Fab 15

5
Operational
Highlights
TSMC manufactured 11,895 different products using 288
distinct technologies for 528 different customers in 2023.

095
 5.1 Business Activities performance and maximum clock frequencies in TSMC’s 5nm ● 12FFC+ RF technology, developed on the same logic process TSMC 3DFabric® - TSMC Advanced Packaging and 3D
family. Customer tape-outs were received in the second half platform as N12eTM technology, started volume production Silicon Stacking Technologies
5.1.1 Business Scope of 2023. for customers’ 4G cellular RF and IoT wireless connectivity ● TSMC-SoIC® Chip-on-Wafer (CoW) technology was qualified

● N5 Plus (N5P) technology, a performance-enhanced version products in 2023. for N5-on-N5 stacking and successfully started volume
As the founder and a leader of the dedicated semiconductor 

foundry segment, TSMC provides a full range of integrated of 5nm technology (N5), entered its third year of volume ● 16FFC FinFET compact (16FFC) RF technology received production in 2023.
production in 2023 for customers’ smartphones and HPC multiple customer tape-outs in 2021. The development of its ● TSMC-SoIC® Wafer-on-Wafer (WoW) technology was
semiconductor foundry services, including leading advanced
process and specialty technologies, advanced mask products. enhanced version (Enhancement I/II) was completed in 2022 qualified for stacking 7nm logic wafer on deep trench
● 6nm FinFET (N6) technology entered its fourth year of volume to support applications such as 28/39/47GHz mmWave RF capacitor (DTC) wafer in 2023 and demonstrated superb
technologies, TSMC 3DFabric® advanced packaging and silicon 

stacking technologies, excellent manufacturing productivity production in 2023 and was widely adopted for customers’ front-end module and 77GHz/79GHz automotive radar. In system performance enhancement for HPC products.
and quality, as well as comprehensive design ecosystem smartphone, HPC, and digital consumer electronics (DCE) addition, non-conductive stress (NCS) calculator and aging ● Chip on Wafer on Substrate with Silicon Interposer

support, to meet a growing variety of customer needs. The products. model were introduced in 2023 to support automotive radar (CoWoS®-S) technology, which integrates multiple
Company strives to provide unparalleled overall value to its ● N6
 ultra-low power (ULP) technology – N6eTM development power amplifier designs. system-on-chip (SoC) chips, the third generation high
customers and views customer success as TSMC’s own success. is on track. Its process design kit (PDK) was completed in the ● 16FFC embedded magnetoresistive random access memory bandwidth memory (HBM3) stacks, and a 3.3-reticle size
As a result, TSMC has gained customer trust from around the fourth quarter of 2023 and the technology is expected to (MRAM) technology completed reliability qualification silicon interposer featuring the second generation of
world and has experienced strong growth and success of its start production in 2024. in 2022, with one million cycles endurance and reflow embedded deep trench capacitor (eDTC), was qualified for
own. ● 7nm
 FinFET (N7) and 7nm FinFET plus (N7+), which have capability. This technology was ready for production and customer HPC products in 2023.
been in volume production for customers’ 5G and HPC passed AEC-Q100 Grade-1 reliability qualification in 2023. ● Chip on Wafer on Substrate with Redistribution Layer

TSMC developed or introduced the following technologies in products for several years, entered their third year of volume ● 22ULL and 28ULL embedded resistive random access memory Interposer (CoWoS®-R) technology featuring redistribution
2023: production for customers’ DCE and automotive products in (RRAM) technologies, TSMC’s second generation of RRAM layer (RDL) interposer for better signal integrity for HPC
2023. solutions featuring balanced cost and reliability, entered the applications successfully started volume production in 2023.
● N12e TM technology, which leverages TSMC’s 12nm FinFET second year of volume production in 2023. ● Integrated Fan-Out on Substrate (InFO_oS) technology that
Logic Technology 

● 2nm (N2) technology development kept on track and

compact plus (12FFC+) baseline, started volume production ● 40nm Silicon on Insulator (N40SOI) technology on 12-inch extended its capability to integrate multiple homogeneous
made good progress. N2 technology features TSMC’s first in 2021. Following this, N12eTM technology introduced wafers, which provides industry-leading competitive SoC chips in a 2.5-reticle size fan-out package successfully
generation of nanosheet transistor technology with full-node innovative ultra-low leakage input/output (IO) devices in advantages, entered its second year of volume production in started volume production in 2023.
strides in performance and power consumption. Volume 2022. This technology started volume production in 2023 to 2023. ● Integrated Fan-Out Multi-chips with Package-on-Package

production is expected in 2025. help customers provide more competitive ultra-low power ● Development of the second generation of 6-inch gallium (InFO_M_PoP) technology, which integrates multiple
● 3nm fin field-effect transistor (FinFET) (N3) technology
products. nitride (GaN) on silicon technology kept on track. This heterogeneous chips with package stacking for wearable
● 22nm ultra-low leakage (22ULL) technology entered its technology will support both DCE and automotive electronics products, successfully started volume production in 2023.
entered its second year of volume production in 2023 for 

customers’ smartphone and high performance computing second year of volume production in 2023 and has been applications and is expected to be ready in 2024. In addition, ● Fine pitch copper (Cu) bump technology for flip chip

(HPC) products. widely adopted for Internet of Things (IoT) products. the 8-inch GaN on Silicon technology development is on packaging on 3nm silicon successfully started volume
● N3 Enhanced (N3E) technology, an enhanced version of
track. This technology will support both DCE and automotive production in 2023.
N3 technology, will continue to provide industry-leading Specialty Technology electronics applications and is expected to be ready in 2025.
advantages for both mobile communication and HPC Based on its N3E technology, TSMC introduced N3 Auto
●  ● CMOS image sensor (CIS) technology was enhanced and 5.1.2 Customer Applications
applications. Volume production started in the fourth quarter Early (N3AE) program in 2023, providing automotive PDKs moved to the next generation to further strengthen the
TSMC manufactured 11,895 different products for 528
of 2023. to support automotive customers to design in the most capabilities of advanced automotive CISs. In 2023, TSMC
customers in 2023. These chips were used across a broad
● N3P technology, an enhanced version of N3E technology, will
advanced 3nm technology for automotive applications. helped customers roll out products with the world’s highest
spectrum of electronic applications, including artificial
further provide industry-leading advantages for both mobile ● N4P
 radio frequency (N4P RF) technology development was dynamic range in performance.
intelligence (AI) and high-performance computing servers,
communications and HPC applications. Volume production is completed, and its V1.0 PDK was available in the fourth ● For silicon photonics technology, TSMC is developing an

wired and wireless communication systems, automotive and

expected in the second half of 2024. quarter of 2023. innovative 3D photonics stack technology – compact universal
● 5nm
industrial equipment, personal computers and peripherals and
● N3X technology, a process tailored for HPC applications,
 FinFET Automotive (N5A) technology, an automotive photonics engine (COUPE), which can integrate silicon
information appliances, as well as consumer electronics such as
was introduced in 2023. Customer product tape-outs are qualified version of 5nm technology (N5) with an automotive photonics chip and electrical control chip into a single-chip
digital TVs, game consoles, digital cameras, AI-enabled IoT and
expected to start in 2024. design enablement platform, completed technology photonic engine. This photonics engine can be co-packaged
wearables, and many other devices and applications.
● 4nm FinFET (N4) technology, an enhanced version of 5nm
development and IP AEC-Q100 qualification and certified with a HPC chip to provide low power and high speed data
FinFET (N5) technology, entered its second year volume by ISO26262: Functional Safety – Road Vehicles Standard in transmission. In 2023, the data rate of the test vehicles using
The rapid ongoing evolution of end products prompts
production in 2023. 2022. Customer product tape-outs were received in 2023. TSMC’s COUPE technology achieved the expected goal, laying
customers to pursue product differentiation using TSMC’s
● N4P technology with additional performance boost over N4
● N6
 RF technology received multiple customer product a solid foundation for future volume production.
innovative technologies and services and, at the same time,
started volume production in 2023. tape-outs in 2022. In addition, the second generation N6
spurs TSMC’s own development of technology. As always,
● N4X technology, introduced in 2021, is TSMC’s first
radio frequency (N6 RF+) technology is also being developed,
TSMC believes success depends on leading rather than
HPC-focused technology, representing the ultimate and its V0.9 PDK is available in the fourth quarter of 2023.
following industry trends.

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 5.1.3 Consolidated Shipments and Net Revenue in 2023 and 2022 In 2023, TSMC maintained strong partnerships with many The Company’s R&D efforts in lithography have been focused
Unit: Shipments (thousand of 12-inch equivalent wafers) / Net Revenue (NT$ thousands)
world-class research institutions, including SRC in the U.S. on improving patterning and material quality, controlling
2023 2022 and IMEC in Belgium. The Company also continued to expand variations, reducing defects, and lowering costs to support
Shipments research collaboration with leading universities throughout 2nm technology. Looking ahead to A14 and beyond, TSMC
Shipments Net Revenue Shipments Net Revenue
the world for two major purposes: the advancement of R&D will continue to explore next-generation EUV (extreme
Wafer Domestic (Note 1) 1,551 145,720,682 2,324 202,075,489
semiconductor technologies and the nurturing of human talent ultraviolet) lithography scanners, conduct research on mask
Export 10,451 1,736,797,398 12,929 1,789,780,458
for the future. pellicles and blanks to support leading-edge technology and
Others (Note 2) Domestic (Note 1) N/A 21,637,291 N/A 16,668,631
extend Moore’s Law. Furthermore, TSMC R&D will continuously
Export N/A 257,580,470 N/A 255,366,714 evaluate new process technologies and materials to enhance
R&D Expenditures Amount: NT$ thousands
Total Domestic (Note 1) 1,551 167,357,973 2,324 218,744,120 lithography capabilities in the future.

