
Capital” on page 112-119 of this Annual Report.
(2) For investor relations, supplier relations and rights of stakeholders, please refer
to “7. Corporate Sustainability (ESG)” on page 146-173 of this Annual Report.
(3) For Directors’ training records, please refer to “Continuing Education/Training of
Directors in 2024” on page 46-47 of this Annual Report.
(4) For Risk Management Policies and Risk Evaluation, please refer to “6.2 Risk
Management” on page 127-145 of this Annual Report.
(5) For Customer Relations Policies, please refer to “5.4 Customer Trust” on page
109-111 of this Annual Report.
(6) TSMC maintains D&O Insurance for its directors and officers.
None
9. The improvement status for the result of Corporate Governance Evaluation announced by Taiwan Stock Exchange
TSMC was ranked in top 5% in Corporate Governance Evaluation over the years. The improvement status in 2024 is as follows:
TSMC received a AAA (the highest tier) certificate by Taiwan Intellectual Property Management System (TIPS) from Industrial Development Administration, Ministry of Economic Affairs in December 2024 again,
and the valid period will expire after December 31, 2027.
3.5 Code of Ethics and Business Conduct
Ethics at TSMC
“Integrity” is TSMC’s most important core value. TSMC strictly adheres to the highest standards of integrity and promotes good
ethical behavior to sustain the hard-earned trust and confidence of its shareholders, customers, suppliers, employees and the
general public – constantly and vigilantly promoting integrity, fairness, and transparency in all that we say and do. We have zero
tolerance for corruption, refrain from bribery, fraud, abuse or embezzlement of corporate assets, and prohibit the advancement
of personal interests at the expense of or in conflict with TSMC. At the heart of our corporate governance culture is the “TSMC
Ethics and Business Conduct Policy” (Ethics Code). The Ethics Code requires that each employee bear a heavy personal responsibility
to preserve and to protect TSMC’s ethical values and reputation. At the same time, we have formulated the “TSMC’s Supplier
Code of Conduct” as well to ensure our suppliers understand and follow the Ethics Code and together fulfill our corporate social
responsibilities.
Specifically, every TSMC employee must adhere to the following:
●Do not advance personal interests at the expense of or in conflict with the Company;
●Refrain from corruption (including collusion with others), bribery, unfair competition, fraud, extortion, embezzlement, and waste
or abuse of corporate assets;
●Avoid any improper efforts to influence the decisions of anyone, including government officials, agencies, as well as TSMC’s
customers and suppliers;
●Do not undertake any practices detrimental to TSMC, to the environment, or to society;
●Procure all of our raw materials from socially responsible sources;
●Protect proprietary information of TSMC, our customers and suppliers; and
●Abide by the letter of all applicable laws, rules and regulations.
The protection of intellectual properties is also an important part of TSMC’s Ethics Code. In order to build and sustain an
environment of innovation, technology leadership, and sustainable profitable growth, the Ethics Code requires that TSMC promotes
business relationships founded upon an unwavering respect for the intellectual property rights, proprietary information and trade
secrets of TSMC, our customers, and others.
With regarding to public disclosures, TSMC’s officers, especially our CEO, CFO, and General Counsel, with oversight from our Board,
are responsible for the full, fair, accurate, timely, and understandable financial accounting and financial disclosure in reports and
documents filed by the Company with securities authorities and in all TSMC public communications and disclosures. TSMC has a
variety of measures in place to ensure compliance with these disclosure obligations.
Any modification to the Ethics Code requires the approval of our Audit and Risk Committee to ensure our ethics compliance
program is independently reviewed against corporate best practices.
Ethics Code Implementation
High Standard of Ethics Culture: Our ethics program is implemented in four ways by all of TSMC’s Board members, officers, and
employees. First, the TSMC management team sets the “tone from top” by acting in accordance with the Ethics Code so that they
will be an example to all stakeholders. Second, working-level managers are responsible for ensuring their staff’s understanding
of and compliance with applicable rules and regulations. Third, TSMC encourages an environment of open communications in
discussing any questions related to the Ethics Code. Any employee may consult his or her direct supervisors, Human Resources or
Legal to obtain timely and appropriately advice. Lastly, TSMC requires all employees to stay vigilant and report any noncompliance
by anyone to their supervisors, the function head of Human Resources, the responsible corporate senior management appointed by
CEO that oversees the Ombudsman system, or to the Chairman of the Audit and Risk Committee directly.
060
061
Self-Assessment of All Departments and Employees: Self-assessment of all departments and employees is an important part of
our ethics compliance program. All TSMC departments and subsidiaries are required to conduct Control Self-Assessment (CSA) tests
annually in reviewing employees’ awareness of the Ethics Code, and to evaluate and strengthen the effectiveness of internal control
related to the Ethics Code. The CSA results are reviewed to track the results of our compliance program. In addition, all employees
must disclose any matters that cause, or may cause, actual or potential conflict of interest. In addition to newly hired employees
who are asked to declare conflicts of interest when joining TSMC, employees with specific job grades or job responsibilities must
annually declare any relationships that may constitute a conflict of interest, which enables TSMC to take necessary arrangements
and report the results to the Audit and Risk Committee.
Internal Auditing: The Internal Auditor of TSMC plays a critical role in ensuring the Company’s compliance with the Ethics Code
and relevant rules and regulations. To ensure that our financial, managerial, and operating information is accurate, reliable, and
timely and that our employees’ actions are in compliance with applicable policies, standards, procedures, laws and regulations, our
Internal Auditor conducts audits of various control points within the Company in accordance with its annual audit plan approved by
the Board of Directors and subsequently reports its audit findings and remedial issues to the Board and management on a regular
basis.
Training and Promotion: To promote awareness to our employees of their responsibilities under the Ethics Code, we publish our
Ethics Code and related policies and documents on our intranet and, provide training courses, posters, emails, and other diversified
ways to advocate the Company’s core values and compliance system. In terms of training courses, TSMC not only provides annual
online course on the Ethics Code and requires all employees to complete the training, as well as face-to-face training courses
delving into more specific ethics-related topics for targeted employees. In 2024, there were 77,293 attendances that completed the
“Annual Ethics and Compliance Training Course” (mandatory 0.5 hour online course) at TSMC and its subsidiaries, both completion
rate and exam pass rate reaching 100%.
In addition to our internal compliance efforts, we expect and assist our business partners such as customers and suppliers, and any
other entities with whom we deal (include consultants or third party agents who act for or on behalf of TSMC) to recognize and
understand TSMC’s ethical standards to fulfill our responsibilities as a corporate citizen. For instance, we require all of our first-tier
suppliers to declare in writing that they will respect and comply with TSMC’s ethical standards and culture. TSMC is a full member of
the Responsible Business Alliance (RBA, formerly the Electronic Industry Citizenship Coalition, EICC). In addition to adopting the RBA
Code of Conduct at all of its facilities, TSMC applied the RBA’s standards to enhance our audit program of our suppliers and relevant
business partners. We provide training and communicate our ethical culture to our suppliers through live seminars and online
programs. For example, we held a sustainable supply chain ESH forum to share/exchange practical experiences on topics such as
the Ethics Code, environmental protection, and occupational safety. We also exchange views on appropriate business conduct and
TSMC’s ethical standards and implementation status with our customers as part of customer audit programs and questionnaires.
Reporting Channels and Whistleblower Protection
TSMC has established and published its “Complaint Policy and Procedure for Certain Accounting & Legal Matters” and pledges
to comply with the relevant regulations in the policy. Open and multiple reporting channels are available for internal and external
voices to protect the rights and interests of stakeholders and the Company. All reported incidents collected from reporting channels
inside or outside of TSMC are properly recorded and traced. TSMC also prohibits any form of retaliation by providing proper
protection for any individual who in good faith reports a suspected violation or participates in an investigation.
TSMC investigates each individual case according to its characteristics through specific divisions, and treats every received case
seriously, carefully, and effectively to ensure the accuracy of the investigation. The TSMC Ethics Committee will evaluate each case
to determine whether it is an exceptional case or whether it results from systemic issues of insufficient awareness in ethics. This
allows TSMC to continue evaluating whether it is necessary to improve its management and internal control procedures. Awareness
such as emails to employees describing the violations and disciplinary actions in each quarter are conducted to promote employees’
awareness and avoid recurrence of similar incidents.
In 2024, TSMC did not receive any reports related to insider trading, money laundering, or other finance, accounting or antitrust
matters, nor did we receive any complaints concerning breach of customer privacy and loss of customer data, or any material
regulatory violations (where a fine exceeds NT$1 million), including non-monetary sanctions.
In 2024, the incidents reported through the Audit and Risk Committee Whistleblower System, Ombudsman System, and Irregular
Business Conduct Reporting System totaled 358. Among them, 236 cases were related to people management/employee relations,
106 cases were categorized as others (e.g., asking personal questions or private matters), and 16 cases were related to ethics. One
incident was verified upon investigation and determined for disciplinary action by the Ethics Committee. In 2024, TSMC leveraged
the one violation to strengthen ethics promotion for employees and suppliers in supplier-related activities. Below are the summary
of reported incidents and reporting area.
Case
FY2020
FY2021
FY2022
FY2023
FY2024
Total reported cases
Ethics-related cases
Cases investigated and verified as ethics violations
246
22
6
327
17
4
335
11
4
348
13
5
358
16
1 (Note 1)
Sexual Harassment Investigation Committees Formed
Cases investigated and verified as violations
4
2
14
11
19
14
35
23
50
28 (Note 2)
Note 1: This verified case involved employees who failed to follow the standard procedures for receiving materials and replacing parts, resulting in discrepancies between inventory records and actual stock. Depending
on the severity of their involvement, the employees were subject to disciplinary actions, including dismissal, retention with a probationary review, removal from managerial positions, and cancellation of bonuses.
Note 2: Employees who violated Company sexual prevention policy (the “Policy”) were disciplined by the Company based on the case-by-case nature and severity of the verified misbehaviors. Since these violations
involved various inappropriate behaviors, the Company leveraged the violations and summarized the Policy to educate employees what kinds of behaviors could be viewed as sexual harassment and the
consequences as well as emphasize the type and possible consequences for power harassment in 2024 TSMC annual sexual harassment prevention training so as to raise employees’ awareness.
Cases Investigated and Verified as Violations in
Different Reporting Area
FY2020
FY2021
FY2022
FY2023 (Note)
FY2024
Corruption or Fraud
6
4
4
2
1
Discrimination or Harassment
2
11
14
23
28
Customer Privacy Data
0
0
0
0
0
Conflicts of Interest
-
-
-
1
0
Money Laundering or Insider Trading
-
-
-
0
0
Antitrust
0
0
0
0
0
Others
-
-
-
2
0
Note: The reporting area classification is starting from 2023.
Ethics Code Violation Disciplinary Action
TSMC has zero tolerance for violation of the Ethics Code of any kind and treat every possible violation case seriously. For example,
any employee who violates the Ethics Code (or relevant regulations) is subject to disciplinary actions in accordance with TSMC
procedures, up to and including termination of employment, and will negatively affect their annual performance reviews (including
bonus adjustment). Similarly, severe consequences, including business termination and legal actions when appropriate, will be taken
against any violating supplier.
062
063
3.5.1 Corporate Conduct and Ethics Implementation Status as Required by Taiwan Financial Supervisory Commission
Assessment Item
Implementation Status
Causes
for the
Difference
Yes
No
Summary
1. Establishment of Corporate Conduct and Ethics Policy and Implementation
Measures
(1) Does the company have a clear ethical corporate management policy
approved by its Board of Directors, and bylaws and publicly available
documents addressing its corporate conduct and ethics policy and
measures, and commitment regarding implementation of such policy
from the Board of Directors and the top management team?
(2) Whether the company has established an assessment mechanism for
the risk of unethical conduct; regularly analyzes and evaluates within a
business context, the business activities with a higher risk of unethical
conduct; has formulated a program to prevent unethical conduct with
a scope no less than the activities prescribed in paragraph 2, Article 7
of the Ethical Corporate Management Best Practice Principles for TWSE/
GTSM Listed Companies?
(3) Whether the company has established relevant policies that are duly
enforced to prevent unethical conduct, provided implementation
procedures, guidelines, consequences of violation and complaint
procedures, and periodically reviews and revises such policies?
V
V
V
(1) Integrity is the most important core value of TSMC’s culture. TSMC is committed to
acting ethically in all aspects of our business. We have established TSMC Code of
Ethics and Business Conduct (the “Ethics Code”) to require that each employee bears
a heavy personal responsibility to uphold TSMC’s ethics value. For more details on
the Ethics Code and the measures that TSMC Board of Directors (the “Board”) and
the management team take to ensure compliance of the Ethics Code please refer to
TSMC’s Annual Report and the Sustainability Report.
(2) At the heart of our corporate governance culture is the Ethics Code that applies
to TSMC and its subsidiaries, and this Ethics Code requires that each employee
bears a heavy personal responsibility to preserve and to protect TSMC’s ethical
values and reputation and to comply with various applicable laws and regulations.
Specific requirements under the Ethics Code could be found in our Annual Report.
In addition, to educate and remind our employees of their responsibilities under
the Ethics Code, we publish our Ethics Code, relevant policies and documents on
our intranet and promote its awareness through training courses, posters, emails,
and other diversified ways to advocate the company’s core values and compliance.
Furthermore, to ensure that our conduct meets relevant legal requirements and the
highest ethical standards under the Ethics Code, TSMC provides multiple channels for
reporting business conduct concerns. Please refer to Assessment Item 3 for details.
We do not tolerate any violation of the Ethics Code and treat every possible violation
incident seriously. Each violator of the Ethics Code (or relevant regulations), for
employees, in addition to affecting individual annual performance evaluation, will be
severely disciplined to the full extent of our policies and the law, up to and including
immediate dismissal, or termination of business relationship for suppliers, and
judicial prosecution as appropriate.
(3) Under the framework of the Ethics Code, TSMC has established a regulatory
compliance program that includes policies, guidelines and procedures in other
policy areas, including: Corporate Governance, Securities Laws, Anti-corruption,
Anti-harassment, Anti-discrimination, Labor Laws, Anti-trust (fair competition),
Environmental Protection, Safety and Health, Export Control, Financial Reporting,
Insider Trading, Intellectual Property, Proprietary Information Protection, Personal
Data Protection, Record Retention and Disposal, as well as procuring certain raw
materials from socially responsible sources (Conflict-free Minerals). The above-
mentioned policies are crucial in facilitating overall compliance with the Ethics Code.
TSMC provided an “Annual Ethics and Compliance Training Course” (mandatory 0.5
hour online course) covering various important regulatory compliance topics and
a total of 77,293 employees (including employees in subsidiaries) completed this
training course, both completion rate and exam pass rate reaching 100%. TSMC,
its employees and its subsidiaries are expected to fully understand and comply with
all laws and regulations that govern our businesses, as well as relevant policies,
guidelines and procedures, and make ethical decisions in every circumstance.
The Internal Auditor of TSMC also plays a critical role in ensuring the Company’s
compliance with the Ethics Code and relevant rules and regulations. To ensure
that our financial, managerial, and operating information is accurate, reliable, and
timely and that our employee’s actions are in compliance with applicable policies,
standards, procedures, laws and regulations, our Internal Auditor conducts audits of
various control points within the Company in accordance with its annual audit plan
approved by the Board of Directors and subsequently reports its audit findings and
remedial issues to the Board and Management on a regular basis.
None
Assessment Item
Implementation Status
Causes
for the
Difference
Yes
No
Summary
2. Ethic Management Practice
(1) Whether the company has assessed the ethics records of whom it has
business relationship with and include business conduct and ethics
related clauses in the business contracts?
(2) Whether the company has set up a unit which is dedicated to promoting
the company’s ethical standards and regularly (at least once a year)
reports directly to the Board of Directors on its ethical corporate
management policy and relevant matters, and program to prevent
unethical conduct and monitor its implementation?
(3) Whether the company has established policies to prevent conflict of
interests, provide appropriate communication and complaint channels
and implement such policies properly?
(4) To implement relevant policies on ethical conducts, has the company
established effective accounting and internal control systems, audit
plans based on the assessment of unethical conduct, and have its ethical
conduct program audited by internal auditors or CPA periodically?
(5) Does the company provide internal and external ethical conduct training
programs on a regular basis?
V
V
V
V
V
(1) We expect and assist our customers, suppliers, business partners, and any other
entities with whom we deal (such as consultant or third party agents who act for
or on behalf of TSMC) to understand and act in accordance with TSMC’s ethical
standards. For instance, we require all of our suppliers to declare in writing that
they will respect and comply with TSMC’s ethical standards and culture. In addition
to periodic audit, we provide training and communicate our ethical culture to our
suppliers through live seminars or online programs to prevent any unethical conduct.
We exchange views on appropriate business conduct and TSMC’s ethical standards
with our customers as part of customer audit programs and questionnaires.
(2) TSMC’s Board of Directors strives to perform the responsibilities of supervising
the corporate conduct and ethics compliance practice through the Audit and Risk
Committee and the Compensation and People Development Committee, the hiring
of a financial expert consultant for the Audit and Risk Committee, and coordination
with the Internal Audit department. The General Counsel and the Corporate &
Compliance Legal Division (which directly reports to the General Counsel) promotes
the Company’s ethical standards, and the General Counsel reports quarterly to
the Board on the implementation status. In addition, both the responsible senior
manager appointed by the CEO to oversee the Ombudsmen system and Internal
Auditors update the Board on ethical standards and compliance issues on a regular
basis. Moreover, TSMC’s officers, especially our CEO, CFO, and General Counsel,
with oversight from our Board, are responsible for the full, fair, accurate, timely,
and understandable financial accounting and financial disclosure in reports and
documents filed by the Company with securities authorities and in all TSMC public
communications and disclosures.
(3) TSMC requires newly hired employees to declare any conflict of interest when joining
TSMC. In addition, according to the Ethics Code, all employees must declare any
actual or potential conflict of interest. Furthermore, employees with specific job
grades or positions need to complete the conflict of interest declarations annually.
(4) TSMC continues maintaining the integrity of its financial reporting processes and
controls and establishes appropriate internal control systems for preventing higher
potential unethical conduct, and the Internal Auditors formulate annual audit
plans based on the results of the risk assessment and subsequently reports its audit
findings and remedial issues to the Board and Management on a regular basis. In
addition, all departments and subsidiaries of TSMC are also required to conduct
Control Self-Assessment (CSA) tests annually to review the effectiveness of the
internal control system.
(5) Training is a major component of our compliance program, conducted throughout
the year to refresh TSMC’s employees’ commitment to ethical conduct, and to get
updated information on laws and regulations related to their daily operations. Please
refer to Assessment Item 1 for more information regarding the training courses.
As for our suppliers, we communicate our ethical culture to our business partners
through live seminars or online programs to ensure their fully understanding of our
commit to ethical conduct.
None
3. Implementation of Complaint Procedures
(1) Does the company establish specific complaint and reward procedures,
set up conveniently accessible complaint channels, and designate
responsible individuals to handle the complaint received?
(2) Whether the company has established standard operation procedures
for investigating the complaints received, follow-up measures after
investigation are completed, and ensuring such complaints are handled in
a confidential manner?
(3) Does the company adopt proper measures to prevent a complainant from
retaliation for his/her filing a complaint?
V
V
V
(1) TSMC has implemented the “Complaint Policy and Procedures for Certain Accounting
and Legal Matters” that allows employees or any whistleblowers with relevant
evidence to report any financial, legal, or ethical irregularities anonymously through
the Audit and Risk Committee Whistleblower System, Ombudsman System, and
Irregular Business Conduct Reporting System. TSMC also requires all employees to
stay vigilant and whistle-blow any noncompliance by anyone to their supervisors, the
function head of Human Resources, or through those current reporting channels.
(2) TSMC treats any complaint and the investigation thereof in a confidential and
sensitive manner, as is clearly stated in our bylaws.
(3) TSMC strictly prohibits any form of retaliation against any individual who in good
faith reports or helps with the investigation of any complaint, as is clearly stated in
our bylaws.
None
4. Information Disclosure
Does the company disclose its guidelines on business ethics as well as
information about implementation of such guidelines on its website and
Market Observation Post System (“MOPS”)?
V
TSMC provides the guidelines and informative articles related to ethics and honorable
business conduct on its internal website (in both Chinese and English) for employees’
easy access. In addition, TSMC posts its Annual Report (which is also available at the
MOPS) and Sustainability Report on its external website (in both Chinese and English,
available at: http://www.tsmc.com) to disclose TSMC Ethics Code and the information
about implementation of the Ethics Codes.
None
5. If the company has established corporate governance policies based on Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, please describe any discrepancy between the
policies and their implementation.
TSMC has established the Ethics Code to require that all employees, officers and board members comply with the Ethics Code and the other policies and procedures. There is no discrepancy between the Ethics
Code, including its affiliate policies and procedures, and its implementation. For more details, please refer to “3.5 Code of Ethics and Business Conduct” on page 59-63 of this Annual Report.
6. Other important information to facilitate better understanding of the company’s corporate conduct and ethics compliance practices (e.g., review the company’s corporate conduct and ethics policy).
For details on the implementation of TSMC’s corporate conduct and ethics, please refer to “3.5 Code of Ethics and Business Conduct” on page 59-63 of this Annual Report.
(Continued)
064
065
3.6 Regulatory Compliance
TSMC’s compliance systems are comprised of a series of legislation monitoring, developing and implementation of effective
compliance policies and programs, training, and maintaining open reporting channels.
Legislative Monitoring
TSMC operates in many countries. To comply with governing legislation, applicable laws, regulations and regulatory expectations,
we closely monitor domestic and foreign government policies and regulatory developments that could materially impact TSMC’s
business and financial operations. Our Legal organization periodically updates our relevant internal departments, management
and the Audit and Risk Committee of applicable regulatory changes so that internal teams ensure compliance with new regulatory
requirements in a timely manner. We are also a proactive advocate for legislative and regulatory reform, and our comments and
recommendations on legal reforms to the government have been accepted constructively. TSMC is increasingly dedicated to
identifying potential regulatory issues and will continue to be involved in advocating public policy changes that foster a positive and
fair business environment.
Policy and Compliance Program Development and Implementation
TSMC has established a regulatory compliance program that includes policies, guidelines and procedures in different compliance
areas, including: Corporate Governance, Securities Laws, Anti-corruption, Anti-harassment, Anti-discrimination, Labor Laws,
Antitrust (fair competition), Environmental Protection, Safety and Health, Export Control, Financial Reporting, Insider Trading,
Intellectual Property, Proprietary Information Protection, Personal Data Protection, Record Retention and Disposal, as well as
procuring certain raw materials from socially responsible sources (Conflict-free Minerals). It is our belief that these policies are
crucial in strengthening overall compliance with the Ethics Code and compliance program. TSMC, its employees and its subsidiaries
are expected to fully understand and comply with all laws and regulations that govern our businesses, as well as internal relevant
policies, guidelines and procedures, and make ethical decisions in every circumstance.
Compliance Awareness Training
Training is one of the major components of our regulatory compliance program. To get updated information on laws and
regulations related to their daily operations and to strengthen TSMC’s employees’ commitment to regulatory compliance and ethical
conduct through regular promotion and training courses. Highlights of our training include:
●Multiple types for training and promotion: TSMC enriches employees’ information sources for regulatory compliance through
various promotion activities. Awareness promotion emails to employees, posters at our facilities, and compliance guidelines, news
articles, tips and FAQs which our employees can access through our intranet.
●Customized face-to-face training courses for different business attributes: For important specific laws and regulations, TSMC
provides face-to-face seminars. These customized training is made mandatory for those employees whose job responsibilities are
especially relevant to a particular topic to ensure sufficient awareness of relevant laws and internal policies.
●Various on-line courses available to employees at any time: On-line learning programs updated frequently to provide most
up-to-date information and timely and flexible access for employees to understand the law and key compliance issues, covering
topics of Corporate Governance, Securities Laws, Anti-corruption, Anti-harassment, Anti-discrimination, Labor Laws, Antitrust
(fair competition), Environmental Protection, Safety and Health, Export Control, Financial Reporting, Insider Trading, Intellectual
Property, Proprietary Information Protection, Personal Data Protection, Record Retention and Disposal, as well as “Conflict-free
Minerals” among others. The course contents will be updated with changes in applicable laws or TSMC internal policies to ensure
the timeliness and accuracy of the course contents.
●Continuous training of the Legal team: TSMC’s Legal team actively participate in external professional courses held in Taiwan or
abroad to receive current developments of new laws and regulations and track the latest developments in various professional
legal fields, and for its lawyers to comply with applicable continuing legal education requirements. External experts are also invited
to give in-house lectures on key issues.
Reporting Channels
TSMC provides multiple channels for reporting business conduct concerns to ensure that our conduct meets relevant legal
requirements and the highest ethical standards under the Ethics Code. For more details about the reporting channels, please refer to
“3.5 Code of Ethics and Business Conduct” on page 59-63 of this Annual Report.
Major Accomplishments
In 2024, TSMC achieved several major accomplishments in regulatory compliance. Externally, in addition to fulfilling the
Company’s obligations toward regulatory compliance matters, TSMC exercised its civic duties as a responsible corporate citizen by
providing feedback on current regulations and regulations in legislation, with the intent to improve Taiwan’s industrial investment
environment, enhance economic development, and help align domestic laws with international law. Furthermore, TSMC continues
to focus on the topics related to the Company Law, the Securities and Exchange Act, intellectual property protection and
environment protection. In addition, TSMC shared its practices and experiences on trade secrets, labor rights, regulatory compliance
system and reporting channel with outside institutions.
Internally, TSMC provides multiple courses about legal and regulatory compliance. The important achievements are as follows:
●Ethics and Compliance: TSMC provided an “Annual Ethics and Compliance Training Course” (mandatory 0.5 hour online course)
covering various important regulatory compliance topics and a total of 77,293 employees (including employees in subsidiaries)
completed this training course, both completion rate and exam pass rate reaching 100% – with all production staffs were starting
from 2019.
●Export Compliance: TSMC’s export management system (EMS) and policy have been in place for a number of years, and was
certified by the International Trade Administration, the Taiwan regulator, as a qualified Internal Compliance Program (ICP) exporter.
It aims to ensure that TSMC complies with all applicable regulations covering the export of information, technologies, products,
materials and equipment. In addition, TSMC implements “No ECCN, No Shipment” control and customers are required to provide
end use and export control classification number (ECCN) of their products, among other required information, for TSMC to apply
for applicable export licenses. To further enhance relevant employees’ awareness of the export control requirements, in addition to
a poster awareness campaign, in 2024 TSMC altogether provided 9 face-to-face meeting sessions and a targeted on-line learning
program to employees in relevant functions.
●Supplier Management: TSMC shares and exchanges practical experiences with suppliers with sales offices in Taiwan by holding a
sustainable supply chain ESH forums on topics such as Ethics Code, environmental protection and occupational safety. In 2024, a
total of 360 attendees from 152 suppliers participated (including through on-line meeting) in these activities.
●Conflict-Free Supply Chain: As a recognized global leader in the Hi-tech supply chain, we acknowledge our corporate social
responsibility to strive to procure conflict-free minerals in an effort to recognize humanitarian and ethical social principles that
protect the dignity of all persons. Meanwhile, we have implemented a series of compliance safeguards in accordance with industry
leading practices, requesting suppliers to fill in the “Conflict Minerals Reporting Template” and sign the “TSMC Conflict-Free
Minerals Declaration” every year. TSMC will continuously make progress to ensure a conflict-free supply chain.
●Personal Data Protection: Because of the importance of personal data protection, TSMC periodically reviews the Rules of Privacy
and Personal Data Protection and external and internal privacy policies to identify the needs to update such documents. Based on
current personal data protection laws and risks, TSMC conducts an annual training on privacy and personal data protection to
enhance employees’ awareness and compliance. In addition, the Personal Data Protection Committee composed of Legal, Human
Resources, and IT divisions convene on an annual basis to assist the implementation of and monitoring compliance with the rules.
Furthermore, the Personal Data Protection Working Taskforce established under the Personal Data Protection Committee assists
various TSMC functions by holding meetings to ensure that their business operations and system implementations comply with the
rules.
●Antitrust Compliance: Based on annual antitrust risk assessment results, TSMC identified functions with potential higher risk from
an antitrust perspective. To enhance targeted functions’ employee awareness of the importance of competition and antitrust laws
and issues during daily operations, TSMC established antitrust training programs and conducted several antitrust trainings, via
either face-to-face or on-line training sessions, for global sales personnel at Taiwan, North America, Europe, Asia Pacific, Japan and
mainland China areas, and employees in other relevant departments.
●Insider Trading Compliance: To implement our insider trading regulatory compliance program and to strengthen employees’
awareness, in addition to introducing the basic concepts of insider trading in the“Annual Ethics and Compliance Training Course”,
using posters to promote important concepts from time to time, we developed an on-line advanced program for employees to
take at any time. In 2024, a total of 451 employees completed this insider trading on-line advanced program (0.5 hour-length
course), with the exam pass rate reaching 100%.
066
067
3.7 Internal Control System Execution Status
3.7.1 Statement of Internal Control System
Taiwan Semiconductor Manufacturing Company Limited
Statement of Internal Control System
February 12, 2025
Based on the findings of a self-assessment, Taiwan Semiconductor Manufacturing Company Limited (TSMC) states the
following with regard to its internal control system during the year 2024:
1. TSMC’s Board of Directors and management are responsible for establishing, implementing, and maintaining an adequate
internal control system. Internal control system is designed to provide reasonable assurance over the effectiveness and
efficiency of our operations (including profitability, performance and safeguarding of assets), reliability, timeliness,
transparency and regulatory compliance of our reporting, and compliance with applicable rulings, laws and regulations.
2. An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system
can provide only reasonable assurance of accomplishing its stated objectives. Moreover, the effectiveness of an internal
control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, our internal
control system contains self-monitoring mechanisms, and TSMC takes immediate remedial actions in response to any
identified deficiencies.
3. TSMC evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the
Regulations Governing the Establishment of Internal Control Systems by Public Companies (herein below, the “Regulations”).
The criteria adopted by the Regulations identify five key components of managerial internal control: (1) control environment,
(2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring activities. Each component
also includes several items which can be found in the Regulations.
4. TSMC has evaluated the design and operating effectiveness of its internal control system according to the aforesaid
Regulations.
5. Based on the findings of such evaluation, TSMC believes that, on December 31, 2024, it has maintained, in all material
respects, an effective internal control system (that includes the supervision and management of our subsidiaries), to provide
reasonable assurance over our operational effectiveness and efficiency, reliability, timeliness, transparency and regulatory
compliance of reporting, and compliance with applicable rulings, laws and regulations.
6. This Statement is an integral part of TSMC’s annual report and prospectus, and will be made public. Any falsehood,
concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the
Securities and Exchange Law.
7. This Statement was passed by the Board of Directors in their meeting held on February 12, 2025, with none of the ten
attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.
Taiwan Semiconductor Manufacturing Company Limited
C.C. Wei,
Chairman & Chief Executive Officer
3.7.2 If CPA Was Engaged to Conduct a Special Audit of Internal Control System, Provide Its Audit Report: None.
3.8 Status of Personnel Responsible for the Company’s Financial Operation
Certification of Employees Whose Jobs Are Related to the Release of the Company’s Financial Information
Certification
Number of Employees
Internal Audit
Finance
Certified Public Accountants (CPA)
3
64
US Certified Public Accountants (US CPA)
3
24
Certified Internal Auditor (CIA)
6
3
Chartered Financial Analyst (CFA)
-
4
Certified Management Accountant (CMA)
-
1
Financial Risk Manager (FRM)
-
2
Certified Information Systems Auditor (CISA)
6
-
Certified Fraud Examiner (CFE)
3
-
3.9 Information Regarding TSMC’s Independent Auditor
3.9.1 Audit Fees
The Audit and Risk Committee approves all fees payable to TSMC’s independent auditor and recommends the same to the Board
of Directors for further approval. The Board of Directors has authorized the Audit and Risk Committee to approve any increase not
exceeding 10% of the approved fees.
Unit: NT$ thousands
Accounting Firm
Name of CPA
CPA’s Audit Period
Audit Fee
Non-audit Fee
(Note)
Total
Remark
Deloitte & Touche
Shih-Tsung Wu and
Shang-Chih Lin
01/01/2024~12/31/2024
72,175
9,186
81,361
-
Note: The fees were mainly related to audit of annual income tax returns.
3.9.2 TSMC Did Not Replace Its Independent Auditor during 2023, 2024, and as of February 28, 2025.
3.9.3 TSMC’s Chairman, Directors, Chief Executive Officer, Chief Financial Officer, and Managers in Charge of Its
Finance and Accounting Operations Did Not Hold Any Positions within TSMC’s Independent Audit Firm or Its
Affiliates in the Most Recent Year.
3.9.4 Evaluation of the External Auditor’s Independence and Suitability
The Audit and Risk Committee annually monitors the independence and suitability of TSMC’s external auditor by conducting the
following evaluation standards and reports the same to the Board of Directors:
1. The auditor’s independence declaration
2. The Audit and Risk Committee pre-approves all audit and non-audit services conducted by the auditor to ensure that the
non-audit services do not influence the results of the audit
3. Ensure the audit partner rotates every five years
4. Annually evaluate the independence and suitability of the external auditor based on the results of the auditor survey and the
Audit Quality Indicator (AQI) released by Financial Supervisory Commission (FSC) regarding its financial interests, commercial
relations, employment relations, etc.
069
4
TSMC continued to increase our investment in R&D to
US$6.361 billion to extend our technology leadership and
differentiation.
Capital
& Shares
070
071
4.1.3 Major Shareholders
Common Shares
Shareholders
Shareholding
Shareholding Percentage
ADR-Taiwan Semiconductor Manufacturing Company Ltd.
5,313,843,923
20.49%
National Development Fund, Executive Yuan
1,653,709,980
6.38%
Citibank (Taiwan) Ltd. in custody for Government of Singapore
682,006,536
2.63%
Citibank (Taiwan) Ltd. in custody for Norges Bank
461,734,025
1.78%
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series
of Vanguard Star Funds
337,167,748
1.30%
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Emerging Markets Stock Index Fund, a series
of Vanguard International Equity Index Funds
311,573,605
1.20%
New Labor Pension Fund
302,276,555
1.17%
Yuanta/P-shares Taiwan Top 50 ETF
233,901,369
0.90%
iShares Core MSCI Emerging Markets ETF
217,727,000
0.84%
JPMorgan Chase Bank N.A. Taipei Branch in Custody for EuroPacific Growth Fund
189,344,553
0.73%
Note: Record date for the second quarter of 2024 cash dividend distribution.
As of 12/18/2024 (Note)
4.1 Capital and Shares
4.1.1 Capitalization
Month/
Year
Face Value
Per Share
Authorized Share Capital
Capital Stock
Remark
Shares
Amount
Shares
Amount
Sources of Capital
Capital Increase by
Assets Other than Cash
Date of Approval
(Month/Day/Year) &
Approval Document
No.
03/2024
10
28,050,000,000
280,500,000,000
25,935,030,992
259,350,309,920
Employee Restricted
Stock Awards Issuance:
NT$29,600,000
None
03/11/2024 Chu Shang Tzu
No. 1130007178
06/2024
10
28,050,000,000
280,500,000,000
25,933,629,242
259,336,292,420
Employee Restricted Stock
Awards Cancellation:
NT$14,017,500
None
06/20/2024 Chu Shang Tzu
No. 1130019255
09/2024
10
28,050,000,000
280,500,000,000
25,932,733,242
259,327,332,420
Employee Restricted
Stock Awards Issuance:
NT$23,530,000;
Cancellation of Treasury
Shares: NT$32,490,000
None
09/11/2024 Chu Shang Tzu
No. 1130029188
Note: On 03/01/2025, based on the vesting conditions, 17,341 common shares, 26,380 common shares and 74,000 common shares in the form of Employee Restricted Stock Awards for year 2021, year 2022 and year
2023, respectively, were reclaimed and will be cancelled subsequently.
Unit: Shares/NT$
4.1.2 Capital and Shares
Unit: Shares
As of 02/28/2025
Type of Stock
Authorized Share Capital
Total
Listed Shares
Unissued Shares
Common Stock
25,932,733,242
2,117,266,758
28,050,000,000
Shelf Registration in Taiwan: None.
As of 02/28/2025
4.1.4 Net Change in Shareholding by Directors, Management and Shareholders with 10% Shareholdings or More
Common Shares
Title
Name
2024
01/01/2025 - 02/28/2025
Net Change in Shares Held
Net Change in Shares
Pledged
Net Change in Shares Held
Net Change in Shares
Pledged
Former Chairman
Mark Liu (Note 1)
2,268
-
-
-
Chairman & Chief Executive Officer
C.C. Wei
-
-
-
-
Director
F.C. Tseng
-
-
-
-
Director
National Development Fund, Executive Yuan
Representative: Chin-Ching Liu (Note 2)
-
-
-
-
-
-
-
-
Independent Director
Sir Peter L. Bonfield
-
-
-
-
Independent Director
Kok-Choo Chen (Note 1)
-
-
-
-
Independent Director
Michael R. Splinter
-
-
-
-
Independent Director
Moshe N. Gavrielov
-
-
-
-
Independent Director
Yancey Hai (Note 1)
-
-
-
-
Independent Director
L. Rafael Reif
-
-
-
-
Independent Director
Ursula M. Burns (Note 3)
-
-
-
-
Independent Director
Lynn L. Elsenhans (Note 3)
-
-
-
-
Independent Director
Chuan Lin (Note 3)
-
-
-
-
Executive Vice President and Co-Chief Operating Officer
Y.P. Chyn
-
-
-
-
Executive Vice President and Co-Chief Operating Officer
Y.J. Mii
-
-
-
-
Senior Vice President and Deputy Co-Chief Operating Officer
Chief Information Security Officer
Cliff Hou (Note 4)
10,989
-
2,762
-
Senior Vice President and Deputy Co-Chief Operating Officer
Kevin Zhang
-
-
-
-
Senior Vice President
Lora Ho
-
-
-
-
Senior Vice President
Wei-Jen Lo
(139,000)
-
(36,000)
-
Senior Vice President
Chairman, TSMC Arizona
Rick Cassidy
-
-
-
-
Senior Vice President
Former Chief Information Security Officer
J.K. Lin (Note 4)
-
-
-
-
Senior Vice President and General Counsel
Corporate Governance Officer
Sylvia Fang
-
-
-
-
Senior Vice President and Chief Financial Officer
Spokesperson
Wendell Huang
63
-
8
-
Vice President
CEO, TSMC Arizona
Y.L. Wang
-
-
-
-
Vice President and TSMC Distinguished Fellow
Douglas Yu
-
-
-
-
Vice President and TSMC Fellow
T.S. Chang
-
-
-
-
Unit: Shares
(Continued)
072
073
Title
Name
2024
01/01/2025 - 02/28/2025
Net Change in Shares Held
Net Change in Shares
Pledged
Net Change in Shares Held
Net Change in Shares
Pledged
Vice President
Michael Wu
-
-
-
-
Vice President
Min Cao
-
-
-
-
Vice President
CEO, JASM
Y.H. Liaw
-
-
-
-
Vice President
Simon Jang
-
-
-
-
Vice President
C.S. Yoo
-
-
-
-
Vice President
Jun He
-
28,000
-
-
Vice President
Geoffrey Yeap
15,000
-
-
-
Vice President and Chief Information Officer
Chris Horng-Dar Lin
-
-
-
-
Vice President
Jonathan Lee
9,942
-
1,477
-
Vice President
Arthur Chuang
-
-
-
-
Vice President and TSMC Fellow
L.C. Lu
-
-
-
-
Vice President
K.C. Hsu
-
-
-
-
Vice President
Managing Director, ESMC
Ray Chuang
-
-
-
-
Vice President
Vanessa Lee (Note 5)
-
-
-
-
Vice President
P.H. Chen (Note 6)
-
-
-
-
Note 1: Former Chairman Dr. Mark Liu retired after the Annual Shareholders’ Meeting on June 4, 2024. The tenures of Independent Directors Ms. Kok-Choo Chen and Mr. Yancey Hai expired on June 4, 2024. Their
shareholdings are no longer required to be disclosed from that date.
Note 2: Mr. Chin-Ching Liu was appointed as the representative of the National Development Fund succeeding Mr. Ming-Hsin Kung on June 6, 2024.
Note 3: Ms. Ursula M. Burns, Ms. Lynn L. Elsenhans and Mr. Chuan Lin were elected as TSMC’s Independent Directors at the Annual Shareholders’ Meeting on June 4, 2024. Their shareholdings were disclosed starting
from that date.
Note 4: Dr. Cliff Hou was appointed as Chief Information Security Officer, effective January 1, 2025.
Note 5: Ms. Vanessa Lee was promoted to Vice President, effective August 13, 2024. Her shareholding was disclosed starting from that date.
Note 6: Mr. P.H. Chen was promoted to Vice President, effective February 12, 2025. His shareholding was disclosed starting from that date.
4.1.5 Stock Trade with Related Party: None.
4.1.6 Stock Pledge with Related Party: None.
4.1.7 Related Party Relationship among TSMC’s 10 Largest Shareholders
Common Shares
Name
Shares Held
Shares Held by Spouse &
Minors
Shares Held in the Name
of Others
Name and Relationship
between TSMC’s
Shareholders
Shares
%
Shares
%
Shares
%
Name
Relationship
ADR-Taiwan Semiconductor Manufacturing Company Ltd.
5,313,843,923
20.49%
N/A
N/A
N/A
N/A
None
None
National Development Fund, Executive Yuan
Representative: Chin-Ching Liu
1,653,709,980
6.38%
N/A
N/A
N/A
N/A
None
None
-
-
-
-
-
-
None
None
Citibank (Taiwan) Ltd. in custody for Government of
Singapore
682,006,536
2.63%
N/A
N/A
N/A
N/A
None
None
Citibank (Taiwan) Ltd. in custody for Norges Bank
461,734,025
1.78%
N/A
N/A
N/A
N/A
None
None
JPMorgan Chase Bank N.A., Taipei Branch in custody for
Vanguard Total International Stock Index Fund, a series of
Vanguard Star Funds
337,167,748
1.30%
N/A
N/A
N/A
N/A
None
None
As of 12/18/2024 (Note)
4.1.8 Long-term Investment Ownership
Long-term Investment
Ownership by TSMC (1)
Ownership by Directors, Managers and
Directly/Indirectly Owned Subsidiaries
(2)
Total Ownership
(1) + (2)
Shares
%
Shares
%
Shares
%
Equity Method:
TSMC Partners, Ltd.
988,268,244
100%
-
-
988,268,244
100%
TSMC Global Ltd.
19,384
100%
-
-
19,384
100%
TSMC North America
11,000,000
100%
-
-
11,000,000
100%
TSMC Europe B.V.
200
100%
-
-
200
100%
TSMC Japan Limited
6,000
100%
-
-
6,000
100%
TSMC Korea Limited
80,000
100%
-
-
80,000
100%
TSMC Design Technology Japan, Inc.
15,000
100%
-
-
15,000
100%
TSMC Japan 3DIC R&D Center, Inc.
49,000
100%
-
-
49,000
100%
TSMC China Company Limited
Not Applicable (Note 1)
100%
Not Applicable (Note 1)
-
Not Applicable (Note 1)
100%
TSMC Nanjing Company Limited
Not Applicable (Note 1)
100%
Not Applicable (Note 1)
-
Not Applicable (Note 1)
100%
TSMC Arizona Corporation
17,850,000 (Note 2)
100%
-
-
17,850,000 (Note 2)
100%
Japan Advanced Semiconductor Manufacturing, Inc.
3,010,894
72.65%
-
-
3,010,894
72.65%
European Semiconductor Manufacturing Company
(ESMC) GmbH
735,000 (Note 3)
70% (Note 3)
-
-
735,000 (Note 3)
70% (Note 3)
VisEra Technologies Company Ltd.
213,619,000
67.32% (Note 4)
-
-
213,619,000
67.32% (Note 4)
Systems on Silicon Manufacturing Co. Pte. Ltd.
313,603
38.79%
-
-
313,603
38.79%
Vanguard International Semiconductor Corp.
506,709,324
27.55%
299,141,075
16.27% (Note 5)
805,850,399
43.82%
Xintec Inc.
111,281,925
41.01%
-
-
111,281,925
41.01%
Global UniChip Corporation
46,687,859
34.84%
-
-
46,687,859
34.84%
VentureTech Alliance Fund II, L.P.
Not Applicable (Note 1)
98.00%
Not Applicable (Note 1)
-
Not Applicable (Note 1)
98.00%
VentureTech Alliance Fund III, L.P.
Not Applicable (Note 1)
98.00%
Not Applicable (Note 1)
-
Not Applicable (Note 1)
98.00%
Emerging Fund L.P.
Not Applicable (Note 1)
99.90%
Not Applicable (Note 1)
-
Not Applicable (Note 1)
99.90%
Note 1: Not applicable. These firms do not issue shares. TSMC’s investments are measured as a percentage of ownership.
Note 2: TSMC Arizona Corporation completed a capital injection in January 2025, which included 1,350,000 shares of advance receipts. In addition, TSMC Arizona Corporation completed capital injections in February
2025. After the capital injections, TSMC holds 19,550,000 shares and 100% equity interests in TSMC Arizona Corporation.
Note 3: European Semiconductor Manufacturing Company (ESMC) GmbH (“ESMC”) will have capital injection in March 2025. After the capital injection, TSMC will hold 752,500 shares and 70% equity interests in
ESMC.
Note 4: As of February 2025, TSMC’s ownership of VisEra is 67.32% due to VisEra’s continuous execution of the Employee Stock Purchase Plan.
Note 5: TSMC’s director, National Development Fund of Executive Yuan, held 16.26%, while TSMC’s other directors and management held 0.01%.
As of 12/31/2024
Name
Shares Held
Shares Held by Spouse &
Minors
Shares Held in the Name
of Others
Name and Relationship
between TSMC’s
Shareholders
Shares
%
Shares
%
Shares
%
Name
Relationship
JPMorgan Chase Bank N.A., Taipei Branch in custody for
Vanguard Emerging Markets Stock Index Fund, a series of
Vanguard International Equity Index Funds
311,573,605
1.20%
N/A
N/A
N/A
N/A
None
None
New Labor Pension Fund
302,276,555
1.17%
N/A
N/A
N/A
N/A
None
None
Yuanta/P-shares Taiwan Top 50 ETF
233,901,369
0.90%
N/A
N/A
N/A
N/A
None
None
iShares Core MSCI Emerging Markets ETF
217,727,000
0.84%
N/A
N/A
N/A
N/A
None
None
JPMorgan Chase Bank N.A. Taipei Branch in Custody for
EuroPacific Growth Fund
189,344,553
0.73%
N/A
N/A
N/A
N/A
None
None
Note: Record date for the second quarter of 2024 cash dividend distribution.
(Continued)
074
075
4.1.9 Dividend Policy and Distribution of Earnings
Except as otherwise specified in the Articles of Incorporation or under the R.O.C. law, TSMC will not pay dividends or make other
distributions to shareholders when there are no earnings. The Company’s profits may be distributed by way of cash dividend, stock
dividend, or a combination of cash and stock. Pursuant to the Company’s Articles of Incorporation, distributions of profits shall be
made preferably by way of cash dividend. In addition, the ratio for stock dividends shall not exceed 50% of the total distribution.
Distribution of stock dividends is subject to approval by the R.O.C. Financial Supervisory Commission.
Pursuant to TSMC’s Articles of Incorporation, the Company’s Board of Directors is authorized to approve quarterly cash dividends
after the close of each quarter. After the Company’s Board of Directors approves quarterly cash dividends, TSMC will distribute the
dividend within six months. The respective amounts and payment dates of 2024 quarterly cash dividends are demonstrated in the
table below. TSMC intends to maintain a sustainable and steadily increasing cash dividend on both an annual and quarterly basis.
2024 Quarterly Earnings Distribution
Unit: NT$
Period
Approval Date
Payment Date
Cash Dividend Per Share
Total Earnings Distribution
Amount
First quarter of 2024
05/10/2024
10/09/2024
NT$4.00013820 (Note 1)
103,734,516,968
Second quarter of 2024
08/13/2024
01/09/2025
NT$3.99963706 (Note 1)
103,721,520,968
Third quarter of 2024
11/12/2024
04/10/2025
NT$4.50002042 (Note 1)
116,697,299,589
Fourth quarter of 2024
02/12/2025
07/10/2025
NT$4.50 (Note 2)
116,697,299,589
Note 1: The cash dividend per share was adjusted, as authorized by the Board of Directors, based on the actual number of common shares outstanding as of the record date for such dividend payment.
Note 2: The actual cash dividend per share shall be subject to adjustment based on the actual number of common shares outstanding as of the record date for such dividend payment.
4.1.10 Compensation to Directors and Profit Sharing to Employees
Based on TSMC’s Articles of Incorporation, before paying dividends or bonuses to shareholders, TSMC shall set aside not more than
0.3% of its annual profit to directors as compensation and not less than 1% to employees as profit sharing.
As resolved by TSMC’s Board of Directors on February 12, 2025, a profit sharing to employees was expensed based on a certain
percentage of 2024 profit; compensation to directors was expensed based on the estimated amount of payment. If the actual
amounts subsequently paid differ from the above estimated amounts, the differences will be recorded in the year paid as a change
in accounting estimate.
2024 Directors’ Compensation and Employees’ Profit Sharing
The 2024 directors’ compensation is NT$358,989 thousand. The directors’ compensation is to be distributed in cash.
The 2024 employees’ profit sharing of NT$70,296,283 thousand was approved by the Board of Directors in its meeting for the first
quarter of 2025. The employees’ profit sharing is to be distributed in cash.
Note: NT$70,296,283 thousand business performance bonus was already distributed following each quarter of 2024. The aforementioned employees’ profit sharing will be distributed in July, 2025.
2023 Directors’ Compensation and Employees’ Profit Sharing
The 2023 directors’ compensation was NT$551,955 thousand, and the employees’ profit sharing was NT$50,090,533 thousand,
both distributed in cash. The aforementioned directors’ compensation and employees’ profit sharing were expensed under the
Company’s 2023 statement of comprehensive income, with no difference in the actual disbursed amounts.
4.1.11 Impact to 2024 Business Performance and EPS of Stock Dividend Distribution: Not applicable.
4.1.12 Buyback of Common Shares
To offset dilution from the increase of outstanding shares due to the issuances of employee restricted stock awards (RSAs), the
Company’s Board of Directors approved a share buyback program on June 5, 2024 to repurchase 3,249,000 common shares on the
Taiwan Stock Exchange. The repurchased shares were subsequently cancelled. The details of the Company’s share buyback program
were as follows.
