NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Taiwan Semiconductor Manufacturing Company Limited (TSMC), a Republic of China
(R.O.C.) corporation, was incorporated on February 21, 1987. TSMC is a dedicated foundry in the semiconductor industry which engages mainly in the manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and
other semiconductor devices and the manufacturing of masks.
On September 5, 1994, TSMCs shares were listed on the Taiwan Stock
Exchange (TWSE). On October 8, 1997, TSMC listed some of its shares of stock on the New York Stock Exchange (NYSE) in the form of American Depositary Shares (ADSs).
The address of its registered office and principal place of business is No. 8, Li-Hsin Rd. 6, Hsinchu Science Park, Taiwan. The principal
operating activities of TSMCs subsidiaries are described in Note 5.
2.
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THE AUTHORIZATION OF FINANCIAL STATEMENTS
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The accompanying consolidated financial
statements were authorized for issue by the management on April 13, 2017.
TSMC and its subsidiaries (collectively as the Company)
maintain its accounts and express its consolidated financial statements in New Taiwan dollars. For convenience only, U.S. dollar amounts presented in the accompanying consolidated financial statements have been translated from New Taiwan dollars at
the exchange rate as set forth in the statistical release of the Federal Reserve Board of the Unites States, which was NT$32.40 to US$1.00 as of December 31, 2016. The convenience translations should not be construed as representations that the
New Taiwan dollar amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.
4.
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APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS), INTERNATIONAL ACCOUNTING STANDARDS (IAS), IFRIC INTERPRETATIONS (IFRIC), AND SIC INTERPRETATIONS (SIC) ISSUED BY THE INTERNATIONAL
ACCOUNTING STANDARDS BOARD (IASB) (collectively, IFRSs).
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a.
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Amendments to IFRSs and the new interpretation that are mandatorily effective for the current year
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New, Revised or Amended Standards and
Interpretations
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Effective Date Issued by
IASB (Note
1)
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Annual Improvements to IFRSs 20122014 Cycle
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January 1, 2016 (Note 2)
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Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities:
Applying the Consolidation
Exception
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January 1, 2016
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(Continued)
F - 12
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New, Revised or Amended Standards and
Interpretations
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Effective Date Issued
by IASB (Note 1)
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Amendment to IFRS 11 Accounting for Acquisitions of Interests in Joint
Operations
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January 1, 2016
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Amendment to IAS 1 Disclosure Initiative
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January 1, 2016
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Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and
Amortization
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January 1, 2016
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Amendment to IAS 27 Equity Method in Separate Financial Statements
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January 1, 2016
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(Concluded)
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Note 1:
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As of report date, the Company has applied a number of amendments to IFRSs that are mandatorily effective for an accounting period that begins on or after January 1, 2016.
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Note 2:
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The amendment to IFRS 5 is applied prospectively to changes in a method of disposal that occur in annual periods beginning on or after January 1, 2016; the remaining amendments are effective for annual periods
beginning on or after January 1, 2016.
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The Company believes that the adoption of aforementioned standards or
interpretations did not have a significant effect on the Companys accounting policies.
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b.
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New and revised standards, amendments and interpretations in issue but not yet effective
|
As of
the date that the accompanying consolidated financial statements were authorized for issue, the new, revised or amended IFRSs in issue but not yet adopted by the Company as well as the effective dates issued by the IASB are stated as follows.
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New, Revised or Amended Standards and
Interpretations
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Effective Date Issued
by IASB (Note 3)
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Annual Improvements to IFRSs 2014-2016 Cycle
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Note 4
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Amendment to IFRS 2 Classification and Measurement of Share-based Payment
Transactions
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January 1, 2018
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IFRS 9 Financial Instruments
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January 1, 2018
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Amendments to IFRS 9 and IFRS 7 Mandatory Effective Date of IFRS 9 and Transition
Disclosure
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January 1, 2018
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Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture
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To be determined by IASB
|
IFRS 15 Revenue from Contracts with Customers
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January 1, 2018
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Amendment to IFRS 15 Clarifications to IFRS 15
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January 1, 2018
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IFRS 16 Leases
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January 1, 2019
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Amendment to IAS 7 Disclosure Initiative
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January 1, 2017
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Amendment to IAS 12 Recognition of Deferred Tax Assets for Unrealized Losses
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January 1, 2017
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IFRIC 22 Foreign Currency Transactions and Advance Consideration
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January 1, 2018
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Note 3:
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The aforementioned new, revised or amended standards or interpretations are effective after fiscal year beginning on or after the effective dates, unless specified otherwise.
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Note 4:
|
The amendment to IFRS 12 is retrospectively applied for annual periods beginning on or after January 1, 2017; the amendment to IAS 28 is retrospectively applied for annual periods beginning on or after
January 1, 2018.
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F - 13
Except for the following items, the Company believes that the adoption of aforementioned
standards or interpretations will not have a significant effect on the Companys accounting policies.
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1)
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IFRS 9, Financial Instruments
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All recognized financial assets currently in the
scope of IAS 39, Financial Instruments: Recognition and Measurement, will be subsequently measured at either the amortized cost or the fair value. The classification and measurement requirements in IFRS 9 are stated as follows:
For the debt instruments invested by the Company, if the contractual cash flows that are solely for payments of principal and interest on the
principal amount outstanding, the classification and measurement requirements are stated as follows:
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a)
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If the objective of the Companys business model is to hold the financial asset to collect the contractual cash flows, such assets are measured at the amortized cost. Interest revenue should be recognized in profit
or loss by using the effective interest method, continuously assessed for impairment and the impairment loss or reversal of impairment loss should be recognized in profit and loss.
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b)
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If the objective of the Companys business model is to hold the financial asset both to collect the contractual cash flows and to sell the financial assets, such assets are measured at fair value through other
comprehensive income and are continuously assessed for impairment. Interest revenue should be recognized in profit or loss by using the effective interest method. A gain or loss on a financial asset measured at fair value through other comprehensive
income should be recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses. When such financial asset is derecognized or reclassified, the cumulative gain or loss previously recognized in
other comprehensive income is reclassified from equity to profit or loss.
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The other financial assets which do not meet the
aforementioned criteria should be measured at the fair value through profit or loss. However, the Company may irrevocably designate an investment in equity instruments that is not held for trading as measured at fair value through other
comprehensive income. All relevant gains and losses shall be recognized in other comprehensive income, except for dividends which are recognized in profit or loss. No subsequent impairment assessment is required, and the cumulative gain or loss
previously recognized in other comprehensive income cannot be reclassified from equity to profit or loss.
IFRS 9 adds a new expected loss
impairment model to measure the impairment of financial assets. A loss allowance for expected credit losses should be recognized on financial assets measured at amortized cost and financial assets mandatorily measured at fair value through other
comprehensive income. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company should measure the loss allowance for that financial instrument at an amount equal to 12-month expected credit
losses. If the credit risk on a financial instrument has increased significantly since initial recognition and is not deemed to be a low credit risk, the Company should measure the loss allowance for that financial instrument at an amount equal to
the lifetime expected credit losses. The Company should always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables.
The main changes in hedge accounting amended the application requirements for hedge accounting to better reflect the entitys risk
management activities. Compared with IAS 39, the main changes include: (1) enhancing types of transactions eligible for hedge accounting, specifically broadening the risks eligible for hedge accounting of non-financial items; (2) changing
the way hedging derivative instruments are accounted for to reduce profit or loss volatility; and (3) replacing retrospective effectiveness assessment with the principle of economic relationship between the hedging instrument and the hedged
item.
F - 14
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2)
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IFRS 15, Revenue from Contracts with Customers and related amendment
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IFRS 15
establishes principles for recognizing revenue that apply to all contracts with customers, and will supersede IAS 18, Revenue, IAS 11, Construction Contracts, and a number of revenue-related interpretations.
When applying IFRS 15, the Company shall recognize revenue by applying the following steps:
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Identify the contract with the customer;
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Identify the performance obligations in the contract;
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Determine the transaction price;
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Allocate the transaction price to the performance obligations in the contracts; and
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Recognize revenue when the entity satisfies a performance obligation.
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When IFRS 15 and
related amendment are effective, the Company may elect to apply this Standard either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this Standard recognized at the date of
initial application.
IFRS 16 sets out the accounting standards for leases that will
supersede IAS 17 and a number of related interpretations.
Under IFRS 16, if the Company is a lessee, it shall recognize right-of-use
assets and lease liabilities for all leases on the consolidated statements of financial position except for low-value and short-term leases. The Company may elect to apply the accounting method similar to the accounting for operating lease under IAS
17 to the low-value and short-term leases. On the consolidated statements of profit or loss and other comprehensive income, the Company should present the depreciation expense charged on the right-of-use asset separately from interest expense
accrued on the lease liability; interest is computed by using effective interest method. On the consolidated statements of cash flows, cash payments for both the principal and interest portion of the lease liability are classified within financing
activities.
When IFRS 16 becomes effective, the Company may elect to apply this Standard either retrospectively to each prior reporting
period presented or retrospectively with the cumulative effect of the initial application of this Standard recognized at the date of initial application.
Except for the aforementioned impact, as of the date that the accompanying consolidated financial statements were authorized for issue, the
Company continues in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the other standards or interpretations. The related impact will be disclosed when the Company completes the
evaluation.
5.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Significant accounting policies are
summarized as follows:
Statement of Compliance
The accompanying consolidated financial statements have been prepared in accordance with IFRSs.
F - 15
Basis of Preparation
The accompanying consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are
measured at fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for the assets.
Basis of Consolidation
The basis for the consolidated financial statements
The consolidated financial statements incorporate the financial statements of TSMC and entities controlled by TSMC (its subsidiaries).
Income and expenses of subsidiaries acquired or disposed of are included in the consolidated statement of profit or loss and other
comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the shareholders of the parent and to the noncontrolling interests even
if this results in the noncontrolling interests having a deficit balance.
When necessary, adjustments are made to the financial statements
of subsidiaries to bring their accounting policies into line with those used by the Company.
All intra-group transactions, balances,
income and expenses are eliminated in full on consolidation.
Changes in the Companys ownership interests in subsidiaries that do not
result in the Company losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Companys interests and the noncontrolling interests are adjusted to reflect the changes in their relative
interests in the subsidiaries. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to shareholders of the
parent.
When the Company loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference
between:
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a.
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the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and
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b.
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the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any noncontrolling interest.
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The Company shall account for all amounts recognized in other comprehensive income in relation to the subsidiary on the same basis as would be
required if the Company had directly disposed of the related assets and liabilities.
The fair value of any investment retained in the
former subsidiary at the date when control is lost is regarded as the cost on initial recognition of an investment in an associate.
F - 16
The subsidiaries in the consolidated financial statements
The detail information of the subsidiaries at the end of reporting period was as follows:
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Percentage of Ownership
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Name of Investor
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Name of Investee
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Main Businesses and Products
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Establishment
and Operating Location
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December 31,
2015
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December 31,
2016
|
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Note
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TSMC
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TSMC North America
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Selling and marketing of integrated circuits and semiconductor devices
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San Jose, California, U.S.A.
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100%
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100%
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TSMC Japan Limited (TSMC Japan)
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Marketing activities
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Yokohama, Japan
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100%
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100%
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a)
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TSMC Partners, Ltd. (TSMC Partners)
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Investing in companies involved in the design, manufacture, and other related business in the
semiconductor industry
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Tortola, British Virgin Islands
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100%
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100%
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a)
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TSMC Korea Limited (TSMC Korea)
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Customer service and technical supporting activities
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Seoul, Korea
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100%
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100%
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a)
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TSMC Europe B.V. (TSMC Europe)
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Marketing and engineering supporting activities
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Amsterdam, the Netherlands
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100%
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100%
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a)
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TSMC Global, Ltd. (TSMC Global)
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Investment activities
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Tortola, British Virgin Islands
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100%
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100%
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TSMC China Company Limited (TSMC China)
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Manufacturing and selling of integrated circuits at the order of and pursuant to product design
specifications provided by customers
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Shanghai, China
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100%
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100%
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TSMC Nanjing Company Limited (TSMC Nanjing)
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Manufacturing and selling of integrated circuits at the order of and pursuant to product design
specifications provided by customers
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Nanjing, China
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100%
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b)
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|
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VentureTech Alliance Fund III, L.P. (VTAF III)
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Investing in new start-up technology companies
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Cayman Islands
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98%
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98%
|
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a)
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VentureTech Alliance Fund II, L.P. (VTAF II)
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Investing in new start-up technology companies
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Cayman Islands
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98%
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98%
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a)
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|
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Emerging Alliance Fund, L.P. (Emerging Alliance)
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Investing in new start-up technology companies
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Cayman Islands
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99.5%
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a), c)
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TSMC Solar Europe GmbH
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Selling of solar related products and providing customer service
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Hamburg, Germany
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100%
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100%
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a), d)
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Chi Cherng Investment Co., Ltd. (Chi Cherng)
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Investment activities
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Taipei, Taiwan
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100%
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e), f)
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VisEra Technologies Company Ltd. (VisEra Tech)
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Engaged in manufacturing electronic spare parts and in researching, developing, designing,
manufacturing, selling, packaging and testing of color filter
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Hsin-Chu, Taiwan
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87%
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e), g)
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TSMC Partners
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TSMC Design Technology Canada Inc. (TSMC Canada)
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Engineering support activities
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Ontario, Canada
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100%
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100%
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a)
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TSMC Technology, Inc. (TSMC Technology)
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Engineering support activities
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Delaware, U.S.A.
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100%
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100%
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a)
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TSMC Development, Inc. (TSMC Development)
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Investment activities
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Delaware, U.S.A.
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100%
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100%
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InveStar Semiconductor Development Fund, Inc. (ISDF)
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|
Investing in new start-up technology companies
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Cayman Islands
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97%
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|
97%
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|
a), h)
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InveStar Semiconductor Development Fund, Inc. (II) LDC. (ISDF II)
|
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Investing in new start-up technology companies
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Cayman Islands
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97%
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97%
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a), h)
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VisEra Holding Company (VisEra Holding)
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Investing in companies involved in the design, manufacturing and other related businesses in the
semiconductor industry
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Cayman Islands
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98%
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a), e), g)
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TSMC Development
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WaferTech, LLC (WaferTech)
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Manufacturing, selling, testing and computer-aided designing of integrated circuits and other
semiconductor devices
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Washington, U.S.A.
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100%
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100%
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VTAF III
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Mutual-Pak Technology Co., Ltd. (Mutual-Pak)
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Manufacturing of electronic parts, wholesaling and retailing of electronic materials, and
researching, developing and testing of RFID
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New Taipei, Taiwan
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58%
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58%
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a)
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Growth Fund Limited (Growth Fund)
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Investing in new start-up technology companies
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Cayman Islands
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100%
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100%
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a)
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VTAF III, VTAF II and Emerging Alliance
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VentureTech Alliance Holdings, LLC (VTA Holdings)
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Investing in new start-up technology companies
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Delaware, U.S.A.
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100%
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a), c)
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VTAF III, VTAF II and TSMC
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VentureTech Alliance Holdings, LLC (VTA Holdings)
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Investing in new start-up technology companies
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Delaware, U.S.A.
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100%
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a), c)
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VisEra Holding
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VisEra Tech
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Engaged in manufacturing electronic spare parts and in researching, developing, designing,
manufacturing, selling, packaging and testing of color filter
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Hsin-Chu, Taiwan
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87%
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e), g)
|
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Note a:
|
This is an immaterial subsidiary for which the consolidated financial statements are not audited by the Companys independent accountants.
|
|
Note b:
|
Under the investment agreement entered into with the municipal government of Nanjing, China on March 28, 2016, the Company will make an investment in Nanjing in the amount of approximately US$3 billion to establish
a subsidiary operating a 300mm wafer fab with the capacity of 20,000 12-inch wafers per month, and a design service center. TSMC Nanjing was established in May 2016.
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F - 17
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Note c:
|
Due to the expiration of the investment agreement between Emerging Alliance and TSMC, Emerging Alliance completed the liquidation procedures in April 2016. Emerging Alliances ownership in VTA Holdings is held
directly by TSMC.
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|
Note d:
|
In August 2015, TSMC Solar Ltd. (TSMC Solar) ceased its manufacturing operations. TSMC Solar and TSMC Guang Neng Investment, Ltd. (TSMC GN) were incorporated into TSMC in December 2015. After the incorporation, TSMC
Solar Europe GmbH, the subsidiary of TSMC Solar, is held directly by TSMC and TSMC Solar Europe GmbH has started the liquidation procedures. TSMC Solar North America, Inc. (TSMC Solar NA), the subsidiary of TSMC Solar, completed the liquidation
procedures in December 2015.
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|
Note e:
|
The Company acquired OmniVision Technologies, Inc.s (OVTs) 49.1% ownership in VisEra Holding and 100% ownership in Taiwan OmniVision Investment Holding Co. (OVT Taiwan) on November 20, 2015. As a
result, the Company has obtained controls of VisEra Holding and OVT Taiwan; therefore the Company has consolidated VisEra Holding, OVT Taiwan and VisEra Tech, held directly by VisEra Holding, since November 20, 2015. Please refer to Note 33.
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|
Note f:
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OVT Taiwan that originally acquired by the Company was renamed as Chi Cherng in December 2015. Chi Cherng was incorporated into TSMC in December 2016.
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|
Note g:
|
To simplify investment structure, VisEra Tech owned by VisEra Holding was transferred to TSMC in the third quarter of 2016. In October 2016, VisEra Holding was incorporated into TSMC Partners, the subsidiary of TSMC.
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|
Note h:
|
ISDF and ISDF II have started the liquidation procedures.