182,370,170
Export 10,451 1,994,377,868 12,929 2,045,147,172

Note 1: Domestic means sales to Taiwan. ● Mask Technology

163,262,208
Note 2: Others mainly include revenue associated with packaging and testing services, mask making, design services, and royalties.
In 2023, to achieve the wafer yield and productivity for
lithography requirements at 2nm node, the R&D team
5.1.4 Production in 2023 and 2022 improved the critical dimension, pattern fidelity, overlay
Unit: Capacity / Output (million 12-inch equivalent wafers) / Amount (NT$ millions) stability, exposure durability and defect mitigation of curvilinear
Wafers patterns by EUV photoresist and blank material modification,
Year Capacity Output Amount multi-beam writer resolution enhancement, mask process
2023 16-17 11-12 791,773 recipe optimization, and advanced deep learning inspection.
2022 15-16 15-16 854,900 Future improvements will focus on developing new blank
materials and new mask process technology at the A14 node
and beyond.
5.2 Technology Leadership

29,501,712
Integrated Interconnect and Packaging

5.2.1 R&D Organization and Investment
TSMC’s existing fine pitch, chip-to-chip connection leveraging
2022 2023 01/01/2024~
In 2023, TSMC continued to invest in research and development, with total R&D expenditures amounting to 8.5% of revenue, a 02/29/2024 wafer processes is called 3DFabric® and consists of both
level that equals or exceeds the R&D investment of many other leading high-tech companies. wafer-level frontend and backend technologies. The
5.2.2 R&D Accomplishments in 2023 Company’s frontend technologies, or TSMC-SoIC®, enables
Faced with the continuous challenge of significantly scaling up semiconductor computing power every two years, thereby extending leading-edge silicon for 3D silicon stacking. TSMC’s advanced
Highlights
Moore’s Law, the Company has focused its R&D efforts on contributing to customers’ product success by offering leading-edge backend technologies includes CoWoS® with chips placed
● 2nm Technology
technologies and design solutions. In 2023, while the development of 2nm technology continued baseline setup and moved into onto pre-made RDLs and InFO with chips embedded before
In 2023, TSMC’s 2nm technological development focused on
yield enhancement stage, TSMC started development and made good progress on 14 Angstrom (A14) technology, which aims interconnection. The Company’s 3DFabric® technology service
baseline setup, yield enhancement, transistor and interconnect
to further improve speed, power, density and cost. Furthermore, the Company’s research efforts continued pushing forward with offers the ultimate flexibility in product design with integrated
R/C performance improvement, and reliability evaluation.
exploratory studies for nodes beyond 14 Angstrom technology. frontend and backend technologies to meet future computing
During the year, major customers completed IP design and
systems integration scaling needs.
started silicon validation. The Company also developed low
In addition to complementary metal oxide semiconductor (CMOS) logic, TSMC conducts R&D on a wide range of other
resistance RDL (redistribution layer), super high performance
semiconductor technologies that provide the functionality required by customers for mobile system-on-chip (SoC) and other 3DIC and TSMC-SoIC®
● 

metal-insulator-metal (MiM) capacitors and backside power

applications. Highlights in 2023 included: TSMC-SoIC® wafer product is an innovative wafer-level
delivery network to further boost performance.
frontend 3DIC chip stacking platform with outstanding
● The Company’s integrated interconnect and packaging solution, the 3DFabric® technology service, showed further progress bonding density, interconnect bandwidth, power efficiency,
A14 Technology
● 
in supporting the newest generation of high bandwidth memory, HBM3E, on both CoWoS®-S and CoWoS®-L. While TSMC and thin profile. It extends Moore’s Law through system-level
Development of the 14 Angstrom (A14) platform technology,
continued its industry leadership in high-volume manufacturing of InFO_PoP Gen-8 packaging, InFO_PoP Gen-9 was also fully scaling with sustainable performance gains and corresponding
targeting both SoC and HPC applications, made good progress
qualified for mobile applications. In addition, InFO_oS Gen-5 was successfully qualified, offering larger application-specific cost benefits. SoIC integrated chips can be subsequently
in 2023. 14 Angstrom platform technology is expected to offer
integrated circuits (ASIC) area, more chip-partition integration, larger package size and higher bandwidth. assembled by using conventional packages or TSMC’s new
excellent improvement in speed, power, density and cost over
● In specialty technologies, examples of progress included: 0.13μm and 90nm BCD (Bipolar-CMOS-DMOS) technologies were 3DFabric® technology service, such as CoWoS® or InFO, for
2nm technology.
expanded to meet the demand of the automotive market; TSMC’s industry leading GaN (Gallium Nitride) power device technology, next generation HPC, AI and mobile applications. The SoIC
the second generation of 650V and 100V E-HEMT, entered the reliability verification stage with production expected in 2024; the CoW Face-to-Back Gen-1 process is in production and the SoIC
Lithography Technology
● 
worldwide first CMOS image sensor technology with 3D-MiM embedded LOFIC (lateral overflow integration capacitor) pixel with CoW Face-to-Back Gen-2 process, with significant thermal
In 2023, TSMC R&D demonstrated high performance and
a high dynamic range (DR>100dB) for high-end smart phone or advanced driver-assistance systems (ADAS) automotive imaging performance improvement, is under product qualification
expected wafer yield for the development of 2nm technology.
applications entered risk production; and the world’s first mass-production of 22nm consumer-grade magnetoresistive random and will enter production phase in 2024. The SoIC CoW
access memory (MRAM) was achieved.

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 Face-to-Face Gen-1 process is under development and will technologies will reinforce TSMC’s technology leadership in in 2023 TSMC introduced N6RF+ technology to provide an The reliability test is expected to be completed in 2024 and
provide an ultrahigh density connection solution in 2025. semiconductor field. alternative, cost-effective option to solve the excess inventory then put into production. Meanwhile, to enhance customer
TSMC will continue to pursue SoIC technological improvements in smartphone markets and also provided N4RF for more product competitiveness, TSMC is also developing 8-inch 650V
and co-optimize with the Company’s advanced silicon Corporate Research high-end RF applications. To address the market in mmWave HEMTs for power devices in automotive electronics, expected
technologies for further gains in transistor density, system TSMC remains at the forefront of 2D transistor research with and RF frontend modules, the Company made continuous to be launched in 2025.
power/performance/area and cost. innovation in devices and materials to enable extremely scaled enhancements in N28HPC+ and N40SOI RF technologies by
logic transistors. At the 2023 Symposia on VLSI Technology value-added design technology co-optimization (DTCO) as Display Drivers
● 

● CoWoS® and Circuits, the Company demonstrated contact length verified by many win-win solutions with customers. TSMC TSMC completed 28nm HV product IC yield and reliability
CoWoS® advanced packaging service is the leading 2.5D scaling with record low contact resistance. Monolayer-MoS2 provided services for other RF technologies aimed at new verification in 2023 and will start production in 2024. To
technology to make ultra-high-performance AI and HPC channel transistors have the same driving current at contact emerging markets, such as low earth orbit (LEO) satellites and bolster the Company’s leading position in the field of high
packages by integrating most advanced logic and memory length down to 30nm. At the 2023 International Electron autonomous vehicles, in the form of RF process design kits voltage display driver technologies, TSMC is developing 16nm
dies on an interposer. Market demands became even greater Device Meeting (IEDM), TSMC successfully demonstrated the (PDKs) with the most powerful ecosystem and time-to-market high voltage FinFET with better performance and lower power
with the advent of generative AI in late 2022. TSMC qualified first stacked nanosheet devices with two 2D monolayer MoS2 advantages from circuit design to product verification. usage for customers to design more competitive OLED display
the CoWoS®-S Si interposer up to 3.3-reticle size (1 reticle channels. With gate dielectric optimization, the Company driver ICs.
size ~830mm2), with volume production launched in also showed high performance 40nm gate length 1L-MoS2 Power IC/Bipolar-CMOS-DMOS (BCD)
● 

2023. Beyond 3.3-reticle size, CoWoS®-L with reconstituted single nanosheet n-FET with a high on-state current. Also at In 2023, TSMC continued to improve its competitiveness in the Complementary Metal-Oxide-Semiconductor (CMOS)
● 

interposer of multiple LSIs (local silicon interconnects) the 2023 IEDM, TSMC demonstrated, for the first time, n-type 12-inch BCD technology process by expanding its 0.13μm and Image Sensors
increases the momentum for continuous interposer scaling. MoS2 and p-type WSe2 2D FET with comparable high on-state 90nm BCD technology to meet the demand of the automotive TSMC achieved several accomplishments in CMOS Image
After its successful development in 2023, the first generation current. This on-state current for 2D p-FET also set a record for market, where the 0.13μm to support 45V operation is Sensor technology in 2023, including (1) risk production of
CoWoS®-L technology will enter volume production in 2024. high performance. CMOS demonstration with co-integration currently undergoing reliability verification and is expected to the worldwide first 3D-MiM embedded LOFIC pixel with a high
HBM3E, the newest generation of high bandwidth memory, is of MoS2 n-FET and WSe2 p-FET on the same chip resulted in be launched in 2024. The 55nm BCD has been successfully dynamic range (DR>100dB) for high-end smartphones or
ready now for production on both CoWoS®-S and CoWoS®-L, nearly unaltered performance. put into mass production and offers multiple 5V solutions ADAS automotive imaging applications; (2) technology transfer
while the next generation of stacked memory of HBM4 and for high-performance and low-power mobile applications. of an enhanced 3D-MiM (2.5X capacitance boost) embedded
process upgrades in CoWoS® advanced packaging service are The Company continues to research emerging high-density, The second-generation of 40nm BCD and ultra-low power voltage domain global shutter (VDGS) CMOS image sensor
being planned to meet new performance requirements. non-volatile memory devices and hardware accelerators (ULP) process are fully compatible with 5-28V high-voltage to a manufacturing fab; (3) demonstration of TSMC’s next
for AI and HPC applications. At the 2023 IEDM, TSMC components, thereby enabling more power management generation Si SPAD (single photon avalanche diode) technology
InFO
●  presented a new 1S1R device based on the arsenic-free SNGCT chip applications. The Company also successfully developed with 55% pixel area shrinkage and 2X PDE improvement for
In 2023, TSMC continued its industry leadership in chalcogenide selector and on the STT-MRAM memory element. a 5V operated 6nm FinFET device for RF power amplifiers in more advanced and powerful 3D depth sensing applications;
high-volume manufacturing of InFO_PoP Gen-8 packaging This 1S1R device demonstrated excellent write and read high-end SoC. and (4) demonstration of new generation Ge/Si heterogeneous
for mobile applications. InFO_PoP Gen-9 was also successfully performance, including low write voltage, high speed, low photodetector with 90% dark current reduction for SWIR
qualified for mobile applications, as was InFO_oS Gen-5, write error rate, high write endurance, and excellent immunity Micro-Electromechanical Systems (MEMS)
●  (short-wave infrared radiation) 3D depth and bio signal sensing
offering larger application-specific integrated circuits (ASIC) to read disturb. At the 2023 International Solid-State Circuits In 2023, TSMC implemented qualified piezoelectric micro applications.
area, larger package size and higher bandwidth. InFO_M_PoP Conference (ISSCC), TSMC demonstrated a nonvolatile AI-Edge electromechanical systems (MEMS) technology for the
Gen-1, which integrates different functional chips suitable for processor with 4MB hybrid-mode ReRAM compute-in-memory sampling of in-ear dynamic vent application, which could Emerging Memory/Memory WoW Stacking Technology
● 