(1) Completed Share Buyback Program
In 2024 and as of the date of this Annual Report
Tranche of Buyback
6th Buyback Program
Purpose of the Share Buyback
For the shareholders’ interests
Scheduled Buyback Period
06/06/2024 - 08/05/2024
Scheduled Buyback Price Range
NT$598 to NT$1,281 per share, while the buyback will still be carried out if the stock price
falls below the aforementioned range
Type and Number of Shares Bought Back
Common shares: 3,249,000 shares
Total Monetary Amount of Shares Bought Back
NT$3,089,176,471
Number of Shares Bought Back as a Percentage of the Approved Number of Shares to be
Bought Back (%)
100%
Number of shares Cancelled and/or Transferred
3,249,000 shares
Cumulative Number of the Company’s Treasury Shares Held
0 share
Cumulative Number of the Company’s Treasury Shares as a Percentage of the Total Number
of Shares Issued (%)
0%
(2) Uncompleted Share Buyback Program: None.
076
077
4.2 Issuance of Corporate Bonds
4.2.1 Corporate Bonds
NTD Corporate Bonds
Issuance
Domestic Unsecured
Bond (109-1)
Domestic Unsecured
Bond (109-2)
Domestic Unsecured
Bond (109-3)
Domestic Unsecured
Bond (109-4)
Domestic Unsecured
Bond (109-5)
Domestic Unsecured Bond
(109-6, Green Bond)
Domestic Unsecured Bond
(109-7)
Domestic Unsecured Bond
(110-1)
Domestic Unsecured Bond
(110-2)
Domestic Unsecured Bond
(110-3)
Domestic Unsecured Bond
(110-4)
Domestic Unsecured Bond
(110-6)
Domestic Unsecured Bond
(110-7)
Issue Date
03/23/2020
04/15/2020
05/29/2020
07/14/2020
09/03/2020
12/02/2020
12/29/2020
03/30/2021
05/03/2021
06/25/2021
08/19/2021
10/05/2021
12/09/2021
Denomination
NT$10,000,000
Offering Price
Par
Total Amount
NT$24,000,000,000
NT$21,600,000,000
NT$14,400,000,000
NT$13,900,000,000
NT$15,600,000,000
NT$12,000,000,000
NT$18,500,000,000
NT$21,100,000,000
NT$19,200,000,000
NT$19,700,000,000
NT$21,600,000,000
NT$16,300,000,000
NT$16,700,000,000
Coupon (Per Annum)
Tranche A: 0.58%
Tranche B: 0.62%
Tranche C: 0.64%
Tranche A: 0.52%
Tranche B: 0.58%
Tranche C: 0.60%
Tranche A: 0.55%
Tranche B: 0.60%
Tranche C: 0.64%
Tranche A: 0.58%
Tranche B: 0.65%
Tranche C: 0.67%
Tranche A: 0.50%
Tranche B: 0.58%
Tranche C: 0.60%
Tranche A: 0.40%
Tranche B: 0.44%
Tranche C: 0.48%
Tranche A: 0.36%
Tranche B: 0.41%
Tranche C: 0.45%
Tranche A: 0.50%
Tranche B: 0.55%
Tranche C: 0.60%
Tranche A: 0.50%
Tranche B: 0.58%
Tranche C: 0.65%
Tranche A: 0.52%
Tranche B: 0.58%
Tranche C: 0.65%
Tranche A: 0.485%
Tranche B: 0.50%
Tranche C: 0.55%
Tranche D: 0.62%
Tranche A: 0.535%
Tranche B: 0.54%
Tranche C: 0.60%
Tranche D: 0.62%
Tranche A: 0.65%
Tranche B: 0.675%
Tranche C: 0.72%
Tenure and Maturity Date
Tranche A: 5 years
Maturity: 03/23/2025
Tranche B: 7 years
Maturity: 03/23/2027
Tranche C: 10 years
Maturity: 03/23/2030
Tranche A: 5 years
Maturity: 04/15/2025
Tranche B: 7 years
Maturity: 04/15/2027
Tranche C: 10 years
Maturity: 04/15/2030
Tranche A: 5 years
Maturity: 05/29/2025
Tranche B: 7 years
Maturity: 05/29/2027
Tranche C: 10 years
Maturity: 05/29/2030
Tranche A: 5 years
Maturity: 07/14/2025
Tranche B: 7 years
Maturity: 07/14/2027
Tranche C: 10 years
Maturity: 07/14/2030
Tranche A: 5 years
Maturity: 09/03/2025
Tranche B: 7 years
Maturity: 09/03/2027
Tranche C: 10 years
Maturity: 09/03/2030
Tranche A: 5 years
Maturity: 12/02/2025
Tranche B: 7 years
Maturity: 12/02/2027
Tranche C: 10 years
Maturity: 12/02/2030
Tranche A: 5 years
Maturity: 12/29/2025
Tranche B: 7 years
Maturity: 12/29/2027
Tranche C: 10 years
Maturity: 12/29/2030
Tranche A: 5 years
Maturity: 03/30/2026
Tranche B: 7 years
Maturity: 03/30/2028
Tranche C: 10 years
Maturity: 03/30/2031
Tranche A: 5 years
Maturity: 05/03/2026
Tranche B: 7 years
Maturity: 05/03/2028
Tranche C: 10 years
Maturity: 05/03/2031
Tranche A: 5 years
Maturity: 06/25/2026
Tranche B: 7 years
Maturity: 06/25/2028
Tranche C: 10 years
Maturity: 06/25/2031
Tranche A: 4 years
Maturity: 08/19/2025
Tranche B: 5 years
Maturity: 08/19/2026
Tranche C: 7 years
Maturity: 08/19/2028
Tranche D: 10 years
Maturity: 08/19/2031
Tranche A: 4.5 years
Maturity: 04/05/2026
Tranche B: 5 years
Maturity: 10/05/2026
Tranche C: 7 years
Maturity: 10/05/2028
Tranche D: 10 years
Maturity: 10/05/2031
Tranche A: 5 years
Maturity: 12/09/2026
Tranche B: 5.5 years
Maturity: 06/09/2027
Tranche C: 7 years
Maturity: 12/09/2028
Repayment
Bullet
Two equal installments in last two years
Bullet
Outstanding
NT$24,000,000,000
NT$21,600,000,000
NT$14,400,000,000
NT$11,050,000,000
NT$13,200,000,000
NT$11,200,000,000
NT$17,550,000,000
NT$21,100,000,000
NT$19,200,000,000
NT$19,700,000,000
NT$21,600,000,000
NT$16,300,000,000
NT$16,700,000,000
Credit Rating
Not Applicable
Underwriter (Lead Underwriter)
Yuanta Securities Co., Ltd.
MasterLink Securities
Co., Ltd.
Hua Nan Securities
Co., Ltd.
Capital Securities Co., Ltd.
KGI Securities Co., Ltd.
Capital Securities Co., Ltd.
KGI Securities Co., Ltd.
Capital Securities Co., Ltd.
SinoPac Securities Co., Ltd.
Yuanta Securities Co., Ltd.
KGI Securities Co., Ltd.
Capital Securities Co., Ltd.
Capital Securities Co., Ltd.
Trustee
Taipei Fubon Commercial Bank Co., Ltd.
Guarantor
None
Legal Counsel
True Honesty International Law Offices
Auditor
Deloitte & Touche
Redemption or Early Repayment
Clause
None
Covenants
None
Other
Rights of
Bondholders
Conversion Right
None
Amount of
Converted or
Exchanged Common
Shares, ADRs or
Other Securities
Not Applicable
Dilution Effect and Other Adverse
Effects on Existing Shareholders
None
Custodian
None
As of 02/28/2025
(Continued)
078
079
Issuance
Domestic Unsecured
Bond (111-1, Green
Bond)
Domestic Unsecured
Bond (111-2)
Domestic Unsecured
Bond (111-3, Green
Bond)
Domestic Unsecured
Bond (111-4, Green
Bond)
Domestic Unsecured
Bond (111-5)
Domestic Unsecured
Bond (111-6, Green
Bond)
Domestic Unsecured Bond
(112-1, Green Bond)
Domestic Unsecured Bond
(112-2, Green Bond)
Domestic Unsecured Bond
(112-3)
Domestic Unsecured Bond
(112-4)
Domestic Unsecured Bond
(112-5)
Domestic Unsecured Bond
(113-1, Green Bond)
Domestic Unsecured Bond
(113-2, Green Bond)
Issue Date
01/12/2022
03/29/2022
05/20/2022
07/27/2022
08/25/2022
10/20/2022
03/28/2023
05/03/2023
06/01/2023
08/16/2023
10/16/2023
03/15/2024
05/17/2024
Denomination
NT$10,000,000
Offering Price
Par
Total Amount
NT$5,400,000,000
NT$14,200,000,000
NT$6,100,000,000
NT$13,900,000,000
NT$15,600,000,000
NT$10,200,000,000
NT$19,300,000,000
NT$20,700,000,000
NT$20,000,000,000
NT$15,900,000,000
NT$9,800,000,000
NT$22,800,000,000
NT$11,500,000,000
Coupon (Per Annum)
Tranche A: 0.63%
Tranche B: 0.72%
Tranche A: 0.84%
Tranche B: 0.85%
Tranche C: 0.90%
1.50%
Tranche A: 1.60%
Tranche B: 1.70%
Tranche C: 1.75%
Tranche D: 1.95%
Tranche A: 1.65%
Tranche B: 1.65%
Tranche C: 1.65%
Tranche D: 1.82%
Tranche A: 1.75%
Tranche B: 1.80%
Tranche C: 2.00%
Tranche A: 1.54%
Tranche B: 1.60%
Tranche C: 1.78%
Tranche A: 1.60%
Tranche B: 1.65%
Tranche C: 1.82%
Tranche A: 1.60%
Tranche B: 1.65%
Tranche C: 1.80%
Tranche A: 1.60%
Tranche B: 1.65%
Tranche C: 1.76%
Tranche A: 1.62%
Tranche B: 1.76%
Tranche A: 1.64%
Tranche B: 1.76%
Tranche A: 1.98%
Tranche B: 2.10%
Tenure and Maturity Date
Tranche A: 5 years
Maturity: 01/12/2027
Tranche B: 7 years
Maturity: 01/12/2029
Tranche A: 4.5 years
Maturity: 09/29/2026
Tranche B: 5 years
Maturity: 03/29/2027
Tranche C: 7 years
Maturity: 03/29/2029
5 years
Maturity: 05/20/2027
Tranche A: 4 years
Maturity: 07/27/2026
Tranche B: 5 years
Maturity: 07/27/2027
Tranche C: 7 years
Maturity: 07/27/2029
Tranche D: 10 years
Maturity: 07/27/2032
Tranche A: 4 years 10
months
Maturity:
06/25/2027
Tranche B: 5 years
Maturity: 08/25/2027
Tranche C: 7 years
Maturity: 08/25/2029
Tranche D: 10 years
Maturity: 08/25/2032
Tranche A: 5 years
Maturity: 10/20/2027
Tranche B: 7 years
Maturity: 10/20/2029
Tranche C: 10 years
Maturity: 10/20/2032
Tranche A: 5 years
Maturity: 03/28/2028
Tranche B: 7 years
Maturity: 03/28/2030
Tranche C: 10 years
Maturity: 03/28/2033
Tranche A: 5 years
Maturity: 05/03/2028
Tranche B: 7 years
Maturity: 05/03/2030
Tranche C: 10 years
Maturity: 05/03/2033
Tranche A: 5 years
Maturity: 06/01/2028
Tranche B: 7 years
Maturity: 06/01/2030
Tranche C: 10 years
Maturity: 06/01/2033
Tranche A: 5 years
Maturity: 08/16/2028
Tranche B: 7 years
Maturity: 08/16/2030
Tranche C: 10 years
Maturity: 08/16/2033
Tranche A: 5 years
Maturity: 10/16/2028
Tranche B: 10 years
Maturity: 10/16/2033
Tranche A: 5 years
Maturity: 03/15/2029
Tranche B: 10 years
Maturity: 03/15/2034
Tranche A: 5 years
Maturity: 05/17/2029
Tranche B: 10 years
Maturity: 05/17/2034
Repayment
Bullet
Outstanding
NT$5,400,000,000
NT$14,200,000,000
NT$6,100,000,000
NT$13,900,000,000
NT$15,600,000,000
NT$10,200,000,000
NT$19,300,000,000
NT$20,700,000,000
NT$20,000,000,000
NT$15,900,000,000
NT$9,800,000,000
NT$22,800,000,000
NT$11,500,000,000
Credit Rating
Not Applicable
Underwriter (Lead Underwriter)
Yuanta Securities Co., Ltd.
Capital Securities Co., Ltd.
Capital Securities Co., Ltd.
SinoPac Securities Co., Ltd. Capital Securities Co., Ltd.
Yuanta Securities Co., Ltd.
Yuanta Securities Co., Ltd.
Fubon Securities Co., Ltd.
Cathay United Bank Co., Ltd.
SinoPac Securities
Corporation
SinoPac Securities
Corporation
Yuanta Securities Co., Ltd.
KGI Securities Co., Ltd.
Trustee
Taipei Fubon Commercial Bank Co., Ltd.
Guarantor
None
Legal Counsel
True Honesty International Law Offices
Auditor
Deloitte & Touche
Redemption or Early Repayment
Clause
None
Covenants
None
Other
Rights of
Bondholders
Conversion Right
None
Amount of
Converted or
Exchanged Common
Shares, ADRs or
Other Securities
Not Applicable
Dilution Effect and Other Adverse
Effects on Existing Shareholders
None
Custodian
None
080
081
Onshore USD Corporate Bonds
As of 02/28/2025
Issuance
US-dollar Domestic Unsecured Bond (109-1)
US-dollar Domestic Unsecured Bond (110-5)
Issue Date
09/22/2020
09/23/2021
Denomination
US$1,000,000
Listing
Taipei Exchange
Offering Price
Par
Total Amount
US$1,000,000,000
US$1,000,000,000
Coupon (Per Annum)
2.70%
3.10%
Tenure and Maturity Date
40 years
Maturity: 09/22/2060
30 years
Maturity: 09/23/2051
Repayment
Bullet
Outstanding
US$1,000,000,000
US$1,000,000,000
Credit Rating
Not Applicable
Underwriter
Goldman Sachs (Asia) L.L.C., Taipei Branch
KGI Securities Co., Ltd. (lead underwriter)
Trustee
Mega International Commercial Bank Co., Ltd.
Guarantor
None
Legal Counsel
True Honesty International Law Offices
Auditor
Deloitte & Touche
Redemption or Early Repayment Clause
Callable on the 5th anniversary of the issue date and every anniversary thereafter
Covenants
None
Other
Rights of
Bondholders
Conversion Right
None
Amount of Converted
or Exchanged Common
Shares, ADRs or Other
Securities
Not Applicable
Dilution Effect and Other Adverse Effects
on Existing Shareholders
None
Custodian
None
Offshore USD Corporate Bonds
As of 02/28/2025
Issuer
TSMC Global Ltd. (Note 1)
TSMC Global Ltd. (Note 1)
TSMC Arizona Corporation
(Note 1)
TSMC Arizona Corporation
(Note 1)
TSMC Global Ltd. (Note 1)
Issuance
Senior Unsecured Notes
(Note 2)
Senior Unsecured Notes
(Note 2)
Senior Unsecured Notes
(Note 2)
Senior Unsecured Notes
(Note 2)
Senior Unsecured Notes
(Note 2)
Issue Date
09/28/2020
04/23/2021
10/25/2021
04/22/2022
07/22/2022
Denomination
US$200,000 and integral multiples of US$1,000 in excess thereof
Listing
Singapore Exchange
Offering Price
2025 Notes: 99.907%
2027 Notes: 99.603%
2030 Notes: 99.083%
2026 Notes: 99.759%
2028 Notes: 99.751%
2031 Notes: 99.831%
2026 Notes: 99.976%
2031 Notes: 99.561%
2041 Notes: 98.898%
2051 Notes: 98.658%
2027 Notes: 99.829%
2029 Notes: 99.843%
2032 Notes: 99.742%
2052 Notes: 99.771%
2027 Notes: 99.951%
2032 Notes: 99.124%
Total Amount
US$3,000,000,000
US$3,500,000,000
US$4,500,000,000
US$3,500,000,000
US$1,000,000,000
Coupon (Per Annum)
2025 Notes: 0.75%
2027 Notes: 1.00%
2030 Notes: 1.375%
2026 Notes: 1.25%
2028 Notes: 1.75%
2031 Notes: 2.25%
2026 Notes: 1.75%
2031 Notes: 2.50%
2041 Notes: 3.125%
2051 Notes: 3.25%
2027 Notes: 3.875%
2029 Notes: 4.125%
2032 Notes: 4.250%
2052 Notes: 4.500%
2027 Notes: 4.375%
2032 Notes: 4.625%
Tenure and Maturity Date
2025 Notes: 5 years
Maturity: 09/28/2025
2027 Notes: 7 years
Maturity: 09/28/2027
2030 Notes: 10 years
Maturity: 09/28/2030
2026 Notes: 5 years
Maturity: 04/23/2026
2028 Notes: 7 years
Maturity: 04/23/2028
2031 Notes: 10 years
Maturity: 04/23/2031
2026 Notes: 5 years
Maturity: 10/25/2026
2031 Notes: 10 years
Maturity: 10/25/2031
2041 Notes: 20 years
Maturity: 10/25/2041
2051 Notes: 30 years
Maturity: 10/25/2051
2027 Notes: 5 years
Maturity: 04/22/2027
2029 Notes: 7 years
Maturity: 04/22/2029
2032 Notes: 10 years
Maturity: 04/22/2032
2052 Notes: 30 years
Maturity: 04/22/2052
2027 Notes: 5 years
Maturity: 07/22/2027
2032 Notes: 10 years
Maturity: 07/22/2032
Repayment
Bullet
Outstanding
US$3,000,000,000
US$3,500,000,000
US$4,500,000,000
US$3,500,000,000
US$1,000,000,000
Credit Rating
Aa3 (Moody’s Investors
Service, 09/21/2020)
AA- (Standard &
Poor’s Rating Services,
09/21/2020)
Aa3 (Moody’s Investors
Service, 04/19/2021)
AA- (Standard &
Poor’s Rating Services,
04/18/2021)
Aa3 (Moody’s Investors
Service, 10/19/2021)
AA- (Standard &
Poor’s Rating Services,
10/18/2021)
Aa3 (Moody’s Investors
Service, 04/19/2022)
AA- (Standard &
Poor’s Rating Services,
04/18/2022)
Aa3 (Moody’s Investors
Service, 07/19/2022)
AA- (Standard &
Poor’s Rating Services,
07/18/2022)
Underwriter
Goldman Sachs International as lead underwriter
Goldman Sachs & Co. LLC as lead underwriter
Goldman Sachs
International as lead
underwriter
Trustee
Citicorp International Limited
Citibank, N.A.
Citicorp International
Limited
Guarantor
TSMC
Legal Counsel
Sullivan & Cromwell (Hong Kong) LLP
Harney Westwood & Riegels
Lee and Li, Attorneys-at-Law
Sullivan & Cromwell (Hong Kong) LLP
Fennemore Craig, P.C.
Lee and Li, Attorneys-at-Law
Sullivan & Cromwell (Hong
Kong) LLP
Harney Westwood &
Riegels
Lee and Li, Attorneys-
at-Law
Auditor
Deloitte & Touche
Redemption or Early Repayment Clause
Issuer may, at its option, redeem the Notes, at any time, in whole or in part at the relevant redemption price according to relevant agreements
Covenants
None
Other
Rights of
Bondholders
Conversion Right
None
Amount of Converted
or Exchanged Common
Shares, ADRs or Other
Securities
Not Applicable
Dilution Effect and Other Adverse Effects
on Existing Shareholders
None
Custodian
None
Note 1: A wholly-owned subsidiary of TSMC.
Note 2: Unconditionally and irrevocably guaranteed by TSMC.
082
083
Note 1: Citibank, N.A., Taipei Branch changed its name to “Citibank Taiwan Limited” in 2009.
Note 2: TSMC has in aggregate issued 813,544,500 ADSs since 1997, which, if taking into consideration stock dividends distributed over the period, would amount to 1,147,835,205 ADSs. Stock dividends distributed
in 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008 and 2009 were 45%, 23%, 28%, 40%, 10%, 8%, 14.08668%, 4.99971%, 2.99903%, 0.49991%, 0.50417% and 0.49998%,
respectively. As of February 28, 2025, total number of outstanding ADSs was 1,062,763,201 after 85,072,004 ADSs were redeemed.
Note 3: All fees and expenses related to issuance of ADSs were paid by the selling shareholders, while maintenance expenses were borne by TSMC.
Note 4: All fees and expenses related to issuance of ADSs were paid proportionately by TSMC and the selling shareholders, while maintenance expenses were borne by TSMC.
4.2.2 Convertible Bond: None.
4.2.3 Exchangeable Bond: None.
4.2.4 Shelf Registration in Taiwan: None.
4.2.5 Bond with Warrants: None.
4.3 Preferred Shares
4.3.1 Preferred Shares: None.
4.3.2 Preferred Shares with Warrants: None.
4.4 Issuance of American Depositary Shares
Issue Date
10/08/1997
11/20/1998
01/12/1999 -
01/14/1999
07/15/1999
08/23/1999 -
09/09/1999
02/22/2000 -
03/08/2000
04/17/2000
06/07/2000 -
06/15/2000
05/17/2001 -
06/11/2001
11/27/2001
02/07/2002 -
02/08/2002
11/21/2002 -
12/19/2002
07/14/2003 -
07/21/2003
11/14/2003
08/10/2005 -
09/08/2005
05/23/2007
Total Amount
(US$ million)
595
185
36
296
159
379
225
1,168
539
321
1,002
160
909
1,077
1,402
2,563
Offering Price Per ADS
(US$)
24.78
15.26
17.75
24.516
28.964
57.79
56.16
35.75
20.63
16.03
16.75
8.73
10.40
10.77
8.60
10.68
Units Issued
24,000,000
12,094,000
2,000,000
12,094,000
5,486,000
6,560,000
4,000,000
32,667,800
26,110,000
20,000,000
59,800,000
18,348,000
87,357,200
100,000,000
163,027,500
240,000,000
Common Shares
Represented
Each unit of ADS represents five TSMC Common Shares.
Underlying Securities
TSMC Common Shares from Selling Shareholders
Cash Offering and
TSMC Common
Shares from Selling
Shareholders
TSMC Common Shares from Selling Shareholders
Apportionment of
Expenses for Issuance
and Maintenance
(Note 3)
(Note 4)
(Note 3)
Issuance and Listing
NYSE
Rights and Obligations
of ADS Holders
Same as those of Common Share Holders
Trustee
Not Applicable
Depositary Bank
Citibank, N.A. – New York
Custodian Bank
(Note 1)
Citibank, N.A. – Taipei Branch
ADSs Outstanding
(Note 2)
As of February 28, 2025, total number of outstanding ADSs was 1,062,763,201
Terms and Conditions
in the Deposit
Agreement and
Custody Agreement
See Deposit Agreement and Custody Agreement for Details
Closing Price Per
ADS (US$; source:
Bloomberg)
01/01/2024 -
12/31/2024
High
207.36
Low
99.13
Average
160.41
01/01/2025 -
02/28/2025
High
224.62
Low
180.53
Average
204.95
084
085
4.5 Status of Employee Stock Option Plan
4.5.1 Issuance of Employee Stock Options: None.
4.5.2 Employee Stock Options Granted to Management Team and to Top 10 Employees: None.
4.6 Status of Employee Restricted Stock
4.6.1 Status of Employee Restricted Stock
As of 03/01/2025 (Note)
Type of Employee Restricted Stock
Employee Restricted Stock Awards for Year 2021
Effective Registration Date and Total
Number of Shares
08/06/2021 /2,600,000 shares
Issue Date
03/01/2022
Number of Restricted Employee Shares
Issued
1,387,000 shares
Number of Restricted Employee Shares
Still Available for Issuance
0 share
Issued Price
None
Ratio of the Number of Restricted
Employee Shares Issued to the Total
Number of Issued Shares
0.00535%
Vesting Conditions of Restricted Employee
Shares
1. The RSAs granted to an executive can only be vested if (a) the executive remains employed by the Company on the last date of each vesting period; (b)
during the vesting period, the executive may not breach any agreement with the Company or violate the Company’s work rules; and (c) certain executive
performance metrics (a year-end performance rating of at least “S” (Note) or above for the year immediately preceding the expiration of each vesting
period) and the Company’s business performance metrics are met. (Note: “S” stands for “Successful”)
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 the Company’s business performance metrics, as detailed in the following point.
3. 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 the
Company’s relative TSR (Note) achievement (see table below) 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 Committee’s evaluation of the Company’s ESG achievements. The number of
shares so calculated should be rounded down to the nearest integral.
The Company’s TSR Relative to the TSR of S&P 500 IT Index
Ratio of Shares to be Vested
Above the Index by X percentage points
50% + X * 2.5%, with the maximum of 100%
Equal to the Index
50%
Below the Index by X percentage points
50% - X * 2.5%, with the minimum of 0%
Note: TSR: Total Shareholder Return (including capital gains and dividends)
Restriction on Rights in the Restricted
Employee Shares
1. Upon the grant of the RSAs, the RSAs shall be deposited in a trust/custody account. Before the vesting conditions are fulfilled, the executives cannot
request the trustee/custodian to return to them the RSAs for any reasons or by any means.
2. During each vesting period, no executives granted RSAs may sell, pledge, transfer, give to another person, create any encumbrance on, or otherwise
dispose of, any shares under the unvested RSAs.
3. Subject to the restrictions mentioned above, the rights of the executives with regard to the unvested RSAs granted under these Rules before the fulfillment
of the vesting conditions, including but not limited to the entitlement to any distribution regarding dividends, bonuses and capital reserve, and the
subscription right of the new shares issued for any capital increase, are the same as those of holders of common shares of the Company. The relevant
matters shall be handled in accordance with the RSA trust/custody agreement.
4. Before the vesting conditions are fulfilled, the attendance, proposal rights, speech rights, voting rights and any other shareholder rights shall be exercised
by the engaged trustee/custodian on the executives’ behalf.
5. During each vesting period, if the Company conducts a capital reduction for cash return, capital reduction for loss offset, or other non-statutory capital
reduction, the unvested RSAs shall be cancelled proportionally by the ratio of such capital reduction. If the Company conducts a capital reduction for cash
return, the returned cash shall be deposited in a trust/custody account and shall not be delivered to the executives until the vesting conditions are fulfilled;
otherwise, the cash will be returned to the Company.
(Continued)
Custody of the Restricted Employee
Shares
1. Upon the grant of the RSAs, the RSAs shall be deposited in a trust/custody account. Before the vesting conditions are fulfilled, the executives cannot
request the trustee/custodian to return to them the RSAs for any reasons or by any means.
2. During the period when the granted RSAs are deposited in a trust/custody account, each executive must enter into an agreement authorizing the
Company to, among others, negotiate, execute, modify, extend, rescind, and terminate the trust/custody agreement with the trustee/custodian, and give
instructions to deliver, use, and dispose of any of the properties under the trust/custody, on their behalf, with full power and authority.
Treatment of the Restricted Shares for
Which the Grantee Fails to Meet the
Vesting Conditions after Receiving or
Subscribing to the Shares
1. The Company will reclaim the granted RSAs and cancel the same at no extra cost to the Company, where an executive fails to meet the vesting conditions.
2. Voluntary Separation, separation with a severance, or involuntary discharge: Any unvested RSAs will be forfeited on the effective date of separation due to
a voluntary separation, separation with a severance, or involuntary discharge of such executives. The Company will reclaim the RSAs granted to them and
cancel the same at no extra cost to the Company.
3. Leave Without Pay: All the rights and obligations in connection with the unvested RSAs will not be affected as a result of executives taking extended leave
without pay. However, the actual number of shares that may be vested will not only be calculated according to the vesting conditions but also be prorated
based on the number of months of their service during the year prior to the applicable vesting day. If such executives are on leave without pay on any
vesting day, it shall be deemed that they fail to meet the vesting conditions, and the Company will reclaim the RSAs granted to them and cancel the same
at no extra cost to the Company.
4. Retirement: All the rights and obligations in connection with the unvested RSAs will not be affected as a result of an employee’s retirement. However, the
actual number of shares that may be vested shall be calculated according to the vesting condition, and the performance rating granted to them shall be
deemed “S”.
5. Employment Termination Due to Death or Physical Disability Caused by Occupational Accidents: The unvested RSAs shall be deemed immediately vested in
the case of death or physical disability due to an occupational accident, where the RSAs vested shall be based on the assumption that the Company’s TSR
equals to the TSR of S&P 500 IT Index and there is no further adjustment for the Company’s ESG achievements. In the case of death, the respective heir(s)
may apply for entitlement to those inheritable shares after completing all necessary legal procedures and providing relevant supporting documents. In the
case of physical disability caused by occupational injury, the vested RSAs will be received by such executives.
6. Position Transfer: Where any executives apply for transferring to any of the Company’s subsidiaries, affiliates, or other companies, the measures to
be taken with respect to their unvested RSAs will be the same as those specified in “Voluntary Separation”. Where any executives are assigned by the
Company to a position in any of the Company’s subsidiaries, affiliates, or other companies, all the rights and obligations in connection with the unvested
RSAs will not be affected as a result. However, subject to the vesting conditions, such executives shall continue working in the assigned subsidiaries,
affiliates, or other companies on the vesting dates. Otherwise, they will be considered to fail to meet the vesting conditions, and the Company will
reclaim the RSAs granted to them and cancel the same at no extra cost to the Company. With respect to the evaluation of the achievement of individual
performance goals, Chairman and Chief Executive Officer will determine whether the vesting conditions are met by reviewing the evaluation of the
executives’ performance provided by the assigned subsidiaries, affiliates, or other companies.
7. Where any executives declare to voluntarily relinquish the granted RSAs with a written statement, the Company will reclaim the RSAs granted to them and
cancel the same at no extra cost to the Company.
8. Where any executives, after being granted the RSAs, breach any agreement with the Company employment agreement or violate the Company’s work
rules, the Company will reclaim the RSAs granted to them and cancel the same at no extra cost to the Company.
9. Where any executives terminate or revoke their authorization given to the Company regarding the executive’s RSA trust/custody account, the Company will
reclaim their unvested RSAs and cancel the same at no extra cost to the Company.
Number of Restricted Employee Shares
That Have Been Retired or Bought Back
783,557 shares
Number of Restricted Employee Shares
That Have Vested
603,443 shares
Number of Unvested Restricted Employee
Shares
0 share
The Ratio of Number of Unvested
Restricted Employee Share to the Total
Number of Issued Shares (%)
0%
The Effect on Shareholders’ Equity
The potential dilution of the Company’s EPS is minimal; therefore, there is no material impact on shareholders’ interest.
Note: The printed date of this Annual Report.
086
087
Type of Employee Restricted Stock
Employee Restricted Stock Awards for Year 2022
Effective Registration Date and Total
Number of Shares
07/25/2022 /3,065,000 shares
Issue Date
03/01/2023
Number of Restricted Employee Shares
Issued
2,110,000 shares
Number of Restricted Employee Shares
Still Available for Issuance
0 share
Issued Price
None
Ratio of the Number of Restricted
Employee Shares Issued to the Total
Number of Issued Shares
0.00814%
Vesting Conditions of Restricted Employee
Shares
1. The RSAs granted to an employee can only be vested if (a) the employee remains employed by the Company or the Company’s subsidiaries on the last date
of each vesting period; (b) during the vesting period, the employee may not breach any agreement with the Company or the Company’s subsidiaries or
violate the Company’s or the Company’s subsidiaries’ work rules; and (c) certain employee performance metrics (a year-end performance rating of at least
“S” (Note) or above for the year immediately preceding the expiration of each vesting period) and the Company’s business performance metrics are met.
(Note: “S” stands for “Successful”)
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 the Company’s business performance metrics, as detailed in the following points.
3. For eligible executive officers of the Company: 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 the Company’s relative TSR (Note) achievement (see table below) 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 Committee’s evaluation of the Company’s
ESG achievements. The number of shares so calculated should be rounded down to the nearest integral.
The Company’s TSR Relative to the TSR of S&P 500 IT Index
Ratio of Shares to Be Vested
Above the Index by X percentage points
50% + X * 2.5%, with the maximum of 100%
Equal to the Index
50%
Below the Index by X percentage points
50% - X * 2.5%, with the minimum of 0%
Note: TSR: Total Shareholder Return (including capital gains and dividends)
4. For eligible employees who are not executive officers of the Company and the Company’s subsidiaries: The number of RSAs to be vested in each year will
be calculated in accordance with the below table based on the Company’s audited consolidated financial statements for the year prior to the vesting year.
The number of shares so calculated should be rounded down to the nearest integral.
Threshold
Target
Weighting
Ratio of Shares to Be Vested
Revenue Growth
10%
15%
One-third
●< Threshold: 0%
●= Threshold: 50%
●≧Target: 100%
●Between Threshold and Target: as calculated
by interpolation method
Gross Margin
50%
53%
One-third
Return on Equity
(ROE)
20%
25%
One-third
Restriction on Rights in the Restricted
Employee Shares
1. Upon the grant of the RSAs, the RSAs shall be deposited in a trust/custody account. Before the vesting conditions are fulfilled, the employees cannot
request the trustee/custodian to return to them the RSAs for any reasons or by any means.
2. During each vesting period, no employees granted RSAs may sell, pledge, transfer, give to another person, create any encumbrance on, or otherwise
dispose of, any shares under the unvested RSAs.
3. Subject to the restrictions mentioned above, the rights of the employees with regard to the unvested RSAs granted under these Rules before the
fulfillment of the vesting conditions, including but not limited to the entitlement to any distribution regarding dividends, bonuses and capital reserve, and
the subscription right of the new shares issued for any capital increase, are the same as those of holders of common shares of the Company. The relevant
matters shall be handled in accordance with the RSA trust/custody agreement.
4. Before the vesting conditions are fulfilled, the attendance, proposal rights, speech rights, voting rights and any other shareholder rights shall be exercised
by the engaged trustee/custodian on the employees’ behalf.
5. During each vesting period, if the Company conducts a capital reduction for cash return, capital reduction for loss offset, or other non-statutory capital
reduction, the unvested RSAs shall be cancelled proportionally by the ratio of such capital reduction. If the Company conducts a capital reduction for cash
return, the returned cash shall be deposited in a trust/custody account and shall not be delivered to the employees until the vesting conditions are fulfilled;
otherwise, the cash will be returned to the Company.
Custody of the Restricted Employee
Shares
1. Upon the grant of the RSAs, the RSAs shall be deposited in a trust/custody account. Before the vesting conditions are fulfilled, the employees cannot
request the trustee/custodian to return to them the RSAs for any reasons or by any means.
2. During the period when the granted RSAs are deposited in a trust/custody account, each executive must enter into an agreement authorizing the
Company to, among others, negotiate, execute, modify, extend, rescind, and terminate the trust/custody agreement with the trustee/custodian, and give
instructions to deliver, use, and dispose of any of the properties under the trust/custody, on their behalf, with full power and authority.
Treatment of the Restricted Shares for
Which the Grantee Fails to Meet the
Vesting Conditions after Receiving or
Subscribing to the Shares
1. The Company will reclaim the granted RSAs and cancel the same at no extra cost to the Company, where an employee fails to meet the vesting conditions.
2. Voluntary Separation, separation with a severance, or involuntary discharge: Any unvested RSAs will be forfeited on the effective date of separation due to
a voluntary separation, separation with a severance, or involuntary discharge of such employees. The Company will reclaim the RSAs granted to them and
cancel the same at no extra cost to the Company.
3. Leave Without Pay: All the rights and obligations in connection with the unvested RSAs will not be affected as a result of employees taking extended leave
without pay. However, the actual number of shares that may be vested will not only be calculated according to the vesting conditions but also be prorated
based on the number of months of their service during the year prior to the applicable vesting day. If such employees are on leave without pay on any
vesting day, it shall be deemed that they fail to meet the vesting conditions, and the Company will reclaim the RSAs granted to them and cancel the same
at no extra cost to the Company.
4. Retirement: All the rights and obligations in connection with the unvested RSAs will not be affected as a result of an employee’s retirement, provided that
the employee complies with both of the following conditions after his/her retirement. If any of the following conditions is not met, any unvested RSAs will
be forfeited. Exemption could be made case by case by Chairman and CEO.
- Not to get any full-time job; and
- Not to engage in competition with the Company or the Company’s subsidiaries, including without limitation: to join a competitor, to provide any
competitive services, to establish any company or business that would involve a competitive foundry process or service, or to employ, induce, or attempt
to induce any TSMC employee to undertake competitive services.
All the rights and obligations in connection with the unvested RSAs will not be affected as a result of an employee’s retirement. However, the actual
number of shares that may be vested shall be calculated according to the vesting condition, and the performance rating granted to them shall be deemed
“S”.
5. Employment Termination Due to Death or Physical Disability Caused by Occupational Accidents: The unvested RSAs shall be deemed immediately
vested in the case of death or physical disability due to an occupational accident. For eligible executive officers of the Company, the RSAs vested shall
be based on the assumption that the Company’s TSR equals to the TSR of S&P 500 IT Index and there is no further adjustment for the Company’s ESG
achievements. For eligible employees who are not executive officers of the Company and the Company’s subsidiaries, the RSAs vested shall be based on
the assumption that the Company’s Revenue growth, Gross Margin, and ROE are all equal to Threshold. In the case of death, the respective heir(s) may
apply for entitlement to those inheritable shares after completing all necessary legal procedures and providing relevant supporting documents. In the case
of physical disability caused by occupational injury, the vested RSAs will be received by such employees.
6. Position Transfer:
- Where any employees apply for transferring to any of the Company’s subsidiaries, affiliates, or other companies, the measures to be taken with respect
to their unvested RSAs will be the same as “Voluntary Separation”.
- Where any employees are assigned by the Company or the Company’s subsidiaries to a position in any of the Company’s subsidiaries, affiliates, or
other companies, all the rights and obligations in connection with the unvested RSAs will not be affected as a result. However, subject to the vesting
condition, such employees shall continue working in the assigned subsidiaries, affiliates, or other companies on the vesting dates. Otherwise, they will
be considered to fail to meet the vesting conditions, and the Company will reclaim the RSAs granted to them and cancel the same at no extra cost to
the Company. With respect to the evaluation of the achievement of individual performance goals, Chairman and Chief Executive Officer will determine
whether the vesting conditions are met by reviewing the evaluation of the employees’ performance provided by the assigned subsidiaries, affiliates, or
other companies.
7. Where any employees declare to voluntarily relinquish the granted RSAs with a written statement, the Company will reclaim the RSAs granted to them and
cancel the same at no extra cost to the Company.
8. Where any employees, after being granted the RSAs, breach any agreement with the Company employment agreement or violate the Company’s work
rules, the Company will reclaim the RSAs granted to them and cancel the same at no extra cost to the Company.
9. Where any employees terminate or revoke their authorization given to the Company regarding the employees’ RSA trust/custody account, the Company
will reclaim their unvested RSAs and cancel the same at no extra cost to the Company.
Number of Restricted Employee Shares
That Have Been Retired or Bought Back
1,081,380 shares
Number of Restricted Employee Shares
That Have Vested
501,120 shares
Number of Unvested Restricted Employee
Shares
527,500 shares
The Ratio of Number of Unvested
Restricted Employee Share to the Total
Number of Issued Shares (%)
0.00203%
The Effect on Shareholders’ Equity
The potential dilution of the Company’s EPS is minimal; therefore, there is no material impact on shareholders’ interest.
(Continued)
088
089
Type of Employee Restricted Stock
Employee Restricted Stock Awards for Year 2023
Effective Registration Date and Total
Number of Shares
12/28/2023 /6,249,000 shares
Issue Date
03/01/2024
Number of Restricted Employee Shares
Issued
2,960,000 shares
Number of Restricted Employee Shares
Still Available for Issuance
0 share
Issued Price
None
Ratio of the Number of Restricted
Employee Shares Issued to the Total
Number of Issued Shares
0.01141%
Vesting Conditions of Restricted Employee
Shares
1. The RSAs granted to an employee can only be vested if (a) the employee remains employed by the Company or the Company’s subsidiaries on the last date
of each vesting period; (b) during the vesting period, the employee may not breach any agreement with the Company or the Company’s subsidiaries or
violate the Company’s or the Company’s subsidiaries’ work rules; and (c) certain employee performance metrics (a year-end performance rating of at least
“S” (Note) or above for the year immediately preceding the expiration of each vesting period) and the Company’s business performance metrics are met.
(Note: “S” stands for “Successful”)
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 the Company’s business performance metrics, as detailed in the following points.
3. For eligible executive officers of the Company: 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 the Company’s relative TSR (Note) achievement (see table below) 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 the Company’s ESG achievements. The number of shares so calculated should be rounded down to the nearest integral.
The Company’s TSR Relative to the TSR of S&P 500 IT Index
Ratio of Shares to Be Vested
Above the Index by X percentage points
50% + X * 2.5%, with the maximum of 100%
Equal to the Index
50%
Below the Index by X percentage points
50% - X * 2.5%, with the minimum of 0%
Note: TSR: Total Shareholder Return (including capital gains and dividends)
4. For eligible employees who are not executive officers of the Company and the Company’s subsidiaries: The number of RSAs to be vested in each year will
be calculated in accordance with the below table based on the Company’s audited consolidated financial statements for the year prior to the vesting year.
The number of shares so calculated should be rounded down to the nearest integral.
Threshold
Target
Weighting
Ratio of Shares to Be Vested
Revenue Growth
10%
15%
One-third
●< Threshold: 0%
●= Threshold: 50%
●≧Target: 100%
●Between Threshold and Target: as calculated
by interpolation method
Gross Margin
50%
53%
One-third
Return on Equity
(ROE)
20%
25%
One-third
Restriction on Rights in the Restricted
Employee Shares
1. Upon the grant of the RSAs, the RSAs shall be deposited in a trust/custody account. Before the vesting conditions are fulfilled, the employees cannot
request the trustee/custodian to return to them the RSAs for any reasons or by any means.
2. During each vesting period, no employees granted RSAs may sell, pledge, transfer, give to another person, create any encumbrance on, or otherwise
dispose of, any shares under the unvested RSAs.
3. Subject to the restrictions mentioned above, the rights of the employees with regard to the unvested RSAs granted under these Rules before the
fulfillment of the vesting conditions, including but not limited to the entitlement to any distribution regarding dividends, bonuses and capital reserve, and
the subscription right of the new shares issued for any capital increase, are the same as those of holders of common shares of the Company. The relevant
matters shall be handled in accordance with the RSA trust/custody agreement.
4. Before the vesting conditions are fulfilled, the attendance, proposal rights, speech rights, voting rights and any other shareholder rights shall be exercised
by the engaged trustee/custodian on the employees’ behalf.
5. During each vesting period, if the Company conducts a capital reduction for cash return, capital reduction for loss offset, or other non-statutory capital
reduction, the unvested RSAs shall be cancelled proportionally by the ratio of such capital reduction. If the Company conducts a capital reduction for cash
return, the returned cash shall be deposited in a trust/custody account and shall not be delivered to the employees until the vesting conditions are fulfilled;
otherwise, the cash will be returned to the Company.
Custody of the Restricted Employee
Shares
1. Upon the grant of the RSAs, the RSAs shall be deposited in a trust/custody account. Before the vesting conditions are fulfilled, the employees cannot
request the trustee/custodian to return to them the RSAs for any reasons or by any means.
2. During the period when the granted RSAs are deposited in a trust/custody account, each executive must enter into an agreement authorizing the
Company to, among others, negotiate, execute, modify, extend, rescind, and terminate the trust/custody agreement with the trustee/custodian, and give
instructions to deliver, use, and dispose of any of the properties under the trust/custody, on their behalf, with full power and authority.
Treatment of the Restricted Shares for
Which the Grantee Fails to Meet the
Vesting Conditions after Receiving or
Subscribing to the Shares
1. The Company will reclaim the granted RSAs and cancel the same at no extra cost to the Company, where an employee fails to meet the vesting conditions.
2. Voluntary Separation, separation with a severance, or involuntary discharge: Any unvested RSAs will be forfeited on the effective date of separation due to
a voluntary separation, separation with a severance, or involuntary discharge of such employees. The Company will reclaim the RSAs granted to them and
cancel the same at no extra cost to the Company.
3. Leave Without Pay: All the rights and obligations in connection with the unvested RSAs will not be affected as a result of employees taking extended leave
without pay. However, the actual number of shares that may be vested will not only be calculated according to the vesting conditions but also be prorated
based on the number of months of their service during the year prior to the applicable vesting day. If such employees are on leave without pay on any
vesting day, it shall be deemed that they fail to meet the vesting conditions, and the Company will reclaim the RSAs granted to them and cancel the same
at no extra cost to the Company.
4. Retirement: All the rights and obligations in connection with the unvested RSAs will not be affected as a result of an employee’s retirement, provided that
the employee complies with both of the following conditions after his/her retirement. If any of the following conditions is not met, any unvested RSAs will
be forfeited. Exemption could be made case by case by Chairman and CEO.
- Not to get any full-time job; and
- Not to engage in competition with the Company or the Company’s subsidiaries, including without limitation: to join a competitor, to provide any
competitive services, to establish any company or business that would involve a competitive foundry process or service, or to employ, induce, or attempt
to induce any TSMC employee to undertake competitive services.
All the rights and obligations in connection with the unvested RSAs will not be affected as a result of an employee’s retirement. However, the actual
number of shares that may be vested shall be calculated according to the vesting condition, and the performance rating granted to them shall be deemed
“S”.
5. Employment Termination Due to Death or Physical Disability Caused by Occupational Accidents: The unvested RSAs shall be deemed immediately
vested in the case of death or physical disability due to an occupational accident. For eligible executive officers of the Company, the RSAs vested shall
be based on the assumption that the Company’s TSR equals to the TSR of S&P 500 IT Index and there is no further adjustment for the Company’s ESG
achievements. For eligible employees who are not executive officers of the Company and the Company’s subsidiaries, the RSAs vested shall be based on
the assumption that the Company’s Revenue growth, Gross Margin, and ROE are all equal to Threshold. In the case of death, the respective heir(s) may
apply for entitlement to those inheritable shares after completing all necessary legal procedures and providing relevant supporting documents. In the case
of physical disability caused by occupational injury, the vested RSAs will be received by such employees.
6. Position Transfer:
- Where any employees apply for transferring to any of the Company’s subsidiaries, affiliates, or other companies, the measures to be taken with respect
to their unvested RSAs will be the same as “Voluntary Separation”.
- Where any employees are assigned by the Company or the Company’s subsidiaries to a position in any of the Company’s subsidiaries, affiliates, or
other companies, all the rights and obligations in connection with the unvested RSAs will not be affected as a result. However, subject to the vesting
condition, such employees shall continue working in the assigned subsidiaries, affiliates, or other companies on the vesting dates. Otherwise, they will
be considered to fail to meet the vesting conditions, and the Company will reclaim the RSAs granted to them and cancel the same at no extra cost to
the Company. With respect to the evaluation of the achievement of individual performance goals, Chairman and Chief Executive Officer will determine
whether the vesting conditions are met by reviewing the evaluation of the employees’ performance provided by the assigned subsidiaries, affiliates, or
other companies.
7. Where any employees declare to voluntarily relinquish the granted RSAs with a written statement, the Company will reclaim the RSAs granted to them and
cancel the same at no extra cost to the Company.
8. Where any employees, after being granted the RSAs, breach any agreement with the Company employment agreement or violate the Company’s work
rules, the Company will reclaim the RSAs granted to them and cancel the same at no extra cost to the Company.
9. Where any employees terminate or revoke their authorization given to the Company regarding the employees’ RSA trust/custody account, the Company
will reclaim their unvested RSAs and cancel the same at no extra cost to the Company.
Number of Restricted Employee Shares
That Have Been Retired or Bought Back
74,000 shares
Number of Restricted Employee Shares
That Have Vested
1,406,000 shares
Number of Unvested Restricted Employee
Shares
1,480,000 shares
The Ratio of Number of Unvested
Restricted Employee Share to the Total
Number of Issued Shares (%)
0.00571%
The Effect on Shareholders’ Equity
The potential dilution of the Company’s EPS is minimal; therefore, there is no material impact on shareholders’ interest.
(Continued)
090
091
Type of Employee Restricted Stock
Employee Restricted Stock Awards for Year 2024
Effective Registration Date and Total
Number of Shares
07/31/2024 /4,185,000 shares
Issue Date
09/01/2024
Number of Restricted Employee Shares
Issued
2,353,000 shares
Number of Restricted Employee Shares
Still Available for Issuance
1,832,000 shares
Issued Price
None
Ratio of the Number of Restricted
Employee Shares Issued to the Total
Number of Issued Shares
0.00907%
Vesting Conditions of Restricted Employee
Shares
1. The RSAs granted to an employee can only be vested if (a) the employee remains employed by the Company or the Company’s subsidiaries on the last date
of each vesting period; (b) during the vesting period, the employee may not breach any agreement with the Company or the Company’s subsidiaries or
violate the Company’s or the Company’s subsidiaries’ work rules; and (c) certain employee performance metrics (a year-end performance rating of at least
“S” (Note) or above for the year immediately preceding the expiration of each vesting period) and the Company’s business performance metrics are met.
(Note: “S” stands for “Successful”)
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 the Company’s business performance metrics, as detailed in the following points.
3. For eligible executive officers of the Company: 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 the Company’s relative TSR (Note) achievement (see table below) 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 the Company’s ESG achievements. The number of shares so calculated should be rounded down to the nearest integral.
The Company’s TSR Relative to the TSR of S&P 500 IT Index
Ratio of Shares to Be Vested
Above the Index by X percentage points
50% + X * 2.5%, with the maximum of 100%
Equal to the Index
50%
Below the Index by X percentage points
50% - X * 2.5%, with the minimum of 0%
Note: TSR: Total Shareholder Return (including capital gains and dividends)
4. For eligible employees who are not executive officers of the Company and the Company’s subsidiaries: The number of RSAs to be vested in each year will
be calculated in accordance with the below table based on the Company’s audited consolidated financial statements for the year prior to the vesting year.
The number of shares so calculated should be rounded down to the nearest integral.
Threshold
Target
Weighting
Ratio of Shares to Be Vested
Revenue Growth
10%
15%
One-third
●< Threshold: 0%
●= Threshold: 50%
●≧Target: 100%
●Between Threshold and Target: as calculated
by interpolation method
Gross Margin
50%
53%
One-third
Return on Equity
(ROE)
20%
25%
One-third
Restriction on Rights in the Restricted
Employee Shares
1. Upon the grant of the RSAs, the RSAs shall be deposited in a trust/custody account. Before the vesting conditions are fulfilled, the employees cannot
request the trustee/custodian to return to them the RSAs for any reasons or by any means.
