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TSMC (NYSE: TSM) delivers higher Q1 2026 revenue, margins and EPS

Filing Impact
(Neutral)
Filing Sentiment
(Neutral)
Form Type
6-K

Rhea-AI Filing Summary

Taiwan Semiconductor Manufacturing Company reported a strong first quarter, with net revenue of NT$1,134,103,440 thousand, up from NT$839,253,664 thousand a year earlier. Gross margin improved to 66%, lifting income from operations to NT$658,966,142 thousand, or 58% of revenue.

Net income rose to NT$572,801,304 thousand from NT$360,732,661 thousand, and basic earnings per share increased to NT$22.08 from NT$13.95. Operating cash flow was NT$698,976,265 thousand, comfortably funding capital expenditures of NT$350,762,799 thousand. Total equity grew to NT$5,932,388,921 thousand as of March 31, 2026.

Positive

  • Strong revenue and profit growth: Q1 2026 net revenue rose to NT$1,134,103,440 thousand (from NT$839,253,664 thousand) and net income to NT$572,801,304 thousand (from NT$360,732,661 thousand), with basic EPS increasing to NT$22.08 from NT$13.95.
  • Margin expansion: Gross margin improved to 66% from 59%, and income from operations reached 58% of revenue versus 49% a year earlier, indicating better operating leverage and mix.
  • Robust cash generation versus capex: Net cash from operating activities of NT$698,976,265 thousand exceeded capital expenditures on property, plant and equipment of NT$350,762,799 thousand, supporting self-funded growth.
  • Stronger balance sheet: Total equity increased to NT$5,932,388,921 thousand as of March 31, 2026, up from NT$4,601,624,457 thousand a year earlier, reinforcing financial resilience.

Negative

  • None.

Insights

TSMC delivered strong Q1 growth with higher margins and robust cash generation.

TSMC grew net revenue to NT$1,134,103,440 thousand for the three months ended March 31, 2026, versus NT$839,253,664 thousand a year earlier. Gross profit expanded to NT$751,295,421 thousand as gross margin rose from 59% to 66%, reflecting richer mix and scale benefits.

Income from operations increased to NT$658,966,142 thousand, or 58% of revenue, compared with 49% previously. Net income attributable to shareholders reached NT$572,479,752 thousand, boosting basic EPS to NT$22.08. These figures indicate substantial profitability improvement on top of strong top-line growth.

Operating cash flow of NT$698,976,265 thousand comfortably exceeded capital expenditures of NT$350,762,799 thousand, supporting ongoing capacity investments. Total assets rose to NT$8,660,949,685 thousand and equity to NT$5,932,388,921 thousand. A quarterly cash dividend of NT$7.00 per share for the first quarter of 2026 was approved, signaling continued shareholder returns alongside expansion.

Net revenue NT$1,134,103,440 thousand Three months ended March 31, 2026
Net revenue prior-year NT$839,253,664 thousand Three months ended March 31, 2025
Net income NT$572,801,304 thousand Three months ended March 31, 2026
Basic EPS NT$22.08 Three months ended March 31, 2026
Operating cash flow NT$698,976,265 thousand Three months ended March 31, 2026
Capital expenditures (PPE cash outflow) NT$350,762,799 thousand Three months ended March 31, 2026
Total equity NT$5,932,388,921 thousand As of March 31, 2026
Total assets NT$8,660,949,685 thousand As of March 31, 2026
International Financial Reporting Standards financial
"pursuant to International Financial Reporting Standards adopted by ROC ("Taiwan-IFRSs")"
International Financial Reporting Standards are a common set of accounting rules used by companies in many countries to prepare and present their financial statements. They matter to investors because they make results easier to compare across borders — like using the same measuring tape — so investors can assess profitability, cash flow and risk more reliably and spot differences that come from business performance rather than differing accounting methods.
Interim Financial Reporting financial
"International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect"
fair value through other comprehensive income financial
"Financial assets at fair value through other comprehensive income (Note 8)"
An accounting classification for certain financial assets where changes in market value are recorded at current market prices, but unrealized gains and losses are sent to a separate equity “holding” area called other comprehensive income instead of appearing in reported profit or loss. Think of it like marking a painting to its gallery price and placing the paper gains in a locked box until the painting is sold; this reduces headline profit volatility but still affects the company’s net worth, so investors watch it to judge true economic exposure and future earnings when assets are sold.
hedging financial instruments financial
"HEDGING FINANCIAL INSTRUMENTS"
government grants financial
"received subsidies from the governments of the United States, Germany, Japan and China, respectively, for local plant setup and operation"
Total Shareholder Return financial
"TSMC’s relative Total Shareholder Return (“TSR”, including capital gains and dividends)"
Total shareholder return is the overall gain an investor gets from owning a stock, combining changes in the share price plus any cash payouts like dividends, and assuming those payouts are reinvested in more shares. Investors use it like a single score that shows the true return on their investment—similar to checking both the growth of a savings account and the interest earned—to compare how well different companies or investments perform over time.
Form 6-K: How Foreign Companies Report to the SEC →

1934 Act Registration No. 1-14700
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM 6-K
_____________________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2026
(Commission File Number: 001-14700)
_____________________________
Taiwan Semiconductor Manufacturing Company Limited
(Translation of Registrant’s Name Into English)
_____________________________
No. 8, Li-Hsin Road 6
Hsinchu Science Park
Hsinchu 300-096, Taiwan
Republic of China
(Address of Principal Executive Offices)
_____________________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F  x            Form 40-F  o
Indicate by check mark if the registrant is submitting the Form 6-K in papers as permitted by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in papers as permitted by Regulation S-T Rule 101(b)(7): o


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Taiwan Semiconductor Manufacturing Company Limited
Date:   May 15, 2026By   /s/ Wendell Huang
  Wendell Huang
   Senior Vice President and Chief Financial Officer


Exhibits
Exhibit NumberExhibit Description
99.1
Consolidated Financial Statements for the Three Months Ended March 31, 2026 and 2025 and Independent Auditors’ Review Report pursuant to International Financial Reporting Standards adopted by ROC ("Taiwan-IFRSs")



English Translation of Financial Statements Originally Issued in Chinese
Taiwan Semiconductor Manufacturing
Company Limited and Subsidiaries
Consolidated Financial Statements for the
Three Months Ended March 31, 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 March 31,
2026 and 2025, the related consolidated statements of comprehensive income, changes in equity and
cash flows for the three 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 March 31, 2026 and 2025, its consolidated
financial performance and its consolidated cash flows for the three months ended March 31, 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.
imagea.jpg
Deloitte & Touche
Taipei, Taiwan
Republic of China
May 12, 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)
March 31, 2026
December 31, 2025
March 31, 2025
Amount
%
Amount
%
Amount
%
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 6)
$3,035,637,228
35
$2,767,856,402
35
$2,394,804,250
34
Financial assets at fair value through profit or loss (Note 7)
5,408
-
100,200
-
54,369
-
Financial assets at fair value through other comprehensive income (Note 8)
194,897,632
2
175,692,690
2
189,928,311
3
Financial assets at amortized cost (Note 9)
153,049,764
2
124,945,519
2
118,298,376
2
Hedging financial assets (Note 10)
11,578
-
-
-
-
-
Notes and accounts receivable, net (Note 11)
357,742,772
4
279,051,553
3
241,682,270
3
Receivables from related parties (Note 31)
5,262,358
-
2,739,500
-
2,267,052
-
Other receivables from related parties (Note 31)
1,684,818
-
268,115
-
252
-
Inventories (Note 12)
311,453,459
4
288,109,485
4
293,387,615
4
Other financial assets (Notes 28, 29 and 32)
69,393,965
1
59,702,922
1
59,537,615
1
Other current assets (Notes 28 and 29)
136,373,194
1
118,664,431
1
45,703,772
-
Total current assets
4,265,512,176
49
3,817,130,817
48
3,345,663,882
47
NONCURRENT ASSETS
Financial assets at fair value through profit or loss (Note 7)
15,582,292
-
15,032,128
-
15,485,300
-
Financial assets at fair value through other comprehensive income (Note 8)
9,704,803
-
8,797,170
-
8,337,662
-
Financial assets at amortized cost (Note 9)
103,514,079
1
110,507,804
1
98,203,676
1
Investments accounted for using equity method (Note 13)
37,765,362
-
38,033,271
1
38,766,658
1
Property, plant and equipment (Notes 14 and 28)
3,954,679,396
46
3,691,840,916
47
3,400,806,154
48
Right-of-use assets (Note 15)
45,965,593
1
43,918,910
1
41,303,416
1
Intangible assets (Note 16)
24,728,596
-
24,952,615
-
25,450,343
-
Deferred income tax assets (Note 4)
65,327,650
1
62,940,253
1
66,666,777
1
Refundable deposits
4,356,387
-
4,242,553
-
5,583,601
-
Other noncurrent assets (Notes 28 and 29)
133,813,351
2
115,627,441
1
87,019,951
1
Total noncurrent assets
4,395,437,509
51
4,115,893,061
52
3,787,623,538
53
TOTAL
$8,660,949,685
100
$7,933,023,878
100
$7,133,287,420
100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Financial liabilities at fair value through profit or loss (Note 7)
$3,076,876
-
$3,083,883
-
$2,069,289
-
Hedging financial liabilities (Note 10)
-
-
817
-
3,462
-
Accounts payable
98,055,133
1
82,551,595
1
75,637,284
1
Payables to related parties (Note 31)
1,800,925
-
1,778,730
-
1,216,344
-
Salary and bonus payable
61,526,478
1
63,872,882
1
40,951,448
-
Accrued profit sharing bonus to employees and compensation to directors (Note 27)
137,670,588
1
103,355,278
1
92,607,250
1
Payables to contractors and equipment suppliers
243,926,716
3
177,730,306
2
199,087,045
3
Cash dividends payable (Note 19)
311,190,294
4
285,258,060
4
233,394,600
3
Income tax payable (Note 4)
318,839,088
4
202,337,872
2
217,332,999
3
Long-term liabilities - current portion (Notes 17, 18 and 29)
156,241,738
2
136,925,710
2
61,771,648
1
Accrued expenses and other current liabilities (Notes 15, 20 and  29)
381,925,612
4
401,124,156
5
475,731,629
7
Total current liabilities
1,714,253,448
20
1,458,019,289
18
1,399,802,998
19
NONCURRENT LIABILITIES
Bonds payable (Notes 17 and 29)
860,026,070
10
856,227,503
11
948,256,974
13
Long-term bank loans (Note 18)
40,991,672
1
39,834,496
1
38,726,925
1
Deferred income tax liabilities (Note 4)
3,881,756
-
3,888,795
-
3,968,524
-
Lease liabilities (Note 15)
33,509,235
-
31,594,992
-
29,121,821
-
Net defined benefit liability (Note 4)
5,940,382
-
6,012,286
-
5,378,586
-
Guarantee deposits
777,505
-
764,178
-
854,533
-
Others (Note 20)
69,180,696
1
75,887,056
1
105,552,602
2
Total noncurrent liabilities
1,014,307,316
12
1,014,209,306
13
1,131,859,965
16
Total liabilities
2,728,560,764
32
2,472,228,595
31
2,531,662,963
35
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)
73,665,831
1
73,445,601
1
73,307,187
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
16,199,411
-
87,284,496
1
-
-
Unappropriated earnings
5,193,142,174
60
4,705,070,165
59
3,851,130,370
54
5,520,488,484
64
5,103,501,560
64
4,162,277,269
58
Others (Notes 19 and 26)
37,482,236
-
(16,676,412)
-
69,251,969
1
Equity attributable to shareholders of the parent
5,890,960,252
68
5,419,595,994
68
4,564,162,580
64
NON - CONTROLLING INTERESTS
41,428,669
-
41,199,289
1
37,461,877
1
Total equity
5,932,388,921
68
5,460,795,283
69
4,601,624,457
65
TOTAL
$8,660,949,685
100
$7,933,023,878
100
$7,133,287,420
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)
Three Months Ended March 31
2026
2025
Amount
%
Amount
%
NET REVENUE (Notes 20, 31 and 37)
$1,134,103,440
100
$839,253,664
100
COST OF REVENUE (Notes 12, 27, 31 and 34)
382,808,019
34
345,858,588
41
GROSS PROFIT
751,295,421
66
493,395,076
59
OPERATING EXPENSES (Notes 27 and 31)
Research and development
67,756,685
6
56,547,493
7
General and administrative
21,833,650
2
24,883,748
3
Marketing
4,415,322
-
3,754,815
-
Total operating expenses
94,005,657
8
85,186,056
10
OTHER OPERATING INCOME AND EXPENSES, NET
(Notes 14, 27 and 34)
1,676,378
-
(1,128,212)
-
INCOME FROM OPERATIONS (Note 37)
658,966,142
58
407,080,808
49
NON-OPERATING INCOME AND EXPENSES
Share of profits of associates
1,684,904
-
1,368,307
-
Interest income (Note 21)
28,862,263
3
24,859,312
3
Other income
124,339
-
51,509
-
Foreign exchange gain, net (Note 35)
6,178,922
1
3,538,319
-
Finance costs (Note 22)
(2,716,862)
-
(2,677,274)
-
Other gains and losses, net (Note 23)
(5,300,021)
(1)
(3,325,569)
(1)
Total non-operating income and expenses
28,833,545
3
23,814,604
2
INCOME BEFORE INCOME TAX
687,799,687
61
430,895,412
51
INCOME TAX EXPENSE (Notes 4 and 24)
114,998,383
10
70,162,751
8
NET INCOME
572,801,304
51
360,732,661
43
OTHER COMPREHENSIVE INCOME (LOSS) (Note 19)
Items that will not be reclassified subsequently to profit
or loss:
Unrealized gain (loss) on investments in equity
instruments at fair value through other
comprehensive income
2,551,451
-
(373,521)
-
Share of other comprehensive income (loss) of
associates
88,414
-
(68,654)
-
2,639,865
-
(442,175)
-
(Continued)
           
