Taiwan Semiconductor : Minutes of the 2023 Annual General Meeting

Taiwan Semiconductor Co., Ltd.

Minutes of the 2023 Annual General Meeting

Time : Monday, 19 June 2023 at 09：00 am

Place : Taiwan Semiconductor Co., Ltd. I-Lan factory (No.96,Meijou 2nd Rd. ,I-Lan City, I-Lan County 260, Taiwan R.O.C.)

Shareholders Present：The number of shares presented in person or by proxy is 161,926,799shares (including 155,819,921shares from electronic voting rights ), representing 61.45% of total outstanding shares.

Directors Present: Director Mr. Wang shiu Ting, TSC Auto ID Technology Co., Ltd. Legal Representative Director Mr. Wang Hsing Lei, UMC Capital Legal Representative Director Mr. Liu Chang Yu, Independent Director Mr. Jhan Cian Long, Independent Director Mr. Fan Hong Shu, Independent Director Mr. Lin Bo Sheng, Independent Director Mr. Ma Shu Zhuang.

Lawyer : Tien Jen Jieh (Lee and Li, Attorneys-at-Law)

Accountants : Mei Yuan Chen (KPMG Certified Public Accountants) Chairman：Mr. Wang shiu Ting (Chairman of the Board of Directors) Record：Ms. Luo Yue Guei

The agenda for the meeting is as follows:

1. The Chairman called the meeting to order.
2. Chairman's Address：(omitted)
3. Report Items：
4. 1. 2022 Business Report and 2023 Annual Business Plan Report
   2. Audit Committee's 2022 Review Report
   3. Status report on the Endorsement and Guarantee, Loaning of Company Funds, Regulations Governing the Acquisition and Disposal of Assets, the Trading of Financial Derivatives of the Company and its subsidiaries in 2022
   4. Report on 2022 employees' profit sharing bonus and directors' compensation
   5. Report on The performance evaluation and compensation report of directors and managers
5. Approval Items：
6. 1. Proposal 1 : The Company's 2022 Business Report and Financial Statements

(Proposed by the Board）

Explanation: 1. The Company＇s business report, standalone financial statement, and consolidated financial statements have been approved by the Board and examined by the audit committee.

2. The business report, standalone financial statement, and consolidated financial statements are attached in the Meeting Agenda.

Voting Results: Shares represented at the time of voting: 161,926,799 votes

Voting Results(Including electronic votes)	% of the total represented share present
Approval votes:	152,733,203 votes	94.32%
Disapproval votes:	112,300 votes	0.06%
Invalid votes:	0 votes	0.00%
Abstention votes/no votes: 9,081,296 votes	5.60%

RESOLVED, that The Company＇s 2022 Business Report and Financial Statements be and hereby were accepted as submitted.

(2) Proposal 2 : The Company's 2022 earnings Distribution.

(Proposed by the Board）

Explanation: 1. In order to improve the capital structure and avoid dilution of earnings, the Company proposes full cash dividend distribution.

1. The net profit after tax in 2022 was NT$1,562,886,413, the Company appropriates NT$156,718,710 to legal reserve, and adds beginning retained earnings NT$ 1,084,254,443 and adds remeasurements of defined benefit plans NT$ 4,300,684. The distributable earnings amounted to NT$ 2,494,722,830. The Company plans to distribute the dividends to shareholders with NT$ 1,053,941,944 all in cash. After the approval of the general meeting of shareholders, an ex-dividend date and payment date for cash dividends will be set. Dividends are allocated based on the shareholding ratio of shareholders listed on Shareholders' Rosters on the ex-dividend record date; NT$ 4.0 per share. The cash dividends shall be distributed to the NTD (decimals are rounded down). The total number of fractional amounts below NT$1 shall be listed as the Company's other income.
   If there is an increase or decrease in the total number of outstanding shares of the Company, which results in a change in the shareholders' payout ratio, it is proposed to request the shareholders' meeting to authorize the Board of Directors to deal with the matter in its sole discretion.
2. Please refer to Earnings Distribution Table on page 36 of this Meeting

Agenda.

Voting Results: Shares represented at the time of voting: 161,926,799 votes

Voting Results(Including electronic votes)	% of the total represented share present
Approval votes:	152,826,003votes	94.37%
Disapproval votes:	115,497 votes	0.07%
Invalid votes:	0 votes	0.00%
Abstention votes/no votes: 8,985,299 votes	5.54%

RESOLVED, that the above proposal be and hereby was approved as proposed.

5. Discussion items：

(1)Proposal 1 : To Amend the rules for the corporation by-laws（Proposed by the Board）

Explanation:1. To meet the need of the Company's future development. We plan to amend the corporation by-laws of the company, and the comparison table of amendment is below. We propose for the approval of 2023 shareholders meeting.

2. Please proceed to discuss.

Voting Results: Shares represented at the time of voting: 161,926,799 votes

Voting Results(Including electronic votes)	% of the total represented share present
Approval votes:	130,305,786 votes	80.47%
Disapproval votes:	22,637,412 votes	13.98%
Invalid votes:	0 votes	0.00%
Abstention votes/no votes: 8,983,601 votes	5.54%

RESOLVED, that the above proposal be and hereby was approved as proposed.

(2)Proposal 2 : To amend the articles of Company's "Regulations Governing the Acquisition and Disposal of Assets". （Proposed by the Board）

Explanation: 1. Proposed amendments to the Company's "Regulations Governing the Acquisition and Disposal of Assets" to meet the operating requirement for the Company. The comparison table of amendments is as follows which is submitted to the 2023 shareholders' meeting for the approval.

