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1、TSMC Annual Report 2022(1)Printed on:March 12,2023TSE:2330NYSE:TSMTaiwan Stock Exchange Market Observation Post System:https:/.twTSMC annual report is available at:https:/ the U.S.,we are in the process of building two advanced semiconductor fabs in Arizona,with N4 and N3 process technology,respecti
2、vely.We are also building a 12-inch specialty technology fab in Kumamoto,Japan.These investment decisions are based on our customers needs in each region,and a necessary level of government support.We believe this is a necessary step to maximize value for our shareholders.Our pricing will remain str
3、ategic to reflect our value,which also includes the value of geographic manufacturing flexibility.At the same time,we will continue to leverage our competitive advantages of large volume,economies of scale and manufacturing technology leadership,to continuously drive costs lower.We will also continu
4、e to work closely with all the regional governments,to secure their support.Combining such actions,TSMC will have the ability to absorb the higher costs of overseas fabs,while remaining the most efficient and cost-effective manufacturer,no matter where we operate.Thus,even as we increase our capacit
5、y outside of Taiwan,we can continue to earn a sustainable and healthy return,while delivering long-term profitable growth for our shareholders.To address the insatiable demand for energy-efficient computing power,customers rely on TSMC not only for reliable capacity,but also a predictable cadence of
6、 technology development.We continued to extend our technology leadership,as our 3-nanometer technology entered volume production in 2022,and is the most advanced semiconductor technology in both PPA and transistor technology.We are building a strong foundation for the next generation technology to f
7、ollow.N2 technology development is on track,with risk production scheduled in 2024 and volume production in 2025.Our 2-nanometer technology will be the most advanced semiconductor technology in the industry in both density and energy efficiency when it is introduced.Highlights of TSMCs accomplishmen
8、ts in 2022:Total wafer shipments were 15.3 million 12-inch equivalent wafers as compared to 14.2 million 12-inch equivalent wafers in 2021.Advanced technologies(7-nanometer and beyond)accounted for 53 percent of total wafer revenue,up from 50 percent in 2021.We deployed 288 distinct process technolo
9、gies,and manufactured 12,698 products for 532 customers.TSMC produced 30 percent of the world semiconductor excluding memory output value in 2022,as compared to 26 percent in the previous year.2022 Financial PerformanceConsolidated revenue reached NT$2,263.89 billion,an increase of 42.6 percent over
10、 NT$1,587.42 billion in 2021.Net income was NT$1,016.53 billion and diluted earnings per share were NT$39.20.Both increased 70.4 percent from the 2021 level of NT$596.54 billion net income and NT$23.01 diluted EPS.Dear Shareholders,The year 2022 was a landmark year for TSMC.Supported by our strong t
11、echnology leadership and differentiation,we delivered a thirteenth-consecutive year of record revenue,with strong profitable growth.Our 2022 annual revenue increased 33.5%year-over-year in U.S.dollar terms,while our EPS rose to NT$39.20,nearly tripling over the past three years.These achievements we
12、re earned in the face of considerable economic,human and geopolitical challenges across the world.The year started with continued COVID-19 lockdowns,conflict in Ukraine,and geopolitical tensions and trade restrictions that severely disrupted global supply chains.Retreat of globalization and free tra
13、de fueled inflationary pressure around the world,increased macroeconomic uncertainty,and impacted consumer confidence.In the second half of the year,pandemic-related demand,such as remote working and remote learning,receded as many parts of the world began to re-open,and the semiconductor industry e
14、ntered an inventory correction mode.The world also began to focus more intently on the importance of the semiconductor industry,as it suddenly recognized the critical role semiconductors play in a modern economy.The rising tensions in geopolitics also accentuated the attention on a resilient semicon
15、ductor supply chain,and the key role it plays in their economic and national infrastructure security.For TSMC,we continued to focus on the fundamentals of our business.We enriched our R&D intensity and worked diligently on our technology development,especially 2-nanometer,to deliver full node stride
16、s in performance and power benefits to our customers,while offering the industrys most advanced transistor scaling.We also increased our productivity and fab operations quality,while successfully bringing our industry-leading 3-nanometer to high volume manufacturing in 4Q22.We deepened our service a
17、nd expanded our capacity to support our customers growth,further earning their trust,as evidenced by higher scores in our annual customer survey.We enhanced our cybersecurity systems and measures continuously,to rigorously protect customers IP and our proprietary information.As we entered our third
18、year of digital transformation,we accelerated the pace to keep our employees connected and productive in a flexible work environment,while protecting them from COVID infection with stringent anti-pandemic measures.Despite the recent macroeconomic uncertainties around the world,the fundamental struct
19、ural growth trajectory in the long-term semiconductor demand remains strong,underpinned by the industrys multi-year megatrends of 5G and High Performance Computing(HPC)-related applications.Therefore,we continuously work closely with our customers in a disciplined manner to plan our capacity,based o
20、n the long-term market demand profile,and investing in leading edge and specialty technologies,to support their structural growth.As geopolitical tensions have arisen in different parts of the world,our customers also start to value more geographic manufacturing flexibility,in addition to technology
21、 leadership,manufacturing excellence,low cost and trust of service quality.Under this environment,based on customers request,we are expanding our global manufacturing footprint,to increase customer trust,to expand our future growth opportunities,and to reach for global talents.In Taiwan,our N3 has j
22、ust entered volume production in Tainan Science Park.We are also preparing for N2 volume production starting in 2025,which will be located in Hsinchu and Taichung Science Parks.008009TSMC generated net income of US$34.07 billion on consolidated revenue of US$75.88 billion,which increased 59.6 percen
23、t and 33.5 percent respectively from the 2021 level of US$21.35 billion net income and US$56.82 billion consolidated revenue.Gross profit margin was 59.6 percent as compared with 51.6 percent in 2021,while operating profit margin was 49.5 percent compared with 40.9 percent a year earlier.Net profit
24、margin was 44.9 percent,an increase of 7.3 percentage points from 2021s 37.6 percent.In 2022,the Company further raised its total cash dividend payments to NT$11.0 per share,up from NT$10.25 a year ago.Technological DevelopmentsIn 2022,we continued to increase our investment in R&D to US$5.47 billio
25、n to extend our technology leadership and differentiation.We also work closely with our customers to enable the global pool of innovators,to unleash their innovations and create greater value for the semiconductor industry.In its third year of ramp,our 5-nanometer family of technologies contributed
26、26%of TSMCs revenue.We continued to enhance our N5 familys performance,power and density,and N4 started volume production in 2022.We also introduced N4P and N4X technologies,targeting next wave 5nm products.N4P technology development is well on track,and volume production is scheduled in 2023.N4X is
27、 TSMCs first HPC-focused,workload-intensive technology,with customers product tape-outs in 2023.After N3 technology entered volume production in 2022,N3E will further extend our N3 family,with enhanced performance,power,and yield.Volume production of N3E is scheduled for 2H23.We are working on a hig
28、h level of customer engagement at both N3 and N3E,with the number of tape-outs more than 2x that of N5 in its first and second year.We expect our N3 family to be another large and long-lasting node for TSMC.Our 2-nanometer technology will adopt nanosheet transistor structure,and deliver full-node pe
29、rformance and power efficiency gains,with 10-15%speed improvement at the same power or 25-30%power improvement at the same speed as compared to N3E,to address the increasing need for energy-efficient computing.N2 will provide our customers with the best performance,cost and technology maturity,and e
30、xtend our technology leadership position well into the future.As TSMC pushes the envelope of transistor scaling,we also continue to expand our TSMC 3DFabricTM design solutions,as another dimension to improve system-level performance.TSMC 3DFabricTM consists of both wafer-level 3D and advanced packag
31、ing technologies.For our 3D technologies,TSMC-SoIC Chip-on-Wafer(CoW)technology successfully entered volume production in 2022,demonstrating significant performance improvement by stacking SRAM chips on logic wafers.TSMC-SoIC Wafer-on-Wafer(WoW)technology demonstrated superb system performance enhan
32、cement for HPC products in 2022 by stacking 7nm logic wafer on deep trench capacitor wafer.For our advanced packaging technologies,the CoWoS-S technology that integrates multiple system-on-chip(SoC)chips,high bandwidth memory stacks,and a 3-reticle size silicon interposer successfully entered volume
33、 production for customer HPC products in 2022.For InFO advanced packaging technology,TSMC successfully entered volume production of Integrated Fan-Out on Substrate(InFO_oS)that integrates multiple SoC chips in a 2-reticle size fan-out package.To help customers unleash their product innovations with
34、fast time-to-market,TSMC provides customers with comprehensive infrastructure needed to optimize design productivity and cycle times.TSMC continues to expand our Open Innovation Platform(OIP),providing over 55,000 items of libraries and silicon IP portfolio,more than 43,000 technology files,and over
35、 2,900 process design kits,from 0.5-micron to 3-nanometer in 2022.Environmental,Social and GovernanceAs a responsible global corporate citizen,TSMC is focused on driving changes in Green Manufacturing,establishing a Responsible Supply Chain,Talent Development,Inclusive Workplace,and Caring for the U
36、nderprivileged.In 2022,we published our first UN SDGs(United Nations Sustainable Development Goals)Action Report and Materiality Analysis Report to enhance the transparency of our sustainability progress.Green Manufacturing is the cornerstone of our sustainability management.TSMC strives to be a glo
37、bal standard of an eco-friendly corporation,and we integrate green management into all aspects of our daily operations,both in Taiwan and overseas.In 2022,TSMCs Reclaimed Water Plant commenced operations in the Southern Taiwan Science Park and began water supply of 10,000 metric tons of water per da
38、y,with the goal of reaching 36,000 metric tons per day by 2026.At TSMC Arizona,we plan to build an Industrial Water Reclamation Plant,which would allow us to reach“Near Zero Liquid Discharge.”In our supply chain,TSMC is actively working with our suppliers to drive low-carbon emissions management,a k
39、ey component of our roadmap to Net Zero Emissions by 2050.We continue to expand carbon capture opportunities in our supply chain management,and encourage our suppliers to set up carbon capture facilities to reduce carbon emissions.Talent is critical to the global semiconductor industrys success.We b
40、elieve TSMCs global footprint expansion not only enables us to better support our customers,but also gives us more opportunities to reach global talent.To attract more talent and create a sustainable recruitment pipeline for the semiconductor industry,TSMC continues to invest in semiconductor relate
41、d research through close collaboration with top universities including National Taiwan University,National Tsing Hua University,National Yang Ming Chiao Tung University,National Cheng Kung University,MIT,Stanford University,UC Berkeley,Arizona State University,Tokyo University,and other prestigious