- 5 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
Three Months Ended March 31
2026
2025
Amount
%
Amount
%
Items that may be reclassified subsequently to profit or
loss:
Exchange differences arising on translation of foreign
operations
$52,958,177
4
$30,220,692
4
Unrealized gain (loss) on investments in debt
instruments at fair value through other
comprehensive income
(1,854,480)
-
2,053,235
-
Loss on hedging instruments
(21,091)
-
(21,068)
-
Share of other comprehensive income of associates
273,180
-
86,244
-
 
51,355,786
4
32,339,103
4
Other comprehensive income, net of income tax
53,995,651
4
31,896,928
4
TOTAL COMPREHENSIVE INCOME
$626,796,955
55
$392,629,589
47
NET INCOME ATTRIBUTABLE TO:
Shareholders of the parent
$572,479,752
50
$361,564,128
43
Non-controlling interests
321,552
1
(831,467)
-
$572,801,304
51
$360,732,661
43
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Shareholders of the parent
$626,591,326
55
$391,813,092
47
Non-controlling interests
205,629
-
816,497
-
$626,796,955
55
$392,629,589
47
EARNINGS PER SHARE (NT$, Note 25)
Basic earnings per share
$22.08
$13.95
Diluted earnings per share
$22.08
$13.94
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
Total
Total
Non-controlling
Interests
Total
Equity
Shares
Legal Capital
Special Capital
Unappropriated
(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
-
-
-
-
-
(116,697,300)
(116,697,300)
-
-
-
-
-
(116,697,300)
-
(116,697,300)
Total
-
-
-
-
-
(116,697,300)
(116,697,300)
-
-
-
-
-
(116,697,300)
-
(116,697,300)
Net income
-
-
-
-
-
361,564,128
361,564,128
-
-
-
-
-
361,564,128
(831,467)
360,732,661
Other comprehensive income (loss), net of
income tax
-
-
-
-
-
(35)
(35)
28,659,020
1,596,114
(6,135)
-
30,248,999
30,248,964
1,647,964
31,896,928
Total comprehensive income (loss)
-
-
-
-
-
361,564,093
361,564,093
28,659,020
1,596,114
(6,135)
-
30,248,999
391,813,092
816,497
392,629,589
Employee restricted shares retired
(118)
(1,177)
1,177
-
-
2,459
2,459
-
-
-
-
-
2,459
-
2,459
Share-based payment arrangements
-
-
-
-
-
-
-
-
-
-
452,782
452,782
452,782
-
452,782
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
-
-
-
-
-
-
-
-
-
1,135
-
1,135
1,135
-
1,135
Adjustments to share of changes in equities of
associates
-
-
57,046
-
-
-
-
-
-
-
-
-
57,046
-
57,046
From share of changes in equities of
subsidiaries
-
-
(11,801)
-
-
-
-
-
-
-
-
-
(11,801)
4,837
(6,964)
Increase in non-controlling interests
-
-
-
-
-
-
-
-
-
-
-
-
-
1,609,845
1,609,845
BALANCE, MARCH 31, 2025
25,932,615
$259,326,155
$73,307,187
$311,146,899
$-
$3,851,130,370
$4,162,277,269
$68,922,015
$279,944
$1,305,307
$(1,255,297)
$69,251,969
$4,564,162,580
$37,461,877
$4,601,624,457
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
-
-
-
-
(71,085,085)
71,085,085
-
-
-
-
-
-
-
-
-
Cash dividends to shareholders
-
-
-
-
-
(155,595,147)
(155,595,147)
-
-
-
-
-
(155,595,147)
-
(155,595,147)
Total
-
-
-
-
(71,085,085)
(84,510,062)
(155,595,147)
-
-
-
-
-
(155,595,147)
-
(155,595,147)
Net income
-
-
-
-
-
572,479,752
572,479,752
-
-
-
-
-
572,479,752
321,552
572,801,304
Other comprehensive income (loss), net of
income tax
-
-
-
-
-
-
-
53,348,140
762,077
1,357
-
54,111,574
54,111,574
(115,923)
53,995,651
Total comprehensive income (loss)
-
-
-
-
-
572,479,752
572,479,752
53,348,140
762,077
1,357
-
54,111,574
626,591,326
205,629
626,796,955
Employee restricted shares retired
(154)
(1,544)
1,544
-
-
5,334
5,334
-
-
-
-
-
5,334
-
5,334
Share-based payment arrangements
-
-
(62,128)
-
-
-
-
-
-
-
146,545
146,545
84,417
-
84,417
Disposal of investments in equity instruments
at fair value through other comprehensive
income
-
-
-
-
-
96,985
96,985
-
(97,542)
-
-
(97,542)
(557)
557
-
Basis adjustment for loss on hedging
instruments
-
-
-
-
-
-
-
-
-
(1,929)
-
(1,929)
(1,929)
-
(1,929)
Adjustments to share of changes in equities of
associates
-
-
280,814
-
-
-
-
-
-
-
-
-
280,814
-
280,814
Increase in non-controlling interests
-
-
-
-
-
-
-
-
-
-
-
-
-
23,194
23,194
BALANCE, MARCH 31, 2026
25,932,370
$259,323,701
$73,665,831
$311,146,899
$16,199,411
$5,193,142,174
$5,520,488,484
$32,328,996
$4,256,018
$1,227,678
$(330,456)
$37,482,236
$5,890,960,252
$41,428,669
$5,932,388,921
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)
Three Months Ended March 31
2026
2025
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
$687,799,687
$430,895,412
Adjustments for:
Depreciation expense
163,312,605
173,004,927
Amortization expense
2,137,832
2,134,152
Expected credit losses recognized (reversal) on investments in debt
instruments
17,283
(8,360)
Finance costs
2,716,862
2,677,274
Share of profits of associates
(1,684,904)
(1,368,307)
Interest income
(28,862,263)
(24,859,312)
Share-based compensation
113,979
455,241
Loss (gain) on disposal or retirement of property, plant and equipment, net
(605,807)
781,375
Impairment loss on property, plant and equipment
-
1,297,218
Gain on financial instruments at fair value through profit or loss, net
(50,482)
(21,700)
Loss on disposal of investments in debt instruments at fair value through
other comprehensive income, net
25,414
50,240
Loss from disposal of subsidiary
-
167,986
Loss (gain) on foreign exchange, net
(3,465,430)
3,884,055
Dividend income
(124,339)
(51,509)
Others
(43,517)
247,618
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss
5,165,216
1,763,120
Notes and accounts receivable, net
(78,691,219)
29,000,965
Receivables from related parties
(2,522,858)
(862,579)
Other receivables from related parties
(483,880)
(1)
Inventories
(23,343,974)
(5,518,805)
Other financial assets
213,958
(14,480,808)
Other current assets
(20,099,311)
(1,692,072)
Other noncurrent assets
(16,723,337)
(2,483,523)
Accounts payable
15,503,538
2,836,726
Payables to related parties
22,195
(209,657)
Salary and bonus payable
(2,346,404)
(6,500,061)
Accrued profit sharing bonus to employees and compensation to directors
34,315,310
21,736,100
Accrued expenses and other current liabilities
(33,017,188)
14,097,144
Other noncurrent liabilities
1,270,340
2,340,161
Net defined benefit liability
(71,904)
(2,202,071)
Cash generated from operations
700,477,402
627,110,949
Income taxes paid
(1,501,137)
(1,537,277)
Net cash generated by operating activities
698,976,265
625,573,672
(Continued)
           
