EX-99.2 3 tsm-ex992_8.htm EX-99.2

tsm-ex992_8.htm

English Translation of Financial Statements Originally Issued in Chinese

Taiwan Semiconductor Manufacturing Company Limited

Parent Company Only Financial Statements for the

Years Ended December 31, 2020 and 2019 and

Independent Auditors’ Report

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勤業眾信

勤業眾信聯合會計師事務所

11073 台北市信義區松仁路100號20樓

Deloitte & Touche

20F, Taipei Nan Shan Plaza

No. 100, Songren Rd.,

Xinyi Dist., Taipei 11073, Taiwan

Tel :+886 (2) 2725-9988

Fax:+886 (2) 4051-6888

www.deloitte.com.tw

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders

Taiwan Semiconductor Manufacturing Company Limited

Opinion

We have audited the accompanying parent company only financial statements of Taiwan Semiconductor Manufacturing Company Limited (the “Company”), which comprise the parent company only balance sheets as of December 31, 2020 and 2019, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the accompanying parent company only financial position of the Company as of December 31, 2020 and 2019, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company’s parent company only financial statements for the year ended December 31, 2020 are stated as follows:

Property, plant and equipment (PP&E) – commencement of depreciation related to PP&E classified as equipment under installation and construction in progress (EUI/CIP)

Refer to Notes 4, 5 and 12 to the parent company only financial statements.

The Company’s evaluation of when to commence depreciation of EUI/CIP involves determining when the assets are available for their intended use. The criteria the Company uses to determine whether EUI/CIP are available for their intended use

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involves subjective judgments and assumptions about the conditions necessary for the assets to be capable of operating in the intended manner. Changes in these assumptions could have a significant impact on when depreciation is recognized.

Given the subjectivity in determining the date to commence depreciation of EUI/CIP, performing audit procedures to evaluate the reasonableness of the Company’s judgments and assumptions required a high degree of auditor judgment. Consequently, the validity of commencement of depreciation related to PP&E classified as EUI/CIP is identified as a key audit matter.

Our audit procedures related to the evaluation of when to commence depreciation of EUI/CIP included the following, among others:

1. We read the Company’s policy and understand the criteria used to determine when to commence depreciation.

2. We tested the effectiveness of the controls over the evaluation of when to commence depreciation of EUI/CIP.

3. We sampled EUI/CIP at year end and performed the following for each selection:

a. Evaluated whether the selection did not meet the criteria specified by the Company for commencement of depreciation.

b. Observed the assets and evaluated their status at year end.

4. We sampled and evaluated whether the selection of EUI/CIP met the criteria specified by the Company for commencement of depreciation during the year.

5. We sampled and evaluated whether the selection of EUI/CIP met the criteria specified by the Company for commencement of depreciation subsequent to year end.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

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As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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The engagement partners on the audit resulting in this independent auditors’ report are Mei Yen Chiang and Yu Feng Huang.

Deloitte & Touche

Taipei, Taiwan

Republic of China

February 9, 2021

Notice to Readers

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

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

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

		December 31, 2020									December 31, 2019
ASSETS		Amount					%				Amount					%
CURRENT ASSETS
Cash and cash equivalents (Note 6)		$		303,165,717				11			$		141,450,698				6
Financial assets at fair value through profit or loss (Note 7)			2,125,825					-				27,481					-
Hedging financial assets (Note 8)			-					-				3,504					-
Notes and accounts receivable, net (Note 9)			34,611,115					1				49,124,933					2
Receivables from related parties (Note 30)			101,781,174					4				82,194,501					4
Other receivables from related parties (Note 30)			1,714,334					-				968,123					-
Inventories (Notes 5 and 10)			130,298,036					5				76,263,851					4
Other financial assets			1,425,594					-				358,245					-
Other current assets			5,827,453					-				4,726,789					-
Total current assets			580,949,248					21				355,118,125					16
NONCURRENT ASSETS
Financial assets at fair value through other comprehensive income			834,830					-				877,110					-
Investments accounted for using equity method (Note 11)			564,597,508					21				558,503,889					24
Property, plant and equipment (Notes 5 and 12)			1,511,784,556					55				1,310,900,634					57
Right-of-use assets (Notes 5 and 13)			25,184,827					1				15,030,020					1
Intangible assets (Notes 5 and 14)			21,733,597					1				16,271,444					1
Deferred income tax assets (Notes 5 and 24)			24,678,225					1				16,728,622					1
Refundable deposits			1,249,552					-				2,046,228					-
Other noncurrent assets			2,492,770					-				-					-
Total noncurrent assets			2,152,555,865					79				1,920,357,947					84
TOTAL		$		2,733,505,113				100			$		2,275,476,072				100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loans (Notes 15 and 27)		$		175,659,726				7			$		148,510,290				7
Financial liabilities at fair value through profit or loss (Note 7)			93,153					-				982,302					-
Hedging financial liabilities (Note 8)			-					-				1,798					-
Accounts payable			36,238,637					1				36,029,135					2
Payables to related parties (Note 30)			7,017,623					-				5,716,635					-
Salary and bonus payable			17,478,038					1				14,215,161					1
Accrued profit sharing bonus to employees and compensation to directors (Note 26)			35,262,937					1				23,526,149					1
Payables to contractors and equipment suppliers			156,342,457					6				139,754,491					6
Cash dividends payable (Note 19)			129,651,902					5				129,651,902					6
Income tax payable (Notes 5 and 24)			53,297,025					2				32,241,052					1
Long-term liabilities - current portion (Notes 16 and 27)			2,600,000					-				31,800,000					1
Accrued expenses and other current liabilities (Notes 5, 13, 18, 20, 27 and 30)			66,888,237					2				43,111,632					2
Total current liabilities			680,529,735					25				605,540,547					27
NONCURRENT LIABILITIES
Bonds payable (Notes 16 and 27)			170,450,745					6				25,100,000					1
Deferred income tax liabilities (Notes 5 and 24)			1,716,367					-				333,606					-
Lease liabilities (Notes 5, 13 and 27)			18,480,111					1				13,300,263					1
Net defined benefit liability (Note 17)			11,914,074					1				9,182,496					-
Guarantee deposits (Notes 18 and 27)			259,073					-				170,446					-
Others			497,752					-				438,590					-
Total noncurrent liabilities			203,318,122					8				48,525,401					2
Total liabilities			883,847,857					33				654,065,948					29
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
Capital stock (Note 19)			259,303,805					9				259,303,805					11
Capital surplus (Note 19)			56,347,243					2				56,339,709					2
Retained earnings (Note 19)
Appropriated as legal capital reserve			311,146,899					11				311,146,899					14
Appropriated as special capital reserve			42,259,146					2				10,675,106					-
Unappropriated earnings			1,235,280,036					45				1,011,512,974					45
			1,588,686,081					58				1,333,334,979					59
Others (Note 19)			(54,679,873		)			(2	)			(27,568,369		)			(1	)
Total equity			1,849,657,256					67				1,621,410,124					71
TOTAL		$		2,733,505,113				100			$		2,275,476,072				100

The accompanying notes are an integral part of the parent company only financial statements.

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

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

		2020									2019
		Amount					%				Amount					%
NET REVENUE (Notes 5, 20 and 30)		$		1,314,793,013				100			$		1,059,646,793				100
COST OF REVENUE (Notes 5, 10, 26, 30 and 33)			632,772,608					48				579,507,047					55
GROSS PROFIT BEFORE REALIZED (UNREALIZED) GROSS PROFIT ON SALES TO SUBSIDIARIES AND ASSOCIATES			682,020,405					52				480,139,746					45
REALIZED (UNREALIZED) GROSS PROFIT ON SALES TO SUBSIDIARIES AND ASSOCIATES			(16,382		)			-				3,395					-
GROSS PROFIT			682,004,023					52				480,143,141					45
OPERATING EXPENSES (Notes 5, 26, and 30)
Research and development			108,613,789					8				90,482,815					8
General and administrative			26,312,285					2				20,353,327					2
Marketing			4,359,436					1				3,231,777					-
Total operating expenses			139,285,510					11				114,067,919					10
OTHER OPERATING INCOME AND EXPENSES, NET (Notes 12, 13 and 26)			746,994					-				(151,230		)			-
INCOME FROM OPERATIONS			543,465,507					41				365,923,992					35
NON-OPERATING INCOME AND EXPENSES
Share of profits of subsidiaries and associates (Note 11)			34,902,194					3				22,906,788					2
Interest income (Note 21)			951,877					-				2,002,877					-
Other income			209,885					-				177,374					-
Foreign exchange gain (loss), net (Note 32)			(1,759,386		)			-				1,994,370					-
Finance costs (Note 22)			(1,766,297		)			-				(3,191,609		)			-
Other gains and losses, net (Note 23)			6,615,162					-				(1,068,573		)			-
Total non-operating income and expenses			39,153,435					3				22,821,227					2
INCOME BEFORE INCOME TAX			582,618,942					44				388,745,219					37
INCOME TAX EXPENSE (Notes 5 and 24)			64,733,555					5				43,481,551					4
NET INCOME			517,885,387					39				345,263,668					33

(Continued)

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

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

		2020									2019
		Amount					%				Amount					%
OTHER COMPREHENSIVE INCOME (LOSS) (Notes 5, 11, 17, 19 and 24)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit obligation		$		(3,516,749	)			-			$		253,895				-
Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income			(41,995		)			-				121,740					-
Gain (loss) on hedging instruments			24,085					-				(109,592		)			-
Share of other comprehensive gain of subsidiaries and associates			453,603					-				194,524					-
Income tax benefit (expense) related to items that will not be reclassified subsequently			422,663					-				(20,992		)			-
			(2,658,393		)			-				439,575					-
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations			(29,853,603		)			(2	)			(14,698,117		)			(2	)
Share of other comprehensive gain of subsidiaries and associates			2,190,087					-				2,435,334					-
			(27,663,516		)			(2	)			(12,262,783		)			(2	)
Other comprehensive loss for the year, net of income tax			(30,321,909		)			(2	)			(11,823,208		)			(2	)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR		$		487,563,478				37			$		333,440,460				31
EARNINGS PER SHARE (NT$, Note 25)
Basic earnings per share		$		19.97							$		13.32
Diluted earnings per share		$		19.97							$		13.32

The accompanying notes are an integral part of the parent company only financial statements.

(Concluded)

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

																																														Others
																																																									Unrealized Gain
																																																									(Loss) on Assets
																																														Foreign											at Fair Value																														Unearned
		Capital Stock - Common Stock															Retained Earnings																													Currency											Through Other														Gain (Loss) on																Stock-Based
		Shares															Legal Capital					Special Capital						Unappropriated																		Translation											Comprehensive														Hedging																Employee																																Total
		(In Thousands)				Amount						Capital Surplus					Reserve					Reserve						Earnings									Total									Reserve											Income														Instruments																Compensation																Total																Equity
BALANCE, JANUARY 1, 2019			25,930,380			$		259,303,805				$		56,315,932			$		276,033,811			$		26,907,527				$				1,073,706,503					$				1,376,647,841					$				(12,042,347	)						$				(3,429,324		)								$					23,601											$					(1,843			)								$					(15,449,913			)								$					1,676,817,665
Appropriations of earnings
Legal capital reserve			-				-						-					35,113,088					-								(35,113,088			)						-									-											-														-																-																-																-
Special capital reserve			-				-						-					-					(16,232,421		)						16,232,421									-									-											-														-																-																-																-
Cash dividends to shareholders			-				-						-					-					-								(388,955,707			)						(388,955,707			)						-											-														-																-																-																(388,955,707						)
Total			-				-						-					35,113,088					(16,232,421		)						(407,836,374			)						(388,955,707			)						-											-														-																-																-																(388,955,707						)
Net income in 2019			-				-						-					-					-								345,263,668									345,263,668									-											-														-																-																-																345,263,668
Other comprehensive income (loss) in 2019, net of income tax			-				-						-					-					-								217,059									217,059									(14,829,053			)								2,898,483														(109,697						)										-																(12,040,267						)										(11,823,208						)
Total comprehensive income (loss) in 2019			-				-						-					-					-								345,480,727									345,480,727									(14,829,053			)								2,898,483														(109,697						)										-																(12,040,267						)										333,440,460
Disposal of investments in equity instruments at fair value through other comprehensive income			-				-						-					-					-								162,118									162,118									-											(162,118				)										-																-																(162,118						)										-
Basis adjustment for gain on hedging instruments			-				-						-					-					-								-									-									-											-														82,276																-																82,276																82,276
Adjustments to share of changes in equities of associates			-				-						19,414					-					-								-									-									-											-														-																1,653																1,653																21,067
From share of changes in equities of subsidiaries			-				-						370					-					-								-									-									-											-														-																-																-																370
Donation from shareholders			-				-						3,993					-					-								-									-									-											-														-																-																-																3,993
BALANCE, DECEMBER 31, 2019			25,930,380				259,303,805						56,339,709					311,146,899					10,675,106								1,011,512,974									1,333,334,979									(26,871,400			)								(692,959				)										(3,820						)										(190						)										(27,568,369						)										1,621,410,124
Appropriations of earnings
Special capital reserve			-				-						-					-					31,584,040								(31,584,040			)						-									-											-														-																-																-																-
Cash dividends to shareholders			-				-						-					-					-								(259,303,805			)						(259,303,805			)						-											-														-																-																-																(259,303,805						)
Total			-				-						-					-					31,584,040								(290,887,845			)						(259,303,805			)						-											-														-																-																-																(259,303,805						)
Net income in 2020			-				-						-					-					-								517,885,387									517,885,387									-											-														-																-																-																517,885,387
Other comprehensive income (loss) in 2020, net of income tax			-				-						-					-					-								(3,121,793			)						(3,121,793			)						(30,130,227			)								2,906,026														24,085																-																(27,200,116						)										(30,321,909						)
Total comprehensive income (loss) in 2020			-				-						-					-					-								514,763,594									514,763,594									(30,130,227			)								2,906,026														24,085																-																(27,200,116						)										487,563,478
Disposal of investments in equity instruments at fair value through other comprehensive income			-				-						-					-					-								(108,687			)						(108,687			)						-											108,687														-																-																108,687																-
Basis adjustment for loss on hedging instruments			-				-						-					-					-								-									-									-											-														(20,265						)										-																(20,265						)										(20,265						)
Adjustments to share of changes in equities of associates			-				-						292					-					-								-									-									-											-														-																190																190																482
Donation from shareholders			-				-						7,242					-					-								-									-									-											-														-																-																-																7,242
BALANCE, DECEMBER 31, 2020			25,930,380			$		259,303,805				$		56,347,243			$		311,146,899			$		42,259,146				$				1,235,280,036					$				1,588,686,081					$				(57,001,627	)						$				2,321,754									$					-											$					-											$					(54,679,873			)								$					1,849,657,256

The accompanying notes are an integral part of the parent company only financial statements.

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

		2020					2019
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax		$		582,618,942			$		388,745,219
Adjustments for:
Depreciation expense			313,379,686					267,464,543
Amortization expense			7,047,694					5,338,886
Finance costs			1,766,297					3,191,609
Share of profits of subsidiaries and associates			(34,902,194		)			(22,906,788		)
Interest income			(951,877		)			(2,002,877		)
Loss (gain) on disposal or retirement of property, plant and equipment, net			(266,581		)			582,289
Gain on disposal of intangible assets, net			(7,960		)			(6,183		)
Reversal of impairment loss on property, plant and equipment			-					(301,384		)
Loss (gain) on financial instruments at fair value through profit or loss, net			(8,289		)			18,291
Gain on disposal of investments accounted for using equity method, net			-					(15,200		)
Unrealized (realized) gross profit on sales to subsidiaries and associates			16,382					(3,395		)
Gain on foreign exchange, net			(7,747,615		)			(6,289,978		)
Dividend income			(186,854		)			(177,374		)
Gain on lease modification			(2,574		)			(2,555		)
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss			(2,973,199		)			964,207
Notes and accounts receivable, net			13,002,568					(20,264,116		)
Receivables from related parties			(19,586,673		)			4,258,083
Other receivables from related parties			(684,360		)			442,439
Inventories			(54,034,185		)			21,824,309
Other financial assets			(1,091,188		)			(211,869		)
Other current assets			(1,174,789		)			(515,166		)
Accounts payable			400,931					5,626,778
Payables to related parties			1,300,988					1,169,883
Salary and bonus payable			3,262,877					1,772,454
Accrued profit sharing bonus to employees and compensation to directors			11,736,788					(393,163		)
Accrued expenses and other current liabilities			19,228,140					(3,618,263		)
Net defined benefit liability			(785,171		)			(215,014		)
Cash generated from operations			829,357,784					644,475,665
Income taxes paid			(49,747,636		)			(51,043,594		)
Net cash generated by operating activities			779,610,148					593,432,071

(Continued)

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

		2020					2019
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Equity interest in subsidiary		$		(937,679	)		$		-
Property, plant and equipment			(494,310,468		)			(450,287,869		)
Intangible assets			(9,482,909		)			(9,252,712		)
Proceeds from disposal or redemption of:
Financial assets at fair value through other comprehensive income			-					775,282
Property, plant and equipment			1,070,855					1,118,338
Proceeds from return of capital of financial assets carried at cost			-					2,300,000
Proceeds from return of capital of investments in equity instruments at fair value through other comprehensive income			285					1,107
Derecognition of hedging financial instruments			19,786					(93,536		)
Interest received			958,590					2,016,735
Other dividends received			186,854					177,374
Dividends received from investments accounted for using equity method			2,752,043					2,225,194
Increase in prepayments for leases			(4,687,970		)			-
Refundable deposits paid			(667,219		)			(1,447,188		)
Refundable deposits refunded			1,427,743					1,007,262
Net cash used in investing activities			(503,670,089		)			(451,460,013		)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans			31,944,333					59,615,602
Proceeds from short-term bills payable			7,485,303					-
Repayments of short-term bills payable			(7,500,000		)			-
Proceeds from issuance of bonds			149,085,000					-
Repayment of bonds			(31,800,000		)			(34,900,000		)
Payments for transaction costs attributable to the issuance of bonds			(155,818		)			-
Repayment of the principal portion of lease liabilities			(2,168,114		)			(2,630,308		)
Interest paid			(1,729,192		)			(3,536,180		)
Guarantee deposits received			144,364					23,063
Guarantee deposits refunded			(13,695		)			(4,061		)
Cash dividends			(259,303,805		)			(259,303,805		)
Payment of partial acquisition of interests in subsidiaries			(220,480		)			(10,602		)
Proceeds from partial disposal of interests in subsidiaries			-					18,500
Donation from shareholders			7,064					3,906
Net cash used in financing activities			(114,225,040		)			(240,723,885		)

(Continued)

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

		2020					2019
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		$		161,715,019			$		(98,751,827	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR			141,450,698					240,202,525
CASH AND CASH EQUIVALENTS, END OF YEAR		$		303,165,717			$		141,450,698

The accompanying notes are an integral part of the parent company only financial statements.

(Concluded)

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Taiwan Semiconductor Manufacturing Company Limited

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

1. GENERAL

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

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

The address of its registered office and principal place of business is No. 8, Li-Hsin Rd. 6, Hsinchu Science Park, Taiwan.

2. THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying parent company only financial statements were approved and authorized for issue by the Board of Directors on February 9, 2021.

3. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

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

The initial application of the amendments to the IFRSs endorsed and issued into effect by the FSC did not have a significant effect on the Company’s accounting policies.

b. Amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers for application starting from 2021 and the IFRSs issued by International Accounting Standards Board (IASB) and endorsed by the FSC with effective date starting 2021

New, Revised or Amended Standards and Interpretations		Effective Date Issued by IASB
Amendments to IFRS 9, IAS 39, IFRS 7 and IFRS 16 “Interest Rate Benchmark Reform - Phase 2”		January 1, 2021

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c. The IFRSs issued by IASB but not yet endorsed and issued into effect by the FSC

New, Revised or Amended Standards and Interpretations		Effective Date Issued by IASB
Annual Improvements to IFRS Standards 2018–2020		January 1, 2022
Amendments to IFRS 3 “Reference to the Conceptual Framework”		January 1, 2022
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”		To be determined by IASB
Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”		January 1, 2023
Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use”		January 1, 2022
Amendments to IAS 37 “Onerous Contracts–Cost of Fulfilling a Contract”		January 1, 2022

As of the date the accompanying parent company only financial statements were authorized for issue, the Company continues in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or interpretations and related applicable period. The related impact will be disclosed when the Company completes the evaluation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Statement of Compliance

The accompanying parent company only financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the “Accounting Standards Used in Preparation of the Parent Company Only Financial Statements”).

Basis of Preparation

The accompanying parent company only financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for the assets.

When preparing the parent company only financial statements, the Company account for subsidiaries and associates by using the equity method. In order to agree with the amount of net income, other comprehensive income and equity attributable to shareholders of the parent in the consolidated financial statements, the differences of the accounting treatment between the parent company only basis and the consolidated basis are adjusted under the heading of investments accounted for using equity method, share of profits of subsidiaries and associates and share of other comprehensive income of subsidiaries and associates in the parent company only financial statements.

Foreign Currencies

In preparing the parent company only financial statements, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Such exchange differences are recognized in profit or loss in the year in which they arise. Non-monetary items measured at fair value that are denominated in foreign

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currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income. Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.

For the purposes of presenting parent company only financial statements, the assets and liabilities of the Company’s foreign operations are translated into NT$ using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity.

Classification of Current and Noncurrent Assets and Liabilities

Current assets are assets held for trading purposes and assets expected to be converted to cash, sold or consumed within one year from the end of the reporting period. Current liabilities are obligations incurred for trading purposes and obligations expected to be settled within one year from the end of the reporting period. Assets and liabilities that are not classified as current are noncurrent assets and liabilities, respectively.

Cash Equivalents

Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial Instruments

Financial assets and liabilities shall be recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and liabilities are initially recognized at fair values. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial Assets

The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Regular way purchases or sales of financial assets are recognized and derecognized on a trade date or settlement date basis for which financial assets were classified in the same way, respectively. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

a. Category of financial assets and measurement

Financial assets are classified into the following categories: financial assets at FVTPL, investments in debt instruments and equity instruments at FVTOCI, and financial assets at amortized cost.

1) Financial asset at FVTPL

For certain financial assets which include debt instruments that do not meet the criteria of amortized cost or FVTOCI, it is mandatorily required to measure them at FVTPL. Any gain or loss arising from

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remeasurement is recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest earned on the financial asset.

2) Investments in debt instruments at FVTOCI

Debt instruments with contractual terms specifying that cash flows are solely payments of principal and interest on the principal amount outstanding, together with objective of collecting contractual cash flows and selling the financial assets, are measured at FVTOCI.

Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment gains or losses on investments in debt instruments at FVTOCI are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when these debt instruments are disposed.

3) Investments in equity instruments at FVTOCI

On initial recognition, the Company may irrevocably designate investments in equity investments that is not held for trading as at FVTOCI.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity.

Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the Company’s rights clearly represent a recovery of part of the cost of the investment.

4) Measured at amortized cost

Cash and cash equivalents, debt instrument investments, notes and accounts receivable (including related parties), other receivables and refundable deposits are measured at amortized cost.

Debt instruments with contractual terms specifying that cash flows are solely payments of principal and interest on the principal amount outstanding, together with objective of holding financial assets in order to collect contractual cash flows, are measured at amortized cost.

Subsequent to initial recognition, financial assets measured at amortized cost are measured at amortized cost, which equals to carrying amount determined by the effective interest method less any impairment loss.

b. Impairment of financial assets

At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable) and for investments in debt instruments that are measured at FVTOCI.

The loss allowance for accounts receivable is measured at an amount equal to lifetime expected credit losses. For financial assets at amortized cost and investments in debt instruments that are measured at FVTOCI, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from possible default events of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.

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The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.

c. Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another entity.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

Financial Liabilities and Equity Instruments

Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities are subsequently measured either at amortized cost using effective interest method or at FVTPL.

Financial liabilities are classified as at fair value through profit or loss when the financial liability is either held for trading or is designated as at fair value through profit or loss.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss.

Financial liabilities other than those held for trading purposes and designated as at FVTPL are subsequently measured at amortized cost at the end of each reporting period.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

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Derivative Financial Instruments

Derivative financial instruments are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative financial instrument is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

Hedge Accounting

Cash flow hedge

The Company designates certain hedging instruments, such as forward exchange contracts, to partially hedge its foreign exchange rate risks associated with certain highly probable forecast transactions (capital expenditures). The effective portion of changes in the fair value of hedging instruments is recognized in other comprehensive income. When the forecast transactions actually take place, the associated gains or losses that were recognized in other comprehensive income are removed from equity and included in the initial cost of the hedged items. The gains or losses from hedging instruments relating to the ineffective portion are recognized immediately in profit or loss.

The Company prospectively discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised.

Inventories

Inventories are stated at the lower of cost or net realizable value. Inventories are recorded at standard cost and adjusted to approximate weighted-average cost at the end of the reporting period. Net realizable value represents the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale.

Investments Accounted for Using Equity Method

Investments accounted for using the equity method include investments in subsidiaries and associates.

Investment in subsidiaries

A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

When the Company loses control of a subsidiary, any retained investment of the former subsidiary is measured at the fair value at that date. A gain or loss is recognized in profit or loss and calculated as the difference between (a) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and (b) the previous carrying amount of the investments in such subsidiary. In addition, the Company shall account for all amounts previously recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the subsidiary had directly disposed of the related assets and liabilities.

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When the Company transacts with its subsidiaries, profits and losses resulting from the transactions with the subsidiaries are recognized in the Company’s parent company only financial statements only to the extent of interests in the subsidiaries that are not owned by the Company.

Investment in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The operating results and assets and liabilities of associates are incorporated in these parent company only financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognized in the statement of financial position at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associate as well as the distribution received. The Company also recognizes its share in the changes in the equities of associates.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

When the Company subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the net assets of the associate. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the Company’s ownership interest is reduced due to the additional subscription to the shares of associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate shall be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

When the Company transacts with an associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s parent company only financial statements only to the extent of interests in the associate that are not owned by the Company.

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Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment. Costs include any incremental costs that are directly attributable to the construction or acquisition of the item of property, plant and equipment.

Property, plant and equipment in the course of construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss. Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other identical categories of property, plant and equipment, commences when the assets are available for their intended use.

Depreciation is recognized so as to write off the cost of the assets less their residual values over their useful lives, and it is computed using the straight-line method mainly over the following estimated useful lives:  buildings (assets used by the Company and assets subject to operating leases) - 10 to 20 years; machinery and equipment (assets used by the Company and assets subject to operating leases) - 5 years; and office equipment - 5 years. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis. Land is not depreciated.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

Leases

For a contract that contains a lease component and non-lease component, the Company may elect to account for the lease and non-lease components as a single lease component.

The Company as lessor

Rental income from operating lease is recognized on a straight-line basis over the term of the lease.

The Company as lessee

Except for payments for low-value asset leases and short-term leases (leases of machinery and equipment and others) which are recognized as expenses on a straight-line basis, the Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of the lease.

Right-of-use assets are measured at cost. The cost of right-of-use assets comprises the initial measurement of lease liabilities adjusted for lease payments and initial direct costs made at or before the commencement date, plus an estimate of costs needed to restore the underlying assets. Subsequent measurement is calculated as cost less accumulated depreciation and accumulated impairment loss and adjusted for changes in lease liabilities as a result of lease term modifications or other related factors. Right-of-use assets are presented separately in the parent company only balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. If the lease transfers ownership of the underlying assets to the Company by the end of the lease terms or if the cost of right-of-use assets reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use assets from the commencement dates to the end of the useful lives of the underlying assets.

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Lease liabilities are measured at the present value of the lease payments. Lease payments comprise fixed payments, variable lease payments which depend on an index or a rate and the exercise price of a purchase option if the Company is reasonably certain to exercise that option. The lease payments are discounted using the lessee’s incremental borrowing rates.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in future lease payments resulting from a change in an index or a rate used to determine those payments, or a change in the assessment of an option to purchase an underlying asset, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. Lease liabilities are presented on a separate line in the parent company only balance sheets.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

Intangible Assets

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

Other intangible assets

Other separately acquired intangible assets with finite useful lives are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized using the straight-line method over the following estimated useful lives:  Technology license fees - the estimated life of the technology or the term of the technology transfer contract; software and system design costs - 3 years or contract period; patent and others - the economic life or contract period. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Impairment of Tangible Assets, Right-of-use Assets and Intangible Assets

Goodwill

Goodwill is not amortized and instead is tested for impairment annually, or more frequently when there is an indication that the cash generating unit may be impaired. For the purpose of impairment testing, goodwill is allocated to each of the Company’s cash generating units or groups of cash-generating units that are expected to benefit. If the recoverable amount of a cash generating unit is less than its carrying amount, the difference is allocated first to reduce the carrying amount of any goodwill allocated to such cash-generating unit and then to the other assets of the cash generating unit pro rata based on the carrying amount of each asset in the cash generating unit. Any impairment loss for goodwill is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

Tangible assets, right-of-use assets and other intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible assets (property, plant and equipment), right-of-use assets and other intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

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Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is increased to the revised estimate of its recoverable amount, but the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Guarantee Deposit

Guarantee deposit mainly consists of cash received under deposit agreements with customers to ensure they have access to the Company’s specified capacity. Cash received from customers is recorded as guarantee deposit upon receipt. Guarantee deposits are refunded to customers when terms and conditions set forth in the deposit agreements have been satisfied.