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Foreign Currencies
The financial statements of each individual consolidated entity were expressed in the currency which reflected its primary economic environment
(functional currency). The functional currency of TSMC and presentation currency of the consolidated financial statements are both New Taiwan Dollars (NT$). In preparing the consolidated financial statements, the operating results and financial
positions of each consolidated entity are translated into NT$.
In preparing the financial statements of each individual consolidated
entity, transactions in currencies other than the entitys functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at that date. Such exchange differences are recognized in profit or loss in the year in which they arise. Non-monetary items measured at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange
differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive
income. Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.
For the purposes of
presenting consolidated financial statements, the assets and liabilities of the Companys foreign operations are translated into NT$ using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at
the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity (attributed to noncontrolling interests as appropriate).
Classification of Current and Noncurrent Assets and Liabilities
Current assets are assets held for trading purposes and assets expected to be converted to cash, sold or consumed within one year from the end
of the reporting period. Current liabilities are obligations incurred for trading purposes and obligations expected to be settled within one year from the end of the reporting period. Assets and liabilities that are not classified as current are
noncurrent assets and liabilities, respectively.
Cash Equivalents
Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
F - 18
Financial Instruments
Financial assets and liabilities shall be recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and liabilities are initially recognized at fair values. Transaction costs that are directly attributable to the acquisition
or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Financial Assets
Financial assets are classified into the following specified categories: Financial assets at fair value through profit or loss
(FVTPL), held-to-maturity financial assets, available-for-sale financial assets and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time
of initial recognition. Regular way purchases or sales of financial assets are recognized and derecognized on a trade date or settlement date basis for which financial assets were classified in the same way, respectively. Regular way purchases or
sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
Financial assets at fair value through profit or loss
Financial assets are classified as at fair value through profit or loss when the financial asset is either held for trading or it is designated
as at fair value through profit or loss.
Financial assets at fair value through profit or loss are stated at fair value, with any gains or
losses arising on remeasurement recognized in profit or loss.
Held-to-maturity financial assets
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Company
has the positive intent and ability to hold to maturity. Subsequent to initial recognition, held-to-maturity financial assets are measured at amortized cost using the effective interest method less any impairment.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated as available-for-sale or are not classified
as (a) loans and receivables, (b) held-to-maturity financial assets or (c) financial assets at fair value through profit or loss.
Available-for-sale financial assets are measured at fair value. Interest income from available-for-sale monetary financial assets and dividends
on available-for-sale equity investments are recognized in profit or loss. Other changes in the carrying amount of available-for-sale financial assets are recognized in other comprehensive income. When the investment is disposed of or is determined
to be impaired, the cumulative gain or loss previously recognized in other comprehensive income is reclassified to profit or loss.
Dividends on available-for-sale equity instruments are recognized in profit or loss when the Companys right to receive the dividends is
established.
Available-for-sale equity instruments that do not have a quoted market price in an active market and whose fair value cannot
be reliably measured are measured at cost less any identified impairment losses at the end of each reporting period. Such equity instruments are subsequently remeasured at fair value when their fair value can be reliably measured, and the difference
between the carrying amount and fair value is recognized in profit or loss or other comprehensive income.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
Loans and receivables including cash and cash equivalents, notes and accounts receivable and other receivables are measured at amortized cost using the effective interest method, less any impairment, except for those loans and receivables with
immaterial discounted effect.
F - 19
Impairment of financial assets
Financial assets, other than those carried at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Those
financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, their estimated future cash flows have been affected.
For financial assets carried at amortized cost, such as trade receivables, assets that are assessed not to be impaired individually are, in
addition, assessed for impairment on a collective basis. The Company assesses the collectability of receivables by performing the account aging analysis and examining current trends in the credit quality of its customers.
For financial assets carried at amortized cost, the amount of the impairment loss is the difference between the assets carrying amount
and the present value of estimated future cash flows, discounted at the financial assets original effective interest rate.
For
financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously
recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial assets at the date the impairment loss is reversed does not exceed what the amortized cost would have been had the impairment loss
not been recognized.
When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously
recognized in other comprehensive income are reclassified to profit or loss in the year.
In respect of available-for-sale equity
instruments, impairment losses previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to the recognition of an impairment loss is recognized in other comprehensive income and
accumulated under the heading of unrealized gains or losses from available-for-sale financial assets.
The carrying amount of the financial
asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it
is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account.
Derecognition of financial assets
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another entity.
On
derecognition of a financial asset in its entirety, the difference between the financial assets carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other
comprehensive income and accumulated in equity is recognized in profit or loss.
Financial Liabilities and Equity Instruments
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance
of the contractual arrangements and the definitions of a financial liability and an equity instrument.
F - 20
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.
Financial liabilities
Financial liabilities are subsequently measured either at amortized cost using effective interest method or at FVTPL.
Financial liabilities are classified as at fair value through profit or loss when the financial liability is either held for trading or is
designated as at fair value through profit or loss.
Financial liabilities at fair value through profit or loss are stated at fair value,
with any gains or losses arising on remeasurement recognized in profit or loss.
Financial liabilities other than those held for trading
purposes and designated as at FVTPL are subsequently measured at amortized cost at the end of each reporting period.
Derecognition of
financial liabilities
The Company derecognizes financial liabilities when, and only when, the Companys obligations are
discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.
Derivative Financial Instruments
Derivative financial instruments are initially recognized at fair value at the date the derivative contracts are entered into and are
subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative financial instrument is designated and effective as a hedging instrument,
in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
Financial Instruments
Designated as at Fair Value through Profit or Loss
A financial instrument may be designated as at fair value through profit or loss
(FVTPL) upon initial recognition. The financial instrument forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the
Companys documented risk management or investment strategy, and information about the grouping is provided internally on that basis.
Hedge Accounting
The
Company designates certain hedging instruments, which include stock forward contracts and interest rate futures contracts in respect of foreign currency risk, as fair value hedge. Changes in the fair value of derivatives that are designated and
qualify as fair value hedges are recognized in profit or loss immediately. Hedge accounting is discontinued prospectively when the Company revokes the designated hedging relationship, or when the hedging instrument expires or is sold, terminated, or
exercised, or when it no longer meets the criteria for hedge accounting.
The effective portion of changes in the fair value of derivative
financial instruments that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading of cash flow hedges reserve. Amounts previously recognized in other comprehensive income and
accumulated in equity are reclassified to profit or loss in the period when the hedged item is recognized in profit or loss.
F - 21
Inventories
Inventories are stated at the lower of cost or net realizable value. Inventories are recorded at standard cost and adjusted to approximate
weighted-average cost at the end of the reporting period. Net realizable value represents the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale.
Noncurrent Assets Held for Sale
Noncurrent assets or disposal groups are classified as noncurrent assets held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the noncurrent asset held for sale is available for immediate sale in its present condition. To meet the
criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
When the committed sale plan involves loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as
held for sale, regardless of whether a noncontrolling interest in its former subsidiary is retained after the sale.
Noncurrent assets
classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Recognition of depreciation would cease.
Investments Accounted for Using Equity Method
Investments accounted for using the equity method include investments in associates and interests in joint venture.
An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant
influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the Company and other parties that have joint control of the arrangement have rights to the net
assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
The operating results and assets and liabilities of associates and joint venture are incorporated in these consolidated financial statements
using the equity method of accounting. Under the equity method, an investment in an associate or a joint venture is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the
Companys share of profit or loss and other comprehensive income of the associate and joint venture as well as the distribution received. The Company also recognizes its share in the changes in the equities of associates and joint venture.
Any excess of the cost of acquisition over the Companys share of the net fair value of the identifiable assets, liabilities and
contingent liabilities of an associate or a joint venture recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Companys share of the net fair value
of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.
When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its
recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the
extent that the recoverable amount of the investment subsequently increases.
F - 22
The Company discontinues the use of the equity method from the date when the Company ceases to
have significant influence over an associate. When the Company retains an interest in the former associate, the Company measures the retained interest at fair value at that date. The difference between the carrying amount of the associate at the
date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate is included in the determination of the gain or loss on disposal of the associate. In addition,
the Company shall account for all amounts recognized in other comprehensive income in relation to that associate on the same basis as would be required if the associate had directly disposed of the related assets or liabilities. If the
Companys ownership interest in an associate is reduced as a result of disposal, but the investment continues to be an associate, the Company should reclassify to profit or loss only a proportionate amount of the gain or loss previously
recognized in other comprehensive income.
When the Company subscribes to additional shares in an associate or a joint venture at a
percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Companys proportionate interest in the net assets of the associate or joint venture. The Company
records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the Companys ownership interest is reduced due to the additional subscription to the shares of associate or
joint venture by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate or joint venture shall be reclassified to profit or loss on the same basis as would
be required if the associate or joint venture had directly disposed of the related assets or liabilities.
When a consolidated entity
transacts with an associate or a joint venture, profits and losses resulting from the transactions with the associate or joint venture are recognized in the Companys consolidated financial statements only to the extent of interests in the
associate or joint venture that are not owned by the Company.
Property, Plant and Equipment
Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment. Costs include any incremental
costs that are directly attributable to the construction or acquisition of the item of property, plant and equipment.
Properties in the
course of construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready
for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation is recognized so as to write off the cost of the assets less their residual values over their useful lives, and it is computed
using the straight-line method over the following estimated useful lives: land improvements20 years; buildings5 to 20 years; machinery and equipment2 to 5 years; office equipment3 to 15 years; and leased assets20 years.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis. Land is not depreciated.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no
reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the
continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in
profit or loss.
F - 23
Leases
Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the
lessee. All other leases are classified as operating leases.
The Company as lessor
Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.
The Company as lessee
Assets held under finance lease are initially recognized as assets of the Company at the fair value at the inception of the lease or, if lower,
at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated statements of financial position as an obligation under finance lease.
Lease payments are apportioned between finance expense and reduction of the lease obligation so as to achieve a constant rate of interest on
the remaining balance of the liability.
Operating lease payments are recognized as an expense on a straight-line basis over the lease
term.
Intangible Assets
Goodwill
Goodwill arising
on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.
Other intangible assets
Other separately acquired intangible assets with finite useful lives are carried at cost less accumulated amortization and accumulated
impairment losses. Amortization is recognized using the straight-line method over the following estimated useful lives: Technology license feesthe estimated life of the technology or the term of the technology transfer contract; software and
system design costs3 years or contract period; patent and othersthe economic life or contract period. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in
estimate being accounted for on a prospective basis.
Impairment of Tangible and Intangible Assets
Goodwill
Goodwill is not
amortized and instead is tested for impairment annually, or more frequently when there is an indication that the cash generating unit may be impaired. For the purpose of impairment testing, goodwill is allocated to each of the Companys
cash-generating units or groups of cash-generating units that are expected to benefit from the synergies of the combination. If the recoverable amount of a cash-generating unit is less than its carrying amount, the difference is allocated first to
reduce the carrying amount of any goodwill allocated to such cash generating unit and then to the other assets of the cash generating unit pro rata based on the carrying amount of each asset in the cash generating unit. Any impairment loss for
goodwill is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.
F - 24
Other tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there
is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the
recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the
asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When
an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is increased to the revised estimate of its recoverable amount, but the increased carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
Provision
Provisions are
recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the
reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
Guarantee Deposit
Guarantee deposit mainly consists of cash received under deposit agreements with customers to ensure they have access to the Companys
specified capacity; and as guarantee of accounts receivable to ensure payment from customers. Cash received from customers is recorded as guarantee deposit upon receipt. Guarantee deposits are refunded to customers when terms and conditions set
forth in the deposit agreements have been satisfied.
Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates
and other similar allowances.
F - 25
Sale of goods
Revenue from the sale of goods is recognized when the goods are delivered and titles have passed, at which time all the following conditions
are satisfied:
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The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
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The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
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The amount of revenue can be measured reliably;
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It is probable that the economic benefits associated with the transaction will flow to the Company; and
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The costs incurred or to be incurred in respect of the transaction can be measured reliably.
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In principle, payment term granted to customers is due 30 days from the invoice date or 30 days from the end of the month of when the invoice
is issued. Due to the short term nature of the receivables from sale of goods with the immaterial discounted effect, the Company measures them at the original invoice amounts without discounting.
Royalties, dividend and interest income
Revenue from royalties is recognized on an accrual basis in accordance with the substance of the relevant agreement, provided that it is
probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably.
Dividend income from
investments is recognized when the shareholders right to receive payment has been established, provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of
income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.
Employee Benefits
Short-term employee benefits
Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid
in exchange for service rendered by employees.
Retirement benefits
For defined contribution retirement benefit plans, payments to the benefit plan are recognized as an expense when the employees have rendered
service entitling them to the contribution. For defined benefit retirement benefit plans, the cost of providing benefit is recognized based on actuarial calculations.
Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are
determined using the Projected Unit Credit Method. Service cost (including current service cost), and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement,
comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately
in retained earnings and will not be reclassified to profit or loss.
Net defined benefit liability represents the actual deficit in the
Companys defined benefit plan.
F - 26
Share-based Payment Arrangements
The Company elected to take the optional exemption under IFRS 1 for the share-based payment transactions granted and vested before
January 1, 2012, the date of transition to IFRSs. There were no stock options granted prior to but unvested at the date of transition.
The compensation costs of employee stock options that were granted after January 1, 2012 are measured at the fair value of the stock
options at the grant date. The fair value of the stock option granted determined at the grant date of the stock options is expensed on a straight-line basis over the vesting period, based on the Companys estimate of the number of stock options
that will eventually vest, with a corresponding increase in capital surplusemployee stock option. The estimate is revised if subsequent information indicates that the number of stock options expected to vest differs from original estimates.
Taxation
Income tax
expense represents the sum of the tax currently payable and deferred tax.
Current tax
Income tax on unappropriated earnings (excluding earnings from foreign consolidated subsidiaries) at a rate of 10% is expensed in the year the
earnings arise and adjusted to the extent that distributions are approved by the shareholders in the following year.
Adjustments of prior
years tax liabilities are added to or deducted from the current years tax provision.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary
differences, net operating loss carryforwards and unused tax credits to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint venture, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible
temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized is also reviewed at the end of each
reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or
the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from
the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
F - 27
Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income
or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.
Business Combinations
Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized in profit or loss
as incurred.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any noncontrolling interests in
the acquiree, and the fair value of the acquirers previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
Noncontrolling interests are initially measured at the noncontrolling interests proportionate share of the fair value of the
acquirees identifiable net assets.
When a business combination is achieved in stages, the Companys previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date, and the resulting gain or loss is recognized in profit or loss.
Insurance Claim
The
Company recognizes insurance claim reimbursement for losses incurred related to disaster damages. Insurance claim reimbursements are recorded, net of any deductible amounts, at the time while there is evidence that the claim reimbursement is
virtually certain to be received.
Government Grants
Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attaching to them and
that the grants will be received.
Government grants whose primary condition is that the Company should purchase, construct or otherwise
acquire non-current assets (mainly including land use right and depreciable assets) are recognized as a deduction from the carrying amount of the related assets and recognized as a reduced depreciation or amortization charge in profit or loss over
the contract period or useful lives of the related assets. Government grants that are receivables as compensation for expenses already incurred are deducted from incurred expenses in the period in which they become receivables.
6.
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CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY
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In the
application of the aforementioned Companys accounting policies, the directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in
which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.
F - 28
The following are the critical judgments, apart from those involving estimations, that the
directors have made in the process of applying the Companys accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements.
Revenue Recognition
The
Company recognizes revenue when the conditions described in Note 5 are satisfied. The Company also records a provision for estimated future returns and other allowances in the same period the related revenue is recorded. Provision for
estimated sales returns and other allowances is generally made and adjusted based on historical experience and the consideration of varying contractual terms, and our management periodically reviews the adequacy of the estimation used.
Impairment of Tangible and Intangible Assets Other than Goodwill
In the process of evaluating the potential impairment of tangible and intangible assets other than goodwill, the Company is required to make
subjective judgments in determining the independent cash flows, useful lives, expected future revenue and expenses related to the specific asset groups with the consideration of the nature of semiconductor industry. Any changes in these estimates
based on changed economic conditions or business strategies could result in significant impairment charges or reversal in future years.
Impairment of Goodwill
The assessment of impairment of goodwill requires the Company to make subjective judgment to determine the identified cash-generating units,
allocate the goodwill to relevant cash-generating units and estimate the recoverable amount of relevant cash-generating units.
Impairment Assessment on Investment Using Equity Method
The Company assesses the impairment of investments accounted for using the equity method whenever triggering events or changes in circumstances
indicate that an investment may be impaired and carrying value may not be recoverable. The Company measures the impairment based on a projected future cash flow of the investees, including the underlying assumptions of sales growth rate and capacity
utilization rate formulated by such investees internal management team. The Company also takes into account market conditions and the relevant industry trends to ensure the reasonableness of such assumptions.
Realization of Deferred Income Tax Assets
Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred
tax assets can be utilized. Assessment of the realization of the deferred tax assets requires the Companys subjective judgment and estimate, including the future revenue growth and profitability, tax holidays, the amount of tax credits can be
utilized and feasible tax planning strategies. Any changes in the global economic environment, the industry trends and relevant laws and regulations could result in significant adjustments to the deferred tax assets.
Valuation of Inventory
Inventories are stated at the lower of cost or net realizable value, and the Company uses judgment and estimate to determine the net realizable
value of inventory at the end of each reporting period.
Due to the rapid technological changes, the Company estimates the net realizable
value of inventory for obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions of
future demand within a specific time horizon.
F - 29
Recognition and Measurement of Defined Benefit Plans
Net defined benefit liability and the resulting defined benefit costs under defined benefit pension plans are calculated using the Projected
Unit Credit Method. Actuarial assumptions comprise the discount rate, rate of employee turnover, and future salary increase rate. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on
the amount of the expense and the liability.