wearable applications, started volume production in 2023, (CIM) macro. This CIM macro includes configurable circuits optimize user experience for wireless earphones and strengthen The Company reached several major milestones in emerging
while the next-generation InFO_PoP with backside RDL for supporting both near-memory computing (NMC) and customers’ competitiveness. In parallel, TSMC’s next generation memory technologies in 2023. TSMC offered RRAM as a
integrated low power DDR DRAM technology (LPDDR) was in-memory computing (IMC) modes within a macro. Among monolithic CMOS-MEMS technology was qualified to produce low-cost embedded NVM (Non-Volatile Memory) solution for
qualified in 2023 and is ready for volume production in 2024. reported nonvolatile AI-edge processors, the proposed 22nm 6-axis inertial measurement unit (IMU) for automotive with the price sensitive IoT market. The Company’s 40nm, 28nm
AI-edge processor achieved the highest energy efficiency. high frequency vibration rejection capability to enable reliable and 22nm nodes entered volume production, while 12nm and
Advanced Interconnect
●  and accurate responses regardless of different vehicle designs the next generation also entered development stage.
TSMC’s continuous striving for excellence and focus on Specialty Technologies and road conditions. Future plans include the development
innovative interconnect technologies empower its customers to TSMC offers a broad array of technologies to address a wide of next-generation environmentally friendly piezoelectric TSMC has achieved the world’s first mass-production of
design and manufacture highly competitive products. In 2023, range of applications: technology, and ultrasound transducer applications. 22nm consumer-grade MRAM. Moreover, the Company has
the Company developed a unique backend-of-line process taken steps to enhance its properties to meet automotive
that reduces via resistance. In addition, TSMC research on new Mixed Signal/Radio Frequency (MS/RF)
●  Gallium Nitride (GaN)
●  grade applications on the 22nm node. In 2023, TSMC
materials for future interconnect applications demonstrated While global consumer electronics were impacted by the TSMC’s second generation of 650V and 100V E-HEMT entered successfully completed the technical qualification of the 16nm
significant line resistance reduction. These state-of-the-art aftermath of economic uncertainty triggered by COVID-19, the reliability verification stage in 2023, maintaining the consumer-grade MRAM. Going forward, TSMC will collaborate
Company’s leading position in the field of GaN power devices. closely with customers to develop an automotive grade 16nm

100 101
 MRAM, as well as explore the next generation of 16nm Tech Files and PDKs 5.2.5 Intellectual Property colleagues with innovative potential by analyzing innovation
embedded MRAM technology and focus on reducing the bit EDA tool certification, an essential element for IP and customer indicators of their registered trade secrets. One-on-one,
For a long time, TSMC has been protecting R&D innovation and
cell size for cost efficiency to accelerate the deployment of designs to ensure that features meet TSMC process technology tailored guidance were provided to these colleagues by
operation development by way of utilizing patents and trade
future technologies for software-defined vehicles (SDVs), smart requirements, can be found on TSMC-Online. Corresponding enthusiastic senior managers who have won several Golden
secrets as dual tracks under the established comprehensive
sensor and edge-AI applications. technology files and PDKs are available for customers to Trade Secret Awards in the past to elevate their innovation’s
IP management system, encouraging Company’s innovation
download and use with certified EDA tools. TSMC provides quality and generate more exceptional trade secrets. Through
culture, and strengthening Company’s competitive strengths so
TSMC developed 55nm node logic wafer and dynamic RAM a broad range of PDKs for digital logic, mixed-signal, radio the transformational synergistic effects of quality and quantity,
as to fulfill the Company’s ESG vision. TSMC’s General Counsel
heterogeneous wafer stacking processes, not only increasing frequency (RF), high-voltage driver, CMOS image sensor (CIS) a continuous upward spiral of innovation is generated,
updates the Board of Directors on the status of the intellectual
data transfer bandwidth but also significantly reducing power and embedded flash technologies from 0.5µm to 2nm. In strengthening the company’s sustainable innovative culture
property management scheme.
consumption, with mass production already underway in 2023. addition, the Company provides technology files for design and competitive advantage. The pilot run demonstrated
TSMC also verified the wafer stacking technology of 28nm rule checking (DRC), layout versus schematic (LVS), resistance- that not only 18 inventors with innovation potential were
TSMC’s comprehensive patent management system includes:
node RRAM. The electrical performance and reliability passed capacitance (RC) extraction, automatic place and route, and successfully mentored by 6 Golden Coaches, but it also verified
Patent management strategies, such as Global patent
the test, providing a solution for high performance computing. a layout editor to ensure that process technology information the feasibility of this novel initiative. This laid the foundation
deployment, Exploratory invention mining, Patent portfolio
In addition, TSMC demonstrated the wafer stacking technology is accurately represented in EDA tools. By 2023, TSMC had for future expansion and implementation in other fabs and
expansion, and Patent exploitation and exercise; and Patent
of 22nm node MRAM, which is expected to meet the high provided customers more than 48,000 technology files and divisions.
management rules, such as Tier-based IP evaluation, Patent
speed and low power requirements of AI computing. 3,400 PDKs.
competition rewards, Educational patent promotion,
TSMC identifies and rewards impactful and high-quality
and Patent professional training. TSMC has established
5.2.3 Technology Platform Library and IP innovations through the annual Golden Trade Secret Award
technological patent road maps by way of innovative patent
Silicon intellectual property (IP) is the basic building block of ceremony, presenting 2,738 trade secrets with the Golden
TSMC provides customers with advanced technology platforms strategy, strict management and risk-control measures;
IC designs. Various IP types are available to support different Trade Secret Award between 2013 and 2023. In addition,
that include the comprehensive infrastructure needed to analyzed and monitored competitors by using intelligent patent
customer design applications including: foundation, analog/ immense innovative drive and potential are illustrated through
optimize design performance, power, area (PPA) and cycle maps; conducted core technology mining through invention
mixed-signal, embedded memory, interface and soft IP. TSMC the 348,503 trade secrets registered thus far and with annual
times. These include electronic design automation (EDA) design workshops; expanded patent families on key technologies; filed
and its alliance partners offer customers a rich portfolio of registrations exceeding 100,000 cases for the first time in
flows; silicon-proven libraries and IPs; and simulation and and maintained patents by tier-based management, further
reusable IPs, which are building blocks for many circuit designs. 2023.
verification design kits, also known as PDKs, and technology enhanced patent protection through quality control on patent
To support 3DIC customer needs, TSMC introduced 3DIC IP
files. applications and continued to construct massive global patent
in 2019. By 2023, the Company had expanded its library and TSMC established the “Green Trade Secret Registration”
portfolio with high quality; and, diversified exploitation of
silicon IP portfolio to contain more than 73,000 items, a 33% column in 2021, and in 2023 alone recorded 633 registrations,
For the latest advanced technologies such as 2nm, 3nm, 4nm patent assets. In terms of patent filings, TSMC has accumulated
increase over 2022. a 500% increase from 2021’s registration numbers,
and 3DFabric®, the Company provides certified EDA tools, more than 94,000 patent applications worldwide as of end
demonstrating how much TSMC’s colleagues value Green
features and IP solutions for customer adoption at various of 2023, including 8,700+ applications filed in 2023. TSMC
Design Methodology and Flow Trade Secrets. Participating employees who registered for
design stages to meet their product requirements. To help ranked No. 2 among global U.S. patent applicants, and No. 1
Design reference flows are developed based on certified Green Trade Secrets span across multiple departments. On
customers plan new product tape-outs incorporating library/ among patent applicants in Taiwan. In terms of patent grants,
EDA tools to provide robust and comprehensive design top of the Facility department, departments such as R&D and
IP from the Company’s Open Innovation Platform® (OIP) TSMC has accumulated 62,000+ patents worldwide as of end
methodology innovations that can help boost productivity. Manufacturing also participated enthusiastically in recording
ecosystem, the OIP ecosystem features a portal to connect of 2023, including more than 6,000 global patents received.
In 2023, TSMC released N2 HPC, mobile and custom design innovations contributing to sustainability, energy conservation,
customers to solution providers from 14 EDA partners, seven TSMC ranked No. 3 among U.S. Patentees, and No. 1 among
reference flows through OIP collaboration and announced and carbon emission reduction, enriching the innovation
Cloud partners, 39 IP partners, 26 design center alliance (DCA) patent patentees in Taiwan. In terms of patent quality, the
their availability for customer adoption. In addition to process diversity of Green Trade Secrets.
and nine value chain aggregator (VCA) partners, as well as 22 allowance rate of TSMC’s U.S. applications approached 100%.
technology advancements, the Company released the design
partners with 3DIC expertise in the new 3DFabric® Alliance.
reference flows for analog design migration 2.0, N16 79GHz TSMC received a AAA (the highest tier) certificate by Taiwan
Turning to trade secret management and strategy, 10 years
mmWave and N4P RF sub-10GHz technologies, and continued Intellectual Property Management System (TIPS) in December
5.2.4 Design Enablement after TSMC pioneered the “Trade Secret Registration System”
to develop and offer 3DFabric® design solutions for both 3D 2021, and the valid period will expire after December 31,
in 2013, followed by the adoption of numerous intelligent
TSMC’s technology platforms provide a solid foundation to chip stacking and 2.5D advanced packaging technologies, 2024.
management programmes, TSMC successfully launched
facilitate the design process. Customers can design using the including solutions supporting the 3Dblox standard, to reduce
the “Trade Secret Intelligent Management Version 2.0” and
Company’s internally developed IPs or use IPs and EDA tools 3DIC design barriers, thus helping customers to improve TSMC’s IP team works closely with technical teams from R&D
piloted the “Trade Secret Innovation Talent Scouting Online
available from TSMC’s OIP partners. productivity in their system-level designs. These design in early stage to mass production, and actively constructs IP
Merge Offline Service” in specific departments selected by a
reference flows feature FinFET-specific and 3DFabric® design portfolio for each key innovative technology, including the
customized artificial intelligence (AI) system at Fab 12B, Fab
solutions to optimize PPA. latest technology nodes, so as to ensure Company’s technology
15A, and Fab 15B in 2023. By leveraging AI, static data from
leadership in semiconductor field; TSMC utilize patents and
registered trade secrets were intelligently utilized to select
trade secrets as dual tracks to successfully protect Company’s