Revenue Recognition

The Company recognizes revenue when performance obligations are satisfied. The performance obligations are satisfied when customers obtain control of the promised goods which is generally when the goods are delivered to the customers’ specified locations.

Revenue from sale of goods is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Estimated sales returns and other allowances is generally made and adjusted based on historical experience and the consideration of varying contractual terms to recognize refund liabilities, which is classified under accrued expenses and other current liabilities.

In principle, payment term granted to customers is due 30 days from the invoice date or 30 days from the end of the month of when the invoice is issued. Due to the short term nature of the receivables from sale of goods with the immaterial discounted effect, the Company measures them at the original invoice amounts without discounting.

Employee Benefits

Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for service rendered by employees.

Retirement benefits

For defined contribution retirement benefit plans, payments to the benefit plan are recognized as an expense when the employees have rendered service entitling them to the contribution. For defined benefit retirement benefit plans, the cost of providing benefit is recognized based on actuarial calculations.

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Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost (including current service cost), and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability represents the actual deficit in the Company’s defined benefit plan.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

Income tax on unappropriated earnings is expensed in the year the shareholders approved the appropriation of earnings which is the year subsequent to the year the earnings are generated.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the parent company only financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, net operating loss carryforwards and tax credits for research and development expenses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized is also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

- 22 -

 

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

The Company has considered the economic implications of COVID-19 on critical accounting estimates and will continue evaluating the impact on its financial position and financial performance as a result of the pandemic.

In the application of the aforementioned Company’s accounting policies, the Company is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Critical Accounting Judgments

Revenue Recognition

The Company recognizes revenue when the conditions described in Note 4 are satisfied.

Commencement of Depreciation Related to Property, Plant and Equipment Classified as Equipment under Installation and Construction in Progress (EUI/CIP)

As described in Note 4, commencement of depreciation related to EUI/CIP involves determining when the assets are available for their intended use. The criteria the Company uses to determine whether EUI/CIP are available for their intended use involves subjective judgments and assumptions about the conditions necessary for the assets to be capable of operating in the intended manner.

Judgments on Lease Terms

In determining a lease term, the Company considers all facts and circumstances that create an economic incentive to exercise or not to exercise an option, including any expected changes in facts and circumstances from the commencement date until the exercise date of the option. Main factors considered include contractual terms and conditions covered by the optional periods, and the importance of the underlying asset to the lessee’s operations, etc. The lease term is reassessed if a significant change in circumstances that are within the control of the Company occurs.

Key Sources of Estimation and Uncertainty

Estimation of Sales Returns and Allowances

Sales returns and other allowance is estimated and recorded based on historical experience and in consideration of different contractual terms. The amount is deducted from revenue in the same period the related revenue is recorded. The Company periodically reviews the reasonableness of the estimates.

Valuation of Inventory

Inventories are stated at the lower of cost or net realizable value, and the Company uses estimate to determine the net realizable value of inventory at the end of each reporting period.

The Company estimates the net realizable value of inventory for normal waste, obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is determined mainly based on assumptions of future demand within a specific time horizon.

- 23 -

 

Impairment of Tangible Assets, Right-of-use Assets and Intangible Assets Other than Goodwill

In the process of evaluating the potential impairment of tangible assets, right-of-use assets and intangible assets other than goodwill, the Company 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.

Realization of Deferred Income Tax Assets

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred tax assets can be utilized. Assessment of the realization of the deferred tax assets requires subjective judgment and estimate, including the future revenue growth and profitability, tax holidays, the amount of tax credits can be utilized and feasible tax planning strategies. Any changes in the global economic environment, the industry trends and relevant laws and regulations could result in significant adjustments to the deferred tax assets.

Determination of Lessees’ Incremental Borrowing Rates

In determining a lessee’s incremental borrowing rate used in discounting lease payments, the Company mainly takes into account the market risk-free rates, the estimated lessee’s credit spreads and secured status in a similar economic environment.

6. CASH AND CASH EQUIVALENTS

		December 31, 2020				December 31, 2019
Cash and deposits in banks		$	303,165,717			$	141,450,698

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

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

		December 31, 2020					December 31, 2019
Financial assets
Mandatorily measured at FVTPL
Forward exchange contracts		$		2,125,825			$		27,481
Financial liabilities
Held for trading
Forward exchange contracts		$		93,153			$		982,302

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

- 24 -

 

Outstanding forward exchange contracts consisted of the following:

				Contract Amount
		Maturity Date		(In Thousands)
December 31, 2020
Sell NT$		January 2021 to March 2021		NT$		144,697,981
December 31, 2019
Sell NT$		January 2020 to June 2020		NT$		108,428,027
Sell JPY		January 2020 to February 2020		JPY		57,471,581

8. HEDGING FINANCIAL INSTRUMENTS

		December 31, 2020					December 31, 2019
Financial assets- current
Cash flow hedges
Forward exchange contracts		$		-			$		3,504
Financial liabilities- current
Cash flow hedges
Forward exchange contracts		$		-			$		1,798

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

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

The main source of hedge ineffectiveness in these hedging relationships is driven by the effect of the counterparty’s own credit risk on the fair value of forward exchange contracts. No other sources of ineffectiveness emerged from these hedging relationships. For the years ended December 31, 2020 and 2019, refer to Note 19(d) for gain or loss arising from changes in the fair value of hedging instruments and the amount transferred to initial carrying amount of hedged items.

The following tables summarize the information relating to the hedges for foreign currency risk.

December 31, 2019

Hedging Instruments		Contract Amount (In Thousands)				Maturity		Balance in Other Equity (Continuing Hedges)
Forward exchange contracts		Sell NT$	1,342,392			January 2020		$	(3,820	)

- 25 -

 

The effect for the years ended December 31, 2020 and 2019 is detailed below:

Hedging Instruments/Hedged Items		Increase (Decrease) in Value Used for Calculating Hedge Ineffectiveness
		Years Ended December 31
		2020					2019
Hedging Instruments
Forward exchange contracts		$		24,085			$		(109,592	)
Hedged Items
Forecast transaction (capital expenditures)		$		(24,085	)		$		109,592

9. NOTES AND ACCOUNTS RECEIVABLE, NET

		December 31, 2020					December 31, 2019
At amortized cost
Notes and accounts receivable		$		31,899,524			$		46,188,113
Less: Loss allowance			(243,710		)			(319,045		)
			31,655,814					45,869,068
At FVTOCI			2,955,301					3,255,865
		$		34,611,115			$		49,124,933

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

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

Aging analysis of notes and accounts receivable

		December 31, 2020					December 31, 2019
Not past due		$		32,068,195			$		43,374,378
Past due
Past due within 30 days			2,780,426					6,054,771
Past due 31-60 days			6,072					10,864
Past due 61-120 days			37					720
Past due over 121 days			95					3,245
Less: Loss allowance			(243,710		)			(319,045		)
		$		34,611,115			$		49,124,933

- 26 -

 

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

Movements of the loss allowance for accounts receivable

		Years Ended December 31
		2020					2019
Balance, beginning of year		$		319,045			$		7,132
Provision (Reversal)			(75,335		)			311,913
Balance, end of year		$		243,710			$		319,045

For the years ended December 31, 2020 and 2019, the changes in loss allowance were mainly due to the variations in the balance of accounts receivable of different risk levels.

10. INVENTORIES

		December 31, 2020					December 31, 2019
Finished goods		$		21,338,980			$		8,533,179
Work in process			88,575,222					49,268,466
Raw materials			13,758,417					15,046,116
Supplies and spare parts			6,625,417					3,416,090
		$		130,298,036			$		76,263,851

Write-down of inventories to net realizable value and reversal of write-down of inventories resulting from the increase in net realizable value were included in the cost of revenue, as illustrated below:

		Years Ended December 31
		2020				2019
Inventory losses (reversal of write-down of inventories)		$	3,642,829			$	(2,071,888	)

The aforementioned reversal of write-down of inventories for the year ended December 31, 2019 excluded wafer contamination losses. Please refer to related losses in Note 33.

11. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investments accounted for using the equity method consisted of the following:

		December 31, 2020					December 31, 2019
Subsidiaries		$		545,784,630			$		539,843,621
Associates			18,812,878					18,660,268
		$		564,597,508			$		558,503,889

- 27 -

 

a. Investments in subsidiaries

Subsidiaries consisted of the following:

				Place of		Carrying Amount										% of Ownership and Voting Rights Held by the Company
Subsidiaries		Principal Activities		Incorporation and Operation		December 31, 2020					December 31, 2019					December 31, 2020				December 31, 2019
TSMC Global Ltd. (TSMC Global)		Investment activities		Tortola, British Virgin Islands		$		382,229,039			$		397,737,270				100%				100%
TSMC China Company Limited (TSMC China)		Manufacturing, selling, testing and computer-aided design of integrated circuits and other semiconductor devices		Shanghai, China			64,243,766					57,289,154					100%				100%
TSMC Partners, Ltd. (TSMC Partners)		Investing in companies involved in the design, manufacture, and other related business in the semiconductor industry and other investment activities		Tortola, British Virgin Islands			52,649,936					53,388,267					100%				100%
TSMC Nanjing Company Limited (TSMC Nanjing)		Manufacturing, selling, testing and computer-aided design of integrated circuits and other semiconductor devices		Nanjing, China			33,573,482					21,364,939					100%				100%
VisEra Technologies Company Ltd. (VisEra Tech)		Engaged in manufacturing electronic spare parts and in researching, developing, designing, manufacturing, selling, packaging and testing of color filter		Hsinchu, Taiwan			6,363,099					4,541,741					87%				87%
TSMC North America		Selling and marketing of integrated circuits and other semiconductor devices		San Jose, California, U.S.A.			4,568,059					4,569,825					100%				100%
TSMC Arizona Corporation（TSMC Arizona）		Manufacturing, selling and testing of integrated circuits and other semiconductor devices		Phoenix, Arizona, U.S.A.			842,745					-					100%				-
TSMC Europe B.V. (TSMC Europe)		Customer service and supporting activities		Amsterdam, the Netherlands			537,737					462,479					100%				100%
TSMC Design Technology Japan, Inc. (TSMC JDC)		Engineering support activities		Yokohama, Japan			292,266					-					100%				-
VentureTech Alliance Fund III, L.P. (VTAF III)		Investing in new start-up technology companies		Cayman Islands			214,881					231,504					98%				98%
TSMC Japan Limited (TSMC Japan)		Customer service and supporting activities		Yokohama, Japan			144,784					142,620					100%				100%
VentureTech Alliance Fund II, L.P. (VTAF II)		Investing in new start-up technology companies		Cayman Islands			82,441					75,095					98%				98%
TSMC Korea Limited (TSMC Korea)		Customer service and supporting activities		Seoul, Korea			42,395					40,727					100%				100%
						$		545,784,630			$		539,843,621

The Company established a subsidiary in November 2020 and invested in TSMC Arizona for the amount of NT$855,599 thousand.

The Company established a subsidiary in January 2020 and continually increased its investment in TSMC JDC for the amount of NT$302,560 thousand.  

b. Investments in associates

Associates consisted of the following:

Place of

Carrying Amount

% of Ownership and Voting Rights Held by the Company

Name of Associate

Principal Activities

Incorporation and Operation

December 31, 2020

December 31, 2019

December 31, 2020

December 31, 2019

Vanguard International Semiconductor Corporation (VIS)

Manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks

Hsinchu, Taiwan

$

9,029,890

$

9,027,572

28%

28%

(Continued)

- 28 -

 

				Place of		Carrying Amount										% of Ownership and Voting Rights Held by the Company
Name of Associate		Principal Activities		Incorporation and Operation		December 31, 2020					December 31, 2019					December 31, 2020				December 31, 2019
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC)		Manufacturing and selling of integrated circuits and other semiconductor devices		Singapore		$		5,900,245			$		6,502,174				39%				39%
Xintec Inc. (Xintec)		Wafer level chip size packaging and wafer level post passivation interconnection service		Taoyuan, Taiwan			2,554,123					1,846,145					41%				41%
Global Unichip Corporation (GUC)		Researching, developing, manufacturing, testing and marketing of integrated circuits		Hsinchu, Taiwan			1,328,620					1,284,377					35%				35%
						$		18,812,878			$		18,660,268

(Concluded)

As of December 31, 2020 and 2019, no investments in associates are individually material to the Company. Please refer to the parent company only statements of comprehensive income for recognition of share of both profit (loss) and other comprehensive income (loss) of associates that are not individually material.

The market prices of the investments accounted for using the equity method in publicly traded stocks calculated by the closing price at the end of the reporting period are summarized as follows. The closing price represents the quoted price in active markets, the level 1 fair value measurement.

Name of Associate		December 31, 2020				December 31, 2019
VIS		$	53,849,925			$	36,812,923
Xintec		$	20,420,233			$	8,958,195
GUC		$	15,827,184			$	11,251,774

12. PROPERTY, PLANT AND EQUIPMENT

		December 31, 2020					December 31, 2019
Assets used by the Company		$		1,510,807,506			$		1,310,882,220
Assets subject to operating leases			977,050					18,414
		$		1,511,784,556			$		1,310,900,634

a. Assets used by the Company

		Land					Buildings					Machinery and Equipment					Office Equipment					Equipment under Installation and Construction in Progress					Total
Cost
Balance at January 1, 2020		$		3,212,000			$		401,141,445			$		2,737,813,896			$		49,644,875			$		526,396,815			$		3,718,209,031
Additions (deductions)			-					84,352,769					720,459,185					14,343,705					(306,254,768		)			512,900,891
Disposals or retirements			-					(25,406		)			(7,962,758		)			(710,899		)			-					(8,699,063		)
Transfers to assets subject to operating leases			-					-					(1,199,011		)			-					-					(1,199,011		)
Balance at December 31, 2020		$		3,212,000			$		485,468,808			$		3,449,111,312			$		63,277,681			$		220,142,047			$		4,221,211,848

(Continued)

- 29 -

 

		Land					Buildings					Machinery and Equipment					Office Equipment					Equipment under Installation and Construction in Progress					Total
Accumulated depreciation   and impairment
Balance at January 1, 2020		$		-			$		222,235,137			$		2,150,734,249			$		34,357,425			$		-			$		2,407,326,811
Additions			-					27,292,400					277,252,114					6,584,391					-					311,128,905
Disposals or retirements			-					(13,823		)			(7,125,781		)			(709,177		)			-					(7,848,781		)
Transfers to assets subject to operating leases			-					-					(202,593		)			-					-					(202,593		)
Balance at December 31, 2020		$		-			$		249,513,714			$		2,420,657,989			$		40,232,639			$		-			$		2,710,404,342
Carrying amounts at December 31, 2020		$		3,212,000			$		235,955,094			$		1,028,453,323			$		23,045,042			$		220,142,047			$		1,510,807,506

Cost
Balance at January 1, 2019		$		3,212,000			$		381,150,802			$		2,585,629,465			$		43,722,686			$		171,277,329			$		3,184,992,282
Additions			-					20,149,613					173,199,951					6,908,814					355,119,486					555,377,864
Disposals or retirements			-					(158,970		)			(21,635,299		)			(986,625		)			-					(22,780,894		)
Transfers from right-of-use assets			-					-					619,779					-					-					619,779
Balance at December 31, 2019		$		3,212,000			$		401,141,445			$		2,737,813,896			$		49,644,875			$		526,396,815			$		3,718,209,031
Accumulated depreciation   and impairment
Balance at January 1, 2019		$		-			$		198,301,715			$		1,931,489,635			$		29,950,916			$		-			$		2,159,742,266
Additions			-					24,077,824					235,731,567					5,392,188					-					265,201,579
Disposals or retirements			-					(144,402		)			(16,206,228		)			(985,679		)			-					(17,336,309		)
Transfers from right-of-use assets			-					-					20,659					-					-					20,659
Reversal of impairment			-					-					(301,384		)			-					-					(301,384		)
Balance at December 31, 2019		$		-			$		222,235,137			$		2,150,734,249			$		34,357,425			$		-			$		2,407,326,811
Carrying amounts at December 31, 2019		$		3,212,000			$		178,906,308			$		587,079,647			$		15,287,450			$		526,396,815			$		1,310,882,220

(Concluded)

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

In the first quarter of 2019, the Company recognized a reversal of impairment loss of NT$301,384 thousand due to redeployment of certain idle machinery and equipment. Such reversal of impairment loss was recognized in other operating income and expenses.

b. Assets subject to operating leases

		Buildings					Machinery and Equipment					Total
Cost
Balance at January 1, 2020		$		494,582			$		-			$		494,582
Disposals or retirements			(311,939		)			-					(311,939		)
Transfers from assets used by the Company			-					1,199,011					1,199,011
Balance at December 31, 2020		$		182,643			$		1,199,011			$		1,381,654

(Continued)

- 30 -

 

		Buildings					Machinery and Equipment					Total
Accumulated depreciation
Balance at January 1, 2020		$		476,168			$		-			$		476,168
Additions			12,210					19,399					31,609
Disposals or retirements			(305,766		)			-					(305,766		)
Transfers from assets used by the Company			-					202,593					202,593
Balance at December 31, 2020		$		182,612			$		221,992			$		404,604
Carrying amounts at December 31, 2020		$		31			$		977,019			$		977,050

Cost
Balance at January 1, 2019		$		494,582			$		-			$		494,582
Balance at December 31, 2019		$		494,582			$		-			$		494,582
Accumulated depreciation
Balance at January 1, 2019		$		457,657			$		-			$		457,657
Additions			18,511					-					18,511
Balance at December 31, 2019		$		476,168			$		-			$		476,168
Carrying amounts at December 31, 2019		$		18,414			$		-			$		18,414

(Concluded)

Operating leases relate to leases of buildings and leases of machinery and equipment with lease terms approximately between 1 to 2 years. The lessees do not have purchase options to acquire the assets at the expiry of the lease periods.

The maturity analysis of operating lease payments receivable from the buildings and machinery and equipment is as follows:

		December 31, 2020				December 31, 2019
Year 1		$	132,128			$	1,458

13. LEASE ARRANGEMENTS

a. Right-of-use assets

		December 31, 2020					December 31, 2019
Carrying amounts
Land		$		24,874,590			$		13,830,199
Buildings			283,086					402,836
Machinery and equipment			-					775,809
Office equipment			27,151					21,176
		$		25,184,827			$		15,030,020

- 31 -

 

		Years Ended December 31
		2020					2019
Additions to right-of-use assets		$		12,558,794			$		639,879
Depreciation of right-of-use assets
Land		$		1,298,315			$		944,052
Buildings			131,436					105,873
Machinery and equipment			775,809					1,184,374
Office equipment			13,612					10,154
		$		2,219,172			$		2,244,453
Income from subleasing right-of-use assets (classified under other operating income and expenses, net)		$		52,317			$		44,796

b. Lease liabilities

		December 31, 2020					December 31, 2019
Carrying amounts
Current portion (classified under accrued expenses and other current liabilities)		$		1,379,097			$		1,843,556
Noncurrent portion			18,480,111					13,300,263
		$		19,859,208			$		15,143,819

Ranges of discount rates for lease liabilities are as follows:

		December 31, 2020		December 31, 2019
Land		0.48%-0.94%		0.67%-0.94%
Buildings		0.54%-0.71%		0.67%-0.71%
Machinery and equipment		-		3.24%
Office equipment		0.28%-0.71%		0.64%-0.71%

c. Material terms of right-of-use assets

The Company leases land and buildings mainly for the use of plants and offices with lease terms of 2 to 22 years. The lease contracts for land located in the R.O.C. specify that lease payments will be adjusted every 2 years on the basis of changes in announced land value prices. The Company does not have purchase options to acquire the leasehold land and buildings at the end of the lease terms.

The Company leases machinery and equipment for use in operation with lease terms of 2 years. The Company has purchase options to acquire leasehold machinery and equipment at the end of the lease terms. As of September 30, 2020, the aforementioned lease contract has been expired.

d. Subleases

The Company subleases the right to use its buildings and machinery and equipment under operating leases with lease terms of 1 to 2 years.

- 32 -

 

The maturity analysis of lease payments receivable under operating subleases is as follows:

		December 31, 2020				December 31, 2019
Year 1		$	142,340			$	50,862

e. Other lease information

		Years Ended December 31
		2020				2019
Expenses relating to short-term leases		$	3,171,455			$	4,991,637
Expenses relating to low-value asset leases		$	72			$	-
Expenses relating to variable lease payments not included in the measurement of lease liabilities		$	212,955			$	158,375

		Years Ended December 31
		2020				2019
Total cash outflow for leases		$	5,823,617			$	7,324,585

14. INTANGIBLE ASSETS

		Goodwill					Technology License Fees					Software and System Design Costs					Patent and Others					Total
Cost
Balance at January 1, 2020		$		1,567,756			$		15,801,406			$		32,518,813			$		8,271,046			$		58,159,021
Additions			-					6,308,926					3,226,715					2,974,805					12,510,446
Disposals or retirements			-					-					(60,467		)			-					(60,467		)
Balance at December 31, 2020		$		1,567,756			$		22,110,332			$		35,685,061			$		11,245,851			$		70,609,000
Accumulated amortization and   impairment
Balance at January 1, 2020		$		-			$		9,770,225			$		26,215,694			$		5,901,658			$		41,887,577
Additions			-					2,404,461					3,527,399					1,115,834					7,047,694
Disposals or retirements			-					-					(59,868		)			-					(59,868		)
Balance at December 31, 2020		$		-			$		12,174,686			$		29,683,225			$		7,017,492			$		48,875,403
Carrying amounts at December 31, 2020		$		1,567,756			$		9,935,646			$		6,001,836			$		4,228,359			$		21,733,597
Cost
Balance at January 1, 2019		$		1,567,756			$		10,921,844			$		29,140,011			$		7,607,537			$		49,237,148
Additions			-					4,879,562					3,639,706					663,509					9,182,777
Disposals or retirements			-					-					(260,904		)			-					(260,904		)
Balance at December 31, 2019		$		1,567,756			$		15,801,406			$		32,518,813			$		8,271,046			$		58,159,021
Accumulated amortization and   impairment
Balance at January 1, 2019		$		-			$		8,703,391			$		22,863,319			$		5,240,508			$		36,807,218
Additions			-					1,066,834					3,610,902					661,150					5,338,886
Disposals or retirements			-					-					(258,527		)			-					(258,527		)
Balance at December 31, 2019		$		-			$		9,770,225			$		26,215,694			$		5,901,658			$		41,887,577
Carrying amounts at December 31, 2019		$		1,567,756			$		6,031,181			$		6,303,119			$		2,369,388			$		16,271,444

- 33 -

 

The Company’s goodwill has been tested for impairment at the end of the annual reporting period and the recoverable amount is determined based on the value in use. The value in use was calculated based on the cash flow forecast from the financial budgets covering the future five-year period, and the Company used annual discount rates of 8.0% in both years in its test of impairment as of December 31, 2020 and 2019, to reflect the relevant specific risk in the cash-generating unit.

For the years ended December 31, 2020 and 2019, the Company did not recognize any impairment loss on goodwill.

15. SHORT-TERM LOANS

		December 31, 2020					December 31, 2019
Unsecured loans		$		88,559,026			$		118,522,290
Related parties unsecured loans			87,100,700					29,988,000
		$		175,659,726			$		148,510,290
Loan content
US$ (in thousands)		$		3,300,000			$		3,370,000
EUR(in thousands)			2,398,000					1,410,000
Annual interest rate			(0.54)%-0.33%					0%-2.22%
Maturity date				Due by July 2022					Due by July 2020

The borrowing rates from loans between the Company and related parties are determined by mutual consent. And the loan are repayable on related parties’ demand.

16. BONDS PAYABLE

		December 31, 2020					December 31, 2019
Domestic unsecured bonds		$		173,197,000			$		56,900,000
Less: Discounts on bonds payable			(146,255		)			-
Less: Current portion			(2,600,000		)			(31,800,000		)
		$		170,450,745			$		25,100,000

The major terms of domestic unsecured bonds are as follows:

Issuance

Tranche

Issuance Period

Total Amount

Coupon Rate

Repayment and Interest Payment

NT$ unsecured   bonds

100-2

B

January 2012 to January 2019

$

7,000,000

1.46%

Bullet repayment; interest payable annually

101-1

B

August 2012 to August 2019

9,000,000

1.40%

The same as above

(Continued)

- 34 -

 

Issuance		Tranche		Issuance Period		Total Amount					Coupon Rate				Repayment and Interest Payment
101-2		B		September 2012 to September 2019		$		9,000,000				1.39%			Bullet repayment; interest payable annually
101-3		-		October 2012 to October 2022			4,400,000					1.53%			The same as above
101-4		B		January 2013 to January 2020			10,000,000					1.35%			The same as above
		C		January 2013 to January 2023			3,000,000					1.49%			The same as above
102-1		B		February 2013 to February 2020			11,600,000					1.38%			The same as above
		C		February 2013 to February 2023			3,600,000					1.50%			The same as above
102-2		A		July 2013 to July 2020			10,200,000					1.50%			The same as above
		B		July 2013 to July 2023			3,500,000					1.70%			The same as above
102-3		B		August 2013 to August 2019			8,500,000					1.52%			The same as above
102-4		C		September 2013 to March 2019			1,400,000					1.60%			Bullet repayment; interest payable annually (interest for the six months prior to maturity will accrue on the basis of actual days and be repayable at maturity)
		D		September 2013 to March 2021			2,600,000					1.85%			The same as above
		E		September 2013 to March 2023			5,400,000					2.05%			The same as above
		F		September 2013 to September 2023			2,600,000					2.10%			Bullet repayment; interest payable annually
109-1		A		March 2020 to March 2025			3,000,000					0.58%			The same as above
		B		March 2020 to March 2027			10,500,000					0.62%			The same as above
		C		March 2020 to March 2030			10,500,000					0.64%			The same as above
109-2		A		April 2020 to April 2025			5,900,000					0.52%			The same as above
		B		April 2020 to April 2027			10,400,000					0.58%			The same as above

(Continued)

- 35 -

 

Issuance		Tranche		Issuance Period		Total Amount					Coupon Rate				Repayment and Interest Payment
109-2		C		April 2020 to April 2030		$		5,300,000				0.60%			Bullet repayment; interest payable annually
109-3		A		May 2020 to May 2025			4,500,000					0.55%			The same as above
		B		May 2020 to May 2027			7,500,000					0.60%			The same as above
		C		May 2020 to May 2030			2,400,000					0.64%			The same as above
109-4		A		July 2020 to July 2025			5,700,000					0.58%			Two equal installments in last two years; interest payable annually
		B		July 2020 to July 2027			6,300,000					0.65%			The same as above
		C		July 2020 to July 2030			1,900,000					0.67%			The same as above
109-5		A		September 2020 to September 2025			4,800,000					0.50%			The same as above
		B		September 2020 to September 2027			8,000,000					0.58%			The same as above
		C		September 2020 to September 2030			2,800,000					0.60%			The same as above
109-6 (green bond)		A		December 2020 to December 2025			1,600,000					0.40%			The same as above
		B		December 2020 to December 2027			5,600,000					0.44%			The same as above
		C		December 2020 to December 2030			4,800,000					0.48%			The same as above
109-7		A		December 2020 to December 2025			1,900,000					0.36%			The same as above
		B		December 2020 to December 2027			10,200,000					0.41%			The same as above
		C		December 2020 to December 2030			6,400,000					0.45%			The same as above

(Concluded)

- 36 -

 

Issuance

Tranche

Issuance Period

Total Amount (US$ in Thousands)

Coupon Rate

Repayment and Interest Payment

US$ unsecured bonds

109-1

-

September 2020 to September 2060

US$1,000,000

2.70%

Bullet repayment (callable on the 5th anniversary of the issue date and every anniversary thereafter); interest payable annually

17. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The plan under the R.O.C. Labor Pension Act (the “Act”) is deemed a defined contribution plan. Pursuant to the Act, the Company has made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts. Accordingly, the Company recognized expenses of NT$2,309,527 thousand and NT$2,063,508 thousand for the years ended December 31, 2020 and 2019, respectively.

b. Defined benefit plans

The Company has defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by the government’s designated authorities; as such, the Company does not have any right to intervene in the investments of the Funds.

