Taiwan Semiconductor : 2023 Q2 Financial reports(IFRSs)

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Stock Code:5425

TAIWAN SEMICONDUCTOR CO., LTD.

AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors' Review Report

For the Six Months Ended June 30, 2023 and 2022

Address:	11F., No. 205, Sec. 3, Beixin Rd., Xindian Dist., New
	Taipei City 231, Taiwan (R.O.C.)
Telephone:	[phone]

The independent auditors' review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' review report and consolidated financial statements, the Chinese version shall prevail.

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Table of contents

		Contents		Page
1.	Cover Page	1
2.	Table of Contents	2
3.	Independent Auditors' Review Report	3
4.	Consolidated Balance Sheets	4
5.	Consolidated Statements of Comprehensive Income	5
6.	Consolidated Statements of Changes in Equity	6
7.	Consolidated Statements of Cash Flows	7
8.	Notes to the Consolidated Financial Statements
	(1)	Company history	8
	(2)	Approval date and procedures of the consolidated financial statements	8
	(3)	New standards, amendments and interpretations adopted		8～9
	(4)	Summary of significant accounting policies		9～12
	(5)	Significant accounting assumptions and judgments, and major sources	12
		of estimation uncertainty
	(6)	Explanation of significant accounts		12～47
	(7)	Related-party transactions	48
	(8)	Pledged assets	48
	(9)	Commitments and contingencies	48
	(10)	Losses Due to Major Disasters	48
	(11)	Subsequent Events	48
	(12)	Other	49
	(13)	Other disclosures
		(a) Information on significant transactions		50～52
		(b) Information on investees	53
		(c) Information on investment in mainland China	54
		(d) Major shareholders	54
	(14)	Segment information		55～56

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Independent Auditors' Review Report

To the Board of Directors of TAIWAN SEMICONDUCTOR CO., LTD.:

Introduction

We have reviewed the accompanying consolidated balance sheets of TAIWAN SEMICONDUCTOR CO., LTD. ("the Company") and its subsidiaries ("the Group") as of June 30, 2023 and 2022, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months and six months ended June 30, 2023 and 2022, as well as the changes in equity and cash flows for the six months ended June 30, 2023 and 2022, and notes to the consolidated financial statements, including a summary of significant accounting policies. 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

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with the Standard on Review Engagements 2410, " Review of Financial Information Performed by the Independent Auditor of the Entity" of the Republic of China. A review of the 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 conducted in accordance with the Standards on Auditing of the Republic of China 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.

Basis for Qualified Conclusion

As stated in Note 4(b), the consolidated financial statements included the financial statements of certain non- significant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect the total assets amounting to $2,793,802 thousand and $3,071,715 thousand, constituting 15.18% and 17.54% of the consolidated total assets; and the total liabilities amounting to $461,707 thousand and $647,183 thousand, constituting 5.53% and 8.10% of the consolidated total liabilities as of June 30, 2023 and 2022, respectively; as well as total comprehensive income (loss) amounting to $5,224 thousand, $137,251 thousand, $52,066 thousand and $283,126 thousand, constituting 1.72%, 23.02%, 7.88% and 22.03% of the consolidated total comprehensive income (loss) for the three months and six months ended June 30, 2023 and 2022, respectively.

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Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews and the review report of other auditors (please refer to Other Matter paragraph), nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of June 30, 2023 and 2022, and of its consolidated financial performance for the three months and six months ended June 30, 2023 and 2022, as well as its consolidated cash flows for the six months ended June 30, 2023 and 2022 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.

Other Matter

We did not review the financial statements of TSC Auto ID Technology Co., Ltd., (TSC Auto ID) a subsidiary of the Group. Those financial statements were reviewed by other auditors, whose review report has been furnished to us, and our conclusion, insofar as it relates to the amounts included for TSC Auto ID, is based solely on the review report of the other auditors. The financial statements of TSC Auto ID reflect total assets amounting to $7,771,056 thousand and $7,053,307 thousand, constituting 42.21% and 40.27% of the consolidated total assets as of June 30, 2023 and 2022, respectively; and the total revenues amounting to $2,194,622 thousand, $2,042,284 thousand, $4,102,667 thousand and $3,804,367 thousand, constituting 58.35%, 51.51%, 55.54% and 49.30% of the consolidated total revenues for the three months and six months ended June 30, 2023 and 2022, respectively.

The engagement partners on the reviews resulting in this independent auditors' review report are Kuo, Yang- Lun and Hsiao, Pei-Ju.

KPMG

Taipei, Taiwan (Republic of China)

August 9, 2023

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the 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 accepted and applied in the Republic of China.