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 main business including process technologies, designs, long conducted strategic research projects at top overseas future cost-effective technologies and manufacturing solutions 5.3.2 Engineering Performance Optimization
manufacturing and sales, and have been strategically utilized universities such as Stanford University, Massachusetts Institute for its customers. With a highly competent and dedicated
As advanced technology continues to evolve and IC geometry
for defense and cross-license negotiation, so as to secure of Technology, Princeton University, University of California, R&D team and unwavering commitment to innovation, TSMC
keeps shrinking, the need for tighter manufacturing process
freedom of business operation worldwide. San Diego, University of Texas at Austin, University of Toronto, is confident in its ability to drive future business growth
and quality control becomes extremely challenging. TSMC has
and the University of Tokyo and so on, focusing on innovative and profitability for years to come, by delivering advanced
tailored its manufacturing infrastructure to handle a diversified
5.2.6 TSMC University Collaboration Programs capabilities in transistors, interconnect, materials, device competitive semiconductor technologies to its customers.
product portfolio that uses strict process control to meet
simulation and circuit design.
In recent years TSMC has collaborated closely with several tightened specs and higher product quality, performance and
Summary of TSMC’s Major Future R&D Projects
prestigious universities in Taiwan to carry out a variety of reliability requirements from customers. TSMC’s process control
TSMC University Shuttle Program
joint research projects. These collaborations encourage more Project Name Description systems are integrated with numerous intelligent functions to
The TSMC University Shuttle Program was established to
university professors to conduct leading-edge semiconductor 2nm logic technology platform and 3D CMOS technology platform for SoC achieve excellence in both quality and manufacturing. Through
provide professors at outstanding research universities applications
research in areas such as novel devices, process, materials intelligent detection, smart diagnosis, and cognitive action,
worldwide with access to the leading silicon process A14 and beyond logic technology platform 3D CMOS technology platform for SoC
manufacturing technologies, specialty technologies for and applications the Company produces remarkable yield enhancement, quality
technologies needed to develop innovative circuit design
electronic applications, and green manufacturing. At the same 3DIC Cost-effective solutions with better form factor assurance, workflow improvement, fault detection, and cost
concepts. In 2023, TSMC teamed up with the Taiwan and performance for 3DIC integration
time, these projects provide hands-on training opportunities reductions, while shortening its R&D cycle.
Semiconductor Research Institute (TSRI) to apply the successful Next-generation lithography Next-generation EUV lithography and related
for students interested in these fields to prepare them patterning technology to extend Moore’s Law
customer experience to the University Shuttle Program. 16
for joining the semiconductor industry after graduation. Long-term research Specialty SoC technology (including new NVM, To meet 5G’s stricter quality requirements for mobile, high
nm technology is available at TSRI for advanced students to MEMS, RF, analog) and transistors with 8 to
Starting in 2013, TSMC established research centers at four performance computing (HPC), automotive and the Internet
design, enabling their creativity to be transformed into physical 10 years horizon
top universities in Taiwan: National Yang Ming Chiao Tung of Things (IoT), TSMC is implementing artificial intelligence
chips. The University Shuttle Program provides access to TSMC The projects above account for roughly 73% of the total R&D budget for 2024. Total R&D budget is
University, National Taiwan University, National Cheng Kung estimated to be around 8% of 2024 revenue. (AI) and machine learning technologies, and has developed
silicon process technologies for digital and analog/mixed-signal
University and National Tsing Hua University. In the past systems for precise fault detection and classification, intelligent
circuits, RF designs, non-volatile memory design and ultra-low
ten years, a total of 295 professors and more than 3,800 5.3 Manufacturing Excellence advanced equipment control and intelligent advanced process
power designs. TSMC and the University Shuttle Program
students with backgrounds in the disciplines of electronics, control to ensure the consistency of tool matching and process
participants enjoy win-win collaboration through the program,
electrical engineering, physics, materials, chemistry, chemical 5.3.1 GIGAFAB® Facilities stability. Combining intelligent process variation detection with
which allows graduate students to implement exciting designs
engineering, and mechanical engineering have joined the foundry know-how to identify potential defects and minimize
and achieve silicon proof points for innovation in various Maintaining reliable production capacity is a key manufacturing
research centers. In 2022, TSMC also actively supported the the convergence of process variation through self-diagnosis
end-applications. strategy at TSMC. The Company currently operates four
establishment of semiconductor or key technology research and cognitive action. As the result, each chip can be precisely
12-inch GIGAFAB® facilities – Fab 12, 14, 15 and 18. The
academies at National Taiwan University, National Cheng controlled at the nanometer level to produce the highest
5.2.7 Future R&D Plans combined capacity of the four facilities exceeded 12 million
Kung University, National Tsing Hua University, National quality wafers for customers.
12-inch wafers in 2023. Production within these facilities
Yang Ming Chiao Tung University, National Sun Yet San To maintain its technology leadership, TSMC plans to continue
support 0.13μm, 90nm, 65nm, 40nm, 28nm, 16nm, 7nm,
University, and National Chung Hsing University, providing investing heavily in R&D. While TSMC’s 2nm and 14 Angstrom 5.3.3 Agile and Intelligent Operations
5nm and 3nm process technologies and their sub-nodes.
continuous funding for forward-looking research in Taiwan’s advanced CMOS logic nodes are progressing through the
The Company’s sophisticated, agile and intelligent operating
semiconductor field and planning scholarship programs to development pipeline, the Company’s exploratory R&D work
The GIGAFAB® facilities are coordinated by a centralized system drives manufacturing excellence. TSMC has integrated
encourage students who are interested in the field. In 2019, is focused on nodes beyond 14 Angstrom, and on areas such
management system known as super manufacturing platform process experience, machine tuning, manufacturing
the Company jointly launched the TSMC-NTHU Semiconductor as 3D transistors, new memories and low-R interconnect,
(SMP) to provide customers with consistent quality and know-how, and AI technologies to create an intelligent
Program to enhance the quality and number of domestic to lay a strong foundation to foster the development of
reliability, greater flexibility to cope with demand fluctuations, manufacturing environment. Intelligent manufacturing
semiconductor students and attract more outstanding students innovative technology platforms in the future. TSMC’s
and faster yield learning and time-to-volume production, technologies are widely applied to lean manufacturing,
to a career in the semiconductor industry. By 2023, the list of 3DFabric® advanced packaging R&D is developing innovations
as well as lower-cost product requalification. In July 2023, employee productivity, equipment productivity, process and
school partners had grown to thirteen universities, including in subsystem integration to further augment advanced CMOS
TSMC inaugurated its global R&D center specializing in the equipment control, quality defense, and robotic control to
National Taiwan University, National Cheng Kung University, logic applications. The Company maintains its intensified focus
technology development of 2nm nodes and beyond and to optimize quality, productivity, efficiency, and flexibility. The
National Yang Ming Chiao Tung University, National Taipei on new specialty technologies such as RF and 3D intelligent
support the exploration of new materials and research on end result is real-time information analysis, improved forecast
University of Technology, National Taiwan University of sensors for 5G and smart IoT applications. TSMC research
transistors structures. In addition, in response to strong market capability, maximum cost effectiveness, and accelerated
Science and Technology, National Central University, National continues to develop novel materials, processes, devices and
demand for 3DIC, TSMC opened and started operating its innovation. TSMC has also integrated new applications such
Sun Yet San University, National Chung Hsing University, memories that may be adopted in the distant future, ten years
Advanced Packaging Fab 6 also in June 2023 as to provide as intelligent mobile devices, IoT, edge computing, and mobile
National Chung Cheng University, Feng Chia University, Yuan and beyond. The Company also continues to collaborate with
comprehensive semiconductor manufacturing services from robot, with intelligent automated material handling systems
Ze University, and Chung Yuan Christian University, with external research bodies from academia and industry consortia
frontend to backend and testing. (AMHS) to consolidate wafer manufacturing data collection
over 7,600 students enrolled to date. In addition, TSMC has alike with the goal of gaining early awareness and adoption of
and analysis, utilize manufacturing resources efficiently,

104 105
 and maximize manufacturing effectiveness. TSMC continues to improve semiconductor production through AI that uses massive Major Materials Major Suppliers Market Status Procurement Strategy
amounts of production data to achieve agile and intelligent operations. Gases Air Liquide These 9 companies are the major worldwide suppliers of The majority of these suppliers have facilities in multiple geographic locations, which
●

Air Products specialty gases. minimizes supply risk for TSMC.

Central Glass TSMC conducts periodic audits to ensure that these suppliers meet TSMC’s standards.
●

5.3.4 Digital Transformation Entegris

Linde LienHwa
Merck
To meet strong pent-up demand from customers, TSMC continues to implement technology to transform the “automated fab” SK specialty Co., Ltd.
Taiwan Material Technology
into the “intelligent fab,” with the simultaneous improvement of product quality, equipment capacity, and personnel effectiveness. Nippon Sanso Taiwan
Intelligent fab has integrated the domain knowledge of semiconductor manufacturing, enabled system self-learning, and expanded Slurry, Pad, Disk 3M These 7 companies are the major worldwide suppliers of TSMC works closely with suppliers to develop materials that meet all application and
●

the application of AI and machine learning, which includes dispatching, equipment tuning, process control, equipment diagnosis AGC CMP (Chemical Mechanical Polishing) materials. cost requirements.
Entegris TSMC and suppliers periodically conduct programs to improve their quality, delivery,
●

and maintenance, and quality inspection. This frees today’s engineers to focus on problem solving. Looking ahead to the future, all DuPont sustainability and green policy, and jointly set improvement programs and monitor
Fujibo progress to ensure continuous improvement in TSMC’s supply chain.
manufacturing improvement plans and productivity enhancements within the factory can be synchronized across global factories Fujifilm Electronic Materials Most suppliers have relocated or plan to establish new manufacturing sites closer to
●

Fujimi TSMC’s major manufacturing facilities, thereby significantly improving procurement

through the Global Manufacturing and Management Platform. Furthermore, the implementation of augmented reality (AR) and logistics and reducing supply risks.
remote operation platforms will provide greater flexibility and efficiency in cross-factory machine maintenance and operations,
thereby enabling a collaborative model to achieve operational efficiency and manufacturing quality consistency across all factories.
Suppliers Accounting for at Least 10% of Annual Consolidated Net Procurement in 2023 and 2022
Unit: NT$ thousands
5.3.5 Raw Materials and Supply Chain Management
2023 2022
In 2023, TSMC, together with suppliers, continued to review and resolve supply and quality issues as well as potential supply chain Supplier
As % of 2023 Total As % of 2022 Total
Procurement Amount Relation to TSMC Procurement Amount Relation to TSMC
risks through the collaboration of teams formed by fab operations, quality control and business organizations. TSMC also worked Net Procurement Net Procurement

with suppliers to drive research and process innovation for advanced materials, strengthen quality, and save energy and reduce Company A 17,862,380 20% None 18,259,301 20% None

carbon emission in the supply chain to achieve a sustainable supply chain and create benefits from win-win solutions. Company B 17,763,637 20% None 16,120,039 18% None
Others 53,109,061 60% - 56,546,611 62% -

Raw Materials Supply Total Net Procurement 88,735,078 100% - 90,925,951 100% -

Major Materials Major Suppliers Market Status Procurement Strategy

Raw Wafers FST These 6 suppliers together provide over 90% of the world’s TSMC’s suppliers of silicon wafers are required to pass stringent quality certification
● Reason for Increase or Decrease: The changes of procurement amount and percentage were mainly due to customer product
● 

GlobalWafers raw wafer supply. procedures.