Amounts recognized in respect of these defined benefit plans were as follows:

		Years Ended December 31
		2020					2019
Current service cost		$		123,311			$		135,645
Net interest expense			81,604					123,951
Components of defined benefit costs recognized in profit or loss			204,915					259,596
Remeasurement on the net defined benefit liability:
Return on plan assets (excluding amounts included in net interest expense)			(139,212		)			(124,344		)
Actuarial loss (gain) arising from experience adjustments			494,051					(438,009		)
Actuarial gain arising from changes in demographic assumptions			-					(233,239		)
Actuarial loss arising from changes in financial assumptions			3,161,910					541,697
Components of defined benefit costs recognized in other comprehensive income			3,516,749					(253,895		)
Total		$		3,721,664			$		5,701

- 37 -

 

The pension costs of the aforementioned defined benefit plans were recognized in profit or loss by the following categories:

		Years Ended December 31
		2020					2019
Cost of revenue		$		126,274			$		157,845
Research and development expenses			57,306					72,686
General and administrative expenses			18,248					25,063
Marketing expenses			3,087					4,002
		$		204,915			$		259,596

The amounts arising from the defined benefit obligation of the Company were as follows:

		December 31, 2020					December 31, 2019
Present value of defined benefit obligation		$		16,980,277			$		13,484,090
Fair value of plan assets			(5,066,203		)			(4,301,594		)
Net defined benefit liability		$		11,914,074			$		9,182,496

Movements in the present value of the defined benefit obligation were as follows:

		Years Ended December 31
		2020					2019
Balance, beginning of year		$		13,484,090			$		13,662,684
Current service cost			123,311					135,645
Interest expense			118,808					175,401
Remeasurement:
Actuarial loss (gain) arising from experience adjustments			494,051						(438,009	)
Actuarial gain arising from changes in demographic assumptions			-					(233,239		)
Actuarial loss arising from changes in financial assumptions			3,161,910					541,697
Benefits paid from plan assets			(398,986		)			(344,131		)
Benefits paid directly by the Company			(2,907		)			(15,958		)
Balance, end of year		$		16,980,277			$		13,484,090

Movements in the fair value of the plan assets were as follows:

		Years Ended December 31
		2020					2019
Balance, beginning of year		$		4,301,594			$		4,011,279
Interest income			37,204					51,450
Remeasurement:
Return on plan assets (excluding amounts included in net interest expense)			139,212					124,344
Contributions from employer			987,179					458,652
Benefits paid from plan assets			(398,986		)			(344,131		)
Balance, end of year		$		5,066,203			$		4,301,594

- 38 -

 

The fair value of the plan assets by major categories at the end of reporting period was as follows:

		December 31, 2020					December 31, 2019
Cash		$		632,769			$		713,204
Equity instruments			2,926,745					2,313,828
Debt instruments			1,506,689					1,274,562
		$		5,066,203			$		4,301,594

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions of the actuarial valuation were as follows:

		Measurement Date
		December 31, 2020				December 31, 2019
Discount rate			0.40%				0.90%
Future salary increase rate			3.00%	(Note)			3.00%

Note: The Company has an additional 20 percent pay raise in 2021.

Through the defined benefit plans under the R.O.C. Labor Standards Law, the Company is exposed to the following risks:

1) Investment risk: The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government’s designated authorities or under the mandated management. However, under the R.O.C. Labor Standards Law, the rate of return on assets shall not be less than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return.

2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.

Assuming a hypothetical decrease in interest rate at the end of the reporting period contributed to a decrease of 0.5% (and not below 0.0%) in the discount rate and all other assumptions were held constant, the present value of the defined benefit obligation would increase by NT$694,732 thousand and NT$724,963 thousand as of December 31, 2020 and 2019, respectively.

3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

Assuming the expected salary rate increases by 0.5% at the end of the reporting period and all other assumptions were held constant, the present value of the defined benefit obligation would increase by NT$835,964 thousand and NT$706,502 thousand as of December 31, 2020 and 2019, respectively.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

- 39 -

 

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability.

The Company expects to make contributions of NT$229,934 thousand to the defined benefit plans in the next year starting from December 31, 2020. The weighted average duration of the defined benefit obligation is 9 years.

18. Guarantee deposits

		December 31, 2020					December 31, 2019
Capacity guarantee		$		-			$		1,499,400
Others			312,230					191,352
		$		312,230			$		1,690,752
Current portion (classified under accrued expenses and other current liabilities)		$		53,157			$		1,520,306
Noncurrent portion			259,073					170,446
		$		312,230			$		1,690,752

Some of guarantee deposits were refunded to customers by offsetting related accounts receivable.

19. EQUITY

a. Capital stock

		December 31, 2020					December 31, 2019
Authorized shares (in thousands)			28,050,000					28,050,000
Authorized capital		$		280,500,000			$		280,500,000
Issued and paid shares (in thousands)			25,930,380					25,930,380
Issued capital		$		259,303,805			$		259,303,805

A holder of issued common shares with par value of NT$10 per share is entitled to vote and to receive dividends.

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

As of December 31, 2020, 1,064,364 thousand ADSs of the Company were traded on the NYSE. The number of common shares represented by the ADSs was 5,321,819 thousand shares (one ADS represents five common shares).

- 40 -

 

b. Capital surplus

		December 31, 2020					December 31, 2019
Additional paid-in capital		$		24,184,939			$		24,184,939
From merger			22,804,510					22,804,510
From convertible bonds			8,892,847					8,892,847
From share of changes in equities of subsidiaries			121,843					121,843
From share of changes in equities of associates			302,526					302,234
Donations			40,578					33,336
		$		56,347,243			$		56,339,709

Under the relevant laws, the capital surplus generated from donations and the excess of the issuance price over the par value of capital stock (including the stock issued for new capital, mergers and convertible bonds) may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or stock dividends up to a certain percentage of the Company’s paid-in capital. The capital surplus from share of changes in equities of subsidiaries and associates and dividend of a claim extinguished by a prescription may be used to offset a deficit; however, when generated from issuance of restricted shares for employees, such capital surplus may not be used for any purpose.

c. Retained earnings and dividend policy

The amendments to the Company’s Articles of Incorporation had been approved by the Company’s shareholders in its meeting held on June 5, 2019, which stipulate that earnings distribution may be made on a quarterly basis after the close of each quarter. Distribution of earnings by way of cash dividends should be approved by the Company’s Board of Directors and reported to the Company’s shareholders in its meeting.

The Company’s amended Articles of Incorporation provide that, when allocating earnings, the Company shall first estimate and reserve the taxes to be paid, offset its losses, set aside a legal capital reserve at 10% of the remaining earnings (until the accumulated legal capital reserve equals the Company’s paid-in capital), then set aside a special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge. Any balance left over shall be allocated according to relevant laws and the Company’s Articles of Incorporation.

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

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

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

- 41 -

 

The appropriations of 2020 and 2019 quarterly earnings have been approved by the Company’s Board of Directors in its meeting, respectively. The appropriations and cash dividends per share were as follows:

		Fourth Quarter				Third Quarter				Second Quarter				First Quarter
Resolution Date of the		of 2020				of 2020				of 2020				of 2020
Company’s Board of		February 9,				November 10,				August 11,				May 12,
Directors in its meeting		2021				2020				2020				2020
Special capital reserve		$	12,420,727			$	5,501,351			$	11,884,457			$	(2,694,841	)
Cash dividends to shareholders		$	64,825,951			$	64,825,951			$	64,825,951			$	64,825,951
Cash dividends per share (NT$)		$	2.5			$	2.5			$	2.5			$	2.5

		Fourth Quarter				Third Quarter				Second Quarter				First Quarter
Resolution Date of the		of 2019				of 2019				of 2019				of 2019
Company’s Board of Directors in its meeting		February 11, 2020				November 12, 2019				August 13, 2019				June 5, 2019
Special capital reserve		$	16,893,073			$	3,289,166			$	(3,338,190	)		$	(4,723,939	)
Cash dividends to shareholders		$	64,825,951			$	64,825,951			$	64,825,951			$	51,860,761
Cash dividends per share (NT$)		$	2.5			$	2.5			$	2.5			$	2.0

The special capital reserve for 2020 is to be presented for approval in the Company’s shareholders’ meeting to be held on June 8, 2021 (expected).

The appropriation of 2018 earnings has been approved by the Company’s shareholders in its meeting held on June 5, 2019. The appropriation and cash dividends per share were as follows:

		Appropriation of Earnings				Cash Dividends Per Share (NT$)
Legal capital reserve		$	35,113,088
Special capital reserve		$	(11,459,458	)
Cash dividends to shareholders		$	207,443,044			$	8.0

d. Others

Changes in others were as follows:

		Year Ended December 31, 2020
		Foreign Currency Translation Reserve					Unrealized Gain (Loss) on Financial Assets at FVTOCI					Gain (Loss) on Hedging Instruments					Unearned Stock-Based Employee Compensation					Total
Balance, beginning of year		$		(26,871,400	)		$		(692,959	)		$		(3,820	)		$		(190	)		$		(27,568,369	)
Exchange differences arising on translation of foreign operations			(29,853,603		)			-					-					-					(29,853,603		)
Unrealized gain (loss) on financial assets at FVTOCI
Equity instruments			-					(41,995		)			-					-					(41,995		)
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal			-					108,687					-					-					108,687
Gain (loss) arising on changes in the fair value of hedging instruments			-					-					24,085					-					24,085
Transferred to initial carrying amount of hedged items			-					-					(20,265		)			-					(20,265		)
Share of other comprehensive income (loss) of subsidiaries and associates			(276,624		)			2,947,368					-					-					2,670,744
Share of unearned stock-based employee compensation of subsidiaries and associates			-					-					-					190					190
Income tax effect			-					653					-					-					653
Balance, end of year		$		(57,001,627	)		$		2,321,754			$		-			$		-			$		(54,679,873	)

- 42 -

 

		Year Ended December 31, 2019
		Foreign Currency Translation Reserve					Unrealized Gain (Loss) on Financial Assets at FVTOCI					Gain (Loss) on Hedging Instruments					Unearned Stock-Based Employee Compensation					Total
Balance, beginning of year		$		(12,042,347	)		$		(3,429,324	)		$		23,601			$		(1,843	)		$		(15,449,913	)
Exchange differences arising on translation of foreign operations			(14,698,117		)			-					-					-					(14,698,117		)
Unrealized gain (loss) on financial assets at FVTOCI
Equity instruments			-					121,740					-					-					121,740
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal			-					(162,118		)			-					-					(162,118		)
Gain (loss) arising on changes in the fair value of hedging instruments			-					-					(109,592		)			-					(109,592		)
Transferred to initial carrying amount of hedged items			-					-					82,276					-					82,276
Share of other comprehensive income (loss) of subsidiaries and associates			(130,936		)			2,767,267					(105		)			-					2,636,226
Share of unearned stock-based employee compensation of subsidiaries and associates			-					-					-					1,653					1,653
Income tax effect			-					9,476					-					-					9,476
Balance, end of year		$		(26,871,400	)		$		(692,959	)		$		(3,820	)		$		(190	)		$		(27,568,369	)

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

20. NET REVENUE

a. Disaggregation of revenue from contracts with customers

		Years Ended December 31
Product		2020					2019
Wafer		$		1,161,829,728			$		921,095,318
Others			152,963,285					138,551,475
		$		1,314,793,013			$		1,059,646,793

		Years Ended December 31
Geography		2020					2019
Taiwan		$		129,082,884			$		84,255,256
United States			809,731,866					628,365,912
China			233,783,358					208,101,401
Europe, the Middle East and Africa			70,213,432					67,568,157
Japan			63,299,176					57,468,605
Others			8,682,297					13,887,462
		$		1,314,793,013			$		1,059,646,793

- 43 -

 

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

		Years Ended December 31
Platform		2020					2019
Smartphone		$		632,600,168			$		518,553,492
High Performance Computing			432,049,509					312,770,702
Internet of Things			108,814,310					85,508,427
Automotive			43,735,803					47,451,547
Digital Consumer Electronics			53,440,805					53,214,200
Others			44,152,418					42,148,425
		$		1,314,793,013			$		1,059,646,793

		Years Ended December 31
Resolution		2020					2019
5-nanometer		$		89,433,830			$		-
7-nanometer			388,846,412					245,690,772
10-nanometer			3,341,769					22,860,307
16-nanometer			195,205,444					191,214,471
20-nanometer			8,298,531					9,357,161
28-nanometer			147,291,670					147,286,987
40/45-nanometer			101,979,651					92,227,266
65-nanometer			60,435,664					68,263,047
90-nanometer			29,036,165					25,296,617
0.11/0.13 micron			32,727,855					22,639,549
0.15/0.18 micron			84,997,377					76,565,220
0.25 micron and above			20,235,360					19,693,921
Wafer revenue		$		1,161,829,728			$		921,095,318

b. Contract balances

		December 31, 2020				December 31, 2019				January 1, 2019
Contract liabilities (classified under accrued expenses and other current liabilities)		$	9,365,661			$	4,095,915			$	2,740,649

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

The Company recognized revenue from the beginning balance of contract liability, which amounted to NT$3,843,787 thousand and NT$2,192,221 thousand for the years ended December 31, 2020 and 2019, respectively.

c. Refund liabilities

Estimated sales returns and other allowances is made and adjusted based on historical experience and the consideration of varying contractual terms, which amounted to NT$38,937,425 thousand and NT$33,893,735 thousand for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, the aforementioned refund liabilities amounted to NT$30,995,223 thousand and NT$17,673,937 thousand (classified under accrued expenses and other current liabilities), respectively.

- 44 -

 

21. INTEREST INCOME

		Years Ended December 31
		2020					2019
Interest income
Bank deposits		$		951,877			$		1,998,705
Financial assets at amortized cost			-					4,172
		$		951,877			$		2,002,877

22. FINANCE COSTS

		Years Ended December 31
		2020					2019
Interest expense
Corporate bonds		$		1,082,311			$		1,139,935
Bank loans			500,080					1,869,335
Lease liabilities			168,854					181,390
Related parties			-					454
Others			15,052					495
		$		1,766,297			$		3,191,609

23. OTHER GAINS AND LOSSES, NET

		Years Ended December 31
		2020					2019
Gain (loss) on financial instruments at FVTPL, net
Mandatorily measured at FVTPL		$		6,430,713			$		(1,361,538	)
Gain on disposal of investments accounted for using equity method, net			-					15,200
Other gains, net			184,449					277,765
		$		6,615,162			$		(1,068,573	)

24. INCOME TAX

a. Income tax expense recognized in profit or loss

Income tax expense consisted of the following:

		Years Ended December 31
		2020					2019
Current income tax expense
Current tax expense recognized in the current year		$		70,657,349			$		44,184,422
Income tax adjustments on prior years			70,617					224,691
Other income tax adjustments			149,768					135,056
			70,877,734					44,544,169
Deferred income tax benefit
The origination and reversal of temporary differences			(6,144,179		)			(1,062,618		)
			(6,144,179		)			(1,062,618		)
Income tax expense recognized in profit or loss		$		64,733,555			$		43,481,551

- 45 -

 

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

		Years Ended December 31
		2020					2019
Income before tax		$		582,618,942			$		388,745,219
Income tax expense at the statutory rate		$		116,523,788			$		77,749,044
Tax effect of adjusting items:
Nondeductible (deductible) items in determining taxable income			1,248,820					(4,124,417		)
Tax-exempt income			(65,988,096		)			(39,808,121		)
Additional income tax under the Alternative Minimum Tax Act			18,872,837					10,367,916
Additional income tax on unappropriated earnings			-					5,903,794
The origination and reversal of temporary differences			(6,144,179		)			(1,062,618		)
Income tax credits			-					(5,903,794		)
			64,513,170					43,121,804
Income tax adjustments on prior years			70,617					224,691
Other income tax adjustments			149,768					135,056
Income tax expense recognized in profit or loss		$		64,733,555			$		43,481,551

Under the amendment to the R.O.C Statute of Industrial Innovation in 2019, the amounts of unappropriated earnings in 2018 and thereafter used for building or purchasing specific assets or technologies can qualify for deduction when computing the income tax on unappropriated earnings.

b. Income tax expense recognized in other comprehensive income

		Years Ended December 31
		2020					2019
Deferred income tax benefit (expense)
Related to remeasurement of defined benefit obligation		$		422,010			$		(30,468	)
Related to unrealized gain/loss on investments in equity instruments at FVTOCI			653					9,476
		$		422,663			$		(20,992	)

c. Deferred income tax balance

The analysis of deferred income tax assets and liabilities was as follows:

		December 31, 2020					December 31, 2019
Deferred income tax assets
Temporary differences
Depreciation		$		18,723,852			$		12,927,764
Refund liability			3,719,427					2,120,873
Net defined benefit liability			1,341,960					1,016,248
Unrealized loss on inventories			826,666					437,327
Investments in equity instruments at FVTOCI			66,320					65,667
Others			-					160,743
		$		24,678,225			$		16,728,622

(Continued)

- 46 -

 

		December 31, 2020					December 31, 2019
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains		$		(866,452	)		$		(333,606	)
Others			(849,915		)			-
		$		(1,716,367	)		$		(333,606	)

(Concluded)

		Year Ended December 31, 2020
							Recognized in
		Balance,										Other
		Beginning of										Comprehensive				Balance,
		Year					Profit or Loss					Income				End of Year
Deferred income tax assets
Temporary differences
Depreciation		$		12,927,764			$		5,796,088			$		-		$		18,723,852
Refund liability			2,120,873					1,598,554					-				3,719,427
Net defined benefit liability			1,016,248					(96,298		)			422,010				1,341,960
Unrealized loss on inventories			437,327					389,339					-				826,666
Investments in equity instruments at FVTOCI			65,667					-					653				66,320
Others			160,743					(160,743		)			-				-
		$		16,728,622			$		7,526,940			$		422,663		$		24,678,225
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains		$		(333,606	)		$		(532,846	)		$		-		$		(866,452	)
Others			-					(849,915		)			-				(849,915		)
		$		(333,606	)		$		(1,382,761	)		$		-		$		(1,716,367	)

		Year Ended December 31, 2019
							Recognized in
		Balance,										Other
		Beginning of										Comprehensive					Balance,
		Year					Profit or Loss					Income					End of Year
Deferred income tax assets
Temporary differences
Depreciation		$		11,177,890			$		1,749,874			$		-			$		12,927,764
Refund liability			2,543,884					(423,011		)			-					2,120,873
Net defined benefit liability			1,084,874					(38,158		)			(30,468		)			1,016,248
Unrealized loss on inventories			723,835					(286,508		)			-					437,327
Investments in equity instruments at FVTOCI			56,191					-					9,476					65,667
Others			-					160,743					-					160,743
		$		15,586,674			$		1,162,940			$		(20,992	)		$		16,728,622
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains		$		(61,677	)		$		(271,929	)		$		-			$		(333,606	)
Others			(171,607		)			171,607					-					-
		$		(233,284	)		$		(100,322	)		$		-			$		(333,606	)

- 47 -

 

d. The deductible temporary differences for which no deferred income tax assets have been recognized

As of December 31, 2020 and 2019, the aggregate deductible temporary differences for which no deferred income tax assets have been recognized amounted to NT$55,521,034 thousand and NT$33,445,504 thousand, respectively.

e. Unused tax-exemption information

As of December 31, 2020, the profits generated from the following projects of the Company are exempt from income tax for a five-year period:

		Tax-exemption Period
Construction and expansion of 2009		2018 to 2022

f. The information of unrecognized deferred income tax liabilities associated with investments

As of December 31, 2020 and 2019, the aggregate taxable temporary differences associated with investments in subsidiaries not recognized as deferred income tax liabilities amounted to NT$152,827,360 thousand and NT$131,085,673 thousand, respectively.

g. Income tax examination

The tax authorities have examined income tax returns of the Company through 2018. All investment tax credit adjustments assessed by the tax authorities have been recognized accordingly.

25. EARNINGS PER SHARE

		Years Ended December 31
		2020				2019
Basic EPS		$	19.97			$	13.32
Diluted EPS		$	19.97			$	13.32

EPS is computed as follows:

		Amounts (Numerator)					Number of Shares (Denominator) (In Thousands)				EPS (NT$)
Year Ended December 31, 2020
Basic/Diluted EPS
Net income available to common shareholders		$		517,885,387				25,930,380			$		19.97
Year Ended December 31, 2019
Basic/Diluted EPS
Net income available to common shareholders		$		345,263,668				25,930,380			$		13.32

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26. ADDITIONAL INFORMATION OF EXPENSES BY NATURE

		Years Ended December 31
		2020					2019
a.Depreciation of property, plant and equipment and right-of-use assets
Recognized in cost of revenue		$		288,762,450			$		243,160,463
Recognized in operating expenses			24,585,627					24,285,569
Recognized in other operating income and expenses			31,609					18,511
		$		313,379,686			$		267,464,543
b.Amortization of intangible assets
Recognized in cost of revenue		$		4,732,478			$		2,971,336
Recognized in operating expenses			2,315,216					2,367,550
		$		7,047,694			$		5,338,886
c.Employee benefits expenses
Post-employment benefits
Defined contribution plans		$		2,309,527			$		2,063,508
Defined benefit plans			204,915					259,596
			2,514,442					2,323,104
Other employee benefits			123,287,720					94,236,265
		$		125,802,162			$		96,559,369
Employee benefits expense summarized by function
Recognized in cost of revenue		$		75,864,049			$		58,502,618
Recognized in operating expenses			49,938,113					38,056,751
		$		125,802,162			$		96,559,369

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

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

		Years Ended December 31
		2020				2019
Profit sharing bonus to employees		$	34,753,184			$	23,165,745

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The Company’s profit sharing bonus to employees and compensation to directors for 2020, 2019 and 2018 had been approved by the Board of Directors of the Company, as illustrated below:

		Years Ended December 31
		2020				2019				2018
Resolution Date of the Company’s Board of		February 9,				February 11,				February 19,
Directors in its meeting		2021				2020				2019
Profit sharing bonus to employees		$	34,753,184			$	23,165,745			$	23,570,040
Compensation to directors		$	509,753			$	360,404			$	349,272

There is no significant difference between the aforementioned approved amounts and the amounts charged against earnings of 2020, 2019 and 2018, respectively.

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

27.CASH FLOW INFORMATION

a. Non-cash transactions

		Years Ended December 31
		2020					2019
Additions of property, plant and equipment		$		512,900,891			$		555,377,864
Exchange of assets			(1,148		)			(3,287,138		)
Changes in payables to contractors and equipment suppliers			(18,609,540		)			(101,720,581		)
Transferred to initial carrying amount of hedged items			20,265					(82,276		)
Payments for acquisition of property, plant and equipment		$		494,310,468			$		450,287,869
Disposal of property, plant and equipment		$		1,112,923			$		1,286,373
Changes in other receivables from related parties			(55,271		)			(175,900		)
Changes in other financial assets			13,203					7,865
Proceeds from disposal of property, plant and equipment		$		1,070,855			$		1,118,338
Additions of intangible assets		$		12,510,446			$		9,182,777
Changes in accounts payable			191,429					69,935
Changes in accrued expenses and other current liabilities			(3,218,966		)			-
Payments for acquisition of intangible assets		$		9,482,909			$		9,252,712

b. Reconciliation of liabilities arising from financing activities

												Non-cash changes
		Balance as of January 1, 2020					Financing Cash Flow					Foreign Exchange Movement					Leases Modifications					Other Changes (Note)					Balance as of December 31, 2020
Short-term loans		$		148,510,290			$		31,944,333			$		(4,794,897	)		$		-			$		-			$		175,659,726
Bonds payable			56,900,000					117,129,182					(986,845		)			-					8,408					173,050,745
Lease liabilities			15,143,819					(2,324,499		)			17,489					6,853,545					168,854					19,859,208
Guarantee deposits			1,690,752					130,669					2,059					-					(1,511,250		)			312,230
Total		$		222,244,861			$		146,879,685			$		(5,762,194	)		$		6,853,545			$		(1,333,988	)		$		368,881,909

- 50 -

 

												Non-cash changes
		Balance as of January 1, 2019					Financing Cash Flow					Foreign Exchange Movement					Leases Modifications					Other Changes (Note)					Balance as of December 31, 2019
Short-term loans		$		91,982,340			$		59,615,602			$		(3,087,652	)		$		-			$		-			$		148,510,290
Bonds payable			91,800,000					(34,900,000		)			-					-					-					56,900,000
Lease liabilities			17,758,578					(2,811,698		)			(17,489		)			33,038					181,390					15,143,819
Guarantee deposits			9,494,648					19,002					1,674					-					(7,824,572		)			1,690,752
Total		$		211,035,566			$		21,922,906			$		(3,103,467	)		$		33,038			$		(7,643,182	)		$		222,244,861

Note: Other changes include amortization of bonds payable, financial cost of lease liabilities and guarantee deposits refunded to customers by offsetting related accounts receivable.

28. CAPITAL MANAGEMENT

The Company requires significant amounts of capital to build and expand its production facilities and acquire additional equipment. In consideration of the industry dynamics, the Company manages its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital needs, capital asset purchases, research and development activities, dividend payments, debt service requirements and other business requirements associated with its existing operations over the next 12 months.

29. FINANCIAL INSTRUMENTS

a. Categories of financial instruments

		December 31, 2020					December 31, 2019
Financial assets
FVTPL (Note 1)		$		2,125,825			$		27,481
FVTOCI (Note 2)			3,790,131					4,132,975
Hedging financial assets			-					3,504
Amortized cost (Note 3)			440,992,185					272,886,863
		$		446,908,141			$		277,050,823
Financial liabilities
FVTPL (Note 4)		$		93,153			$		982,302
Hedging financial liabilities			-					1,798
Amortized cost (Note 5)			734,363,642					553,905,061
		$		734,456,795			$		554,889,161

Note 1: Financial assets mandatorily measured at FVTPL.

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

Note 3: Including cash and cash equivalents, financial assets at amortized cost, notes and accounts receivable (including related parties), other receivables and refundable deposits.

Note 4: Held for trading.

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

- 51 -

 

b. Financial risk management objectives

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

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

c. Market risk

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

Foreign currency risk

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

Based on a sensitivity analysis performed on the Company’s total monetary assets and liabilities for the years ended December 31, 2020 and 2019, a hypothetical adverse foreign currency exchange rate change of 10% would have decreased its net income by NT$832,231 thousand and NT$2,112,450 thousand, respectively, and decreased its other comprehensive income by NT$107,690 thousand for the year ended December 31, 2019, after taking into account hedges and offsetting positions.

Interest rate risk

The Company is exposed to interest rate risks primarily related to its bank deposits and bank loans. Changes in interest rates affect the interest earned on the Company’s bank deposits, as well as the interest paid on its bank loans. Because all of the Company’s bonds issued are fixed-rate and measured at amortized cost, changes in interest rates would not affect the future cash flows and the carrying amount.

Other price risk

The Company is exposed to equity price risk arising from financial assets at FVTOCI.

Assuming a hypothetical decrease of 10% in prices of the equity investments at the end of the reporting period for the years ended December 31, 2020 and 2019, the other comprehensive income would have decreased by NT$73,464 thousand and NT$77,156 thousand, respectively.

d. Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the Company. The Company is exposed to credit risks from operating activities, primarily accounts receivable, and from investing activities, primarily deposits, fixed-income investments and other financial instruments with banks. Credit risk is managed separately for business related and

- 52 -

 

financial related exposures. As of the end of the reporting period, the Company’s maximum credit risk exposure is equal to the carrying amount of financial assets.

Business related credit risk

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

As of December 31, 2020 and 2019, the Company’s ten largest customers accounted for 67% and 83% of accounts receivable, respectively. The Company considers the concentration of credit risk for the remaining accounts receivable not material.

Financial credit risk

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

e. Liquidity risk management

The objective of liquidity risk management is to ensure the Company has sufficient liquidity to fund its business operations over the next 12 months. The Company manages its liquidity risk by maintaining adequate cash and cash equivalent.

