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English Translation of Financial Statements Originally Issued in Chinese
Taiwan Semiconductor Manufacturing
Company Limited and Subsidiaries
Consolidated Financial Statements for the
Six Months Ended June 30, 2026 and 2025 and
Independent Auditors’ Review Report
- 1 -
勤業眾信
勤業眾信聯合會計師事務所
110421 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 110421, Taiwan
Tel :+886 (2) 2725-9988
Fax:+886 (2) 4051-6888
www.deloitte.com.tw
INDEPENDENT AUDITORS’ REVIEW REPORT
The Board of Directors and Shareholders
Taiwan Semiconductor Manufacturing Company Limited
Introduction
We have reviewed the accompanying consolidated balance sheets of Taiwan Semiconductor
Manufacturing Company Limited and its subsidiaries (collectively, the “Company”) as of June 30,
2026 and 2025, the related consolidated statements of comprehensive income for the three months
ended June 30, 2026 and 2025 and for the six months ended June 30, 2026 and 2025, the consolidated
statements of changes in equity and cash flows for the six months then ended, and the related notes to
the consolidated financial statements, including material accounting policy information (collectively
referred to as the “consolidated financial statements”). Management is responsible for the preparation
and fair presentation of the consolidated financial statements in accordance with the Regulations
Governing the Preparation of Financial Reports by Securities Issuers and International Accounting
Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial
Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on
the consolidated financial statements based on our reviews.
Scope of Review
We conducted our reviews in accordance with the Standards on Review Engagements of the Republic
of China 2410 “Review of Interim Financial Information Performed by the Independent Auditor of
the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of
persons responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our reviews, nothing has come to our attention that caused us to believe that the
accompanying consolidated financial statements do not present fairly, in all material respects, the
consolidated financial position of the Company as of June 30, 2026 and 2025, its consolidated
financial performance for the three months ended June 30, 2026 and 2025, and its consolidated
financial performance and its consolidated cash flows for the six months ended June 30, 2026 and
2025 in accordance with the Regulations Governing the Preparation of Financial Reports by
Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed
and issued into effect by the Financial Supervisory Commission of the Republic of China.
- 2 -
The engagement partners on the reviews resulting in this independent auditors’ review report are Shih
Tsung Wu and Yen Chun Chen.
a2q26_cpasignaturea.jpg
Deloitte & Touche
Taipei, Taiwan
Republic of China
August 11, 2026
Notice to Readers
The accompanying consolidated financial statements are intended only to present the consolidated
financial position, financial performance and cash flows in accordance with accounting principles
and practices generally accepted in the Republic of China and not those of any other jurisdictions.
The standards, procedures and practices to review such consolidated financial statements are those
generally applied in the Republic of China.
For the convenience of readers, the independent auditors’ review report and the accompanying
consolidated financial statements have been translated into English from the original Chinese version
prepared and used in the Republic of China. If there is any conflict between the English version and
the original Chinese version or any difference in the interpretation of the two versions, the Chinese-
language independent auditors’ review report and consolidated financial statements shall prevail.
- 3 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In Thousands of New Taiwan Dollars)
June 30, 2026
December 31, 2025
June 30, 2025
Amount
%
Amount
%
Amount
%
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 6)
$3,134,218,213
33
$2,767,856,402
35
$2,364,524,340
34
Financial assets at fair value through profit or loss (Note 7)
226,375
-
100,200
-
1,765,904
-
Financial assets at fair value through other comprehensive income (Note 8)
193,182,690
2
175,692,690
2
163,637,740
2
Financial assets at amortized cost (Note 9)
190,385,845
2
124,945,519
2
104,501,262
2
Notes and accounts receivable, net (Note 11)
435,762,477
5
279,051,553
3
233,407,179
3
Receivables from related parties (Note 31)
5,160,539
-
2,739,500
-
2,277,792
-
Other receivables from related parties (Note 31)
1,209,013
-
268,115
-
2,567,972
-
Inventories (Note 12)
385,524,542
4
288,109,485
4
304,193,716
4
Other financial assets (Notes 28, 29 and 32)
80,032,539
1
59,702,922
1
49,202,958
1
Other current assets (Notes 28 and 29)
139,998,509
2
118,664,431
1
38,838,612
1
Total current assets
4,565,700,742
49
3,817,130,817
48
3,264,917,475
47
NONCURRENT ASSETS
Financial assets at fair value through profit or loss (Note 7)
15,780,286
-
15,032,128
-
13,831,497
-
Financial assets at fair value through other comprehensive income (Notes 8 and 13)
88,151,593
1
8,797,170
-
7,605,736
-
Financial assets at amortized cost (Note 9)
105,877,457
1
110,507,804
1
81,827,491
1
Investments accounted for using equity method (Note 13)
18,126,371
-
38,033,271
1
34,162,043
1
Property, plant and equipment (Notes 14 and 28)
4,302,880,478
46
3,691,840,916
47
3,386,206,352
48
Right-of-use assets (Note 15)
54,895,205
1
43,918,910
1
43,857,918
1
Intangible assets (Note 16)
24,074,828
-
24,952,615
-
24,707,294
-
Deferred income tax assets (Note 4)
62,888,627
1
62,940,253
1
64,996,327
1
Refundable deposits
4,267,187
-
4,242,553
-
4,854,963
-
Other noncurrent assets (Notes 28 and 29)
133,011,953
1
115,627,441
1
79,382,453
1
Total noncurrent assets
4,809,953,985
51
4,115,893,061
52
3,741,432,074
53
TOTAL
$9,375,654,727
100
$7,933,023,878
100
$7,006,349,549
100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Financial liabilities at fair value through profit or loss (Note 7)
$2,452,333
-
$3,083,883
-
$220,702
-
Hedging financial liabilities (Note 10)
2,563
-
817
-
2,384
-
Accounts payable
108,890,080
1
82,551,595
1
83,495,172
1
Payables to related parties (Note 31)
1,735,737
-
1,778,730
-
1,276,538
-
Salary and bonus payable
69,960,764
1
63,872,882
1
46,014,993
1
Accrued profit sharing bonus to employees and compensation to directors (Note 27)
173,683,261
2
103,355,278
1
116,534,813
2
Payables to contractors and equipment suppliers (Note 29)
290,850,560
3
177,730,306
2
161,416,417
2
Cash dividends payable (Note 19)
337,435,778
4
285,258,060
4
246,672,182
4
Income tax payable (Note 4)
283,343,231
3
202,337,872
2
182,884,380
3
Long-term liabilities - current portion (Notes 17, 18 and 29)
167,409,865
2
136,925,710
2
94,213,641
1
Accrued expenses and other current liabilities (Notes 15, 20 and  29)
421,997,653
4
401,124,156
5
444,583,112
6
Total current liabilities
1,857,761,825
20
1,458,019,289
18
1,377,314,334
20
NONCURRENT LIABILITIES
Bonds payable (Notes 17 and 29)
815,036,716
9
856,227,503
11
848,534,856
12
Long-term bank loans (Note 18)
49,226,958
1
39,834,496
1
35,136,246
1
Deferred income tax liabilities (Note 4)
3,906,819
-
3,888,795
-
3,954,595
-
Lease liabilities (Note 15)
33,276,056
-
31,594,992
-
31,363,997
-
Net defined benefit liability (Note 4)
5,893,691
-
6,012,286
-
5,355,403
-
Guarantee deposits
777,475
-
764,178
-
714,229
-
Others (Note 20)
135,304,206
1
75,887,056
1
87,344,039
1
Total noncurrent liabilities
1,043,421,921
11
1,014,209,306
13
1,012,403,365
14
Total liabilities
2,901,183,746
31
2,472,228,595
31
2,389,717,699
34
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
Capital stock (Note 19)
259,323,701
3
259,325,245
3
259,326,155
4
Capital surplus (Notes 19 and 26)
72,290,839
1
73,445,601
1
73,326,265
1
Retained earnings (Note 19)
Appropriated as legal capital reserve
311,146,899
4
311,146,899
4
311,146,899
4
Appropriated as special capital reserve
-
-
87,284,496
1
-
-
Unappropriated earnings
5,739,966,200
61
4,705,070,165
59
4,119,740,394
59
6,051,113,099
65
5,103,501,560
64
4,430,887,293
63
Others (Notes 19 and 26)
49,790,695
-
(16,676,412)
-
(182,465,738)
(3)
Equity attributable to shareholders of the parent
6,432,518,334
69
5,419,595,994
68
4,581,073,975
65
NON - CONTROLLING INTERESTS
41,952,647
-
41,199,289
1
35,557,875
1
Total equity
6,474,470,981
69
5,460,795,283
69
4,616,631,850
66
TOTAL
$9,375,654,727
100
$7,933,023,878
100
$7,006,349,549
100
The accompanying notes are an integral part of the consolidated financial statements.
- 4 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
For the Three Months Ended June 30
For the Six Months Ended June 30
2026
2025
2026
2025
Amount
%
Amount
%
Amount
%
Amount
%
NET REVENUE (Notes 20, 31 and 37)
$1,270,380,250
100
$933,791,869
100
$2,404,483,690
100
$1,773,045,533
100
COST OF REVENUE (Notes 12, 27, 31 and 34)
410,069,555
32
386,422,631
41
792,877,574
33
732,281,219
41
GROSS PROFIT
860,310,695
68
547,369,238
59
1,611,606,116
67
1,040,764,314
59
OPERATING EXPENSES (Notes 27 and 31)
Research and development
73,146,138
6
61,279,719
7
140,902,823
6
117,827,212
7
General and administrative
21,366,992
2
18,955,373
2
43,200,642
2
43,839,121
3
Marketing
4,468,953
-
4,273,247
-
8,884,275
-
8,028,062
-
Total operating expenses
98,982,083
8
84,508,339
9
192,987,740
8
169,694,395
10
OTHER OPERATING INCOME AND EXPENSES, NET (Notes 14,
27 and 34)
5,274,039
-
562,739
-
6,950,417
-
(565,473)
-
INCOME FROM OPERATIONS (Note 37)
766,602,651
60
463,423,638
50
1,425,568,793
59
870,504,446
49
NON-OPERATING INCOME AND EXPENSES
Share of profits of associates
1,438,471
-
1,220,948
-
3,123,375
-
2,589,255
-
Interest income (Note 21)
30,044,721
3
25,191,998
3
58,906,984
2
50,051,310
3
Other income
1,846,711
-
412,043
-
1,971,050
-
463,552
-
Foreign exchange gain (loss), net (Note 35)
419,968
-
(4,782,532)
(1)
6,598,890
-
(1,244,213)
-
Finance costs (Note 22)
(3,085,049)
-
(3,691,095)
-
(5,801,911)
-
(6,368,369)
-
Other gains and losses, net (Notes 13 and 23)
65,162,613
5
11,260,204
1
59,862,592
3
7,934,635
-
Total non-operating income and expenses
95,827,435
8
29,611,566
3
124,660,980
5
53,426,170
3
INCOME BEFORE INCOME TAX
862,430,086
68
493,035,204
53
1,550,229,773
64
923,930,616
52
INCOME TAX EXPENSE (Notes 4 and 24)
155,649,163
12
95,541,780
10
270,647,546
11
165,704,531
9
NET INCOME
706,780,923
56
397,493,424
43
1,279,582,227
53
758,226,085
43
OTHER COMPREHENSIVE INCOME (LOSS) (Note 19)
Items that will not be reclassified subsequently to profit or loss:
Unrealized gain on investments in equity instruments at fair value
through other comprehensive income
25,874,210
2
1,982,348
-
28,425,661
1
1,608,828
-
Loss on hedging instruments
-
-
(31,030)
-
-
-
(31,030)
-
Share of other comprehensive income (loss) of associates
(12,480)
-
(27,249)
-
75,934
-
(95,903)
-
 
25,861,730
2
1,924,069
-
28,501,595
1
1,481,895
-
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations
(7,864,761)
(1)
(256,492,873)
(28)
45,093,416
2
(226,272,181)
(13)
Unrealized gain (loss) on investments in debt instruments at fair
value through other comprehensive income
(117,250)
-
812,218
-
(1,971,730)
-
2,865,452
-
Loss on hedging instruments
(21,314)
-
(20,105)
-
(42,405)
-
(41,173)
-
Share of other comprehensive loss of associates
(571,807)
-
(725,190)
-
(298,627)
-
(638,946)
-
 
(8,575,132)
(1)
(256,425,950)
(28)
42,780,654
2
(224,086,848)
(13)
 
Other comprehensive income (loss), net of income tax
17,286,598
1
(254,501,881)
(28)
71,282,249
3
(222,604,953)
(13)
 
TOTAL COMPREHENSIVE INCOME
$724,067,521
57
$142,991,543
15
$1,350,864,476
56
$535,621,132
30
(Continued)
 
- 5 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
For the Three Months Ended June 30
For the Six Months Ended June 30
2026
2025
2026
2025
Amount
%
Amount
%
Amount
%
Amount
%
NET INCOME ATTRIBUTABLE TO:
Shareholders of the parent
$706,561,938
56
$398,273,102
43
$1,279,041,690
53
$759,837,230
43
Non-controlling interests
218,985
-
(779,678)
-
540,537
-
(1,611,145)
-
 
 
$706,780,923
56
$397,493,424
43
$1,279,582,227
53
$758,226,085
43
 
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Shareholders of the parent
$724,359,648
57
$146,202,878
15
$1,350,950,974
56
$538,015,970
30
Non-controlling interests
(292,127)
-
(3,211,335)
-
(86,498)
-
(2,394,838)
-
 
 
$724,067,521
57
$142,991,543
15
$1,350,864,476
56
$535,621,132
30
 
EARNINGS PER SHARE (NT$, Note 25)
Basic earnings per share
$27.25
$15.36
$49.33
$29.31
Diluted earnings per share
$27.25
$15.36
$49.32
$29.30
The accompanying notes are an integral part of the consolidated financial statements.
