EX-99.1 2 tsm-ex991_50.htm EX-99.1

English Translation of Financial Statements Originally Issued in Chinese

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

Consolidated Financial Statements for the

Years Ended December 31, 2022 and 2021 and

Independent Auditors’ Report

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REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of Taiwan Semiconductor Manufacturing Company Limited as of and for the year ended December 31, 2022, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements”. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

Taiwan Semiconductor Manufacturing Company Limited

By

MARK LIU

Chairman

February 14, 2023

1

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 consolidated financial statements of Taiwan Semiconductor Manufacturing Company Limited and its subsidiaries (the “Company”), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated 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 consolidated financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

2

Key audit matter for the Company’s consolidated financial statements for the year ended December 31, 2022 is 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 14 to the consolidated 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 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 understood 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 the year-end balance of EUI/CIP 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.

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.

Other Matter

We have also audited the parent company only financial statements of Taiwan Semiconductor Manufacturing Company Limited as of and for the years ended December 31, 2022 and 2021 on which we have issued an unmodified opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

3

In preparing the consolidated 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 Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 Standards on Auditing of 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 consolidated financial statements.

As part of an audit in accordance with the Standards on Auditing of 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 consolidated 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 consolidated 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 consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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6. | Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated 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 consolidated financial statements for the year ended December 31, 2022 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.

The engagement partners on the audits resulting in this independent auditors’ report are Mei Yen Chiang and Shang Chih Lin.

Deloitte & Touche

Taipei, Taiwan

Republic of China

February 14, 2023

Notice to Readers

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

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

5

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

|  | December 31, 2022 |  | December 31, 2021
ASSETS |  | Amount |  | % |  | Amount |  | %
CURRENT ASSETS |  |  |  |  |  |  |  |
Cash and cash equivalents (Note 6) |  | $ | 1,342,814,083 |  |  |  | 27 |  |  | $ | 1,064,990,192 |  |  |  | 29 |
Financial assets at fair value through profit or loss (Note 7) |  |  | 1,070,398 |  |  |  | - |  |  |  | 159,048 |  |  |  | - |
Financial assets at fair value through other comprehensive income (Note 8) |  |  | 122,998,543 |  |  |  | 2 |  |  |  | 119,519,251 |  |  |  | 3 |
Financial assets at amortized cost (Note 9) |  |  | 94,600,219 |  |  |  | 2 |  |  |  | 3,773,571 |  |  |  | - |
Hedging financial assets (Note 10) |  |  | 2,329 |  |  |  | - |  |  |  | 13,468 |  |  |  | - |
Notes and accounts receivable, net (Note 11) |  |  | 229,755,887 |  |  |  | 5 |  |  |  | 197,586,109 |  |  |  | 5 |
Receivables from related parties (Note 34) |  |  | 1,583,958 |  |  |  | - |  |  |  | 715,324 |  |  |  | - |
Other receivables from related parties (Note 34) |  |  | 68,975 |  |  |  | - |  |  |  | 61,531 |  |  |  | - |
Inventories (Notes 5 and 12) |  |  | 221,149,148 |  |  |  | 4 |  |  |  | 193,102,321 |  |  |  | 5 |
Other financial assets (Note 35) |  |  | 25,964,428 |  |  |  | 1 |  |  |  | 16,630,611 |  |  |  | 1 |
Other current assets |  |  | 12,888,776 |  |  |  | - |  |  |  | 10,521,481 |  |  |  | - |
Total current assets |  |  | 2,052,896,744 |  |  |  | 41 |  |  |  | 1,607,072,907 |  |  |  | 43 |
NONCURRENT ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial assets at fair value through other comprehensive income (Note 8) |  |  | 6,159,200 |  |  |  | - |  |  |  | 5,887,892 |  |  |  | - |
Financial assets at amortized cost (Note 9) |  |  | 35,127,215 |  |  |  | 1 |  |  |  | 1,533,391 |  |  |  | - |
Investments accounted for using equity method (Note 13) |  |  | 27,641,505 |  |  |  | 1 |  |  |  | 21,963,418 |  |  |  | 1 |
Property, plant and equipment (Notes 5 and 14) |  |  | 2,693,836,970 |  |  |  | 54 |  |  |  | 1,975,118,704 |  |  |  | 53 |
Right-of-use assets (Notes 5 and 15) |  |  | 41,914,136 |  |  |  | 1 |  |  |  | 32,734,537 |  |  |  | 1 |
Intangible assets (Notes 5 and 16) |  |  | 25,999,155 |  |  |  | 1 |  |  |  | 26,821,697 |  |  |  | 1 |
Deferred income tax assets (Notes 5 and 26) |  |  | 69,185,842 |  |  |  | 1 |  |  |  | 49,153,886 |  |  |  | 1 |
Refundable deposits |  |  | 4,467,022 |  |  |  | - |  |  |  | 2,624,854 |  |  |  | - |
Other noncurrent assets |  |  | 7,551,089 |  |  |  | - |  |  |  | 2,592,169 |  |  |  | - |
Total noncurrent assets |  |  | 2,911,882,134 |  |  |  | 59 |  |  |  | 2,118,430,548 |  |  |  | 57 |
TOTAL |  | $ | 4,964,778,878 |  |  |  | 100 |  |  | $ | 3,725,503,455 |  |  |  | 100 |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CURRENT LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term loans (Notes 17 and 31) |  | $ | - |  |  |  | - |  |  | $ | 114,921,333 |  |  |  | 3 |
Financial liabilities at fair value through profit or loss (Note 7) |  |  | 116,215 |  |  |  | - |  |  |  | 681,914 |  |  |  | - |
Hedging financial liabilities (Note 10) |  |  | 813 |  |  |  | - |  |  |  | 9,642 |  |  |  | - |
Accounts payable |  |  | 54,879,708 |  |  |  | 1 |  |  |  | 47,285,603 |  |  |  | 1 |
Payables to related parties (Note 34) |  |  | 1,642,637 |  |  |  | - |  |  |  | 1,437,186 |  |  |  | - |
Salary and bonus payable |  |  | 36,435,509 |  |  |  | 1 |  |  |  | 23,802,100 |  |  |  | 1 |
Accrued profit sharing bonus to employees and compensation to directors (Note 29) |  |  | 61,748,574 |  |  |  | 1 |  |  |  | 36,524,741 |  |  |  | 1 |
Payables to contractors and equipment suppliers |  |  | 213,499,613 |  |  |  | 4 |  |  |  | 145,742,148 |  |  |  | 4 |
Cash dividends payable (Note 21) |  |  | 142,617,093 |  |  |  | 3 |  |  |  | 142,617,093 |  |  |  | 4 |
Income tax payable (Notes 5 and 26) |  |  | 120,801,814 |  |  |  | 3 |  |  |  | 59,647,152 |  |  |  | 2 |
Long-term liabilities - current portion (Notes 18, 19 and 31) |  |  | 19,313,889 |  |  |  | - |  |  |  | 4,566,667 |  |  |  | - |
Accrued expenses and other current liabilities (Notes 5, 15, 22, 31 and 34) |  |  | 293,170,952 |  |  |  | 6 |  |  |  | 162,267,779 |  |  |  | 4 |
Total current liabilities |  |  | 944,226,817 |  |  |  | 19 |  |  |  | 739,503,358 |  |  |  | 20 |
NONCURRENT LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds payable (Notes 18 and 31) |  |  | 834,336,439 |  |  |  | 17 |  |  |  | 610,070,652 |  |  |  | 16 |
Long-term bank loans (Notes 19 and 31) |  |  | 4,760,047 |  |  |  | - |  |  |  | 3,309,131 |  |  |  | - |
Deferred income tax liabilities (Notes 5 and 26) |  |  | 1,031,383 |  |  |  | - |  |  |  | 1,873,877 |  |  |  | - |
Lease liabilities (Notes 5, 15 and 31) |  |  | 29,764,097 |  |  |  | - |  |  |  | 20,764,214 |  |  |  | 1 |
Net defined benefit liability (Note 20) |  |  | 9,321,091 |  |  |  | - |  |  |  | 11,036,879 |  |  |  | - |
Guarantee deposits |  |  | 892,021 |  |  |  | - |  |  |  | 686,762 |  |  |  | - |
Others (Note 22) |  |  | 179,958,116 |  |  |  | 4 |  |  |  | 167,525,377 |  |  |  | 5 |
Total noncurrent liabilities |  |  | 1,060,063,194 |  |  |  | 21 |  |  |  | 815,266,892 |  |  |  | 22 |
Total liabilities |  |  | 2,004,290,011 |  |  |  | 40 |  |  |  | 1,554,770,250 |  |  |  | 42 |
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital stock (Notes 4 and 21) |  |  | 259,303,805 |  |  |  | 5 |  |  |  | 259,303,805 |  |  |  | 7 |
Capital surplus (Notes 4, 21 and 28) |  |  | 69,330,328 |  |  |  | 1 |  |  |  | 64,761,602 |  |  |  | 2 |
Retained earnings (Notes 4 and 21) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Appropriated as legal capital reserve |  |  | 311,146,899 |  |  |  | 6 |  |  |  | 311,146,899 |  |  |  | 8 |
Appropriated as special capital reserve |  |  | 3,154,310 |  |  |  | - |  |  |  | 59,304,212 |  |  |  | 2 |
Unappropriated earnings |  |  | 2,323,223,479 |  |  |  | 47 |  |  |  | 1,536,378,550 |  |  |  | 41 |
|  |  | 2,637,524,688 |  |  |  | 53 |  |  |  | 1,906,829,661 |  |  |  | 51 |
Others (Notes 4, 21 and 28) |  |  | (20,505,626 | ) |  |  | - |  |  |  | (62,608,515 | ) |  |  | (2 | )
Equity attributable to shareholders of the parent |  |  | 2,945,653,195 |  |  |  | 59 |  |  |  | 2,168,286,553 |  |  |  | 58 |
NON - CONTROLLING INTERESTS |  |  | 14,835,672 |  |  |  | 1 |  |  |  | 2,446,652 |  |  |  | - |
Total equity |  |  | 2,960,488,867 |  |  |  | 60 |  |  |  | 2,170,733,205 |  |  |  | 58 |
TOTAL |  | $ | 4,964,778,878 |  |  |  | 100 |  |  | $ | 3,725,503,455 |  |  |  | 100 |

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

6

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

|  | 2022 |  | 2021
|  | Amount |  | % |  | Amount |  | %
NET REVENUE (Notes 5, 22, 34 and 39) |  | $ | 2,263,891,292 |  |  |  | 100 |  |  | $ | 1,587,415,037 |  |  |  | 100 |
COST OF REVENUE (Notes 5, 12, 29 and 34) |  |  | 915,536,486 |  |  |  | 40 |  |  |  | 767,877,771 |  |  |  | 48 |
GROSS PROFIT |  |  | 1,348,354,806 |  |  |  | 60 |  |  |  | 819,537,266 |  |  |  | 52 |
OPERATING EXPENSES (Notes 5, 29 and 34) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and development |  |  | 163,262,208 |  |  |  | 7 |  |  |  | 124,734,755 |  |  |  | 8 |
General and administrative |  |  | 53,524,898 |  |  |  | 2 |  |  |  | 36,929,588 |  |  |  | 2 |
Marketing |  |  | 9,920,446 |  |  |  | 1 |  |  |  | 7,558,591 |  |  |  | 1 |
Total operating expenses |  |  | 226,707,552 |  |  |  | 10 |  |  |  | 169,222,934 |  |  |  | 11 |
OTHER OPERATING INCOME AND EXPENSES, NET (Notes 14 and 29) |  |  | (368,403 | ) |  |  | - |  |  |  | (333,435 | ) |  |  | - |
INCOME FROM OPERATIONS (Note 39) |  |  | 1,121,278,851 |  |  |  | 50 |  |  |  | 649,980,897 |  |  |  | 41 |
NON-OPERATING INCOME AND EXPENSES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Share of profits of associates |  |  | 7,798,359 |  |  |  | - |  |  |  | 5,603,084 |  |  |  | - |
Interest income (Note 23) |  |  | 22,422,209 |  |  |  | 1 |  |  |  | 5,708,765 |  |  |  | - |
Other income |  |  | 947,697 |  |  |  | - |  |  |  | 973,141 |  |  |  | - |
Foreign exchange gain, net (Note 37) |  |  | 4,505,784 |  |  |  | - |  |  |  | 13,662,655 |  |  |  | 1 |
Finance costs (Note 24) |  |  | (11,749,984 | ) |  |  | - |  |  |  | (5,414,218 | ) |  |  | - |
Other gains and losses, net (Note 25) |  |  | (1,012,198 | ) |  |  | - |  |  |  | (7,388,010 | ) |  |  | - |
Total non-operating income and expenses |  |  | 22,911,867 |  |  |  | 1 |  |  |  | 13,145,417 |  |  |  | 1 |
INCOME BEFORE INCOME TAX |  |  | 1,144,190,718 |  |  |  | 51 |  |  |  | 663,126,314 |  |  |  | 42 |
INCOME TAX EXPENSE (Notes 5 and 26) |  |  | 127,290,203 |  |  |  | 6 |  |  |  | 66,053,180 |  |  |  | 4 |
NET INCOME |  |  | 1,016,900,515 |  |  |  | 45 |  |  |  | 597,073,134 |  |  |  | 38 |
OTHER COMPREHENSIVE INCOME (LOSS) (Notes 5, 20, 21 and 26) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Items that will not be reclassified subsequently to profit or loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Remeasurement of defined benefit obligation |  |  | (823,060 | ) |  |  | - |  |  |  | 242,079 |  |  |  | - |
Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income |  |  | (263,749 | ) |  |  | - |  |  |  | 1,900,797 |  |  |  | - |
Loss on hedging instruments |  |  | - |  |  |  | - |  |  |  | (41,416 | ) |  |  | - |
Share of other comprehensive income (loss) of associates |  |  | 154,457 |  |  |  | - |  |  |  | (30,194 | ) |  |  | - |
Income tax benefit (expense) related to items that will not be reclassified subsequently |  |  | 733,956 |  |  |  | - |  |  |  | (85,269 | ) |  |  | - |
|  |  | (198,396 | ) |  |  | - |  |  |  | 1,985,997 |  |  |  | - |

(Continued)

7

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

|  | 2022 |  | 2021
|  | Amount |  | % |  | Amount |  | %
Items that may be reclassified subsequently to profit or loss: |  |  |  |  |  |  |  |
Exchange differences arising on translation of foreign operations |  | $ | 50,845,614 |  |  |  | 2 |  |  | $ | (6,181,830 | ) |  |  | (1 | )
Unrealized loss on investments in debt instruments at fair value through other comprehensive income |  |  | (10,102,658 | ) |  |  | - |  |  |  | (3,431,791 | ) |  |  | - |
Gain on hedging instruments |  |  | 1,329,231 |  |  |  | - |  |  |  | 131,535 |  |  |  | - |
Share of other comprehensive income (loss) of associates |  |  | 550,338 |  |  |  | - |  |  |  | (119,997 | ) |  |  | - |
Income tax benefit (expense) related to items that may be reclassified subsequently |  |  | 6,036 |  |  |  | - |  |  |  | (3,370 | ) |  |  | - |
|  |  | 42,628,561 |  |  |  | 2 |  |  |  | (9,605,453 | ) |  |  | (1 | )
Other comprehensive income (loss), net of income tax |  |  | 42,430,165 |  |  |  | 2 |  |  |  | (7,619,456 | ) |  |  | (1 | )
TOTAL COMPREHENSIVE INCOME |  | $ | 1,059,330,680 |  |  |  | 47 |  |  | $ | 589,453,678 |  |  |  | 37 |
NET INCOME ATTRIBUTABLE TO: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shareholders of the parent |  | $ | 1,016,530,249 |  |  |  | 45 |  |  | $ | 596,540,013 |  |  |  | 38 |
Non-controlling interests |  |  | 370,266 |  |  |  | - |  |  |  | 533,121 |  |  |  | - |
|  | $ | 1,016,900,515 |  |  |  | 45 |  |  | $ | 597,073,134 |  |  |  | 38 |
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shareholders of the parent |  | $ | 1,059,124,890 |  |  |  | 47 |  |  | $ | 588,918,059 |  |  |  | 37 |
Non-controlling interests |  |  | 205,790 |  |  |  | - |  |  |  | 535,619 |  |  |  | - |
|  | $ | 1,059,330,680 |  |  |  | 47 |  |  | $ | 589,453,678 |  |  |  | 37 |
EARNINGS PER SHARE (NT$, Note 27) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | 39.20 |  |  |  |  |  |  | $ | 23.01 |  |  |  |  |
Diluted earnings per share |  | $ | 39.20 |  |  |  |  |  |  | $ | 23.01 |  |  |  |  |

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

(Concluded)

8

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

|  | Equity Attributable to Shareholders of the Parent |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Others |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Unrealized |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Gain (Loss) on |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Financial |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Assets at Fair |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Foreign |  | Value Through |  |  |  | Unearned |  |  |  |  |  |  |  |  |  |
|  | Capital Stock - Common Stock |  |  |  | Retained Earnings |  | Currency |  | Other |  | Gain (Loss) on |  | Stock-Based |  |  |  |  |  |  |  |  |  |
|  | Shares |  |  |  |  |  | Legal Capital |  | Special Capital |  | Unappropriated |  |  |  | Translation |  | Comprehensive |  | Hedging |  | Employee |  |  |  | Treasury |  |  |  | Non-controlling |  | Total
|  | (In Thousands) |  | Amount |  | Capital Surplus |  | Reserve |  | Reserve |  | Earnings |  | Total |  | Reserve |  | Income |  | Instruments |  | Compensation |  | Total |  | Stock |  | Total |  | Interests |  | Equity
BALANCE, JANUARY 1, 2021 |  |  | 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 |  | $ | 964,743 |  | $1,850,621,999
Appropriations of earnings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Special capital reserve |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | 17,045,066 |  |  | (17,045,066 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  | -
Cash dividends to shareholders |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (278,751,590 | ) |  | (278,751,590 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (278,751,590 | ) |  | - |  | (278,751,590)
Total |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | 17,045,066 |  |  | (295,796,656 | ) |  | (278,751,590 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (278,751,590 | ) |  | - |  | (278,751,590)
Net income |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 596,540,013 |  |  | 596,540,013 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 596,540,013 |  |  | 533,121 |  | 597,073,134
Other comprehensive income (loss), net of income tax |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 167,503 |  |  | 167,503 |  |  | (6,301,734 | ) |  | (1,559,790 | ) |  | 72,067 |  |  | - |  |  | (7,789,457 | ) |  | - |  |  | (7,621,954 | ) |  | 2,498 |  | (7,619,456)
Total comprehensive income (loss) |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 596,707,516 |  |  | 596,707,516 |  |  | (6,301,734 | ) |  | (1,559,790 | ) |  | 72,067 |  |  | - |  |  | (7,789,457 | ) |  | - |  |  | 588,918,059 |  |  | 535,619 |  | 589,453,678
Disposal of investments in equity instruments at fair value through other comprehensive income |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 187,654 |  |  | 187,654 |  |  | - |  |  | (187,654 | ) |  | - |  |  | - |  |  | (187,654 | ) |  | - |  |  | - |  |  | - |  | -
Basis adjustment for gain on hedging instruments |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 48,469 |  |  | - |  |  | 48,469 |  |  | - |  |  | 48,469 |  |  | - |  | 48,469
Adjustments to share of changes in equities of associates |  |  | - |  |  |  | - |  |  | 4,796 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 4,796 |  |  | - |  | 4,796
From difference between the consideration received and the carrying amount of the subsidiaries' net assets during actual disposal |  |  | - |  |  |  | - |  |  | 8,406,282 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 8,406,282 |  |  | 1,045,516 |  | 9,451,798
From share of changes in equities of subsidiaries |  |  | - |  |  |  | - |  |  | (7,891 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (7,891 | ) |  | 7,891 |  | -
Donation from shareholders |  |  | - |  |  |  | - |  |  | 11,172 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 11,172 |  |  | 110 |  | 11,282
Decrease in non-controlling interests |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (107,382 | ) | (107,382)
Effect of acquisition of subsidiary |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 155 |  | 155
BALANCE, DECEMBER 31, 2021 |  |  | 25,930,380 |  |  |  | 259,303,805 |  |  | 64,761,602 |  |  | 311,146,899 |  |  | 59,304,212 |  |  | 1,536,378,550 |  |  | 1,906,829,661 |  |  | (63,303,361 | ) |  | 574,310 |  |  | 120,536 |  |  | - |  |  | (62,608,515 | ) |  | - |  |  | 2,168,286,553 |  |  | 2,446,652 |  | 2,170,733,205
Appropriations of earnings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Special capital reserve |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | (56,149,902 | ) |  | 56,149,902 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  | -
Cash dividends to shareholders |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (285,234,185 | ) |  | (285,234,185 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (285,234,185 | ) |  | - |  | (285,234,185)
Total |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | (56,149,902 | ) |  | (229,084,283 | ) |  | (285,234,185 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (285,234,185 | ) |  | - |  | (285,234,185)
Net income |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1,016,530,249 |  |  | 1,016,530,249 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1,016,530,249 |  |  | 370,266 |  | 1,016,900,515
Other comprehensive income (loss), net of income tax |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (49,572 | ) |  | (49,572 | ) |  | 51,560,060 |  |  | (10,327,421 | ) |  | 1,411,574 |  |  | - |  |  | 42,644,213 |  |  | - |  |  | 42,594,641 |  |  | (164,476 | ) | 42,430,165
Total comprehensive income (loss) |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1,016,480,677 |  |  | 1,016,480,677 |  |  | 51,560,060 |  |  | (10,327,421 | ) |  | 1,411,574 |  |  | - |  |  | 42,644,213 |  |  | - |  |  | 1,059,124,890 |  |  | 205,790 |  | 1,059,330,680
Share-based payment arrangements |  |  | 1,387 |  |  |  | 13,870 |  |  | 438,029 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (185,153 | ) |  | (185,153 | ) |  | - |  |  | 266,746 |  |  | - |  | 266,746
Treasury stock acquired |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (871,566 | ) |  | (871,566 | ) |  | - |  | (871,566)
Treasury stock retired |  |  | (1,387 | ) |  |  | (13,870 | ) |  | (2,989 | ) |  | - |  |  | - |  |  | (854,707 | ) |  | (854,707 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 871,566 |  |  | - |  |  | - |  | -
Disposal of investments in equity instruments at fair value through other comprehensive income |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 303,242 |  |  | 303,242 |  |  | - |  |  | (303,242 | ) |  | - |  |  | - |  |  | (303,242 | ) |  | - |  |  | - |  |  | - |  | -
Basis adjustment for loss on hedging instruments |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (52,929 | ) |  | - |  |  | (52,929 | ) |  | - |  |  | (52,929 | ) |  | - |  | (52,929)
Adjustments to share of changes in equities of associates |  |  | - |  |  |  | - |  |  | 4,541 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 4,541 |  |  | - |  | 4,541
From share of changes in equities of subsidiaries |  |  | - |  |  |  | - |  |  | 4,115,940 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 4,115,940 |  |  | 12,350,219 |  | 16,466,159
Donation from shareholders |  |  | - |  |  |  | - |  |  | 13,205 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 13,205 |  |  | 20 |  | 13,225
Decrease in non-controlling interests |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (167,009 | ) | (167,009)
BALANCE, DECEMBER 31, 2022 |  |  | 25,930,380 |  |  | $ | 259,303,805 |  | $ | 69,330,328 |  | $ | 311,146,899 |  | $ | 3,154,310 |  | $ | 2,323,223,479 |  | $ | 2,637,524,688 |  | $ | (11,743,301 | ) | $ | (10,056,353 | ) | $ | 1,479,181 |  | $ | (185,153 | ) | $ | (20,505,626 | ) | $ | - |  | $ | 2,945,653,195 |  | $ | 14,835,672 |  | $2,960,488,867

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

9

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

|  | 2022 |  | 2021
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |
Income before income tax |  | $ | 1,144,190,718 |  |  | $ | 663,126,314 |
Adjustments for: |  |  |  |  |  |  |  |
Depreciation expense |  |  | 428,498,179 |  |  |  | 414,187,700 |
Amortization expense |  |  | 8,756,094 |  |  |  | 8,207,169 |
Expected credit losses recognized (reversal) on investments in debt instruments |  |  | 52,351 |  |  |  | (2,735 | )
Finance costs |  |  | 11,749,984 |  |  |  | 5,414,218 |
Share of profits of associates |  |  | (7,798,359 | ) |  |  | (5,603,084 | )
Interest income |  |  | (22,422,209 | ) |  |  | (5,708,765 | )
Share-based compensation |  |  | 302,348 |  |  |  | 7,788 |
Loss (gain) on disposal or retirement of property, plant and equipment, net |  |  | (98,856 | ) |  |  | 273,627 |
Loss on disposal or retirement of intangible assets, net |  |  | 6,004 |  |  |  | 1,228 |
Impairment loss on property, plant and equipment |  |  | 790,740 |  |  |  | 274,388 |
Loss (gain) on disposal of investments in debt instruments at fair value through other comprehensive income, net |  |  | 410,076 |  |  |  | (93,229 | )
Loss (gain) on foreign exchange, net |  |  | 10,342,706 |  |  |  | (16,115,936 | )
Dividend income |  |  | (266,767 | ) |  |  | (362,310 | )
Others |  |  | 138,827 |  |  |  | (414,219 | )
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Financial instruments at fair value through profit or loss |  |  | (1,354,359 | ) |  |  | 2,649,244 |
Notes and accounts receivable, net |  |  | (32,169,853 | ) |  |  | (52,105,823 | )
Receivables from related parties |  |  | (868,634 | ) |  |  | (157,193 | )
Other receivables from related parties |  |  | (7,444 | ) |  |  | (10,886 | )
Inventories |  |  | (28,046,827 | ) |  |  | (55,748,914 | )
Other financial assets |  |  | (1,680,611 | ) |  |  | (8,236,897 | )
Other current assets |  |  | (4,450,883 | ) |  |  | (3,899,043 | )
Accounts payable |  |  | 7,594,105 |  |  |  | 8,298,319 |
Payables to related parties |  |  | 205,451 |  |  |  | (670,532 | )
Salary and bonus payable |  |  | 12,633,409 |  |  |  | 3,730,859 |
Accrued profit sharing bonus to employees and compensation to directors |  |  | 25,223,833 |  |  |  | 843,695 |
Accrued expenses and other current liabilities |  |  | 46,578,784 |  |  |  | 84,322,721 |
Other noncurrent liabilities |  |  | 101,390,476 |  |  |  | 154,085,985 |
Net defined benefit liability |  |  | (2,538,848 | ) |  |  | (635,116 | )
Cash generated from operations |  |  | 1,697,160,435 |  |  |  | 1,195,658,573 |
Income taxes paid |  |  | (86,561,247 | ) |  |  | (83,497,851 | )
Net cash generated by operating activities |  |  | 1,610,599,188 |  |  |  | 1,112,160,722 |
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |  |  |  |
Acquisitions of: |  |  |  |  |  |  |  |
Financial instruments at fair value through profit or loss |  |  | (125,540 | ) |  |  | - |
Financial assets at fair value through other comprehensive income |  |  | (54,566,725 | ) |  |  | (255,888,679 | )
Financial assets at amortized cost |  |  | (183,125,920 | ) |  |  | (3,799,737 | )
Property, plant and equipment |  |  | (1,082,672,130 | ) |  |  | (839,195,708 | )
Intangible assets |  |  | (6,954,326 | ) |  |  | (9,040,751 | )
Proceeds from disposal or redemption of: |  |  |  |  |  |  |  |
Financial assets at fair value through other comprehensive income |  |  | 44,963,367 |  |  |  | 254,604,537 |
Financial assets at amortized cost |  |  | 62,329,674 |  |  |  | 9,368,275 |
Property, plant and equipment |  |  | 983,358 |  |  |  | 390,364 |
Intangible assets |  |  | 12,636 |  |  |  | - |

(Continued)

10

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

|  | 2022 |  | 2021
Proceeds from return of capital of investments in equity instruments at fair value through other comprehensive income |  | $ | 2,938 |  |  | $ | 115,627 |
Derecognition of hedging financial instruments |  |  | 1,684,430 |  |  |  | 276,261 |
Interest received |  |  | 18,083,755 |  |  |  | 5,990,948 |
Proceeds from government grants - property, plant and equipment |  |  | 7,046,136 |  |  |  | 821,312 |
Proceeds from government grants - others |  |  | 5,296 |  |  |  | 6,605 |
Other dividends received |  |  | 266,767 |  |  |  | 362,310 |
Dividends received from investments accounted for using equity method |  |  | 2,749,667 |  |  |  | 2,136,426 |
Increase in prepayments for leases |  |  | - |  |  |  | (1,200,000 | )
Refundable deposits paid |  |  | (2,117,041 | ) |  |  | (1,997,337 | )
Refundable deposits refunded |  |  | 505,423 |  |  |  | 683,684 |
Net cash used in investing activities |  |  | (1,190,928,235 | ) |  |  | (836,365,863 | )
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |  |  |  |
Increase (decrease) in short-term loans |  |  | (111,959,992 | ) |  |  | 35,668,397 |
Proceeds from issuance of bonds |  |  | 198,293,561 |  |  |  | 364,592,792 |
Repayment of bonds |  |  | (4,400,000 | ) |  |  | (2,600,000 | )
Proceeds from long-term bank loans |  |  | 2,670,000 |  |  |  | 1,510,000 |
Repayment of long-term bank loans |  |  | (166,667 | ) |  |  | - |
Payments for transaction costs attributable to the issuance of bonds |  |  | (414,307 | ) |  |  | (737,724 | )
Treasury stock acquired |  |  | (871,566 | ) |  |  | - |
Repayment of the principal portion of lease liabilities |  |  | (2,428,277 | ) |  |  | (1,985,338 | )
Interest paid |  |  | (12,218,659 | ) |  |  | (3,833,633 | )
Guarantee deposits received |  |  | 271,387 |  |  |  | 469,041 |
Guarantee deposits refunded |  |  | (62,100 | ) |  |  | (36,763 | )
Cash dividends |  |  | (285,234,185 | ) |  |  | (265,786,399 | )
Disposal of ownership interests in subsidiaries (without losing control) |  |  | - |  |  |  | 9,451,798 |
Donation from shareholders |  |  | 13,225 |  |  |  | 11,282 |
Increase (decrease) in non-controlling interests |  |  | 16,263,548 |  |  |  | (115,015 | )
Net cash generated by (used in) financing activities |  |  | (200,244,032 | ) |  |  | 136,608,438 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |  |  | 58,396,970 |  |  |  | (7,583,752 | )
NET INCREASE IN CASH AND CASH EQUIVALENTS |  |  | 277,823,891 |  |  |  | 404,819,545 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |  |  | 1,064,990,192 |  |  |  | 660,170,647 |
CASH AND CASH EQUIVALENTS, END OF YEAR |  | $ | 1,342,814,083 |  |  | $ | 1,064,990,192 |

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

(Concluded)

11

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

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

1. | GENERAL

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

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

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

2. | THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on February 14, 2023.

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 accounting policies of TSMC and its subsidiaries (collectively as the “Company”).

| b. | The IFRSs issued by International Accounting Standards Board (IASB) and endorsed by the FSC with effective date starting 2023

New, Revised or Amended Standards and Interpretations |  | Effective Date Issued by IASB
Amendments to IAS 1 “Disclosure of Accounting Policies” |  | January 1, 2023
Amendments to IAS 8 “Definition of Accounting Estimates” |  | January 1, 2023
Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction” |  | January 1, 2023

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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
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” and “Non-current Liabilities with Covenants” |  | January 1, 2024

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

4. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed by the FSC with the effective dates (collectively, “Taiwan-IFRSs”).

Basis of Preparation

The accompanying consolidated 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.

Basis of Consolidation

The basis for the consolidated financial statements

The consolidated financial statements incorporate the financial statements of TSMC and entities controlled by TSMC (its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

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. The carrying amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the

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fair value of the consideration paid or received is recognized directly in equity and attributed to shareholders of the parent.

When the Company loses control of a subsidiary, a gain or loss is recognized in profit or loss and is 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 assets (including goodwill), and liabilities of the subsidiary and any non-controlling interest.

The Company shall account for all amounts recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the Company had directly disposed of the related assets and liabilities.

The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the cost on initial recognition of an investment in an associate.