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

		Less Than 1 Year					1-3 Years					3-5 Years					More Than 5 Years					Total
December 31, 2020
Non-derivative financial liabilities
Short-term loans		$		175,658,226			$		-			$		-			$		-			$		175,658,226
Accounts payable (including related parties)			43,256,260					-					-					-					43,256,260
Payables to contractors and equipment suppliers			156,342,457					-					-					-					156,342,457
Accrued expenses and other current liabilities			56,090,322					-					-					-					56,090,322
Bonds payable			4,423,599					25,822,844					30,134,920					148,299,359					208,680,722
Lease liabilities (including those classified under accrued expenses and other current liabilities)			1,539,173					2,864,146					2,763,636					13,977,371					21,144,326
Guarantee deposits (including those classified under accrued expenses and other current liabilities)			53,157					107,328					151,745					-					312,230
			437,363,194					28,794,318					33,050,301					162,276,730					661,484,543
Derivative financial instruments
Forward exchange contracts
Outflows			144,697,981					-					-					-					144,697,981
Inflows			(148,236,932		)			-					-					-					(148,236,932		)
			(3,538,951		)			-					-					-					(3,538,951		)
		$		433,824,243			$		28,794,318			$		33,050,301			$		162,276,730			$		657,945,592

- 53 -

 

		Less Than 1 Year					1-3 Years					3-5 Years					More Than 5 Years					Total
December 31, 2019
Non-derivative financial liabilities
Short-term loans		$		148,550,641			$		-			$		-			$		-			$		148,550,641
Accounts payable (including related parties)			41,745,770					-					-					-					41,745,770
Payables to contractors and equipment suppliers			139,754,491					-					-					-					139,754,491
Accrued expenses and other current liabilities			35,651,856					-					-					-					35,651,856
Bonds payable			32,338,853					7,777,715					18,203,601					-					58,320,169
Lease liabilities (including those classified under accrued expenses and other current liabilities)			1,976,891					2,170,171					2,063,855					9,981,523					16,192,440
Guarantee deposits (including those classified under accrued expenses and other current liabilities)			1,520,306					114,945					55,501					-					1,690,752
			401,538,808					10,062,831					20,322,957					9,981,523					441,906,119
Derivative financial instruments
Forward exchange contracts
Outflows			125,580,851					-					-					-					125,580,851
Inflows			(125,114,784		)			-					-					-					(125,114,784		)
			466,067					-					-					-					466,067
		$		402,004,875			$		10,062,831			$		20,322,957			$		9,981,523			$		442,372,186

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

		5-10 Years				10-15 Years				15-20 Years				More Than 20 Years				Total
December 31, 2020
Lease liabilities		$	6,498,231			$	5,082,504			$	2,242,373			$	154,263			$	13,977,371

December 31, 2019
Lease liabilities		$	4,679,991			$	3,626,190			$	1,600,962			$	74,380			$	9,981,523

f. Fair value of financial instruments

1) Fair value measurements recognized in the parent company only balance sheets

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

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

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

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

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

Fair value hierarchy

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

		December 31, 2020
		Level 2					Level 3					Total
Financial assets at FVTPL
Mandatorily measured at FVTPL
Forward exchange contracts		$		2,125,825			$		-			$		2,125,825
Financial assets at FVTOCI
Investments in equity instruments
Non-publicly traded equity investments		$		-			$		834,830			$		834,830
Notes and accounts receivable, net			2,955,301					-					2,955,301
		$		2,955,301			$		834,830			$		3,790,131
Financial liabilities at FVTPL
Held for trading
Forward exchange contracts		$		93,153			$		-			$		93,153

		December 31, 2019
Financial assets at FVTPL
Mandatorily measured at FVTPL
Forward exchange contracts		$		27,481			$		-			$		27,481
Financial assets at FVTOCI
Investments in equity instruments
Non-publicly traded equity investments		$		-			$		877,110			$		877,110
Notes and accounts receivable, net			3,255,865					-					3,255,865
		$		3,255,865			$		877,110			$		4,132,975
Hedging financial assets
Cash flow hedges
Forward exchange contracts		$		3,504			$		-			$		3,504
Financial liabilities at FVTPL
Held for trading
Forward exchange contracts		$		982,302			$		-			$		982,302
Hedging financial liabilities
Cash flow hedges
Forward exchange contracts		$		1,798			$		-			$		1,798

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Reconciliation of Level 3 fair value measurements of financial assets

The financial assets measured at Level 3 fair value were equity investments classified as financial assets at FVTOCI. Reconciliations for the years ended December 31, 2020 and 2019 were as follows:

		Years Ended December 31
		2020					2019
Balance, beginning of year		$		877,110			$		963,610
Recognized in other comprehensive income			(41,995		)			(85,393		)
Disposals and proceeds from return of capital of investments			(285		)			(1,107		)
Balance, end of year		$		834,830			$		877,110

Valuation techniques and assumptions used in Level 2 fair value measurement

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

● Forward exchange contracts are measured using forward exchange rates and discount rates derived from quoted market prices.

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

Valuation techniques and assumptions used in Level 3 fair value measurement

The fair values of non-publicly traded equity investments are mainly determined by using the asset approach and market approach.

The asset approach takes into account the net asset value measured at the fair value by independent parties.

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

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

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

Fair value hierarchy

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

		December 31, 2020
		Carrying				Level 2
		Amount				Fair Value
Financial liabilities
Financial liabilities at amortized costs
Bonds payable		$	173,050,745			$	173,972,033

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		December 31, 2019
		Carrying				Level 2
		Amount				Fair Value
Financial liabilities
Financial liabilities at amortized costs
Bonds payable		$	56,900,000			$	57,739,115

Valuation techniques and assumptions used in Level 2 fair value measurement

The fair value of the Company’s bonds payable is determined by quoted market prices provided by third party pricing services.

30. RELATED PARTY TRANSACTIONS

The significant transactions between the Company and its related parties, other than those disclosed in other notes, are summarized as follows:

a. Related party name and categories

Related Party Name		Related Party Categories
TSMC Global		Subsidiaries
TSMC China		Subsidiaries
TSMC Nanjing		Subsidiaries
VisEra Tech		Subsidiaries
TSMC Arizona		Subsidiaries
TSMC North America		Subsidiaries
TSMC Europe		Subsidiaries
TSMC Japan		Subsidiaries
TSMC Korea		Subsidiaries
TSMC JDC		Subsidiaries
TSMC Design Technology Canada Inc. (TSMC Canada)		Indirect Subsidiaries
TSMC Technology, Inc. (TSMC Technology)		Indirect Subsidiaries
WaferTech, LLC (WaferTech)		Indirect Subsidiaries
GUC		Associates
VIS		Associates
SSMC		Associates
Xintec		Associates
TSMC Education and Culture Foundation		Other related parties
TSMC Charity Foundation		Other related parties

b. Net revenue

				Years Ended December 31
				2020					2019
Item		Related Party Name/Categories
Net revenue from sale of goods		TSMC North America		$		824,139,751			$		636,441,507
		Associates			5,656,748					4,052,853
		Other subsidiaries			85,147					149,560
				$		829,881,646			$		640,643,920

(Continued)

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				Years Ended December 31
				2020					2019
Net revenue from royalties		Subsidiaries		$		214,352			$		64,710
		Associates			195,111					183,583
				$		409,463			$		248,293

(Concluded)

c. Purchases

		Years Ended December 31
		2020					2019
Related Party Categories
Subsidiaries		$		44,920,702			$		40,419,311
Associates			7,605,080					6,301,417
		$		52,525,782			$		46,720,728

d. Receivables from related parties

				December 31, 2020					December 31, 2019
Item		Related Party Name/Categories
Receivables from related		TSMC North America		$		101,467,381			$		81,732,281
parties		Associates			313,064					458,292
		Other subsidiaries			729					3,928
				$		101,781,174			$		82,194,501
Other receivables from related		TSMC North America		$		1,390,902			$		802,726
parties		TSMC Nanjing			203,209					101,559
		Other subsidiaries			71,058					13,388
		Associates			49,165					50,450
				$		1,714,334			$		968,123

e. Payables to related parties

				December 31, 2020					December 31, 2019
Item		Related Party Name/Categories
Payables to related parties		TSMC Nanjing		$		1,889,906			$		1,266,002
		TSMC China			1,643,070					1,538,971
		Xintec			1,358,624					736,747
		WaferTech			697,756					1,097,625
		Other subsidiaries			679,227					379,250
		Other associates			749,040					683,040
		Other related parties			-					15,000
				$		7,017,623			$		5,716,635

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f. Accrued expenses and other current liabilities

				December 31, 2020					December 31, 2019
Item		Related Party Name/Categories
Accrued expenses and other		TSMC North America		$		317,011			$		-
current liabilities		Other subsidiaries			1,643					2,722
				$		318,654			$		2,722

g. Acquisition of property, plant and equipment

		Acquisition Price
		Years Ended December 31
Related Party Categories		2020				2019
TSMC China		$	126,162			$	-

h. Disposal of property, plant and equipment

		Proceeds
		Years Ended December 31
		2020					2019
Related Party Name/Categories
TSMC Nanjing		$		527,134			$		1,096,516
Other subsidiaries			6,115					44,095
		$		533,249			$		1,140,611

		Gains
		Years Ended December 31
		2020					2019
Related Party Name/Categories
TSMC Nanjing		$		31,494			$		332,955
Other subsidiaries			49,844					67,151
		$		81,338			$		400,106

		Deferred Gains (Losses) from Disposal of Property, Plant and Equipment
		December 31, 2020					December 31, 2019
Related Party Name/Categories
TSMC Nanjing		$		4,221			$		(30,731	)
Other subsidiaries			86,186					129,915
		$		90,407			$		99,184

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i. Others

				Years Ended December 31
				2020					2019
Item		Related Party Name/Categories
Manufacturing expenses		Associates		$		5,425,878			$		2,816,089
		Subsidiaries			29,700					35,825
				$		5,455,578			$		2,851,914
Research and development		Subsidiaries		$		3,409,037			$		2,821,204
expenses		Associates			256,496					163,425
				$		3,665,533			$		2,984,629
Marketing expenses -		TSMC Europe		$		735,295			$		439,147
commission		Other subsidiaries			474,553					419,920
				$		1,209,848			$		859,067
General and administrative		Other related parties		$		120,000			$		120,000
expenses		Subsidiaries			3,569					3,423
				$		123,569			$		123,423

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 using equity method, and then recognized such gain or loss over the depreciable lives of the disposed assets.

i. Compensation of key management personnel

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

		Years Ended December 31
		2020					2019
Short-term employee benefits		$		2,567,833			$		1,822,806
Post-employment benefits			1,951					2,330
		$		2,569,784			$		1,825,136

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

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31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

a. Under a technical cooperation agreement with Industrial Technology Research Institute, the R.O.C. Government or its designee approved by the Company can use up to 35% of the Company’s capacity provided the Company’s outstanding commitments to its customers are not prejudiced. The term of this agreement is for five years beginning from January 1, 1987 and is automatically renewed for successive periods of five years unless otherwise terminated by either party with one year prior notice. As of December 31, 2020, the R.O.C. Government did not invoke such right.

b. Under a Shareholders Agreement entered into with Philips and EDB Investments Pte Ltd. on March 30, 1999, the parties formed a joint venture company, SSMC, which is an integrated circuit foundry in Singapore. The Company’s equity interest in SSMC was 32%. Nevertheless, in September 2006, Philips spun-off its semiconductor subsidiary which was renamed as NXP B.V. Further, the Company and NXP B.V. purchased all the SSMC shares owned by EDB Investments Pte Ltd. pro rata according to the Shareholders Agreement on November 15, 2006. After the purchase, the Company and NXP B.V. currently own approximately 39% and 61% of the SSMC shares, respectively. The Company and NXP B.V. are required, in the aggregate, to purchase at least 70% of SSMC’s capacity, but the Company alone is not required to purchase more than 28% of the capacity. If any party defaults on the commitment and the capacity utilization of SSMC falls below a specific percentage of its capacity, the defaulting party is required to compensate SSMC for all related unavoidable costs. There was no default from the aforementioned commitment as of December 31, 2020.

c. On September 28, 2017, the Company was contacted by the European Commission (the “Commission”), which asked us for information and documents concerning alleged anti-competitive practices in relation to semiconductor sales. We cooperated continuously with the Commission to provide the requested information and documents. The Commission subsequently decided to close the investigation in May 2020.

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

e. The Company entered into a long-term purchase agreement of equipment. The relative purchase quantity and price are specified in the agreement.

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

g. As of December 31, 2020, the Company provided endorsement guarantees of NT$2,338,044 thousand to its subsidiary, TSMC North America, in respect of providing endorsement guarantees for office leasing contract.

h. As of December 31, 2020, the Company provided a NT$84,291,000 thousand endorsement guarantee for its subsidiary, TSMC Global, in respect of its issuance of US dollar-denominated senior unsecured corporate bonds.

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

The following information was summarized according to the foreign currencies other than the functional currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into the

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functional currency. The significant financial assets and liabilities denominated in foreign currencies were as follows:

		Foreign Currencies (In Thousands)					Exchange Rate (Note)				Carrying Amount (In Thousands)
December 31, 2020
Financial assets
Monetary items
USD		$		6,556,606				28.097			$		184,220,958
EUR			10,505					34.587				363,340
JPY			83,135,801					0.2729				22,687,760
Financial liabilities
Monetary items
USD			6,906,646					28.097				194,056,024
EUR			4,146,458					34.587				143,413,558
JPY			103,973,930					0.2729				28,374,485
December 31, 2019
Financial assets
Monetary items
USD		$		4,515,031				29.988			$		135,396,753
EUR			2,867					33.653				96,495
JPY			71,980,350					0.2751				19,801,794
Financial liabilities
Monetary items
USD			5,874,701					29.988				176,170,537
EUR			2,550,377					33.653				85,827,831
JPY			100,338,589					0.2751				27,603,146

Note: Exchange rate represents the number of NT dollar for which one foreign currency could be exchanged.

Please refer to the parent company only statements of comprehensive income for the total of realized and unrealized foreign exchange gain and loss for the years ended December 31, 2020 and 2019, respectively. Since there were varieties of foreign currency transactions of the Company, the Company was unable to disclose foreign exchange gain (loss) towards each foreign currency with significant impact.

33. SIGNIFICANT OPERATION LOSSES

On January 19, 2019, the Company discovered a wafer contamination issue in a fab in Taiwan caused by a batch of unqualified photoresist materials. After investigation, the Company immediately stopped using the unqualified materials. An estimated loss of NT$3,400,000 thousand related to this event was recognized in cost of revenue for the three months ended March 31, 2019.

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34. ADDITIONAL DISCLOSURES

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

a. Financings provided: See Table 1 attached;

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

c. Marketable securities held (excluding investments in subsidiaries and associates): See Table 3 attached;

d. Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: See Table 4 attached;

e. Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: See Table 5 attached;

f. Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: None;

g. Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: See Table 6 attached;

h. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 7 attached;

i. Information about the derivative financial instruments transaction: See Notes 7 and 8;

j. Names, locations, and related information of investees over which the Company exercises significant influence (excluding information on investment in mainland China): See Table 8 attached;

k. Information on investment in mainland China

1) The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: See Table 9 attached.

2) Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: See Note 30.

l. Information of major shareholder

List of all shareholders with ownership of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder: See Table 10 attached.

35. OPERATING SEGMENTS INFORMATION

The Company has provided the operating segments disclosure in the consolidated financial statements.

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TABLE 1

Taiwan Semiconductor Manufacturing Company Limited and Investees

FINANCINGS PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2020

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

No.	Financing Company	Counterparty	Financial Statement Account	Related Party	Maximum Balance for the Period (Foreign Currencies in Thousands) (Note 3)				Ending Balance (Foreign Currencies in Thousands) (Note 3)				Amount Actually Drawn (Foreign Currencies in Thousands)				Interest Rate			Nature for Financing	Transaction Amounts				Reason for Financing	Allowance for Bad Debt				Collateral					Financing Limits for Each Borrowing Company (Notes 1 and 2)				Financing Company’s Total Financing Amount Limits (Notes 1 and 2)
																														Item	Value
1	TSMC China	TSMC Nanjing	Other receivables from related parties	Yes	$ (RMB (US$		38,028,092 6,000,000 436,000	)& )	$ (RMB (US$		34,752,490 5,800,000 350,000	)& )	$ (RMB		20,622,240 4,800,000	)		1.50%		The need for long-term  financing	$		-		Operating capital	$		-		-	$		-		$		64,492,719		$		64,492,719
2	TSMC Global	TSMC	Other receivables from related parties	Yes	(US$		87,100,700 3,100,000	)	(US$		87,100,700 3,100,000	)	(US$		87,100,700 3,100,000	)		0.00%		The need for short-term financing		-			Operating capital		-			-		-				382,229,039				382,229,039

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

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

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

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TABLE 2

Taiwan Semiconductor Manufacturing Company Limited and Investees

ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2020

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

No.	Endorsement/ Guarantee Provider	Guaranteed Party		Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party (Notes 1 and 2)				Maximum Balance for the Period (Foreign Currencies in Thousands) (Note 3)				Ending Balance (Foreign Currencies in Thousands) (Note 3)				Amount Actually Drawn (US$ in Thousands)				Amount of Endorsement/ Guarantee Collateralized by Properties				Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements			Maximum Endorsement/ Guarantee Amount Allowable (Note 1 and 2)				Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China
		Name	Nature of Relationship
0	TSMC	TSMC North America	Subsidiary	$		462,414,314		$ (US$		2,338,044 83,213	)	$ (US$		2,338,044 83,213	)	$ (US$		2,338,044 83,213	)	$		-			0.13%		$		462,414,314		Yes	No	No
		TSMC Global	Subsidiary		462,414,314			(US$		84,291,000 3,000,000	)	(US$		84,291,000 3,000,000	)	(US$		84,291,000 3,000,000	)		-				4.56%			462,414,314			Yes	No	No
1	TSMC Japan	TSMC JDC	The same parent company		184,965,726			(JPY		360,228 1,320,000	)	(JPY		360,228 1,320,000	)	(JPY		360,228 1,320,000	)		-				0.02%			184,965,726			No	No	No

Note 1: The total amount of the endorsement/guarantee provided by TSMC to TSMC North America and TSMC Global shall not exceed twenty-five percent (25%) of TSMC’s net worth.

Note 2: The total amount of the endorsement/guarantee provided by TSMC Japan to TSMC JDC shall not exceed ten percent (10%) of TSMC’s net worth.

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

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TABLE 3

Taiwan Semiconductor Manufacturing Company Limited and Investees

MARKETABLE SECURITIES HELD

DECEMBER 31, 2020

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

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020																Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)					Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC	Non-publicly traded equity investments
	United Industrial Gases Co., Ltd.	-	Financial assets at fair value through other comprehensive income		21,230		$		427,665				10		$		427,665
	Shin-Etsu Handotai Taiwan Co., Ltd.	-	〃		10,500			313,992					7			313,992
	Global Investment Holding Co., Ltd.	-	〃		10,442			87,059					6			87,059
	W.K. Technology Fund IV	-	〃		806			5,944					2			5,944
	Horizon Ventures Fund	-	〃		-			170					12			170
	Crimson Asia Capital	-	〃		-			-					1			-
TSMC Partners	Non-publicly traded equity investments
	Shanghai Walden Venture Capital Enterprise	-	Financial assets at fair value through other comprehensive income		-		US$			22,944			6		US$			22,944
	China Walden Venture Investments II, L.P.	-	〃		-		US$			12,551			9		US$			12,551
	China Walden Venture Investments III, L.P.	-	〃		-		US$			4,978			4		US$			4,978
	Inpria Corporation	-	〃		1,778		US$			3,600			4		US$			3,600
	Tela Innovations	-	〃		10,440			-					25			-
	Mcube Inc.	-	〃		6,333			-					10			-
TSMC Global	Corporate bond
	Bank of America Corp	-	Financial assets at fair value through other comprehensive income		-		US$			59,845			N/A		US$			59,845
	Citigroup Inc	-	〃		-		US$			44,484			N/A		US$			44,484
	Morgan Stanley	-	〃		-		US$			43,256			N/A		US$			43,256
	Goldman Sachs Group Inc/The	-	〃		-		US$			40,089			N/A		US$			40,089
	Wells Fargo & Co	-	〃		-		US$			36,031			N/A		US$			36,031
	Mitsubishi UFJ Financial Group Inc	-	〃		-		US$			34,946			N/A		US$			34,946
	JPMorgan Chase & Co	-	〃		-		US$			33,739			N/A		US$			33,739
	AbbVie Inc	-	〃		-		US$			33,716			N/A		US$			33,716
	Sumitomo Mitsui Financial Group Inc	-	〃		-		US$			27,424			N/A		US$			27,424
	Metropolitan Life Global Funding I	-	〃		-		US$			21,597			N/A		US$			21,597
	Lloyds Banking Group PLC	-	〃		-		US$			21,490			N/A		US$			21,490
	Bristol-Myers Squibb Co	-	〃		-		US$			21,090			N/A		US$			21,090
	Mizuho Financial Group Inc	-	〃		-		US$			20,795			N/A		US$			20,795
	Toyota Motor Credit Corp	-	〃		-		US$			20,448			N/A		US$			20,448
	NatWest Markets PLC	-	〃		-		US$			19,179			N/A		US$			19,179
	Athene Global Funding	-	〃		-		US$			18,421			N/A		US$			18,421
	Credit Suisse AG/New York NY	-	〃		-		US$			17,442			N/A		US$			17,442
	Royal Bank of Canada	-	〃		-		US$			16,267			N/A		US$			16,267
	HSBC Holdings PLC	-	〃		-		US$			16,113			N/A		US$			16,113
	Hyundai Capital America	-	〃		-		US$			15,983			N/A		US$			15,983
	Macquarie Bank Ltd	-	〃		-		US$			15,912			N/A		US$			15,912
	Nordea Bank Abp	-	〃		-		US$			15,907			N/A		US$			15,907
	Apple Inc	-	〃		-		US$			15,762			N/A		US$			15,762
	Santander UK PLC	-	〃		-		US$			15,704			N/A		US$			15,704
	BP Capital Markets America Inc	-	〃		-		US$			15,621			N/A		US$			15,621

(Continued)

- 66 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	Toronto-Dominion Bank/The	-	Financial assets at fair value through other comprehensive income		-		US$		15,527			N/A		US$		15,527
	Volkswagen Group of America Finance LLC	-	〃		-		US$		15,417			N/A		US$		15,417
	Comcast Corp	-	〃		-		US$		14,947			N/A		US$		14,947
	BNP Paribas SA	-	〃		-		US$		14,590			N/A		US$		14,590
	National Securities Clearing Corp	-	〃		-		US$		14,129			N/A		US$		14,129
	Principal Life Global Funding II	-	〃		-		US$		13,580			N/A		US$		13,580
	Roper Technologies Inc	-	〃		-		US$		13,249			N/A		US$		13,249
	AT&T Inc	-	〃		-		US$		13,180			N/A		US$		13,180
	Banco Santander SA	-	〃		-		US$		13,146			N/A		US$		13,146
	Banque Federative du Credit Mutuel SA	-	〃		-		US$		13,019			N/A		US$		13,019
	Nationwide Building Society	-	〃		-		US$		12,913			N/A		US$		12,913
	Chevron Corp	-	〃		-		US$		12,771			N/A		US$		12,771
	Guardian Life Global Funding	-	〃		-		US$		12,187			N/A		US$		12,187
	Bank of Nova Scotia/The	-	〃		-		US$		12,144			N/A		US$		12,144
	Equifax Inc	-	〃		-		US$		12,015			N/A		US$		12,015
	BPCE SA	-	〃		-		US$		11,978			N/A		US$		11,978
	UBS Group Funding Switzerland AG	-	〃		-		US$		11,758			N/A		US$		11,758
	US Bancorp	-	〃		-		US$		11,651			N/A		US$		11,651
	Societe Generale SA	-	〃		-		US$		11,567			N/A		US$		11,567
	American Honda Finance Corp	-	〃		-		US$		11,354			N/A		US$		11,354
	American International Group Inc	-	〃		-		US$		11,011			N/A		US$		11,011
	Amazon.com Inc	-	〃		-		US$		10,846			N/A		US$		10,846
	TJX Cos Inc/The	-	〃		-		US$		10,563			N/A		US$		10,563
	Verizon Communications Inc	-	〃		-		US$		10,558			N/A		US$		10,558
	Jackson National Life Global Funding	-	〃		-		US$		10,434			N/A		US$		10,434
	Equinor ASA	-	〃		-		US$		10,372			N/A		US$		10,372
	Canadian Imperial Bank of Commerce	-	〃		-		US$		10,297			N/A		US$		10,297
	DTE Energy Co	-	〃		-		US$		10,173			N/A		US$		10,173
	BMW US Capital LLC	-	〃		-		US$		10,125			N/A		US$		10,125
	Shire Acquisitions Investments Ireland DAC	-	〃		-		US$		9,893			N/A		US$		9,893
	NextEra Energy Capital Holdings Inc	-	〃		-		US$		9,527			N/A		US$		9,527
	Cox Communications Inc	-	〃		-		US$		9,526			N/A		US$		9,526
	Sumitomo Mitsui Trust Bank Ltd	-	〃		-		US$		9,446			N/A		US$		9,446
	Credit Agricole SA/London	-	〃		-		US$		9,250			N/A		US$		9,250
	NIKE Inc	-	〃		-		US$		9,232			N/A		US$		9,232
	Protective Life Global Funding	-	〃		-		US$		9,137			N/A		US$		9,137
	New York Life Global Funding	-	〃		-		US$		9,057			N/A		US$		9,057
	Bank of Montreal	-	〃		-		US$		9,002			N/A		US$		9,002
	Svenska Handelsbanken AB	-	〃		-		US$		8,963			N/A		US$		8,963
	Truist Bank	-	〃		-		US$		8,775			N/A		US$		8,775
	Intuit Inc	-	〃		-		US$		8,524			N/A		US$		8,524
	Barclays PLC	-	〃		-		US$		8,492			N/A		US$		8,492
	Inter-American Development Bank	-	〃		-		US$		8,211			N/A		US$		8,211
	Suncorp-Metway Ltd	-	〃		-		US$		8,134			N/A		US$		8,134
	AIG Global Funding	-	〃		-		US$		8,098			N/A		US$		8,098
	Fiserv Inc	-	〃		-		US$		8,079			N/A		US$		8,079
	Oracle Corp	-	〃		-		US$		7,822			N/A		US$		7,822
	Credit Suisse Group AG	-	〃		-		US$		7,804			N/A		US$		7,804
	Exxon Mobil Corp	-	〃		-		US$		7,576			N/A		US$		7,576
	Great-West Lifeco US Finance 2020 LP	-	〃		-		US$		7,455			N/A		US$		7,455
	Skandinaviska Enskilda Banken AB	-	〃		-		US$		7,409			N/A		US$		7,409
	AstraZeneca PLC	-	〃		-		US$		7,333			N/A		US$		7,333

(Continued)

- 67 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	Prudential Funding LLC	-	Financial assets at fair value through other comprehensive income		-		US$		7,322			N/A		US$		7,322
	Huntington Bancshares Inc/OH	-	〃		-		US$		7,249			N/A		US$		7,249
	Tencent Holdings Ltd	-	〃		-		US$		7,024			N/A		US$		7,024
	Daimler Finance North America LLC	-	〃		-		US$		6,772			N/A		US$		6,772
	Scentre Group Trust 1 / Scentre Group Trust 2	-	〃		-		US$		6,611			N/A		US$		6,611
	Capital One Financial Corp	-	〃		-		US$		6,498			N/A		US$		6,498
	ING Groep NV	-	〃		-		US$		6,484			N/A		US$		6,484
	Cigna Corp	-	〃		-		US$		6,445			N/A		US$		6,445
	General Electric Co	-	〃		-		US$		6,267			N/A		US$		6,267
	UnitedHealth Group Inc	-	〃		-		US$		6,255			N/A		US$		6,255
	Bank of New York Mellon Corp/The	-	〃		-		US$		6,241			N/A		US$		6,241
	WPP Finance 2010	-	〃		-		US$		6,236			N/A		US$		6,236
	Standard Chartered PLC	-	〃		-		US$		6,231			N/A		US$		6,231
	Macquarie Group Ltd	-	〃		-		US$		6,193			N/A		US$		6,193
	Cargill Inc	-	〃		-		US$		6,175			N/A		US$		6,175
	UBS Group AG	-	〃		-		US$		6,171			N/A		US$		6,171
	CVS Health Corp	-	〃		-		US$		5,981			N/A		US$		5,981
	Analog Devices Inc	-	〃		-		US$		5,975			N/A		US$		5,975
	Alabama Power Co	-	〃		-		US$		5,920			N/A		US$		5,920
	Capital One NA	-	〃		-		US$		5,919			N/A		US$		5,919
	Intercontinental Exchange Inc	-	〃		-		US$		5,873			N/A		US$		5,873
	John Deere Capital Corp	-	〃		-		US$		5,824			N/A		US$		5,824
	Shell International Finance BV	-	〃		-		US$		5,794			N/A		US$		5,794
	American Express Co	-	〃		-		US$		5,761			N/A		US$		5,761
	BAT Capital Corp	-	〃		-		US$		5,574			N/A		US$		5,574
	Intel Corp	-	〃		-		US$		5,547			N/A		US$		5,547
	Thermo Fisher Scientific Inc	-	〃		-		US$		5,516			N/A		US$		5,516
	Microsoft Corp	-	〃		-		US$		5,489			N/A		US$		5,489
	Fox Corp	-	〃		-		US$		5,483			N/A		US$		5,483
	Charles Schwab Corp/The	-	〃		-		US$		5,465			N/A		US$		5,465
	Georgia-Pacific LLC	-	〃		-		US$		5,422			N/A		US$		5,422
	Dominion Energy Gas Holdings LLC	-	〃		-		US$		5,403			N/A		US$		5,403
	SMBC Aviation Capital Finance DAC	-	〃		-		US$		5,399			N/A		US$		5,399
	Fifth Third Bancorp	-	〃		-		US$		5,399			N/A		US$		5,399
	BB&T Corp	-	〃		-		US$		5,381			N/A		US$		5,381
	Sompo International Holdings Ltd	-	〃		-		US$		5,344			N/A		US$		5,344
	Merck & Co Inc	-	〃		-		US$		5,302			N/A		US$		5,302
	Sempra Energy	-	〃		-		US$		5,257			N/A		US$		5,257
	Federation des Caisses Desjardins du Quebec	-	〃		-		US$		5,246			N/A		US$		5,246
	National Bank of Canada	-	〃		-		US$		5,214			N/A		US$		5,214
	Tyson Foods Inc	-	〃		-		US$		5,073			N/A		US$		5,073
	Five Corners Funding Trust	-	〃		-		US$		4,991			N/A		US$		4,991
	Enel Finance International NV	-	〃		-		US$		4,988			N/A		US$		4,988
	Pacific Life Global Funding II	-	〃		-		US$		4,961			N/A		US$		4,961
	Danske Bank A/S	-	〃		-		US$		4,897			N/A		US$		4,897
	Nomura Holdings Inc	-	〃		-		US$		4,875			N/A		US$		4,875
	Sprint Spectrum Co LLC / Sprint Spectrum Co II LLC / Sprint Spectrum Co III LLC	-	〃		-		US$		4,856			N/A		US$		4,856
	Johnson & Johnson	-	〃		-		US$		4,802			N/A		US$		4,802
	Keurig Dr Pepper Inc	-	〃		-		US$		4,796			N/A		US$		4,796
	DNB Bank ASA	-	〃		-		US$		4,726			N/A		US$		4,726
	Moody's Corp	-	〃		-		US$		4,695			N/A		US$		4,695