  (Concluded)
                                                                                                                                                       
- 6 -
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
Capital Stock - Common Stock
Retained Earnings
Foreign
Currency
Translation
Reserve
Unrealized
Gain (Loss) on
Financial
Assets at Fair
Value Through
Other
Comprehensive
Income
Gain (Loss) on
Hedging
Instruments
Unearned
Stock-Based
Employee
Compensation
Shares
Legal Capital
Special Capital
Unappropriated
Total
Total
Non-controlling
Interests
Total
Equity
(In Thousands)
Amount
Capital Surplus
Reserve
Reserve
Earnings
Total
BALANCE, JANUARY 1, 2025
25,932,733
$259,327,332
$73,260,765
$311,146,899
$-
$3,606,105,124
$3,917,252,023
$40,262,995
$(1,160,176)
$1,310,307
$(1,708,079)
$38,705,047
$4,288,545,167
$35,030,698
$4,323,575,865
Appropriations of earnings
Cash dividends to shareholders
-
-
-
-
-
(246,360,378)
(246,360,378)
-
-
-
-
-
(246,360,378)
-
(246,360,378)
Total
-
-
-
-
-
(246,360,378)
(246,360,378)
-
-
-
-
-
(246,360,378)
-
(246,360,378)
Net income
-
-
-
-
-
759,837,230
759,837,230
-
-
-
-
-
759,837,230
(1,611,145)
758,226,085
Other comprehensive income (loss), net of income tax
-
-
-
-
-
(35)
(35)
(226,127,300)
4,360,969
(54,894)
-
(221,821,225)
(221,821,260)
(783,693)
(222,604,953)
Total comprehensive income (loss)
-
-
-
-
-
759,837,195
759,837,195
(226,127,300)
4,360,969
(54,894)
-
(221,821,225)
538,015,970
(2,394,838)
535,621,132
Employee restricted shares retired
(118)
(1,177)
1,177
-
-
2,459
2,459
-
-
-
-
-
2,459
-
2,459
Share-based payment arrangements
-
-
-
-
-
-
-
-
-
-
797,188
797,188
797,188
-
797,188
Disposal of investments in equity instruments at fair value
through other comprehensive income
-
-
-
-
-
155,994
155,994
-
(155,994)
-
-
(155,994)
-
-
-
Basis adjustment for gain on hedging instruments
-
-
-
-
-
-
-
-
-
9,246
-
9,246
9,246
-
9,246
Adjustments to share of changes in equities of associates
-
-
79,432
-
-
-
-
-
-
-
-
-
79,432
-
79,432
From share of changes in equities of subsidiaries
-
-
(15,109)
-
-
-
-
-
-
-
-
-
(15,109)
8,146
(6,963)
Increase in non-controlling interests
-
-
-
-
-
-
-
-
-
-
-
-
-
2,913,869
2,913,869
BALANCE, JUNE 30, 2025
25,932,615
$259,326,155
$73,326,265
$311,146,899
$-
$4,119,740,394
$4,430,887,293
$(185,864,305)
$3,044,799
$1,264,659
$(910,891)
$(182,465,738)
$4,581,073,975
$35,557,875
$4,616,631,850
BALANCE, JANUARY 1, 2026
25,932,524
$259,325,245
$73,445,601
$311,146,899
$87,284,496
$4,705,070,165
$5,103,501,560
$(21,019,144)
$3,591,483
$1,228,250
$(477,001)
$(16,676,412)
$5,419,595,994
$41,199,289
$5,460,795,283
Appropriations of earnings
Special capital reserve
-
-
-
-
(87,284,496)
87,284,496
-
-
-
-
-
-
-
-
-
Cash dividends to shareholders
-
-
-
-
-
(337,121,738)
(337,121,738)
-
-
-
-
-
(337,121,738)
-
(337,121,738)
Total
-
-
-
-
(87,284,496)
(249,837,242)
(337,121,738)
-
-
-
-
-
(337,121,738)
-
(337,121,738)
Net income
-
-
-
-
-
1,279,041,690
1,279,041,690
-
-
-
-
-
1,279,041,690
540,537
1,279,582,227
Other comprehensive income (loss), net of income tax
-
-
-
-
-
-
-
45,426,050
26,514,792
(31,558)
-
71,909,284
71,909,284
(627,035)
71,282,249
Total comprehensive income (loss)
-
-
-
-
-
1,279,041,690
1,279,041,690
45,426,050
26,514,792
(31,558)
-
71,909,284
1,350,950,974
(86,498)
1,350,864,476
Disposal of investments accounted for using equity method
-
-
(1,393,789)
-
-
(87,379)
(87,379)
-
98,746
(11,367)
-
87,379
(1,393,789)
-
(1,393,789)
Employee restricted shares retired
(154)
(1,544)
1,544
-
-
5,334
5,334
-
-
-
-
-
5,334
-
5,334
Share-based payment arrangements
-
-
(62,128)
-
-
-
-
-
-
-
245,093
245,093
182,965
-
182,965
Disposal of investments in equity instruments at fair value
through other comprehensive income
-
-
-
-
-
5,773,632
5,773,632
-
(5,774,189)
-
-
(5,774,189)
(557)
557
-
Basis adjustment for loss on hedging instruments
-
-
-
-
-
-
-
-
-
(460)
-
(460)
(460)
-
(460)
Adjustments to share of changes in equities of associates
-
-
299,611
-
-
-
-
-
-
-
-
-
299,611
-
299,611
Increase in non-controlling interests
-
-
-
-
-
-
-
-
-
-
-
-
-
839,299
839,299
BALANCE, JUNE 30, 2026
25,932,370
$259,323,701
$72,290,839
$311,146,899
$-
$5,739,966,200
$6,051,113,099
$24,406,906
$24,430,832
$1,184,865
$(231,908)
$49,790,695
$6,432,518,334
$41,952,647
$6,474,470,981
The accompanying notes are an integral part of the consolidated financial statements.
- 7 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)
Six Months Ended June 30
2026
2025
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
$1,550,229,773
$923,930,616
Adjustments for:
Depreciation expense
359,541,458
359,012,194
Amortization expense
4,447,147
4,184,797
Expected credit losses recognized (reversal) on investments in debt
instruments
51,743
(25,220)
Finance costs
5,801,911
6,368,369
Share of profits of associates
(3,123,375)
(2,589,255)
Interest income
(58,906,984)
(50,051,310)
Share-based compensation
237,026
799,647
Loss (gain) on disposal or retirement of property, plant and equipment, net
(175,957)
1,235,418
Loss (gain) on disposal or retirement of intangible assets, net
(224,968)
2,071
Impairment loss on property, plant and equipment
-
1,670,522
Gain on financial instruments at fair value through profit or loss, net
(301,612)
(204,315)
Loss on disposal of investments in debt instruments at fair value through
other comprehensive income, net
49,766
82,845
Gain on disposal of investments accounted for using equity method, net
(63,202,285)
-
Loss from disposal of subsidiary
-
167,986
Gain on foreign exchange, net
(4,354,953)
(17,895,105)
Dividend income
(1,971,050)
(463,552)
Others
254,365
583,464
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss
3,810,341
(1,796,243)
Notes and accounts receivable, net
(156,710,924)
37,276,056
Receivables from related parties
(2,421,039)
(873,319)
Other receivables from related parties
265,882
(10,235)
Inventories
(97,415,057)
(16,324,906)
Other financial assets
(857,463)
(9,975,826)
Other current assets
(23,877,386)
3,428,197
Other noncurrent assets
(16,151,482)
(2,609,468)
Accounts payable
26,338,485
10,694,614
Payables to related parties
(42,993)
(149,463)
Salary and bonus payable
6,087,882
(1,436,516)
Accrued profit sharing bonus to employees and compensation to directors
70,327,983
45,663,663
Accrued expenses and other current liabilities
(28,028,952)
(29,100,990)
Other noncurrent liabilities
102,502,167
(7,848,202)
Net defined benefit liability
(118,595)
(2,225,254)
Cash generated from operations
1,672,060,854
1,251,521,280
Income taxes paid
(189,719,612)
(128,883,523)
Net cash generated by operating activities
1,482,341,242
1,122,637,757
(Continued)
- 8 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)
Six Months Ended June 30
2026
2025
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Financial instruments at fair value through profit or loss
$(744,405)
$(128,359)
Financial assets at fair value through other comprehensive income
(57,792,544)
(37,351,763)
Financial assets at amortized cost
(145,731,439)
(95,249,939)
Hedging financial instruments
-
(631,620)
Property, plant and equipment
(846,764,746)
(628,052,531)
Right-of-use assets
(9,441,034)
-
Intangible assets
(3,876,352)
(4,616,458)
Proceeds from disposal or redemption of:
Financial instruments at fair value through profit or loss
15,238
-
Financial assets at fair value through other comprehensive income
46,790,889
49,745,299
Financial assets at amortized cost
90,183,179
77,925,126
Investments accounted for using equity method
24,301,349
-
Property, plant and equipment
1,992,188
245,283
Intangible assets
235,417
-
Derecognition of derivative financial instruments
(4,344,665)
-
Proceeds from return of capital of investments in equity instruments at fair
value through other comprehensive income
186,812
4,976
Derecognition of hedging financial instruments
16,726
574,700
Interest received
52,546,142
50,443,657
Proceeds from government grants - property, plant and equipment
590,398
67,128,197
Other dividends received
310,283
438,461
Dividends received from investments accounted for using equity method
1,855,845
747,006
Increase in prepayments for leases
(18,979)
(17,174)
Refundable deposits paid
(295,764)
(282,366)
Refundable deposits refunded
321,288
396,772
Net cash used in investing activities
(849,664,174)
(518,680,733)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in hedging financial liabilities - bank loans
(274,342)
430,085
Proceeds from issuance of bonds
35,600,000
33,300,000
Repayment of bonds
(54,861,100)
(13,400,000)
Proceeds from long-term bank loans
11,950,000
5,395,000
Repayment of long-term bank loans
(651,389)
(1,438,333)
Payments for transaction costs attributable to the issuance of bonds
(36,448)
(34,820)
Repayment of the principal portion of lease liabilities
(2,249,689)
(1,645,424)
Interest paid
(9,889,408)
(9,738,700)
Guarantee deposits received
8,561
1,000
Guarantee deposits refunded
(6,569)
(41,853)
Cash dividends
(285,258,060)
(220,418,821)
Increase in non-controlling interests
1,104,611
3,225,673
Net cash used in financing activities
(304,563,833)
(204,366,193)
(Continued)
- 9 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)
Six Months Ended June 30
2026
2025
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS
$38,248,576
$(162,693,534)
NET INCREASE IN CASH AND CASH EQUIVALENTS
366,361,811
236,897,297
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
2,767,856,402
2,127,627,043
CASH AND CASH EQUIVALENTS, END OF PERIOD
$3,134,218,213
$2,364,524,340
The accompanying notes are an integral part of the consolidated financial statements.
(Concluded)
- 10 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(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 issuance by the
Board of Directors on August 11, 2026.
3.APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING
STANDARDS
a.Initial application of the amendments to the International Financial Reporting Standards (IFRS),
International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC)
(collectively, “IFRS Accounting Standards”) endorsed and issued into effect by the Financial
Supervisory Commission (FSC)
The initial application of the amendments to the IFRS Accounting Standards endorsed and issued into
effect by the FSC did not have a material impact on the accounting policies of TSMC and its
subsidiaries (collectively as the “Company”).
b.The IFRS Accounting Standards issued by International Accounting Standards Board (IASB) and
endorsed by the FSC with effective date starting 2027
New, Amended and Revised Standards and Interpretations
Effective Date Issued
by IASB
IFRS 18 “Presentation and Disclosure in Financial Statements”
January 1, 2027 (Note)
Note : Domestic entities are required to apply IFRS 18 starting January 1, 2028, with the option for
early adoption.
- 11 -
IFRS 18 “Presentation and Disclosure in Financial Statements” and consequential amendments
IFRS 18 will supersede IAS 1“Presentation of Financial Statements”. The main changes comprise:
•Items of income and expenses included in the statement of profit or loss shall be classified into the
operating, investing, financing, income taxes and discontinued operations categories.
•The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or
loss before financing and income taxes and profit or loss.
•Provides guidance to enhance the requirements of aggregation and disaggregation: The Company
shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from
individual transactions or other events and shall classify and aggregate them into groups based on
shared characteristics, so as to result in the presentation in the primary financial statements of line
items that have at least one similar characteristic. The Company shall disaggregate items with
dissimilar characteristics in the primary financial statements and in the notes. The Company labels
items as “other” only if it cannot find a more informative label.
In addition, a consequential amendment has been made to IAS 7 “Statement of Cash Flows”, requiring
the Company to use operating profit or loss as the starting point when presenting cash flows from
operating activities under the indirect method.
Except for the above impact, as of the date the accompanying consolidated financial statements were
issued, the Company continues in evaluating other impacts of the above amended standards and on its
financial position and financial performance from the initial adoption of the aforementioned standards
or interpretations and related applicable period. The related impact will be disclosed when the
Company completes its evaluation.
c.The IFRS Accounting Standards issued by IASB, but not yet endorsed and issued into effect by the FSC
New, Amended and Revised Standards and Interpretations
Effective Date Issued
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
4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
Except for the following, the accounting policies applied in these consolidated financial statements are
consistent with those applied in the consolidated financial statements for the year ended December 31,
2025.
For the convenience of readers, the accompanying consolidated financial statements have been translated
into English from the original Chinese version prepared and used in the R.O.C. If there is any conflict
between the English version and the original Chinese version or any difference in the interpretation of the
two versions, the Chinese-language consolidated financial statements shall prevail.
Statement of Compliance
The accompanying consolidated financial statements have been prepared in conformity with the
Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34, “Interim
Financial Reporting,” endorsed and issued into effect by the FSC. The consolidated financial statements do
not present all the disclosures required for a complete set of annual consolidated financial statements
- 12 -
prepared under the IFRS Accounting Standards endorsed and issued into effect by the FSC (collectively,
the “Taiwan-IFRS Accounting Standards”).
Basis of Consolidation
The basis of preparation and the basis for the consolidated financial statements
The basis of preparation and the basis for the consolidated financial statements applied in these
consolidated financial statements are consistent with those applied in the consolidated financial statements
for the year ended December 31, 2025.
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
June 30,
2026
December 31,
2025
June 30,
2025
Note
TSMC
TSMC North America
Sales and marketing of integrated
circuits and other semiconductor
devices
San Jose,
California, U.S.A.
100%
100%
100%
-
TSMC Europe B.V. (TSMC
Europe)
Customer service and supporting
activities
Amsterdam, the
Netherlands
100%
100%
100%
a)
TSMC Japan Limited
(TSMC Japan)
Customer service and supporting
activities
Yokohama, Japan
100%
100%
100%
a)
TSMC Design Technology
Japan, Inc. (TSMC JDC)
Engineering support activities
Yokohama, Japan
100%
100%
100%
a)
TSMC Japan 3DIC R&D
Center, Inc. (TSMC 3DIC)
Engineering support activities
Yokohama, Japan
100%
100%
100%
a)
TSMC Korea Limited
(TSMC Korea)
Customer service and supporting
activities
Seoul, Korea
100%
100%
100%
a)
TSMC Partners, Ltd.
(TSMC Partners)
Investing in companies involved in the
semiconductor design and
manufacturing, and other investment
activities
Tortola, British
Virgin Islands
100%
100%
100%
-
TSMC Global Ltd. (TSMC
Global)
Investment activities
Tortola, British
Virgin Islands
100%
100%
100%
-
TSMC China Company
Limited (TSMC China)
Manufacturing, sales, testing and
computer-aided design of integrated
circuits and other semiconductor
devices
Shanghai, China
100%
100%
100%
-
TSMC Nanjing Company
Limited (TSMC Nanjing)
Manufacturing, sales, testing and
computer-aided design of integrated
circuits and other semiconductor
devices
Nanjing, China
100%
100%
100%
-
VisEra Technologies
Company Ltd. (VisEra
Tech)
Research, design, development,
manufacturing, sales, packaging and
test of color filter
Hsinchu, Taiwan
67%
67%
67%
-
TSMC Arizona Corporation
(TSMC Arizona)
Manufacturing, sales and testing of
integrated circuits and other
semiconductor devices
Phoenix, Arizona,
U.S.A.
100%
100%
100%
-
Japan Advanced
Semiconductor
Manufacturing, Inc.
(JASM)
Manufacturing, sales and testing of
integrated circuits and other
semiconductor devices
Kumamoto, Japan
73%
73%
73%
-
European Semiconductor
Manufacturing Company
(ESMC) GmbH (ESMC)
Manufacturing, sales and testing of
integrated circuits and other
semiconductor devices
Dresden, Germany
70%
70%
70%
-
Emerging Fund, L.P.
(Emerging Fund)
Investing in technology start-up
companies
Cayman Islands
99.9%
99.9%
99.9%
b)
TSMC Partners
TSMC Development, Inc.
(TSMC Development)
Investing in companies involved in
semiconductor manufacturing
Delaware, U.S.A.
100%
100%
100%
-
TSMC Technology, Inc.
(TSMC Technology)
Engineering support activities
Delaware, U.S.A.
100%
100%
100%
a)
TSMC Design Technology
Canada Inc. (TSMC
Canada)
Engineering support activities
Ontario, Canada
100%
100%
100%
a)
TSMC Development
TSMC Washington, LLC
(TSMC Washington)
Manufacturing, sales and testing of
integrated circuits and other
semiconductor devices
Washington, U.S.A.
100%
100%
100%
-
Note a:This is an immaterial subsidiary for which the consolidated financial statements are neither reviewed nor audited by the Company’s independent auditors.
Note b:This is an immaterial subsidiary for which the consolidated financial statements for the year ended, are audited by the Company’s independent auditors.
- 13 -
Retirement Benefits
Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined
pension cost rate at the end of the prior financial year.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. The interim period
income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings,
that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim
period.
5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND
UNCERTAINTY
The same material accounting judgments and key sources of estimates and uncertainty have been followed
in these consolidated financial statements as were applied in the preparation of the Company’s consolidated
financial statements for the year ended December 31, 2025.
6. CASH AND CASH EQUIVALENTS
June 30,
2026
December 31,
2025
June 30,
2025
Cash and deposits in banks
$3,119,195,029
$2,761,829,868
$2,333,623,182
Money market funds
13,063,599
2,056,733
28,123,554
Commercial paper
1,205,116
-
-
Government bonds/Agency bonds
754,469
2,627,142
1,728,061
Repurchase agreements
-
1,342,659
1,049,543
$3,134,218,213
$2,767,856,402
$2,364,524,340
Deposits in banks consisted of highly liquid time deposits that were readily convertible to known amounts
of cash and were subject to an insignificant risk of changes in value.
7. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
June 30,
2026
December 31,
2025
June 30,
2025
Financial assets
Convertible preferred stocks
$13,813,964
$13,608,819
$12,617,717
Mutual funds
1,966,322
1,297,533
1,097,164
Convertible bonds
223,426
-
-
Forward exchange contracts
2,949
100,200
1,765,904
Simple agreement for future equity
-
125,776
116,616
$16,006,661
$15,132,328
$15,597,401
Current
$226,375
$100,200
$1,765,904
Noncurrent
15,780,286
15,032,128
13,831,497
$16,006,661
$15,132,328
$15,597,401
Financial liabilities
Forward exchange contracts
$2,452,333
$3,083,883
$220,702
- 14 -
The Company entered into forward exchange contracts to manage exposures due to fluctuations of foreign
exchange rates. These forward exchange contracts did not meet the criteria for hedge accounting.
Therefore, the Company did not apply hedge accounting treatment for these forward exchange contracts.
Outstanding forward exchange contracts consisted of the following:
Contract Amount
Maturity Date
(In Thousands)
June 30, 2026
Sell US$
July 2026 to September 2026
US$6,720,500
December 31, 2025
Sell US$
January 2026 to March 2026
US$9,234,000
Sell JPY
January 2026
JPY6,095,977
June 30, 2025
Sell US$
July 2025 to September 2025
US$4,220,500
Sell JPY
July 2025
JPY39,505,545
8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
June 30,
2026
December 31,
2025
June 30,
2025
Investments in debt instruments at FVTOCI
Corporate bonds
$104,967,103
$88,636,098
$80,137,883
Agency mortgage-backed securities
50,118,652
49,150,771
46,016,814
Government bonds/Agency bonds
27,707,810
25,437,560
23,173,091
Asset-backed securities
7,888,500
8,512,188
9,019,262
190,682,065
171,736,617
158,347,050
Investments in equity instruments at FVTOCI
Publicly traded stocks
79,117,839
3,956,073
5,290,690
Non-publicly traded equity investments
11,534,379
8,797,170
7,605,736
90,652,218
12,753,243
12,896,426
$281,334,283
$184,489,860
$171,243,476
Current
$193,182,690
$175,692,690
$163,637,740
Noncurrent
88,151,593
8,797,170
7,605,736
$281,334,283
$184,489,860
$171,243,476
These investments in equity instruments are held for medium to long-term purposes and therefore are
accounted for as financial assets at 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.
- 15 -
For the six months ended June 30, 2026 and 2025, as the Company adjusted its investment portfolio, equity
investments designated at FVTOCI were divested for NT$7,931,592 thousand and NT$284,890 thousand,
respectively. The related other equity-unrealized gain/loss on financial assets at FVTOCI of NT$5,773,632
thousand and NT$155,994 thousand were transferred to increase retained earnings, respectively.
As of June 30, 2026 and 2025, the cumulative loss allowance for expected credit loss of NT$50,362
thousand and NT$41,888 thousand was recognized under investments in debt instruments at FVTOCI,
respectively. Refer to Note 30 for information relating to the credit risk management and expected credit
loss.
9. FINANCIAL ASSETS AT AMORTIZED COST
June 30,
2026
December 31,
2025
June 30,
2025
Corporate bonds
$273,881,621
$231,374,019
$176,321,657
Commercial paper
18,281,520
-
6,209,030
Government bonds/Agency bonds
4,282,693
4,213,491
3,901,492
Less: Allowance for impairment loss
(182,532)
(134,187)
(103,426)
$296,263,302
$235,453,323
$186,328,753
Current
$190,385,845
$124,945,519
$104,501,262
Noncurrent
105,877,457
110,507,804
81,827,491
$296,263,302
$235,453,323
$186,328,753
Refer to Note 30 for information relating to credit risk management and expected credit loss for financial
assets at amortized cost.
10. HEDGING FINANCIAL INSTRUMENTS
June 30,
2026
December 31,
2025
June 30,
2025
Financial liabilities - current
Fair value hedges
Interest rate futures contracts
$2,563
$817
$2,384
Fair value hedge
The Company entered into interest rate futures contracts, which are used to partially hedge against the fair
value changes caused by interest rate fluctuation in the Company’s fixed income investments. The hedge
ratio is adjusted in response to the changes in the financial market and capped at 100%.
On the basis of economic relationships, the value of the interest rate futures contracts and the value of the
hedged financial assets change in opposite directions in response to movements in interest rates.
- 16 -
The reasons that may cause hedge ineffectiveness in these hedging relationships are mainly from the credit
risk of the hedged financial assets, which are not reflected in the fair value of the interest rate futures
contracts. No other sources of ineffectiveness have emerged from these hedging relationships during the
hedging period. Amount of hedge ineffectiveness recognized in profit or loss is classified under other gains
and losses, net.
The following tables summarize the information relating to the hedges of interest rate risks.
June 30, 2026
Hedging Instruments
Contract Amount
(US$ in Thousands)
Maturity
Interest rate futures contracts - US Treasury
futures
US$16,100
September 2026
Hedged Items
Asset Carrying
Amount
Accumulated Amount of
Fair Value Hedge
Adjustments
Financial assets at FVTOCI
$883,461
        $  2,563     
December 31, 2025
Hedging Instruments
Contract Amount
(US$ in Thousands)
Maturity
Interest rate futures contracts - US Treasury
futures
US$23,700
March 2026
Hedged Items
Asset Carrying
Amount
Accumulated Amount of
Fair Value Hedge
Adjustments
Financial assets at FVTOCI
$711,878
        $  817     
June 30, 2025
Hedging Instruments
Contract Amount
(US$ in Thousands)
Maturity
Interest rate futures contracts - US Treasury
futures
US$7,600
September 2025
Hedged Items
Asset Carrying
Amount
Accumulated Amount of
Fair Value Hedge
Adjustments
Financial assets at FVTOCI
$766,126
        $  2,384     
- 17 -
The effect for the six months ended June 30, 2026 and 2025 is detailed below:
Change in Value Used for
Calculating Hedge Ineffectiveness
Six Months Ended June 30
Hedging Instruments/Hedged Items
2026
2025
Hedging Instruments
Interest rate futures contracts - US Treasury futures
$15,006
$(39,615)
Hedged Items
Financial assets at FVTOCI
(15,006)
39,615
$-
$-
Cash flow hedge
The Company has designated the bank deposits denominated in foreign currency to partially hedge foreign
exchange rate risks associated with certain highly probable forecast transactions (capital expenditures). The
hedge ratio is adjusted in response to the changes in the financial market and capped at 100%. The foreign
currency deposits have maturities of 12 months or less.
On the basis of economic relationships, the Company expects that the value of the foreign currency
deposits will move in opposite directions to the value of hedged transactions in response to foreign
exchange rates movements.
The reasons that may cause hedge ineffectiveness in these hedging relationships are mainly driven by the
effect of the counterparty’s own credit risk on the fair value of foreign currency deposits. No other sources
of ineffectiveness have emerged from these hedging relationships during the hedging period. Refer to Note
19 (d) for gain or loss arising from changes in the fair value of hedging instruments and hedged item affects
profit or loss, and the amount transferred to initial carrying amount of hedged items.
The effect for the six months ended June 30, 2025 is detailed below:
Hedging Instruments/Hedged Items
Change in Value
Used for
Calculating
Hedge
Ineffectiveness
Six Months
Ended June 30
2026
2025
Hedging Instruments
Foreign currency deposits
$-
$(31,030)
Hedged Items
Forecast transaction (capital expenditures)
$-
$31,030
- 18 -
Hedges of net investments in foreign operations
TSMC has designated the bank loans denominated in foreign currency as a hedge of net investments in
foreign operations to manage its foreign currency risk arising from investment in overseas subsidiaries.
The reasons that may cause hedge ineffectiveness in these hedging relationships are mainly driven by the
material difference between the notional amount of bank loans denominated in foreign currency and the net
investment in foreign operations. No other sources of ineffectiveness have emerged from these hedging
relationships during the hedging period. Refer to Note 19 (d) for gain or loss arising from changes in the
fair value of hedging instruments.
The effect for the six months ended June 30, 2026 and 2025 is detailed below:
Change in Value Used for
Calculating Hedge Ineffectiveness
Six Months Ended June 30
Hedging Instruments/Hedged Items
2026
2025
Hedging Instruments
Bank loans
$(274,342)
$430,085
Hedged Items
Net investments in foreign operations
$274,342
$(430,085)
11. NOTES AND ACCOUNTS RECEIVABLE, NET
June 30,
2026
December 31,
2025
June 30,
2025
At amortized cost
Notes and accounts receivable
$426,303,540
$271,835,077
$226,439,255
Less: Loss allowance
(607,667)
(478,617)
(399,415)
425,695,873
271,356,460
226,039,840
At FVTOCI
10,066,604
7,695,093
7,367,339
$435,762,477
$279,051,553
$233,407,179
The Company signed a contract with the bank to sell certain accounts receivable without recourse and
transaction cost required. These accounts receivable are classified as at FVTOCI because they are held
within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets.
In principle, the payment term granted to customers is due 30 days from the invoice date or 15 days from
the end of the month when the invoice is issued. Aside from recognizing impairment loss for credit-
impaired accounts receivable, the Company recognizes loss allowance based on the expected credit loss
ratio of customers by different risk levels with consideration of factors of historical loss ratios and
customers’ financial conditions, competitiveness and business outlook. For accounts receivable past due
over 90 days without collaterals or guarantees, the Company recognizes loss allowance at full amount.
- 19 -
Aging analysis of notes and accounts receivable
June 30,
2026
December 31,
2025
June 30,
2025
Not past due
$424,027,929
$263,766,991
$219,476,668
Past due
Past due within 30 days
12,342,214
15,762,377
14,329,911
Past due over 31 days
1
802
15
Less: Loss allowance
(607,667)
(478,617)
(399,415)
   
$435,762,477
$279,051,553
$233,407,179
All of the Company’s accounts receivable classified as at FVTOCI were not past due.
Movements of the loss allowance for accounts receivable
Six Months Ended June 30
2026
2025
Balance, beginning of period
$478,617
$453,009
Provision (Reversal)
129,034
(53,527)
Effect of exchange rate changes
16
(67)
Balance, end of period
$607,667
$399,415
For the six months ended June 30, 2026 and 2025, the changes in loss allowance were mainly due to the
variations in the balance of accounts receivable across different risk levels.
12. INVENTORIES
June 30,
2026
December 31,
2025
June 30,
2025
Finished goods
$35,336,897
$29,412,948
$32,076,396
Work in process
283,877,389
188,014,421
198,740,785
Raw materials
40,004,493
45,863,351
47,907,755
Supplies and spare parts
26,305,763
24,818,765
25,468,780
$385,524,542
$288,109,485
$304,193,716
Write-down of inventories to net realizable value (excluding earthquake losses) and reversal of write-down
of inventories resulting from the increase in net realizable value were included in the cost of revenue, which
were as follows. Please refer to related earthquake losses in Note 34.
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Net inventory losses (reversal of
write-down of inventories)
$(1,038,801)
$103,900
$1,596,001
$2,630,365
- 20 -
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
June 30,
2026
December 31,
2025
June 30,
2025
June 30,
2026
December 31,
2025
June 30,
2025
Systems on Silicon
Manufacturing
Company Pte Ltd.
(SSMC)
Manufacturing and sales of
integrated circuits and
other semiconductor
devices
Singapore
$11,562,140
$12,419,167
$10,699,204
39%
39%
39%
Xintec Inc. (Xintec)
Wafer level chip size
packaging and wafer
level post passivation
interconnection service
Taoyuan,
Taiwan
4,530,659
4,495,255
4,109,929
41%
41%
41%
Global Unichip
Corporation (GUC)
Researching, developing,
manufacturing, testing
and marketing of
integrated circuits
Hsinchu,
Taiwan
2,033,572
2,952,582
2,753,078
35%
35%
35%
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
-
18,166,267
16,599,832
-
28%
28%
   
$18,126,371
$38,033,271
$34,162,043
In May 2026, the Company disposed of 152,000 thousand common shares of VIS, resulting in a decrease in
the Company’s shareholding to 19% and the loss of significant influence over VIS. Accordingly, the
investment has been reclassified as financial assets at FVTOCI since the date of disposal. The Company
recognized a gain on disposal of NT$63,202,285 thousand in the second quarter of 2026. This included the
remeasurement of its remaining interest in VIS to a fair value of NT$56,398,783 thousand on the disposal
date, compared with its carrying amount, resulting in a non-cash remeasurement gain.
The market prices of the associates’ ownership held by the Company in publicly traded stocks calculated
base on the closing price are summarized as follows. The closing price represents the quoted price in active
markets, the level 1 fair value measurement.
Name of Associate
June 30,
2026
December 31,
2025
June 30,
2025
GUC
$226,202,676
$99,211,700
$60,927,656
Xintec
$31,882,271
$15,468,187
$16,414,084
VIS
$-
$46,667,928
$50,924,287
14. PROPERTY, PLANT AND EQUIPMENT
June 30,
2026
December 31,
2025
June 30,
2025
Assets used by the Company
$4,301,710,305
$3,690,642,070
$3,384,953,044
Assets subject to operating leases
1,170,173
1,198,846
1,253,308
$4,302,880,478
$3,691,840,916
$3,386,206,352
- 21 -
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, 2026
$13,445,772
$1,191,861,820
$6,236,677,716
$124,264,120
$1,518,996,210
$9,085,245,638
Additions (deductions)
154,610
295,865,520
1,134,555,892
21,269,491
(489,033,285)
962,812,228
Disposals or retirements
-
(237,807)
(79,885,117)
(999,408)
-
(81,122,332)
Reclassification
-
(18,647)
-
-
-
(18,647)
Effect of exchange rate changes
(51,154)
2,983,212
12,132,943
259,755
2,990,421
18,315,177
Balance at June 30, 2026
$13,549,228
$1,490,454,098
$7,303,481,434
$144,793,958
$1,032,953,346
$9,985,232,064
Accumulated depreciation and
impairment
Balance at January 1, 2026
$603,856
$511,294,326
$4,799,921,522
$82,783,864
$-
$5,394,603,568
Additions
9,983
42,430,707
306,832,640
7,689,277
-
356,962,607
Disposals or retirements
-
(212,592)
(77,596,803)
(999,233)
-
(78,808,628)
Effect of exchange rate changes
9,205
1,376,813
9,199,177
179,017
-
10,764,212
Balance at June 30, 2026
$623,044
$554,889,254
$5,038,356,536
$89,652,925
$-
$5,683,521,759
Carrying amounts at January 1,
2026
$12,841,916
$680,567,494
$1,436,756,194
$41,480,256
$1,518,996,210
$3,690,642,070
Carrying amounts at June 30, 2026
$12,926,184
$935,564,844
$2,265,124,898
$55,141,033
$1,032,953,346
$4,301,710,305
Cost
Balance at January 1, 2025
$13,054,161
$959,133,864
$5,852,202,689
$105,434,750
$1,080,284,237
$8,010,109,701
Additions (deductions)
121,919
248,872,681
339,781,756
14,465,762
(24,819,915)
578,422,203
Disposals or retirements
-
(96,094)
(19,975,634)
(873,885)
-
(20,945,613)
Reclassification
-
(1,197,245)
-
-
-
(1,197,245)
Effect of exchange rate changes
(508,290)
(32,289,583)
(45,682,789)
(1,620,552)
(13,358,251)
(93,459,465)
Balance at June 30, 2025
$12,667,790
$1,174,423,623
$6,126,326,022
$117,406,075
$1,042,106,071
$8,472,929,581
Accumulated depreciation and
impairment
Balance at January 1, 2025
$608,531
$440,369,241
$4,262,882,850
$70,679,950
$790,740
$4,775,331,312
Additions
9,756
34,372,332
315,655,919
6,962,695
-
357,000,702
Disposals or retirements
-
(69,575)
(18,535,834)
(869,223)
-
(19,474,632)
Reclassification
-
(129,702)
-
-
-
(129,702)
Impairment losses
-
-
1,670,522
-
-
1,670,522
Effect of exchange rate changes
(67,973)
(3,765,303)
(22,007,529)
(580,860)
-
(26,421,665)
Balance at June 30, 2025
$550,314
$470,776,993
$4,539,665,928
$76,192,562
$790,740
$5,087,976,537
Carrying amounts at January 1,
2025
$12,445,630
$518,764,623
$1,589,319,839
$34,754,800
$1,079,493,497
$3,234,778,389
Carrying amounts at June 30, 2025
$12,117,476
$703,646,630
$1,586,660,094
$41,213,513
$1,041,315,331
$3,384,953,044
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.