The independent auditors' review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' review report and consolidated financial statements, the Chinese version shall prevail.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

TAIWAN SEMICONDUCTOR CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2023, December 31, 2022, and June 30, 2022

(Expressed in Thousands of New Taiwan Dollars)

	Assets
	Current assets:
1100	Cash and cash equivalents (note 6(a))	$
1110	Current financial assets at fair value through profit
	or loss (note 6(b))
1150	Notes receivable, net (notes 6(c) and (r))
1170	Accounts receivable, net (notes 6(c) and (r))
1200	Other receivables
1220	Current tax assets
130X	Inventories (note 6(d))
1410	Prepayments
1476	Other current financial assets (note 6(b))

Non-current assets:

1510 Non-current financial assets at fair value through profit or loss (note 6(b))

1517 Non-current financial assets at fair value through other comprehensive income (note 6(b))

1600 Property, plant and equipment (notes 6(f) and (w))

1755 Right-of-use assets (note 6(g))

1822 Intangible assets (notes 6(h) and (w))

1805 Goodwill (notes 6(i) and (w))

1840 Deferred tax assets

1980 Other non-current financial assets (note 6(b))

1990 Other non-current assets

Total assets

$

June 30, 2023			December 31, 2022	June 30, 2022
Amount	%		Amount	%			Amount	%
3,404,331		18		3,595,681		20			2,858,561			16
520,849		3		1,798		-			232,342			1
233		-		588		-			207			-
2,917,030		16		3,015,880		17			3,369,004			19
65,385		-		105,789		1			73,129			1
4,760		-		409		-			10,079			-
3,472,686		19		3,500,033		19			3,059,102			18
209,008		1		251,545		1			208,169			1
85,640		1		599,488		3			523,802			3
10,679,922		58		11,071,211		61			10,334,395			59
3,499		-		-		-			-			-
-		-		4,157		-			-			-
4,398,309		24		4,483,033		25			4,473,543			26
216,550		1		229,239		1			247,387			1
297,959		2		308,413		2			354,071			2
1,450,633		8		1,136,565		6			1,099,926			6
502,331		3		458,165		3			457,753			3
429,560		2		83,020		-			79,790			-
431,663		2		443,016		2			466,913			3
7,730,504		42		7,145,608		39			7,179,383			41

18,410,426	100	18,216,819	100	17,513,778	100

	Liabilities and Equity
	Current liabilities:
2100	Short-term borrowings (note 6(j))	$
2120	Current financial liabilities at fair value through
	profit or loss (note 6(b))
2170	Accounts payable
2200	Other payables (note 6(l))
2230	Current tax liabilities
2322	Long-term borrowings, current portion (note 6(k))
2280	Lease liabilities, current (note 6(m))
2399	Other current liabilities

Non-Current liabilities:

2540 Long-term borrowings (note 6(k))

2580 Lease liabilities, non-current (note 6(m))

2640 Net defined benefit liabilities, non-current

2570 Deferred tax liabilities

2670 Other non-current liabilities

	Total liabilities
	Stockholder' equity attributable to parent:
	(note 6(p))
3110	Common stock
3200	Capital surplus
3300	Retained earnings
3400	Other stockholders' equity
3500	Treasury shares
	Total equity attributable to owners of parent
36XX Non-controlling interests (note 6(e))
	Total equity
	Total liabilities and equity	$

June 30, 2023			December 31, 2022		June 30, 2022
Amount		%			Amount		%			Amount			%
1,296,610			7		1,466,515		8		1,135,034			6
5,675			-		2,392		-		14,361			-
1,355,621			7		1,648,557		9		1,764,263			10
2,311,975			12		1,065,266		6		1,829,927			10
357,724			2		415,066		2		357,871			2
350,469			2		322,349		2		109,775			1
121,331			1		106,012		-		96,366			1
322,234			2			325,900			2			299,486			2
6,121,639			33			5,352,057			29			5,607,083			32
1,137,966			6		1,084,391		6		1,329,555			8
102,397			-		123,214		1		145,588			1
34,871			-		35,000		-		42,578			-
857,919			5		825,106		5		795,446			5
99,625			1			71,568			-			72,845			-
2,232,778			12			2,139,279			12			2,386,012			14
8,354,417			45			7,491,336			41			7,993,095			46
2,634,854			14		2,634,854		14		2,634,854			15
2,199,956			12		2,137,088		12		2,134,317			12
3,487,262			19		4,155,591		23		3,359,327			19
(442,041)		(2)	(359,558)	(2)	(387,947)		(2)
(506,043)		(3)	(506,043)	(3)	(506,043)		(3)
7,373,988			40			8,061,932			44			7,234,508			41
2,682,021			15			2,663,551			15			2,286,175			13
10,056,009			55			10,725,483			59			9,520,683			54
18,410,426			100		18,216,819		100		17,513,778			100

See accompanying notes to financial statements.