(Continued)

- 68 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	Eversource Energy	-	Financial assets at fair value through other comprehensive income		-		US$		4,665			N/A		US$		4,665
	Entergy Corp	-	〃		-		US$		4,665			N/A		US$		4,665
	Florida Power & Light Co	-	〃		-		US$		4,569			N/A		US$		4,569
	Gilead Sciences Inc	-	〃		-		US$		4,496			N/A		US$		4,496
	Barclays Bank PLC	-	〃		-		US$		4,481			N/A		US$		4,481
	Altria Group Inc	-	〃		-		US$		4,450			N/A		US$		4,450
	NiSource Inc	-	〃		-		US$		4,440			N/A		US$		4,440
	MPLX LP	-	〃		-		US$		4,412			N/A		US$		4,412
	PNC Bank NA	-	〃		-		US$		4,335			N/A		US$		4,335
	ERAC USA Finance LLC	-	〃		-		US$		4,298			N/A		US$		4,298
	Alimentation Couche-Tard Inc	-	〃		-		US$		4,295			N/A		US$		4,295
	Exelon Corp	-	〃		-		US$		4,291			N/A		US$		4,291
	Reliance Standard Life Global Funding II	-	〃		-		US$		4,232			N/A		US$		4,232
	National Australia Bank Ltd/New York	-	〃		-		US$		4,208			N/A		US$		4,208
	European Bank for Reconstruction & Development	-	〃		-		US$		4,192			N/A		US$		4,192
	Ameriprise Financial Inc	-	〃		-		US$		4,147			N/A		US$		4,147
	Bayer US Finance II LLC	-	〃		-		US$		4,137			N/A		US$		4,137
	Pricoa Global Funding I	-	〃		-		US$		4,122			N/A		US$		4,122
	American Express Credit Corp	-	〃		-		US$		4,103			N/A		US$		4,103
	BorgWarner Inc	-	〃		-		US$		4,053			N/A		US$		4,053
	Phillips 66	-	〃		-		US$		4,044			N/A		US$		4,044
	Banco Bilbao Vizcaya Argentaria SA	-	〃		-		US$		4,027			N/A		US$		4,027
	Welltower Inc	-	〃		-		US$		3,986			N/A		US$		3,986
	BOC Aviation Ltd	-	〃		-		US$		3,976			N/A		US$		3,976
	VF Corp	-	〃		-		US$		3,972			N/A		US$		3,972
	Compass Bank	-	〃		-		US$		3,950			N/A		US$		3,950
	KeyBank NA/Cleveland OH	-	〃		-		US$		3,920			N/A		US$		3,920
	Vodafone Group PLC	-	〃		-		US$		3,916			N/A		US$		3,916
	Laboratory Corp of America Holdings	-	〃		-		US$		3,888			N/A		US$		3,888
	BG Energy Capital PLC	-	〃		-		US$		3,853			N/A		US$		3,853
	Reckitt Benckiser Treasury Services PLC	-	〃		-		US$		3,805			N/A		US$		3,805
	GE Capital Funding LLC	-	〃		-		US$		3,761			N/A		US$		3,761
	Monongahela Power Co	-	〃		-		US$		3,737			N/A		US$		3,737
	Cooperatieve Rabobank UA	-	〃		-		US$		3,698			N/A		US$		3,698
	Verisk Analytics Inc	-	〃		-		US$		3,677			N/A		US$		3,677
	Diageo Capital PLC	-	〃		-		US$		3,667			N/A		US$		3,667
	Ameren Corp	-	〃		-		US$		3,658			N/A		US$		3,658
	UBS AG/London	-	〃		-		US$		3,588			N/A		US$		3,588
	Dominion Energy Inc	-	〃		-		US$		3,586			N/A		US$		3,586
	Pfizer Inc	-	〃		-		US$		3,521			N/A		US$		3,521
	AutoZone Inc	-	〃		-		US$		3,456			N/A		US$		3,456
	HSBC Bank Canada	-	〃		-		US$		3,440			N/A		US$		3,440
	Hewlett Packard Enterprise Co	-	〃		-		US$		3,439			N/A		US$		3,439
	Unilever Capital Corp	-	〃		-		US$		3,394			N/A		US$		3,394
	Swedbank AB	-	〃		-		US$		3,388			N/A		US$		3,388
	MassMutual Global Funding II	-	〃		-		US$		3,369			N/A		US$		3,369
	CNA Financial Corp	-	〃		-		US$		3,316			N/A		US$		3,316
	ONE Gas Inc	-	〃		-		US$		3,310			N/A		US$		3,310
	Texas Instruments Inc	-	〃		-		US$		3,292			N/A		US$		3,292
	Avangrid Inc	-	〃		-		US$		3,262			N/A		US$		3,262
	Ralph Lauren Corp	-	〃		-		US$		3,207			N/A		US$		3,207
	Oncor Electric Delivery Co LLC	-	〃		-		US$		3,201			N/A		US$		3,201

(Continued)

- 69 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	Royal Bank of Scotland Group PLC	-	Financial assets at fair value through other comprehensive income		-		US$		3,199			N/A		US$		3,199
	Novartis Capital Corp	-	〃		-		US$		3,199			N/A		US$		3,199
	Baidu Inc	-	〃		-		US$		3,184			N/A		US$		3,184
	Raytheon Technologies Corp	-	〃		-		US$		3,130			N/A		US$		3,130
	Valero Energy Corp	-	〃		-		US$		3,109			N/A		US$		3,109
	Stryker Corp	-	〃		-		US$		3,081			N/A		US$		3,081
	Walt Disney Co/The	-	〃		-		US$		3,058			N/A		US$		3,058
	Zions Bancorp NA	-	〃		-		US$		3,057			N/A		US$		3,057
	HCP Inc	-	〃		-		US$		2,978			N/A		US$		2,978
	Penske Truck Leasing Co Lp / PTL Finance Corp	-	〃		-		US$		2,967			N/A		US$		2,967
	American Electric Power Co Inc	-	〃		-		US$		2,948			N/A		US$		2,948
	Xcel Energy Inc	-	〃		-		US$		2,948			N/A		US$		2,948
	Ventas Realty LP	-	〃		-		US$		2,942			N/A		US$		2,942
	Philip Morris International Inc	-	〃		-		US$		2,933			N/A		US$		2,933
	Air Products and Chemicals Inc	-	〃		-		US$		2,909			N/A		US$		2,909
	Berkshire Hathaway Energy Co	-	〃		-		US$		2,877			N/A		US$		2,877
	Credit Suisse Group Funding Guernsey Ltd	-	〃		-		US$		2,867			N/A		US$		2,867
	Equitable Financial Life Global Funding	-	〃		-		US$		2,849			N/A		US$		2,849
	Ross Stores Inc	-	〃		-		US$		2,837			N/A		US$		2,837
	Nuveen Finance LLC	-	〃		-		US$		2,817			N/A		US$		2,817
	Ryder System Inc	-	〃		-		US$		2,800			N/A		US$		2,800
	AvalonBay Communities Inc	-	〃		-		US$		2,798			N/A		US$		2,798
	Quest Diagnostics Inc	-	〃		-		US$		2,798			N/A		US$		2,798
	Kimco Realty Corp	-	〃		-		US$		2,726			N/A		US$		2,726
	CMS Energy Corp	-	〃		-		US$		2,717			N/A		US$		2,717
	Roche Holdings Inc	-	〃		-		US$		2,702			N/A		US$		2,702
	Magellan Midstream Partners LP	-	〃		-		US$		2,700			N/A		US$		2,700
	Nutrien Ltd	-	〃		-		US$		2,687			N/A		US$		2,687
	PNC Financial Services Group Inc/The	-	〃		-		US$		2,683			N/A		US$		2,683
	Pinnacle West Capital Corp	-	〃		-		US$		2,669			N/A		US$		2,669
	Aetna Inc	-	〃		-		US$		2,592			N/A		US$		2,592
	Empower Finance 2020 LP	-	〃		-		US$		2,562			N/A		US$		2,562
	Nestle Holdings Inc	-	〃		-		US$		2,533			N/A		US$		2,533
	Reynolds American Inc	-	〃		-		US$		2,530			N/A		US$		2,530
	Berkshire Hathaway Inc	-	〃		-		US$		2,513			N/A		US$		2,513
	Chevron USA Inc	-	〃		-		US$		2,511			N/A		US$		2,511
	Georgia Power Co	-	〃		-		US$		2,497			N/A		US$		2,497
	Northrop Grumman Corp	-	〃		-		US$		2,491			N/A		US$		2,491
	State Street Corp	-	〃		-		US$		2,487			N/A		US$		2,487
	SunTrust Bank/Atlanta GA	-	〃		-		US$		2,486			N/A		US$		2,486
	Honeywell International Inc	-	〃		-		US$		2,480			N/A		US$		2,480
	Enterprise Products Operating LLC	-	〃		-		US$		2,470			N/A		US$		2,470
	Duke Energy Corp	-	〃		-		US$		2,428			N/A		US$		2,428
	DuPont de Nemours Inc	-	〃		-		US$		2,427			N/A		US$		2,427
	Suncor Energy Inc	-	〃		-		US$		2,416			N/A		US$		2,416
	Union Pacific Corp	-	〃		-		US$		2,398			N/A		US$		2,398
	O'Reilly Automotive Inc	-	〃		-		US$		2,394			N/A		US$		2,394
	Public Service Electric and Gas Co	-	〃		-		US$		2,321			N/A		US$		2,321
	Health Care Service Corp A Mutual Legal Reserve Co	-	〃		-		US$		2,303			N/A		US$		2,303
	Magna International Inc	-	〃		-		US$		2,291			N/A		US$		2,291
	BAT International Finance PLC	-	〃		-		US$		2,287			N/A		US$		2,287
	Caterpillar Financial Services Corp	-	〃		-		US$		2,284			N/A		US$		2,284

(Continued)

- 70 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	ITC Holdings Corp	-	Financial assets at fair value through other comprehensive income		-		US$		2,263			N/A		US$		2,263
	East Ohio Gas Co/The	-	〃		-		US$		2,261			N/A		US$		2,261
	QUALCOMM Inc	-	〃		-		US$		2,253			N/A		US$		2,253
	Citizens Bank NA/Providence RI	-	〃		-		US$		2,212			N/A		US$		2,212
	Amphenol Corp	-	〃		-		US$		2,201			N/A		US$		2,201
	Bank of New Zealand	-	〃		-		US$		2,196			N/A		US$		2,196
	ASB Bank Ltd	-	〃		-		US$		2,184			N/A		US$		2,184
	Tucson Electric Power Co	-	〃		-		US$		2,177			N/A		US$		2,177
	Otis Worldwide Corp	-	〃		-		US$		2,159			N/A		US$		2,159
	WP Carey Inc	-	〃		-		US$		2,103			N/A		US$		2,103
	CNOOC Finance 2012 Ltd	-	〃		-		US$		2,072			N/A		US$		2,072
	PayPal Holdings Inc	-	〃		-		US$		2,068			N/A		US$		2,068
	Shinhan Financial Group Co Ltd	-	〃		-		US$		2,024			N/A		US$		2,024
	CK Hutchison International 16 Ltd	-	〃		-		US$		2,016			N/A		US$		2,016
	Regions Financial Corp	-	〃		-		US$		2,007			N/A		US$		2,007
	Kentucky Utilities Co	-	〃		-		US$		1,994			N/A		US$		1,994
	NetApp Inc	-	〃		-		US$		1,982			N/A		US$		1,982
	Sydney Airport Finance Co Pty Ltd	-	〃		-		US$		1,968			N/A		US$		1,968
	CRH America Inc	-	〃		-		US$		1,965			N/A		US$		1,965
	Evergy Kansas Central Inc	-	〃		-		US$		1,937			N/A		US$		1,937
	Burlington Northern Santa Fe LLC	-	〃		-		US$		1,935			N/A		US$		1,935
	ANZ New Zealand Int'l Ltd/London	-	〃		-		US$		1,927			N/A		US$		1,927
	Appalachian Power Co	-	〃		-		US$		1,924			N/A		US$		1,924
	Gulfstream Natural Gas System LLC	-	〃		-		US$		1,913			N/A		US$		1,913
	Public Service Enterprise Group Inc	-	〃		-		US$		1,908			N/A		US$		1,908
	Air Lease Corp	-	〃		-		US$		1,882			N/A		US$		1,882
	Discover Bank	-	〃		-		US$		1,873			N/A		US$		1,873
	Boston Properties LP	-	〃		-		US$		1,840			N/A		US$		1,840
	McCormick & Co Inc/MD	-	〃		-		US$		1,837			N/A		US$		1,837
	Infor Inc	-	〃		-		US$		1,810			N/A		US$		1,810
	International Business Machines Corp	-	〃		-		US$		1,761			N/A		US$		1,761
	Anheuser-Busch InBev Worldwide Inc	-	〃		-		US$		1,759			N/A		US$		1,759
	Emerson Electric Co	-	〃		-		US$		1,750			N/A		US$		1,750
	MetLife Inc	-	〃		-		US$		1,681			N/A		US$		1,681
	Duke Energy Florida LLC	-	〃		-		US$		1,677			N/A		US$		1,677
	Toyota Industries Corp	-	〃		-		US$		1,672			N/A		US$		1,672
	Exelon Generation Co LLC	-	〃		-		US$		1,652			N/A		US$		1,652
	Essex Portfolio LP	-	〃		-		US$		1,650			N/A		US$		1,650
	Midwest Connector Capital Co LLC	-	〃		-		US$		1,641			N/A		US$		1,641
	Brookfield Finance Inc	-	〃		-		US$		1,641			N/A		US$		1,641
	Suntory Holdings Ltd	-	〃		-		US$		1,637			N/A		US$		1,637
	Panasonic Corp	-	〃		-		US$		1,619			N/A		US$		1,619
	CK Hutchison International 19 Ltd	-	〃		-		US$		1,603			N/A		US$		1,603
	Marsh & McLennan Cos Inc	-	〃		-		US$		1,592			N/A		US$		1,592
	Marathon Petroleum Corp	-	〃		-		US$		1,576			N/A		US$		1,576
	Public Service Electric & Gas Co	-	〃		-		US$		1,562			N/A		US$		1,562
	AIA Group Ltd	-	〃		-		US$		1,560			N/A		US$		1,560
	NTT Finance Corp	-	〃		-		US$		1,540			N/A		US$		1,540
	ABN AMRO Bank NV	-	〃		-		US$		1,527			N/A		US$		1,527
	Alliant Energy Finance LLC	-	〃		-		US$		1,526			N/A		US$		1,526
	KEB Hana Bank	-	〃		-		US$		1,504			N/A		US$		1,504
	Virginia Electric & Power Co	-	〃		-		US$		1,501			N/A		US$		1,501

(Continued)

- 71 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	Entergy Louisiana LLC	-	Financial assets at fair value through other comprehensive income		-		US$		1,472			N/A		US$		1,472
	Daiwa Securities Group Inc	-	〃		-		US$		1,430			N/A		US$		1,430
	Citizens Financial Group Inc	-	〃		-		US$		1,418			N/A		US$		1,418
	Andrew W Mellon Foundation/The	-	〃		-		US$		1,418			N/A		US$		1,418
	Wells Fargo Bank NA	-	〃		-		US$		1,416			N/A		US$		1,416
	CNOOC Curtis Funding No 1 Pty Ltd	-	〃		-		US$		1,410			N/A		US$		1,410
	Siemens Financieringsmaatschappij NV	-	〃		-		US$		1,410			N/A		US$		1,410
	Kilroy Realty LP	-	〃		-		US$		1,402			N/A		US$		1,402
	Entergy Arkansas LLC	-	〃		-		US$		1,349			N/A		US$		1,349
	Ontario Teachers' Cadillac Fairview Properties Trust	-	〃		-		US$		1,339			N/A		US$		1,339
	Federal Realty Investment Trust	-	〃		-		US$		1,306			N/A		US$		1,306
	General Dynamics Corp	-	〃		-		US$		1,238			N/A		US$		1,238
	Santander UK Group Holdings PLC	-	〃		-		US$		1,237			N/A		US$		1,237
	Lincoln National Corp	-	〃		-		US$		1,227			N/A		US$		1,227
	PSEG Power LLC	-	〃		-		US$		1,208			N/A		US$		1,208
	Schlumberger Finance Canada Ltd	-	〃		-		US$		1,189			N/A		US$		1,189
	eBay Inc	-	〃		-		US$		1,154			N/A		US$		1,154
	Cleveland Electric Illuminating Co/The	-	〃		-		US$		1,149			N/A		US$		1,149
	APT Pipelines Ltd	-	〃		-		US$		1,148			N/A		US$		1,148
	Alexandria Real Estate Equities Inc	-	〃		-		US$		1,112			N/A		US$		1,112
	Southern California Edison Co	-	〃		-		US$		1,105			N/A		US$		1,105
	Cooperatieve Rabobank UA/NY	-	〃		-		US$		1,102			N/A		US$		1,102
	Baltimore Gas & Electric Co	-	〃		-		US$		1,066			N/A		US$		1,066
	Entergy Mississippi LLC	-	〃		-		US$		1,063			N/A		US$		1,063
	BBVA USA	-	〃		-		US$		1,062			N/A		US$		1,062
	DH Europe Finance II Sarl	-	〃		-		US$		1,056			N/A		US$		1,056
	Loews Corp	-	〃		-		US$		1,047			N/A		US$		1,047
	USAA Capital Corp	-	〃		-		US$		1,046			N/A		US$		1,046
	Kinder Morgan Inc/DE	-	〃		-		US$		1,046			N/A		US$		1,046
	Kaiser Foundation Hospitals	-	〃		-		US$		1,039			N/A		US$		1,039
	Texas Eastern Transmission LP	-	〃		-		US$		1,034			N/A		US$		1,034
	Simon Property Group LP	-	〃		-		US$		1,030			N/A		US$		1,030
	Mondelez International Holdings Netherlands BV	-	〃		-		US$		1,024			N/A		US$		1,024
	Toyota Motor Finance Netherlands BV	-	〃		-		US$		1,008			N/A		US$		1,008
	MUFG Union Bank NA	-	〃		-		US$		1,006			N/A		US$		1,006
	BHP Billiton Finance USA Ltd	-	〃		-		US$		964			N/A		US$		964
	Southern California Gas Co	-	〃		-		US$		959			N/A		US$		959
	QNB Finance Ltd	-	〃		-		US$		954			N/A		US$		954
	Prudential Financial Inc	-	〃		-		US$		933			N/A		US$		933
	Mitsubishi UFJ Lease & Finance Co Ltd	-	〃		-		US$		927			N/A		US$		927
	Westpac Banking Corp	-	〃		-		US$		879			N/A		US$		879
	Woolworths Group Ltd	-	〃		-		US$		867			N/A		US$		867
	Niagara Mohawk Power Corp	-	〃		-		US$		851			N/A		US$		851
	CenterPoint Energy Inc	-	〃		-		US$		851			N/A		US$		851
	Visa Inc	-	〃		-		US$		845			N/A		US$		845
	Sinopec Capital 2013 Ltd	-	〃		-		US$		835			N/A		US$		835
	Natwest Group PLC	-	〃		-		US$		815			N/A		US$		815
	Sky Ltd	-	〃		-		US$		779			N/A		US$		779
	Xylem Inc/NY	-	〃		-		US$		774			N/A		US$		774
	DR Horton Inc	-	〃		-		US$		772			N/A		US$		772
	Nationwide Financial Services Inc	-	〃		-		US$		758			N/A		US$		758
	Canadian Natural Resources Ltd	-	〃		-		US$		758			N/A		US$		758

(Continued)

- 72 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	Warner Media LLC	-	Financial assets at fair value through other comprehensive income		-		US$		752			N/A		US$		752
	BNZ International Funding Ltd/London	-	〃		-		US$		743			N/A		US$		743
	Sinopec Group Overseas Development 2017 Ltd	-	〃		-		US$		717			N/A		US$		717
	Abbott Laboratories	-	〃		-		US$		705			N/A		US$		705
	Digital Realty Trust LP	-	〃		-		US$		679			N/A		US$		679
	Cummins Inc	-	〃		-		US$		664			N/A		US$		664
	Carlisle Cos Inc	-	〃		-		US$		658			N/A		US$		658
	Glencore Funding LLC	-	〃		-		US$		645			N/A		US$		645
	Western Union Co/The	-	〃		-		US$		644			N/A		US$		644
	Republic Services Inc	-	〃		-		US$		644			N/A		US$		644
	American Water Capital Corp	-	〃		-		US$		637			N/A		US$		637
	OneBeacon US Holdings Inc	-	〃		-		US$		633			N/A		US$		633
	Sinopec Group Overseas Development 2012 Ltd	-	〃		-		US$		623			N/A		US$		623
	Ohio Power Co	-	〃		-		US$		622			N/A		US$		622
	Arizona Public Service Co	-	〃		-		US$		604			N/A		US$		604
	Duke Energy Progress LLC	-	〃		-		US$		592			N/A		US$		592
	ViacomCBS Inc	-	〃		-		US$		590			N/A		US$		590
	Evergy Inc	-	〃		-		US$		579			N/A		US$		579
	Fifth Third Bank/Cincinnati OH	-	〃		-		US$		566			N/A		US$		566
	United Parcel Service Inc	-	〃		-		US$		565			N/A		US$		565
	Aflac Inc	-	〃		-		US$		552			N/A		US$		552
	PACCAR Financial Corp	-	〃		-		US$		552			N/A		US$		552
	ABC Inc	-	〃		-		US$		525			N/A		US$		525
	TTX Co	-	〃		-		US$		524			N/A		US$		524
	Baker Hughes a GE Co LLC / Baker Hughes Co-Obligor Inc	-	〃		-		US$		522			N/A		US$		522
	Realty Income Corp	-	〃		-		US$		521			N/A		US$		521
	Hanwha Energy USA Holdings Corp	-	〃		-		US$		514			N/A		US$		514
	Danone SA	-	〃		-		US$		506			N/A		US$		506
	United Overseas Bank Ltd	-	〃		-		US$		459			N/A		US$		459
	Target Corp	-	〃		-		US$		455			N/A		US$		455
	Starbucks Corp	-	〃		-		US$		430			N/A		US$		430
	GlaxoSmithKline Capital PLC	-	〃		-		US$		426			N/A		US$		426
	Comerica Bank	-	〃		-		US$		425			N/A		US$		425
	Banco del Estado de Chile	-	〃		-		US$		423			N/A		US$		423
	CBS Corp	-	〃		-		US$		413			N/A		US$		413
	Fidelity National Information Services Inc	-	〃		-		US$		413			N/A		US$		413
	Komatsu Finance America Inc	-	〃		-		US$		413			N/A		US$		413
	Truist Financial Corp	-	〃		-		US$		410			N/A		US$		410
	Newmont Goldcorp Corp	-	〃		-		US$		404			N/A		US$		404
	AXA Equitable Holdings Inc	-	〃		-		US$		403			N/A		US$		403
	PepsiCo Inc	-	〃		-		US$		400			N/A		US$		400
	StanCorp Financial Group Inc	-	〃		-		US$		388			N/A		US$		388
	Canadian Pacific Railway Co	-	〃		-		US$		378			N/A		US$		378
	Enbridge Inc	-	〃		-		US$		378			N/A		US$		378
	Principal Financial Group Inc	-	〃		-		US$		372			N/A		US$		372
	Pernod Ricard SA	-	〃		-		US$		364			N/A		US$		364
	First Republic Bank/CA	-	〃		-		US$		360			N/A		US$		360
	Archer-Daniels-Midland Co	-	〃		-		US$		353			N/A		US$		353
	WEC Energy Group Inc	-	〃		-		US$		351			N/A		US$		351
	Ventas Realty LP / Ventas Capital Corp	-	〃		-		US$		349			N/A		US$		349
	Amgen Inc	-	〃		-		US$		347			N/A		US$		347
	Allstate Corp/The	-	〃		-		US$		332			N/A		US$		332

(Continued)

- 73 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	BP Capital Markets PLC	-	Financial assets at fair value through other comprehensive income		-		US$		329			N/A		US$		329
	CommonSpirit Health	-	〃		-		US$		322			N/A		US$		322
	Total Capital International SA	-	〃		-		US$		320			N/A		US$		320
	Southern Co/The	-	〃		-		US$		318			N/A		US$		318
	Anthem Inc	-	〃		-		US$		314			N/A		US$		314
	Chubb INA Holdings Inc	-	〃		-		US$		313			N/A		US$		313
	America Movil SAB de CV	-	〃		-		US$		311			N/A		US$		311
	Alibaba Group Holding Ltd	-	〃		-		US$		306			N/A		US$		306
	Aon Corp	-	〃		-		US$		300			N/A		US$		300
	Johnson Controls International plc	-	〃		-		US$		298			N/A		US$		298
	Mondelez International Inc	-	〃		-		US$		284			N/A		US$		284
	Southern Natural Gas Co LLC / Southern Natural Issuing Corp	-	〃		-		US$		277			N/A		US$		277
	Coca-Cola Co/The	-	〃		-		US$		275			N/A		US$		275
	Huntington National Bank/The	-	〃		-		US$		257			N/A		US$		257
	EI du Pont de Nemours and Co	-	〃		-		US$		255			N/A		US$		255
	Capital One Bank USA NA	-	〃		-		US$		254			N/A		US$		254
	Waste Management Inc	-	〃		-		US$		251			N/A		US$		251
	Aon PLC	-	〃		-		US$		246			N/A		US$		246
	Nasdaq Inc	-	〃		-		US$		220			N/A		US$		220
	Deere & Co	-	〃		-		US$		217			N/A		US$		217
	Saudi Arabian Oil Co	-	〃		-		US$		202			N/A		US$		202
	Nucor Corp	-	〃		-		US$		189			N/A		US$		189
	Dow Chemical Co/The	-	〃		-		US$		135			N/A		US$		135
	Columbia Property Trust Operating Partnership LP	-	〃		-		US$		105			N/A		US$		105
	Wells Fargo & Company	-	Financial assets at amortized cost		-		US$		180,487			N/A		US$		182,212
	Citigroup Global Market Inc.	-	〃		-		US$		99,965			N/A		US$		100,488
	JPMorgan Chase & Co.	-	〃		-		US$		95,058			N/A		US$		95,567
	Goldman Sachs Group Inc/The	-	〃		-		US$		14,930			N/A		US$		15,140
	Government bond
	United States Treasury Note/Bond	-	Financial assets at fair value through other comprehensive income		-		US$		472,618			N/A		US$		472,618
	Abu Dhabi Government International Bond	-	〃		-		US$		5,023			N/A		US$		5,023
	Qatar Government International Bond	-	〃		-		US$		1,396			N/A		US$		1,396
	Agency bonds/Agency mortgage-backed securities
	Fannie Mae Pool	-	Financial assets at fair value through other comprehensive income		-		US$		518,729			N/A		US$		518,729
	Ginnie Mae II Pool	-	〃		-		US$		297,578			N/A		US$		297,578
	Fannie Mae REMICS	-	〃		-		US$		134,588			N/A		US$		134,588
	Freddie Mac REMICS	-	〃		-		US$		128,111			N/A		US$		128,111
	Freddie Mac Pool	-	〃		-		US$		121,514			N/A		US$		121,514
	Fannie Mae or Freddie Mac	-	〃		-		US$		110,508			N/A		US$		110,508
	Ginnie Mae	-	〃		-		US$		99,267			N/A		US$		99,267
	Freddie Mac Gold Pool	-	〃		-		US$		80,113			N/A		US$		80,113
	Government National Mortgage Association	-	〃		-		US$		35,743			N/A		US$		35,743
	Fannie Mae-Aces	-	〃		-		US$		19,416			N/A		US$		19,416
	Freddie Mac Strips	-	〃		-		US$		3,760			N/A		US$		3,760
	State Board of Administration Finance Corp	-	〃		-		US$		3,605			N/A		US$		3,605
	University of California	-	〃		-		US$		1,947			N/A		US$		1,947
	Korea Hydro & Nuclear Power Co Ltd	-	〃		-		US$		1,942			N/A		US$		1,942
	Federal National Mortgage Association	-	〃		-		US$		1,159			N/A		US$		1,159
	Denver City & County Housing Authority	-	〃		-		US$		1,029			N/A		US$		1,029