42、institutions around the world.In order to deepen employee awareness and practice of Diversity and Inclusion,TSMC focuses on enhancing employees awareness of respecting individual differences and its unique values in the workplace.TSMC has designed a course on unconscious bias to help employees ident
43、ify and respond to biases in the right way.Employees can also use intercultural assessment tools to evaluate themselves and learn how to work with colleagues from diverse backgrounds in their teams.The TSMC Education and Culture Foundation and the TSMC Charity Foundation have long been invested in d
44、riving positive changes towards a better society,by focusing on caring for the disadvantaged and helping youth education.In 2022,the TSMC Charity Foundation assisted 6,358 students at 134 rural care institutes and collaborated with TSMC volunteers to produce tutorial videos for scientific experiment
45、s and science education.TSMC also partnered with SEMI to hold a session at 2022 SEMICON Taiwan,promoting a matching platform that offered 600 jobs opportunities from 30 different companies to rural vocational students.010011We are increasing our capacity beyond Taiwan to expand our future growth pot
46、ential,to reach for global talent,and to further increase our customer trust.As we expand our global footprint,and recruit people from around the world,our priority is to identify,attract and hire talent whose core values and principles are aligned with TSMCs,so that we can establish TSMC culture in
47、 all our employees,no matter where we operate.We recognize the increasingly important role of TSMC in the global semiconductor industry,our impact to many of the worlds economies,and the responsibilities that come with our position.We remain steadfast to our dedicated foundry business model,and will
48、 continue to work as One Team to support all the IC innovators and enable their success.We will hold ourselves to rigorous standards of corporate governance,and adhere to our core values of Integrity,Commitment,Innovation and Customer Trust,while pursuing a sustainable future.We are honored to earn
49、your trust in TSMC through the challenges of 2022.We are more excited about our future,and are even more firmly committed to earning good returns for our shareholders in the years to come.Corporate DevelopmentsIn December 2022,TSMC announced that,in addition to TSMC Arizonas first fab,which is sched
50、uled to begin production of N4 process technology in 2024,the Company has also started the construction of a second fab in Arizona to begin production of 3nm process technology in 2026.The overall investment for these two facilities will be approximately US$40 billion.When completed,TSMC Arizonas tw
51、o fabs will manufacture over 600,000 wafers per year.In February 2022,TSMC,Sony Semiconductor Solutions Corporation(SSS)and Denso Corporation jointly announced a joint venture of Japan Advanced Semiconductor Manufacturing(JASM).In addition to the previously announced 22/28 nanometer process,TSMC wil
52、l also enhance JASMs capabilities with 12/16 nanometer FinFET process technology,and increase monthly production capacity to 55,000 12-inch wafers.With the additional capacity,the total capital expenditure for JASMs Kumamoto fab is estimated to be approximately US$8.6 billion with strong support fro
53、m the Japanese government.Honors and AwardsTSMC received recognition for achievements in innovation,corporate governance,sustainability,investor relations and overall excellence in management from organizations including Forbes,Fortune Magazine,Asiamoney,The Asset,CommonWealth Magazine,Taiwan Stock
54、Exchange,and Taiwan Institute for Sustainable Energy.For innovation,TSMC was recognized as 3rd in IFI Claims Patent Services“2022 Top 50 US Patent Assignees.”TSMC was also recognized by Fortune Magazine as“2022 Worlds Most Admired Companies.”In sustainability,we were chosen once again as a component
55、 of the Dow Jones Sustainability Indices,becoming the only semiconductor company to be selected for 22 consecutive years.We also received MSCI ESG Researchs AAA Rating,CDPs“2022 CDP Supplier Engagement Leader,”Sustainalytics“Company ESG Risk Ratings-Low ESG Risk”rating,ISS ESGs“Prime”status in the E
56、SG Corporate Rating,and Corporate Knights“2022 Global 100 Most Sustainable Corporations.”Meanwhile,we remained a major component in various MSCI ESG and FTSE4Good indices.In investor relations,TSMC continued to receive multiple awards from Institutional Investor Magazine.OutlookEntering 2023,macroec
57、onomic and geopolitical uncertainties persist.As global COVID-19 pandemic subsides,we have entered a more intelligent and connected world.As semiconductors become increasingly essential and ubiquitous to every part of our daily lives,semiconductor technology is becoming a foundational technology for
58、 the modern digital economy.The semiconductor value in the global supply chain continues to increase,creating greater value opportunities for our customers,and greater value opportunities for TSMC.It is more important than ever for TSMC to fulfill our mission to be the trusted technology and capacit
59、y provider for the global logic IC industry for years to come.We will uphold our Trinity of Strengths of Technology Leadership,Manufacturing Excellence,and Customer Trust,to address and capture the strong growth opportunities.We are increasing our investments in R&D,to continue to extend our overall
60、 competitiveness and technology leadership.With our leadership in both leading edge process technologies and 3DIC solutions,TSMCs technology cadence remains constant,to deliver the value of our technology platform,and to help our customers to enhance their product competitiveness and to grow their m
61、arkets well into the future.We continue to focus on optimizing our manufacturing operations to drive greater efficiency and productivity,including“digitalization”of our fabs,to support high volume ramp of N3 in 2023 and beyond.Annual Growth RateCapacity:million 12-inch equivalent wafers202113-147%20
62、2215-169%20235%16-17Capacity Plan 202253%47%50%50%2021202350-60%40-50%7nm 7nm2023 wafer shipment is expected to be 14-15 million 12-inch equivalent wafers.Wafer Sales PlanC.C.WeiChief Executive OfficerMark Liu Chairman0160172.1 An Introduction to TSMCEstablished in 1987 and headquartered in Hsinchu
63、Science Park,Taiwan,TSMC pioneered the pure-play foundry business model with an exclusive focus on manufacturing its customers products.By choosing not to design,manufacture or market any semiconductor products under its own name,the Company ensures that it never competes with its customers.Based on
64、 this founding principle,the key to TSMCs success has always been to enable its customers success.TSMCs foundry business model has led to the rise of the global fabless industry,and,since its inception,TSMC has been one of the worlds leading semiconductor foundries.In 2022,the Company manufactured 1
65、2,698 different products using 288 distinct technologies for 532 different customers.TSMC-made semiconductors serve a global customer base that is large and diverse entailing a wide range of applications.These products are used in a variety of end markets including high performance computing,smartph
66、ones,the Internet of Things(IoT),automotive,and digital consumer electronics.Such strong diversification helps to smooth fluctuations in demand,which in turn allows TSMC to maintain high levels of capacity utilization and profitability,and generate healthy returns for future investment.The annual ca
67、pacity of the manufacturing facilities managed by TSMC and its subsidiaries exceeded 15 million 12-inch equivalent wafers in 2022.These facilities include four 12-inch wafer GIGAFAB fabs,four 8-inch wafer fabs,and one 6-inch wafer fab all in Taiwan as well as one 12-inch wafer fab at a wholly owned
68、subsidiary,TSMC Nanjing Company Limited,and two 8-inch wafer fabs at wholly owned subsidiaries,WaferTech in the United States and TSMC China Company Limited.In December 2022,TSMC announced that,in addition to TSMC Arizonas first fab,which is scheduled to begin production of N4 process technology in
69、2024,the Company has also started the construction of a second fab in Arizona to begin production of 3nm process technology in 2026.The overall investment for these two facilities will be approximately US$40 billion.When completed,TSMC Arizonas two fabs will manufacture over 600,000 wafers per year,
70、with estimated end-product value of more than US$40 billion.At the same time,the Company continues to execute its plan for a fab in Kumamoto,Japan,with production targeted for 2024.2.2.3 Industry Outlook,Opportunities and ThreatsFoundry Industry Demand and Supply OutlookIn 2022,TSMCs solid growth in
71、 the foundry segment was fueled by strong,broad based market demand.Industry megatrends,such as 5G,artificial intelligence(AI)proliferation,and the accelerating digital transformation,drove increased demand across all major markets:smartphones,high performance computing,Internet of Things,and automo
72、tive.However,the electronics supply chain was also carrying high levels of excess inventory,accumulated over the past two years due to supply uncertainties.Hence,in the second half of 2022,the electronics supply chain entered an inventory correction period,which impacted the foundry segment and TSMC
73、 growth.Looking ahead,TSMC expects the inventory correction to continue into 2023,primarily in the first half of the year.Furthermore,concerns about inflation and slowing economic growth will likely have a dampening impact on discretionary consumer spending,reducing overall demand for electronic dev
74、ices.Against these two headwinds,TSMC projects mid-single-digit decline for the worldwide semiconductor market excluding memory in 2023.For the longer term,driven by increasing semiconductor content in most electronic devices,continued market segment share gains by fabless companies,increases in int
75、egrated device manufacturer(IDM)outsourcing,and the expanding use of in-house application-specific integrated circuits(ASIC)by systems companies,TSMC expects foundry segment revenue to outpace the mid-single-digit compound annual growth rate projected for the worldwide semiconductor market excluding
76、 memory from 2022 through 2027.As an upstream supplier in the semiconductor supply chain,the foundry segment is tightly correlated with the market health of all major platforms including smartphones,HPC,the IoT,automotive,and digital consumer electronics(DCE).SmartphonesDue to the combined impact of
77、 the COVID-19 pandemic,the Russo-Ukrainian war and generally higher inflation,smartphone unit shipments declined 11%in 2022,reflecting a slowdown in the pace of 5G commercialization and thus prolonging the replacement of 4G.As this situation is likely to persist,TSMC projects a continued low-single-
78、digit decline for the smartphone market in 2023.Over the longer term,however,the inevitable migration to 5G,together with improved performance,longer battery life,biosensors and more AI features,will all continue to propel smartphone sales going forward.High performance and power efficient IC techno
79、logies are essential requirements among handset manufacturers,and highly integrated chips and advanced 3D packaging designs are the preferred solutions to optimize cost,power and form factor(IC footprint and thickness).The migration to advanced process technologies will certainly continue spurred by
80、 the need for higher performance chips to run AI applications and various complex software computations as well as higher resolution video.TSMC is an acknowledged leader in process technology for manufacturing highly integrated chips and advanced 3D packaging designs and as such is very well positio
81、ned to serve the evolving smartphone market.High Performance Computing(HPC)The HPC platform includes PCs,tablets,game consoles,servers,base stations and more.Major HPC unit shipments declined 11%in 2022 due to prolonged high inflation,macro-economic uncertainty and inventory overbuilt,all resulting
82、in weak demand on the consumer side.Meanwhile,the server and data center upgrade cycle remained relatively healthy to accommodate rapidly growing data traffic and to fulfill the expanding needs of AI applications and continued 5G base station deployment.Although the trend toward accelerated digitali
83、zation stimulated by the COVID-19 pandemic has induced a structural increase in HPC-related semiconductor demand,the economic headwinds cited above will increasingly dampen demand on both consumer and enterprise sides and,as a result,TSMC projects another year of low teens decline in HPC unit shipme