The subsidiaries in the consolidated financial statements

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

|  |  |  |  |  | Establishment |  | Percentage of Ownership |  |
Name of Investor |  | Name of Investee |  | Main Businesses and Products |  | and Operating Location |  | December 31, 2022 |  | December 31, 2021 |  | Note
TSMC |  | TSMC North America |  | Sales and marketing of integrated circuits and other semiconductor devices |  | San Jose, California, U.S.A. |  |  | 100% |  |  |  | 100% |  |  | -
|  | TSMC Europe B.V. (TSMC Europe) |  | Customer service and supporting activities |  | Amsterdam, the Netherlands |  |  | 100% |  |  |  | 100% |  |  | a)
|  | TSMC Japan Limited (TSMC Japan) |  | Customer service and supporting activities |  | Yokohama, Japan |  |  | 100% |  |  |  | 100% |  |  | a)
|  | TSMC Design Technology Japan, Inc. (TSMC JDC) |  | Engineering support activities |  | Yokohama, Japan |  |  | 100% |  |  |  | 100% |  |  | a)
|  | TSMC Japan 3DIC R&D Center, Inc. (TSMC 3DIC) |  | Engineering support activities |  | Yokohama, Japan |  |  | 100% |  |  |  | 100% |  |  | a)
|  | TSMC Korea Limited (TSMC Korea) |  | Customer service and supporting activities |  | Seoul, Korea |  |  | 100% |  |  |  | 100% |  |  | a)
|  | TSMC Partners, Ltd. (TSMC Partners) |  | Investing in companies involved in the semiconductor design and manufacturing, and other investment activities |  | Tortola, British Virgin Islands |  |  | 100% |  |  |  | 100% |  |  | a)
|  | TSMC Global, Ltd. (TSMC Global) |  | Investment activities |  | Tortola, British Virgin Islands |  |  | 100% |  |  |  | 100% |  |  | -
|  | TSMC China Company Limited (TSMC China) |  | Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices |  | Shanghai, China |  |  | 100% |  |  |  | 100% |  |  | -
|  | TSMC Nanjing Company Limited (TSMC Nanjing) |  | Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices |  | Nanjing, China |  |  | 100% |  |  |  | 100% |  |  | -
|  | VisEra Technologies Company Ltd. (VisEra Tech) |  | Research, design, development, manufacturing, sales, packaging and test of color filter |  | Hsin-Chu, Taiwan |  |  | 68% |  |  |  | 73% |  |  | b)
|  | TSMC Arizona Corporation (TSMC Arizona) |  | Manufacturing, sales and testing of integrated circuits and other semiconductor devices |  | Phoenix, Arizona, U.S.A. |  |  | 100% |  |  |  | 100% |  |  | c)
|  | Japan Advanced Semiconductor Manufacturing, Inc. (JASM) |  | Manufacturing, sales, testing and computer aided design of integrated circuits and other semiconductor devices |  | Kumamoto, Japan |  |  | 71% |  |  |  | 100% |  |  | a), d)
|  | VentureTech Alliance Fund II, L.P. (VTAF II) |  | Investing in technology start-up companies |  | Cayman Islands |  |  | 98% |  |  |  | 98% |  |  | a)
|  | VentureTech Alliance Fund III, L.P. (VTAF III) |  | Investing in technology start-up companies |  | Cayman Islands |  |  | 98% |  |  |  | 98% |  |  | a)
|  | Emerging Fund L.P. (Emerging Fund) |  | Investing in technology start-up companies |  | Cayman Islands |  |  | 99.9% |  |  |  | 99.9% |  |  | a)

(Continued)

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|  |  |  |  |  | Establishment |  | Percentage of Ownership |  |
Name of Investor |  | Name of Investee |  | Main Businesses and Products |  | and Operating Location |  | December 31, 2022 |  | December 31, 2021 |  | Note
TSMC Partners |  | TSMC Development, Inc. (TSMC Development) |  | Investing in companies involved in semiconductor manufacturing |  | Delaware, U.S.A. |  |  | 100% |  |  |  | 100% |  |  | -
|  | TSMC Technology, Inc. (TSMC Technology) |  | Engineering support activities |  | Delaware, U.S.A. |  |  | 100% |  |  |  | 100% |  |  | a)
|  | TSMC Design Technology Canada Inc. (TSMC Canada) |  | Engineering support activities |  | Ontario, Canada |  |  | 100% |  |  |  | 100% |  |  | a)
TSMC Development |  | WaferTech, LLC (WaferTech) |  | Manufacturing, sales and testing of integrated circuits and other semiconductor devices |  | Washington, U.S.A. |  |  | 100% |  |  |  | 100% |  |  | -
VTAF III |  | Growth Fund Limited (Growth Fund) |  | Investing in technology start-up companies |  | Cayman Islands |  |  | 100% |  |  |  | 100% |  |  | a)

(Concluded)

| Note a: | This is an immaterial subsidiary for which the consolidated financial statements are not audited by the Company’s independent auditors.

| Note b: | VisEra has increased its capital in June 2022. After the increase in capital, TSMC’s shareholding in VisEra decreased from 73% to 68%. This transaction was accounted for as an equity transaction since the transaction did not change TSMC’s control over VisEra.

| Note c: | Under the terms of the development agreement entered into between TSMC Arizona and the City of Phoenix, the City of Phoenix commits approximately US$205 million toward various public infrastructure projects in the area of the proposed manufacturing facility, conditioned on TSMC Arizona’s achieving a minimum project scale with defined spending and job-creation thresholds.

| Note d: | JASM is established in December 2021 and has increased its capital in January 2022. After the increase in capital, TSMC’s shareholding in JASM decreased from 100% to 81%. In addition, JASM increased its capital by issuing noncumulative preferred shares and common shares in April 2022, TSMC’s shareholding in JASM decreased from 81% to 71% and the proportion of voting right remain 81%. The aforementioned transactions were accounted for as an equity transaction since the transaction did not change TSMC’s control over JASM.

Foreign Currencies

The financial statements of each individual consolidated entity were expressed in the currency which reflected its primary economic environment (functional currency). The functional currency of TSMC and presentation currency of the consolidated financial statements are both New Taiwan Dollars (NT$). In preparing the consolidated financial statements, the operating results and financial positions of each consolidated entity are translated into NT$.

In preparing the financial statements of each individual consolidated entity, 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 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 consolidated 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 (attributed to non-controlling interests as appropriate).

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.

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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 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.

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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, commercial paper, debt instrument investments, notes and accounts receivable (including related parties), other receivables, refundable deposits and temporary payments (including those classified under other current assets and other noncurrent assets) 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.

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

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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.

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

| a. | Fair value hedge

The Company designates certain hedging instruments, such as interest rate futures contracts, to partially hedge against the fair value change caused by interest rates fluctuation in the Company’s fixed income investments. Changes in the fair value of hedging instruments that are designated and qualify as fair value hedges are recognized in profit or loss immediately, together with any changes in the fair value of the hedged items that are attributable to the hedged risk.

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| b. | Cash flow hedge

The Company designates certain hedging instruments, such as forward contracts, to partially hedge its foreign exchange rate risks or interest rate risks associated with certain highly probable forecast transactions (capital expenditures or issuance of debts). The effective portion of changes in the fair value of hedging instruments is recognized in other comprehensive income. When forecast transactions actually take place, the accumulated gains or losses that were recognized in other comprehensive income are transferred from equity to the initial cost of the hedged items, or reclassified to finance costs of hedged items in the same period or periods during which the hedged expected future cash flows affect profit or loss. 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 are investments 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 consolidated financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognized in the consolidated statements 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

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

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, acquisition of the item of property, plant and equipment or borrowing costs eligible for capitalization.

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: land improvements - 20 years; 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 consolidated balance sheets.

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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.

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 consolidated balance sheets.

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 from the synergies of the combination. 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

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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.

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.

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.

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

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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.

Treasury Stock

Treasury stock represents the outstanding shares that the Company buys back from market, which is stated at cost and shown as a deduction in shareholders’ equity. When the Company retires treasury stock, the treasury stock account is reduced and the common stock as well as the capital surplus - additional paid-in capital are reversed on a pro rata basis. When the book value of the treasury stock exceeds the sum of the par value and additional paid-in capital, the difference is charged to capital surplus - treasury stock transactions and to retained earnings for any remaining amount.

Share-based payment arrangements

| a. | Equity-settled share-based payment arrangements

Restricted shares for employees are expensed on a straight-line basis over the vesting period, based on the fair value at the grant date and the Company’s best estimate of the number expected to ultimately vest, with a corresponding increase in other equity - unearned employee benefits.

When restricted shares for employees are issued, other equity - unearned employee benefits is recognized on the grant date, with a corresponding increase in capital surplus - restricted shares for employees. Dividends paid to employees on restricted shares which do not need to be returned if employees resign in the vesting period are recognized as expenses upon the dividend declaration with a corresponding adjustment in retained earnings.

At the end of each reporting period, the Company revises its estimate of the number of restricted shares for employees that are expected to vest. The impact from such revision is recognized in profit or loss so that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus - restricted shares for employees.

| b. | Cash-settled share-based payment arrangements

For cash-settled share-based payments, a liability is recognized for the services acquired, measured at the fair value of the liability incurred. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognized in profit or loss.

Taxation

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

Current tax

Income tax on unappropriated earnings (excluding earnings from foreign consolidated subsidiaries) 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.

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Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated 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.

Government Grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire noncurrent assets (mainly including land use right and depreciable assets) are recognized as a deduction from the carrying amount of the related assets and recognized as a reduced depreciation or amortization charge in profit or loss over the contract period or useful lives of the related assets. Government grants that are receivables as compensation for expenses already incurred are deducted from incurred expenses in the period in which they become receivables.

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.

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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.

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

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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, 2022 |  | December 31, 2021
Cash and deposits in banks |  | $ | 1,329,291,394 |  |  | $ | 1,058,808,104 |
Commercial paper |  |  | 9,566,430 |  |  |  | - |
Government bonds |  |  | 2,451,570 |  |  |  | 906,743 |
Repurchase agreements |  |  | 1,133,310 |  |  |  | 5,275,345 |
Corporate bonds |  |  | 371,379 |  |  |  | - |
|  | $ | 1,342,814,083 |  |  | $ | 1,064,990,192 |

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, 2022 |  | December 31, 2021
Financial assets |  |  |  |
Mandatorily measured at FVTPL |  |  |  |
Forward exchange contracts |  | $ | 947,546 |  |  | $ | 159,048 |
Convertible bonds |  |  | 122,852 |  |  |  | - |
|  | $ | 1,070,398 |  |  | $ | 159,048 |
Financial liabilities |  |  |  |  |  |  |  |
Held for trading |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | 116,215 |  |  | $ | 681,914 |

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.

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Outstanding forward exchange contracts consisted of the following:

|  |  |  | Contract Amount
|  | Maturity Date |  | (In Thousands)
December 31, 2022 |  |  |  |
Sell NT$ |  | January 2023 to March 2023 |  | NT$ | 79,610,590 |
Sell US$ |  | January 2023 to March 2023 |  | US$ | 752,486 |
Sell RMB |  | January 2023 to March 2023 |  | RMB | 1,448,371 |
December 31, 2021 |  |  |  |  |  |
Sell NT$ |  | January 2022 to March 2022 |  | NT$ | 132,734,482 |
Sell US$ |  | January 2022 to March 2022 |  | US$ | 2,009,148 |

8. | FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

|  | December 31, 2022 |  | December 31, 2021
Investments in debt instruments at FVTOCI |  |  |  |
Corporate bonds |  | $ | 66,116,166 |  |  | $ | 57,253,161 |
Agency bonds/Agency mortgage-backed securities |  |  | 28,399,890 |  |  |  | 32,070,114 |
Government bonds |  |  | 18,929,924 |  |  |  | 21,345,794 |
Asset-backed securities |  |  | 9,274,697 |  |  |  | 8,660,424 |
|  |  | 122,720,677 |  |  |  | 119,329,493 |
Investments in equity instruments at FVTOCI |  |  |  |  |  |  |  |
Non-publicly traded equity investments |  |  | 6,159,200 |  |  |  | 5,887,892 |
Publicly traded stocks |  |  | 277,866 |  |  |  | 189,758 |
|  |  | 6,437,066 |  |  |  | 6,077,650 |
|  | $ | 129,157,743 |  |  | $ | 125,407,143 |
Current |  | $ | 122,998,543 |  |  | $ | 119,519,251 |
Noncurrent |  |  | 6,159,200 |  |  |  | 5,887,892 |
|  | $ | 129,157,743 |  |  | $ | 125,407,143 |

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

For the years ended December 31, 2022 and 2021, as non-publicly traded investees were acquired and the Company adjusted its investment portfolio, equity investments designated at FVTOCI were divested for NT$561,600 thousand and NT$628,711 thousand, respectively. The related other equity-unrealized gain/loss on financial assets at FVTOCI of NT$303,242 thousand and NT$185,993 thousand were transferred to increase retained earnings, respectively.

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As of December 31, 2022 and 2021, the cumulative loss allowance for expected credit loss of NT$37,783 thousand and NT$33,209 thousand was recognized under investments in debt instruments at FVTOCI, respectively. Refer to Note 33 for information relating to the credit risk management and expected credit loss.

9. | FINANCIAL ASSETS AT AMORTIZED COST

|  | December 31, 2022 |  | December 31, 2021
Corporate bonds |  | $ | 81,041,056 |  |  | $ | 5,310,039 |
Commercial paper |  |  | 48,742,817 |  |  |  | - |
Less: Allowance for impairment loss |  |  | (56,439 | ) |  |  | (3,077 | )
|  | $ | 129,727,434 |  |  | $ | 5,306,962 |
Current |  | $ | 94,600,219 |  |  | $ | 3,773,571 |
Noncurrent |  |  | 35,127,215 |  |  |  | 1,533,391 |
|  | $ | 129,727,434 |  |  | $ | 5,306,962 |

Refer to Note 33 for information relating to credit risk management and expected credit loss for financial assets at amortized cost.

10. | HEDGING FINANCIAL INSTRUMENTS

|  | December 31, 2022 |  | December 31, 2021
Financial assets- current |  |  |  |
Fair value hedges |  |  |  |
Interest rate futures contracts |  | $ | 2,329 |  |  | $ | - |
Cash flow hedges |  |  |  |  |  |  |  |
Forward interest rate contracts |  |  | - |  |  |  | 13,468 |
|  | $ | 2,329 |  |  | $ | 13,468 |
Financial liabilities- current |  |  |  |  |  |  |  |
Fair value hedges |  |  |  |  |  |  |  |
Interest rate futures contracts |  | $ | 813 |  |  | $ | 9,642 |

Fair value hedge

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

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

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

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

December 31, 2022

Hedging Instruments |  | Contract Amount (US$ in Thousands) |  | Maturity
Interest rate futures contracts - US Treasury futures |  | US$ | 74,300 |  |  | March 2023

Hedged Items |  | Asset Carrying Amount |  | Accumulated Amount of Fair Value Hedge Adjustments
Financial assets at FVTOCI |  | $ | 4,008,179 |  |  | $ | (1,516 | )

December 31, 2021

Hedging Instruments |  | Contract Amount (US$ in Thousands) |  | Maturity
Interest rate futures contracts - US Treasury futures |  | US$ | 53,900 |  |  | March 2022

Hedged Items |  | Asset Carrying Amount |  | Accumulated Amount of Fair Value Hedge Adjustments
Financial assets at FVTOCI |  | $ | 4,079,274 |  |  | $ | 9,642 |

The effect for the years ended December 31, 2022 and 2021 is detailed below:

Hedging Instruments/Hedged Items |  | Change in Value Used for Calculating Hedge Ineffectiveness
|  | Years Ended December 31
|  | 2022 |  | 2021
Hedging Instruments |  |  |  |
Interest rate futures contracts - US Treasury futures |  | $ | 283,995 |  |  | $ | 148,817 |
Hedged Items |  |  |  |  |  |  |  |
Financial assets at FVTOCI |  |  | (283,995 | ) |  |  | (148,817 | )
|  | $ | - |  |  | $ | - |

Cash flow hedge

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

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

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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 contracts. No other sources of ineffectiveness emerged from these hedging relationships during the hedging period. For the years ended December 31, 2022 and 2021, refer to Note 21(d) for gain or loss arising from changes in the fair value of hedging instruments, the amount transferred to initial carrying amount of hedged items and the amount reclassified to finance costs of hedged items.

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

December 31, 2021

Hedging Instruments |  | Contract Amount (In Thousands) |  | Maturity |  | Balance in Other Equity (Continuing Hedges)
Forward interest rate contracts |  | US$ | 328,000 |  |  | January 2022 |  | $ | 128,165 |

The effect for the years ended December 31, 2022 and 2021 is detailed below:

Hedging Instruments/Hedged Items |  | Change in Value Used for Calculating Hedge Ineffectiveness
|  | Years Ended December 31
|  | 2022 |  | 2021
Hedging Instruments |  |  |  |
Forward exchange contracts (capital expenditures) |  | $ | - |  |  | $ | (41,416 | )
Forward interest rate contracts (issuance of debts) |  | $ | 1,379,119 |  |  | $ | 132,508 |
Hedged Items |  |  |  |  |  |  |  |
Forecast transaction (capital expenditures) |  | $ | - |  |  | $ | 41,416 |
Forecast transaction (issuance of debts) |  | $ | (1,379,119 | ) |  | $ | (132,508 | )

11. | NOTES AND ACCOUNTS RECEIVABLE, NET

|  | December 31, 2022 |  | December 31, 2021
At amortized cost |  |  |  |
Notes and accounts receivable |  | $ | 222,761,927 |  |  | $ | 193,733,220 |
Less: Loss allowance |  |  | (331,646 | ) |  |  | (347,020 | )
|  |  | 222,430,281 |  |  |  | 193,386,200 |
At FVTOCI |  |  | 7,325,606 |  |  |  | 4,199,909 |
|  | $ | 229,755,887 |  |  | $ | 197,586,109 |

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

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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, 2022 |  | December 31, 2021
Not past due |  | $ | 205,053,142 |  |  | $ | 191,740,045 |
Past due |  |  |  |  |  |  |  |
Past due within 30 days |  |  | 24,516,277 |  |  |  | 6,186,814 |
Past due over 31 days |  |  | 518,114 |  |  |  | 6,270 |
Less: Loss allowance |  |  | (331,646 | ) |  |  | (347,020 | )
|  | $ | 229,755,887 |  |  | $ | 197,586,109 |

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
|  | 2022 |  | 2021
Balance, beginning of year |  | $ | 347,020 |  |  | $ | 246,626 |
Provision (Reversal) |  |  | (15,449 | ) |  |  | 100,408 |
Effect of exchange rate changes |  |  | 75 |  |  |  | (14 | )
Balance, end of year |  | $ | 331,646 |  |  | $ | 347,020 |

For the years ended December 31, 2022 and 2021, the changes in loss allowance were mainly due to the variations in the balance of accounts receivable of different risk levels.

12. | INVENTORIES

|  | December 31, 2022 |  | December 31, 2021
Finished goods |  | $ | 54,818,402 |  |  | $ | 32,562,750 |
Work in process |  |  | 125,661,912 |  |  |  | 137,700,402 |
Raw materials |  |  | 20,389,115 |  |  |  | 11,111,122 |
Supplies and spare parts |  |  | 20,279,719 |  |  |  | 11,728,047 |
|  | $ | 221,149,148 |  |  | $ | 193,102,321 |

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 during reporting period. The amounts are illustrated below:

|  | Years Ended December 31
|  | 2022 |  | 2021
Inventory losses |  | $ | 4,689,112 |  |  | $ | 533,034 |

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13. | INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Associates consisted of the following:

|  |  |  | Place of |  | Carrying Amount |  | % of Ownership and Voting Rights Held by the Company
Name of Associate |  | Principal Activities |  | Incorporation and Operation |  | December 31, 2022 |  | December 31, 2021 |  | December 31, 2022 |  | December 31, 2021
Vanguard International Semiconductor Corporation (VIS) |  | Manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks |  | Hsinchu, Taiwan |  | $ | 13,492,653 |  |  | $ | 10,613,127 |  |  |  | 28% |  |  |  | 28% |
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC) |  | Manufacturing and sales of integrated circuits and other semiconductor devices |  | Singapore |  |  | 8,934,731 |  |  |  | 6,795,699 |  |  |  | 39% |  |  |  | 39% |
Xintec Inc. (Xintec) |  | Wafer level chip size packaging and wafer level post passivation interconnection service |  | Taoyuan, Taiwan |  |  | 3,528,417 |  |  |  | 3,046,961 |  |  |  | 41% |  |  |  | 41% |
Global Unichip Corporation (GUC) |  | Researching, developing, manufacturing, testing and marketing of integrated circuits |  | Hsinchu, Taiwan |  |  | 1,666,651 |  |  |  | 1,484,683 |  |  |  | 35% |  |  |  | 35% |
Mutual-Pak Technology Co., Ltd. (Mutual-Pak) |  | Manufacturing of electronic parts, wholesaling and retailing of electronic materials, and researching, developing and testing of RFID |  | New Taipei, Taiwan |  |  | 19,053 |  |  |  | 22,948 |  |  |  | 28% |  |  |  | 28% |
|  |  |  |  |  | $ | 27,641,505 |  |  | $ | 21,963,418 |  |  |  |  |  |  |  |  |

As of December 31, 2022 and 2021, no investments in associates are individually material to the Company. Please refer to the consolidated 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 associates’ ownership held by the Company 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, 2022 |  | December 31, 2021
VIS |  | $ | 35,977,321 |  |  | $ | 73,347,312 |
GUC |  | $ | 29,926,918 |  |  | $ | 27,359,085 |
Xintec |  | $ | 10,716,449 |  |  | $ | 15,913,315 |

14. | PROPERTY, PLANT AND EQUIPMENT

|  | December 31, 2022 |  | December 31, 2021
Assets used by the Company |  | $ | 2,693,815,688 |  |  | $ | 1,975,113,974 |
Assets subject to operating leases |  |  | 21,282 |  |  |  | 4,730 |
|  | $ | 2,693,836,970 |  |  | $ | 1,975,118,704 |

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Assets used by the Company

|  | Land and Land Improvements |  | Buildings |  | Machinery and Equipment |  | Office Equipment |  | Equipment under Installation and Construction in Progress |  | Total
Cost |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2022 |  | $ | 6,488,230 |  |  | $ | 576,597,777 |  |  | $ | 3,984,749,236 |  |  | $ | 76,154,170 |  |  | $ | 593,155,733 |  |  | $ | 5,237,145,146 |
Additions |  |  | 816,366 |  |  |  | 59,443,801 |  |  |  | 330,782,690 |  |  |  | 10,325,337 |  |  |  | 738,523,914 |  |  |  | 1,139,892,108 |
Disposals or retirements |  |  | - |  |  |  | (236,765 | ) |  |  | (25,846,536 | ) |  |  | (1,709,151 | ) |  |  | - |  |  |  | (27,792,452 | )
Transfers to assets subject to operating leases |  |  | - |  |  |  | - |  |  |  | (65,779 | ) |  |  | - |  |  |  | - |  |  |  | (65,779 | )
Effect of exchange rate changes |  |  | 357,221 |  |  |  | 1,242,136 |  |  |  | 6,322,919 |  |  |  | 257,684 |  |  |  | 5,162,961 |  |  |  | 13,342,921 |
Balance at December 31, 2022 |  | $ | 7,661,817 |  |  | $ | 637,046,949 |  |  | $ | 4,295,942,530 |  |  | $ | 85,028,040 |  |  | $ | 1,336,842,608 |  |  | $ | 6,362,521,944 |
Accumulated depreciation and impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2022 |  | $ | 499,826 |  |  | $ | 306,165,242 |  |  | $ | 2,903,539,441 |  |  | $ | 51,826,663 |  |  | $ | - |  |  | $ | 3,262,031,172 |
Additions |  |  | 1,402 |  |  |  | 35,982,373 |  |  |  | 380,216,160 |  |  |  | 9,216,278 |  |  |  | - |  |  |  | 425,416,213 |
Disposals or retirements |  |  | - |  |  |  | (225,637 | ) |  |  | (24,706,719 | ) |  |  | (1,708,639 | ) |  |  | - |  |  |  | (26,640,995 | )
Transfers to assets subject to operating leases |  |  | - |  |  |  | - |  |  |  | (40,266 | ) |  |  | - |  |  |  | - |  |  |  | (40,266 | )
Impairment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 790,740 |  |  |  | 790,740 |
Effect of exchange rate changes |  |  | 54,933 |  |  |  | 1,016,381 |  |  |  | 5,872,264 |  |  |  | 205,814 |  |  |  | - |  |  |  | 7,149,392 |
Balance at December 31, 2022 |  | $ | 556,161 |  |  | $ | 342,938,359 |  |  | $ | 3,264,880,880 |  |  | $ | 59,540,116 |  |  | $ | 790,740 |  |  | $ | 3,668,706,256 |
Carrying amounts at December 31, 2022 |  | $ | 7,105,656 |  |  | $ | 294,108,590 |  |  | $ | 1,031,061,650 |  |  | $ | 25,487,924 |  |  | $ | 1,336,051,868 |  |  | $ | 2,693,815,688 |
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2021 |  | $ | 3,942,625 |  |  | $ | 522,447,474 |  |  | $ | 3,607,005,732 |  |  | $ | 68,862,648 |  |  | $ | 223,965,360 |  |  | $ | 4,426,223,839 |
Additions |  |  | 2,587,183 |  |  |  | 53,971,271 |  |  |  | 401,659,011 |  |  |  | 7,642,962 |  |  |  | 369,545,869 |  |  |  | 835,406,296 |
Disposals or retirements |  |  | - |  |  |  | (41,143 | ) |  |  | (26,192,191 | ) |  |  | (333,385 | ) |  |  | - |  |  |  | (26,566,719 | )
Transfers from assets subject to operating leases |  |  | - |  |  |  | 35,478 |  |  |  | 1,443,590 |  |  |  | - |  |  |  | - |  |  |  | 1,479,068 |
Transfers to assets subject to operating leases |  |  | - |  |  |  | - |  |  |  | (244,579 | ) |  |  | - |  |  |  | - |  |  |  | (244,579 | )
Effect of exchange rate changes |  |  | (41,578 | ) |  |  | 184,697 |  |  |  | 1,077,673 |  |  |  | (18,055 | ) |  |  | (355,496 | ) |  |  | 847,241 |
Balance at December 31, 2021 |  | $ | 6,488,230 |  |  | $ | 576,597,777 |  |  | $ | 3,984,749,236 |  |  | $ | 76,154,170 |  |  | $ | 593,155,733 |  |  | $ | 5,237,145,146 |
Accumulated depreciation and impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2021 |  | $ | 506,129 |  |  | $ | 271,799,471 |  |  | $ | 2,555,529,969 |  |  | $ | 43,802,332 |  |  | $ | - |  |  | $ | 2,871,637,901 |
Additions |  |  | 1,329 |  |  |  | 34,331,645 |  |  |  | 368,777,680 |  |  |  | 8,373,282 |  |  |  | - |  |  |  | 411,483,936 |
Disposals or retirements |  |  | - |  |  |  | (36,527 | ) |  |  | (22,230,098 | ) |  |  | (332,557 | ) |  |  | - |  |  |  | (22,599,182 | )
Transfers from assets subject to operating leases |  |  | - |  |  |  | 15,066 |  |  |  | 436,816 |  |  |  | - |  |  |  | - |  |  |  | 451,882 |
Transfers to assets subject to operating leases |  |  | - |  |  |  | - |  |  |  | (68,279 | ) |  |  | - |  |  |  | - |  |  |  | (68,279 | )
Impairment |  |  | - |  |  |  | - |  |  |  | 274,388 |  |  |  | - |  |  |  | - |  |  |  | 274,388 |
Effect of exchange rate changes |  |  | (7,632 | ) |  |  | 55,587 |  |  |  | 818,965 |  |  |  | (16,394 | ) |  |  | - |  |  |  | 850,526 |
Balance at December 31, 2021 |  | $ | 499,826 |  |  | $ | 306,165,242 |  |  | $ | 2,903,539,441 |  |  | $ | 51,826,663 |  |  | $ | - |  |  | $ | 3,262,031,172 |
Carrying amounts at December 31, 2021 |  | $ | 5,988,404 |  |  | $ | 270,432,535 |  |  | $ | 1,081,209,795 |  |  | $ | 24,327,507 |  |  | $ | 593,155,733 |  |  | $ | 1,975,113,974 |

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 2022 and 2021, the Company recognized an impairment loss of NT$790,740 thousand and NT$274,388 thousand for certain machinery and equipment that were assessed to have no future use, and the recoverable amount of the aforementioned assets were nil. Such impairment loss was recognized in other operating income and expenses.

Information about capitalized interest is set out in Note 24.

33

15. | LEASE ARRANGEMENTS

| a. | Right-of-use assets

|  | December 31, 2022 |  | December 31, 2021
Carrying amounts |  |  |  |
Land |  | $ | 38,525,856 |  |  | $ | 29,778,636 |
Buildings |  |  | 3,356,700 |  |  |  | 2,918,133 |
Machinery and equipment |  |  | 2,965 |  |  |  | 3,474 |
Office equipment |  |  | 28,615 |  |  |  | 34,294 |
|  | $ | 41,914,136 |  |  | $ | 32,734,537 |

|  | Years Ended December 31
|  | 2022 |  | 2021
Additions to right-of-use assets |  | $ | 12,610,664 |  |  | $ | 7,769,782 |
Depreciation of right-of-use assets |  |  |  |  |  |  |  |
Land |  | $ | 2,119,828 |  |  | $ | 1,825,712 |
Buildings |  |  | 928,726 |  |  |  | 707,856 |
Machinery and equipment |  |  | 863 |  |  |  | 539 |
Office equipment |  |  | 23,588 |  |  |  | 22,091 |
|  | $ | 3,073,005 |  |  | $ | 2,556,198 |

| b. | Lease liabilities

|  | December 31, 2022 |  | December 31, 2021
Carrying amounts |  |  |  |
Current portion (classified under accrued expenses and other current liabilities) |  | $ | 2,603,504 |  |  | $ | 2,176,451 |
Noncurrent portion |  |  | 29,764,097 |  |  |  | 20,764,214 |
|  | $ | 32,367,601 |  |  | $ | 22,940,665 |

Ranges of discount rates for lease liabilities are as follows:

|  | December 31, 2022 |  | December 31, 2021
Land |  |  | 0.39%-2.30% |  |  |  | 0.39%-2.14% |
Buildings |  |  | 0.39%-5.63% |  |  |  | 0.39%-3.88% |
Machinery and equipment |  |  | 0.71% |  |  |  | 0.71% |
Office equipment |  |  | 0.28%-4.71% |  |  |  | 0.28%-3.88% |

34

| c. | Material terms of right-of-use assets

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

| d. | Other lease information

|  | Years Ended December 31
|  | 2022 |  | 2021
Expenses relating to short-term leases |  | $ | 4,731,087 |  |  | $ | 5,250,279 |
Total cash outflow for leases |  | $ | 7,618,290 |  |  | $ | 7,510,762 |

16. | INTANGIBLE ASSETS

|  | Goodwill |  | Technology License Fees |  | Software and System Design Costs |  | Patent and Others |  | Total
Cost |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2022 |  | $ | 5,379,164 |  |  | $ | 23,533,959 |  |  | $ | 43,650,957 |  |  | $ | 11,497,309 |  |  | $ | 84,061,389 |
Additions |  |  | - |  |  |  | 2,253,095 |  |  |  | 5,078,967 |  |  |  | 203,030 |  |  |  | 7,535,092 |
Disposals or retirements |  |  | - |  |  |  | (29,991 | ) |  |  | (66,261 | ) |  |  | - |  |  |  | (96,252 | )
Effect of exchange rate changes |  |  | 412,657 |  |  |  | 1,956 |  |  |  | 12,131 |  |  |  | 1,553 |  |  |  | 428,297 |
Balance at December 31, 2022 |  | $ | 5,791,821 |  |  | $ | 25,759,019 |  |  | $ | 48,675,794 |  |  | $ | 11,701,892 |  |  | $ | 91,928,526 |
Accumulated amortization and impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2022 |  | $ | - |  |  | $ | 14,912,293 |  |  | $ | 34,121,578 |  |  | $ | 8,205,821 |  |  | $ | 57,239,692 |
Additions |  |  | - |  |  |  | 2,793,539 |  |  |  | 4,774,522 |  |  |  | 1,188,033 |  |  |  | 8,756,094 |
Disposals or retirements |  |  | - |  |  |  | (11,351 | ) |  |  | (66,261 | ) |  |  | - |  |  |  | (77,612 | )
Effect of exchange rate changes |  |  | - |  |  |  | 1,956 |  |  |  | 8,555 |  |  |  | 686 |  |  |  | 11,197 |
Balance at December 31, 2022 |  | $ | - |  |  | $ | 17,696,437 |  |  | $ | 38,838,394 |  |  | $ | 9,394,540 |  |  | $ | 65,929,371 |
Carrying amounts at December 31, 2022 |  | $ | 5,791,821 |  |  | $ | 8,062,582 |  |  | $ | 9,837,400 |  |  | $ | 2,307,352 |  |  | $ | 25,999,155 |
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2021 |  | $ | 5,436,602 |  |  | $ | 22,161,712 |  |  | $ | 36,238,967 |  |  | $ | 11,277,701 |  |  | $ | 75,114,982 |
Additions |  |  | - |  |  |  | 1,372,806 |  |  |  | 7,726,168 |  |  |  | 219,504 |  |  |  | 9,318,478 |
Disposals or retirements |  |  | - |  |  |  | - |  |  |  | (318,736 | ) |  |  | - |  |  |  | (318,736 | )
Effect of exchange rate changes |  |  | (57,438 | ) |  |  | (559 | ) |  |  | 4,558 |  |  |  | 104 |  |  |  | (53,335 | )
Balance at December 31, 2021 |  | $ | 5,379,164 |  |  | $ | 23,533,959 |  |  | $ | 43,650,957 |  |  | $ | 11,497,309 |  |  | $ | 84,061,389 |
Accumulated amortization and impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2021 |  | $ | - |  |  | $ | 12,226,066 |  |  | $ | 30,111,759 |  |  | $ | 7,008,978 |  |  | $ | 49,346,803 |
Additions |  |  | - |  |  |  | 2,686,786 |  |  |  | 4,323,860 |  |  |  | 1,196,523 |  |  |  | 8,207,169 |
Disposals or retirements |  |  | - |  |  |  | - |  |  |  | (317,508 | ) |  |  | - |  |  |  | (317,508 | )
Effect of exchange rate changes |  |  | - |  |  |  | (559 | ) |  |  | 3,467 |  |  |  | 320 |  |  |  | 3,228 |
Balance at December 31, 2021 |  | $ | - |  |  | $ | 14,912,293 |  |  | $ | 34,121,578 |  |  | $ | 8,205,821 |  |  | $ | 57,239,692 |
Carrying amounts at December 31, 2021 |  | $ | 5,379,164 |  |  | $ | 8,621,666 |  |  | $ | 9,529,379 |  |  | $ | 3,291,488 |  |  | $ | 26,821,697 |

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

35

cash flow forecast from the financial budgets covering the future five-year period, and the Company used annual discount rates of 8.7% and 8.0% in its test of impairment as of December 31, 2022 and 2021, respectively, to reflect the relevant specific risk in the cash-generating unit.

For the years ended December 31, 2022 and 2021, the Company did not recognize any impairment loss on goodwill.