(Continued)

- 74 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	Ginnie Mae I Pool	-	Financial assets at fair value through other comprehensive income		-		US$		976			N/A		US$		976
	Oregon Health & Science University	-	〃		-		US$		826			N/A		US$		826
	FRESB 2019-SB61 Mortgage Trust	-	〃		-		US$		623			N/A		US$		623
	Freddie Mac Multifamily Structured Pass Through Certificates	-	〃		-		US$		596			N/A		US$		596
	State of Hawaii	-	〃		-		US$		556			N/A		US$		556
	FHLMC-GNMA	-	〃		-		US$		535			N/A		US$		535
	State of Wisconsin	-	〃		-		US$		526			N/A		US$		526
	Brazos Higher Education Authority Inc	-	〃		-		US$		480			N/A		US$		480
	FRESB 2019-SB60 Mortgage Trust	-	〃		-		US$		412			N/A		US$		412
	Freddie Mac Non Gold Pool	-	〃		-		US$		300			N/A		US$		300
	Sales Tax Securitization Corp	-	〃		-		US$		252			N/A		US$		252
	Fannie Mae Benchmark REMIC	-	〃		-		US$		97			N/A		US$		97
	Asset-backed securities
	JPMBB Commercial Mortgage Securities Trust 2014-C24	-	Financial assets at fair value through other comprehensive income		-		US$		8,013			N/A		US$		8,013
	Wells Fargo Commercial Mortgage Trust 2016-BNK1	-	〃		-		US$		7,881			N/A		US$		7,881
	BANK 2020-BNK26	-	〃		-		US$		7,325			N/A		US$		7,325
	Citigroup Commercial Mortgage Trust 2014-GC21	-	〃		-		US$		6,888			N/A		US$		6,888
	CGDBB Commercial Mortgage Trust 2017-BIOC	-	〃		-		US$		6,854			N/A		US$		6,854
	Hyundai Auto Receivables Trust 2017-A	-	〃		-		US$		6,742			N/A		US$		6,742
	Benchmark 2019-B11 Mortgage Trust	-	〃		-		US$		6,533			N/A		US$		6,533
	Wells Fargo Commercial Mortgage Trust 2016-C35	-	〃		-		US$		6,388			N/A		US$		6,388
	Morgan Stanley Bank of America Merrill Lynch Trust 2016-C29	-	〃		-		US$		6,074			N/A		US$		6,074
	UBS-Barclays Commercial Mortgage Trust 2012-C2	-	〃		-		US$		5,743			N/A		US$		5,743
	WFRBS Commercial Mortgage Trust 2013-C13	-	〃		-		US$		5,663			N/A		US$		5,663
	BBCMS 2018-TALL Mortgage Trust	-	〃		-		US$		5,403			N/A		US$		5,403
	Morgan Stanley Bank of America Merrill Lynch Trust 2016-C30	-	〃		-		US$		5,372			N/A		US$		5,372
	COMM 2015-CCRE24 Mortgage Trust	-	〃		-		US$		5,333			N/A		US$		5,333
	Morgan Stanley Bank of America Merrill Lynch Trust 2013-C10	-	〃		-		US$		5,071			N/A		US$		5,071
	MRCD 2019-MARK Mortgage Trust	-	〃		-		US$		4,917			N/A		US$		4,917
	BANK 2019-BNK22	-	〃		-		US$		4,583			N/A		US$		4,583
	Mercedes-Benz Auto Lease Trust 2019-B	-	〃		-		US$		4,333			N/A		US$		4,333
	BANK 2017-BNK5	-	〃		-		US$		4,272			N/A		US$		4,272
	JPMCC Commercial Mortgage Securities Trust 2017-JP7	-	〃		-		US$		4,261			N/A		US$		4,261
	BANK 2017-BNK6	-	〃		-		US$		4,254			N/A		US$		4,254
	UBS Commercial Mortgage Trust 2018-C10	-	〃		-		US$		4,248			N/A		US$		4,248
	BANK 2019-BNK17	-	〃		-		US$		4,234			N/A		US$		4,234
	Morgan Stanley Bank of America Merrill Lynch Trust 2013-C7	-	〃		-		US$		4,024			N/A		US$		4,024
	JP Morgan Chase Commercial Mortgage Securities Trust 2012-LC9	-	〃		-		US$		4,020			N/A		US$		4,020
	Enterprise Fleet Financing 2020-1 LLC	-	〃		-		US$		3,870			N/A		US$		3,870
	JPMBB Commercial Mortgage Securities Trust 2015-C28	-	〃		-		US$		3,620			N/A		US$		3,620
	Benchmark 2018-B2 Mortgage Trust	-	〃		-		US$		3,482			N/A		US$		3,482
	UBS-Barclays Commercial Mortgage Trust 2013-C6	-	〃		-		US$		3,321			N/A		US$		3,321
	GS Mortgage Securities Trust 2012-GC6	-	〃		-		US$		3,188			N/A		US$		3,188
	Ford Credit Auto Lease Trust 2019-B	-	〃		-		US$		3,139			N/A		US$		3,139
	Wells Fargo Commercial Mortgage Trust 2017-C40	-	〃		-		US$		3,063			N/A		US$		3,063
	Morgan Stanley Capital I Trust 2017-H1	-	〃		-		US$		3,051			N/A		US$		3,051
	Citigroup Commercial Mortgage Trust 2016-P5	-	〃		-		US$		3,017			N/A		US$		3,017
	Hyundai Auto Receivables Trust 2018-A	-	〃		-		US$		2,942			N/A		US$		2,942
	Nissan Auto Lease Trust 2019-B	-	〃		-		US$		2,899			N/A		US$		2,899

(Continued)

- 75 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	GS Mortgage Securities Corp Trust 2018-RIVR	-	Financial assets at fair value through other comprehensive income		-		US$		2,873			N/A		US$		2,873
	Ford Credit Auto Lease Trust 2020-B	-	〃		-		US$		2,869			N/A		US$		2,869
	UBS-Barclays Commercial Mortgage Trust 2012-C3	-	〃		-		US$		2,865			N/A		US$		2,865
	BANK 2019-BNK24	-	〃		-		US$		2,829			N/A		US$		2,829
	Citigroup Commercial Mortgage Trust 2016-C3	-	〃		-		US$		2,781			N/A		US$		2,781
	Enterprise Fleet Financing 2019-2 LLC	-	〃		-		US$		2,770			N/A		US$		2,770
	BX Commercial Mortgage Trust 2018-IND	-	〃		-		US$		2,760			N/A		US$		2,760
	GS Mortgage Securities Trust 2013-GCJ12	-	〃		-		US$		2,717			N/A		US$		2,717
	Wells Fargo Commercial Mortgage Trust 2020-C55	-	〃		-		US$		2,638			N/A		US$		2,638
	Ford Credit Auto Owner Trust 2020-REV1	-	〃		-		US$		2,635			N/A		US$		2,635
	GM Financial Consumer Automobile Receivables Trust 2017-2	-	〃		-		US$		2,524			N/A		US$		2,524
	American Express Credit Account Master Trust	-	〃		-		US$		2,519			N/A		US$		2,519
	BBCMS Mortgage Trust 2020-C8	-	〃		-		US$		2,478			N/A		US$		2,478
	Morgan Stanley Bank of America Merrill Lynch Trust 2012-C6	-	〃		-		US$		2,470			N/A		US$		2,470
	Citibank Credit Card Issuance Trust	-	〃		-		US$		2,304			N/A		US$		2,304
	UBS Commercial Mortgage Trust 2018-C11	-	〃		-		US$		2,243			N/A		US$		2,243
	Morgan Stanley Capital I Trust 2018-H3	-	〃		-		US$		2,240			N/A		US$		2,240
	COMM 2013-CCRE12 Mortgage Trust	-	〃		-		US$		2,165			N/A		US$		2,165
	BENCHMARK 2018-B4	-	〃		-		US$		2,163			N/A		US$		2,163
	JPMDB Commercial Mortgage Securities Trust 2017-C7	-	〃		-		US$		2,126			N/A		US$		2,126
	Citigroup Commercial Mortgage Trust 2017-P8	-	〃		-		US$		2,103			N/A		US$		2,103
	Ford Credit Auto Owner Trust 2019-A	-	〃		-		US$		2,096			N/A		US$		2,096
	Morgan Stanley Bank of America Merrill Lynch Trust 2016-C31	-	〃		-		US$		2,068			N/A		US$		2,068
	JPMBB Commercial Mortgage Securities Trust 2014-C19	-	〃		-		US$		2,015			N/A		US$		2,015
	Hyundai Auto Receivables Trust 2016-B	-	〃		-		US$		1,913			N/A		US$		1,913
	Morgan Stanley Bank of America Merrill Lynch Trust 2013-C8	-	〃		-		US$		1,866			N/A		US$		1,866
	Wells Fargo Commercial Mortgage Trust 2012-LC5	-	〃		-		US$		1,716			N/A		US$		1,716
	Wells Fargo Commercial Mortgage Trust 2015-C28	-	〃		-		US$		1,586			N/A		US$		1,586
	WFRBS Commercial Mortgage Trust 2013-C17	-	〃		-		US$		1,578			N/A		US$		1,578
	COMM 2014-CCRE17 Mortgage Trust	-	〃		-		US$		1,568			N/A		US$		1,568
	JPMBB Commercial Mortgage Securities Trust 2013-C12	-	〃		-		US$		1,563			N/A		US$		1,563
	COMM 2020-CBM Mortgage Trust	-	〃		-		US$		1,535			N/A		US$		1,535
	ARI Fleet Lease Trust 2019-A	-	〃		-		US$		1,497			N/A		US$		1,497
	GS Mortgage Securities Trust 2014-GC22	-	〃		-		US$		1,476			N/A		US$		1,476
	Wells Fargo Commercial Mortgage Trust 2016-C36	-	〃		-		US$		1,411			N/A		US$		1,411
	Honda Auto Receivables 2017-3 Owner Trust	-	〃		-		US$		1,385			N/A		US$		1,385
	Toyota Auto Receivables 2018-D Owner Trust	-	〃		-		US$		1,341			N/A		US$		1,341
	DBGS 2018-BIOD Mortgage Trust	-	〃		-		US$		1,299			N/A		US$		1,299
	Nissan Auto Lease Trust 2019-A	-	〃		-		US$		1,243			N/A		US$		1,243
	Chase Issuance Trust	-	〃		-		US$		1,231			N/A		US$		1,231
	GM Financial Automobile Leasing Trust 2019-4	-	〃		-		US$		1,218			N/A		US$		1,218
	Morgan Stanley Capital I Trust 2019-H6	-	〃		-		US$		1,188			N/A		US$		1,188
	Benchmark 2019-B14 Mortgage Trust	-	〃		-		US$		1,178			N/A		US$		1,178
	GS Mortgage Securities Trust 2014-GC24	-	〃		-		US$		1,168			N/A		US$		1,168
	Hyundai Auto Receivables Trust 2019-B	-	〃		-		US$		1,165			N/A		US$		1,165
	GM Financial Consumer Automobile Receivables Trust 2018-1	-	〃		-		US$		1,138			N/A		US$		1,138
	GS Mortgage Securities Trust 2019-GSA1	-	〃		-		US$		1,072			N/A		US$		1,072
	Morgan Stanley Bank of America Merrill Lynch Trust 2013-C12	-	〃		-		US$		1,047			N/A		US$		1,047
	Ford Credit Auto Owner Trust 2017-REV1	-	〃		-		US$		1,025			N/A		US$		1,025
	COMM 2013-LC6 Mortgage Trust	-	〃		-		US$		1,013			N/A		US$		1,013
	Ford Credit Auto Lease Trust 2019-A	-	〃		-		US$		1,013			N/A		US$		1,013

(Continued)

- 76 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
TSMC Global	WFRBS Commercial Mortgage Trust 2011-C4	-	Financial assets at fair value through other comprehensive income		-		US$		1,006			N/A		US$		1,006
	Benchmark 2019-B9 Mortgage Trust	-	〃		-		US$		980			N/A		US$		980
	Citigroup Commercial Mortgage Trust 2013-GC11	-	〃		-		US$		977			N/A		US$		977
	Citigroup Commercial Mortgage Trust 2015-GC27	-	〃		-		US$		970			N/A		US$		970
	Hyundai Auto Lease Securitization Trust 2019-A	-	〃		-		US$		964			N/A		US$		964
	Morgan Stanley Bank of America Merrill Lynch Trust 2013-C13	-	〃		-		US$		952			N/A		US$		952
	COMM 2012-CCRE5 Mortgage Trust	-	〃		-		US$		934			N/A		US$		934
	Toyota Auto Receivables 2020-A Owner Trust	-	〃		-		US$		928			N/A		US$		928
	Wells Fargo Commercial Mortgage Trust 2015-LC20	-	〃		-		US$		919			N/A		US$		919
	BBCMS MORTGAGE TRUST 2017-C1	-	〃		-		US$		895			N/A		US$		895
	Benchmark 2019-B15 Mortgage Trust	-	〃		-		US$		841			N/A		US$		841
	280 Park Avenue 2017-280P Mortgage Trust	-	〃		-		US$		830			N/A		US$		830
	GM Financial Automobile Leasing Trust 2019-2	-	〃		-		US$		826			N/A		US$		826
	BANK 2017-BNK7	-	〃		-		US$		818			N/A		US$		818
	Cantor Commercial Real Estate Lending 2019-CF1	-	〃		-		US$		797			N/A		US$		797
	Ford Credit Auto Lease Trust	-	〃		-		US$		790			N/A		US$		790
	Citigroup Commercial Mortgage Trust 2014-GC23	-	〃		-		US$		778			N/A		US$		778
	Citigroup Commercial Mortgage Trust 2015-GC35	-	〃		-		US$		773			N/A		US$		773
	Toyota Auto Receivables 2017-A Owner Trust	-	〃		-		US$		764			N/A		US$		764
	BANK 2019-BNK23	-	〃		-		US$		741			N/A		US$		741
	Morgan Stanley Capital I Trust 2019-H7	-	〃		-		US$		733			N/A		US$		733
	COMM 2013-CCRE8 Mortgage Trust	-	〃		-		US$		716			N/A		US$		716
	Wells Fargo Commercial Mortgage Trust 2015-NXS3	-	〃		-		US$		696			N/A		US$		696
	GM Financial Automobile Leasing Trust 2019-1	-	〃		-		US$		672			N/A		US$		672
	GM Financial Automobile Leasing Trust 2019-3	-	〃		-		US$		655			N/A		US$		655
	COMM 2015-CCRE22 Mortgage Trust	-	〃		-		US$		627			N/A		US$		627
	Mercedes-Benz Auto Lease Trust 2019-A	-	〃		-		US$		617			N/A		US$		617
	GS Mortgage Securities Corp Trust 2020-UPTN	-	〃		-		US$		602			N/A		US$		602
	CD 2016-CD2 Mortgage Trust	-	〃		-		US$		503			N/A		US$		503
	JPMDB Commercial Mortgage Securities Trust 2019-COR6	-	〃		-		US$		500			N/A		US$		500
	JP Morgan Chase Commercial Mortgage Securities Trust 2015-JP1	-	〃		-		US$		492			N/A		US$		492
	Citigroup Commercial Mortgage Trust 2014-GC19	-	〃		-		US$		444			N/A		US$		444
	Chesapeake Funding II LLC	-	〃		-		US$		403			N/A		US$		403
	DBUBS 2011-LC2 Mortgage Trust	-	〃		-		US$		392			N/A		US$		392
	WFRBS Commercial Mortgage Trust 2014-C25	-	〃		-		US$		385			N/A		US$		385
	GS Mortgage Securities Trust 2014-GC26	-	〃		-		US$		383			N/A		US$		383
	UBS-Barclays Commercial Mortgage Trust 2013-C5	-	〃		-		US$		370			N/A		US$		370
	Mercedes-Benz Auto Lease Trust 2018-B	-	〃		-		US$		368			N/A		US$		368
	Morgan Stanley Bank of America Merrill Lynch Trust 2012-C5	-	〃		-		US$		197			N/A		US$		197
	Honda Auto Receivables 2020-2 Owner Trust	-	〃		-		US$		166			N/A		US$		166
	COMM 2015-DC1 Mortgage Trust	-	〃		-		US$		165			N/A		US$		165
	BANK 2020-BNK28	-	〃		-		US$		156			N/A		US$		156
	Toyota Auto Receivables 2018-B Owner Trust	-	〃		-		US$		132			N/A		US$		132
	BBCMS Mortgage Trust 2020-C7	-	〃		-		US$		110			N/A		US$		110
	CFCRE Commercial Mortgage Trust 2011-C1	-	〃		-		US$		73			N/A		US$		73
	COMM 2014-CCRE15 Mortgage Trust	-	〃		-		US$		46			N/A		US$		46
	Wells Fargo Commercial Mortgage Trust 2015-NXS1	-	〃		-		US$		36			N/A		US$		36
	Non-publicly traded equity investments
	Primavera Capital Fund II L.P.	-	Financial assets at fair value through other comprehensive income		-		US$		81,161			4		US$		81,161

(Continued)

- 77 -

 

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	December 31, 2020														Note
				Shares/Units (In Thousands)			Carrying Value (Foreign Currencies in Thousands)				Percentage of Ownership (%)			Fair Value (Foreign Currencies in Thousands)
VTAF II	Non-publicly traded equity investments
	Aether Systems, Inc.	-	Financial assets at fair value through other comprehensive income		1,085		US$		386			20		US$		386
	5V Technologies, Inc.	-	〃		4			-				-			-
	Publicly traded stocks
	Sentelic Corporation	-	Financial assets at fair value through other comprehensive income		1,019		US$		1,778			3		US$		1,778
VTAF III	Non-publicly traded equity investments
	LiquidLeds Lighting Corp.	-	Financial assets at fair value through other comprehensive income		1,952		US$		800			14		US$		800
	Neoconix, Inc.	-	〃		4,147		US$		174			-		US$		174
Growth Fund	Non-publicly traded equity investments
	Innovium, Inc.	-	Financial assets at fair value through other comprehensive income		230		US$		1,863			-		US$		1,863
	Innovium, Inc.	-	〃		221		US$		1,793			-		US$		1,793
	CNEX Labs, Inc.	-	〃		237		US$		479			-		US$		479
	Astera Labs, Inc.	-	〃		127		US$		250			-		US$		250

(Concluded)

- 78 -

 

TABLE 4

Taiwan Semiconductor Manufacturing Company Limited and Investees

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2020

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

Company Name	Marketable Securities Type and Name	Financial Statement Account	Counterparty	Nature of Relationship	Beginning Balance							Acquisition							Disposal															Ending Balance (Note)
					Shares/Units (In Thousands)			Amount				Shares/Units (In Thousands)			Amount				Shares/Units (In Thousands)			Amount				Carrying Value				Gain/Loss on Disposal				Shares/Units (In Thousands)			Amount
TSMC Global	Corporate bond
	Bank of America Corp	Financial assets at fair value through other comprehensive income	-	-		-		US$		46,084			-		US$		35,954			-		US$		25,078		US$		23,852		US$		1,226			-		US$		58,724
	Mitsubishi UFJ Financial Group Inc	〃	-	-		-		US$		21,332			-		US$		16,408			-		US$		3,583		US$		3,565		US$		18			-		US$		34,946
	AbbVie Inc	〃	-	-		-		US$		31,425			-		US$		30,755			-		US$		30,437		US$		30,223		US$		214			-		US$		33,716
	Goldman Sachs Group Inc/The	〃	-	-		-		US$		25,789			-		US$		18,529			-		US$		15,109		US$		14,762		US$		347			-		US$		29,809
	JPMorgan Chase & Co	〃	-	-		-		US$		20,825			-		US$		11,988			-		US$		4,033		US$		4,000		US$		33			-		US$		29,759
	Wells Fargo & Co	〃	-	-		-		US$		11,864			-		US$		17,277			-		US$		4,109		US$		3,956		US$		153			-		US$		26,074
	Metropolitan Life Global Funding I	〃	-	-		-		US$		8,222			-		US$		22,410			-		US$		9,691		US$		9,427		US$		264			-		US$		21,597
	Bristol-Myers Squibb Co	〃	-	-		-		US$		21,666			-		US$		26,225			-		US$		27,630		US$		27,393		US$		237			-		US$		21,090
	Mizuho Financial Group Inc	〃	-	-		-		US$		10,307			-		US$		14,034			-		US$		3,862		US$		3,774		US$		88			-		US$		20,795
	Toyota Motor Credit Corp	〃	-	-		-		US$		-			-		US$		18,775			-		US$		-		US$		-		US$		-			-		US$		19,401
	HSBC Holdings PLC	〃	-	-		-		US$		20,102			-		US$		9,739			-		US$		14,126		US$		13,853		US$		273			-		US$		16,113
	Hyundai Capital America	〃	-	-		-		US$		3,187			-		US$		12,872			-		US$		406		US$		400		US$		6			-		US$		15,983
	Santander UK PLC	〃	-	-		-		US$		8,272			-		US$		11,560			-		US$		4,480		US$		4,322		US$		158			-		US$		15,704
	Volkswagen Group of America Finance LLC	〃	-	-		-		US$		3,896			-		US$		13,134			-		US$		1,777		US$		1,754		US$		23			-		US$		15,417
	National Securities Clearing Corp	〃	-	-		-		US$		-			-		US$		15,211			-		US$		1,473		US$		1,449		US$		24			-		US$		14,129
	Lloyds Banking Group PLC	〃	-	-		-		US$		2,359			-		US$		10,734			-		US$		-		US$		-		US$		-			-		US$		13,428
	AT&T Inc	〃	-	-		-		US$		26,140			-		US$		15,881			-		US$		30,123		US$		28,835		US$		1,288			-		US$		13,180
	Chevron Corp	〃	-	-		-		US$		-			-		US$		13,770			-		US$		1,574		US$		1,530		US$		44			-		US$		12,771
	Royal Bank of Canada	〃	-	-		-		US$		1,004			-		US$		15,844			-		US$		5,082		US$		4,983		US$		99			-		US$		12,271
	Guardian Life Global Funding	〃	-	-		-		US$		1,502			-		US$		10,601			-		US$		-		US$		-		US$		-			-		US$		12,187
	US Bancorp	〃	-	-		-		US$		2,028			-		US$		11,094			-		US$		2,000		US$		1,953		US$		47			-		US$		11,651
	American Honda Finance Corp	〃	-	-		-		US$		-			-		US$		11,210			-		US$		-		US$		-		US$		-			-		US$		11,354
	Amazon.com Inc	〃	-	-		-		US$		1,018			-		US$		10,687			-		US$		1,054		US$		976		US$		78			-		US$		10,846
	TJX Cos Inc/The	〃	-	-		-		US$		-			-		US$		12,500			-		US$		3,429		US$		3,150		US$		279			-		US$		10,563
	Verizon Communications Inc	〃	-	-		-		US$		14,058			-		US$		9,489			-		US$		13,490		US$		12,509		US$		981			-		US$		10,558
	Equinor ASA	〃	-	-		-		US$		-			-		US$		11,811			-		US$		3,052		US$		2,889		US$		163			-		US$		9,635
	Exxon Mobil Corp	〃	-	-		-		US$		-			-		US$		17,331			-		US$		10,272		US$		10,025		US$		247			-		US$		7,576
	CVS Health Corp	〃	-	-		-		US$		22,242			-		US$		4,205			-		US$		21,034		US$		20,205		US$		829			-		US$		5,981
	Fox Corp	〃	-	-		-		US$		7,331			-		US$		10,171			-		US$		12,216		US$		12,059		US$		157			-		US$		5,483
	ERAC USA Finance LLC	〃	-	-		-		US$		11,904			-		US$		3,659			-		US$		11,312		US$		11,159		US$		153			-		US$		4,298
	JPMorgan Chase & Co	〃	-	-		-		US$		7,849			-		US$		7,837			-		US$		11,950		US$		11,819		US$		131			-		US$		3,981
	Hewlett Packard Enterprise Co	〃	-	-		-		US$		10,661			-		US$		3,863			-		US$		11,564		US$		11,142		US$		422			-		US$		3,439
	Walt Disney Co/The	〃	-	-		-		US$		3,246			-		US$		23,391			-		US$		25,026		US$		23,723		US$		1,303			-		US$		3,058
	General Dynamics Corp	〃	-	-		-		US$		6,297			-		US$		9,418			-		US$		15,546		US$		14,412		US$		1,134			-		US$		1,238
	Wells Fargo & Co	Financial assets at amortized cost	-	-		-		US$		160,098			-		US$		20,630			-		US$		-		US$		-		US$		-			-		US$		180,487
	Citigroup Global Market Inc.	〃	-	-		-							-		US$		100,000			-		US$		-		US$		-		US$		-			-		US$		99,965
	JPMorgan Chase & Co.	〃	-	-		-		US$		84,967			-		US$		10,111			-		US$		-		US$		-		US$		-			-		US$		95,058
	Goldman Sachs Group Inc/The	〃	-	-		-							-		US$		14,930			-		US$		-		US$		-		US$		-			-		US$		14,930

(Continued)

- 79 -

 