84、nts in 2023.Longer term,an increasingly intelligent and more connected 5G world will fuel massive requirements for computation power as well as a great need for energy-efficient computing.These require higher performance and more power-efficient CPUs,GPUs,NPUs,AI accelerators,and related-ASICs,which
85、 will drive the overall HPC platform towards richer silicon content,more advanced process technologies and advanced 3D packaging.These trends are all favorable to TSMC given our technology leadership in these areas.TSMC provides customer support,account management and engineering services through of
86、fices in North America,Europe,Japan,China,and South Korea.At the end of 2022,the Company and its subsidiaries employed more than 73,000 people worldwide.The Company is listed on the Taiwan Stock Exchange(TWSE)under ticker number 2330,and its American Depositary Shares(ADSs)are traded on the New York
87、 Stock Exchange(NYSE)under the symbol TSM.2.2 Market/Business Summary2.2.1 TSMC AchievementsIn 2022,TSMC maintained its leading position in the foundry segment of the global semiconductor industry by accounting for 30%of the worldwide semiconductor market excluding memory,an increase from 26%in 2021
88、.TSMCs growth was mainly driven by the continued expansion of 5G and high performance computing(HPC)-related applications.The Companys strong market position stems in great part from its leadership in advanced process technologies.In 2022,53%of TSMCs wafer revenue came from advanced manufacturing pr
89、ocesses defined as geometries of 7nm and smaller up from 50%in 2021.TSMC offers comprehensive technology portfolio and continues to invest in advanced technologies,specialty technologies,and advanced packaging and silicon stacking technologies,to provide customers more added value.In addition to its
90、 leadership in advanced process and specialty technologies,TSMC offers TSMC 3DFabricTM,a comprehensive family of 3D silicon stacking and advanced packaging technologies to complement its process technology offerings.TSMC 3DFabricTM provides customers greater chip design flexibility to unleash innova
91、tion and is another differentiating competitive advantage for the Company.2.2.2 Market OverviewTSMC estimates that the worldwide semiconductor market excluding memory reached US$492 billion in revenue in 2022,representing a 10%increase from 2021.In the foundry segment of the semiconductor industry,t
92、otal revenue rose to US$130 billion in 2022,a robust growth of 28%over 2021.018019Internet of Things(IoT)The IoT platform includes various types of“smart”connected devices ranging from wearables,health monitors and speakers to home automation devices,city and manufacturing automation devices.As the
93、COVID-19 pandemic changed individual life and work styles and accelerated the digital transformation in enterprises,IoT unit shipments grew 18%in 2022,with smart health devices,smart retail,and smart manufacturing as the major growth drivers.While these trends remain strong,TSMC believes demand for
94、consumer-related IoT devices will be somewhat tempered by high inflation and projects unit shipment growth in the low teens in 2023.Overall,as IoT devices take on more AI functions,they will require higher performance but lower power controllers,connectivity ICs and various types of sensors.TSMC off
95、ers the industrys most advanced technologies in these areas including ultra-low power(ULP)and various specialty process technologies to help customers meet demand,fulfill ESG requirements and succeed in the marketplaceAutomotiveWith generally improving chip availability,worldwide car unit sales grew
96、 7%in 2022 but was still held back by supply chain disruptions caused by the Russo-Ukrainian war and sporadic lockdowns due to the spread of COVID-19 particularly in China.The ongoing headwinds of high inflation and macro-economic uncertainty are expected to hold global car unit sales to low-single-
97、digit growth in 2023 as well.The entire automotive industry is moving toward“greener,safer and smarter,”which will accelerate the adoption of electric vehicles(EVs),advanced driver assistance systems(ADAS)and smart cockpit/infotainment systems,along with new electrical/electronic(E/E)architecture.Al
98、l these will lead to increased demand for AP/MCU/ASIC processors,in-car networking,sensors,and power management ICs,thus continuously increasing the silicon content per car.TSMC offers a wide variety of relevant process technologies to enable customers to deliver competitive products in the automoti
99、ve market.Digital Consumer Electronics(DCE)Logistical disruptions such as port congestion led to prolonged lead times in the TV supply chain causing major electronics retailers to over-order and create excess inventory in 2022.At the same time,inflation,rate hikes and the China lockdown due to its z
100、ero-COVID policy weakened demand for TVs,set-top boxes(STB)and other consumer products.As a result,the total DCE market fell by 11%in 2022.While some high-end areas such as large screen,120Hz/144Hz high frame rate TV,voice AI control and WiFi 6 connectivity will continue to show good growth,fears of
101、 economic recession may stifle overall recovery.As a result,TSMC forecasts a low-single-digit decline in global DCE unit shipments in 2023.Regardless of the timing of the recovery,TSMC advanced technologies will continue to enable DCE customers to create and differentiate their innovative products.S
102、upply ChainThe electronics industry features a long and complex supply chain,the elements of which are correlated and highly interdependent.At the upstream manufacturing level,IC vendors need to have sufficient,flexible supply deliveries to handle fluctuating demand dynamics.Foundry vendors play an
103、important role in maintaining the health and effectiveness of the supply chain.As a leader in the foundry segment,TSMC provides advanced technologies and large-scale capacity to complement and support the innovations created in the downstream chain.2.2.4 TSMC Position,Differentiation and StrategyPos
104、itionTSMC is a global semiconductor foundry leader in advanced,specialty and advanced packaging technologies.In 2022,TSMC accounted for 30%of the worldwide semiconductor market excluding memory,an increase from 26%in 2021.Net revenue by geography,calculated mainly on the country in which customers a
105、re headquartered,was:68%from North America;11%from the Asia Pacific region,excluding China and Japan;11%from China;5%from Europe,the Middle East and Africa;and 5%from Japan.Net revenue by platform was:41%from high performance computing;39%from smartphones;9%from the Internet of Things;and 5%from aut
106、omotive.In addition,3%came from digital consumer electronics,while others accounted for the remaining 3%.DifferentiationTSMCs leadership position is based on three defining competitive strengths and a business strategy rooted in the Companys heritage.The Company distinguishes itself from the competi
107、tion through its technology leadership,manufacturing excellence and customer trust.As a technology leader,TSMC is consistently first among dedicated foundries to provide next-generation,leading-edge technologies.The Company also maintains a leadership position in more mature technologies by applying
108、 the lessons learned in developing leading-edge technologies to enrich its specialty technologies.Beyond process technology,TSMC has established frontend and backend integration capabilities to create the optimum power/performance/area“sweet spot”to help customers achieve faster time-to-production.W
109、ell known for industry-leading manufacturing capabilities,TSMC extends its leadership through its Open Innovation Platform(OIP)and Grand Alliance initiatives.The OIP initiative accelerates the pace of innovation in the semiconductor design community and among the Companys ecosystem partners,as well
110、as in its own IP,design implementation and design for manufacturing capabilities,process technology and backend services.A key element is a set of ecosystem interfaces and collaborative components initiated and supported by the Company that more efficiently empower innovation throughout the supply c
111、hain and drive the creation and sharing of new revenue and profits.The TSMC Grand Alliance is one of the most powerful forces for innovation in the semiconductor industry,bringing together customers,electronic design automation(EDA)partners and IP partners,along with the partners in the new 3DFabric
112、 Alliance,officially announced in October 2022,and key equipment and material suppliers all to achieve new,higher levels of collaboration.Through this collaboration,the Grand Alliances objective is to help customers,alliance members and TSMC win business and improve competitiveness.The foundation fo
113、r customer trust is a commitment TSMC made when it opened for business in 1987 to never compete with its customers.In keeping this commitment,the Company has never designed,manufactured or marketed any integrated circuits under its own name,but instead has focused all of its efforts and resources on
114、 becoming the trusted foundry for its customers.StrategyTSMC is confident that its competitive advantages will enable it to prosper from the foundry segments many attractive growth opportunities.For the five major markets,namely smartphones,high performance computing,the Internet of Things,automotiv
115、e,and digital consumer electronics,and in response to the fact that the focus of customer demand is shifting from process-technology-centric to product-application-centric,the Company has constructed five corresponding technology platforms to provide customers with comprehensive and competitive logi
116、c process technologies,specialty technologies,IPs and packaging and testing technologies to shorten customers time to design and time to market.These five platforms are:High Performance Computing(HPC):Driven by data explosion and application innovation,HPC has become one of the key growth drivers fo
117、r TSMCs business.TSMC provides customers,including both fabless IC design companies and system companies,with leading-edge process technologies such as 3nm FinFET(N3),4nm FinFET(N4),5nm FinFET(N5),6nm FinFET(N6),7nm FinFET(N7),and 12nm/16nm FinFET,as well as comprehensive IPs including high-speed in
118、terconnect IPs,to meet customers product requirements for transferring and processing vast amounts of data anywhere and anytime.In particular,TSMC introduced its first HPC focused technology,N4X,representing the ultimate performance and maximum clock frequencies in TSMCs 5-nanometer family.Based on
119、advanced process nodes,a variety of HPC products have been launched,such as personal computer central processing units(CPUs),graphics processor units(GPUs),field programmable gate arrays(FPGAs),server processors,accelerators and high-speed networking chips,etc.These products can be used in current a
120、nd future 5G/6G infrastructures,AI,cloud,and enterprise data centers.The Company also offers multiple advanced TSMC 3DFabricTM packaging and silicon stacking technologies,such as CoWoS,InFO,and TSMC-SoIC,to enable homogeneous and heterogeneous chip integration to meet customers requirements for high
121、 performance,high compute density and high energy efficiency,low latency and high integration.TSMC will continue to optimize its high performance computing platform and strengthen collaboration with customers to help them capture market growth in HPC markets.Smartphone:For customers premium product
122、applications,TSMC offers leading logic process technologies such as N3,N4 and N5,as well as comprehensive IPs to further enhance chip performance,reduce power consumption,and decrease chip size.For mainstream product applications,the Company offers a broad range of logic process technologies,includi
123、ng N6,7nm FinFET Plus(N7+),N7,12nm FinFET compact plus(12FFC+),12nm FinFET compact(12FFC),16nm FinFET compact plus(16FFC+),16nm FinFET compact(16FFC),28nm high performance compact(28HPC),28nm high performance mobile compact plus(28HPC+),and 22nm ultra-low power(22ULP)logic process technologies,in ad
124、dition to comprehensive IPs,to satisfy customer needs for high performance and low power chips.Furthermore,for premium and mainstream product applications,the Company offers highly competitive,leading-edge specialty technologies to deliver specialty companion chips for customers logic application pr
125、ocessors,including RF,embedded flash memory,emerging memory technologies,power management 020021ICs,sensors,and display chips,as well as advanced TSMC 3DFabricTM packaging technologies,such as industry-leading Integrated Fan-Out(InFO)technology.Internet of Things:TSMC provides leading,comprehensive