SEH TSMC procures wafers from multiple sources to ensure adequate supplies for volume
●
demand change.
Siltronic manufacturing and to appropriately manage supply risk.
SK siltron Raw wafer quality enhancement programs are in place to support TSMC’s technology
●

SUMCO advancement.
TSMC regularly reviews the quality, delivery, cost, sustainability and service performance
●

of its wafer suppliers. The results of these reviews are incorporated into subsequent 5.3.6 Quality and Reliability (Q&R)
purchasing decisions.
A periodic audit of each wafer supplier’s quality assurance system ensures that TSMC
TSMC strives to offer excellence in semiconductor manufacturing services to all its customers worldwide. The Company is dedicated
●

can maintain the highest quality in its own products.

TSMC takes various approaches with suppliers to optimize cost and supply.
●
to providing outstanding quality in every facet of its business and maintains a culture of continuous improvement to assure
Chemicals Air Liquide These 12 companies are the major worldwide suppliers of Most suppliers have located their new operations closer to TSMC’s major
●
customer satisfaction. TSMC implements containment and preventive measures to protect customers from potential product
BASF chemicals. manufacturing facilities, thereby significantly improving procurement logistics and
DuPont reducing supply risk. defects.
Entegris All supplied products are regularly reviewed to ensure that TSMC’s specifications are
●

Fujifilm Electronic Materials met and product quality is satisfactory.

Kanto PPC In order to effectively manage costs and supply chain, TSMC has collaborated with
In the technology development stage, the Q&R organization helps customers design in superior product reliability. In 2023, Q&R
●

Kuang Ming suppliers and adopted various strategies.

Merck TSMC encourages and collaborates with chemical suppliers to implement innovative
●
worked continuously with R&D in advanced logic, specialty and advanced packaging technologies throughout development and
RASA green manufacturing improvement programs.
Shiny qualification stages to ensure meeting commitments to customers with respect to device characteristics, process yield and product
Tokuyama
Wah Lee reliability.
Lithographic DuPont These 7 companies are the major worldwide suppliers of TSMC works closely with suppliers to develop materials that meet all application and
●

Materials Fujifilm Electronic Materials lithographic materials. cost requirements. For advanced logic technology, following 3nm FinFET, Q&R successfully certified N3E, which is an enhanced version of 3nm
JSR TSMC and suppliers periodically conduct programs to improve their quality, delivery,
●

Nissan sustainability and green policies, and jointly set improvement programs and monitor processes for better power, performance and density. For specialty technologies, Q&R successfully qualified consumer-grade
Shin-Etsu Chemical progress to ensure continuous improvement in TSMC’s supply chain.
Sumitomo Chemical 22nm embedded MRAM process enhancement IP and completed reliability certification for 28nm HV (high voltage) technology.
T.O.K.
In addition, TSMC’s advanced packaging solutions enabled system improvement of the wafer level process by integrating the
frontend wafer process and backend chip packaging. In 2023, Q&R completed the qualification and entered volume production

106 107
 of TSMC-SoIC® stacking technology, which stacks chips on organizations in the breakthrough of cutting-edge materials, the excellent quality culture of TSMC, Q&R began offering Infineon Technologies AG, Intel Corporation, MediaTek Inc.,
wafers (CoW). TSMC also successfully certified the CoWoS® and improving the yield of products and processes. In addition, quality culture courses for new employees in 2022. These NVIDIA Corporation, NXP Semiconductors N.V., Qualcomm
advanced packaging technology on larger substrates, enabling Q&R and its chemical lab also assist the supply chain in courses help new employees establish the correct quality Incorporated, Sony Semiconductor Solutions Corporation and
the 3DFabric® technology platform to be applied to artificial material innovation, guiding suppliers to ensure compliance values and accelerate their integration and adaptation to their many more worldwide.
intelligence and high-speed computing. In terms of advanced with international regulation for carcinogenic, mutagenic and roles. In addition to internal cross-organizational learning
packaging technology, TSMC has successfully certified the reprotoxic (CMR) substances and to classify risky materials and and exchange, TSMC participates in the Taiwan Continuous Customer Service
InFO_PoP technology for advanced N3 chips and power carry out test sampling. In addition, Q&R applies best known Improvement Award (TCIA) to promote the development of TSMC is committed to providing customers with the highest
management ICs (PMICs), achieving higher efficiency and lower methods based on professional expertise and collaborates other local industries by sharing its experience, and to enhance quality service. The Company believes that excellent service
power consumption in mobile devices. with the materials supply chain management division to the problem-solving and innovation ability of its colleagues by is key to maintaining and improving customer satisfaction,
build a resilient raw material supply chain. Even in the face observing improvement methods of other industries. In 2023, solidifying existing customers, and attracting new customers.
To continuously reduce product defects, enhance process of pandemic restrictions, geopolitical tensions and material TSMC’s outstanding performance was recognized with seven To this end, TSMC has established a dedicated customer
controls, facilitate early detection of abnormalities and prevent shortages, TSMC successfully expanded existing material gold, two silver and two “best improvement and innovation” service team to act as the primary contact window, facilitating
quality problems in general, Q&R collaborates with other production capacity with suppliers, established new production awards. Meanwhile, Q&R encouraged local material seamless communication and coordination with customers
operational entities to establish and continuously improve lines of verified quality at overseas bases, and developed suppliers to participate in the TCIA for ability and quality in areas such as product design, mask making, wafer
real-time defense systems using advanced statistical methods sufficient qualified second sources. All the efforts above have culture enhancement, and in 2023, they won a total of nine manufacturing, and 3DFabric® technology services, ensuring
and quality tools. Q&R and the Company’s fabs have also supported TSMC in navigating through geo-political turmoil to medals: one gold, seven silver, and one bronze. Additionally, world-class service every step of the way. TSMC is committed
worked together on enhancements for automotive product achieve continuous growth and optimize the balance between Q&R added quality courses to TSMC’s Supply Online 360, to continuously improving customer satisfaction, earning
quality improvement, including design rule implementation quality and capacity. sharing basic concepts of quality tools, problem-solving, and customer trust, maintaining sales and profitability, and
and migration to Automotive Quality System 2.0. This covers continuous improvement, as well as explaining the necessary solidifying its role as a most reliable partner.
process capability requirements to tighten in-line and wafer Furthermore, Q&R assisted suppliers in developing recycling procedures for management changes and evaluation of new
acceptance testing in fabs and the handling of maverick wafers projects, enabling several recycled chemicals to achieve an materials. To improve customer interaction on a real-time basis,
and lots. Q&R also provides dedicated resources for field/line electronic grade quality level. Q&R also collaborated with TSMC-Online offers a suite of web-based applications to
return analysis and timely physical failure analysis (PFA) for operations to conduct engineering verification for recycled Thanks to qualification in technology development, real-time provide more proactive customer service and support in
process improvement to meet automotive customers’ stringent chemicals, meeting TSMC’s quality requirements and defense systems and innovative applications in semiconductor design, engineering and logistics. Customers thus have 24-7
defective parts per million (DPPM) requirements. environmentally friendly sustainability goals. Q&R is also manufacturing services, as well as its continuous quality access to critical information. TSMC-Online facilitates design
committed to the continual improvement of local supply chains improvement culture, TSMC had no product recalls initiated collaboration by maintaining data availability and accessibility
To stimulate employee problem-solving and develop related and developing local talent. In 2023, TSMC again collaborated by customers due to safety concerns in 2023. Meanwhile, a and providing customers with accurate up-to-date information
quality systems and methodologies, Q&R held several with the Semiconductor Equipment and Materials International third-party audit verified the effectiveness of the Company’s at each stage of the design process. Engineering collaboration
company-wide symposia and training programs on total quality (SEMI) to hold the fifth Strategic Materials Conference (SMC) in quality management systems in compliance with IATF focuses on wafer, and 3DFabric® processes, yield and wafer
excellence (TQE) in 2023. Q&R has successfully completed a Taiwan and invited domestic and overbroad members to share 16949: 2016 and IECQ QC 080000: 2017 requirements. acceptance test analysis, as well as data quality and reliability.
series of digital transformation development tasks, applied in the most advanced material technology, to motivate talented In 2023, TSMC’s backend fabs also continually passed the Logistics collaboration includes information on wafer
areas such as raw material management, statistical process personnel and elevate the international competitiveness of certification of American National Standards Institute ANSI/ESD fabrication, advanced packaging, testing, and transportation.
control (SPC), metrology, and laboratory analysis. By leveraging the local supply chain. In addition, in 2023 Q&R collaborated (electrostatic discharge) S20.20 standard. Regular customer In addition, customers can generate customized reports
advanced digital technologies and platforms, TSMC achieved with a professional consulting firm to participate in the feedback indicates that products shipped from TSMC have through TSMC-Online to meet their system automation needs.
its digital transformation goals. Moreover, during the initial Electronic Specialty Gases & Systems Conference in Arizona, consistently met or exceeded all field quality and reliability
phase of overseas expansion, Q&R addressed the challenges of U.S., to discuss the importance of technical goals and quality requirements. In these ways, TSMC helps customers improve Customer Satisfaction
personnel training, remote management, and support through management with the local supply chain. This provided an time-to-market delivery and competitiveness with excellent, To ensure customer satisfaction, TSMC must fully comprehend
digital transformation. This has made the successful practice opportunity to attract talented local individuals who share the reliable products for the five major growth markets the its customers’ needs. To this end, the Company works with
of globalized management possible, achieving zero distance same values. Company serves: HPC, smartphones, IoT, automotive, and third-party consulting firms to conduct annual customer
and zero time difference in quality management across global digital consumer electronics. satisfaction surveys (ACSS) with the majority of existing
fabs. In 2024, Q&R will continue to promote the development TSMC fully supports continuous improvement programs to customers, either via online surveys or in direct interviews.
of quality management methods and professional training and strengthen the work culture, improve product quality and 5.4 Customer Trust In addition to the survey, TSMC also conducts quarterly
apply artificial intelligence technologies to consolidate TSMC production efficiency, reduce production costs, and enhance business/technical reviews (QBR/QTR) with customers to
5.4.1 Customers
comprehensive competitive advantages in this industry. customer satisfaction. These programs encourage colleagues collect their feedback on a regular basis. Customer feedback is
to strive for excellence, drive cross-departmental observation TSMC’s customers make a wide variety of products that deliver routinely reviewed, analyzed and used to develop appropriate
Q&R is committed to quality excellence, responsible supply and learning, and enhance their innovative, problem-solving excellent performance across the semiconductor industry. They improvement plans, all in all becoming an integral part of the
chain, green manufacturing, and sustainable management abilities – all traits that greatly contribute to achieving a include fabless semiconductor companies, system companies, customer satisfaction process. Through surveys and feedback
practices. Q&R has established a state-of-the-art chemical lab win-win outcome of honing TSMC’s competitive edge and and integrated device manufacturers such as Advanced Micro reviews, TSMC is able to closely interact with customers,
responsible for monitoring raw material quality, assisting R&D building customer satisfaction. To continue and uphold Devices, Inc., Amazon Web Services, Inc., Broadcom Inc., provide better services, and enhance the quality of customer
collaboration.