17. | SHORT-TERM LOANS

|  |  |  | December 31, 2021
Unsecured loans |  |  |  |
Amount |  |  |  | $ | 114,921,333 |
Loan content |  |  |  |  |  |
EUR (in thousands) |  |  |  | $ | 3,652,935 |
Annual interest rate |  |  |  |  | (0.73)%-0% |
Maturity date |  |  |  |  | Due by June 2022 |

18. | BONDS PAYABLE

|  | December 31, 2022 |  | December 31, 2021
Domestic unsecured bonds |  | $ | 379,526,000 |  |  | $ | 312,448,000 |
Overseas unsecured bonds |  |  | 476,051,500 |  |  |  | 304,414,000 |
Less: Discounts on bonds payable |  |  | (3,141,061 | ) |  |  | (2,391,348 | )
Less: Current portion |  |  | (18,100,000 | ) |  |  | (4,400,000 | )
|  | $ | 834,336,439 |  |  | $ | 610,070,652 |

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 |  |  |  |  |  |  |  |  |  |
101-3 |  | - |  | October 2012 to October 2022 |  | $ | 4,400,000 |  |  |  | 1.53% |  |  | Bullet repayment; interest payable annually
101-4 |  | C |  | January 2013 to January 2023 |  |  | 3,000,000 |  |  |  | 1.49% |  |  | The same as above
102-1 |  | C |  | February 2013 to February 2023 |  |  | 3,600,000 |  |  |  | 1.50% |  |  | The same as above
102-2 |  | B |  | July 2013 to July 2023 |  |  | 3,500,000 |  |  |  | 1.70% |  |  | The same as above

(Continued)

36

Issuance |  | Tranche |  | Issuance Period |  | Total Amount |  | Coupon Rate |  | Repayment and Interest Payment
102-4 |  | D |  | September 2013 to March 2021 |  | $ | 2,600,000 |  |  |  | 1.85% |  |  | 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)
|  | 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
|  | C |  | April 2020 to April 2030 |  |  | 5,300,000 |  |  |  | 0.60% |  |  | The same as above
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

(Continued)

37

Issuance |  | Tranche |  | Issuance Period |  | Total Amount |  | Coupon Rate |  | Repayment and Interest Payment
109-7 |  | A |  | December 2020 to December 2025 |  | $ | 1,900,000 |  |  |  | 0.36% |  |  | Two equal installments in last two years; interest payable annually
|  | 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
110-1 |  | A |  | March 2021 to March 2026 |  |  | 4,800,000 |  |  |  | 0.50% |  |  | Bullet repayment; interest payable annually
|  | B |  | March 2021 to March 2028 |  |  | 11,400,000 |  |  |  | 0.55% |  |  | The same as above
|  | C |  | March 2021 to March 2031 |  |  | 4,900,000 |  |  |  | 0.60% |  |  | The same as above
110-2 |  | A |  | May 2021 to May 2026 |  |  | 5,200,000 |  |  |  | 0.50% |  |  | The same as above
|  | B |  | May 2021 to May 2028 |  |  | 8,400,000 |  |  |  | 0.58% |  |  | The same as above
|  | C |  | May 2021 to May 2031 |  |  | 5,600,000 |  |  |  | 0.65% |  |  | The same as above
110-3 |  | A |  | June 2021 to June 2026 |  |  | 6,900,000 |  |  |  | 0.52% |  |  | The same as above
|  | B |  | June 2021 to June 2028 |  |  | 7,900,000 |  |  |  | 0.58% |  |  | The same as above
|  | C |  | June 2021 to June 2031 |  |  | 4,900,000 |  |  |  | 0.65% |  |  | The same as above
110-4 |  | A |  | August 2021 to August 2025 |  |  | 4,000,000 |  |  |  | 0.485% |  |  | The same as above
|  | B |  | August 2021 to August 2026 |  |  | 8,000,000 |  |  |  | 0.50% |  |  | The same as above
|  | C |  | August 2021 to August 2028 |  |  | 5,400,000 |  |  |  | 0.55% |  |  | The same as above
|  | D |  | August 2021 to August 2031 |  |  | 4,200,000 |  |  |  | 0.62% |  |  | The same as above
110-6 |  | A |  | October 2021 to April 2026 |  |  | 3,200,000 |  |  |  | 0.535% |  |  | The same as above
|  | B |  | October 2021 to October 2026 |  |  | 6,900,000 |  |  |  | 0.54% |  |  | The same as above
|  | C |  | October 2021 to October 2028 |  |  | 4,600,000 |  |  |  | 0.60% |  |  | The same as above
|  | D |  | October 2021 to October 2031 |  |  | 1,600,000 |  |  |  | 0.62% |  |  | The same as above
110-7 |  | A |  | December 2021 to December 2026 |  |  | 7,700,000 |  |  |  | 0.65% |  |  | The same as above
|  | B |  | December 2021 to June 2027 |  |  | 3,500,000 |  |  |  | 0.675% |  |  | The same as above
|  | C |  | December 2021 to December 2028 |  |  | 5,500,000 |  |  |  | 0.72% |  |  | The same as above
111-1 (Green bond) |  | A |  | January 2022 to January 2027 |  |  | 2,100,000 |  |  |  | 0.63% |  |  | The same as above
|  | B |  | January 2022 to January 2029 |  |  | 3,300,000 |  |  |  | 0.72% |  |  | The same as above

(Continued)

38

Issuance |  | Tranche |  | Issuance Period |  | Total Amount |  | Coupon Rate |  | Repayment and Interest Payment
111-2 |  | A |  | March 2022 to September 2026 |  | $ | 3,000,000 |  |  |  | 0.84% |  |  | Bullet repayment; interest payable annually
|  | B |  | March 2022 to March 2027 |  |  | 9,600,000 |  |  |  | 0.85% |  |  | The same as above
|  | C |  | March 2022 to March 2029 |  |  | 1,600,000 |  |  |  | 0.90% |  |  | The same as above
111-3 (Green bond) |  | - |  | May 2022 to May 2027 |  |  | 6,100,000 |  |  |  | 1.50% |  |  | The same as above
111-4 (Green bond) |  | A |  | July 2022 to July 2026 |  |  | 1,200,000 |  |  |  | 1.60% |  |  | The same as above
|  | B |  | July 2022 to July 2027 |  |  | 10,100,000 |  |  |  | 1.70% |  |  | The same as above
|  | C |  | July 2022 to July 2029 |  |  | 1,200,000 |  |  |  | 1.75% |  |  | The same as above
|  | D |  | July 2022 to July 2032 |  |  | 1,400,000 |  |  |  | 1.95% |  |  | The same as above
111-5 |  | A |  | August 2022 to June 2027 |  |  | 2,000,000 |  |  |  | 1.65% |  |  | The same as above
|  | B |  | August 2022 to August 2027 |  |  | 8,900,000 |  |  |  | 1.65% |  |  | The same as above
|  | C |  | August 2022 to August 2029 |  |  | 2,200,000 |  |  |  | 1.65% |  |  | The same as above
|  | D |  | August 2022 to August 2032 |  |  | 2,500,000 |  |  |  | 1.82% |  |  | The same as above
111-6 (Green bond) |  | A |  | October 2022 to October 2027 |  |  | 5,700,000 |  |  |  | 1.75% |  |  | The same as above
|  | B |  | October 2022 to October 2029 |  |  | 1,000,000 |  |  |  | 1.80% |  |  | The same as above
|  | C |  | October 2022 to October 2032 |  |  | 3,500,000 |  |  |  | 2.00% |  |  | The same as above

(Concluded)

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
110-5 |  | - |  | September 2021 to September 2051 |  |  | 1,000,000 |  |  |  | 3.10% |  |  | The same as above

39

The major terms of overseas unsecured bonds are as follows:

Issuance Period |  | Total Amount (US$ in Thousands) |  | Coupon Rate |  | Repayment and Interest Payment
September 2020 to September 2025 |  | US$ | 1,000,000 |  |  |  | 0.75% |  |  | Bullet repayment (callable at any time, in whole or in part, at the relevant redemption price according to relevant agreements); interest payable semi-annually
September 2020 to September 2027 |  |  | 750,000 |  |  |  | 1.00% |  |  | The same as above
September 2020 to September 2030 |  |  | 1,250,000 |  |  |  | 1.375% |  |  | The same as above
April 2021 to April 2026 |  |  | 1,100,000 |  |  |  | 1.25% |  |  | The same as above
April 2021 to April 2028 |  |  | 900,000 |  |  |  | 1.75% |  |  | The same as above
April 2021 to April 2031 |  |  | 1,500,000 |  |  |  | 2.25% |  |  | The same as above
October 2021 to October 2026 |  |  | 1,250,000 |  |  |  | 1.75% |  |  | The same as above
October 2021 to October 2031 |  |  | 1,250,000 |  |  |  | 2.50% |  |  | The same as above
October 2021 to October 2041 |  |  | 1,000,000 |  |  |  | 3.125% |  |  | The same as above
October 2021 to October 2051 |  |  | 1,000,000 |  |  |  | 3.25% |  |  | The same as above
April 2022 to April 2027 |  |  | 1,000,000 |  |  |  | 3.875% |  |  | The same as above
April 2022 to April 2029 |  |  | 500,000 |  |  |  | 4.125% |  |  | The same as above
April 2022 to April 2032 |  |  | 1,000,000 |  |  |  | 4.25% |  |  | The same as above
April 2022 to April 2052 |  |  | 1,000,000 |  |  |  | 4.50% |  |  | The same as above
July 2022 to July 2027 |  |  | 400,000 |  |  |  | 4.375% |  |  | The same as above
July 2022 to July 2032 |  |  | 600,000 |  |  |  | 4.625% |  |  | The same as above

19. | LONG-TERM BANK LOANS

|  | December 31, 2022 |  | December 31, 2021
Unsecured loans |  | $ | 6,013,333 |  |  | $ | 3,510,000 |
Less: Discounts on government grants |  |  | (39,397 | ) |  |  | (34,202 | )
Less: Current portion |  |  | (1,213,889 | ) |  |  | (166,667 | )
|  | $ | 4,760,047 |  |  | $ | 3,309,131 |
Loan content |  |  |  |  |  |  |  |
Annual interest rate |  |  | 1.03%-1.23% |  |  |  | 0.40%-0.90% |
Maturity date |  |  | Due by December 2027 |  |  |  | Due by September 2026 |

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

40

20. | 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, TSMC and VisEra Tech have made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts. Furthermore, TSMC North America, TSMC China, TSMC Nanjing, TSMC Arizona, TSMC Europe, TSMC Canada, TSMC Technology and JASM also make monthly contributions at certain percentages of the basic salary of their employees. Accordingly, the Company recognized expenses of NT$4,550,387 thousand and NT$3,711,010 thousand for the years ended December 31, 2022 and 2021, respectively.

| b. | Defined benefit plans

TSMC 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
|  | 2022 |  | 2021
Current service cost |  | $ | 134,376 |  |  | $ | 145,289 |
Net interest expense |  |  | 74,265 |  |  |  | 47,196 |
Components of defined benefit costs recognized in profit or loss |  |  | 208,641 |  |  |  | 192,485 |
Remeasurement on the net defined benefit liability: |  |  |  |  |  |  |  |
Return on plan assets (excluding amounts included in net interest expense) |  |  | (429,948 | ) |  |  | (73,298 | )
Actuarial loss arising from experience adjustments |  |  | 1,413,760 |  |  |  | 94,278 |
Actuarial loss arising from changes in demographic assumptions |  |  | - |  |  |  | 277,454 |
Actuarial gain arising from changes in financial assumptions |  |  | (160,752 | ) |  |  | (540,513 | )
Components of defined benefit costs recognized in other comprehensive income |  |  | 823,060 |  |  |  | (242,079 | )
Total |  | $ | 1,031,701 |  |  | $ | (49,594 | )

41

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

|  | Years Ended December 31
|  | 2022 |  | 2021
Cost of revenue |  | $ | 135,125 |  |  | $ | 124,548 |
Research and development expenses |  |  | 55,632 |  |  |  | 52,801 |
General and administrative expenses |  |  | 15,129 |  |  |  | 12,430 |
Marketing expenses |  |  | 2,755 |  |  |  | 2,706 |
|  | $ | 208,641 |  |  | $ | 192,485 |

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

|  | December 31, 2022 |  | December 31, 2021
Present value of defined benefit obligation |  | $ | 17,483,951 |  |  | $ | 16,585,442 |
Fair value of plan assets |  |  | (8,162,860 | ) |  |  | (5,548,563 | )
Net defined benefit liability |  | $ | 9,321,091 |  |  | $ | 11,036,879 |

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

|  | Years Ended December 31
|  | 2022 |  | 2021
Balance, beginning of year |  | $ | 16,585,442 |  |  | $ | 16,980,277 |
Current service cost |  |  | 134,376 |  |  |  | 145,289 |
Interest expense |  |  | 120,791 |  |  |  | 66,664 |
Remeasurement: |  |  |  |  |  |  |  |
Actuarial loss arising from experience adjustments |  |  | 1,413,760 |  |  |  | 94,278 |
Actuarial loss arising from changes in demographic assumptions |  |  | - |  |  |  | 277,454 |
Actuarial gain arising from changes in financial assumptions |  |  | (160,752 | ) |  |  | (540,513 | )
Benefits paid from plan assets |  |  | (585,343 | ) |  |  | (431,817 | )
Benefits paid directly by the Company |  |  | (24,323 | ) |  |  | (6,190 | )
Balance, end of year |  | $ | 17,483,951 |  |  | $ | 16,585,442 |

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

|  | Years Ended December 31
|  | 2022 |  | 2021
Balance, beginning of year |  | $ | 5,548,563 |  |  | $ | 5,066,203 |
Interest income |  |  | 46,526 |  |  |  | 19,468 |
Remeasurement: |  |  |  |  |  |  |  |
Return on plan assets (excluding amounts included in net interest expense) |  |  | 429,948 |  |  |  | 73,298 |
Contributions from employer |  |  | 2,723,166 |  |  |  | 821,411 |
Benefits paid from plan assets |  |  | (585,343 | ) |  |  | (431,817 | )
Balance, end of year |  | $ | 8,162,860 |  |  | $ | 5,548,563 |

42

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

|  | December 31, 2022 |  | December 31, 2021
Cash |  | $ | 1,337,893 |  |  | $ | 1,000,961 |
Equity instruments |  |  | 4,696,909 |  |  |  | 2,951,835 |
Debt instruments |  |  | 2,128,058 |  |  |  | 1,595,767 |
|  | $ | 8,162,860 |  |  | $ | 5,548,563 |

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, 2022 |  | December 31, 2021
Discount rate |  |  | 1.80% |  |  |  | 0.75% |
Future salary increase rate |  |  | 4.00% |  |  |  | 3.00% |

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$766,692 thousand and NT$780,460 thousand as of December 31, 2022 and 2021, 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$746,933 thousand and NT$759,527 thousand as of December 31, 2022 and 2021, 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.

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.

43

The Company expects to make contributions of NT$2,832,093 thousand to the defined benefit plans in the next year starting from December 31, 2022. The weighted average duration of the defined benefit obligation is 9 years.

21. | EQUITY

| a. | Capital stock

|  | December 31, 2022 |  | December 31, 2021
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.

On March 1, 2022, the Company issued employee restricted stocks awards (RSAs) for its employees in a total of 1,387 thousand shares with a par value of NT$10 each. The aforementioned issuance of new shares was approved by the relevant authority and the registration has been completed. Refer to Note 28 for the information on RSAs.

On May 10, 2022, TSMC’s Board of Directors resolved to cancel 1,387 thousand treasury shares. Refer to Note 21(e) for the information.

As of the end of reporting period, 1,063,847 thousand ADSs of TSMC were traded on the NYSE. The number of common shares represented by the ADSs was 5,319,234 thousand shares (one ADS represents five common shares).

| b. | Capital surplus

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

|  | December 31, 2022 |  | December 31, 2021
May be used to offset a deficit, distributed as cash dividends, or transferred to share capital |  |  |  |
Additional paid-in capital |  | $ | 24,183,645 |  |  | $ | 24,184,939 |
From merger |  |  | 22,803,291 |  |  |  | 22,804,510 |
From convertible bonds |  |  | 8,892,371 |  |  |  | 8,892,847 |
From difference between the consideration received and the carrying amount of the subsidiaries’ net assets during actual disposal |  |  | 8,406,282 |  |  |  | 8,406,282 |
Donations - donated by shareholders |  |  | 11,275 |  |  |  | 11,275 |

(Continued)

44

|  | December 31, 2022 |  | December 31, 2021
May only be used to offset a deficit |  |  |  |
From share of changes in equities of subsidiaries |  | $ | 4,229,892 |  |  | $ | 113,952 |
From share of changes in equities of associates |  |  | 311,863 |  |  |  | 307,322 |
Donations - unclaimed dividend |  |  | 53,680 |  |  |  | 40,475 |
May not be used for any purpose |  |  |  |  |  |  |  |
Employee restricted shares |  |  | 438,029 |  |  |  | - |
|  | $ | 69,330,328 |  |  | $ | 64,761,602 |

(Concluded)

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

| c. | Retained earnings and dividend policy

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

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

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

Pursuant to existing regulations, the Company is required to set aside 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.

The appropriations of 2022, 2021 and 2020 quarterly earnings have been approved by TSMC’s Board of Directors in its meeting, respectively. The appropriations and cash dividends per share were as follows:

|  | Fourth Quarter |  | Third Quarter |  | Second Quarter |  | First Quarter
Resolution Date of TSMC’s |  | of 2022 |  | of 2022 |  | of 2022 |  | of 2022
Board of Directors in its |  | February 14, |  | November 8, |  | August 9, |  | May 10,
meeting |  | 2023 |  | 2022 |  | 2022 |  | 2022
Special capital reserve |  | $ | 17,166,163 |  |  | $ | (31,910,353 | ) |  | $ | (12,002,798 | ) |  | $ | (15,541,054 | )
Cash dividends to shareholders |  | $ | 71,308,546 |  |  | $ | 71,308,547 |  |  | $ | 71,308,546 |  |  | $ | 71,308,546 |
Cash dividends per share (NT$) |  | $ | 2.75 |  |  | $ | 2.75 |  |  | $ | 2.75 |  |  | $ | 2.75 |

45

|  | Fourth Quarter |  | Third Quarter |  | Second Quarter |  | First Quarter
Resolution Date of TSMC’s |  | of 2021 |  | of 2021 |  | of 2021 |  | of 2021
Board of Directors in its |  | February 15, |  | November 9, |  | August 10, |  | June 9,
meeting |  | 2022 |  | 2021 |  | 2021 |  | 2021
Special capital reserve |  | $ | 3,304,303 |  |  | $ | 710,169 |  |  | $ | 10,201,220 |  |  | $ | (6,287,050 | )
Cash dividends to shareholders |  | $ | 71,308,546 |  |  | $ | 71,308,547 |  |  | $ | 71,308,546 |  |  | $ | 71,308,546 |
Cash dividends per share (NT$) |  | $ | 2.75 |  |  | $ | 2.75 |  |  | $ | 2.75 |  |  | $ | 2.75 |

|  | Fourth Quarter |  | Third Quarter |  | Second Quarter |  | First Quarter
Resolution Date of TSMC’s |  | of 2020 |  | of 2020 |  | of 2020 |  | of 2020
Board of Directors in its meeting |  | February 9, 2021 |  | November 10, 2020 |  | August 11, 2020 |  | May 12, 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 |

The special capital reserve for 2022 is to be presented for approval in TSMC’s shareholders’ meeting to be held on June 6, 2023 (expected).

| d. | Others

Changes in others were as follows:

|  | Year Ended December 31, 2022
|  | 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 |  | $ | (63,303,361 | ) |  | $ | 574,310 |  |  | $ | 120,536 |  |  | $ | - |  |  | $ | (62,608,515 | )
Exchange differences arising on translation of foreign operations |  |  | 51,009,722 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 51,009,722 |
Unrealized gain (loss) on financial assets at FVTOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity instruments |  |  | - |  |  |  | (263,380 | ) |  |  | - |  |  |  | - |  |  |  | (263,380 | )
Debt instruments |  |  | - |  |  |  | (10,513,643 | ) |  |  | - |  |  |  | - |  |  |  | (10,513,643 | )
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal |  |  | - |  |  |  | (303,242 | ) |  |  | - |  |  |  | - |  |  |  | (303,242 | )
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal |  |  | - |  |  |  | 410,076 |  |  |  | - |  |  |  | - |  |  |  | 410,076 |
Loss allowance adjustments from debt instruments |  |  | - |  |  |  | 909 |  |  |  | - |  |  |  | - |  |  |  | 909 |
Gain (loss) arising on changes in the fair value of hedging instruments |  |  | - |  |  |  | - |  |  |  | 1,329,231 |  |  |  | - |  |  |  | 1,329,231 |
Transferred to initial carrying amount of hedged items |  |  | - |  |  |  | - |  |  |  | (52,929 | ) |  |  | - |  |  |  | (52,929 | )
Issuance of shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (451,899 | ) |  |  | (451,899 | )
Share-based payment expenses recognized |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 266,746 |  |  |  | 266,746 |
Share of other comprehensive income (loss) of associates |  |  | 550,338 |  |  |  | 38,696 |  |  |  | 76,307 |  |  |  | - |  |  |  | 665,341 |
Income tax effect |  |  | - |  |  |  | (79 | ) |  |  | 6,036 |  |  |  | - |  |  |  | 5,957 |
Balance, end of year |  | $ | (11,743,301 | ) |  | $ | (10,056,353 | ) |  | $ | 1,479,181 |  |  | $ | (185,153 | ) |  | $ | (20,505,626 | )

46

|  | Year Ended December 31, 2021
|  | 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 |  | $ | (57,001,627 | ) |  | $ | 2,321,754 |  |  | $ | - |  |  | $ | - |  |  | $ | (54,679,873 | )
Exchange differences arising on translation of foreign operations |  |  | (6,181,737 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (6,181,737 | )
Unrealized gain (loss) on financial assets at FVTOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity instruments |  |  | - |  |  |  | 1,898,206 |  |  |  | - |  |  |  | - |  |  |  | 1,898,206 |
Debt instruments |  |  | - |  |  |  | (3,339,796 | ) |  |  | - |  |  |  | - |  |  |  | (3,339,796 | )
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal |  |  | - |  |  |  | (187,654 | ) |  |  | - |  |  |  | - |  |  |  | (187,654 | )
Cumulative unrealized gain (loss) of debt instruments transferred to profit or loss due to disposal |  |  | - |  |  |  | (93,229 | ) |  |  | - |  |  |  | - |  |  |  | (93,229 | )
Loss allowance adjustments from debt instruments |  |  | - |  |  |  | 1,234 |  |  |  | - |  |  |  | - |  |  |  | 1,234 |
Gain (loss) arising on changes in the fair value of hedging instruments |  |  | - |  |  |  | - |  |  |  | 90,119 |  |  |  | - |  |  |  | 90,119 |
Transferred to initial carrying amount of hedged items |  |  | - |  |  |  | - |  |  |  | 48,469 |  |  |  | - |  |  |  | 48,469 |
Share of other comprehensive income (loss) of associates |  |  | (119,997 | ) |  |  | 30,015 |  |  |  | (14,682 | ) |  |  | - |  |  |  | (104,664 | )
Income tax effect |  |  | - |  |  |  | (56,220 | ) |  |  | (3,370 | ) |  |  | - |  |  |  | (59,590 | )
Balance, end of year |  | $ | (63,303,361 | ) |  | $ | 574,310 |  |  | $ | 120,536 |  |  | $ | - |  |  | $ | (62,608,515 | )

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

| e. | Treasury stock

For TSMC’s shareholders’ interests, TSMC’s Board of Directors approved a share buyback program on February 15, 2022 to repurchase 1,387 thousand shares. TSMC has completed this share buyback program during the first quarter of 2022. On May 10, 2022, TSMC’s Board of Directors resolved to cancel the 1,387 thousand shares and set May 10, 2022 as the record date for capital reduction. The registration for share cancellation was completed on May 20, 2022.

22. | NET REVENUE

| a. | Disaggregation of revenue from contracts with customers

|  | Years Ended December 31
Product |  | 2022 |  | 2021
Wafer |  | $ | 1,991,855,947 |  |  | $ | 1,405,300,273 |
Others |  |  | 272,035,345 |  |  |  | 182,114,764 |
|  | $ | 2,263,891,292 |  |  | $ | 1,587,415,037 |

47

|  | Years Ended December 31
Geography |  | 2022 |  | 2021
Taiwan |  | $ | 210,470,783 |  |  | $ | 203,963,760 |
United States |  |  | 1,493,328,765 |  |  |  | 1,015,996,424 |
China |  |  | 245,168,746 |  |  |  | 164,552,063 |
Europe, the Middle East and Africa |  |  | 123,767,140 |  |  |  | 89,010,064 |
Japan |  |  | 119,099,336 |  |  |  | 71,920,856 |
Others |  |  | 72,056,522 |  |  |  | 41,971,870 |
|  | $ | 2,263,891,292 |  |  | $ | 1,587,415,037 |

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

|  | Years Ended December 31
Platform |  | 2022 |  | 2021
High Performance Computing |  | $ | 932,383,729 |  |  | $ | 587,780,144 |
Smartphone |  |  | 888,879,250 |  |  |  | 695,091,191 |
Internet of Things |  |  | 196,114,987 |  |  |  | 133,005,979 |
Automotive |  |  | 116,380,987 |  |  |  | 67,076,353 |
Digital Consumer Electronics |  |  | 56,158,772 |  |  |  | 55,577,223 |
Others |  |  | 73,973,567 |  |  |  | 48,884,147 |
|  | $ | 2,263,891,292 |  |  | $ | 1,587,415,037 |

|  | Years Ended December 31
Resolution |  | 2022 |  | 2021
5-nanometer |  | $ | 508,689,881 |  |  | $ | 262,327,365 |
7-nanometer |  |  | 535,153,763 |  |  |  | 440,383,100 |
10-nanometer |  |  | 24,871 |  |  |  | 659,989 |
16-nanometer |  |  | 258,544,274 |  |  |  | 191,058,940 |
20-nanometer |  |  | 8,853,291 |  |  |  | 5,668,752 |
28-nanometer |  |  | 206,611,955 |  |  |  | 153,066,563 |
40/45-nanometer |  |  | 145,546,243 |  |  |  | 103,413,639 |
65-nanometer |  |  | 93,288,614 |  |  |  | 66,467,903 |
90-nanometer |  |  | 40,184,169 |  |  |  | 32,260,288 |
0.11/0.13 micron |  |  | 57,992,328 |  |  |  | 40,558,534 |
0.15/0.18 micron |  |  | 110,571,222 |  |  |  | 86,700,287 |
0.25 micron and above |  |  | 26,395,336 |  |  |  | 22,734,913 |
Wafer revenue |  | $ | 1,991,855,947 |  |  | $ | 1,405,300,273 |

| b. | Contract balances

|  | December 31, 2022 |  | December 31, 2021 |  | January 1, 2021
Contract liabilities (classified under accrued expenses and other current liabilities) |  | $ | 70,806,617 |  |  | $ | 39,762,588 |  |  | $ | 13,775,088 |

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

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The Company recognized revenue from the beginning balance of contract liability, which amounted to NT$38,433,111 thousand and NT$11,590,400 thousand for the years ended December 31, 2022 and 2021, respectively.

| c. | Temporary receipts from customers

|  | December 31, 2022 |  | December 31, 2021
Current portion (classified under accrued expenses and other current liabilities) |  | $ | 107,723,580 |  |  | $ | 30,612,702 |
Noncurrent portion (classified under other noncurrent liabilities) |  |  | 168,399,207 |  |  |  | 155,381,485 |
|  | $ | 276,122,787 |  |  | $ | 185,994,187 |

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

| d. | Refund liabilities

Estimated sales returns and other allowances is made and adjusted based on historical experience and the consideration of varying contractual terms. As of December 31, 2022 and 2021, the aforementioned refund liabilities amounted to NT$53,078,351 thousand and NT$41,038,041 thousand (classified under accrued expenses and other current liabilities), respectively.

23.INTEREST INCOME

|  | Years Ended December 31
|  | 2022 |  | 2021
Interest income |  |  |  |
Bank deposits |  | $ | 17,831,257 |  |  | $ | 2,834,838 |
Financial assets at FVTOCI |  |  | 2,582,341 |  |  |  | 2,192,470 |
Financial assets at amortized cost |  |  | 2,008,611 |  |  |  | 681,457 |
|  | $ | 22,422,209 |  |  | $ | 5,708,765 |

24. | FINANCE COSTS

|  | Years Ended December 31
|  | 2022 |  | 2021
Interest expense |  |  |  |
Corporate bonds |  | $ | 14,116,112 |  |  | $ | 5,202,999 |
Lease liabilities |  |  | 267,050 |  |  |  | 193,324 |
Bank loans |  |  | 32,017 |  |  |  | 17,546 |
Others |  |  | 1,673 |  |  |  | 349 |
Less: Capitalized interest under property, plant and equipment |  |  | (2,666,868 | ) |  |  | - |
|  | $ | 11,749,984 |  |  | $ | 5,414,218 |

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Information about capitalized interest is as follows:

|  | Years Ended December 31, 2022
Capitalization rate |  | 0.56%-3.36%

25. | OTHER GAINS AND LOSSES, NET

|  | Years Ended December 31
|  | 2022 |  | 2021
Gain (loss) on disposal of financial assets, net |  |  |  |
Investments in debt instruments at FVTOCI |  | $ | (410,076 | ) |  | $ | 93,229 |
Loss on financial instruments at FVTPL, net |  |  |  |  |  |  |  |
Mandatorily measured at FVTPL |  |  | (622,537 | ) |  |  | (7,973,667 | )
The reversal (accrual) of expected credit loss of financial assets |  |  |  |  |  |  |  |
Investments in debt instruments at FVTOCI |  |  | (909 | ) |  |  | (1,234 | )
Financial assets at amortized cost |  |  | (51,442 | ) |  |  | 3,969 |
Other gains, net |  |  | 72,766 |  |  |  | 489,693 |
|  | $ | (1,012,198 | ) |  | $ | (7,388,010 | )

26. | INCOME TAX

| a. | Income tax expense recognized in profit or loss

Income tax expense consisted of the following:

|  | Years Ended December 31
|  | 2022 |  | 2021
Current income tax expense |  |  |  |
Current tax expense recognized in the current year |  | $ | 147,685,403 |  |  | $ | 88,844,915 |
Income tax adjustments on prior years |  |  | (563,555 | ) |  |  | 207,801 |
Other income tax adjustments |  |  | 206,136 |  |  |  | 152,232 |
|  |  | 147,327,984 |  |  |  | 89,204,948 |
Deferred income tax benefit |  |  |  |  |  |  |  |
The origination and reversal of temporary differences |  |  | (24,714,488 | ) |  |  | (17,530,023 | )
Investment tax credits |  |  | 4,676,707 |  |  |  | (5,621,745 | )
|  |  | (20,037,781 | ) |  |  | (23,151,768 | )
Income tax expense recognized in profit or loss |  | $ | 127,290,203 |  |  | $ | 66,053,180 |

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

|  | Years Ended December 31
|  | 2022 |  | 2021
Income before tax |  | $ | 1,144,190,718 |  |  | $ | 663,126,314 |
Income tax expense at the statutory rate |  | $ | 231,799,774 |  |  | $ | 134,613,312 |
Tax effect of adjusting items: |  |  |  |  |  |  |  |
Nondeductible items in determining taxable income |  |  | 12,286,136 |  |  |  | 11,261,407 |
Tax-exempt income |  |  | (157,955,934 | ) |  |  | (89,852,940 | )
Additional income tax under the Alternative Minimum Tax Act |  |  | 61,578,020 |  |  |  | 32,852,688 |
The origination and reversal of temporary differences |  |  | (24,714,488 | ) |  |  | (17,530,023 | )
Income tax credits |  |  | 4,654,114 |  |  |  | (5,651,297 | )
|  |  | 127,647,622 |  |  |  | 65,693,147 |
Income tax adjustments on prior years |  |  | (563,555 | ) |  |  | 207,801 |
Other income tax adjustments |  |  | 206,136 |  |  |  | 152,232 |
Income tax expense recognized in profit or loss |  | $ | 127,290,203 |  |  | $ | 66,053,180 |

For the years ended December 31, 2022 and 2021, the Company applied a tax rate of 20% for entities subject to the R.O.C. Income Tax Law; for other jurisdictions, taxes are calculated using the applicable tax rate for each individual jurisdiction.

| b. | Deferred income tax balance

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

|  | December 31, 2022 |  | December 31, 2021
Deferred income tax assets |  |  |  |
Temporary differences |  |  |  |
Depreciation |  | $ | 45,299,310 |  |  | $ | 34,720,661 |
Refund liability |  |  | 12,089,451 |  |  |  | 5,986,173 |
Unrealized exchange losses |  |  | 5,782,345 |  |  |  | - |
Unrealized loss on inventories |  |  | 2,305,328 |  |  |  | 898,998 |
Net defined benefit liability |  |  | 1,722,005 |  |  |  | 1,237,086 |
Investment tax credits |  |  | 945,038 |  |  |  | 5,621,745 |
Deferred compensation cost |  |  | 361,241 |  |  |  | 373,983 |
Others |  |  | 681,124 |  |  |  | 315,240 |
|  | $ | 69,185,842 |  |  | $ | 49,153,886 |
Deferred income tax liabilities |  |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |  |
Unrealized exchange gains |  | $ | - |  |  | $ | (706,311 | )
Others |  |  | (1,031,383 | ) |  |  | (1,167,566 | )
|  | $ | (1,031,383 | ) |  | $ | (1,873,877 | )

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|  | Year Ended December 31, 2022
|  |  |  | Recognized in |  |  |  |
|  | Balance, Beginning of Year |  | Profit or Loss |  | Other Comprehensive Income |  | Effect of Exchange Rate Changes |  | Balance, End of Year
Deferred income tax assets |  |  |  |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |  |  |  |
Depreciation |  | $ | 34,720,661 |  |  | $ | 10,552,264 |  |  | $ | - |  |  | $ | 26,385 |  |  | $ | 45,299,310 |
Refund liability |  |  | 5,986,173 |  |  |  | 6,100,849 |  |  |  | - |  |  |  | 2,429 |  |  |  | 12,089,451 |
Unrealized exchange losses |  |  | - |  |  |  | 5,782,345 |  |  |  | - |  |  |  | - |  |  |  | 5,782,345 |
Unrealized loss on inventories |  |  | 898,998 |  |  |  | 1,402,241 |  |  |  | - |  |  |  | 4,089 |  |  |  | 2,305,328 |
Net defined benefit liability |  |  | 1,237,086 |  |  |  | (249,116 | ) |  |  | 734,035 |  |  |  | - |  |  |  | 1,722,005 |
Investment tax credits |  |  | 5,621,745 |  |  |  | (4,676,707 | ) |  |  | - |  |  |  | - |  |  |  | 945,038 |
Deferred compensation cost |  |  | 373,983 |  |  |  | (48,180 | ) |  |  | - |  |  |  | 35,438 |  |  |  | 361,241 |
Others |  |  | 315,240 |  |  |  | 334,801 |  |  |  | (79 | ) |  |  | 31,162 |  |  |  | 681,124 |
|  | $ | 49,153,886 |  |  | $ | 19,198,497 |  |  | $ | 733,956 |  |  | $ | 99,503 |  |  | $ | 69,185,842 |
Deferred income tax liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized exchange gains |  | $ | (706,311 | ) |  | $ | 706,311 |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Others |  |  | (1,167,566 | ) |  |  | 132,973 |  |  |  | 6,036 |  |  |  | (2,826 | ) |  |  | (1,031,383 | )
|  | $ | (1,873,877 | ) |  | $ | 839,284 |  |  | $ | 6,036 |  |  | $ | (2,826 | ) |  | $ | (1,031,383 | )

|  | Year Ended December 31, 2021
|  |  |  | Recognized in |  |  |  |
|  | Balance, Beginning of Year |  | Profit or Loss |  | Other Comprehensive Income |  | Effect of Exchange Rate Changes |  | Balance, End of Year
Deferred income tax assets |  |  |  |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |  |  |  |
Depreciation |  | $ | 19,354,383 |  |  | $ | 15,365,737 |  |  | $ | - |  |  | $ | 541 |  |  | $ | 34,720,661 |
Refund liability |  |  | 3,755,131 |  |  |  | 2,231,450 |  |  |  | - |  |  |  | (408 | ) |  |  | 5,986,173 |
Investment tax credits |  |  | - |  |  |  | 5,621,745 |  |  |  | - |  |  |  | - |  |  |  | 5,621,745 |
Net defined benefit liability |  |  | 1,341,960 |  |  |  | (75,825 | ) |  |  | (29,049 | ) |  |  | - |  |  |  | 1,237,086 |
Unrealized loss on inventories |  |  | 858,463 |  |  |  | 41,061 |  |  |  | - |  |  |  | (526 | ) |  |  | 898,998 |
Deferred compensation cost |  |  | 330,340 |  |  |  | 49,113 |  |  |  | - |  |  |  | (5,470 | ) |  |  | 373,983 |
Others |  |  | 317,907 |  |  |  | 59,045 |  |  |  | (56,220 | ) |  |  | (5,492 | ) |  |  | 315,240 |
|  | $ | 25,958,184 |  |  | $ | 23,292,326 |  |  | $ | (85,269 | ) |  | $ | (11,355 | ) |  | $ | 49,153,886 |
Deferred income tax liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized exchange gains |  | $ | (866,495 | ) |  | $ | 160,184 |  |  | $ | - |  |  | $ | - |  |  | $ | (706,311 | )
Others |  |  | (863,446 | ) |  |  | (300,742 | ) |  |  | (3,370 | ) |  |  | (8 | ) |  |  | (1,167,566 | )
|  | $ | (1,729,941 | ) |  | $ | (140,558 | ) |  | $ | (3,370 | ) |  | $ | (8 | ) |  | $ | (1,873,877 | )

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

As of December 31, 2022 and 2021, the aggregate deductible temporary differences for which no deferred income tax assets have been recognized amounted to NT$26,790,935 thousand and NT$66,431,255 thousand, respectively.