2. During each vesting period, no employees granted RSAs may sell, pledge, transfer, give to another person, create any encumbrance on, or otherwise
dispose of, any shares under the unvested RSAs.
3. Subject to the restrictions mentioned above, the rights of the employees with regard to the unvested RSAs granted under these Rules before the
fulfillment of the vesting conditions, including but not limited to the entitlement to any distribution regarding dividends, bonuses and capital reserve, and
the subscription right of the new shares issued for any capital increase, are the same as those of holders of common shares of the Company. The relevant
matters shall be handled in accordance with the RSA trust/custody agreement.
4. Before the vesting conditions are fulfilled, the attendance, proposal rights, speech rights, voting rights and any other shareholder rights shall be exercised
by the engaged trustee/custodian on the employees’ behalf.
5. During each vesting period, if the Company conducts a capital reduction for cash return, capital reduction for loss offset, or other non-statutory capital
reduction, the unvested RSAs shall be cancelled proportionally by the ratio of such capital reduction. If the Company conducts a capital reduction for cash
return, the returned cash shall be deposited in a trust/custody account and shall not be delivered to the employees until the vesting conditions are fulfilled;
otherwise, the cash will be returned to the Company.
Custody of the Restricted Employee
Shares
1. Upon the grant of the RSAs, the RSAs shall be deposited in a trust/custody account. Before the vesting conditions are fulfilled, the employees cannot
request the trustee/custodian to return to them the RSAs for any reasons or by any means.
2. During the period when the granted RSAs are deposited in a trust/custody account, each executive must enter into an agreement authorizing the
Company to, among others, negotiate, execute, modify, extend, rescind, and terminate the trust/custody agreement with the trustee/custodian, and give
instructions to deliver, use, and dispose of any of the properties under the trust/custody, on their behalf, with full power and authority.
Treatment of the Restricted Shares for
Which the Grantee Fails to Meet the
Vesting Conditions after Receiving or
Subscribing to the Shares
1. The Company will reclaim the granted RSAs and cancel the same at no extra cost to the Company, where an employee fails to meet the vesting conditions.
2. Voluntary Separation, separation with a severance, or involuntary discharge: Any unvested RSAs will be forfeited on the effective date of separation due to
a voluntary separation, separation with a severance, or involuntary discharge of such employees. The Company will reclaim the RSAs granted to them and
cancel the same at no extra cost to the Company.
3. Leave Without Pay: All the rights and obligations in connection with the unvested RSAs will not be affected as a result of employees taking extended leave
without pay. However, the actual number of shares that may be vested will not only be calculated according to the vesting conditions but also be prorated
based on the number of months of their service during the year prior to the applicable vesting day. If such employees are on leave without pay on any
vesting day, it shall be deemed that they fail to meet the vesting conditions, and the Company will reclaim the RSAs granted to them and cancel the same
at no extra cost to the Company.
4. Retirement: All the rights and obligations in connection with the unvested RSAs will not be affected as a result of an employee’s retirement, provided that
the employee complies with both of the following conditions after his/her retirement. If any of the following conditions is not met, any unvested RSAs will
be forfeited. Exemption could be made case by case by Chairman and CEO.
- Not to get any full-time job; and
- Not to engage in competition with the Company or the Company’s subsidiaries, including without limitation: to join a competitor, to provide any
competitive services, to establish any company or business that would involve a competitive foundry process or service, or to employ, induce, or attempt
to induce any TSMC employee to undertake competitive services.
All the rights and obligations in connection with the unvested RSAs will not be affected as a result of an employee’s retirement. However, the actual
number of shares that may be vested shall be calculated according to the vesting condition, and the performance rating granted to them shall be deemed
“S”.
5. Employment Termination Due to Death or Physical Disability Caused by Occupational Accidents: The unvested RSAs shall be deemed immediately
vested in the case of death or physical disability due to an occupational accident. For eligible executive officers of the Company, the RSAs vested shall
be based on the assumption that the Company’s TSR equals to the TSR of S&P 500 IT Index and there is no further adjustment for the Company’s ESG
achievements. For eligible employees who are not executive officers of the Company and the Company’s subsidiaries, the RSAs vested shall be based on
the assumption that the Company’s Revenue growth, Gross Margin, and ROE are all equal to Threshold. In the case of death, the respective heir(s) may
apply for entitlement to those inheritable shares after completing all necessary legal procedures and providing relevant supporting documents. In the case
of physical disability caused by occupational injury, the vested RSAs will be received by such employees.
6. Position Transfer:
- Where any employees apply for transferring to any of the Company’s subsidiaries, affiliates, or other companies, the measures to be taken with respect
to their unvested RSAs will be the same as “Voluntary Separation”.
- Where any employees are assigned by the Company or the Company’s subsidiaries to a position in any of the Company’s subsidiaries, affiliates, or
other companies, all the rights and obligations in connection with the unvested RSAs will not be affected as a result. However, subject to the vesting
condition, such employees shall continue working in the assigned subsidiaries, affiliates, or other companies on the vesting dates. Otherwise, they will
be considered to fail to meet the vesting conditions, and the Company will reclaim the RSAs granted to them and cancel the same at no extra cost to
the Company. With respect to the evaluation of the achievement of individual performance goals, Chairman and Chief Executive Officer will determine
whether the vesting conditions are met by reviewing the evaluation of the employees’ performance provided by the assigned subsidiaries, affiliates, or
other companies.
7. Where any employees declare to voluntarily relinquish the granted RSAs with a written statement, the Company will reclaim the RSAs granted to them and
cancel the same at no extra cost to the Company.
8. Where any employees, after being granted the RSAs, breach any agreement with the Company employment agreement or violate the Company’s work
rules, the Company will reclaim the RSAs granted to them and cancel the same at no extra cost to the Company.
9. Where any employees terminate or revoke their authorization given to the Company regarding the employees’ RSA trust/custody account, the Company
will reclaim their unvested RSAs and cancel the same at no extra cost to the Company.
Number of Restricted Employee Shares
That Have Been Retired or Bought Back
0 share
Number of Restricted Employee Shares
That Have Vested
0 share
Number of Unvested Restricted Employee
Shares
2,353,000 shares
The Ratio of Number of Unvested
Restricted Employee Share to the Total
Number of Issued Shares (%)
0.00907%
The Effect on Shareholders’ Equity
The potential dilution of the Company’s EPS is minimal; therefore, there is no material impact on shareholders’ interest.
(Continued)
092
093
4.6.2 Employee Restricted Stock Granted to Management Team and to Top 10 Employees
Unit: Share
As of 03/01/2025
Management Team and
Employee
Title
Name
No. of Employee Restricted
Stock Granted
Employee Restricted Stock
as a Percentage of Shared
Issued (Note 1)
Restrictions Released
Restrictions Unreleased
No. of Shares
Issued Price (NT$)
Issued Amount
(NT$ thousands)
Released Shares as a
Percentage of Shares
Issued (Note 1)
No. of Shares
Issued Price (NT$)
Issued Amount
(NT$ thousands)
Unreleased Shares as a
Percentage of Shares
Issued (Note 1)
Chairman & Chief Executive Officer
C.C. Wei (Note 2)
8,810,000
0.03397%
2,510,563
0
0
0.00968%
4,360,500
0
0
0.01681%
Senior Vice President, Chief Financial
Officer/Spokesperson
Wendell Huang
Executive Vice President and Co-Chief
Operating Officer
Y.P. Chyn (Note 3)
Executive Vice President and Co-Chief
Operating Officer
Y.J. Mii (Note 3)
Senior Vice President and Deputy
Co-Chief Operating Officer/Information
Security Officer
Cliff Hou
(Note 4 and Note 5)
Senior Vice President and Deputy Co-
Chief Operating Officer
Kevin Zhang (Note 4)
Senior Vice President
Lora Ho
Senior Vice President
Wei-Jen Lo
Senior Vice President/
J.K. Lin
Senior Vice President
J.K. Wang (Note 6)
Senior Vice President and General
Counsel/Corporate Governance Officer
Sylvia Fang
Vice President
Connie Ma (Note 6)
Vice President/CEO, TSMC Arizona
Y.L. Wang
Vice President and TSMC Distinguished
Fellow
Douglas Yu
Vice President and TSMC Fellow
T.S. Chang
Vice President
Michael Wu
Vice President
Min Cao
Vice President
Marvin Liao (Note 6)
Vice President/CEO, JASM
Y.H. Liaw
Vice President
Simon Jang
Vice President
C.S. Yoo
Vice President
Jun He
Vice President
Geoffrey Yeap
Vice President and Chief Information
Officer
Chris Horng-Dar Lin
Vice President
Jonathan Lee
Vice President
Arthur Chuang
Vice President and TSMC Fellow
L.C. Lu
Vice President
K.C. Hsu
Vice President/Managing Director,
ESMC
Ray Chuang
Vice President
Vanessa Lee (Note 7)
Employee
Y.C. Huang (Note 6)
Note 1: The number of shares issued is based on the amended number of total shares disclosed on Ministry of Economic Affairs as of 12/18/2024.
Note 2: Dr. C.C. Wei was elected as Chairman and Chief Executive Officer (CEO), effective June 4, 2024.
Note 3: Mr. Y.P. Chyn and Dr. Y.J. Mii were appointed as Executive Vice Presidents and Co-Chief Operating Officers, effective on March 1, 2024.
Note 4: Dr. Cliff Hou and Dr. Kevin Zhang were appointed as Senior Vice Presidents and Deputy Co-Chief Operating Officers, effective on March 1, 2024.
Note 5: Dr. Cliff Hou was appointed as Chief Information Security Officer, effective January 1, 2025.
Note 6: Vice President J.K. Wang retired, effective May 7, 2022. Vice President Connie Ma retired, effective November 1, 2022. Vice President Dr. Marvin Liao retired, effective November 11, 2022. Mr. Y.C. Huang retired,
effective May 1, 2022.
Note 7: Ms. Vanessa Lee was promoted to Vice President, effective August 13, 2024.
4.7 Status of New Share Issuance in Connection with Mergers and Acquisitions: None.
4.8 Funding Plans and Implementation
The funds raised by TSMC through issuances of domestic corporate bonds are used in accordance with respective funding plans and
actual needs. As of the end of the fourth quarter of 2024, the implementation status of each uncompleted plan was as follow:
Projects
Gross Proceeds
Use of Proceeds
Implementation Status
Unsecured Corporate Bond
(113-1, Green Bond)
NT$22.8 billion
Green buildings and environmental
protection related expenditures
As of the end of the fourth quarter of 2024, the actual completion rate of fund uses was 80.71%, higher than the
original plan of 33.87%, reflecting the progress of actual payment application. The funds were used in accordance
with the original plans and there were no material differences between the expected benefits and the actual ones.
Unsecured Corporate Bond
(113-2, Green Bond)
NT$11.5 billion
Green buildings and environmental
protection related expenditures
The funds are scheduled to be used from the first quarter of 2026.
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5
TSMC manufactured 11,878 different products using 288
distinct technologies for 522 different customers.
Operational
Highlights
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5.1 Business Activities
5.1.1 Business Scope
As the founder and a leader of the dedicated semiconductor
foundry segment, TSMC provides a full range of integrated
semiconductor foundry services including leading advanced
process and specialty technologies, advanced mask
technologies, TSMC 3DFabric® advanced silicon stacking and
packaging technologies, excellent manufacturing productivity
and quality, as well as comprehensive design ecosystem
support, to meet a growing variety of customer needs. The
Company strives to provide unparalleled total value to its
customers and views customer success as its own success. As a
result, TSMC has gained customer trust from around the world
and has experienced strong growth and success of its own.
TSMC developed or introduced the following technologies in
2024:
Logic Technology
●TSMC A16TM process technology, the Company’s newest
technology offering with nanosheet transistor structure and
the innovative backside power rail solution, brings greatly
improved logic density and performance. It will further
extend TSMC’s technology leadership with even better power,
performance and area (PPA) than N2P.
●2nm (N2) technology development made significant progress
in 2024. N2 technology features TSMC’s first generation of
nanosheet transistor technology with full-node strides in
performance and power consumption. Volume production is
expected in the second half of 2025.
●3nm fin field-effect transistor (FinFET) (N3) technology
entered its third year of volume production in 2024 for
customers’ smartphone and high-performance computing
(HPC) products.
●N3 Enhanced (N3E) technology, an enhanced version of N3
technology, continues to provide industry-leading advantages
for both mobile communication and HPC applications.
Volume production started in the fourth quarter of 2023 and
ramped up in 2024.
●N3P technology, an enhanced version of N3E technology,
provides industry-leading advantages for both mobile
communications and HPC applications. Volume production
began in the second half of 2024.
●N3X technology, a process tailored for HPC applications was
introduced in 2023. This technology completed qualification
in the fourth quarter of 2024, and its volume production is
expected to commence in 2025.
●4nm FinFET (N4) technology, an enhanced version of 5nm
FinFET (N5) technology, entered its third year of volume
production in 2024.
●N4P technology, with additional performance boost over N4
technology, entered its third year of volume production in
2024.
●N4 Compact (N4C) technology features innovative process
improvements that offer higher density components and
simplified process flow compared to N4P technology. This
technology was developed in 2024 and is planned for
customer products tape-outs in 2025.
●N4X technology, introduced in 2021, is TSMC’s first
HPC-focused technology, representing the ultimate
performance and maximum clock frequencies in TSMC’s 5nm
family. Its volume production started in 2024.
●N5 Plus (N5P) technology, a performance-enhanced version
of 5nm technology (N5), entered its fourth year of volume
production in 2024 for customers’ smartphones and HPC
products.
●6nm FinFET (N6) technology, widely adopted for
smartphones, HPC, and digital consumer electronics (DCE)
products, entered its fifth year of volume production in 2024.
●N6e®, N6 Ultra-Low Power (ULP) technology’s process design
kit (PDK) was completed in the fourth quarter of 2023 and
the technology started production in the fourth quarter of
2024.
●7nm FinFET (N7) and 7nm FinFET Plus (N7+), which have
been in volume production for customers’ 5G and HPC
products for several years, entered their fourth year of volume
production for DCE and automotive products in 2024.
●N12e® specialty technology continued its extensive adoption
in 2024. This technology leverages TSMC’s 12nm FinFET
Compact Plus (12FFC+) baseline and incorporates a
silicon-proven “Low Vdd Design Guidance” to help customers
achieve an accurate and user-friendly low Vdd design sign-off
methodology. Additionally, Low Vdd standard cells libraries
and Low Vdd static random-access memory (SRAM) compilers
help customers design ULP products with extreme low Vdd
capabilities.
●22ULL technology entered its fifth year of volume production
in 2024 having been adopted in a wide range of applications,
including wireless connectivity products such as Bluetooth
and Wi-Fi for IoT, digital TV chips, and smartphones.
Specialty Technology
●N3A V0.9 PDK was released in 2024. Based on its N3E
technology, TSMC introduced the N3 Auto Early (N3AE)
program in 2023, providing automotive PDKs to support
automotive customers to design with the most advanced
3nm technology for automotive applications. N3A technology
is expected to complete automotive grade qualification,
automotive design enablement platform (ADEP) development,
and the release of V1.0 PDK by the end of 2025.
●N4C radio frequency (N4C RF) technology, the next
generation of N4P RF technology, is on track in development
in 2024 and is expected to be launched in 2025.
●5nm FinFET Automotive (N5A) technology received multiple
customer product tape-outs since 2023. These products were
successfully prototyped, qualified for automotive applications,
and are expected to enter volume production utilizing TSMC’s
automotive service package (ASP) in 2025.
●Second-generation N6 RF (N6 RF+) technology development
was completed and its V1.1 PDK was finalized in 2024.
●12FFC+ RF technology process enhancements offer an
advanced RF fT/fMAX corner model and feature the
ultra-thicker metal with aggressive metal width push. The
technology continues volume production for customers’ 4G
and 5G cellular RF and IoT wireless connectivity products
since 2023.
●16FFC FinFET Compact (16FFC) RF Enhancement III
technology, with continuous improvement of 16FFC RF
technology is expected to be launched in the second half
of 2025. 16FFC RF technology has received many customer
tape-outs since 2021. The development of its enhanced
version (Enhancement I/II) was completed in 2022 to support
applications such as 28/39/47GHz mmWave RF front-end
module and 77GHz/79GHz automotive radar.
●N12e® RRAM, TSMC’s third-generation RRAM solution,
features balanced cost and reliability. This technology entered
risk production for consumer grade in 2024.
●28ULL resistive random-access memory (RRAM) technology,
TSMC’s second-generation RRAM technology, passed
Automotive Grade-1 technology qualification in 2024.
●28nm high voltage (HV) technology began volume
production for smartphone organic light-emitting diode
(OLED) display applications in 2024.
●40nm silicon on insulator (N40SOI) technology on 12-inch
wafers, which provides industry-leading competitive
advantages, entered its third year of volume production in
2024.
●80nm technology for micro-OLED-on-Silicon display
backplanes in augmented reality (AR)/virtual reality (VR)
devices entered volume production in 2024. This technology
offers extremely high density with over 3,000 pixels per inch
(ppi), enhancing vision quality for near-eye applications.
●Advanced 40nm Bipolar-CMOS-DMOS (BCD) technology PDK
was ready in 2024.
●Competitive 90nm BCD technology received multiple
tape-outs and started volume production in 2024. This
technology is positioned as the next platform for 0.18μm BCD
technology for high digital content products such as charger
and audio amplifier ICs. Additionally, the new continuous
improvement plan (CIP) is underway, targeting server
applications, and its PDK is scheduled to be ready by 2026.
●0.13μm BCD technology will continue to be optimized,
for the digital consumer electronics (DCE) and automotive
markets. Its latest PDK will be released in 2025.
●The switch device of the second-generation 6-inch gallium
nitride (GaN) on silicon technology was qualified in 2024.
This technology will support both DCE and automotive
electronics applications. In addition, the 8-inch GaN on silicon
technology development is on track.
●CMOS image sensor (CIS) technology was enhanced and
progressed to the next generation, further strengthening
the capabilities of advanced CISs. In 2024, TSMC helped
customers roll out advanced high dynamic range products to
the market.
●For silicon photonics technology, the Company continued
development work on an innovative 3D photonics stacking
technology – compact universal photonics engine (COUPE),
which can integrate silicon photonics chip and electrical
control chip into a single-chip photonic engine. This
photonics engine can be co-packaged with HPC chip to
provide low-power and high-speed data transmission. The
data rate of the test vehicles using TSMC’s COUPE technology
achieved its targeted goal in 2024. TSMC also continued
working on co-packaged optics (CPO) solutions to reduce
data transmission power consumption in data centers.
TSMC 3DFabric® – TSMC Advanced 3D Silicon Stacking
and Packaging Technologies
●TSMC-SoIC® Chip on Wafer N5 system on integrated chip
(SoIC) stacking technology entered its second year of volume
production for HPC products in 2024, and N3 SoIC stacking
technology volume production is expected in 2025.
●TSMC-COUPETM technology service, which integrates silicon
photonics and electrical control chips using TSMC-SoIC® Chip
on Wafer stacking process, is on track in development for
high-speed data transmission products.
●Chip on Wafer on Substrate (CoWoS®) technology service
integrates multiple system-on-chip (SoC) chips, and the
high bandwidth memory stacks on the interposer wafer
to enable HPC products with more compute power and
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memory bandwidth. Chip on Wafer on Substrate with Silicon
Interposer (CoWoS®-S) technology service featuring high
interconnect routing density and embedded deep trench
capacitor (eDTC) has been in volume production for several
years.
●Chip on Wafer on Substrate with Redistribution Layer
Interposer (CoWoS®-R) technology service, featuring multiple
redistribution layers (RDL) to enable product design simplicity,
supports larger HPC products. This technology entered its
second year of volume production in 2024.
●CoWoS®-L technology service, combining Chip on Wafer on
Substrate with RDL-based interposer and embedded local
silicon interconnect (LSI), improves product design flexibility
by integrating a variety of embedded chips. LSI with higher
routing density and eDTC facilitates the expansion of HPC
products to larger sizes. This technology started volume
production in 2024.
●TSMC-SoWTM system on wafer technology service enables
wafer-level heterogeneous integration for next-generation
data center computing chips with better power efficiency,
higher bandwidth and greater chip density. The first
generation (logic only) technology entered volume production
in 2024.
●Integrated Fan-Out Multi-chips with Package-on-Package
(InFO-M-PoP) technology, which integrates multiple
heterogeneous chips with package stacking for wearable
products, entered its second year of volume production in
2024.
●Fine pitch copper (Cu) bump technology for flip chip
packaging on 2nm silicon completed qualification in 2024.
5.1.2 Customer Applications
TSMC manufactured 11,878 different products for 522
customers in 2024. These chips were used across a broad
spectrum of electronic applications, including artificial
intelligence (AI) and high-performance computing servers,
wired and wireless communication systems, automotive and
industrial equipment, personal computers and peripherals and
information appliances, as well as consumer electronics such as
digital TVs, game consoles, digital cameras, AI-enabled IoT and
wearables, and many others.
The rapid ongoing evolution of end products prompts
customers to pursue product differentiation using TSMC’s
innovative technologies and services and, at the same time,
spurs TSMC’s own development of technology. As always,
TSMC believes success depends on leading rather than
following industry trends.
5.2 Technology Leadership
5.2.1 R&D Organization and Investment
The semiconductor industry is characterized by rapid
technological change, frequently resulting in the introduction
of new technologies to meet customer demand. To stay
technologically ahead of its competitors and to maintain its
strong market position in the foundry segment, TSMC believes
it must continue its technology lead across the semiconductor
industry.
In 2024, TSMC continued to invest in research and
development, with total R&D expenditures amounting to 7.1%
of revenue, a level that equals or exceeds the R&D investment
of many other leading high-tech companies.
The Company continuously invests significant amounts in R&D
to maintain its leading position in the advancement of process
technologies. These efforts have allowed customers to access
certain advanced process technologies, such as 7nm, 5nm and
3nm technology for volume production, ahead of competitors
and many integrated device manufacturers. In addition, the
Company is committed to developing more advanced process
technologies to the 2-nanometer level and below in the
coming years to sustain its technology leadership.
In 2024, as the development of 2nm technology progressed
from baseline setup to yield enhancement stage, TSMC made
good progress in the development of TSMC’s 16 Angstrom
(A16) and 14 Angstrom (A14) technologies, which aim to
further improve speed, power, density and cost. In addition,
the Company’s research efforts continued to push forward
with exploratory studies for nodes beyond A14. The Company
will also continue to invest in R&D for mature technologies to
provide function-rich process capabilities to its customers.
TSMC’s research and development efforts are divided into two
areas: centralized activities and those undertaken by individual
fabs. Centralized R&D focuses primarily on the development
of new logic, SoC, derivatives and package/system-in-package
(SIP) technologies, along with cost-effective 3D wafer-level
system integration solutions, including InFO, CoWoS®, and
TSMC-SoIC® technologies. R&D at the fab level is mainly
concentrated on improving and upgrading manufacturing
process technologies.
R&D Expenditures
Amount: NT$ thousands
204,181,823
182,370,170
35,997,801
2023
2024
01/01/2025~
02/28/2025
5.2.2 R&D Accomplishments in 2024
Highlights
●2nm Technology
In 2024, TSMC’s 2nm technological development focused
on baseline setup, yield enhancement, transistor and
interconnect R/C performance improvement, and reliability
evaluation. During the year, customers completed IP design
and qualification, and the first customer new tape-out (NTO)
was done. The Company also developed low resistance
RDL (redistribution layer) and super-high performance
metal-insulator-metal (MiM) capacitors to further boost
performance.
●A16 Technology
TSMC’s A16 technology development made significant
progress in 2024. This platform enhances logic gate density
and power efficiency in order to more efficiently support high
performance computing applications. Compared to 2nm
process technology, A16 process technology adopts a backside
power delivery network resulting in major speed, power, and
density improvements.
●A14 Technology
The Company made significant advances in 2024 in
developing its A14 technology, targeting both mobile SoC
and HPC applications. The A14 platform is expected to create
significant improvement in speed, power, density and cost
over 2nm technology. Development activities focused on
manufacturing baseline process setup, yield learning, transistor
and interconnect R/C performance. TSMC plans to continue full
development of A14 in 2025.
●Lithography Technology
In 2024, TSMC R&D lithography development focused on
improving wafer yield for 2nm risk production. At the same
time, the Company continued to enhance the application
efficiency of EUV scanners, reduce material defects, and
improve planarization in support A16 and A14 production.
TSMC A16TM process technology is the next nanosheet-based
technology and features Super Power Rail technology. In terms
of lithography improvements in overlay errors demonstrated
good performance with expected wafer yield. Looking ahead
to A14 and beyond, TSMC’s R&D will continue to focus on
developing more advanced lithography processes, researching
mask pellicles and blanks, exploring new materials, and
reducing costs. Moving forward, TSMC lithography will
integrate high numerical-aperture (High-NA) EUV technology
to maintain leadership in lithography technology.
●Mask Technology
In 2024, the TSMC R&D team completed 2nm technology
transfer. To achieve the wafer yield and productivity for the
lithography requirements for A14 node, the team improved the
uniformity of critical dimensions, pattern fidelity, and overlay
accuracy of curvilinear patterns through EUV blank material
modification, multi-beam writer resolution enhancement, and
mask process optimization. In addition, advanced e-beam
inspection was developed to enhance the defect sensitivity
to improve the EUV mask reliability. Future improvements
will focus on developing new blank materials and new mask
process technologies.
Integrated Interconnect and Packaging
TSMC’s fine pitch, chip-to-chip connection leveraging wafer
processes is called 3DFabric® technology service and consists
of both wafer-level frontend and backend technologies. The
Company’s frontend technologies, or TSMC-SoIC®, enables
leading-edge silicon for 3D silicon stacking. TSMC’s advanced
backend technologies includes CoWoS® advanced packaging
service with chips placed onto pre-made RDLs and InFO with
chips embedded before interconnection. The Company’s
3DFabric® technology service offers the ultimate flexibility
TSMC has long maintained strong partnerships with several
worldclass research institutions, including Semiconductor
Research Corporation (SRC) in the U.S. and Interuniversity
Microelectronics Centre (IMEC) in Belgium. The Company
also continued to expand research collaboration with leading
universities worldwide not only to advance semiconductor
technologies but also to nurture human talent for the future.
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with improved performance and stability, overcoming the
traditional trade-off between mobility/performance and
enhancement-mode operation for OSFET.
TSMC also continues to research emerging high-density,
non-volatile memory devices and hardware accelerators for
AI and HPC applications. At the 2024 IEDM, TSMC presented
a STT-MRAM Design-Technology-System Co-Optimization
(DTSCO) for AI edge devices. In this work, a novel
capacitive-coupling sense amplifier was developed to provide
low read energy consumption and improved robustness.
Through this DTSCO approach the Company showed
significant improvements in read energy efficiency (27.1% to
45.3%).
Specialty Technologies
TSMC offers a broad array of technologies to address a wide
range of applications:
●Mixed Signal/Radio Frequency (MS/RF)
As the digital transformation continues, accelerated in part by
the rapid rise of AI, the leap from 3nm to 2nm logic process
has paved the way to meet the computational demands of a
digital-first world. At the same time, as the world becomes
more connected and data-driven, RF and MS technologies are
also the cornerstones in next-generation semiconductor design.
In 2024, several cost-effective and performance-enhancing
process knobs were added to extend TSMC RF technology from
6nm to 4nm node, which can enable cutting-edge applications
in sub-6GHz RF wireless transceiver (WTR), wireless local area
networking (WLAN), and true wireless stereo (TWS) sectors. For
other increasing demands in 5G mmWave and sub-6GHz RF
front-end module (FEM) sectors, TSMC also made great strides
in improving RF device and circuit KPI by pioneering innovative
RF design technology co-optimization (DTCO) in low-earth
orbit (LEO), cellular phone, and automotive markets.
●Power IC/Bipolar-CMOS-DMOS (BCD)
To meet the high power and low energy consumption
demands of HPC, AI, and high-efficiency mobile devices, TSMC
introduced a series of Bipolar-CMOS-DMOS (BCD) process
technology solutions in 2024. 55nm BCD technology with
new 5V components for products requiring both high power
and low power consumption entered mass production. The
second-generation 40nm BCD technology introduced new
high-voltage components ranging from 5V to 28V to cover the
needs of additional power management markets. Additionally,
TSMC completed design certification of 5V power devices for
6nm FinFET technology, enabling the integration of RF power
amplifiers and power management units onto a single chip for
high-end RF power modules.
●Micro-Electromechanical Systems (MEMS)
In 2024, TSMC implemented qualified piezoelectric micro
electromechanical systems (MEMS) technology for ultrasonic
frequency in audio applications, which could be also used
as active heat dissipation for high-performance chips. TSMC
also developed a new generation high-voltage capacitive
micromachined ultrasonic transducer (CMUT) to improve
medical imaging quality. Future plans include the development
of next-generation environmentally friendly piezoelectric
technology.
●Gallium Nitride (GaN)
During 2024, TSMC continued development work on gallium
nitride (GaN) transistors to maintain its leading position in this
field. The Company successfully developed second-generation
650V and 100V enhanced high-electron-mobility transistor
(E-HEMT) devices, which passed reliability testing. Notably,
the second-generation 650V E-HEMT devices exhibit a static
resistance degradation of less than 20% and meets the
stringent specifications for automotive electronics, which
signifies higher reliability. Production is expected to commence
in 2025. Additionally, TSMC is actively developing an 8-inch
650V enhanced high-electron-mobility transistor, scheduled for
production in 2026.
●Display Drivers
TSMC successfully mass-produced 28HV display-driver ICs
(DDICs) for smartphones in 2024. In addition, to bolster its
leading position in the field of high voltage display driver
technologies, the Company is developing the world’s first
16nm HV FinFET, with better performance and lower power
usage to be used in next generation high-end mobile devices
and AR/VR applications. It is expected that the customer
product DDIC yield will be verified in 2025.
●Complementary Metal-Oxide-Semiconductor Image
Sensors
TSMC had several accomplishments in this area in 2024.
For automotive applications, with a newly developed
Gen-3 3D-MiM storage capacitor (11 times capacitance
boost compared to Gen-1), the lateral overflow integration
capacitor (LOFIC) pixel exhibited a significant dynamic range
improvement of 14dB. In parallel, a 3-wafer stacked backside
illuminated process was transferred to manufacturing, offering
high design flexibility with special-functions sensor and
advanced node ISP (e.g., N22, N12) for die matching and a
in product design with integrated frontend and backend
technologies to meet future computing systems integration
scaling needs.
●3DIC and TSMC-SoIC®
TSMC-SoIC® wafer product is an innovative wafer-level
frontend 3DIC chip stacking platform with outstanding
bonding density, interconnect bandwidth, power efficiency,
and thin profile. It extends Moore’s Law through system-level
scaling with sustainable performance gains and corresponding
cost benefits. SoIC integrated chips can be subsequently
assembled by using conventional packages or TSMC’s new
3DFabric® technology services, such as CoWoS® or InFO, for
next generation HPC, artificial intelligence (AI) and mobile
applications. The SoIC CoW Face-to-Back Gen-1 process is in
production and the SoIC CoW Face-to-Back Gen-2 process,
with significant thermal performance improvement, was
qualified and started production in 2024. The SoIC CoW
Face-to-Face Gen-1 process is under qualification and will
provide an ultrahigh density connection solution. Gen-2
process, with advanced SoC (N2 and beyond) compatibility,
is under development and will provide better band width
and power performance gain. The first-generation Compact
Universal Photonics Engine (COUPE) with electrical chip on
photonics chip using SoIC bond has progressed well. TSMC
will continue to pursue SoIC technological improvements and
co-optimize with the Company’s advanced silicon technologies
for further gains in transistor density, system PPA (power,
performance and area) and cost.
●CoWoS®
As the leading 2.5D advanced packaging technology, CoWoS®
advanced packaging service is experiencing strong growth
momentum due to the surging AI demand since 2023. The
CoWoS®-S Si interposer technology has advanced from
1.0-reticle to 3.3-reticle size (1 reticle size is approximately
830mm2) during the past decade. The development focus is
now shifted to CoWoS®-L with reconstituted interposer of
multiple local silicon interconnects (LSIs). The first CoWoS®-L
at 3.5-reticle size has been developed and entered production
in 2024. New CoWoS®-L development targeting 5.5-reticle
size interposer has been launched this year to meet higher
performance goal in a package. In parallel, CoWoS®
Co-packaged optics (CPO) for ultra-high-end network switch
is under development to integrate interposer-based CoW
module and COUPE-based optical IO’s in one package to
achieve higher data bandwidth and to reduce system power
consumption.
●InFO
In 2024, TSMC continued its industry leadership in
high-volume manufacturing of InFO_PoP packaging for mobile
applications. The new feature with backside RDL, was also
qualified and ready for volume production.
●Advanced Interconnect
With the growing demand for high performance and low
power consumption products, TSMC’s continuous innovations
on back-end-of-line interconnect provide its customers with
competitive solutions. In 2024, the Company developed a
novel interconnect structure that delivers power reduction
as well as improvements in speed and routing density.
Furthermore, the research on advanced materials demonstrated
significant capacitance reduction with robust reliability. Those
innovations will allow TSMC to continue scale interconnect for
future generations of technology.
Corporate Research
TSMC corporate research stayed at the forefront of
low-dimensional transistor exploration with innovation
in devices and materials to drive higher performance and
lower power consumption to enable extremely scaled logic
transistors. At the 2024 Symposium on VLSI Technology
and Circuits (VLSI Symposium), TSMC demonstrated
a high performance nanosheet transistor with dense
aligned one-dimensional carbon nanotube channel.
With simultaneously improved gate control, channel
transconductance (gm) and contact resistance (Rc), this work
demonstrated the highest performing 1-D carbon nanotube
transistor (CNFET). From a process integration perspective,
at the 2024 IEEE International Electron Devices Meeting
(IEDM) TSMC presented the first electrical demonstration of
a two-stacked nanosheet (NS) FET with a monolayer MoS2
channel, utilizing a typical nanosheet release process prior to
high-K metal gate deposition.
For potential applications in 3-D integration with CMOS
technology, TSMC continued its extensive research on
back-end-of-line (BEOL) compatible oxide semiconductor
field-effect transistors (OSFET). At the 2024 VLSI Symposium,
TSMC presented a high-quality SnO oxide semiconductor
channel that demonstrated the first successful sub-100nm
channel length p-type SnO OSFET with ion current density
10~20 μA/μm and Ion/Ioff ratio over 104. Also, at the
2024 IEDM TSMC reported a n-type OSFET with W-doped
In2O3 (IWO) channel using atomic layer deposition (ALD).
An oxide capping layer and post-capping anneal were used
to demonstrate an enhancement-mode ALD IWO OSFET
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cost-effective DTCO solution. In light detection and ranging
(LiDAR) sensor development for both automotive and mobile
applications, Gen-2 (7μm pitch) Si single photon avalanche
diode (SPAD) process was readied for manufacture with a
significant photon detection efficiency (PDE) improvement
of three times higher compared to Gen-1. In addition,
good progress was made in both the dark count rate (DCR)
reduction and performance uniformity improvement in
Ge/Si heterogeneous photodetectors, and the first ever
room-temperature short-wave infrared radiation (SWIR) depth
image (1310nm wavelength) was demonstrated.
●Emerging Memory/Memory WoW Stacking Technology
The Company reached several major milestones in emerging
memory technologies in 2024. TSMC offered RRAM as a
low-cost embedded non-volatile memory (NVM) solution for
the price sensitive IoT market. The Company’s 40nm, 28nm
and 22nm nodes entered volume production and completed
the technical qualification of 12nm consumer-grade RRAM,
while 6nm node also entered development stage.
TSMC further developed a smaller and more energy-efficient
16nm MRAM cell with the same high-speed read/write
capabilities but greater endurance of over one million
read/write cycles, support for solder reflow, and excellent
high-temperature data retention. This technology is expected
to complete its technical qualification of the 16nm automotive
grade in 2025. In response to market demand, TSMC also
began developing the 12nm and 5nm nodes MRAM to meet
future customer needs in automotive, smart sensor, and
edge-AI applications.
The Company continued to develop wafer stacking (WoW)
technology, creating a heterogeneous process platform
for logic wafers and dynamic random-access memory. The
Company made progress in the development of 55nm, 6nm,
4nm and 3nm logic wafers with single memory wafer stacking
process technology. 55nm was the first to enter production
with stable yields. TSMC will extend to advanced logic wafers
(6nm, 4nm, 3nm) bonded with multi-wafers memory stacking
to enable faster computing capabilities and higher memory
bandwidth. WoW is suitable for AI chips and data center
needs and can also be used in mobile phone chips and mining
chips. This new memory architecture is compatible with
advanced packaging technology, which is expected to satisfy
a wide range of product applications and shorten product
development times.
5.2.3 Technology Platform
TSMC provides customers with advanced technology platforms
that include the comprehensive infrastructure needed to
optimize design performance, power, area (PPA) and cycle
times. These include electronic design automation (EDA)
design flows, silicon-proven libraries and IPs, simulation and
verification design kits, also known as PDKs, and technology
files.
For the most advanced technologies such as 2nm, 3nm, 4nm
and 3DFabric®, the Company provides certified EDA tools,
features and IP solutions for customer adoption at various
design stages to meet their product requirements. To help
customers plan new product tape-outs incorporating library/
IP from the Company’s Open Innovation Platform® (OIP)
ecosystem, there’s a portal to connect customers to solution
providers including 16 EDA partners, seven Cloud partners, 40
IP partners, 29 design center alliance (DCA) and eight value
chain aggregator (VCA) partners, as well as 23 partners with
3DIC expertise in the new TSMC 3DFabric® Alliance.
5.2.4 Design Enablement
TSMC’s technology platforms provide a solid foundation to
facilitate the design process. Customers can design using the
Company’s internally developed IPs or use IPs and EDA tools
available from TSMC’s OIP partners.
Tech Files and PDKs
EDA tool certification, an essential element for IP and customer
designs to ensure that features meet TSMC process technology
requirements, can be found on TSMC-Online. Corresponding
technology files and PDKs are available for customers to
download and use with certified EDA tools. TSMC provides
a broad range of PDKs for digital logic, mixed-signal, radio
frequency (RF), high-voltage driver, CMOS image sensor (CIS)
and embedded flash technologies from 0.5µm to 2nm. In
addition, the Company provides technology files for design
rule checking (DRC), layout versus schematic (LVS), resistance-
capacitance (RC) extraction, automatic place and route, and
a layout editor to ensure that process technology information
is accurately represented in EDA tools. By 2024, TSMC had
provided customers more than 52,000 technology files and
3,699 PDKs.
Library and IP
Silicon intellectual property (IP) is the basic building block of
IC designs. Various IP types are available to support different
customer design applications including foundation, analog/
mixed-signal, embedded memory, interface and soft IP. TSMC
and its alliance partners offer customers a rich portfolio of
reusable IPs, which are building blocks for many circuit designs.
To support 3DIC customer needs, TSMC introduced 3DIC IP
in 2019. By 2024, the company had expanded its library and
silicon IP portfolio to contain more than 83,000 items, a 13%
increase over 2023.
Design Methodology and Flow
Design reference flows are developed based on certified
EDA tools to provide robust and comprehensive design
methodology innovations that can help boost productivity.
In 2024, TSMC released N2P HPC, mobile and custom design
reference flows through OIP collaboration and announced
their availability for customer adoption. In addition to process
technology advancements, the company released the design
reference flows for analog design migration 3.0, N16 to N6 RF
design migration, and continued to develop and offer TSMC
3DFabric® design solutions for both 3D chip stacking and
2.5D advanced packaging technologies, including solutions
supporting the 3Dblox standard, to reduce 3DIC design
barriers, thus helping customers to improve productivity in
their system-level designs. These design reference flows feature
FinFET-specific and 3DFabric® design solutions to optimize
PPA.
5.2.5 Intellectual Property
For a long time, TSMC has been protecting R&D innovation and
operation development by way of utilizing patents and trade
secrets as dual tracks under the established comprehensive
IP management system, encouraging Company’s innovation
culture, and strengthening Company’s competitive strengths so
as to fulfill the Company’s ESG vision. TSMC’s General Counsel
updates the Board of Directors on the status of the intellectual
property management scheme.
TSMC’s comprehensive patent management system includes:
Patent management strategies, such as Global patent
deployment, Exploratory invention mining, Patent portfolio
expansion, and Patent exploitation and exercise; and Patent
management rules, such as Tier-based IP evaluation, Patent
competition rewards, Educational patent promotion,
and Patent professional training. TSMC has established
technological patent road maps by way of innovative patent
strategy, strict management and risk-control measures;
analyzed and monitored competitors by using intelligent patent
maps; conducted core technology mining through invention
workshops; expanded patent families on key technologies; filed
and maintained patents by tier-based management, further
enhanced patent protection through quality control on patent
applications and continued to construct massive global patent
portfolio with high quality; and, diversified exploitation of
patent assets. In terms of patent filings, TSMC has accumulated
more than 104,000 patent applications worldwide as of end
of 2024, including more than 9,100 applications filed in 2024.
TSMC ranked No. 2 among global U.S. patent applicants,
and No. 1 among patent applicants in Taiwan. In terms of
patent grants, TSMC has accumulated more than 69,000
patents worldwide as of end of 2024, including more than
6,700 global patents received. TSMC ranked No. 2 among
U.S. Patentees, and No. 1 among patent patentees in Taiwan.
In terms of patent quality, the allowance rate of TSMC’s U.S.
applications approached near 100%.
Turning to trade secret management and strategy, 10 years
after TSMC pioneered the “Trade Secret Registration System”
in 2013 and followed by the adoption of numerous intelligent
management programmes, in light of the Company’s global
expansion as well as its efforts at realizing the four visions of
innovation management: “IP Strategy, Competitive Advantage,
Innovative Culture, and Sustainable Operations”. In the
following year of 2024, TSMC established the “Trade Secret
Sustainable Intelligent Management Center” in pursuit of the
comprehensive realization of visions of sustainable innovation
and sustainable operations. Four new systems were introduced:
the Intelligent Trade Secret Monitoring & Matching System,
Trade Secret Registration Innovation Index Analytics System,
Trade Secret Registration Intelligent Reminder System, and
the Trade Secret Intelligent Management App. They are
synergistically integrated with seven existing systems under
six service categories: Intelligent Registration Integration,
Intelligent Misappropriation Prevention & Monitoring,
Intelligent Automated Services, Artificial Intelligence Utility,
Green Trade Secret, and Charitable Sharing & Public Benefit.
In particular, the “Trade Secret Innovation Talent Scouting
Online Merge Offline Service”, which was first introduced in
2023, saw its services expanded at Fab 12B, Fab 15A, and Fab
15B in 2024, saw 31 prior Golden Trade Secret winners as
Golden Coaches personally mentor 102 prospective inventors
and successfully resulted in 22 first time Golden Trade Secret
winners, strengthening the company’s sustainable innovative
culture and competitive advantage, once again validated the
feasibility of this novel initiative.
TSMC identifies and rewards impactful and high-quality
innovations through the annual Golden Trade Secret Award
ceremony, having presented 3,290 Golden Trade Secret Award
out of 475,462 registered trade secrets between 2013 and
2024, demonstrating immense innovative drive and potential.
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TSMC established the “Green Trade Secret Registration”
column in 2021, and to date recorded a total of 1,872
registrations, including 559 registrations made in 2024 alone,
demonstrating TSMC employees’ continuous emphasis placed
on Green Trade Secrets. Participating employees who registered
for Green Trade Secrets span across multiple departments. On
top of the Facility department, departments such as R&D and
Manufacturing also participated enthusiastically in recording
innovations contributing to sustainability, energy conservation,
and carbon emission reduction, enriching the innovation
diversity of Green Trade Secrets.
TSMC received a AAA (the highest tier) certificate by Taiwan
Intellectual Property Management System (TIPS) from Industrial
Development Administration, Ministry of Economic Affairs in
December 2024 again, and the valid period will expire after
December 31, 2027.
TSMC’s IP team works closely with technical teams from R&D
in early stage to mass production, and actively constructs IP
portfolio for each key innovative technology, including the
latest technology nodes, so as to ensure Company’s technology
leadership in semiconductor field; TSMC utilize patents and
trade secrets as dual tracks to successfully protect Company’s
main business including process technologies, designs,
manufacturing and sales, and have been strategically utilized
for defense and cross-license negotiation, so as to secure
freedom of business operation worldwide.
5.2.6 TSMC University Collaboration Programs
In recent years, TSMC has collaborated closely with several
prestigious universities in Taiwan to carry out a variety of
joint research projects. These collaborations encourage more
university professors to conduct leading-edge semiconductor
research in areas such as novel devices, process, materials
manufacturing technologies, specialty technologies for
electronic applications, and green manufacturing. At the same
time, these projects provide hands-on training opportunities
for students interested in these fields to prepare them
for joining the semiconductor industry after graduation.
Starting in 2013, TSMC established research centers at four
top universities in Taiwan: National Yang Ming Chiao Tung
University, National Taiwan University, National Cheng Kung
University and National Tsing Hua University. In the past
eleven years, a total of 374 professors and more than 4,700
students with backgrounds in the disciplines of electronics,
electrical engineering, physics, materials, chemistry, chemical
engineering, and mechanical engineering have joined the
TSMC and the University Shuttle Program participants enjoy
win-win collaboration through the program, which allows
graduate students to implement exciting designs and achieve
silicon proof points for innovation in various end-applications.
5.2.7 Future R&D Plans
To maintain its technology leadership, TSMC plans to continue
investing heavily in R&D. While its A16 and A14 advanced
CMOS logic nodes are progressing through the development
pipeline, the Company’s exploratory R&D work is focused
on nodes beyond A14, as well as on areas such as 3D
transistors, new memories, and low-R interconnect. This work
aims to lay a strong foundation to foster the development
of innovative technology platforms in the future. TSMC’s
3DFabric® advanced packaging R&D is developing innovations
in subsystem integration to further enhance advanced CMOS
logic applications. The Company maintains an intense focus
on new specialty technologies such as RF and 3D intelligent
sensors for 5G and smart IoT applications. TSMC’s research
continues to develop novel materials and new processes,
devices and memories that may be adopted in the longer-term
future of ten years and beyond. The Company also continues to
collaborate with external research bodies from academia and
industry consortia, aiming for early awareness and adoption of
future cost-effective technologies and manufacturing solutions.
With a highly competent and dedicated R&D team and an
unwavering commitment to innovation, TSMC is confident
in its ability to drive future business growth and profitability
for years to come by delivering advanced, competitive
semiconductor technologies to its customers.
Summary of TSMC’s Major Future R&D Projects
Project Name
Description
2nm logic technology platform and
applications
3D CMOS technology platform for SoC
A16 logic technology platform
3D CMOS technology platform for SoC
A14 and beyond logic technology platform
and applications
3D CMOS technology platform for SoC
3DIC
Cost-effective solutions with better form factor
and performance for 3DIC integration
Next-generation lithography
Next-generation EUV lithography and related
patterning technology to extend Moore’s Law
Long-term research
Specialty SoC technology (including new
Emerging memory NVM, MEMS, RF, analog)
and transistors with 8 to 10 years horizon
The projects above account for roughly 83% of the total R&D budget for 2025. Total R&D budget is
estimated to be around 7% of 2025 revenue.
research centers. In 2022, TSMC also actively supported the
establishment of semiconductor or key technology research
academies at National Taiwan University, National Cheng Kung
University, National Tsing Hua University, National Yang Ming
Chiao Tung University, National Sun Yet San University, and
National Chung Hsing University, providing continuous funding
for forward-looking research in Taiwan’s semiconductor field
and planning scholarship programs to encourage students
who are interested in the field. In 2019, the company jointly
launched the TSMC-NTHU Semiconductor Program to enhance
the quality and number of domestic semiconductor students
and attract more outstanding students to a career in the
semiconductor industry. By 2024, the list of school partners
had grown to seventeen universities, including National
Taiwan University, National Cheng Kung University, National
Yang Ming Chiao Tung University, National Taipei University
of Technology, National Taiwan University of Science and
Technology, National Central University, National Sun Yet
San University, National Chung Hsing University, National
Chung Cheng University, Feng Chia University, Yuan Ze
University, Chung Yuan Christian University, National Taiwan
Normal University, National Yunlin University of Science and
Technology, National Pingtung University of Science and
Technology, and National Kaohsiung University of Science and
Technology, with over 13,000 students enrolled to date. In
addition, TSMC has long conducted strategic research projects
with over 20 top overseas universities, such as Massachusetts
Institute of Technology, Harvard University, Stanford University,
National University of Singapore, University of Chicago,
University of Toronto, University of California, Berkeley,
University of Tokyo, University of California, Los Angeles,
Nanyang Technological University and so on, focusing on
innovative capabilities in transistors, interconnect, materials,
device simulation and circuit design.
TSMC University Shuttle Program
The TSMC University Shuttle Program was established to
provide professors at outstanding research universities
worldwide with access to the reliable silicon process
technologies needed to develop innovative circuit design
concepts. In 2024, TSMC introduced its 7nm technology into
ongoing industry-academia collaboration projects for the
first time, allowing outstanding students to utilize excellent
technology to realize innovations and foster closer cooperation
between industry and academia. The University Shuttle
Program provides access to TSMC silicon process technologies
for digital and analog/mixed-signal circuits, RF designs,
non-volatile memory design and ultra-low power designs.
5.3 Manufacturing Excellence
5.3.1 GIGAFAB® Facilities
Maintaining reliable production capacity is a key manufacturing
strategy at TSMC. The Company currently operates four
12-inch GIGAFAB® facilities – Fab 12, 14, 15 and 18. The
combined capacity of the four facilities exceeded 12.74 million
12-inch wafers in 2024. Production within these facilities
support 0.13μm, 90nm, 65nm, 40nm, 28nm, 16nm, 7nm,
5nm and 3nm process technologies and their sub-nodes.
The GIGAFAB® facilities are coordinated by a centralized
management system known as super manufacturing platform
(SMP) to provide customers with consistent quality and
reliability, greater flexibility to cope with demand fluctuations,
and faster yield learning and time-to-volume production, as
well as better-function and lower-cost product requalification.
In 2024, TSMC established 2nm advanced manufacturing
facilities in Hsinchu and Kaohsiung, and expanded advanced
packaging capabilities in Chiayi and Tainan. These efforts help
clients accelerate innovation to meet the rapidly changing
market challenges and satisfy greater demand brought by
the growth of AI. Besides, to better serve the needs of global
customers, TSMC has made significant progress at several
overseas production sites, such as those in Arizona, U.S., and
Kumamoto, Japan, enhancing the maturity and stability of its
global operations.