- 22 -
The Company assesses impairment and recognizes impairment losses or reversals based on the assets'
usage status and expected usage plan. These are recorded under other operating income and expenses. For
details regarding the impairment losses recognized in the first quarter of 2025 due to earthquake damage
that rendered certain assets unusable, please refer to Note 34.
Information about capitalized interest is set out in Note 22.
15. LEASE ARRANGEMENTS
a.Right-of-use assets
June 30,
2026
December 31,
2025
June 30,
2025
Carrying amounts
Land
$50,633,119
$39,873,344
$39,936,860
Buildings
4,229,012
4,005,321
3,874,921
Office equipment
33,074
40,245
46,137
$54,895,205
$43,918,910
$43,857,918
Six Months Ended June 30
2026
2025
Additions to right-of-use assets
$14,020,217
$6,147,227
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Depreciation of right-of-use
assets
Land
$884,030
$728,775
$1,723,303
$1,419,125
Buildings
409,236
287,408
796,959
565,045
Office equipment
5,686
5,982
11,379
11,406
$1,298,952
$1,022,165
$2,531,641
$1,995,576
b.Lease liabilities
June 30,
2026
December 31,
2025
June 30,
2025
Carrying amounts
Current portion (classified under accrued expenses
and other current liabilities)
$3,606,345
$3,833,015
$3,723,801
Noncurrent portion
33,276,056
31,594,992
31,363,997
$36,882,401
$35,428,007
$35,087,798
- 23 -
Ranges of discount rates for lease liabilities are as follows:
June 30,
2026
December 31,
2025
June 30,
2025
Land
0.39%~3.50%
0.39%~3.50%
0.39%~3.30%
Buildings
0.40%~6.44%
0.40%~6.52%
0.40%~6.52%
Office equipment
0.54%~7.13%
0.28%~6.46%
0.28%~6.46%
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
50 years. The lease contracts for land located in the R.O.C. specify that lease payments will be adjusted
every 2 years on the basis of changes in announced land value prices. The Company does not have
purchase options to acquire the leasehold land and buildings at the end of the lease terms.
d.Other lease information
Six Months Ended June 30
2026
2025
Total cash outflow for leases
$11,953,537
$2,018,618
16. INTANGIBLE ASSETS
Goodwill
Technology
License Fees
Software and
System Design
Costs
Patent and
Others
Total
Cost
Balance at January 1, 2026
$5,891,082
$29,702,421
$58,451,384
$13,337,085
$107,381,972
Additions
-
591,864
2,871,412
116,521
3,579,797
Disposals or retirements
-
-
(438,311)
(61,777)
(500,088)
Effect of exchange rate changes
64,363
(1,234)
17,014
3,614
83,757
Balance at June 30, 2026
$5,955,445
$30,293,051
$60,901,499
$13,395,443
$110,545,438
Accumulated amortization and
  impairment
Balance at January 1, 2026
$-
$24,513,166
$45,879,452
$12,036,739
$82,429,357
Additions
-
684,502
3,551,135
211,510
4,447,147
Disposals or retirements
-
-
(427,862)
-
(427,862)
Effect of exchange rate changes
-
(1,233)
20,227
2,974
21,968
Balance at June 30, 2026
$-
$25,196,435
$49,022,952
$12,251,223
$86,470,610
Carrying amounts at January 1, 2026
$5,891,082
$5,189,255
$12,571,932
$1,300,346
$24,952,615
Carrying amounts at June 30, 2026
$5,955,445
$5,096,616
$11,878,547
$1,144,220
$24,074,828
(Continued)
- 24 -
Goodwill
Technology
License Fees
Software and
System Design
Costs
Patent and
Others
Total
Cost
Balance at January 1, 2025
$6,070,864
$28,566,518
$53,279,044
$13,133,519
$101,049,945
Additions
-
88,794
2,848,922
295,787
3,233,503
Disposals or retirements
-
(82,471)
(157,972)
(53,741)
(294,184)
Effect of exchange rate changes
(490,735)
(3,562)
(131,973)
(14,418)
(640,688)
Balance at June 30, 2025
$5,580,129
$28,569,279
$55,838,021
$13,361,147
$103,348,576
Accumulated amortization and
  impairment
Balance at January 1, 2025
$-
$23,186,748
$40,100,685
$11,479,992
$74,767,425
Additions
-
731,359
3,104,746
348,692
4,184,797
Disposals or retirements
-
(82,471)
(155,901)
-
(238,372)
Effect of exchange rate changes
-
(3,562)
(63,193)
(5,813)
(72,568)
Balance at June 30, 2025
$-
$23,832,074
$42,986,337
$11,822,871
$78,641,282
Carrying amounts at January 1, 2025
$6,070,864
$5,379,770
$13,178,359
$1,653,527
$26,282,520
Carrying amounts  at June 30, 2025
$5,580,129
$4,737,205
$12,851,684
$1,538,276
$24,707,294
(Concluded)
The Company’s goodwill has been tested for impairment at the end of the annual reporting period and the
recoverable amount is determined based on the value in use. The value in use was calculated based on the
cash flow forecast from the financial budgets covering the future five-year period, and the Company used
annual discount rate of 9.5% in its test of impairment as of December 31, 2025 to reflect the relevant
specific risk in the cash-generating unit.
17. BONDS PAYABLE
June 30,
2026
December 31,
2025
June 30,
2025
Domestic unsecured bonds
$554,836,000
$538,388,000
$491,208,000
Overseas unsecured bonds
427,701,200
455,938,000
451,887,000
Less: Discounts on bonds payable
(2,173,605)
(2,292,509)
(2,269,558)
Less: Current portion
(165,326,879)
(135,805,988)
(92,290,586)
$815,036,716
$856,227,503
$848,534,856
The Company issued domestic unsecured bonds for the six months ended June 30, 2026. The major terms
are as follows:
- 25 -
Issuance
Tranche
Issuance Period
Total Issue
Amount
Coupon
Rate
Repayment and
Interest Payment
NT$ unsecured
bonds
115-1
A
March 2026 to
March 2031
$12,600,000
1.72%
Bullet repayment;
interest payable
annually
B
March 2026 to
March 2036
4,600,000
1.78%
The same as above
115-2
(Green bond)
A
May 2026 to May
2031
13,700,000
1.80%
The same as above
B
May 2026 to May
2036
4,700,000
1.85%
The same as above
The Company issued domestic unsecured bonds during the period from July 1, 2026 to August 11, 2026,
the major terms are as follows:
Issuance
Tranche
Issuance Period
Total Issue
Amount
Coupon
Rate
Repayment and
Interest Payment
NT$ unsecured
bonds
115-3
(Green bond)
A
July 2026 to July
2031
$14,000,000
2.03%
Bullet repayment;
interest payable
annually
B
July 2026 to July
2036
4,500,000
2.10%
The same as above
The major terms of overseas unsecured bonds are as follows:
Issuance Period
Total Issue Amount
(US$ in Thousands)
Coupon
Rate
Repayment and Interest Payment
September 2020
to September
2025
US$1,000,000
0.75%
Bullet repayment (callable at any time, in
whole or in part, at the relevant redemption
price according to relevant agreements);
interest payable semi-annually
September 2020
to September
2027
750,000
1.00%
The same as above
September 2020
to September
2030
1,250,000
1.375%
The same as above
April 2021 to
April 2026
1,100,000
1.25%
The same as above
(Continued)
- 26 -
Issuance Period
Total Issue Amount
(US$ in Thousands)
Coupon
Rate
Repayment and Interest Payment
April 2021 to
April 2028
900,000
1.75%
Bullet repayment (callable at any time, in
whole or in part, at the relevant redemption
price according to relevant agreements);
interest payable semi-annually
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
(Concluded)
18. LONG-TERM BANK LOANS
June 30,
2026
December 31,
2025
June 30,
2025
NT$ unsecured loans
$1,049,444
$1,700,833
$2,972,500
JPY unsecured loans
50,260,500
39,253,500
34,087,300
Less: Discounts on government grants
-
(115)
(499)
Less: Current portion
(2,082,986)
(1,119,722)
(1,923,055)
$49,226,958
$39,834,496
$35,136,246
Loan content
Annual interest rate
1.05%~1.78%
0.79%~1.78%
0.78%~1.78%
Maturity date
Due by December
2030
Due by December
2030
Due by December
2030
The long-term bank loans of the Company are used for plants setup, procurement of machinery and
equipment, and operating capital. The partial long-term bank loans are with preferential interest rates
subsidized by the government, and the loans are used to fund capital expenditure qualifying for the subsidy.
- 27 -
The Company is required to maintain certain financial covenants during the borrowing period, including
the annual equity of the subsidiary receiving the loan not to fall below a specific amount; its debt-to-equity
ratio must not exceed a certain ratio; and the ratio of the Company’s annual debt to earnings before interest,
taxes, depreciation, and amortization (EBITDA) not to exceed a certain multiple.
19. EQUITY
a.Capital stock
June 30,
2026
December 31,
2025
June 30,
2025
Authorized shares (in thousands)
28,050,000
28,050,000
28,050,000
Authorized capital
$280,500,000
$280,500,000
$280,500,000
Issued and paid shares (in thousands)
25,932,370
25,932,524
25,932,615
Issued capital
$259,323,701
$259,325,245
$259,326,155
The par value of issued common shares is NT$10 per share. A holder of common shares has one vote
for each common share and is entitled to receive dividends.
The authorized shares include 500,000 thousand shares allocated for the exercise of employee stock
options.
During the first quarter of 2026, the third quarter of 2025 and the first quarter of 2025, TSMC reclaimed
154 thousand, 91 thousand and 118 thousand employee restricted shares, respectively, that were
unvested. On May 12, 2026, November 11, 2025 and May 13, 2025, TSMC’s Board of Directors
resolved to cancel the aforementioned shares. Subsequently, TSMC completed the registration for share
cancellation. Refer to Note 26 for information on RSAs.
As of June 30, 2026, TSMC’s total issued and outstanding ADSs were 1,062,690 thousand units,
representing 5,313,451 thousand common shares.
b.Capital surplus
The categories of uses and the sources of capital surplus based on regulations were as follows:
June 30,
2026
December 31,
2025
June 30,
2025
May be used to offset a deficit, distributed as
cash dividends, or transferred to share
capital
Additional paid-in capital
$26,726,501
$26,343,550
$25,586,161
From merger
22,800,434
22,800,434
22,800,434
From convertible bonds
8,891,257
8,891,257
8,891,257
From difference between the consideration
received and the carrying amount of the
subsidiaries’ net assets during actual
disposal
8,411,566
8,411,566
8,411,566
Donations - donated by shareholders
11,280
11,280
11,275
(Continued)
- 28 -
June 30,
2026
December 31,
2025
June 30,
2025
May only be used to offset a deficit
From share of changes in equities of
subsidiaries
$4,093,999
$4,093,999
$4,093,849
From share of changes in equities of
associates
271,072
1,365,250
1,251,828
Donations - unclaimed dividend
105,684
105,684
78,976
May not be used for any purpose
Employee restricted shares
979,046
1,422,581
2,200,919
$72,290,839
$73,445,601
$73,326,265
(Concluded)
If such capital surplus is distributed as transferred to share capital, it is limited to a certain percentage of
the Company’s paid-in capital each year.
c.Retained earnings and dividend policy
TSMC’s Articles of Incorporation provide that, earnings distribution may be made on a quarterly basis
after the close of each quarter. Distribution of earnings by way of cash dividends should be approved by
TSMC’s Board of Directors and reported to TSMC’s shareholders in its meeting. When allocating
earnings, TSMC shall first estimate and reserve the taxes to be paid, offset its losses, set aside a legal
capital reserve at 10% of the remaining earnings (until the accumulated legal capital reserve equals
TSMC’s paid-in capital), then set aside a special capital reserve in accordance with relevant laws or
regulations or as requested by the authorities in charge. Any balance left over shall be allocated
according to relevant laws and TSMC’s Articles of Incorporation.
TSMC’s Articles of Incorporation also provide that profits of TSMC may be distributed by way of cash
dividend and/or stock dividend. However, distribution of earnings shall be made preferably by way of
cash dividend. Distribution of earnings may also be made by way of stock dividend, provided that the
ratio for stock dividend shall not exceed 50% of the total distribution.
The legal capital reserve may be used to offset a deficit, or be distributed as dividends in cash or stocks
for the portion in excess of 25% of the paid-in capital if the Company incurs no loss.
Pursuant to existing regulations, the Company is required to set aside an additional special capital
reserve equivalent to the net debit balance of the other components of stockholders’ equity, such as the
accumulated balance of the foreign currency translation reserve, the effectiveness of hedges of net
investments in foreign operations, unrealized valuation gain or loss from fair value through other
comprehensive income financial assets, gain or loss from changes in fair value of hedging instruments
in cash flow hedges, etc. For the subsequent decrease in the deduction amount to stockholders’ equity,
any special reserve appropriated may be reversed to the extent that the net debit balance reverses.
- 29 -
The appropriations of 2026, 2025 and 2024 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:
Third Quarter
Second Quarter
First Quarter
Resolution Date of TSMC’s
of 2026
of 2026
of 2026
Board of Directors in its
November 11,
August 11,
May 12,
meeting
2026
2026
2026
Special capital reserve
$-
$-
$(16,199,411)
Cash dividends to shareholders
$-
$181,526,591
$181,526,591
Cash dividends per share (NT$)
$7.00
$7.00
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Resolution Date of TSMC’s
of 2025
of 2025
of 2025
of 2025
Board of Directors in its
February 10,
November 11,
August 12,
May 13,
meeting
2026
2025
2025
2025
Special capital reserve
$(71,085,085)
$(94,270,352)
$181,554,848
$-
Cash dividends to shareholders
$155,595,147
$155,595,147
$129,662,913
$129,663,078
Cash dividends per share (NT$)
$6.00
$6.00
$5.00
$5.00
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Resolution Date of TSMC’s
of 2024
of 2024
of 2024
of 2024
Board of Directors in its
February 12,
November 12,
August 13,
May 10,
meeting
2025
2024
2024
2024
Special capital reserve
$-
$-
$-
$(28,020,822)
Cash dividends to shareholders
$116,697,300
$116,697,300
$103,721,521
$103,734,517
Cash dividends per share (NT$)
$4.50
$4.50
$4.00
$4.00
The quarterly cash dividends per share is affected by the subsequent number of outstanding ordinary
shares, the information of the actual payout is available at the Market Observation Post System website.