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| d. | Unused tax-exemption information

As of the end of reporting period, the profits generated from the following project of TSMC are exempt from income tax for a five-year period:

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

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

As of December 31, 2022 and 2021, the aggregate taxable temporary differences associated with investments in subsidiaries not recognized as deferred income tax liabilities amounted to NT$222,682,649 thousand and NT$177,552,831 thousand, respectively.

| f. | Income tax examination

The tax authorities have examined income tax returns of TSMC through 2020. All investment tax credit adjustments assessed by the tax authorities have been recognized accordingly.

27. | EARNINGS PER SHARE

|  | Years Ended December 31
|  | 2022 |  | 2021
Basic EPS |  | $ | 39.20 |  |  | $ | 23.01 |
Diluted EPS |  | $ | 39.20 |  |  | $ | 23.01 |

EPS is computed as follows:

|  | Years Ended December 31
|  | 2022 |  | 2021
Basic EPS |  |  |  |
Net income available to common shareholders of the parent |  | $ | 1,016,530,249 |  |  | $ | 596,540,013 |
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands) |  |  | 25,929,190 |  |  |  | 25,930,380 |
Basic EPS (in dollars) |  | $ | 39.20 |  |  | $ | 23.01 |
Diluted EPS |  |  |  |  |  |  |  |
Net income available to common shareholders of the parent |  | $ | 1,016,530,249 |  |  | $ | 596,540,013 |
Weighted average number of common shares outstanding used in the computation of basic EPS (in thousands) |  |  | 25,929,190 |  |  |  | 25,930,380 |
Effects of all dilutive potential common shares (in thousands) |  |  | 193 |  |  |  | - |
Weighted average number of common shares used in the computation of diluted EPS (in thousands) |  |  | 25,929,383 |  |  |  | 25,930,380 |
Diluted EPS (in dollars) |  | $ | 39.20 |  |  | $ | 23.01 |

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28. | SHARE-BASED PAYMENT ARRANGEMENTS

| a. | Equity-settled share-based payment- RSAs

The RSAs in each year are as follows:

|  | 2022 RSAs |  | 2021 RSAs
Resolution Date of TSMC’s shareholders in its meeting |  | June 8, 2022 |  | July 26, 2021
Resolution Date of TSMC’s Board of Directors in its meeting |  | February 14, 2023 |  | February 15, 2022
Issuance of stocks (in thousands) |  | 2,110 |  | 1,387
Eligible employees |  | Executive officers and non- executive officers |  | Executive officers
Grant date/Issuance date |  | March 1, 2023 |  | March 1, 2022

Vesting conditions of the aforementioned arrangement are as follow:

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

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

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

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

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

| 3) | For eligible executive officers of TSMC: The maximum number of RSAs that may be vested in each year will be set as 110%, among which 100% will be subject to a calculation based on TSMC’s relative Total Shareholder Return (”TSR”, including capital gains and dividends) achievement to determine the number of RSAs to be vested; this number will be further subject to a modifier to increase or decrease up to 10% based on the Compensation Committee’s (rename to Compensation and People Development Committee from February 14, 2023) evaluation of TSMC’s Environmental, Social, and Governance (”ESG”) achievements. The number of shares so calculated should be rounded down to the nearest integral.

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

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| 4) | For eligible employees who are not executive officers of the Company: The number of RSAs to be vested in each year will be calculated in accordance with the below table based on TSMC’s audited consolidated financial statements for the year prior to the vesting year. The number of shares so calculated should be rounded down to the nearest integral.

| Threshold | Target | Weight | Ratio of Shares to be Vested
Revenue Growth Rate | 10% | 15% | 1/3 | < Threshold: 0 %
Gross Margin | 50% | 53% | 1/3 | = Threshold: 50%
Return on Equity | 20% | 25% | 1/3 | ≥ Target: 100% Between threshold and target: as calculated by interpolation method

| 5) | Restrictions imposed on the employees’ rights in the RSAs before the vesting conditions are fulfilled:

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

| ● | Before the vesting conditions are fulfilled, the attendance, proposal rights, speech rights, voting rights and etc. shall be exercised by the engaged trustee/custodian on the employee’s behalf. Any other shareholder rights including but not limited to the entitlement to any distribution regarding dividends, bonuses and capital reserve, and the subscription right of the new shares issued for any capital increase, are the same as those of holders of common shares of TSMC.

| 6) | Details of granted 2021 RSAs are as follows:

|  | 2021 RSAs
|  | Number of Stocks (In Thousands)
Balance, beginning of year |  |  | - |
Issuance of stocks |  |  | 1,387 |
Balance, end of year |  |  | 1,387 |
Weighted-average fair value of RSAs (in dollars) |  | $ | 325.81 |

The 2021 RSAs is measured at fair value at grant date by using the binominal tree approach. Relevant information is as follows:

|  | 2021 RSAs
|  | March 1, 2022
Stock price at grant date (in dollars) |  | $ | 604 |
Expected price volatility |  |  | 25.34%-28.28% |
Expected option life |  |  | 1-3years |
Risk-free interest rate |  |  | 0.57% |

Refer to Note 29 for the compensation costs of the 2021 RSAs recognized by TSMC.

On February 14, 2023, TSMC’s Board of Directors approved the issuance of RSAs for year 2023 of no more than 6,249 thousand common shares. The grants will be made free of charge. The actual number of shares to be issued will be resolved by the Board of Directors after the RSAs is approved at the shareholders’ meeting and by the competent authority.

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b.Cash-settled share-based payment arrangements

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

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

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

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

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

|  | Years Ended December 31, 2022
|  | 2021 Plan
Stock price at measurement date (in dollars) |  | $ | 451 |
Expected price volatility |  |  | 28.80%-32.19% |
Expected option life |  |  | 1-3years |
Risk-free interest rate |  |  | 1.09% |

Refer to Note 29 for the compensation costs of the cash-settled share-based payment recognized by TSMC. The liabilities under cash-settled share-based payment arrangement amounted to NT$30,757 thousand as of the end of reporting period.

29. | ADDITIONAL INFORMATION OF EXPENSES BY NATURE

|  | Years Ended December 31
|  | 2022 |  | 2021
a.Depreciation of property, plant and equipment and right-of-use assets |  |  |  |
Recognized in cost of revenue |  | $ | 399,638,755 |  |  | $ | 386,103,923 |
Recognized in operating expenses |  |  | 28,850,463 |  |  |  | 27,936,211 |
Recognized in other operating income and expenses |  |  | 8,961 |  |  |  | 147,566 |
|  | $ | 428,498,179 |  |  | $ | 414,187,700 |
b.Amortization of intangible assets |  |  |  |  |  |  |  |
Recognized in cost of revenue |  | $ | 6,086,246 |  |  | $ | 5,574,246 |
Recognized in operating expenses |  |  | 2,669,848 |  |  |  | 2,632,923 |
|  | $ | 8,756,094 |  |  | $ | 8,207,169 |

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|  | Years Ended December 31
|  | 2022 |  | 2021
c.Employee benefits expenses |  |  |  |
Post-employment benefits |  |  |  |
Defined contribution plans |  | $ | 4,550,387 |  |  | $ | 3,711,010 |
Defined benefit plans |  |  | 208,641 |  |  |  | 192,485 |
|  |  | 4,759,028 |  |  |  | 3,903,495 |
Share-based payments |  |  |  |  |  |  |  |
Equity-settled |  |  | 302,348 |  |  |  | 7,788 |
Cash-settled |  |  | 32,704 |  |  |  | - |
|  |  | 335,052 |  |  |  | 7,788 |
Other employee benefits |  |  | 234,367,880 |  |  |  | 161,035,865 |
|  | $ | 239,461,960 |  |  | $ | 164,947,148 |
Employee benefits expense summarized by function |  |  |  |  |  |  |  |
Recognized in cost of revenue |  | $ | 139,361,369 |  |  | $ | 98,012,833 |
Recognized in operating expenses |  |  | 100,100,591 |  |  |  | 66,934,315 |
|  | $ | 239,461,960 |  |  | $ | 164,947,148 |

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

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

|  | Years Ended December 31
|  | 2022 |  | 2021
Profit sharing bonus to employees |  | $ | 60,702,047 |  |  | $ | 35,601,449 |

TSMC’s profit sharing bonus to employees and compensation to directors for 2022, 2021 and 2020 had been approved by the Board of Directors of TSMC, as illustrated below:

|  | Years Ended December 31
|  | 2022 |  | 2021 |  | 2020
Resolution Date of TSMC’s Board of |  | February 14, |  | February 15, |  | February 9,
Directors in its meeting |  | 2023 |  | 2022 |  | 2021
Profit sharing bonus to employees |  | $ | 60,702,047 |  |  | $ | 35,601,449 |  |  | $ | 34,753,184 |
Compensation to directors |  | $ | 690,128 |  |  | $ | 487,537 |  |  | $ | 509,753 |

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There is no significant difference between the aforementioned approved amounts and the amounts charged against earnings of 2022, 2021 and 2020, respectively.

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

30.GOVERNMENT GRANTS

Subsidiaries such as JASM and TSMC Nanjing received subsidies from the governments of Japan and China, respectively, for local plants setup and operation, which were mainly used to subsidize the purchase costs of property, plant and equipment as well as partial costs and expenses incurred from plant construction and production. For the years ended December 31, 2022 and 2021, TSMC received a total of NT$7,051,432 thousand and NT$827,917 thousand as government grants respectively.

31.CASH FLOW INFORMATION

| a. | Non-cash transactions

|  | Years Ended December 31
|  | 2022 |  | 2021
Additions of financial assets at FVTOCI |  | $ | 45,126,181 |  |  | $ | 253,613,917 |
Exchange of equity instruments |  |  | - |  |  |  | (106,185 | )
Changes in accrued expenses and other current liabilities |  |  | 9,440,544 |  |  |  | 2,380,947 |
Payments for acquisition of financial assets at FVTOCI |  | $ | 54,566,725 |  |  | $ | 255,888,679 |
Disposal of financial assets at FVTOCI |  | $ | 43,130,926 |  |  | $ | 251,201,439 |
Changes in other financial assets |  |  | 1,832,441 |  |  |  | 3,509,283 |
Exchange of equity instruments |  |  | - |  |  |  | (106,185 | )
Proceeds from disposal of financial assets at FVTOCI |  | $ | 44,963,367 |  |  | $ | 254,604,537 |
Additions of property, plant and equipment |  | $ | 1,139,892,108 |  |  | $ | 835,406,296 |
Changes in other financial assets |  |  | 5,730,104 |  |  |  | 1,933,965 |
Exchange of assets |  |  | (275,564 | ) |  |  | (3,256,517 | )
Changes in payables to contractors and equipment suppliers |  |  | (60,638,244 | ) |  |  | 5,153,380 |
Changes in accrued expenses and other current liabilities |  |  | 630,594 |  |  |  | - |
Transferred to initial carrying amount of hedged items |  |  | - |  |  |  | (41,416 | )
Capitalized interests |  |  | (2,666,868 | ) |  |  | - |
Payments for acquisition of property, plant and equipment |  | $ | 1,082,672,130 |  |  | $ | 839,195,708 |
Additions of intangible assets |  | $ | 7,535,092 |  |  | $ | 9,318,478 |
Changes in other financial assets |  |  | 7,584 |  |  |  | 2,950 |
Changes in accrued expenses and other current liabilities |  |  | (588,350 | ) |  |  | (280,677 | )
Payments for acquisition of intangible assets |  | $ | 6,954,326 |  |  | $ | 9,040,751 |

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| b. | Reconciliation of liabilities arising from financing activities

|  |  |  |  |  | Non-cash Changes |  |
|  | Balance as of January 1, 2022 |  | Financing Cash Flow |  | Foreign Exchange Movement |  | Leases Modifications |  | Other Changes (Note) |  | Balance as of December 31, 2022
Short-term loans |  | $ | 114,921,333 |  |  | $ | (111,959,992 | ) |  | $ | (2,372,053 | ) |  | $ | - |  |  | $ | (589,288 | ) |  | $ | - |
Bonds payable |  |  | 614,470,652 |  |  |  | 193,479,254 |  |  |  | 44,183,113 |  |  |  | - |  |  |  | 303,420 |  |  |  | 852,436,439 |
Long-term bank loans |  |  | 3,475,798 |  |  |  | 2,503,333 |  |  |  | - |  |  |  | - |  |  |  | (5,195 | ) |  |  | 5,973,936 |
Lease liabilities |  |  | 22,940,665 |  |  |  | (2,690,784 | ) |  |  | 137,196 |  |  |  | 11,713,474 |  |  |  | 267,050 |  |  |  | 32,367,601 |
Total |  | $ | 755,808,448 |  |  | $ | 81,331,811 |  |  | $ | 41,948,256 |  |  | $ | 11,713,474 |  |  | $ | (24,013 | ) |  | $ | 890,777,976 |

|  |  |  |  |  | Non-cash Changes |  |
|  | Balance as of January 1, 2021 |  | Financing Cash Flow |  | Foreign Exchange Movement |  | Leases Modifications |  | Other Changes (Note) |  | Balance as of December 31, 2021
Short-term loans |  | $ | 88,559,026 |  |  | $ | 35,668,397 |  |  | $ | (8,777,416 | ) |  | $ | - |  |  | $ | (528,674 | ) |  | $ | 114,921,333 |
Bonds payable |  |  | 256,705,084 |  |  |  | 361,255,068 |  |  |  | (3,646,920 | ) |  |  | - |  |  |  | 157,420 |  |  |  | 614,470,652 |
Long-term bank loans |  |  | 1,967,611 |  |  |  | 1,510,000 |  |  |  | - |  |  |  | - |  |  |  | (1,813 | ) |  |  | 3,475,798 |
Lease liabilities |  |  | 22,388,674 |  |  |  | (2,178,297 | ) |  |  | (82,377 | ) |  |  | 2,619,341 |  |  |  | 193,324 |  |  |  | 22,940,665 |
Total |  | $ | 369,620,395 |  |  | $ | 396,255,168 |  |  | $ | (12,506,713 | ) |  | $ | 2,619,341 |  |  | $ | (179,743 | ) |  | $ | 755,808,448 |

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

32.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 expenditures, research and development activities, dividend payments, debt service requirements and other business requirements associated with its existing operations over the next 12 months.

33.FINANCIAL INSTRUMENTS

| a. | Categories of financial instruments

|  | December 31, 2022 |  | December 31, 2021
Financial assets |  |  |  |
FVTPL (Note 1) |  | $ | 1,070,398 |  |  | $ | 159,048 |
FVTOCI (Note 2) |  |  | 136,483,349 |  |  |  | 129,607,052 |
Hedging financial assets |  |  | 2,329 |  |  |  | 13,468 |
Amortized cost (Note 3) |  |  | 1,727,306,556 |  |  |  | 1,283,715,674 |
|  | $ | 1,864,862,632 |  |  | $ | 1,413,495,242 |
Financial liabilities |  |  |  |  |  |  |  |
FVTPL (Note 4) |  | $ | 116,215 |  |  | $ | 681,914 |
Hedging financial liabilities |  |  | 813 |  |  |  | 9,642 |
Amortized cost (Note 5) |  |  | 1,669,270,659 |  |  |  | 1,355,957,244 |
|  | $ | 1,669,387,687 |  |  | $ | 1,356,648,800 |

| Note 1: | Financial assets mandatorily measured at FVTPL.

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

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

| Note 4: | Held for trading.

| Note 5: | Including 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, long-term bank loans, guarantee deposits and other noncurrent liabilities.

| b. | Financial risk management objectives

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

The plans for material treasury activities are reviewed by the Audit Committees (rename to Audit and Risk Committee from February 14, 2023) 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

Substantially all the Company’s sales are denominated in U.S. dollars and over half of its capital expenditures are denominated in currencies other than NT dollars, primarily in U.S. dollars, Japanese yen and Euros. As a result, any significant fluctuations to its disadvantage in the exchanges rate of NT dollar against such currencies, in particular a weakening of U.S. dollar against NT dollar, would have an adverse impact on the revenue and operating profit as expressed in NT dollars. The Company uses foreign currency derivative contracts, such as currency forwards or currency swaps, 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, 2022 and 2021, a hypothetical adverse foreign currency exchange rate change of 10% would have decreased its net income by NT$1,704,553 thousand and NT$1,435,346 thousand, respectively, after taking into account hedges and offsetting positions.

Interest rate risk

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

The Company’s cash and cash equivalents as well as fixed income investments in both fixed- and floating-rate securities carry a degree of interest rate risk. The majority of the Company’s fixed income

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investments are fixed-rate securities, which are classified as financial assets at FVTOCI, and may have their fair value adversely affected due to a rise in interest rates. At the same time, if interest rates fall, cash and cash equivalents as well as floating-rate securities may generate less interest income than expected. The Company has entered and may in the future enter into interest rate derivatives to partially hedge the interest rate risk on its fixed income investments and anticipated debt issuance. However, these hedges can offset only a limited portion of the financial impact from movements in interest rates.

Based on a sensitivity analysis performed on the Company’s fixed income investments at the end of the reporting period, interest rates increase of 100 basis points (1.00%) across all maturities would have decreased the Company’s other comprehensive income by NT$3,831,326 thousand and NT$3,767,071 thousand for the years ended December 31, 2022 and 2021, respectively.

All of the Company’s short-term debt is floating-rate, hence a rise in interest rates may result in higher interest expense than expected. The majority of the Company’s long-term debt is fixed-rate and measured at amortized cost and as such, changes in interest rates would not affect future cash flows or the carrying amount.

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, 2022 and 2021, the other comprehensive income would have decreased by NT$631,530 thousand and NT$595,766 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 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, 2022 and 2021, the Company’s ten largest customers accounted for 82% and 79% of accounts receivable, respectively. The Company considers the concentration of credit risk for the remaining accounts receivable not material.

Financial credit risk

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

The objective of the Company’s investment policy is to achieve a return that will allow the Company to preserve principal and support liquidity requirements. The policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer. The Company assesses whether there has been a significant increase in credit risk in the invested securities since initial

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recognition by reviewing changes in external credit ratings, financial market conditions and material information of the issuers.

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

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

For the years ended December 31, 2022 and 2021, the expected credit loss increased NT$57,936 thousand and decreased NT$3,293 thousand, respectively. The changes were mainly due to increased investment amount and adjusted investment portfolio.

| e. | Liquidity risk management

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

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

|  | Less Than 1 Year |  | 1-3 Years |  | 3-5 Years |  | More Than 5 Years |  | Total
December 31, 2022 |  |  |  |  |  |  |  |  |  |
Non-derivative financial liabilities |  |  |  |  |  |  |  |  |  |
Accounts payable (including related parties) |  | $ | 56,522,345 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 56,522,345 |
Payables to contractors and equipment suppliers |  |  | 213,499,613 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 213,499,613 |
Accrued expenses and other current liabilities |  |  | 219,587,908 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 219,587,908 |
Bonds payable |  |  | 34,668,909 |  |  |  | 94,869,159 |  |  |  | 320,211,460 |  |  |  | 625,049,539 |  |  |  | 1,074,799,067 |
Long-term bank loans |  |  | 1,278,130 |  |  |  | 3,533,152 |  |  |  | 1,360,549 |  |  |  | - |  |  |  | 6,171,831 |
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note) |  |  | 2,999,840 |  |  |  | 5,367,809 |  |  |  | 4,754,007 |  |  |  | 22,589,117 |  |  |  | 35,710,773 |
Others |  |  | - |  |  |  | 166,266,718 |  |  |  | 10,518,481 |  |  |  | 783,182 |  |  |  | 177,568,381 |
|  |  | 528,556,745 |  |  |  | 270,036,838 |  |  |  | 336,844,497 |  |  |  | 648,421,838 |  |  |  | 1,783,859,918 |

(Continued)

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|  | Less Than 1 Year |  | 1-3 Years |  | 3-5 Years |  | More Than 5 Years |  | Total
December 31, 2022 |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  |  |  |  |  |  |  |  |  |
Outflows |  | $ | 103,617,399 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 103,617,399 |
Inflows |  |  | (104,600,085 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (104,600,085 | )
|  |  | (982,686 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (982,686 | )
|  | $ | 527,574,059 |  |  | $ | 270,036,838 |  |  | $ | 336,844,497 |  |  | $ | 648,421,838 |  |  | $ | 1,782,877,232 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term loans |  | $ | 114,767,034 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 114,767,034 |
Accounts payable (including related parties) |  |  | 48,722,789 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 48,722,789 |
Payables to contractors and equipment suppliers |  |  | 145,742,148 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 145,742,148 |
Accrued expenses and other current liabilities |  |  | 120,240,359 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 120,240,359 |
Bonds payable |  |  | 13,580,628 |  |  |  | 42,801,397 |  |  |  | 191,458,126 |  |  |  | 506,504,958 |  |  |  | 754,345,109 |
Long-term bank loans |  |  | 183,671 |  |  |  | 2,217,112 |  |  |  | 1,153,900 |  |  |  | - |  |  |  | 3,554,683 |
Lease liabilities (including those classified under accrued expenses and other current liabilities) (Note) |  |  | 2,371,568 |  |  |  | 3,896,249 |  |  |  | 3,385,295 |  |  |  | 14,649,235 |  |  |  | 24,302,347 |
Others |  |  | - |  |  |  | 164,991,929 |  |  |  | - |  |  |  | - |  |  |  | 164,991,929 |
|  |  | 445,608,197 |  |  |  | 213,906,687 |  |  |  | 195,997,321 |  |  |  | 521,154,193 |  |  |  | 1,376,666,398 |
Derivative financial instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outflows |  |  | 187,708,035 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 187,708,035 |
Inflows |  |  | (187,631,930 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (187,631,930 | )
|  |  | 76,105 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 76,105 |
|  | $ | 445,684,302 |  |  | $ | 213,906,687 |  |  | $ | 195,997,321 |  |  | $ | 521,154,193 |  |  | $ | 1,376,742,503 |

(Concluded)

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

|  | 5-10 Years |  | 10-15 Years |  | 15-20 Years |  | More Than 20 Years |  | Total
December 31, 2022 |  |  |  |  |  |  |  |  |  |
Lease liabilities |  | $ | 10,241,734 |  |  | $ | 7,329,012 |  |  | $ | 4,233,886 |  |  | $ | 784,485 |  |  | $ | 22,589,117 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease liabilities |  | $ | 7,513,939 |  |  | $ | 5,043,067 |  |  | $ | 1,972,740 |  |  | $ | 119,489 |  |  | $ | 14,649,235 |

| f. | Fair value of financial instruments

| 1) | Fair value measurements recognized in the consolidated balance sheets

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

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

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

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

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

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

Fair value hierarchy

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

|  | December 31, 2022
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial assets at FVTPL |  |  |  |  |  |  |  |
Mandatorily measured at FVTPL |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 947,546 |  |  | $ | - |  |  | $ | 947,546 |
Convertible bonds |  |  | - |  |  |  | - |  |  |  | 122,852 |  |  |  | 122,852 |
|  | $ | - |  |  | $ | 947,546 |  |  | $ | 122,852 |  |  | $ | 1,070,398 |
Financial assets at FVTOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in debt instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | - |  |  | $ | 66,116,166 |  |  | $ | - |  |  | $ | 66,116,166 |
Agency bonds/Agency mortgage-backed securities |  |  | - |  |  |  | 28,399,890 |  |  |  | - |  |  |  | 28,399,890 |
Government bonds |  |  | 18,845,577 |  |  |  | 84,347 |  |  |  | - |  |  |  | 18,929,924 |
Asset-backed securities |  |  | - |  |  |  | 9,274,697 |  |  |  | - |  |  |  | 9,274,697 |
Investments in equity instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-publicly traded equity investments |  |  | - |  |  |  | - |  |  |  | 6,159,200 |  |  |  | 6,159,200 |
Publicly traded stocks |  |  | 277,866 |  |  |  | - |  |  |  | - |  |  |  | 277,866 |
Notes and accounts receivable, net |  |  | - |  |  |  | 7,325,606 |  |  |  | - |  |  |  | 7,325,606 |
|  | $ | 19,123,443 |  |  | $ | 111,200,706 |  |  | $ | 6,159,200 |  |  | $ | 136,483,349 |
Hedging financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate futures contracts |  | $ | 2,329 |  |  | $ | - |  |  | $ | - |  |  | $ | 2,329 |
Financial liabilities at FVTPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Held for trading |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 116,215 |  |  | $ | - |  |  | $ | 116,215 |
Hedging financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate futures contracts |  | $ | 813 |  |  | $ | - |  |  | $ | - |  |  | $ | 813 |

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|  | December 31, 2021
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial assets at FVTPL |  |  |  |  |  |  |  |
Mandatorily measured at FVTPL |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 159,048 |  |  | $ | - |  |  | $ | 159,048 |
Financial assets at FVTOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in debt instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | - |  |  | $ | 57,253,161 |  |  | $ | - |  |  | $ | 57,253,161 |
Agency bonds/Agency mortgage-backed securities |  |  | - |  |  |  | 32,070,114 |  |  |  | - |  |  |  | 32,070,114 |
Government bonds |  |  | 21,267,002 |  |  |  | 78,792 |  |  |  | - |  |  |  | 21,345,794 |
Asset-backed securities |  |  | - |  |  |  | 8,660,424 |  |  |  | - |  |  |  | 8,660,424 |
Investments in equity instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-publicly traded equity investments |  |  | - |  |  |  | - |  |  |  | 5,887,892 |  |  |  | 5,887,892 |
Publicly traded stocks |  |  | 189,758 |  |  |  | - |  |  |  | - |  |  |  | 189,758 |
Notes and accounts receivable, net |  |  | - |  |  |  | 4,199,909 |  |  |  | - |  |  |  | 4,199,909 |
|  | $ | 21,456,760 |  |  | $ | 102,262,400 |  |  | $ | 5,887,892 |  |  | $ | 129,607,052 |
Hedging financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward interest rate contracts |  | $ | - |  |  | $ | 13,468 |  |  | $ | - |  |  | $ | 13,468 |
Financial liabilities at FVTPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Held for trading |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 681,914 |  |  | $ | - |  |  | $ | 681,914 |
Hedging financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate futures contracts |  | $ | 9,642 |  |  | $ | - |  |  | $ | - |  |  | $ | 9,642 |

Reconciliation of Level 3 fair value measurements of financial assets

The financial assets measured at Level 3 fair value were equity investments classified as financial assets at FVTOCI and financial assets at FVTPL. Reconciliations for the years ended December 31, 2022 and 2021 are as follows:

|  | Years Ended December 31
|  | 2022 |  | 2021
Balance, beginning of year |  | $ | 5,887,892 |  |  | $ | 4,514,940 |
Additions |  |  | 715,612 |  |  |  | 319,177 |
Recognized in other comprehensive income or loss |  |  | (373,263 | ) |  |  | 1,821,762 |
Disposals and proceeds from return of capital of investments |  |  | (359,506 | ) |  |  | (700,224 | )
Transfers out of level 3 (Note) |  |  | (139,770 | ) |  |  | - |
Effect of exchange rate changes |  |  | 551,087 |  |  |  | (67,763 | )
Balance, end of year |  | $ | 6,282,052 |  |  | $ | 5,887,892 |

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

65

Valuation techniques and assumptions used in Level 2 fair value measurement

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

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

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

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

Valuation techniques and assumptions used in Level 3 fair value measurement

The fair values of non-publicly traded equity investments (excluding those trading on the Emerging Stock Board) 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. On December 31, 2022 and 2021, the Company uses unobservable inputs derived from discount for lack of marketability of 10%. When other inputs remain equal, the fair value will decrease by NT$48,704 thousand and NT51,372 thousand, respectively, if discounts for lack of marketability increase by 1%.

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

In addition, the fair values of convertible bonds are prior transaction prices.

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

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

Fair value hierarchy

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

|  | December 31, 2022
|  | Carrying |  | Level 2
|  | Amount |  | Fair Value
Financial assets |  |  |  |
Financial assets at amortized costs |  |  |  |
Corporate bonds |  | $ | 80,994,958 |  |  | $ | 80,236,142 |
Commercial paper |  |  | 48,732,476 |  |  |  | 48,882,028 |
|  | $ | 129,727,434 |  |  | $ | 129,118,170 |
Financial liabilities |  |  |  |  |  |  |  |
Financial liabilities at amortized costs |  |  |  |  |  |  |  |
Bonds payable |  | $ | 852,436,439 |  |  | $ | 765,301,535 |

66

|  | December 31, 2021
|  | Carrying |  | Level 2
|  | Amount |  | Fair Value
Financial assets |  |  |  |
Financial assets at amortized costs |  |  |  |
Corporate bonds |  | $ | 5,306,962 |  |  | $ | 5,317,957 |
Financial liabilities |  |  |  |  |  |  |  |
Financial liabilities at amortized costs |  |  |  |  |  |  |  |
Bonds payable |  | $ | 614,470,652 |  |  | $ | 613,514,692 |

Valuation techniques and assumptions used in Level 2 fair value measurement

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

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

34. | RELATED PARTY TRANSACTIONS

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

| a. | Related party name and categories

Related Party Name |  | Related Party Categories
GUC |  | Associates
VIS |  | Associates
SSMC |  | Associates
Xintec |  | Associates

| b. | Net revenue

|  |  |  | Years Ended December 31
|  |  |  | 2022 |  | 2021
Item |  | Related Party Categories |  |  |  |
Net revenue from sale of goods |  | Associates |  | $ | 15,351,465 |  |  | $ | 8,475,908 |

67

| c. | Purchases

|  | Years Ended December 31
|  | 2022 |  | 2021
Related Party Categories |  |  |  |
Associates |  | $ | 6,423,913 |  |  | $ | 7,569,787 |

| d. | Receivables from related parties

|  |  |  | December 31, 2022 |  | December 31, 2021
Item |  | Related Party Name |  |  |  |
Receivables from related |  | GUC |  | $ | 1,471,351 |  |  | $ | 597,836 |
parties |  | Xintec |  |  | 112,607 |  |  |  | 117,488 |
|  |  |  | $ | 1,583,958 |  |  | $ | 715,324 |
Other receivables from related |  | SSMC |  | $ | 68,277 |  |  | $ | 50,375 |
parties |  | VIS |  |  | 669 |  |  |  | 11,156 |
|  | Others |  |  | 29 |  |  |  | - |
|  |  |  | $ | 68,975 |  |  | $ | 61,531 |

| e. | Payables to related parties

|  |  |  | December 31, 2022 |  | December 31, 2021
Item |  | Related Party Name |  |  |  |
Payables to related parties |  | Xintec |  | $ | 1,047,452 |  |  | $ | 725,325 |
|  | SSMC |  |  | 385,979 |  |  |  | 349,211 |
|  | VIS |  |  | 190,587 |  |  |  | 357,151 |
|  | Others |  |  | 18,619 |  |  |  | 5,499 |
|  |  |  | $ | 1,642,637 |  |  | $ | 1,437,186 |

| f. | Accrued expenses and other current liabilities

|  |  |  | December 31, 2022 |  | December 31, 2021
Item |  | Related Party Categories |  |  |  |
Contract liabilities |  | Associates |  | $ | 1,075,659 |  |  | $ | 726,350 |

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| g. | Others

|  |  |  | Years Ended December 31
|  |  |  | 2022 |  | 2021
Item |  | Related Party Categories |  |  |  |
Manufacturing expenses |  | Associates |  | $ | 6,011,522 |  |  | $ | 5,459,919 |

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

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

| h. | Compensation of key management personnel

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

|  | Years Ended December 31
|  | 2022 |  | 2021
Short-term employee benefits |  | $ | 4,369,097 |  |  | $ | 2,886,786 |
Post-employment benefits |  |  | 3,013 |  |  |  | 2,900 |
Share-based payments |  |  | 286,227 |  |  |  | - |
|  | $ | 4,658,337 |  |  | $ | 2,889,686 |

The compensation to directors and other key management personnel were determined by the Compensation Committee (rename to Compensation and People Development Committee from February 14, 2023) of TSMC in accordance with the individual performance and market trends.

35. | PLEDGED ASSETS

The Company provided certificate of deposits recorded in other financial assets as collateral mainly for building construction, building lease agreements and energy purchase agreements. As of December 31, 2022 and 2021, the aforementioned other financial assets amounted to NT$129,138 thousand and NT$210,235 thousand, respectively.

36. | SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

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

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

| c. | In September 2022, Daedalus Prime LLC (“Daedalus”) filed complaints in the U.S. International Trade Commission (“ITC”) and the U.S. District Court for the Eastern District of Texas alleging that TSMC, TSMC North America, and other companies infringe four U.S. patents. The ITC instituted an investigation in October 2022. The outcome cannot be determined and we cannot make a reliable estimate of the contingent liability at this time.

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

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

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

| g. | Amounts available under unused letters of credit as of December 31, 2022 and 2021 were NT$383,974 thousand and NT$136,710 thousand, respectively.

| h. | The Company entrusted financial institutions to open performance guarantee mainly for import and export of goods, lease agreement and energy purchase agreement. As of December 31, 2022 and 2021, the aforementioned guarantee amounted to NT$7,623,262 thousand and NT$4,954,798 thousand, respectively.