7.
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CASH AND CASH EQUIVALENTS
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December 31,
2015
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December 31,
2016
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NT$
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NT$
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(In Millions)
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(In Millions)
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Cash and deposits in banks
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$
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557,270.9
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$
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536,895.3
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Repurchase agreements collateralized by corporate bonds
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5,132.8
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2,361.3
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Commercial paper
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1,997.2
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Repurchase agreements collateralized by government bonds
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285.2
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$
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562,688.9
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$
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541,253.8
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Deposits in banks consisted of highly liquid time deposits that were readily convertible to known
amounts of cash and were subject to an insignificant risk of changes in value.
8.
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FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
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December 31,
2015
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December 31,
2016
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NT$
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NT$
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(In Millions)
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(In Millions)
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Financial assets
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Held for trading
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Forward exchange contracts
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$
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6.0
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$
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142.4
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Cross currency swap contracts
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11.0
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6.0
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153.4
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Designated as at FVTPL
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Time deposit
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6,297.7
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$
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6.0
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$
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6,451.1
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Financial liabilities
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Held for trading
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|
|
|
Forward exchange contracts
|
|
$
|
72.6
|
|
|
$
|
91.6
|
|
Designated as at FVTPL
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
|
|
|
|
|
99.5
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
72.6
|
|
|
$
|
191.1
|
|
|
|
|
|
|
|
|
|
|
F - 30
The Company entered into derivative contracts to manage exposures due to fluctuations of foreign
exchange rates. The derivative contracts entered into by the Company did not meet the criteria for hedge accounting. Therefore, the Company did not apply hedge accounting treatment for derivative contracts.
Outstanding forward exchange contracts consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
Contract Amount
|
|
|
|
Maturity Date
|
|
(In Millions)
|
|
December 31, 2015
|
|
|
|
|
|
|
Sell US$/Buy JPY
|
|
January 2016
|
|
|
US$128.4/JPY15,449.4
|
|
Sell US$/Buy RMB
|
|
January 2016
|
|
|
US$226.0/RMB1,464.5
|
|
Sell US$/Buy NT$
|
|
January 2016 to February 2016
|
|
|
US$440.0/NT$14,434.2
|
|
December 31, 2016
|
|
|
|
|
|
|
Sell NT$/Buy EUR
|
|
January 2017
|
|
|
NT$5,393.3/EUR159.4
|
|
Sell NT$/Buy JPY
|
|
January 2017
|
|
|
NT$7,314.8/JPY26,501.8
|
|
Sell US$/Buy EUR
|
|
January 2017
|
|
|
US$4.2/EUR4.0
|
|
Sell US$/Buy JPY
|
|
January 2017
|
|
|
US$0.4/JPY50.0
|
|
Sell US$/Buy NT$
|
|
January 2017 to February 2017
|
|
|
US$439.0/NT$14,138.2
|
|
Sell US$/Buy RMB
|
|
January 2017 to June 2017
|
|
|
US$421.8/RMB2,908.4
|
|
Outstanding cross currency swap contracts consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Maturity Date
|
|
Contract Amount
(In Millions)
|
|
|
Range of
Interest Rates
Paid
|
|
|
Range of
Interest Rates
Received
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
January 2017
|
|
US$
|
170.0/ NT$5,487.6
|
|
|
|
3.98
|
%
|
|
|
|
|
9.
|
AVAILABLE-FOR-SALE FINANCIAL ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Corporate bonds
|
|
$
|
6,267.8
|
|
|
$
|
29,999.5
|
|
Agency bonds/Agency mortgage-backed securities
|
|
|
2,627.3
|
|
|
|
14,880.5
|
|
Asset-backed securities
|
|
|
3,154.4
|
|
|
|
11,254.7
|
|
Government bonds
|
|
|
878.4
|
|
|
|
8,457.4
|
|
Publicly traded stocks
|
|
|
1,371.5
|
|
|
|
3,196.7
|
|
Non-publicly traded stocks
|
|
|
3,268.1
|
|
|
|
2,944.9
|
|
Mutual funds
|
|
|
722.8
|
|
|
|
1,157.6
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18,290.3
|
|
|
$
|
71,891.3
|
|
|
|
|
|
|
|
|
|
|
(Continued)
F - 31
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Current portion
|
|
$
|
14,299.4
|
|
|
$
|
67,788.8
|
|
Noncurrent portion
|
|
|
3,990.9
|
|
|
|
4,102.5
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18,290.3
|
|
|
$
|
71,891.3
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
Since there is a wide range of estimated fair values of the Companys investments in non-publicly traded stocks, the Company concludes
that the fair value cannot be reliably measured and therefore should be measured at the cost less any impairment.
10.
|
HELD-TO-MATURITY FINANCIAL ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Corporate bonds/Bank debentures
|
|
$
|
8,143.1
|
|
|
$
|
23,849.7
|
|
Commercial paper
|
|
|
|
|
|
|
8,628.2
|
|
Negotiable certificate of deposit
|
|
|
4,934.3
|
|
|
|
4,829.9
|
|
Structured product
|
|
|
3,000.0
|
|
|
|
1,609.9
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16,077.4
|
|
|
$
|
38,917.7
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
|
$
|
9,166.5
|
|
|
$
|
16,610.1
|
|
Noncurrent portion
|
|
|
6,910.9
|
|
|
|
22,307.6
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16,077.4
|
|
|
$
|
38,917.7
|
|
|
|
|
|
|
|
|
|
|
11.
|
HEDGING DERIVATIVE FINANCIAL INSTRUMENTS
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Financial assetscurrent
|
|
|
|
|
|
|
|
|
Fair value hedges
|
|
|
|
|
|
|
|
|
Interest rate futures contracts
|
|
$
|
1.7
|
|
|
$
|
5.6
|
|
|
|
|
|
|
|
|
|
|
The Company entered into interest rate futures contracts, which are used to hedge against price risk
caused by changes in interest rates in the Companys investments in fixed income securities.
F - 32
The outstanding interest rate futures contracts consisted of the following:
|
|
|
|
|
Maturity Period
|
|
Contract
Amount
(US$ in
Millions)
|
|
December 31, 2015
|
|
|
|
|
March 2016
|
|
US$
|
13.8
|
|
December 31, 2016
|
|
|
|
|
March 2017
|
|
US$
|
53.6
|
|
12.
|
NOTES AND ACCOUNTS RECEIVABLE, NET
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Notes and accounts receivable
|
|
$
|
85,547.9
|
|
|
$
|
128,815.4
|
|
Allowance for doubtful receivables
|
|
|
(488.2
|
)
|
|
|
(480.1
|
)
|
|
|
|
|
|
|
|
|
|
Notes and accounts receivable, net
|
|
$
|
85,059.7
|
|
|
$
|
128,335.3
|
|
|
|
|
|
|
|
|
|
|
In principle, the payment term granted to customers is due 30 days from the invoice date or 30 days from
the end of the month of when the invoice is issued. The allowance for doubtful receivables is assessed by reference to the collectability of receivables by performing the account aging analysis, historical experience and current financial condition
of customers.
Except for those impaired, for the rest of the notes and accounts receivable, the account aging analysis at the end of the
reporting period is summarized in the following table. Notes and accounts receivable include amounts that are past due but for which the Company has not recognized a specific allowance for doubtful receivables after the assessment since there has
not been a significant change in the credit quality of its customers and the amounts are still considered recoverable. In addition, the Company has obtained guarantee to certain receivables.
Aging analysis of notes and accounts receivable, net
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Neither past due nor impaired
|
|
$
|
71,482.7
|
|
|
$
|
108,411.4
|
|
Past due but not impaired
|
|
|
|
|
|
|
|
|
Past due within 30 days
|
|
|
13,577.0
|
|
|
|
15,017.8
|
|
Past due 31-60 days
|
|
|
|
|
|
|
1,844.8
|
|
Past due 61-120 days
|
|
|
|
|
|
|
3,061.3
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
85,059.7
|
|
|
$
|
128,335.3
|
|
|
|
|
|
|
|
|
|
|
F - 33
Movements of the allowance for doubtful receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually
Assessed for
Impairment
|
|
|
Collectively
Assessed for
Impairment
|
|
|
Total
|
|
Balance at January 1, 2014
|
|
$
|
8.1
|
|
|
$
|
478.5
|
|
|
$
|
486.6
|
|
Provision
|
|
|
|
|
|
|
23.4
|
|
|
|
23.4
|
|
Reversal
|
|
|
|
|
|
|
(23.4
|
)
|
|
|
(23.4
|
)
|
Effect of exchange rate changes
|
|
|
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2014
|
|
$
|
8.1
|
|
|
$
|
478.6
|
|
|
$
|
486.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
8.1
|
|
|
$
|
478.6
|
|
|
$
|
486.7
|
|
Provision
|
|
|
28.6
|
|
|
|
4.8
|
|
|
|
33.4
|
|
Reversal/Write-off
|
|
|
(29.1
|
)
|
|
|
(4.7
|
)
|
|
|
(33.8
|
)
|
Effect of acquisition of subsidiary
|
|
|
1.8
|
|
|
|
|
|
|
|
1.8
|
|
Effect of exchange rate changes
|
|
|
0.8
|
|
|
|
(0.7
|
)
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2015
|
|
$
|
10.2
|
|
|
$
|
478.0
|
|
|
$
|
488.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
10.2
|
|
|
$
|
478.0
|
|
|
$
|
488.2
|
|
Provision
|
|
|
|
|
|
|
0.3
|
|
|
|
0.3
|
|
Reversal/Write-off
|
|
|
(8.4
|
)
|
|
|
|
|
|
|
(8.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2016
|
|
$
|
1.8
|
|
|
$
|
478.3
|
|
|
$
|
480.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aging analysis of accounts receivable that is individually determined as impaired
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Past due over 121 days
|
|
$
|
10.2
|
|
|
$
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Finished goods
|
|
$
|
7,974.9
|
|
|
$
|
8,521.9
|
|
Work in process
|
|
|
53,632.0
|
|
|
|
33,330.8
|
|
Raw materials
|
|
|
3,038.8
|
|
|
|
4,012.2
|
|
Supplies and spare parts
|
|
|
2,406.6
|
|
|
|
2,817.3
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
67,052.3
|
|
|
$
|
48,682.2
|
|
|
|
|
|
|
|
|
|
|
Write-down of inventories to net realizable value (excluding earthquake losses) in the amount of
NT$1,964.5 million, NT$464.4 million and NT$1,542.8 million, respectively, were included in the cost of revenue for the years ended December 31, 2014, 2015 and 2016. Please refer to related earthquake losses in Note 41.
F - 34
14.
|
INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD
|
|
a.
|
Investments in associates
|
Associates consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Place of
|
|
Carrying Amount
|
|
|
% of Ownership and Voting
Rights Held by the Company
|
|
Name of Associate
|
|
Principal Activities
|
|
Incorporation and
Operation
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard International Semiconductor Corporation (VIS)
|
|
Research, design, development, manufacture, packaging, testing and sale of memory integrated
circuits, LSI, VLSI and related parts
|
|
Hsinchu, Taiwan
|
|
$
|
8,341.8
|
|
|
$
|
8,665.0
|
|
|
|
28%
|
|
|
|
28%
|
|
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC)
|
|
Fabrication and supply of integrated circuits
|
|
Singapore
|
|
|
9,511.5
|
|
|
|
7,163.5
|
|
|
|
39%
|
|
|
|
39%
|
|
Xintec Inc. (Xintec)
|
|
Wafer level chip size packaging service
|
|
Taoyuan, Taiwan
|
|
|
2,927.2
|
|
|
|
2,599.8
|
|
|
|
41%
|
|
|
|
41%
|
|
Global Unichip Corporation (GUC)
|
|
Researching, developing, manufacturing, testing and marketing of integrated circuits
|
|
Hsinchu, Taiwan
|
|
|
1,136.9
|
|
|
|
1,157.0
|
|
|
|
35%
|
|
|
|
35%
|
|
Motech Industries, Inc. (Motech)
|
|
Manufacturing and sales of solar cells, crystalline silicon solar cell, and test and measurement
instruments and design and construction of solar power systems
|
|
New Taipei, Taiwan
|
|
|
2,053.6
|
|
|
|
|
|
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
23,971.0
|
|
|
$
|
19,585.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In both of the second quarter of 2014 and 2015, the Company sold 82.0 million common shares of VIS
and respectively recognized a disposal gain of NT$2,054.4 million and NT$2,273.2 million. After the sale, the Company owned approximately 33.7% and 28.3% of the equity interest in VIS.
In March 2015, Xintec listed its shares on the R.O.C. Over-the-Counter (Taipei Exchange). Consequently, the Companys percentage of
ownership over Xintec was diluted to approximately 35.4%. In April 2015, the Company sold 2.2 million common shares of Xintec and recognized a disposal gain of NT$43.6 million.
The Company acquired OVTs 49.1% ownership in VisEra Holding on November 20, 2015. As a result, the Company has obtained control of
VisEra Holding and consolidated VisEra Holding since November 20, 2015. The Company included the Xintec shares held by VisEra Holding and total percentage of ownership over Xintec increased to 41.4%. To simplify investment structure, Xintec
owned by VisEra Holding was transferred to TSMC in the third quarter of 2016.
In June 2015, Motech merged with Topcell Solar International
Co., Ltd with exchange of shares. As a result, the Companys percentage of ownership over Motech decreased to 18.0%. In the fourth quarter of 2015, the Company sold 29.2 million common shares of Motech and recognized a disposal gain of
NT$202.4 million. After the sale, the Companys percentage of ownership over Motech decreased to 12.0%. Motech continues to be accounted for using equity method as the Company still retains significant influence over Motech.
Starting June 2016, the Company has no longer served as Motechs board of director. As a result, the Company exercises no significant
influence over Motech. Therefore, Motech is no longer accounted for using the equity method. Further, such investment was reclassified to available-for-sale financial assets and the Company recognized a disposal loss of NT$260.0 million.
The summarized financial information in respect of each of the Companys material associates is set out below. The summarized financial
information below represents amounts shown in the associates financial statements prepared in accordance with IFRSs adjusted by the Company using the equity method of accounting.
F - 35
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Current assets
|
|
$
|
24,800.7
|
|
|
$
|
25,662.9
|
|
|
|
|
|
|
|
|
|
|
Noncurrent assets
|
|
$
|
7,785.1
|
|
|
$
|
9,501.4
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
$
|
4,630.0
|
|
|
$
|
5,975.7
|
|
|
|
|
|
|
|
|
|
|
Noncurrent liabilities
|
|
$
|
712.6
|
|
|
$
|
804.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Net revenue
|
|
$
|
23,931.5
|
|
|
$
|
23,319.7
|
|
|
$
|
25,828.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
$
|
6,182.0
|
|
|
$
|
4,593.4
|
|
|
$
|
6,083.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
5,327.7
|
|
|
$
|
4,253.9
|
|
|
$
|
5,389.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
$
|
(68.6
|
)
|
|
$
|
(61.9
|
)
|
|
$
|
5.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
$
|
5,259.1
|
|
|
$
|
4,192.0
|
|
|
$
|
5,395.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends received
|
|
$
|
960.0
|
|
|
$
|
1,206.4
|
|
|
$
|
1,207.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of the above summarized financial information to the carrying amount of the interest in
the associate recognized in the consolidated statements of financial position was as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Net assets
|
|
$
|
27,243.2
|
|
|
$
|
28,384.5
|
|
Percentage of ownership
|
|
|
28%
|
|
|
|
28%
|
|
|
|
|
|
|
|
|
|
|
The Companys share of net assets of the associate
|
|
|
7,715.3
|
|
|
|
8,038.5
|
|
Goodwill
|
|
|
626.5
|
|
|
|
626.5
|
|
|
|
|
|
|
|
|
|
|
Carrying amount of the investment
|
|
$
|
8,341.8
|
|
|
$
|
8,665.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Current assets
|
|
$
|
20,078.2
|
|
|
$
|
14,585.1
|
|
|
|
|
|
|
|
|
|
|
Noncurrent assets
|
|
$
|
6,144.3
|
|
|
$
|
5,360.1
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
$
|
1,954.1
|
|
|
$
|
1,746.6
|
|
|
|
|
|
|
|
|
|
|
Noncurrent liabilities
|
|
$
|
303.2
|
|
|
$
|
286.3
|
|
|
|
|
|
|
|
|
|
|
F - 36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Net revenue
|
|
$
|
14,669.7
|
|
|
$
|
15,026.0
|
|
|
$
|
14,045.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
$
|
5,362.5
|
|
|
$
|
5,802.3
|
|
|
$
|
4,921.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
5,317.6
|
|
|
$
|
5,904.6
|
|
|
$
|
4,918.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
$
|
5,317.6
|
|
|
$
|
5,904.6
|
|
|
$
|
4,918.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends received
|
|
$
|
1,512.0
|
|
|
$
|
1,556.6
|
|
|
$
|
4,076.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of the above summarized financial information to the carrying amount of the interest in
the associate recognized in the consolidated statements of financial position was as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Net assets
|
|
$
|
23,965.2
|
|
|
$
|
17,912.3
|
|
Percentage of ownership
|
|
|
39%
|
|
|
|
39%
|
|
|
|
|
|
|
|
|
|
|
The Companys share of net assets of the associate
|
|
|
9,296.1
|
|
|
|
6,948.2
|
|
Goodwill
|
|
|
214.0
|
|
|
|
214.0
|
|
Other adjustments
|
|
|
1.4
|
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
Carrying amount of the investment
|
|
$
|
9,511.5
|
|
|
$
|
7,163.5
|
|
|
|
|
|
|
|
|
|
|
Aggregate information of associates that are not individually material was summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
The Companys share of profits (losses) of associates
|
|
$
|
(93.3
|
)
|
|
$
|
(154.2
|
)
|
|
$
|
22.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Companys share of other comprehensive income (loss) of associates
|
|
$
|
24.0
|
|
|
$
|
7.9
|
|
|
$
|
(5.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Companys share of total comprehensive income (loss) of associates
|
|
$
|
(69.3
|
)
|
|
$
|
(146.3
|
)
|
|
$
|
17.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The market prices of the investments accounted for using the equity method in publicly traded stocks
calculated by the closing price at the end of the reporting period are summarized as follows. The closing price represents the quoted price in active markets, the level 1 fair value measurement.