126、and highly integrated ultra-low power(ULP)technology platforms to enable innovation in artificial intelligence of things(AIoT)applications.The Companys offerings include the new FinFET-based 12-nanometer technology N12eTM featuring energy efficiency with high performance that results in more computi
127、ng power and AI inferencing,22nm ultra-low leakage(ULL),28nm ULP,40nm ULP,and 55nm ULP technologies,which have been widely adopted by various edge AI system-on-a-chip(SoC),and battery-powered applications.TSMC has also extended its low operating voltage(Vdd)offerings,providing simulation program wit
128、h integrated circuit emphasis(SPICE)models with a wide-range of operating voltages for extreme low-power applications.In addition,the Company offers competitive and comprehensive specialty technologies in RF,enhanced analog devices,embedded flash memory,emerging memory,sensors and display chips,powe
129、r management ICs,as well as multiple TSMC 3DFabricTM advanced packaging technologies,including InFO technology to support the fast-growing demand in AIoT edge computing and wireless connectivity.Automotive:TSMC offers a comprehensive spectrum of technologies and services to support the automotive in
130、dustrys three megatrends:safer,smarter and greener.The Company is also an industry leader in providing a robust automotive IP ecosystem,which covers 5nm FinFET,7nm FinFET,and 16nm FinFET technologies,for advanced driver-assistance systems(ADAS),advanced in-vehicle infotainment(IVI),as well as zonal
131、controllers for new electrical/electronic(E/E)architecture for the automotive industry.In addition to its advanced logic platform,TSMC offers a broad array of competitive specialty technologies including 28nm embedded flash memory,28nm,22nm,and 16nm mmWave RF,high sensitivity CMOS Image/LiDAR(light
132、detection and ranging)sensors,and power management ICs.The emerging technology of magnetoresistive random access memory(MRAM)has demonstrated automotive Grade-1 capability on 22nm and is under development with good progress on 16nm to meet automotive Grade-1 requirements.All these technologies are a
133、pplied to TSMCs automotive process qualification standards based on AEC-Q100 standards or meeting customers technology specifications.Digital Consumer Electronics(DCE):TSMC provides customers with leading,comprehensive technologies to deliver AI-enabled smart devices for DCE applications,including s
134、mart digital TV(DTV),set-top box(STB),AI-embedded smart camera and associated wireless local area network(WLAN),power management ICs(PMIC),timing controller(T-CON)and so on.The Companys leading 7nm FinFET(N7),16FFC/12FFC,22ULP/22ULL and 28HPC+technologies have been widely adopted by leading global m
135、akers of 8K/4K DTV,4K streaming STB/over-the-top(OTT),digital single-lens reflex(DSLR)devices,and so on.TSMC will continue to make these technologies more cost competitive through die size shrink for customers digital intensive chip designs and to drive lower power consumption for more cost-effectiv
136、e packaging.TSMC continually strengthens its core competitiveness and deploys both short-and long-term plans for technology and business development and assists customers in taking on the challenges of short product cycles and intense competition in the electronic products market to meet return on i
137、nvestment(ROI)and growth objectives.Short-Term Semiconductor Business Development Plan1.Substantially ramp up the business and sustain advanced technology market segment share by continually increasing capacity and R&D investments.2.Maintain mainstream technology market segment share by expanding bu
138、siness to new customers and market segments.3.Continue to enhance the competitive advantages of the Companys technology platforms in HPC,smartphones,IoT,automotive,and digital consumer electronics to expand TSMCs dedicated foundry services in these product applications.4.Further expand TSMCs busines
139、s and service infrastructure into emerging and developing markets.Long-Term Semiconductor Business Development Plan1.Continue developing leading-edge technologies at a predictable pace to elevate energy-efficient compute.2.Broaden specialty business contributions by further developing derivative tec
140、hnologies.3.Provide more integrated services,covering system-level integration design,design technology definition,design tool preparation,wafer processing,TSMC 3DFabricTM advanced packaging and silicon stacking technologies,and testing services,and so on,all of which deliver more value to customers
141、 through optimized solutions.2.3 Organization2.3.1 Organization ChartShareholders MeetingAudit and Risk Committee(Note)Compensation and People Development Committee(Note)As of 02/28/2023Board of DirectorsChairmanVice ChairmanCEO OfficeOperationsResearch and DevelopmentPathfinding for System Integrat
142、ionEurope and Asia SalesNorth AmericaBusiness DevelopmentCorporate Planning OrganizationCorporate Strategy OfficeQuality and ReliabilityInformation Technology/Materials Management and Risk ManagementFinanceLegalHuman ResourcesCorporate Governance OfficerInternal AuditESGNominating,Corporate Governan
143、ce and Sustainability Committee(Note)Note:On February 14,2023,the Board approved the renaming of“Audit Committee”to“Audit and Risk Committee”,and the renaming of“Compensation Committee”to“Compensation and People Development Committee”,and the establishment of“Nominating,Corporate Governance and Sust
144、ainability Committee”.0220232.3.2 Major Corporate FunctionsOperations Includes managing all fabs in Taiwan and overseas;manufacturing technology development;product engineering,advanced packaging technology development,production and service integration Research and Development Advanced technology d
145、evelopment,exploratory research,and design and technology platform development,specialty technology developmentPathfinding for System Integration System Integration Technology PathfindingEurope and Asia Sales Customer business,technical marketing,and regional market development in Europe and Asia(Ch
146、ina,Japan,South Korea and Taiwan);immediate and comprehensive technical support,as well as customer service including customers in North America.North America Sales and market development,field technical solutions and business operations for customers in North AmericaBusiness Development Identificat
147、ion of market trends and new applications that shape the technology roadmap and portfolios for the Company;also provides key support in strengthening customer relationships along with Company branding management Corporate Planning Organization Planning for operational resources,as well as for produc
148、tion and demand;integration of business processes,corporate pricing,market analysis and forecastingCorporate Strategy Office Corporate strategy formation and implementationQuality and Reliability Assurance of the quality and reliability of the Companys products by resolving issues at the development
149、al stage;improving and managing product quality at the production stage;providing solutions to customers quality related issues;and providing services for advanced materials and failure analysisRisk Management Implementation of Enterprise Risk Management,Business Continuity Management and Crisis Man
150、agementCorporate Environmental,Safety and Health Environmental protection,safety and health management and strategy formulationInformation Technology/Corporate Information Security Integration of the Companys technology and business IT systems;infrastructure development;communication services and as
151、surance of IT security and service quality;implementing big data and machine learning to improve the Companys productivity and accelerate R&D delivery Materials Management Procurement,warehousing,import and export,and logistics supportFinance and Spokesperson Corporate finance,accounting and corpora
152、te communications;with the head of the organization also serving as the Company SpokespersonLegal Corporate legal affairs including regulatory compliance,commercial transactions,patents and management of other intellectual properties,and litigation Human Resources Personnel management,organizational
153、 development,physical security management,employee services and wellness managementInternal Audit Inspection and review of the Companys internal control system,its adequacy in design and effectiveness in operation,with independent risk assessment to ensure compliance with the Companys policies and p
154、rocedures as well as with external regulationsESG Identify ESG issues in relation to the Companys operations and stakeholders concern,frame sustainability strategies,goals,action plans and track implementation results,continuing to create sustainability value0240252.4 Board Members2.4.1 Information
155、Regarding Board Members Title/NameGenderAgeNationality or Place of RegistrationDate ElectedTerm ExpiresDate First ElectedShares Held When ElectedShares Currently HeldShares Currently Held by Spouse&Minors Selected Education and Professional QualificationPast PositionsCurrent Positions at Non-profit
156、OrganizationsSelected Current Positions at TSMC and Other CompaniesShares(Note 1)%Shares(Note 1)%Shares(Note 1)%ChairmanMark LiuMale66-70U.S.07/26/202107/25/202406/08/201712,913,1140.05%12,916,2160.05%-Selected Education and Professional QualificationBachelor Degree in Electrical Engineering,Nationa
157、l Taiwan UniversityMaster Degree and Ph.D.in Electrical Engineering&Computer Science,University of California,Berkeley,U.S.Laureate,Industrial Technology Research Institute(ITRI)Past PositionsPresident,Worldwide Semiconductor Manufacturing Corp.Senior Vice President,Advanced Technology Business,TSMC
158、Senior Vice President,Operations,TSMCExecutive Vice President and Co-Chief Operating Officer,TSMCPresident and Co-CEO,TSMCCurrent Positions at Non-profit OrganizationsChairman,Taiwan Semiconductor Industry Association(TSIA)(Note 2)NoneVice ChairmanC.C.WeiMale66-70R.O.C.07/26/202107/25/202406/08/2017
159、7,179,2070.03%6,346,2070.02%700,2610.00%Selected Education and Professional QualificationBachelor and Master Degrees in Electrical Engineering,National Chiao Tung UniversityPh.D.in Electrical Engineering,Yale University,U.S.Laureate,Industrial Technology Research Institute(ITRI)Past PositionsSenior
160、Vice President,Technology,Chartered Semiconductor Manufacturing Ltd.,SingaporeSenior Vice President,Mainstream Technology Business,TSMCSenior Vice President,Business Development,TSMCExecutive Vice President and Co-Chief Operating Officer,TSMCPresident and Co-CEO,TSMCChairman,Taiwan Semiconductor Ind
161、ustry Association(TSIA)CEO,TSMCDirectorF.C.TsengMale76-80R.O.C.07/26/202107/25/202405/13/199734,472,6750.13%29,472,6750.11%5,132,8550.02%Selected Education and Professional QualificationBachelor Degree in Electrical Engineering,National Cheng Kung UniversityMaster Degree in Electrical Engineering,Na
162、tional Chiao Tung UniversityPh.D.in Electrical Engineering,National Cheng Kung UniversityHonorary Ph.D.,National Chiao Tung UniversityHonorary Ph.D.,National Tsing Hua UniversityPast PositionsPresident,Vanguard International Semiconductor Corp.President,TSMCDeputy CEO,TSMCVice Chairman,TSMCIndepende
163、nt Director,Chairman of Audit Committee&Compensation Committee member,Acer Inc.Director,National Culture and Arts Foundation,R.O.C.Current Positions at Non-profit OrganizationsChairman,TSMC Education and Culture FoundationDirector,Cloud Gate Culture and Arts FoundationDirector,Zu-Ming Medical Founda
164、tionChairman of:-TSMC China Company Ltd.(a non-public company)-Global UniChip Corp.Vice Chairman,Vanguard International Semiconductor Corp.Director National Development Fund,Executive Yuan(Note 3)Representative:Ming-Hsin KungMale56-60R.O.C.07/26/202107/25/202412/10/198607/24/2020(Note 4)1,653,709,98
165、0779(Note 4)6.38%0.00%1,653,709,9807796.38%0.00%-Selected Education and Professional Qualification B.A.,Statistics,Fu Jen Catholic UniversityM.A.,Economics,National Taiwan UniversityPh.D.,Economics,National Chung Hsing UniversityPast PositionsAdjunct Assistant Professor,Tamkang UniversityDeputy Exec
166、utive Secretary,Industrial Development Advisory Council,Ministry of Economic AffairsResearch Fellow,Science and Technology Advisory Group,Executive YuanResearch Fellow,Taiwan Institute of Economic ResearchVice President,Taiwan Institute of Economic ResearchAdvisory Committee Member,Mainland Affairs