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

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

|  | Foreign Currencies (In Thousands) |  | Exchange Rate (Note 1) |  | Carrying Amount (In Thousands)
December 31, 2022 |  |  |  |  |  |
Financial assets |  |  |  |  |  |
Monetary items |  |  |  |  |  |
USD |  | $ | 15,214,896 |  |  |  | 30.713 |  |  | $ | 467,295,097 |
EUR |  |  | 8,375 |  |  |  | 32.838 |  |  |  | 275,006 |

(Continued)

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|  | Foreign Currencies (In Thousands) |  | Exchange Rate (Note 1) |  | Carrying Amount (In Thousands)
EUR |  | $ | 29,161 |  |  |  | 7.432 | (Note 2) |  | $ | 957,587 |
JPY |  |  | 133,034,271 |  |  |  | 0.2331 |  |  |  | 31,010,288 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |
Monetary items |  |  |  |  |  |  |  |  |  |  |  |
USD |  |  | 15,190,659 |  |  |  | 30.713 |  |  |  | 466,550,704 |
EUR |  |  | 2,375,378 |  |  |  | 32.838 |  |  |  | 78,002,647 |
JPY |  |  | 134,608,488 |  |  |  | 0.2331 |  |  |  | 31,377,239 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |
Monetary items |  |  |  |  |  |  |  |  |  |  |  |
USD |  |  | 11,445,396 |  |  |  | 27.674 |  |  |  | 316,739,883 |
USD |  |  | 2,023,233 |  |  |  | 6.379 | (Note 3) |  |  | 55,990,951 |
EUR |  |  | 14,964 |  |  |  | 31.460 |  |  |  | 470,776 |
EUR |  |  | 40,326 |  |  |  | 7.252 | (Note 2) |  |  | 1,268,665 |
JPY |  |  | 10,921,880 |  |  |  | 0.2414 |  |  |  | 2,636,542 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |
Monetary items |  |  |  |  |  |  |  |  |  |  |  |
USD |  |  | 11,958,503 |  |  |  | 27.674 |  |  |  | 330,939,620 |
EUR |  |  | 3,539,320 |  |  |  | 31.460 |  |  |  | 111,347,020 |
JPY |  |  | 112,456,908 |  |  |  | 0.2414 |  |  |  | 27,147,098 |

(Concluded)

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

| Note 2: | The exchange rate represents the number of RMB for which one Euro could be exchanged.

| Note 3: | The exchange rate represents the number of RMB for which one U.S. dollar could be exchanged.

Please refer to the consolidated statements of comprehensive income for the total of realized and unrealized foreign exchange gain and loss for the years ended December 31, 2022 and 2021, respectively. Since there were varieties of foreign currency transactions and functional currencies within the subsidiaries of the Company, the Company was unable to disclose foreign exchange gain (loss) towards each foreign currency with significant impact.

38. | ADDITIONAL DISCLOSURES

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

| a. | Financings provided: See Table 1 attached;

71

| 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 10;

| j. | Others: The business relationship between the parent and the subsidiaries and significant transactions between them: See Table 8 attached;

| k. | Names, locations, and related information of investees over which TSMC exercises significant influence (excluding information on investment in mainland China): See Table 9 attached;

| l. | 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 10 attached.

| 2) | Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: See Table 8 attached.

| m. | Information of major shareholders

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 11 attached.

39. | OPERATING SEGMENTS INFORMATION

| a. | Operating segments, segment revenue and operating results

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

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

72

| b. | Geographic and major customers’ information were as follows:

| 1) | Geographic information

|  | December 31, |  | December 31,
Noncurrent Assets |  | 2022 |  | 2021
Taiwan |  | $ | 2,510,238,722 |  |  | $ | 1,953,007,722 |
United States |  |  | 153,137,833 |  |  |  | 41,208,723 |
China |  |  | 90,349,673 |  |  |  | 41,895,164 |
Europe, the Middle East and Africa |  |  | 140,709 |  |  |  | 143,916 |
Japan |  |  | 15,432,491 |  |  |  | 1,011,043 |
Others |  |  | 1,922 |  |  |  | 539 |
|  | $ | 2,769,301,350 |  |  | $ | 2,037,267,107 |

Noncurrent assets include property, plant and equipment, right-of-use assets, intangible assets and other noncurrent assets.

| 2) | Major customers representing at least 10% of net revenue

|  | Years Ended December 31
|  | 2022 |  | 2021
|  | Amount |  | % |  | Amount |  | %
Customer A |  | $ | 529,649,200 |  |  |  | 23 |  |  | $ | 405,402,955 |  |  |  | 26 |
Customer B |  |  | NA(Note | ) |  |  | NA |  |  |  | 153,740,831 |  |  |  | 10 |

| Note: | Revenue less than 10% of the Company’s net revenue.

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TABLE 1

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

FINANCINGS PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2022

(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 2) | Ending Balance (Foreign Currencies in Thousands) (Note 2) | 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 (Note 1) | Financing Company’s Total Financing Amount Limits (Note 1)
Item | Value
1 | TSMC China | TSMC Nanjing | Other receivables from related parties | Yes | $ (RMB (USD | 74,200,110 8,800,000 1,150,000 | )& ) | $ (RMB (USD | 74,200,110 8,800,000 1,150,000 | )& ) | $ (RMB (USD | 45,211,510 7,800,000 350,000 | )& ) |  | 0.75%-1.50% |  | The need for short-term and long-term financing | $ | - |  | Operating capital | $ | - |  | - | $ | - |  | $ | 87,432,993 |  | $ | 87,432,993 |

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 maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.

- 74 -

TABLE 2

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2022

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

No. | Endorsement/ Guarantee Provider | Guaranteed Party | Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party (Notes 1 and 2) | Maximum Balance for the Period (Foreign Currencies in Thousands) (Note 3) | Ending Balance (Foreign Currencies in Thousands) (Note 3) | Amount Actually Drawn (US$ in Thousands) | Amount of Endorsement/ Guarantee Collateralized by Properties | Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements | Maximum Endorsement/ Guarantee Amount Allowable (Notes 1 and 2) | Guarantee Provided by Parent Company | Guarantee Provided by A Subsidiary | Guarantee Provided to Subsidiaries in Mainland China
Name | Nature of Relationship
0 | TSMC | TSMC North America | Subsidiary | $ | 736,413,299 |  | $ (US$ | 2,555,730 83,213 | ) | $ (US$ | 2,555,730 83,213 | ) | $ (US$ | 2,555,730 83,213 | ) | $ | - |  |  | 0.09% |  | $ | 736,413,299 |  | Yes | No | No
|  | TSMC Global | Subsidiary |  | 736,413,299 |  | (US$ | 230,347,500 7,500,000 | ) | (US$ | 230,347,500 7,500,000 | ) | (US$ | 230,347,500 7,500,000 | ) |  | - |  |  | 7.82% |  |  | 736,413,299 |  | Yes | No | No
|  | TSMC Arizona | Subsidiary |  | 736,413,299 |  | (US$ | 369,551,715 12,032,420 | ) | (US$ | 369,551,715 12,032,420 | ) | (US$ | 246,699,701 8,032,420 | ) |  | - |  |  | 12.55% |  |  | 736,413,299 |  | Yes | No | No
1 | TSMC Japan | TSMC JDC | The same parent company |  | 336,399 |  | (JPY | 307,692 1,320,000 | ) | (JPY | 307,692 1,320,000 | ) | (JPY | 307,692 1,320,000 | ) |  | - |  |  | 0.01% |  |  | 336,399 |  | No | No | No

Note 1: | The total amount of the endorsement/guarantee provided by TSMC to TSMC North America, TSMC Global and TSMC Arizona 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 two hundred and fifty percent (250%) of TSMC Japan’s net worth.

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

- 75 -

TABLE 3

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

MARKETABLE SECURITIES HELD

December 31, 2022

(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, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC | Commercial paper |  |  |  |  |  |  |
| Taiwan Power Company | - | Financial assets at amortized cost |  | 2,950 |  | $ | 29,335,729 |  |  | N/A |  | $ | 29,421,735 |  |
| CPC Corporation, Taiwan | - | 〃 |  | 750 |  |  | 7,458,936 |  |  | N/A |  |  | 7,481,537 |  |
| Nan Ya Plastics Corporation | - | 〃 |  | 450 |  |  | 4,476,301 |  |  | N/A |  |  | 4,492,086 |  |
| Formosa Petrochemical Corporation | - | 〃 |  | 300 |  |  | 2,985,385 |  |  | N/A |  |  | 2,994,951 |  |
| Formosa Chemicals & Fibre Corporation | - | 〃 |  | 250 |  |  | 2,485,666 |  |  | N/A |  |  | 2,494,159 |  |
| Formosa Plastics Corporation | - | 〃 |  | 200 |  |  | 1,990,459 |  |  | N/A |  |  | 1,997,560 |  |
| Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Shin-Etsu Handotai Taiwan Co., Ltd. | - | Financial assets at fair value through other comprehensive income |  | 10,500 |  |  | 473,508 |  |  | 7 |  |  | 473,508 |  |
| United Industrial Gases Co., Ltd. | - | 〃 |  | 21,230 |  |  | 443,461 |  |  | 10 |  |  | 443,461 |  |
| Global Investment Holding Inc. | - | 〃 |  | 10,442 |  |  | 97,772 |  |  | 6 |  |  | 97,772 |  |
| 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$ | 26,441 |  |  | 6 |  | US$ | 26,441 |  |
| China Walden Venture Investments II, L.P. | - | 〃 |  | - |  | US$ | 18,454 |  |  | 9 |  | US$ | 18,454 |  |
| China Walden Venture Investments III, L.P. | - | 〃 |  | - |  | US$ | 13,602 |  |  | 4 |  | US$ | 13,602 |  |
| Tela Innovations | - | 〃 |  | 6,942 |  |  | - |  |  | 22 |  |  | - |  |
| Movella Inc. | - | 〃 |  | 6,333 |  |  | - |  |  | 9 |  |  | - |  |
TSMC Global | Corporate bond |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Morgan Stanley | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 83,242 |  |  | N/A |  | US$ | 83,242 |  |
| Bank of America Corporation | - | 〃 |  | - |  | US$ | 76,626 |  |  | N/A |  | US$ | 76,626 |  |
| Citigroup Inc. | - | 〃 |  | - |  | US$ | 61,493 |  |  | N/A |  | US$ | 61,493 |  |
| Wells Fargo & Company | - | 〃 |  | - |  | US$ | 59,735 |  |  | N/A |  | US$ | 59,735 |  |
| The Goldman Sachs Group, Inc. | - | 〃 |  | - |  | US$ | 51,439 |  |  | N/A |  | US$ | 51,439 |  |
| JPMorgan Chase & Co. | - | 〃 |  | - |  | US$ | 50,629 |  |  | N/A |  | US$ | 50,629 |  |
| Mitsubishi UFJ Financial Group, Inc. | - | 〃 |  | - |  | US$ | 32,949 |  |  | N/A |  | US$ | 32,949 |  |
| HSBC Holdings plc | - | 〃 |  | - |  | US$ | 32,402 |  |  | N/A |  | US$ | 32,402 |  |
| AbbVie Inc. | - | 〃 |  | - |  | US$ | 27,892 |  |  | N/A |  | US$ | 27,892 |  |
| Sumitomo Mitsui Financial Group, Inc. | - | 〃 |  | - |  | US$ | 27,658 |  |  | N/A |  | US$ | 27,658 |  |
| Banco Santander, S.A. | - | 〃 |  | - |  | US$ | 26,257 |  |  | N/A |  | US$ | 26,257 |  |
| Metropolitan Life Global Funding I | - | 〃 |  | - |  | US$ | 24,408 |  |  | N/A |  | US$ | 24,408 |  |
| Athene Global Funding | - | 〃 |  | - |  | US$ | 23,191 |  |  | N/A |  | US$ | 23,191 |  |
| Oracle Corporation | - | 〃 |  | - |  | US$ | 21,865 |  |  | N/A |  | US$ | 21,865 |  |
| Royal Bank of Canada | - | 〃 |  | - |  | US$ | 21,423 |  |  | N/A |  | US$ | 21,423 |  |
| Principal Life Global Funding II | - | 〃 |  | - |  | US$ | 19,768 |  |  | N/A |  | US$ | 19,768 |  |
| The Toronto-Dominion Bank | - | 〃 |  | - |  | US$ | 19,510 |  |  | N/A |  | US$ | 19,510 |  |
| Equitable Financial Life Global Funding | - | 〃 |  | - |  | US$ | 18,979 |  |  | N/A |  | US$ | 18,979 |  |
| BNP Paribas SA | - | 〃 |  | - |  | US$ | 18,931 |  |  | N/A |  | US$ | 18,931 |  |

(Continued)

- 76 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Nordea Bank Abp | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 18,263 |  |  | N/A |  | US$ | 18,263 |  |
| Fédération des caisses Desjardins du Québec | - | 〃 |  | - |  | US$ | 18,086 |  |  | N/A |  | US$ | 18,086 |  |
| Sumitomo Mitsui Trust Bank, Limited | - | 〃 |  | - |  | US$ | 17,158 |  |  | N/A |  | US$ | 17,158 |  |
| Guardian Life Global Funding | - | 〃 |  | - |  | US$ | 16,412 |  |  | N/A |  | US$ | 16,412 |  |
| Mizuho Financial Group, Inc. | - | 〃 |  | - |  | US$ | 16,169 |  |  | N/A |  | US$ | 16,169 |  |
| Deutsche Bank AG - New York Branch | - | 〃 |  | - |  | US$ | 16,038 |  |  | N/A |  | US$ | 16,038 |  |
| Hyundai Capital America | - | 〃 |  | - |  | US$ | 15,807 |  |  | N/A |  | US$ | 15,807 |  |
| Volkswagen Group of America Finance, LLC | - | 〃 |  | - |  | US$ | 15,613 |  |  | N/A |  | US$ | 15,613 |  |
| Nationwide Building Society | - | 〃 |  | - |  | US$ | 15,375 |  |  | N/A |  | US$ | 15,375 |  |
| NatWest Markets Plc | - | 〃 |  | - |  | US$ | 15,314 |  |  | N/A |  | US$ | 15,314 |  |
| Bank of Montreal | - | 〃 |  | - |  | US$ | 15,224 |  |  | N/A |  | US$ | 15,224 |  |
| Protective Life Global Funding | - | 〃 |  | - |  | US$ | 15,045 |  |  | N/A |  | US$ | 15,045 |  |
| BPCE SA | - | 〃 |  | - |  | US$ | 14,691 |  |  | N/A |  | US$ | 14,691 |  |
| Capital One Financial Corporation | - | 〃 |  | - |  | US$ | 14,125 |  |  | N/A |  | US$ | 14,125 |  |
| ING Groep N.V. | - | 〃 |  | - |  | US$ | 14,050 |  |  | N/A |  | US$ | 14,050 |  |
| NTT Finance Corporation | - | 〃 |  | - |  | US$ | 13,744 |  |  | N/A |  | US$ | 13,744 |  |
| Svenska Handelsbanken AB (publ) | - | 〃 |  | - |  | US$ | 13,508 |  |  | N/A |  | US$ | 13,508 |  |
| Société Générale Société anonyme | - | 〃 |  | - |  | US$ | 13,327 |  |  | N/A |  | US$ | 13,327 |  |
| The Bank of Nova Scotia | - | 〃 |  | - |  | US$ | 12,914 |  |  | N/A |  | US$ | 12,914 |  |
| Credit Suisse AG, New York Branch | - | 〃 |  | - |  | US$ | 12,688 |  |  | N/A |  | US$ | 12,688 |  |
| Apple Inc. | - | 〃 |  | - |  | US$ | 12,233 |  |  | N/A |  | US$ | 12,233 |  |
| Macquarie Group Limited | - | 〃 |  | - |  | US$ | 11,654 |  |  | N/A |  | US$ | 11,654 |  |
| Santander UK Group Holdings plc | - | 〃 |  | - |  | US$ | 11,628 |  |  | N/A |  | US$ | 11,628 |  |
| Credit Agricole SA London Branch | - | 〃 |  | - |  | US$ | 11,611 |  |  | N/A |  | US$ | 11,611 |  |
| Toyota Motor Credit Corporation | - | 〃 |  | - |  | US$ | 11,609 |  |  | N/A |  | US$ | 11,609 |  |
| Standard Chartered PLC | - | 〃 |  | - |  | US$ | 11,541 |  |  | N/A |  | US$ | 11,541 |  |
| UBS Group AG | - | 〃 |  | - |  | US$ | 11,473 |  |  | N/A |  | US$ | 11,473 |  |
| The Bank of New York Mellon Corporation | - | 〃 |  | - |  | US$ | 11,282 |  |  | N/A |  | US$ | 11,282 |  |
| Barclays PLC | - | 〃 |  | - |  | US$ | 11,263 |  |  | N/A |  | US$ | 11,263 |  |
| Fifth Third Bancorp | - | 〃 |  | - |  | US$ | 10,917 |  |  | N/A |  | US$ | 10,917 |  |
| National Securities Clearing Corporation | - | 〃 |  | - |  | US$ | 10,878 |  |  | N/A |  | US$ | 10,878 |  |
| Banque Fédérative du Crédit Mutuel Société anonyme | - | 〃 |  | - |  | US$ | 10,738 |  |  | N/A |  | US$ | 10,738 |  |
| Lloyds Banking Group plc | - | 〃 |  | - |  | US$ | 10,533 |  |  | N/A |  | US$ | 10,533 |  |
| AT&T Inc. | - | 〃 |  | - |  | US$ | 10,528 |  |  | N/A |  | US$ | 10,528 |  |
| S&P Global Inc. | - | 〃 |  | - |  | US$ | 10,246 |  |  | N/A |  | US$ | 10,246 |  |
| Nomura Holdings, Inc. | - | 〃 |  | - |  | US$ | 10,195 |  |  | N/A |  | US$ | 10,195 |  |
| U.S. Bancorp | - | 〃 |  | - |  | US$ | 9,781 |  |  | N/A |  | US$ | 9,781 |  |
| Verizon Communications Inc. | - | 〃 |  | - |  | US$ | 9,765 |  |  | N/A |  | US$ | 9,765 |  |
| Citizens Bank, National Association | - | 〃 |  | - |  | US$ | 9,364 |  |  | N/A |  | US$ | 9,364 |  |
| Enel Finance International N.V. | - | 〃 |  | - |  | US$ | 9,104 |  |  | N/A |  | US$ | 9,104 |  |
| Roper Technologies, Inc. | - | 〃 |  | - |  | US$ | 9,035 |  |  | N/A |  | US$ | 9,035 |  |
| Equifax Inc. | - | 〃 |  | - |  | US$ | 8,925 |  |  | N/A |  | US$ | 8,925 |  |
| Equinor ASA | - | 〃 |  | - |  | US$ | 8,832 |  |  | N/A |  | US$ | 8,832 |  |
| Amazon.com, Inc. | - | 〃 |  | - |  | US$ | 8,820 |  |  | N/A |  | US$ | 8,820 |  |
| Merck & Co., Inc. | - | 〃 |  | - |  | US$ | 8,616 |  |  | N/A |  | US$ | 8,616 |  |
| Bristol-Myers Squibb Company | - | 〃 |  | - |  | US$ | 8,441 |  |  | N/A |  | US$ | 8,441 |  |
| GSK Consumer Healthcare Capital US LLC | - | 〃 |  | - |  | US$ | 8,314 |  |  | N/A |  | US$ | 8,314 |  |
| AIG Global Funding | - | 〃 |  | - |  | US$ | 8,209 |  |  | N/A |  | US$ | 8,209 |  |
| New York Life Global Funding | - | 〃 |  | - |  | US$ | 8,192 |  |  | N/A |  | US$ | 8,192 |  |

(Continued)

- 77 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | American Express Company | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 8,037 |  |  | N/A |  | US$ | 8,037 |  |
| Truist Financial Corporation | - | 〃 |  | - |  | US$ | 7,851 |  |  | N/A |  | US$ | 7,851 |  |
| International Bank for Reconstruction and Development | - | 〃 |  | - |  | US$ | 7,608 |  |  | N/A |  | US$ | 7,608 |  |
| KfW | - | 〃 |  | - |  | US$ | 7,594 |  |  | N/A |  | US$ | 7,594 |  |
| UnitedHealth Group Incorporated | - | 〃 |  | - |  | US$ | 7,504 |  |  | N/A |  | US$ | 7,504 |  |
| AstraZeneca Finance LLC | - | 〃 |  | - |  | US$ | 7,477 |  |  | N/A |  | US$ | 7,477 |  |
| Canadian Imperial Bank of Commerce | - | 〃 |  | - |  | US$ | 7,443 |  |  | N/A |  | US$ | 7,443 |  |
| Inter-American Development Bank | - | 〃 |  | - |  | US$ | 7,346 |  |  | N/A |  | US$ | 7,346 |  |
| Suncorp-Metway Limited | - | 〃 |  | - |  | US$ | 7,315 |  |  | N/A |  | US$ | 7,315 |  |
| Great-West Lifeco U.S. Finance 2020, Lp | - | 〃 |  | - |  | US$ | 7,287 |  |  | N/A |  | US$ | 7,287 |  |
| Lowe's Companies, Inc. | - | 〃 |  | - |  | US$ | 7,135 |  |  | N/A |  | US$ | 7,135 |  |
| Northwestern Mutual Global Funding | - | 〃 |  | - |  | US$ | 6,853 |  |  | N/A |  | US$ | 6,853 |  |
| Chevron Corporation | - | 〃 |  | - |  | US$ | 6,838 |  |  | N/A |  | US$ | 6,838 |  |
| Fidelity National Information Services, Inc. | - | 〃 |  | - |  | US$ | 6,619 |  |  | N/A |  | US$ | 6,619 |  |
| AstraZeneca PLC | - | 〃 |  | - |  | US$ | 6,500 |  |  | N/A |  | US$ | 6,500 |  |
| Prudential Funding Corp. | - | 〃 |  | - |  | US$ | 6,447 |  |  | N/A |  | US$ | 6,447 |  |
| John Deere Capital Corporation | - | 〃 |  | - |  | US$ | 6,437 |  |  | N/A |  | US$ | 6,437 |  |
| Intuit Inc. | - | 〃 |  | - |  | US$ | 6,421 |  |  | N/A |  | US$ | 6,421 |  |
| Cargill, Incorporated | - | 〃 |  | - |  | US$ | 6,378 |  |  | N/A |  | US$ | 6,378 |  |
| Daimler Trucks Finance North America LLC | - | 〃 |  | - |  | US$ | 6,367 |  |  | N/A |  | US$ | 6,367 |  |
| Roche Holdings, Inc. | - | 〃 |  | - |  | US$ | 6,339 |  |  | N/A |  | US$ | 6,339 |  |
| The East Ohio Gas Company | - | 〃 |  | - |  | US$ | 6,333 |  |  | N/A |  | US$ | 6,333 |  |
| Jackson National Life Global Funding | - | 〃 |  | - |  | US$ | 6,283 |  |  | N/A |  | US$ | 6,283 |  |
| Danske Bank A/S | - | 〃 |  | - |  | US$ | 6,149 |  |  | N/A |  | US$ | 6,149 |  |
| Ameren Corporation | - | 〃 |  | - |  | US$ | 5,960 |  |  | N/A |  | US$ | 5,960 |  |
| Huntington Bancshares Incorporated | - | 〃 |  | - |  | US$ | 5,865 |  |  | N/A |  | US$ | 5,865 |  |
| Discover Bank (New Castle, Delaware) | - | 〃 |  | - |  | US$ | 5,864 |  |  | N/A |  | US$ | 5,864 |  |
| Exxon Mobil Corporation | - | 〃 |  | - |  | US$ | 5,749 |  |  | N/A |  | US$ | 5,749 |  |
| Swedbank AB (publ) | - | 〃 |  | - |  | US$ | 5,733 |  |  | N/A |  | US$ | 5,733 |  |
| Fox Corporation | - | 〃 |  | - |  | US$ | 5,630 |  |  | N/A |  | US$ | 5,630 |  |
| ANZ New Zealand (Int'l) Limited | - | 〃 |  | - |  | US$ | 5,604 |  |  | N/A |  | US$ | 5,604 |  |
| Exelon Corporation | - | 〃 |  | - |  | US$ | 5,591 |  |  | N/A |  | US$ | 5,591 |  |
| Take-Two Interactive Software, Inc. | - | 〃 |  | - |  | US$ | 5,576 |  |  | N/A |  | US$ | 5,576 |  |
| Macquarie Bank Limited | - | 〃 |  | - |  | US$ | 5,541 |  |  | N/A |  | US$ | 5,541 |  |
| Scentre Group Trust 1 | - | 〃 |  | - |  | US$ | 5,525 |  |  | N/A |  | US$ | 5,525 |  |
| WEC Energy Group, Inc. | - | 〃 |  | - |  | US$ | 5,498 |  |  | N/A |  | US$ | 5,498 |  |
| WPP Finance 2010 | - | 〃 |  | - |  | US$ | 5,459 |  |  | N/A |  | US$ | 5,459 |  |
| Huntington National Bank | - | 〃 |  | - |  | US$ | 5,415 |  |  | N/A |  | US$ | 5,415 |  |
| Intercontinental Exchange, Inc. | - | 〃 |  | - |  | US$ | 5,388 |  |  | N/A |  | US$ | 5,388 |  |
| UBS AG, London Branch | - | 〃 |  | - |  | US$ | 5,387 |  |  | N/A |  | US$ | 5,387 |  |
| Pacific Life Global Funding II | - | 〃 |  | - |  | US$ | 5,359 |  |  | N/A |  | US$ | 5,359 |  |
| Siemens Financieringsmaatschappij N.V. | - | 〃 |  | - |  | US$ | 5,302 |  |  | N/A |  | US$ | 5,302 |  |
| The Charles Schwab Corporation | - | 〃 |  | - |  | US$ | 5,292 |  |  | N/A |  | US$ | 5,292 |  |
| Alabama Power Company | - | 〃 |  | - |  | US$ | 5,263 |  |  | N/A |  | US$ | 5,263 |  |
| Pioneer Natural Resources Company | - | 〃 |  | - |  | US$ | 5,254 |  |  | N/A |  | US$ | 5,254 |  |
| ASB Bank Limited | - | 〃 |  | - |  | US$ | 5,239 |  |  | N/A |  | US$ | 5,239 |  |
| Cox Communications, Inc. | - | 〃 |  | - |  | US$ | 5,112 |  |  | N/A |  | US$ | 5,112 |  |
| Intel Corporation | - | 〃 |  | - |  | US$ | 5,109 |  |  | N/A |  | US$ | 5,109 |  |
| Nutrien Ltd. | - | 〃 |  | - |  | US$ | 5,048 |  |  | N/A |  | US$ | 5,048 |  |

(Continued)

- 78 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Southern California Edison Company | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 5,017 |  |  | N/A |  | US$ | 5,017 |  |
| Fiserv, Inc. | - | 〃 |  | - |  | US$ | 4,999 |  |  | N/A |  | US$ | 4,999 |  |
| Five Corners Funding Trust | - | 〃 |  | - |  | US$ | 4,958 |  |  | N/A |  | US$ | 4,958 |  |
| Penske Truck Leasing Co., L.P. | - | 〃 |  | - |  | US$ | 4,774 |  |  | N/A |  | US$ | 4,774 |  |
| CVS Health Corporation | - | 〃 |  | - |  | US$ | 4,750 |  |  | N/A |  | US$ | 4,750 |  |
| CGI Inc. | - | 〃 |  | - |  | US$ | 4,713 |  |  | N/A |  | US$ | 4,713 |  |
| Brookfield Finance Inc. | - | 〃 |  | - |  | US$ | 4,601 |  |  | N/A |  | US$ | 4,601 |  |
| Thermo Fisher Scientific Inc. | - | 〃 |  | - |  | US$ | 4,558 |  |  | N/A |  | US$ | 4,558 |  |
| Virginia Electric and Power Company | - | 〃 |  | - |  | US$ | 4,468 |  |  | N/A |  | US$ | 4,468 |  |
| NextEra Energy Capital Holdings, Inc. | - | 〃 |  | - |  | US$ | 4,439 |  |  | N/A |  | US$ | 4,439 |  |
| W. P. Carey Inc. | - | 〃 |  | - |  | US$ | 4,414 |  |  | N/A |  | US$ | 4,414 |  |
| HP Inc. | - | 〃 |  | - |  | US$ | 4,388 |  |  | N/A |  | US$ | 4,388 |  |
| CenterPoint Energy, Inc. | - | 〃 |  | - |  | US$ | 4,342 |  |  | N/A |  | US$ | 4,342 |  |
| CNH Industrial Capital LLC | - | 〃 |  | - |  | US$ | 4,260 |  |  | N/A |  | US$ | 4,260 |  |
| Comcast Corporation | - | 〃 |  | - |  | US$ | 4,232 |  |  | N/A |  | US$ | 4,232 |  |
| Bank of New Zealand | - | 〃 |  | - |  | US$ | 4,231 |  |  | N/A |  | US$ | 4,231 |  |
| Eversource Energy | - | 〃 |  | - |  | US$ | 4,185 |  |  | N/A |  | US$ | 4,185 |  |
| Brighthouse Financial Global Funding | - | 〃 |  | - |  | US$ | 4,100 |  |  | N/A |  | US$ | 4,100 |  |
| Mercedes-Benz Finance North America LLC | - | 〃 |  | - |  | US$ | 4,089 |  |  | N/A |  | US$ | 4,089 |  |
| Korea Electric Power Corporation | - | 〃 |  | - |  | US$ | 4,037 |  |  | N/A |  | US$ | 4,037 |  |
| Florida Power & Light Company | - | 〃 |  | - |  | US$ | 4,026 |  |  | N/A |  | US$ | 4,026 |  |
| Dollar General Corporation | - | 〃 |  | - |  | US$ | 4,005 |  |  | N/A |  | US$ | 4,005 |  |
| F&G Global Funding | - | 〃 |  | - |  | US$ | 4,003 |  |  | N/A |  | US$ | 4,003 |  |
| 7-Eleven, Inc. | - | 〃 |  | - |  | US$ | 3,981 |  |  | N/A |  | US$ | 3,981 |  |
| Element Fleet Management Corp. | - | 〃 |  | - |  | US$ | 3,873 |  |  | N/A |  | US$ | 3,873 |  |
| CNO Global Funding | - | 〃 |  | - |  | US$ | 3,858 |  |  | N/A |  | US$ | 3,858 |  |
| Coca-Cola Europacific Partners PLC | - | 〃 |  | - |  | US$ | 3,837 |  |  | N/A |  | US$ | 3,837 |  |
| AvalonBay Communities, Inc. | - | 〃 |  | - |  | US$ | 3,831 |  |  | N/A |  | US$ | 3,831 |  |
| European Bank for Reconstruction and Development | - | 〃 |  | - |  | US$ | 3,802 |  |  | N/A |  | US$ | 3,802 |  |
| Mondelez International, Inc. | - | 〃 |  | - |  | US$ | 3,696 |  |  | N/A |  | US$ | 3,696 |  |
| B.A.T. International Finance p.l.c. | - | 〃 |  | - |  | US$ | 3,619 |  |  | N/A |  | US$ | 3,619 |  |
| Appalachian Power Company | - | 〃 |  | - |  | US$ | 3,618 |  |  | N/A |  | US$ | 3,618 |  |
| Public Storage | - | 〃 |  | - |  | US$ | 3,506 |  |  | N/A |  | US$ | 3,506 |  |
| V.F. Corporation | - | 〃 |  | - |  | US$ | 3,503 |  |  | N/A |  | US$ | 3,503 |  |
| Monongahela Power Company | - | 〃 |  | - |  | US$ | 3,415 |  |  | N/A |  | US$ | 3,415 |  |
| DNB Bank ASA | - | 〃 |  | - |  | US$ | 3,407 |  |  | N/A |  | US$ | 3,407 |  |
| Ryder System, Inc. | - | 〃 |  | - |  | US$ | 3,399 |  |  | N/A |  | US$ | 3,399 |  |
| Truist Bank | - | 〃 |  | - |  | US$ | 3,397 |  |  | N/A |  | US$ | 3,397 |  |
| BorgWarner Inc. | - | 〃 |  | - |  | US$ | 3,392 |  |  | N/A |  | US$ | 3,392 |  |
| OGE Energy Corp. | - | 〃 |  | - |  | US$ | 3,390 |  |  | N/A |  | US$ | 3,390 |  |
| Welltower Inc. | - | 〃 |  | - |  | US$ | 3,389 |  |  | N/A |  | US$ | 3,389 |  |
| HSBC Bank Canada | - | 〃 |  | - |  | US$ | 3,351 |  |  | N/A |  | US$ | 3,351 |  |
| Kimco Realty Corporation | - | 〃 |  | - |  | US$ | 3,348 |  |  | N/A |  | US$ | 3,348 |  |
| Diageo Capital plc | - | 〃 |  | - |  | US$ | 3,339 |  |  | N/A |  | US$ | 3,339 |  |
| Ross Stores, Inc. | - | 〃 |  | - |  | US$ | 3,275 |  |  | N/A |  | US$ | 3,275 |  |
| Sprint Spectrum Co Llc | - | 〃 |  | - |  | US$ | 3,248 |  |  | N/A |  | US$ | 3,248 |  |
| SMBC Aviation Capital Finance DAC | - | 〃 |  | - |  | US$ | 3,222 |  |  | N/A |  | US$ | 3,222 |  |
| U.S. Bancorp. | - | 〃 |  | - |  | US$ | 3,205 |  |  | N/A |  | US$ | 3,205 |  |
| Pfizer Inc. | - | 〃 |  | - |  | US$ | 3,174 |  |  | N/A |  | US$ | 3,174 |  |

(Continued)