Company Name	Marketable Securities Type and Name	Financial Statement Account	Counterparty	Nature of Relationship	Beginning Balance							Acquisition							Disposal															Ending Balance (Note)
					Shares/Units (In Thousands)			Amount				Shares/Units (In Thousands)			Amount				Shares/Units (In Thousands)			Amount				Carrying Value				Gain/Loss on Disposal				Shares/Units (In Thousands)			Amount
																																		-
TSMC Global	Government bond																																	-
	United States Treasury Note/Bond	Financial assets at fair value through other comprehensive income	-	-		-		US$		419,942			-		US$		683,985			-		US$		836,067		US$		817,467		US$		18,600			-		US$		287,012
	United States Treasury Note/Bond	〃	-	-		-		US$		-			-		US$		243,371			-		US$		60,688		US$		60,688		US$		-			-		US$		182,533
																																			-
	Agency bonds/Agency mortgage-backed securities																																		-
	Fannie Mae or Freddie Mac	Financial assets at fair value through other comprehensive income	-	-		-		US$		-			-		US$		671,704			-		US$		630,072		US$		628,929		US$		1,143			-		US$		42,872
	Ginnie Mae	〃	-	-		-		US$		-			-		US$		371,076			-		US$		329,867		US$		329,505		US$		362			-		US$		41,775
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		31,529			-		US$		77		US$		81		US$		(4	)		-		US$		31,812
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		31,618			-		US$		-		US$		-		US$		-			-		US$		31,787
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		31,658			-		US$		-		US$		-		US$		-			-		US$		31,756
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		31,057			-		US$		5		US$		5		US$		-			-		US$		31,174
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		30,824			-		US$		2,420		US$		2,406		US$		14			-		US$		28,723
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		28,376			-		US$		-		US$		-		US$		-			-		US$		28,537
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		28,251			-		US$		243		US$		253		US$		(10	)		-		US$		28,188
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		28,496			-		US$		3,626		US$		3,632		US$		(6	)		-		US$		24,963
	FNMA TBA 30 Yr 4	〃	-	-		-		US$		17,372			-		US$		413,102			-		US$		409,695		US$		409,435		US$		260			-		US$		21,036
	Freddie Mac Pool	〃	-	-		-		US$		-			-		US$		26,913			-		US$		6,834		US$		6,806		US$		28			-		US$		20,247
	FNMA TBA 30 Yr 3.5	〃	-	-		-		US$		9,259			-		US$		538,814			-		US$		528,608		US$		528,389		US$		219			-		US$		19,673
	GNMA II TBA 30 Yr 3.5	〃	-	-		-		US$		10,517			-		US$		405,941			-		US$		397,904		US$		397,624		US$		280			-		US$		18,900
	Ginnie Mae	〃	-	-		-		US$		-			-		US$		150,623			-		US$		132,937		US$		132,781		US$		156			-		US$		17,896
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		18,793			-		US$		1,872		US$		1,994		US$		(122	)		-		US$		17,503
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		17,435			-		US$		-		US$		-		US$		-			-		US$		17,474
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		16,176			-		US$		209		US$		220		US$		(11	)		-		US$		15,890
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		15,207			-		US$		917		US$		959		US$		(42	)		-		US$		14,294
	GNMA II TBA 30 Yr 3	〃	-	-		-		US$		15,095			-		US$		546,063			-		US$		547,550		US$		546,840		US$		710			-		US$		14,249
	Freddie Mac	〃	-	-		-		US$		696			-		US$		15,872			-		US$		2,926		US$		3,119		US$		(193	)		-		US$		13,631
	Freddie Mac Gold Pool	〃	-	-		-		US$		-			-		US$		12,610			-		US$		2,904		US$		3,043		US$		(139	)		-		US$		9,723
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		17,468			-		US$		8,915		US$		8,946		US$		(31	)		-		US$		8,515
	FNMA TBA 30 Yr 4.5	〃	-	-		-		US$		20,165			-		US$		369,946			-		US$		382,027		US$		381,698		US$		329			-		US$		8,394
	Fannie Mae or Freddie Mac	〃	-	-		-		US$		987			-		US$		207,006			-		US$		202,126		US$		201,841		US$		285			-		US$		6,155
	GNMA II TBA 30 Yr 4.5	〃	-	-		-		US$		7,496			-		US$		56,467			-		US$		58,653		US$		58,590		US$		63			-		US$		5,381
	Fannie Mae or Freddie Mac	〃	-	-		-		US$		-			-		US$		13,115			-		US$		8,732		US$		8,752		US$		(20	)		-		US$		4,377
	Fannie Mae or Freddie Mac	〃	-	-		-		US$		-			-		US$		28,040			-		US$		24,518		US$		24,461		US$		57			-		US$		3,592
	Fannie Mae or Freddie Mac	〃	-	-		-		US$		-			-		US$		720,211			-		US$		718,892		US$		716,978		US$		1,914			-		US$		3,253
	GNMA II TBA 30 Yr 4	〃	-	-		-		US$		-			-		US$		36,042			-		US$		35,090		US$		34,978		US$		112			-		US$		1,067
	Fannie Mae or Freddie Mac	〃	-	-		-		US$		-			-		US$		25,440			-		US$		24,718		US$		24,658		US$		60			-		US$		782
	Fannie Mae Pool	〃	-	-		-		US$		16,230			-		US$		-			-		US$		16,413		US$		16,148		US$		265			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		11,962			-		US$		-			-		US$		12,079		US$		11,900		US$		179			-		US$		-
	Freddie Mac Gold Pool	〃	-	-		-		US$		19,392			-		US$		-			-		US$		19,677		US$		19,135		US$		542			-		US$		-
	Freddie Mac Pool	〃	-	-		-		US$		-			-		US$		30,881			-		US$		30,624		US$		30,845		US$		(221	)		-		US$		-
	Freddie Mac Pool	〃	-	-		-		US$		-			-		US$		11,321			-		US$		11,441		US$		11,320		US$		121			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		29,463			-		US$		-			-		US$		29,873		US$		29,355		US$		518			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		13,261			-		US$		-			-		US$		12,741		US$		12,622		US$		119			-		US$		-
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		29,498			-		US$		29,527		US$		29,476		US$		51			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		40,438			-		US$		-			-		US$		40,787		US$		40,399		US$		388			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		42,143			-		US$		42,162		US$		42,119		US$		43			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		22,677			-		US$		-			-		US$		23,181		US$		22,349		US$		832			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		12,810			-		US$		12,807		US$		12,809		US$		(2	)		-		US$		-
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		19,016			-		US$		18,664		US$		19,009		US$		(345	)		-		US$		-

(Continued)

- 80 -

 

Company Name	Marketable Securities Type and Name	Financial Statement Account	Counterparty	Nature of Relationship	Beginning Balance							Acquisition							Disposal															Ending Balance (Note)
					Shares/Units (In Thousands)			Amount				Shares/Units (In Thousands)			Amount				Shares/Units (In Thousands)			Amount				Carrying Value				Gain/Loss on Disposal				Shares/Units (In Thousands)			Amount
TSMC Global	Fannie Mae Pool	Financial assets at fair value through other comprehensive income	-	-		-		US$		-			-		US$		27,694			-		US$		27,598		US$		27,659		US$		(61	)		-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		26,299			-		US$		27,107		US$		26,265		US$		842			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		43,455			-		US$		-			-		US$		43,789		US$		43,333		US$		456			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		6,072			-		US$		4,451			-		US$		10,551		US$		10,512		US$		39			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		16,122			-		US$		-			-		US$		16,194		US$		16,095		US$		99			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		28,876			-		US$		28,743		US$		28,875		US$		(132	)		-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		25,431			-		US$		26,008		US$		25,393		US$		615			-		US$		-
	Freddie Mac Pool	〃	-	-		-		US$		-			-		US$		30,971			-		US$		31,136		US$		30,964		US$		172			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		11,248			-		US$		-			-		US$		11,350		US$		11,003		US$		347			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		19,901			-		US$		-			-		US$		20,081		US$		19,418		US$		663			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		40,590			-		US$		41,110		US$		40,555		US$		555			-		US$		-
	Freddie Mac Pool	〃	-	-		-		US$		-			-		US$		13,065			-		US$		13,073		US$		13,044		US$		29			-		US$		-
	Freddie Mac Pool	〃	-	-		-		US$		-			-		US$		12,107			-		US$		12,146		US$		12,080		US$		66			-		US$		-
	Freddie Mac Pool	〃	-	-		-		US$		12,628			-		US$		-			-		US$		12,111		US$		11,994		US$		117			-		US$		-
	FNMA TBA 30 Yr 5	〃	-	-		-		US$		3,603			-		US$		62,210			-		US$		65,896		US$		65,813		US$		83			-		US$		-
	Ginnie Mae	〃	-	-		-		US$		-			-		US$		17,223			-		US$		17,315		US$		17,223		US$		92			-		US$		-
	FNMA TBA 30 Yr 3	〃	-	-		-		US$		2,028			-		US$		721,017			-		US$		723,739		US$		722,965		US$		774			-		US$		-
	FNMA TBA 15 Yr 3	〃	-	-		-		US$		3,073			-		US$		9,656			-		US$		12,739		US$		12,724		US$		15			-		US$		-
	Freddie Mac Pool	〃	-	-		-		US$		-			-		US$		19,031			-		US$		19,456		US$		19,002		US$		454			-		US$		-
	Freddie Mac Gold Pool	〃	-	-		-		US$		12,480			-		US$		-			-		US$		12,551		US$		12,132		US$		419			-		US$		-
	Ginnie Mae II Pool	〃	-	-		-		US$		513			-		US$		13,356			-		US$		13,853		US$		13,849		US$		4			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		35,024			-		US$		35,439		US$		34,994		US$		445			-		US$		-
	Ginnie Mae II Pool	〃	-	-		-		US$		-			-		US$		12,270			-		US$		12,345		US$		12,262		US$		83			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		12,751			-		US$		12,782		US$		12,731		US$		51			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		31,593			-		US$		31,900		US$		31,554		US$		346			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		16,331			-		US$		16,375		US$		16,327		US$		48			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		49,131			-		US$		48,934		US$		49,083		US$		(149	)		-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		6,284			-		US$		7,821			-		US$		14,163		US$		14,070		US$		93			-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		30,870			-		US$		30,603		US$		30,863		US$		(260	)		-		US$		-
	GNMA II Pool MA6090	〃	-	-		-		US$		16,840			-		US$		-			-		US$		17,140		US$		16,943		US$		197			-		US$		-
	GNMA II Pool MA6155	〃	-	-		-		US$		23,932			-		US$		-			-		US$		23,946		US$		24,029		US$		(83	)		-		US$		-
	Ginnie Mae II Pool	〃	-	-		-		US$		5,285			-		US$		16,418			-		US$		21,492		US$		21,683		US$		(191	)		-		US$		-
	Fannie Mae Pool	〃	-	-		-		US$		-			-		US$		19,011			-		US$		19,004		US$		19,004		US$		-			-		US$		-

Note: The ending balance includes the amortization of premium/discount on bonds investments and other related adjustment.

(Concluded)

- 81 -

 

TABLE 5

Taiwan Semiconductor Manufacturing Company Limited and Investees

ACQUISITION OF INDIVIDUAL REAL ESTATE PROPERTIES AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2020

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

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

TSMC

Fab construction & installation of fab facilities

February 11, 2020 (Note 1)

$

47,500,000 (Note 1

)

Based on the terms in the purchase order

80 counterparties (Note 1), including：

-

N/A

N/A

N/A

N/A

Price comparison and price negotiation

Manufacturing purpose

None

ABB Ltd.

Accudevice Co., Ltd.

Air Liquide Far Eastern Ltd.

Allis Electric Co., Ltd.

Am-Power Machine International Enterprise Co., Ltd.

Atlas Copco Taiwan Ltd.

Atlas Technology Corp.

Capital Machinery Limited

Chen Yuan International Co., Ltd.

Chenfull International Co., Ltd.

Cheng Deh Fire Protection Industrial Corp.

China Steel Structure Co., Ltd.

Chun Yuan Steel Industry Co., Ltd.

Cica-Huntek Chemical Technology Taiwan Co., Ltd.

Confederate Technology Co., Ltd.

Da-Cin Construction Co., Ltd.

Desiccant Technology Corporation

EDS International

Evergreen Steel Corporation

Exyte Taiwan Co., Ltd.

Fortune Electric Co., Ltd.

(Continued)

- 82 -

 

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

TSMC

Fab construction & installation of fab facilities

Fu Tsu Construction Co., Ltd.

Hantech Engineering Co., Ltd.

Hsieh Kun Co., Ltd.

Hueng Luei Process Industry Co., Ltd.

Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore)

J.C. Yang Architect and Associates

JG Environmental Technology Co., Ltd.

JJmr-Clean-Air Solution Tech.Services Co., Ltd.

Jusun Instruments Co., Ltd.

Kedge Construction Co., Ltd.

Kinetics Technology Corporation

L&K Engineering Co., Ltd.

Lead-Fu Industrials Corporation

Mandartech Interiors Inc.

Marketech International Corp.

Mega Union Technology Incorporated

Organo Technology Co., Ltd.

Ovivo Taiwan Co., Ltd.

Pan Asia (Engineers & Constructors) Corporation

San Fu Chemical Co., Ltd.

Schneider Electric Taiwan Co., Ltd.

Shihlin Electric & Engineering Corporation

Siemens Limited

Solomon Technology Corporation

Swift Engineering Co., Ltd.

Taiwan Gleno Enterprise Co., Ltd.

Taiwan Puritic Corp.

TASA Construction Corporation

Techgo Industrial Co., Ltd.

Trusval Technology Co., Ltd.

(Continued)

- 83 -

 

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

TSMC

Fab construction & installation of fab facilities

Tung Kang Steel Structure Corp.

Uangyih-Tech Industrial Co., Ltd.

Unelectra International Corp.

United Integrated Services Co., Ltd.

Versum Materials Taiwan Co., Ltd.

Weltall Technology Corporation

Wholetech System Hitech Limited

Yang Lung-Shih Architect & Associates

Yangtech Engineering Co., Ltd.

Yankey Engineering Co., Ltd.

Ying Pao Technology Inc.

Zhao-Cheng Corp.

Fab construction & installation of fab facilities

May 12, 2020 (Note 1)

$

66,600,000 (Note 1

)

Based on the terms in the purchase order

84 counterparties (Note 1), including：

-

N/A

N/A

N/A

N/A

Price comparison and price negotiation

Manufacturing purpose

None

ABB Ltd.

Accudevice Co., Ltd.

Air Liquide Far Eastern Ltd.

Allis Electric Co., Ltd.

Am-Power Machine International Enterprise Co., Ltd.

Atlas Copco Taiwan Ltd.

Atlas Technology Corp.

Capital Machinery Limited

Chen Yuan International Co., Ltd.

Chenfull International Co., Ltd.

Cheng Deh Fire Protection Industrial Corp.

Chien Kuo Construction Co., Ltd.

China Steel Structure Co., Ltd.

Chun Yuan Steel Industry Co., Ltd.

Chung-Lin General Contractors, Ltd.

(Continued)

- 84 -

 

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

TSMC

Fab construction & installation of fab facilities

Cica-Huntek Chemical Technology Taiwan Co., Ltd.

Confederate Technology Co., Ltd.

Da-Cin Construction Co., Ltd.

Desiccant Technology Corporation

Evergreen Steel Corporation

Exyte Taiwan Co., Ltd.

Fortune Electric Co., Ltd.

Fu Tsu Construction Co., Ltd.

Hantech Engineering Co., Ltd.

Hsieh Kun Co., Ltd.

Hueng Luei Process Industry Co., Ltd.

Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore)

J.C. Yang Architect and Associates

JG Environmental Technology Co., Ltd.

JJmr-Clean-Air Solution Tech.Services Co., Ltd.

Jusun Instruments Co., Ltd.

Kedge Construction Co., Ltd.

Kinetics Technology Corporation

L&K Engineering Co., Ltd.

Lead-Fu Industrials Corporation

Lee Ming Construction Co., Ltd.

Li Jin Engineering Co., Ltd.

Mandartech Interiors Inc.

Marketech International Corp.

Mega Union Technology Incorporated

Obayashi Corporation

Organo Technology Co., Ltd.

Ovivo Taiwan Co., Ltd.

(Continued)

- 85 -

 

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

TSMC

Fab construction & installation of fab facilities

Pan Asia (Engineers & Constructors) Corporation

San Fu Chemical Co., Ltd.

San Min Construction Development

Schneider Electric Taiwan Co., Ltd.

Shihlin Electric & Engineering Corporation

Siemens Limited

Solomon Technology Corporation

Swift Engineering Co., Ltd.

Taiwan Gleno Enterprise Co., Ltd.

Taiwan Puritic Corp.

TASA Construction Corporation

Techgo Industrial Co., Ltd.

Trusval Technology Co., Ltd.

Tung Kang Steel Structure Corp.

Uangyih-Tech Industrial Co., Ltd.

Unelectra International Corp.

United Integrated Services Co., Ltd.

Versum Materials Taiwan Co., Ltd.

Weltall Technology Corporation

Wholetech System Hitech Limited

Yangtech Engineering Co., Ltd.

Yankey Engineering Co., Ltd.

Ying Pao Technology Inc.

Zhao-Cheng Corp.

TSMC

Fab construction & installation of fab facilities

August 11, 2020 (Note 2)

$

57,700,000 (Note 2

)

Based on the terms in the purchase order

102 counterparties (Note 2), including:

-

N/A

N/A

N/A

N/A

Price comparison and price negotiation

Manufacturing purpose

None

ABB Ltd.

Accudevice Co., Ltd.

Air Liquide Far Eastern Ltd.

Allis Electric Co., Ltd.

(Continued)

- 86 -

 

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

TSMC

Fab construction & installation of fab facilities

Am-Power Machine International Enterprise Co., Ltd.

Atlas Copco Taiwan Ltd.

Atlas Technology Corp.

Capital Machinery Limited

Chen Yuan International Co., Ltd.

Chenfull International Co., Ltd.

Cheng Deh Fire Protection Industrial Corp.

Chien Kuo Construction Co., Ltd.

China Steel Structure Co., Ltd.

Chun Yuan Steel Industry Co., Ltd.

Chung-Lin General Contractors, Ltd.

Cica-Huntek Chemical Technology Taiwan Co., Ltd.

Confederate Technology Co., Ltd.

Da-Cin Construction Co., Ltd.

Desiccant Technology Corporation

Evergreen Steel Corporation

Exyte Taiwan Co., Ltd.

Fortune Electric Co., Ltd.

Fu Tsu Construction Co., Ltd.

Hantech Engineering Co., Ltd.

Hsieh Kun Co., Ltd.

Hueng Luei Process Industry Co., Ltd.

Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore)

J.C. Yang Architect and Associates

JG Environmental Technology Co., Ltd.

JJmr-Clean-Air Solution Tech.Services Co., Ltd.

(Continued)

- 87 -

 

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

TSMC

Fab construction & installation of fab facilities

Jusun Instruments Co., Ltd.

Kedge Construction Co., Ltd.

Kinetics Technology Corporation

L&K Engineering Co., Ltd.

Lead-Fu Industrials Corporation

Lee Ming Construction Co., Ltd.

Li Jin Engineering Co., Ltd.

Mandartech Interiors Inc.

Marketech International Corp.

Mega Union Technology Incorporated

Obayashi Corporation

Optimax Technology Corporation

Organo Technology Co., Ltd.

Ovivo Taiwan Co., Ltd.

Pan Asia (Engineers & Constructors) Corporation

San Fu Chemical Co., Ltd.

San Min Construction Development

Schneider Electric Taiwan Co., Ltd.

Shihlin Electric & Engineering Corporation

Siemens Limited

Solomon Technology Corporation

Swift Engineering Co., Ltd.

Taiwan Gleno Enterprise Co., Ltd.

Taiwan Puritic Corp.

TASA Construction Corporation

Techgo Industrial Co., Ltd.

Trusval Technology Co., Ltd.

Tung Kang Steel Structure Corp.

Uangyih-Tech Industrial Co., Ltd.

Unelectra International Corp.

United Integrated Services Co., Ltd.

(Continued)

- 88 -

 

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

TSMC

Fab construction & installation of fab facilities

Versum Materials Taiwan Co., Ltd.

Weltall Technology Corporation

Wholetech System Hitech Limited

Yangtech Engineering Co., Ltd.

Yankey Engineering Co., Ltd.

Ying Pao Technology Inc.

Zhao-Cheng Corp.

TSMC

Buildings and facilities

August 20, 2020

$

860,000

Based on the terms in the purchase order

E-Ton Solar Tech Co., LTD

-

N/A

N/A

N/A

N/A

Price comparison and price negotiation

Manufacturing purpose

None

Real estate

November 10, 2020 (Note 2)

229,600,000 (Note 2

)

Based on the terms in the purchase order

99 counterparties (Note2), including：

-

N/A

N/A

N/A

N/A

Price comparison and price negotiation

Manufacturing purpose

None

ABB Ltd.

Accudevice Co., Ltd.

Air Liquide Far Eastern Ltd.

Allis Electric Co., Ltd.

Am-Power Machine International Enterprise Co., Ltd.

Arizona State Land Department

Atlas Copco Taiwan Ltd.

Atlas Technology Corp.

Capital Machinery Limited

Central Taiwan Science Park Bureau, Ministry of Science and Technology

Chen Yuan International Co., Ltd.

Chenfull International Co., Ltd.

Cheng Deh Fire Protection Industrial Corp.

Chien Kuo Construction Co., Ltd.

China Steel Structure Co., Ltd.

Chun Yuan Steel Industry Co., Ltd.

Chung-Lin General Contractors, Ltd.

(Continued)

- 89 -

 

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

TSMC

Real estate

Cica-Huntek Chemical Technology Taiwan Co., Ltd.

Confederate Technology Co., Ltd.

Da-Cin Construction Co., Ltd.

Desiccant Technology Corporation

Evergreen Steel Corporation

Exyte Taiwan Co., Ltd.

Fortune Electric Co., Ltd.

Fu Tsu Construction Co., Ltd.

Hantech Engineering Co., Ltd.

-

N/A

N/A

N/A

N/A

Price comparison and price negotiation

Manufacturing purpose

None

Hsieh Kun Co., Ltd.

Hueng Luei Process Industry Co., Ltd.

Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore)

J.C. Yang Architect and Associates

JG Environmental Technology Co., Ltd.

JJmr-Clean-Air Solution Tech.Services Co., Ltd.

Jusun Instruments Co., Ltd.

Kedge Construction Co., Ltd.

Kinetics Technology Corporation

L&K Engineering Co., Ltd.

Lead-Fu Industrials Corporation

Lee Ming Construction Co., Ltd.

Li Jin Engineering Co., Ltd.

Mandartech Interiors Inc.

Marketech International Corp.

Mega Union Technology Incorporated

Organo Technology Co., Ltd.

Ovivo Taiwan Co., Ltd.

Pan Asia (Engineers & Constructors) Corporation

San Fu Chemical Co., Ltd.

(Continued)

- 90 -

 

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

TSMC

Real estate

Schneider Electric Taiwan Co., Ltd.

Shihlin Electric & Engineering Corporation

Siemens Limited

Solomon Technology Corporation

Southern Taiwan Science Park Bureau, Ministry of Science and Technology

Swift Engineering Co., Ltd.

Taiwan Gleno Enterprise Co., Ltd.

Taiwan Obayashi Corporation

Taiwan Puritic Corp.

TASA Construction Corporation

Techgo Industrial Co., Ltd.

Trusval Technology Co., Ltd.

Tung Kang Steel Structure Corp.

Uangyih-Tech Industrial Co., Ltd.

Unelectra International Corp.

United Integrated Services Co., Ltd.

Versum Materials Taiwan Co., Ltd.

Weltall Technology Corporation

Wholetech System Hitech Limited

Yangtech Engineering Co., Ltd.

Yankey Engineering Co., Ltd.

Ying Pao Technology Inc.

Zhao-Cheng Corp.

VisEra

Fab construction & installation of fab facilities

July 17, 2020

$

1,680,000

Based on the terms in the purchase order

Li Jin Engineering Co., Ltd.

-

N/A

N/A

N/A

N/A

Price comparison and price negotiation

Manufacturing purpose

None

(Continued)

- 91 -

 

Company Name

Types of Property

Transaction Date

Transaction Amount (Foreign Currencies in Thousands)

Payment Term

Counter-party

Nature of Relationships

Prior Transaction of Related Counter-party

Price Reference

Purpose of Acquisition

Other Terms

Owner

Relationships

Transfer Date

Amount

VisEra

Fab construction & installation of fab facilities

December 7, 2020

$

1,930,000

Based on the terms in the purchase order

Acter Group Corporation Limited

-

N/A

N/A

N/A

N/A

Price comparison and price

Manufacturing purpose

None

Note 1: The disclosures are expected information based on the capital appropriation approved by the Board of Directors.  The actual information shall be subject to the final purchase order of TSMC.

Note 2: The disclosures are expected information based on the capital appropriation approved by the Board of Directors (Right-of-use assets are included).  The actual information shall be subject to the final purchase order of TSMC.

(Concluded)

- 92 -

 

TABLE 6

Taiwan Semiconductor Manufacturing Company Limited and Investees

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

FOR THE YEAR ENDED DECEMBER 31, 2020

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

Company Name	Related Party	Nature of Relationships	Transaction Details										Abnormal Transaction				Notes/Accounts Payable or Receivable								Note
			Purchases/ Sales	Amount (Foreign Currencies in Thousands)					% to Total			Payment Terms	Unit Price			Payment Terms	Ending Balance (Foreign Currencies in Thousands)					% to Total
TSMC	TSMC North America	Subsidiary	Sales	$		824,139,751				61		Net 30 days from invoice date (Note)		-		(Note)	$		101,467,381				74
	GUC	Associate	Sales		5,607,239					-		Net 30 days from the end of the month of when invoice is issued		-		-		313,064					-
	TSMC China	Subsidiary	Purchases		19,971,901					19		Net 30 days from the end of the month of when invoice is issued		-		-		(1,643,070			)		4
	TSMC Nanjing	Subsidiary	Purchases		16,933,672					16		Net 30 days from the end of the month of when invoice is issued		-		-		(1,889,906			)		4
	WaferTech	Indirect subsidiary	Purchases		8,015,129					7		Net 30 days from the end of the month of when invoice is issued		-		-		(697,756			)		2
	SSMC	Associate	Purchases		4,110,449					4		Net 30 days from the end of the month of when invoice is issued		-		-		(400,765			)		1
	VIS	Associate	Purchases		3,494,631					3		Net 30 days from the end of the month of when invoice is issued		-		-		(311,406			)		1
TSMC North America	GUC	Associate of TSMC	Sales		1,572,476					-		Net 30 days from invoice date		-		-		57,354					-
				(US$			53,406	)									(US$			2,041	)
VisEra Tech	Xintec	Associate of TSMC	Sales		898,091					13		Net 30 days from the end of the month of when invoice is issued		-		-		187,488					20

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

- 93 -

 

TABLE 7

Taiwan Semiconductor Manufacturing Company Limited and Investees

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

DECEMBER 31, 2020

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

Company Name	Related Party	Nature of Relationships	Ending Balance (Foreign Currencies in Thousands)					Turnover Days (Note 1)	Overdue					Amounts Received in Subsequent Period				Allowance for Bad Debts
									Amount				Action Taken
TSMC	TSMC North America	Subsidiary	$		102,858,283			41	$		-		-	$		-		$		-
	TSMC Nanjing	Subsidiary		203,209				Note 2		-			-		-				-
	GUC	Associate		313,064				25		-			-		-				-
TSMC China	TSMC Nanjing	The same parent company		20,710,244				Note 2		-			-		-				-
			(RMB			4,820,484	)
	TSMC	Parent company		1,643,070				28		-			-		-				-
			(RMB			382,438	)
TSMC Nanjing	TSMC	Parent company		1,889,906				34		-			-		-				-
			(RMB			439,891	)
VisEra Tech	Xintec	Associate of TSMC		187,488				31		-			-		-				-
TSMC Technology	TSMC	The ultimate parent of the Company	(US$			444,021 15,803	)	Note 2		-			-		-				-
WaferTech	TSMC	The ultimate parent of the Company	(US$			697,756 24,834	)	41		-			-		-				-
	TSMC Development	Parent company		103,033				Note 2		-			-		-				-
			(US$			3,667	)

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

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

- 94 -

 