- 8 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)
Three Months Ended March 31
2026
2025
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Financial instruments at fair value through profit or loss
$(199,549)
$(60,235)
Financial assets at fair value through other comprehensive income
(39,021,167)
(23,341,809)
Financial assets at amortized cost
(52,400,523)
(47,339,382)
Property, plant and equipment
(350,762,799)
(330,826,730)
Intangible assets
(933,027)
(2,285,615)
Proceeds from disposal or redemption of:
Financial assets at fair value through other comprehensive income
22,786,201
29,048,286
Financial assets at amortized cost
38,519,146
24,877,973
Property, plant and equipment
1,812,754
127,764
Derecognition of derivative financial instruments
(5,077,020)
-
Proceeds from return of capital of investments in equity instruments at fair
value through other comprehensive income
185,918
1,112
Derecognition of hedging financial instruments
(178)
(29,621)
Interest received
26,745,717
24,418,735
Proceeds from government grants - property, plant and equipment
505,000
35,149,257
Other dividends received
124,339
94,878
Dividends received from investments accounted for using equity method
916,967
-
Increase in prepayments for leases
(10,202)
(11,212)
Refundable deposits paid
(104,983)
(47,164)
Refundable deposits refunded
59,650
31,337
Net cash used in investing activities
(356,853,756)
(290,192,426)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in hedging financial liabilities - bank loans
(182,380)
-
Proceeds from issuance of bonds
17,200,000
19,200,000
Repayment of bonds
(4,800,000)
(3,000,000)
Proceeds from long-term bank loans
2,020,000
5,395,000
Repayment of long-term bank loans
(389,722)
(719,167)
Payments for transaction costs attributable to the issuance of bonds
(17,574)
(20,246)
Repayment of the principal portion of lease liabilities
(1,328,422)
(891,185)
Interest paid
(2,747,192)
(2,516,219)
Guarantee deposits received
4,244
1,000
Guarantee deposits refunded
(5,618)
(3,099)
Cash dividends
(129,662,913)
(103,721,521)
Increase (decrease) in non-controlling interests
(1,035)
1,609,845
Net cash used in financing activities
(119,910,612)
(84,665,592)
(Continued)
           
- 9 -
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)
Three Months Ended March 31
2026
2025
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS
$45,568,929
$16,461,553
NET INCREASE IN CASH AND CASH EQUIVALENTS
267,780,826
267,177,207
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
2,767,856,402
2,127,627,043
CASH AND CASH EQUIVALENTS, END OF PERIOD
$3,035,637,228
$2,394,804,250
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 THREE MONTHS ENDED MARCH 31, 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 May 12, 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 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
IFRS 18 “Presentation and Disclosure in Financial Statements”
January 1, 2027 (Note)
Note : On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January
1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the
endorsement of IFRS 18 by the FSC.
           
- 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.
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
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.
           
- 12 -
The subsidiaries in the consolidated financial statements
The detail information of the subsidiaries at the end of reporting period was as follows:
Name of Investor
Name of Investee
Main Businesses and Products
Establishment
Percentage of Ownership
and Operating
Location
March 31,
2026
December 31,
2025
March 31,
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.
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.
           
- 13 -
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
March 31,
2026
December 31,
2025
March 31,
2025
Cash and deposits in banks
$3,030,871,905
$2,761,829,868
$2,373,616,720
Money market funds
2,769,832
2,056,733
17,984,089
Repurchase agreements
1,231,258
1,342,659
2,107,626
Government bonds/Agency bonds
764,233
2,627,142
-
Commercial paper
-
-
1,095,815
$3,035,637,228
$2,767,856,402
$2,394,804,250
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
March 31,
2026
December 31,
2025
March 31,
2025
Financial assets
Convertible preferred stocks
$13,877,152
$13,608,819
$14,370,972
Mutual funds
1,576,884
1,297,533
981,508
Simple agreement for future equity
128,256
125,776
132,820
Forward exchange contracts
5,408
100,200
54,369
$15,587,700
$15,132,328
$15,539,669
Current
$5,408
$100,200
$54,369
Noncurrent
15,582,292
15,032,128
15,485,300
$15,587,700
$15,132,328
$15,539,669
Financial liabilities
Forward exchange contracts
$3,076,876
$3,083,883
$2,069,289
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.
           
- 14 -
Outstanding forward exchange contracts consisted of the following:
Contract Amount
Maturity Date
(In Thousands)
March 31, 2026
Sell US$
April 2026 to June 2026
US$6,822,000
December 31, 2025
Sell US$
January 2026 to March 2026
US$9,234,000
Sell JPY
January 2026
JPY6,095,977
March 31, 2025
Sell US$
April 2025 to June 2025
US$6,977,081
Sell JPY
April 2025
JPY54,982,913
8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
March 31,
2026
December 31,
2025
March 31,
2025
Investments in debt instruments at FVTOCI
Corporate bonds
$102,384,998
$88,636,098
$98,352,454
Agency mortgage-backed securities
50,999,655
49,150,771
51,252,453
Government bonds/Agency bonds
27,966,498
25,437,560
25,701,271
Asset-backed securities
7,874,285
8,512,188
10,622,969
189,225,436
171,736,617
185,929,147
Investments in equity instruments at FVTOCI
Non-publicly traded equity investments
9,704,803
8,797,170
8,337,662
Publicly traded stocks
5,672,196
3,956,073
3,999,164
15,376,999
12,753,243
12,336,826
$204,602,435
$184,489,860
$198,265,973
Current
$194,897,632
$175,692,690
$189,928,311
Noncurrent
9,704,803
8,797,170
8,337,662
$204,602,435
$184,489,860
$198,265,973
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.
For the three months ended March 31, 2026 and 2025, as the Company adjusted its investment portfolio,
equity investments designated at FVTOCI were divested for NT$246,801 thousand and NT$284,890
thousand, respectively. The related other equity-unrealized gain/loss on financial assets at FVTOCI of
NT$96,985 thousand and NT$155,994 thousand were transferred to increase retained earnings,
respectively.
           
- 15 -
As of March 31, 2026 and 2025, the cumulative loss allowance for expected credit loss of NT$49,253
thousand and NT$52,383 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
March 31,
2026
December 31,
2025
March 31,
2025
Corporate bonds
$252,414,240
$231,374,019
$200,156,770
Government bonds/Agency bonds
4,299,402
4,213,491
4,440,747
Commercial paper
-
-
12,034,516
Less: Allowance for impairment loss
(149,799)
(134,187)
(129,981)
$256,563,843
$235,453,323
$216,502,052
Current
$153,049,764
$124,945,519
$118,298,376
Noncurrent
103,514,079
110,507,804
98,203,676
$256,563,843
$235,453,323
$216,502,052
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
March 31,
2026
December 31,
2025
March 31,
2025
Financial assets - current
Fair value hedges
Interest rate futures contracts
$11,578
$-
$-
Financial liabilities - current
Fair value hedges
Interest rate futures contracts
$-
$817
$3,462
Fair value hedge
The Company entered into interest rate futures contracts, which are used to partially hedge against the fair
value changes caused by interest rate fluctuation in the Company’s fixed income investments. The hedge
ratio is adjusted in response to the changes in the financial market and capped at 100%.
On the basis of economic relationships, the value of the interest rate futures contracts and the value of the
hedged financial assets change in opposite directions in response to movements in interest rates.
The main source of hedge ineffectiveness in these hedging relationships is the credit risk of the hedged
financial assets, which is not reflected in the fair value of the interest rate futures contracts. No other
sources of ineffectiveness 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.
           
- 16 -
The following tables summarize the information relating to the hedges of interest rate risks.
March 31, 2026
Hedging Instruments
Contract Amount
(US$ in Thousands)
Maturity
Interest rate futures contracts - US Treasury
futures
US$33,900
June 2026
Hedged Items
Asset Carrying
Amount
Accumulated Amount of
Fair Value Hedge
Adjustments
Financial assets at FVTOCI
$2,184,474
      $  (11,578)     
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     
March 31, 2025
Hedging Instruments
Contract Amount
(US$ in Thousands)
Maturity
Interest rate futures contracts - US Treasury
futures
US$14,800
June 2025
Hedged Items
Asset Carrying
Amount
Accumulated Amount of
Fair Value Hedge
Adjustments
Financial assets at FVTOCI
$1,596,110
      $  3,462     
The effect for the three months ended March 31, 2026 and 2025 is detailed below:
Change in Value Used for
Calculating Hedge Ineffectiveness
Three Months Ended March 31
Hedging Instruments/Hedged Items
2026
2025
Hedging Instruments
Interest rate futures contracts - US Treasury futures
$12,049
$(44,044)
Hedged Items
Financial assets at FVTOCI
(12,049)
44,044
$-
$-
           
- 17 -
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 main source of hedge ineffectiveness in these hedging relationships is 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 three months ended March 31, 2026 is detailed below:
Change in Value
Used for
Calculating
Hedge
Ineffectiveness
Three Months
Ended March 31
Hedging Instruments/Hedged Items
2026
Hedging Instruments
Bank loans
$(182,380)
Hedged Items
Net investments in foreign operations
$182,380
11. NOTES AND ACCOUNTS RECEIVABLE, NET
March 31,
2026
December 31,
2025
March 31,
2025
At amortized cost
Notes and accounts receivable
$350,247,669
$271,835,077
$234,443,474
Less: Loss allowance
(576,710)
(478,617)
(415,051)
349,670,959
271,356,460
234,028,423
At FVTOCI
8,071,813
7,695,093
7,653,847
$357,742,772
$279,051,553
$241,682,270
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.
           