167、Council,Executive YuanConsultant,Ministry of Economic AffairsMember,National Stabilization Fund Management Committee,Executive YuanDeputy Minister,National Development Council&concurrently Executive Secretary,National Development Fund,Executive Yuan Deputy Minister,Ministry of Economic AffairsMinist
168、er without Portfolio,Executive YuanCurrent Positions at Non-profit OrganizationsMinister without Portfolio,Executive Yuan&concurrently Minister,National Development CouncilThe Convener of the National Development FundDirector,Taiwania Capital Management Corp.(a non-public company)(Representative of
169、the National Development Fund)As of 02/28/2023(Continued)026027Title/NameGenderAgeNationality or Place of RegistrationDate ElectedTerm ExpiresDate First ElectedShares Held When ElectedShares Currently HeldShares Currently Held by Spouse&Minors Selected Education and Professional QualificationPast Po
170、sitionsCurrent Positions at Non-profit OrganizationsSelected Current Positions at TSMC and Other CompaniesShares(Note 1)%Shares(Note 1)%Shares(Note 1)%Independent DirectorSir Peter L.BonfieldMale76-80UK07/26/202107/25/202405/07/2002-Selected Education and Professional QualificationBachelor and Honou
171、rs Degrees in Engineering,Loughborough UniversityFellow of the Royal Academy of EngineeringKnighted,1996Awarded Commander of the Order of the British Empire(CBE),1989Awarded the Order of the Lion of FinlandAwarded the Gold Medal from the Institute of ManagementAwarded the Mountbatten Medal from the
172、National Electronics CouncilAwarded the FT ODX Outstanding Director Award,2019Past PositionsChairman and CEO,ICL Plc,UKCEO and Chairman of the Executive Committee,British Telecommunications PlcVice President,the British Quality FoundationDirector,Mentor Graphics Corp.,U.S.Director,Sony Corp.,JapanDi
173、rector,L.M.Ericsson,SwedenChairman,GlobalLogic Inc.,U.S.Senior Advisor,Hampton Group,LondonChair of Council and Senior Pro-Chancellor,Loughborough University,UKBoard Member,EastWest Institute,New YorkChairman,NXP Semiconductors N.V.,the NetherlandsNon-Executive Director of:-Imagination Technologies
174、Group Ltd.,UK(a non-public company)-Darktrace Plc,UKAdvisory Board Member,The Longreach Group Ltd.,HK(a non-public company)Senior Advisor,Alix Partners LLP,LondonBoard Mentor,Chairman Mentors International(CMi)Ltd.,London(a non-public company)Independent DirectorKok-Choo ChenFemale71-75R.O.C.07/26/2
175、02107/25/202406/09/2011-Selected Education and Professional Qualification Inns of Court School of Law,EnglandBarrister-at-law,EnglandAdvocate&Solicitor,SingaporeAttorney-at-law,California,U.S.Professional ExperienceLawyer,Tan,Rajah&Cheah,Singapore(1969-1970)Lawyer,Sullivan&Cromwell,New York,U.S.(197
176、1-1974)Lawyer,Heller,Erhman,White&McAuliffe,San Francisco,California,U.S.(1974-1975)Partner,Ding&Ding Law Offices,R.O.C.(1975-1988)Partner,Chen&Associates Law Offices,R.O.C.(1988-1992)Vice President,Echo Publishing,R.O.C.(1992-1995)President,National Culture and Arts Foundation,R.O.C.(1995-1997)Seni
177、or Vice-President and General Counsel,TSMC(1997-2001)Founder and Executive Director,Taipei Story House(2003-2015)Advisor,Executive Yuan,R.O.C.(2009-2016)Director,National Culture and Arts Foundation,R.O.C.(2011-2016)Chairman,National Performing Arts Center(2014-2017)Founder and Executive Director,Mu
178、seum207,Taipei(2017-2022)Academic ExperienceLecturer,Nanyang University,Singapore(1970-1971)Associate Professor,Soochow University,(1981-1998)Chair Professor,National Tsing Hua University(1999-2002)Professor,National Chengchi University(2001-2004)Professor,Soochow University(2001-2008)Current Positi
179、ons at Non-profit OrganizationsDirector,Republic of China Female Cancer FoundationFounder and Chairman,Artspace K,Hong Kong(2020-)NoneIndependent DirectorMichael R.SplinterMale71-75U.S.07/26/202107/25/202406/09/2015-Selected Education and Professional Qualification Bachelor and Master Degrees in Ele
180、ctrical Engineering,University of Wisconsin-MadisonHonorary Ph.D in Engineering,University of Wisconsin-MadisonAwarded 2013 Robert N.Noyce Award by Semiconductor Industry AssociationRecognized as NACD(National Association of Corporate Directors)Directorship CertifiedTM,2020Member of the National Aca
181、demy of Engineering,2017Past PositionsExecutive Vice President of Technology and Manufacturing group,Intel Corp.Executive Vice President of Sales and Marketing,Intel Corp.CEO,Applied Materials,Inc.Chairman,Applied Materials,Inc.Director,The NASDAQ OMX Group,Inc.Director,Silicon Valley Leadership Gro
182、upDirector,Semiconductor Equipment and Materials International(SEMI)Director,Meyer Burger Technology Ltd.,SwitzerlandDirector,University of Wisconsin Foundation,U.S.Chairman of the Board,NASDAQ,Inc.Chairman of the Board,US-Taiwan Business CouncilCurrent Positions at Non-profit OrganizationsChair of
183、Industrial Advisory Committee,National Institute of Standards and Technology,Department of Commerce,U.S.Lead Independent Director,NASDAQ,Inc.Independent Director and Compensation Committee Chair,Gogoro Inc.,Cayman IslandsDirector of:-Pica8,Inc.,U.S.(a non-public company)-Tigo Energy,Inc.,U.S.(a non-
184、public company)-Kioxia Holdings Corp.,Japan(a non-public company)General Partner of:-WISC Partners LP,U.S.-MRS Business and Technology Advisors,U.S.(a non-public company)(Continued)028029Title/NameGenderAgeNationality or Place of RegistrationDate ElectedTerm ExpiresDate First ElectedShares Held When
185、 ElectedShares Currently HeldShares Currently Held by Spouse&Minors Selected Education and Professional QualificationPast PositionsCurrent Positions at Non-profit OrganizationsSelected Current Positions at TSMC and Other CompaniesShares(Note 1)%Shares(Note 1)%Shares(Note 1)%Independent DirectorMoshe
186、 N.GavrielovMale66-70U.S.07/26/202107/25/202406/05/2019-Selected Education and Professional Qualification Bachelor Degree in Electrical Engineering,Technion-Israel Institute of TechnologyMaster Degree in Computer Science,Technion-Israel Institute of TechnologyPast PositionsIn a variety of engineerin
187、g and engineering management positions,National Semiconductor Corp.and Digital Equipment Corp.,U.S.In a variety of executive management positions,LSI Logic Corp.for nearly 10 years,U.S.CEO,Verisity,Ltd.,U.S.Executive Vice President and General Manager of the Verification Division,Cadence Design Syst
188、ems,Inc.,U.S.President and CEO,Xilinx,Inc.,U.S.Director,Xilinx,Inc.,U.S.Executive Chairman,Wind River Systems,Inc.,U.S.(2018-2022)Current Positions at Non-profit OrganizationsDirector,San Jose Institute of Contemporary Art,U.S.Chairman of:-SiMa Technologies,Inc.,U.S.(a non-public company)-Foretellix
189、,Ltd.,Israel(a non-public company)Independent DirectorYancey HaiMale71-75R.O.C.U.S.07/26/202107/25/202406/09/2020-Selected Education and Professional Qualification M.A.,International Business Management,University of Texas at DallasLaureate,Industrial Technology Research Institute(ITRI)Past Position
190、sCountry Manager,GE Capital Taiwan Vice Chairman and CEO,Delta Electronics,Inc.Chair,Strategic Steering Committee,Delta(2012-2021)Current Positions at Non-profit OrganizationsSenior Strategy Consultant,Cloud Computing&IoT Association in TaiwanDirector,Taiwan Business Council for Sustainable Developm
191、entDirector,Delta Electronic FoundationDirector,Felix Chang FoundationDirector and Finance Committee Member,Chiang Ching-Kuo Foundation for International Scholarly ExchangeChairman,Taiwan Climate PartnershipChairman,Delta Electronics,Inc.(Delta),2012-Chair of ESG Committee,Delta Director of Deltas s
192、ubsidiaries:-Delta Electronics(Shanghai)Co.,Ltd.(a non-public company)-Delta Networks,Inc.(a non-public company)-Delta Electronics Capital Company(a non-public company)-Cyntec Co.,Ltd.(a non-public company)Independent Director,Audit Committee member,ESG Committee member and Convener of Remuneration
193、Committee,USI CorporationDirector and Commissioner of ESG&Net Zero Committee,CTCI CorporationIndependent DirectorL.Rafael ReifMale71-75U.S.07/26/202107/25/202407/26/2021-Selected Education and Professional QualificationIngeniero Elctrico Degree,Universidad de Carabobo,Valencia,VenezuelaMaster Degree
194、 and Ph.D.in Electrical Engineering,Stanford UniversityHonorary Doctor of Laws degree,The Chinese University of Hong Kong(2015)Honorary Doctorates from Tsinghua University(2016),the Technion(2017),Arizona State University(2018)and University of Miami(2022)Member of Tau Beta Pi,the Engineering Honor
195、SocietyMember of the Electrochemical Society Fellow of the Institute of Electrical and Electronics Engineers(IEEE)Member of the American Academy of Arts and Sciences,the National Academy of Engineering and the Chinese Academy of EngineeringFellow of the National Academy of InventorsAwarded with Unit
196、ed States Presidential Young Investigator Award(1984)Awarded with the Semiconductor Research Corporations Aristotle Award(2000)Awarded the Tribeca Disruptive Innovation Award(2012)Awarded the Frank E.Taplin,Jr.Public Intellectual Award by the Woodrow Wilson National Fellowship Foundation(2015)Awarde
197、d with Engineer of the Year from Great Minds in STEM(2018)Awarded the Simon Ramo Founders Award by the U.S.National Academy of Engineering(2022)Inventor or co-inventor on 13 patents,editor or Co-editor of 5 books,and supervisor to 38 doctoral thesesPast PositionsAssistant Professor,Universidad Simn
198、Bolvar,Caracas,VenezuelaVisiting Assistant Professor of Electrical Engineering,Stanford UniversityFaculty,Massachusetts Institute of Technology(MIT),since 1980IBM Faculty Fellowship,MIT Center for Materials Science and EngineeringAnalog Devices Career Development Professorship,MIT Electrical Enginee
199、ringFariborz Maseeh Professor of Emerging Technology,MIT(2004-2012)Director of Microsystems Technology Laboratories,MITAssociate Department Head of Electrical Engineering,MITHead of the Department of Electrical Engineering and Computer Science(EECS),MITProvost,MITBoard Director,Schlumberger LimitedP
200、resident,MIT(2012-2022)Current Positions at Non-profit OrganizationsPresident Emeritus,MIT,since 2023Member of Board of Trustees,Carnegie Endowment for International PeaceDirector,Council on Foreign Relations,U.S.Co-Chair of Growth Technical Advisory Board,Applied Materials,Inc.Remarks:1.No member o
201、f the Board of Directors held TSMC shares by nominee arrangement.2.Managers or Directors who are spouses or within second-degree relative of consanguinity to the directors:None.3.Chairman and President(or someone with an equivalent job responsibility,i.e.the highest ranking manager of the company)ar
202、e not(1)the same person,(2)in a marital relationship with each other,or(3)within one degree of consanguinity.Note 1:Does not include shares held in the form of ADSs.Note 2:Chairman Dr.Mark Liu retired from his current position as the Chairman of Taiwan Semiconductor Industry Association(TSIA)on Marc
203、h 30,2023.Note 3:Major Shareholders of the Institutional ShareholderInstitutional ShareholderMajor Shareholders(Top 10 Shareholders)of the Institutional ShareholderNational Development Fund,Executive Yuan Not ApplicableNote 4:Mr.Ming-Hsin Kung was appointed as the representative of National Developm
204、ent Fund on July 24,2020.0300312.4.2 Remuneration Paid to Directors and Independent Directors(Note 1)Unit:NT$Note 1:Directors and Independent Directors remuneration policies,procedures,standards and structure,as well as the linkage to responsibilities,risks and time spent:According to TSMCs Articles
205、 of Incorporation,the Board of Directors is authorized to determine the salary for the Chairman,Vice Chairman and Directors,taking into account the extent and value of the services provided for the management of the Corporation and the standards of the industry within the R.O.C.and overseas.The Arti
206、cles of Incorporation also provide that the compensation to directors shall be no more than 0.3%of annual profits and directors who also serve as executive officers of TSMC are not entitled to receive compensation to directors.According to TSMCs Compensation Committee Charter,the distribution of com
207、pensation to directors shall be made in accordance with TSMCs“Rules for Distribution of Compensation to Directors”based on the following principles:(1)directors who also serve as executive officers of the Company are not entitled to receive compensation;(2)the compensation for independent directors