108 109
 Customer Information Protection ● Alliances that provide design services to support customer 3D chip stacking and 2.5D advanced packaging design
TSMC complies with applicable regulations and international standards to protect customer information and has received ISO demand regarding resources and capabilities, depending on solutions, together with EDA tools compliant to the 3Dblox
27001 international information security certification. In addition, relevant proprietary information protection policies and standard the scope and various requirements in the semiconductor open standard to facilitate integration of multiple chips/
work processes are also established to ensure only authorized personnel can access the engineering and production data of any design stages and value chain. chiplets in system-level designs using 3DFabric® technology
specific customer. ● Alliances to enable customers’ system-level designs for services which include TSMC-SoIC®, InFO and CoWoS®. The
integrating multiple chips/chiplets in 3D stacking and availability of the aforementioned design ecosystem solutions
Customers Accounting for at Least 10% of Annual Consolidated Net Revenue in 2023 and 2022 advanced packaging. helps customers successfully pursue opportunities in all major
Unit: NT$ thousands ● Participants consisting of 14 EDA partners, seven Cloud markets: HPC, smartphones, the Internet of Things (IoT),
2023 2022 partners, 39 IP partners, 26 design center alliance (DCA) automotive and digital consumer electronics.
Customer partners, nine value chain aggregator (VCA) partners and 22
As % of 2023Total As % of 2022 Total
Net Revenue Relation to TSMC Net Revenue Relation to TSMC
Net Revenue Net Revenue 5.5 Information Security Management
partners in the new 3DFabric® Alliance.
Customer A 546,550,925 25% None 529,649,200 23% None ● A partner management portal to facilitate communication
5.5.1 Information Security Policy and Organization
Customer B 241,152,357 11% None N/A N/A None with ecosystem partners for efficient business productivity –
Others 1,374,032,559 64% - 1,734,242,092 77% - designed with a highly intuitive interface and accessible via a TSMC is committed to information security and confidentiality
Total Net Revenue 2,161,735,841 100% - 2,263,891,292 100% - direct link from TSMC-Online. protection for its customers, shareholders, and partners. To
this end, the Company has formulated, implemented and
TSMC and partners work together proactively and engage regularly updated rigorous cybersecurity policies, procedures
Reason for increase or decrease: The changes of sales amount and percentage were mainly due to customer product demand
● 
much earlier and deeper than ever before in order to address and measures as reflected in TSMC’s Information Security
change.
the mounting design challenges of advanced technology Declaration.
nodes. Through this early and intensive collaboration, OIP is
5.4.2 Open Innovation Platform® Initiative
able to deliver the needed design infrastructure with timely In 2022, following the regulations of the Financial Supervisory
At TSMC, innovation has always been an exciting challenge. Competition continues to intensify in the face of increasing industry enhancement of EDA tools, early availability of critical IPs and Commission of Taiwan, TSMC appointed J.K Lin, Senior
consolidation and the commoditization of technology at more mature, conventional levels, and thus semiconductor companies quality design services when customers need them. Taking Vice President of Information Technology, Material and
must find ways to keep innovating in order to survive and prosper. One way to promote innovation is through active collaboration full advantage of the process technologies once they reach Risk Management, to take on the addition role of Chief
with external partners. At TSMC this is known as Open Innovation®, an “outside in” approach to complement traditional “inside production-ready maturity is critical to customer success. Information Security Officer (CISO). Mr. Lin is responsible for
out” methods. TSMC has chosen this path to stimulate innovation via its OIP initiative, which is a key part of the TSMC Grand Hence, this helps achieve DTCO among TSMC process the overall planning and coordination of Company resources,
Alliance. technologies, OIP design solutions and customer product communicating on information security policies and directions.
designs. TSMC has established a dedicated corporate information
The OIP initiative is a comprehensive design technology infrastructure that encompasses all critical IC implementation areas to security (CIS) organization, led by Director James Tu, to be
lower design barriers and improve design cycle times and first-time silicon success rates. OIP promotes the speedy implementation The 2023 annual OIP Ecosystem Forum in North America responsible for the implementation, planning, monitoring,
of innovation within the semiconductor design community and its ecosystem partners using TSMC’s process technology and OIP demonstrated how TSMC and its ecosystem partners jointly and management of information security. TSMC has also
partners’ solutions in design implementation and backend services. develop design solutions on top of TSMC’s advanced established the PIP and Risk Committee and the IT Security
technologies through OIP. At the forum, TSMC made key Committee to cooperate with the Company’s information
Crucial to OIP are ecosystem interfaces and collaborative components initiated and supported by TSMC to empower innovation presentations on its comprehensive 3nm technology family technology and related organizations to strengthen corporate
throughout the supply chain and, in turn, drive the creation and sharing of new revenue and profits. TSMC’s active accuracy that continues the full-node PPA scaling trend, together with information security protection and management mechanisms.
assurance (AAA) initiative is key to OIP, providing the precision and quality required by the ecosystem interfaces and collaborative the offering of high-density and high-performance libraries and Both committees are chaired by the CISO and comprise VP-level
components. design solutions to support smartphone and high performance executives who meet regularly to review and deliberate on
computing (HPC) design applications. The Company also important information security policies as well as project
TSMC’s Open Innovation® model brings together the creative thinking of customers and partners under the common goal of made presentations on the readiness of analog cells that can implementation. Every six months, CIS executives report risk
shortening each of the following: design time, time to volume production, time to market and, ultimately, time to revenue. The help boost analog IP yields and analog design productivity, management measures to the Audit and Risk Committee,
model features: with the design solutions to enable EDA and design flow including global information security trends, corporate
automation to support analog design migration. In response information security policies, plans, and implementation
● The foundry segment’s earliest and most comprehensive electronic design automation (EDA) certification program, delivering to the rising demand for more complex system level designs, results. The chair of the Audit and Risk Committee also reports
timely design tool enhancement required by new process technologies. TSMC collaborates with 3DFabric® alliance partners of 3DIC on the effectiveness of information security supervision and risk
● The foundry segment’s largest, most comprehensive and most robust silicon-proven IP (intellectual properties) and library portfolio. expertise in EDA, IP, DCA/VCA, memory, substrate, outsourcing control measures to the Board of Directors.
● Alliances that enable semiconductor designing in the Cloud for the benefit of scalability, agility and flexibility to meet various semiconductor assembly testing (OSAT) and testing to provide
customer requirements for work models.

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 Corporate Information Security Organization Structure countermeasures to mitigate these risks. In 2023 and as of the Due Diligence
●  TSMC conducted multiple human rights protection training
date of this Annual Report, TSMC has not suffered any financial TSMC follows the recommendations of the OECD Due courses in 2023 including plant safety and health, emergency
Board of Directors
losses nor experienced any operational impact due to material Diligence Guidance for Responsible Business Conduct to carry response, first-aid personnel training, friendly workplace, etc.
information security incidents. out the Company’s due diligence process. TSMC conducts The total training hours are 156,595 hours, and a total of
the due diligence process by embedding responsible business 70,576 employees have completed the training, accounting
5.6 Human Capital practices into its policies and management systems, regularly for 92% of employees. To further promote human rights,
Audit and Risk identifying and assessing risks, implementing prevention and TSMC offered a course called “Understand TSMC Human
Committee Human capital is TSMC’s most treasured asset. The Company
mitigation measures, and tracking mechanisms. Rights Policy, Create a Friendly Workplace, and Eliminate Sexual
strives to provide employees with meaningful work, continuous
PIP and Risk Committee Harassment”. 65,364 employees completed this training, and
learning, a safe and pleasant work environment that is both
Training and Advocacy
●  the passing rate of the post-training test was 100%.
Corporate Information diverse and inclusive, and high-quality compensation and
TSMC develops human rights protection training to establish
Security Organization benefits. TSMC goes beyond this by actively encouraging
awareness and develop a culture of respecting human rights. TSMC abides by the rights granted to workers by laws and
employees to nurture and enjoy a healthy family life, develop
IT Security Committee Through such training, the Company informs employees regulations and respects the freedom of collective consultation
personal interests, expand social participation, and, in general,
about human rights concepts and their importance, accessible and assembly and association of all employees. The Company
live a happy life.
grievance channels to all, and TSMC’s measures for the will not interfere or intervene with these activities. TSMC holds
5.5.2 Information Security Management Strategy and management, prevention, and remediation of human rights Silicon Garden meetings, aka Labor-Management meetings,
5.6.1 Human Rights Policy and Specific Actions
Resources violations. on a regular basis, listens to employees’ opinions and makes
TSMC strongly believes that respecting human rights and timely and appropriate responses through a diversified and
To achieve TSMC’s information security goals and maintain promoting a decent work environment are vitally important. Grievance Channels
●  comprehensive internal communication framework, in order
competitiveness, the corporate information security The Company is committed to supporting the following TSMC establishes robust grievance and communication to strengthen the communication between the Company’s
organization actively strengthens security and confidential international human rights standards while complying with channels and commits to protecting complainants. Potential management team and employees and ensure harmonious
information protection mechanisms. CIS sets clear policy, local laws in all operating locations, treating and respecting human rights violations can be reported anonymously or employee relations.
procedures and guidelines and continuously enhances all personnel equally. The TSMC Human Rights Policy applies through multiple communication mechanisms to provide
the Company’s management systems and implements to the management team and all employees (those employed concerns or suspected violations to TSMC, and the Company 5.6.2 Diversity and Inclusion
comprehensive risk controls. In addition, CIS regularly performs by TSMC and receiving wages or compensation), affiliated will initiate corresponding measures.
information security risk assessments and sets priorities TSMC believes that a diverse management and talent structure
enterprises, suppliers, contractors, partners (including
based on the impact and probability of a risk, as well as the contributes to the Company’s competitive advantage and
customers and communities), and other stakeholders Remediation
● 

cost of reducing such risk. CIS uses the plan-do-check-act sustainable development. Through the implementation of the
committed to eliminating any human rights violations. Once a human rights violation caused or contributed to by
(PDCA) methodology to continuously enhance multi-layer Diversity and Inclusion Statement, TSMC actively establishes
TSMC is identified, the Company will initiate a remediation
information security defenses and establish key performance an open management model, creates an inclusive working
Management Principles mechanism based on the type of incident and, if necessary,
indicators (KPIs) for information security. In 2023, TSMC environment, and encourages people of varying skills and
● Human
 Rights Governance Structure cooperate with relevant stakeholders to prevent recurrence.
invested in excess of NT$1 billion to strengthen information backgrounds to join the semiconductor sector, so that the
TSMC has established a human rights governance structure
security, involving more than 500 employees for information industry can maximize the benefits of diverse talent resources.
with the Board of Directors at the highest level. The ESG Communication and Disclosure
● 