- 18 -
Aging analysis of notes and accounts receivable
March 31,
2026
December 31,
2025
March 31,
2025
Not past due
$340,247,189
$263,766,991
$231,331,692
Past due
Past due within 30 days
18,072,040
15,762,377
10,751,604
Past due over 31 days
253
802
14,025
Less: Loss allowance
(576,710)
(478,617)
(415,051)
$357,742,772
$279,051,553
$241,682,270
All of the Company’s accounts receivable classified as at FVTOCI were not past due.
Movements of the loss allowance for accounts receivable
Three Months Ended March 31
2026
2025
Balance, beginning of period
$478,617
$453,009
Provision (Reversal)
98,080
(37,966)
Effect of exchange rate changes
13
8
Balance, end of period
$576,710
$415,051
For the three months ended March 31, 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
March 31,
2026
December 31,
2025
March 31,
2025
Finished goods
$31,888,061
$29,412,948
$34,263,618
Work in process
212,974,385
188,014,421
187,068,666
Raw materials
42,034,026
45,863,351
46,880,887
Supplies and spare parts
24,556,987
24,818,765
25,174,444
$311,453,459
$288,109,485
$293,387,615
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 March 31
2026
2025
Net inventory losses
$2,634,802
$2,526,465
-19-
13. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD
Associates consisted of the following:
Name of Associate
Principal Activities
Place of
Carrying Amount
% of Ownership and Voting Rights Held by the
Company
Incorporation
and Operation
March 31,
2026
December 31,
2025
March 31,
2025
March 31,
2026
December 31,
2025
March 31,
2025
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
$19,193,955
$18,166,267
$19,031,412
28%
28%
28%
Systems on Silicon
Manufacturing Company
Pte Ltd. (SSMC)
Manufacturing and sales of
integrated circuits and
other semiconductor
devices
Singapore
11,136,415
12,419,167
11,768,652
39%
39%
39%
Xintec Inc. (Xintec)
Wafer level chip size
packaging and wafer level
post passivation
interconnection service
Taoyuan,
Taiwan
4,645,631
4,495,255
4,361,292
41%
41%
41%
Global Unichip Corporation
(GUC)
Researching, developing,
manufacturing, testing
and marketing of
integrated circuits
Hsinchu,
Taiwan
2,789,361
2,952,582
3,605,302
35%
35%
35%
$37,765,362
$38,033,271
$38,766,658
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
March 31,
2026
December 31,
2025
March 31,
2025
GUC
$101,079,214
$99,211,700
$49,022,252
VIS
$58,778,281
$46,667,928
$47,174,638
Xintec
$17,081,775
$15,468,187
$15,857,674
14. PROPERTY, PLANT AND EQUIPMENT
March 31,
2026
December 31,
2025
March 31,
2025
Assets used by the Company
$3,953,500,782
$3,690,642,070
$3,400,609,937
Assets subject to operating leases
1,178,614
1,198,846
196,217
$3,954,679,396
$3,691,840,916
$3,400,806,154
-20-
                                     
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
-
53,964,734
136,525,233
5,552,185
219,282,429
415,324,581
Disposals or retirements
-
(100,198)
(61,165,702)
(825,767)
-
(62,091,667)
Effect of exchange rate changes
48,120
5,064,046
10,971,420
336,013
3,696,069
20,115,668
Balance at March 31, 2026
$13,493,892
$1,250,790,402
$6,323,008,667
$129,326,551
$1,741,974,708
$9,458,594,220
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
4,991
19,657,576
138,786,079
3,611,038
-
162,059,684
Disposals or retirements
-
(97,307)
(59,592,194)
(825,741)
-
(60,515,242)
Effect of exchange rate changes
11,981
1,293,992
7,465,876
173,579
-
8,945,428
Balance at March 31, 2026
$620,828
$532,148,587
$4,886,581,283
$85,742,740
$-
$5,505,093,438
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 March 31,
2026
$12,873,064
$718,641,815
$1,436,427,384
$43,583,811
$1,741,974,708
$3,953,500,782
(Continued)
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)
45,793
236,932,128
249,090,469
10,529,881
(173,113,992)
323,484,279
Disposals or retirements
-
(26,520)
(8,360,693)
(618,534)
-
(9,005,747)
Effect of exchange rate changes
382,170
7,763,994
7,526,228
421,100
5,568,357
21,661,849
Balance at March 31, 2025
$13,482,124
$1,203,803,466
$6,100,458,693
$115,767,197
$912,738,602
$8,346,250,082
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
5,017
14,980,174
153,758,437
3,282,424
-
172,026,052
Disposals or retirements
-
(23,144)
(7,454,933)
(618,211)
-
(8,096,288)
Impairment losses
-
-
1,297,218
-
-
1,297,218
Effect of exchange rate changes
8,165
692,224
4,270,774
110,688
-
5,081,851
Balance at March 31, 2025
$621,713
$456,018,495
$4,414,754,346
$73,454,851
$790,740
$4,945,640,145
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 March 31,
2025
$12,860,411
$747,784,971
$1,685,704,347
$42,312,346
$911,947,862
$3,400,609,937
The significant part of the Company’s buildings includes main plants, mechanical and electrical power
equipment and clean rooms, and the related depreciation is calculated using the estimated useful lives of 20
years, 10 years and 10 years, respectively.
In the first quarter of 2025, the Company recognized impairment losses due to partial machinery and
equipment damage caused by earthquakes, which rendered them unusable. Please refer to the related
earthquake losses in Note 34.
The Company assesses impairment and recognizes impairment losses or reversal gains based on the asset's
usage status and expected usage plan. These are recorded under other operating income and expenses.  
Information about capitalized interest is set out in Note 22.
-21-
15. LEASE ARRANGEMENTS
a.Right-of-use assets
March 31,
2026
December 31,
2025
March 31,
2025
Carrying amounts
Land
$41,297,926
$39,873,344
$38,057,144
Buildings
4,630,684
4,005,321
3,204,286
Office equipment
36,983
40,245
41,986
$45,965,593
$43,918,910
$41,303,416
Three Months Ended March 31
2026
2025
Additions to right-of-use assets
$3,470,239
$2,190,130
Depreciation of right-of-use assets
Land
$839,273
$690,350
Buildings
387,723
277,637
Office equipment
5,693
5,424
$1,232,689
$973,411
b.Lease liabilities
March 31,
2026
December 31,
2025
March 31,
2025
Carrying amounts
Current portion (classified under accrued
expenses and other current liabilities)
$3,601,073
$3,833,015
$3,147,525
Noncurrent portion
33,509,235
31,594,992
29,121,821
$37,110,308
$35,428,007
$32,269,346
Ranges of discount rates for lease liabilities are as follows:
March 31,
2026
December 31,
2025
March 31,
2025
Land
0.39%~3.50%
0.39%~3.50%
0.39%~3.30%
Buildings
0.40%~6.52%
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
36 years. The lease contracts for land located in the R.O.C. specify that lease payments will be adjusted
every 2 years on the basis of changes in announced land value prices. The Company does not have
purchase options to acquire the leasehold land and buildings at the end of the lease terms.
-22-
d.Other lease information
Three Months Ended March 31
2026
2025
Total cash outflow for leases
$1,490,249
$1,088,662
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
-
140,294
1,615,616
116,521
1,872,431
Disposals or retirements
-
-
(412,324)
(51,892)
(464,216)
Effect of exchange rate changes
84,188
163
28,717
3,403
116,471
Balance at March 31, 2026
$5,975,270
$29,842,878
$59,683,393
$13,405,117
$108,906,658
Accumulated amortization and
  impairment
Balance at January 1, 2026
$-
$24,513,166
$45,879,452
$12,036,739
$82,429,357
Additions
-
348,496
1,682,759
106,577
2,137,832
Disposals or retirements
-
-
(412,324)
-
(412,324)
Effect of exchange rate changes
-
164
20,890
2,143
23,197
Balance at March 31, 2026
$-
$24,861,826
$47,170,777
$12,145,459
$84,178,062
Carrying amounts at January 1, 2026
$5,891,082
$5,189,255
$12,571,932
$1,300,346
$24,952,615
Carrying amounts at March 31, 2026
$5,975,270
$4,981,052
$12,512,616
$1,259,658
$24,728,596
Cost
Balance at January 1, 2025
$6,070,864
$28,566,518
$53,279,044
$13,133,519
$101,049,945
Additions
-
17,298
1,111,089
96,214
1,224,601
Disposals or retirements
-
(82,471)
(94,300)
(41,460)
(218,231)
Effect of exchange rate changes
59,339
722
70,283
3,411
133,755
Balance at March 31, 2025
$6,130,203
$28,502,067
$54,366,116
$13,191,684
$102,190,070
Accumulated amortization and
  impairment
Balance at January 1, 2025
$-
$23,186,748
$40,100,685
$11,479,992
$74,767,425
Additions
-
378,751
1,512,273
243,128
2,134,152
Disposals or retirements
-
(82,471)
(94,300)
-
(176,771)
Effect of exchange rate changes
-
722
12,999
1,200
14,921
Balance at March 31, 2025
$-
$23,483,750
$41,531,657
$11,724,320
$76,739,727
Carrying amounts at January 1, 2025
$6,070,864
$5,379,770
$13,178,359
$1,653,527
$26,282,520
Carrying amounts  at March 31, 2025
$6,130,203
$5,018,317
$12,834,459
$1,467,364
$25,450,343
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.
   