d.Others
Changes in others were as follows:
Six Months Ended June 30, 2026
Foreign
Currency
Translation
Reserve
Unrealized
Gain (Loss) on
Financial
Assets at
FVTOCI
Gain (Loss) on
Hedging
Instruments
Unearned
Stock-Based
Employee
Compensation
Total
Balance, beginning of period
$(21,019,144)
$3,591,483
$1,228,250
$(477,001)
$(16,676,412)
Exchange differences arising on translation
of foreign operations
45,999,019
-
-
-
45,999,019
Gain (loss) on hedging instruments
designated as hedges of net investments
in foreign operations
(274,342)
-
-
-
(274,342)
Unrealized gain (loss) on financial assets at
FVTOCI
Equity instruments
-
28,421,434
-
-
28,421,434
Debt instruments
-
(2,027,323)
-
-
(2,027,323)
Disposal of investments in equity
instruments at FVTOCI
-
(5,774,189)
-
-
(5,774,189)
(Continued)
- 30 -
Six Months Ended June 30, 2026
Foreign
Currency
Translation
Reserve
Unrealized
Gain (Loss) on
Financial
Assets at
FVTOCI
Gain (Loss) on
Hedging
Instruments
Unearned
Stock-Based
Employee
Compensation
Total
Cumulative unrealized gain (loss) of debt
instruments at FVTOCI transferred to
profit or loss due to disposal
$-
$49,766
$-
$-
$49,766
Loss allowance adjustments from debt
instruments at FVTOCI
-
5,828
-
-
5,828
Gain (loss) arising on changes in the fair
value of hedging instruments and
hedged item affects profit or loss
-
-
(42,405)
-
(42,405)
Transferred to initial carrying amount of
hedged items
-
-
(460)
-
(460)
Share-based payment expenses recognized
-
-
-
245,093
245,093
Share of other comprehensive income
(loss) of associates
95,624
65,087
10,847
-
171,558
Other comprehensive income transferred to
profit or loss due to disposal of
investments accounted for using equity
method
(394,251)
-
-
(394,251)
Disposal of investments accounted for
using equity method
-
98,746
(11,367)
-
87,379
Balance, end of period
$24,406,906
$24,430,832
$1,184,865
$(231,908)
$49,790,695
(Concluded)
Six Months Ended June 30, 2025
Foreign
Currency
Translation
Reserve
Unrealized
Gain (Loss) on
Financial
Assets at
FVTOCI
Gain (Loss) on
Hedging
Instruments
Unearned
Stock-Based
Employee
Compensation
Total
Balance, beginning of period
$40,262,995
$(1,160,176)
$1,310,307
$(1,708,079)
$38,705,047
Exchange differences arising on translation
of foreign operations
(225,918,439)
-
-
-
(225,918,439)
Gain (loss) on hedging instruments
designated as hedges of net investments
in foreign operations
430,085
-
-
-
430,085
Unrealized gain (loss) on financial assets at
FVTOCI
Equity instruments
-
1,608,693
-
-
1,608,693
Debt instruments
-
2,798,417
-
-
2,798,417
Disposal of investments in equity
instruments at FVTOCI
-
(155,994)
-
-
(155,994)
Cumulative unrealized gain (loss) of debt
instruments at FVTOCI transferred to
profit or loss due to disposal
-
82,845
-
-
82,845
Loss allowance adjustments from debt
instruments at FVTOCI
-
(15,809)
-
-
(15,809)
Gain (loss) arising on changes in the fair
value of hedging instruments and
hedged item affects profit or loss
-
-
(72,203)
-
(72,203)
Transferred to initial carrying amount of
hedged items
-
-
9,246
-
9,246
Share-based payment expenses recognized
-
-
-
797,188
797,188
Share of other comprehensive income
(loss) of associates
(638,946)
(113,177)
17,309
-
(734,814)
Balance, end of period
$(185,864,305)
$3,044,799
$1,264,659
$(910,891)
$(182,465,738)
The aforementioned other equity includes the changes in other equities of TSMC and TSMC’s share of
its subsidiaries and associates.
- 31 -
20. NET REVENUE
a.Disaggregation of revenue from contracts with customers
Three Months Ended June 30
Six Months Ended June 30
Product
2026
2025
2026
2025
Wafer
$1,073,707,321
$795,434,048
$2,041,819,655
$1,509,462,975
Others
196,672,929
138,357,821
362,664,035
263,582,558
   
$1,270,380,250
$933,791,869
$2,404,483,690
$1,773,045,533
Three Months Ended June 30
Six Months Ended June 30
Geography
2026
2025
2026
2025
Taiwan
$79,315,268
$73,556,401
$164,712,217
$140,049,911
United States
970,894,218
694,211,968
1,818,632,487
1,326,650,754
China
76,730,473
87,328,812
162,572,350
149,551,163
Japan
45,441,332
35,426,165
87,147,314
71,183,847
Europe, the Middle East and
Africa
50,604,544
28,706,029
97,298,702
54,233,006
Others
47,394,415
14,562,494
74,120,620
31,376,852
$1,270,380,250
$933,791,869
$2,404,483,690
$1,773,045,533
The Company categorized the net revenue mainly based on the countries where the customers are
headquartered.
Three Months Ended June 30
Six Months Ended June 30
Platform
2026
2025
2026
2025
High Performance Computing
$830,369,159
$561,155,353
$1,525,112,948
$1,054,378,499
Smartphone
283,278,967
249,959,546
577,400,811
483,570,934
Internet of Things
64,054,205
44,298,398
125,644,708
83,021,588
Automotive
53,662,812
43,029,218
100,250,425
86,057,463
Digital Consumer Electronics
12,655,440
14,997,583
24,698,471
26,550,049
Others
26,359,667
20,351,771
51,376,327
39,467,000
   
$1,270,380,250
$933,791,869
$2,404,483,690
$1,773,045,533
- 32 -
Three Months Ended June 30
Six Months Ended June 30
Resolution
2026
2025
2026
2025
2-nanometer
$31,934,248
$-
$31,934,248
$-
3-nanometer
320,558,574
187,252,107
566,508,701
347,432,294
5-nanometer
350,112,503
289,669,221
701,309,302
544,077,476
7-nanometer
121,857,311
109,051,362
250,707,216
217,247,909
16-nanometer
68,235,397
56,317,381
132,571,277
103,654,228
20-nanometer
965,254
633,072
2,189,225
1,815,646
28-nanometer
67,295,079
54,583,088
136,733,694
107,326,777
40/45-nanometer
26,476,486
25,199,803
50,791,879
45,531,166
65-nanometer
38,817,949
27,827,833
77,080,049
54,378,791
90-nanometer-0.13 micron
17,692,493
17,878,199
34,637,728
35,285,959
0.15 micron and above
29,762,027
27,021,982
57,356,336
52,712,729
Wafer revenue
$1,073,707,321
$795,434,048
$2,041,819,655
$1,509,462,975
b.Contract balances
June 30,
2026
December 31,
2025
June 30,
2025
January 1,
2025
Contract liabilities (classified
under accrued expenses and
other current liabilities)
$55,852,048
$49,954,384
$56,799,375
$89,435,361
The changes in the contract liability balances primarily result from the timing difference between the
satisfaction of performance obligation and the customer’s payment.
The Company recognized revenue from the beginning balance of contract liability, which amounted to
NT$4,465,128 thousand and NT$9,527,546 thousand for the three months ended June 30, 2026 and
2025, respectively; and NT$16,171,871 thousand and NT$53,183,111 thousand for the six months
ended June 30, 2026 and 2025, respectively.
c.Temporary receipts from customers
June 30,
2026
December 31,
2025
June 30,
2025
Current portion (classified under accrued
expenses and other current liabilities)
$141,853,142
$146,559,275
$155,973,239
Noncurrent portion (classified under other
noncurrent liabilities)
92,372,004
43,298,936
65,942,034
$234,225,146
$189,858,211
$221,915,273
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.
- 33 -
21. INTEREST INCOME
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Interest income
Cash and cash equivalents
$24,087,280
$20,969,288
$47,268,887
$41,229,036
Financial assets at amortized cost
2,970,344
2,462,521
5,782,487
5,109,422
Financial assets at FVTOCI
2,039,504
1,760,189
4,031,323
3,712,852
Government grants receivable
and others
947,593
-
1,824,287
-
$30,044,721
$25,191,998
$58,906,984
$50,051,310
22.  FINANCE COSTS
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Interest expense
Corporate bonds
$5,214,781
$4,831,318
$10,305,539
$9,782,284
Others
304,844
219,646
592,416
410,901
Less: Capitalized interest under
property, plant and
equipment
(2,434,576)
(1,359,869)
(5,096,044)
(3,824,816)
$3,085,049
$3,691,095
$5,801,911
$6,368,369
Information about capitalized interest is as follows:
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Capitalization rate
1.44%-3.34%
1.32%-3.34%
1.44%-3.34%
1.32%-3.34%
23. OTHER GAINS AND LOSSES, NET
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Loss on disposal of financial assets,
net
Investments in debt instruments at
FVTOCI
$(24,352)
$(32,605)
$(49,766)
$(82,845)
Gain on disposal of investments
accounted for using equity
method, net
63,202,285
-
63,202,285
-
Loss on disposal of subsidiaries
-
-
-
(167,986)
(Continued)
- 34 -
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Gain (loss) on financial instruments
at FVTPL, net
$1,606,005
$11,143,784
$(3,508,729)
$8,052,726
Reversal of (provision for)
expected credit loss of financial
assets
Investments in debt instruments
at FVTOCI
(1,321)
4,372
(5,828)
15,809
Financial assets at amortized cost
(33,139)
12,488
(45,915)
9,411
Other gains, net
413,135
132,165
270,545
107,520
$65,162,613
$11,260,204
$59,862,592
$7,934,635
(Concluded)
24. INCOME TAX
a.Income tax expense recognized in profit or loss
Income tax expense consisted of the following:
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Current income tax expense
Current tax expense
recognized in the current
period
$163,899,258
$108,759,971
$281,054,812
$179,026,001
Income tax adjustments on
prior years
(10,641,402)
(14,158,210)
(10,606,746)
(13,878,570)
Other income tax adjustments
100,169
91,171
191,109
187,709
153,358,025
94,692,932
270,639,175
165,335,140
Deferred income tax expense
(benefit)
The origination and reversal
of temporary differences
(1,971,499)
1,857,930
(433,083)
3,128,206
Operating loss carryforward
4,262,637
(1,009,082)
441,454
(2,758,815)
2,291,138
848,848
8,371
369,391
Income tax expense recognized
in profit or loss
$155,649,163
$95,541,780
$270,647,546
$165,704,531
b.Income tax examination
The tax authorities have examined income tax returns of TSMC through 2024. All investment tax credit
adjustments assessed by the tax authorities have been recognized accordingly.
- 35 -
25. EARNINGS PER SHARE
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Basic EPS
$27.25
$15.36
$49.33
$29.31
Diluted EPS
$27.25
$15.36
$49.32
$29.30
EPS is computed as follows:
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Basic EPS
Net income available to common
shareholders of the parent
$706,561,938
$398,273,102
$1,279,041,690
$759,837,230
Weighted average number of
common shares outstanding
used in the computation of
basic EPS (in thousands)
25,930,549
25,928,255
25,930,160
25,927,526
Basic EPS (in dollars)
$27.25
$15.36
$49.33
$29.31
Diluted EPS
Net income available to common
shareholders of the parent
$706,561,938
$398,273,102
$1,279,041,690
$759,837,230
Weighted average number of
common shares outstanding
used in the computation of
basic EPS (in thousands)
25,930,549
25,928,255
25,930,160
25,927,526
Effects of all dilutive potential
common shares (in thousands)
1,222
622
1,384
1,245
Weighted average number of
common shares used in the
computation of diluted EPS (in
thousands)
25,931,771
25,928,877
25,931,544
25,928,771
Diluted EPS (in dollars)
$27.25
$15.36
$49.32
$29.30
26. SHARE-BASED PAYMENT ARRANGEMENTS
a.Equity-settled share-based payment- RSAs
The RSAs in each year are as follows:
2024 RSAs
2023 RSAs
2022 RSAs
Resolution Date of TSMC’s shareholders in its meeting
June 4, 2024
June 6, 2023
June 8, 2022
Resolution Date of TSMC’s Board of Directors in its
meeting
August 13, 2024
February 6, 2024
February 14, 2023
Issuance of stocks (in thousands)
2,353
2,960
2,110
Available for issuance (in thousands)
1,832
-
-
Eligible employees
Executive officers
Executive officers
Executive officers
Grant date/Issuance date
September 1, 2024
March 1, 2024
March 1, 2023
- 36 -
Vesting conditions of the aforementioned arrangement are as follow:
1)The RSAs granted to eligible employees can only be vested if
•the employee remains employed by the Company on the last date of each vesting period;
•during the vesting period, the employee may not breach any agreement with the Company or
violate the Company’s work rules; and
•certain employee performance metrics and TSMC’s business performance metrics are met.
2)The maximum percentage of granted RSAs that may be vested each year shall be as follows: one-
year anniversary of the grant: 50%; two-year anniversary of the grant: 25%; and three-year
anniversary of the grant: 25%; provided that the actual percentage and number of the RSAs to be
vested in each year will be calculated based on the achievement of TSMC’s business performance
metrics.
3)For eligible executive officers of TSMC: The maximum number of RSAs that may be vested in
each year will be set as 110%, among which 100% will be subject to a calculation based on
TSMC’s relative Total Shareholder Return (“TSR”, including capital gains and dividends)
achievement to determine the number of RSAs to be vested; this number will be further subject to a
modifier to increase or decrease up to 10% based on the Compensation and People Development
Committee’s evaluation of TSMC’s Environmental, Social, and Governance (“ESG”)
achievements. The number of shares so calculated should be rounded down to the nearest integral.
TSMC’s TSR relative to the
TSR of S&P 500 IT Index
Ratio of Shares to be Vested
Above the Index by X percentage points
50% + X * 2.5%, with the maximum of 100%
Equal to the Index
50%
Below the Index by X percentage points
50% - X * 2.5%, with the minimum of 0%
4)Restrictions imposed on the employees’ rights in the RSAs before the vesting conditions are
fulfilled:
•During each vesting period, no employee granted RSAs, except for inheritance, may sell,
pledge, transfer, give to another person, create any encumbrance on, or otherwise dispose of,
any shares under the unvested RSAs.
•Before the vesting conditions are fulfilled, the attendance, proposal rights, speech rights, voting
rights and etc. shall be exercised by the engaged trustee/custodian on the employee’s behalf.
Any other shareholder rights including but not limited to the entitlement to any distribution
regarding 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.
- 37 -
5)Details of granted RSAs in each year are as follows:
2024 RSAs
2023 RSAs
2022 RSAs
Number of Shares
(In Thousands)
Number of Shares
(In Thousands)
Number of Shares
(In Thousands)
Balance, beginning of period
1,160
1,480
527
Vested shares
-
(696)
(495)
Canceled shares
(41)
(81)
(32)
Balance, end of period
1,119
703
-
Weighted-average fair value of RSAs (in dollars)
$662.42
$364.43
$277.71
The RSAs in each year are measured at fair value at grant date by using the binomial tree approach.
Relevant information is as follows:
2024 RSAs
2023 RSAs
2022 RSAs
September 1, 2024
March 1, 2024
March 1, 2023
Stock price at measurement date (in dollars)
$944
$689
$511
Expected price volatility
25.51%-29.87%
24.77%-26.12%
29.34%-32.11%
Expected life
1-3 years
1-3 years
1-3 years
Risk-free interest rate
1.40%
1.16%
1.06%
Refer to Note 27 for the compensation costs of the RSAs recognized by TSMC.
b.Cash-settled share-based payment arrangements
The cash-settled share-based payment arrangements in each year are as follows:
2023 Plan
2022 Plan
Resolution Date of TSMC’s Board of
Directors in its meeting
February 6, 2024
February 14, 2023
Issuance of units (in thousands) (Note)
550
400
Grant date
March 1, 2024
March 1, 2023
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
binomial tree approach and will be measured at each reporting period until settlement. Relevant
information is as follows:
- 38 -
Six Months Ended June 30
2026
2025
2023 Plan
2023 Plan
2022 Plan
Stock price at measurement date (in dollars)
$2,340
$1,080
$1,080
Expected price volatility
24.34%-31.55%
25.92%-32.48%
25.92%-32.48%
Residual life
1 year
1-2 years
1 year
Risk-free interest rate
1.45%
1.33%
1.32%
Refer to Note 27 for the compensation costs of the cash-settled share-based payment recognized by
TSMC. As of June 30, 2026, December 31, 2025 and June 30, 2025, the liabilities under cash-settled
share-based payment arrangement amounted to NT$223,588 thousand, NT$330,836 thousand and
NT$117,847 thousand, respectively.