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
Name of Associate
|
|
(In Millions)
|
|
|
(In Millions)
|
|
VIS
|
|
$
|
19,868.8
|
|
|
$
|
26,089.4
|
|
|
|
|
|
|
|
|
|
|
GUC
|
|
$
|
3,081.4
|
|
|
$
|
3,665.0
|
|
|
|
|
|
|
|
|
|
|
Xintec
|
|
$
|
3,605.5
|
|
|
$
|
3,622.2
|
|
|
|
|
|
|
|
|
|
|
Motech
|
|
$
|
2,636.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 37
|
b.
|
Investments in joint venture
|
The Company and OVT entered into a joint agreement to invest in
VisEra Holding. The Company acquired OVTs 49.1% ownership in VisEra Holding on November 20, 2015. As a result, the Company has obtained control of VisEra Holding and consolidated VisEra Holding since November 20, 2015. Please refer
to Note 33 for related disclosures.
15.
|
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land and Land
Improvements
|
|
|
Buildings
|
|
|
Machinery
and
Equipment
|
|
|
Office
Equipment
|
|
|
Assets under
Finance
Leases
|
|
|
Equipment under
Installation and
Construction in
Progress
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2014
|
|
$
|
3,986.9
|
|
|
$
|
229,182.7
|
|
|
$
|
1,413,919.8
|
|
|
$
|
22,062.0
|
|
|
$
|
804.5
|
|
|
$
|
272,173.8
|
|
|
$
|
1,942,129.7
|
|
Additions (decrease)
|
|
|
|
|
|
|
39,833.1
|
|
|
|
340,661.0
|
|
|
|
6,499.0
|
|
|
|
|
|
|
|
(162,974.4
|
)
|
|
|
224,018.7
|
|
Disposals or retirements
|
|
|
|
|
|
|
(108.7
|
)
|
|
|
(2,128.1
|
)
|
|
|
(645.9
|
)
|
|
|
|
|
|
|
|
|
|
|
(2,882.7
|
)
|
Reclassification
|
|
|
|
|
|
|
(2.0
|
)
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification as held for sale
|
|
|
|
|
|
|
(854.9
|
)
|
|
|
(2,231.4
|
)
|
|
|
(67.8
|
)
|
|
|
|
|
|
|
(2.6
|
)
|
|
|
(3,156.7
|
)
|
Effect of exchange rate changes
|
|
|
49.9
|
|
|
|
1,113.7
|
|
|
|
3,946.9
|
|
|
|
113.5
|
|
|
|
36.7
|
|
|
|
137.9
|
|
|
|
5,398.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2014
|
|
$
|
4,036.8
|
|
|
$
|
269,163.9
|
|
|
$
|
1,754,170.2
|
|
|
$
|
27,960.8
|
|
|
$
|
841.2
|
|
|
$
|
109,334.7
|
|
|
$
|
2,165,507.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2014
|
|
$
|
404.2
|
|
|
$
|
125,234.1
|
|
|
$
|
1,009,213.7
|
|
|
$
|
14,225.8
|
|
|
$
|
386.0
|
|
|
$
|
|
|
|
$
|
1,149,463.8
|
|
Additions
|
|
|
27.7
|
|
|
|
15,589.0
|
|
|
|
178,850.6
|
|
|
|
3,135.8
|
|
|
|
42.1
|
|
|
|
|
|
|
|
197,645.2
|
|
Disposals or retirements
|
|
|
|
|
|
|
(107.7
|
)
|
|
|
(1,998.3
|
)
|
|
|
(645.7
|
)
|
|
|
|
|
|
|
|
|
|
|
(2,751.7
|
)
|
Impairment
|
|
|
|
|
|
|
|
|
|
|
239.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239.9
|
|
Reclassification
|
|
|
|
|
|
|
(0.5
|
)
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification as held for sale
|
|
|
|
|
|
|
(257.6
|
)
|
|
|
(1,476.5
|
)
|
|
|
(43.4
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,777.5
|
)
|
Effect of exchange rate changes
|
|
|
27.3
|
|
|
|
788.6
|
|
|
|
3,558.5
|
|
|
|
95.4
|
|
|
|
19.3
|
|
|
|
|
|
|
|
4,489.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2014
|
|
$
|
459.2
|
|
|
$
|
141,245.9
|
|
|
$
|
1,188,388.4
|
|
|
$
|
16,767.9
|
|
|
$
|
447.4
|
|
|
$
|
|
|
|
$
|
1,347,308.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts at December 31, 2014
|
|
$
|
3,577.6
|
|
|
$
|
127,918.0
|
|
|
$
|
565,781.8
|
|
|
$
|
11,192.9
|
|
|
$
|
393.8
|
|
|
$
|
109,334.7
|
|
|
$
|
818,198.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
4,036.8
|
|
|
$
|
269,163.9
|
|
|
$
|
1,754,170.2
|
|
|
$
|
27,960.8
|
|
|
$
|
841.2
|
|
|
$
|
109,334.7
|
|
|
$
|
2,165,507.6
|
|
Additions
|
|
|
|
|
|
|
26,960.5
|
|
|
|
142,090.4
|
|
|
|
3,428.6
|
|
|
|
|
|
|
|
82,595.3
|
|
|
|
255,074.8
|
|
Disposals or retirements
|
|
|
|
|
|
|
(75.0
|
)
|
|
|
(5,923.0
|
)
|
|
|
(1,170.0
|
)
|
|
|
|
|
|
|
|
|
|
|
(7,168.0
|
)
|
Lease agreement modification
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(824.1
|
)
|
|
|
|
|
|
|
(824.1
|
)
|
Effect of acquisition of subsidiary
|
|
|
|
|
|
|
624.7
|
|
|
|
1,402.0
|
|
|
|
447.9
|
|
|
|
|
|
|
|
176.6
|
|
|
|
2,651.2
|
|
Effect of exchange rate changes
|
|
|
30.6
|
|
|
|
127.8
|
|
|
|
1,750.0
|
|
|
|
32.7
|
|
|
|
(10.0
|
)
|
|
|
4.9
|
|
|
|
1,936.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2015
|
|
$
|
4,067.4
|
|
|
$
|
296,801.9
|
|
|
$
|
1,893,489.6
|
|
|
$
|
30,700.0
|
|
|
$
|
7.1
|
|
|
$
|
192,111.5
|
|
|
$
|
2,417,177.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
459.2
|
|
|
$
|
141,245.9
|
|
|
$
|
1,188,388.4
|
|
|
$
|
16,767.9
|
|
|
$
|
447.4
|
|
|
$
|
|
|
|
$
|
1,347,308.8
|
|
Additions
|
|
|
28.9
|
|
|
|
16,312.6
|
|
|
|
199,185.0
|
|
|
|
3,751.7
|
|
|
|
25.2
|
|
|
|
|
|
|
|
219,303.4
|
|
Disposals or retirements
|
|
|
|
|
|
|
(74.0
|
)
|
|
|
(5,585.4
|
)
|
|
|
(1,125.2
|
)
|
|
|
|
|
|
|
|
|
|
|
(6,784.6
|
)
|
Lease agreement modification
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(460.4
|
)
|
|
|
|
|
|
|
(460.4
|
)
|
Impairment
|
|
|
|
|
|
|
278.1
|
|
|
|
2,256.8
|
|
|
|
10.7
|
|
|
|
|
|
|
|
|
|
|
|
2,545.6
|
|
Effect of exchange rate changes
|
|
|
18.1
|
|
|
|
147.6
|
|
|
|
1,612.9
|
|
|
|
20.9
|
|
|
|
(5.1
|
)
|
|
|
|
|
|
|
1,794.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2015
|
|
$
|
506.2
|
|
|
$
|
157,910.2
|
|
|
$
|
1,385,857.7
|
|
|
$
|
19,426.0
|
|
|
$
|
7.1
|
|
|
$
|
|
|
|
$
|
1,563,707.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts at December 31, 2015
|
|
$
|
3,561.2
|
|
|
$
|
138,891.7
|
|
|
$
|
507,631.9
|
|
|
$
|
11,274.0
|
|
|
$
|
|
|
|
$
|
192,111.5
|
|
|
$
|
853,470.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
4,067.4
|
|
|
$
|
296,801.9
|
|
|
$
|
1,893,489.6
|
|
|
$
|
30,700.0
|
|
|
$
|
7.1
|
|
|
$
|
192,111.5
|
|
|
$
|
2,417,177.5
|
|
Additions
|
|
|
|
|
|
|
9,113.3
|
|
|
|
156,874.2
|
|
|
|
4,584.1
|
|
|
|
|
|
|
|
195,256.0
|
|
|
|
365,827.6
|
|
Disposals or retirements
|
|
|
|
|
|
|
(13.4
|
)
|
|
|
(3,094.2
|
)
|
|
|
(469.2
|
)
|
|
|
|
|
|
|
|
|
|
|
(3,576.8
|
)
|
Reclassification
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.1
|
|
|
|
(7.1
|
)
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
|
|
|
(18.1
|
)
|
|
|
(1,497.3
|
)
|
|
|
(4,401.9
|
)
|
|
|
(92.4
|
)
|
|
|
|
|
|
|
(167.8
|
)
|
|
|
(6,177.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2016
|
|
$
|
4,049.3
|
|
|
$
|
304,404.5
|
|
|
$
|
2,042,867.7
|
|
|
$
|
34,729.6
|
|
|
$
|
|
|
|
$
|
387,199.7
|
|
|
$
|
2,773,250.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
506.2
|
|
|
$
|
157,910.2
|
|
|
$
|
1,385,857.7
|
|
|
$
|
19,426.0
|
|
|
$
|
7.1
|
|
|
$
|
|
|
|
$
|
1,563,707.2
|
|
Additions
|
|
|
29.4
|
|
|
|
17,540.5
|
|
|
|
198,189.4
|
|
|
|
4,325.7
|
|
|
|
|
|
|
|
|
|
|
|
220,085.0
|
|
Disposals or retirements
|
|
|
|
|
|
|
(7.3
|
)
|
|
|
(3,049.5
|
)
|
|
|
(468.4
|
)
|
|
|
|
|
|
|
|
|
|
|
(3,525.2
|
)
|
Reclassification
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.1
|
|
|
|
(7.1
|
)
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
|
|
|
(10.8
|
)
|
|
|
(1,094.3
|
)
|
|
|
(3,620.1
|
)
|
|
|
(68.7
|
)
|
|
|
|
|
|
|
|
|
|
|
(4,793.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2016
|
|
$
|
524.8
|
|
|
$
|
174,349.1
|
|
|
$
|
1,577,377.5
|
|
|
$
|
23,221.7
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,775,473.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts at December 31, 2016
|
|
$
|
3,524.5
|
|
|
$
|
130,055.4
|
|
|
$
|
465,490.2
|
|
|
$
|
11,507.9
|
|
|
$
|
|
|
|
$
|
387,199.7
|
|
|
$
|
997,777.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The significant part of the Companys buildings includes main plants, mechanical and electrical
power equipment and clean rooms, and the related depreciation is calculated using the estimated useful lives of 20 years, 10 years and 10 years, respectively.
In the second quarter of 2014, the Company recognized an impairment loss of NT$239.9 million under other operating segments since some of
property, plant and equipment had become obsolete and their recoverable amount determined on the basis of value in use was nil. Such impairment loss was included in other operating income and expenses.
F - 38
In August 2015, TSMC Solar ceased its manufacturing operations. In the third quarter of 2015, the
Company recognized an impairment loss of NT$2,286.0 million since the carrying amounts of certain machinery and equipment, office equipment and mechanical and electrical power equipment were not expected to be recoverable. The recoverable amount
determined on the basis of value in use is nil. Such impairment loss was included in other operating income and expenses.
For the year
ended December 31, 2015, the Company recognized an impairment loss of NT$259.6 million under foundry segment since the carrying amount of some of property, plant and equipment, mostly from termination of a project, was expected to be
unrecoverable. Their recoverable amount determined on the basis of value in use was nil. Such impairment loss was included in other operating income and expenses.
The Company had a building lease agreement with leasing terms from December 2003 to November 2018 and such lease was accounted for as a finance
lease. In August 2015, the lease was determined to be an operating lease due to a modification on lease conditions; as such, the Company recognized a gain of NT$430.0 million from the modification. Such gain was included in other operating income
and expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
Technology
License Fees
|
|
|
Software and
System Design
Costs
|
|
|
Patent and
Others
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2014
|
|
$
|
5,627.5
|
|
|
$
|
4,444.9
|
|
|
$
|
17,086.8
|
|
|
$
|
3,729.4
|
|
|
$
|
30,888.6
|
|
Additions
|
|
|
|
|
|
|
1,906.9
|
|
|
|
1,695.2
|
|
|
|
826.2
|
|
|
|
4,428.3
|
|
Retirements
|
|
|
|
|
|
|
|
|
|
|
(51.4
|
)
|
|
|
|
|
|
|
(51.4
|
)
|
Reclassification as held for sale
|
|
|
|
|
|
|
|
|
|
|
(39.6
|
)
|
|
|
(269.2
|
)
|
|
|
(308.8
|
)
|
Effect of exchange rate changes
|
|
|
261.3
|
|
|
|
(1.5
|
)
|
|
|
6.1
|
|
|
|
6.1
|
|
|
|
272.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2014
|
|
$
|
5,888.8
|
|
|
$
|
6,350.3
|
|
|
$
|
18,697.1
|
|
|
$
|
4,292.5
|
|
|
$
|
35,228.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2014
|
|
$
|
|
|
|
$
|
3,341.7
|
|
|
$
|
13,439.1
|
|
|
$
|
2,617.4
|
|
|
$
|
19,398.2
|
|
Additions
|
|
|
|
|
|
|
438.7
|
|
|
|
1,499.7
|
|
|
|
667.9
|
|
|
|
2,606.3
|
|
Retirements
|
|
|
|
|
|
|
|
|
|
|
(51.4
|
)
|
|
|
|
|
|
|
(51.4
|
)
|
Reclassification as held for sale
|
|
|
|
|
|
|
|
|
|
|
(32.0
|
)
|
|
|
(229.4
|
)
|
|
|
(261.4
|
)
|
Effect of exchange rate changes
|
|
|
|
|
|
|
(1.5
|
)
|
|
|
5.7
|
|
|
|
1.3
|
|
|
|
5.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2014
|
|
$
|
|
|
|
$
|
3,778.9
|
|
|
$
|
14,861.1
|
|
|
$
|
3,057.2
|
|
|
$
|
21,697.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts at December 31, 2014
|
|
$
|
5,888.8
|
|
|
$
|
2,571.4
|
|
|
$
|
3,836.0
|
|
|
$
|
1,235.3
|
|
|
$
|
13,531.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
5,888.8
|
|
|
$
|
6,350.3
|
|
|
$
|
18,697.1
|
|
|
$
|
4,292.5
|
|
|
$
|
35,228.7
|
|
Additions
|
|
|
|
|
|
|
2,112.5
|
|
|
|
867.8
|
|
|
|
587.8
|
|
|
|
3,568.1
|
|
Retirements
|
|
|
|
|
|
|
|
|
|
|
(101.4
|
)
|
|
|
|
|
|
|
(101.4
|
)
|
Effect of acquisition of subsidiary
|
|
|
52.7
|
|
|
|
|
|
|
|
12.1
|
|
|
|
|
|
|
|
64.8
|
|
Effect of exchange rate changes
|
|
|
163.3
|
|
|
|
(8.5
|
)
|
|
|
(1.2
|
)
|
|
|
(1.3
|
)
|
|
|
152.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2015
|
|
$
|
6,104.8
|
|
|
$
|
8,454.3
|
|
|
$
|
19,474.4
|
|
|
$
|
4,879.0
|
|
|
$
|
38,912.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
F - 39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
Technology
License Fees
|
|
|
Software and
System Design
Costs
|
|
|
Patent and
Others
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Accumulated amortization and impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
|
|
|
$
|
3,778.9
|
|
|
$
|
14,861.1
|
|
|
$
|
3,057.2
|
|
|
$
|
21,697.2
|
|
Additions
|
|
|
|
|
|
|
950.9
|
|
|
|
1,672.6
|
|
|
|
578.7
|
|
|
|
3,202.2
|
|
Retirements
|
|
|
|
|
|
|
|
|
|
|
(101.4
|
)
|
|
|
|
|
|
|
(101.4
|
)
|
Impairment
|
|
|
|
|
|
|
58.1
|
|
|
|
0.4
|
|
|
|
|
|
|
|
58.5
|
|
Effect of exchange rate changes
|
|
|
|
|
|
|
(8.5
|
)
|
|
|
(1.1
|
)
|
|
|
(0.3
|
)
|
|
|
(9.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2015
|
|
$
|
|
|
|
$
|
4,779.4
|
|
|
$
|
16,431.6
|
|
|
$
|
3,635.6
|
|
|
$
|
24,846.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts at December 31, 2015
|
|
$
|
6,104.8
|
|
|
$
|
3,674.9
|
|
|
$
|
3,042.8
|
|
|
$
|
1,243.4
|
|
|
$
|
14,065.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
6,104.8
|
|
|
$
|
8,454.3
|
|
|
$
|
19,474.4
|
|
|
$
|
4,879.0
|
|
|
$
|
38,912.5
|
|
Additions
|
|
|
|
|
|
|
1,091.3
|
|
|
|
2,788.5
|
|
|
|
519.3
|
|
|
|
4,399.1
|
|
Retirements
|
|
|
|
|
|
|
|
|
|
|
(5.2
|
)
|
|
|
|
|
|
|
(5.2
|
)
|
Effect of exchange rate changes
|
|
|
(96.8
|
)
|
|
|
0.4
|
|
|
|
(14.1
|
)
|
|
|
(11.9
|
)
|
|
|
(122.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2016
|
|
$
|
6,008.0
|
|
|
$
|
9,546.0
|
|
|
$
|
22,243.6
|
|
|
$
|
5,386.4
|
|
|
$
|
43,184.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization and impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
|
|
|
$
|
4,779.4
|
|
|
$
|
16,431.6
|
|
|
$
|
3,635.6
|
|
|
$
|
24,846.6
|
|
Additions
|
|
|
|
|
|
|
1,367.4
|
|
|
|
1,730.8
|
|
|
|
645.2
|
|
|
|
3,743.4
|
|
Retirements
|
|
|
|
|
|
|
|
|
|
|
(5.2
|
)
|
|
|
|
|
|
|
(5.2
|
)
|
Effect of exchange rate changes
|
|
|
|
|
|
|
0.4
|
|
|
|
(12.7
|
)
|
|
|
(3.3
|
)
|
|
|
(15.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2016
|
|
$
|
|
|
|
$
|
6,147.2
|
|
|
$
|
18,144.5
|
|
|
$
|
4,277.5
|
|
|
$
|
28,569.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts at December 31, 2016
|
|
$
|
6,008.0
|
|
|
$
|
3,398.8
|
|
|
$
|
4,099.1
|
|
|
$
|
1,108.9
|
|
|
$
|
14,614.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
The Companys goodwill has been tested for impairment at the end of the annual reporting period and the recoverable amount is determined
based on the value in use. The value in use was calculated based on the cash flow forecast from the financial budgets covering the future five-year period, and the Company used annual discount rate of 8.40% in its test of impairment for both
December 31, 2015 and 2016 to reflect the relevant specific risk in the cash-generating unit.