                                                           
 
(Continued)
-23-
17. BONDS PAYABLE
March 31,
2026
December 31,
2025
March 31,
2025
Domestic unsecured bonds
$552,028,000
$538,388,000
$495,610,000
Overseas unsecured bonds
464,928,000
455,938,000
514,677,500
Less: Discounts on bonds payable
(2,253,609)
(2,292,509)
(2,639,433)
Less: Current portion
(154,676,321)
(135,805,988)
(59,391,093)
$860,026,070
$856,227,503
$948,256,974
The Company issued domestic unsecured bonds for the three months ended March 31, 2026. The major
terms are as follows:
Issuance
Tranche
Issuance Period
Total Issue
Amount
Coupon
Rate
Repayment and
Interest Payment
NT$ unsecured
bonds
115-1
A
March 2026 to
March 2031
$12,600,000
1.72%
Bullet repayment;
interest payable
annually
B
March 2026 to
March 2036
4,600,000
1.78%
The same as above
The major terms of overseas unsecured bonds are as follows:
Issuance Period
Total Issue Amount
(US$ 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
April 2021 to
April 2028
900,000
1.75%
The same as above
April 2021 to
April 2031
1,500,000
2.25%
The same as above
-24-
(Concluded)
                                                                                                                         
Issuance Period
Total Issue Amount
(US$ in Thousands)
Coupon
Rate
Repayment and Interest Payment
October 2021 to
October 2026
US$1,250,000
1.75%
Bullet repayment (callable at any time, in
whole or in part, at the relevant redemption
price according to relevant agreements);
interest payable semi-annually
October 2021 to
October 2031
1,250,000
2.50%
The same as above
October 2021 to
October 2041
1,000,000
3.125%
The same as above
October 2021 to
October 2051
1,000,000
3.25%
The same as above
April 2022 to
April 2027
1,000,000
3.875%
The same as above
April 2022 to
April 2029
500,000
4.125%
The same as above
April 2022 to
April 2032
1,000,000
4.25%
The same as above
April 2022 to
April 2052
1,000,000
4.50%
The same as above
July 2022 to July
2027
400,000
4.375%
The same as above
July 2022 to July
2032
600,000
4.625%
The same as above
18. LONG-TERM BANK LOANS
March 31,
2026
December 31,
2025
March 31,
2025
NT$ unsecured loans
$1,311,111
$1,700,833
$3,691,666
JPY unsecured loans
41,246,000
39,253,500
37,416,600
Less: Discounts on government grants
(22)
(115)
(786)
Less: Current portion
(1,565,417)
(1,119,722)
(2,380,555)
$40,991,672
$39,834,496
$38,726,925
Loan content
Annual interest rate
1.03%~1.78%
0.79%~1.78%
0.13%~1.78%
Maturity date
Due by December
2030
Due by December
2030
Due by December
2030
-25-
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.
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
March 31,
2026
December 31,
2025
March 31,
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)
25,932,524
25,932,524
25,932,733
Shares awaiting retirement (in thousands)
(154)
-
(118)
Capital stock (in thousands)
25,932,370
25,932,524
25,932,615
Issued capital
$259,325,245
$259,325,245
$259,327,332
Share capital awaiting retirement
(1,544)
-
(1,177)
Capital stock
$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, TSMC reclaimed 154 thousand employee restricted shares which were
unvested (classified under share capital awaiting retirement). On May 12, 2026, TSMC’s Board of
Directors resolved to cancel the aforementioned shares.
During the third quarter of 2025 and the first quarter of 2025, TSMC reclaimed 91 thousand and 118
thousand employee restricted shares, respectively, that were unvested. On 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 March 31, 2026, TSMC’s total issued and outstanding ADSs were 1,062,690 thousand units,
representing 5,313,451 thousand common shares.
-26-
b.Capital surplus
The categories of uses and the sources of capital surplus based on regulations were as follows:
March 31,
2026
December 31,
2025
March 31,
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
May only be used to offset a deficit
From share of changes in equities of
subsidiaries
4,093,999
4,093,999
4,097,157
From share of changes in equities of
associates
1,646,064
1,365,250
1,229,442
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
$73,665,831
$73,445,601
$73,307,187
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.
-27-
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.
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:
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Resolution Date of TSMC’s
of 2026
of 2026
of 2026
of 2026
Board of Directors in its
February 10,
November 11,
August 12,
May 12,
meeting
2026
2025
2025
2026
Special capital reserve
$-
$-
$-
$(16,199,411)
Cash dividends to shareholders
$-
$-
$-
$181,526,591
Cash dividends per share (NT$)
$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 special capital reserve for 2025 is to be presented for approval in TSMC’s shareholders’ meeting to
be held on June 4, 2026 (expected).
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.
-28-
d.Others
Changes in others were as follows:
Three Months Ended March 31, 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
53,257,340
-
-
-
53,257,340
Gain (loss) on hedging instruments designated as
hedges of net investments in foreign operations
(182,380)
-
-
-
(182,380)
Unrealized gain (loss) on financial assets at
FVTOCI
Equity instruments
-
2,550,591
-
-
2,550,591
Debt instruments
-
(1,884,401)
-
-
(1,884,401)
Disposal of investments in equity instruments at
FVTOCI
-
(97,542)
-
-
(97,542)
Cumulative unrealized gain (loss) of debt
instruments at FVTOCI transferred to profit or
loss due to disposal
-
25,414
-
-
25,414
Loss allowance adjustments from debt instruments
at FVTOCI
-
4,507
-
-
4,507
Gain (loss) arising on changes in the fair value of
hedging instruments and hedged item affects
profit or loss
-
-
(21,091)
-
(21,091)
Transferred to initial carrying amount of hedged
items
-
-
(1,929)
-
(1,929)
Share-based payment expenses recognized
-
-
-
146,545
146,545
Share of other comprehensive income (loss) of
associates
273,180
65,966
22,448
-
361,594
Balance, end of period
$32,328,996
$4,256,018
$1,227,678
$(330,456)
$37,482,236
Three Months Ended March 31, 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
28,572,776
-
-
-
28,572,776
Unrealized gain (loss) on financial assets at
FVTOCI
Equity instruments
-
(373,569)
-
-
(373,569)
Debt instruments
-
2,014,432
-
-
2,014,432
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
-
50,240
-
-
50,240
Loss allowance adjustments from debt
instruments at FVTOCI
-
(11,437)
-
-
(11,437)
Gain (loss) arising on changes in the fair value
of hedging instruments and hedged item
affects profit or loss
-
-
(21,068)
-
(21,068)
Transferred to initial carrying amount of hedged
items
-
-
1,135
-
1,135
Share-based payment expenses recognized
-
-
-
452,782
452,782
Share of other comprehensive income (loss) of
associates
86,244
(83,552)
14,933
-
17,625
Balance, end of period
$68,922,015
$279,944
$1,305,307
$(1,255,297)
$69,251,969
-29-
The aforementioned other equity includes the changes in other equities of TSMC and TSMC’s share of
its subsidiaries and associates.
20. NET REVENUE
a.Disaggregation of revenue from contracts with customers
Three Months Ended March 31
Product
2026
2025
Wafer
$968,112,334
$714,028,927
Others
165,991,106
125,224,737
$1,134,103,440
$839,253,664
Three Months Ended March 31
Geography
2026
2025
Taiwan
$85,396,949
$66,493,510
United States
847,738,269
632,438,786
China
85,841,877
62,222,351
Japan
41,705,982
35,757,682
Europe, the Middle East and Africa
46,694,158
25,526,977
Others
26,726,205
16,814,358
$1,134,103,440
$839,253,664
The Company categorized the net revenue mainly based on the countries where the customers are
headquartered.
Three Months Ended March 31
Platform
2026
2025
High Performance Computing
$694,743,789
$493,223,146
Smartphone
294,121,844
233,611,388
Internet of Things
61,590,503
38,723,190
Automotive
46,587,613
43,028,245
Digital Consumer Electronics
12,043,031
11,552,466
Others
25,016,660
19,115,229
$1,134,103,440
$839,253,664
-30-
Three Months Ended March 31
Resolution
2026
2025
3-nanometer
$245,950,127
$160,180,187
5-nanometer
351,196,799
254,408,255
7-nanometer
128,849,905
108,196,547
16-nanometer
64,335,880
47,336,847
20-nanometer
1,223,971
1,182,574
28-nanometer
69,438,615
52,743,689
40/45-nanometer
24,315,393
20,331,363
65-nanometer
38,262,100
26,550,958
90-nanometer
5,560,407
5,137,987
0.11/0.13 micron
11,384,828
12,269,773
0.15/0.18 micron
23,031,617
21,220,625
0.25 micron and above
4,562,692
4,470,122
Wafer revenue
$968,112,334
$714,028,927
b.Contract balances
March 31,
2026
December 31,
2025
March 31,
2025
January 1,
2025
Contract liabilities (classified
under accrued expenses and
other current liabilities)
$50,425,399
$49,954,384
$102,047,887
$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$11,706,743 thousand and NT$43,655,565 thousand for the three months ended March 31, 2026 and
2025, respectively.
c.Temporary receipts from customers
March 31,
2026
December 31,
2025
March 31,
2025
Current portion (classified under accrued
expenses and other current liabilities)
$117,675,257
$146,559,275
$166,477,077
Noncurrent portion (classified under other
noncurrent liabilities)
32,006,610
43,298,936
86,982,769
$149,681,867
$189,858,211
$253,459,846
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.
-31-
21. INTEREST INCOME
Three Months Ended March 31
2026
2025
Interest income
Cash and cash equivalents
$23,181,607
$20,259,748
Financial assets at amortized cost
2,812,143
2,646,901
Financial assets at FVTOCI
1,991,819
1,952,663
Government grants receivable
876,694
-
$28,862,263
$24,859,312
22.  FINANCE COSTS
Three Months Ended March 31
2026
2025
Interest expense
Corporate bonds
$5,090,758
$4,950,966
Others
287,572
191,255
Less: Capitalized interest under property, plant and equipment
(2,661,468)
(2,464,947)
$2,716,862
$2,677,274
Information about capitalized interest is as follows:
Three Months Ended March 31
2026
2025
Capitalization rate
1.44%-3.34%
1.32%-3.34%
23. OTHER GAINS AND LOSSES, NET
Three Months Ended March 31
2026
2025
Loss on disposal of financial assets, net
Investments in debt instruments at FVTOCI
$(25,414)
$(50,240)
Loss on disposal of subsidiaries
-
(167,986)
Loss on financial instruments at FVTPL, net
(5,114,734)
(3,091,058)
Reversal of (provision for) expected credit loss of financial assets
Investments in debt instruments at FVTOCI
(4,507)
11,437
Financial assets at amortized cost
(12,776)
(3,077)
Other losses, net
(142,590)
(24,645)
$(5,300,021)
$(3,325,569)
-32-
24. INCOME TAX
a.Income tax expense recognized in profit or loss
Income tax expense consisted of the following:
Three Months Ended March 31
2026
2025
Current income tax expense
Current tax expense recognized in the current period
$117,155,553
$70,266,030
Income tax adjustments on prior years
34,656
279,640
Other income tax adjustments
90,941
96,538
117,281,150
70,642,208
Deferred income tax expense (benefit)
The origination and reversal of temporary differences
1,538,416
1,270,276
Operating loss carryforward
(3,821,183)
(1,749,733)
(2,282,767)
(479,457)
Income tax expense recognized in profit or loss
$114,998,383
$70,162,751
b.Income tax examination
The tax authorities have examined income tax returns of TSMC through 2023. All investment tax credit
adjustments assessed by the tax authorities have been recognized accordingly.
25. EARNINGS PER SHARE
Three Months Ended March 31
2026
2025
Basic EPS
$22.08
$13.95
Diluted EPS
$22.08
$13.94
EPS is computed as follows:
Three Months Ended March 31
2026
2025
Basic EPS
Net income available to common shareholders of the parent
$572,479,752
$361,564,128
Weighted average number of common shares outstanding used in
the computation of basic EPS (in thousands)
25,929,767
25,926,789
Basic EPS (in dollars)
$22.08
$13.95
Diluted EPS
Net income available to common shareholders of the parent
$572,479,752
$361,564,128
Weighted average number of common shares outstanding used in
the computation of basic EPS (in thousands)
25,929,767
25,926,789
Effects of all dilutive potential common shares (in thousands)
1,518
2,010
Weighted average number of common shares used in the
computation of diluted EPS (in thousands)
25,931,285
25,928,799
Diluted EPS (in dollars)
$22.08
$13.94
-33-
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
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.
-34-
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)
Shares awaiting retirement
(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 binominal 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
binominal tree approach and will be measured at each reporting period until settlement. Relevant
information is as follows:
Three Months Ended March 31
2026
2025
2023 Plan
2023 Plan
2022 Plan
Stock price at measurement date (in dollars)
$1,820
$952
$952
Expected price volatility
23.62%-30.61%
25.40%-31.02%
25.40%-31.02%
Residual life
1 year
1-2 years
1 year
Risk-free interest rate
1.39%
1.43%
1.39%
-35-
Refer to Note 27 for the compensation costs of the cash-settled share-based payment recognized by
TSMC. As of March 31, 2026, December 31, 2025 and March 31, 2025, the liabilities under cash-
settled share-based payment arrangement amounted to NT$151,339 thousand, NT$330,836 thousand
and NT$101,908 thousand, respectively.
27. ADDITIONAL INFORMATION OF EXPENSES BY NATURE
Three Months Ended March 31
2026
2025
a.Depreciation of property, plant and equipment and right-of-use
assets
Recognized in cost of revenue
$151,370,802
$161,648,245
Recognized in operating expenses
11,921,571
11,351,218
Recognized in other operating income and expenses
20,232
5,464
$163,312,605
$173,004,927
b.Amortization of intangible assets
Recognized in cost of revenue
$1,263,376
$1,410,729
Recognized in operating expenses
874,456
723,423
$2,137,832
$2,134,152
c.Employee benefits expenses
Post-employment benefits
Defined contribution plans
$1,758,452
$1,614,682
Defined benefit plans
58,318
62,057
1,816,770
1,676,739
Share-based payments
Equity-settled
113,979
455,241
Cash-settled
287,174
69,962
401,153
525,203
Other employee benefits
118,077,916
86,097,562
$120,295,839
$88,299,504
Employee benefits expense summarized by function
Recognized in cost of revenue
$71,900,074
$48,006,765
Recognized in operating expenses
48,395,765
40,292,739
$120,295,839
$88,299,504
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).
-36-
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 March 31
2026
2025
Profit sharing bonus to employees
$34,348,790
$21,693,850
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 approved 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 three months
ended March 31, 2026 and 2025, the Company received a total of NT$505,000 thousand and
NT$35,149,257 thousand as government grants, respectively.
The aforementioned subsidiaries have signed grant agreements with the local government. 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. Furthermore, in line with
revisions to relevant regulations, effective January 1, 2026, the credit percentage will be increased to 35%
of the qualified investments.
29. CASH FLOW INFORMATION
a.Non-cash transactions
Three Months Ended March 31
2026
2025
Additions of property, plant and equipment
$414,530,014
$323,484,279
Changes in other receivables
1,046,069
2,326,950
Exchange of assets
(140,129)
-
Changes in payables to contractors and equipment suppliers
(65,169,539)
(2,415,721)
Changes in accrued expenses and other current liabilities
3,157,852
9,896,169
Capitalized interests
(2,661,468)
(2,464,947)
Payments for acquisition of property, plant and equipment
$350,762,799
$330,826,730
-37-
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 
March 31,
2026
Bonds payable
$992,033,491
$12,382,426
$10,191,015
$95,459
$1,014,702,391
Non-cash Changes
Balance as of
January 1,
2025
Financing Cash
Flow
Foreign
Exchange
Movement
Other Changes
(Note)
Balance as of 
March 31,
2025
Bonds payable
$983,752,385
$16,179,754
$7,615,641
$100,287
$1,007,648,067
Note:Other changes include amortization of bonds payable.
30. FINANCIAL INSTRUMENTS
a.Categories of financial instruments
March 31,
2026
December 31,
2025
March 31,
2025
Financial assets
FVTPL
$15,587,700
$15,132,328
$15,539,669
FVTOCI (Note 1)
212,674,248
192,184,953
205,919,820
Hedging financial assets
11,578
-
-
Amortized cost (Note 2)
3,767,122,443
3,368,760,773
2,973,250,822
$3,995,395,969
$3,576,078,054
$3,194,710,311
Financial liabilities
FVTPL
$3,076,876
$3,083,883
$2,069,289
Hedging financial liabilities
-
817
3,462
Amortized cost (Note 3)
2,076,717,390
1,974,710,221
2,019,207,007
$2,079,794,266
$1,977,794,921
$2,021,279,758
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.
-38-
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 exchanges rate of NT
dollar against such currencies, in particular a weakening of U.S. dollar against NT dollar, would have
an adverse impact on the revenue and operating profit as expressed in NT dollars. The Company uses
foreign currency derivative contracts, such as currency forwards or currency swaps, 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
three months ended March 31, 2026 and 2025, a hypothetical adverse foreign currency exchange rate
change of 10% would have decreased its net income by NT$576,921 thousand and NT$889,382
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$4,385,342 thousand and NT$4,476,317
thousand for the  three months ended March 31, 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.
-39-
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$1,246,583 thousand and
NT$1,238,824 thousand for the three months ended March 31, 2026 and 2025, respectively, and the
other comprehensive income would have decreased by NT$1,230,160 thousand and NT$986,946
thousand for the three months ended March 31, 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 deposits, fixed-income
investments and other financial instruments with banks. Credit risk is managed separately for business
related and financial related exposures. As of the end of the reporting period, the Company’s maximum
credit risk exposure is equal to the carrying amount of financial assets.
Business related credit risk
The Company’s accounts receivable are from its customers worldwide. The majority of the Company’s
outstanding accounts receivable are not covered by collaterals or guarantees. While the Company has
procedures to monitor and manage credit risk exposure on accounts receivable, there is no assurance
such procedures will effectively eliminate losses resulting from its credit risk. This risk is heightened
during periods when economic conditions worsen.
As of March 31, 2026, December 31, 2025 and March 31, 2025, the Company’s ten largest customers
accounted for 84%, 84% and 84% of accounts receivable, respectively. The Company considers the
concentration of credit risk for the remaining accounts receivable not material.
Financial credit risk
The Company mitigates its financial credit risk by selecting counterparties with investment grade credit
ratings and by limiting the exposure to any individual counterparty. The Company regularly monitors
and reviews the limit applied to counterparties and adjusts the limit according to market conditions and
the credit standing of the counterparties.
The objective of the Company’s investment policy is to achieve a return that will allow the Company to
preserve principal and support liquidity requirements. The policy generally requires securities to be
investment grade and limits the amount of credit exposure to any one issuer. The Company assesses
whether there has been a significant increase in credit risk in the invested securities since initial
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:
-40-
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 three months ended March 31, 2026 and 2025, the expected credit loss increased NT$21,050
thousand and decreased NT$6,086 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
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
March 31, 2026
Non-derivative financial liabilities
Accounts payable (including related
parties)
$99,856,058
$-
$-
$-
$99,856,058
Payables to contractors and equipment
suppliers
243,926,716
-
-
-
243,926,716
Accrued expenses and other current
liabilities
324,597,278
-
-
-
324,597,278
Bonds payable
174,342,361
307,007,510
211,345,461
517,593,230
1,210,288,562
Long-term bank loans
2,065,452
10,711,565
31,568,139
-
44,345,156
Lease liabilities (including those
classified under accrued expenses
and other current liabilities) (Note)
4,197,292
7,048,697
6,027,649
23,798,102
41,071,740
Others
-
25,568,225
5,499,331
8,040,359
39,107,915
848,985,157
350,335,997
254,440,580
549,431,691
2,003,193,425
Derivative financial instruments
Forward exchange contracts
Outflows
205,732,428
-
-
-
205,732,428
Inflows
(202,968,093)
-
-
-
(202,968,093)
2,764,335
-
-
-
2,764,335
$851,749,492
$350,335,997
$254,440,580
$549,431,691
$2,005,957,760
-41-
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
Less Than
1 Year
1-3 Years
3-5 Years
More Than
5 Years
Total
March 31, 2025
Non-derivative financial liabilities
Accounts payable (including related
parties)
$76,853,628
$-
$-
$-
$76,853,628
Payables to contractors and equipment
suppliers
199,087,045
-
-
-
199,087,045
Accrued expenses and other current
liabilities
367,308,567
-
-
-
367,308,567
Bonds payable
79,180,865
355,977,247
199,574,108
586,060,547
1,220,792,767
Long-term bank loans
2,708,527
5,353,088
25,472,236
8,909,136
42,442,987
Lease liabilities (including those
classified under accrued expenses
and other current liabilities) (Note)
3,628,656
5,695,999
4,924,098
21,291,773
35,540,526
Others
-
82,046,217
10,904,756
-
92,950,973
   