5.3.2 Engineering Performance Optimization
As advanced technology continues to evolve and IC geometry
keeps shrinking, the need for tighter manufacturing process
and quality control becomes extremely challenging. TSMC has
tailored its manufacturing infrastructure to handle a diversified
product portfolio that uses strict process control to meet
tightened specs and higher product quality, performance and
reliability requirements from customers. TSMC’s process control
systems are integrated with numerous intelligent functions to
achieve excellence in both quality and manufacturing. Through
intelligent detection, smart diagnosis, and cognitive action,
the Company produces remarkable yield enhancement, quality
assurance, workflow improvement, fault detection, and cost
reductions, while shortening its R&D cycle.
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To meet AI’s stricter quality requirements for mobile, high performance computing (HPC), automotive and the Internet of Things
(IoT), TSMC is implementing artificial intelligence (AI) and machine learning technologies, and has developed systems for precise
fault detection and classification, intelligent advanced equipment control and intelligent advanced process control to ensure the
consistency of tool matching and process stability. Combining intelligent process variation detection and engineering analysis with
foundry know-how to identify potential defects and minimize the convergence of process variation through self-diagnosis and
cognitive action. As the result, each chip can be precisely controlled at the nanometer level to produce the highest quality wafers for
customers.
In 2024, TSMC extended its intelligent manufacturing systems from the front-end fabs to the back-end fabs. This ensured significant
improvements in product quality, product production cycle and machine productivity across all production stages, from wafer to die
packaging.
5.3.3 Agile and Intelligent Operations
The Company’s intelligent operating system drives manufacturing excellence. Intelligent manufacturing technologies are widely
applied to lean manufacturing, employee productivity, equipment productivity, process and equipment control, quality defense,
and robotic control to optimize quality, productivity, efficiency, flexibility, and accelerated innovation. TSMC has also integrated
new applications such as intelligent mobile devices, IoT, edge computing, and mobile robot, with automated material handling
systems (AMHS), which was successfully expanded to serve and connect multiple mega fabs, bringing higher efficiency and stability
to the production process, significantly enhancing overall capacity. Furthermore, TSMC actively collaborated with global supply
chain partners to ensure that production standards and service quality met global consistency and further utilizes advanced artificial
intelligence algorithms to optimize the learning curve of cutting-edge process technologies. This accelerates innovation in process
control techniques, achieving convergence of variations to atomic-level precision, thereby further solidifying and expanding TSMC’s
competitive edge over competitors.
5.3.4 Digital Excellence
To meet strong pent-up demand from customers, TSMC continues to implement technology to transform the “automated fab”
into the “intelligent fab,” with the simultaneous improvement of product quality, equipment capacity, and personnel effectiveness.
Intelligent fab has integrated the domain knowledge of semiconductor manufacturing, enabled system self-learning, and expanded
the application of AI and machine learning, which includes dispatching, equipment tuning, process control, equipment diagnosis
and maintenance, and quality inspection. This frees today’s engineers to focus on problem solving. TSMC is actively applying
Generative Artificial Intelligence (Generative AI) technology, combining it with years of accumulated semiconductor manufacturing
experience. Through digital collaboration between personnel and AI, the company strives to enhance work efficiency and quality.
Looking ahead to the future, all manufacturing improvement plans and productivity enhancements within the fab can be
synchronized across global fabs through the Global Manufacturing and Digital Workflow Management Platform, which supports
multiple languages. Furthermore, by utilizing cloud management and more flexible and efficient collaborative operation models,
TSMC achieves consistency in operational efficiency and manufacturing quality across multiple sites, realizing the goal of global
integrated manufacturing.
5.3.5 Raw Materials and Supply Chain Management
In 2024, in collaboration with various fab operations, quality management, and related business units, TSMC continued to work
hand in hand with suppliers to review and resolve issues related to capacity shortages, quality defects, and potential supply chain
risks. Additionally, TSMC and its suppliers are committed to the development of advanced materials, process innovation, quality
improvement, and supply chain energy conservation and carbon reduction, with the aim of promoting the development of a
sustainable supply chain and achieving mutually beneficial outcomes.
Raw Materials Supply
Major Materials
Major Suppliers
Market Status
Procurement Strategy
Raw Wafers
A Company
B Company
C Company
D Company
E Company
Supply and demand equilibrium
●TSMC’s suppliers of silicon wafers are required to pass stringent quality certification
procedures.
●TSMC procures wafers from multiple sources to ensure adequate supplies for volume
manufacturing and to appropriately manage supply risk.
●Raw wafer quality enhancement programs are in place to support TSMC’s technology
advancement.
●TSMC regularly reviews the quality, delivery, cost, sustainability and service performance
of its wafer suppliers. The results of these reviews are incorporated into subsequent
purchasing decisions.
●A periodic audit of each wafer supplier’s quality assurance system ensures that TSMC
can maintain the highest quality in its own products.
●TSMC takes various approaches with suppliers to optimize cost and supply.
Chemicals
F Company
G Company
H Company
I Company
J Company
Supply and demand equilibrium
●Most suppliers have located their new operations closer to TSMC’s major
manufacturing facilities, thereby improving procurement logistics and reducing supply
risk.
●All supplied products are regularly reviewed to ensure that TSMC’s specifications are
met and product quality is satisfactory.
●In order to effectively manage costs and supply chain, TSMC has collaborated with
suppliers and adopted various strategies.
●TSMC encourages and collaborates with chemical suppliers to implement innovative
green manufacturing improvement programs.
Lithographic
Materials
K Company
L Company
M Company
N Company
O Company
Supply and demand equilibrium
●TSMC works closely with suppliers to develop materials that meet all application and
cost requirements.
●TSMC and suppliers periodically conduct programs to improve their quality, delivery,
sustainability and green policies, and jointly set improvement programs and monitor
progress to ensure continuous improvement in TSMC’s supply chain.
Gases
P Company
Q Company
R Company
S Company
T Company
Supply and demand equilibrium
●The majority of these suppliers have facilities in multiple geographic locations, which
minimizes supply risk for TSMC.
●TSMC conducts periodic audits to ensure that these suppliers meet TSMC’s standards.
Slurry, Pad, Disk
U Company
V Company
W Company
X Company
Y Company
Supply and demand equilibrium
●TSMC works closely with suppliers to develop materials that meet all application and
cost requirements.
●TSMC and suppliers periodically conduct programs to improve their quality, delivery,
sustainability and green policy, and jointly set improvement programs and monitor
progress to ensure continuous improvement in TSMC’s supply chain.
●Most suppliers have relocated or plan to establish new manufacturing sites closer to
TSMC’s major manufacturing facilities, thereby improving procurement logistics and
reducing supply risks.
Supplier
2024
2023
Procurement Amount
As % of 2024 Total
Net Procurement
Relation to TSMC
Procurement Amount
As % of 2023 Total
Net Procurement
Relation to TSMC
Company A
19,640,121
21%
None
17,763,637
20%
None
Company B
18,225,314
19%
None
17,862,380
20%
None
Others
57,754,619
60%
-
53,109,061
60%
-
Total Net Procurement
95,620,054
100%
-
88,735,078
100%
-
●Reason for Increase or Decrease: No significant change.
Unit: NT$ thousands
Suppliers Accounting for at Least 10% of Annual Consolidated Net Procurement in 2024 and 2023
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5.3.6 Quality and Reliability (Q&R)
TSMC strives to offer excellence in semiconductor
manufacturing services to all its customers worldwide. The
Company is dedicated to providing outstanding quality in every
facet of its business and maintains a culture of continuous
improvement to assure customer satisfaction. TSMC
implements containment and preventive measures to protect
customers from potential product defects.
In the technology development stage, the Q&R organization
helps customers design in superior product reliability. In
2024, Q&R worked continuously with R&D in advanced
logic, specialty and advanced packaging technologies
throughout development and qualification stages to ensure
meeting commitments to customers with respect to device
characteristics, process yield and product reliability.
For advanced logic technology, following the successful mass
production of the 3nm and its enhanced version N3E FinFET
technology, Q&R also successfully completed the process
technology and product quality and reliability certification
for the performance-enhanced version N3P. For specialty
technologies, Q&R successfully qualified CIS 3-wafer stacking
product reliability certification for mass production and
completed the qualification of 28nm high-performance mobile
computing embedded RRAM technology for automotive
grade-1. Regarding advanced packaging technology, TSMC
integrates front-end wafer processing with back-end chip
packaging to provide advanced packaging solutions. In 2024,
Q&R completed certification for CoWoS® technology with
larger interposer sizes and initiated mass production. It also
completed the first System on Wafer certification and mass
production, readying its advanced packaging technology
platform for applications in AI and HPC. As for InFO_PoP
technology, the Company’s mass produced 3nm chips
achieved higher efficiency and lower power consumption for
mobile devices.
To continuously reduce product defects, enhance process
controls, facilitate early detection of abnormalities and prevent
quality problems in general, Q&R collaborates with other
operational entities to improve real-time defense systems using
advanced AI to continuously optimize quality tools through
statistical methods. Q&R and the Company’s fabs have also
worked together on enhancements for automotive product
quality improvement, including design rule implementation
and migration to Automotive Quality System 2.0. This covers
process capability requirements to tighten in-line and wafer
acceptance testing in fabs and the handling of maverick
wafers. Q&R also provides dedicated resources for field/line
return analysis and timely physical failure analysis (PFA) for
process improvement to meet automotive customers’ stringent
defective parts per million (DPPM) requirements.
Q&R successfully completed a series of digital transformation
development tasks, applied in areas such as raw material
management, statistical process control (SPC), metrology,
automatic defect detection and classification, and laboratory
analysis. By leveraging advanced digital technologies and
platforms, TSMC achieved its digital transformation targets.
Moreover, during the initial phase of overseas expansion,
Q&R addressed the challenges of personnel training, remote
management, and support through digital transformation.
This facilitated successful remote management, achieving
zero distance and zero-time difference in quality management
across global fabs. In 2025, Q&R will continue to promote
the development of quality management methods and
professional training and apply AI technologies to consolidate
TSMC’s comprehensive competitive advantages in this industry.
Q&R’s supply chain management strategy covers four core
areas: quality excellence, supply chain responsibility, green
manufacturing and operational sustainability. In addition to
using professional expertise and best-known methods to assist
suppliers in making improvements, Q&R’s state-of-the-art
chemical lab monitors the quality of raw materials and helps
the R&D achieve breakthroughs in advanced materials,
improving product and process yields. The lab also guides
material suppliers in setting standards for the use of
internationally concerning hazardous substances (such as
carcinogens, reproductive mutagens, and teratogens), and
performs classification and sampling to manage potential
risks in raw materials. Additionally, Q&R collaborates with the
material supply chain management division to assist suppliers
in expanding the production capacity of high-quality raw
materials. This collaboration has successfully established new
production lines overseas that meet quality standards, thereby
building a robust raw material supply chain. This effort not
only enhances the industrial competitiveness of TSMC and its
supply chain but also achieves a win-win strategy that balances
quality and capacity.
Q&R assisted suppliers in developing recycling projects and
successfully improved the quality of several recycled chemicals
to achieve an electronic grade quality level in 2024. Q&R
collaborates with operations to expand engineering verification
for recycled chemicals, meeting TSMC’s quality requirements
and environmentally friendly sustainability goals. Q&R is also
committed to the continual improvement of local supply
chains and developing local talent. In 2024, TSMC again
collaborated with SEMI (Semiconductor Equipment and
Materials International) to hold the sixth Strategic Materials
Conference (SMC) in Taiwan and invited domestic and overseas
members to share the most advanced material technology,
to motivate talented personnel and elevate the international
competitiveness of the local supply chain.
To promote employees’ problem-solving skills and develop
related quality systems and methodologies, TSMC fully
supports continuous improvement programs and initiates
several Company-wide symposia and training programs.
To strengthen TSMC’s quality culture, Q&R began offering
quality culture courses for new employees in 2022. These
courses help new employees establish the correct quality
values and accelerate the integration and adaptation to their
roles. In addition to internal cross-organizational learning
and exchange, TSMC participates in the Taiwan Continuous
Improvement Award (TCIA) to promote the development
of other local industries by sharing its experiences. In 2024,
TSMC’s outstanding performance was recognized with eight
gold, one silver and three “best improvement and innovation”
awards. Meanwhile, Q&R encouraged local material suppliers
to participate in the TCIA program for capability and quality
culture enhancement, and they won a total of three gold, three
silver, and six bronze medals in 2024.
Thanks to qualification in technology development, real-time
defense systems and innovative applications in semiconductor
manufacturing services, as well as its continuous quality
improvement culture, TSMC had no product recalls initiated
by customers due to safety concerns in 2024. Meanwhile, a
third-party audit verified the effectiveness of the Company’s
quality management systems in compliance with IATF
16949: 2016 and IECQ QC 080000: 2017 requirements.
In 2024, TSMC’s backend fabs also continually passed the
certification of American National Standards Institute ANSI/ESD
(electrostatic discharge) S20.20 standard. Regular customer
feedback indicates that products shipped from TSMC have
consistently met or exceeded all field quality and reliability
requirements. In these ways, TSMC helps customers improve
time-to-market delivery and competitiveness with excellent,
reliable products for the major growth markets that the
Company serves: HPC, smartphones, IoT, automotive, and
digital consumer electronics.
5.4 Customer Trust
5.4.1 Customers
TSMC has customers with wide-ranging product portfolios
who are top-tier in each sector within the semiconductor
industry from all over world, including fabless semiconductor
companies, system companies, and integrated device
manufacturers.
Customer Service
TSMC is committed to providing customers with the highest
quality service. The Company believes that excellent customer
service is key to maintaining and improving customer
satisfaction, solidifying existing customers, and attracting new
customers. To this end, TSMC has established a dedicated
customer service team to act as the primary contact window,
facilitating seamless communication and coordination with
customers in areas such as product design, mask making,
wafer manufacturing, and 3DFabric® technology services,
ensuring world-class service every step of the way. TSMC is
committed to continuously improving customer satisfaction,
earning customer trust, maintaining sales and profitability, and
solidifying its role as one of the most reliable partners.
To improve customer interaction on a real-time basis,
TSMC-Online offers a suite of web-based applications to
provide more proactive customer service and support in
design, engineering and logistics. Customers thus have 24-7
access to critical information. TSMC-Online facilitates design
collaboration by maintaining data availability and accessibility
and providing customers with accurate up-to-date information
at each stage of the design process. Engineering collaboration
focuses on wafer, and 3DFabric® processes, yield and wafer
acceptance test analysis, as well as data quality and reliability.
Logistics collaboration includes information on wafer
fabrication, advanced packaging, testing, and transportation.
In addition, customers can generate customized reports
through TSMC-Online to meet their system automation needs.
Customer Satisfaction
To ensure customer satisfaction, TSMC must fully comprehend
its customers’ needs. To this end, the Company works with
third-party consulting firms to conduct annual customer
satisfaction surveys (ACSS) with the majority of existing
customers, either via online surveys or in direct interviews. In
addition to the survey, TSMC also conducts quarterly business/
technical reviews (QBR/QTR) with customers to collect their
feedback on a regular basis. Customer feedback is routinely
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reviewed, analyzed and used to develop appropriate improvement plans, all in all becoming an integral part of the customer
satisfaction process. Through surveys and feedback reviews, TSMC is able to closely interact with customers, provide better services,
and enhance the quality of customer collaboration.
Customer Information Protection
TSMC complies with applicable regulations and international standards to protect customer information and has received ISO
27001 international information security certification. In addition, relevant proprietary information protection policies and standard
work processes are also established to ensure only authorized personnel can access the engineering and production data of any
specific customer.
Customers Accounting for at Least 10% of Annual Consolidated Net Revenue in 2024 and 2023
Unit: NT$ thousands
Customer
2024
2023
Net Revenue
As % of 2024 Total
Net Revenue
Relation to TSMC
Net Revenue
As % of 2023 Total
Net Revenue
Relation to TSMC
Customer A
624,345,477
22%
None
546,550,925
25%
None
Customer B
352,271,213
12%
None
N/A
N/A
None
Customer C
N/A
N/A
None
241,152,357
11%
None
Others
1,917,691,009
66%
-
1,374,032,559
64%
-
Total Net Revenue
2,894,307,699
100%
-
2,161,735,841
100%
-
●Reason for Increase or Decrease: The changes of sales amount and percentage were mainly due to customer product demand
change.
5.4.2 Open Innovation Platform®
At TSMC, innovation has always been an exciting challenge. Competition continues to intensify in the face of increasing industry
consolidation and the commoditization of technology at more mature, conventional levels, and thus semiconductor companies
must find ways to keep innovating in order to survive and prosper. One way to promote innovation is through active collaboration
with external partners. At TSMC this is known as Open Innovation®, an “outside in” approach to complement traditional “inside
out” methods. TSMC has chosen this path to stimulate innovation via its OIP initiative, which is a key part of the TSMC Grand
Alliance.
The OIP initiative is a comprehensive design technology infrastructure that encompasses all critical IC implementation areas to
lower design barriers and improve design cycle times and first-time silicon success rates. OIP promotes the speedy implementation
of innovation within the semiconductor design community and its ecosystem partners using TSMC’s process technology and OIP
partners’ solutions in design implementation and backend services.
Crucial to OIP are ecosystem interfaces and collaborative components initiated and supported by TSMC to empower innovation
throughout the supply chain and, in turn, drive the creation and sharing of new revenue and profits. TSMC’s active accuracy
assurance (AAA) initiative is key to OIP, providing the precision and quality required by the ecosystem interfaces and collaborative
components.
TSMC’s Open Innovation® model brings together the creative thinking of customers and partners under the common goal of
shortening each of the following: design time, time to volume production, time to market and, ultimately, time to revenue. The
model features:
●The foundry segment’s earliest and most comprehensive electronic design automation (EDA) certification program, delivering
timely design tool enhancement required by new process technologies.
●The foundry segment’s most comprehensive and robust silicon-proven IP (intellectual properties) and library portfolio.
●Alliance that enables semiconductor designing in the Cloud
for the benefit of scalability, agility and flexibility to meet
various customer requirements for work models.
●Alliance that provides design services to support customer
demand regarding resources and capabilities, depending on
the scope and various requirements in the semiconductor
design stages and value chain.
●Alliance to enables customers’ system-level designs for
integrating multiple chips/chiplets in 3D stacking and
advanced packaging.
●Participants consisting of 16 EDA partners, seven Cloud
partners, 40 IP partners, 29 design center alliance (DCA)
partners, eight value chain aggregator (VCA) partners and 23
partners in the new TSMC 3DFabric® Alliance.
●A partner management portal to facilitate communication
with ecosystem partners for efficient business productivity –
designed with a highly intuitive interface and accessible via a
direct link from TSMC-Online.
TSMC and partners work together proactively and engage
much earlier and deeper than ever before in order to address
the mounting design challenges of advanced technology
nodes. Through this early and intensive collaboration, OIP is
able to deliver the needed design infrastructure with timely
enhancement of EDA tools, early availability of critical IPs and
quality design services when customers need them. Taking
full advantage of the process technologies once they reach
production-ready maturity is critical to customer success.
Hence, this helps achieve DTCO among TSMC process
technologies, OIP design solutions and customer product
designs.
The 2024 annual OIP Ecosystem Forum in North America
demonstrated how TSMC and its ecosystem partners jointly
develop design solutions on top of TSMC’s advanced
technologies through OIP. At the forum, TSMC made key
presentations on its comprehensive 2nm technology family
and TSMC A16TM that continue the full-node PPA scaling
trend, together with the offering of high-density and
high-performance libraries and design solutions to support
smartphone and high-performance computing (HPC) design
applications. The Company also made presentations on the
readiness of analog cells that can help boost analog IP yields
and analog design productivity, with the design solutions to
enable EDA and design flow automation to support analog
design migration. In response to the rising demand for more
complex system level designs, TSMC collaborates with TSMC
3DFabric® alliance partners of 3DIC expertise in EDA, IP, DCA/
VCA, memory, substrate, outsourcing semiconductor assembly
testing (OSAT) and testing to provide 3D chip stacking and
2.5D advanced packaging design solutions, together with
EDA tools compliant to the 3Dblox® open standard to
facilitate integration of multiple chips/chiplets in system-level
designs using 3DFabric® technology services which include
TSMC-SoIC®, InFO and CoWoS®. The availability of the
aforementioned design ecosystem solutions helps customers
successfully pursue opportunities in all major markets: HPC,
smartphones, the Internet of Things (IoT), automotive and
digital consumer electronics.
5.5 Information Security Management
5.5.1 Information Security Policy and Organization
TSMC is committed to information security and confidentiality
protection for its customers, shareholders, and partners. To
this end, the Company has formulated, implemented and
regularly updated rigorous cybersecurity policies, procedures
and measures as reflected in TSMC’s Information Security
Declaration.
In 2022, following the regulations of the Financial Supervisory
Commission of Taiwan, TSMC appointed J.K Lin, Senior
Vice President of Information Technology, Material and
Risk Management, to take on the addition role of Chief
Information Security Officer (CISO). Starting from 2025,
TSMC appointed Cliff Hou, Senior Vice President and Deputy
Co-COO as CISO, who is responsible for the overall planning
and coordination of Company resources, communicating
on information security policies and directions. TSMC has
established a dedicated corporate information security (CIS)
organization, led by Director James Tu, to be responsible for
the implementation, planning, monitoring, and management
of information security. In 2024, in response to TSMC’s global
expansion, the organization was renamed Global Security
Management (GSM) to integrate and enhance corporate
security management. TSMC has also established the PIP and
Risk Committee and the IT Security Committee to cooperate
with the Company’s information technology and related
organizations to strengthen corporate information security
protection and management mechanisms. Both committees
are chaired by the CISO and comprise VP-level executives
who meet regularly to review and deliberate on important
information security policies as well as project implementation.
Every six months, GSM executives report risk management
measures to the Audit and Risk Committee, including global
information security trends, corporate information security
policies, plans, and implementation results. The chair of the
Audit and Risk Committee also reports on the effectiveness of
information security supervision and risk control measures to
the Board of Directors.
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5.5.2 Information Security Management Strategy and
Resources
To achieve TSMC’s information security goals and maintain
competitiveness, the corporate information security
organization actively strengthens security and confidential
information protection mechanisms. GSM sets clear policy,
procedures and guidelines and continuously enhances
the Company’s management systems and implements
comprehensive risk controls. In addition, GSM regularly
performs information security risk assessments and sets
priorities based on the impact and probability of a risk,
as well as the cost of reducing such risk. GSM uses the
plan-do-check-act (PDCA) methodology to continuously
enhance multi-layer information security defenses and establish
key performance indicators (KPIs) for information security. In
2024, TSMC invested in excess of NT$1 billion to strengthen
information security, involving more than 800 employees for
information security-related activities, with more than 1,000
external security personnel engaged in the physical aspects of
information security services.
5.5.3 Information Security Incident Handling and
Notification
TSMC has established enterprise risk management mechanisms
and procedures to handle information security incidents.
The mechanisms and procedures define relevant processes
and measures for incident notification, designation of
personnel responsible for handling material information
security incidents, and assessment of losses suffered as well as
additional measures needed, evaluation of information security
risks to the Company’s financial and operations, and proposed
countermeasures to mitigate these risks. In 2024 and as of the
Board of Directors
Audit and Risk
Committee
PIP and Risk Committee
Global Security
Management
IT Security Committee
Global Security Management Organization Structure
date of this Annual Report, TSMC has not suffered any financial
losses nor experienced any operational impact due to material
information security incidents.
5.6 Human Capital
Human capital is TSMC’s most treasured asset. The Company
strives to provide employees with meaningful work, continuous
learning, a healthy and inclusive workplace, and high-quality
compensation and benefits. TSMC goes beyond this by actively
encouraging employees to nurture and enjoy a healthy family
life, develop personal interests, expand social participation,
and, in general, live a happy life.
5.6.1 Human Rights Policy and Specific Actions
TSMC strongly believes that respecting human rights and
promoting a decent work environment are vitally important.
The Company is committed to supporting the international
human rights standards while complying with local laws in
all operating locations, treating and respecting all personnel
equally. The TSMC Human Rights Policy applies to the
management team and all employees (those employed by
TSMC and receiving wages or compensation), affiliated
enterprises, suppliers, contractors, partners (including
customers and communities), and other stakeholders
committed to eliminating any human rights violations.
Management Principles
●Human Rights Governance Structure
TSMC has established a human rights governance structure
with the Board of Directors at the highest level. The ESG
Committee has established a cross-department human
rights task force, encompassing Customer Service, Corporate
Sustainability, Environmental Safety and Health, Human
Resources, Information Technology, Corporate Information
Security, Materials Management, Legal, Operations, Quality
and Reliability, Research and Development and other functional
organizations to systematically and effectively promote human
rights management activities. In addition to regularly reporting
progress to the ESG Steering Committee, the chairperson of
the ESG Committee reports to The Nominating, Corporate
Governance and Sustainability Committee under the Board
of Directors on human rights management actions and
implementation results.
●Due Diligence
TSMC follows the recommendations of the OECD Due
Diligence Guidance for Responsible Business Conduct to carry
out the Company’s due diligence process. TSMC conducts
the due diligence process by embedding responsible business
practices into its policies and management systems, regularly
identifying and assessing risks, implementing prevention and
mitigation measures, and tracking mechanisms.
●Training and Advocacy
TSMC develops human rights protection training to establish
awareness and develop a culture of respecting human rights.
Through such training, the Company informs employees
about human rights concepts and their importance, accessible
grievance channels to all, and TSMC’s measures for the
management, prevention, and remediation of human rights
violations.
●Grievance Channels
TSMC establishes robust grievance and communication
channels and commits to protecting complainants. Potential
human rights violations can be reported anonymously or
through multiple communication mechanisms to provide
concerns or suspected violations to TSMC, and the Company
will initiate corresponding measures.
●Remediation
Once a human rights violation caused or contributed to by
TSMC is identified, the Company will initiate a remediation
mechanism based on the type of incident and, if necessary,
cooperate with relevant stakeholders to prevent recurrence.
●Communication and Disclosure
TSMC identifies affected individuals on a case-by-case basis
based on salient human rights issues to build a solid, trusting
relationship, and listens to the voices of stakeholders through
diverse, open, and two-way communication channels. The
Company regularly discloses human rights management goals,
actions, performance, and progress on the Company’s ESG
website, Sustainability Report, and Human Rights Report.
In 2024, the Company used the Responsible Business Alliance’s
Self-Assessment Questionnaire (SAQ) to identify the greatest
risks regarding labor, health and safety, environment, and
ethics matters and to formulate substantive actions and
managerial response. The SAQ scores of each of TSMC’s
operating fabs in Taiwan were in the low-risk range, defined as
80 points or above.
TSMC conducted multiple human rights protection training
sessions in 2024, encompassing a range of topics to ensure
a safe and respectful workplace. The training included
areas such as workplace safety and health, emergency
response procedures, first aid training, fostering a friendly
work environment, and anti-harassment training. The total
training hours are 191,983 hours, and a total of 79,610
employees have completed the training, accounting for 95%
of employees. To further promote human rights, TSMC offered
a course called “Build a Zero Tolerance Harassment Workplace
Environment Say NO to Sexual Harassment.” 69,051
employees completed this training, and the passing rate of the
post-training test was 100%.
TSMC abides by laws and regulations and respects the freedom
of collective consultation and assembly and association of
all employees. The Company will not interfere or intervene
with these activities. TSMC holds Silicon Garden meetings,
aka Labor-Management meetings, on a regular basis, listens
to employees’ opinions and makes timely and appropriate
responses through a diversified and comprehensive internal
communication framework, in order to strengthen the
communication between the Company’s management team
and employees and ensure harmonious employee relations.
5.6.2 Inclusive Workplace
TSMC is dedicated to solving some of the world’s most
complex technological challenges to accelerate innovations
around the world. This requires a culture that encourages
contributions from all employees, at every level, in any role,
regardless of their background or identity. Building an inclusive
workplace reflects TSMC’s core values and business philosophy.
Through actively establishing the open-style management
system, the Company encourages diverse talents to join the
semiconductor industry.
To realize TSMC’s People Vision of fostering an inclusive
environment, the Company focuses on three endeavors:
providing inclusive experience throughout employee lifecycle,
supporting diverse talents through employee resource groups
(ERGs), and connecting with external resources and partners.
At every stage of employees’ lifecycle, TSMC constantly
examines the procedures and policies to ensure recruitment
channels and development opportunities are in place for the
diverse talents. In 2024, TSMC hosted its second inclusive
workplace series campaign in hope to foster empathy
and allyship for diverse talents. Furthermore, TSMC also
launched programs on inclusive workplace champions at its
headquarters to encourage employees to take actions through
continual participation in inclusive workplace initiatives. To
support diverse talents, TSMC has established four ERGs:
Women@tsmc, Global Family@tsmc, Accessibility@tsmc, and
Veterans@tsmc (exclusively in the U.S.) to focus on the areas of
gender, race/nationality, disability, and U.S. protected veterans.
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ERGs are open to all employees, regardless of whether they
possess the relevant identity, allowing employees to participate
and show their support, aiming to enhance their sense of
belonging. As for connecting with external resources, TSMC
benchmarks with international standards and establishes
partnerships with professional organizations to ensure
alignment with global best practices. Our external partners
include global organizations such as Global Semiconductor
Alliance (GSA) and Disability:IN.
At the same time, TSMC also developed a learning structure
and core training courses by job levels for all employees. The
aim is to help employees understand the essence of inclusion,
help them be mindful of any unconscious biases, cultivate their
ability to identify and respond appropriately to biases while
enhancing their awareness of this topic.
5.6.3 Workforce Structure
At the end of 2024, TSMC had 83,825 employees worldwide,
including 8,737 managers, 40,477 professionals, 10,207
assistants and 24,404 technicians. The following two tables
summarize the makeup of TSMC’s workforce and the female
portion of management as of the end of February 2025:
Workforce Structure
12/31/2023
12/31/2024
02/28/2025
Job
Managers
7,861
8,737
8,920
Professionals
36,807
40,477
41,139
Assistant
Engineer/Clerical
9,235
10,207
10,469
Technicians
22,575
24,404
24,606
Total
76,478
83,825
85,134
Gender
Male
65.8%
66.3%
66.4%
Female
34.2%
33.7%
33.6%
Education
Ph.D.
3.9%
3.7%
3.7%
Master’s
47.7%
48.5%
48.6%
Bachelor’s
29.5%
29.9%
29.9%
Other Higher
Education
8.0%
7.5%
7.4%
High School
10.9%
10.5%
10.4%
Average Age
36.2
36.2
36.2
Average Years of Service
8.7
8.7
8.7
Female Ratio in Management
12/31/2023
12/31/2024
02/28/2025
Female Ratio in Junior Management
14.3%
15.0%
15.1%
Female Ratio in Senior Management
13.7%
14.0%
14.1%
Female Ratio in Top Management
5.9%
11.4%
10.8%
Note: Junior management positions include first-line managers; top management positions include vice
presidents and higher as well as the CEO.
5.6.4 Recruitment
Sharing a common vision and values by the Company’s
employees is key to TSMC’s growth and success. TSMC
is an equal opportunity employer and is committed to
searching and hiring top-notch professionals in all positions
through open and fair recruitment processes. In addition to
prioritizing integrity and ability as the primary conditions for
employment, the Company also considers suitability for the
position, evaluating all candidates equally regardless of gender,
age, disability, religion, race, ethnicity, nationality, political
affiliation, or sexual orientation.
TSMC adheres to its core values and continues to move
towards its lofty vision. To ensure the talent it needs for the
continuous growth, the Company has expanded its recruitment
channels to attract top-notch professionals in all positions and
employed over 10,000 people worldwide in 2024.
5.6.5 People Development
TSMC is committed to realizing its People Vision by inspiring
passion and enabling employees to perform their best in
the workplace. This, in turn, helps establish a continuous
and stable talent supply system, ensuring the Company’s
sustainable growth. To achieve People Vision, TSMC has
developed the “TSMC Talent Development Model” as the
cornerstone, which emphasizes two strategies: (1) unleashing
employees' potential and innovation, i.e. encouraging and
enabling self-learning and continuous innovation to create a
positive impact on the Company and society, and (2) equipping
employees with future capabilities, i.e. preparing employees
with the skills for future work and building a talent pool.
Following the two strategies, TSMC has initiated ability-based
learning programs. In addition to focusing on the core
attributes – character, perseverance, resilience, initiative,
innovation, decisiveness and judgment, broadness of
mind and breadth/depth of knowledge, the Company also
develops leadership, professional and general skills according
to colleagues’ different positions and the needs of the
Company’s organization. Meanwhile, TSMC offers diverse
and versatile learning approaches such as 70% experiential learning, 20% feedback and guidance, 10% education and training,
blended learning, and future AI adaptive learning. These approaches are integrated with training and development programs at
all levels, systematically cultivating the capabilities required by all employees, thereby supporting employees and TSMC in achieving
continuous growth and breakthroughs.
In 2024, TSMC offered 10,038 in-person courses (including face-to-face and live online), and 35,596 online resources (including
internal and external learning platforms), providing over 8.42 million hours of training with a total in excess of 3.5 million
participants. The average annual training time per employee grew to 100.5 hours, an increase of 17.7% over the previous year.
TSMC training expenses reached NT$1.1 billion in 2024 and the average training cost per employee was approximately NT$13,395,
a 15.4% increase over the previous year. (Note)
5.6.6 Competitive Overall Compensation
In order to develop the most effective compensation strategies, TSMC reviews and selects benchmark companies annually and
collects market information on compensation data of the whole industry for competitiveness analysis.
TSMC’s compensation program includes a monthly salary, performance bonuses based on quarterly business results, and profit
sharing based on annual results.
TSMC Talent Development Model
TSMC Vision
Be the most advanced and
largest technology and
foundry services provider
Power-Up Talent Supply
Establish a continuous and stable talent supply system
Unleash Employees’
Potential & Innovation
Enable self-learning and create
positive impact to the company
and the society
Equip Employees
with Future Capabilities
Prepare employees with the skills
for the future and build a talent
pool
Ability-Based
Learning Program
TSMC People Development
Framework & organization
development diagnosis
Diverse & Versatile
Learning Approach
70/20/10 principle, blended
learning & AI adaptive learning
Training &
Development
Programs at All Levels
Systematic learning roadmap
Company Sustainability
Sustainable Talent
Pipeline
Talent Development
Strategy
Learning Momentum
Cultivation
Note: In order to align the definition of training expenses with international market research information (as in Training magazine) to include total training spending, outside products and services, and training staff
payroll, starting in 2022 the Company began including training staff payroll in annual training expenses.
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The purpose of the business performance bonus and profit
sharing programs is to reward employee contributions
appropriately, to encourage employees to work consistently
toward ensuring TSMC’s success, and to align employee
interests with those of TSMC’s shareholders so as to achieve
win-wins for the Company, shareholders and employees
alike. The Company determines the bonus and profit sharing
amounts based on operating results and domestic industry
practice. The amount and distribution of the employee
bonuses are recommended by the compensation and
people development committee to the Board of Directors for
approval. Individual rewards are based on each employee’s job
responsibility, contributions and performance.
A similar approach is used in TSMC’s compensation programs
at subsidiaries. In addition to providing employees with a
locally competitive base salary, annual bonuses are granted
as a part of total compensation, in line with local regulations,
market practices and the overall operating performance of
each subsidiary.
In addition to the competitive compensation described above,
the Company established a global employee stock purchase
plan in 2022, which is available to all regular employees
of TSMC and its wholly owned subsidiaries, and in 2024,
extended the coverage to majority-owned subsidiaries as well.
Through this plan, employees are encouraged to participate in
the Company’s long-term success.
To strengthen the link between TSMC managers and
shareholders’ interests, the Company established corporate
officer shareholding guidelines in 2020. The required holding
value of TSMC shares by the chairman, CEO, and corporate
officers is proportional to their annual base salary: 18 times for
the chairman and CEO, nine times or three times for officers
(three times only for officers hired in overseas). Officers must
reach the required value within three years of appointment and
maintain it for the entire period of employment. Furthermore,
to attract and retain corporate executives and other critical
talent and to link their compensation with shareholder interests
and environmental, social, governance (ESG) achievements,
TSMC established employee restricted stock awards for each
year starting from 2021 to 2024.
5.6.7 Employee Benefits Exceed Legal Requirements
TSMC generally offers employee benefits superior to those
required by applicable statutes. In addition to twelve national
holidays per year, seven memorial days are also designated
as holidays. To alleviate traffic congestion during commuting
hours, support family care needs, and create an inclusive
workplace, the Company implemented a staggered commuting
policy in 2023, which is continuously optimized. To encourage
employee participation in the Company’s vision of “making
society better,” TSMC provides one day of volunteer leave
per year. The Company provides employees with statuary
labor insurance and national health insurance as well as
comprehensive paid group insurance plans. Coverage includes
life insurance and insurance for accidents, hospitalization,
cancer, critical illness, maternity and international business
travel. There are also various and unique employee self-paid
group insurance plans available for employee family members.
The group insurance coverage is extended to employees on
approved unpaid leave. To better support new hires, TSMC
offers one day of annual leave for every two months of service
in the first year. Employees who need to take long leaves of
absence for military service or severe injuries can also apply
for unpaid leave, and then apply for reinstatement after the
expiration of the period. In addition, TSMC provides pensions,
financial assistance for emergencies, subsidies for marriage,
childbirth and funerals, as well as discounts in designated
shops. In response to the continuous growth and diversification
of its workforce, and to enhance support for employees’ lives
and family care, the Company launched the “TSMC Global
Flexible Benefit Plan (abbreviated as tFlex)” in 2024, building on
its existing benefits system. This plan is divided into four main
categories: medical and insurance, family care, wellness, and
development and volunteering. The plan offers each full-time
employee worldwide flexible benefit points equivalent to
US$250 (for employees in Taiwan, it’s equivalent to NT$8,000)
per year. Employees can independently choose and redeem
benefits that align with their lifestyle.
In accordance with local laws and regulations, TSMC provides
breastfeeding and breast milk collection rooms. To help
employees balance their personal and work lives, TSMC not
only offers parental leave but also provides a comprehensive
leave management system. To further create a family-friendly
workplace and support for TSMC employee parenting needs, in
2023 the Company implemented the TSMC Childcare Benefit
Program 2.0, to extend maternity leave for a second birth
from 12 to 16 weeks and a third birth from 16 to 20 weeks.
The maternity subsidy increased to a maximum of NT$20,000
(NT$10,000 from employee welfare committee and maximum
NT$10,000 maternity insurance). TSMC has set up four onsite
kindergartens for employees in Taiwan. In addition, a holiday
STEAM (science, technology, engineering, art and math)
campus has been organized for employees’ children.
All TSMC facilities are equipped with 24-hour Wellness Center,
where occupational health professionals (physicians, nursing
practitioners, psychologists) and appointed onsite physicians
provide quality services beyond those required legally. The
Wellness Center work with hospitals and employee assistance
program service providers to offer comprehensive support
for the emotional and physical well-being of employees. In
addition to annual checkups for all employees, TSMC provides
employees with five advanced checkup items upon completion
of every five years of service. The Company encourages
employees to exercise regularly by subsidizing approximately 70
clubs or exercise facilities, and holding regular sports events to
help employees find peers with similar sports interests. Also, to
help employees balance their work and life, TSMC provides:
●Convenient onsite services and amenities such as in-fab
cafeterias, convenience stores, and other services
●Comprehensive health management services, including in-fab
clinic services, post health-exam follow-up activities, and
employee assistance programs
●Diverse employee welfare programs, leisure and art events,
hobby clubs, vibrant sports centers and onsite preschool
services to meet employees’ needs for childcare, festival
bonuses and emergency subsidies if and when needed
Vacation and insurance policies at TSMC’s overseas offices are
designed to comply with local regulations. In China, North
America and Europe, TSMC provides more vacation days to
employees than legally required. In overseas offices, TSMC
offers a more comprehensive life and medical insurance than
required by local regulations and customs.
5.6.8 Diverse Employee Recognition
TSMC sponsors various internal award programs to recognize
employees for outstanding achievement, both individual and
at a team level. With these award programs, TSMC aims to
encourage continued employee development, which also
enhances the Company’s competitiveness.
The award programs include:
●TSMC Academy to recognize outstanding scientists and
engineers whose individual technical capabilities have made
significant contributions
●TSMC Excellent Labor Award to recognize technicians
whose outstanding performances have made significant
contributions
●Total Quality Excellence to recognize employees’ continuous
efforts in creating value at each fab
●Service Award to recognize and show appreciation of senior
employees for their long-term commitment and dedication
●Excellent Instructor Award to praise the outstanding
performance and contribution of internal instructors of
training courses for employees
Apart from the recognitions above, there are function-wide
awards dedicated to innovation, such as the Idea Forum, the
Total Quality Excellence Award and the ESG Award, which
recognize employee initiative and continuous implementation
of innovative practices. In addition, TSMC encourages
employees to participate in external talent activities and
competitions. In 2024, distinguished TSMC employees
continued to be recognized through a host of awards, such as
the Model Labor Award, the Excellent Young Engineers Award,
the Outstanding Engineer Award, the Taiwan Continuous
Improvement Awards, the National Manager Excellence Award
and the National Industrial Awards.
5.6.9 Employee Engagement
The Company encourages employees to maintain a healthy and
well-balanced life while pursuing their career goals effectively.
TSMC facilitates employee communication and provides
employee caring, benefit, rewards and recognition programs.
Employee Communication
TSMC values employee communication and is committed
to keeping communication channels open and transparent
between managers and employees, and amongst peers. The
Company is committed to ensuring that employees are able
to communicate openly and share ideas and concerns with
management regarding work conditions and management
practices without fear of recrimination, reprisal, intimidation
or harassment. TSMC makes continuous efforts to listen to
employees and to facilitate mutual and timely employee
communication, through multiple channels and platforms,
which in turn fosters harmonious labor relations.
TSMC conducts biannual face-to-face CEO dialogue sessions
in Hsinchu, Taichung, and Tainan, which allows the employees
to make suggestions, express their thoughts and get direct
feedback from the CEO. In addition, the Company has also
enlarged the scope of the labor-management meeting,
transforming it into the Silicon Garden Meeting, which helps all
employees feel free to put forward their ideas so the Company
can take appropriate action.
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System/
Committee Chair
Employee Voice Channels
•Ombudsman System
•Employee Opinion Box
•Whistleblower Procedures
•Fab Caring Circle
•Ethic Report Channel
•Sexual Harassment Investigation Committee
•Employee Voices for Silicon Garden Meeting
(Labor-Management Meeting)
Human Resources
Employee Portal
Employee Survey
HR Area Service Team
eSilicon Garden
Managers of All
Levels
Face-to-Face Meeting
•Chairman’s/CEO’s Communication Meeting
•Silicon Garden Meeting (Labor-Management
Meeting)
•Communication Meetings in Individual
Functions/Divisions
•Functional Activity
Employees
Board of Directors and
Management Team
TSMC Internal Communication Structure
Employee Communication Channels
TSMC supports a host of various communication channels including:
●Communication meetings for various levels of managers and employees, e.g. the executives communication meeting, skip levels
and communication meetings in individual functions/divisions
●Quarterly Silicon Garden meetings, aka Labor-Management meetings, to provide business updates and discuss issues of concern
for employees
●The biennial global core values survey is conducted to understand the Company’s implementation of core values from the
employees’ perspective
●The biennial global employee engagement survey is conducted to understand employees’ work experience and engagement in the
Company
●Periodic employee pulse surveys and service satisfaction surveys given to selected employees with follow-up actions based on
survey findings
●myTSMC employee portal, an internal website featuring talks by the Founder, the Chairman and the CEO, corporate messages,
executive interviews, and other topics of interest to employees
●eSilicon Garden, TSMC’s newsletter providing real-time updates on major activities of the Company as well as inspirational content
featuring outstanding teams or individuals
●Three channels for reporting complaints regarding managerial, financial, auditing, ethics and business conduct issues:
– The whistleblower reporting system, administered by the Audit and Risk Committee
– The irregular business conduct reporting system, administered by the Ethics Committee
– The ombudsman system administered by a senior manager, appointed by the CEO
●The Employee Opinion Box, which provides an opportunity to submit suggestions or opinions regarding work and the work
environment
●The Fab Caring Circle in each fab, which addresses issues related to employees’ work and personal life – dedicated mainly to the
Company’s direct laborers
●The sexual harassment investigation committee, a channel dedicated to ensuring a work environment free from the threat of
sexual harassment; the committee consists of three directors appointed by the CEO, one from human resources, one from legal
affairs, and the third from another organization
During 2024 and as of the date of this Annual Report, TSMC
has not incurred any labor-dispute related losses. However,
the Company was fined for the following labor inspection
results: NT$400,000 issued on 02/07/2024 for the extension
of working hours combined with the regular working hours
exceeding permitted limit (Labor Standards Act Article 32
Paragraph 2). NT$400,000 issued on 05/31/2024 for the
extension of working hours combined with the regular working
hours exceeding permitted limit (Labor Standards Act Article
32 Paragraph 2). NT$200,000 issued on 09/13/2024 for the
extension of working hours combined with the regular working
hours exceeding permitted limit (Labor Standards Act Article 32
Paragraph 2).
The Company has reviewed its working hour management
process and established indices to remind employees to apply
for overtime payment on time and for mangers to respond
to such applications efficiently and in a timely fashion, and to
be more diligent about employee working hours as well as to
strengthen communication about these matters and relevant
policies.
5.6.10 Retention
TSMC’s efforts in talent retention are also reflected in the
biennial “Core Values Survey” conducted in 2024. The survey
covered employees from TSMC and its subsidiaries worldwide,
with the exception of VisEra Technologies due to differences in
industry background. The survey received valid responses from
71,706 employees, representing 91% of the total workforce.
Among the respondents, 93% expressed their willingness to
fully commit to their work to make TSMC even more successful,
and 93% indicated that they were willing to contribute their
talents and grow together with the company over the next five
years. Both figures show a significant increase compared to
2022.
TSMC’s turnover rate was 3.5% in 2024 compared to 3.7% in
2023, both within a healthy range of less than 10%.
5.6.11 Retirement Policy
TSMC established its statutory defined benefit plan and
supervisory committee of labor retirement reserve according to
the Labor Standards Act, and also set up its statutory defined
contribution plan according to Labor Pension Act, which
became effective starting July 1, 2005. For each region, TSMC
also established pension plans according to local standards and
regulations. The previously mentioned supervisory committee
not only holds quarterly meetings but also supervises affairs
in connection with labor’s retirement reserve fund. To meet
legal requirements for disclosure of financial reporting and
ensure sufficient funding levels, TSMC makes contributions
based statutory requirements and also engages an actuarial
consulting firm to assess the valuation of the defined benefit
plan. Please refer to page 44 to 46 of TSMC’s Consolidated
Financial Statements for details. Thanks to the Company’s
sound financial condition, it is able to ensure the future
viability of employee retirement benefits and solid pension
contributions and payments, which encourages employees to
make long-term career plans with and further deepen their
commitment to TSMC.
5.7 Material Contracts
TSMC is not currently a party to any material contracts,
other than those entered into in the ordinary course of its
business. The Company’s “Significant Contingent Liabilities and
Unrecognized Commitments” are disclosed in our company’s
consolidated financial statements on the Market Observation
Post System (MOPS).
Link to MOPS: https://mops.twse.com.tw/mops/#/web/home
Note: Based on Willis Towers Watson’s “High Performance Employee Experience (HPEX) Model.”
120
121
6
Advanced technologies (7-nanometer and beyond)
accounted for 69 percent of TSMC’s total wafer revenue.
Financial
Highlights &
Analysis
122
123
6.1 Financial Status and Operating Results
6.1.1 Financial Status
Consolidated
Unit: NT$ thousands
Item
2024
2023
Difference
%
Current Assets
3,088,352,120
2,194,032,910
894,319,210
41%
Long-term Investments (Note 1)
149,040,373
129,442,117
19,598,256
15%
Property, Plant and Equipment
3,234,980,070
3,064,474,984
170,505,086
6%
Right-of-use Assets
40,128,391
40,424,830
(296,439)
-1%
Intangible Assets
26,282,520
22,766,744
3,515,776
15%
Other Assets (Note 2)
153,154,526
81,229,630
71,924,896
89%
Total Assets
6,691,938,000
5,532,371,215
1,159,566,785
21%
Current Liabilities
1,264,524,964
913,583,316
350,941,648
38%
Noncurrent Liabilities
1,103,837,171
1,135,525,052
(31,687,881)
-3%
Total Liabilities
2,368,362,135
2,049,108,368
319,253,767
16%
Capital Stock
259,327,332
259,320,710
6,622
0%
Capital Surplus
73,260,765
69,876,381
3,384,384
5%
Retained Earnings
3,917,252,023
3,158,030,792
759,221,231
24%
Others Equity
38,705,047
(28,314,256)
67,019,303
NM
Equity Attributable to Shareholders of the Parent
4,288,545,167
3,458,913,627
829,631,540
24%
Total Equity
4,323,575,865
3,483,262,847
840,313,018
24%
Note 1: Long-term investments consist of noncurrent financial assets at fair value through profit and loss, noncurrent financial assets at fair value through other comprehensive income, noncurrent financial assets at
amortized cost, and investments accounted for using equity method.
Note 2: Other assets consist of deferred income tax assets, refundable deposits, and other noncurrent assets.
●Analysis of Deviation over 20%
Increase in Current Assets: The increase was mainly due to increase in cash and cash equivalents.
Increase in Other Assets: The increase in other assets was mainly due to increase in other noncurrent assets.
Increase in Total Assets: The increase in total assets was mainly due to increase in current assets and property, plant and equipment.
Increase in Current Liabilities: The increase was mainly due to increase in accrued expenses and other current liabilities and cash
dividends payable.
Increase in Retained Earnings: The increase was mainly due to net income of 2024, partially offset by distribution of earnings.
Increase in Others Equity: The increase was mainly due to increase in currency exchange gain arising from translation of foreign
operations in 2024.
Increase in Equity Attributable to Shareholders of the Parent: The increase was mainly due to increase in retained earnings.
Increase in Total Equity: The increase was mainly due to increase in equity attributable to shareholders of the parent.
●Major Impact on Financial Position: The above deviations had no major impact on TSMC’s financial position.
●Future Plan on Financial Position: Not applicable.