TABLE 8

Taiwan Semiconductor Manufacturing Company Limited and Investees

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

FOR THE YEAR ENDED DECEMBER 31, 2020

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

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount										Balance as of December 31, 2020											Net Income (Losses) of the Investee (Foreign Currencies in Thousands)					Share of Profits/Losses of Investee (Note 1) (Foreign Currencies in Thousands)				Note
				December 31, 2020 (Foreign Currencies in Thousands)					December 31, 2019 (Foreign Currencies in Thousands)					Shares (In Thousands)			Percentage of Ownership			Carrying Value (Foreign Currencies in Thousands)
TSMC	TSMC Global	Tortola, British Virgin Islands	Investment activities	$		355,162,309			$		355,162,309				11			100		$		382,229,039			$		7,668,014			$		7,668,014		Subsidiary
	TSMC Partners	Tortola, British Virgin Islands	Investing in companies involved in the design, manufacture, and other related business in the semiconductor industry and other investment activities		31,456,130					31,456,130					988,268			100			52,649,936					2,273,717					2,273,717			Subsidiary
	VIS	Hsin-Chu, Taiwan	Manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks		10,180,677					10,180,677					464,223			28			9,029,890					6,305,519					1,780,829			Associate
	VisEra Tech	Hsin-Chu, Taiwan	Engaged in manufacturing electronic spare parts and in researching, developing, designing, manufacturing, selling, packaging and testing of color filter		5,005,171					5,005,171					253,120			87			6,363,099					2,090,545					1,817,520			Subsidiary
	SSMC	Singapore	Manufacturing and selling of integrated circuits and other semiconductor devices		5,120,028					5,120,028					314			39			5,900,245					2,106,093					816,954			Associate
	TSMC North America	San Jose, California, U.S.A	Selling and marketing of integrated circuits and other semiconductor devices		333,718					333,718					11,000			100			4,568,059					294,316					294,316			Subsidiary
	Xintec	Taoyuan, Taiwan	Wafer level chip size packaging and wafer level post passivation interconnection service		1,988,317					1,988,317					111,282			41			2,554,123					1,727,445					709,125			Associate
	GUC	Hsin-Chu, Taiwan	Researching, developing, manufacturing, testing and marketing of integrated circuits		386,568					386,568					46,688			35			1,328,620					850,007					296,142			Associate
	TSMC Arizona	Phoenix, Arizona, U.S.A.	Manufacturing, selling and testing of integrated circuits and other semiconductor devices		855,599					-					30			100			842,745					(196			)		(196		)	Subsidiary
	TSMC Europe	Amsterdam, the Netherlands	Customer service and supporting activities		15,749					15,749					-			100			537,737					60,142					60,142			Subsidiary
	TSMC JDC	Yokohama, Japan	Engineering support activities		302,560					-					11			100			292,266					(8,070			)		(8,070		)	Subsidiary
	VTAF III	Cayman Islands	Investing in new start-up technology companies		1,318,846					1,318,846					-			98			214,881					(14,453			)		(14,163		)	Subsidiary
	TSMC Japan	Yokohama, Japan	Customer service and supporting activities		83,760					83,760					6			100			144,784					3,361					3,361			Subsidiary
	VTAF II	Cayman Islands	Investing in new start-up technology companies		260,300					260,300					-			98			82,441					(2,066			)		(2,024		)	Subsidiary
	TSMC Korea	Seoul, Korea	Customer service and supporting activities		13,656					13,656					80			100			42,395					1,598					1,598			Subsidiary
TSMC Partners	TSMC Development	Delaware, U.S.A	Investing in companies involved in the manufacturing related business in the semiconductor industry	(US$			16,491,220 586,939	)	(US$			16,491,220 586,939	)		-			100		(US$			29,493,929 1,049,718	)	(US$			1,626,764 55,150	)		Note2			Subsidiary
	TSMC Technology	Delaware, U.S.A	Engineering support activities		401,282					401,282					-			100			769,414					147,271					Note2			Subsidiary
				(US$			14,282	)	(US$			14,282	)							(US$			27,384	)	(US$			5,024	)
	TSMC Canada	Ontario, Canada	Engineering support activities		64,623					64,623					2,300			100			256,777					27,379					Note2			Subsidiary
				(US$			2,300	)	(US$			2,300	)							(US$			9,139	)	(US$			923	)
VTAF III	Growth Fund	Cayman Islands	Investing in new start-up technology companies		70,348					70,348					-			100			123,940					(1,280			)		Note2			Subsidiary
				(US$			2,504	)	(US$			2,504	)							(US$			4,411	)	(US$			(43	))
	Mutual-Pak	New Taipei, Taiwan	Manufacturing of electronic parts, wholesaling and retailing of electronic materials, and researching, developing and testing of RFID	(US$			44,768 1,593	)	(US$			44,768 1,593	)		4,693			28		(US$			28,183 1,003	)	(US$			(36,461 (1,209	) ))		Note2			Associate
TSMC Development	WaferTech	Washington, U.S.A	Manufacturing, selling and testing of integrated circuits and other semiconductor devices		-					-					293,637			100		(US$			4,610,909 164,107	)	(US$			1,394,261 47,293	)		Note2			Subsidiary

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

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

- 95 -

 

TABLE 9

Taiwan Semiconductor Manufacturing Company Limited and Investees

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR YEAR ENDED DECEMBER 31, 2020

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

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital (RMB in Thousands)				Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2020 (US$ in Thousands)				Investment Flows								Accumulated Outflow of Investment from Taiwan as of December 31, 2020 (US$ in Thousands)				Net Income (Losses) of the Investee Company				Percentage of Ownership			Share of Profits/Losses					Carrying Amount as of December 31, 2020				Accumulated Inward Remittance of Earnings as of December 31, 2020
											Outflow (US$ in Thousands)				Inflow
TSMC China	Manufacturing, selling, testing and computer-aided design of integrated circuits and other semiconductor devices	$ (RMB		18,939,667 4,502,080	)	Note 1	$ (US$		18,939,667 596,000	)	$		-		$		-		$ (US$		18,939,667 596,000	)	$		7,200,634			100%		$			6,999,772 (Note2	)	$		64,243,766		$		-
TSMC Nanjing	Manufacturing, selling, testing and computer-aided design of integrated circuits and other semiconductor devices	(RMB		30,521,412 6,650,119	)	Note 1	(US$		30,521,412 1,000,000	)		-				-			(US$		30,521,412 1,000,000	)		12,143,866				100%				12,205,157 (Note2		)		33,573,482				-

Accumulated Investment in Mainland China as of December 31, 2020 (US$ in Thousands)				Investment Amounts Authorized by Investment Commission, MOEA (US$ in Thousands)				Upper Limit on Investment
$ (US$		49,461,079 1,596,000	)	$ (US$		119,412,667 3,596,000	)	$		1,110,373,199 (Note 3	)

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

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

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

- 96 -

 

TABLE 10

Taiwan Semiconductor Manufacturing Company Limited

INFORMATION ON MAJOR SHAREHOLDERS

DECEMBER 31, 2020

Shareholders (Note)	Shares
	Total Shares Owned			Ownership Percentage
ADR-Taiwan Semiconductor Manufacturing Company, Ltd.		5,321,819,398			20.52%
National Development Fund, Executive Yuan		1,653,709,980			6.38%

Note: Major shareholders shows the list of all shareholders with ownership of 5 percent or greater.

- 97 -

 

THE CONTENTS OF STATEMENTS OF major
accountING ITEMS

item		statement INDEX
Major Accounting Items in Assets, Liabilities and Equity
Statement of Cash and Cash Equivalents		1
Statement of Notes and Accounts Receivable, Net		2
Statement of Receivables from Related Parties		3
Statement of Inventories		4
Statement of Changes in Investments Accounted for Using Equity Method		5
Statement of Changes in Property, Plant and Equipment		Note 12
Statement of Changes in Accumulated Depreciation and Accumulated Impairment of Property, Plant and Equipment		Note 12
STATEMENT OF Changes in RIGHT-OF-USE ASSETS		6
Statement of Changes in Intangible Assets		Note 14
Statement of Guarantee deposits		Note 18
Statement of Deferred Income Tax Assets / LIABILITIES		Note 24
Statement of Short-term Loans		7
STATEMENT OF ACCOUNTS PAYABLES		8
Statement of Payables to Related Parties		9
Statement of Payables to Contractors and Equipment Suppliers		10
STATEMENT OF LEASE LIABILITIES		11
Statement of Accrued Expenses and Other Current Liabilities		12
Statement of Bonds Payable		13
Major Accounting Items in Profit or Loss
Statement of net revEnue		14
Statement of Cost of revEnue		15
Statement of Operating Expenses		16
Statement of Finance Costs		Note 22
Statement of Labor, Depreciation and Amortization by function		17

- 98 -

 

STATEMENT 1

Taiwan Semiconductor Manufacturing Company Limited

Statement of Cash and cash Equivalents

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item		Description		Amount
Cash
Petty cash				$		400
Cash in banks
Checking accounts and demand deposits					29,250,907
Foreign currency deposits		Including US$1,058,998 thousand @28.097, JPY33,254,815 thousand @0.2729 and EUR10,148 thousand @34.587			39,180,918
Time deposits		From 2020.09.03 to 2021.12.25, interest rates at 0.00%-0.80%, including NT$205,907,397 thousand, US$550,023 thousand @28.097 and JPY49,000,000 thousand @0.2729			234,733,492
Total				$		303,165,717

- 99 -

 

STATEMENT 2

Taiwan Semiconductor Manufacturing Company Limited

Statement of Notes and Accounts Receivable, Net

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Client Name		Amount
Client A		$		7,081,325
Client B			3,122,124
Client C			3,032,759
Client D			2,773,917
Others (Note)			18,844,700
			34,854,825
Less: Loss allowance			(243,710		)
Total		$		34,611,115

Note: The amount of individual client included in others does not exceed 5% of the account balance.

- 100 -

 

STATEMENT 3

Taiwan Semiconductor Manufacturing Company Limited

Statement of Receivables from Related Parties

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Client Name		Amount
TSMC North America		$		101,467,381
Others (Note)			313,793
Total		$		101,781,174

Note: The amount of individual client included in others does not exceed 5% of the account balance.

- 101 -

 

STATEMENT 4

Taiwan Semiconductor Manufacturing Company Limited

Statement of Inventories

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

		Amount
Item		Cost					Net Realizable Value
Finished goods		$		21,338,980			$		50,098,692
Work in process			88,575,222					350,472,186
Raw materials			13,758,417					12,962,429
Supplies and spare parts			6,625,417					6,759,866
Total		$		130,298,036			$		420,293,173

- 102 -

 

STATEMENT 5

Taiwan Semiconductor Manufacturing Company Limited

Statement of Changes in Investments Accounted for Using Equity Method

FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

																													Increase
																													(Decrease)
																													in Using the																		Market Value or
		Balance, January 1, 2020									Additions in Investment									Decrease in Investment									Equity Method					Balance, December 31, 2020													Net Assets Value
		Shares									Shares									Shares									Amount					Shares													Unit Price
Investees		(In Thousands)				Amount					(In Thousands)				Amount					(In Thousands)				Amount					(Note 2)					(In Thousands)				%				Amount					(NT$)					Total Amount					Collateral
Stocks
TSMC Global			11			$		397,737,270				-			$		-				-			$		-			$		(15,508,231	)			11				100			$		382,229,039			$		-			$		382,229,039			Nil
TSMC Partners			988,268				53,388,267					-				-					-				-					(738,331		)			988,268				100				52,649,936					-					52,692,858				Nil
VIS			464,223				9,027,572					-				-					-				-					2,318					464,223				28				9,029,890					116(Note1		)			53,849,925				Nil
VisEra Tech			253,120				4,541,741					-				-					-				-					1,821,358					253,120				87				6,363,099					-					6,331,697				Nil
SSMC			314				6,502,174					-				-					-				-					(601,929		)			314				39				5,900,245					-					5,692,841				Nil
TSMC North America			11,000				4,569,825					-				-					-				-					(1,766		)			11,000				100				4,568,059					-					4,568,059				Nil
Xintec			111,282				1,846,145					-				-					-				-					707,978					111,282				41				2,554,123					184(Note1		)			20,420,233				Nil
GUC			46,688				1,284,377					-				-					-				-					44,243					46,688				35				1,328,620					339(Note1		)			15,827,184				Nil
TSMC Arizona			-				-					30				855,599					-				-					(12,854		)			30				100				842,745					-					842,745				Nil
TSMC Europe			-				462,479					-				-					-				-					75,258					-				100				537,737					-					537,737				Nil
TSMC JDC			-				-					11				302,560					-				-					(10,294		)			11				100				292,266					-					292,266				Nil
TSMC Japan			6				142,620					-				-					-				-					2,164					6				100				144,784					-					144,784				Nil
TSMC Korea			80				40,727					-				-					-				-					1,668					80				100				42,395					-					42,395				Nil
Subtotal							479,543,197									1,158,159									-					(14,218,418		)											466,482,938										543,471,763
Capital
TSMC China			-				57,289,154					-				-					-				-					6,954,612					-				100				64,243,766					-					64,492,719				Nil
TSMC Nanjing			-				21,364,939					-				-					-				-					12,208,543					-				100				33,573,482					-					33,587,786				Nil
VTAF III			-				231,504					-				-					-				-					(16,623		)			-				98				214,881					-					191,606				Nil
VTAF II			-				75,095					-				-					-				-					7,346					-				98				82,441					-					76,195				Nil
Subtotal							78,960,692									-									-					19,153,878													98,114,570										98,348,306
Total						$		558,503,889							$		1,158,159							$		-			$		4,935,460											$		564,597,508								$		641,820,069

Note 1: ： The unit price is calculated by closing price of the Taipei Exchange or the TWSE as of December 31,2020.

Note 2: ： Mainly including share of profit or loss of subsidiaries and associates, share of other comprehensive income of subsidiaries and associates, cash dividends received from subsidiaries and associates, etc.

- 103 -

 

STATEMENT 6

Taiwan Semiconductor Manufacturing Company Limited

Statement of CHANGE IN RIGHT-OF-USE ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Item		Land					Buildings					Machinery and Equipment					Office Equipment					Total					Remark
Cost
Balance at January 1, 2020		$		14,768,551			$		508,709			$		1,939,524			$		30,564			$		17,247,348
Additions			12,518,687					19,564					-					20,543					12,558,794
Deductions			(186,988		)			(7,878		)			(1,939,524		)			(9,328		)			(2,143,718		)
Balance at December 31, 2020		$		27,100,250			$		520,395			$		-			$		41,779			$		27,662,424
Accumulated depreciation
Balance at January 1, 2020		$		938,352			$		105,873			$		1,163,715			$		9,388			$		2,217,328
Additions			1,298,315					131,436					775,809					13,612					2,219,172
Deductions			(11,007		)			-					(1,939,524		)			(8,372		)			(1,958,903		)
Balance at December 31, 2020		$		2,225,660			$		237,309			$		-			$		14,628			$		2,477,597
Carrying amounts at December 31, 2020		$		24,874,590			$		283,086			$		-			$		27,151			$		25,184,827

- 104 -

 

STATEMENT 7

Taiwan Semiconductor Manufacturing Company Limited

Statement of Short-term Loans

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Type		Balance, End of Year					Contract Period		Range of Interest Rates (%)		Loan Commitments					Collateral		Remark
Unsecured loans		$		88,559,026			2020.09.24-2021.02.26		(0.54)-0.33		USD		3,400,000			Nil		-
											EUR		1,000,000
Related parties
TSMC Global			87,100,700				2019.07.18~2022.07.17		-		USD		3,100,000			Nil		Note
Total		$		175,659,726

Note: The loan are repayable on related parties’ demand.

- 105 -

 

STATEMENT 8

Taiwan Semiconductor Manufacturing Company Limited

Statement of ACCOUNTS Payables

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Accounts payables was NT$36,238,637 thousand. The amount of individual vendor does not exceed 5% of the account balance.

- 106 -

 

STATEMENT 9

Taiwan Semiconductor Manufacturing Company Limited

Statement of Payables to Related Parties

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Vendor Name		Amount
TSMC Nanjing		$		1,889,906
TSMC China			1,643,070
Xintec			1,358,624
WaferTech			697,756
TSMC Technology, Inc.			444,021
SSMC			400,765
Others (Note)			583,481
Total		$		7,017,623

Note: The amount of individual vendor in others does not exceed 5% of the account balance.

- 107 -

 

STATEMENT 10

Taiwan Semiconductor Manufacturing Company Limited

Statement of Payables to Contractors and Equipment Suppliers

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Vendor Name				Amount
Vendor A				$		54,343,056
Vendor B					20,368,832
Vendor C					11,972,002
Vendor D					10,478,183
Others (Note)					59,180,384
Total				$		156,342,457

Note: The amount of individual vendor included in others does not exceed 5% of the account balance.

- 108 -

 

STATEMENT 11

Taiwan Semiconductor Manufacturing Company Limited

Statement of LEASE LIABILITIES

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Item		Description		Lease Term		Discount Rate (%)		Balance, End of Year
Land		Mainly for the use of plants and offices		2 to 22 years		0.48-0.94		$		19,550,141
Buildings		Mainly for the use of offices		2 to 6 years		0.54-0.71			281,676
Office equipment		For operation use		2 to 3 years		0.28-0.71			27,391
									19,859,208
Less: Current portion									(1,379,097		)
Noncurrent portion								$		18,480,111

- 109 -

 

STATEMENT 12

Taiwan Semiconductor Manufacturing Company Limited

Statement of Accrued Expenses and Other Current Liabilities

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Item		Amount
Refund liability		$		30,995,223
Contract liabilities			9,365,661
Utilities			3,408,672
Others (Note)			23,118,681
Total		$		66,888,237

Note: The amount of each item in others does not exceed 5% of the account balance.

- 110 -

 

STATEMENT 13

Taiwan Semiconductor Manufacturing Company Limited

Statement of Bonds Payable

DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

												Amount
																																					Unamortized
						Interest		Coupon									Repayment					Balance,					Premiums
Bonds Name		Trustee		Issuance Date		Payment Date		Rate (%)				Total Amount					paid					End of Year					(Discounts)					Carrying Value					Repayment		Collateral
Domestic unsecured bonds-101-3		Taipei Fubon Commercial Bank Co., Ltd.		2012.10.09		On 10.09 annually			1.53			$		4,400,000			$		-			$		4,400,000			$		-			$		4,400,000			Bullet repayment		Nil
Domestic unsecured bonds-101-4
-B		Taipei Fubon Commercial Bank Co., Ltd.		2013.01.04		On 01.04 annually			1.35				10,000,000					10,000,000					-					-					-				Bullet repayment		Nil
-C		Taipei Fubon Commercial Bank Co., Ltd.		2013.01.04		On 01.04 annually			1.49				3,000,000					-					3,000,000					-					3,000,000				Bullet repayment		Nil
Domestic unsecured bonds-102-1
-B		Taipei Fubon Commercial Bank Co., Ltd.		2013.02.06		On 02.06 annually			1.38				11,600,000					11,600,000					-					-					-				Bullet repayment		Nil
-C		Taipei Fubon Commercial Bank Co., Ltd.		2013.02.06		On 02.06 annually			1.50				3,600,000					-					3,600,000					-					3,600,000				Bullet repayment		Nil
Domestic unsecured bonds-102-2
-A		Taipei Fubon Commercial Bank Co., Ltd.		2013.07.16		On 07.16 annually			1.50				10,200,000					10,200,000					-					-					-				Bullet repayment		Nil
-B		Taipei Fubon Commercial Bank Co., Ltd.		2013.07.16		On 07.16 annually			1.70				3,500,000					-					3,500,000					-					3,500,000				Bullet repayment		Nil
Domestic unsecured bonds-102-4
-D		Taipei Fubon Commercial Bank Co., Ltd.		2013.09.25		On 09.25 annually			1.85				2,600,000					-					2,600,000					-					2,600,000				Bullet repayment		Nil
-E		Taipei Fubon Commercial Bank Co., Ltd.		2013.09.25		On 09.25 annually			2.05				5,400,000					-					5,400,000					-					5,400,000				Bullet repayment		Nil
-F		Taipei Fubon Commercial Bank Co., Ltd.		2013.09.25		On 09.25 annually			2.10				2,600,000					-					2,600,000					-					2,600,000				Bullet repayment		Nil
Domestic unsecured bonds-109-1
-A		Taipei Fubon Commercial Bank Co., Ltd.		2020.03.23		On 03.23 annually			0.58				3,000,000					-					3,000,000					(2,641		)			2,997,359				Bullet repayment		Nil
-B		Taipei Fubon Commercial Bank Co., Ltd.		2020.03.23		On 03.23 annually			0.62				10,500,000					-					10,500,000					(9,721		)			10,490,279				Bullet repayment		Nil
-C		Taipei Fubon Commercial Bank Co., Ltd.		2020.03.23		On 03.23 annually			0.64				10,500,000					-					10,500,000					(10,079		)			10,489,921				Bullet repayment		Nil
Domestic unsecured bonds-109-2
-A		Taipei Fubon Commercial Bank Co., Ltd.		2020.04.15		On 04.15 annually			0.52				5,900,000					-					5,900,000					(5,196		)			5,894,804				Bullet repayment		Nil
-B		Taipei Fubon Commercial Bank Co., Ltd.		2020.04.15		On 04.15 annually			0.58				10,400,000					-					10,400,000					(9,586		)			10,390,414				Bullet repayment		Nil
-C		Taipei Fubon Commercial Bank Co., Ltd.		2020.04.15		On 04.15 annually			0.60				5,300,000					-					5,300,000					(5,054		)			5,294,946				Bullet repayment		Nil
Domestic unsecured bonds-109-3
-A		Taipei Fubon Commercial Bank Co., Ltd.		2020.05.29		On 05.29 annually			0.55				4,500,000					-					4,500,000					(4,148		)			4,495,852				Bullet repayment		Nil
-B		Taipei Fubon Commercial Bank Co., Ltd.		2020.05.29		On 05.29 annually			0.60				7,500,000					-					7,500,000					(7,172		)			7,492,828				Bullet repayment		Nil
-C		Taipei Fubon Commercial Bank Co., Ltd.		2020.05.29		On 05.29 annually			0.64				2,400,000					-					2,400,000					(2,363		)			2,397,637				Bullet repayment		Nil
Domestic unsecured bonds-109-4
-A		Taipei Fubon Commercial Bank Co., Ltd.		2020.07.14		On 07.14 annually			0.58				5,700,000					-					5,700,000					(5,347		)			5,694,653				Two equal installments in last two years		Nil
-B		Taipei Fubon Commercial Bank Co., Ltd.		2020.07.14		On 07.14 annually			0.65				6,300,000					-					6,300,000					(6,119		)			6,293,881				Two equal installments in last two years		Nil
-C		Taipei Fubon Commercial Bank Co., Ltd.		2020.07.14		On 07.14 annually			0.67				1,900,000					-					1,900,000					(1,894		)			1,898,106				Two equal installments in last two years		Nil
Domestic unsecured bonds-109-5
-A		Taipei Fubon Commercial Bank Co., Ltd.		2020.09.03		On 09.03 annually			0.50				4,800,000					-					4,800,000					(4,635		)			4,795,365				Two equal installments in last two years		Nil
-B		Taipei Fubon Commercial Bank Co., Ltd.		2020.09.03		On 09.03 annually			0.58				8,000,000					-					8,000,000					(7,905		)			7,992,095				Two equal installments in last two years		Nil
-C		Taipei Fubon Commercial Bank Co., Ltd.		2020.09.03		On 09.03 annually			0.60				2,800,000					-					2,800,000					(2,817		)			2,797,183				Two equal installments in last two years		Nil

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												Amount
																																					Unamortized
						Interest		Coupon									Repayment					Balance,					Premiums
Bonds Name		Trustee		Issuance Date		Payment Date		Rate (%)				Total Amount					paid					End of Year					(Discounts)					Carrying Value					Repayment		Collateral
Domestic unsecured bonds-109-6
-A		Taipei Fubon Commercial Bank Co., Ltd.		2020.12.02		On 12.02 annually			0.40			$		1,600,000			$		-			$		1,600,000			$		(1,779	)		$		1,598,221			Two equal installments in last two years		Nil
-B		Taipei Fubon Commercial Bank Co., Ltd.		2020.12.02		On 12.02 annually			0.44				5,600,000					-					5,600,000					(6,249		)			5,593,751				Two equal installments in last two years		Nil
-C		Taipei Fubon Commercial Bank Co., Ltd.		2020.12.02		On 12.02 annually			0.48				4,800,000					-					4,800,000					(5,378		)			4,794,622				Two equal installments in last two years		Nil
Domestic unsecured bonds-109-7
-A		Taipei Fubon Commercial Bank Co., Ltd.		2020.12.29		On 12.29 annually			0.36				1,900,000					-					1,900,000					(1,965		)			1,898,035				Two equal installments in last two years		Nil
-B		Taipei Fubon Commercial Bank Co., Ltd.		2020.12.29		On 12.29 annually			0.41				10,200,000					-					10,200,000					(10,530		)			10,189,470				Two equal installments in last two years		Nil
-C		Taipei Fubon Commercial Bank Co., Ltd.		2020.12.29		On 12.29 annually			0.45				6,400,000					-					6,400,000					(6,611		)			6,393,389				Two equal installments in last two years		Nil
Domestic US$ unsecured bonds-109-1		Mega International Commercial Bank Co., Ltd.		2020.09.22		On 09.22 annually			2.70				28,097,000					-					28,097,000					(29,066		)			28,067,934				Bullet repayment (callable on the 5th anniversary of the issue date and every anniversary thereafter)		Nil
TOTAL												$		204,997,000			$		31,800,000			$		173,197,000			$		(146,255	)			173,050,745
Less: current portion																																	(2,600,000		)
																																$		170,450,745
																																							(Concluded)

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STATEMENT 14

Taiwan Semiconductor Manufacturing Company Limited

Statement of NET REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item		Shipments (Piece) (Note)				Amount
Wafer			12,330,845			$		1,161,829,728
Other							152,963,285
Net revenue						$		1,314,793,013

Note: 12-inch equivalent wafers.

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STATEMENT 15

Taiwan Semiconductor Manufacturing Company Limited

Statement of Cost of Revenue

FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Item		Amount
Raw materials used
Balance, beginning of year		$		15,046,116
Raw material purchased			52,544,726
Raw materials, end of year			(13,758,417		)
Transferred to manufacturing or operating expenses			(8,754,326		)
Others			(229,837		)
Subtotal			44,848,262
Direct labor			16,052,096
Manufacturing expenses			598,258,250
Manufacturing cost			659,158,608
Work in process, beginning of year			49,268,466
Work in process, end of year			(88,575,222		)
Transferred to manufacturing or operating expenses			(31,212,918		)
Cost of finished goods			588,638,934
Finished goods, beginning of year			8,533,179
Finished goods purchased			55,090,585
Finished goods, end of year			(21,338,980		)
Transferred to manufacturing or operating expenses			(15,849,741		)
Scrapped			(389,449		)
Subtotal			614,684,528
Others			18,088,080
Total		$		632,772,608

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STATEMENT 16

Taiwan Semiconductor Manufacturing Company Limited

Statement of Operating Expenses

FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Item		Research and Development Expenses					General and Administrative Expenses					Marketing Expenses
Payroll and related expense		$		37,368,383			$		9,657,107			$		2,912,623
Consumables			29,818,550					241,693					429
Depreciation expense			23,236,302					1,312,862					36,464
Repair and maintenance expense			5,167,078					1,364,661					3,666
Management fees of the Science Park Administration			-					2,433,954					-
Patents			-					2,008,393					-
Commission			-					-					1,209,848
Others (Note)			13,023,476					9,293,615					196,406
Total		$		108,613,789			$		26,312,285			$		4,359,436

Note: The amount of each item in others does not exceed 5% of the account balance.

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STATEMENT 17

Taiwan Semiconductor Manufacturing Company Limited

Statement of Labor, Depreciation and Amortization BY FUNCTION

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

		Year Ended December 31, 2020																				Year Ended December 31, 2019
												Classified as																				Classified as
												Other																				Other
							Classified as					Operating															Classified as					Operating
		Classified as					Operating					Income										Classified as					Operating					Income
		Cost of Revenue					Expenses					and Expenses					Total					Cost of Revenue					Expenses					and Expenses					Total
Labor cost
Salary and bonus		$		69,338,762			$		45,256,603			$		-			$		114,595,365			$		52,887,855			$		34,021,777			$		-			$		86,909,632
Labor and health insurance			3,237,054					2,161,319					-					5,398,373					2,688,910					1,828,610					-					4,517,520
Pension			1,551,256					962,997					-					2,514,253					1,412,525					910,355					-					2,322,880
Board compensation			-					525,853					-					525,853					-					376,433					-					376,433
Others			1,736,977					1,031,341					-					2,768,318					1,513,328					919,576					-					2,432,904
		$		75,864,049			$		49,938,113			$		-			$		125,802,162			$		58,502,618			$		38,056,751			$		-			$		96,559,369
Depreciation		$		288,762,450			$		24,585,627			$		31,609			$		313,379,686			$		243,160,463			$		24,285,569			$		18,511			$		267,464,543
Amortization		$		4,732,478			$		2,315,216			$		-			$		7,047,694			$		2,971,336			$		2,367,550			$		-			$		5,338,886

Note 1: As of December 31, 2020 and 2019, the Company had 47,917 and 44,058 employees, respectively.  There were 9 and 8 non-employee directors, respectively.

Note 2: Average labor cost for the years ended December 31, 2020 and 2019 were NT$2,615 thousand and 2,183 thousand, respectively.

Note 3: Average salary and bonus for the years ended December 31, 2020 and 2019 were NT$2,392 thousand and 1,973 thousand, respectively. The average salary and bonus increased by 21.24% year over year.

Note 4: The Company did not have supervisors for the years ended December 31, 2020 and 2019. Therefore, there was no compensation to the supervisor.

Note 5:  The Company’s compensation policies:  The Company’s employees are entitled to a comprehensive compensation and benefits program above the industry average. The compensation program includes a monthly salary, business performance bonuses based on quarterly business results, and a profit sharing bonus based on annual profits.　The Company determines the amount of the business performance bonus and profit sharing based on operating results and industry practice in the R.O.C.. The amount and distribution of the bonus and profit sharing are recommended by the Compensation Committee to the Board of Directors for approval. Individual rewards are based on each employee’s job responsibility, contribution and performance.　

Note 6:  The total compensation paid to the executive officers is decided based on their job responsibility, contribution, company performance and projected future risks the Company will face. It is reviewed by the Compensation Committee then submitted to the Board of Directors for approval.

Note 7:  According to the Company’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 Company and the standards of the industry within the R.O.C. and overseas. 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 the Company are not entitled to receive compensation to directors. The distribution of compensation to directors shall be made in accordance with the Company’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 the other directors, as all independent directors also serve as members of the Audit Committee and the Compensation Committee and thus participate in the discussions as well as resolutions of related committee meetings in accordance with the charter of each committee; and (3) the compensation for overseas independent directors may be higher than domestic independent directors.

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