27. ADDITIONAL INFORMATION OF EXPENSES BY NATURE
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
a.Depreciation of property, plant
and equipment and right-of-use
assets
Recognized in cost of revenue
$183,848,441
$175,806,058
$335,219,243
$337,454,303
Recognized in operating
expenses
12,353,434
10,190,757
24,275,005
21,541,975
Recognized in other operating
income and expenses
26,978
10,452
47,210
15,916
$196,228,853
$186,007,267
$359,541,458
$359,012,194
b.Amortization of intangible
assets
Recognized in cost of revenue
$1,330,278
$1,321,247
$2,593,654
$2,731,976
Recognized in operating
expenses
979,037
729,398
1,853,493
1,452,821
$2,309,315
$2,050,645
$4,447,147
$4,184,797
c.Employee benefits expenses
Post-employment benefits
Defined contribution plans
$1,879,819
$1,661,208
$3,638,271
$3,275,890
Defined benefit plans
58,328
64,229
116,646
126,286
1,938,147
1,725,437
3,754,917
3,402,176
Share-based payments
Equity-settled
123,047
344,406
237,026
799,647
Cash-settled
73,075
17,627
360,249
87,589
196,122
362,033
597,275
887,236
Other employee benefits
125,808,414
93,369,582
243,886,330
179,467,144
$127,942,683
$95,457,052
$248,238,522
$183,756,556
(Continued)
- 39 -
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Employee benefits expense
summarized by function
Recognized in cost of
revenue
$77,105,984
$57,897,171
$149,006,058
$105,903,936
Recognized in operating
expenses
50,836,699
37,559,881
99,232,464
77,852,620
$127,942,683
$95,457,052
$248,238,522
$183,756,556
(Concluded)
According to TSMC’s Articles of Incorporation, TSMC shall allocate compensation to directors and profit
sharing bonus to employees of TSMC not more than 0.3% and not less than 1% of annual profits during the
period, respectively (among which not less than 30% as profit sharing bonuses to entry-level employees).
TSMC accrued profit sharing bonus to employees based on a percentage of net income before income tax,
profit sharing bonus to employees and compensation to directors during the period; compensation to
directors was expensed based on estimated amount payable. If there is a change in the proposed amounts
after the annual consolidated financial statements are authorized for issue, the differences are recorded as a
change in accounting estimate. Accrued profit sharing bonus to employees is illustrated below:
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Profit sharing bonus to employees
$35,998,500
$23,896,380
$70,347,290
$45,590,230
TSMC’s accrued profit sharing bonus to employees and compensation to directors 2025 and 2024 are
illustrated below:
Years Ended December 31
2025
2024
Profit sharing bonus to employees
$103,072,958
$70,296,283
Compensation to directors
$156,305
$358,989
There is no significant difference between the aforementioned amounts and the amounts charged against
earnings of 2025 and 2024, respectively.
The information about the appropriations of TSMC’s profit sharing bonus to employees and compensation
to directors is available at the Market Observation Post System website.
28. GOVERNMENT GRANTS
Subsidiaries such as TSMC Arizona, ESMC, JASM and TSMC Nanjing received subsidies from the
governments of the United States, Germany, Japan and China, respectively, for local plant setup and
operation, which were mainly used to subsidize the purchase costs of property, plant and equipment, as
well as partial costs and expenses incurred from plant construction and production. For the six months
ended June 30, 2026 and 2025, the Company received a total of NT$590,398 thousand and NT$67,128,197
thousand as government grants, respectively.
- 40 -
The aforementioned subsidiaries have signed grant agreements with the local governments. The agreements
include the construction timelines and other conditions that must be complied with. TSMC Arizona is also
eligible to apply for a 25% investment credit for its qualified investments. Effective January 1, 2026, the
credit percentage has been increased to 35% of the qualified investment amount following amendments to
relevant regulations.
29. CASH FLOW INFORMATION
a.Non-cash transactions
Six Months Ended June 30
2026
2025
Additions of property, plant and equipment
$962,017,661
$578,422,202
Changes in other receivables
1,302,850
22,794,692
Exchange of assets
(268,919)
-
Changes in payables to contractors and equipment suppliers
(114,790,916)
18,923,594
Changes in accrued expenses and other current liabilities
3,600,114
11,767,889
Transferred to initial carrying amount of hedged items
-
(31,030)
Capitalized interests
(5,096,044)
(3,824,816)
Payments for acquisition of property, plant and equipment
$846,764,746
$628,052,531
b.Reconciliation of liabilities arising from financing activities
Non-cash Changes
Balance as of
January 1,
2026
Financing Cash
Flow
Foreign
Exchange
Movement
Other Changes
(Note)
Balance as of 
June 30,
2026
Bonds payable
$992,033,491
$(19,297,548)
$7,443,111
$184,541
$980,363,595
Non-cash Changes
Balance as of
January 1,
2025
Financing Cash
Flow
Foreign
Exchange
Movement
Other Changes
(Note)
Balance as of 
June 30,
2025
Bonds payable
$983,752,385
$19,865,180
$(62,988,983)
$196,860
$940,825,442
Note:Other changes include amortization of bonds payable.
- 41 -
30. FINANCIAL INSTRUMENTS
a.Categories of financial instruments
June 30,
2026
December 31,
2025
June 30,
2025
Financial assets
FVTPL
$16,006,661
$15,132,328
$15,597,401
FVTOCI (Note 1)
291,400,887
192,184,953
178,610,815
Amortized cost (Note 2)
3,991,113,420
3,368,760,773
2,888,647,577
$4,298,520,968
$3,576,078,054
$3,082,855,793
Financial liabilities
FVTPL
$2,452,333
$3,083,883
$220,702
Hedging financial liabilities
2,563
817
2,384
Amortized cost (Note 3)
2,233,981,763
1,974,710,221
1,923,984,698
$2,236,436,659
$1,977,794,921
$1,924,207,784
Note 1:Including notes and accounts receivable (net), equity and debt investments.
Note 2:Including cash and cash equivalents, financial assets at amortized cost, notes and accounts
receivable (including related parties), other receivables from related parties, other financial
assets, refundable deposits and temporary payments (including those classified under other
noncurrent assets).
Note 3:Including accounts payable (including related parties), payables to contractors and equipment
suppliers, cash dividends payable, accrued expenses and other current liabilities, bonds
payable, long-term bank loans, guarantee deposits and other noncurrent liabilities.
b.Financial risk management objectives
The Company manages its exposure to foreign currency risk, interest rate risk, equity price risk, credit
risk and liquidity risk with the objective to reduce the potentially adverse effects the market
uncertainties may have on its financial performance.
The plans for material treasury activities are reviewed by the Audit and Risk Committee and/or Board
of Directors in accordance with procedures required by relevant regulations or internal controls. During
the implementation of such plans, the Company must comply with certain treasury procedures that
provide guiding principles for overall financial risk management and segregation of duties.
c.Market risk
The Company is exposed to the financial market risks, primarily changes in foreign currency exchange
rates, interest rates and equity prices. A portion of these risks is hedged.
Foreign currency risk
Substantially all the Company’s sales are denominated in U.S. dollars and over half of its capital
expenditures are denominated in currencies other than NT dollars, primarily in U.S. dollars, Japanese
yen and Euros. As a result, any significant fluctuations to its disadvantage in the exchange rates of NT
- 42 -
dollar against such currencies, in particular a weakening of U.S. dollar against NT dollar, would have
an adverse impact on the revenue and operating profit as expressed in NT dollars. The Company uses
foreign currency derivative contracts, such as currency forwards or currency swaps, and non-derivative
financial instruments, such as foreign currency bank loans and bank deposits, to protect against
currency exchange rate risks associated with non-NT dollar-denominated monetary assets and
liabilities, net investments in foreign operations, and certain forecasted transactions. These hedges
reduce, but do not entirely eliminate, the effect of foreign currency exchange rate movements on the
assets and liabilities.
Based on a sensitivity analysis performed on the Company’s total monetary assets and liabilities for the
six months ended June 30, 2026 and 2025, a hypothetical adverse foreign currency exchange rate
change of 10% would have decreased its net income by NT$1,429,244 thousand and NT$5,619,499
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 majority of the Company’s fixed income investments are fixed-rate securities, which are classified
as financial assets at FVTOCI or at amortized cost. For those fixed income investments classified as
financial assets at FVTOCI, changes in their fair value are recognized through other comprehensive
income; for those classified as financial assets at amortized cost, changes in their fair value are not
reflected in the carrying amount. Both classifications recognized in profit or loss if the assets are sold.
Based on a sensitivity analysis performed on the Company’s fixed income investments at the end of the
reporting period, interest rates increase of 100 basis points (1.00%) across all maturities would have
decreased the Company’s other comprehensive income by NT$4,515,149 thousand and NT$3,865,424
thousand for the six months ended June 30, 2026 and 2025, respectively.
The majority of the Company’s debt is fixed-rate and measured at amortized cost and as such, changes
in interest rates would not affect future cash flows or the carrying amount.
The Company has entered and may in the future enter into interest rate derivatives to partially hedge the
interest rate risk on its fixed income investments and anticipated debt issuance. However, these hedges
can offset only a limited portion of the financial impact from movements in interest rates.
Other price risk
The Company is exposed to convertible preferred stocks, equity instrument investments, and other
investments price risk arising from financial assets at FVTPL and FVTOCI.
Assuming a hypothetical decrease of 10% in prices of the investments mentioned above at the end of
the reporting period, the net income would have decreased by NT$1,262,423 thousand and
NT$1,106,520 thousand for the six months ended June 30, 2026 and 2025, respectively, and the other
comprehensive income would have decreased by NT$7,252,177 thousand and NT$1,031,714 thousand
for the six months ended June 30, 2026 and 2025, respectively.
d.Credit risk management
Credit risk refers to the risk that a counterparty may default on its contractual obligations resulting in
financial losses to the Company. The Company is exposed to credit risks from operating activities,
primarily accounts receivable, and from investing activities, primarily bank deposits, fixed-income
- 43 -
investments and other financial instruments. 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 June 30, 2026, December 31, 2025 and June 30, 2025, the Company’s ten largest customers
accounted for 84%, 84% and 83% of accounts receivable, respectively. The Company considers the
concentration of credit risk for the remaining accounts receivable not material.
Financial credit risk
The Company mitigates its financial credit risk by selecting counterparties with investment grade credit
ratings and by limiting the exposure to any single 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 single issuer. The Company assesses
whether there has been a significant increase in credit risk in the invested securities since initial
recognition by reviewing changes in external credit ratings, financial market conditions and material
information of the issuers.
The Company assesses the 12-month expected credit loss and lifetime expected credit loss based on the
probability of default and loss given default provided by external credit rating agencies. The current
credit risk assessment policies are as follows:
Category
Description
Basis for Recognizing
Expected Credit Loss
Expected
Credit Loss
Ratio
Performing
Credit rating is investment grade on
valuation date
12 months expected credit
loss
0-0.1%
Doubtful
Credit rating is non-investment grade
on valuation date
Lifetime expected credit
loss-not credit impaired
-
In default
Credit rating is CC or below on
valuation date
Lifetime expected credit
loss-credit impaired
-
Write-off
There is evidence indicating that the
debtor is in severe financial
difficulty and the Company has no
realistic prospect of recovery
Amount is written off
-
For the six months ended June 30, 2026 and 2025, the expected credit loss increased NT$54,892
thousand and decreased NT$43,136 thousand, respectively. The changes were mainly due to adjusted
investment portfolio and fluctuations in exchange rates.
e.Liquidity risk management
The objective of liquidity risk management is to ensure the Company has sufficient liquidity to fund its
business operations over the next 12 months. The Company manages its liquidity risk by maintaining
- 44 -
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
June 30, 2026
Non-derivative financial liabilities
Accounts payable (including related
parties)
$110,625,817
$-
$-
$-
$110,625,817
Payables to contractors and
equipment suppliers
290,850,560
-
-
-
290,850,560
Accrued expenses and other current
liabilities
362,537,091
-
-
-
362,537,091
Bonds payable
184,699,582
265,557,973
262,031,632
459,849,681
1,172,138,868
Long-term bank loans
4,084,168
18,715,107
30,895,569
-
53,694,844
Lease liabilities (including those
classified under accrued
expenses and other current
liabilities) (Note)
4,211,100
6,862,715
5,991,018
23,894,625
40,959,458
Others
-
87,346,861
4,890,624
7,841,849
100,079,334
957,008,318
378,482,656
303,808,843
491,586,155
2,130,885,972
Derivative financial instruments
Forward exchange contracts
Outflows
198,806,500
-
-
-
198,806,500
Inflows
(196,733,450)
-
-
-
(196,733,450)
2,073,050
-
-
-
2,073,050
$959,081,368
$378,482,656
$303,808,843
$491,586,155
$2,132,959,022
Less Than
1 Year
1-3 Years
3-5 Years
More Than
5 Years
Total
December 31, 2025
Non-derivative financial liabilities
Accounts payable (including related
parties)
$84,330,325
$-
$-
$-
$84,330,325
Payables to contractors and
equipment suppliers
177,730,306
-
-
-
177,730,306
Accrued expenses and other current
liabilities
344,034,962
-
-
-
344,034,962
Bonds payable
155,291,157
310,496,642
209,405,344
512,306,851
1,187,499,994
Long-term bank loans
1,530,435
11,349,870
29,477,805
-
42,358,110
Lease liabilities (including those
classified under accrued
expenses and other current
liabilities) (Note)
4,381,382
6,573,701
5,804,479
22,709,939
39,469,501
Others
-
35,208,665
6,060,461
8,333,478
49,602,604
767,298,567
363,628,878
250,748,089
543,350,268
1,925,025,802
Derivative financial instruments
Forward exchange contracts
Outflows
279,876,485
-
-
-
279,876,485
Inflows
(276,880,302)
-
-
-
(276,880,302)
2,996,183
-
-
-
2,996,183
$770,294,750
$363,628,878
$250,748,089
$543,350,268
$1,928,021,985
- 45 -
Less Than
1 Year
1-3 Years
3-5 Years
More Than
5 Years
Total
June 30, 2025
Non-derivative financial liabilities
Accounts payable (including related
parties)
$84,771,710
$-
$-
$-
$84,771,710
Payables to contractors and
equipment suppliers
161,416,417
-
-
-
161,416,417
Accrued expenses and other current
liabilities
380,758,339
-
-
-
380,758,339
Bonds payable
110,351,218
353,568,731
149,283,960
514,258,504
1,127,462,413
Long-term bank loans
2,263,986
5,439,391
22,578,388
8,106,360
38,388,125
Lease liabilities (including those
classified under accrued
expenses and other current
liabilities) (Note)
4,212,515
6,235,143
5,555,966
22,816,058
38,819,682
Others
-
57,576,074
5,633,693
8,555,432
71,765,199
743,774,185
422,819,339
183,052,007
553,736,354
1,903,381,885
Derivative financial instruments
Forward exchange contracts
Outflows
131,012,725
-
-
-
131,012,725
Inflows
(131,831,271)
-
-
-
(131,831,271)
(818,546)
-
-
-
(818,546)
$742,955,639
$422,819,339
$183,052,007
$553,736,354
$1,902,563,339
Note:Information about the maturity analysis for lease liabilities more than 5 years:
5-10 Years
10-15 Years
15-20 Years
More Than
20 Years
Total
June 30, 2026
Lease liabilities
$11,400,063
$7,846,043
$4,096,005
$552,514
$23,894,625
December 31, 2025
Lease liabilities
$10,974,203
$7,513,615
$4,002,476
$219,645
$22,709,939
June 30, 2025
Lease liabilities
$10,904,753
$7,502,665
$4,081,986
$326,654
$22,816,058
f.Fair value of financial instruments
1)Fair value measurements recognized in the consolidated balance sheets
Fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value
is observable:
•Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active
markets for identical assets or liabilities;
•Level 2 fair value measurements are those derived from inputs other than quoted prices
included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
•Level 3 fair value measurements are those derived from valuation techniques that include inputs
for the asset or liability that are not based on observable market data (unobservable inputs).