Unconsolidated
Unit: NT$ thousands
Item
2024
2023
Difference
%
Current Assets
1,609,565,096
1,185,788,564
423,776,532
36%
Long-term Investments (Note 1)
1,759,646,229
1,095,656,042
663,990,187
61%
Property, Plant and Equipment
2,537,292,611
2,453,465,322
83,827,289
3%
Right-of-use Assets
37,899,147
37,872,705
26,442
0%
Intangible Assets
20,452,082
17,684,064
2,768,018
16%
Other Assets (Note 2)
72,394,135
83,612,587
(11,218,452)
-13%
Total Assets
6,037,249,300
4,874,079,284
1,163,170,016
24%
Current Liabilities
1,173,346,326
763,602,324
409,744,002
54%
Noncurrent Liabilities
575,357,807
651,563,333
(76,205,526)
-12%
Total Liabilities
1,748,704,133
1,415,165,657
333,538,476
24%
Capital Stock
259,327,332
259,320,710
6,622
0%
Capital Surplus
73,260,765
69,876,381
3,384,384
5%
Retained Earnings
3,917,252,023
3,158,030,792
759,221,231
24%
Others
38,705,047
(28,314,256)
67,019,303
NM
Total Equity
4,288,545,167
3,458,913,627
829,631,540
24%
Note 1: Long-term investments consist of noncurrent financial assets at fair value through other comprehensive income, and investments accounted for using equity method.
Note 2: Other assets consist of deferred income tax assets, refundable deposits, and other noncurrent assets.
●Analysis of Deviation over 20%
Increase in Current Assets: The increase was mainly due to increase in cash and cash equivalents.
Increase in Long-term Investments: The increase was mainly due to increase in investments accounted for using equity method.
Increase in Total Assets: The increase in total assets was mainly due to increase in current assets and long-term investments.
Increase in Current Liabilities: The increase was mainly due to increase in accrued expenses and other current liabilities and cash
dividends payable.
Increase in Total Liabilities: The increase was mainly due to increase in current liabilities.
Increase in Retained Earnings: The increase was mainly due to net income of 2024, partially offset by distribution of earnings.
Increase in Others Equity: The increase was mainly due to increase in currency exchange gain arising from translation of foreign
operations in 2024.
Increase in Total Equity: The increase was mainly due to increase in retained earnings.
●Major Impact on Financial Position: The above deviations had no major impact on TSMC’s financial position.
●Future Plan on Financial Position: Not applicable.
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125
6.1.2 Financial Performance
Consolidated
Unit: NT$ thousands
Item
2024
2023
Difference
%
Net Revenue
2,894,307,699
2,161,735,841
732,571,858
34%
Cost of Revenue
1,269,954,135
986,625,213
283,328,922
29%
Gross Profit
1,624,353,564
1,175,110,628
449,242,936
38%
Operating Expenses
301,070,315
253,833,716
47,236,599
19%
Other Operating Income and Expenses, Net
(1,230,199)
188,694
(1,418,893)
-752%
Income from Operations
1,322,053,050
921,465,606
400,587,444
43%
Non-operating Income and Expenses
83,785,585
57,705,718
26,079,867
45%
Income before Income Tax
1,405,838,635
979,171,324
426,667,311
44%
Income Tax Expenses
233,406,876
141,403,807
92,003,069
65%
Net Income
1,172,431,759
837,767,517
334,664,242
40%
Other Comprehensive Gain (Loss), Net of Income Tax
71,585,646
(8,813,644)
80,399,290
NM
Total Comprehensive Income for the Year
1,244,017,405
828,953,873
415,063,532
50%
Total Net Income Attributable to Shareholders of the Parent
1,173,267,703
838,497,664
334,770,039
40%
Total Comprehensive Income Attributable to Shareholders
of the Parent
1,245,836,616
830,509,542
415,327,074
50%
●Analysis of Deviation over 20%
Increase in Net Revenue: The increase was mainly attributed to rise in average selling price, higher wafer shipments and the
favorable impact of change in foreign exchange rate.
Increase in Cost of Revenue: The increase was mainly due to higher sales.
Increase in Gross Profit: The increase was mainly due to higher capacity utilization and the favorable impact of change in foreign
exchange rate, partially offset by 3-nanometer ramp-up and higher electricity cost.
Decrease in Other Operating Income and Expenses, Net: The decrease was mainly due to impairment losses caused by the
earthquake in 2024.
Increase in Income from Operations: The increase was mainly due to higher gross profit.
Increase in Non-operating Income and Expenses: The increase was mainly due to higher interest income in 2024.
Increase in Income before Income Tax: The increase was mainly due to higher income from operations.
Increase in Income Tax Expenses and Net Income: The increase was mainly due to higher income before income tax.
Increase in Other Comprehensive Gain (Loss), Net of Income Tax: The increase was mainly due to increase in currency exchange gain
arising from translation of foreign operations in 2024.
Increase in Total Comprehensive Income for the Year, Total Net Income Attributable to Shareholders of the Parent and Total
Comprehensive Income Attributable to Shareholders of the Parent: The increase was mainly due to higher net income in 2024.
●Sales Volume Forecast and Related Information: For additional details, please refer to “1. Letter to Shareholders.”
●Major Impact on Financial Performance: The above deviations had no major impact on TSMC’s financial performance.
●Future Plan on Financial Performance: Not applicable.
Unconsolidated
Unit: NT$ thousands
Item
2024
2023
Difference
%
Net Revenue
2,880,383,350
2,153,285,095
727,098,255
34%
Cost of Revenue
1,306,140,916
1,022,660,164
283,480,752
28%
Gross Profit
1,574,242,434
1,130,624,931
443,617,503
39%
Operating Expenses
255,546,895
223,733,531
31,813,364
14%
Other Operating Income and Expenses, Net
(1,549,447)
481,455
(2,030,902)
-422%
Income from Operations
1,317,146,092
907,372,855
409,773,237
45%
Non-operating Income and Expenses
90,462,877
70,398,381
20,064,496
29%
Income before Income Tax
1,407,608,969
977,771,236
429,837,733
44%
Income Tax Expenses
234,341,266
139,273,572
95,067,694
68%
Net Income
1,173,267,703
838,497,664
334,770,039
40%
Other Comprehensive Gain (Loss), Net of Income Tax
72,568,913
(7,988,122)
80,557,035
NM
Total Comprehensive Income for the Year
1,245,836,616
830,509,542
415,327,074
50%
●Analysis of Deviation over 20%
Increase in Net Revenue: The increase was mainly attributed to rise in average selling price, higher wafer shipments and the
favorable impact of change in foreign exchange rate.
Increase in Cost of Revenue: The increase was mainly due to higher sales.
Increase in Gross Profit: The increase was mainly due to higher capacity utilization and the favorable impact of change in foreign
exchange rate, partially offset by 3-nanometer ramp-up and higher electricity cost.
Decrease in Other Operating Income and Expenses, Net: The decrease was mainly due to impairment losses caused by the
earthquake in 2024.
Increase in Income from Operations: The increase was mainly due to higher gross profit.
Increase in Non-operating Income and Expenses: The increase was mainly due to higher share of profits of subsidiaries and
associates in 2024.
Increase in Income before Income Tax: The increase was mainly due to higher income from operations.
Increase in Income Tax Expenses and Net Income: The increase was mainly due to higher income before income tax.
Increase in Other Comprehensive Gain (Loss), Net of Income Tax: The increase was mainly due to increase in currency exchange gain
arising from translation of foreign operations in 2024.
Increase in Total Comprehensive Income for the Year: The increase was mainly due to higher net income in 2024.
●Sales Volume Forecast and Related Information: For additional details, please refer to “1. Letter to Shareholders.”
●Major Impact on Financial Performance: The above deviations had no major impact on TSMC’s financial performance.
●Future Plan on Financial Performance: Not applicable.
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127
6.1.3 Cash Flow
Consolidated
Unit: NT$ thousands
Cash Balance
12/31/2023
Net Cash Provided
by Operating
Activities in 2024
Net Cash Used in
Investing Activities
in 2024
Net Cash Used in
Financing Activities
in 2024
Effect of Exchange
Rate Changes on
Cash and Cash
Equivalents in 2024
Cash Balance
12/31/2024
Remedy for Liquidity Shortfall
Investment Plan
Financing Plan
1,465,427,753
1,826,177,068
(864,842,769)
(346,300,910)
47,165,901
2,127,627,043
None
None
●Analysis of Cash Flow
NT$1,826.2 billion net cash generated by operating activities: mainly include net income, along with depreciation and amortization
expenses.
NT$864.8 billion net cash used in investing activities: primarily for capital expenditures.
NT$346.3 billion net cash used in financing activities: mainly for cash dividend payment.
●Remedial Actions for Liquidity Shortfall: As a result of positive operating cash flows and cash on-hand, remedial actions are not
required.
●Cash Flow Projection for Next Year: Not applicable.
Unconsolidated
Unit: NT$ thousands
Cash Balance
12/31/2023
Net Cash Provided by
Operating Activities in
2024
Net Cash Used in
Investing Activities in
2024
Net Cash Used in
Financing Activities in
2024
Cash Balance
12/31/2024
Remedy for Liquidity Shortfall
Investment Plan
Financing Plan
718,703,712
1,835,575,369
(618,548,957)
(900,668,625)
1,035,061,499
None
None
●Analysis of Cash Flow
NT$1,835.6 billion net cash generated by operating activities: mainly include net income, along with depreciation and amortization
expenses.
NT$618.5 billion net cash used in investing activities: primarily for capital expenditures.
NT$900.7 billion net cash used in financing activities: mainly for investment in subsidiaries and cash dividend payment.
●Remedial Actions for Liquidity Shortfall: As a result of positive operating cash flows and cash on-hand, remedial actions are not
required.
●Cash Flow Projection for Next Year: Not applicable.
6.1.4 Recent Years Major Capital Expenditures and Impact on Financial and Business
Unit: NT$ thousands
Plan
Actual or Planned Source of Capital
Total Amount for
2024 and 2023
Actual Use of Capital
2024
2023
Production Facilities, R&D and Production Equipment
Cash flow generated from operations and issuance of
corporate bonds
1,878,220,726
939,764,405
938,456,321
Others
Cash flow generated from operations
27,602,635
16,242,131
11,360,504
Total
1,905,823,361
956,006,536
949,816,825
Based on capital expenditures listed above, TSMC’s annual production capacity increased by approximately 0.9 million 12-inch
equivalent wafers in 2024.
6.1.5 Long-term Equity Investment Policy and Results
TSMC’s long-term equity investments, accounted for using the
equity method, were all made for strategic purposes. In 2024,
the gains from these investments amounted to NT$4,879,367
thousand on a consolidated basis, up from the previous year
mainly due to increases in product demand. In the future,
TSMC’s long-term equity investments, accounted for using the
equity method, will continue to focus on strategic purposes
through prudent assessments.
6.2 Risk Management
6.2.1 Risk Management Overview
Risk Management Policy and Framework
TSMC employs a balanced risk-reward approach to risk
management to optimize business returns. This applies to
all aspects of the business, including our commitment to
environmental, social and governance (ESG) issues in to
delivering long-term value to all stakeholders. TSMC’s risk
management policy is approved by the Board of Directors and
signed by the Chairman and CEO. The Company is committed
to proactive and robust risk management system in assisting
TSMC in making well-considered, risk-based decisions that
fulfill the corporate vision and deliver sustainable value to
TSMC and its stakeholders.
Adhering closely to the International Organization for
Standardization (ISO) 31000: 2018 Risk Management System
and the Committee of Sponsoring Organizations of the
Treadway Commission (COSO)’s Enterprise Risk Management
– Integrated Framework, TSMC’s Enterprise Risk Management
(ERM) framework is a systematic approach that enables the
Company to respond to the changing dynamics in the business
environment, as well as to capitalize on business opportunities.
The ERM framework specifies the risk governance structure, the
management process that integrates business operations, and
the tools that facilitate the identification, assessment, response,
monitoring and review of risks. A risk criteria matrix, on the
potential likelihood and impact on financials, operational,
reputation and compliance, is applied in the assessment and
priortisation of risks identified. A formalized training and
communication program to build risk competency and foster
a risk-aware culture helps management in making informed
risk-based decisions while implementing corporate strategies.
Risk-Aware Culture
TSMC’s Board and management are fully committed to
fostering a strong risk-aware culture and to cultivating the
following:
●Strategy and leadership – Strategy, values and behaviors are
clearly linked to risk objectives. Key messages encouraging
proactive risk management are integrated into events,
meetings and decision making to optimize the risk
management process.
●Accountability and reinforcement – Risk management is a
responsibility shared by both management and employees. All
employees are expected to be accountable for managing risks
related to their area of responsibility with clear risk ownership.
Risk management is embedded in the performance evaluation
process, which further promotes accountability and
ownership.
●Communication and capability – The Company promotes
consistency, transparency and openness in sharing
information and managing pressing risk matters, incidents
and near-misses. TSMC’s Risk Management Academy is
tasked with the goal of raising risk management competency
through training at all levels of employees, including the
Board of Directors and management. To foster an effective
risk-aware culture, risk communication is made in various
forums, in-house publications and events.
●Risk management and infrastructure – Risk identification
and assessment are embedded in key control processes with
systems, tools, processes and policies to support effective risk
management.
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129
CORPORATE STRATEGY | Technology Leadership, Manufacturing Excellence, Customer Partnership
Risk Management Competency and Communication
Integrated Risk Managemet IT System
Risk
Governance
Risk
Management
Process
Risk Tools
Key Risk Indicator / Risk Register
Risk-aware Culture
Risk Management Policy and Procedures
Board of Directors
Audit and Risk Committee
Management
Review
Identification
Assessment
Response
Monitor
Operational Risk
Strategic Risk
Financial Risk
Compliance Risk
●Enterprise Risk Management Framework
Risk Appetite and Risk Management Scope
TSMC has defined its risk appetite in statements that outline the nature and extent of risks it is willing to take in pursuit of its
business goals:
●The risk taken should be carefully evaluated, commensurate with rewards and in line with the Company’s strategic, investment,
financial and corporate objectives.
●Risk considerations are an integral part of business operations and managed within the risk tolerance of the divisions, of relevant
functional units and of the Company itself.
●The Company will not invest or participate in any business activities that exceed its risk tolerance.
●The Company does not tolerate safety related breaches or lapses, non-compliance with laws and regulations, or illegal acts such as
fraud, bribery and corruption.
Following a five-step risk management process – identification, assessment, response, monitoring and review – risk assessments are
performed by key functional units to form an enterprise-level risk map and mitigation plans, which are presented to the audit and
risk committee. This process is supported by ongoing education and awareness efforts in fostering a risk-aware culture and building
risk competencies. TSMC recognizes that its systems and processes provide reasonable but not absolute assurance and hence
continually strives to improve its ability to manage and respond to risks and capitalize on opportunities.
Emerging Risks
Effective risk management is dynamic and encompasses
the evaluation of both risks and opportunities. TSMC’s risk
management framework and processes ensure that the
evaluations stay effective and relevant. In a dynamic business
environment, the Company recognizes the impact of global
and emerging risks on corporate strategy. TSMC continues to
scan the environment for risks that could impact its business
or operations. Where relevant, these risks are examined and
discussed at various forums and by the RM steering committee
to determine if any further actions or responses are warranted.
TSMC is committed to evaluating all significant risks in a
balanced and holistic manner with the objective of delivering
sustainable long-term value to all stakeholders.
TSMC’s top emerging risks have been identified as:
●Complexity in the cyber landscape giving rise to sophisticated
cyber threats: The adoption of new technologies, such as AI
and quantum computing, increases cybersecurity risks, which
is further exacerbated by cyber espionage. The semiconductor
ecosystem, including suppliers and customers, is also at risk
from cyberattacks, which could potentially have a major
impact on the supply chain resulting in business disruption,
loss of business opportunities, reputational impact, etc.
Mitigating actions include but are not limited to multi-layered
defenses, continuous simulation exercises, and supply chain
security management.
●De-globalization leading to the polarization of high-tech
industry: National security is expected to be a growing
concern and top priority of major countries, which in turn
have deployed strategic actions to secure semiconductor
self-sufficiency and localization of supply chains. The
multi-polarization effect of the high-tech industry is
weakening globalization and restricting the free flow
of goods and technology for geopolitical gain. TSMC’s
business might face adverse impact arising from weakened
operational efficiency and resilience, elevated costs, and loss
of business opportunities, etc. Mitigating actions include but
are not limited to risk-based strategic investment planning,
localization and optimization of key operation resources, and
enhancement of business continuity plans.
●Climate transition action failure: Climate inaction is one of
the major threats to the world. Ineffective responses to the
changes needed to achieve a net-zero world pose risks to
TSMC’s operations, value chain and markets, notwithstanding
measures taken by others to address climate risks and
opportunities. Mitigating actions include implementing plans
targeting RE100/net zero emission and collaborating with
external parties and authorities.
Risk Management Governance Structure
Risk management at TSMC involves both the Board of Directors
and management in an effort to embed sound risk related
practices in business decisions and operations throughout
the Company. The Board of Directors is responsible for risk
governance and has authorized the Audit and Risk Committee
to review TSMC’s ERM framework. At the executive level,
the risk management governance structure includes the risk
management steering committee, the risk management
executive council, taskforces and the risk management division.
Assisting the audit and risk committee in establishing
and overseeing a proactive and effective system, the risk
management division works with each function and fab in
applying the ERM framework to assess and mitigate risks
throughout TSMC by monitoring and implementing risk
related policies and guidelines, as well as by taking initiatives
to support the implementation of ERM framework. Every six
months, the risk management division reports to the audit
and risk committee on TSMC’s key risks and mitigation efforts.
The audit and risk committee’s chairperson then reports to the
Board of Directors on the current risk profile and risk mitigation
measures being taken.
●Risk Management Governance Structure
Risk Management
Division
Risk Management Steering
Committee
(Functional heads, VP level)
Risk Management Executive
Council
(Members titled as Risk Management
Champion (RMC), director-level)
Risk Management Taskforces
(Representatives from each Fab/Division)
Audit and Risk Committee
Board of Directors
Board
Management
130
131
The roles and responsibilities of the various committees under
the risk management governance structure are defined below:
Risk Management Steering Committee
●Advises the Board in determining overall risk appetite,
tolerance, strategy and resource allocation, taking
into account current and prospective macroeconomic,
technological, regulatory, environmental and social
developments and trends.
●Reviews and oversees the applicability and performances of
the risk management framework, policies and procedures.
●Provides advice and assurance to the Board by adopting a
holistic view of the key risks that TSMC is exposed to and
approves the prioritization of risk mitigations.
●Sets the tone for risk management from the top, sponsors
initiatives and activities to nurture the desired risk culture,
awareness and capabilities to effectively manage key risks and
new type of risks, including clarifying risk ownership.
●Ensures that risk management is incorporated into strategic
business development and operational planning, day-to-day
management and decision making.
●Advises the Board on proposed transactions so as to address
strategic risks and capitalize on opportunities.
Risk Management Executive Council
●Identifies potential and emerging risks that may impact TSMC
in achieving its objectives and/or the continued effectiveness
and efficiency of its business operations.
●Conducts risk assessments, defines mitigation plans, including
incident management plans, provides sponsorship and
allocates sufficient resources to enable timely and effective
mitigation.
●Leads and drives cross-functional taskforces, meetings
or other activities to ensure that risks are adequately and
effectively mitigated, including collaborating with the risk
management division and various other parties.
●Defines key risk indicators (KRIs) to proactively monitor risk
dynamics and respond in a timely and effective manner.
●Builds a risk-aware culture and raises risk competency in fabs
and divisions, including but not limited to training, exercises
and continuous improvement.
●Defines and facilitates action plans based on root cause
analysis to prevent recurrences of major incidents and
high-risk events as raised by major findings of internal and
external reviews.
●Implements the decisions made by the risk management
steering committee and reports back to the committee on the
progress, effectiveness, and lessons learned.
●Includes performance of RM Council in management reviews.
Risk Management Taskforce
●Identifies and assesses potential risks and threats that may
prevent TSMC from achieving its business objectives and
deploys appropriate mitigation measures.
●Plans and executes risk prevention and mitigation in
accordance with various scenarios.
●Organizes and/or participates in cross-functional meetings to
address risks that span multiple disciplines or divisions/fabs.
●Participates in the implementation and execution of risk
management initiatives and activities.
●Reviews division or fab investigations of major incidents
or high-risk events and their major findings. Monitors the
effectiveness of action plans.
Risk Management Division
●Assists the Board in establishing and overseeing a proactive
and effective mechanism of risk management and business
continuity, including risk appetite and tolerance, risk strategy
and management framework, policies and procedures.
●Strengthens risk culture, awareness, and risk management
capabilities through continuous trainings, communications
and awareness programs.
●Identifies and analyzes the sources and categories of risks to
the Company and regularly reviews their relevance.
●Facilitates risk management committees and risk owners
in the implementation of risk management activities and
initiatives to identify and manage risks, including the
review of mitigation plans, business continuity, crisis and
incident management plans; reviews the effectiveness of
risk management activities through documented reports,
management discussions and meetings.
●Coordinates cross-department and cross-functional
interaction and communication of risk management
operations and decisions, including implementing decisions
of the risk management steering committee.
●Consults with management, consultants and peers on best
practices and standards for continuous improvement and
benchmarking.
●Prepares reports to stakeholders that may be required from
time to time by regulators, government agencies, insurers/
brokers and customers, including an annual report on the
implementation of Company’s risk management system.
Three-Lines of Defense
TSMC adopts the Three-Lines of Defense Model towards
ensuring the adequacy and effectiveness of TSMC’s risk
management system.
Three-Lines of Defense
3
Internal Audit
Independent Assurance
2
Risk Management
ERM Framework and Risk Aware Culture
1
Management
Risk Management Process
●Under the First Line, management is supported by their respective line functions and committees such as the Risk Management
Council, comprising of risk management champions, responsible for the identification and mitigation of risks (including strategic,
financial, operation, and compliance risks) facing the company. Risk Management Taskforces are formed in the management
of specific risk areas. Guided by the TSMC’s Enterprise Risk Management Framework, appropriate policies and procedures
are implemented and operationalized in line with the TSMC’s risk appetite to address such risks. Adoption of the 5-step risk
management process ensures the integration of risk management process in business operations.
●Under the Second Line, the TSMC’s Risk Management Policy is established to enable oversight and governance over operations
and activities undertaken by management under the First Line. The Risk Management Steering Committee supports the Board in
its oversight of the effectiveness of the risk management framework. Risk Management Division works alongside functions and
business management to ensure relevant policies and processes are effectively designed and implemented to ensure risks are
effectively managed and fostered by a risk-aware culture.
●The Third Line comprises independent assurance, including internal and external audit. TSMC conducts internal and external
audits of the risk management framework and process periodically, to identify opportunities to improve the effectiveness of risk
management and its processes. The Internal Audit Division reports quarterly to the Audit and Risk Committee.
Risk Management Initiatives in 2024
The table below outlines the key initiatives taken to strengthen our risk management program:
Strengthen Risk Governance
Foster Risk Aware Culture
Build Operational Resilience
Deepen Stakeholder’s
Engagement
Raise Risk Competency
●Appointment of Risk Management
Champions
●Formalization of ERM/BCM taskforce
for Enterprise Risks
●Embedment of risk management
indicators in performance evaluation.
●Risk Management Communication
and Publicity Efforts
●Newsletters
●Lunchtime Talks / Seminars
●Risk management portal
●BCM exercises across cross function
teams and fabs
●Streamline BCM plans and
procedures
●Risk Management Champions
Community Building and Exchange
●Deepen external engagements with
insurers, customers, government
authorities, regulators, suppliers
●Governing Cyber Security Training
for Board
●ERM/BCM workshops for Fabs/
Overseas subsidiaries
●Roll out RM e-training
●RM resource publications
Crisis Management and Business Continuity Management
TSMC is committed to maintaining operational resilience and business continuity by taking close reference to standards that enable
the Company to respond effectively to business disruption. The Company is cognizant of the major risks of natural and man-made
disasters, including earthquakes, floods, typhoons, droughts, tsunamis, sandstorms, wildfires, volcanic eruptions, fire, gas/chemical
leaks or spills, pandemics, cyber-attacks, supply chain disruption, geopolitical tension, sabotage, failure of critical facilities and
equipment, and shortages in utilities such as water, electricity and natural gas – any or all of which could disrupt operations.
To mitigate the operational impact of crisis events, the risk management division implements pre-crisis risk assessment, response
procedures and recovery plans. Exercises and drills are also conducted to validate emergency responses, crisis management, business
continuity plans to enhance operational preparedness. In major incidents or crisis events, the crisis management guidelines are
followed. The central crisis command center (C4), headed by the Chairman and CEO and comprised of senior executives across
key functions, provides guidance and decision-making to maintain response readiness, including timely communication to key
stakeholders.
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6.2.2 Strategic Risks
Risks Associated with Changes in Technology and Industry
●Industry Developments
The electronics industries and semiconductor market are cyclical and subject to significant and often rapid fluctuations in product
demand, which could impact TSMC’s semiconductor foundry business. Variations in customer order levels may result in volatility in
the Company’s revenue and earnings.
From time to time, the electronics and semiconductor industries have experienced significant and occasionally prolonged
periods of downturns and overcapacity. Because TSMC is, and will continue to be, dependent on the demand of electronics and
semiconductor companies for its services, periods of downturns and overcapacity in the general electronics and semiconductor
industries could lead to reduced demand for overall semiconductor foundry services, including TSMC’s services. If TSMC is not able
to take appropriate actions, such as reducing its costs to sufficiently offset declines in demand, the Company’s revenue, margins and
earnings will likely suffer during periods of downturns and overcapacity.
●Changes in Technology
The semiconductor industry and its technologies are constantly changing. TSMC competes by developing process technologies
using increasingly advanced nodes and manufacturing products with more functions. The Company also competes by developing
new derivative technologies. If TSMC does not anticipate these changes in technologies and rapidly develop new and innovative
technologies, or the Company’s competitors unforeseeably gain sudden access to additional technologies, TSMC may not be able
to provide foundry services on competitive terms. For example,
the global surge in the development of artificial intelligence
(AI) has had a significant impact on customer demand for
advanced semiconductor chips and the market dynamics
in TSMC’s industry; thus, TSMC’s ability to continuously
develop relevant technologies, products and services to meet
these customer needs and changes in the AI industry will be
critical for the Company to effectively compete in this space.
TSMC also believes that the effective use of AI in its internal
operations is important to its long-term success. As the AI
technologies are rapidly evolving, if TSMC is unable to deploy
new AI technologies in its internal operations as effectively
as its competitors, it may hurt the Company’s competitive
position. In addition, TSMC’s customers have significantly
decreased the time in which their products or services are
launched into the market. If TSMC is unable to meet these
shorter product time-to-market, it risks losing these customers.
These factors have also been intensified by the shift of the
global technology market to consumer driven products, such
as smartphones, and increasing competition and concentration
of customers (all further discussed among these risk factors).
Also, the uncertainty and instability inherent in advanced
technologies impose challenges for achieving expected product
quality and product yield. If TSMC fails to maintain quality, it
may result in loss of revenue and additional cost, as well as loss
of business or customer trust. If TSMC is unable to overcome
the above factors, it may become less competitive and its
revenue may decline significantly.
Regarding the response measures for the above-mentioned
risks, please refer to “2.2.4 TSMC Position, Differentiation and
Strategy” on page 17-19 of this Annual Report.
●IT Security
Even though TSMC has established a comprehensive internet
and computing security network, the Company cannot
guarantee that its computing systems which control or
maintain vital corporate functions, such as its manufacturing
operations and enterprise accounting, would be completely
immune to crippling cyberattacks. In the event of a serious
cyberattack, TSMC’s systems may lose important corporate
data or its production lines may be shut down pending the
resolution of such attack. Major cyberattacks could also lead
to loss or divulgence of trade secrets and other sensitive
information, such as proprietary information of its customers
and other stakeholders and personal information of its
employees. While TSMC seeks to continuously review and
assess its cybersecurity policies and procedures to ensure their
adequacy and effectiveness, it cannot guarantee that it will
not be susceptible to new and emerging risks and attacks in
the evolving landscape of cybersecurity threats. For example,
as AI continues to evolve, cyber-attackers could also use AI to
develop malicious codes and sophisticated phishing attempts.
Malicious hackers may also try to introduce computer viruses,
corrupted software or ransomware into TSMC’s network
systems to disrupt its operations, or blackmail the Company
to regain control of its computing systems, or spy on it for
sensitive information. These attacks may result in TSMC
having to pay damages for its delayed or disrupted orders
or incur significant expenses in implementing remedial and
improvement measures to further enhance its cybersecurity
network, and may also expose the Company to significant
legal liabilities arising from or related to legal proceedings or
regulatory investigations associated with such breaches.
In the past, TSMC has experienced and may in the future be
subject to attack by malicious software. The Company has
implemented and continually updates rigorous cybersecurity
measures to prevent and minimize harm caused by such
attacks. These measures comprehensively enhance security
protection capabilities across internet services, offices, fabs, and
cloud platforms. In addition, TSMC consistently strengthens
the security of its offices, facilities, and data centers worldwide
to ensure operational stability and data integrity. As a result,
TSMC’s scores in international security assessments are
significantly higher than the industry average, demonstrating
the Company’s ongoing commitment to and high regard for
cybersecurity.
In 2024, TSMC focused on enhancing network security
visibility in its fabs, improving fab network architecture and
control to prevent the spread of viruses across tools and
fabs, and conducting comprehensive threat monitoring in
data centers. The Company has implemented automated
end-to-end scanning protection from offices to data centers,
established robust cloud service security posture management
(tools and practices that monitor, detect, and remediate
security risks across cloud environments), and adopted secure
configurations for unified external website security. TSMC has
also implemented device authentication and control in office
environments, created a global virtual office environment
to enable employees to use computers and systems safely
and conveniently anytime, anywhere, and adopted proactive
network defense measures to detect and prevent attackers.
Additionally, the Company has identified potential risks
from a hacker’s perspective, conducted external red team
Business Continuity Management Framework
TSMC’s business continuity management (BCM) framework guides the Company in responding effectively and promptly to business
disruption, which safeguards the interests of the Company and its stakeholders. The BCM framework outlines the governance
structure, processes and capabilities supported by a resilient culture in fortifying the Company’s operational resilience.
Fortifying Operational Resilience
Safeguard – People, Technology, Information, Physical Resource
Resilient Culture
BCM Policy & Procedures
BCM Steering Committee
BCM Executive Council
BCM Taskforces
Analysis
• Risk & Threat
Assessment
• Business Impact
Analysis
Design
• BC Objectives
• Infrastructure
Design
• Preventions /
Mitigations
Validation
• Exercise / Testing
• Lessons Learned
Review
• Program Performance
Monitoring & Management
• Management Review
• Continuous Improvement
Implementation
• Training and Awareness
• BC Plans Development &
Implementation
• Communications
Emergency
Response
Crisis
Management
Cyber
Resilience
Business Continuity
& Recovery
Technology & Data
Resilience
Supply Chain
Resilience
BCM
Governance
BCM
Process
Core
Capabilities
Business Continuity Management Framework
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(cyberattack simulation) testing, and continually assessed its
security posture. TSMC has implemented application quality
measures, enhanced the security and efficiency of the software
development process, and introduced new technologies to
strengthen data protection, ensuring that the protection of
TSMC’s critical data complies with international standards and
improving overall employee security awareness.
To reduce supply chain risks, TSMC collaborates with key
suppliers to assist them in improving their information
security maturity. In 2024, TSMC organized a cybersecurity
workshop for suppliers, sharing network security defense
solutions and practices. Nearly 800 participants from close to
500 suppliers attended the workshop, which received high
recognition from the suppliers. This effort not only enhanced
the security capabilities of the suppliers but also strengthened
the trust and communication between TSMC and its suppliers,
thereby promoting the information security resilience of the
entire supply chain. In 2024, TSMC further signed the MOU,
memorandum of cybersecurity cooperation with the National
Institute of Cyber Security. The two parties will enhance
information security professional capabilities and protection
capabilities through joint information security defense,
and deepen industrial supply chain information security
management and protection. TSMC continues to strengthen
its own and supply chain information security and fulfill its
corporate social responsibilities. Starting from 2021, TSMC
has won the TCSA Taiwan Corporate Sustainability Award –
Information Security Leadership Award for four consecutive
years.
In addition, TSMC employs certain third-party service providers
for the Company and its affiliates worldwide with whom it
needs to share highly sensitive and confidential information
to enable them to provide the relevant services. While TSMC
requires such third-party service providers to strictly fulfill
the confidentiality and/or internet security requirements in
its service agreements with them, there is no assurance that
each of them will comply with such obligations. Moreover,
such third-party service providers may also be susceptible
to cyberattacks. If TSMC or its service providers are not able
to timely resolve the respective technical difficulties caused
by such cyberattacks, or ensure the integrity and availability
of its data (and data belonging to its customers and other
third parties) or maintain control of its or its service providers’
computing systems, the Company’s commitments to its
customers and other stakeholders may be materially impaired
and its results of operations, financial condition, prospects and
reputation may also be materially and adversely affected.
Risks Associated with Decrease in Demand and Average
Selling Price
A vast majority of the Company’s revenue is derived from
customers who use TSMC products in HPC (including AI
applications), smartphones, IoT, automotive, and digital
consumer electronics. Any deterioration in or a slowdown
in the growth of such end markets resulting in a substantial
decrease in the demand for overall global semiconductor
foundry services, including TSMC products and services,
could adversely affect the Company’s revenue. Further,
semiconductor manufacturing facilities require substantial
investment to construct and are largely fixed cost assets
once they are in operation. Because TSMC owns most of its
manufacturing capacities, a significant portion of its operating
costs is fixed. In general, these costs do not decline when
customer demand or its capacity utilization rates drop, and
thus declines in customer demand, among other factors, may
significantly decrease the Company’s margins. Conversely,
as product demand rises and factory utilization increases,
the fixed costs are spread over increased output, which can
improve the Company’s margins. In addition, the historical
trend of declining average selling prices (ASP) of end-use
applications places downward pressure on the prices of the
components that go into such applications. Decreases in the
ASP of end-use applications may increase pricing pressure on
components produced by TSMC, which, in turn, may negatively
impact its revenue, margin and earnings.
Risks Associated with Competition
The competition in the semiconductor foundry segment is
fierce. TSMC competes with other foundry service providers,
as well as a number of integrated device manufacturers. Some
of these companies may have access to more advanced or
different technologies than the Company. Other companies
may have greater financial and other resources than the
Company, such as the possibility of receiving direct or indirect
government subsidies, economic stimulus funds, or other
incentives that may be unavailable to TSMC. The governments
of the United States, China, Europe, South Korea and Japan
provide various incentive programs to promote developments
of their domestic semiconductor industries, such as the
Creating Helpful Incentives to Produce Semiconductors and
Science Act of 2022 (the U.S. CHIPS Act), which provides
financial incentives to incentivize the development of U.S.
semiconductor industry. In November 2024, TSMC Arizona
Corporation (“TSMC Arizona”) entered into agreements with
the U.S. Department of Commerce for the receipt of certain
incentives pursuant to the U.S. CHIPS Act, which includes up to
US$6.6 billion in total direct funding and up to US$5 billion of
proposed loans. In December 2024, European Semiconductor
Manufacturing Company (ESMC) GmbH (“ESMC”), TSMC’s
subsidiary in Germany, entered into an agreement with the
Federal Republic of Germany for the receipt of up to EUR5
billion state aid under the European Chips Act (Regulation (EU)
2023/1781). Although governments in certain of the countries
or regions where TSMC is currently expanding or planning to
expand its production capacity have extended or may in the
future extend certain financial incentives to the Company,
there is no assurance that TSMC will be able to receive such
financial incentives, including pursuant to the U.S. CHIPS Act,
at the levels the Company anticipate or at all. Additionally, any
financial incentives the Company receives may be subject to
conditions and requirements imposed by the grantors, such as
restrictions on the expansion of facilities in foreign countries of
concern and on joint research and technology licensing efforts
with foreign entities of concern on any technology or product
that raises national security concerns. Noncompliance with
the terms and conditions of the grants that the Company may
receive could result in a delay or forfeiture of all or a portion
of any future amounts to be received, as well as obligate us
to repay all or a portion of amounts already received pursuant
to the grants. Even if the Company satisfies the conditions
and requirements for the funding disbursement, it is possible
that the grantor may delay the disbursement or be unable to
provide the funding. While the Company expects to continue
benefiting from government incentives, failure to obtain grants
that the Company seeks, to fully utilize available grants, or to
comply with the terms and conditions of grants, could impact
the Company’s ability to achieve its goals for the projects that
would otherwise benefit from grant funding and could has
an adverse effect on its business, results of operations, and
financial condition.
Moreover, the Company’s competitors may, from time to
time, also decide to undertake aggressive pricing initiatives in
one or several technology nodes. The Company’s competitors
may also compete for its customers who seek to diversify
their supply chains. These competitive activities may decrease
TSMC’s customer base, its pricing, or both. If the Company
is unable to compete effectively with such competitors on
technology, manufacturing capacity, product quality, supply
chain diversification and resilience, and customer satisfaction, it
risks losing customers or business to such contenders.
Risks Associated with Changes in the Government
Policies and Regulatory Environment
TSMC management closely monitors all domestic and foreign
governmental policies and regulations that might impact
TSMC’s business and financial operations. During 2024 and
as of the date of this Annual Report, the following changes or
developments in governmental policies and regulations may
influence the Company’s business operations:
The manufacturing, assembling and testing of TSMC’s products
require the use of chemicals and materials that are subject to
environmental, climate related, health and safety laws and
regulations issued worldwide as well as international accords
such as the Paris Agreement. The Climate Change Response Act
of the R.O.C., effective since 2015 and amended in February
2023, set a goal of reaching net-zero emissions in Taiwan by
2050 and established a carbon fee system to collect carbon
fee. For emitters with direct and indirect emissions exceeding
a certain threshold, carbon fees will be levied starting from
2025. As TSMC’s emissions from each fab in Taiwan exceed the
current regulatory threshold, we will start to pay carbon fees
from 2026 (for the 2025 fees), which will result in increased
operating costs for us. Also, the R.O.C. legislative authority is
regularly reviewing various environmental issues to develop
laws and regulations relating to environmental protection and
climate changes. The impact of such laws and regulations is
currently indeterminable.
It is not expected that other governmental policies or
regulatory changes would materially impact TSMC’s operations
or financial condition.
6.2.3 Operational Risks
Natural and Man-Made Disaster
TSMC is committed to maintaining operational resilience in
accordance with business continuity management standards
that equips it with the capability to respond effectively to
business disruption. Disruptions caused by natural and
man-made disasters, including earthquakes, flooding,
typhoons, droughts, tsunamis, sandstorms, wildfires, volcanic
eruptions, fire, gas/chemical leakage or spill, pandemic,
cyberattacks, supply chain disruption, geopolitical tensions,
sabotage, terrorism, failure of critical facilities and equipment,
disruptions in utilities, such as water, electricity and natural
gas, etc., could interrupt our operations.
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Most of TSMC’s production facilities, as well as those of
many of its suppliers, customers and upstream providers of
complementary semiconductor manufacturing services, are
located in areas susceptible to natural disasters and may face
potential shortages of electricity and/or water, which could
cause interruptions to TSMC’s operations. In April 2024 and
January 2025, several earthquakes struck Taiwan, causing
damage to our inventories, plant facilities, machinery and
equipment. We recognized approximately NT$3 billion and
NT$5.3 billion in losses from earthquakes, net of insurance
claim, respectively, in the second quarter of 2024 and the first
quarter of 2025.
If one or more natural disasters result in a prolonged disruption
to TSMC’s operations or those of its customers or suppliers,
or if any of its fabs or vendor facilities were to be damaged or
cease operations as a result of an unforeseen disruptive event,
it could reduce TSMC’s manufacturing capacity and cause
the loss of important customers and thereby have an adverse,
material impact on its operational and financial performance.
To cope with possible droughts resulted from severe climate
change, TSMC implemented manufacturing process water
saving, as well as building up industrial water recycling plants,
using household water and cooperating with government
to mitigate water shortage risk. As part of TSMC’s business
continuity plans, measures taken include water conservation
measures, use of alternative water sources. Close monitoring of
water situation including stress testing and exercises are carried
out to validate our response plan.
TSMC has occasionally suffered power outages, dips or surges
caused by difficulties encountered by its electricity supplier
or other power consumers on the same power grid. Some
of these incidents have resulted in interruptions to TSMC’s
operations. Such outages, shortages or interruptions in
electricity supply could further be exacerbated by changes in
the energy policy of the governments. If TSMC is unable to
secure reliable and uninterrupted supply of electricity to power
its manufacturing fabs, its ability to fill customers’ orders
would be jeopardized. Moreover, TSMC has encountered and
may continue to encounter increases in the prices of utilities.
For example, effective from April 1, 2024, TSMC is subject to
a higher electricity tariff rate in Taiwan, which is estimated to
increase by 25%, as compared to the tariff rate applicable to
the Company in 2023. The increased prices for electricity could
increase TSMC’s manufacturing costs and therefore adversely
impact TSMC’s financial results. In addition, due to climate
change, severe weather events, such as droughts, and any
measures taken by governments in response to such severe
weather events may materially affect TSMC’s operations and
its suppliers’ production. For example, the measures taken
by governments in response to droughts, including water
rationing and conservation, may cause interruption to TSMC’s
operations or its expansion plans.
If such events were to occur over prolonged periods of
time, TSMC’s operations and financial performance may be
materially adversely affected. Moreover, TSMC’s future capacity
expansions in Taiwan and elsewhere could be curtailed by
utility shortages.
TSMC has further strengthened its business continuity
management, which includes periodic risk assessments
and mitigations, implementing centralized scenario
planning for business continuity management exercises,
and the establishment of taskforces. The taskforces define
emergency response, crisis communication, recovery plans
and preventative measures based on the thorough analysis
of derivative effects and alternative solutions to ensure the
impacts to lives, business operations and assets are minimized.
TSMC reviews periodically its business continuity plans and
refines them to reflect exercise results and implementation.
In response to the impact of the earthquakes that occurs in
Taiwan and Japan, TSMC continues to improve its earthquake
emergency response, tool anchorage and seismic isolation
facilities, and readiness for tool salvage and production
recovery. These improvements have been integrated into new
fab design and processes.
TSMC maintains a comprehensive risk management system
dedicated to human safety, the conservation of natural
resources and the protection of property. In order to
cope effectively with emergencies and natural disasters,
management at each facility has developed comprehensive
plans and procedures that focus on risk prevention,
emergency response, crisis management and business
continuity. All TSMC manufacturing fabs have been ISO
14001 certified (environmental management) and ISO 45001
certified (occupational health and safety management). All
manufacturing fabs in Taiwan have also been TOSHMS (Taiwan
Occupational Safety and Health Management System) certified.
New fabs will also attain the above certifications within 18
months after acquiring factory registration certification.
TSMC and many of its suppliers use flammable and toxic
materials in their manufacturing processes and are therefore
subject to risks that cannot be completely eliminated arising
from explosion, fire, or environmental influences. Although
TSMC maintains multiple layers of risk prevention and
protection, as well as fire and casualty insurance, TSMC’s
risk management and insurance coverage may not always
be sufficient to cover all of its potential losses. If any of
TSMC’s fabs or vendor facilities were to be damaged or cease
operations as a result of an explosion, fire or environmental
causes, it could reduce the TSMC’s manufacturing capacity
leading to the loss of important sales and customers and have
a negative impact on TSMC’s financial performance.
TSMC continues to monitor key disruptive threats to its
business operations and adapt the plans to ensure operational
resilience.
Risks Associated with Capacity Expansion
TSMC performs long-term market demand forecasts on
a regular basis for its products and services to manage its
overall capacity. Based on market demand, the Company
has continued to add capacity to meet market needs for its
products and services, including in Taiwan, in Arizona, U.S., in
Kumamoto, Japan and in Dresden, Germany.
Implementing these capacity expansion plans will increase
its costs, and the increases may be substantial. For example,
the Company would need to build new facilities, purchase
additional equipment and hire and train personnel to operate
the new equipment. If TSMC does not increase its net revenue
accordingly, its financial performance may be adversely
affected by these increased costs.
In addition, market conditions are dynamic, and TSMC’s
market demand forecasts may change significantly at any time.
During periods of decreased demand, certain manufacturing
lines or tools in some of the Company’s manufacturing facilities
may be suspended or shut down temporarily. However, if
demand subsequently increases rapidly over a short period
of time, TSMC may not be able to restore the capacity in
a timely manner to take advantage of the upturn. In such
circumstances, its financial performance and competitiveness
may be adversely affected.
In order to mitigate the risk associated with capacity expansion,
TSMC continuously watches for changes in market conditions
and works closely with its customers. When market demand
is not as expected, the Company tries to adjust its capacity
plans in a timely manner to reduce the impact on its financial
performance.
Risks Associated with Construction of New Fabs
The Company has multiple expansion projects that are currently
underway, including the design and construction of new fabs
worldwide. Global expansion has required and will continue to
require considerable managerial, financial and other resources.
The Company expects to face particular challenges in global
expansion and operations, including but not limited to:
●higher costs associated with construction of new fabs,
establishing supply chains for various materials in different
overseas locations, the impact on the Company’s ability to
sustain its current level of productivity and manufacturing
efficiency provided by its ecosystem of interconnected
semiconductor fabs, employees and suppliers in the R.O.C.,
and recruiting and retaining talent in various overseas
locations;
●labor shortages, interruptions in the supply chains for various
materials, and construction issues, which could substantially
delay the completion of the Company’s expansion projects,
and could further result in substantial additional costs or
failure to meet its capacity expansion plans;
●disruptions to the Company’s operations caused by natural
or man-made disasters, including earthquakes, flooding,
typhoons, droughts, tsunamis, sandstorms, wildfires,
volcanic eruptions, fire, gas/chemical leakage or spill,
pandemic, cyberattacks, supply chain disruption, geopolitical
tensions, labor issues, sabotage, failure of critical facilities
and equipment and disruptions in utilities, such as water,
electricity and natural gas, etc.;
●scarcity of industrial-use land, which could limit the
Company’s future expansion of operations;
●compliance with applicable foreign laws and regulations, and
the risk of penalties if the Company’s practices are deemed
not to be in compliance;
●challenges in managing information technology infrastructure
in multiple locations and across different systems and risks
of our information technology infrastructure succumbing to
cyberattacks worldwide;
●adverse changes relating to government grants or other
government incentives, including non-receipt, delay and
potential claw backs of government subsidies;
●challenges in creating an inclusive workplace in new sites to
embrace the cultural differences and managing the operation
over large geographic distances and in context of different
employment practices and labor laws and regulations;
●limited or insufficient intellectual property protection or
difficulties enforcing the Company’s rights to intellectual
property; and
●exposure to different tax jurisdictions and potential adverse
tax consequences.
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If TSMC is unable to overcome the above challenges, the
Company’s business, financial condition and results of
operations could be adversely affected.
Risks Associated with Sales Concentration
Over the years, the Company’s customer profile and the
nature of the Company’s customers’ business have changed
dramatically. While TSMC generates revenue from hundreds of
customers worldwide, TSMC’s ten largest customers in 2022,
2023 and 2024 accounted for approximately, 68%, 70% and
76% of TSMC’s net revenue in the respective year. TSMC’s
largest customer in 2022, 2023 and 2024 accounted for 23%,
25% and 22% of the Company’s net revenue in the respective
year. TSMC’s second largest customer in 2022, 2023 and 2024
accounted for less than 10%, 11% and 12% of TSMC’s net
revenue in the respective year.
A more concentrated customer base will subject TSMC’s
revenue to seasonal demand fluctuations from the Company’s
large customers, and cause different seasonal patterns in the
Company’s business. This customer concentration results in
part from the changing dynamics of the electronics industry
with the structural shift to mobile and HPC devices and
applications and software that provide the content for such
devices.
There are only a limited number of customers who are
successfully exploiting this new business model paradigm. Also,
TSMC has seen changes in the nature of its customers’ business
models in response to this new business model paradigm. For
example, there is a growing trend among system companies
designing their own semiconductors and working directly with
the semiconductor foundries, which makes their products and
services more marketable in a changing consumer market.
These shifting business models could lead to significant
variations in our sales if the growth of their products and
services, particularly in the AI sector, is volatile or not
sustainable.
Also, since the global semiconductor industry has become
increasingly competitive, some of TSMC’s customers have
engaged in industry consolidations in order to remain
competitive. Such consolidations have taken the form of
mergers and acquisitions. If more of TSMC’s major customers
consolidate, this will further decrease the overall number of the
Company’s customer pool. In addition, regulatory restrictions,
such as export controls directed at TSMC’s major customers,
could impact the Company’s ability to supply products to
those customers or reduce those customers’ demand for
TSMC’s products and services and thus impact their business
operations.
The loss of, or significant curtailment of purchases by, one or
more of the Company’s top customers including curtailments
due to increased competitive pressures, industry consolidation,
changes in applicable regulatory restrictions, product designs,
manufacturing sourcing or outsourcing policies or practices
of these customers, the timing of customer inventory
adjustments, or changes in its major customers’ business
models, may adversely affect TSMC’s results of operations and
financial condition.
Risks Associated with Purchasing Concentration
●Raw Materials
TSMC’s production operations require that it obtain
adequate supplies of raw materials, such as silicon wafers,
gases, chemicals and photoresist, on a timely basis and at
commercially reasonable prices. In the past, shortages in
the supply of some materials, whether by specific suppliers
or by the semiconductor industry generally, have resulted in
occasional industry-wide price adjustments and delivery delays.
Moreover, major natural disasters, trade barriers and political
or economic turmoil, including military conflicts and inflation,
occurring within the country of origin of such raw materials
may also significantly disrupt the availability of such raw
materials or increase their prices. Also, since TSMC procures
some of its raw materials from sole-sourced suppliers, there is a
risk that the Company’s needs for such raw materials may not
be met or that back-up supplies may not be readily available.
Importation and domestic production limitations may also
restrict the Company’s ability to obtain adequate supplies of
raw materials as well as materials of the necessary quality.
In addition, recent trade tensions could result in increased
prices or even unavailability of raw materials due to tariffs,
export control or other non-tariff barriers. TSMC’s revenue and
earnings could be adversely affected if we are unable to obtain
adequate supplies of the necessary raw materials in a timely
manner or if there are significant increases in the costs of raw
materials. To reduce the supply chain risk and to manage costs
effectively, TSMC commits resources toward developing new
supply sources and developing a future capacity plan with
qualified raw material suppliers. Furthermore, the Company
continually encourages its suppliers to reduce their supply
chain risk by decentralizing production plants to improve their
cost competitiveness and to support TSMC global demands in
a timely fashion.