For the years ended December 31,
2014, 2015 and 2016, the Company did not recognize any impairment loss on goodwill.
In August 2015, TSMC Solar ceased its manufacturing
operation and the Company recognized an impairment loss of NT$58.5 million in the third quarter of 2015 since the carrying amounts of technology license fees, software and system design costs were expected to be unrecoverable. Their recoverable
amount determined on the basis of value in use is nil. Such impairment loss was included in other operating income and expenses.
F - 40
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Tax receivable
|
|
$
|
2,026.5
|
|
|
$
|
2,325.8
|
|
Prepaid expenses
|
|
|
1,457.0
|
|
|
|
1,007.0
|
|
Net Input VAT
|
|
|
|
|
|
|
333.1
|
|
Long-term receivable
|
|
|
360.0
|
|
|
|
|
|
Others
|
|
|
1,118.5
|
|
|
|
1,219.9
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,962.0
|
|
|
$
|
4,885.8
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
|
$
|
3,533.4
|
|
|
$
|
3,385.4
|
|
Noncurrent portion
|
|
|
1,428.6
|
|
|
|
1,500.4
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,962.0
|
|
|
$
|
4,885.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Unsecured loans
|
|
|
|
|
|
|
|
|
Amount
|
|
$
|
39,474.0
|
|
|
$
|
57,958.2
|
|
|
|
|
|
|
|
|
|
|
Original loan content
|
|
|
|
|
|
|
|
|
US$ (in millions)
|
|
$
|
1,200.0
|
|
|
$
|
1,800.0
|
|
Annual interest rate
|
|
|
0.50%-0.77%
|
|
|
|
0.87%-1.07%
|
|
Maturity date
|
|
|
Due by February
2016
|
|
|
|
Due by January
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Sales returns and allowances
|
|
$
|
10,163.5
|
|
|
$
|
18,037.8
|
|
Warranties
|
|
|
46.3
|
|
|
|
28.2
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10,209.8
|
|
|
$
|
18,066.0
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
|
$
|
10,163.5
|
|
|
$
|
18,037.8
|
|
Noncurrent portion (classified under other noncurrent liabilities)
|
|
|
46.3
|
|
|
|
28.2
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10,209.8
|
|
|
$
|
18,066.0
|
|
|
|
|
|
|
|
|
|
|
F - 41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Returns
and Allowances
|
|
|
Warranties
|
|
|
Total
|
|
|
|
NT$
(In Millions)
|
|
|
NT$
(In Millions)
|
|
|
NT$
(In Millions)
|
|
Year ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of year
|
|
$
|
7,603.8
|
|
|
$
|
10.5
|
|
|
$
|
7,614.3
|
|
Provision
|
|
|
10,506.4
|
|
|
|
11.4
|
|
|
|
10,517.8
|
|
Payment
|
|
|
(7,679.3
|
)
|
|
|
(1.6
|
)
|
|
|
(7,680.9
|
)
|
Reclassification as held for sale
|
|
|
(7.6
|
)
|
|
|
|
|
|
|
(7.6
|
)
|
Effect of exchange rate changes
|
|
|
22.2
|
|
|
|
(0.5
|
)
|
|
|
21.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
10,445.5
|
|
|
$
|
19.8
|
|
|
$
|
10,465.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of year
|
|
$
|
10,445.5
|
|
|
$
|
19.8
|
|
|
$
|
10,465.3
|
|
Provision
|
|
|
17,723.2
|
|
|
|
41.8
|
|
|
|
17,765.0
|
|
Payment
|
|
|
(18,133.1
|
)
|
|
|
(14.7
|
)
|
|
|
(18,147.8
|
)
|
Effect of acquisition of subsidiary
|
|
|
126.0
|
|
|
|
|
|
|
|
126.0
|
|
Effect of exchange rate changes
|
|
|
1.9
|
|
|
|
(0.6
|
)
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
10,163.5
|
|
|
$
|
46.3
|
|
|
$
|
10,209.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of year
|
|
$
|
10,163.5
|
|
|
$
|
46.3
|
|
|
$
|
10,209.8
|
|
Provision (Reversal)
|
|
|
36,519.3
|
|
|
|
(13.6
|
)
|
|
|
36,505.7
|
|
Payment
|
|
|
(28,569.3
|
)
|
|
|
(4.5
|
)
|
|
|
(28,573.8
|
)
|
Effect of exchange rate changes
|
|
|
(75.7
|
)
|
|
|
|
|
|
|
(75.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
18,037.8
|
|
|
$
|
28.2
|
|
|
$
|
18,066.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions for sales returns and allowances are estimated based on historical experience, management judgment,
and any known factors that would significantly affect the returns and allowances, and are recognized as a reduction of revenue in the same year of the related product sales.
The provision for warranties represents the present value of the Companys best estimate of the future outflow of the economic benefits
that will be required under the Companys obligations for warranties. The best estimate has been made on the basis of historical warranty trends of business.
F - 42
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Domestic unsecured bonds
|
|
$
|
166,200.0
|
|
|
$
|
154,200.0
|
|
Overseas unsecured bonds
|
|
|
49,342.5
|
|
|
|
37,028.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
215,542.5
|
|
|
|
191,228.9
|
|
Less: Discounts on bonds payable
|
|
|
(67.3
|
)
|
|
|
(35.3
|
)
|
Less: Current portion
|
|
|
(23,510.1
|
)
|
|
|
(38,100.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
191,965.1
|
|
|
$
|
153,093.6
|
|
|
|
|
|
|
|
|
|
|
The major terms of domestic unsecured bonds are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
NT$
(In Millions)
|
|
|
Coupon
|
|
|
Repayment and
|
Issuance
|
|
Tranche
|
|
Issuance Period
|
|
|
Rate
|
|
|
Interest Payment
|
100-1
|
|
A
|
|
September 2011 to September 2016
|
|
|
$10,500.0
|
|
|
|
1.40%
|
|
|
Bullet repayment; interest payable annually
|
|
|
B
|
|
September 2011 to September 2018
|
|
|
7,500.0
|
|
|
|
1.63%
|
|
|
The same as above
|
100-2
|
|
A
|
|
January 2012 to January 2017
|
|
|
10,000.0
|
|
|
|
1.29%
|
|
|
The same as above
|
|
|
B
|
|
January 2012 to January 2019
|
|
|
7,000.0
|
|
|
|
1.46%
|
|
|
The same as above
|
101-1
|
|
A
|
|
August 2012 to August 2017
|
|
|
9,900.0
|
|
|
|
1.28%
|
|
|
The same as above
|
|
|
B
|
|
August 2012 to August 2019
|
|
|
9,000.0
|
|
|
|
1.40%
|
|
|
The same as above
|
101-2
|
|
A
|
|
September 2012 to September 2017
|
|
|
12,700.0
|
|
|
|
1.28%
|
|
|
The same as above
|
|
|
B
|
|
September 2012 to September 2019
|
|
|
9,000.0
|
|
|
|
1.39%
|
|
|
The same as above
|
101-3
|
|
-
|
|
October 2012 to October 2022
|
|
|
4,400.0
|
|
|
|
1.53%
|
|
|
The same as above
|
101-4
|
|
A
|
|
January 2013 to January 2018
|
|
|
10,600.0
|
|
|
|
1.23%
|
|
|
The same as above
|
|
|
B
|
|
January 2013 to January 2020
|
|
|
10,000.0
|
|
|
|
1.35%
|
|
|
The same as above
|
|
|
C
|
|
January 2013 to January 2023
|
|
|
3,000.0
|
|
|
|
1.49%
|
|
|
The same as above
|
(Continued)
F - 43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
NT$
|
|
|
Coupon
|
|
|
Repayment and
|
Issuance
|
|
Tranche
|
|
Issuance Period
|
|
(In Millions)
|
|
|
Rate
|
|
|
Interest Payment
|
102-1
|
|
A
|
|
February 2013 to February 2018
|
|
|
$6,200.0
|
|
|
|
1.23%
|
|
|
Bullet repayment; interest payable annually
|
|
|
B
|
|
February 2013 to February 2020
|
|
|
11,600.0
|
|
|
|
1.38%
|
|
|
The same as above
|
|
|
C
|
|
February 2013 to February 2023
|
|
|
3,600.0
|
|
|
|
1.50%
|
|
|
The same as above
|
102-2
|
|
A
|
|
July 2013 to July 2020
|
|
|
10,200.0
|
|
|
|
1.50%
|
|
|
The same as above
|
|
|
B
|
|
July 2013 to July 2023
|
|
|
3,500.0
|
|
|
|
1.70%
|
|
|
The same as above
|
102-3
|
|
A
|
|
August 2013 to August 2017
|
|
|
4,000.0
|
|
|
|
1.34%
|
|
|
The same as above
|
|
|
B
|
|
August 2013 to August 2019
|
|
|
8,500.0
|
|
|
|
1.52%
|
|
|
The same as above
|
102-4
|
|
A
|
|
September 2013 to September 2016
|
|
|
1,500.0
|
|
|
|
1.35%
|
|
|
The same as above
|
|
|
B
|
|
September 2013 to September 2017
|
|
|
1,500.0
|
|
|
|
1.45%
|
|
|
The same as above
|
|
|
C
|
|
September 2013 to March 2019
|
|
|
1,400.0
|
|
|
|
1.60%
|
|
|
Bullet repayment; interest payable annually (interest for the six months prior to maturity will
accrue on the basis of actual days and be repayable at maturity)
|
|
|
D
|
|
September 2013 to March 2021
|
|
|
2,600.0
|
|
|
|
1.85%
|
|
|
The same as above
|
|
|
E
|
|
September 2013 to March 2023
|
|
|
5,400.0
|
|
|
|
2.05%
|
|
|
The same as above
|
|
|
F
|
|
September 2013 to September 2023
|
|
|
2,600.0
|
|
|
|
2.10%
|
|
|
Bullet repayment; interest payable annually
|
(Concluded)
The major terms of overseas unsecured bonds are as follows:
|
|
|
|
|
|
|
|
|
|
|
Issuance Period
|
|
Total Amount
US$
(In Millions)
|
|
|
Coupon
Rate
|
|
|
Repayment and Interest Payment
|
April 2013 to April 2016
|
|
$
|
350.0
|
|
|
|
0.95
|
%
|
|
Bullet repayment; interest payable semi-annually
|
April 2013 to April 2018
|
|
|
1,150.0
|
|
|
|
1.625
|
%
|
|
The same as above
|
F - 44
21. RETIREMENT BENEFIT PLANS
|
a.
|
Defined contribution plans
|
The plan under the R.O.C. Labor Pension Act (the Act)
is deemed a defined contribution plan. Pursuant to the Act, TSMC, Mutual-Pak, TSMC Solid State Lighting Ltd. (TSMC SSL), TSMC Solar and VisEra Tech have made monthly contributions equal to 6% of each employees monthly salary to employees
pension accounts. Furthermore, TSMC North America, TSMC China, TSMC Nanjing, TSMC Europe, TSMC Canada, TSMC Technology, TSMC Solar NA and TSMC Solar Europe GmbH also make monthly contributions at certain percentages of the basic salary of their
employees. Accordingly, the Company recognized expenses of NT$1,743.6 million, NT$2,002.6 million and NT$2,164.9 million in the consolidated statements of profit or loss and other comprehensive income for the years ended December 31, 2014, 2015
and 2016, respectively.
TSMC, TSMC SSL and TSMC Solar have defined benefit plans under the
R.O.C. Labor Standards Law that provide benefits based on an employees length of service and average monthly salary for the six-month period prior to retirement. The aforementioned companies contribute an amount equal to 2% of salaries paid
each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committees name in the Bank of Taiwan. Before the end of each year, the
Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in
one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by the governments designated authorities; as such, the Company does not have any right to intervene in the investments of the
Funds.
Amounts recognized in the consolidated statements of profit or loss and other comprehensive income in respect of these defined
benefit plans were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Current service cost
|
|
$
|
161.9
|
|
|
$
|
134.5
|
|
|
$
|
132.8
|
|
Net interest expense
|
|
|
143.8
|
|
|
|
144.4
|
|
|
|
139.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of defined benefit costs recognized in profit or loss
|
|
|
305.7
|
|
|
|
278.9
|
|
|
|
272.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement on the net defined benefit liability:
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on plan assets (excluding amounts included in net interest expense)
|
|
|
(7.0
|
)
|
|
|
(13.7
|
)
|
|
|
45.7
|
|
Actuarial loss (gain) arising from experience adjustments
|
|
|
(101.5
|
)
|
|
|
297.1
|
|
|
|
38.2
|
|
Actuarial loss (gain) arising from changes in financial assumptions
|
|
|
(150.0
|
)
|
|
|
544.3
|
|
|
|
694.6
|
|
Actuarial loss arising from changes in demographic assumptions
|
|
|
|
|
|
|
|
|
|
|
278.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of defined benefit costs recognized in other comprehensive income
|
|
|
(258.5
|
)
|
|
|
827.7
|
|
|
|
1,057.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
47.2
|
|
|
$
|
1,106.6
|
|
|
$
|
1,329.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 45
The pension costs of the aforementioned defined benefit plans were recognized in profit or loss
by the following categories:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Cost of revenue
|
|
$
|
198.4
|
|
|
$
|
189.5
|
|
|
$
|
177.0
|
|
Research and development expenses
|
|
|
80.7
|
|
|
|
81.3
|
|
|
|
73.4
|
|
General and administrative expenses
|
|
|
21.1
|
|
|
|
3.1
|
|
|
|
17.4
|
|
Marketing expenses
|
|
|
5.5
|
|
|
|
5.0
|
|
|
|
4.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
305.7
|
|
|
$
|
278.9
|
|
|
$
|
272.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The amounts arising from the defined benefit obligation of the Company in the consolidated statements of
financial position were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Present value of defined benefit obligation
|
|
$
|
11,318.1
|
|
|
$
|
12,480.5
|
|
Fair value of plan assets
|
|
|
(3,870.1
|
)
|
|
|
(3,929.1
|
)
|
|
|
|
|
|
|
|
|
|
Net defined benefit liability
|
|
$
|
7,448.0
|
|
|
$
|
8,551.4
|
|
|
|
|
|
|
|
|
|
|
Movements in the present value of the defined benefit obligation were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Balance, beginning of year
|
|
$
|
10,329.5
|
|
|
$
|
10,265.3
|
|
|
$
|
11,318.1
|
|
Current service cost
|
|
|
161.9
|
|
|
|
134.5
|
|
|
|
132.8
|
|
Interest expense
|
|
|
220.1
|
|
|
|
228.4
|
|
|
|
213.0
|
|
Remeasurement losses (gains):
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial loss (gain) arising from experience adjustments
|
|
|
(101.5
|
)
|
|
|
297.1
|
|
|
|
38.2
|
|
Actuarial loss (gain) arising from changes in financial assumptions
|
|
|
(150.0
|
)
|
|
|
544.3
|
|
|
|
694.6
|
|
Actuarial loss arising from changes in demographic assumptions
|
|
|
|
|
|
|
|
|
|
|
278.7
|
|
Benefits paid from plan assets
|
|
|
(105.0
|
)
|
|
|
(146.1
|
)
|
|
|
(194.9
|
)
|
Benefits paid directly by the Company
|
|
|
(23.2
|
)
|
|
|
(5.4
|
)
|
|
|
|
|
Reclassification as held for sale
|
|
|
(66.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
10,265.3
|
|
|
$
|
11,318.1
|
|
|
$
|
12,480.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 46
Movements in the fair value of the plan assets were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Balance, beginning of year
|
|
$
|
3,527.8
|
|
|
$
|
3,697.5
|
|
|
$
|
3,870.1
|
|
Interest income
|
|
|
76.3
|
|
|
|
84.0
|
|
|
|
73.6
|
|
Remeasurement gains (losses) :
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on plan assets (excluding amounts included in net interest expense)
|
|
|
7.0
|
|
|
|
13.7
|
|
|
|
(45.7
|
)
|
Contributions from employer
|
|
|
222.0
|
|
|
|
221.0
|
|
|
|
226.0
|
|
Benefits paid from plan assets
|
|
|
(105.0
|
)
|
|
|
(146.1
|
)
|
|
|
(194.9
|
)
|
Reclassification as held for sale
|
|
|
(30.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
3,697.5
|
|
|
$
|
3,870.1
|
|
|
$
|
3,929.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair value of the plan assets by major categories at the end of reporting period was as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Cash
|
|
$
|
690.8
|
|
|
$
|
818.4
|
|
Equity instruments
|
|
|
2,070.1
|
|
|
|
1,853.0
|
|
Debt instruments
|
|
|
1,109.2
|
|
|
|
1,257.7
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,870.1
|
|
|
$
|
3,929.1
|
|
|
|
|
|
|
|
|
|
|
The actuarial valuations of the present value of the defined benefit obligation were carried out by
qualified actuaries. The principal assumptions of the actuarial valuation were as follows:
|
|
|
|
|
|
|
Measurement Date
|
|
|
December 31,
2015
|
|
December 31,
2016
|
Discount rate
|
|
1.90%
|
|
1.50%
|
Future salary increase rate
|
|
3.00%
|
|
3.00%
|
Through the defined benefit plans under the R.O.C. Labor Standards Law, the Company is exposed to the
following risks:
|
1)
|
Investment risk: The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the governments designated authorities or under the mandated
management. However, under the R.O.C. Labor Standards Law, the rate of return on assets shall not be less than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in
the event that the rate of return is less than the required rate of return.