- 79 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Highmark Inc. | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 3,171 |  |  | N/A |  | US$ | 3,171 |  |
| Dominion Energy, Inc. | - | 〃 |  | - |  | US$ | 3,167 |  |  | N/A |  | US$ | 3,167 |  |
| Verisk Analytics, Inc. | - | 〃 |  | - |  | US$ | 3,163 |  |  | N/A |  | US$ | 3,163 |  |
| Realty Income Corporation | - | 〃 |  | - |  | US$ | 3,162 |  |  | N/A |  | US$ | 3,162 |  |
| ERAC USA Finance LLC | - | 〃 |  | - |  | US$ | 3,112 |  |  | N/A |  | US$ | 3,112 |  |
| Anheuser-Busch Companies, LLC | - | 〃 |  | - |  | US$ | 3,035 |  |  | N/A |  | US$ | 3,035 |  |
| Xcel Energy Inc. | - | 〃 |  | - |  | US$ | 3,029 |  |  | N/A |  | US$ | 3,029 |  |
| Simon Property Group, L.P. | - | 〃 |  | - |  | US$ | 3,018 |  |  | N/A |  | US$ | 3,018 |  |
| ONE Gas, Inc. | - | 〃 |  | - |  | US$ | 3,012 |  |  | N/A |  | US$ | 3,012 |  |
| Public Service Enterprise Group Incorporated | - | 〃 |  | - |  | US$ | 2,996 |  |  | N/A |  | US$ | 2,996 |  |
| The Western Union Company | - | 〃 |  | - |  | US$ | 2,983 |  |  | N/A |  | US$ | 2,983 |  |
| Gilead Sciences, Inc. | - | 〃 |  | - |  | US$ | 2,970 |  |  | N/A |  | US$ | 2,970 |  |
| CNA Financial Corporation | - | 〃 |  | - |  | US$ | 2,950 |  |  | N/A |  | US$ | 2,950 |  |
| MPLX LP | - | 〃 |  | - |  | US$ | 2,941 |  |  | N/A |  | US$ | 2,941 |  |
| Atmos Energy Corporation | - | 〃 |  | - |  | US$ | 2,934 |  |  | N/A |  | US$ | 2,934 |  |
| Johnson & Johnson | - | 〃 |  | - |  | US$ | 2,914 |  |  | N/A |  | US$ | 2,914 |  |
| Rio Tinto Finance (USA) Limited | - | 〃 |  | - |  | US$ | 2,908 |  |  | N/A |  | US$ | 2,908 |  |
| Oncor Electric Delivery Company LLC | - | 〃 |  | - |  | US$ | 2,905 |  |  | N/A |  | US$ | 2,905 |  |
| Nestlé Holdings, Inc. | - | 〃 |  | - |  | US$ | 2,905 |  |  | N/A |  | US$ | 2,905 |  |
| Air Lease Corporation | - | 〃 |  | - |  | US$ | 2,895 |  |  | N/A |  | US$ | 2,895 |  |
| Avangrid, Inc. | - | 〃 |  | - |  | US$ | 2,861 |  |  | N/A |  | US$ | 2,861 |  |
| Southern California Gas Company | - | 〃 |  | - |  | US$ | 2,848 |  |  | N/A |  | US$ | 2,848 |  |
| Parker-Hannifin Corporation | - | 〃 |  | - |  | US$ | 2,768 |  |  | N/A |  | US$ | 2,768 |  |
| TORONTO-DOMINION BANK/THE | - | 〃 |  | - |  | US$ | 2,768 |  |  | N/A |  | US$ | 2,768 |  |
| Coöperatieve Rabobank U.A. | - | 〃 |  | - |  | US$ | 2,767 |  |  | N/A |  | US$ | 2,767 |  |
| Novartis Capital Corporation | - | 〃 |  | - |  | US$ | 2,734 |  |  | N/A |  | US$ | 2,734 |  |
| Baxalta Incorporated | - | 〃 |  | - |  | US$ | 2,728 |  |  | N/A |  | US$ | 2,728 |  |
| PPL Electric Utilities Corporation | - | 〃 |  | - |  | US$ | 2,718 |  |  | N/A |  | US$ | 2,718 |  |
| Amazon.com, Inc | - | 〃 |  | - |  | US$ | 2,691 |  |  | N/A |  | US$ | 2,691 |  |
| Ameriprise Financial, Inc. | - | 〃 |  | - |  | US$ | 2,677 |  |  | N/A |  | US$ | 2,677 |  |
| B.A.T Capital Corporation | - | 〃 |  | - |  | US$ | 2,671 |  |  | N/A |  | US$ | 2,671 |  |
| Hewlett Packard Enterprise Company | - | 〃 |  | - |  | US$ | 2,635 |  |  | N/A |  | US$ | 2,635 |  |
| Ventas Realty, Limited Partnership | - | 〃 |  | - |  | US$ | 2,600 |  |  | N/A |  | US$ | 2,600 |  |
| Eastern Energy Gas Holdings, LLC | - | 〃 |  | - |  | US$ | 2,598 |  |  | N/A |  | US$ | 2,598 |  |
| Chevron Phillips Chemical Company LLC | - | 〃 |  | - |  | US$ | 2,579 |  |  | N/A |  | US$ | 2,579 |  |
| Mondelez International Holdings Netherlands B.V. | - | 〃 |  | - |  | US$ | 2,577 |  |  | N/A |  | US$ | 2,577 |  |
| Masco Corporation | - | 〃 |  | - |  | US$ | 2,519 |  |  | N/A |  | US$ | 2,519 |  |
| GA Global Funding Trust | - | 〃 |  | - |  | US$ | 2,484 |  |  | N/A |  | US$ | 2,484 |  |
| Baxter International Inc. | - | 〃 |  | - |  | US$ | 2,469 |  |  | N/A |  | US$ | 2,469 |  |
| NBN Co Limited | - | 〃 |  | - |  | US$ | 2,461 |  |  | N/A |  | US$ | 2,461 |  |
| M&T Bank Corporation | - | 〃 |  | - |  | US$ | 2,459 |  |  | N/A |  | US$ | 2,459 |  |
| Air Products and Chemicals, Inc. | - | 〃 |  | - |  | US$ | 2,447 |  |  | N/A |  | US$ | 2,447 |  |
| International Business Machines Corporation | - | 〃 |  | - |  | US$ | 2,445 |  |  | N/A |  | US$ | 2,445 |  |
| Nuveen Finance, LLC | - | 〃 |  | - |  | US$ | 2,437 |  |  | N/A |  | US$ | 2,437 |  |
| Cigna Corporation | - | 〃 |  | - |  | US$ | 2,426 |  |  | N/A |  | US$ | 2,426 |  |
| The PNC Financial Services Group, Inc. | - | 〃 |  | - |  | US$ | 2,424 |  |  | N/A |  | US$ | 2,424 |  |
| Santander UK plc | - | 〃 |  | - |  | US$ | 2,417 |  |  | N/A |  | US$ | 2,417 |  |
| Pinnacle West Capital Corporation | - | 〃 |  | - |  | US$ | 2,397 |  |  | N/A |  | US$ | 2,397 |  |
| Bayer US Finance II LLC | - | 〃 |  | - |  | US$ | 2,374 |  |  | N/A |  | US$ | 2,374 |  |

(Continued)

- 80 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | AutoZone, Inc. | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 2,373 |  |  | N/A |  | US$ | 2,373 |  |
| CRH America, Inc. | - | 〃 |  | - |  | US$ | 2,371 |  |  | N/A |  | US$ | 2,371 |  |
| Phillips 66 | - | 〃 |  | - |  | US$ | 2,352 |  |  | N/A |  | US$ | 2,352 |  |
| American Electric Power Company, Inc. | - | 〃 |  | - |  | US$ | 2,343 |  |  | N/A |  | US$ | 2,343 |  |
| Workday, Inc. | - | 〃 |  | - |  | US$ | 2,333 |  |  | N/A |  | US$ | 2,333 |  |
| CMS Energy Corporation | - | 〃 |  | - |  | US$ | 2,324 |  |  | N/A |  | US$ | 2,324 |  |
| Magellan Midstream Partners, L.P. | - | 〃 |  | - |  | US$ | 2,299 |  |  | N/A |  | US$ | 2,299 |  |
| Georgia Power Company | - | 〃 |  | - |  | US$ | 2,281 |  |  | N/A |  | US$ | 2,281 |  |
| Texas Instruments Incorporated | - | 〃 |  | - |  | US$ | 2,279 |  |  | N/A |  | US$ | 2,279 |  |
| Chevron U.S.A. Inc. | - | 〃 |  | - |  | US$ | 2,262 |  |  | N/A |  | US$ | 2,262 |  |
| USAA Capital Corp. | - | 〃 |  | - |  | US$ | 2,242 |  |  | N/A |  | US$ | 2,242 |  |
| Reynolds American Inc. | - | 〃 |  | - |  | US$ | 2,228 |  |  | N/A |  | US$ | 2,228 |  |
| BOC Aviation Limited | - | 〃 |  | - |  | US$ | 2,223 |  |  | N/A |  | US$ | 2,223 |  |
| O'Reilly Automotive, Inc. | - | 〃 |  | - |  | US$ | 2,223 |  |  | N/A |  | US$ | 2,223 |  |
| RGA Global Funding | - | 〃 |  | - |  | US$ | 2,216 |  |  | N/A |  | US$ | 2,216 |  |
| Yara International ASA | - | 〃 |  | - |  | US$ | 2,215 |  |  | N/A |  | US$ | 2,215 |  |
| National Australia Bank - New York Branch | - | 〃 |  | - |  | US$ | 2,200 |  |  | N/A |  | US$ | 2,200 |  |
| NiSource Inc. | - | 〃 |  | - |  | US$ | 2,178 |  |  | N/A |  | US$ | 2,178 |  |
| Berkshire Hathaway Inc. | - | 〃 |  | - |  | US$ | 2,161 |  |  | N/A |  | US$ | 2,161 |  |
| Empower Finance 2020, LP | - | 〃 |  | - |  | US$ | 2,129 |  |  | N/A |  | US$ | 2,129 |  |
| Union Pacific Corporation | - | 〃 |  | - |  | US$ | 2,082 |  |  | N/A |  | US$ | 2,082 |  |
| Health Care Service Corporation, a Mutual Legal Reserve Company | - | 〃 |  | - |  | US$ | 2,065 |  |  | N/A |  | US$ | 2,065 |  |
| Georgia-Pacific LLC | - | 〃 |  | - |  | US$ | 2,028 |  |  | N/A |  | US$ | 2,028 |  |
| General Electric Company | - | 〃 |  | - |  | US$ | 1,991 |  |  | N/A |  | US$ | 1,991 |  |
| The Sherwin-Williams Company | - | 〃 |  | - |  | US$ | 1,967 |  |  | N/A |  | US$ | 1,967 |  |
| Mead Johnson Nutrition Company | - | 〃 |  | - |  | US$ | 1,961 |  |  | N/A |  | US$ | 1,961 |  |
| Magna International Inc. | - | 〃 |  | - |  | US$ | 1,956 |  |  | N/A |  | US$ | 1,956 |  |
| Reliance Standard Life Global Funding II | - | 〃 |  | - |  | US$ | 1,948 |  |  | N/A |  | US$ | 1,948 |  |
| Public Service Electric and Gas Company | - | 〃 |  | - |  | US$ | 1,948 |  |  | N/A |  | US$ | 1,948 |  |
| Tucson Electric Power Company | - | 〃 |  | - |  | US$ | 1,918 |  |  | N/A |  | US$ | 1,918 |  |
| Gulf Power Company | - | 〃 |  | - |  | US$ | 1,884 |  |  | N/A |  | US$ | 1,884 |  |
| National Rural Utilities Cooperative Finance Corporation | - | 〃 |  | - |  | US$ | 1,881 |  |  | N/A |  | US$ | 1,881 |  |
| Duke Energy Corporation | - | 〃 |  | - |  | US$ | 1,871 |  |  | N/A |  | US$ | 1,871 |  |
| Olympus Corporation | - | 〃 |  | - |  | US$ | 1,860 |  |  | N/A |  | US$ | 1,860 |  |
| Otis Worldwide Corporation | - | 〃 |  | - |  | US$ | 1,859 |  |  | N/A |  | US$ | 1,859 |  |
| Kinder Morgan, Inc. | - | 〃 |  | - |  | US$ | 1,787 |  |  | N/A |  | US$ | 1,787 |  |
| Shinhan Financial Group Co., Ltd. | - | 〃 |  | - |  | US$ | 1,785 |  |  | N/A |  | US$ | 1,785 |  |
| NBK SPC Limited | - | 〃 |  | - |  | US$ | 1,754 |  |  | N/A |  | US$ | 1,754 |  |
| Mitsubishi Corporation | - | 〃 |  | - |  | US$ | 1,752 |  |  | N/A |  | US$ | 1,752 |  |
| Sydney Airport Finance Company Pty Ltd. | - | 〃 |  | - |  | US$ | 1,733 |  |  | N/A |  | US$ | 1,733 |  |
| Caterpillar Financial Services Corporation | - | 〃 |  | - |  | US$ | 1,726 |  |  | N/A |  | US$ | 1,726 |  |
| Kentucky Utilities Company | - | 〃 |  | - |  | US$ | 1,717 |  |  | N/A |  | US$ | 1,717 |  |
| Wipro IT Services LLC | - | 〃 |  | - |  | US$ | 1,674 |  |  | N/A |  | US$ | 1,674 |  |
| Enbridge Inc. | - | 〃 |  | - |  | US$ | 1,672 |  |  | N/A |  | US$ | 1,672 |  |
| Infor, Inc. | - | 〃 |  | - |  | US$ | 1,670 |  |  | N/A |  | US$ | 1,670 |  |
| Evergy Kansas Central, Inc. | - | 〃 |  | - |  | US$ | 1,658 |  |  | N/A |  | US$ | 1,658 |  |
| DTE Energy Company | - | 〃 |  | - |  | US$ | 1,647 |  |  | N/A |  | US$ | 1,647 |  |
| Tyson Foods, Inc. | - | 〃 |  | - |  | US$ | 1,624 |  |  | N/A |  | US$ | 1,624 |  |

(Continued)

- 81 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Quest Diagnostics Incorporated | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 1,601 |  |  | N/A |  | US$ | 1,601 |  |
| Gulfstream Natural Gas System, L.L.C. | - | 〃 |  | - |  | US$ | 1,595 |  |  | N/A |  | US$ | 1,595 |  |
| NatWest Group plc | - | 〃 |  | - |  | US$ | 1,594 |  |  | N/A |  | US$ | 1,594 |  |
| Burlington Northern Santa Fe, LLC | - | 〃 |  | - |  | US$ | 1,591 |  |  | N/A |  | US$ | 1,591 |  |
| Berkshire Hathaway Energy Company | - | 〃 |  | - |  | US$ | 1,587 |  |  | N/A |  | US$ | 1,587 |  |
| Walmart Inc. | - | 〃 |  | - |  | US$ | 1,583 |  |  | N/A |  | US$ | 1,583 |  |
| University of California | - | 〃 |  | - |  | US$ | 1,578 |  |  | N/A |  | US$ | 1,578 |  |
| CSL Finance plc | - | 〃 |  | - |  | US$ | 1,577 |  |  | N/A |  | US$ | 1,577 |  |
| Raytheon Technologies Corporation | - | 〃 |  | - |  | US$ | 1,576 |  |  | N/A |  | US$ | 1,576 |  |
| AIA Group Limited | - | 〃 |  | - |  | US$ | 1,554 |  |  | N/A |  | US$ | 1,554 |  |
| Midwest Connector Capital Company LLC | - | 〃 |  | - |  | US$ | 1,551 |  |  | N/A |  | US$ | 1,551 |  |
| eBay Inc. | - | 〃 |  | - |  | US$ | 1,532 |  |  | N/A |  | US$ | 1,532 |  |
| UBS AG (LONDON BRANCH) | - | 〃 |  | - |  | US$ | 1,522 |  |  | N/A |  | US$ | 1,522 |  |
| Emerson Electric Co. | - | 〃 |  | - |  | US$ | 1,508 |  |  | N/A |  | US$ | 1,508 |  |
| MetLife, Inc. | - | 〃 |  | - |  | US$ | 1,507 |  |  | N/A |  | US$ | 1,507 |  |
| Westpac Banking Corporation | - | 〃 |  | - |  | US$ | 1,503 |  |  | N/A |  | US$ | 1,503 |  |
| Glencore Funding LLC | - | 〃 |  | - |  | US$ | 1,493 |  |  | N/A |  | US$ | 1,493 |  |
| APA Infrastructure Limited | - | 〃 |  | - |  | US$ | 1,483 |  |  | N/A |  | US$ | 1,483 |  |
| Brookfield Finance LLC | - | 〃 |  | - |  | US$ | 1,473 |  |  | N/A |  | US$ | 1,473 |  |
| CK Hutchison International (19) Limited | - | 〃 |  | - |  | US$ | 1,465 |  |  | N/A |  | US$ | 1,465 |  |
| Amcor Flexibles North America Inc. | - | 〃 |  | - |  | US$ | 1,461 |  |  | N/A |  | US$ | 1,461 |  |
| Microchip Technology Incorporated | - | 〃 |  | - |  | US$ | 1,458 |  |  | N/A |  | US$ | 1,458 |  |
| Commonwealth Bank of Australia | - | 〃 |  | - |  | US$ | 1,452 |  |  | N/A |  | US$ | 1,452 |  |
| UBS Group Funding (Jersey) Ltd. | - | 〃 |  | - |  | US$ | 1,443 |  |  | N/A |  | US$ | 1,443 |  |
| Marsh & McLennan Companies, Inc. | - | 〃 |  | - |  | US$ | 1,427 |  |  | N/A |  | US$ | 1,427 |  |
| The Southern Company | - | 〃 |  | - |  | US$ | 1,423 |  |  | N/A |  | US$ | 1,423 |  |
| NSTAR Electric Company | - | 〃 |  | - |  | US$ | 1,420 |  |  | N/A |  | US$ | 1,420 |  |
| Duke Energy Florida, LLC | - | 〃 |  | - |  | US$ | 1,419 |  |  | N/A |  | US$ | 1,419 |  |
| Marathon Petroleum Corporation | - | 〃 |  | - |  | US$ | 1,411 |  |  | N/A |  | US$ | 1,411 |  |
| Essex Portfolio, L.P. | - | 〃 |  | - |  | US$ | 1,409 |  |  | N/A |  | US$ | 1,409 |  |
| Alimentation Couche-Tard Inc. | - | 〃 |  | - |  | US$ | 1,389 |  |  | N/A |  | US$ | 1,389 |  |
| ITC Holdings Corp. | - | 〃 |  | - |  | US$ | 1,353 |  |  | N/A |  | US$ | 1,353 |  |
| Alliant Energy Finance, LLC | - | 〃 |  | - |  | US$ | 1,321 |  |  | N/A |  | US$ | 1,321 |  |
| Eastern Gas Transmission and Storage, Inc. | - | 〃 |  | - |  | US$ | 1,299 |  |  | N/A |  | US$ | 1,299 |  |
| NetApp, Inc. | - | 〃 |  | - |  | US$ | 1,265 |  |  | N/A |  | US$ | 1,265 |  |
| Amphenol Corporation | - | 〃 |  | - |  | US$ | 1,256 |  |  | N/A |  | US$ | 1,256 |  |
| PACCAR Financial Corp. | - | 〃 |  | - |  | US$ | 1,227 |  |  | N/A |  | US$ | 1,227 |  |
| State Of Tennessee | - | 〃 |  | - |  | US$ | 1,225 |  |  | N/A |  | US$ | 1,225 |  |
| Met Tower Global Funding | - | 〃 |  | - |  | US$ | 1,223 |  |  | N/A |  | US$ | 1,223 |  |
| Elevance Health Inc. | - | 〃 |  | - |  | US$ | 1,215 |  |  | N/A |  | US$ | 1,215 |  |
| Andrew W. Mellon Foundation, The | - | 〃 |  | - |  | US$ | 1,208 |  |  | N/A |  | US$ | 1,208 |  |
| American Honda Finance Corporation | - | 〃 |  | - |  | US$ | 1,174 |  |  | N/A |  | US$ | 1,174 |  |
| Corebridge Financial, Inc. | - | 〃 |  | - |  | US$ | 1,167 |  |  | N/A |  | US$ | 1,167 |  |
| Banco Bilbao Vizcaya Argentaria, S.A. | - | 〃 |  | - |  | US$ | 1,162 |  |  | N/A |  | US$ | 1,162 |  |
| The Curators of the University of Missouri | - | 〃 |  | - |  | US$ | 1,080 |  |  | N/A |  | US$ | 1,080 |  |
| Ferguson Finance PLC | - | 〃 |  | - |  | US$ | 1,077 |  |  | N/A |  | US$ | 1,077 |  |
| Nucor Corporation | - | 〃 |  | - |  | US$ | 1,067 |  |  | N/A |  | US$ | 1,067 |  |
| Baker Hughes Holdings LLC | - | 〃 |  | - |  | US$ | 1,038 |  |  | N/A |  | US$ | 1,038 |  |
| State Street Corporation | - | 〃 |  | - |  | US$ | 1,035 |  |  | N/A |  | US$ | 1,035 |  |

(Continued)

- 82 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Enterprise Products Operating LLC | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 1,028 |  |  | N/A |  | US$ | 1,028 |  |
| IBERDROLA INTL BV | - | 〃 |  | - |  | US$ | 1,015 |  |  | N/A |  | US$ | 1,015 |  |
| The Cleveland Electric Illuminating Company | - | 〃 |  | - |  | US$ | 1,005 |  |  | N/A |  | US$ | 1,005 |  |
| Baltimore Gas and Electric Company | - | 〃 |  | - |  | US$ | 993 |  |  | N/A |  | US$ | 993 |  |
| Sinopec Group Overseas Development (2014) Ltd. | - | 〃 |  | - |  | US$ | 993 |  |  | N/A |  | US$ | 993 |  |
| Entergy Mississippi, LLC | - | 〃 |  | - |  | US$ | 989 |  |  | N/A |  | US$ | 989 |  |
| Foxconn (Far East) Limited | - | 〃 |  | - |  | US$ | 987 |  |  | N/A |  | US$ | 987 |  |
| MassMutual Global Funding II | - | 〃 |  | - |  | US$ | 987 |  |  | N/A |  | US$ | 987 |  |
| BBVA México, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México | - | 〃 |  | - |  | US$ | 985 |  |  | N/A |  | US$ | 985 |  |
| Denver City & County Housing Authority | - | 〃 |  | - |  | US$ | 973 |  |  | N/A |  | US$ | 973 |  |
| Pricoa Global Funding I | - | 〃 |  | - |  | US$ | 963 |  |  | N/A |  | US$ | 963 |  |
| Kansas City Southern | - | 〃 |  | - |  | US$ | 940 |  |  | N/A |  | US$ | 940 |  |
| Suntory Holdings Limited | - | 〃 |  | - |  | US$ | 939 |  |  | N/A |  | US$ | 939 |  |
| Shire Acquisitions Investments Ireland Designated Activity Company | - | 〃 |  | - |  | US$ | 919 |  |  | N/A |  | US$ | 919 |  |
| Unilever Capital Corporation | - | 〃 |  | - |  | US$ | 873 |  |  | N/A |  | US$ | 873 |  |
| KeyBank National Association | - | 〃 |  | - |  | US$ | 864 |  |  | N/A |  | US$ | 864 |  |
| QNB Finance Ltd. | - | 〃 |  | - |  | US$ | 859 |  |  | N/A |  | US$ | 859 |  |
| AmerisourceBergen Corporation | - | 〃 |  | - |  | US$ | 834 |  |  | N/A |  | US$ | 834 |  |
| Hormel Foods Corporation | - | 〃 |  | - |  | US$ | 820 |  |  | N/A |  | US$ | 820 |  |
| BMW US Capital, LLC | - | 〃 |  | - |  | US$ | 797 |  |  | N/A |  | US$ | 797 |  |
| Palm Beach County, Florida | - | 〃 |  | - |  | US$ | 795 |  |  | N/A |  | US$ | 795 |  |
| Sinopec Capital (2013) Ltd. | - | 〃 |  | - |  | US$ | 795 |  |  | N/A |  | US$ | 795 |  |
| BHP Billiton Finance (USA) Limited | - | 〃 |  | - |  | US$ | 795 |  |  | N/A |  | US$ | 795 |  |
| TransCanada PipeLines Limited | - | 〃 |  | - |  | US$ | 787 |  |  | N/A |  | US$ | 787 |  |
| Oregon Health & Science University | - | 〃 |  | - |  | US$ | 772 |  |  | N/A |  | US$ | 772 |  |
| Tencent Holdings Limited | - | 〃 |  | - |  | US$ | 749 |  |  | N/A |  | US$ | 749 |  |
| Niagara Mohawk Power Corporation | - | 〃 |  | - |  | US$ | 745 |  |  | N/A |  | US$ | 745 |  |
| CubeSmart, L.P. | - | 〃 |  | - |  | US$ | 735 |  |  | N/A |  | US$ | 735 |  |
| The Walt Disney Company | - | 〃 |  | - |  | US$ | 732 |  |  | N/A |  | US$ | 732 |  |
| Southern Power Company | - | 〃 |  | - |  | US$ | 718 |  |  | N/A |  | US$ | 718 |  |
| Visa Inc. | - | 〃 |  | - |  | US$ | 717 |  |  | N/A |  | US$ | 717 |  |
| Canadian Natural Resources Limited | - | 〃 |  | - |  | US$ | 700 |  |  | N/A |  | US$ | 700 |  |
| Sky Limited | - | 〃 |  | - |  | US$ | 684 |  |  | N/A |  | US$ | 684 |  |
| Hyundai Capital Services, Inc. | - | 〃 |  | - |  | US$ | 652 |  |  | N/A |  | US$ | 652 |  |
| State Of Washington | - | 〃 |  | - |  | US$ | 645 |  |  | N/A |  | US$ | 645 |  |
| Abbott Laboratories | - | 〃 |  | - |  | US$ | 643 |  |  | N/A |  | US$ | 643 |  |
| Sodexo, Inc. | - | 〃 |  | - |  | US$ | 640 |  |  | N/A |  | US$ | 640 |  |
| Norsk Hydro ASA | - | 〃 |  | - |  | US$ | 639 |  |  | N/A |  | US$ | 639 |  |
| Stryker Corporation | - | 〃 |  | - |  | US$ | 635 |  |  | N/A |  | US$ | 635 |  |
| Automatic Data Processing, Inc. | - | 〃 |  | - |  | US$ | 626 |  |  | N/A |  | US$ | 626 |  |
| Bell Canada, Inc. | - | 〃 |  | - |  | US$ | 617 |  |  | N/A |  | US$ | 617 |  |
| Keurig Dr Pepper Inc. | - | 〃 |  | - |  | US$ | 594 |  |  | N/A |  | US$ | 594 |  |
| QUALCOMM Incorporated | - | 〃 |  | - |  | US$ | 592 |  |  | N/A |  | US$ | 592 |  |
| Republic Services, Inc. | - | 〃 |  | - |  | US$ | 578 |  |  | N/A |  | US$ | 578 |  |
| Florida Hurricane Catastrophe Fund Finance Corporation | - | 〃 |  | - |  | US$ | 572 |  |  | N/A |  | US$ | 572 |  |
| Lincoln National Corporation | - | 〃 |  | - |  | US$ | 571 |  |  | N/A |  | US$ | 571 |  |
| Port of Morrow | - | 〃 |  | - |  | US$ | 565 |  |  | N/A |  | US$ | 565 |  |
| American Water Capital Corp. | - | 〃 |  | - |  | US$ | 558 |  |  | N/A |  | US$ | 558 |  |

(Continued)

- 83 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Fifth Third Bank, National Association | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 549 |  |  | N/A |  | US$ | 549 |  |
| Duke Energy Progress, LLC | - | 〃 |  | - |  | US$ | 544 |  |  | N/A |  | US$ | 544 |  |
| Shell International Finance B.V. | - | 〃 |  | - |  | US$ | 524 |  |  | N/A |  | US$ | 524 |  |
| American International Group, Inc. | - | 〃 |  | - |  | US$ | 518 |  |  | N/A |  | US$ | 518 |  |
| Intesa Sanpaolo S.p.A. | - | 〃 |  | - |  | US$ | 510 |  |  | N/A |  | US$ | 510 |  |
| Arizona Public Service Company | - | 〃 |  | - |  | US$ | 501 |  |  | N/A |  | US$ | 501 |  |
| ConocoPhillips Company | - | 〃 |  | - |  | US$ | 499 |  |  | N/A |  | US$ | 499 |  |
| State of Hawaii | - | 〃 |  | - |  | US$ | 498 |  |  | N/A |  | US$ | 498 |  |
| United Parcel Service, Inc. | - | 〃 |  | - |  | US$ | 493 |  |  | N/A |  | US$ | 493 |  |
| Skandinaviska Enskilda Banken AB (publ) | - | 〃 |  | - |  | US$ | 491 |  |  | N/A |  | US$ | 491 |  |
| Gsk Consumer Healthcare Capital Uk Plc | - | 〃 |  | - |  | US$ | 476 |  |  | N/A |  | US$ | 476 |  |
| Trane Technologies Luxembourg Finance S.A. | - | 〃 |  | - |  | US$ | 472 |  |  | N/A |  | US$ | 472 |  |
| Genuine Parts Company | - | 〃 |  | - |  | US$ | 467 |  |  | N/A |  | US$ | 467 |  |
| Altria Group, Inc. | - | 〃 |  | - |  | US$ | 466 |  |  | N/A |  | US$ | 466 |  |
| McCormick & Company, Incorporated | - | 〃 |  | - |  | US$ | 466 |  |  | N/A |  | US$ | 466 |  |
| Ecolab Inc. | - | 〃 |  | - |  | US$ | 465 |  |  | N/A |  | US$ | 465 |  |
| DENSO Corporation | - | 〃 |  | - |  | US$ | 435 |  |  | N/A |  | US$ | 435 |  |
| Brazos Higher Education Authority Inc | - | 〃 |  | - |  | US$ | 429 |  |  | N/A |  | US$ | 429 |  |
| PayPal Holdings, Inc. | - | 〃 |  | - |  | US$ | 407 |  |  | N/A |  | US$ | 407 |  |
| The Home Depot, Inc. | - | 〃 |  | - |  | US$ | 406 |  |  | N/A |  | US$ | 406 |  |
| Target Corporation | - | 〃 |  | - |  | US$ | 404 |  |  | N/A |  | US$ | 404 |  |
| National Australia Bank Limited | - | 〃 |  | - |  | US$ | 397 |  |  | N/A |  | US$ | 397 |  |
| Aetna Inc. | - | 〃 |  | - |  | US$ | 396 |  |  | N/A |  | US$ | 396 |  |
| Boston Properties Limited Partnership | - | 〃 |  | - |  | US$ | 394 |  |  | N/A |  | US$ | 394 |  |
| University of Massachusetts Building Authority | - | 〃 |  | - |  | US$ | 387 |  |  | N/A |  | US$ | 387 |  |
| Comerica Bank | - | 〃 |  | - |  | US$ | 384 |  |  | N/A |  | US$ | 384 |  |
| Entergy Corporation | - | 〃 |  | - |  | US$ | 379 |  |  | N/A |  | US$ | 379 |  |
| Aflac Incorporated | - | 〃 |  | - |  | US$ | 377 |  |  | N/A |  | US$ | 377 |  |
| Banco del Estado de Chile | - | 〃 |  | - |  | US$ | 377 |  |  | N/A |  | US$ | 377 |  |
| McKesson Corporation | - | 〃 |  | - |  | US$ | 374 |  |  | N/A |  | US$ | 374 |  |
| Sierra Pacific Power Company | - | 〃 |  | - |  | US$ | 372 |  |  | N/A |  | US$ | 372 |  |
| Honeywell International Inc. | - | 〃 |  | - |  | US$ | 370 |  |  | N/A |  | US$ | 370 |  |
| NIKE, Inc. | - | 〃 |  | - |  | US$ | 359 |  |  | N/A |  | US$ | 359 |  |
| PepsiCo, Inc. | - | 〃 |  | - |  | US$ | 357 |  |  | N/A |  | US$ | 357 |  |
| First Republic Bank | - | 〃 |  | - |  | US$ | 349 |  |  | N/A |  | US$ | 349 |  |
| The Norinchukin Bank | - | 〃 |  | - |  | US$ | 349 |  |  | N/A |  | US$ | 349 |  |
| Principal Financial Group, Inc. | - | 〃 |  | - |  | US$ | 348 |  |  | N/A |  | US$ | 348 |  |
| Rabobank Nederland - New York Branch | - | 〃 |  | - |  | US$ | 334 |  |  | N/A |  | US$ | 334 |  |
| Amgen Inc. | - | 〃 |  | - |  | US$ | 310 |  |  | N/A |  | US$ | 310 |  |
| Philip Morris International Inc. | - | 〃 |  | - |  | US$ | 297 |  |  | N/A |  | US$ | 297 |  |
| Mid-America Apartments, L.P. | - | 〃 |  | - |  | US$ | 295 |  |  | N/A |  | US$ | 295 |  |
| The Allstate Corporation | - | 〃 |  | - |  | US$ | 293 |  |  | N/A |  | US$ | 293 |  |
| Alabama State Federal Aid Highway Finance Authority | - | 〃 |  | - |  | US$ | 292 |  |  | N/A |  | US$ | 292 |  |
| TotalEnergies Capital International | - | 〃 |  | - |  | US$ | 287 |  |  | N/A |  | US$ | 287 |  |
| BOC Aviation (USA) Corporation | - | 〃 |  | - |  | US$ | 285 |  |  | N/A |  | US$ | 285 |  |
| Aptiv PLC | - | 〃 |  | - |  | US$ | 282 |  |  | N/A |  | US$ | 282 |  |
| Salesforce, Inc. | - | 〃 |  | - |  | US$ | 282 |  |  | N/A |  | US$ | 282 |  |
| Barclays Bank PLC | - | 〃 |  | - |  | US$ | 270 |  |  | N/A |  | US$ | 270 |  |
| Johnson Controls International plc | - | 〃 |  | - |  | US$ | 269 |  |  | N/A |  | US$ | 269 |  |

(Continued)