208、may be higher than the other directors,as all independent directors also serve as members of the Audit Committee and the Compensation Committee and thus participate in the discussions as well as resolutions of related committee meetings in accordance with the charter of each committee;and(3)the comp
209、ensation for overseas independent directors may be higher than domestic independent directors,as they require additional time to attend quarterly meetings in Taiwan.Note 2:Pensions funded according to applicable law.Note 3:The above-mentioned figures include expenses for Company cars and related rei
210、mbursements,but do not include compensation paid to Company drivers(totaled NT$5,205,050).Note 4:Total remuneration paid to the directors from TSMC and from all consolidated entities in 2021,including their employee compensation,both accounted for 0.1521%of 2021 net income.Title/NameDirectors Remune
211、ration(A+B+C+D)as a%of Net IncomeCompensation Earned by a Director Who is an Employee of TSMC or of TSMCs Consolidated Entities(A+B+C+D+E+F+G)as a%of Net Income(Note 4)Compensation Paid to Directors from Non-consolidated Affiliates or Parent CompanyBase Compensation(A)Severance Pay and Pensions(B)(N
212、ote 2)Compensation to Directors(C)Allowances(D)(Note 3)Base Compensation,Bonuses,and Allowances(E)(Note 3)Severance Pay and Pensions(F)(Note 2)Profit Sharing(G)From TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Conso
213、lidated EntitiesFrom TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Consolidated EntitiesCash Stock(Fair Market Value)Cash Stock(Fair Market Value)ChairmanMark Liu50,905,19250,90
214、5,192214,206 214,206 579,536,780 579,536,780 1,418,210 1,418,210 0.0622%0.0622%-0.0622%0.0622%-Vice ChairmanC.C.Wei-353,404,118 353,404,118 214,206 214,206 289,768,390-289,768,390-0.0633%0.0633%-DirectorF.C.Tseng-10,560,00010,560,0001,324,440 1,324,440 0.0012%0.0012%-0.0012%0.0012%16,904,548 Directo
215、rNational Development Fund,Executive YuanRepresentative:Ming-Hsin Kung-10,560,00010,560,000-0.0010%0.0010%-0.0010%0.0010%-Independent Director Sir Peter L.Bonfield-15,767,97215,767,972-0.0016%0.0016%-0.0016%0.0016%-Independent Director Kok-Choo Chen-13,200,00013,200,000-0.0013%0.0013%-0.0013%0.0013%
216、-Independent Director Michael R.Splinter-15,767,97215,767,972-0.0016%0.0016%-0.0016%0.0016%-Independent Director Moshe N.Gavrielov-15,767,97215,767,972-0.0016%0.0016%-0.0016%0.0016%-Independent Director Yancey Hai-13,200,00013,200,000-0.0013%0.0013%-0.0013%0.0013%-Independent DirectorL.Rafael Reif-1
217、5,767,972 15,767,972-0.0016%0.0016%-0.0016%0.0016%-Total50,905,192 50,905,192 214,206 214,206 690,128,668 690,128,668 2,742,650 2,742,650 0.0732%0.0732%353,404,118 353,404,118 214,206 214,206 289,768,390-289,768,390-0.1365%0.1365%16,904,548*Other than disclosure in the above table,Directors remunera
218、tions earned by providing services(e.g.providing consulting services as a non-employee of parent company/all consolidated entities/non-consolidated affiliates)to TSMC and all consolidated entities in the 2022 financial statements:Dr.F.C.Tseng for NT$17,750,609.0320332.5 Management Team2.5.1 Informat
219、ion Regarding Management TeamAs of 02/28/2023Title Name(Note1)GenderNationalityOn-board Date(Note 2)Shares HeldShares Held by Spouse&MinorsShares Held in the Name of OthersEducation and Selected Past PositionsSelected Current Positions at Other CompaniesManagers Who are Spouses or within Second-degr
220、ee Relative of Consanguinity to Each Other(Note 4)Shares(Note 3)%Shares(Note 3)%Shares(Note 3)%TitleNameRelationChief Executive OfficerC.C.Wei MaleR.O.C.02/01/19986,346,2070.02%700,261 0.00%-Ph.D.,Electrical Engineering,Yale University,U.S.President and Co-Chief Executive Officer,TSMCExecutive Vice
221、President and Co-Chief Operating Officer,TSMCSenior Vice President,Business Development,TSMCSenior Vice President,Mainstream Technology Business,TSMCSenior Vice President,Chartered Semiconductor Manufacturing Ltd.NoneNoneNoneNoneSenior Vice President Human ResourcesLora HoFemaleR.O.C.06/01/19994,399
222、,3420.02%2,059,5300.01%-Master,Business Administration,National Taiwan University,TaiwanSenior Vice President,Europe and Asia Sales,TSMCSenior Vice President,Chief Financial Officer/Spokesperson,TSMCSenior Director,Accounting,TSMCVice President&CFO,TI-Acer Semiconductor Manufacturing Corp.Director a
223、nd/or Supervisor,TSMC subsidiariesNoneNoneNoneSenior Vice President Research and DevelopmentWei-Jen Lo MaleR.O.C.07/01/20041,441,127 0.01%-Ph.D.,Solid State Physics and Surface Chemistry,University of California,Berkeley,U.S.Vice President,Technology Development,TSMCVice President,Manufacturing Tech
224、nology,TSMCVice President,Advanced Technology Business,TSMCVice President,Operations II,TSMCDirector,Advanced Technology Development and CTM Plant Manager,Intel Corp.NoneNoneNoneNoneSenior Vice President Corporate Strategy OfficeCEO&President TSMC AZRick CassidyMaleU.S.11/14/1997-Bachelor,Engineerin
225、g Technology,United States Military Academy at West Point,U.S.Chief Executive Officer,TSMC North AmericaPresident,TSMC North AmericaVice President,TSMC North AmericaPresident and CEO,TSMC subsidiary(Note 5)NoneNoneNoneSenior Vice President Operations Y.P.ChinMaleR.O.C.01/01/19874,920,122 0.02%4,191,
226、1070.02%-Master,Electrical Engineering,National Cheng Kung University,TaiwanSenior Vice President,Product Development,TSMCVice President,Advanced Technology and Business,TSMCDirector,TSMC subsidiariesNoneNoneNoneSenior Vice PresidentResearch and DevelopmentY.J.MiiMaleR.O.C.11/14/19941,002,419 0.00%-
227、Ph.D.,Electrical Engineering,University of California,Los Angeles,U.S.Vice President,Technology Development,TSMC Senior Director,Platform I Division,TSMCNoneNoneNoneNoneSenior Vice PresidentChief Information Security OfficerInformation Technology and Materials Management&Risk ManagementJ.K.Lin MaleR
228、.O.C.01/01/198712,648,2510.05%1,047,9610.00%-Bachelor,Science,National Changhua University of Education,TaiwanVice President,Mainstream Fabs and Manufacturing Technology,TSMCSenior Director,Mainstream Fabs,TSMCNoneNoneNoneNoneSenior Vice PresidentEurope&Asia Sales and Research&Development/Corporate
229、ResearchCliff HouMaleR.O.C.12/15/1997404,5750.00%60,8020.00%-Ph.D.,Electrical Engineering,Syracuse University,U.S.Senior Vice President,Technology Development,TSMCVice President,Design and Technology Platform,TSMCSenior Director,Design and Technology Platform,TSMCDirector and/or President,TSMC subsi
230、diaries Director,TSMC affiliate NoneNoneNoneSenior Vice PresidentBusiness DevelopmentKevin Zhang MaleU.S.11/01/2016105,0000.00%-Ph.D.,Electrical Engineering,Duke University,U.S.Vice President,Design and Technology Platform,TSMCVice President,Technology and Manufacturing Group,Intel Corp.NoneNoneNone
231、NoneVice President and General Counsel Corporate Governance Officer Legal Sylvia FangFemaleR.O.C.03/20/1995700,285 0.00%67,906 0.00%384,0000.00%Master,Comparative Law,School of Law,University of Iowa,U.S.Attorney-at-law,TaiwanAssociate General Counsel,TSMCSenior Associate,Taiwan International Patent
232、 and Law Office(TIPLO)Director and/or Supervisor,TSMC subsidiaries NoneNoneNoneVice PresidentOperations/Fab Operations I Y.L.WangMaleR.O.C06/01/1992218,535 0.00%1,135,529 0.00%-Ph.D.,Electrical Engineering,National Chiao Tung University,TaiwanVice President,Fab Operations,TSMCVice President,Technolo
233、gy Development,TSMCVice President,Fab 14B,TSMCSenior Director,Fab 14B,TSMCDirector,TSMC subsidiary(Note 5)NoneNoneNoneVice President and TSMC Distinguished FellowPathfinding for System IntegrationDouglas Yu MaleR.O.C.12/28/1994250,000 0.00%-Ph.D.,Materials Engineering,Georgia Institute of Technology
234、,U.S.Vice President,Integrated Interconnect&Packaging,TSMCSenior Director,Integrated Interconnect&Packaging Division,TSMCNoneNoneNoneNoneVice President and TSMC FellowOperations/Advanced Technology and Mask EngineeringT.S.ChangMaleR.O.C.02/06/1995173,7810.00%-Ph.D.,Electrical Engineering,National Ts
235、ing Hua University,TaiwanVice President,Product Development,TSMCVice President,Fab 12B,TSMCSenior Director,Fab 12B,TSMCNoneNoneNoneNoneVice PresidentResearch and Development/Platform TechnologyMichael WuMaleR.O.C.12/09/1996485,5010.00%198,9430.00%-Ph.D.,Electrical Engineering,University of Wisconsin
236、-Madison,U.S.Senior Director,Platform Development,TSMC NoneNoneNoneNoneVice PresidentResearch and Development/PathfindingMin CaoMaleU.S.07/29/2002363,1520.00%34,4700.00%-Ph.D.,Physics,Stanford University,U.S.Senior Director,Pathfinding Division,TSMCNoneNoneNoneNone(Continued)034035Title Name(Note1)G
237、enderNationalityOn-board Date(Note 2)Shares HeldShares Held by Spouse&MinorsShares Held in the Name of OthersEducation and Selected Past PositionsSelected Current Positions at Other CompaniesManagers Who are Spouses or within Second-degree Relative of Consanguinity to Each Other(Note 4)Shares(Note 3
238、)%Shares(Note 3)%Shares(Note 3)%TitleNameRelationVice PresidentOperations/Fab Operations IIY.H.LiawMaleR.O.C.08/03/1988370,0000.00%-430,0000.00%Master,Chemical Engineering,National Tsing Hua University,TaiwanVice President,Fab Operations,TSMCVice President,Fab 15B,TSMCSenior Director,Fab 15B,TSMCDir
239、ector,TSMC subsidiaries Director,TSMC affiliate(Note 6)NoneNoneNoneVice PresidentResearch and Development/Advanced Tool and Module DevelopmentSimon JangMaleR.O.C.09/01/1993351,6950.00%6630.00%-Ph.D.,Materials Science&Engineering,Massachusetts Institute of Technology,U.S.Senior Director,Advanced Tool
240、 and Module Development Division,TSMCNone1.Deputy Director2.Manager1.Sharon Jang2.Jimmy Hu1.Sister2.Brother in lawVice President and Chief Financial Officer SpokespersonFinance Wendell HuangMaleR.O.C.05/03/19991,651,9240.01%-Master,Business Administration,Cornell University,U.S.Deputy Chief Financia
241、l Officer,TSMCSenior Director,Finance Division,TSMCVice President,Corporate Finance,ING BaringsVice President,Corporate Finance,Chase Manhattan BankVice President,Corporate Finance,Bankers Trust CompanyDirector,Supervisor,and/or President,TSMC subsidiariesDirector,TSMC affiliateNoneNoneNoneVice Pres
242、identResearch and Development/More than Moore TechnologiesC.S.YooMaleR.O.C.06/16/19881,703,6900.01%219,9240.00%851,9080.00%Ph.D.,Chemical Engineering,Worcester Polytech.Institute,U.S.Vice President,Europe&Asia Sales,TSMCSenior Director,Office of Strategy Customer Program,TSMCSenior Director,E-Beam O
243、peration Division,TSMCNoneNoneNoneNoneVice PresidentQuality and Reliability and Operations/Advanced Packaging Technology and Service Jun HeMaleU.S.05/22/201728,3710.00%-Ph.D.,Materials Science and Engineering,University of California,Santa Barbara,U.S.Senior Director,Quality and Reliability,TSMCSeni
244、or Director,Head of Quality and Reliability for Technology&Manufacturing Group,Intel Corp.Director,TSMC subsidiariesNoneNoneNoneVice PresidentResearch and Development/Platform TechnologyGeoffrey Yeap MaleU.S.03/21/201658,0000.00%-Ph.D.,Electrical and Computer Engineering,University of Texas-Austin,U
245、.S.Senior Director,Platform Development,TSMCSenior Director,Advanced Technology,TSMCVice President,Engineering,Silicon Technology,QualcommNoneNoneNoneNoneVice President and Chief Information Officer Information Technology and Materials Management&Risk Management/Corporate Information TechnologyChris
246、 Horng-Dar LinMaleU.S.01/04/202116,0000.00%-Ph.D.,Electrical Engineering and Computer Science,University of California,Berkeley,U.S.Vice President,Information Technology,MozillaDirector,Enterprise Platform Infrastructure,FacebookNoneNoneNoneNoneVice PresidentCorporate Planning OrganizationJonathan L
247、ee MaleR.O.C.05/28/2007368,6040.00%6,0000.00%-Master,Business Administration,City University of New York,Baruch College,U.S.Senior Director,Strategic Planning Division,TSMCNoneNoneNoneNoneVice PresidentOperations/FacilityArthur ChuangMaleR.O.C.01/17/19892,602,9810.01%1,993,0400.01%-Ph.D.,Civil Engin
248、eering,National Taiwan University,TaiwanSenior Director,Facility Division,TSMCNoneSection ManagerGavin ChuangBrotherVice President and TSMC FellowResearch and Development/Design&Technology PlatformL.C.LuMaleR.O.C.08/01/2000175,2270.00%15,0000.00%-Ph.D.,Computer Science,Yale University,U.S.Senior Dir
249、ector,Digital IPs Solution Division,TSMCNoneNoneNoneNoneVice PresidentResearch and Development/Integrated Interconnect&PackagingK.C.Hsu MaleR.O.C.11/01/202160,0000.00%-Master,Technology Management,National Chiao-Tung University,TaiwanTaiwan Country Manager,Micron Technology Inc.President,WaferTech,L