TSMC not only operates world-class manufacturing process
and facilities but needs sufficient world-class high-quality raw
materials. As a result, TSMC engages early and extensively with
primary suppliers on managing quality and capacity issues so as
to be prepared for any unexpected need to ramp up or curtail
production. To streamline supply chain risk, the Company
communicates early on with major material suppliers regarding
quality and capacity topics and has formed a dedicated team
for supplier plant onsite or remote audits to extend supply
chain best practices to its upstream suppliers. In addition,
in response to the rapid increase or decrease in production
capacity of new products, TSMC has continued to improve its
inventory monitoring system to achieve more accurate demand
forecasts and ensure that the supply chain maintains sufficient
inventory levels. The Company also performs supply chain
risk assessments to ensure that critical suppliers meet various
standards in labor, ethics, environmental, safety and health
(ESH) practices and business continuity plans (BCPs).
●Equipment
The Company’s operations and ongoing expansion plans
depend on its ability to obtain necessary equipment and
related services available from a limited number of suppliers. As
a result, TSMC may encounter the situation of limited supply
and/or long delivery cycles. To better manage its supply chain,
the Company evaluates and projects delivery lead times to
minimize the impact of supply chain risks on operating costs.
TSMC has also implemented various collaborative business
models and risk management contingencies with suppliers
to ensure supply and shorten the procurement lead time.
To enhance its sourcing capabilities for its global sites, the
company has also taken steps to strengthen its understanding
of local regulations, policies, and supply chains. However, if
TSMC is unable to acquire in a timely manner the equipment
and parts it needs, it may fail to successfully implement
capacity expansion plans and exploit time sensitive business
opportunities. Additionally, ongoing trade tensions could result
in increased prices for, or even unavailability of, key equipment,
through delay or denial of necessary export licenses, adoption
of additional export control measures and other tariff or
non-tariff barriers. If TSMC is unable to obtain equipment in a
timely fashion to fulfill its customers’ demand for technology
and production capacity, or unable to do so at a reasonable
cost, its financial condition and results of operations could be
negatively impacted.
Risks Associated with Intellectual Property Rights
The Company’s ability to compete successfully and to achieve
future growth depends in part on the continued strength of
its intellectual property portfolio. While the Company actively
enforces and protects its intellectual property rights, there can
be no assurance that its efforts will be adequate to prevent
the misappropriation or improper use of its proprietary
technologies, software, trade secrets or know-how. Also, the
Company cannot assure you that, as its business or business
models expand into new areas, it will be able to develop
independently the technologies, patents, software, trade
secrets or know-how necessary to conduct its business or that
it can do so without unknowingly infringing the intellectual
property rights of others. As a result, the Company may has
to rely on, to a certain degree, licensed technologies and
patent licenses from others. To the extent that the Company
relies on licenses from others, there can be no assurance that
it will be able to obtain any or all of the necessary licenses in
the future on terms it considers reasonable or at all. The lack
of necessary licenses could expose the Company to claims
for damages and/or injunctions from third parties, as well as
claims for indemnification by its customers in instances where
it has contractually agreed to indemnify its customers against
damages resulting from infringement claims.
The Company has received, from time to time, communications
from third parties, including non-practicing entities
and semiconductor companies, asserting that TSMC’s
technologies, its manufacturing processes, or the design IPs
of the semiconductors made by TSMC or the use of those
semiconductors by its customers may infringe their patents
or other intellectual property rights. Because of the nature
of the industry, its market position, and the expansion of its
manufacturing operations outside of Taiwan, the Company
may receive an increased number of such communications
in the future. The assertions made and lawsuits initiated by
litigious, well-funded, non-practicing entities are particularly
aggressive in their monetary demand and in seeking
court-issued injunctions. Such lawsuits and assertions may
increase TSMC’s cost of doing business and may potentially
be extremely disruptive if these asserting entities succeed in
blocking the trade of products made and services offered
by TSMC. Also, with the expansion of its manufacturing
operations into certain non-R.O.C. jurisdictions, it has faced
increased challenges in managing risks of intellectual property
misappropriation. Despite our efforts to adopt robust measures
to mitigate the risk of intellectual property misappropriation
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in such new jurisdictions, we cannot guarantee that the
protection measures we adopted will be sufficient to prevent
us from potential infringements by others, or at all.
If the Company fails to obtain or maintain certain technologies
or intellectual property licenses or fails to prevent our
intellectual property from being misappropriated and, if
litigation relating to alleged intellectual property matters
occurs, it could: (1) prevent the Company from manufacturing
particular products or selling particular services or applying
particular technologies; and (2) reduce our ability to compete
effectively against entities benefiting from our misappropriated
intellectual property, which could reduce its opportunities to
generate revenue.
The Company has taken related measures to minimize potential
loss of shareholder value arising from intellectual property
claims and litigation filed against it. These measures include:
strategically obtaining licenses from certain semiconductor
and other technology companies as needed; timely securing
intellectual property rights originating within and outside
of TSMC for defensive and/or offensive protection of TSMC
technology and business; and aggressively defending against
baseless litigation.
Risks Associated with Litigious and Non-litigious Matters
As is the case with many companies in the semiconductor
industry, the Company has received from time to time
communications from third parties asserting that its
technologies, its manufacturing processes, or the design
of the semiconductors made by TSMC or the use of those
semiconductors by its customers may infringe upon their
patents or other intellectual property rights. These assertions
have at times resulted in litigation by or against the Company
and settlement payments by the Company. Irrespective of the
validity of these claims, the Company could incur significant
costs in the defense thereof or could suffer adverse effects
on its operations. The Company is also subject to antitrust
compliance requirements and scrutiny by governmental
regulators in multiple jurisdictions. Any adverse results of such
proceeding or other similar proceedings that may arise in
those jurisdictions could harm TSMC’s business and distract its
management, and thereby have a material adverse effect on its
results of operations or prospects, and subject the Company to
potential significant legal liability.
Currently, TSMC’s material legal proceeding is as follows:
In February 2025, Longitude Licensing Ltd. and Marlin
Semiconductor Limited (collectively, “Marlin”) filed complaints
with the U.S. International Trade Commission (“ITC”) and the
U.S. District Court for the Eastern District of Texas alleging
that TSMC and its customers infringe five U.S. patents. The ITC
instituted an investigation on March 21, 2025. The outcome
cannot be determined, and we cannot make a reliable estimate
of the contingent liability at this time.
Other than the matter described above, as of the date of this
Annual Report, TSMC is not currently a party to any other
material legal proceedings.
Risks Associated with Mergers and Acquisitions
In 2024 and as of the date of this Annual Report, TSMC had
not conducted any merger or acquisition.
Risks Associated with Talent Recruitment
TSMC relies on the continued services and contributions
of its management team, as well as skilled technical and
professional personnel. The Company’s business could
suffer from the inability to fulfill personnel needs with high
quality professionals in a timely fashion caused by the loss
of personnel, talent shortages, illegal talent poaching,
immigration controls, or related changes in market demand
for our products and services. Since there is fierce competition
for talent recruitment, the Company cannot ensure timely
fulfillment of its personnel demand.
In order to reduce the risk of talent shortage, TSMC encourages
job rotation and employs an on-the-job training and
certification system. In this way, employees can continuously
learn and enhance their work efficiency and effectiveness in
the workplace. Moreover, TSMC creates multiple recruitment
channels and continues to hire diverse top-notch, talented
professionals from Taiwan and overseas. At the same time, the
Company continues to expand industry-academic cooperation
to meet outstanding talent at an early phase to recruit them in
the future.
Future R&D Plans and Expected R&D Spending
For additional details, see “5.2.7 Future R&D Plans” on page
105 of this Annual Report.
Changes in Corporate Reputation and Impact on the
Company’s Crisis Management
TSMC has established an excellent reputation worldwide based
on its core values of integrity, commitment, innovation and
customer trust. The Company’s positive image also reflects
outstanding operations, rigorous corporate governance and
dedication to sustainable responsibility by serving as a good
corporate citizen. TSMC continues to pursue innovation in
economic, environmental and social dimensions.
In 2024, TSMC was honored with numerous awards
and citations for achievements in various areas including
operations, corporate governance, patents, profit growth,
investor relations, environmental protection, and corporate
sustainability. The Company was selected as a part of the
Dow Jones Sustainability World Index for the 24th consecutive
year. TSMC won first place in CommonWealth magazine’s
Talent Sustainability award for the second year in a row and
also received the Taiwan Institute for Sustainable Energy’s
Corporate Sustainability award for 2024. The Company earned
top honors for the Taiwan Top Ten Sustainability Exemplary,
as well as awards for Corporate Sustainability Report,
climate leadership, circular economy leadership, supply chain
management, sustainable water management and information
security leadership. In addition, The S&P Global ranked TSMC
in the top ten percent of its Sustainability Yearbook Award for
2024. The Company also ranked in the top five percent of the
Taiwan Stock Exchange corporate governance evaluation. The
Company was named a member of Fortune’s 2024 World’s
Most Admired Companies and the Fortune Global 500 and
was rated as “Prime” by ISS ESG Corporate Rating; TSMC
was a member of PricewaterhouseCoopers’ Global Top 100
Companies by market capitalization and a member of the
2024 Carbon Clean 200TM list issued by the media research
company Corporate Knights and the non-profit As You Sow
organization. The Company was also honored as part of
the World Benchmarking Alliance’s SDG2000, the 2,000
Most Influential Companies, and in Morgan Stanley Capital
International’s All Country World Index ESG Leaders, while
being ranked AAA by MSCI Research in its ESG Indexes.
To promote sustainability, TSMC’s ESG Steering Committee,
led by Chairman and Chief Executive Officer Dr. C.C. Wei,
presented the fifth TSMC ESG Award in 2024, honoring
internal organizations and divisions for tangible achievements
in the Company’s five ESG strategic directions: drive green
manufacturing, build a responsible supply chain, create
a healthy and inclusive workplace, develop talent, and
care for the disadvantaged. At the same time, this award
presentation encouraged all employees to propose new ideas
for sustainability to be assessed for feasibility and potential
incorporation in the Company’s implementation plans.
Compared to 3,166 sustainability proposals in the fourth year,
the fifth annual ESG Award generated 4,330 innovative ideas,
adding new energy to the Company’s culture of sustainability.
TSMC is committed to maintaining operational resilience and
business continuity by following standards that enable the
Company to respond effectively to major risks of natural and
man-made disasters, including earthquakes, floods, typhoons,
droughts, tsunamis, sandstorms, wildfires, volcanic eruptions,
fire, gas/chemical leaks or spills, pandemics, cyber-attacks,
supply chain disruption, geopolitical tension, sabotage,
failure of critical facilities and equipment, and shortages in
utilities such as water, electricity and natural gas. TSMC also
implements pre-crisis risk assessment, response procedures
and recovery plans. In major incidents or crisis events, TSMC
adheres to established crisis management guidelines. The
central crisis command center (C4), led by the Chairman
and CEO and consisting of senior executives from key
functions, provides guidance and decision-making to ensure
response readiness, including timely communication with key
stakeholders. In 2024, TSMC received a rating of Low ESG Risk
from Sustainalytics ESG Risk Ratings.
TSMC’s environment, safety and health committee holds
monthly meetings to coordinate with relevant departments
in each fab to conduct emergency response drills and
continuously improve their notification and operational
procedures. This ensures clear channels of communication to
stakeholders in case a crisis arises, with the public relations
division serving as the designated gateway for external
communications.
TSMC has further strengthened its business continuity
management, which includes periodic risk assessments and
mitigations, implementing centralized scenario planning
for business continuity management exercises, and the
establishment of task forces. TSMC has also deepened the
risk management mechanisms of its overseas subsidiaries and
offices by conducting risk management and business continuity
management workshops and incident commander training.
These efforts aim to fortify operational resilience and raise risk
awareness of operational preparedness across TSMC’s global
footprint.
If the aforementioned crisis occurs, relevant personnel at
TSMC’s headquarters and global operating locations can
deploy comprehensive emergency response measures to
eliminate or minimize the impact on personnel safety,
environment, property and operations. Responders also involve
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the public relations division from the initial stage to ensure
timely, clear, and consistent external communication regarding
the situation.
Risks Associated with Change in Management
In 2024 and as of the date of this Annual Report, there were
no such risks for TSMC.
Risks Regarding Non-Compliance with Export Control,
Environmental and Climate Change Related Laws,
Regulations and Accords, and Failure to Timely Obtain
Requisite Approvals Necessary for Conducting Business
Because TSMC engages in manufacturing activities in multiple
jurisdictions and conducts business with its customers
located worldwide, such activities are subject to a myriad of
governmental regulations. For example, the manufacturing,
assembling and testing of TSMC’s products require the use
of equipment that is subject to export control laws and
regulations, as well as metals, chemicals, and materials that are
subject to environmental, climate-related, health and safety,
and humanitarian forced labor prohibition and conflict-free
sourcing laws, regulations and guidelines issued worldwide.
The Company’s failure to comply with any such laws or
regulations, as amended from time to time, and its failure to
comply with any information and document sharing requests
from the relevant authorities in a timely manner could result in:
●significant penalties and legal liabilities, such as the denial
of import or export permits or third party private lawsuits,
criminal or administrative proceedings;
●the temporary or permanent suspension of production of the
affected products;
●the temporary or permanent inability to procure or use
certain production critical chemicals or materials;
●unfavorable alterations in TSMC’s manufacturing, fabrication
and assembly and test processes;
●challenges from its customers that place TSMC at a significant
competitive disadvantage, such as loss of actual or potential
sales contracts in case the Company is unable to satisfy the
applicable legal standard or customer requirement;
●restrictions on TSMC’s operations or sales;
●loss of tax benefits, including termination of current tax
incentives, disqualification of tax credit application and
repayment of the tax benefits that the Company is not
entitled to; and
●damages to TSMC’s goodwill and reputation.
TSMC’s role in the semiconductor supply chain inherently
limits its visibility and information available to it regarding the
downstream use or user of final products that incorporate
semiconductors manufactured by it. This constraint
impedes TSMC’s ability to fully ensure that semiconductors
manufactured by it will not be diverted to unintended end use
or end-user, including potentially by its business partners, or
by third parties with an intent of circumvention. In addition, if
TSMC or TSMC’s business partners fail to obtain appropriate
import, export or re-export licenses or permits or are found to
have violated applicable export control or sanctions laws, TSMC
may also be adversely affected, through reputational harm as
well as other negative consequences, including government
investigations and penalties resulting from relevant legal
proceedings, as described in the above paragraph. In October
2024, TSMC notified relevant U.S. and Taiwan authorities
that one type of its customer’s chip manufactured by it might
have been diverted to a restricted entity or incorporated
into a restricted entity’s product, and since then has been
cooperating with the authorities’ requests for additional
information and documents. Despite TSMC’s best efforts to
comply with all relevant export control and sanctions laws and
regulations, there is no assurance that its business activities
will not be found incompliant with export control laws and
regulations.
Complying with applicable laws and regulations, such as
environmental and climate related laws and regulations, could
also require TSMC, among other things, to do the following:
(1) purchase, use or install remedial equipment; (2) implement
remedial programs such as climate change mitigation
programs and air pollution reduction plans; (3) modify its
product designs and manufacturing processes, or incur other
significant expenses such as paying any incurred carbon fees
if the Company’s emission levels exceed applicable thresholds,
and obtaining renewable energy sources, renewable energy
certificates or carbon credits, substitute raw materials or
chemicals that may cost more or be less available for the
Company’s operations.
TSMC’s inability to timely obtain approvals necessary for
the conduct of its business could impair its operational and
financial results. For example, if the Company is unable to
timely obtain environmental related approvals needed to
undertake the development and construction of a new fab
or expansion project, then such inability may delay, limit, or
increase the cost of its expansion plans that could also in turn
adversely affect its business and operational results. In light
of increased public interest in environmental issues, TSMC’s
operations and expansion plans may be adversely affected or
delayed in response to public concern and social environmental
pressures even if the Company complies with all applicable
laws and regulations.
TSMC believes that climate change should be regarded as a
significant corporate risk that must be managed to improve
competitiveness. For TSMC’s climate change related risks
and control measures, see the Climate Change and Energy
Management section under “7.2.1 Environmental Protection”
on page 154-155 of this Annual Report.
6.2.4 Financial Risks
Economic Risks
Any future systemic political, economic or financial crisis or
market volatility, including but not limited to interest rate
and foreign exchange rate fluctuations, inflation or deflation
or changes in economic, fiscal and monetary policies in
major economies, could cause revenue or profits for the
semiconductor industry as a whole to decline dramatically.
If the economic conditions or financial conditions of the
Company’s customers were to deteriorate, the demand for its
products and services may decrease and additional accounting
related allowances may be required, which could reduce
TSMC’s operating income and net income.
●Interest Rate Fluctuation
TSMC 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 objective of TSMC’s investment policy is to achieve a
return that will allow the Company to preserve principal and
support liquidity requirements. The policy generally requires
the Company to invest in investment grade securities and limits
the amount of credit exposure to any one issuer. The majority
of TSMC’s fixed income investments are fixed-rate securities,
which are classified as financial assets at fair value through
other comprehensive income (FVTOCI) or 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 asset values unless the assets are sold.
The majority of TSMC’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.
TSMC has entered and may in the future enter into interest
rate derivatives to partially hedge 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.
●Foreign Exchange Volatility
Substantially all of TSMC’s sales are denominated in U.S. dollars
and over half of its capital expenditures are denominated in
currencies other than the NT dollar, primarily in U.S. dollars,
Euros and Japanese yen. As a result, any significant fluctuations
to its disadvantage in the exchange rate of the NT dollar
against such currencies, in particular a weakening of the U.S.
dollar against the NT dollar, would have an adverse impact on
the Company’s revenue and operating profit as expressed in NT
dollars. For example, every one percent depreciation of the U.S.
dollar against the NT dollar would result in an approximately
0.4 percentage point decrease in the Company’s operating
margin based on its 2024 results.
Conversely, if the U.S. dollar appreciates significantly versus
other major currencies, the demand for the products and
services of TSMC’s customers and for its goods and services
will likely decrease, which will negatively affect the Company’s
revenue. TSMC uses foreign currency derivatives contracts, such
as currency forwards or currency swaps, and non-derivative
financial instruments, such as foreign currency denominated
debts, to protect against currency exchange rate risks
associated with non-NT dollar-denominated monetary assets
and liabilities, net investments in foreign operations, and
certain forecasted transactions. These hedges reduce, but do
not entirely eliminate, the effect of foreign currency exchange
rate movements on its assets and liabilities.
Fluctuations in the exchange rate between the U.S. dollar
and the NT dollar may affect the U.S. dollar value of the
Company’s common shares and the market price of the
Company’s American Depositary Shares (ADSs) as well as any
cash dividends paid in NT dollars on TSMC’s common shares
represented by ADSs.
●Inflation
TSMC is subject to the effects of inflation through increases in
the cost of items such as raw materials and equipment used to
produce its products, wage expenses and employee benefits,
electricity costs, and costs in relation to construction of fabs.
Although TSMC does not believe that inflation has had a
material impact on its financial position or results of operations
to date, a high inflation in the future may have an adverse
effect on the Company’s ability to maintain current levels of
profit margin if the selling prices of its products and services do
not increase with these increased costs.
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●Amendments to Tax Regulations or Implementation of
New Tax Laws
Any amendments to existing tax regulations or the
implementation of any new tax laws in the jurisdictions in
which TSMC operates its business may have an adverse effect
on its net income.
While the Company is subject to tax laws and regulations
in various jurisdictions in which it operates or conducts
business, TSMC’s principal operations are in the R.O.C. and it
is exposed primarily to taxes levied by the R.O.C. government.
Any unfavorable changes of tax laws and regulations in these
jurisdictions could increase TSMC’s effective tax rate and
adversely affect its operating results. Further, changes in the
tax laws of foreign jurisdictions could arise as a result of the
base erosion and profit shifting (“BEPS”) project that was
undertaken by the Organization for Economic Cooperation
and Development (OECD). These changes may increase tax
uncertainty and have an adverse effect on TSMC’s operating
results.
In order to control tax risk, the Company closely monitors
all domestic and foreign governmental policies and
regulations that might impact its financial operations. TSMC
has established risk management procedures to collect
information, analyze potential tax implications, and develop
countermeasures.
Risks Associated with External Financing
In addition, sufficient external financing may not be available
to the Company on a timely basis, on commercially reasonable
terms to the Company, or at all. If sufficient external financing
is not available when TSMC needs such financing to meet its
capital requirements, the Company may be forced to curtail
its expansion, modify plans or delay the deployment of new or
expanded services until it obtains such financing. In conclusion,
any of these events, including any future global systemic crisis
or further escalation of trade tensions as described above,
could materially and adversely affect our results of operations.
Risks Associated with High-Risk/Highly Leveraged
Investments; Lending, Endorsements, and Guarantees
for Other Parties; and Financial Derivative Transactions
In 2024 and as of the date of this Annual Report, TSMC made
no high-risk or highly leveraged financial investments. All
financial derivative transactions engaged by TSMC were strictly
for hedging and not for trading or speculative purposes. All
guarantees and intercompany loans provided by TSMC and
its subsidiaries were solely for TSMC and/or its wholly-owned
subsidiaries. All guarantees and intercompany loans were in
compliance with relevant rules and regulations.
To manage risks of various financial transactions, TSMC has
established internal control policies and procedures based on
sound financial and business practices, all in compliance with
the relevant rules and regulations issued by the R.O.C. Financial
Supervisory Commission. TSMC’s policies and procedures
include Procedures for Financial Derivatives Transactions,
Procedures for Lending Funds to Other Parties, Procedures
for Acquisition or Disposal of Assets, and Procedures for
Endorsement and Guarantee.
Risks Associated with Impairment Charges
Under Taiwan-IFRSs, TSMC is required to evaluate its tangible
assets, right-of-use assets and intangible assets for impairment
whenever triggering events or changes in circumstances
indicate that the asset may be impaired. If certain criteria are
met, TSMC is required to record an impairment charge. TSMC
is not able to estimate the extent or timing of any impairment
charge for future years. Any impairment charge required may
have a material adverse effect on the Company’s net income.
The determination of an impairment charge at any given
time is mainly based on the projected results of operations
over several years subsequent to that time. Consequently,
an impairment charge is more likely to occur during a
period when the Company’s operating results are otherwise
already depressed. In the process of evaluating the potential
impairment of tangible assets, right-of-use assets and
intangible assets other than goodwill, TSMC determines the
independent cash flows, useful lives, expected future revenue
and expenses related to the specific asset groups with the
consideration of the nature of semiconductor industry. Any
change in these estimates based on changed economic
conditions or business strategies could result in significant
impairment charges or reversal in future years.
6.2.5 Other Risks
Potential Impact and Risks Associated with Sales of
Significant Numbers of Shares by TSMC’s Directors, and/
or Shareholders Who Own 10% or More of TSMC’s Total
Outstanding Shares
The value of TSMC shareholders’ investment may be reduced
by possible future sales of TSMC shares owned by major
shareholders.
As of the date of this Annual Report, no single shareholder
owned 10% or more of TSMC’s total outstanding shares.
Risks of Trade Policies
As TSMC’s revenue is primarily derived from sales to major
economies in the world (please refer to “2.2.4 TSMC Position,
Differentiation and Strategy” on page 17-19 of this Annual
Report), any changes in the trade policies (such as the increase
of tariffs on certain products, the implementation of import
and export controls, and the adoption of other trade barriers)
of such major economies can affect the sales of TSMC or its
customers and thereby affect TSMC’s operating results. For
example, U.S. President Donald Trump announced in 2025
an intention to impose more expansive tariffs on imports
into the United States. Any tariffs imposed on imports of
semiconductors and products incorporating chips into the
United States may result in increased costs for purchasing such
products, which may, in turn, lead to decreased demand for
TSMC’s products and services and adversely affect its business
and future growth.
Also, any increase in the use of export control restrictions
and sanctions to target certain countries and entities, any
expansion of the extraterritorial jurisdiction of such measures,
or complete or partial ban on semiconductor products sales
to certain entities could impact not only TSMC’s ability to
continue supplying products to those customers, but also our
customers’ demand for our products, and could even lead to
changes in semiconductor supply chains.
For example, the U.S. tightened its export control measures
against Huawei Technology Co. Ltd. and its affiliates
(collectively, “Huawei”) in 2020. To comply with relevant
laws and regulations, TSMC has discontinued shipment of
products to Huawei since September 2020. In October 2022
and October 2023, the U.S. adopted additional export controls
(the “October Rules”) over specified countries (including
China) under the U.S. Export Administration Regulations
(“U.S. EAR”) on certain advanced computing integrated
circuits (“ICs”), computer commodities that contain such ICs,
and certain semiconductor manufacturing items, as well as
controls on transactions involving items for supercomputer
and semiconductor manufacturing end-uses. The controls
impose license requirements for items subject to the U.S.
EAR where the items are destined to a semiconductor
fabrication facility in China that fabricates ICs meeting
specified advanced node parameters as well as for U.S.
persons’ activities supporting such facility or semiconductor
manufacturing items. In response, TSMC obtained from the
U.S. Department of Commerce a Validated End-User (the
“VEU”) authorization for TSMC’s fab located in Nanjing, China,
which is a permanent authorization that allows TSMC’s fab
in Nanjing to receive exports of eligible items from the U.S.
without separate licenses. However, there is no assurance that
the VEU authorization TSMC obtained will not be terminated
in the future. The restrictions imposed by the October Rules
on advanced computing ICs are further reinforced by the
U.S.’ new rules issued in January 2025. Under the new rules,
TSMC may need to obtain an export license prior to shipping
products using 16-nanometer or below process to any global
destination unless specific conditions are met. As a result,
shipments of certain products may be delayed or prohibited
due to the license requirements and the Company’s financial
results may be adversely affected.
On the other hand, measures adopted by an affected country
to counteract the impact of another country’s actions
or regulations could lead to significant legal liability to
multinational corporations including our own. For example, in
January 2021, China adopted a blocking statute that, among
other matters, entitles Chinese entities incurring damages from
a multinational’s compliance with foreign laws to seek civil
remedies.
Imposition of trade barriers, including protectionist measures,
sanctions and import and export controls (including without
limitation the export control measures mentioned in the
foregoing paragraph), could increase TSMC’s manufacturing
costs, limit TSMC’s access to certain supplies, make TSMC’s
pricing less competitive, and impact the sales of TSMC or its
customers. In 2024 and as of the date of this Annual Report,
the Company’s current results of operations have not been
materially affected by the expanded export control regulations
or the novel rules or measures adopted to counteract them.
Nevertheless, depending on future developments in global
trade tensions, such regulations, rules, or measures may have
an adverse impact on the Company’s business and operations,
and TSMC may incur significant legal liability and financial
losses as a result.
TSMC continues to monitor the recent shifts in trade policies
and measures among the relevant major economies and will
take corresponding responsive actions in accordance with
subsequent developments.
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7
TSMC is the only semiconductor company to be selected as
a component of the Dow Jones Sustainability Indices for 24
consecutive years.
Corporate
Sustainability (ESG)
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7.1 Overview
In pursuit of its core business achievements, TSMC remains committed to responsible management, guided by three key
missions: Integrity, Strengthen Environmental Protection, and Care for the Underprivileged. The Company actively engages in ESG
(environmental, social, governance) management, collaborating with stakeholders including employees, shareholders/investors,
customers, suppliers/contractors, governments/associations, and communities. TSMC aspires to catalyze sustained positive societal
change, fostering shared value for a sustainable future.
Guidance for Implementing ESG
With the vision of Uplifting Society, TSMC’s ESG Policy serves as the paramount guiding principle for sustainable development.
The ESG Matrix, thoughtfully conceived by the Company’s founder, Dr. Morris Chang, delineates the Company’s ESG scope. The
horizontal axis represents TSMC’s aspiration to set sustainability benchmarks in seven domains: morality, business ethics, economy,
rule of law, sustainability, work-life balance/happiness, and philanthropy. Conversely, the vertical axis showcases specific actions,
including integrity, law compliance, anti-corruption/anti-bribery/anti-cronyism, environmental protection/climate control/energy
conservation, corporate governance, providing well-paying jobs, generating good shareholder return, employee work-life balance,
encouraging innovation and a good work environment. Through the TSMC Charity Foundation and the TSMC Education and
Culture Foundation, the Company actively engages in societal participation, laying the groundwork for a harmonious and virtuous
society.
TSMC ESG Matrix
Society
TSMC
Morality
Business Ethics
Economy
Rule of Law
Sustainability
Work-life
Balance/
Happiness
Philanthropy
Integrity
V
V
Law Compliance
V
Anti-Corruption
Anti-Bribery
Anti-Cronyism
V
V
V
Environmental Protection
Climate Control
Energy Conservation
V
V
Corporate Governance
V
V
V
Provide Well-Paying Jobs
V
V
Good Shareholder Return
V
Employees’ Work-Life Balance
V
Encourage Innovation
V
V
Good Work Environment
V
TSMC Charity Foundation
V
V
V
TSMC Education and Culture Foundation
V
V
V
ESG Management
The ESG Steering Committee at TSMC serves as the apex of ESG decision-making, chaired by the Company’s Chairman, with the
Chairperson of the ESG Committee acting as the executive secretary. This committee, comprising senior executives from a wide
variety of functions, collaboratively examines ESG issues critical to the Company’s operations and establishes short-, medium-, and
long-term strategic directions and development goals, aligning with the United Nations sustainable development goals (SDGs),
while leveraging the Company’s core strengths.
The ESG Committee, operating under the guidance of the ESG Steering Committee’s resolutions, is responsible for integrating
resources and coordinating communication across various departments. It oversees the dedicated ESG department (established
in 2019 and renamed in 2021) and engages cross-organizational representatives to collaboratively identify sustainability issues
pertinent to the Company’s operations and stakeholders’ interests. Task forces are established based on identified issues to
develop corresponding strategies, goals, and action plans. Progress is monitored through quarterly meetings to ensure effective
implementation of ESG strategies in TSMC’s daily operations. Additionally, the Chairperson of the ESG Committee provides quarterly
updates on execution outcomes and future plans to the Board of Directors/Nominating, Corporate Governance, and Sustainability
Committee. This ongoing communication aims to enhance TSMC’s sustainability management policies, strategies, and objectives,
fostering sustainable development.
In 2024, TSMC focused primarily on green manufacturing and supply chain management (including climate and nature risk/
opportunity identification and actions, carbon and water footprint management, the Eco Plus! Ecological Harmony Program, and
value chain decarbonization), inclusive workplaces and talent development (including conducting workplace human rights climate
surveys and strengthening semiconductor industry-academia collaboration). Public welfare contributions (including Teach and
Learn Program and Vocational Training Project,) alongside planning and executing ESG budgets for 2024 and 2025. TSMC employs
sustainability reports as a tool for ESG management and has updated themed reports such as the Climate and Nature Report, the
UN’s SDG Action Report, the Materiality Analysis Report, the Sustainability Impact Valuation Report, and the Human Rights Report.
Stakeholder Engagement
TSMC respects all stakeholders’ rights and interests in sustainability issues through diverse communication platforms. These channels
include a dedicated ESG website, ESG mailbox, Investor Relations mailbox, employee feedback channels, irregular business conduct
reporting system, and the supply chain worker grievance channel. TSMC systematically manages and addresses stakeholders’
concerns through identification, prioritization, and validation.
Stakeholders and Communication Channels in 2024
Stakeholders
Communication Channels
Employees
●Employee Opinion Survey on Company Core Values and Employee Engagement Survey
●Workplace Human Rights Climate Survey and Risk-Aware Culture Survey
●Employee training (forums, lectures, physical and online courses)
●Communication meetings for various levels of managers and employees, e.g. the executives communication meeting, skip levels and communication meeting in
individual functions or divisions
●Human Resources Business Partner Team
●Corporate intranet, internal emails, and other announcement channels (such as promotion posters at facilities), TSMC eSilicon Garden Stories
●Diverse communication channels, such as Silicon Garden Meeting (labor-management meeting), Ombudsman System, Whistleblower Procedures, Irregular Business
Conduct Reporting, Sexual Harassment Investigation Committee, Fab Caring Circle, Employee Opinion Box, Wellness Center, wellness website, employee PIP & IT
Security mailbox and hotline, Occupational Disease Investigation Committee and Occupational Safety and Health Feedback Channels, etc.
Shareholders/Investors
●General shareholders’ meeting
●Annual Reports, Sustainability Reports, Theme Reports (Climate and Nature Report, UN SDGs Action Reports, Materiality Analysis Reports, Sustainability Impact
Valuation Report, Human Rights Report), and Form 20-F with the U.S. Securities and Exchange Commission
●Earnings conference
●Domestic and overseas broker conference
●Face-to-face meetings, video conference calls, telephone conference calls and Investor Relations mailbox
●Major announcements on the Market Observation Post System, and corporate press releases on the Company’s website
Customers
●Customer satisfaction survey
●Business and technology assessment
●Customer meetings
●Customer visits/audits
Suppliers/Contractors
●Supplier Code of Conduct promotion
●Supplier Self-Assessment Questionnaire (SAQ)
●Supply chain environment, safety and health training
●Supplier Human Rights Enhancement Workshop
●Sustainable Supply Chain Environment, Safety and Health Forum, Supply Chain ESH Technical Forum
●Carbon reduction follow-up meeting with major emission contributors
●Supplier meetings
●On-site support and audit
●Supply Chain Employee Grievance Channel
●Supply Online 360 Global Responsible Supply Chain Platform
Government/Industry Associations
●Industry association communication platform
●Official correspondence, documents, emails and visits
●Offer industry experience and advice, and keynote speech
●Conferences (e.g., briefings, public hearings, symposia, seminars, meetups, phone conference)
Communities
●Volunteer cadre meetings and volunteer activities and services
●Project collaboration and visit
●Sponsorship of charity projects and educational projects
●“Sending Love” charity platform
●TSMC Education and Culture Foundation and TSMC Charity Foundation websites
●ESG website, ESG Newsletter, ESG mailbox and social media (Facebook and LinkedIn)
●Irregular Business Conduct Reporting System
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2024 ESG Awards and Ratings
Category
Organization
Awards and Ratings
Overall ESG
Dow Jones Sustainability Indices (DJSI)
●Dow Jones Sustainability World Index for the 24th consecutive year
MSCI ESG Indexes
●MSCI ACWI ESG Leaders Index component
●MSCI ESG Research – AAA Ratings
●MSCI ACWI SRI Index component
●MSCI Emerging Markets ESG Leaders Index
Sustainalytics
●Company ESG Risk Ratings: Low ESG Risk – Semiconductor Industry
ISS ESG
●“Prime” Rated by ISS ESG Corporate Rating
FTSE4Good Index
●FTSE4Good Emerging Index component
●FTSE4Good All-World Index component
●FTSE4Good TIP Taiwan ESG Index component
World Benchmarking Alliance (WBA)
●SDG2000 – The 2,000 Most Influential Companies
S&P Global
●The Sustainability Yearbook Award 2024 – Top 10% S&P Global ESG Score
CommonWealth Magazine
●Excellence in Corporate Social Responsibility
Taiwan Institute for Sustainable Energy
●The Most Prestigious Sustainability Award – Top Ten Domestic Corporates for the 9th consecutive year
●Best Sustainability Report Award
●Cyclical Economy Leadership Award
●Information Security Leadership Award
●Sustainable Supply Chain Leadership Award
●Water Management Leadership Award
●Climate Leadership Award
Morningstar
●The Best Sustainable Companies to Own in 2025
(Continued)
Responsibilities of ESG Steering Committee and ESG Committee Members
Committee Members
Responsibilities
Stakeholders
Business Development
Shaping an energy-efficient technology roadmap; building alliance with customers to foster smarter and greener product
innovations; establishing and promoting TSMC as a responsible technology thought leader, and sharing its experiences and
achievements
Employees
Customers
Communities
Customer Service
Customers’ service and satisfaction, customer trust, customer confidentiality, Responsible Business Alliance and its code of
conduct
Customers
Government/Industry
Associations
Environment, Safety and Health
Environmental policy and management system, climate change mitigation and adaption, pollution prevention, energy
consumption efficiency, carbon emissions and carbon rights management, product environmental responsibility, response
mechanism for environmental issues, environmental spending, green supply chain, policy and management systems for
occupational health and safety, workplace health and safety, occupational disease prevention and health promotion,
communication of ESH regulations
Employees
Shareholders/Investors
Customers
Suppliers/Contractors
Government/Industry
Associations
Communities
Finance
Financial disclosure, dividend policy, tax strategy
Employees
Shareholders/Investors
Customers
Suppliers/Contractors
Government/Industry
Associations
Human Resources
Inclusive workplace, talent attraction and retention, talent development
Employees
Government/Industry
Associations
Communities
Information Technology and Information
Security
Information security
Employees
Shareholders/Investors
Customers
Suppliers/Contractors
Government/Industry
Associations
Investor Relations
Resolving issues of stakeholder concern, establishing trusting long-term relationships, effective two-way communication, annual
report production
Shareholders/Investors
Legal
Corporate governance, code of conduct, legal compliance (including fair competition, privacy and personal information, and
protection for whistle-blowers), intellectual property, protection of confidential information
Employees
Government/Industry
Associations
Communities
Materials Management
Materials and supply chain risk management, supplier management, conflict minerals, Responsible Business Alliance and its code
of conduct, circular resources
Shareholders/Investors
Customers
Suppliers/Contractors
Government/Industry
Associations
Operations
Operational eco-efficiency, pollution prevention, water positivity and risk management, green manufacturing
Shareholders/Investors
Customers
Suppliers/Contractors
Public Relations
Stakeholder engagement, mechanism for reflecting issues of social concern, media relations
Employees
Shareholders/Investors
Customers
Suppliers/Contractors
Government/Industry
Associations
Communities
Quality and Reliability
Product quality and reliability, product recall mechanism
Customers
Suppliers/Contractors
Research and Development
Innovation management, green products
Employees
Customers
Suppliers/Contractors
Government/Industry
Associations
Risk Management
Risk management, crisis management, emergency response and action plan
Employees
Shareholders/Investors
Customers
Suppliers/Contractors
TSMC Education and Culture Foundation
Cultivate young generation, promote educational collaboration, promote arts and culture
Communities
TSMC Charity Foundation
Empower education, care for the elderly, protect the Environment
Communities
TSMC actively engages with its diverse stakeholders to understand their insights and expectations while aligning with international
sustainability standards. For 26 consecutive years, TSMC has published its non-financial report. The Company conducts materiality
analyses based on Global Reporting Initiative (GRI) 3: Material Topics 2021, incorporating the dynamic materiality concept proposed
by the World Economic Forum (WEF) and the dual materiality principle recommended by the European Sustainability Reporting
Standards (ESRS). The analysis, which includes TSMC’s facilities in Taiwan (headquarters, wafer fabs, and advanced backend fabs),
TSMC China, TSMC Nanjing, TSMC Arizona, TSMC Washington, LLC, Japan Advanced Semiconductor Manufacturing, Inc., VisEra,
and other subsidiaries, applies the concepts of impact, risk, and opportunity in conjunction with TSMC’s Risk Management Policy.
This process identifies ESG issues and potential challenges with significant implications for operations, enabling TSMC to adjust its
sustainability strategies and objectives. By employing innovative thinking and concrete actions, TSMC effectively implements risk
mitigation measures, enhances organizational resilience, and deepens its capacity for sustainable development.
In addition to the GRI Standards, the TSMC Sustainability Report aligns with the Task Force on Climate-related Financial Disclosures
(TCFD) Recommendations, Taskforce on Nature-related Financial Disclosures (TNFD) Recommendations, Sustainability Accounting
Standards Board (SASB) Standards, the AA1000 Accountability Principles as well as utilizes the Impact Reporting and Investment
Standards (IRIS+) to evaluate its public welfare projects. The report is independently verified by DNV Business Assurance Co. Ltd.,
ensuring that the verification scope and criteria adhere to the DNV VeriSustainTM Protocol, the GRI Standards, SASB Standards, and
the TCFD framework, thereby ensuring that the disclosed sustainability information meets stakeholder needs through a diversified
standards and verification mechanism.
In response to global political, economic, and environmental changes, TSMC proactively fulfills its corporate citizenship
responsibilities by aligning with the UN SDGs and examining their relevance to its operations. The Company has set long-term
goals for 2030, with specific actions centered around SDG 17: Partnerships for the Goals. TSMC collaborates closely with internal
and external stakeholders and business partners throughout the value chain to continually explore opportunities for development
across economic, environmental, and social dimensions. As the only semiconductor company to be included in the Dow Jones
Sustainability World Index for 24 consecutive years, TSMC is committed to driving sustainable innovation. The Company focuses on
ESG in five directions: drive green manufacturing, build a responsible supply chain, create a healthy and inclusive workplace develop
talent, and care for the underprivileged. Through these efforts, TSMC aims to generate substantial and positive impacts, fostering a
future of shared prosperity.
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7.2 Environmental, Safety and Health (ESH) Management
TSMC believes its environmental, safety and health (ESH) practices must not only meet legal requirements but should also align
with internationally recognized best practices. The Company’s ESH policies aim to achieve “zero incidents” and “environmental
sustainability” and to make TSMC a world-class organization in environmental, safety and health management. The Company’s
strategies for attaining these goals are to comply with regulations, promote safety and health, strengthen recycling and pollution
prevention, manage ESH risks, instill an ESH culture, establish a green supply chain, and fulfill its related corporate citizen
responsibilities.
All TSMC and its subsidiaries’ manufacturing facilities have received ISO 14001: 2015 certification for environmental management
systems and ISO 45001: 2018 certification for occupational safety and health management systems. TSMC and its subsidiary
fabs in Taiwan have each been certified by the Taiwan Occupational Safety and Health Management System (TOSHMS). All the
Category
Organization
Awards and Ratings
Economy and Governance
Extel 2024 All-Asia Executive Team
●Most Honored Company (Technology/Semiconductors) – 1st Place (buy-side and sell-side) – All-Asia
●Best CEO (Technology/Semiconductors) – 1st Place (buy-side and sell-side) – All-Asia
●Best CFO (Technology/Semiconductors) – 1st Place (buy-side and sell-side) – All-Asia
●Best IR Professionals (Technology/Semiconductors) – 1st Place (buy-side and sell-side) – All-Asia
●Best IR Team (Technology/Semiconductors) – 1st Place (buy-side and sell-side) – All-Asia
●Best IR Program (Technology/Semiconductors) – 1st Place (buy-side and sell-side) – All-Asia
●Best ESG Program (Technology/Semiconductors) – 1st Place (buy-side and sell-side) – All-Asia
●Best Company Board (Technology/Semiconductors) – 1st Place (buy-side and sell-side) – All-Asia
IFI Claims Patent Services
●Ranked as 2nd in 2024 Top 50 US Patent Assignees
Forbes
●Forbes Global 2,000
FutureBrand Index
●FutureBrand Index 2024
FORTUNE
●2024 World’s Most Admired Companies
●Fortune Global 500
Brand Finance
●Brand Finance Global 500
Business Today
●Top 1,000 Enterprises in Taiwan, Hong Kong and Mainland China
Taiwan Stock Exchange
●Top 5% in Corporate Governance Evaluation of Listed Companies for the 10th consecutive year
PricewaterhouseCoopers
●Global Top 100 Companies by Market Capitalization for the 12th consecutive year
R.O.C. Ministry of Economic Affairs Intellectual
Property Office
●Ranked No. 1 in Taiwan Patent Applications for the 9th consecutive year
●Ranked No. 1 in Taiwan Patent Grants for the 5th consecutive year
Industrial Development Administration, Ministry of
Economic Affairs
●Taiwan Intellectual Property Management System (TIPS) AAA certification
Germany Federal Office for Information Security
●Common Criteria, ISO/IEC 15408- EAL6 Site Certification
Corporate Synergy Development Center
●Taiwan Continuous Improvement Award – Gold Tower Award – Fab 3, Fab 8, Fab 12A, Fab14A, Fab15B, Fab 16, EBO
●Taiwan Continuous Improvement Award – Silver Tower Award – Fab18A & FAC
●Taiwan Continuous Improvement Award – Fab 12A, Fab 14A, Fab 16
Clarivate
●2024 Top 100 Global Innovators
LexisNexis
●Innovation Momentum 2024: The Global Top 100
Environment, Safety and Health
Corporate Knights & As You Sow
●2024 Carbon Clean 200TM List
CDP
●Climate Change B Ratings
●Water Security A- Ratings
Alliance for Water Stewardship, AWS
●“Platinum” Class Certification for the 5th consecutive year – Fab 5, Fab 6, Fab 12A, Fab 12B, Fab 14P5, Fab 14P6, Fab
14P7, Fab 15A, Fab 15B, AP3
U.S. Green Building Council
●Leadership in Energy and Environmental Design (LEED) – “Gold” Class Certification – Fab 14P8 Manufacturing Facility,
Fab 23P1 Manufacturing Facility, AP6A Manufacturing Facility, AP6C Manufacturing Facility, Fab 12P8 Office, Fab 23
Office, AP6A Office
UL Solutions
●Platinum Rating for UL 2799 Standard
Ministry of Environment, R.O.C.
●National Enterprise Environmental Protection Award – Fab 14B, Fab 15B, Fab 18A, Fab 8
●Green Chemistry Application and Innovation Award – Fab 14B, Fab 18P1, AP3
●Sustainable Water Innovation Award – TSMC S.T.S.P. Reclaimed Water Plant
●The Best Companies of Resources Cycle – AP3
Society
Forbes
●2024 World’s Best Employers
Occupational Safety and Health Administration,
Ministry of Labor, R.O.C.
●National Occupational Safety and Health Award – Enterprise Benchmarking Award for the 3rd consecutive year
CommonWealth Magazine
●Talent Sustainability Award: Large Enterprise (Manufacturing) 1st Place
diseases in the semiconductor manufacturing process and
prevention plans for such diseases. To mitigate health risks to
employees, suppliers and contractors in the workplace, TSMC
has adopted rigorous safety and health control measures
focused on preventing occupational injuries and diseases and
promoting employee safety, physical and mental health.
To minimize supply chain risk and fulfill its corporate citizen
responsibility, TSMC not only follows ESH best practices
internally but also strives to improve the ESH performance of its
suppliers and contractors through audits and counselling.
TSMC uses priority work management and self-management
to govern services provided by contractors. The Company
requires contractors performing level-one high-risk operations
to complete certification for technicians and to establish
their own ISO 45001 safety and health management system.
The emphasis on self-management nurtures the sense of
responsibility, with the goal of promoting safety awareness
and technical improvement for all contractors in the industry.
For onsite contractor personnel, TSMC not only provides
standardized courses on safety and health but has also
established interactive online training and increased the
frequency of such courses to improve effectiveness and safety
awareness. To ensure that the Company’s safety protocols are
accurately delivered to contractors on a timely basis, TSMC has
established a digital platform for mutual communication and
blue book for contractors’ safety, health and environmental
protection so that onsite operational risks can be mitigated.
TSMC collaborates with suppliers to undertake sustainable
supply chain management, which includes establishing
sustainable standards for suppliers, developing audit plans,
conducting audits and tracking improvements, providing
guidance and training, and offering further assistances
to underperforming suppliers. Key focus in 2024 include
enhancing suppliers’ capabilities in environmental, safety, and
health (ESH) technologies, improving fire response and water
conservation capabilities, and increasing the understanding
of biodiversity issues. To achieve these, the Company held
the fire emergency response workshops (62 participants from
52 suppliers) and continued the supplier ESH improvement
program for senior executives (50 participants from nine
suppliers). Additionally, for nine consecutive years, suppliers
have been invited to observe TSMC’s annual emergency
response drills (217 participants from 212 suppliers) and the
Company’s ESH sustainability forum focused on successful
case sharing (360 participants from 152 suppliers). TSMC also
conducted ESH audits at supplier manufacturing sites and
above certifications have been maintained and remain valid.
Per TSMC policy, all new facilities are required to attain the
aforementioned certifications within 18 months after receiving
their operating license.
To reduce overall environmental, safety and health risks, TSMC
strives for continuous improvement and actively seeks to
enhance climate-change management, pollution prevention
and control, power and resource conservation, waste reduction
and recycling, safety and health management, and fire and
explosion prevention, as well as to minimize the impact of
earthquake damage.
In order to meet regulatory and customer requirements for the
management of hazardous materials, TSMC has adopted the
IECQ QC 080000 hazardous substance process management
(HSPM) system. All TSMC fabs have been QC 080000
certified and have maintained validity since 2006. Through
the establishment of QC 080000, TSMC ensures that its
products comply with customer requirements and international
regulations including the European Union’s Restriction of
Hazardous Substances (RoHS) Directive, the EU’s Registration,
Evaluation, Authorization and Restriction of Chemicals
(REACH), the Montreal Protocol on Substances that Deplete
the Ozone Layer, the “halogen-free in electronic products”
initiative, perfluorooctane sulfonates (PFOS), perfluorooctanoic
acid (PFOA) and related substances restriction standards. In
addition, TSMC continuously promote its reduction plan for the
use of the hazardous substance N-methylpyrrolidinone (NMP)
and has completed NMP phase-out project for the etching
process in overseas subsidiaries by the end of 2024, achieving
its annual goal.
TSMC began implementing the ISO 50001 energy
management system for continuous improvement in energy
conservation in 2011. By 2022, all TSMC and its subsidiaries’
manufacturing facilities had received ISO 50001 certification
and have maintained it except for TSMC Washington in the
U.S, which has been verified by a third party and plans to
receive this certification in 2025.
Aiming to establish the healthiest possible workplace, in 2017
TSMC formed a corporate-level health promotion committee
led by executives at the vice president level to address on an
ad-hoc basis occupational disease cases or other health issues.
The committee members included fab directors, managers
of safety and health department, and representatives from
wellness, HR and legal affairs divisions. External experts were
also invited to discuss the potential risks of occupational
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actively assists suppliers in improving their ESH performance. A new ESH Technical Forum was introduced to provide solutions to
common ESH issues (199 participants from 175 suppliers). Furthermore, the Company requested that suppliers conduct a carbon
emissions inventory and encouraged them to reduce these emissions and implement measures to save energy, conserve water and
reduce waste.
7.2.1 Environmental Protection
Climate Change and Energy Management
●Task Force on Climate-related Financial Disclosures (TCFD)
To address the potential financial risks of climate change on operations, in 2018 TSMC adopted the TCFD’s recommendations
released by the Financial Stability Board (FSB) to identify risks and opportunities and further establish metrics and management
targets based on the results identified.