728,767,288
449,072,551
240,875,198
616,261,456
2,034,976,493
Derivative financial instruments
Forward exchange contracts
Outflows
$231,869,244
$-
$-
$-
$231,869,244
Inflows
(229,561,459)
-
-
-
(229,561,459)
2,307,785
-
-
-
2,307,785
$731,075,073
$449,072,551
$240,875,198
$616,261,456
$2,037,284,278
Note:Information about the maturity analysis for lease liabilities more than 5 years:
(Continued)                                                                       
-42-
5-10 Years
10-15 Years
15-20 Years
More Than
20 Years
Total
March 31, 2026
Lease liabilities
$11,470,745
$7,919,574
$4,237,076
$170,707
$23,798,102
December 31, 2025
Lease liabilities
$10,974,203
$7,513,615
$4,002,476
$219,645
$22,709,939
March 31, 2025
Lease liabilities
$10,446,365
$7,023,891
$3,679,414
$142,103
$21,291,773
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).
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:
March 31, 2026
Level 1
Level 2
Level 3
Total
Financial assets at FVTPL
Convertible preferred stocks
$-
$-
$13,877,152
$13,877,152
Mutual funds
-
-
1,576,884
1,576,884
Simple agreement for future equity
-
-
128,256
128,256
Forward exchange contracts
-
5,408
-
5,408
$-
$5,408
$15,582,292
$15,587,700
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds
$-
$102,384,998
$-
$102,384,998
Agency mortgage-backed securities
-
50,999,655
-
50,999,655
Government bonds/Agency bonds
27,840,097
126,401
-
27,966,498
Asset-backed securities
-
7,874,285
-
7,874,285
-43-
(Concluded)
March 31, 2026
Level 1
Level 2
Level 3
Total
Investments in equity instruments
Non-publicly traded equity
investments
$-
$-
$9,704,803
$9,704,803
Publicly traded stocks
5,672,196
-
-
5,672,196
Notes and accounts receivable, net
-
8,071,813
-
8,071,813
$33,512,293
$169,457,152
$9,704,803
$212,674,248
Hedging financial assets
Fair value hedges
Interest rate futures contracts
$11,578
$-
$-
$11,578
Financial liabilities at FVTPL
Forward exchange contracts
$-
$3,076,876
$-
$3,076,876
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
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
-44-
March 31, 2025
Level 1
Level 2
Level 3
Total
Financial assets at FVTPL
Convertible preferred stocks
$-
$-
$14,370,972
$14,370,972
Mutual funds
-
-
981,508
981,508
Simple agreement for future equity
-
-
132,820
132,820
Forward exchange contracts
-
54,369
-
54,369
$-
$54,369
$15,485,300
$15,539,669
Financial assets at FVTOCI
Investments in debt instruments
Corporate bonds
$-
$98,352,454
$-
$98,352,454
Agency mortgage-backed securities
-
51,252,453
-
51,252,453
Government bonds/Agency bonds
25,471,792
229,479
-
25,701,271
Asset-backed securities
-
10,622,969
-
10,622,969
Investments in equity instruments
Non-publicly traded equity
investments
-
-
8,337,662
8,337,662
Publicly traded stocks
3,999,164
-
-
3,999,164
Notes and accounts receivable, net
-
7,653,847
-
7,653,847
$29,470,956
$168,111,202
$8,337,662
$205,919,820
Financial liabilities at FVTPL
Forward exchange contracts
$-
$2,069,289
$-
$2,069,289
Hedging financial liabilities
Fair value hedges
Interest rate futures contracts
$3,462
$-
$-
$3,462
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 three months ended
March 31, 2026 and 2025 are as follows:
Three Months Ended March 31
2026
2025
Balance, beginning of period
$23,829,298
$23,022,726
Additions
294,325
241,385
Recognized in profit or loss
50,482
21,700
Recognized in other comprehensive income or loss
1,053,960
240,879
Disposals and proceeds from return of capital of investments
(402,442)
(1,112)
Effect of exchange rate changes
461,472
297,384
Balance, end of period
$25,287,095
$23,822,962
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.
-45-
•The fair value of accounts receivable classified as at FVTOCI is determined by the present
value of future cash flows based on the discount rate that reflects the credit risk of
counterparties.
Valuation techniques and assumptions used in Level 3 fair value measurement
The fair values of 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 March 31,
2026, December 31, 2025 and March 31, 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$67,361 thousand, NT$64,123 thousand and NT$59,454 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 March 31, 2026,
December 31, 2025 and March 31, 2025, the Company mainly uses unobservable inputs, which
include expected returns, discount rate of 8.8%, 8.9% and 8.8%, 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$1,912,859 thousand, NT$1,812,408 thousand and NT$586,129
thousand, respectively; if discount for lack of marketability increases by 1%, the fair value will
decrease by NT$141,912 thousand, NT$133,626 thousand and NT$155,838 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:
March 31, 2026
Carrying
Fair Value
Amount
Level 1
Level 2
Total
Financial assets
Financial assets at amortized costs
Corporate bonds
$252,264,441
$-
$252,166,113
$252,166,113
Government bonds/Agency
bonds
4,299,402
4,330,500
-
4,330,500
$256,563,843
$4,330,500
$252,166,113
$256,496,613
Financial liabilities
Financial liabilities at amortized
costs
Bonds payable
$1,014,702,391
$-
$958,345,421
$958,345,421
-46-
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
March 31, 2025
Carrying
Fair Value
Amount
Level 1
Level 2
Total
Financial assets
Financial assets at amortized costs
Corporate bonds
$200,037,909
$-
$200,927,445
$200,927,445
Commercial paper
12,023,396
-
12,035,073
12,035,073
Government bonds/Agency
bonds
4,440,747
4,473,583
-
4,473,583
$216,502,052
$4,473,583
$212,962,518
$217,436,101
Financial liabilities
Financial liabilities at amortized
costs
Bonds payable
$1,007,648,067
$-
$930,273,718
$930,273,718
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:
-47-
a.Related party name and categories
Related Party Name
Related Party Categories
GUC and its subsidiaries (GUC)
Associates
VIS and its subsidiaries (VIS)
Associates
SSMC
Associates
Xintec
Associates
TSMC Charity Foundation
Other related parties
TSMC Education and Culture Foundation
Other related parties
b.Net revenue
Three Months Ended March 31
2026
2025
Item
Related Party Categories
Sales revenue
Associates
$12,704,466
$7,736,472
c.Purchases
Three Months Ended March 31
2026
2025
Related Party Categories
Associates
$1,499,852
$1,062,416
d.Receivables from related parties
March 31,
2026
December 31,
2025
March 31,
2025
Item
Related Party
Name
Receivables from related
parties
GUC
$3,756,641
$1,651,010
$1,092,244
VIS
1,400,103
945,224
1,028,233
Others
105,614
143,266
146,575
$5,262,358
$2,739,500
$2,267,052
Other receivables from
related parties
SSMC
$933,087
$307
$252
VIS
751,731
267,808
-
$1,684,818
$268,115
$252
-48-
e.Payables to related parties
March 31,
2026
December 31,
2025
March 31,
2025
Item
Related Party
Name
Payables to related parties
Xintec
$1,081,709
$1,298,672
$808,463
SSMC
614,258
374,088
314,804
Others
104,958
105,970
93,077
$1,800,925
$1,778,730
$1,216,344
f.Accrued expenses and other current liabilities
March 31,
2026
December 31,
2025
March 31,
2025
Item
Related Party Categories
Temporary receipts
Associates
$839,964
$638,804
$4,380,204
g.Others
Three Months Ended March 31
2026
2025
Item
Related Party Categories
Manufacturing expenses
Associates
$1,422,849
$1,062,424
The sales prices and payment terms to related parties were not significantly different from those of sales
to third parties. For other related party transactions, price and terms were determined in accordance
with mutual agreements.
The Company leased factory and office from associates. The lease terms and prices were both
determined in accordance with mutual agreements. The rental expenses were paid to associates
monthly; the related expenses were both classified under manufacturing expenses.
h.Compensation of key management personnel
The compensation to directors and other key management personnel were as follows:
Three Months Ended March 31
2026
2025
Short-term employee benefits
$2,287,495
$1,441,279
Post-employment benefits
719
1,001
Share-based payments
78,751
452,154
   