250、LCNoneNoneNoneNoneNote 1:Senior Vice President Mr.J.K.Wang retired,effective May 7,2022.Vice President Ms.Connie Ma retired,effective November 1,2022.Vice President Dr.Marvin Liao retired,effective November 11,2022.Note 2:On-board date means the official date joining TSMC.Note 3:Does not include sha
251、res held in the form of ADSs.Note 4:President(or someone with an equivalent job responsibility,i.e.the highest ranking manager of the company)and Chairman are not(1)the same person,(2)in a marital relationship with each other,or(3)within one degree of consanguinity.Note 5:Effective April 1,2023,Mr.R
252、ick Cassidy was appointed as Chairman of the Board of Directors and Mr.Y.L.Wang was appointed as CEO of TSMC Arizona Corporation.Note 6:Effective April 1,2023,Mr.Y.H.Liaw was appointed as CEO of Japan Advanced Semiconductor Manufacturing,Inc.,in addition to his current position as Representative Dir
253、ector of the Company.0360372.5.2 Compensation Paid to CEO and Vice Presidents(Note 1)TitleNameSalary(A)Severance Pay and Pensions(B)(Note 3)Bonuses and Allowances(C)(Note 4)Profit Sharing(D)(A+B+C+D)as a%of Net Income(Note 5)Compensation Received from Non-consolidated Affiliates or Parent CompanyFro
254、m TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Consolidated EntitiesFrom TSMCFrom All Consolidated EntitiesCashStock(Fair Market Value)CashStock(Fair Market Value)Chief Executive OfficerC.C.Wei14,185,74014,185,74021
255、4,206214,206339,218,378339,218,378289,768,390-289,768,390-0.0633%0.0633%-Vice President,Chief Financial Officer/SpokespersonWendell Huang5,684,7825,684,78285,84185,84159,631,85359,631,85350,691,071-50,691,071-0.0114%0.0114%-Senior Vice PresidentLora Ho139,283,107156,214,6642,103,1792,498,9791,549,04
256、9,7351,679,252,7191,311,694,719-1,311,694,719-0.2953%0.3098%-Senior Vice PresidentWei-Jen Lo Senior Vice President/CEO&President of TSMC ArizonaRick Cassidy Senior Vice PresidentY.P.Chin Senior Vice PresidentY.J.MiiSenior Vice President/Chief Information Security OfficerJ.K.LinSenior Vice PresidentJ
257、.K.Wang(Note 2)Senior Vice PresidentCliff HouSenior Vice PresidentKevin ZhangVice President and General Counsel/Corporate Governance OfficerSylvia FangVice President Connie Ma(Note 2)Vice PresidentY.L.WangVice President and TSMC Distinguished FellowDouglas YuVice President and TSMC FellowT.S.ChangVi
258、ce PresidentMichael WuVice PresidentMin CaoVice PresidentMarvin Liao(Note 2)Vice PresidentY.H.LiawVice PresidentSimon JangVice PresidentC.S.YooVice PresidentJun HeVice PresidentGeoffrey Yeap Vice President and Chief Information OfficerChris Horng-Dar LinVice PresidentJonathan Lee Vice PresidentArthu
259、r ChuangVice President and TSMC FellowL.C.LuVice PresidentK.C.HsuTotal159,153,629176,085,1862,403,2262,799,0261,947,899,9662,078,102,9501,652,154,180-1,652,154,180-0.3700%0.3846%-Unit:NT$Note 1:Compensation policy,standards/packages,procedures,the linkage to operating performance and future risk exp
260、osure:The total compensation paid to the executive officers is based on their job responsibility,contribution,company performance,and projected future risks the Company will face.It is reviewed by the Compensation Committee then submitted to the Board of Directors for approval.Note 2:Senior Vice Pre
261、sident Mr.J.K.Wang retired,effective May 7,2022.Vice President Ms.Connie Ma retired,effective November 1,2022.Vice President Dr.Marvin Liao retired,effective November 11,2022.The pension payment to Mr.J.K.Wang,Ms.Connie Ma and Dr.Marvin Liao amounts to NT$34,518,105.Note 3:Pensions funded according
262、to applicable law.Note 4:The above-mentioned figures include the expense for the business performance bonuses distributed in May,August,November 2022&February 2023,and Company cars and gasoline reimbursements.Note 5:Total compensation paid to the executive officers from TSMC in 2021 accounted for 0.
263、3788%of 2021 net income.Total compensation paid to the executive officers from all consolidated entities in 2021 accounted for 0.3987%of 2021 net income.Compensation Paid to CEO and Vice Presidents2022From TSMCFrom All Consolidated Entities and Non-consolidated AffiliatesNT$0 NT$999,999Rick CassidyN
264、oneNT$1,000,000 NT$1,999,999NoneNoneNT$2,000,000 NT$3,499,999NoneNoneNT$3,500,000 NT$4,999,999NoneNoneNT$5,000,000 NT$9,999,999NoneNoneNT$10,000,000 NT$14,999,999NoneNoneNT$15,000,000 NT$29,999,999NoneNoneNT$30,000,000 NT$49,999,999J.K.Wang(Note 2)J.K.Wang(Note 2)NT$50,000,000 NT$99,999,999Connie Ma
265、(Note 2),Marvin Liao(Note 2),Y.H.Liaw,Simon Jang,C.S.Yoo,Jun He,Geoffrey Yeap,Chris Horng-Dar Lin,Jonathan Lee,Arthur Chuang,L.C.Lu,K.C.HsuConnie Ma(Note 2),Marvin Liao(Note 2),Y.H.Liaw,Simon Jang,C.S.Yoo,Jun He,Geoffrey Yeap,Chris Horng-Dar Lin,Jonathan Lee,Arthur Chuang,L.C.Lu,K.C.HsuOver NT$100,0
266、00,000C.C.Wei,Wendell Huang,Lora Ho,Wei-Jen Lo,Y.P.Chin,Y.J.Mii,J.K.Lin,Cliff Hou,Kevin Zhang,Sylvia Fang,Y.L.Wang,Douglas Yu,T.S.Chang,Michael Wu,Min CaoC.C.Wei,Wendell Huang,Lora Ho,Wei-Jen Lo,Rick Cassidy,Y.P.Chin,Y.J.Mii,J.K.Lin,Cliff Hou,Kevin Zhang,Sylvia Fang,Y.L.Wang,Douglas Yu,T.S.Chang,Mic
267、hael Wu,Min CaoTotal29290380392.5.3 Employees Profit Sharing Paid to Management TeamTitleNameStock (Fair Market Value)CashTotalTotal Profit Sharing Paid to Management Team as a%of Net IncomeChief Executive OfficerC.C.Wei-289,768,390 289,768,390 0.0285%Vice President,Chief Financial Officer/Spokesper
268、sonWendell Huang-50,691,071 50,691,071 0.0050%Senior Vice PresidentLora Ho-1,311,694,719 1,311,694,719 0.1290%Senior Vice PresidentWei-Jen Lo Senior Vice President/CEO&President of TSMC ArizonaRick Cassidy Senior Vice PresidentY.P.Chin Senior Vice PresidentY.J.MiiSenior Vice President/Chief Informat
269、ion Security Officer J.K.LinSenior Vice PresidentJ.K.Wang(Note)Senior Vice PresidentCliff HouSenior Vice PresidentKevin ZhangVice President and General Counsel/Corporate Governance OfficerSylvia FangVice President Connie Ma(Note)Vice PresidentY.L.WangVice President and TSMC Distinguished FellowDougl
270、as YuVice President and TSMC FellowT.S.ChangVice PresidentMichael WuVice PresidentMin CaoVice PresidentMarvin Liao(Note)Vice PresidentY.H.LiawVice PresidentSimon JangVice PresidentC.S.Yoo Vice PresidentJun He Vice PresidentGeoffrey YeapVice President and Chief Information OfficerChris Horng-Dar LinV
271、ice PresidentJonathan LeeVice PresidentArthur ChuangVice President and TSMC FellowL.C.LuVice PresidentK.C.HsuTotal-1,652,154,180 1,652,154,180 0.1625%Unit:NT$Note:Senior Vice President Mr.J.K.Wang retired,effective May 7,2022.Vice President Ms.Connie Ma retired,effective November 1,2022.Vice Preside
272、nt Dr.Marvin Liao retired,effective November 11,2022.0420433.1 OverviewTSMC advocates and acts upon the principles of operational transparency and respect for shareholder rights.We believe that the basis for successful corporate governance is a sound and effective Board of Directors.In line with thi
273、s principle,TSMC Board of Directors set up the“Audit Committee”and the“Compensation Committee”in 2002 and 2003 respectively.To continue to make our corporate governance more comprehensive,the TSMC Board took a step further in February 2023 to expand and strengthen the functions and responsibilities
274、of its committees,including renaming the“Audit Committee”to the“Audit and Risk Committee”,and the renaming the“Compensation Committee”to the“Compensation and People Development Committee”.In addition,in order to strengthen the selection mechanism for directors,build diversified and professional boar
275、d,TSMCs Board of Directors approved the establishment of the“Nominating,Corporate Governance and Sustainability Committee”referencing international practices.Each Committee supports the Board to fulfill its responsibilities and each Committees chairperson regularly reports to the Board on its activi
276、ties and recommendations.2022 Corporate Governance Awards and RatingsOrganizationAwardsDow Jones Sustainability Indices(DJSI)Dow Jones Sustainability World Index for the 22nd consecutive yearDow Jones Sustainability Emerging Markets IndexMSCI ESG IndexesMSCI ACWI ESG Leaders Index component MSCI ESG
277、 Research AAA RatingsMSCI ACWI SRI Index componentMSCI ACWI Islamic Index componentMSCI Emerging Markets ESG Leaders IndexSustainalyticsCompany ESG Risk Ratings:Low ESG Risk Semiconductor IndustryISS ESG“Prime”Rated by ISS ESG Corporate RatingFTSE4Good IndexFTSE4Good Emerging Index componentFTSE4Goo
278、d All-World Index componentFTSE4Good TIP Taiwan ESG Index componentCorporate Knights2022 Global 100 Most Sustainable CorporationsSemiconductor Company Top 100Taiwan Stock ExchangeTop 5%in Corporate Governance Evaluation of Listed Companies for the 8th consecutive yearCommonWealth MagazineExcellence
279、in Corporate Social Responsibility Award Honorable Legion of Corporate SustainabilitySemiconductor Company Top 100Institutional Investor MagazineMost Honored Company(Technology/Semiconductors)All-AsiaBest Overall ESG(Technology/Semiconductors)1st Place(buy-side and sell-side)All-AsiaForbesThe Worlds
280、 Top 10 Largest Technology Companies in 2022Worlds Best EmployersFORTUNE2022 Worlds Most Admired CompaniesFortune Global 500Asiamoney2022 Asias Outstanding Companies Semiconductors&Semiconductor Equipment Sector for the 5th consecutive yearTaiwan Institute of Sustainable EnergyTaiwan Top 10 Sustaina
281、bility Exemplary Awards for the 7th consecutive yearIFI Claims Patent ServicesRanked as 3rd in 2022 Top 50 US Patent Assignees3.2 Board of DirectorsBoard StructureTSMCs Board of Directors consists of ten distinguished members with a great breadth of experience as world-class business leaders or prof
282、essionals.We deeply rely on them for their diverse knowledge,personal perspectives,and solid business judgment.Six of those ten members are Independent Directors:former British Telecommunications Chief Executive Officer,Sir Peter L.Bonfield;former Chairman of National Performing Arts Center and form
283、er Advisor of Executive Yuan,R.O.C.,Ms.Kok-Choo Chen;former Chairman of Applied Materials,Inc.,Mr.Michael R.Splinter;former Chief Executive Officer of Xilinx,Inc.,Mr.Moshe N.Gavrielov;currently Chairman of Delta Electronics Inc.,Mr.Yancey Hai;and former President of MIT,Mr.L.Rafael Reif.TSMCs Board
284、is comprised of a diverse group of professionals from different backgrounds in industries,academia,law,etc.These professionals include citizens from Taiwan,Europe and the U.S.with world-class business operating experience,one of whom is female.Independent Directors constitute 60%of the Board.Board R
285、esponsibilitiesInheriting the spirit of TSMCs Founder,Dr.Morris Changs philosophy on corporate governance,under the leadership of Chairman Dr.Mark Liu and CEO&Vice Chairman Dr.C.C.Wei,TSMCs Board of Directors takes a serious and forthright approach to its duties and is a dedicated,competent and inde
286、pendent Board.The Boards primary duty is to supervise the Companys compliance with relevant laws and regulations,financial transparency,timely disclosure of material information,and maintaining of the highest integrity.TSMCs Board of Directors strives to perform these responsibilities through its Au
287、dit Committee and the Compensation Committee,the hiring of a financial expert consultant for the Audit Committee,and coordination with our Internal Audit department.The second duty of the Board of Directors is to appoint and dismiss officers of the Company when necessary,to evaluate the managements
288、performance and to review the succession plan for senior executives.TSMCs management has maintained a healthy and functional communication with the Board of Directors,has been devoted in executing guidance of the Board,and is dedicated in running the business operations,all to achieve the best inter
289、ests for TSMC shareholders.The third duty of the Board of Directors is to resolve critical matters,such as capital appropriations,investment activities,dividends,etc.044045CriteriaName/TitleProfessional Qualification and ExperienceIndependent Directors Independence StatusNumber of Other Taiwanese Pu
290、blic Companies Concurrently Serving as an Independent DirectorMark LiuChairmanFor Directors professional qualification and experience,please refer to“2.4.1 Information Regarding Board Members”on page 24-29 of this Annual Report.None of the Directors has been in or is under any circumstances stated i
291、n Article 30 of the Company Law.(Note 1)Not Applicable0C.C.WeiVice Chairman0Ming-Hsin KungDirector0F.C.TsengDirector0Sir Peter L.BonfieldIndependent DirectorAll of the following situations apply to each and every of the Independent Directors:1.Satisfy the requirements of Article 14-2 of“Securities a