2. Please proceed to discuss.

Voting Results: Shares represented at the time of voting: 161,926,799 votes

Voting Results(Including electronic votes)	% of the total represented share present
Approval votes:	129,391,973 votes	79.90%
Disapproval votes:	14,917,121 votes	9.21%
Invalid votes:	0 votes	0.00%
Abstention votes/no votes: 17,617,705 votes	10.88%

RESOLVED, that the above proposal be and hereby was approved as proposed.

1. Extraordinary Motions : none
2. Adjournment: 9:13 am ( No question was raised by Shareholder.)

Mr. Wang shiu Ting	Ms. Luo Yue Guei
Chairman	Recorder

Appendix

1. 2022 Business Report

1. Implementation of Business Plan

The Company's and its subsidiaries major businesses included the production and sale of rectifiers and barcode printers. In 2022, the earnings per share after tax was NT$6.28. The 2022 consolidated operating revenue, gross profit, operating income, net income before tax, net income, comprehensive income, and after-tax earnings per share compared to 2021 is presented below:

						Unit: NT$ thousand
Item			Implementation of Business Plan
		2022	2021		Increase
							(decrease)
Operating revenue			15,687,134	13,177,417		19.05%
Gross Profit				5,349,166	4,127,721		29.59%
				1,908,907
Operating Income			2,790,521		46.18%
			1,947,632
Net income before tax		3,013,930		54.75%
					1,381,895
Net income				2,176,915		57.53%
		1,269,814
Comprehensive income	2,478,073		95.15%
Net income	attributable to	1,562,877	882,805		77.04%
the Parent Company
Comprehensive	income
attributable	to the	Parent	1,738,755	809,542		114.78%
Company
After-tax earnings	per	share	6.28	3.55		76.90%
(NT$)

1. Budget Implementation: The Company did not disclose its financial forecasts of the year of 2022, so it is not necessary to publicly disclose the implementation of the budget.
2. Financial Status and Profitability

					Unit: NT$ thousand
Item		Annual revenue and expenditure
2022		2021		Increase(decrease)
Interest Revenue		19,892		14,541	36.80%
Interest Expense		38,330		30,911	24.00%

	Item
Financial	Total debt to assets (%)
Structure	Long-term asset to real estate, plant
	and equipment ratio (%)
Liquidity	Current ratio (%)
Analysis	Quick ratio (%)
Profitability	Return on assets (%)
	Return on equity (%)
	Profit ratio (%)

2022

41.12

286.97

206.86

136.76

12.89

21.82

13.88

2021

42.28

259.53

206.04

145.12

9.19

16.19

10.49

After-tax earnings per share (NT$)

1. Research and Development
2. 1. Rectifier

6.28

3.55

To increase our overall competitiveness and gross margin, the Company invests a great deal of manpower and budget every year in collecting market information, analyzing market demand, and setting the direction and strategy for new product development. As most of the mainstream products in the market today are becoming thin and light, our products are also actively developing toward small, energy-saving, and comprehensive in order to develop new markets. We have developed and increased market penetration in personal handheld products, automotive electronics, industrial control industry and white goods market.

In recent years, with self-developed chip technology and the advantage of automated packaging, we have continued to develop Schottky rectifier, MOSFET, ESD protection, automotive LED driver, automotive low dropout voltage regulator and other products.

The development of the new generation of trench Schottky rectifier, Super Junction MOSFET, and Split Gate Technology MOSFET that can effectively reduce conduction loss and switching loss to meet market trends and needs for environmental protection, energy-saving, and low power consumption. These new technologies will be developed in a full range to facilitate the promotion of active and passive safety applications for automotive electronics, industrial, communications, and energy industries.

Fully automated die bonding technology and fully automated high-speed packaging, testing and printing technology have been fully introduced, which is conducive to enhancing product reliability and significantly increasing output and reducing costs to expand market share and enhance profitability. Packaging technology has developed higher current density surface mount power device components, which surpasses the European, American and Japanese top tier manufacturers.

The development of ESD protection has been focused on multi-channel,ultra-low junction capacitance and miniature packaging. Corresponding to the application of various high-frequency transmission ports in the market, such as ESD protections on USB3.1, USB3.0, USB2.0, HDMI2.0 ports.

The Company has put a full range of LED lighting product lines into mass production, which can be applied to various solutions including isolation, non-isolation and dimming features. The dimming series covers existing dimming methods such as linear dimming, PWM dimming, etc., as well as various integrated high-voltage MOSFET solutions, which have reached maturity and have been adopted by international manufacturers, and which has continued to grow steadily. Facing a low-price, competitive market in China, the company actively seeks products with higher quality and gross profit. The Company also cooperates with customers to develop customized products, particularly focusing on automotive products as it has been the main R&D project in recent years, including the automotive LED Driver ICs, which can cover all kinds of voltage and applications of automotive lighting, such as headlamps, tail lamps, fog lamps, daytime running lamps and so on. Various low power consumption and high output current automotive low-dropout and low power consumption regulator ICs are also being developed, which can be used to supply 3.3V and 5V voltage regulators to automotive MCUs, and some of them have been developed independently. The Company has invested more manpower and equipment costs in the verification of vehicle regulations and is now gradually passing the qualification of AEC-Q100 standard. We hope to gain the recognition of automotive customers with high quality and service.

(B) Barcode printer

With the increase in applications for automatic identification in the global market, the Company spent NT$229,823 thousand on research and development in 2022, accounting for 3% of the revenue and will continue invest in network applications, network security,