- 84 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | QatarEnergy | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 266 |  |  | N/A |  | US$ | 266 |  |
| Sales Tax Securitization Corporation Of Chicago | - | 〃 |  | - |  | US$ | 250 |  |  | N/A |  | US$ | 250 |  |
| Equitable Holdings, Inc. | - | 〃 |  | - |  | US$ | 243 |  |  | N/A |  | US$ | 243 |  |
| Starbucks Corporation | - | 〃 |  | - |  | US$ | 237 |  |  | N/A |  | US$ | 237 |  |
| E. I. du Pont de Nemours and Company | - | 〃 |  | - |  | US$ | 227 |  |  | N/A |  | US$ | 227 |  |
| Waste Management, Inc. | - | 〃 |  | - |  | US$ | 224 |  |  | N/A |  | US$ | 224 |  |
| Entergy Louisiana, LLC | - | 〃 |  | - |  | US$ | 218 |  |  | N/A |  | US$ | 218 |  |
| Children's Hospital Of Orange County | - | 〃 |  | - |  | US$ | 214 |  |  | N/A |  | US$ | 214 |  |
| The Pennsylvania State University | - | 〃 |  | - |  | US$ | 206 |  |  | N/A |  | US$ | 206 |  |
| Martin Marietta Materials, Inc. | - | 〃 |  | - |  | US$ | 205 |  |  | N/A |  | US$ | 205 |  |
| Riverside County Infrastructure Financing Authority | - | 〃 |  | - |  | US$ | 198 |  |  | N/A |  | US$ | 198 |  |
| Deere & Company | - | 〃 |  | - |  | US$ | 192 |  |  | N/A |  | US$ | 192 |  |
| Saudi Arabian Oil Company | - | 〃 |  | - |  | US$ | 192 |  |  | N/A |  | US$ | 192 |  |
| Los Angeles Department of Water and Power, California | - | 〃 |  | - |  | US$ | 191 |  |  | N/A |  | US$ | 191 |  |
| NongHyup Bank | - | 〃 |  | - |  | US$ | 187 |  |  | N/A |  | US$ | 187 |  |
| Hoover Alabama Board Of Education | - | 〃 |  | - |  | US$ | 175 |  |  | N/A |  | US$ | 175 |  |
| Dormitory Authority of the State of New York | - | 〃 |  | - |  | US$ | 154 |  |  | N/A |  | US$ | 154 |  |
| Oregon Education Districts | - | 〃 |  | - |  | US$ | 152 |  |  | N/A |  | US$ | 152 |  |
| Electricité de France S.A. | - | 〃 |  | - |  | US$ | 96 |  |  | N/A |  | US$ | 96 |  |
| Beth Israel Deaconess Medical Center, Inc. | - | 〃 |  | - |  | US$ | 85 |  |  | N/A |  | US$ | 85 |  |
| Pima County, Arizona | - | 〃 |  | - |  | US$ | 76 |  |  | N/A |  | US$ | 76 |  |
| State of Wisconsin | - | 〃 |  | - |  | US$ | 61 |  |  | N/A |  | US$ | 61 |  |
| Aon Corporation | - | 〃 |  | - |  | US$ | 51 |  |  | N/A |  | US$ | 51 |  |
| Huntington Beach California | - | 〃 |  | - |  | US$ | 49 |  |  | N/A |  | US$ | 49 |  |
| Nueces County | - | 〃 |  | - |  | US$ | 24 |  |  | N/A |  | US$ | 24 |  |
| The Goldman Sachs Group, Inc. | - | Financial assets at amortized cost |  | - |  | US$ | 440,655 |  |  | N/A |  | US$ | 436,003 |  |
| Citigroup Global Markets Inc. | - | 〃 |  | - |  | US$ | 349,886 |  |  | N/A |  | US$ | 347,251 |  |
| Bank of America Corporation | - | 〃 |  | - |  | US$ | 324,757 |  |  | N/A |  | US$ | 323,371 |  |
| JPMorgan Chase & Co. | - | 〃 |  | - |  | US$ | 280,213 |  |  | N/A |  | US$ | 278,222 |  |
| Wells Fargo & Company | - | 〃 |  | - |  | US$ | 274,713 |  |  | N/A |  | US$ | 273,120 |  |
| Citigroup Inc. | - | 〃 |  | - |  | US$ | 174,540 |  |  | N/A |  | US$ | 174,301 |  |
| Citigroup Global Markets Holdings Inc. | - | 〃 |  | - |  | US$ | 149,951 |  |  | N/A |  | US$ | 146,964 |  |
| Goldman Sachs Finance Corp International Ltd. | - | 〃 |  | - |  | US$ | 149,870 |  |  | N/A |  | US$ | 146,872 |  |
| Morgan Stanley | - | 〃 |  | - |  | US$ | 60,207 |  |  | N/A |  | US$ | 60,267 |  |
| Jpmorgan LLC | - | 〃 |  | - |  | US$ | 49,984 |  |  | N/A |  | US$ | 49,077 |  |
| Banco Bilbao Vizcaya Argentaria, S.A. | - | 〃 |  | - |  | US$ | 10,534 |  |  | N/A |  | US$ | 10,440 |  |
| Hyundai Capital Services, Inc. | - | 〃 |  | - |  | US$ | 9,278 |  |  | N/A |  | US$ | 9,068 |  |
| Great-West Lifeco U.S. Finance 2020, Lp | - | 〃 |  | - |  | US$ | 9,233 |  |  | N/A |  | US$ | 8,994 |  |
| Nomura Holdings, Inc. | - | 〃 |  | - |  | US$ | 9,197 |  |  | N/A |  | US$ | 9,009 |  |
| Fédération des caisses Desjardins du Québec | - | 〃 |  | - |  | US$ | 9,165 |  |  | N/A |  | US$ | 8,997 |  |
| UBS Group AG | - | 〃 |  | - |  | US$ | 9,104 |  |  | N/A |  | US$ | 9,061 |  |
| Sumitomo Mitsui Trust Bank, Limited | - | 〃 |  | - |  | US$ | 9,057 |  |  | N/A |  | US$ | 8,910 |  |
| Deutsche Bank AG - New York Branch | - | 〃 |  | - |  | US$ | 9,023 |  |  | N/A |  | US$ | 8,923 |  |
| Lloyds Banking Group plc | - | 〃 |  | - |  | US$ | 8,972 |  |  | N/A |  | US$ | 8,891 |  |
| NatWest Markets Plc | - | 〃 |  | - |  | US$ | 8,956 |  |  | N/A |  | US$ | 8,834 |  |
| Athene Global Funding | - | 〃 |  | - |  | US$ | 8,915 |  |  | N/A |  | US$ | 8,733 |  |
| NongHyup Bank | - | 〃 |  | - |  | US$ | 8,545 |  |  | N/A |  | US$ | 8,431 |  |
| BPCE SA | - | 〃 |  | - |  | US$ | 8,431 |  |  | N/A |  | US$ | 8,243 |  |
| Banco Santander, S.A. | - | 〃 |  | - |  | US$ | 8,307 |  |  | N/A |  | US$ | 8,223 |  |

(Continued)

- 85 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Enel Finance International N.V. | - | Financial assets at amortized cost |  | - |  | US$ | 8,215 |  |  | N/A |  | US$ | 8,062 |  |
| Ventas Realty, Limited Partnership | - | 〃 |  | - |  | US$ | 8,181 |  |  | N/A |  | US$ | 8,076 |  |
| Protective Life Global Funding | - | 〃 |  | - |  | US$ | 8,088 |  |  | N/A |  | US$ | 7,913 |  |
| Volkswagen Group of America Finance, LLC | - | 〃 |  | - |  | US$ | 8,058 |  |  | N/A |  | US$ | 7,937 |  |
| Sydney Airport Finance Company Pty Ltd. | - | 〃 |  | - |  | US$ | 7,631 |  |  | N/A |  | US$ | 7,476 |  |
| BNP Paribas SA | - | 〃 |  | - |  | US$ | 7,552 |  |  | N/A |  | US$ | 7,448 |  |
| AIG Global Funding | - | 〃 |  | - |  | US$ | 7,200 |  |  | N/A |  | US$ | 7,151 |  |
| Nationwide Building Society | - | 〃 |  | - |  | US$ | 7,200 |  |  | N/A |  | US$ | 6,971 |  |
| KeyBank National Association | - | 〃 |  | - |  | US$ | 7,014 |  |  | N/A |  | US$ | 6,844 |  |
| GA Global Funding Trust | - | 〃 |  | - |  | US$ | 6,285 |  |  | N/A |  | US$ | 6,185 |  |
| Canadian Imperial Bank of Commerce | - | 〃 |  | - |  | US$ | 6,167 |  |  | N/A |  | US$ | 6,065 |  |
| Mitsubishi UFJ Financial Group, Inc. | - | 〃 |  | - |  | US$ | 6,062 |  |  | N/A |  | US$ | 5,983 |  |
| CRH America, Inc. | - | 〃 |  | - |  | US$ | 5,975 |  |  | N/A |  | US$ | 5,822 |  |
| Sumitomo Mitsui Financial Group, Inc. | - | 〃 |  | - |  | US$ | 5,754 |  |  | N/A |  | US$ | 5,702 |  |
| Daimler Trucks Finance North America LLC | - | 〃 |  | - |  | US$ | 5,706 |  |  | N/A |  | US$ | 5,582 |  |
| Swedbank AB (publ) | - | 〃 |  | - |  | US$ | 5,248 |  |  | N/A |  | US$ | 5,173 |  |
| F&G Global Funding | - | 〃 |  | - |  | US$ | 5,185 |  |  | N/A |  | US$ | 5,098 |  |
| Bayer US Finance II LLC | - | 〃 |  | - |  | US$ | 4,988 |  |  | N/A |  | US$ | 4,929 |  |
| Ecolab Inc. | - | 〃 |  | - |  | US$ | 4,878 |  |  | N/A |  | US$ | 4,812 |  |
| Kinder Morgan, Inc. | - | 〃 |  | - |  | US$ | 4,681 |  |  | N/A |  | US$ | 4,643 |  |
| Jackson Financial Inc. | - | 〃 |  | - |  | US$ | 4,678 |  |  | N/A |  | US$ | 4,632 |  |
| Bristol-Myers Squibb Company | - | 〃 |  | - |  | US$ | 4,674 |  |  | N/A |  | US$ | 4,621 |  |
| ING Groep N.V. | - | 〃 |  | - |  | US$ | 4,504 |  |  | N/A |  | US$ | 4,465 |  |
| Toyota Motor Credit Corporation | - | 〃 |  | - |  | US$ | 4,497 |  |  | N/A |  | US$ | 4,449 |  |
| Five Corners Funding Trust | - | 〃 |  | - |  | US$ | 4,415 |  |  | N/A |  | US$ | 4,356 |  |
| Svenska Handelsbanken AB (publ) | - | 〃 |  | - |  | US$ | 4,182 |  |  | N/A |  | US$ | 4,105 |  |
| Danone S.A. | - | 〃 |  | - |  | US$ | 4,156 |  |  | N/A |  | US$ | 4,113 |  |
| National Australia Bank - New York Branch | - | 〃 |  | - |  | US$ | 4,005 |  |  | N/A |  | US$ | 3,979 |  |
| Société Générale Société anonyme | - | 〃 |  | - |  | US$ | 4,005 |  |  | N/A |  | US$ | 3,965 |  |
| Mercedes-Benz Finance North America LLC | - | 〃 |  | - |  | US$ | 4,002 |  |  | N/A |  | US$ | 3,979 |  |
| Mizuho Financial Group, Inc. | - | 〃 |  | - |  | US$ | 4,000 |  |  | N/A |  | US$ | 3,991 |  |
| BMW US Capital, LLC | - | 〃 |  | - |  | US$ | 3,999 |  |  | N/A |  | US$ | 3,983 |  |
| Penske Truck Leasing Co., L.P. | - | 〃 |  | - |  | US$ | 3,998 |  |  | N/A |  | US$ | 3,978 |  |
| Georgia-Pacific LLC | - | 〃 |  | - |  | US$ | 3,996 |  |  | N/A |  | US$ | 3,963 |  |
| Simon Property Group, L.P. | - | 〃 |  | - |  | US$ | 3,987 |  |  | N/A |  | US$ | 3,960 |  |
| SMBC Aviation Capital Finance DAC | - | 〃 |  | - |  | US$ | 3,979 |  |  | N/A |  | US$ | 3,961 |  |
| Philip Morris International Inc. | - | 〃 |  | - |  | US$ | 3,969 |  |  | N/A |  | US$ | 3,950 |  |
| Danske Bank A/S | - | 〃 |  | - |  | US$ | 3,966 |  |  | N/A |  | US$ | 3,921 |  |
| The Bank of Nova Scotia | - | 〃 |  | - |  | US$ | 3,914 |  |  | N/A |  | US$ | 3,875 |  |
| Komatsu Finance America, Inc. | - | 〃 |  | - |  | US$ | 3,912 |  |  | N/A |  | US$ | 3,879 |  |
| Nordea Bank Abp | - | 〃 |  | - |  | US$ | 3,788 |  |  | N/A |  | US$ | 3,751 |  |
| Shire Acquisitions Investments Ireland Designated Activity Company | - | 〃 |  | - |  | US$ | 3,740 |  |  | N/A |  | US$ | 3,703 |  |
| Georgia Power Company | - | 〃 |  | - |  | US$ | 3,553 |  |  | N/A |  | US$ | 3,532 |  |
| Enbridge Inc. | - | 〃 |  | - |  | US$ | 3,423 |  |  | N/A |  | US$ | 3,382 |  |
| Central Japan Railway Company | - | 〃 |  | - |  | US$ | 3,389 |  |  | N/A |  | US$ | 3,361 |  |
| Jackson National Life Global Funding | - | 〃 |  | - |  | US$ | 3,326 |  |  | N/A |  | US$ | 3,242 |  |
| Nestlé Holdings, Inc. | - | 〃 |  | - |  | US$ | 3,276 |  |  | N/A |  | US$ | 3,237 |  |
| ANZ New Zealand (Int'l) Limited | - | 〃 |  | - |  | US$ | 3,191 |  |  | N/A |  | US$ | 3,122 |  |
| Spectra Energy Partners, LP | - | 〃 |  | - |  | US$ | 2,831 |  |  | N/A |  | US$ | 2,770 |  |

(Continued)

- 86 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Reliance Standard Life Global Funding II | - | Financial assets at amortized cost |  | - |  | US$ | 2,671 |  |  | N/A |  | US$ | 2,657 |  |
| Ryder System, Inc. | - | 〃 |  | - |  | US$ | 2,553 |  |  | N/A |  | US$ | 2,527 |  |
| Southern California Edison Company | - | 〃 |  | - |  | US$ | 2,273 |  |  | N/A |  | US$ | 2,262 |  |
| American Honda Finance Corporation | - | 〃 |  | - |  | US$ | 1,964 |  |  | N/A |  | US$ | 1,943 |  |
| Oracle Corporation | - | 〃 |  | - |  | US$ | 888 |  |  | N/A |  | US$ | 879 |  |
| Baxter International Inc. | - | 〃 |  | - |  | US$ | 783 |  |  | N/A |  | US$ | 774 |  |
| Fidelity National Information Services, Inc. | - | 〃 |  | - |  | US$ | 596 |  |  | N/A |  | US$ | 595 |  |
| Abbott Laboratories | - | 〃 |  | - |  | US$ | 362 |  |  | N/A |  | US$ | 358 |  |
| Metropolitan Life Global Funding I | - | 〃 |  | - |  | US$ | 147 |  |  | N/A |  | US$ | 146 |  |
| Government bond |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| United States Department of The Treasury | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 613,603 |  |  | N/A |  | US$ | 613,603 |  |
| Emirate of Abu Dhabi | - | 〃 |  | - |  | US$ | 1,453 |  |  | N/A |  | US$ | 1,453 |  |
| Qatar | - | 〃 |  | - |  | US$ | 1,293 |  |  | N/A |  | US$ | 1,293 |  |
| Agency bonds/Agency mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| FEDERAL NATIONAL MORTGAGE ASSOCIATION | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 464,686 |  |  | N/A |  | US$ | 464,686 |  |
| Federal Home Loan Mortgage Corporation | - | 〃 |  | - |  | US$ | 284,933 |  |  | N/A |  | US$ | 284,933 |  |
| Government National Mortgage Association | - | 〃 |  | - |  | US$ | 175,067 |  |  | N/A |  | US$ | 175,067 |  |
| Asset-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Hyundai Auto Receivables Trust 2021-C | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 10,395 |  |  | N/A |  | US$ | 10,395 |  |
| BX Trust 2022-LBA6 | - | 〃 |  | - |  | US$ | 9,655 |  |  | N/A |  | US$ | 9,655 |  |
| JPMBB Commercial Mortgage Securities Trust 2014-C24 | - | 〃 |  | - |  | US$ | 9,612 |  |  | N/A |  | US$ | 9,612 |  |
| Toyota Auto Receivables 2022-B Owner Trust | - | 〃 |  | - |  | US$ | 9,543 |  |  | N/A |  | US$ | 9,543 |  |
| Wells Fargo Commercial Mortgage Trust 2016-Bnk1 | - | 〃 |  | - |  | US$ | 8,910 |  |  | N/A |  | US$ | 8,910 |  |
| Ford Credit Auto Owner Trust 2021-Rev2 | - | 〃 |  | - |  | US$ | 7,307 |  |  | N/A |  | US$ | 7,307 |  |
| Citigroup Commercial Mortgage Trust 2015-GC33 | - | 〃 |  | - |  | US$ | 7,101 |  |  | N/A |  | US$ | 7,101 |  |
| BX Trust 2022-CLS | - | 〃 |  | - |  | US$ | 6,865 |  |  | N/A |  | US$ | 6,865 |  |
| Ford Credit Auto Owner Trust 2020-REV2 | - | 〃 |  | - |  | US$ | 6,603 |  |  | N/A |  | US$ | 6,603 |  |
| Morgan Stanley Capital I Trust 2021-L6 | - | 〃 |  | - |  | US$ | 6,163 |  |  | N/A |  | US$ | 6,163 |  |
| JPMBB Commercial Mortgage Securities Trust 2016-C1 | - | 〃 |  | - |  | US$ | 6,085 |  |  | N/A |  | US$ | 6,085 |  |
| Morgan Stanley Bank America Merrill Lynch Trust 2016-C30 | - | 〃 |  | - |  | US$ | 5,990 |  |  | N/A |  | US$ | 5,990 |  |
| BBCMS Mortgage Trust 2020-C8 | - | 〃 |  | - |  | US$ | 5,924 |  |  | N/A |  | US$ | 5,924 |  |
| Benchmark 2019-B11 Mortgage Trust | - | 〃 |  | - |  | US$ | 5,796 |  |  | N/A |  | US$ | 5,796 |  |
| Bank 2020-BNK26 | - | 〃 |  | - |  | US$ | 5,741 |  |  | N/A |  | US$ | 5,741 |  |
| Hudson Yards 2016-10HY Mortgage Trust | - | 〃 |  | - |  | US$ | 5,552 |  |  | N/A |  | US$ | 5,552 |  |
| Citigroup Commercial Mortgage Trust 2021-PRM2 | - | 〃 |  | - |  | US$ | 5,388 |  |  | N/A |  | US$ | 5,388 |  |
| Wells Fargo Commercial Mortgage Trust 2016-C35 | - | 〃 |  | - |  | US$ | 5,318 |  |  | N/A |  | US$ | 5,318 |  |
| Bank 2021-bnk33 | - | 〃 |  | - |  | US$ | 5,307 |  |  | N/A |  | US$ | 5,307 |  |
| Bank 2017-Bnk6 | - | 〃 |  | - |  | US$ | 5,305 |  |  | N/A |  | US$ | 5,305 |  |
| Benchmark 2019-B12 Mortgage Trust | - | 〃 |  | - |  | US$ | 5,231 |  |  | N/A |  | US$ | 5,231 |  |
| BBCMS 2018-Tall Mortgage Trust | - | 〃 |  | - |  | US$ | 5,080 |  |  | N/A |  | US$ | 5,080 |  |
| Morgan Stanley Bank America Merrill Lynch Trust 2013-C10 | - | 〃 |  | - |  | US$ | 4,697 |  |  | N/A |  | US$ | 4,697 |  |
| CSAIL 2018-CX11 | - | 〃 |  | - |  | US$ | 4,670 |  |  | N/A |  | US$ | 4,670 |  |
| Wells Fargo Commercial Mortgage Trust 2021-C59 | - | 〃 |  | - |  | US$ | 4,662 |  |  | N/A |  | US$ | 4,662 |  |
| GM Financial Revolving Receivables Trust 2021-1 | - | 〃 |  | - |  | US$ | 4,350 |  |  | N/A |  | US$ | 4,350 |  |
| Honda Auto Receivables 2021 - 4 Owner Trust | - | 〃 |  | - |  | US$ | 4,329 |  |  | N/A |  | US$ | 4,329 |  |

(Continued)

- 87 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | MRCD 2019-Prkc Mortgage Trust | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 4,306 |  |  | N/A |  | US$ | 4,306 |  |
| Bank 2017-BNK9 | - | 〃 |  | - |  | US$ | 4,245 |  |  | N/A |  | US$ | 4,245 |  |
| Citigroup Commercial Mortgage Trust 2014-GC21 | - | 〃 |  | - |  | US$ | 4,127 |  |  | N/A |  | US$ | 4,127 |  |
| Bank 2017 - BNK7 | - | 〃 |  | - |  | US$ | 3,967 |  |  | N/A |  | US$ | 3,967 |  |
| Bank 2019-Bnk17 | - | 〃 |  | - |  | US$ | 3,904 |  |  | N/A |  | US$ | 3,904 |  |
| JPMCC 2017-JP7 | - | 〃 |  | - |  | US$ | 3,849 |  |  | N/A |  | US$ | 3,849 |  |
| BANK 2017-BNK5 | - | 〃 |  | - |  | US$ | 3,458 |  |  | N/A |  | US$ | 3,458 |  |
| Msbam 2016-C29 | - | 〃 |  | - |  | US$ | 3,433 |  |  | N/A |  | US$ | 3,433 |  |
| Bank 2019-Bnk22 | - | 〃 |  | - |  | US$ | 3,270 |  |  | N/A |  | US$ | 3,270 |  |
| Citigroup Commercial Mortgage Trust 2019-Gc43 | - | 〃 |  | - |  | US$ | 3,162 |  |  | N/A |  | US$ | 3,162 |  |
| Commerce 2015-CCRE24 Mortgage Trust | - | 〃 |  | - |  | US$ | 3,030 |  |  | N/A |  | US$ | 3,030 |  |
| Msbam 2016-C31 | - | 〃 |  | - |  | US$ | 2,983 |  |  | N/A |  | US$ | 2,983 |  |
| WFRBS Commercial Mortgage Trust 2014-C25 | - | 〃 |  | - |  | US$ | 2,882 |  |  | N/A |  | US$ | 2,882 |  |
| Ford Credit Auto Owner Trust 2022-B | - | 〃 |  | - |  | US$ | 2,850 |  |  | N/A |  | US$ | 2,850 |  |
| Benchmark 2019-B15 Mortgage Trust | - | 〃 |  | - |  | US$ | 2,790 |  |  | N/A |  | US$ | 2,790 |  |
| Sreit Commercial Mortgage Trust 2021-Mfp | - | 〃 |  | - |  | US$ | 2,789 |  |  | N/A |  | US$ | 2,789 |  |
| GS Mortgage Securities Corporation Trust 2018-RIVR | - | 〃 |  | - |  | US$ | 2,787 |  |  | N/A |  | US$ | 2,787 |  |
| JPMDB 2017-C7 | - | 〃 |  | - |  | US$ | 2,622 |  |  | N/A |  | US$ | 2,622 |  |
| GS Mortgage Securities Trust 2015-GC32 | - | 〃 |  | - |  | US$ | 2,600 |  |  | N/A |  | US$ | 2,600 |  |
| Benchmark 2018-B3 Commercial Mortgage Trust | - | 〃 |  | - |  | US$ | 2,473 |  |  | N/A |  | US$ | 2,473 |  |
| Ford Credit Auto Owner Trust 2020-Rev1 | - | 〃 |  | - |  | US$ | 2,343 |  |  | N/A |  | US$ | 2,343 |  |
| GS Mortgage Securities Trust 2013-GCJ12 | - | 〃 |  | - |  | US$ | 2,313 |  |  | N/A |  | US$ | 2,313 |  |
| Mhc Commercial Mortgage Trust 2021-Mhc | - | 〃 |  | - |  | US$ | 2,221 |  |  | N/A |  | US$ | 2,221 |  |
| Citigroup Commercial Mortgage Trust 2015-P1 | - | 〃 |  | - |  | US$ | 2,144 |  |  | N/A |  | US$ | 2,144 |  |
| GM Financial Consumer Automobile Receivables Trust 2021-4 | - | 〃 |  | - |  | US$ | 2,069 |  |  | N/A |  | US$ | 2,069 |  |
| Citigroup Commercial Mortgage Trust 2015-GC27 | - | 〃 |  | - |  | US$ | 2,055 |  |  | N/A |  | US$ | 2,055 |  |
| Wells Fargo Commercial Mortgage Trust 2020-C55 | - | 〃 |  | - |  | US$ | 2,046 |  |  | N/A |  | US$ | 2,046 |  |
| UBS Commercial Mortgage Trust 2018-C11 | - | 〃 |  | - |  | US$ | 1,983 |  |  | N/A |  | US$ | 1,983 |  |
| Morgan Stanley Capital I Trust 2018-H3 | - | 〃 |  | - |  | US$ | 1,970 |  |  | N/A |  | US$ | 1,970 |  |
| Commerce 2013-CCRE12 Mortgage Trust | - | 〃 |  | - |  | US$ | 1,962 |  |  | N/A |  | US$ | 1,962 |  |
| Benchmark 2018-B4 Mortgage Trust | - | 〃 |  | - |  | US$ | 1,946 |  |  | N/A |  | US$ | 1,946 |  |
| Morgan Stanley Capital I Trust | - | 〃 |  | - |  | US$ | 1,830 |  |  | N/A |  | US$ | 1,830 |  |
| Dolp Trust 2021-NYC | - | 〃 |  | - |  | US$ | 1,759 |  |  | N/A |  | US$ | 1,759 |  |
| CGCMT 2017-P8 Mortgage Trust | - | 〃 |  | - |  | US$ | 1,690 |  |  | N/A |  | US$ | 1,690 |  |
| JPMBB Commercial Mortgage Securities Trust 2015-C28 | - | 〃 |  | - |  | US$ | 1,585 |  |  | N/A |  | US$ | 1,585 |  |
| Wells Fargo Commercial Mortgage Trust 2015-C30 | - | 〃 |  | - |  | US$ | 1,547 |  |  | N/A |  | US$ | 1,547 |  |
| JPMBB Commercial Mortgage Securities Trust 2015-C27 | - | 〃 |  | - |  | US$ | 1,498 |  |  | N/A |  | US$ | 1,498 |  |
| Wells Fargo Commercial Mortgage Trust 2018-C44 | - | 〃 |  | - |  | US$ | 1,455 |  |  | N/A |  | US$ | 1,455 |  |
| JPMBB Commercial Mortgage Securities Trust 2013-C12 | - | 〃 |  | - |  | US$ | 1,450 |  |  | N/A |  | US$ | 1,450 |  |
| COMM 2020-CBM Mortgage Trust | - | 〃 |  | - |  | US$ | 1,421 |  |  | N/A |  | US$ | 1,421 |  |
| Morgan Stanley Capital I Trust 2021-L5 | - | 〃 |  | - |  | US$ | 1,331 |  |  | N/A |  | US$ | 1,331 |  |
| Dbgs 2018-Biod Mortgage Trust | - | 〃 |  | - |  | US$ | 1,257 |  |  | N/A |  | US$ | 1,257 |  |
| Wells Fargo Commercial Mortgage Trust 2015-C29 | - | 〃 |  | - |  | US$ | 1,225 |  |  | N/A |  | US$ | 1,225 |  |
| WFRBS Commercial Mortgage Trust 2013-UBS1 | - | 〃 |  | - |  | US$ | 1,217 |  |  | N/A |  | US$ | 1,217 |  |
| Honda Auto Receivables 2021-2 Owner Trust | - | 〃 |  | - |  | US$ | 1,209 |  |  | N/A |  | US$ | 1,209 |  |
| WFRBS Commercial Mortgage Trust 2013-C13 | - | 〃 |  | - |  | US$ | 1,164 |  |  | N/A |  | US$ | 1,164 |  |
| Toyota Auto Receivables 2021-D Owner Trust | - | 〃 |  | - |  | US$ | 1,131 |  |  | N/A |  | US$ | 1,131 |  |
| Wells Fargo Commercial Mortgage Trust 2017-C40 | - | 〃 |  | - |  | US$ | 1,054 |  |  | N/A |  | US$ | 1,054 |  |
| Morgan Stanley Capital I Trust 2015 - UBS8 | - | 〃 |  | - |  | US$ | 946 |  |  | N/A |  | US$ | 946 |  |

(Continued)

- 88 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Morgan Stanley Bank Of America Merrill Lynch Trust 2013-C13 | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 874 |  |  | N/A |  | US$ | 874 |  |
| JPMCC Commercial Mortgage Securities Trust 2016 - JP3 | - | 〃 |  | - |  | US$ | 838 |  |  | N/A |  | US$ | 838 |  |
| UBS Barclays Commercial Mortgage Trust 2013-C6 | - | 〃 |  | - |  | US$ | 836 |  |  | N/A |  | US$ | 836 |  |
| BX Trust 2021-BXMF | - | 〃 |  | - |  | US$ | 815 |  |  | N/A |  | US$ | 815 |  |
| 280 Park Avenue Trust 2017 - 280P | - | 〃 |  | - |  | US$ | 810 |  |  | N/A |  | US$ | 810 |  |
| Elp Commercial Mortgage Trust 2021-Elp | - | 〃 |  | - |  | US$ | 768 |  |  | N/A |  | US$ | 768 |  |
| COMM Mortgage Trust Series 2015-LC19 | - | 〃 |  | - |  | US$ | 763 |  |  | N/A |  | US$ | 763 |  |
| UBS Commercial Mortgage Trust 2018-C10 | - | 〃 |  | - |  | US$ | 750 |  |  | N/A |  | US$ | 750 |  |
| Equs 2021-Eqaz Mortgage Trust | - | 〃 |  | - |  | US$ | 577 |  |  | N/A |  | US$ | 577 |  |
| Benchmark 2019-B14 Mortgage Trust | - | 〃 |  | - |  | US$ | 576 |  |  | N/A |  | US$ | 576 |  |
| Bx 2021-21M Mortgage Trust | - | 〃 |  | - |  | US$ | 573 |  |  | N/A |  | US$ | 573 |  |
| Gs Mortgage Securities Corporation Trust 2020-Uptn | - | 〃 |  | - |  | US$ | 539 |  |  | N/A |  | US$ | 539 |  |
| Wells Fargo Commercial Mortgage Trust 2015-C28 | - | 〃 |  | - |  | US$ | 532 |  |  | N/A |  | US$ | 532 |  |
| Bx Commercial Mortgage Trust 2021-CIP | - | 〃 |  | - |  | US$ | 531 |  |  | N/A |  | US$ | 531 |  |
| Commerce 2014-Ccre17 Mortgage Trust | - | 〃 |  | - |  | US$ | 518 |  |  | N/A |  | US$ | 518 |  |
| Morgan Stanley Capital I Trust 2019-H6 | - | 〃 |  | - |  | US$ | 516 |  |  | N/A |  | US$ | 516 |  |
| GS Mortgage Securities Trust 2014-GC22 | - | 〃 |  | - |  | US$ | 505 |  |  | N/A |  | US$ | 505 |  |
| Citigroup Commercial Mortgage Trust 2018-C5 | - | 〃 |  | - |  | US$ | 482 |  |  | N/A |  | US$ | 482 |  |
| Wells Fargo Commercial Mortgage Trust 2015-LC20 | - | 〃 |  | - |  | US$ | 478 |  |  | N/A |  | US$ | 478 |  |
| GS Mortgage Securities Trust 2014-GC24 | - | 〃 |  | - |  | US$ | 470 |  |  | N/A |  | US$ | 470 |  |
| Bank 2019-BNK23 | - | 〃 |  | - |  | US$ | 392 |  |  | N/A |  | US$ | 392 |  |
| Wells Fargo Commercial Mortgage Trust 2015-NXS3 | - | 〃 |  | - |  | US$ | 373 |  |  | N/A |  | US$ | 373 |  |
| WFRBSCommercial Mortgage Trust 2013-C17 | - | 〃 |  | - |  | US$ | 365 |  |  | N/A |  | US$ | 365 |  |
| Morgan Stanley Capital I Trust 2019-H7 | - | 〃 |  | - |  | US$ | 349 |  |  | N/A |  | US$ | 349 |  |
| CF 2019-CF1 Mortgage Trust | - | 〃 |  | - |  | US$ | 336 |  |  | N/A |  | US$ | 336 |  |
| Benchmark 2019-B9 Mortgage Trust | - | 〃 |  | - |  | US$ | 328 |  |  | N/A |  | US$ | 328 |  |
| JPMBB Commercial Mortgage Securities Trust 2014-C19 | - | 〃 |  | - |  | US$ | 315 |  |  | N/A |  | US$ | 315 |  |
| Citigroup Commercial Mortgage Trust 2014-GC23 | - | 〃 |  | - |  | US$ | 308 |  |  | N/A |  | US$ | 308 |  |
| COMM 2015-CCRE22 Mortgage Trust | - | 〃 |  | - |  | US$ | 301 |  |  | N/A |  | US$ | 301 |  |
| JPMCC 2015 - JP1 | - | 〃 |  | - |  | US$ | 269 |  |  | N/A |  | US$ | 269 |  |
| JPMDB Commercial Mortgage Securities Trust 2019-COR6 | - | 〃 |  | - |  | US$ | 237 |  |  | N/A |  | US$ | 237 |  |
| Citigroup Commercial Mortgage Trust 2015-GC35 | - | 〃 |  | - |  | US$ | 203 |  |  | N/A |  | US$ | 203 |  |
| GS Mortgage Securities Trust 2014-GC26 | - | 〃 |  | - |  | US$ | 170 |  |  | N/A |  | US$ | 170 |  |
| Citigroup Commercial Mortgage Trust 2014-GC19 | - | 〃 |  | - |  | US$ | 137 |  |  | N/A |  | US$ | 137 |  |
| Morgan Stanley Bank Of America Merrill Lynch Trust 2013-C12 | - | 〃 |  | - |  | US$ | 117 |  |  | N/A |  | US$ | 117 |  |
| BBCMS Mortgage Trust 2020-C7 | - | 〃 |  | - |  | US$ | 69 |  |  | N/A |  | US$ | 69 |  |
| Bank 2020-BNK28 | - | 〃 |  | - |  | US$ | 25 |  |  | N/A |  | US$ | 25 |  |
| Wells Fargo Commercial Mortgage Trust 2015-NXS1 | - | 〃 |  | - |  | US$ | 3 |  |  | N/A |  | US$ | 3 |  |
| Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Primavera Capital Fund II L.P. | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 81,039 |  |  | 4 |  | US$ | 81,039 |  |
VTAF II | Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Aether Systems, Inc. | - | Financial assets at fair value through other comprehensive income |  | 1,085 |  |  | - |  |  | 20 |  |  | - |  |
| 5V Technologies, Inc. | - | 〃 |  | 1 |  |  | - |  |  | - |  |  | - |  |
| Publicly traded stocks |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Sentelic Corporation | - | Financial assets at fair value through other comprehensive income |  | 971 |  | US$ | 1,422 |  |  | 3 |  | US$ | 1,422 |  |

(Continued)