|
|
2)
|
Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt
investments of the plan assets.
|
F - 47
Assuming a hypothetical decrease in interest rate at the end of the reporting period contributed
to a decrease of 0.5% in the discount rate and all other assumptions were held constant, the present value of the defined benefit obligation would increase by NT$844.1 million and NT$970.3 million as of December 31, 2015 and 2016, respectively.
|
3)
|
Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the
present value of the defined benefit obligation.
|
Assuming the expected salary rate increases by 0.5% at the end of the
reporting period and all other assumptions were held constant, the present value of the defined benefit obligation would increase by NT$830.7 million and NT$951.4 million as of December 31, 2015 and 2016, respectively.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely
that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in
presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the
defined benefit obligation liability recognized in the consolidated statements of financial position.
The Company expects to make
contributions of NT$232.8 million to the defined benefit plans in the next year starting from December 31, 2016. The weighted average duration of the defined benefit obligation is 14 years.
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Capacity guarantee
|
|
$
|
27,549.6
|
|
|
$
|
20,929.3
|
|
Receivables guarantee
|
|
|
|
|
|
|
5,560.0
|
|
Others
|
|
|
183.0
|
|
|
|
181.3
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
27,732.6
|
|
|
$
|
26,670.6
|
|
|
|
|
|
|
|
|
|
|
Current portion (classified under accrued expenses and other current liabilities)
|
|
$
|
6,167.8
|
|
|
$
|
12,000.2
|
|
Noncurrent portion
|
|
|
21,564.8
|
|
|
|
14,670.4
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
27,732.6
|
|
|
$
|
26,670.6
|
|
|
|
|
|
|
|
|
|
|
Some of guarantee deposits were refunded to customers by offsetting related accounts receivable.
F - 48
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Authorized shares
|
|
|
28,050.0
|
|
|
|
28,050.0
|
|
|
|
|
|
|
|
|
|
|
Authorized capital
|
|
$
|
280,500.0
|
|
|
$
|
280,500.0
|
|
|
|
|
|
|
|
|
|
|
Issued and paid shares
|
|
|
25,930.3
|
|
|
|
25,930.3
|
|
|
|
|
|
|
|
|
|
|
Issued capital
|
|
$
|
259,303.8
|
|
|
$
|
259,303.8
|
|
|
|
|
|
|
|
|
|
|
A holder of issued common shares with par value of NT$10 per share is entitled to vote and to receive
dividends.
The authorized shares include 500.0 million shares allocated for the exercise of employee stock options.
As of December 31, 2016, 1,072.2 million ADSs of TSMC were traded on the NYSE. The number of common shares represented by the ADSs
was 5,361.0 million shares (one ADS represents five common shares).
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Additional paid-in capital
|
|
$
|
24,185.0
|
|
|
$
|
24,185.0
|
|
From merger
|
|
|
22,804.5
|
|
|
|
22,804.5
|
|
From convertible bonds
|
|
|
8,892.9
|
|
|
|
8,892.9
|
|
From share of changes in equities of subsidiaries
|
|
|
100.8
|
|
|
|
107.8
|
|
From share of changes in equities of associates and joint venture
|
|
|
317.0
|
|
|
|
282.1
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
56,300.2
|
|
|
$
|
56,272.3
|
|
|
|
|
|
|
|
|
|
|
Under the relevant laws, the capital surplus generated from donations and the excess of the issuance
price over the par value of capital stock (including the stock issued for new capital, mergers and convertible bonds) may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash
dividends or stock dividends up to a certain percentage of TSMCs paid-in capital. The capital surplus from share of changes in equities of subsidiaries, associates and joint venture may be used to offset a deficit.
|
c.
|
Retained earnings and dividend policy
|
In accordance with the amendments to the R.O.C. Company
Act in May 2015, the recipients of dividends and bonuses are limited to shareholders and do not include employees. The amendments to TSMCs Articles of Incorporation on profits distribution policy had been approved by TSMCs shareholders
in its meeting held on June 7, 2016. For policy about the profit sharing bonus to employees, please refer to Note 32.
TSMCs
amended Articles of Incorporation provide that, when allocating the net profits for each fiscal year, TSMC shall first offset its losses in previous years and then set aside the following items accordingly:
F - 49
|
1)
|
Legal capital reserve at 10% of the profits left over, until the accumulated legal capital reserve equals TSMCs paid-in capital;
|
|
2)
|
Special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge;
|
|
3)
|
Any balance left over shall be allocated according to the resolution of the shareholders meeting.
|
TSMCs Articles of Incorporation also provide that profits of TSMC may be distributed by way of cash dividend and/or stock dividend.
However, distribution of profits shall be made preferably by way of cash dividend. Distribution of profits may also be made by way of stock dividend; provided that the ratio for stock dividend shall not exceed 50% of the total distribution.
Any appropriations of the profits are subject to shareholders approval in the following year.
The appropriation for legal capital reserve shall be made until the reserve equals the Companys paid-in capital. The reserve may be used
to offset a deficit, or be distributed as dividends in cash or stocks for the portion in excess of 25% of the paid-in capital if the Company incurs no loss.
Pursuant to existing regulations, the Company is required to set aside additional special capital reserve equivalent to the net debit balance
of the other components of stockholders equity, such as the accumulated balance of foreign currency translation reserve, unrealized valuation gain/loss from available-for-sale financial assets, gain/loss from changes in fair value of hedging
instruments in cash flow hedges, etc. For the subsequent decrease in the deduction amount to stockholders equity, any special reserve appropriated may be reversed to the extent that the net debit balance reverses.
The appropriations of 2014 and 2015 earnings have been approved by TSMCs shareholders in its meetings held on June 9, 2015 and on
June 7, 2016, respectively. The appropriations and dividends per share were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appropriation of Earnings
|
|
|
Dividends Per Share
(NT$)
|
|
|
|
For Fiscal
|
|
|
For Fiscal
|
|
|
For Fiscal
|
|
|
For Fiscal
|
|
|
|
Year 2014
|
|
|
Year 2015
|
|
|
Year 2014
|
|
|
Year 2015
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
|
|
|
|
|
Legal capital reserve
|
|
$
|
26,389.9
|
|
|
$
|
30,657.4
|
|
|
|
|
|
|
|
|
|
Cash dividends to shareholders
|
|
|
116,683.5
|
|
|
|
155,582.3
|
|
|
$
|
4.5
|
|
|
$
|
6.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
143,073.4
|
|
|
$
|
186,239.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSMCs appropriations of earnings for 2016 had been approved in the meeting of the Board of
Directors held on February 14, 2017. The appropriations and dividends per share were as follows:
|
|
|
|
|
|
|
|
|
|
|
Appropriation
of Earnings
|
|
|
Dividends Per
Share (NT$)
|
|
|
|
For Fiscal Year
2016
|
|
|
For Fiscal Year
2016
|
|
|
|
NT$
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
Legal capital reserve
|
|
$
|
33,424.7
|
|
|
|
|
|
Cash dividends to shareholders
|
|
|
181,512.7
|
|
|
$
|
7.0
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
214,937.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 50
The appropriations of earnings for 2016 are to be presented for approval in the TSMCs
shareholders meeting to be held on June 8, 2017 (expected).
Under the Integrated Income Tax System that became effective on
January 1, 1998, the R.O.C. resident shareholders are allowed a tax credit for their proportionate share of the income tax paid by TSMC on earnings generated since January 1, 1998.
Changes in others were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2014
|
|
|
|
Foreign
Currency
Translation
Reserve
|
|
|
Unrealized
Gain/Loss from
Available-for-
sale Financial
Assets
|
|
|
Cash Flow
Hedges Reserve
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Balance, beginning of year
|
|
$
|
(7,140.4
|
)
|
|
$
|
21,310.8
|
|
|
$
|
(0.1
|
)
|
|
$
|
14,170.3
|
|
Exchange differences arising on translation of foreign operations
|
|
|
11,769.5
|
|
|
|
|
|
|
|
|
|
|
|
11,769.5
|
|
Other comprehensive income/losses reclassified to profit or loss upon liquidation of
subsidiaries
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
Changes in fair value of available-for-sale financial assets
|
|
|
|
|
|
|
229.5
|
|
|
|
|
|
|
|
229.5
|
|
Cumulative (gain)/loss reclassified to profit or loss upon disposal of available-for-sale
financial assets
|
|
|
|
|
|
|
(279.5
|
)
|
|
|
|
|
|
|
(279.5
|
)
|
Share of other comprehensive income/(loss) of associates and joint venture
|
|
|
(130.1
|
)
|
|
|
(5.3
|
)
|
|
|
(0.2
|
)
|
|
|
(135.6
|
)
|
The proportionate share of other comprehensive income/losses reclassified to profit or loss upon
partial disposal of associates
|
|
|
3.0
|
|
|
|
(2.9
|
)
|
|
|
|
|
|
|
0.1
|
|
Income tax effect
|
|
|
|
|
|
|
(5.1
|
)
|
|
|
|
|
|
|
(5.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
4,502.1
|
|
|
$
|
21,247.5
|
|
|
$
|
(0.3
|
)
|
|
$
|
25,749.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015
|
|
|
|
Foreign
Currency
Translation
Reserve
|
|
|
Unrealized
Gain/Loss from
Available-for-
sale Financial
Assets
|
|
|
Cash Flow
Hedges Reserve
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Balance, beginning of year
|
|
$
|
4,502.1
|
|
|
$
|
21,247.5
|
|
|
$
|
(0.3
|
)
|
|
$
|
25,749.3
|
|
Exchange differences arising on translation of foreign operations
|
|
|
8,061.8
|
|
|
|
|
|
|
|
|
|
|
|
8,061.8
|
|
Other comprehensive income/losses reclassified to profit or loss upon liquidation of
subsidiaries
|
|
|
138.1
|
|
|
|
|
|
|
|
|
|
|
|
138.1
|
|
Changes in fair value of available-for-sale financial assets
|
|
|
|
|
|
|
(5.6
|
)
|
|
|
|
|
|
|
(5.6
|
)
|
Cumulative (gain)/loss reclassified to profit or loss upon disposal of available-for-sale
financial assets
|
|
|
(1,595.4
|
)
|
|
|
(20,475.2
|
)
|
|
|
|
|
|
|
(22,070.6
|
)
|
Share of other comprehensive income/(loss) of associates and joint venture
|
|
|
(60.6
|
)
|
|
|
(18.0
|
)
|
|
|
(0.3
|
)
|
|
|
(78.9
|
)
|
The proportionate share of other comprehensive income/losses reclassified to profit or loss upon
partial disposal of associates
|
|
|
(6.1
|
)
|
|
|
2.1
|
|
|
|
|
|
|
|
(4.0
|
)
|
Income tax effect
|
|
|
|
|
|
|
(16.0
|
)
|
|
|
|
|
|
|
(16.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
11,039.9
|
|
|
$
|
734.8
|
|
|
$
|
(0.6
|
)
|
|
$
|
11,774.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
|
|
|
Foreign
Currency
Translation
Reserve
|
|
|
Unrealized
Gain/Loss from
Available-for-
sale Financial
Assets
|
|
|
Cash Flow
Hedges Reserve
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Balance, beginning of year
|
|
$
|
11,039.9
|
|
|
$
|
734.8
|
|
|
$
|
(0.6
|
)
|
|
$
|
11,774.1
|
|
Exchange differences arising on translation of foreign operations
|
|
|
(9,409.2
|
)
|
|
|
|
|
|
|
|
|
|
|
(9,409.2
|
)
|
Other comprehensive income reclassified to profit or loss upon liquidation of
subsidiaries
|
|
|
36.1
|
|
|
|
|
|
|
|
|
|
|
|
36.1
|
|
Changes in fair value of available-for-sale financial assets
|
|
|
|
|
|
|
(696.3
|
)
|
|
|
|
|
|
|
(696.3
|
)
|
(Continued)
F - 52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
|
|
|
Foreign
Currency
Translation
Reserve
|
|
|
Unrealized
Gain/Loss from
Available-for-
sale Financial
Assets
|
|
|
Cash Flow
Hedges Reserve
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Cumulative (gain)/loss reclassified to profit or loss upon disposal of available-for-sale
financial assets
|
|
$
|
|
|
|
$
|
4.1
|
|
|
$
|
|
|
|
$
|
4.1
|
|
Share of other comprehensive income (loss) of associates and joint venture
|
|
|
(0.9
|
)
|
|
|
24.7
|
|
|
|
0.7
|
|
|
|
24.5
|
|
Other comprehensive loss reclassified to profit or loss upon disposal of associates
|
|
|
(4.7
|
)
|
|
|
(3.5
|
)
|
|
|
|
|
|
|
(8.2
|
)
|
Income tax effect
|
|
|
|
|
|
|
(61.2
|
)
|
|
|
|
|
|
|
(61.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
1,661.2
|
|
|
$
|
2.6
|
|
|
$
|
0.1
|
|
|
$
|
1,663.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
The exchange differences arising on translation of foreign operations net assets from its functional currency to TSMCs
presentation currency are recognized directly in other comprehensive income and also accumulated in the foreign currency translation reserve.
Unrealized gain/loss on available-for-sale financial assets represents the cumulative gains or losses arising from the fair value measurement
on available-for-sale financial assets that are recognized in other comprehensive income, excluding the amounts recognized in profit or loss for the effective portion from changes in fair value of the hedging instruments. When those
available-for-sale financial assets have been disposed of or are determined to be impaired subsequently, the related cumulative gains or losses in other comprehensive income are reclassified to profit or loss.
The cash flow hedges reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of the hedging
instruments entered into as cash flow hedges. The cumulative gains or losses arising on changes in fair value of the hedging instruments that are recognized and accumulated in cash flow hedges reserve will be reclassified to profit or loss only when
the hedge transaction affects profit or loss.
TSMCs Employee Stock Option Plans, consisting of the TSMC
2002 Plan, TSMC 2003 Plan and TSMC 2004 Plan, were approved by the Securities and Futures Bureau on June 25, 2002, October 29, 2003 and January 6, 2005, respectively. The maximum number of stock options authorized to be granted
under the TSMC 2002 Plan, TSMC 2003 Plan and TSMC 2004 Plan was 100.0 million, 120.0 million and 11.0 million, respectively, with each stock option eligible to subscribe for one common share of TSMC when exercised. The stock options
may be granted to qualified employees of TSMC or any of its domestic or foreign subsidiaries, in which TSMCs shareholding with voting rights, directly or indirectly, is more than fifty percent (50%). The stock options of all the plans are
valid for ten years and exercisable at certain percentages subsequent to the second anniversary of the grant date. Under the terms of the plans, the stock options are granted at an exercise price equal to the closing price of TSMCs common
shares quoted on the TWSE on the grant date.
F - 53
The Company did not issue employee stock option plans for years ended December 31, 2014,
2015 and 2016. Information about the TSMCs outstanding employee stock options is described as follows:
|
|
|
|
|
|
|
|
|
|
|
Number of
Stock Options
(In
Millions)
|
|
|
Weighted-
average
Exercise Price
(NT$)
|
|
Year ended December 31, 2014
|
|
|
|
|
|
|
|
|
Balance, beginning of year
|
|
|
1.7
|
|
|
$
|
45.9
|
|
Options exercised
|
|
|
(1.0
|
)
|
|
|
45.0
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
|
0.7
|
|
|
|
47.2
|
|
|
|
|
|
|
|
|
|
|
Balance exercisable, end of year
|
|
|
0.7
|
|
|
|
47.2
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2015
|
|
|
|
|
|
|
|
|
Balance, beginning of year
|
|
|
0.7
|
|
|
$
|
47.2
|
|
Options exercised
|
|
|
(0.7
|
)
|
|
|
47.2
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance exercisable, end of year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The numbers of outstanding stock options and exercise prices have been adjusted to reflect the
distribution of earnings by TSMC in accordance with the plans.
