Unleash Innovation

Unleash Innovation

2023 First Quarter Earnings Conference

April 20, 2023

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Agenda
• Welcome Jeff Su, IR Director

• 1Q23 Financial Results and 2Q23 Outlook Wendell Huang, CFO

• Key Messages Wendell Huang, CFO

C.C. Wei, CEO

• Q&A

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Safe Harbor Notice

• TSMC’s statements of its current expectations are forward-looking statements subject to
significant risks and uncertainties and actual results may differ materially from those
contained in the forward-looking statements.

• Information as to those factors that could cause actual results to vary can be found in
TSMC’s 2021 Annual Report on Form 20-F filed with the United States Securities and
Exchange Commission (the “SEC”) on April 14, 2022 and such other documents as TSMC
may file with, or submit to, the SEC from time to time.

• Except as required by law, we undertake no obligation to update any forward-looking

statement, whether as a result of new information, future events, or otherwise.

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Statements of Comprehensive Income

Selected Items from Statements of Comprehensive Income

1Q23 1Q23 1Q23

1Q23 4Q22 1Q22 Over Over
(In NT$ billions unless otherwise noted) Guidance 4Q22 1Q22

Net Revenue (US$ billions) 16.72 16.7-17.5 19.93 17.57 -16.1% -4.8%
Net Revenue 508.63 625.53 491.08 -18.7% +3.6%
Gross Margin 56.3% 53.5% -55.5% 62.2% 55.6% -5.9 ppts +0.7 ppt
Operating Expenses (55.31) (64.54) (48.61) -14.3% +13.8%
Operating Margin 45.5% 41.5% -43.5% 52.0% 45.6% -6.5 ppts -0.1 ppt
Non-Operating Items 13.04 9.63 3.04 +35.4% +328.6%
Net Income to Shareholders of the Parent Company 206.99 295.90 202.73 -30.0% +2.1%
Net Profit Margin 40.7% 47.3% 41.3% -6.6 ppts -0.6 ppt
EPS (NT Dollar) 7.98 11.41 7.82 -30.0% +2.1%
ROE 27.5% 41.7% 36.2% -14.2 ppts -8.7 ppts
Shipment (Kpcs, 12"-equiv. Wafer) 3,227 3,702 3,778 -12.8% -14.6%
Average Exchange Rate--USD/NTD 30.42 30.70 31.39 27.95 -3.1% +8.8%

* Diluted weighted average outstanding shares were 25,929mn units in 1Q23.

** ROE figures are annualized based on average equity attributable to shareholders of the parent company.

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1Q23 Revenue by Technology

7nm and Below Revenue

90nm 0.11/0.13um
2% 0.15/0.18um 300
65nm 2%
5%
6% 0.25um and above
250
40/45nm 1%
7%

Revenue (NT$B)
200
28nm
12% 5nm
20nm 150
31%
1%
16nm 100
13% 7nm
20% 50

7nm 5nm

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1Q23 Revenue by Platform

Growth Rate by Platform (QoQ)

Automotive
DCE
7% +5%
IoT 2% Others
9% 4%
HPC Smartphone IoT DCE Others
Automotive

-5%

Smartphone HPC
34% 44%
-14%

-19% -18%

-27%

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Balance Sheets & Key Indices

Selected Items from Balance Sheets 1Q23 4Q22 1Q22
(In NT$ b illions)
Amount % Amount % Amount %
Cash & Marketable Securities 1,589.19 31.6% 1,561.49 31.4% 1,282.06 32.1%
Accounts Receivable 148.05 2.9% 231.34 4.7% 213.43 5.3%
Inventories 216.07 4.3% 221.15 4.4% 200.12 5.0%
Long-term Investments 69.91 1.4% 68.93 1.4% 45.74 1.2%
Net PP&E 2,833.40 56.1% 2,693.84 54.3% 2,104.33 52.7%

Total Assets 5,045.84 100.0% 4,964.78 100.0% 3,992.68 100.0%

Current Liabilities 873.09 17.3% 944.23 19.0% 822.87 20.6%
Long-term Interest-bearing Debts 854.79 16.9% 839.10 16.9% 632.74 15.8%

Total Liabilities 1,952.95 38.7% 2,004.29 40.4% 1,671.21 41.9%

Total Shareholders' Equity 3,092.89 61.3% 2,960.49 59.6% 2,321.47 58.1%

Key Indices
A/R Turnover Days 34 36 38
Inventory Turnover Days 96 93 88
Current Ratio (x) 2.3 2.2 2.1
Asset Productivity (x) 0.7 1.0 1.0

* Total outstanding shares were 25,932 mn units at 3/31/23

** Asset productivity = Annualized net revenue / Average net PP&E

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Cash Flows

(In NT$ billions) 1Q23 4Q22 1Q22

Beginning Balance 1,342.81 1,296.01 1,064.99

Cash from operating activities 385.24 486.88 372.17
Capital expenditures (302.50) (336.84) (262.13)
Cash dividends (71.30) (71.30) (71.31)
Short-term loans 0.00 0.00 30.53
Bonds payable 7.30 5.80 19.60
Investments and others 23.68 (37.74) (2.26)
Ending Balance 1,385.23 1,342.81 1,151.59

Free Cash Flow * 82.74 150.04 110.04

* Free cash flow = Cash from operating activities – Capital expenditures

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2Q23 Guidance

Based on our current business outlook, management expects:

◼ Revenue to be between US$ 15.2 billion and US$ 16.0 billion

And, based on the exchange rate assumption of 1 US dollar to 30.4 NT dollars,

management expects:

◼ Gross profit margin to be between 52% and 54%

◼ Operating profit margin to be between 39.5% and 41.5%

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Recap of Recent Major Events

• TSMC Board of Directors Approved NT$2.75 Cash Dividend for the Fourth Quarter of 2022 and Set June
15 as the Ex-Dividend Date, June 21 as the Record Date and July 13, 2023 as the Distribution Date
(2023/02/14)

• TSMC Board of Directors Approved the Issuance of Unsecured Corporate Bonds in the Domestic Market
for An Amount Not to Exceed NT$60 Billion (2023/02/14)

• TSMC Board of Directors Approved the Issuance of 2,110,000 Shares of 2022 Employee Restricted Stock
Awards (RSAs). In Addition, the Board Approved the Issuance of No More Than 6,249,000 Common
Shares of RSAs for the Year 2023, Which Will Be Submitted to the 2023 Annual Shareholders’ Meeting for
Approval (2023/02/14)

• TSMC Board of Directors Approved the Convening of the 2023 AGM on June 6, 2023 (2023/02/14)

• TSMC Offers the Industry’s Most Successful FinFET Technology to Academia (2023/02/03)

• TSMC Presents 2022 Excellent Performance Award to Outstanding Suppliers (2023/01/18)

• Please visit TSMC's website (https://www.tsmc.com) and Market Observation Post System (https://mops.twse.com.tw) for details and other announcements

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https://www.tsmc.com
[email protected]

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