$2,366,965
$1,894,434
-49-
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.
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 March 31, 2026,
December 31, 2025 and March 31, 2025, the aforementioned other financial assets amounted to
NT$381,920 thousand, NT$129,385 thousand and NT$134,029 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. The outcome cannot be
determined, and we cannot make a reliable estimate of the contingent liability at this time.
d.TSMC entered into long-term purchase agreements of materials and supplies, 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 March 31, 2026, December 31, 2025  and
March 31, 2025 were NT$447,293 thousand, NT$438,643 thousand and NT$496,415 thousand,
respectively.
-50-
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 March 31, 2026, December 31, 2025  and
March 31, 2025, the aforementioned guarantee amounted to NT$24,039,125 thousand, NT$23,375,215
thousand, and NT$8,687,244 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.
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 1)
Carrying
Amount
(In Thousands)
March 31, 2026
Financial assets
Monetary items
USD
$19,033,768
32.064
$610,298,727
EUR
1,689,308
36.768
62,112,489
JPY
191,452,342
0.2012
38,520,211
Financial liabilities
Monetary items
USD
12,548,938
32.064
402,369,135
EUR
1,609,695
36.768
59,185,260
JPY
181,252,720
0.2012
36,468,047
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
(Continued)
-51-
Foreign
Currencies
(In Thousands)
Exchange Rate
(Note 1)
Carrying
Amount
(In Thousands)
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
March 31, 2025
Financial assets
Monetary items
USD
20,280,414
33.205
673,411,158
EUR
795,560
35.928
28,582,881
JPY
143,636,004
0.2214
31,801,011
Financial liabilities
Monetary items
USD
14,011,933
33.205
465,266,251
EUR
937,784
35.928
33,692,689
JPY
147,104,858
0.2214
32,569,016
(Concluded)
Note 1: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 ended March 31, 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;
b.Endorsement/guarantee provided: See Table 2 attached;
c.Marketable securities held (excluding investments in subsidiaries and associates): there are no
significant securities that need to be listed separately;
d.Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital:
See Table 3 attached;
-52-
e.Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital:
See Table 4 attached;
f.Others: The business relationship between the parent and the subsidiaries and significant transactions
between them: See Table 5 attached;
g.Names, locations, and related information of investees over which TSMC exercises significant
influence (excluding information on investment in mainland China): See Table 6 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 7 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 5 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.
-53-
TABLE 1
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
FINANCINGS PROVIDED
FOR THE THREE MONTHS ENDED MARCH 31, 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
$15,787,560
$11,144,160
$11,144,160
1.50%
The need for short-term
financing
$-
Operating capital
$-
-
$-
$129,569,624
$129,569,624
(RMB3,400,000) 
(RMB2,400,000) 
(RMB2,400,000) 
2
TSMC
Development
TSMC
Washington
Other receivables from
related parties
Yes
3,847,680
3,847,680
2,885,760
-
The need for short-term
financing
-
Operating capital
-
-
-
34,462,953
34,462,953
(US$ 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.
-54-
TABLE 2
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE THREE MONTHS ENDED MARCH 31, 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
$2,356,384,101
$2,668,151
$2,668,151
$2,668,151
$-
0.05%
$2,356,384,101
Yes
No
No
(US$ 83,213)
(US$ 83,213)
(US$ 83,213)
TSMC Global
Subsidiary
2,356,384,101
208,416,000
208,416,000
208,416,000
-
3.54%
2,356,384,101
Yes
No
No
(US$ 6,500,000)
(US$ 6,500,000)
(US$ 6,500,000)
TSMC Arizona
Subsidiary
2,356,384,101
480,669,372
480,669,372
350,410,398
-
8.16%
2,356,384,101
Yes
No
No
(US$ 14,990,936)
(US$ 14,990,936)
(US$ 10,928,468)
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.
-55-
TABLE 3
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 THREE MONTHS ENDED MARCH 31, 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
$863,512,267
77
Net 30 days from invoice date
(Note)
-
-
$285,255,389
85
JASM
Subsidiary
Sales
495,544
-
Net 30 days from the end of the
month of when invoice is issued
-
-
484,985
-
GUC
Associate
Sales
2,233,905
-
Net 30 days from invoice date
-
-
299,025
-
VIS
Associate
Sales
647,952
-
Net 30 days from the end of the
month of when invoice is issued
-
-
1,400,104
-
TSMC Arizona
Subsidiary
Purchases
38,749,910
42
Net 30 days from the end of the
month of when invoice is issued
-
-
(14,038,018)
12
TSMC Nanjing
Subsidiary
Purchases
21,031,620
23
Net 30 days from the end of the
month of when invoice is issued
-
-
(6,788,965)
6
TSMC China
Subsidiary
Purchases
6,835,064
7
Net 30 days from the end of the
month of when invoice is issued
-
-
(2,487,330)
2
TSMC Washington
Indirect subsidiary
Purchases
1,815,459
2
Net 30 days from the end of the
month of when invoice is issued
-
-
(554,879)
-
SSMC
Associate
Purchases
1,277,528
1
Net 30 days from the end of the
month of when invoice is issued
-
-
(614,258)
1
VIS
Associate
Purchases
222,324
-
Net 30 days from the end of the
month of when invoice is issued
-
-
(81,799)
-
TSMC North America
GUC
Associate of TSMC
Sales
9,692,577
1
Net 30 days from invoice date
-
-
3,457,617
1
(US$306,805)
(US$107,835)
Note:The tenor is determined by the payment terms granted to its clients by TSMC North America.
-56-
TABLE 4
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
March 31, 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
$289,716,664
26
$-
-
$-
$-
JASM
Subsidiary
485,006
Note 2
-
-
-
-
VIS
Associate
2,151,835
Note 2
-
-
-
-
SSMC
Associate
998,430
Note 2
-
-
-
-
GUC
Associate
299,025
14
-
-
-
-
TSMC North America
GUC
Associate of TSMC
3,457,617
22
-
-
-
-
(US$ 107,835)
TSMC Europe
TSMC
Parent company
101,999
Note 2
-
-
-
-
(EUR 2,774)
TSMC JDC
TSMC
Parent company
133,751
Note 2
-
-
-
-
(JPY 664,766)
TSMC China
TSMC
Parent company
2,487,330
31
-
-
-
-
(RMB 535,671)
TSMC Nanjing
The same parent company
11,196,871
Note 2
-
-
-
-
(RMB 2,411,352)
TSMC Nanjing
TSMC
Parent company
6,788,965
21
-
-
-
-
(RMB 1,462,071)
TSMC Arizona
TSMC
Parent company
14,038,018
27
-
-
-
-
(US$ 437,812)
TSMC Technology
TSMC
The ultimate parent of the Company
972,121
Note 2
-
-
-
-
(US$ 30,318)
TSMC Development
TSMC Washington
Subsidiary
2,885,760
Note 2
-
-
-
-
(US$ 90,000)
TSMC Washington
TSMC
The ultimate parent of the Company
554,879
28
-
-
-
-
(US$ 17,305)
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.
-57-
TABLE 5
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS
FOR THE THREE MONTHS ENDED MARCH 31, 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
$863,512,267
－
76%
Receivables from related parties
285,255,389
－
3%
Accrued expenses and other current liabilities
73,300,725
－
1%
TSMC Nanjing
1
Purchases
21,031,620
－
2%
TSMC Arizona
1
Purchases
38,749,910
－
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.
-58-
TABLE 6
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 THREE MONTHS ENDED MARCH 31, 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 March 31, 2026
Net Income
(Losses) of the
Investee
(Foreign
Currencies in
Thousands)
Share of
Profits/Losses
of Investee
(Note 1)
(Foreign
Currencies in
Thousands)
Note
March 31,
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
$1,285,638,909
$1,178,213,709
40
100
$1,501,555,620
$15,951,199
$15,951,199
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
762,123,304
18,807,633
16,909,276
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
79,027,513
386,617
386,617
Subsidiary
JASM
Kumamoto, Japan
Manufacturing, sales and testing of integrated circuits
and other semiconductor devices
68,384,148
68,384,148
3,011
73
48,849,998
951,388
691,183
Subsidiary
ESMC
Dresden, Germany
Manufacturing, sales and testing of integrated circuits
and other semiconductor devices
38,221,667
38,221,667
805
70
39,030,970
(278,113)
(194,679)
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
13,919,430
506,709
28
19,193,955
2,246,078
617,571
Associate
VisEra Tech
Hsinchu, Taiwan
Research, design, development, manufacturing, sales,
packaging and test of color filter
4,224,082
4,224,082
213,619
67
12,244,267
475,899
297,289
Subsidiary
SSMC
Singapore
Manufacturing and sales of integrated circuits and other
semiconductor devices
5,120,028
5,120,028
314
39
11,136,415
866,547
336,133
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
9,059,100
114,082
114,082
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
4,645,631
384,417
157,650
Associate
Emerging Fund
Cayman Islands
Investing in technology start-up companies
2,878,378
3,014,372
-
99.9
4,617,329
4,814
4,809
Subsidiary
GUC
Hsinchu, Taiwan
Researching, developing, manufacturing, testing and
marketing of integrated circuits
386,568
386,568
46,688
35
2,789,361
1,646,240
573,550
Associate
TSMC 3DIC
Yokohama, Japan
Engineering support activities
1,144,356
1,144,356
49
100
1,523,066
21,754
21,754
Subsidiary
TSMC Europe
Amsterdam, the Netherlands
Customer service and supporting activities
15,749
15,749
-
100
778,075
15,652
15,652
Subsidiary
TSMC JDC
Yokohama, Japan
Engineering support activities
410,680
410,680
15
100
447,251
14,197
14,197
Subsidiary
TSMC Japan
Yokohama, Japan
Customer service and supporting activities
83,760
83,760
6
100
131,703
2,626
2,626
Subsidiary
TSMC Korea
Seoul, Korea
Customer service and supporting activities
13,656
13,656
80
100
42,776
169
169
Subsidiary
TSMC Partners
TSMC Development
Delaware, U.S.A.
Investing in companies involved in semiconductor
manufacturing
18,819,606
18,819,606
-
100
39,148,275
(79,014)
Note 2
Subsidiary
(US$ 586,939)
(US$ 586,939)
(US$ 1,220,942)
(US$ (2,501))
TSMC Technology
Delaware, U.S.A.
Engineering support activities
457,939
457,939
-
100
1,996,699
46,567
Note 2
Subsidiary
(US$ 14,282)
(US$ 14,282)
(US$ 62,272)
(US$ 1,474)
TSMC Canada
Ontario, Canada
Engineering support activities
73,747
73,747
2,300
100
487,977
14,249
Note 2
Subsidiary
(US$ 2,300)
(US$ 2,300)
(US$ 15,219)
(US$ 451)
TSMC
Development
TSMC Washington
Washington, U.S.A.
Manufacturing, sales and testing of integrated circuits
and other semiconductor devices
-
-
293,637
100
4,465,673
(192,884)
Note 2
Subsidiary
(US$ 139,274)
(US$ (6,105))
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.
-59-
TABLE 7
Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries
INFORMATION ON INVESTMENT IN MAINLAND CHINA
FOR THE THREE MONTHS ENDED MARCH 31, 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
March 31, 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
March 31, 2026
Accumulated
Inward
Remittance of
Earnings as of
March 31, 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
$2,825,328
100%
$2,842,661
$129,346,799
$-
(RMB4,502,080)
(US$ 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
7,589,124
100%
7,593,489
158,058,509
-
(RMB6,650,119)
(US$ 1,000,000)
(US$ 1,000,000)
(Note 2)
Accumulated Investment in Mainland China
as of March 31, 2026                               
(US$ in Thousands)
Investment Amounts Authorized by
Investment Commission, MOEA
(US$ in Thousands)
Upper Limit on Investment
$    49,461,079
$  119,412,667
$  3,559,433,353
(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.