Management Structure of TSMC Climate-related Risks and Opportunities
Category
Management Strategy and Actions
Governance
Board of Directors periodically reviews climate change related risks and opportunities
●ESG Steering Committee: TSMC’s top organization in climate change management. Led by TSMC’s Chairman with the chairperson of the ESG committee serving as executive
secretary, the committee reviews TSMC’s climate change strategies and goals every quarter and reports to the Board of Directors/nominating, corporate governance and
sustainability committee
●Energy Saving and Carbon Reduction Committee: The Company’s management organization for taking action on climate change risk and opportunity. Chaired by the senior
executive of fab operations, every quarter this committee formulates management plans, reviews implementation status, and discusses future plans
Strategy
Identify short-, medium- and long-term climate risks and opportunities through cross-departmental discussion
Use scenario analysis to assess the potential operational and financial impact of significant climate risks and opportunities to the Company
Promote low carbon manufacturing to approach net zero emissions and strengthen climate resilience
Through communication and coaching, enhance suppliers’ climate risk awareness and response capabilities, and cooperate with suppliers to actively develop and implement specific
carbon reduction actions
Risk Management
Use the TCFD framework to establish TSMC’s climate risk identification process
Follow risk identification and ranking on climate change to develop relevant response projects
Integrate climate risk identification and assessment into the enterprise risk management (ERM) process
Metrics and Targets
Set management metrics related to climate change
Develop carbon emissions reduction targets for TSMC and its suppliers and regularly review the progress on achieving said targets
Financial Impact Analysis and Response of Climate Risks and Opportunities
Climate Risks
Potential Financial Impact
Climate Opportunities
Potential Financial Impact
2024 Actions
Greenhouse Gas (GHG)
Emissions Cap and Carbon
Tax/Carbon Fee
Restrictions on capacity expansion,
increases in operation costs
●Participation in renewable energy
plans
●Participation in carbon trading
market
Early purchases of renewable
energy, successfully increasing
production capacity
●Have signed power purchase agreements for renewable
energy totaling 4.4 GW
●Used 3,610 GWh in renewable energy, and increased the
proportion of renewable energy use to 14.1%
●Achieved 100% renewable energy used in overseas
subsidiaries and offices for the seventh consecutive year
Trend to Net Zero Emission
●Increased cost of installation and
operation of carbon reduction
equipment
●Increased cost of purchasing
carbon offset products
Win public recognition and carbon
emissions offset cooperation
Accumulate carbon credits in
preparation for future carbon
emissions offset
●Received carbon credit for fluorinated-GHG and nitrous
oxide reduction offset project about 1,500 thousand tons
●100% use of carbon neutral natural gas from Chinese
Petroleum Corporation in TSMC Taiwan fabs
●Purchased approximately 289 thousand tons of carbon
credits, with around 234 thousand tons used to offset
Scope 1 carbon emissions, achieving net-zero emissions.
Develop low-carbon product services
to improve product energy efficiency
Satisfy customer needs for
energy-saving products and
increase revenue
●Developed energy saving products for the 3nm, 2nm and
more advanced manufacturing process
Commitment of
Environmental Impact
Assessment (EIA)
The development of advanced
technologies potentially hampered
by inability to obtain renewable
energy and reclaimed water
Use reclaimed water
Smooth construction of
advanced production lines
●Consumed 19.65 million cubic meter/year of reclaimed
water
Uncertainty of
Development of New
Energy Saving Technology
Rising electricity consumption in
advanced technology production
lines increases production costs
Construct green buildings
Reduce utility costs
●Received nine green building certifications
Climate Risks
Potential Financial Impact
Climate Opportunities
Potential Financial Impact
2024 Actions
Impact on the Company’s
reputation
Inability to satisfy the expectations
of stakeholders, negatively
impacting the Company’s
reputation
Improve the Company’s reputation
Upgrade TSMC performance
in stakeholders’ sustainability
ranking
●Led the industry as the only semiconductor company
chosen for the Dow Jones Sustainability Indices (DJSI) for
the 24th consecutive year
Drought (TSMC Operation)
Production negatively affected,
causing financial losses and a
decrease in revenue
Increase resilience and ability to cope
with natural disasters
Strengthen resilience in coping
with climate change impact,
lower risk of operations
disruption, and reduce potential
losses
●Raised the building base of Fab 22 Phase 1 five meters
higher
●Fab 20 Phase 1 and Fab 22 Phase 1 committed to using
reclaimed water
●Required suppliers to assess drought and flooding risk in
operating facilities and implement related risk reduction
actions
●Implemented drills based on drought emergency
procedures
Drought (Supply Chain)
Flooding (TSMC Operation)
Flooding (Supply Chain)
Rising Temperatures
Increase in electricity consumption,
cost, and carbon emissions
Strive for low-carbon, green
manufacturing
Save energy and cut costs
●Conserved 810 GWh of electricity through energy-saving
projects
Greenhouse Gas (GHG) Emission Reduction and Energy Management
TSMC remains committed to becoming a global leader in green manufacturing. In response to threats presented by extreme
weather, TSMC sets strategies and targets, ensures sound execution and strives to build a sustainable culture. In 2021, TSMC
announced its long-term goal of net zero emissions by 2050, while setting the short-term goal of zero growth in emissions by
2025. By actively implementing emission reduction measures, the Company is working to return its carbon emissions to 2020 levels
by 2030.
The Company actively participates in the initiatives of the World Semiconductor Council (WSC) and has leveraged its past experience
to develop best practices, which have been fully adopted and implemented by the Company since 2012 to reduce perfluorinated
compounds (PFC) emissions. In 2018, in accordance with the Ministry of Environment’s regulation, “Greenhouse Gas Offset Project
Management Regulations”, TSMC applied for recognition of GHG reduction and accumulatively received 1.5 million tons of carbon
dioxide credits since 2022. Those carbon credits can be used to offset GHG emissions of new manufacturing facilities regulated by
environmental impact assessment (EIA) Act in support of the Company’s sustainable operations and mitigate climate-change risk.
Since 2005, TSMC has completed the GHG inventory program and taken a complete inventory of its GHG emissions to gain ISO
14064 certification. The inventory shows that the major direct GHG emissions are PFCs, which are widely used in semiconductor
manufacturing. The primary indirect GHG emission is electricity consumption. The analysis of the inventory data was performed not
only to meet domestic regulatory reporting requirements but also to serve as a baseline reference for the Company’s strategy to
reduce GHG emissions. For the last 20 years TSMC has worked with the CDP, an international non-profit organization, to publicly
disclose climate change information and to continuously review and improve related management practices.
In response to the Paris global climate agreement and the R.O.C. Greenhouse Gas Reduction and Management Act, TSMC initiated
a cross-functional platform for carbon management in 2016. The three areas of focus of this platform are legal compliance,
emission reduction, and carbon credit acquisition. In addition to participating in official regulatory consultation and communications
meetings, the Company also sets short-, medium- and long-term reduction targets through the Energy Saving and Carbon
Reduction Committee led by the fab operations’ senior executive. The measures are carried out by energy and carbon reduction
teams of individual fabs. Because more than 80% of TSMC’s GHG emissions come from electricity consumption, the Company
emphasizes energy conservation and carbon reduction initiatives. TSMC has not only implemented energy-conserving designs in
its manufacturing fabs and offices but has also continuously improved the energy efficiency in operating its facilities. These efforts
simultaneously reduce carbon dioxide gas emissions and costs. As a result, TSMC has conserved 4.7 billion kilowatt hours (kWh)
of power since 2016. In 2023, Taiwan renamed the “Greenhouse Gas Reduction and Management Act” to the “Climate Change
Response Act” and amended the provisions, setting a target to achieve net-zero emissions by 2050 and establishing a carbon
fee mechanism. In 2024, three subordinate regulations were announced: the “Carbon Fee Charging Measures”, “Regulations on
the Management of Voluntary Emission Reduction Programs” and “Designated Greenhouse Gas Reduction Targets for Entities
Subject to Carbon Fee Collection” and the rate of carbon fee was also set and announced. For emitters with direct and indirect
emissions exceeding a certain threshold, carbon fees will be levied starting in 2025. As TSMC’s emissions in Taiwan exceed the
current regulatory threshold, the Company will pay a carbon fee in 2026 for the first time. TSMC will continue to integrate green
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management into its daily operations, actively implement greenhouse gas reduction targets, and propose a voluntary reduction plan
to obtain preferential rates, thereby mitigating the financial impact on the Company.
Since 2018, TSMC has aggressively negotiated the purchase of renewable energy from suppliers in Taiwan. The Company aims to
achieve 60% of its electricity consumption from renewable energy by 2030 on the way to fulfilling its long-term commitment of
100% renewable energy usage by 2040. Also since 2018, TSMC overseas manufacturing fabs and offices have purchased renewable
energy, REC and carbon credits to offset all carbon emissions caused by power consumption. All TSMC overseas sites achieved net
zero emissions in 2024. The development of renewable energy in Taiwan has recently entered an active planning and construction
phase, and TSMC’s renewable energy task force continues to communicate with the government, offering suggestions related to
the development of renewable energy, with the hope of collaborating with the government to accelerate the progress of renewable
energy in Taiwan. TSMC continues to increase its procurement amount of renewable energy. By the end of 2024, the total
installation capacity of renewable energy contracted reached 4.4 GW (gigawatts). The renewable energy will be provided to TSMC
gradually after the related business process has been completed. This is a clear manifestation of the Company’s active support of the
UN Sustainable Development Goals (SDGs).
TSMC GHG Reduction Target and Achievement Status
Strategy
2030 Goal
2024 Target and Achievement
Achievement Status
Continue to use best available technology to
reduce GHG emissions and become an industry
leader in low-carbon manufacturing
Reduce GHG emissions per unit product (metric
ton of carbon dioxide equivalent (MTCO2e)/12-
inch equivalent wafer mask layer) by 30% (base
year: 2020)
GHG emissions per unit product (metric ton of
carbon dioxide equivalent (MTCO2e)/12-inch
equivalent wafer mask layer) increased by 19%
(target: -10%)
Unachieved (Note)
Note: Target not achieved due to increase in production capacity of advanced processes and related carbon emissions, as well as the insufficiency of reduction plans and available renewable energy. TSMC will, therefore,
continue to implement more energy saving and carbon reduction actions.
Air and Water Pollution Control
The Company has installed air and water pollution control equipment in each fab to meet regulatory emissions requirements. In
addition, TSMC maintains backup pollution control systems, including emergency power supplies, to mitigate the risk of pollutant
emissions in the event of equipment failure. The Company centrally monitors the operations of its air and water pollution control
equipment 24 hours a day by rotating staff and treats system effectiveness as an important tracking item to ensure the quality of
emitted air and discharged water.
To further enhance water resources sustainability, TSMC has adopted and followed the Alliance for Water Stewardship (AWS)
standard, the sustainable water management standard (Note). The annual verification for 2024 was completed at the Taichung
sites (Fab 15A and Fab 15B) and the Tainan sites (Fab 6, Fab 14 Phase 7, and Fab 14B), and platinum-level certification has been
maintained.
In view of TSMC’s global operation, and to comply with international regulations and standards, TSMC’s Facility Development
Division formed a green manufacturing department- Environmental Monitoring Center. This center regularly integrates effluent
monitoring data to provide more timely water quality reports and establish effluent baselines, enabling early responses and ensuring
compliance with environmental regulations. Also, in pursuit of technological innovation, the Company collaborated with academic
institutions and suppliers to successfully implement drinking water-grade bituminous coal Granular Activated Carbon (GAC) in 2024.
This adsorption filtration technology is used to treat process wastewater containing per/poly fluoroalkyl substances (PFAS), achieving
an average removal rate of 95%. In 2024, TSMC continued to implement four major water saving measures: improving the water
production rate of the system, reducing facility system water consumption, increasing the wastewater recycling of facilities, and
decreasing water discharge loss from the system. The overall system has increased water conservation by 5.54 million cubic meters.
The goal of water management at TSMC is to optimize the use
of every drop of water. In addition to implementing process
water-saving measures, TSMC collaborates with industrial,
governmental and academic organizations to invest in the
development of water reclamation technology. Through
participation in the professional committee activities of the
Taiwan Science Park Association, TSMC shares water-saving
experiences and professional knowledge with semiconductor
industry peers to achieve the common goal of the entire park
and ensure long-term water resource supply-demand balance.
In order to further circulate the use of water resources and
support the government’s promotion of reclaimed water,
TSMC launched the Southern Taiwan Science Park Reclaimed
Water Plant operation in 2022. It is the first private water
reclamation plant in Taiwan and the industry’s first to
introduce reclaimed water into semiconductor manufacturing
process. In addition to reclaimed water by that plant, TSMC’s
fabs in Southern Taiwan Science Park also started using
reclaimed water supplied by the Yongkang and Anping
plants when they started up in 2022 and 2023 respectively.
The cumulative supply use of reclaimed water exceeded 67
thousand cubic meters per day and, by the end of 2024, over
19.65 million cubic meters of reclaimed water had been used
in the semiconductor manufacturing process in TSMC’s Tainan
fabs. This reduced city water usage by 31% as the Company
reached a 17% replacement rate using reclaimed water. TSMC
is committed to promoting reclaimed water use in all newly
constructed fabs in the future.
TSMC Water Usage in Recent Two Years
Year
Total Water Usage
(million m3) (Note 1)
Unit Product Water Usage
(L/12-inch wafer-e-layer)
2024
129
161.0
2023
114
176.4
TSMC Water Usage Reduction Target and Achievement
Status
Strategy
2030 Goal
2024 Target and
Achievement
Achievement
Status
Enforce climate
change mitigation
policies, implement
water conservation
and water shortage
adaptation
measures
Reduce unit water
consumption (liter/12-
inch equivalent wafer
mask layer) by 30%
(base year: 2010)
Increased unit water
consumption by 14.3%
(Target: -2.7%)
Unachieved
(Note 2)
Note 1: Includes TSMC fabs in Taiwan and subsidiaries total use of city water and reclaimed water.
Note 2: Affected by the global economic cycle, TSMC’s capacity utilization rate had not yet stabilized in
the first half of 2024. The water usage per unit of product did not meet the annual target, and
the company will continue to develop diverse water resources to reduce tap water consumption.
Waste Management and Recycling
Waste production at TSMC has risen in recent years as TSMC
continues to develop advanced manufacturing processes
and rapidly expand its production capacity both at home
and overseas. This increase is due to the complexity of new
manufacturing processes, the demand for reliable yield rates,
and the increased use of raw materials.
To achieve the goal of sustainable resource utilization, TSMC
has a designated unit responsible for waste recycling and
disposal. The priorities are onsite process waste reduction and
offsite recycling and regeneration, with incineration and landfill
as the least desirable, final option. In 2017, TSMC amended
its articles of incorporation to add four business items for
chemical materials to enhance waste process flow and reduce
risks of improper waste disposal by commissioned agencies.
It also set up onsite resource activation facilities to convert
waste resources produced during manufacturing process into
products to be used onsite or to sell to other industries. TSMC
recycled copper sulfate waste, cobalt-containing liquid waste,
sulfuric acid waste and ammonium sulfate waste, all of which
were regenerated into products. The Company also developed
a system of cryolite synthesis whereby hydrogen fluoride (HF)
waste is recycled and regenerated into raw material that can be
used in other industries. In 2024, in addition to having recycled
cyclopentanone for use as an electronic-grade material the
previous year, TSMC continued to collaborate with suppliers
to enhance filtration and electrolysis processes. TSMC has
successfully recycled tetramethylammonium hydroxide (TMAH)
to meet its process requirements for electronic-grade materials.
The recycled TMAH has been integrated into the fab process,
establishing a sustainable recycling cycle. Concurrently, the
Company has been actively working to reduce incineration
volumes as its fabs in Taiwan achieved a 95% waste recycling
rate for the tenth consecutive year, with a landfill rate below
1% for the 15th consecutive year. In addition, in 2024 TSMC
successfully separated aluminum and plastic from foil bags,
reclaiming them as aluminum ingots and plastic pallets. TSMC
will continue to strive towards its goal of net-zero emissions by
2050.
Note: TSMC AWS certified fabs include Advanced Backend Fab 3, Fab 5, Fab 12A/B, Fab 15A/B, Fab 6, Fab 14B and Fab 14 Phase 7, covering the watersheds of all the fab locations across the Hsinchu, Central Taiwan
and Southern Taiwan Science Park.
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TSMC Waste Quantity and Outsourced Unit Waste Disposal in Recent Two Years (Note 1)
Year
Outsourced General Waste (ton) (Note 2)
Outsourced Hazardous Waste (ton)
(Note 2)
Outsourced Unit Waste Disposal (Note 3)
(kg/12-inch equivalent wafer mask layer)
2024
344,056
445,152
1.16
2023
285,605
371,236
1.17
Note 1: The data in the table are preliminary results collected by TSMC and have not yet been verified by a third party
Note 2: Totals include Taiwan and subsidiary facilities
Note 3: Taiwan facilities
TSMC Waste Reduction Target and Achievement Status
Strategy
2030 Goal
2024 Target and Achievement
Achievement Status
Promote waste reduction by source separation
and require vendors to provide low chemical
consumption equipment
Outsourced unit waste disposal per wafer ≦
0.50 (kg/12-inch equivalent wafer mask layer)
Outsourced unit waste disposal per wafer 1.16
(kg/12-inch equivalent wafer mask layer) target:
≦1.17
Achieved
In order to ensure that all waste is treated and recycled properly, TSMC closely tracks the recycling and reuse practices of its cleanup
and disposal vendors. The Company carefully selects waste disposal and recycling vendors that are certified and have the required
permits. TSMC regularly checks the onsite operational status, disposal declaration forms, operational records, etc., to compare
with actual reuse and disposal, and takes proactive steps to strengthen vendor auditing. For example, all waste transportation
contractors have agreed to join the GPS satellite fleet so that the cleanup transportation routes and abnormal stays for all trucks
can be traced. All waste recycling and disposal vendors have installed closed-circuit TV systems at operating sites to monitor and
audit waste handling. At the same time, to further guarantee proper waste handling, in 2022 TSMC built the system of waste
intelligent fast track (S.W.I.F.T.) and completed five different types of waste treatment vendors for pilot testing. As of 2024, 44% of
waste treatment vendors have instituted S.W.I.F.T. and TSMC intends to roll it out to all waste treatment vendors by 2030. Using AI
technology in lieu of in-person on-site spot checks increases inspection efficiency 65-fold and reduces manual inspection by 13,000
hours each year. In addition, TSMC conducts ongoing surveys of recycled product tracking and requires all recycling contractors to
report their recycled product sales monthly to track waste flow and ensure that actions are taken to adhere to lawful and proper
waste recycling and treatment.
Environmental Accounting
The purpose of TSMC’s environmental accounting system is to identify and quantify environmental costs for internal management.
At the same time, the Company also calculates and evaluates the savings or economic benefits of environmental protection
programs so as to continuously promote economically effective programs. While environmental expenses are expected to continue
to rise, environmental accounting can help manage these costs more effectively. TSMC’s approach measures various environmental
costs, establishes independent environmental account codes, and provides the data to all units for use in annual budgeting. The
Company’s economic benefit evaluation calculates cost savings for energy conservation, water or waste reductions and recycling
benefits in accordance with its environmental protection programs. The benefits disclosed in this report include real income from
projects such as waste recycling as well as savings from major environmental projects. In 2024, the total benefits of environmental
protection programs of TSMC fabs including waste recycling exceeded NT$5.8 billion.
2024 Environmental Cost of TSMC Fabs in Taiwan
Unit: NT$ thousands
Classification
Description
Expense
Investment
1. Direct Costs for Reducing Environmental Impact
(1) Pollution Control
Fees for air pollution control, water pollution control, and others
16,680,115
20,477,945
(2) Resource Conservation
Costs for resource (e.g. water) conservation
-
8,745,208
(3) Energy Conservation
Costs for electricity consumption saving
-
2,877,959
(4) GHG Reduction
Includes: (1) Process GHG emissions abatement equipment; (2) Premium for
purchasing renewable energy; (3) Costs for purchasing carbon credits; (4) Other
costs for direct GHG emissions reduction
1,334,824
4,398,213
(5) Industrial Waste Disposal and Recycling
Costs for waste treatment (including recycling, incineration and landfill)
5,209,318
-
2. Indirect Costs for Reducing Environmental
Impact (Environmental Managerial Costs)
(1) Cost of employee environmental training
(2) Environmental management system and certification expenditures
(3) Environmental impact measurement and monitoring fees
(4) Environmental protection product costs
(5) Environmental protection organization fees
1,254,008
2,511,034
3. Other Environmental Costs
(1) Costs for soil decontamination and natural environment remediation
(2) Environmental damage insurance fees and environmental taxes and expenses
(3) Costs related to environmental settlement, compensations, penalties and lawsuits
-
-
Total
24,478,265
39,010,360
2024 Environmental Efficiency of TSMC Fabs in Taiwan
Unit: NT$ thousands
Category
Description
Efficiency
1. Cost Savings of Environmental Protection
Projects
Energy savings
3,041,775
Water savings
53,003
Waste reduction
1,680,778
2. Economic Efficiency for Industrial Waste
Recycling
Recycling of used chemicals, wafers, sputter targets, batteries, lamps, packaging materials, paper cardboard, metals,
plastics, and other waste
1,072,666
Total
5,848,222
Green Building and Green Factory
Since 2006 TSMC has adopted and followed standards from both the Taiwan Green Building and the U.S. Green Building Council
– Leadership in Energy and Environmental Design (LEED) for new fab and office building designs to achieve better energy and
resource efficiency compared to conventional designs. The Company has also continued to upgrade existing office buildings to
comply with the LEED standard each year. From 2008 to 2024, 51 of TSMC’s fabs and office buildings achieved LEED certification:
three platinum and 48 gold. During this time, the Company also received 31 Taiwan ecology, energy saving, waste reduction and
health (EEWH) certifications: 21 diamond, seven gold and three silver.
Environmental Audit Results in Violation of Environmental Regulations
In 2024 and as of the date of this annual report, TSMC has had no environmental regulation violations.
7.2.2 Sustainable Products
TSMC collaborates with its upstream material and equipment suppliers, design ecosystem partners and downstream assembly
and testing service providers to minimize environmental impact. Reducing the resources and energy consumed for each unit of
production allows the Company to provide customers with more advanced, power efficient, and ecologically sound products.
These include ultra-low power (ULP) and low operating voltage (low Vdd) chips for wearables and IoT devices, low-power chips for
mobile devices, high-efficiency LED driver chips for flat panel display backlighting, indoor/outdoor solid state LED lighting, Energy
Star certified low standby AC-DC adaptor chips, high-efficiency DC brushless motor chips, electric vehicle chips and low-power
server chips. By leveraging TSMC’s superior energy-efficient technologies, these chips support sustainable city infrastructure, greener
vehicles, smarter grids, more energy efficient servers and data centers and other applications. In addition to helping customers
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design low power, high performance products to reduce
resource consumption over the product’s life cycle, TSMC’s
green manufacturing practices provide additional green value
to customers and other stakeholders.
TSMC-manufactured ICs are used in a broad variety of
applications in various market segments including computer,
communications, consumer, industrial, electric vehicle,
server and data center, and other electronics. Through
TSMC’s manufacturing technologies, customers’ designs are
realized, and their products are incorporated into people’s
lives. These chips, therefore, make significant contributions
to the progress of modern society. The Company endeavors
to achieve profitable growth while providing products that
add both environmental and social value. Listed below are
several examples of how TSMC-manufactured products make
significant contributions to the environment and society.
Environmental Contributions by TSMC Foundry Services
1. Continuously Drive Technology to Reduce Power
Consumption and Save Resources
●To play its part in achieving sustainability, TSMC continues to
drive the development of advanced semiconductor process
technologies to help customers create more advanced,
energy-efficient and environmentally friendly products. In
each new technology generation, circuitry line widths shrink,
making transistors smaller and reducing product power
consumption for completing the same tasks or achieving
the same level of performance. In addition, calculations
using the Industry, Science, and Technology International
Strategy Center’s model reveal that in 2020 TSMC helped
the world conserve 4 kWh of energy for each 1 kWh spent in
production – a testimony to TSMC’s commitment to green
manufacturing both internally and externally. (Please refer
to “Sustainable Products by TSMC Facilitates Global Energy
Conservation” on page 11 of TSMC’s 2020 Corporate Social
Responsibility Report.)
●As TSMC quickly ramped up its 7nm and newer generation
technologies, the combined wafer revenue contribution of
7nm and more advanced technologies grew significantly from
27% in 2019 to 69% in 2024. TSMC’s objective is to continue
R&D investment and increase the wafer revenue contribution
from 7nm and more advanced technologies, helping the
Company achieve both profitable growth and sustainability.
TSMC Wafer Revenue Contribution from 7nm and More Advanced
Technologies
2019
2020
2021
2022
2023
2024
27%
41%
50%
53%
58%
69%
Chip Die Size Cross-Technology Comparison
Die size shrinks as line width shrinks
1
0.48
0.25
0.11
0.063
0.047
0.035
0.026
55nm
40nm
28nm
16FFC/
10nm
7nm
5nm
3nm
12FFC
Note: The logic chip/SRAM/IO (input/output) ratio, which affects die size and power consumption, was
re-aligned.
Chip Total Power Consumption
Cross-Technology Comparison
More power is saved as line width shrinks
1
0.6
0.3
0.07
0.056
0.034
0.022
0.015
N55LP
N40LP N28HPM 16FFC/
10nm
7nm
5nm
3nm
(1.2V)
(1.1V)
(0.9V)
12FFC
(0.75V) (0.75V) (0.75V) (0.75V)
(0.8V)
Note: The logic chip/SRAM/IO (input/output) ratio, which affects die size and power consumption, was
re-aligned.
2. Provide Customers Leading Power Management IC
Processes with the Highest Efficiency
●TSMC’s leading manufacturing technologies help customers
design and produce green products. Power management
chips, the key components that supply and regulate power
to all other IC components within electronic devices, are
the most notable green IC products. TSMC helps customers
produce industry-leading power management chips with
more stable and efficient power supplies and lower energy
consumption. Power management ICs manufactured
by TSMC for its customers are widely used in computer,
communication, consumer electronics, electric vehicle, server
and data center, and other products or systems throughout
the world.
3. Drive the Industry-leading, Comprehensive ULP
Technology Platform
●To meet low-power consumption requirements for IoT
markets, such as smart wearable, smart home, health
care and smart city for IoT products, TSMC continues to
invest in expanding and enhancing its ultra-low power
processes. The Company provides industry’s leading and
most comprehensive ULP technology platform to support
various smart edge devices, including smart watches,
hearing aids, pacemakers, continuous glucose monitoring
(CGM) devices, environment monitoring, and smart grid
infrastructure. TSMC’s industry-leading ULP offerings,
including the FinFET-based 6-nanometer technology,
N6e® and the 12-nanometer technology, N12e®, both of
which feature energy efficiency and high performance for
enhanced computing power and AI inferencing, as well as
22nm ultra-low leakage (ULL), 28nm ULP, 40nm ULP, and
55nm ULP, have been widely adopted in various Edge AI
system-on-a-chip (SoC) and battery-powered applications.
TSMC has also extended its low Vdd offerings for extreme
low-power applications.
4. Develop Greener Manufacturing to Lower Energy
Consumption
●TSMC continues to develop more advanced and efficient
technologies to reduce energy/resource consumption and
pollution per unit during the manufacturing process, as well
as power consumption and pollution during product use.
In each new technology generation, circuitry line widths
shrink, making chips smaller for the same circuit designs
and lowering the energy and raw materials consumed
for per chip in manufacturing. In addition, the Company
continuously provides process simplification and new design
methodology based on its manufacturing excellence to
help customers reduce design and process waste so as to
produce more advanced, energy-saving and environmentally
friendly products. For total energy savings and benefits
realized in 2024 through TSMC’s green manufacturing, see
Environmental Accounting on page 158-159 in this Annual
Report.
Social Contributions by TSMC Foundry Services
1. Unleash Customers’ Mobile and Wireless Chip Innovations
that Enhance Mobility and Convenience
●The rapid growth of smartphones and tablets in recent
years reflects strong demand for mobile devices, which
accelerates innovations for IC products such as baseband,
RF transceivers, application processors (AP), wireless local
area networks (WLAN), CMOS image sensors (CIS), near-field
communication (NFC), Bluetooth, global positioning systems
(GPS), ultra-wide band (UWB), organic light-emitting diode
(OLED) display drivers and power management ICs (PMIC)
among others. These mobile devices offer remarkable
convenience in daily living, and TSMC contributes significant
value to these devices in the following ways: (1) new TSMC
process technologies help chips achieve faster computing
speeds in smaller sizes, leading to smaller form factors for
these electronic devices. In addition, TSMC SoC technology
integrates more functions into one chip, reducing the
total number of chips in electronic devices, again resulting
in a smaller system form factor; (2) new TSMC process
technologies also help chips reduce power consumption,
allowing mobile devices to be used for a longer period;
and (3) TSMC helps spread the growth of more convenient
wireless connectivity such as 3G/4G/5G and WLAN/Bluetooth/
UWB, meaning people can communicate more efficiently and
“work anytime and anywhere,” significantly increasing the
productivity and mobility of modern society.
2. Unleash Customer Innovations in CMOS Image Sensor
(CIS) and Micro-Electromechanical Systems (MEMS) that
Enhance Human Health and Safety and Create Green
Products
●To make machines smarter, safer and more user and
environmentally friendly, sensors are a must. Optical,
acoustic, motion, and environment sensors are mostly made
using either CIS or MEMS technologies. TSMC continues to
put substantial effort into developing more advanced CIS
and MEMS technologies to enable customers to create new
products for new applications. For CIS, TSMC and customers
have extended applications from traditional RGB (red, green,
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management review, internal audit, automatic check, and
security patrol to identify safety concerns and opportunities for
improvement. All Company fabs in Taiwan received ISO 45001
certification for occupational health and safety in 2019 and all
TSMC subsidiaries obtained the certification in 2020. All the
above certifications have been maintained to date through
2024. Per TSMC’s internal policy, new facilities are required to
receive these certifications within 18 months upon receiving
facility license.
In addition to accident prevention, TSMC has established
emergency response procedures to protect employees and
contractors if a disaster should occur, as well as to prevent
and/or reduce the negative impact on the community and the
environment. TSMC communicates regularly with suppliers
to ensure that the potential risk in operating production
equipment is minimized and that safety control procedures are
followed rigorously during installation. The Company places
stringent controls on high-risk operations, and also evaluates
the seismic tolerance of its facilities and equipment to reduce
the risk of earthquake damage.
For epidemics, TSMC has established corporate-level prevention
committees and procedures for emergency response to
outbreaks of infectious diseases.
Working Environment and Employee Safety and Health
Protection
The Company’s ESH policy is focused on establishing a safe
working environment, preventing occupational injury and
illness, keeping employees healthy, enhancing every employee’s
awareness and sense of ESH accountability, and building a
strong ESH culture.
There were a total of 37 occupational injuries at TSMC in 2024,
involving 37 people, representing approximately 0.05% of the
total number of employees. The disabling injury frequency
rate (FR) was 0.26, under the 0.4 target, and the disability
injury severity rate (SR) was 3, achieving the target of less than
4. TSMC routinely reviews potential improvement measures,
such as the promotion of safety culture-related posters or
animations to strengthen employee safety awareness. By
implementing interactive communication training courses
on safety culture and “safety moments” activities, TSMC can
integrate safety into daily life and encourage employees to
proactively discuss safety-related issues. To reduce sports
injuries, it is mandatory for the welfare committee and
departments to conduct risk identification and hazard
reminders before organizing sports activities. The Company
continuously observes operations and conducts compliance
inspections to identify potential injury risks in the workplace
and implement improvement measures to enhance workplace
safety. In addition to regular reviews, the caring program
for employees has been enhanced and managers have been
directed to pay closer attention to the physical and mental
state of employees to ensure their safety and health while at
work.
TSMC safety and health management operations apply to the
following:
●Equipment Safety and Health Management
In addition to meeting regulatory requirements and internal
standards, as well as mitigating ESH-related risks when
building or expanding facilities, TSMC maintains procedures
governing new equipment and raw materials, requires safety
approvals for bringing new tools online, updates safety rules,
and implements seismic protection and other safety measures.
TSMC requires that all new tools meet SEMI-S8 requirements
and that appropriate supplementary control measures be taken
to reduce ergonomic risk. Moreover, the Company endeavors
to automate the transportation of 300mm front-opening
unified pods (FOUPs) to prevent cumulative physical injury
caused by repetitive manual handling of this equipment. TSMC
300mm fabs have all converted to automatic transportation
control.
●Environmental, Safety and Health Evaluation of New Tools
and New Chemical Substances
As a technology leader in the global semiconductor industry,
TSMC operates increasingly diversified process tools and
introduces new chemicals in the R&D stage. Before using
new tools or new chemicals, they are reviewed carefully
by the new tool and new chemical review committee. The
purpose is to ensure that new tools are compliant with the
semiconductor industry’s safety standards (such as SEMI-S2)
and that environmental, safety and health concerns about
new chemicals are addressed and controlled including
the use of engineering controls and personal protection
equipment, as well as operational safety training during
storage, transportation, use and disposal. A total of 351 cases
of new tools and chemical substances were approved by the
new tool and new chemical review committee in 2024 after
they were evaluated and reviewed in accordance with the
aforementioned standards and before entering TSMC.
●General Safety Management, Training and Audit
All TSMC manufacturing facilities hold environmental, safety
and health committee meetings on a monthly basis. TSMC
has adopted multiple preventive measures such as controls
on high-risk work, contractor management, chemical safety
management, personal protective equipment requirements,
and safety audit management. In addition, the Company
maintains detailed disaster response procedures and performs
regular drills designed to minimize injuries to employees and
damage to property, as well as the impact on society and the
environment, in the event of a mishap or disaster.
TSMC Safety-related Training in Recent Two Years
Year
Total Number of Employee Counts that Have Completed
Safety-related Training
2024
300,533
2023
297,403
●Working Environment Hazardous Factors Management
TSMC conducts workplace hazard assessments to provide a
comfortable, safe workplace for employees. The Company also
educates employees and requires them, when appropriate, to
use personal protective equipment (PPE) to prevent hazardous
exposures.
The Company performs semi-annual workplace environment
assessments of physical and chemical hazards, including
CO2 concentration, illumination, noise, and hazardous
chemical substances as regulated by local laws. In addition,
TSMC performs exposure assessments and uses hierarchy
management control for chemicals with potential health
hazards. If abnormal measurements occur, events happen, or
an exposure assessment indicates there is an adverse health
effect on employees, ESH professionals immediately conduct
onsite observation and intervention to reduce the risk of
hazardous factors exposure to acceptable levels.
●Health Promotion Program
In order to establish the healthiest possible workplace and
reduce the incidence of occupational disease, TSMC formed
a corporate-level committee to carry out health promotion
programs covering three key areas:
blue) sensing to 3D depth sensing, optical fingerprint, and
near-infrared (NIR) machine vision, and so on. For MEMS,
TSMC and customers have extended applications from
traditional motion sensing to microphone, bio-sensing,
micro-speakers, medical ultrasound actuators and more.
TSMC customers’ sensing devices are used in consumer
electronics, mobile communications, automotive electronics,
industrial, and medical devices, and they are increasingly
smaller, faster, more accurate and more energy efficient,
greatly enhancing human convenience, health and safety,
and contributing to sustainability.
As an example, TSMC customers introduced their latest
automotive CIS products for car safety systems in 2024
with significantly improved dynamic range performance,
which makes advanced driver assistance systems (ADAS) and
autonomous vehicles smarter and safer. In addition, adopting
TSMC’s innovative MEMS technology, TSMC customers
successfully introduced next-generation MEMS speakers with
smaller form factor and better high frequency response. These
features further improve user experience by enabling more
flexible industry design, bigger battery space, and closer to
natural sound quality for hearing aids and consumer-grade
hearing assistance devices.
7.2.3 Safety and Health
Safety and Health Management
TSMC’s safety and health management complies with local
and international standards and adheres to the management
approach of “plan, do, check, act” to prevent accidents,
promote employee safety and health, and protect Company
assets. All TSMC fabs in Taiwan have received Taiwan
Occupational Safety and Health Management System
(TOSHMS) certification since 2009.
In 2018, the International Organization for Standardization
released ISO 45001: 2018, replacing OHSAS 18001. This new
standard introduced major changes, including an expanded
scope, increased support and participation from leadership,
and a focus on both internal and external issues. It also
addressed the expectations and demands of stakeholders,
the assessment of risk inspections, communication and
consultation with non-managers, the application of
performance indicators, and the evaluation of corrective and
preventive actions. These changes ensure that the system can
be effectively implemented at the management level through
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1. Exposure and health risk assessment: develop an exposure
assessment system to identify high health risk employees.
2. Hazardous training and notification: use standardized
training materials for employees and contractors in all
TSMC fabs. Inform them of the health risks and prevention
measures at the workplace before they begin working or
providing any services there.
3. Management of chemicals with significant health risks:
request that all materials suppliers prove to TSMC that
they comply with applicable laws including clear disclosure
of any hazardous substances. Perform sampling of raw
materials used in the manufacturing process to confirm
that they do not contain any carcinogenic, mutagenic or
toxic-reproductive materials as claimed on supplier’s safety
data sheets.
●Emergency Response
The planning and execution of an effective emergency response
require identifying potential high-risk events via risk assessment
and being prepared for various scenarios and should focus on
continuous improvements and drills covering all potentially
serious events. TSMC’s emergency response plans include
procedures for rapid-response, crisis management and disaster
recovery from potential incidents.
All TSMC fabs conduct major annual emergency response
exercises and evacuation drills. TSMC’s onsite service
contractors are also required to participate in emergency
response planning and exercises to ensure cooperation in
handling accidents and to effectively minimize any damage
caused by disasters. In 2024, the Company held 116
evacuation drills and 66 fire drills. At least every two years, each
fab director invites fab management and support functions to
participate in business continuity drills for potentially high-risk
events such as earthquake, fire and flood (at the Tainan site).
Since 2018, TSMC has conducted numerous comprehensive
accident emergency response drills, including simultaneous
scenarios for earthquake, fire and chemical spills, to ensure
rapid response to emergencies so that losses can be minimized
in the event of a real disaster. In 2020, TSMC took the lead
in the industry by introducing the all-hazard approach as
recommended by the Federal Emergency Management Agency
(FEMA) to conduct disaster prevention exercises.
In response to the COVID-19 pandemic, TSMC added tabletop
exercises to disaster prevention training in an effort to minimize
the risks of group infections that might arise in full-scale,
in-person exercises. The inclusion of tabletop exercises also
aids in the verification of full-scale exercise procedures to
make disaster response more comprehensive, thus effectively
mitigating the impact of various types of disasters on business
continuity in the future. As of 2024, in addition to 126
sessions of tabletop exercises, 608 full-scale exercises had been
completed.
In addition to the regular emergency response drills held
by engineering and facilities departments each quarter, the
Company’s laboratory, canteen, dormitory, and shuttle bus
personnel also hold similar drills to prepare for events such as
earthquakes, chemical spills, ammonia releases, fires and traffic
accidents. Conduct annual inventory of the public hazardous
substances in all fabs to identify potential risks and enhance
the disaster prevention management capabilities of the fab,
effectively reducing the risks of fires and legal violations.
●Emerging Infectious Disease Response
TSMC has a dedicated corporate ESH organization to monitor
emerging infectious diseases around the world, to assess
any potential impact on the workplace, and to provide an
appropriate strategic response plan. In previous outbreaks
such as SARS in 2003, H1N1 influenza in 2009, and MERS in
2015, as well as with COVID-19 from 2019 to 2023, TSMC
followed the Taiwan CDC’s (Center for Disease Control) rules
and convened the corporate influenza response committee to
develop the Company’s strategies. These strategies included
educating employees in prevention and response, publishing
guidelines for managers, establishing guidelines for employee
sick leave, and installing alcohol-based hand sanitizers at
appropriate locations. The Committee also monitors the
status of employee leave due to illness and, at the same time,
develops a continuity plan to address manpower shortages
and minimize business impact. For example, during the
COVID-19 outbreak, in order to protect the health of TSMC
employees, their families, and work partners, employees were
encouraged to be fully vaccinated if in healthy condition.
In addition, TSMC periodically reviewed the situation and
implemented appropriate preventive measures such as
providing updated vaccination information and performing
daily body temperature checks before entering Company
facilities, while continuing to follow standard epidemic
prevention recommendations such as mask wearing, frequent
hand washing and social distancing.
●Employee Physical and Mental Health Enhancement
TSMC believes that employee physical and mental health is not
only fundamental to maintaining sound business operations
but is also an important part of a corporation’s responsibility.
To preserve and promote the physical and mental health of
its employees, TSMC fosters collaboration among the onsite
industrial safety and environmental protection department, the
onsite medical personnel of the health center, and physicians
of occupational medicine. TSMC strives to reduce cerebral
injuries and cardiovascular conditions that might be induced or
aggravated by overwork, night work or shift work.
The Company conducts programs for maternal health
protection and for prevention of cumulative trauma disorders
as well. TSMC devotes significant resources to mental health
awareness, focused not only on hazards at work but also on
employee health in general. In 2024, planned personal health
management activities included the following: 1) 539 female
employees participated in the maternal health program with a
completion rate of 100%. All of them were at first degree risk,
where there was no potential harm to the mother or infant.
(2) Through analysis of historical cerebral and cardiovascular
cases of its employees, combined with internal annual health
examination reports and work scheduling information,
the Company was able to identify 5,071 employees with
middle to high risk for cerebral and cardiovascular diseases.
These employees were provided with health education and
medical assistance. Also, they and their managers received
recommended changes in working hours and shifts to reduce
health risks. (3) 171 employees were identified as high risk for
cumulative trauma disorders, including two who might also
have job-related risks, and the Company adjusted working
conditions accordingly to reduce potential risks. (4) Obesity
is recognized as a potential catalyst for various health issues,
including high blood sugar, high cholesterol, high blood
pressure, and insomnia. In response, TSMC has diligently
organized health promotion initiatives over the years. In
2024, acknowledging the younger generation’s preference for
multimedia content, the Company enhanced its digital tool
usage to broaden employees’ access to health information. In
addition to conducting physical weight loss programs, which
saw 7,180 participants collectively shedding 6,534 kilograms,
the Company meticulously curated a series of online interactive
health education events. These initiatives included expert-led
seminars focused on topics such as healthy eating and
exercise, conducted across seven sessions and engaging 1,482
participants.
For mental health, in 2024, six psychologists were appointed
to address mental health, designing tailored health knowledge
and activities for different groups within the Company. These
initiatives included: (a) employee lectures, with 79 sessions
and 3,107 attendees; (b) mindfulness workshops, with eight
sessions attended by 402 attendees; (c) a World Mental Health
Month with online lectures and questionnaires, involving 3,435
attendees. Additionally, the interactive “Three Good Things”
activity drew 1,708 attendees. All the actions above received
positive feedback from employees, so the Company will
continue to implement relevant promotional activities to take
care of the health of employees in the future.
7.2.4 Supplier Management
Management Aspect
For better supply chain management, TSMC is committed
to communicating with and encouraging its suppliers and
contractors to increase their quality, cost effectiveness and
delivery performance, and make continuous improvement in
supply chain sustainability. Through regular communication
with senior managers, site audits and experience sharing, the
Company collaborates with major suppliers and contractors to
enhance partnerships and ensure continued improvement of
performance and increased joint contributions to society. As
noted above, contractors performing high-risk activities must
lay out clearly defined safety precautions and preventative
measures. In addition, contractors working on high-risk
engineering projects must establish ISO 45001 or OHSAS
18001 systems, and their workers must successfully complete
work-related skill training. By 2024, all TSMC contractors
performing high-risk activities had obtained ISO 45001
certification.
Supply Chain Sustainability
TSMC closely collaborates with suppliers across various
sustainability domains, including establishing a green supply
chain, managing carbon emissions to address climate change,
reducing fire risk, and developing operational plans for
environmental protection, safety and health management, and
natural disasters.
Since joining the Responsible Business Alliance (RBA) in 2015,
TSMC has been committed to reviewing and improving the
Company’s policies and processes in labor, health and safety,
environment, ethics, and management systems through
rigorous internal assessments and policy adjustments to ensure
compliance with the RBA Code of Conduct.
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To enhance sustainable management and effective risk
management of the supply chain, TSMC is committed to
working closely with suppliers to ensure compliance with
Taiwan’s environmental protection, safety, health, and fire
regulations. Additionally, TSMC has established sustainability
standards for the supply chain, which cover areas such as labor
rights, health and safety, environmental protection, ethical
standards, and management systems. TSMC collaborates
closely with its suppliers to assess and improve risks and
impacts in the economic, environmental, and social domains.
By regularly organizing forums and workshops for experience
sharing and training, TSMC assists suppliers in enhancing their
sustainability performance, aiming to exceed international
standards and become a model in the global semiconductor
supply chain.
TSMC is subject to the U.S. Securities & Exchange Commission
(SEC) disclosure rule on conflict minerals released under Rule
13p-1 of the U.S. Securities Exchange Act of 1934. As a
recognized global leader in the high-tech supply chain, the
Company acknowledges its corporate social responsibility
to ensure procurement of conflict-free minerals in an effort
to recognize humanitarian and ethical social principles that
protect the dignity of all people. To this end, TSMC has
implemented a series of compliance safeguards in accordance
with leading industry practices such as adopting the due
diligence framework in the Organization for Economic
Cooperation and Development (OECD)’s model supply chain
policy for a responsible global supply chain of minerals from
conflict-affected and high risk areas, issued in 2011.
TSMC is a strong supporter of the RBA and the Global
e-Sustainability Initiative (GeSI). As a member of RBA, TSMC
requires that suppliers source conflict-free minerals through
their jointly developed Responsible Minerals Initiative (RMI).
Since 2011, TSMC has asked its suppliers to disclose and
make timely updates on smelters information. The Company
encourages suppliers to source minerals from facilities or
smelters that have received a “conformant” designation by a
recognized industry group (such as the RMI) and also requires
those who have not received such designation to become
compliant with RMI or an equivalent third-party audit program.
TSMC requires the use of conflict-free tantalum, tin, tungsten
and gold in its products.
TSMC will continue to conduct the supplier survey annually
and require suppliers to improve and expand their disclosure
to fulfill regulatory and customer requirements. For further
information, see the Company’s Form SD filed with the U.S.
SEC. (https://investor.tsmc.com/english/sec-filings)
7.3 TSMC Education and Culture Foundation
Focusing on three major areas – promotion of arts and culture,
education collaboration, and cultivation of young generation
– the TSMC Education and Culture Foundation continues its
ongoing commitment to invest resources where appropriate
and committed NT$144.27 million in 2024. Following in the
footsteps of TSMC’s global facilities expansion, the Foundation
made its cultural and arts debut overseas, as well as to more
cities in Taiwan, so as to enrich the communities’ spiritual life.
Apart from holding refined art exhibitions and performances,
the Foundation further brings sustainability education to
various educational events, guiding young students to
understand the concepts of sustainability and inspiring them
to engage in social issues with creativity and passion, thereby
becoming a refreshing force to be reckoned with in uplifting
society.
Overseas Sponsorship, Improving International Cultural
Ties
Since beginning operations on February 24, 2024, TSMC’s
JASM subsidiary in Kumamoto, Kyushu, Japan, has empowered
its local community economically through the innovation
power of technology.Following TSMC’s footsteps of global
expansion, the TSMC Education and Cultural Foundation has
also committed some of its arts and cultural resources to
overseas events. It sponsored a concert “Sound from Formosa”
by the renowned Taiwanese music group, OneSong Orchestra,
at the Kumamoto Prefectural Theater. The event featured
award-winning violinist Richard Lin, who won first prize in
the Sendai International Music Competition. The concert
program included Taiwanese and Japanese folk songs, as well
as Taiwanese pop songs. To strengthen ties between Taiwan
and Japan, the Foundation invited Kumamoto Prefectural
Daiichi High School’s choir to perform alongside OneSong
Orchestra. Apart from traditional Japanese folk songs, the choir
performed the famous song “The Story of a Small Town” by
the late singer Teresa Teng, who is well-known in both Japan
and Taiwan. The thousand-strong audience from the local
communities were all enchanted by the beautiful tunes of
Taiwanese music.
The TSMC Hsin-chu Arts Festival, held annually in the local
communities where TSMC operates, paid homage to the
Chinese canon “Strange Tales from a Chinese Studio” in
2024. Working with the festival’s theme of “Transcendence
the World of the HEART,” the Foundation teamed up with
Unitas magazine to present a special literary exhibition titled
“Strange Tales from a Chinese Studio – Continuing into the
After Life, the Real of the Unreal” at the national heritage site
of Taichung Station Railway Cultural Park. Through interactive
exhibition approaches and talks, the exhibition brought the
printed words to life, crossing the boundaries of the physical
books and revealing the human nature behind the stories. The
exhibition attracted over 14,000 visitors. In addition to the
special literary exhibition, the Foundation continues to promote
traditional theater, inviting the Tang Mei-Yun Taiwanese Opera
Company to perform “Zhuge Liang: A Promise Never Forgot”
and the GuoGuang Opera Company to stage the Peking Opera
“Chun-Tsao Braving the Court.”
Moreover, internationally renowned Berlin Philharmonic horn
player Sarah Willis and Cuban singer Carlos Calunga teamed up
to present the concert “Mozart y Mambo from Havana”. The
fusion of classical music and world music aligns perfectly with
this year’s arts festival theme. The 2024 Hsin-chu Arts Festival
featured 39 refined performances and exhibitions and attracted
over 26,000 members from the local community.
At the year-end, TSMC Lectures, renowned novelist Yan Lianke
was invited to share his insight on the modern literary elements
of the classic Chinese tale collection “Strange Tales from a
Chinese Studio.” The event attracted over 850 attendees.
In 2024, marking the 20th anniversary of literary maestro
Pai Hsien-Yung’s youth edition of “The Peony Pavilion,” the
Foundation, in collaboration with the National Kaohsiung
Center for the Arts (Weiwuying), showcased the complete
youth edition of this classic over three days. This event aimed
to introduce the enchanting art of Kun Qu opera to a broader
audience and the younger generation, inviting everyone to
experience this timeless love story from Chinese literature.
Supporting Cultural Inheritance Together with
Educational Partners
The TSMC Education and Cultural Foundation is dedicated to
promoting the preservation and continuation of traditional
theater art. From 2021 to 2024, the Foundation partnered
with GuoGuang Opera Company to launch a three-year
“Passing the Heritage of Traditional Theatre on Campus”
project. This initiative offered full-year courses at both National
Tsing Hua University and Tunghai University. The courses
covered opera appreciation and stage performance, blending
theoretical knowledge with practical performance skills. Using
the classic Peking Opera piece “Chun-Tsao Braving the Court”
as the central curriculum, actors from the GuoGuan Opera
Company personally guided over a hundred students. In
2024, 50 students performed at Taiwan Traditional Theatre
Center’s main auditorium, attracting an audience of nearly 600
people. In September of the same year, the second phase of
the three-year “Passing the Heritage of Traditional Theatre on
Campus” was launched.