security-related activities, with more than 1,000 external Committee has established a cross-department human TSMC identifies affected individuals on a case-by-case basis
security personnel engaged in the physical aspects of To realize TSMC’s People Vision and provide an inclusive
rights task force, encompassing Customer Service, Corporate based on salient human rights issues to build a solid, trusting
information security services. workplace, TSMC has officially established three employee
Sustainability, Environmental Safety and Health, Human relationship, and listens to the voices of stakeholders through
resource groups (ERGs), Women@tsmc, Global Family@
Resources, Information Technology, Corporate Information diverse, open, and two-way communication channels. The
5.5.3 Information Security Incident Handling and tsmc and Accessibility@tsmc, to focus on the diversity areas
Security, Materials Management, Legal, Operations, Quality Company regularly discloses human rights management goals,
Notification of gender, race/nationality and disability since 2022-2023. In
and Reliability, Research and Development and other functional actions, performance, and progress on the Company’s ESG
2023, TSMC hosted the first Diversity and Inclusion Campaign,
organizations to systematically and effectively promote human website, Sustainability Report, and Human Rights Report.
TSMC has established enterprise risk management mechanisms turning the Company’s goals into concrete actions and
rights management activities. In addition to regularly reporting
and procedures to handle information security incidents. promoting the innovative value of diversity and inclusion.
progress to the ESG Steering Committee, the chairperson of In 2023, the Company used the Responsible Business Alliance’s
The mechanisms and procedures define relevant processes TSMC has further expanded the scope of diversity and
the ESG Committee reports to The Nominating, Corporate Self-Assessment Questionnaire (SAQ) to identify the greatest
and measures for incident notification, designation of inclusion, planning learning structures and learning focus for
Governance and Sustainability Committee under the Board risks regarding labor, health and safety, environment, and
personnel responsible for handling material information different roles for all employees, aiming to support colleagues
of Directors on human rights management actions and ethics matters and to formulate substantive actions and
security incidents, and assessment of losses suffered as well as in understanding the subtleties of diversity and inclusion,
implementation results. managerial response. The SAQ scores of each of TSMC’s
additional measures needed, evaluation of information security including unconscious bias and how it is formed, jointly raising
operating fabs were in the low risk range, defined as xx points
risks to the Company’s financial and operations, and proposed diverse and inclusive awareness.
or above.

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 台積人才發展架構 & 70/20/10法則、混成學習 & 系統化學習藍圖
組織發展診斷 AI自適應學習

5.6.3 Workforce Structure TSMC adheres to its core values and continues to move TSMC Talent Development Model
forward with a lofty vision, attracting the attention of young
At the end of 2023, TSMC had 76,478 employees worldwide,
talents both in Taiwan and overseas. To ensure the talent it
including 7,861 managers, 36,807 professionals, 9,235
needs for the continuous growth, TSMC expanded its recruiting
assistants and 22,575 technicians. The following two tables
channels to attract top-notch professionals in all positions and
summarize the makeup of TSMC’s workforce and the female
employed over 6,000 employees worldwide in 2023. TSMC Vision Company Sustainability
portion of management as of the end of February 2024:
Be the most advanced and
5.6.5 Talent Development largest technology and foundry
Workforce Structure
services provider
Employees are TSMC’s most important asset. In addition to
12/31/2022 12/31/2023 02/29/2024
creating a diverse and inclusive workplace that encourages
Managers 7,295 7,861 8,000
employees to learn and develop their strengths, TSMC also Equip employees Unleash employees’
Professionals 35,189 36,807 37,129
attaches great importance to the early and continuous with future capabilities potential & innovation Talent Development Strategy
Job
Assistant 8,665 9,235 9,284
Engineer/Clerical development of the capabilities of all employees. In this regard, Prepare employees with Enable self-learning and create
the Company integrates internal and external resources, the skills for the future and build positive impact to the company
Technicians 21,941 22,575 22,620
a talent pool and the society
provides challenging, meaningful and interesting work in
Total 73,090 76,478 77,033
a world-class workplace and creates a continuous, diverse
Gender Male 65.6% 65.8% 65.9%
learning environment. In addition, the Company has initiated Ability-based Diverse & Versatile Training & Development
Female 34.4% 34.2% 34.1% Learning Program Learning Approach Programs at all levels Learning Momentum
training and education procedures to ensure that the employees
Ph.D. 3.8% 3.9% 3.9% Cultivation
and the Company can grow together with “goals, plan and TSMC People Development 70/20/10 principle, blended Systematic learning roadmap
Master’s 47.2% 47.7% 47.9% discipline” so as to become a force to uplift the society. Framework & organization learning, & AI adaptive learning
development diagnosis
Bachelor’s 29.3% 29.5% 29.5%
Education
Other Higher 8.4% 8.0% 8.0% To pursue sustainable growth TSMC intends to expand global
Education
operations, and talent development is crucial to achieving In 2023, TSMC conducted over more than 7,000 training sessions, more than 10,000 online courses, and provided over 6.53 million
High School 11.3% 10.9% 10.9%
this strategic goal. Therefore, the Company selects and hours of training with a total in excess of 2.59 million participants. The average annual training time per employee grew to 85.4
Average Age 35.7 36.2 36.2 cultivates talented employees based on the TSMC Talent hours, an increase of 23% over the previous year. TSMC training expense reached NT$887 million and the average training cost per
Average Years of Service 8.3 8.7 8.8 Development Model to support sustainability and follows employee was approximately NT$11,604, a 12 percent decrease from the previous year (Note).
two strategies for talent development: equipping employees
with future capabilities, i.e. preparing employees with the 5.6.6 Competitive Overall Compensation
Female Ratio in Management
skills for the future and building a talent pool, and unleashing
12/31/2022 12/31/2023 02/29/2024 employees’ potentials and innovation, i.e. encouraging and In order to develop the most effective compensation strategies, TSMC reviews and selects benchmark companies annually and
Female Ratio in Junior Management 13.6% 14.3% 14.4% enabling self-learning and continuous innovation to create collects market information on compensation data of the whole industry for competitiveness analysis.
Female Ratio in Senior Management 13.0% 13.7% 13.9% positive impacts on the Company and society. To this end, the
Female Ratio in Top Management 6.1% 5.9% 5.9% Company initiates ability-based learning programs, focusing on TSMC’s compensation program includes a monthly salary, performance bonuses based on quarterly business results, and profit
the core traits of character (perseverance, resilience, initiative, sharing based on annual results.
Note: Junior management positions include first-line managers; top management positions include vice
presidents and higher as well as the CEO. innovation, judgment, broadness of mind and breadth/depth
of knowledge), and further develop leadership, professional The purpose of the business performance bonus and profit sharing programs is to reward employee contributions appropriately,
5.6.4 Recruitment and general skills according to colleagues’ different positions to encourage employees to work consistently toward ensuring TSMC’s success, and to align employee interests with those of
and professional, and the needs of Company’s organization. TSMC’s shareholders so as to achieve win-wins for the Company, shareholders and employees alike. The Company determines
Sharing a common vision and values by the Company’s
At the same time, the Company uses a blended approach the bonus and profit sharing amounts based on operating results and domestic industry practice. The amount and distribution of
employees is key to TSMC’s growth and success. As for
consisting of experiential learning (70%), feedback and the employee bonuses are recommended by the Compensation and People Development Committee to the Board of Directors for
recruitment of new employees, the Company is committed
guidance (20%), and education and training (10%). The approval. Individual rewards are based on each employee’s job responsibility, contributions and performance.
to finding and hiring top-notch professionals in all positions.
Company also employs future AI adaptive learning, together
TSMC is an equal opportunity employer and practices open and
with training and development programs at all levels, to A similar approach is used in TSMC’s compensation programs at subsidiaries. In addition to providing employees with a locally
fair recruitment. In addition to prioritizing integrity and ability
comprehensively and systematically plan and develop the competitive base salary, annual bonuses are granted as a part of total compensation, in line with local regulations, market practices
as the primary conditions for employment, the Company also
capabilities required by all employees. These approaches help and the overall operating performance of each subsidiary.
considers suitability for the position, evaluating all candidates
cultivate learning momentum and support employees and the
equally regardless of race, gender, age, religion, nationality or
Company in achieving continuous growth and breakthroughs.
political affiliation.

Note: In order to align the definition of training expenses with international market research information (as in Training magazine) to include total training spending, outside products and services, and training staff
payroll, starting in 2022 the Company began including training staff payroll in annual training expenses. The change in the average training cost per employee in 2023 reflects the comprehensive impact of
training manpower’s business performance bonus and profit sharing and changes in the number of employees.