The employee stock options have been fully exercised in the second quarter
of 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Net revenue from sale of goods
|
|
$
|
762,176.9
|
|
|
$
|
842,997.6
|
|
|
$
|
947,415.9
|
|
Net revenue from royalties
|
|
|
629.6
|
|
|
|
499.8
|
|
|
|
522.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
762,806.5
|
|
|
$
|
843,497.4
|
|
|
$
|
947,938.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
6.
|
OTHER OPERATING INCOME AND EXPENSES, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Gain on disposal of property, plant and equipment, net
|
|
$
|
14.5
|
|
|
$
|
433.5
|
|
|
$
|
46.5
|
|
Impairment loss on property, plant and equipment
|
|
|
(239.9
|
)
|
|
|
(2,545.6
|
)
|
|
|
|
|
Gain from lease agreement modification
|
|
|
|
|
|
|
430.0
|
|
|
|
|
|
Impairment loss on noncurrent assets held for sale
|
|
|
(735.5
|
)
|
|
|
|
|
|
|
|
|
Others
|
|
|
(41.2
|
)
|
|
|
(198.5
|
)
|
|
|
(16.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,002.1
|
)
|
|
$
|
(1,880.6
|
)
|
|
$
|
29.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank deposits
|
|
$
|
2,705.1
|
|
|
$
|
3,928.0
|
|
|
$
|
4,892.6
|
|
Available-for-sale financial assets
|
|
|
2.7
|
|
|
|
35.8
|
|
|
|
816.2
|
|
Held-to-maturity financial assets
|
|
|
8.2
|
|
|
|
76.8
|
|
|
|
383.3
|
|
Structured product
|
|
|
14.7
|
|
|
|
88.7
|
|
|
|
225.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,730.7
|
|
|
|
4,129.3
|
|
|
|
6,317.5
|
|
Dividend income
|
|
|
649.7
|
|
|
|
621.5
|
|
|
|
137.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,380.4
|
|
|
$
|
4,750.8
|
|
|
$
|
6,454.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
$
|
3,082.9
|
|
|
$
|
3,103.7
|
|
|
$
|
3,014.7
|
|
Bank loans
|
|
|
133.5
|
|
|
|
74.6
|
|
|
|
291.2
|
|
Finance leases
|
|
|
19.7
|
|
|
|
11.7
|
|
|
|
|
|
Others
|
|
|
0.2
|
|
|
|
0.3
|
|
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,236.3
|
|
|
$
|
3,190.3
|
|
|
$
|
3,306.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29.
|
OTHER GAINS AND LOSSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Gain on disposal of financial assets, net
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets
|
|
$
|
362.4
|
|
|
$
|
22,157.9
|
|
|
$
|
33.2
|
|
Gain (loss) on disposal of investments accounted for using equity method, net
|
|
|
2,054.4
|
|
|
|
2,492.1
|
|
|
|
(260.0
|
)
|
Other gains
|
|
|
356.9
|
|
|
|
189.3
|
|
|
|
176.8
|
|
Net gain (loss) on financial instruments at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for trading
|
|
|
(1,889.5
|
)
|
|
|
(1,769.3
|
)
|
|
|
467.1
|
|
Designated as at FVTPL
|
|
|
|
|
|
|
|
|
|
|
(37.4
|
)
|
(Continued)
F - 55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Fair value hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) from hedging instruments
|
|
$
|
(10,577.7
|
)
|
|
$
|
(134.1
|
)
|
|
$
|
12.7
|
|
Gain (loss) arising from changes in fair value of available-for-sale financial assets in hedge
effective portion
|
|
|
10,088.6
|
|
|
|
(305.6
|
)
|
|
|
4.2
|
|
Impairment loss of financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets
|
|
|
(211.5
|
)
|
|
|
(154.7
|
)
|
|
|
(122.2
|
)
|
Loss from liquidation of subsidiaries
|
|
|
(0.1
|
)
|
|
|
(138.2
|
)
|
|
|
(36.1
|
)
|
Other losses
|
|
|
(155.5
|
)
|
|
|
(145.9
|
)
|
|
|
(42.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
28.0
|
|
|
$
|
22,191.5
|
|
|
$
|
195.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
|
a.
|
Income tax expense recognized in profit or loss
|
Income tax expense consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Current income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax expense recognized in the current year
|
|
$
|
49,779.0
|
|
|
$
|
61,297.7
|
|
|
$
|
72,405.0
|
|
Income tax adjustments on prior years
|
|
|
(4,417.5
|
)
|
|
|
(12,661.2
|
)
|
|
|
(16,628.1
|
)
|
Other income tax adjustments
|
|
|
230.0
|
|
|
|
247.8
|
|
|
|
122.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,591.5
|
|
|
|
48,884.3
|
|
|
|
55,899.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax expense (benefit)
|
|
|
|
|
|
|
|
|
|
|
|
|
The origination and reversal of temporary differences
|
|
|
(427.4
|
)
|
|
|
(1,542.8
|
)
|
|
|
(1,775.0
|
)
|
Investment tax credits and operating loss carryforward
|
|
|
2,725.8
|
|
|
|
303.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,298.4
|
|
|
|
(1,239.6
|
)
|
|
|
(1,775.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense recognized in profit or loss
|
|
$
|
47,889.9
|
|
|
$
|
47,644.7
|
|
|
$
|
54,124.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 56
A reconciliation of income before income tax and income tax expense recognized in profit or loss
was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Income before tax
|
|
$
|
302,073.5
|
|
|
$
|
350,477.6
|
|
|
$
|
385,921.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense at the statutory rate
|
|
$
|
52,766.4
|
|
|
$
|
60,674.4
|
|
|
$
|
66,938.7
|
|
Tax effect of adjusting items:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deductible items in determining taxable income
|
|
|
(1,132.8
|
)
|
|
|
(6,340.4
|
)
|
|
|
(44.9
|
)
|
Tax-exempt income
|
|
|
(20,415.8
|
)
|
|
|
(22,144.3
|
)
|
|
|
(19,595.0
|
)
|
Additional income tax under the Alternative Minimum Tax Act
|
|
|
4,081.2
|
|
|
|
6,041.6
|
|
|
|
|
|
Additional income tax on unappropriated earnings
|
|
|
23,771.5
|
|
|
|
27,543.6
|
|
|
|
30,046.8
|
|
The origination and reversal of temporary differences
|
|
|
(427.4
|
)
|
|
|
(1,542.8
|
)
|
|
|
(1,775.0
|
)
|
Income tax credits
|
|
|
(3,275.1
|
)
|
|
|
(4,243.6
|
)
|
|
|
(4,940.2
|
)
|
Remeasurement of investment tax credits
|
|
|
(3,188.3
|
)
|
|
|
|
|
|
|
|
|
Remeasurement of operating loss carryforward
|
|
|
(102.3
|
)
|
|
|
69.6
|
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52,077.4
|
|
|
|
60,058.1
|
|
|
|
70,630.0
|
|
Income tax adjustments on prior years
|
|
|
(4,417.5
|
)
|
|
|
(12,661.2
|
)
|
|
|
(16,628.1
|
)
|
Other income tax adjustments
|
|
|
230.0
|
|
|
|
247.8
|
|
|
|
122.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense recognized in profit or loss
|
|
$
|
47,889.9
|
|
|
$
|
47,644.7
|
|
|
$
|
54,124.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31, 2014, 2015 and 2016, the Company applied a tax rate of 17% for
entities subject to the R.O.C. Income Tax Law; for other jurisdictions, the Company measures taxes by using the applicable tax rate for each individual jurisdiction.
|
b.
|
Income tax expense recognized in other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Deferred income tax benefit (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Related to remeasurement of defined benefit obligation
|
|
$
|
(31.9
|
)
|
|
$
|
99.3
|
|
|
$
|
126.9
|
|
Related to unrealized gain/loss on available-for-sale financial assets
|
|
|
(5.1
|
)
|
|
|
(16.0
|
)
|
|
|
(61.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(37.0
|
)
|
|
$
|
83.3
|
|
|
$
|
65.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 57
|
c.
|
Deferred income tax balance
|
The analysis of deferred income tax assets and liabilities in the
consolidated statements of financial position was as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Deferred income tax assets
|
|
|
|
|
|
|
|
|
Temporary differences
|
|
|
|
|
|
|
|
|
Depreciation
|
|
$
|
2,853.0
|
|
|
$
|
4,244.2
|
|
Provision for sales returns and allowance
|
|
|
1,141.5
|
|
|
|
1,512.1
|
|
Net defined benefit liability
|
|
|
895.5
|
|
|
|
939.5
|
|
Unrealized loss on inventories
|
|
|
622.8
|
|
|
|
737.3
|
|
Deferred compensation cost
|
|
|
316.3
|
|
|
|
378.7
|
|
Goodwill from business combination
|
|
|
10.0
|
|
|
|
|
|
Others
|
|
|
531.4
|
|
|
|
445.1
|
|
Operating loss carryforward
|
|
|
14.5
|
|
|
|
14.5
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,385.0
|
|
|
$
|
8,271.4
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities
|
|
|
|
|
|
|
|
|
Temporary differences
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets
|
|
$
|
(31.3
|
)
|
|
$
|
(92.5
|
)
|
Unrealized exchange gains
|
|
|
|
|
|
|
(48.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(31.3
|
)
|
|
$
|
(141.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2014
|
|
|
|
|
|
|
Recognized in
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
Beginning
of Year
|
|
|
Profit or
Loss
|
|
|
Other
Comprehensive
Income
|
|
|
Reclassification
as Held For
Sale
|
|
|
Effect of
Exchange
Rate
Changes
|
|
|
Balance,
End of Year
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Deferred income tax assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment tax credits
|
|
$
|
1,955.9
|
|
|
$
|
(1,955.9
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Temporary differences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for sales returns and allowance
|
|
|
900.4
|
|
|
|
328.2
|
|
|
|
|
|
|
|
|
|
|
|
2.2
|
|
|
|
1,230.8
|
|
Depreciation
|
|
|
644.8
|
|
|
|
339.3
|
|
|
|
|
|
|
|
20.1
|
|
|
|
6.9
|
|
|
|
1,011.1
|
|
Net defined benefit liability
|
|
|
813.4
|
|
|
|
4.5
|
|
|
|
(31.9
|
)
|
|
|
1.4
|
|
|
|
|
|
|
|
787.4
|
|
Unrealized loss on inventories
|
|
|
438.4
|
|
|
|
150.9
|
|
|
|
|
|
|
|
|
|
|
|
2.6
|
|
|
|
591.9
|
|
Deferred compensation cost
|
|
|
267.4
|
|
|
|
(27.7
|
)
|
|
|
|
|
|
|
|
|
|
|
15.9
|
|
|
|
255.6
|
|
Goodwill from business combination
|
|
|
373.7
|
|
|
|
(193.2
|
)
|
|
|
|
|
|
|
|
|
|
|
14.9
|
|
|
|
195.4
|
|
Available-for-sale financial assets
|
|
|
6.2
|
|
|
|
(6.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others
|
|
|
684.6
|
|
|
|
26.2
|
|
|
|
|
|
|
|
0.5
|
|
|
|
38.3
|
|
|
|
749.6
|
|
Operating loss carryforward
|
|
|
1,060.2
|
|
|
|
(769.9
|
)
|
|
|
|
|
|
|
(22.4
|
)
|
|
|
49.1
|
|
|
|
317.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,145.0
|
|
|
$
|
(2,103.8
|
)
|
|
$
|
(31.9
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
129.9
|
|
|
$
|
5,138.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized exchange gains
|
|
$
|
|
|
|
$
|
(184.4
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(184.4
|
)
|
Available-for-sale financial assets
|
|
|
|
|
|
|
(10.2
|
)
|
|
|
(5.1
|
)
|
|
|
|
|
|
|
|
|
|
|
(15.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
(194.6
|
)
|
|
$
|
(5.1
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(199.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015
|
|
|
|
|
|
|
Recognized in
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
Beginning
of Year
|
|
|
Profit or
Loss
|
|
|
Other
Comprehensive
Income
|
|
|
Effect of
Acquisition
of Subsidiary
|
|
|
Effect of
Exchange Rate
Changes
|
|
|
Balance,
End of Year
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Deferred income tax assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
$
|
1,011.1
|
|
|
$
|
1,808.7
|
|
|
$
|
|
|
|
$
|
11.9
|
|
|
$
|
21.3
|
|
|
$
|
2,853.0
|
|
Provision for sales returns and allowance
|
|
|
1,230.8
|
|
|
|
(104.4
|
)
|
|
|
|
|
|
|
13.8
|
|
|
|
1.3
|
|
|
|
1,141.5
|
|
Net defined benefit liability
|
|
|
787.4
|
|
|
|
8.8
|
|
|
|
99.3
|
|
|
|
|
|
|
|
|
|
|
|
895.5
|
|
Unrealized loss on inventories
|
|
|
591.9
|
|
|
|
25.1
|
|
|
|
|
|
|
|
4.1
|
|
|
|
1.7
|
|
|
|
622.8
|
|
Deferred compensation cost
|
|
|
255.6
|
|
|
|
49.4
|
|
|
|
|
|
|
|
|
|
|
|
11.3
|
|
|
|
316.3
|
|
Goodwill from business combination
|
|
|
195.4
|
|
|
|
(185.8
|
)
|
|
|
|
|
|
|
|
|
|
|
0.4
|
|
|
|
10.0
|
|
Others
|
|
|
749.6
|
|
|
|
(243.4
|
)
|
|
|
|
|
|
|
0.2
|
|
|
|
25.0
|
|
|
|
531.4
|
|
Operating loss carryforward
|
|
|
317.0
|
|
|
|
(303.2
|
)
|
|
|
|
|
|
|
|
|
|
|
0.7
|
|
|
|
14.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,138.8
|
|
|
$
|
1,055.2
|
|
|
$
|
99.3
|
|
|
$
|
30.0
|
|
|
$
|
61.7
|
|
|
$
|
6,385.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets
|
|
$
|
(15.3
|
)
|
|
$
|
|
|
|
$
|
(16.0
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(31.3
|
)
|
Unrealized exchange gains
|
|
|
(184.4
|
)
|
|
|
184.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(199.7
|
)
|
|
$
|
184.4
|
|
|
$
|
(16.0
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(31.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
|
|
|
|
|
|
Recognized in
|
|
|
|
|
|
|
|
|
|
Balance,
Beginning
of Year
|
|
|
Profit or
Loss
|
|
|
Other
Comprehensive
Income
|
|
|
Effect of
Exchange
Rate
Changes
|
|
|
Balance,
End of Year
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Deferred income tax assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
$
|
2,853.0
|
|
|
$
|
1,437.6
|
|
|
$
|
|
|
|
$
|
(46.4
|
)
|
|
$
|
4,244.2
|
|
Provision for sales returns and allowance
|
|
|
1,141.5
|
|
|
|
371.5
|
|
|
|
|
|
|
|
(0.9
|
)
|
|
|
1,512.1
|
|
Net defined benefit liability
|
|
|
895.5
|
|
|
|
(82.9
|
)
|
|
|
126.9
|
|
|
|
|
|
|
|
939.5
|
|
Unrealized loss on inventories
|
|
|
622.8
|
|
|
|
115.5
|
|
|
|
|
|
|
|
(1.0
|
)
|
|
|
737.3
|
|
Deferred compensation cost
|
|
|
316.3
|
|
|
|
69.3
|
|
|
|
|
|
|
|
(6.9
|
)
|
|
|
378.7
|
|
Goodwill from business combination
|
|
|
10.0
|
|
|
|
(9.8
|
)
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
Others
|
|
|
531.4
|
|
|
|
(77.5
|
)
|
|
|
|
|
|
|
(8.8
|
)
|
|
|
445.1
|
|
Operating loss carryforward
|
|
|
14.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,385.0
|
|
|
$
|
$1,823.7
|
|
|
$
|
126.9
|
|
|
$
|
(64.2
|
)
|
|
$
|
8,271.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets
|
|
$
|
(31.3
|
)
|
|
$
|
|
|
|
$
|
(61.2
|
)
|
|
$
|
|
|
|
$
|
(92.5
|
)
|
Unrealized exchange gains
|
|
|
|
|
|
|
(48.7
|
)
|
|
|
|
|
|
|
|
|
|
|
(48.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(31.3
|
)
|
|
$
|
(48.7
|
)
|
|
$
|
(61.2
|
)
|
|
$
|
|
|
|
$
|
(141.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d.
|
The investment operating loss carryforward and deductible temporary differences for which no deferred income tax assets have been recognized in the consolidated statements of financial position
|
F - 59
The information of the operating loss carryforward for which no deferred tax assets have been
recognized was as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
Expiry period
|
|
|
|
|
|
|
|
|
1 4 years
|
|
$
|
85.4
|
|
|
$
|
136.7
|
|
5 10 years
|
|
|
97.8
|
|
|
|
41.4
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
183.2
|
|
|
$
|
178.1
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2015 and 2016, the aggregate deductible temporary differences for which no
deferred income tax assets have been recognized amounted to NT$1,972.3 million and NT$1,919.8 million, respectively.
|
e.
|
Unused operating loss carryforward and tax-exemption information
|
As of December 31, 2016,
operating loss carryforward of Mutual-Pak consisted of the following:
|
|
|
|
|
|
|
Remaining Creditable Amount
|
|
Expiry period
|
|
|
|
|
1 4 years
|
|
$
|
136.7
|
|
5 10 years
|
|
|
126.6
|
|
|
|
|
|
|
|
|
$
|
263.3
|
|
|
|
|
|
|
As of December 31, 2016, the profits generated from the following projects of TSMC are exempt from
income tax for a five-year period:
|
|
|
|
|
|
|
Tax-exemption Period
|
|
Construction and expansion of 2007 by TSMC
|
|
|
2014 to 2018
|
|
Construction and expansion of 2008 by TSMC
|
|
|
2015 to 2019
|
|
Construction and expansion of 2009 by TSMC
|
|
|
2018 to 2022
|
|
|
f.
|
The information of unrecognized deferred income tax liabilities associated with investments
|
As
of December 31, 2015 and 2016, the aggregate taxable temporary differences associated with investments in subsidiaries not recognized as deferred income tax liabilities amounted to NT$80,919.3 million and NT$83,181.4 million, respectively.
|
g.
|
Integrated income tax information
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Balance of the Imputation
|
|
|
|
|
|
|
|
|
Credit Account - TSMC
|
|
$
|
59,973.5
|
|
|
$
|
82,072.6
|
|
|
|
|
|
|
|
|
|
|
The actual and estimated creditable ratio for distribution of TSMCs earnings of 2015 and 2016 were
12.57% and 13.94%, respectively; however, effective from January 1, 2015, the creditable ratio for individual shareholders residing in the R.O.C. will be half of the original creditable ratio according to the revised Article 666 of the
R.O.C. Income Tax Law.
