37.

RELATED PARTY TRANSACTIONS

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

Related party name and categories


Related Party Name		Related Party Categories
GUC		Associates
VIS		Associates
SSMC		Associates
Xintec		Associates
Mutual-Pak		Associates
TSMC Education and Culture Foundation		Other related parties
TSMC Charity Foundation		Other related parties

Net revenue


		Years Ended December 31
		2016		2017		2018
		NT$		NT$		NT$
		(In Millions)		(In Millions)		(In Millions)
Item	Related Party Categories
Net revenue from sale of goods	Associates	$	5,929.1	$	8,496.0	$	8,980.1
	Other related parties		—		0.1		0.3



		$	5,929.1	$	8,496.1	$	8,980.4


Net revenue from royalties	Associates	$	516.7	$	482.5	$	362.3

Purchases

Years Ended December 31

2016

2017

2018

NT$

(In Millions)

Related Party Categories

Associates

10,108.2

9,904.6

8,809.5

Receivables from related parties


		December 31, 2017		December 31, 2018
		NT$		NT$
		(In Millions)		(In Millions)
Item	Related Party Name/Categories
Receivables from related parties	GUC	$	1,022.9	$	481.9
	Xintec		161.2		102.5

		$	1,184.1	$	584.4


Other receivables from related parties	SSMC	$	83.1	$	53.8
	VIS		78.2		10.4
	Other Associates		9.8		0.8


		$	171.1	$	65.0

Payables to related parties


		December 31, 2017		December 31, 2018
		NT$		NT$
		(In Millions)		(In Millions)
Item	Related Party Name/Categories
Payables to related parties	Xintec	$	817.9	$	649.8
	SSMC		407.0		362.6
	VIS		410.0		357.1
	Other Associates		21.5		7.0


		$	1,656.4	$	1,376.5

Others


		Years Ended December 31
		2016		2017		2018
		NT$		NT$		NT$
		(In Millions)		(In Millions)		(In Millions)
Item	Related Party Categories
Manufacturing expenses	Associates	$	1,389.2	$	2,196.1	$	2,974.6


Research and development expenses	Associates	$	161.7	$	69.8	$	83.1


General and administrative expenses	Other related parties	$	60.0	$	101.5	$	120.8

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

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

The Company deferred the disposal gain or loss derived from sales of property, plant and equipment to related parties (transactions with associates), and then recognized such gain or loss over the depreciable lives of the disposed assets.

Compensation of key management personnel

The compensation to directors and other key management personnel for the years ended December 31, 2016, 2017 and 2018 were as follows:


	Years Ended December 31
	2016		2017		2018
	NT$ (In Millions)		NT$ (In Millions)		NT$ (In Millions)
Short-term employee benefits	$	2,024.0	$	2,170.3	$	2,004.9
Post-employment benefits		4.0		3.7		3.4


	$	2,028.0	$	2,174.0	$	2,008.3

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