Source: View Original Filing on SEC EDGAR

FAQ

How did TSM (Taiwan Semiconductor Manufacturing Company) perform financially in Q1 2026?

TSMC generated net revenue of NT$1,134,103,440 thousand and net income of NT$572,801,304 thousand for Q1 2026. Both figures increased substantially from Q1 2025, reflecting higher volumes, stronger mix, and improved profitability across its semiconductor foundry operations.

What were TSM’s profit margins for the three months ended March 31, 2026?

For Q1 2026, TSMC reported a gross margin of 66% and income from operations equal to 58% of net revenue. These margins improved from 59% gross and 49% operating in Q1 2025, indicating better cost efficiency and product mix.

What earnings per share did TSM report for Q1 2026?

TSMC’s basic earnings per share were NT$22.08 for Q1 2026, up from NT$13.95 a year earlier. Diluted EPS was also NT$22.08. The increase reflects strong revenue growth and higher margins translating into greater earnings for shareholders.

How strong was TSM’s cash flow from operations in the first quarter of 2026?

Net cash generated by operating activities reached NT$698,976,265 thousand in Q1 2026. This comfortably covered capital expenditures of NT$350,762,799 thousand, allowing TSMC to fund its capacity expansion while still increasing its cash and cash equivalents balance.

What is TSM’s balance sheet position as of March 31, 2026?

As of March 31, 2026, TSMC reported total assets of NT$8,660,949,685 thousand and total equity of NT$5,932,388,921 thousand. Total liabilities were NT$2,728,560,764 thousand, resulting in equity representing 68% of total capital.

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