- 46 -
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:
June 30, 2026
Level 1
Level 2
Level 3
Total
Financial assets at FVTPL
Convertible preferred stocks
$-
$-
$13,813,964
$13,813,964
Mutual funds
-
-
1,966,322
1,966,322
Convertible bonds
-
-
223,426
223,426
Forward exchange contracts
-
2,949
-
2,949
$-
$2,949
$16,003,712
$16,006,661
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds
$-
$104,967,103
$-
$104,967,103
Agency mortgage-backed securities
-
50,118,652
-
50,118,652
Government bonds/Agency bonds
27,470,168
237,642
-
27,707,810
Asset-backed securities
-
7,888,500
-
7,888,500
Investments in equity instruments
Publicly traded stocks
79,117,839
-
-
79,117,839
Non-publicly traded equity
investments
-
-
11,534,379
11,534,379
Notes and accounts receivable, net
-
10,066,604
-
10,066,604
$106,588,007
$173,278,501
$11,534,379
$291,400,887
Financial liabilities at FVTPL
Forward exchange contracts
$-
$2,452,333
$-
$2,452,333
Hedging financial liabilities
Fair value hedges
Interest rate futures contracts
$2,563
$-
$-
$2,563
December 31, 2025
Level 1
Level 2
Level 3
Total
Financial assets at FVTPL
Convertible preferred stocks
$-
$-
$13,608,819
$13,608,819
Mutual funds
-
-
1,297,533
1,297,533
Simple agreement for future equity
-
-
125,776
125,776
Forward exchange contracts
-
100,200
-
100,200
$-
$100,200
$15,032,128
$15,132,328
(Continued)
- 47 -
December 31, 2025
Level 1
Level 2
Level 3
Total
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds
$-
$88,636,098
$-
$88,636,098
Agency mortgage-backed securities
-
49,150,771
-
49,150,771
Government bonds/Agency bonds
25,437,560
-
-
25,437,560
Asset-backed securities
-
8,512,188
-
8,512,188
Investments in equity instruments
Non-publicly traded equity
investments
-
-
8,797,170
8,797,170
Publicly traded stocks
3,956,073
-
-
3,956,073
Notes and accounts receivable, net
-
7,695,093
-
7,695,093
$29,393,633
$153,994,150
$8,797,170
$192,184,953
Financial liabilities at FVTPL
Forward exchange contracts
$-
$3,083,883
$-
$3,083,883
Hedging financial liabilities
Fair value hedges
Interest rate futures contracts
$817
$-
$-
$817
(Concluded)
June 30, 2025
Level 1
Level 2
Level 3
Total
Financial assets at FVTPL
Convertible preferred stocks
$-
$-
$12,617,717
$12,617,717
Forward exchange contracts
-
1,765,904
-
1,765,904
Mutual funds
-
-
1,097,164
1,097,164
Simple agreement for future equity
-
-
116,616
116,616
$-
$1,765,904
$13,831,497
$15,597,401
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds
$-
$80,137,883
$-
$80,137,883
Agency mortgage-backed securities
-
46,016,814
-
46,016,814
Government bonds/Agency bonds
23,072,157
100,934
-
23,173,091
Asset-backed securities
-
9,019,262
-
9,019,262
Investments in equity instruments
Non-publicly traded equity
investments
-
-
7,605,736
7,605,736
Publicly traded stocks
5,290,690
-
-
5,290,690
Notes and accounts receivable, net
-
7,367,339
-
7,367,339
$28,362,847
$142,642,232
$7,605,736
$178,610,815
(Continued)
- 48 -
June 30, 2025
Level 1
Level 2
Level 3
Total
Financial liabilities at FVTPL
Forward exchange contracts
$-
$220,702
$-
$220,702
Hedging financial liabilities
Fair value hedges
Interest rate futures contracts
$2,384
$-
$-
$2,384
(Concluded)
Reconciliation of Level 3 fair value measurements of financial assets
The financial assets measured at Level 3 fair value were financial assets at FVTPL and equity
investments classified as financial assets at FVTOCI. Reconciliations for the six months ended June
30, 2026 and 2025 are as follows:
Six Months Ended June 30
2026
2025
Balance, beginning of period
$23,829,298
$23,022,726
Additions
1,313,195
386,930
Recognized in profit or loss
301,612
204,315
Recognized in other comprehensive income or loss
2,297,453
327,837
Disposals and proceeds from return of capital of investments
(418,574)
(4,976)
Transfers out of level 3 (Note)
(158,005)
-
Effect of exchange rate changes
373,112
(2,499,599)
Balance, end of period
$27,538,091
$21,437,233
Note:The transfer from level 3 to level 1 is because quoted prices (unadjusted) in active markets
data became available for the equity investments.
Valuation techniques and assumptions used in Level 2 fair value measurement
The fair values of financial assets and financial liabilities are determined as follows:
•The fair values of debt investments designated at FVTOCI are determined by market prices
provided by third party pricing services, or measured using inputs that are observable either
directly or indirectly.
•The fair values of forward exchange 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.
- 49 -
Valuation techniques and assumptions used in Level 3 fair value measurement
The fair values of financial assets at FVTPL and non-publicly traded equity investments are mainly
determined by using the asset approach, income approach or market approach.
The asset approach takes into account the net asset value measured at the fair value. On June 30,
2026, December 31, 2025 and June 30, 2025, 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$72,498 thousand, NT$64,123 thousand and NT$55,189 thousand, respectively, if
discounts for lack of marketability increase by 1%.
The income approach utilizes discounted cash flows to determine the present value of the expected
future economic benefits that will be derived from the investment. On June 30, 2026, December 31,
2025 and June 30, 2025, the Company mainly uses unobservable inputs, which include expected
returns, discount rate of 9.4%, 8.9% and 9.0%, respectively, and discount for lack of marketability
of 20%. With other inputs remain equal, if discount rate increases by 1%, the fair value will
decrease by NT$1,486,895 thousand, NT$1,812,408 thousand and NT$510,947 thousand,
respectively; if discount for lack of marketability increases by 1%, the fair value will decrease by
NT$118,417 thousand, NT$133,626 thousand and NT$136,055 thousand, respectively.
For the remaining few investments, the market approach is used to arrive at their fair values, for
which the recent financing activities of investees, the market transaction prices of the similar
companies and market conditions are considered.
3)Fair value of financial instruments that are not measured at fair value
Except as detailed in the following table, the Company considers that the carrying amounts of
financial instruments in the consolidated financial statements that are not measured at fair value
approximate their fair values.
Fair value hierarchy
The table below sets out the fair value hierarchy for the Company’s financial assets and liabilities
which are not required to be measured at fair value:
June 30, 2026
Carrying
Fair Value
Amount
Level 1
Level 2
Total
Financial assets
Financial assets at amortized costs
Corporate bonds
$273,703,927
$-
$273,692,247
$273,692,247
Government bonds/Agency
bonds
4,282,693
4,286,912
-
4,286,912
Commercial paper
18,276,682
-
18,271,332
18,271,332
$296,263,302
$4,286,912
$291,963,579
$296,250,491
Financial liabilities
Financial liabilities at amortized
costs
Bonds payable
$980,363,595
$-
$925,119,959
$925,119,959
- 50 -
December 31, 2025
Carrying
Fair Value
Amount
Level 1
Level 2
Total
Financial assets
Financial assets at amortized costs
Corporate bonds
$231,239,832
$-
$232,259,166
$232,259,166
Government bonds/Agency
bonds
4,213,491
4,284,607
-
4,284,607
$235,453,323
$4,284,607
$232,259,166
$236,543,773
Financial liabilities
Financial liabilities at amortized
costs
Bonds payable
$992,033,491
$-
$939,475,287
$939,475,287
June 30, 2025
Carrying
Fair Value
Amount
Level 1
Level 2
Total
Financial assets
Financial assets at amortized
costs
Corporate bonds
$176,223,968
$-
$177,126,610
$177,126,610
Commercial paper
6,203,293
-
6,209,445
6,209,445
Government bonds/Agency
bonds
3,901,492
3,950,111
-
3,950,111
$186,328,753
$3,950,111
$183,336,055
$187,286,166
Financial liabilities
Financial liabilities at amortized
costs
Bonds payable
$940,825,442
$-
$876,591,412
$876,591,412
Valuation techniques and assumptions used in Level 2 fair value measurement
The fair values of financial assets and liabilities at amortized cost are determined by market prices
provided by third party pricing services, or measured using inputs that are observable either directly
or indirectly.
31. RELATED PARTY TRANSACTIONS
Intercompany balances and transactions between TSMC and its subsidiaries, which are related parties of
TSMC, have been eliminated upon consolidation; therefore, those items are not disclosed in this note. The
following is a summary of significant transactions between the Company and other related parties:
- 51 -
a.Related party name and categories
Related Party Name
Related Party Categories
GUC and its subsidiaries (GUC)
Associates
VIS and its subsidiaries (VIS)
Associates (Note)
SSMC
Associates
Xintec
Associates
TSMC Charity Foundation
Other related parties
TSMC Education and Culture Foundation
Other related parties
Note: VIS has ceased to be an associate since May 19, 2026. Please refer to Note 13 for the related
          assessment. The same basis also applies to the additional disclosures.
b.Net revenue
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Item
Related Party Categories
Sales revenue
Associates
$11,277,014
$6,490,996
$23,981,480
$14,227,468
c.Purchases
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Related Party Categories
Associates
$1,493,363
$1,226,904
$2,993,215
$2,289,320
d.Receivables from related parties
June 30,
2026
December 31,
2025
June 30,
2025
Item
Related Party Name
Receivables from related
parties
GUC
$3,640,053
$1,651,010
$1,047,087
VIS
1,409,539
945,224
1,128,563
Others
110,947
143,266
102,142
$5,160,539
$2,739,500
$2,277,792
Other receivables from
related parties
SSMC
$928,792
$307
$338
Xintec
280,221
-
280,221
VIS
-
267,808
2,287,413
$1,209,013
$268,115
$2,567,972
- 52 -
e.Payables to related parties
June 30,
2026
December 31,
2025
June 30,
2025
Item
Related Party Name
Payables to related parties
Xintec
$1,146,005
$1,298,672
$788,255
SSMC
494,694
374,088
361,668
Others
95,038
105,970
126,615
$1,735,737
$1,778,730
$1,276,538
f.Others
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Item
Related Party Categories
Manufacturing
expenses
Associates
$1,672,650
$1,215,870
$3,095,499
$2,278,294
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.
g.Compensation of key management personnel
The compensation to directors and other key management personnel were as follows:
Three Months Ended June 30
Six Months Ended June 30
2026
2025
2026
2025
Short-term employee benefits
$2,793,708
$2,197,290
$5,081,203
$3,638,569
Post-employment benefits
862
959
1,581
1,960
Share-based payments
92,065
338,000
170,816
790,154
$2,886,635
$2,536,249
$5,253,600
$4,430,683
The compensation to directors and other key management personnel were determined by the
Compensation and People Development Committee of TSMC in accordance with the individual
performance and market trends.
- 53 -
32. PLEDGED ASSETS
The Company provided negotiable certificates of deposit and time deposits recorded in other financial
assets as collateral mainly for court deposit and building lease agreements. As of June 30, 2026,
December 31, 2025 and June 30, 2025, the aforementioned other financial assets amounted to NT$381,814
thousand, NT$129,385 thousand and NT$120,669 thousand, respectively.
33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS
Significant contingent liabilities and unrecognized commitments of the Company as of the end of the
reporting period, excluding those disclosed in other notes, were as follows:
a.Under a technical cooperation agreement with Industrial Technology Research Institute, the R.O.C.
Government or its designee approved by TSMC can use up to 35% of TSMC’s capacity provided
TSMC’s outstanding commitments to its customers are not prejudiced. The term of this agreement is for
five years beginning from January 1, 1987 and is automatically renewed for successive periods of five
years unless otherwise terminated by either party with one year prior notice. As of the end of reporting
period, the R.O.C. Government did not invoke such right.
b.Under a Shareholders Agreement entered into with Philips and EDB Investments Pte Ltd. on March 30,
1999, the parties formed a joint venture company, SSMC, which is an integrated circuit foundry in
Singapore. TSMC’s equity interest in SSMC was 32%. Nevertheless, in September 2006, Philips spun-
off its semiconductor subsidiary which was renamed as NXP B.V. Further, TSMC and NXP B.V.
purchased all the SSMC shares owned by EDB Investments Pte Ltd. pro rata according to the
Shareholders Agreement on November 15, 2006. After the purchase, TSMC and NXP B.V. currently
own approximately 39% and 61% of the SSMC shares, respectively. TSMC and NXP B.V. are
required, in the aggregate, to purchase at least 70% of SSMC’s capacity, but TSMC alone is not
required to purchase more than 28% of the capacity. If any party defaults on the commitment and the
capacity utilization of SSMC falls below a specific percentage of its capacity, the defaulting party is
required to compensate SSMC for all related unavoidable costs. There was no default from the
aforementioned commitment as of the end of reporting period.
c.In February 2025, Longitude Licensing Ltd. and Marlin Semiconductor Limited (collectively, “Marlin”)
filed complaints with the U.S. International Trade Commission (“ITC”) and the U.S. District Court for
the Eastern District of Texas alleging that TSMC and its customers infringe five U.S. patents. The ITC
instituted an investigation on March 21, 2025 and the lawsuit in the Eastern District Court for Texas
was statutorily stayed on April 23, 2025 pending the ITC investigation. Marlin dropped 3 of the 5
asserted patents in the ITC investigation before the evidentiary hearing in February 2026. The ITC
investigation was terminated on August 6, 2026, following the parties' joint motion filed on July 13,
2026.
d.TSMC entered into long-term purchase agreements of materials and supplies, manufacturing services
and agreements of waste disposal with multiple suppliers. The relative minimum fulfillment quantity
and price are specified in the agreements.
e.TSMC entered into long-term purchase agreement of equipment and maintenance service. The relative
fulfillment period, quantity and price are specified in the agreement.
f.TSMC entered into long-term energy purchase agreements with multiple suppliers. The relative
fulfillment period, quantity and price are specified in the agreements.
g.Amounts available under unused letters of credit as of June 30, 2026, December 31, 2025  and June 30,
2025 were NT$1,077,232 thousand, NT$438,643 thousand and NT$435,852 thousand, respectively.
- 54 -
h.The Company entrusted financial institutions to provide performance guarantees mainly for import and
export of goods, lease agreement and apply for subsidy. As of June 30, 2026, December 31, 2025  and
June 30, 2025, the aforementioned guarantee amounted to NT$35,125,511 thousand, NT$23,375,215
thousand, and NT$16,695,014 thousand, respectively.
34. SIGNIFICANT LOSS FROM DISASTER
In January 2025, several earthquakes struck Taiwan. The resulting damage was mostly to inventories,
machinery and equipment. In the first quarter of 2025, the Company recognized related earthquake losses
to be approximately NT$5.3 billion, net of insurance claim. Such losses were primarily included in the cost
of revenue and other operating income and expenses in net amounts.
On April 3, 2024, an earthquake struck Taiwan. The resulting damage was mostly to inventories, plant
facilities and machinery and equipment. In the second quarter of 2024, the Company recognized related
earthquake losses to be approximately NT$3 billion, net of insurance claim. Such losses were primarily
included in the cost of revenue and other operating income and expenses in net amounts. The relevant
insurance claims were finalized in the second quarter of 2026. The cumulative net impact of the
earthquake, representing total losses net of insurance claims, resulted in a gain of approximately NT$4.3
billion.
35. EXCHANGE RATE INFORMATION OF FOREIGN-CURRENCY FINANCIAL ASSETS AND
LIABILITIES
The following information was summarized according to the foreign currencies other than the functional
currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into
the functional currency. The significant financial assets and liabilities denominated in foreign currencies
were as follows:
Foreign
Currencies
(In Thousands)
Exchange Rate
(Note)
Carrying
Amount
(In Thousands)
June 30, 2026
Financial assets
Monetary items
USD
$21,707,309
31.918
$692,853,878
EUR
2,654,898
36.489
96,874,562
JPY
198,453,684
0.1971
39,115,221
Financial liabilities
Monetary items
USD
15,806,554
31.918
504,513,586
EUR
2,488,826
36.489
90,814,783
JPY
191,712,415
0.1971
37,786,517
(Continued)
- 55 -
Foreign
Currencies
(In Thousands)
Exchange Rate
(Note)
Carrying
Amount
(In Thousands)
December 31, 2025
Financial assets
Monetary items
USD
$20,847,509
31.444
$655,529,057
EUR
1,110,573
37.003
41,094,543
JPY
132,541,455
0.2013
26,680,595
Financial liabilities
Monetary items
USD
12,688,419
31.444
398,974,654
EUR
1,016,157
37.003
37,600,861
JPY
131,018,646
0.2013
26,374,053
June 30, 2025
Financial assets
Monetary items
USD
16,150,439
29.154
470,849,904
EUR
1,553,439
34.215
53,150,932
JPY
141,178,705
0.2017
28,475,745
Financial liabilities
Monetary items
USD
14,372,499
29.154
419,015,840
EUR
1,419,584
34.215
48,571,078
JPY
131,844,170
0.2017
26,592,969
(Concluded)
Note:Except as otherwise noted, exchange rate represents the number of NT dollar for which one
foreign currency could be exchanged.