In 2024, TSMC’s Traditional Theatre partnered with Guoguang
Opera Company, Taiwan Kunqu Opera Company, and Hsing
Legend Youth Theatre to host special events focused on the
promotion, introduction, and appreciation of traditional opera.
These activities, which have been expanding, were not only
held in the existing locations of Hsinchu, Taichung, and Tainan
but also extended to Kaohsiung. The aim was to introduce
more high school students to the beauty of traditional theater,
with a total of 3,809 participants taking part.
The TSMC Education and Culture Foundation is committed to
addressing the disparities in educational resources between
urban and rural areas. The Foundation continues to partner
with various educational organizations to bridge this gap.
In its second year, the “TSMC Aesthetic Trip “ and “TSMC
Science Trip” programs have evolved to offer more in-depth
educational experiences. In addition to visiting permanent
exhibitions at major arts and science museums, the Foundation
has introduced Chinese hard-tipped pen calligraphy writing
workshops and semiconductor science workshops. These
themed activities are designed to enhance students’ learning
and retention during their visits.
The Foundation continues its collaboration with the
CommonWealth Magazine Education Foundation and Prof.
Hwawei Ko Reading Research Center at National Tsing Hua
University on a five-year “Teaching and Learning” project. This
initiative focuses on reading comprehension and instruction to
build an educational support system for teachers in rural areas.
By tailoring content to fit educational needs, the program
aims to enhance students’ literacy skills. Now in its fourth year,
the program has engaged 161 teachers and 1,627 students.
Since 2004, the Foundation has supported the “Hope Reading
Project,” annually distributing a hundred of new, high-quality
books to 200 remote junior high and primary schools. The
project includes teacher training, parent-child reading sessions,
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and inter-school reading competitions. By the end of 2024,
a documentary titled “Where the Story Begins” was released
to celebrate the 20th anniversary of the Hope Reading Project,
aiming to raise public awareness of the initiative.
Building a Platform for Youth and Broadening Student
Horizons
For the 12th consecutive year, the Foundation is partnering
with the Center for the Advancement of Science Education
of National Taiwan University to hosts the “TSMC Cup –
Competition of Scientific Short Talk.” This event includes two
sub-competitions: the “Creative Expression Contest” and the
“Science Popularization Writing Contest”. Participants hail not
only students from Taiwan but also from Malaysia, Indonesia
and South Korea, facilitating a rich exchange of scientific
knowledge and ideas. In 2024, over 550 students took part in
these activities. Additionally, the TSMC Science Trip for Young
Women was a two-day camp inviting female students from
ten high schools to visit science museums, engage in hands-on
workshops, and attend talks with female scientists. These
sessions provide insights into the scientists’ academic and
career paths, encouraging young women to explore the field
of STEM. In 2024, for the first time, the Foundation expanded
the program to include a one-day camp to inspire even more
high school female students to develop an interest in science.
Together, both camps attracted over 500 participants.
The 17th TSMC Youth Calligraphy and Seal Carving
Competition continues to encourage young students to
engage with the art of calligraphy and seal carving, fostering
the appreciation for the beauty of Chinese characters through
various themes. In 2024, the theme was “Paper,” one of
the Four Treasures of the Study. Students from National
Experimental High School at Central Taiwan Science Park
visited Going Xing Paper Mill in Nantou to experience the
culture of traditional handmade paper. Through the practice
of recreating classic ink rubbings and hands-on papermaking,
students gained a deeper understanding of how ink interacts
with different paper materials, sparking greater interest in
calligraphy. In the 21st TSMC Youth Literature Award, both the
novel and essay category were won by Liu Zi Xin from National
Chia-Yi Girls’ Senior High School, whose literary talent captured
public attention. To further support emerging Taiwanese
literary talent in their creative and publishing endeavors, the
●Education Empowerment
The Foundation continued to enhance rural education by
offering volunteer services, financial aid, and educational
resources. From 2022, beyond providing essential support,
the focus expanded to nurturing the employability of rural
students. In 2024, the Foundation hosted vocational job fairs
featuring career exploration and employment matchmaking in
collaboration with eight county and city governments. These
efforts were expected to benefit over 7,200 participants.
The Quick-Impact Vocational Training Program, now in its fifth
year, was scaled up to include TSMC suppliers and over 200
leading companies such as Daikin, SEMI, Panasonic Taiwan,
104 Job Bank, Howard Hotels and Chenglin Company. This
program connects rural students with quality job opportunities
through friendly employment expos and tailored training
camps held across eight cities like Yilan, Nantou, Tainan,
Kaohsiung, Pingtung and Taitung. By empowering over 8,500
young participants to explore diverse career paths, these
initiatives create avenues for sustainable livelihoods.
●Healthy Aging
Since 2014, partnering with social welfare groups and medical
institutions, the Foundation strives to enhance the well-being
of elderly individuals living alone. In 2022, a Smart Fitness Club
for Seniors, developed in collaboration with NYCU and Guandu
Hospital, was established to help prevent disability and delay
aging. This initiative was expanded in 2023with the support of
TSMC volunteers, engaging retired employees in meaningful
contributions.
In the year 2024, the TSMC Charity Foundation partnered
with National Yang Ming Chiao Tung University and Guandu
Hospital, along with Kikuyo Town in Kumamoto Prefecture,
Japan, and Kumamoto University, to formally establish
a collaborative alliance. Combining the triangular model
of “corporate x hospital/university x community, ” smart
philanthropy is implemented in Kumamoto to create a healthy
and prosperous community for all. Additionally, Kumamoto
University Hospital supports about 500 TSMC employees
and their families in Japan with pediatric medical resources,
ensuring quality care and reducing language barriers.
Foundation introduced the “Sunrise Book Award” as a category
within the framework of the TSMC Youth Literature Award.
In 2024, the top prizes were awarded to Han-Yau Huang’s
essay collection “The Lost River” and Hsiao Yu-Hsiang’s poetry
collection “How Should People Burn Darkness.”
The 9th TSMC Udreamer Project centered on the theme
“Sustainability: It’s Up to Us,” aligning with King Charles III’s
Terra Carta initiative. In collaboration with Linking Publishing
and the Mandarin Daily News, the Foundation featured the
children’s picture book “It’s Up to Us” in a special exhibition.
The exhibition showcased several large-scale illustrations
from the book and hosted an art competition for elementary
school students nationwide. From 166 submissions, 38
outstanding pieces were selected to engage in a “dialogue”
with works by 33 international illustrators featured in the book.
This special exhibition displayed both the book illustrations
and the children’s visions for the future world. Through
this pilot project and related activities, the aim is to raise
public awareness about sustainability and plant the seeds of
sustainable thinking for future generations.
7.4 TSMC Charity Foundation
Since its inception in 2017, the TSMC Charity Foundation,
under the leadership of Chairwoman Sophie Chang, has
championed the mission of empowering rural areas. Anchored
in three core pillars – Education Empowerment, Healthy Aging,
and Environmental Protection – this Foundation has built
robust local support and created a lasting impact.
The Foundation mobilizes corporate volunteers to address
real societal needs through both physical and online services.
Leveraging TSMC’s extensive industry network, it strengthens
collaboration with local governments, corporations, and
universities to provide educational and medical resources for
underprivileged children and their families. These initiatives
aim to foster long-term self-sufficiency, enabling families to
improve their quality of life. Additionally, through its “Sending
Love” platform, the Foundation connects communities and
amplifies social goodwill, enhancing local service capacities and
promoting collective growth.
In 2024, the Foundation demonstrated its dedication to
investing in public welfare and expanding projects as follows:
●Protecting the Environment
The Foundation actively promotes green energy adoption and
sustainable practices. In 2024, it assisted 15 social welfare
organizations in installing solar panels, generating revenue of
NT$4.2 million annually from electricity sales. The goal for the
future is to increase the number of social welfare organizations
by at least 8 each year. Furthermore, 363 rural schools across
nine counties benefited from LED energy-saving installations,
reducing electricity costs by 30%, savings of NT$7.3 million
and carbon emissions by 1,400 tons – equivalent to the
environmental impact of 7.5 Da’an Forest Parks, benefiting
120,000 teachers and students. These projects not only create
sustainable support for rural schools but also set a benchmark
for environmental stewardship.
7.5 TSMC i-Charity Platform
Launched in 2014, the TSMC i-Charity Platform empowers
employees to initiate and support social projects, share
outcomes, and participate in real-time fundraising activities.
In 2024, over 71 thousand donors contributed to campaigns
such as “Hualien Relief” and “Farm-to-Table Shelter Produce.”
Four recurring projects, supporting rural baseball and academic
education, garnered over NT$79 million in cumulative
donations.
Since its launch, the platform has raised more than NT$422.5
million in charitable funds, reinforcing TSMC’s commitment to
societal well-being. By encouraging employees to contribute in
diverse ways, the Company continues to uphold its promise to
drive positive change across communities.
170
171
7.6 Sustainability Development Implementation Status as Required by Taiwan Financial Supervisory
Commission
Assessment Item
Implementation Status
Non-
implementation
and Its Reason(s)
Yes
No
Summary
1. Does the Company have a governance structure for sustainability
development and a dedicated (or ad-hoc) sustainable development
organization with Board of Directors authorization for senior management,
which is reviewed by the Board of Directors?
V
1. For the Company’s governance structure for sustainability development,
please refer to “7.1 Corporate Sustainability (ESG) – Overview” on page 148-
152 of this Annual Report.
2. For the time of establishment, structure, operations, implementation status
and frequency of reporting to the Board of Directors of the Company’s
dedicated organization for sustainability development, please refer to “7.1
Corporate Sustainability (ESG) – Overview” on page 148-152 of this Annual
Report.
3. For progress of the Board of Directors’ supervision of the Company’s
sustainability development, please refer to “7.1 Corporate Sustainability
(ESG) – Overview” on page 148-152 of this Annual Report.
None
2. Does the Company follow materiality principle to conduct risk assessment for
environmental, social and corporate governance topics related to company
operation, and establish risk management related policy or strategy?
V
1. For the Company’s scope of risk assessment, please refer to “7.1 Corporate
Sustainability (ESG) – Overview” on page 148-152 of this Annual Report.
2. For the principle, process and result of the Company’s materiality analysis of
ESG related topics and risk management related policy or strategy, please
refer to “7.1 Corporate Sustainability (ESG) – Overview” on page 148-152 of
this Annual Report.
None
3. Environmental Topic
(1) Has the Company set an environmental management system designed to
industry characteristics?
(2) Is the Company committed to improving resource efficiency and to the
use of renewable materials with low environmental impact?
(3) Does the Company evaluate current and future climate change potential
risks and opportunities and take measures related to climate related
topics?
(4) Does the Company collect data for greenhouse gas emissions, water
usage and waste quantity in recent two years, and set greenhouse
gas emissions reduction, water usage reduction and other waste
management policies?
V
V
V
V
(1) For the Company’s environmental management system and the regulations
on which it is based, please refer to “7.2 Environmental, Safety and Health
(ESH) Management” on page 152-166 and “6.2.3 Risks Regarding Non-
Compliance with Export Control, Environmental and Climate Change Related
Laws, Regulations and Accords, and Failure to Timely Obtain Requisite
Approvals Necessary for Conducting Business” on page 142-143 of this
Annual Report.
For the Company’s international certifications and their scope, please refer
to “7.2 Environmental, Safety and Health (ESH) Management” on page
152-166 of this Annual Report.
(2) For the Company’s improvement of resource efficiency and the use of
renewable materials, please refer to “7.2.1 Environmental Protection
– Climate Change and Energy Management/Waste Management and
Recycling” on page 154-155, 157-158 of this Annual Report.
(3) For the Company’s evaluation of potential risks and opportunities of current
and future climate change and measures taken related to climate topics,
please refer to “7.2.1 Environmental Protection - Climate Change and
Energy Management” on page 154-155 of this Annual Report.
(4) For the Company’s statistical data, intensity and data coverage for
greenhouse gas emissions, water usage and waste quantity in recent two
years, please refer to “7.2.1 Environmental Protection – Climate Change and
Energy Management/Greenhouse Gas (GHG) Emission Reduction and Energy
Management/Air and Water Pollution Control/Waste Management and
Recycling” on page 154-155, 155-156, 156-157, 157-158, “7.7 Climate-
related Information of Listed Companies – TSMC GHG Emissions in Recent
Two Years” on page 173 of this Annual Report.
For the Company’s policies on the reduction of greenhouse gas emissions,
water usage and waste management, please refer to “7.2.1 Environmental
Protection” on page 154-159 of this Annual Report.
For the Company’s certification status of each data set and its scope, please
refer to “7.2.1 Environmental Protection – Climate Change and Energy
Management/Greenhouse Gas (GHG) Emission Reduction and Energy
Management/Air and Water Pollution Control/Waste Management and
Recycling” on page 154-155, 155-156, 156-157, 157-158 of this Annual
Report.
None
Assessment Item
Implementation Status
Non-
implementation
and Its Reason(s)
Yes
No
Summary
4. Social Topic
(1) Does the Company set policies and procedures in compliance with
regulations and internationally recognized human rights principles?
(2) Has the Company established appropriately managed employee welfare
measures (include salary and compensation, leave and others), and link
operational performance or achievements with employee salary and
compensation?
(3) Does the Company provide employees with a safe and healthy working
environment, with regular safety and health training?
(4) Has the Company established effective career development training
plans?
(5) Does the Company’s product and service comply with related regulations
and international rules for customers’ health and safety, privacy, sales,
labelling and set policies to protect consumers’ or customers’ rights and
consumer appeal procedures?
(6) Does the Company set supplier management policy and request suppliers
to comply with related standards on the topics of environmental,
occupational safety and health or labor right, and their implementation
status?
V
V
V
V
V
V
(1) For the Company’s policies and specific programs in compliance with
regulations and internationally recognized human rights principles, please
refer to “5.6.1 Human Rights Policy and Specific Actions” on page 112-113
of this Annual Report.
(2) For the Company’s employee welfare measures, including salary and
compensation, equitable and inclusive workplace, leave, allowance,
bonuses, and subsidies, please refer to “5.6.6 Competitive Overall
Compensation”, “5.6.2 Inclusive Workplace”, “5.6.3 Workforce Structure”,
and “5.6.7 Employee Benefits Exceed Legal Requirements” on pages 115-
116, 113-114, 114, 116-117 of this Annual Report.
For the information on how the Company’s operational performance or
achievements are reflected in the policy and implementation of employee
salary and compensation, please refer to “5.6.6 Competitive Overall
Compensation” on page 115-116 of this Annual Report.
(3) For the Company’s status with respect to providing employees with a safe
and healthy working environment, with regular safety and health training,
please refer to “7.2.3 Safety and Health” on page 162-165 of this Annual
Report.
For the Company’s related certification status and its scope, please refer to
“7.2.3 Safety and Health” on page 162-165 of this Annual Report.
For a presentation and analysis of the Company’s occupational accidents
in the current year, the number of employees involved, and the ratio of the
number of employees involved to the total number of employees, as well
as related improvement measures taken, please refer to “7.2.3 Safety and
Health” on page 162-165 of this Annual Report.
The number of fire incidents and the number of casualties in the given year,
and the ratio of the number of casualties to the total number of employees,
and improvement measures related to fire incidents: In 2024 and as of the
date of this Annual Report, there were no fire incidents in TSMC and its
subsidiary.
(4) For the scope and implementation of the Company’s employee training
plans, please refer to “5.6.5 People Development” on page 114-115 of this
Annual Report.
(5) Not applicable as TSMC is not an end product manufacturer.
For the Company’s policy to protect customers’ rights, please refer to “5.4.1
Customers – Customer Information Protection” on page 110 of this Annual
Report.
(6) For the Company’s supplier management policy and related compliance
norms, and specific requirements for suppliers in environmental protection,
occupational safety and health or labor rights, please refer to “7.2.4
Supplier Management” on page 165-166 and “5.6.1 Human Rights Policy
and Specific Actions” on page 112-113 of this Annual Report.
For a description of the implementation of the Company’s supplier
management policy and related compliance norms, please refer to “7.2.4
Supplier Management” on page 165-166 of this Annual Report.
None
5. Does the Company refer to international reporting rules or guidelines to
publish Sustainability Report to disclose non-financial information of the
Company? Has the said Report acquire third party verification or statement
of assurance?
V
For the reporting rules and guidelines that the Company follows in disclosing
non-financial information in the Sustainability Report, please refer to “7.1
Corporate Sustainability (ESG) – Overview” on page 148-152 of this Annual
Report.
For third party verification, the items or scope certified, and the standards
that are followed of the Sustainability Report, please refer to “7.1 Corporate
Sustainability (ESG) – Overview” on page 148-152 of this Annual Report.
None
6. If the Company has established its sustainable development code of practice according to “Listed Companies Sustainable Development Code of Practice,” please describe the operational status and differences.
TSMC follows the ESG Policy to promote the Company’s sustainable development through concrete practices. For sustainable development operational status, please refer to “7.1 Corporate Sustainability (ESG) –
Overview” on page 148-152 of this Annual Report and ESG related information on the Company’s website: https://esg.tsmc.com/en-US
7. Other important information to facilitate better understanding of the Company’s implementation of sustainable development:
Please refer to TSMC’s website for its sustainable development implementation status: https://esg.tsmc.com/en-US
(Continued)
172
173
7.7 Climate-related Information of Listed Companies
Items
Execution Status
1. Description on the Board and Management’s oversight and governance on
climate-related risks and opportunities
●ESG Steering Committee: TSMC’s top organization in climate change management. Chaired by the Chairman of TSMC
with the chairperson of the ESG Committee serving as executive secretary. The Committee reviews TSMC’s climate change
strategies and goals every quarter and reports to the Board of Directors.
●Energy Saving and Carbon Reduction Committee: The Company’s management organization for taking action on climate
change risk and opportunity. It is chaired by the Vice President of Fab Operations. Every quarter, this Committee formulates
management plans, reviews implementation status, and discusses future plans.
2. Description on how the identified climate risks and opportunities impact the
company’s business, strategies, and finance (short, mid, long term)
TSMC identifies and updates climate risks and opportunities every two years based on the Recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD) framework. Please refer to the “Financial Impact Analysis and Response
of Climate Risks and Opportunities” table for details on page 154-155 of this Annual Report.
3. Description on the impact extreme climate events and transitional actions have
on finance
Please refer to the “Financial Impact Analysis and Response of Climate Risks and Opportunities” table for details on page
154-155 of this Annual Report.
4. Description on how the climate risk identification, assessment, and management
process is integrated in the overall risk management system
Please refer to the Risk Management in “Management Structure of TSMC Climate-related Risks and Opportunities” table for
details on page 154 of this Annual Report.
5. Should scenario analysis be used to assess the Company’s resilience in face of
climate change risks, explanations on the scenario, parameters, hypothesis,
analysis factors and major financial impacts should be provided
TSMC selected high-emission scenarios (SSP5-8.5) from IPCC AR6 to analyze physical risks and assess the potential short,
mid and long-term risks in TSMC facilities and supply chains. In addition to the existing flood, drought, and heat risks,
the Company further evaluated risks such as wind disasters from typhoons, landslide disasters, and rising ocean levels.
Meanwhile, TSMC increased its scope to cover all facilities around the world as well as five critical supply chains - direct raw
materials, indirect raw materials, equipment, fab facilities, and parts and components. Analysis of physical risks shows that
the risks of droughts are the most significant physical risks, which cause the impact to self-operation resulting financial loss
and revenue decrease due to water shortage.
6. Should there be transitional programs in response to managing climate-related
risks, please explain the program’s content and metrics and targets used to
identify and manage physical and transitional risks
TSMC actively implements greenhouse gas reduction measures in accordance with the 2050 Net Zero Transition Plan, in
order to achieve the RE100 target by 2040 and net-zero emissions by 2050. Throughout the process, TSMC will continue to
introduce the best energy-saving and carbon-reducing technologies to reduce emissions, and will continuously expand the
use of renewable energy until reaching the RE100 goal. Ultimately, TSMC plans to achieve the net-zero transition target by
partially offsetting emissions with carbon credits.
7. Should the internal carbon pricing be used as the planning tool, the pricing
mechanism should be explained
Internal carbon prices include carbon tax (fee), regulatory fines, carbon reduction and renewable energy cost, and carbon
market price.
8. Should climate-related targets be in place, information such as their scope of
action, GHG emissions, planned timeline, and yearly achieved progress should be
stated; for targets achieved through carbon offset and RECs, the source of offset
amount and number of RECs should be stated
1. Reduce unit GHG emissions by 30% compared to the base year (metric ton of carbon dioxide equivalent (MTCO2e)/12-
inch equivalent wafer mask layer), and restore GHG emissions to the 2020 level in 2030, net zero emissions in 2050.
2. 60% renewable energy company-wide in 2030, 100% renewable energy company-wide in 2040.
2024 achievements: unit GHG emissions (metric ton of carbon dioxide equivalent (MTCO2e)/12-inch equivalent wafer mask
layer) increased by 19%; Used 3,610 GWh in renewable energy, and increased the proportion of renewable energy use to
14.1%.
9. GHG inventory and assurance status, and reduction goals, strategies and specific
action plans
Please refer to “7.2.1 Environmental Protection – Climate Change and Energy Management” on page 154-155 of this
Annual Report, “7.2.1 Environmental Protection – Greenhouse Gas (GHG) Emission Reduction and Energy Management” on
page 155-156 of this Annual Report and the “TSMC GHG Emissions in Recent Two Years” table on page 173 of this Annual
Report.
TSMC GHG Emissions in Recent Two Years
Year
Scope
Scope 1
Scope 2
Verification
Party
Verification
Guideline
Verification
Statement
Total Emissions
(Metric Ton
CO2e)
Intensity (Metric
Ton CO2e / M
NTD)
Total Emissions
(Metric Ton
CO2e)
Intensity (Metric
Ton CO2e / M
NTD)
2024
Parent Company
1,581,312
0.55
10,926,644
3.79
DNV
ISO 14064-3
Reasonable Assurance
VisEra Technologies Company
Ltd.
5,043
0.50
30,753
3.07
DNV
ISO 14064-3
Reasonable Assurance
TSMC China Company
Limited
118,141
4.56
0
0
DNV
ISO 14064-3
Reasonable Assurance
TSMC Nanjing Company
Limited
53,216
0.77
0
0
DNV
ISO 14064-3
Reasonable Assurance
TSMC Washington, LLC
53,723
9.04
0
0
Has not been verified yet
JASM
7,745
71.45
0
0
Has not yet been verified
3DIC
215
0.23
0
0
Has not yet been verified
2023
Parent Company
1,307,966
0.61
10,150,252
4.71
DNV
ISO 14064-3
Reasonable Assurance
VisEra Technologies Company
Ltd.
4,399
0.61
37,135
5.13
DNV
ISO 14064-3
Reasonable Assurance
TSMC China Company
Limited
161,698
6.34
0
0
DNV
ISO 14064-3
Reasonable Assurance
TSMC Nanjing Company
Limited
45,118
0.74
0
0
DNV
ISO 14064-3
Reasonable Assurance
TSMC Washington, LLC
76,851
9.28
0
0
AWN
ISO 14064-3
Limited Assurance
Note 1: GHG includes CO2, CH4, N2O, HCFCs, PFCs, SF6, NF3
Note 2: Scope 1: Direct emissions, i.e. sources owned or controlled by the Company; according to the 2019 Refinement to the Guidelines for National Greenhouse Gases Inventories of the United Nations; and use the
Global Warming Potential (GWP) referring to the Intergovernmental Panel on Climate Change (IPCC) AR5 for calculation.
Scope 2: Indirect emissions, i.e. those arising from externally purchased electricity, heat or steam. The calculation is according to market-based method.
TSMC will continue to play a critical and integral role in
the global semiconductor industry, while supporting our
customers’ growth.
Subsidiary
Information & Other
Special Notes
8
176
177
Unit: NT$ (USD, EUR, JPY, KRW, RMB, CAD) thousands
As of 12/31/2024
Company
Date of
Incorporation
Place of Registration
Capital Stock
Business Activities
TSMC North America
Jan. 18, 1988
San Jose, California, U.S.
US$
11,000
Sales and marketing of integrated circuits and
semiconductor devices
TSMC Europe B.V.
Mar. 04, 1994
Amsterdam, The Netherlands
EUR
100
Customer service and supporting activities
TSMC Japan Limited
Sep. 10, 1997
Yokohama, Japan
JPY
300,000
Customer service and supporting activities
TSMC Korea Limited
May 02, 2006
Seoul, Korea
KRW
400,000
Customer service and supporting activities
TSMC Design Technology Japan, Inc.
Jan. 10, 2020
Yokohama, Japan
JPY
750,000
Engineering support activities
TSMC Japan 3DIC R&D Center, Inc.
Mar. 29, 2021
Yokohama, Japan
JPY
2,450,000
Engineering support activities
TSMC China Company Limited
Aug. 04, 2003
Shanghai, China
RMB
4,502,080
Manufacturing, sales, testing, and computer-aided design
of integrated circuits and other semiconductor devices
TSMC Nanjing Company Limited
May 16, 2016
Nanjing, China
RMB
6,650,119
Manufacturing, sales, testing, and computer-aided design
of integrated circuits and other semiconductor devices
TSMC Arizona Corporation
Nov. 10, 2020
Arizona, U.S.
US$
17 (Note 1)
Manufacturing, sales, and testing of integrated circuits and
other semiconductor devices
Japan Advanced Semiconductor Manufacturing,
Inc.
Dec. 10, 2021
Kumamoto, Japan
JPY
207,232,200
Manufacturing, sales, and testing of integrated circuits and
other semiconductor devices
European Semiconductor Manufacturing
Company (ESMC) GmbH
Jun. 30, 2023
Dresden, Germany
EUR
1,050
(Note 2)
Manufacturing, sales, and testing of integrated circuits and
other semiconductor devices
TSMC Technology, Inc.
Feb. 20, 1996
Delaware, U.S.
US$
0.001
Engineering support activities
TSMC Development, Inc.
Feb. 16, 1996
Delaware, U.S.
US$
0.001
Investing in companies involved in semiconductor
manufacturing
TSMC Washington, LLC
Jun. 03, 1996
Delaware, U.S.
US$
0
Manufacturing, sales, and testing of integrated circuits and
other semiconductor devices
TSMC Partners, Ltd.
Mar. 26, 1998
British Virgin Islands
US$
988,268
Investing in companies involved in the semiconductor
design and manufacturing, and other investment activities
TSMC Design Technology Canada Inc.
May 28, 2007
Ontario, Canada
CAD
2,434
Engineering support activities
TSMC Global Ltd.
Jul. 18, 2006
British Virgin Islands
US$
19,384,000
Investment activities
VentureTech Alliance Fund II, L.P. (Note 3)
Feb. 27, 2004
Cayman Islands
US$
283
Investing in technology start-up companies
VentureTech Alliance Fund III, L.P. (Note 4)
Mar. 25, 2006
Cayman Islands
US$
67,400
Investing in technology start-up companies
Growth Fund Limited (Note 5)
May 30, 2007
Cayman Islands
US$
1,236
Investing in technology start-up companies
Emerging Fund, L.P.
Jan. 27, 2021
Cayman Islands
US$
88,103
Investing in technology start-up companies
VisEra Technologies Company Ltd.
Dec. 01, 2003
Hsinchu, Taiwan
NT$
3,173,081
Research, design, development, manufacturing, sales,
packaging and test of color filter
Note 1: TSMC Arizona Corporation completed capital injections in January 2025 and February 2025 with capital stock of US$20 thousands post the capital injections.
Note 2: European Semiconductor Manufacturing Company (ESMC) GmbH will have capital injection in March 2025 with capital stock of EUR1,075 thousands post capital injection.
Note 3: VentureTech Alliance Fund II, L.P. was dissolved in 2025.
Note 4: VentureTech Alliance Fund III, L.P. was dissolved in 2025.
Note 5: Growth Fund Limited is under dissolution procedures.
8.1 Subsidiaries
For the Company’s consolidated business reports of affiliated enterprises, please refer to “8.1.1 TSMC Subsidiaries Chart” to “8.1.6
Operational Highlights of TSMC Subsidiaries” of this Annual Report.
8.1.1 TSMC Subsidiaries Chart
TSMC Technology, Inc.
Shareholding: 100%
Growth Fund Limited
Shareholding: 100% (Note 3)
TSMC Washington, LLC
Shareholding: 100%
TSMC Development, Inc.
Shareholding: 100%
TSMC Design Technology Canada Inc.
Shareholding: 100%
As of 12/31/2024
Taiwan
Semiconductor
Manufacturing
Company Limited
TSMC North America
Shareholding: 100%
TSMC Europe B.V.
Shareholding: 100%
TSMC Japan Limited
Shareholding: 100%
TSMC Design Technology Japan, Inc.
Shareholding: 100%
TSMC Japan 3DIC R&D Center, Inc.
Shareholding: 100%
TSMC Korea Limited
Shareholding: 100%
TSMC Global Ltd.
Shareholding: 100%
VentureTech Alliance Fund II, L.P.
Shareholding: 98% (Note 1)
VentureTech Alliance Fund III, L.P.
Shareholding: 98% (Note 2)
Emerging Fund, L.P.
Shareholding: 99.9%
TSMC Nanjing Company Limited
Shareholding: 100%
VisEra Technologies Company Ltd.
Shareholding: 67%
TSMC Arizona Corporation
Shareholding: 100%
Japan Advanced Semiconductor
Manufacturing, Inc.
Shareholding: 73%
European Semiconductor Manufacturing
Company (ESMC) GmbH
Shareholding: 70%
TSMC China Company Limited
Shareholding: 100%
TSMC Partners, Ltd.
Shareholding: 100%
8.1.2 Business Scope of TSMC and Its Subsidiaries
TSMC and its subsidiaries strive to deliver the best possible foundry services. TSMC Washington, LLC in the United States and TSMC
China provide 8-inch wafer capacity, while TSMC Nanjing provides 12-inch wafer capacity. In addition, TSMC Arizona in the United
States and Japan Advanced Semiconductor Manufacturing, Inc. in Japan have entered volume production to provide 12-inch wafer
capacity in fourth quarter of 2024 and year end 2024, respectively. TSMC’s subsidiaries in North America, Europe, Japan, China,
South Korea and other regions are dedicated to providing timely services and engineering support to customers worldwide and also
support the Company’s core foundry business with related services as well as investing in start-up companies in the semiconductor
industry.
8.1.3 TSMC Subsidiaries
Note 1: VentureTech Alliance Fund II, L.P. was dissolved in 2025.
Note 2: VentureTech Alliance Fund III, L.P. was dissolved in 2025.
Note 3: Growth Fund Limited is under dissolution procedures.
178
179
8.1.4 Shareholders in Common of TSMC and Its Subsidiaries with Deemed Control and Subordination: None.
8.1.5 Rosters of Directors, Supervisors, and Presidents of TSMC’s Subsidiaries
Unit: NT$ (USD), except shareholding
As of 12/31/2024
Company
Title
Name
Shareholding
Shares (Investment Amount)
% (Investment
Holding %)
TSMC North America
Director
Director
CEO
President
Sylvia Fang
David Keller
David Keller
Sajiv Dalal
-
-
-
-
TSMC holds 11,000,000 shares
-
-
-
-
100%
TSMC Europe B.V.
Director
Director
President
Wendell Huang
Paul de Bot
Paul de Bot
-
-
-
TSMC holds 200 shares
-
-
-
100%
TSMC Japan Limited
Representative Director
Director
President
Makoto Onodera
Sylvia Fang
Makoto Onodera
-
-
-
TSMC holds 6,000 shares
-
-
-
100%
TSMC Korea Limited
Representative Director
Director
Director
Wei-Li Chen
Ray Wan
Wendell Huang
-
-
-
TSMC holds 80,000 shares
-
-
-
100%
TSMC Design Technology Japan, Inc.
Representative Director
Director
Supervisor
L.C. Lu
Wendell Huang
Morris Cheng
-
-
-
TSMC holds 15,000 shares
-
-
-
100%
TSMC Japan 3DIC R&D Center, Inc.
Representative Director
Director
Supervisor
Jun He
Diane Kao
Morris Cheng
-
-
-
TSMC holds 49,000 shares
-
-
-
100%
TSMC China Company Limited
Chairman
Director
Director
Supervisor
President
F.C. Tseng
Y.P. Chyn
Roger Luo
Lora Ho
Roger Luo
-
-
-
-
-
(TSMC invests US$596,000,000)
-
-
-
-
-
(100%)
TSMC Nanjing Company Limited
Chairman
Director
Director
Director
Supervisor
Supervisor
President
Lora Ho
Y.P. Chyn
Cliff Hou
Roger Luo
Wendell Huang
Sylvia Fang
Roger Luo
-
-
-
-
-
-
-
(TSMC invests US$1,000,000,000)
-
-
-
-
-
-
-
(100%)
TSMC Arizona Corporation
Chairman
Director
Director
Director
CEO
President
Rick Cassidy
Y.L. Wang
Sylvia Fang
Wendell Huang
Y.L. Wang
Rose Castanares
-
-
-
-
-
-
TSMC holds 17,850,000 shares (Note 1)
-
-
-
-
-
-
100%
(Continued)
Company
Title
Name
Shareholding
Shares (Investment Amount)
% (Investment
Holding %)
Japan Advanced Semiconductor
Manufacturing, Inc.
Representative Director
Director
Director
Director
Director
Supervisor
CEO
President
Y.H. Liaw
Diane Kao
Chien-Hsin Lee
Yuichi Horita
Yasuhiro Kono
Morris Cheng
Y.H. Liaw
Yuichi Horita
-
-
-
-
-
-
-
-
TSMC holds 3,010,894 shares
-
-
-
-
-
-
-
-
72.65%
European Semiconductor Manufacturing
Company (ESMC) GmbH
Shareholders’ Committee Chairman
Shareholders’ Committee Member
Shareholders’ Committee Member
Shareholders’ Committee Member
Shareholders’ Committee Member
Shareholders’ Committee Member
Shareholders’ Committee Member
Managing Director
Managing Director
Arthur Chuang
Chien-Hsin Lee
Morris Cheng
David Liu
Stefan Joeres
Rutger Wijburg
Maarten Dirkzwager
Ray Chuang
Christian Koitzsch
-
-
-
-
-
-
-
-
-
TSMC holds 735,000 shares (Note 2)
-
-
-
-
-
-
-
-
-
70% (Note 2)
TSMC Technology, Inc.
Chairman
Director
President
Wendell Huang
L.C. Lu
L.C. Lu
-
-
-
TSMC Partners, Ltd. holds 10 shares
-
-
-
100%
TSMC Development, Inc.
Chairman
Director
President
Wendell Huang
Sylvia Fang
Wendell Huang
-
-
-
TSMC Partners, Ltd. holds 10 shares
-
-
-
100%
TSMC Washington, LLC
Director
Director
President
Y.H. Liaw
Wendell Huang
Julian Lee
-
-
-
TSMC Development, Inc. holds 293,636,833 shares
-
-
-
100%
TSMC Partners, Ltd.
Director
Director
President
Wendell Huang
Sylvia Fang
Wendell Huang
-
-
-
TSMC holds 988,268,244 shares
-
-
-
100%
TSMC Design Technology Canada Inc.
Director
Director
Director
President
L.C. Lu
Cormac Michael O’Connell
Sylvia Fang
L.C. Lu
-
-
-
-
TSMC Partners, Ltd. holds 2,300,000 shares
-
-
-
-
100%
TSMC Global Ltd.
Director
Director
Wendell Huang
Sylvia Fang
-
-
TSMC holds 19,384 shares
-
-
100%
VentureTech Alliance Fund II, L.P.
(Note 3)
None
None
(TSMC invests US$277,199)
(98.00%)
VentureTech Alliance Fund III, L.P.
(Note 4)
None
None
(TSMC invests US$66,052,139)
(98.00%)
Growth Fund Limited (Note 5)
None
None
(VentureTech Alliance Fund III, L.P. invests
US$1,235,897)
(100%)
Emerging Fund, L.P.
None
None
(TSMC invests US$88,014,901)
(99.90%)
VisEra Technologies Company Ltd.
Chairman
Director
Director
Independent Director
Independent Director
Independent Director
Independent Director
CEO/President
Robert Kuan
Chien-Hsin Lee
David Liu
Laura Huang
Emma Chang
P.H. Chang
Han-Fei Lin
Robert Kuan
264,500 shares
-
-
-
-
-
-
-
TSMC holds 213,619,000 shares
0.08%
-
-
-
-
-
-
-
67.32% (Note 6)
Note 1: TSMC Arizona Corporation completed a capital injection in January 2025, which included 1,350,000 shares of advance receipts. In addition, TSMC Arizona Corporation completed capital injections in February
2025. After the capital injections, TSMC holds 19,550,000 shares and 100% equity interests in TSMC Arizona Corporation.
Note 2: European Semiconductor Manufacturing Company (ESMC) GmbH ("ESMC") will have capital injection in March 2025. After the capital injection, TSMC will hold 752,500 shares and 70% equity interests in ESMC.
Note 3: VentureTech Alliance Fund II, L.P. was dissolved in 2025.
Note 4: VentureTech Alliance Fund III, L.P. was dissolved in 2025.
Note 5: Growth Fund Limited is under dissolution procedures.
Note 6: As of February 2025, TSMC’s ownership of VisEra is 67.32% due to VisEra’s continuous execution of the Employee Stock Purchase Plan.
180
181
8.1.6 Operational Highlights of TSMC Subsidiaries
Unit: NT$ thousands, except EPS (NT$)
As of 12/31/2024
Company
Capital
Stock
Assets
Liabilities
Net Worth
Net
Revenues
Income
(Loss) from
Operation
Net Income
(Loss)
Basic Earning
(Loss) Per
Share
TSMC North America
360,448
494,324,245
486,467,322
7,856,923
2,066,605,288
4,043,133
1,141,666
103.79
TSMC Europe B.V.
3,410
1,008,995
377,056
631,939
664,737
234,275
41,506
207,530.55
TSMC Japan Limited
62,760
257,933
128,707
129,226
274,314
120,578
4,694
782.39
TSMC Design Technology Japan, Inc.
156,900
604,720
186,337
418,383
870,534
275,458
42,836
2,855.72
TSMC Japan 3DIC R&D Center, Inc.
512,540
1,709,053
365,683
1,343,370
946,628
278,339
177,952
3,631.67
TSMC Korea Limited
8,920
46,125
2,361
43,764
12,933
1,202
1,913
23.92
TSMC Development, Inc.
0.03
39,632,534
0
39,632,534
828,447
(172,992)
(346,954)
(34,695,416.00)
TSMC Partners, Ltd.
32,383,574
76,837,398
69
76,837,329
1,888,987
1,737,572
1,723,648
1.74
TSMC Global Ltd.
635,174,912
1,019,515,522
247,077,568
772,437,954
42,998,157
37,342,396
37,342,396
2,533,544.43
TSMC Washington, LLC
0
7,999,932
2,474,418
5,525,514
5,945,919
(1,362,667)
(1,001,385)
(3.41)
TSMC China Company Limited
20,213,889
114,583,264
4,071,951
110,511,313
25,913,486
10,995,390
11,273,152
NA
TSMC Nanjing Company Limited
29,858,371
149,167,726
32,202,147
116,965,579
69,035,463
25,960,606
25,954,842
NA
VisEra Technologies Company Ltd.
3,173,081
24,739,536
6,675,790
18,063,746
10,002,074
2,007,339
1,738,905
5.49
TSMC Arizona Corporation
541
842,626,491
298,124,387
544,502,104
0
(24,291,263)
(14,298,315)
(1,144.92)
Japan Advanced Semiconductor
Manufacturing, Inc.
43,352,976
161,575,137
82,560,347
79,014,790
108,406
(8,363,000)
(4,375,561)
(1,177.09)
European Semiconductor Manufacturing
Company (ESMC) GmbH
35,807
26,750,103
1,735,717
25,014,386
0
(702,304)
(556,876)
(596.52)
TSMC Technology, Inc.
0.03
3,951,653
2,392,307
1,559,346
5,101,227
1,703,297
351,561
35,156,111.50
TSMC Design Technology Canada Inc.
55,614
512,774
88,702
424,072
379,415
30,046
52,594
22.87
VentureTech Alliance Fund II, L.P.
9,269
0
0
0
2,592
(2,815)
(3,177)
NA
VentureTech Alliance Fund III, L.P.
2,208,568
0
0
0
4,254
1,062
1,062
NA
Growth Fund Limited
40,498
0
0
0
5,927
4,307
4,254
NA
Emerging Fund, L.P.
2,886,959
3,217,273
34
3,217,239
14,659
(17,367)
(17,367)
NA
8.1.7 Consolidated Financial Statements and Affiliation Reports of Affiliated Enterprises
Please refer to our company's consolidated financial statements on the Market Observation Post System (MOPS).
Link to MOPS: https://mops.twse.com.tw/mops/#/web/home
8.2 Special Notes
8.2.1 Private Placement Securities in 2024 and as of the Date of this Annual Report: None.
8.2.2 Any Events in 2024 and as of the Date of this Annual Report that Had Material Impacts on Shareholders’
Interests or Securities Prices as Stated in Item 3 Paragraph 2 of Article 36 of Securities and Exchange Act of
Taiwan: None.
8.2.3 Other Necessary Supplement: None.
182
Contact Information
Corporate Headquarters & Fab 12A
8, Li-Hsin Rd. 6, Hsinchu Science Park, Hsinchu 300-096, Taiwan, R.O.C.
Tel: +886-3-5636688 Fax: +886-3-5637000
Global R&D Center
168, Kehuan Rd., Hsinchu Science Park, Hsinchu 308-001, Taiwan,
R.O.C.
Tel: +886-3-5636688
Fab 12B
168, Park Ave. 2, Hsinchu Science Park, Hsinchu 300-091, Taiwan,
R.O.C.
Tel: +886-3-5636688 Fax: +886-3-6687827
Fab 2, Fab 5
121, Park Ave. 3, Hsinchu Science Park, Hsinchu 300-096, Taiwan,
R.O.C.
Tel: +886-3-5636688 Fax: +886-3-5781546
Fab 3
9, Creation Rd. 1, Hsinchu Science Park, Hsinchu 300-092, Taiwan,
R.O.C.
Tel: +886-3-5636688 Fax: +886-3-5781548
Fab 6
1, Nan-Ke North Rd., Southern Taiwan Science Park, Tainan 741-014,
Taiwan, R.O.C.
Tel: +886-6-5056688 Fax: +886-6-5052057
Fab 8
25, Li-Hsin Rd., Hsinchu Science Park, Hsinchu 300-094, Taiwan, R.O.C.
Tel: +886-3-5636688 Fax: +886-3-5662051
Fab 14A
1-1, Nan-Ke North Rd., Southern Taiwan Science Park, Tainan 741-014,
Taiwan, R.O.C.
Tel: +886-6-5056688 Fax: +886-6-5051262
Fab 14B
17, Nan-Ke 9th Rd., Southern Taiwan Science Park, Tainan 741-014,
Taiwan, R.O.C.
Tel: +886-6-5056688 Fax: +886-6-5055217
Fab 15A
1, Keya Rd. 6, Central Taiwan Science Park, Taichung 428-303, Taiwan,
R.O.C.
Tel: +886-4-27026688 Fax: +886-4-25607548
Fab 15B
1, Xinke Rd., Central Taiwan Science Park, Taichung 407-728, Taiwan,
R.O.C.
Tel: +886-4-27026688 Fax: +886-4-24630372
Fab 18A
8, Beiyuan Rd. 2, Southern Taiwan Science Park, Tainan 745-093,
Taiwan, R.O.C.
Tel: +886-6-5056688 Fax: +886-6-5050363
Fab 18B
8, Beiyuan Rd. 2, Southern Taiwan Science Park, Tainan 745-093,
Taiwan, R.O.C.
Tel: +886-6-5056688
Fab 20
1, Kehuan Rd., Hsinchu Science Park, Hsinchu 308-001, Taiwan, R.O.C.
Tel: +886-3-5636688
Fab 22
1, Yuanqu N. Rd., Nanzi Dist., Kaohsiung City 811, Taiwan, R.O.C.
Tel: +886-6-5056688
Advanced Backend Fab 1
6, Creation Rd. 2, Hsinchu Science Park, Hsinchu 300-093, Taiwan,
R.O.C.
Tel: +886-3-5636688 Fax: +886-3-5773628
Advanced Backend Fab 2
1, Sanbaozhu Rd., Southern Taiwan Science Park, Tainan 741-013,
Taiwan, R.O.C.
Tel: +886-6-5056688 Fax: +886- 6-5057223
Advanced Backend Fab 3
101, Longyuan 6th Rd., Longtan Dist., Taoyuan City 325-002, Taiwan,
R.O.C.
Tel: +886-3-5636688 Fax: +886-3-4804250
Advanced Backend Fab 5
5, Keya W. Rd., Central Taiwan Science Park, Taichung 428-303, Taiwan,
R.O.C.
Tel: +886-4-27026688 Fax: +886-4-25609631
Advanced Backend Fab 6
1, Kezhuan 1st Rd., Zhunan Township, Miaoli 350-012, Taiwan, R.O.C.
Tel: +886-3-5636688
VisEra Technologies Company Limited
12, Duxing Rd. 1, Hsinchu Science Park, Hsinchu 300-096, Taiwan, R.O.C.
Tel: +886-3-6668788 Fax: +886-3-6662858
“TSMC”, “tsmc”, “Open Innovation Platform”, “Open Innovation”, “GIGAFAB”, “CoWoS”, “TSMC-SoIC”, “3DFabric”, “TSMC 3DFabric”, “N12e”, “3Dblox”, “TSMC-COUPE”, “TSMC-SoW”,
and “TSMC A16” are some of TSMC’s registered and/or pending trademarks used by the Company in various jurisdictions, including Taiwan. All rights reserved.
Copyright © 2024 by Taiwan Semiconductor Manufacturing Company, Ltd. All rights reserved.
TSMC Spokesperson
Name: Wendell Huang
Title: Senior Vice President & CFO
Tel: +886-3-5636688 Fax: +886-3-5637000
Email: press@tsmc.com
TSMC Deputy Spokesperson
Name: Nina Kao
Title: Head of Public Relations Division
Tel: +886-3-5636688 Fax: +886-3-5637000
Email: press@tsmc.com
Auditors
Company: Deloitte & Touche
Auditors: Shih-Tsung Wu, Shang-Chih Lin
Address: 20F, No. 100, Songren Rd., Xinyi Dist.,Taipei 110-016,
Taiwan, R.O.C.
Tel: +886-2-27259988 Fax: +886-2-40516888
Website: http://www.deloitte.com.tw
Taiwan
Common Share Transfer Agent and Registrar
Company: Stock Affairs Agency Department of CTBC Bank Co., Ltd.
Address: 5F., No. 83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist.,
Taipei City 100-003, Taiwan, R.O.C.
Tel: +886-2-66365566
Website: https://www.ctbcbank.com
ADR Depositary Bank
Company: Citibank, N.A.
Depositary Receipts Services
Address: 388 Greenwich Street, 26th Floor, New York, NY 10013,
U.S.A.
Website: https://www.citi.com/dr
Tel: +1-877-2484237 (toll free)
Tel: +1-781-5754555 (out of US) Fax: +1-201-3243284
E-mail: citibank@shareholders-online.com
TSMC’s depositary receipts of the common shares are listed on New
York Stock Exchange (NYSE) under the symbol TSM. The information
relating to TSM is available at https://www.nyse.com and https://
mops.twse.com.tw
Asia
TSMC China Company Limited
4000, Wen Xiang Road, Songjiang, Shanghai, China
Postcode: 201616
Tel: +86-21-57768000
TSMC Nanjing Company Limited
16, Zifeng Road, Pukou Economic Development Zone, Nanjing,
Jiangsu Province, China
Postcode: 211806
Tel: +86-25-57668000
TSMC Korea Limited
Rm 2104-2105 west, Hanshin Inter Valley 24 Building, 322,
Teheran-ro, Gangnam-gu, Seoul 06211, Korea
Tel: +82-2-20511688
TSMC Japan Limited
21F, Queen’s Tower C, 2-3-5, Minatomirai, Nishi-ku, Yokohama,
Kanagawa, 220-6221, Japan
Tel: +81-45-682-0670
TSMC Design Technology Japan, Inc.
10F, Minatomirai Grand Central Tower, 4-6-2, Minatomirai, Nishi-ku,
Yokohama, Kanagawa, 220-0012, Japan
Tel: +81-45-6644500
TSMC Japan 3DIC R&D Center, Inc.
2F, 7D Bldg., West, 16-1 Onogawa, Tsukuba, Ibaraki, 305-8569,
Japan
Tel: +81-29-893-2968
Japan Advanced Semiconductor Manufacturing, Inc.
4106-1, Haramizu, Kikuyo-machi, Kikuchi-gun, Kumamoto,
869-1102, Japan
Tel: +81-96-9213-9421
Europe/North America
TSMC Europe B.V.
World Trade Center, Zuidplein 60, 1077 XV Amsterdam,
The Netherlands
Tel: +31-20-3059900
TSMC Design Technology Canada Inc.
1000 Innovation Drive, Suite 400, Kanata, ON K2K 3E7, Canada
Tel: +613-576-1990
TSMC North America
2851 Junction Avenue, San Jose, CA 95134, U.S.A.
Tel: +1-408-3828000 Fax: +1-408-3828008
TSMC Technology, Inc.
2851 Junction Avenue, San Jose, CA 95134, U.S.A.
Tel: +1-408-3828000
TSMC Washington, LLC
5509 N.W. Parker Street, Camas, WA 98607-9299, U.S.A.
Tel: +1-360-8173000 Fax: +1-360-8173009
TSMC Arizona Corporation
5088 W. Innovation Circle, Phoenix, AZ 85083, U.S.A.
Tel: +1-602-567-1688
European Semiconductor Manufacturing Company
(ESMC) GmbH
World Trade Center, Rosenstrasse 32, 01067 Dresden, Germany
8, Li-Hsin Rd. 6, Hsinchu Science Park, Hsinchu 300-096, Taiwan, R.O.C. | https://www.tsmc.com
Tel: +886-3-5636688 | Fax: +886-3-5637000 | This report is made with recycled paper
C.C. Wei, Chairman
Taiwan Semiconductor Manufacturing Company, Ltd.
“
TSMC Vision
Our vision is to be the most
advanced and largest
technology and foundry
services provider to fabless
companies and IDMs,
and in partnership with
them, to forge a powerful
competitive force in the
semiconductor industry.