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 In addition to the competitive compensation described above, then apply for reinstatement after the expiration of the period. Vacation and insurance policies at TSMC’s overseas offices are 5.6.9 Employee Engagement
the Company approved and implemented a global employee In addition, TSMC provides pensions, financial assistance for designed to be in compliance with local regulations. In China,
The Company encourages employees to maintain a healthy and
stock purchase plan in 2022, which is available to all regular emergencies, subsidies for marriage, childbirth and funerals, as North America and Europe, TSMC provides more vacation days
well-balanced life while pursuing their career goals effectively.
employees of TSMC and its wholly owned subsidiaries. Through well as discounts in designated shops. to employees than legally required. In overseas offices, TSMC
TSMC facilitates employee communication and provides
this plan, employees are encouraged to participate in the offers a more comprehensive life and medical insurance than
employee caring, benefit, rewards and recognition programs.
Company’s long-term success. In accordance with local laws and regulations, TSMC provides required by local regulations and customs.
breastfeeding and breast milk collection rooms. To help
Employee Communication
To strengthen the link between TSMC managers and employees balance their personal and work lives, TSMC not 5.6.8 Diverse Employee Recognition
TSMC values employee communication and is committed
shareholders’ interests, the Company established corporate only offers parental leave but also provides a comprehensive
TSMC sponsors various internal award programs to recognize to keeping communication channels open and transparent
officer shareholding guidelines in 2020. The required holding leave management system. To further create a family-friendly
employees for outstanding achievement, both individual and between managers and employees, and amongst peers. The
value of TSMC shares by the chairman, CEO, and corporate workplace and support for TSMC employees’ parenting needs,
at a team level. With these award programs, TSMC aims to Company is committed to ensuring that employees are able
officers is proportional to their annual base salary: 18 times for starting from October 1, 2023 the Company implemented the
encourage continued employee development, which also to communicate openly and share ideas and concerns with
the chairman and CEO, nine times or three times for officers TSMC Childcare Benefit Program 2.0, to extend maternity leave
enhances the Company’s competitiveness. management regarding work conditions and management
(three times is only applicable for officers hired in overseas) for second birth from 12 to 16 weeks and third birth from 16
practices without fear of recrimination, reprisal, intimidation
Officers shall fulfill the required value within three years of to 20 weeks. The maternity subsidy increased to a maximum of
The award programs include: or harassment. TSMC makes continuous efforts to listen to
appointment and maintain the required value for the entire NT$20,000 (NT$10,000 from employee welfare committee and
● TSMC Academy to recognize outstanding scientists and employees and to facilitate mutual and timely employee
period of employment. Furthermore, to attract and retain maximum NT$10,000 maternity insurance). TSMC has set up
engineers whose individual technical capabilities have made communication, through multiple channels and platforms,
corporate executives and other critical talent and to link their four onsite kindergartens for employees in Taiwan. In addition,
significant contributions which in turn fosters harmonious labor relations.
compensation with shareholder interests and environmental, a holiday STEAM (science, technology, engineering, art and
● TSMC Excellent Labor Award to recognize technicians
social, governance (ESG) achievements, TSMC established math) campus has been organized for employees’ children.
whose outstanding performances have made significant TSMC conducts biannual face-to-face CEO dialogue sessions
employee restricted stock awards rules in 2021, 2022 and
contributions in Hsinchu, Taichung, and Tainan, which allows the employees
2023. All TSMC facilities are equipped with 24-hour health centers,
● Total Quality Excellence to recognize employees’ continuous to make suggestions, express their thoughts and get direct
where healthcare management professionals and appointed
efforts in creating value at each fab feedback from the CEO. In addition, the Company has also
5.6.7 Employee Benefit System Superior to Statute onsite physicians provide quality services beyond those required
● Service Award to recognize and show appreciation of senior enlarged the scope of the labor-management meeting,
legally. The health centers work with hospitals and employee
TSMC offers employee benefits that are superior to those employees for their long-term commitment and dedication transforming it into the Silicon Garden Meeting, which helps all
assistance program service providers to offer comprehensive
required by applicable statutes. In addition to twelve national ● Excellent Instructor Award to praise the outstanding employees feel free to put forward their ideas so the Company
support for the emotional and physical well-being of
holidays per year, seven memorial days are also designated performance and contribution of internal instructors of can take appropriate action.
employees. In addition to annual checkups for all employees,
as holidays. To alleviate traffic congestion during commuting training courses for employees
in 2023 TSMC began providing employees with five advanced
hours, support family care needs, and create a diverse and TSMC supports a host of various communication channels
checkup items upon completion of every five years of service.
inclusive workplace, the Company implemented a staggered Apart from the recognitions above, there are function-wide including:
The Company encourages employees to exercise regularly by
commuting policy in 2023 and continuously optimized related awards dedicated to innovation, such as the Idea Forum, the ● Communication meetings for various levels of managers and
subsidizing 65 clubs, improving exercise facilities, and holding
flexible support. In order to support employees in practicing Total Quality Excellence Award and the ESG Award, which employees, e.g. the executives communication meeting, skip
regular sports events to help employees find peers with similar
the Company’s sustainable vision of “making society better,” recognize employee initiative and continuous implementation levels and communication meetings in individual functions/
sports interests. Also, to help employees balance their work
TSMC provides one day of volunteer leave per year since 2023. of innovative practices. In addition, TSMC encourages divisions
and life, TSMC provides:
The Company provides employees with statuary labor insurance employees to participate in external talent activities and ● Quarterly Silicon Garden meetings, aka Labor-Management

and national health insurance as well as comprehensive paid competitions. In 2023, distinguished TSMC employees meetings, to provide business updates and discuss issues of
Convenient onsite services and amenities such as in-fab
● 

group insurance plans. Coverage includes life insurance and continued to be recognized through a host of awards, such as concern for employees
cafeterias, convenience stores, and other services
insurance for accidents, hospitalization, cancer, critical illness, ● Comprehensive
the Model Labor Award, the Excellent Young Engineers Award, ● The biennial employee survey on core values taken to
 health management services, including in-fab
maternity and international business travel. There are also the Outstanding Engineer Award, the Taiwan Continuous understand the Company’s implementation of core values
clinic services, post health-exam follow-up activities, and
various and unique employee self-paid group insurance plans Improvement Awards, the National Manager Excellence Award and employee commitment
employee assistance programs
available for employee family members. The group insurance ● Diverse
and the National Industrial Awards. ● The biennial global employee engagement survey taken to
 employee welfare programs, leisure and art events,
coverage is extended to employees on approved unpaid systematically understand the work experience of employees
hobby clubs, vibrant sports centers and onsite preschool
leave. To better support new hires, TSMC offers one day of and to enhance employee engagement and sense of
services to meet employees’ needs for childcare, festival
annual leave for every two months of service in the first year. belonging in the Company
bonuses and emergency subsidies if and when needed
Employees who need to take long leaves of absence for military
service or severe injuries can also apply for unpaid leave, and

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 ● Periodic employee pulse surveys and service satisfaction surveys given to selected employees with follow-up actions based on emergency or unexpected event (Labor Standards Act Article ● Encourage colleagues to proactively share their ideas through
survey findings 32 Paragraph 2, and Paragraph 4). NT$300,000 issued on an open management model in order to create a mutually
● myTSMC employee portal, an internal website featuring talks by the Founder, the Chairman and the CEO, corporate messages, 08/07/2023 for the extension of working hours combined with respectful environment.
executive interviews, and other topics of interest to employees the regular working hours exceeding permitted limit (Labor ● Enhance colleagues’ sense of belonging and achievement by

● eSilicon Garden Stories, TSMC’s newsletter providing real-time updates on major activities of the Company as well as inspirational Standards Act Article 32 Paragraph 2). NT$350,000 issued on unleashing their potential, allowing them to enjoy their work,
content featuring outstanding teams or individuals 08/18/2023 for the extension of working hours combined with continuously learn, and grow.
● Three channels for reporting complaints regarding managerial, financial, auditing, ethics and business conduct issues: the regular working hours exceeding permitted limit (Labor ● Motivate and retain talent by providing more non-monetary

– T he whistleblower reporting system, administered by the Audit Committee Standards Act Article 32 Paragraph 2). NT$150,000 issued on rewards.
– T he irregular business conduct reporting system, administered by the Ethics Committee 09/26/2023 for the extension of working hours combined with
– T he ombudsman system administered by a senior manager, appointed by the CEO the regular working hours exceeding permitted limit (Labor TSMC’s turnover rate was 3.7% in 2023 compared to 6.7% in
● The Employee Opinion Box, which provides an opportunity to submit suggestions or opinions regarding work and the work Standards Act Article 32 Paragraph 2). NT$150,000 issued on 2022, both within a healthy range of less than 10%.
environment 10/03/2023 for the extension of working hours combined with
● The Fab Caring Circle in each fab, which addresses issues related to employees’ work and personal life – dedicated mainly to the the regular working hours exceeding permitted limit (Labor 5.6.11 Retirement Policy
Company’s direct laborers Standards Act Article 32 Paragraph 2). NT$400,000 issued on
TSMC established its statutory defined benefit plan and
● The sexual harassment investigation committee, a channel dedicated to ensuring a work environment free from the threat of 02/07/2024 for the extension of working hours combined with
supervisory committee of labor retirement reserve according to
sexual harassment; the committee consists of three directors appointed by the CEO, one from human resources, one from legal the regular working hours exceeding permitted limit (Labor
the Labor Standards Act, and also set up its statutory defined
affairs, and the third from another organization Standards Act Article 32 Paragraph 2).
contribution plan according to Labor Pension Act, which
became effective starting July 1, 2005. For each region, TSMC
Employee Communication Channels The Company has reviewed its working hour management
also established pension plans according to local standards and
process and established indices to remind employees to apply
TSMC Internal Communication Structure regulations. The previously mentioned supervisory committee
for overtime payment on time and for mangers to respond
not only holds quarterly meetings but also supervises affairs
to such applications efficiently and in a timely fashion, and to
in connection with labor’s retirement reserve fund. To meet
Face-to-Face Meeting be more diligent about employee working hours as well as to
•Chairman’s/CEO’s Communication Meeting legal requirements for disclosure of financial reporting and
strengthen communication about these matters and relevant
•Silicon Garden Meeting (Labor-Management ensure sufficient funding levels, TSMC makes contributions
Managers of All
Meeting) policies.
Levels based statutory requirements and also engages an actuarial
•Communication Meetings in Individual
Functions/Divisions consulting firm to assess the valuation of the defined benefit
•Functional Activity 5.6.10 Retention
plan. Please refer to page 45-47 of the attached financial
In 2023, TSMC conducted its second global employee report for details. Thanks to the Company’s sound financial
engagement survey (EES), based on High Performance condition, it is able to ensure the future viability of employee
Employee Portal
Employee Experience Model (Note) to maintain comparability retirement benefits and solid pension contributions and
Employee Survey Board of Directors and
Human Resources
Employees HR Business Partner Management Team
with 2021 EES data. The survey aimed to understand the payments, which encourages employees to make long-term
eSilicon Garden Stories strengths and opportunities for continuous improvement in career plans with and further deepen their commitment to
employee experience at TSMC and to develop action plans that TSMC.
retain talent. The survey participants included global TSMC
Employee Voice Channels employees and its subsidiaries, except for VisEra due to its 5.7 Material Contracts
•Ombudsman System
•Employee Opinion Box different industrial background. Overall, 65,123 employees
TSMC is not currently a party to any material contracts,
•Whistleblower Procedures System/ participated in the survey, representing 89% of all TSMC
•Fab Caring Circle other than those entered into in the ordinary course of its
•Ethic Report Channel
Committee Chair employees.
business. The Company’s “Significant Contingent Liabilities and
•Sexual Harassment Investigation Committee
•Employee Voices for Silicon Garden Meeting Unrecognized Commitments” are disclosed in Annual Report
Based on the survey results in 2023, TSMC is perceived by its
(Labor-Management Meeting) section (II), Financial Statements, page 73.
employees as possessing strong competitiveness in the market,
exhibiting agility in responding to market changes, and being
During 2023 and as of the date of this Annual Report, TSMC has not incurred any labor-dispute related losses. However, adept at delivering innovative products and services that create
the Company was fined for the following labor inspection results: NT$100,000 issued on 04/26/2023 for the extension of value for its customers. TSMC will continue to enhance the
working hours combined with the regular working hours exceeding permitted limit (Labor Standards Act Article 32 Paragraph following 3 aspects:
2). NT$100,000, and NT$50,000 issued, respectively, on 05/19/2023 for the extension of working hours combined with the
regular working hours exceeding permitted limit, and inadequate rest time of a minimum of 12 hours after the occurrence of an

Note: Based on Willis Towers Watson’s “High Performance Employee Experience (HPEX) Model”.

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