Please refer to the consolidated statements of comprehensive income for the total of realized and unrealized
foreign exchange gain and loss for the three months and the six months ended June 30, 2026 and 2025,
respectively. Since there were varieties of foreign currency transactions and functional currencies within
the subsidiaries of the Company, the Company was unable to disclose foreign exchange gain (loss) towards
each foreign currency with significant impact.
36. ADDITIONAL DISCLOSURES
Following are the additional disclosures required by the Securities and Futures Bureau for TSMC:
a.Financings provided: See Table 1 attached;
- 56 -
b.Endorsement/guarantee provided: See Table 2 attached;
c.Significant marketable securities held (excluding investments in subsidiaries and associates):  See Table
3 attached;
d.Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital:
See Table 4 attached;
e.Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital:
See Table 5 attached;
f.Others: The business relationship between the parent and the subsidiaries and significant transactions
between them: See Table 6 attached;
g.Names, locations, and related information of investees over which TSMC exercises significant
influence (excluding information on investment in mainland China): See Table 7 attached;
h.Information on investment in mainland China
1)The name of the investee in mainland China, the main businesses and products, its issued capital,
method of investment, information on inflow or outflow of capital, percentage of ownership,
income (losses) of the investee, share of profits/losses of investee, ending balance, amount received
as dividends from the investee, and the limitation on investee: See Table 8 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 6 attached.
37. OPERATING SEGMENTS INFORMATION
TSMC’s chief operating decision makers periodically review operating results, focusing on operating
income generated by foundry segment. Operating results are used for resource allocation and/or
performance assessment. As a result, the Company has only one operating segment, the foundry segment.
The foundry segment engages mainly in the manufacturing, sales, packaging, testing and computer-aided
design of integrated circuits and other semiconductor devices and the manufacturing of masks.
The basis for the measurement of income from operations is the same as that for the preparation of
financial statements. Please refer to the consolidated statements of comprehensive income for the related
segment revenue and operating results.
- 57 -
TABLE 1
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
FINANCINGS PROVIDED
FOR THE SIX MONTHS ENDED JUNE 30, 2026
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
No.
Financing
Company
Counterparty
Financial Statement
Account
Related
Party
Maximum
Balance for the
Period (Foreign
Currencies in
Thousands) (Note 3)
Ending Balance
(Foreign Currencies
in Thousands)
(Note 3)
Amount Actually
Drawn
(Foreign
Currencies in
Thousands)
Interest Rate
Nature for Financing
Transaction
Amounts
Reason for
Financing
Allowance for Bad
Debt
Collateral
Financing Limits
for Each
Borrowing
Company
(Notes 1 and 2)
Financing
Company’s Total
Financing Amount
Limits
(Notes 1 and 2)
Item
Value
1
TSMC China
TSMC Nanjing
Other receivables from
related parties
Yes
$15,972,180
$-
$-
-
The need for short-term
financing
$-
Operating capital
$-
-
$-
$134,102,630
$134,102,630
(RMB3,400,000) 
2
TSMC
Development
TSMC
Washington
Other receivables from
related parties
Yes
3,830,160
3,830,160
2,872,620
-
The need for short-term
financing
-
Operating capital
-
-
-
34,650,975
34,650,975
(US$ 120,000) 
(US$ 120,000) 
(US$ 90,000) 
Note 1:The aggregate amount available for lending to TSMC Nanjing from TSMC China and the aggregate amount of lending from TSMC China shall not exceed the net worth of TSMC China.
Note 2:The aggregate amount available for lending to TSMC Washington from TSMC Development and the aggregate amount of lending from TSMC Development shall not exceed the net worth of TSMC Development.
Note 3:The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.
- 58 -
TABLE 2
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE SIX MONTHS ENDED JUNE 30, 2026
(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
(Note 1)
Maximum
Balance
for the Period
(Foreign
Currencies in
Thousands)
(Note 2)
Ending Balance
(Foreign
Currencies in
Thousands)
(Note 2)
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
$2,573,007,334
$2,656,002
$2,656,002
$2,656,002
$-
0.04%
$2,573,007,334
Yes
No
No
(US$ 83,213)
(US$ 83,213)
(US$ 83,213)
TSMC Global
Subsidiary
2,573,007,334
207,467,000
172,357,200
172,357,200
-
2.68%
2,573,007,334
Yes
No
No
(US$ 6,500,000)
(US$ 5,400,000)
(US$ 5,400,000)
TSMC Arizona
Subsidiary
2,573,007,334
478,480,695
478,480,695
349,217,008
-
7.44%
2,573,007,334
Yes
No
No
(US$ 14,990,936)
(US$ 14,990,936)
(US$ 10,941,068)
Note 1:TSMC's individual endorsement/guarantee limits for TSMC North America, TSMC Global, and TSMC Arizona, as well as the total external endorsement/guarantee limits for TSMC and its subsidiaries, shall not exceed forty percent
(40%) of TSMC’s net worth.
Note 2:The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.
- 59 -
TABLE 3
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
MARKETABLE SECURITIES HELD
June 30, 2026
(Amounts in Thousands of New Taiwan Dollars)
Held Company Name
Marketable Securities Type and Name
Relationship with the Company
Financial Statement Account
June 30, 2026
Note
Shares/Units
(In Thousands)
Carrying Value
Percentage of
Ownership (%)
Fair Value
TSMC
Publicly traded stocks
VIS
-
Financial assets at fair value through
other comprehensive income
354,709
$76,617,214
19
$76,617,214
- 60 -
TABLE 4
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 2026
(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
$1,869,330,193
79
Net 30 days from invoice date
(Note)
-
-
$341,618,903
83
JASM
Subsidiary
Sales
1,228,688
-
Net 30 days from the end of the
month of when invoice is issued
-
-
727,010
-
TSMC Arizona
Subsidiary
Sales
167,791
-
Net 30 days from the end of the
month of when invoice is issued
-
-
42,023
-
GUC
Associate
Sales
4,181,760
-
Net 30 days from invoice date
-
-
578,210
-
VIS
Associate
Sales
966,094
-
Net 30 days from the end of the
month of when invoice is issued
-
-
1,409,539
-
SSMC
Associate
Sales
151,613
-
Net 30 days from the end of the
month of when invoice is issued
-
-
80,296
-
TSMC Arizona
Subsidiary
Purchases
84,003,238
43
Net 30 days from the end of the
month of when invoice is issued
-
-
(15,468,597)
12
TSMC Nanjing
Subsidiary
Purchases
42,332,694
22
Net 30 days from the end of the
month of when invoice is issued
-
-
(7,120,538)
6
TSMC China
Subsidiary
Purchases
13,916,721
7
Net 30 days from the end of the
month of when invoice is issued
-
-
(2,456,679)
2
TSMC Washington
Indirect subsidiary
Purchases
4,078,253
2
Net 30 days from the end of the
month of when invoice is issued
-
-
(824,830)
1
SSMC
Associate
Purchases
2,670,818
1
Net 30 days from the end of the
month of when invoice is issued
-
-
(494,694)
-
VIS
Associate
Purchases
322,397
-
Net 30 days from the end of the
month of when invoice is issued
-
-
-
-
TSMC North America
GUC
Associate of TSMC
Sales
18,573,443
1
Net 30 days from invoice date
-
-
3,061,843
1
(US$587,836)
(US$95,928)
VisEra Tech
Xintec
Associate of TSMC
Sales
108,570
2
Net 60 days from the end of the
month of when invoice is issued
-
-
30,651
3
Note:The tenor is determined by the payment terms granted to its clients by TSMC North America.
- 61 -
TABLE 5
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
June 30, 2026
(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
$345,736,055
27
$-
-
$-
$-
JASM
Subsidiary
728,553
Note 2
-
-
-
-
VisEra Tech
Subsidiary
645,492
Note 2
-
-
-
-
VIS
Associate
1,409,539
Note 2
-
-
-
-
SSMC
Associate
1,009,088
Note 2
-
-
-
-
GUC
Associate
578,210
21
-
-
-
-
Xintec
Associate
280,221
Note 2
-
-
-
-
TSMC North America
GUC
Associate of TSMC
3,061,843
21
-
-
-
-
(US$ 95,928)
TSMC Europe
TSMC
Parent company
105,456
Note 2
-
-
-
-
(EUR2,890)
TSMC 3DIC
TSMC
Parent company
137,912
Note 2
-
-
-
-
(JPY 699,706)
TSMC China
TSMC
Parent company
2,456,679
30
-
-
-
-
(RMB522,955)
TSMC Nanjing
TSMC
Parent company
7,120,538
21
-
-
-
-
(RMB1,515,752)
TSMC Arizona
TSMC
Parent company
15,468,597
27
-
-
-
-
(US$ 484,636)
TSMC Technology
TSMC
The ultimate parent of the Company
1,203,679
Note 2
-
-
-
-
(US$ 37,712)
TSMC Development
TSMC Washington
Subsidiary
2,872,620
Note 2
-
-
-
-
(US$ 90,000)
TSMC Washington
TSMC
The ultimate parent of the Company
824,830
31
-
-
-
-
(US$ 25,842)
Note 1:The calculation of turnover days excludes other receivables from related parties.
Note 2:The ending balance is primarily consisted of royalty receivables and other receivables, which is not applicable for the calculation of turnover days.
- 62 -
TABLE 6
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2026
(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
Sales revenue
$1,869,330,193
－
78%
Receivables from related parties
341,618,903
－
4%
Accrued expenses and other current liabilities
90,866,471
－
1%
Other noncurrent liabilities
70,388,765
－
1%
TSMC Nanjing
1
Purchases
42,332,694
－
2%
TSMC Arizona
1
Purchases
84,003,238
－
3%
Note 1:No. 1 represents the transactions from parent company to subsidiary.
Note 2:The sales prices and payment terms of intercompany sales are not significantly different from those to third parties. For other intercompany transactions, prices and terms are determined in accordance with mutual agreements.
- 63 -
TABLE 7
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA)
FOR THE SIX MONTHS ENDED JUNE 30, 2026
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Investor Company
Investee Company
Location
Main Businesses and Products
Original Investment Amount
Balance as of June 30, 2026
Net Income
(Losses) of the
Investee
(Foreign
Currencies in
Thousands)
Share of
Profits/Losses
of Investee
(Note 1)
(Foreign
Currencies in
Thousands)
Note
June 30,
2026
(Foreign
Currencies in
Thousands)
December 31,
2025
(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
$1,450,615,659
$1,178,213,709
46
100
$1,677,893,275
$33,132,695
$33,132,695
Subsidiary
TSMC Arizona
Phoenix, Arizona, U.S.A.
Manufacturing, sales and testing of integrated circuits
and other semiconductor devices
759,561,260
672,616,510
24,000
100
773,143,379
36,066,488
31,151,259
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
81,785,287
1,399,096
1,399,096
Subsidiary
JASM
Kumamoto, Japan
Manufacturing, sales and testing of integrated circuits
and other semiconductor devices
68,384,148
68,384,148
3,011
73
48,387,662
1,678,303
1,219,287
Subsidiary
ESMC
Dresden, Germany
Manufacturing, sales and testing of integrated circuits
and other semiconductor devices
40,800,257
38,221,667
823
70
41,000,885
(693,548)
(485,483)
Subsidiary
VisEra Tech
Hsinchu, Taiwan
Research, design, development, manufacturing, sales,
packaging and test of color filter
4,224,082
4,224,082
213,619
67
11,921,725
936,147
590,325
Subsidiary
SSMC
Singapore
Manufacturing and sales of integrated circuits and other
semiconductor devices
5,120,028
5,120,028
314
39
11,562,140
2,104,527
804,791
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
9,335,002
428,084
428,084
Subsidiary
Emerging Fund
Cayman Islands
Investing in technology start-up companies
3,632,533
3,014,372
-
99.9
8,684,735
153,355
153,202
Subsidiary
Xintec
Taoyuan, Taiwan
Wafer level chip size packaging and wafer level post
passivation interconnection service
1,988,317
1,988,317
111,282
41
4,530,659
780,742
320,171
Associate
GUC
Hsinchu, Taiwan
Researching, developing, manufacturing, testing and
marketing of integrated circuits
386,568
386,568
46,688
35
2,033,572
3,201,497
1,115,364
Associate
TSMC 3DIC
Yokohama, Japan
Engineering support activities
1,144,356
1,144,356
49
100
1,535,765
65,823
65,823
Subsidiary
TSMC Europe
Amsterdam, the Netherlands
Customer service and supporting activities
15,749
15,749
-
100
791,630
35,291
35,291
Subsidiary
TSMC JDC
Yokohama, Japan
Engineering support activities
410,680
410,680
15
100
449,206
25,350
25,350
Subsidiary
TSMC Japan
Yokohama, Japan
Customer service and supporting activities
83,760
83,760
6
100
130,838
4,457
4,458
Subsidiary
TSMC Korea
Seoul, Korea
Customer service and supporting activities
13,656
13,656
80
100
42,726
744
744
Subsidiary
VIS
Hsinchu, Taiwan
Manufacturing, sales, packaging, testing and computer-
aided design of integrated circuits and other
semiconductor devices and the manufacturing and
design service of masks
-
13,919,430
354,709
19
-
3,211,180
883,049
-
TSMC Partners
TSMC Development
Delaware, U.S.A.
Investing in companies involved in semiconductor
manufacturing
18,733,913
18,733,913
-
100
39,314,962
262,505
Note 2
Subsidiary
(US$ 586,939)
(US$ 586,939)
(US$ 1,231,749)
(US$ 8,306)
TSMC Technology
Delaware, U.S.A.
Engineering support activities
455,853
455,853
-
100
2,163,719
220,929
Note 2
Subsidiary
(US$ 14,282)
(US$ 14,282)
(US$ 67,790)
(US$ 6,992)
TSMC Canada
Ontario, Canada
Engineering support activities
73,411
73,411
2,300
100
490,300
29,628
Note 2
Subsidiary
(US$ 2,300)
(US$ 2,300)
(US$ 15,361)
(US$ 938)
TSMC
Development
TSMC Washington
Washington, U.S.A.
Manufacturing, sales and testing of integrated circuits
and other semiconductor devices
-
-
293,637
100
4,679,596
39,047
Note 2
Subsidiary
(US$ 146,613)
(US$ 1,234)
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.
- 64 -
TABLE 8
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
INFORMATION ON INVESTMENT IN MAINLAND CHINA
FOR THE SIX MONTHS ENDED JUNE 30, 2026
(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, 2026
(US$ in Thousands)
Investment Flows
Accumulated
Outflow of
Investment from
Taiwan as of
June 30, 2026
(US$ in
Thousands)
Net Income
(Losses) of the
Investee
Company
Percentage of
Ownership
Share of
Profits/Losses
Carrying
Amount
as of
Balance as of
June 30, 2026
Accumulated
Inward
Remittance of
Earnings as of
June 30, 2026
Outflow
(US$ in
Thousands)
Inflow
TSMC China
Manufacturing, sales,
testing and computer-
aided design of
integrated circuits and
other semiconductor
devices
$18,939,667
(Note 1)
$18,939,667
$-
$-
$18,939,667
$5,806,078
100%
$5,836,350
$133,901,613
$-
(RMB      4,502,080)
(US$        596,000)
(US$    596,000)
(Note 2)
TSMC Nanjing
Manufacturing, sales,
testing and computer-
aided design of
integrated circuits and
other semiconductor
devices
30,521,412
(Note 1)
30,521,412
-
-
30,521,412
14,977,998
100%
14,904,706
167,292,306
-
(RMB      6,650,119)
(US$      1,000,000)
(US$ 1,000,000)
(Note 2)
Accumulated Investment in Mainland China
as of June 30, 2026                                       
(US$ in Thousands)
Investment Amounts Authorized by
Investment Commission, MOEA
(US$ in Thousands)
Upper Limit on Investment
$    49,461,079
$  119,412,667
$  3,884,682,589
（US$ 1,596,000）
（US$ 3,596,000）
(Note 3)
Note 1:TSMC directly invested US$596,000 thousand in TSMC China and US$1,000,000 thousands in TSMC Nanjing.
Note 2:Amount was recognized based on the reviewed financial statements.
Note 3:The upper limit on investment in mainland China is determined by sixty percent (60%) of the Company's consolidated net worth.