292、nd Exchange Act”and“Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies”(Note 2)issued by Taiwans Securities and Futures Bureau2.Independent Director(or nominee arrangement)as well as his/her spouse and minor children do not hold any TSMC common sha
293、res3.Received no compensation or benefits for providing commercial,legal,financial,accounting services or consultation to the Company or to any its affiliates within the preceding two years,and the service provided is either an“audit service”or a“non-audit service”0Kok-Choo ChenIndependent Director0
294、Michael R.SplinterIndependent Director0Moshe N.GavrielovIndependent Director0Yancey HaiIndependent Director1L.Rafael ReifIndependent Director0The fourth duty of the Board of Directors is to provide guidance to the Companys management team and risk management.In each quarter,TSMCs management reports
295、to the Board on various subjects(including ESG programs)and strategies,and spends substantial time and effort to communicate with the Board.The Board would comment on the risk and probabilities for success of the proposed corporate strategies.The Board also periodically oversees those strategies imp
296、lementation and outcomes,and may suggest the management team to make adjustments to the strategic goals and objectives if necessary.Nomination and Election of DirectorsTSMC envisions the membership of its esteemed Board of Directors to be composed of highly ethical professionals with the necessary k
297、nowledge,experience as world-class business leaders and understanding from diverse backgrounds.TSMC has establishes the“Guidelines for Nomination of Directors”that set out the procedures and criteria for the nomination,qualification and evaluation of Director candidates to be nominated by the Board
298、of Directors,and provide that“Nominating,Corporate Governance and Sustainability Committee”will propose independent director candidates to the Board of Directors.The independence of each independent director candidate is also considered and assessed under relevant laws.Directors shall be elected pur
299、suant to the candidate nomination system specified in Article 192-1 of the R.O.C.Company Law.The tenure of office for Directors shall be three years.The independence of each independent director candidate is also considered and assessed under relevant law such as the Taiwan“Regulations Governing App
300、ointment of Independent Directors and Compliance Matters for Public Companies”.Under R.O.C.law,in which TSMC was incorporated,any shareholders holding one percent or more of our total outstanding common shares may nominate their own candidate to stand for election as a Board member.This democratic m
301、echanism allows our shareholders to become involved in the selection and nomination process of Board candidates.The final slate of candidates is put to the shareholders for voting at the relevant annual shareholders meeting.There are no limits on the number of terms that a director may serve.We beli
302、eve the Company benefits from the contributions of directors who have over their years of dedicated service acquired unique insights into the operations and financial developments of the Company.The Company reviews the appropriateness of each directors continued service to ensure there are new viewp
303、oints available to the Board.Directors CompensationAccording to TSMCs Articles of Incorporation,the Board of Directors is authorized to determine the salary for the Chairman,Vice Chairman and Directors,taking into account the extent and value of the services provided for the management of the Corpor
304、ation and the standards of the industry within the R.O.C.and overseas.TSMCs Articles of Incorporation also state that not more than 0.3 percent of our annual profits may be distributed as compensation to our directors.In addition,directors who also serve as executive officers of the Company are not
305、entitled to receive any director compensation.According to TSMCs Compensation Committee Charter,the distribution of compensation to directors shall be made in accordance with TSMCs“Rules for Distribution of Compensation to Directors”based on the following principles:(1)directors who also serve as ex
306、ecutive officers of the Company are not entitled to receive compensation;(2)the compensation for independent directors may be higher than other directors,as all independent directors also serve as members of the Audit Committee and Compensation Committee and thus participate in the discussions as we
307、ll as resolutions of related committee meetings in accordance with the charter of each committee;and(3)the compensation for overseas independent directors may be higher than domestic independent directors,as they require additional time to attend quarterly meetings in Taiwan.Directors Professional Q
308、ualifications and Independent Directors Independence StatusNote 1:A person shall not act in a management capacity for a company,and if so appointed,must be immediately discharged if they have been:1.Convicted for a violation of the Statutes for the Prevention of Organizational Crimes and:has not sta
309、rted serving the sentence;has not completed serving the sentence;or five years have not elapsed since completion of serving the sentence,expiration of probation,or pardon;2.Convicted for fraud,breach of trust or misappropriation,with imprisonment for a term of more than one year,and:has not started
310、serving the sentence;has not completed serving the sentence;or two years have not elapsed since completion of serving the sentence,expiration of probation,or pardon;3.Convicted for violation of the Anti-Corruption Act,and:has not started serving the sentence;has not completed serving the sentence;or
311、 two years have not elapsed since completion of serving the sentence,expiration of probation,or pardon;4.Adjudicated bankrupt or adjudicated to commence a liquidation process by a court,and having not been reinstated to his or her rights and privileges;5.Sanctioned for unlawful use of credit instrum
312、ents,and the term of such sanction has not expired yet;6.if she/he does not have any or limited legal capacity;or 7.if she/he has been adjudicated to require legal guardianship and such requirement has not been revoked yet.Note 2:1.Not a governmental,juridical person or its representative as defined
313、 in Article 27 of the Company Law.2.Not serving concurrently as an independent director on more than three other Taiwanese public companies in total.3.During the two years before being elected and during the term of office,meet any of the following situations:(1)Not an employee of the company or any
314、 of its affiliates;(2)Not a director or supervisor of the company or any of its affiliates;(3)Not a natural-person shareholder who holds shares,together with those held by the persons spouse,minor children,or held by the person under others names,in an aggregate amount of one percent or more of the
315、total number of issued shares of the company or ranks as one of its top ten shareholders;(4)Not a spouse,relative within the second degree of kinship,or lineal relative within the third degree of kinship,of any of the officer in the preceding(1)subparagraph,or of any of the above persons in the prec
316、eding subparagraphs(2)and(3);(5)Not a director,supervisor,or employee of a corporate/institutional shareholder that directly holds five percent or more of the total number of issued shares of the company,ranks as of its top five shareholders,or has representative director(s)serving on the companys b
317、oard based on Article 27 of the Company Law;(6)Not a director,supervisor,or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company;(7)Not a director,supervisor,or employee of a company of which the chairman or
318、 CEO(or equivalent)themselves or their spouse also serve as the companys chairman or CEO(or equivalent);(8)Not a director,supervisor,officer,or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the company;
319、and(9)Other than serving as a compensation committee member of the company,not a professional individual who,or an owner,partner,director,supervisor,or officer of a sole proprietorship,partnership,company,or institution that,provides commercial,legal,financial,accounting services or consultation to
320、the company or to any affiliate of the company,or a spouse thereof,and the service provided is an“audit service”or a“non-audit service which total compensation within the recent two years exceeds NT$500,000”.046047Implementation of the Diversity Policy for Board MembersTitleChairmanVice ChairmanDire
321、ctorIndependent DirectorNameMark LiuC.C.WeiF.C.TsengMing-Hsin KungSir Peter L.BonfieldKok-Choo ChenMichael R.SplinterMoshe N.GavrielovYancey HaiL.Rafael ReifGenderMaleMaleMaleMaleMaleFemaleMaleMaleMaleMaleNationalityU.S.R.O.C.R.O.C.R.O.C.UKR.O.C.U.S.U.S.R.O.C./U.S.U.S.Age66-7066-7076-8056-6076-8071-
322、7571-7566-7071-7571-75Employed by TSMCVProfessional Knowledge and Expertise BusinessVVVVVVVVVTechnologyVVVVVVVVFinance/AccountingVVLegalVSales and MarketingVVVVVVVVCybersecurityVOthersInnovation/R&D/Education/TrainingSkills and ExperienceLeadership SkillVVVVVVVVVVStrategic Decision-makingVVVVVVVVVVG
323、lobal Market PerspectiveVVVVVVVVIndustry ExperienceVVVVVVVVFinancialVVVVVVVVVOperating and ManufacturingVVVVVVVBusiness DevelopmentVVVVVVVVRisk/Crisis ManagementVVVVVVVVVVEnvironmental SustainabilityVVVVVVVVVVSocial EngagementVVVVVVVVVV3.2.1 Audit CommitteeThe Audit Committee assists the Board in fu
324、lfilling its oversight of the quality and integrity of the accounting,auditing,reporting,and financial control practices,as well as risk management of the Company.The Audit Committee is responsible to review the following major matters:Financial reports;Auditing and accounting policies and procedure
325、s;Internal control systems and related policies and procedures;Material asset or derivatives transactions;Material lending funds,endorsements or guarantees;Offering or issuance of any equity-type securities;Derivatives and cash investments;Legal compliance;Related-party transactions and potential co
326、nflicts of interests involving executive officers and directors;Ombudsman reports;Fraud prevention and investigation reports;Corporate information security;Corporate risk management;Performance,independence,qualification of independent auditor;Hiring or dismissal of an attesting CPA,or the compensat
327、ion given thereto;Appointment or discharge of financial,accounting,or internal auditing officers;Assessment of Committee Charter and fulfillment of Audit Committee duties;Self-assessment of the Committees performance;and Any other matters that shall be reviewed by the Audit Committee Meeting as requ
328、ired by relevant laws and regulations or the Audit Committee Charter,or that are deemed to be material by the regulatory authorities.Under R.O.C.law,the membership of Audit Committee shall consist of all independent directors.TSMCs Audit Committee satisfies this statutory requirement.The Committee a
329、lso engaged a financial expert consultant in accordance with the rules of the U.S.Securities and Exchange Commission.The Audit Committee annually conducts self-evaluation to assess the Committees performance and identify areas for further attention.TSMCs Audit Committee is empowered by its Charter t
330、o conduct any study or investigation it deems appropriate to fulfill its responsibilities.It has direct access to TSMCs internal auditors,the Companys independent auditors,and all employees of the Company.The Committee is authorized to retain and oversee special legal,accounting,or other consultants
331、 as it deems appropriate to fulfill its mandate.3.2.2 Compensation CommitteeThe Compensation Committee assists the Board in discharging its responsibilities related to TSMCs compensation and benefits policies,plans and programs,and in the evaluation and compensation of TSMCs directors of the Board a
332、nd executives.The members of the Compensation Committee are appointed by the Board as required by R.O.C.law.According to its charter,the committee shall consist of no fewer than three independent directors of the Board,whereas the actual committee is comprised of all six independent directors.The Ch
333、airman of the Board and the Chief Executive Officer are invited by the committee to attend all meetings and are excused from the committees discussion of their own compensation.TSMCs Compensation Committee is authorized by its charter to retain an independent consultant to assist in the evaluation of CEOs or executive officers compensation.Board Diversity and IndependenceTSMC establishes the“Guide