- 89 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2022 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
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 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Astera Labs, Inc. | - | Financial assets at fair value through other comprehensive income |  | 637 |  | US$ | 4,146 |  |  | - |  | US$ | 4,146 |  |
| CNEX Labs, Inc. | - | 〃 |  | 33 |  | US$ | 166 |  |  | - |  | US$ | 166 |  |
| Publicly traded stocks |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Marvell Technology Group Ltd. | - | Financial assets at fair value through other comprehensive income |  | 30 |  | US$ | 1,097 |  |  | - |  | US$ | 1,097 |  |
Emerging Fund | Convertible bonds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| EdgeQ Inc. | - | Financial assets at fair value through profit or loss |  | - |  | US$ | 4,000 |  |  | N/A |  | US$ | 4,000 |  |
| Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Astera Labs, Inc. | - | Financial assets at fair value through other comprehensive income |  | 1,487 |  | US$ | 9,680 |  |  | - |  | US$ | 9,680 |  |
| Empower Semiconductor, Inc. | - | 〃 |  | 868 |  | US$ | 5,000 |  |  | 3 |  | US$ | 5,000 |  |
| Kinara, Inc. | - | 〃 |  | 2,015 |  | US$ | 3,000 |  |  | 2 |  | US$ | 3,000 |  |
| NeuReality Ltd. | - | 〃 |  | 122 |  | US$ | 3,000 |  |  | 3 |  | US$ | 3,000 |  |
| RiVos, Inc. | - | 〃 |  | 750 |  | US$ | 2,000 |  |  | - |  | US$ | 2,000 |  |
| Publicly traded stocks |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Credo Technology Group Holding Ltd. | - | Financial assets at fair value through other comprehensive income |  | 491 |  | US$ | 6,529 |  |  | - |  | US$ | 6,529 |  |

(Concluded)

- 90 -

TABLE 4

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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, 2022

(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 (Foreign Currencies in Thousands) | Shares/Units (In Thousands) | Amount (Foreign Currencies in Thousands) | Shares/Units (In Thousands) | Amount (Foreign Currencies in Thousands) | Carrying Value (Foreign Currencies in Thousands) | Gain/Loss on Disposal (Foreign Currencies in Thousands) | Shares/Units (In Thousands) | Amount (Foreign Currencies in Thousands)
TSMC | Commercial paper |  |  |  |  |  |  |  |  |  |  |  |  |
| Taiwan Power Company | Financial assets at amortized cost | - | - |  | - |  | $ | - |  |  | 5,610 |  | $ | 55,830,298 |  |  | 2,660 |  | $ | 26,600,000 |  | $ | 26,600,000 |  | $ | - |  |  | 2,950 |  | $ | 29,335,729 |
| CPC Corporation, Taiwan | 〃 | - | - |  | - |  |  | - |  |  | 3,009 |  |  | 29,969,655 |  |  | 2,259 |  |  | 22,590,000 |  |  | 22,590,000 |  |  | - |  |  | 750 |  |  | 7,458,936 |
| Nan Ya Plastics Corporation | 〃 | - | - |  | - |  |  | - |  |  | 450 |  |  | 4,480,179 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 450 |  |  | 4,476,301 |
| Formosa Petrochemical Corporation | 〃 | - | - |  | - |  |  | - |  |  | 300 |  |  | 2,987,971 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 300 |  |  | 2,985,385 |
| Formosa Chemicals & Fibre Corporation | 〃 | - | - |  | - |  |  | - |  |  | 250 |  |  | 2,487,819 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 250 |  |  | 2,485,666 |
| Formosa Plastics Corporation | 〃 | - | - |  | - |  |  | - |  |  | 200 |  |  | 1,992,183 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 200 |  |  | 1,990,459 |
| Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| TSMC Arizona | Investments accounted for using equity method | - | - |  | 770 |  |  | 16,667,696 |  |  | 500 |  |  | 15,372,500 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1,270 |  |  | 25,639,079 |
| JASM | 〃 | - | - |  | 58 |  |  | 1,383,554 |  |  | 962 |  |  | 23,150,164 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1,020 |  |  | 23,330,125 |
| TSMC 3DIC | 〃 | - | - |  | 11 |  |  | 270,513 |  |  | 38 |  |  | 865,370 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 49 |  |  | 1,172,706 |
| Capital |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Emerging Fund | Investments accounted for using equity method | - | - |  | - |  |  | 286,205 |  |  | - |  |  | 1,033,339 |  |  | - |  |  | - |  |  | 62,532 |  |  | - |  |  | - |  |  | 1,760,885 |
TSMC Global | Corporate bond |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Morgan Stanley | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | 65,115 |  |  | - |  | US$ | 27,545 |  |  | - |  | US$ | 4,750 |  | US$ | 4,678 |  | US$ | 72 |  |  | - |  | US$ | 83,242 |
| Bank of America Corporation | 〃 | - | - |  | - |  | US$ | 75,265 |  |  | - |  | US$ | 20,231 |  |  | - |  | US$ | 13,680 |  | US$ | 13,631 |  | US$ | 49 |  |  | - |  | US$ | 76,626 |
| Citigroup Inc. | 〃 | - | - |  | - |  | US$ | 49,298 |  |  | - |  | US$ | 21,416 |  |  | - |  | US$ | 5,787 |  | US$ | 5,779 |  | US$ | 8 |  |  | - |  | US$ | 61,493 |
| Wells Fargo & Company | 〃 | - | - |  | - |  | US$ | 38,439 |  |  | - |  | US$ | 24,456 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 59,735 |
| The Goldman Sachs Group, Inc. | 〃 | - | - |  | - |  | US$ | 53,756 |  |  | - |  | US$ | 15,998 |  |  | - |  | US$ | 14,852 |  | US$ | 14,906 |  | US$ | (54 | ) |  | - |  | US$ | 51,439 |
| JPMorgan Chase & Co. | 〃 | - | - |  | - |  | US$ | 45,332 |  |  | - |  | US$ | 12,125 |  |  | - |  | US$ | 3,842 |  | US$ | 3,869 |  | US$ | (27 | ) |  | - |  | US$ | 50,629 |
| Banco Santander, S.A. | 〃 | - | - |  | - |  | US$ | 18,461 |  |  | - |  | US$ | 10,094 |  |  | - |  | US$ | 410 |  | US$ | 420 |  | US$ | (10 | ) |  | - |  | US$ | 26,257 |
| Metropolitan Life Global Funding I | 〃 | - | - |  | - |  | US$ | 17,341 |  |  | - |  | US$ | 10,758 |  |  | - |  | US$ | 3,000 |  | US$ | 3,000 |  | US$ | - |  |  | - |  | US$ | 24,408 |
| The Toronto-Dominion Bank | 〃 | - | - |  | - |  | US$ | 14,786 |  |  | - |  | US$ | 15,598 |  |  | - |  | US$ | 9,344 |  | US$ | 9,685 |  | US$ | (341 | ) |  | - |  | US$ | 19,510 |
| Bank of Montreal | 〃 | - | - |  | - |  | US$ | 6,295 |  |  | - |  | US$ | 14,842 |  |  | - |  | US$ | 5,076 |  | US$ | 4,999 |  | US$ | 77 |  |  | - |  | US$ | 15,224 |
| The Bank of New York Mellon Corporation | 〃 | - | - |  | - |  | US$ | 6,072 |  |  | - |  | US$ | 11,290 |  |  | - |  | US$ | 6,177 |  | US$ | 6,165 |  | US$ | 12 |  |  | - |  | US$ | 11,282 |
| Lloyds Banking Group plc | 〃 | - | - |  | - |  | US$ | 21,675 |  |  | - |  | US$ | 2,210 |  |  | - |  | US$ | 12,370 |  | US$ | 12,339 |  | US$ | 31 |  |  | - |  | US$ | 10,533 |
| S&P Global Inc. | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 14,096 |  |  | - |  | US$ | 2,893 |  | US$ | 2,934 |  | US$ | (41 | ) |  | - |  | US$ | 10,246 |
| The Goldman Sachs Group, Inc. | Financial assets at amortized cost | - | - |  | - |  | US$ | 51,347 |  |  | - |  | US$ | 561,607 |  |  | - |  | US$ | 171,000 |  | US$ | 171,000 |  | US$ | - |  |  | - |  | US$ | 440,655 |

(Continued)

- 91 -

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 (Foreign Currencies in Thousands) | Shares/Units (In Thousands) | Amount (Foreign Currencies in Thousands) | Shares/Units (In Thousands) | Amount (Foreign Currencies in Thousands) | Carrying Value (Foreign Currencies in Thousands) | Gain/Loss on Disposal (Foreign Currencies in Thousands) | Shares/Units (In Thousands) | Amount (Foreign Currencies in Thousands)
TSMC Global | Citigroup Global Markets Inc. | Financial assets at amortized cost | - | - |  | - |  | US$ | 99,968 |  |  | - |  | US$ | 350,000 |  |  | - |  | US$ | 100,000 |  | US$ | 100,000 |  | US$ | - |  |  | - |  | US$ | 349,886 |
| Bank of America Corporation | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 448,254 |  |  | - |  | US$ | 124,000 |  | US$ | 123,818 |  | US$ | 182 |  |  | - |  | US$ | 324,757 |
| JPMorgan Chase & Co. | 〃 | - | - |  | - |  | US$ | 10,054 |  |  | - |  | US$ | 268,126 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 280,213 |
| Wells Fargo & Company | 〃 | - | - |  | - |  | US$ | 30,399 |  |  | - |  | US$ | 243,897 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 274,713 |
| Citigroup Inc. | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 188,138 |  |  | - |  | US$ | 14,000 |  | US$ | 14,000 |  | US$ | - |  |  | - |  | US$ | 174,540 |
| Citigroup Global Markets Holdings Inc. | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 150,000 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 149,951 |
| Goldman Sachs Finance Corp International Ltd. | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 150,000 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 149,870 |
| Morgan Stanley | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 60,255 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 60,207 |
| Jpmorgan LLC | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 50,000 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 49,984 |
| Banco Bilbao Vizcaya Argentaria, S.A. | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 10,418 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 10,534 |
| Government bond |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| United States Department of The Treasury | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | 768,483 |  |  | - |  | US$ | 93,078 |  |  | - |  | US$ | 193,697 |  | US$ | 195,409 |  | US$ | (1,712 | ) |  | - |  | US$ | 613,603 |
| Agency bonds/Agency mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| FEDERAL NATIONAL MORTGAGE ASSOCIATION | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | 460,205 |  |  | - |  | US$ | 251,791 |  |  | - |  | US$ | 170,673 |  | US$ | 174,005 |  | US$ | (3,332 | ) |  | - |  | US$ | 464,686 |
| Federal Home Loan Mortgage Corporation | 〃 | - | - |  | - |  | US$ | 253,075 |  |  | - |  | US$ | 146,242 |  |  | - |  | US$ | 74,099 |  | US$ | 75,623 |  | US$ | (1,524 | ) |  | - |  | US$ | 284,933 |
| Government National Mortgage Association | 〃 | - | - |  | - |  | US$ | 285,581 |  |  | - |  | US$ | 75,508 |  |  | - |  | US$ | 158,836 |  | US$ | 162,184 |  | US$ | (3,348 | ) |  | - |  | US$ | 175,067 |
Emerging Fund | Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Solanium Labs, Ltd. | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | - |  |  | 1,429 |  | US$ | 5,000 |  |  | 1,429 |  | US$ | 11,370 |  | US$ | 5,000 |  | US$ | 6,370 |  |  | - |  | US$ | - |

Note: | The ending balance includes the realized gain/loss on equity investment, the amortization of premium/discount on bonds investments and other related adjustment.

(Concluded)

- 92 -

TABLE 5

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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, 2022

(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 | Counterparty | Nature of Relationships | Prior Transaction of Related Counterparty | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Real estate | February 15, 2022 (Note) | $213,300,000 (Note) | Based on the terms in the purchase order | 122 counterparties (Note), including: | - | N/A | N/A | N/A | N/A | Price comparison and price negotiation | Manufacturing purpose | None
|  |  |  |  | ABB Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Accudevice Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Addtron Technology (Japan), Inc. |  |  |  |  |  |  |  |
|  |  |  |  | Aegis Technology Co. |  |  |  |  |  |  |  |
|  |  |  |  | Air Liquid Japan G.K. |  |  |  |  |  |  |  |
|  |  |  |  | Air Liquide Far Eastern Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Air Water Plant Engineering Co., 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. |  |  |  |  |  |  |  |

(Continued)

- 93 -

Company Name | Types of Property | Transaction Date | Transaction Amount (Foreign Currencies in Thousands) | Payment Term | Counterparty | Nature of Relationships | Prior Transaction of Related Counterparty | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Real estate |  |  |  | Chung-Lin General Contractors, Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Chunghwa Telecom Japan Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Cica-Huntek Chemical Technology Taiwan Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Confederate Technology Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Da-Cin Construction Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Desiccant Technology Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Eaton Electric Japan |  |  |  |  |  |  |  |
|  |  |  |  | Evergreen Steel Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Exyte Taiwan Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Fortune Electric Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Fu Tsu Construction Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Fuji Electric Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Fuji Furukawa E&C Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Green Partners Industry Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Hantech Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Hitachi Energy 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 |  |  |  |  |  |  |  |
|  |  |  |  | Japan Material Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | JG Environmental Technology Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Jienshian Information Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | JJmr-Clean-Air Solution Tech.Services Co., Ltd. |  |  |  |  |  |  |  |

(Continued)

- 94 -

Company Name | Types of Property | Transaction Date | Transaction Amount (Foreign Currencies in Thousands) | Payment Term | Counterparty | Nature of Relationships | Prior Transaction of Related Counterparty | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Real estate |  |  |  | Johnson Controls York Taiwan Co, Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Jusun Instruments Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Kajima Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Kanto Chemical Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Kao Hsin Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Kedge Construction Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Kinetics Technology Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Koei International Corp. |  |  |  |  |  |  |  |
|  |  |  |  | Kuken Kogyo Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Kurita Water Industries Ltd., Taiwan |  |  |  |  |  |  |  |
|  |  |  |  | Kyudenko Corporation |  |  |  |  |  |  |  |
|  |  |  |  | L&K Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Lead-Fu Industrials Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Lee Ming Construction Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Lumax International Corp., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Mandartech Interiors Inc. |  |  |  |  |  |  |  |
|  |  |  |  | Marketech International Corp. |  |  |  |  |  |  |  |
|  |  |  |  | Mega Union Technology Incorporated |  |  |  |  |  |  |  |
|  |  |  |  | Mitsubishi Heavy Industries Air-Conditioning & Refrigeration Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Mitsubishi Heavy Industries, Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | NAGASE & CO. LTD. |  |  |  |  |  |  |  |
|  |  |  |  | NEC Facilities, Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Organo Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Organo Technology Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Ovivo Taiwan Co., Ltd. |  |  |  |  |  |  |  |

(Continued)

- 95 -

Company Name | Types of Property | Transaction Date | Transaction Amount (Foreign Currencies in Thousands) | Payment Term | Counterparty | Nature of Relationships | Prior Transaction of Related Counterparty | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Real estate |  |  |  | Pan Asia (Engineers & Constructors) Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Quicken System Integration Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Ruentex Engineering & Construction Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | SACHEM Inc. |  |  |  |  |  |  |  |
|  |  |  |  | San Fu Chemical Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Schneider Electric Taiwan Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Seibu Giken Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Shihlin Electric & Engineering Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Shimizu Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Siemens Limited |  |  |  |  |  |  |  |
|  |  |  |  | SN Tech Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Solomon Technology Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Sumitomo Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Swift Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Taikisha Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Taisei Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Taiwan Gleno Enterprise Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Taiwan Obayashi Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Taiwan Puritic Corp. |  |  |  |  |  |  |  |
|  |  |  |  | Taiyo Nippon Sanso Corporation |  |  |  |  |  |  |  |
|  |  |  |  | TASA Construction Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Techgo Industrial Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Toshiba Mitsubishi-Electric Industrial Systems Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Toyoko Kagaku Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Trane Taiwan Distribution Limited |  |  |  |  |  |  |  |

(Continued)

- 96 -

Company Name | Types of Property | Transaction Date | Transaction Amount (Foreign Currencies in Thousands) | Payment Term | Counterparty | Nature of Relationships | Prior Transaction of Related Counterparty | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Real estate |  |  |  | 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. |  |  |  |  |  |  |  |
|  |  |  |  | Vertiv |  |  |  |  |  |  |  |
|  |  |  |  | Weltall Technology Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Wholetech System Hitech Limited |  |  |  |  |  |  |  |
|  |  |  |  | Yangtech Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Yankey Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Ying Pao Technology Inc. |  |  |  |  |  |  |  |
|  |  |  |  | Zhao-Cheng Corp. |  |  |  |  |  |  |  |
| Real estate | May 10, 2022 (Note) | US$2,147,000 (Note) | Based on the terms in the purchase order | 19 counterparties (Note), including: | - | N/A | N/A | N/A | N/A | Price comparison and price negotiation | Manufacturing purpose | None
|  |  |  |  | Southern Taiwan Science Park Bureau, Ministry of Science and Technology |  |  |  |  |  |  |  |
| Real estate | November 8, 2022 (Note) | US$1,119,000 (Note) | Based on the terms in the purchase order | 115 counterparties (Note), 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. |  |  |  |  |  |  |  |

(Continued)

- 97 -

Company Name | Types of Property | Transaction Date | Transaction Amount (Foreign Currencies in Thousands) | Payment Term | Counterparty | Nature of Relationships | Prior Transaction of Related Counterparty | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Real estate |  |  |  | Atlas Technology Corp. |  |  |  |  |  |  |  |
|  |  |  |  | Capital Machinery Limited |  |  |  |  |  |  |  |
|  |  |  |  | Central Taiwan Science Park Bureau, Ministry of Science and Technology |  |  |  |  |  |  |  |
|  |  |  |  | Century Iron and Steel Industrial Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | 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. |  |  |  |  |  |  |  |
|  |  |  |  | Hsinchu Science Park Bureau, Ministry of Science and Technology |  |  |  |  |  |  |  |
|  |  |  |  | Hueng Luei Process Industry Co., Ltd. |  |  |  |  |  |  |  |

(Continued)

- 98 -

Company Name | Types of Property | Transaction Date | Transaction Amount (Foreign Currencies in Thousands) | Payment Term | Counterparty | Nature of Relationships | Prior Transaction of Related Counterparty | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Real estate |  |  |  | Immense Team Construction & Building Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore) |  |  |  |  |  |  |  |
|  |  |  |  | J.C. Yang Architect and Associates |  |  |  |  |  |  |  |
|  |  |  |  | Jaie Haour Industry Corporation |  |  |  |  |  |  |  |
|  |  |  |  | JG Environmental Technology Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | JJmr-Clean-Air Solution Tech.Services Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Ju Yao Construction 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 |  |  |  |  |  |  |  |
|  |  |  |  | Ruentex Engineering & Construction Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | San Fu Chemical Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Schneider Electric Taiwan Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Shihlin Electric & Engineering Corporation |  |  |  |  |  |  |  |

(Continued)

- 99 -

Company Name | Types of Property | Transaction Date | Transaction Amount (Foreign Currencies in Thousands) | Payment Term | Counterparty | Nature of Relationships | Prior Transaction of Related Counterparty | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Real estate |  |  |  | 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. |  |  |  |  |  |  |  |

Note: | 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)

- 100 -

TABLE 6

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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

FOR THE YEAR ENDED DECEMBER 31, 2022

(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 | $ | 1,538,849,403 |  |  | 68 |  | Net 30 days from invoice date (Note) | - | (Note) | $ | 171,738,863 |  |  | 80 |  |
| TSMC Nanjing | Subsidiary | Sales |  | 155,024 |  |  | - |  | Net 30 days from the end of the month of when invoice is issued | - | - |  | - |  |  | - |  |
| GUC | Associate | Sales |  | 11,346,289 |  |  | 1 |  | Net 30 days from the end of the month of when invoice is issued | - | - |  | 1,300,302 |  |  | 1 |  |
| TSMC Nanjing | Subsidiary | Purchases |  | 43,186,122 |  |  | 26 |  | Net 30 days from the end of the month of when invoice is issued | - | - |  | (4,105,919 | ) |  | 7 |  |
| TSMC China | Subsidiary | Purchases |  | 28,400,454 |  |  | 17 |  | Net 30 days from the end of the month of when invoice is issued | - | - |  | (2,296,083 | ) |  | 4 |  |
| WaferTech | Indirect subsidiary | Purchases |  | 10,336,735 |  |  | 6 |  | Net 30 days from the end of the month of when invoice is issued | - | - |  | (855,952 | ) |  | 1 |  |
| SSMC | Associate | Purchases |  | 4,572,894 |  |  | 3 |  | Net 30 days from the end of the month of when invoice is issued | - | - |  | (385,979 | ) |  | 1 |  |
| VIS | Associate | Purchases |  | 1,849,937 |  |  | 1 |  | Net 30 days from the end of the month of when invoice is issued | - | - |  | (190,587 | ) |  | - |  |
TSMC North America | GUC | Associate of TSMC | Sales |  | 3,204,489 |  |  | - |  | Net 30 days from invoice date | - | - |  | 171,049 |  |  | - |  |
|  |  |  | (US$ | 106,695 | ) |  |  |  |  |  |  | (US$ | 5,569 | ) |  |  |  |
VisEra Tech | Xintec | Associate of TSMC | Sales |  | 787,702 |  |  | 9 |  | Net 60 days from the end of the month of when invoice is issued | - | - |  | 112,607 |  |  | 15 |  |

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

- 101 -

TABLE 7

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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

December 31, 2022

(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 | $ | 177,923,661 |  | 37 | $ | - |  | - | $ | - |  | $ | - |
| GUC | Associate |  | 1,300,302 |  | 27 |  | - |  | - |  | - |  |  | - |
TSMC North America | GUC | Associate of TSMC | (US$ | 171,078 5,570 | ) | 22 |  | - |  | - |  | - |  |  | - |
TSMC JDC | TSMC | Parent company | (JPY | 108,835 466,905 | ) | Note 2 |  | - |  | - |  | - |  |  | - |
TSMC China | TSMC | Parent company |  | 2,296,083 |  | 26 |  | - |  | - |  | - |  |  | - |
|  |  | (RMB | 519,682 | ) |  |  |  |  |  |  |  |  |  |  |
| TSMC Nanjing | The same parent company |  | 45,353,940 |  | Note 2 |  | - |  | - |  | - |  |  | - |
|  |  | (RMB | 10,265,253 | ) |  |  |  |  |  |  |  |  |  |  |
TSMC Nanjing | TSMC | Parent company |  | 4,105,919 |  | 29 |  | - |  | - |  | - |  |  | - |
|  |  | (RMB | 929,191 | ) |  |  |  |  |  |  |  |  |  |  |
VisEra Tech | Xintec | Associate of TSMC |  | 112,607 |  | 53 |  | - |  | - |  | - |  |  | - |
TSMC Technology | TSMC | The ultimate parent of the Company | (US$ | 744,620 24,244 | ) | Note 2 |  | - |  | - |  | - |  |  | - |
WaferTech | TSMC | The ultimate parent of the Company | (US$ | 855,952 27,869 | ) | 29 |  | - |  | - |  | - |  |  | - |
| TSMC Development | Parent company | (US$ | 192,719 6,275 | ) | Note 2 |  | - |  | - |  | - |  |  | - |

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.

- 102 -

TABLE 8

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE YEAR ENDED DECEMBER 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

No. | Company Name | Counterparty | Nature of Relationship (Note 1) | Intercompany Transactions
Financial Statements Item | Amount | Terms (Note 2) | Percentage of Consolidated Net Revenue or Total Assets
0 | TSMC | TSMC North America | 1 | Net revenue from sale of goods | $ | 1,538,849,403 |  | - |  | 68% |
|  |  |  | Receivables from related parties |  | 171,738,863 |  | - |  | 3% |
|  |  |  | Other receivables from related parties |  | 6,184,798 |  | - |  | - |
|  |  |  | Accrued expenses and other current liabilities |  | 98,595,725 |  | - |  | 2% |
|  |  |  | Other noncurrent liabilities |  | 142,132,113 |  | - |  | 3% |
|  | JASM | 1 | Other noncurrent assets |  | 6,925,782 |  | - |  | - |
|  | TSMC JDC | 1 | Research and development expenses |  | 505,454 |  | - |  | - |
|  | TSMC 3DIC | 1 | Research and development expenses |  | 787,114 |  | - |  | - |
|  | TSMC Europe | 1 | Marketing expenses-commission |  | 541,200 |  | - |  | - |
|  | TSMC China | 1 | Purchases |  | 28,400,454 |  | - |  | 1% |
|  |  |  | Marketing expenses-commission |  | 329,166 |  | - |  | - |
|  |  |  | Payables to related parties |  | 2,296,083 |  | - |  | - |
|  | TSMC Nanjing | 1 | Purchases |  | 43,186,122 |  | - |  | 2% |
|  |  |  | Proceeds from disposal of property, plant and equipment |  | 673,945 |  | - |  | - |
|  |  |  | Gains from disposal of property, plant and equipment |  | 302,234 |  | - |  | - |
|  |  |  | Payables to related parties |  | 4,105,919 |  | - |  | - |
|  | TSMC Technology | 1 | Research and development expenses |  | 3,653,480 |  | - |  | - |
|  |  |  | Payables to related parties |  | 744,620 |  | - |  | - |
|  | WaferTech | 1 | Purchases |  | 10,336,735 |  | - |  | - |
|  |  |  | Payables to related parties |  | 855,952 |  | - |  | - |
1 | TSMC China | TSMC Nanjing | 3 | Interest income |  | 436,902 |  | - |  | - |
|  |  |  | Other receivables from related parties |  | 45,353,940 |  | - |  | 1% |

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

| No. 3 represents the transactions between subsidiaries.

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

- 103 -

TABLE 9

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

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

FOR THE YEAR ENDED DECEMBER 31, 2022

(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, 2022 | 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, 2022 (Foreign Currencies in Thousands) | December 31, 2021 (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 |  | $ | 411,992,426 |  | $ | 7,308,722 |  | $ | 7,308,722 |  | Subsidiary
| TSMC Partners | Tortola, British Virgin Islands | Investing in companies involved in the semiconductor design and manufacturing, and other investment activities |  | 31,456,130 |  |  | 31,456,130 |  |  | 988,268 |  |  | 100 |  |  | 63,697,217 |  |  | 3,135,764 |  |  | 3,135,764 |  | Subsidiary
| TSMC Arizona | Phoenix, Arizona, U.S.A. | Manufacturing, sales and testing of integrated circuits and other semiconductor devices |  | 37,015,800 |  |  | 21,643,300 |  |  | 1,270 |  |  | 100 |  |  | 25,639,079 |  |  | (9,430,070 | ) |  | (9,430,070 | ) | Subsidiary
| JASM | Kumamoto, Japan | Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices |  | 24,567,085 |  |  | 1,416,921 |  |  | 1,020 |  |  | 71 |  |  | 23,330,125 |  |  | (593,429 | ) |  | (452,020 | ) | Subsidiary
| VIS | Hsin-Chu, Taiwan | Manufacturing, sales, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks |  | 10,180,677 |  |  | 10,180,677 |  |  | 464,223 |  |  | 28 |  |  | 13,492,653 |  |  | 15,280,388 |  |  | 4,322,799 |  | Associate
| VisEra Tech | Hsin-Chu, Taiwan | Research, design, development, manufacturing, sales, packaging and test of color filter |  | 4,224,082 |  |  | 4,224,082 |  |  | 213,619 |  |  | 68 |  |  | 11,467,860 |  |  | 1,765,796 |  |  | 1,253,986 |  | Subsidiary
| SSMC | Singapore | Manufacturing and sales of integrated circuits and other semiconductor devices |  | 5,120,028 |  |  | 5,120,028 |  |  | 314 |  |  | 39 |  |  | 8,934,731 |  |  | 3,540,176 |  |  | 1,373,234 |  | Associate
| TSMC North America | San Jose, California, U.S.A | Sales and marketing of integrated circuits and other semiconductor devices |  | 333,718 |  |  | 333,718 |  |  | 11,000 |  |  | 100 |  |  | 5,449,755 |  |  | 62,213 |  |  | 62,213 |  | 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 |  |  | 3,528,417 |  |  | 1,983,736 |  |  | 813,516 |  | Associate
| Emerging Fund | Cayman Islands | Investing in technology start-up companies |  | 1,269,425 |  |  | 298,618 |  |  | - |  |  | 99.9 |  |  | 1,760,885 |  |  | (6,917 | ) |  | (6,910 | ) | Subsidiary
| GUC | Hsin-Chu, Taiwan | Researching, developing, manufacturing, testing and marketing of integrated circuits |  | 386,568 |  |  | 386,568 |  |  | 46,688 |  |  | 35 |  |  | 1,666,651 |  |  | 3,710,442 |  |  | 1,292,705 |  | Associate
| TSMC 3DIC | Yokohama, Japan | Engineering support activities |  | 1,144,356 |  |  | 278,986 |  |  | 49 |  |  | 100 |  |  | 1,172,706 |  |  | 27,950 |  |  | 27,950 |  | Subsidiary
| TSMC Europe | Amsterdam, the Netherlands | Customer service and supporting activities |  | 15,749 |  |  | 15,749 |  |  | - |  |  | 100 |  |  | 527,693 |  |  | (4,926 | ) |  | (4,926 | ) | Subsidiary
| TSMC JDC | Yokohama, Japan | Engineering support activities |  | 410,680 |  |  | 410,680 |  |  | 15 |  |  | 100 |  |  | 376,176 |  |  | 20,303 |  |  | 20,303 |  | Subsidiary
| VTAF III | Cayman Islands | Investing in technology start-up companies |  | 1,239,621 |  |  | 1,321,594 |  |  | - |  |  | 98 |  |  | 246,702 |  |  | (6,700 | ) |  | (6,566 | ) | Subsidiary
| TSMC Japan | Yokohama, Japan | Customer service and supporting activities |  | 83,760 |  |  | 83,760 |  |  | 6 |  |  | 100 |  |  | 134,560 |  |  | 6,559 |  |  | 6,559 |  | Subsidiary
| VTAF II | Cayman Islands | Investing in technology start-up companies |  | 260,300 |  |  | 260,300 |  |  | - |  |  | 98 |  |  | 71,429 |  |  | 319 |  |  | 313 |  | Subsidiary
| TSMC Korea | Seoul, Korea | Customer service and supporting activities |  | 13,656 |  |  | 13,656 |  |  | 80 |  |  | 100 |  |  | 44,082 |  |  | 1,408 |  |  | 1,408 |  | Subsidiary
TSMC Partners | TSMC Development | Delaware, U.S.A | Investing in companies involved in semiconductor manufacturing | (US$ | 18,026,652 586,939 | ) | (US$ | 18,026,652 586,939 | ) |  | - |  |  | 100 |  | (US$ | 36,609,536 1,191,988 | ) | (US$ | 2,620,596 87,795 | ) |  | Note2 |  | Subsidiary
| TSMC Technology | Delaware, U.S.A | Engineering support activities |  | 438,644 |  |  | 438,644 |  |  | - |  |  | 100 |  |  | 993,700 |  |  | 66,998 |  |  | Note2 |  | Subsidiary
|  |  |  | (US$ | 14,282 | ) | (US$ | 14,282 | ) |  |  |  |  |  |  | (US$ | 32,354 | ) | (US$ | 2,150 | ) |  |  |  |
| TSMC Canada | Ontario, Canada | Engineering support activities |  | 70,640 |  |  | 70,640 |  |  | 2,300 |  |  | 100 |  |  | 321,059 |  |  | 31,997 |  |  | Note2 |  | Subsidiary
|  |  |  | (US$ | 2,300 | ) | (US$ | 2,300 | ) |  |  |  |  |  |  | (US$ | 10,454 | ) | (US$ | 1,071 | ) |  |  |  |
VTAF III | Growth Fund | Cayman Islands | Investing in technology start-up companies |  | 67,429 |  |  | 79,970 |  |  | - |  |  | 100 |  |  | 166,549 |  |  | (609 | ) |  | Note2 |  | Subsidiary
|  |  |  | (US$ | 2,195 | ) | (US$ | 2,604 | ) |  |  |  |  |  |  | (US$ | 5,423 | ) | (US$ | (21 | )) |  |  |  |
| Mutual-Pak | New Taipei, Taiwan | Manufacturing of electronic parts, wholesaling and retailing of electronic materials, and researching, developing and testing of RFID | (US$ | 48,937 1,593 | ) | (US$ | 48,937 1,593 | ) |  | 4,693 |  |  | 28 |  | (US$ | 19,053 620 | ) | (US$ | (13,738 (464 | ) )) |  | Note2 |  | Associate

(Continued)

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Investor Company | Investee Company | Location | Main Businesses and Products | Original Investment Amount | Balance as of December 31, 2022 | 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, 2022 (Foreign Currencies in Thousands) | December 31, 2021 (Foreign Currencies in Thousands) | Shares (In Thousands) | Percentage of Ownership | Carrying Value (Foreign Currencies in Thousands)
TSMC Development | WaferTech | Washington, U.S.A | Manufacturing, sales and testing of integrated circuits and other semiconductor devices | $ | - |  | $ | - |  |  | 293,637 |  |  | 100 |  | $ (US$ | 6,251,109 203,533 | ) | $ (US$ | 2,299,054 77,303 | ) | Note 2 | Subsidiary

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

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

(Concluded)

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TABLE 10

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR YEAR ENDED DECEMBER 31, 2022

(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, 2022 (US$ in Thousands) | Investment Flows | Accumulated Outflow of Investment from Taiwan as of December 31, 2022 (US$ in Thousands) | Net Income (Losses) of the Investee Company | Percentage of Ownership | Share of Profits/Losses | Carrying Amount as of Balance as of December 31, 2022 | Accumulated Inward Remittance of Earnings as of December 31, 2022
Outflow (US$ in Thousands) | Inflow
TSMC China | Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices | $ (RMB | 18,939,667 4,502,080 | ) | Note 1 | $ (US$ | 18,939,667 596,000 | ) | $ | - |  | $ | - |  | $ (US$ | 18,939,667 596,000 | ) | $ | 12,411,290 |  |  | 100% |  | $ | 12,223,165 (Note2 | ) | $ | 87,028,722 |  | $ | - |
TSMC Nanjing | Manufacturing, sales, testing and computer-aided design of integrated circuits and other semiconductor devices | (RMB | 30,521,412 6,650,119 | ) | Note 1 | (US$ | 30,521,412 1,000,000 | ) |  | - |  |  | - |  | (US$ | 30,521,412 1,000,000 | ) |  | 20,486,591 |  |  | 100% |  |  | 20,473,263 (Note2 | ) |  | 67,385,300 |  |  | - |

Accumulated Investment in Mainland China as of S December 31, 2022 (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 | ) | $ | 1,776,293,320 (Note3 | )

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

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TABLE 11

Taiwan Semiconductor Manufacturing Company Limited

INFORMATION ON MAJOR SHAREHOLDERS

DECEMBER 31, 2022

Shareholders (Note) | Shares
Total Shares Owned | Ownership Percentage
ADR-Taiwan Semiconductor Manufacturing Company, Ltd. |  | 5,319,233,558 |  |  | 20.51% |
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.

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