The imputation credit allocated to shareholders is based on its balance as of the date of the dividend
distribution. The estimated creditable ratio may change when the actual distribution of the imputation credit is made.
All of TSMCs
earnings generated prior to December 31, 1997 have been appropriated.
F - 60
|
h.
|
Income tax examination
|
The tax authorities have examined income tax returns of TSMC through
2013. All investment tax credit adjustments assessed by the tax authorities have been recognized accordingly.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
(NT$)
|
|
|
(NT$)
|
|
|
(NT$)
|
|
Basic EPS
|
|
$
|
9.81
|
|
|
$
|
11.68
|
|
|
$
|
12.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$
|
9.81
|
|
|
$
|
11.68
|
|
|
$
|
12.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS is computed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts
(Numerator)
NT$
(In
Millions)
|
|
|
Number of
Shares
(Denominator)
(In Millions)
|
|
|
EPS
(NT$)
|
|
Year ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders of the parent
|
|
$
|
254,301.4
|
|
|
|
25,929.3
|
|
|
$
|
9.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive potential common shares
|
|
|
|
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders of the parent (including effect of dilutive potential
common shares)
|
|
$
|
254,301.4
|
|
|
|
25,930.1
|
|
|
$
|
9.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders of the parent
|
|
$
|
302,850.9
|
|
|
|
25,930.3
|
|
|
$
|
11.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive potential common shares
|
|
|
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders of the parent (including effect of dilutive potential
common shares)
|
|
$
|
302,850.9
|
|
|
|
25,930.4
|
|
|
$
|
11.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic/Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders of the parent
|
|
$
|
331,713.7
|
|
|
|
25,930.3
|
|
|
$
|
12.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 61
32.
|
ADDITIONAL INFORMATION OF EXPENSES BY NATURE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
a. Depreciation of property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognized in cost of revenue
|
|
$
|
183,750.9
|
|
|
$
|
204,126.2
|
|
|
$
|
203,476.8
|
|
Recognized in operating expenses
|
|
|
13,869.4
|
|
|
|
15,152.2
|
|
|
|
16,583.1
|
|
Recognized in other operating income and expenses
|
|
|
24.9
|
|
|
|
25.0
|
|
|
|
25.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
197,645.2
|
|
|
$
|
219,303.4
|
|
|
$
|
220,085.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b. Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognized in cost of revenue
|
|
$
|
1,356.9
|
|
|
$
|
1,642.1
|
|
|
$
|
2,028.5
|
|
Recognized in operating expenses
|
|
|
1,249.4
|
|
|
|
1,560.1
|
|
|
|
1,714.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,606.3
|
|
|
$
|
3,202.2
|
|
|
$
|
3,743.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c. Research and development costs expensed as incurred
|
|
$
|
56,828.8
|
|
|
$
|
65,544.6
|
|
|
$
|
71,207.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d. Employee benefits expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Post-employment benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined contribution plans
|
|
$
|
1,743.6
|
|
|
$
|
2,002.6
|
|
|
$
|
2,164.9
|
|
Defined benefit plans
|
|
|
305.7
|
|
|
|
278.9
|
|
|
|
272.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,049.3
|
|
|
|
2,281.5
|
|
|
|
2,437.1
|
|
Other employee benefits
|
|
|
79,385.1
|
|
|
|
88,929.4
|
|
|
|
97,248.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
81,434.4
|
|
|
$
|
91,210.9
|
|
|
$
|
99,685.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expense summarized by function
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognized in cost of revenue
|
|
$
|
48,199.8
|
|
|
$
|
52,983.2
|
|
|
$
|
58,493.5
|
|
Recognized in operating expenses
|
|
|
33,234.6
|
|
|
|
38,227.7
|
|
|
|
41,191.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
81,434.4
|
|
|
$
|
91,210.9
|
|
|
$
|
99,685.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In accordance with the amendments to the R.O.C. Company Act in May 2015 and the amended TSMCs
Articles of Incorporation approved by TSMCs shareholders in its meeting held on June 7, 2016, TSMC shall allocate compensation to directors and profit sharing bonus to employees of TSMC not more than 0.3% and not less than 1% of annual
profits during the period, respectively. Prior to the amendments, TSMCs Articles of Incorporation provided that, when allocating the net profits for each fiscal year, TSMC shall first set aside legal capital reserve and special capital
reserve, then set aside not more than 0.3% of the balance as compensation to directors and not less than 1% as profit sharing bonus to employees, respectively.
TSMC accrued profit sharing bonus to employees based on certain percentage of net income during the period, which amounted to NT$17,646.0
million for the year ended December 31, 2014. TSMC accrued profit sharing bonus to employees based on a percentage of net income before income tax, profit sharing bonus to employees and compensation to directors during the period, which
amounted to NT$20,556.9 million and NT$22,418.3 million for the years ended December 31, 2015 and 2016, respectively; Compensation to directors was expensed based on estimated amount payable. If there is a change in the proposed amounts after
the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in accounting estimate.
F - 62
TSMCs profit sharing bonus to employees and compensation to directors in the amounts of
NT$17,646.0 million and NT$406.8 million in cash for 2014, respectively, had been approved by the shareholders in its meeting held on June 9, 2015. The aforementioned approved amount has no difference with the one recognized in the consolidated
financial statements for the year ended December 31, 2014.
TSMCs profit sharing bonus to employees and compensation to
directors in the amounts of NT$20,556.9 million and NT$356.2 million in cash for 2015, respectively, had been approved by the Board of Directors on February 2, 2016. The profit sharing bonus to employees and compensation to directors in cash
for 2015 had been reported to TSMCs shareholders in its meeting held on June 7, 2016, after the amended TSMCs Articles of Incorporation had been approved. The aforementioned approved amount has no difference with the one recognized
in the consolidated financial statements for the year ended December 31, 2015.
The Board of Directors of TSMC held on
February 14, 2017 approved the profit sharing bonus to employees and compensation to directors in the amounts of NT$22,418.3 million and NT$376.4 million in cash for 2016, respectively. There is no significant difference between the
aforementioned approved amounts and the amounts charged against earnings of 2016.
3
3.
|
CONSOLIDATION OF SUBSIDIARY
|
Due to a Chinese consortiums acquisition of OVT,
major shareholders of VisEra Holding and OVT Taiwan, the Company acquired OVTs 49.1% ownership in VisEra Holding and 100% ownership in OVT Taiwan on November 20, 2015. The related information is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Activity
|
|
Date of Acquisition
|
|
Proportion of
Voting Equity
Interests
Acquired (%)
|
|
|
Consideration
Transferred
NT$
(In Millions)
|
|
VisEra Holding
|
|
Investing in
companies
involved in the
design,
manufacturing
and other related
businesses in the
semiconductor
industry
|
|
November 20, 2015
|
|
|
49.1
|
|
|
|
$ 3,536.1
|
|
OVT Taiwan
|
|
Investment activities
|
|
November 20, 2015
|
|
|
100
|
|
|
|
$ 394.7
|
|
|
b.
|
Considerations transferred
|
|
|
|
|
|
|
|
|
|
|
|
VisEra Holding
|
|
|
OVT Taiwan
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Cash
|
|
$
|
3,536.1
|
|
|
$
|
394.7
|
|
|
|
|
|
|
|
|
|
|
F - 63
|
|
|
|
|
|
|
|
|
|
|
c.
|
|
Assets acquired and liabilities assumed at the date of acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
VisEra Holding
|
|
|
OVT Taiwan
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,858.5
|
|
|
$
|
20.7
|
|
|
|
Accounts receivable
|
|
|
512.0
|
|
|
|
|
|
|
|
Inventories
|
|
|
59.1
|
|
|
|
|
|
|
|
Other financial assets
|
|
|
706.5
|
|
|
|
373.8
|
|
|
|
Other current assets
|
|
|
26.4
|
|
|
|
0.2
|
|
|
|
Noncurrent assets
|
|
|
|
|
|
|
|
|
|
|
Investments accounted for using equity method
|
|
|
721.6
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
2,651.2
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
12.1
|
|
|
|
|
|
|
|
Deferred income tax assets
|
|
|
30.0
|
|
|
|
|
|
|
|
Refundable deposits
|
|
|
15.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,593.0
|
|
|
|
394.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities at fair value through profit or loss
|
|
|
1.0
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
87.5
|
|
|
|
|
|
|
|
Salary and bonus payable
|
|
|
183.1
|
|
|
|
|
|
|
|
Accrued profit sharing bonus to employees and compensation to directors and supervisors
|
|
|
45.8
|
|
|
|
|
|
|
|
Payables to contractors and equipment suppliers
|
|
|
132.3
|
|
|
|
|
|
|
|
Income tax payable
|
|
|
47.9
|
|
|
|
|
|
|
|
Provisions
|
|
|
126.0
|
|
|
|
|
|
|
|
Accrued expenses and other current liabilities
|
|
|
102.8
|
|
|
|
|
|
|
|
Noncurrent liabilities
|
|
|
|
|
|
|
|
|
|
|
Guarantee deposits
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
727.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
$
|
7,865.3
|
|
|
$
|
394.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d.
|
|
Goodwill arising on acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
VisEra Holding
|
|
|
|
|
|
|
|
|
NT$
|
|
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
|
Consideration transferred
|
|
$
|
3,536.1
|
|
|
|
|
|
|
|
Fair value of investments previously owned
|
|
|
3,458.2
|
|
|
|
|
|
|
|
Less: Fair value of identifiable net assets acquired
|
|
|
(7,865.3
|
)
|
|
|
|
|
|
|
Noncontrolling interests
|
|
|
923.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill arising on acquisition
|
|
$
|
52.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 64
|
e.
|
Net cash outflow on acquisition of subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
VisEra Holding
|
|
|
OVT Taiwan
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Consideration paid in cash
|
|
$
|
3,536.1
|
|
|
$
|
394.7
|
|
Less: Cash and cash equivalent balances acquired
|
|
|
(3,858.5
|
)
|
|
|
(20.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(322.4
|
)
|
|
$
|
374.0
|
|
|
|
|
|
|
|
|
|
|
|
f.
|
Impact of acquisitions on the results of the Company
|
The results of VisEra Holding since the
acquisition date included in the consolidated statements of profit or loss and other comprehensive income for the year ended December 31, 2015 were as follows:
|
|
|
|
|
|
|
VisEra Holding
|
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
Net revenue
|
|
$
|
254.3
|
|
|
|
|
|
|
Net income
|
|
$
|
13.9
|
|
|
|
|
|
|
Had the business combination of VisEra Holding been in effect on January 1, 2015, the Companys
net revenue and net income for the year ended December 31, 2015 would have been NT$846,401.8 million and NT$302,964.4 million, respectively. This pro-forma information is for illustrative purposes only and is not necessarily an indication of
revenue and results of operations of the Company that actually would have been achieved had the acquisition been completed on January 1, 2015, nor is it intended to be a projection of future results. The aforementioned pro-forma net revenue and
net income were calculated based on the fair value of assets acquired and liabilities assumed at the date of acquisition.
34.
|
DISPOSAL OF SUBSIDIARY
|
In January 2015, the Board of Directors of TSMC approved a sale
of TSMC SSL common shares of 565.5 million held by TSMC and TSMC GN to Epistar Corporation. Accordingly, the Company reclassified TSMC SSL as a disposal group held for sale in its consolidated statements of financial position as of
December 31, 2014. The expected fair value less costs to sell is substantially lower than the carrying amount of the related net assets of TSMC SSL; as such, impairment losses of NT$735.5 million were recognized under other operating gains and
losses in the Companys consolidated statement of profit or loss and other comprehensive income for the year ended December 31, 2014. The transaction was completed in February 2015.
|
a.
|
Consideration received from the disposal
|
|
|
|
|
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
Total consideration received
|
|
$
|
825.0
|
|
Expenditure associated with consideration received
|
|
|
(142.5
|
)
|
|
|
|
|
|
Net consideration received
|
|
$
|
682.5
|
|
|
|
|
|
|
F - 65
|
b.
|
Analysis of assets and liabilities over which the control was lost
|
|
|
|
|
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
Assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
81.5
|
|
Inventories
|
|
|
28.5
|
|
Other current assets
|
|
|
91.3
|
|
Property, plant and equipment
|
|
|
643.7
|
|
Intangible assets
|
|
|
47.4
|
|
Others
|
|
|
51.8
|
|
|
|
|
|
|
|
|
|
944.2
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Salary and bonus payable
|
|
|
38.2
|
|
Accrued expenses and other current liabilities
|
|
|
68.1
|
|
Net defined benefit liability
|
|
|
35.9
|
|
Others
|
|
|
76.9
|
|
|
|
|
|
|
|
|
|
219.1
|
|
|
|
|
|
|
Net assets disposed of
|
|
$
|
725.1
|
|
|
|
|
|
|
|
c.
|
Gain/loss on disposal of subsidiary
|
|
|
|
|
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
Net consideration received
|
|
$
|
682.5
|
|
Net assets disposed of
|
|
|
(725.1
|
)
|
Noncontrolling interests
|
|
|
42.6
|
|
|
|
|
|
|
Gain/loss on disposal of subsidiary
|
|
$
|
|
|
|
|
|
|
|
|
d.
|
Net cash inflow arising from disposal of subsidiary
|
|
|
|
|
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
Net consideration received
|
|
$
|
682.5
|
|
Less: Balance of cash and cash equivalents disposed of
|
|
|
81.5
|
|
|
|
|
|
|
|
|
$
|
601.0
|
|
|
|
|
|
|
The Company requires significant amounts of capital to build and
expand its production facilities and acquire additional equipment. In consideration of the industry dynamics, the Company manages its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital
needs, capital asset purchases, research and development activities, dividend payments, debt service requirements and other business requirements associated with its existing operations over the next 12 months.
F - 66
36.
|
FINANCIAL INSTRUMENTS
|
|
a.
|
Categories of financial instruments
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Financial assets
|
|
|
|
|
|
|
|
|
FVTPL
|
|
|
|
|
|
|
|
|
Held for trading
|
|
$
|
6.0
|
|
|
$
|
153.4
|
|
Designated as at FVTPL
|
|
|
|
|
|
|
6,297.7
|
|
Available-for-sale financial assets
|
|
|
18,290.3
|
|
|
|
71,891.3
|
|
Held-to-maturity financial assets
|
|
|
16,077.4
|
|
|
|
38,917.7
|
|
Derivative financial instruments in designated hedge accounting relationships
|
|
|
1.7
|
|
|
|
5.6
|
|
Loans and receivables
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
562,688.9
|
|
|
|
541,253.8
|
|
Notes and accounts receivable (including related parties)
|
|
|
85,565.4
|
|
|
|
129,304.8
|
|
Other receivables
|
|
|
4,790.4
|
|
|
|
2,626.4
|
|
Refundable deposits
|
|
|
430.8
|
|
|
|
407.9
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
687,850.9
|
|
|
$
|
790,858.6
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
FVTPL
|
|
|
|
|
|
|
|
|
Held for trading
|
|
$
|
72.6
|
|
|
$
|
91.6
|
|
Designated as at FVTPL
|
|
|
|
|
|
|
99.5
|
|
Amortized cost
|
|
|
|
|
|
|
|
|
Short-term loans
|
|
|
39,474.0
|
|
|
|
57,958.2
|
|
Accounts payable (including related parties)
|
|
|
19,725.3
|
|
|
|
27,324.5
|
|
Payables to contractors and equipment suppliers
|
|
|
26,012.2
|
|
|
|
63,154.5
|
|
Accrued expenses and other current liabilities
|
|
|
18,900.1
|
|
|
|
20,713.3
|
|
Bonds payable (including long-term liabilities-current portion)
|
|
|
215,475.2
|
|
|
|
191,193.6
|
|
Long-term bank loans (including long-term liabilities-current portion)
|
|
|
40.0
|
|
|
|
31.5
|
|
Other long-term payables (classified under accrued expenses and other current
liabilities)
|
|
|
18.0
|
|
|
|
|
|
Guarantee deposits (including those classified under accrued expenses and other current
liabilities)
|
|
|
27,732.6
|
|
|
|
26,670.6
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
347,450.0
|
|
|
$
|
387,237.3
|
|
|
|
|
|
|
|
|
|
|
|
b.
|
Financial risk management objectives
|
The Company seeks to ensure sufficient cost-efficient
funding readily available when needed. The Company manages its exposure to foreign currency risk, interest rate risk, equity price risk, credit risk and liquidity risk with the objective to reduce the potentially adverse effects the market
uncertainties may have on its financial performance.
F - 67
The plans for material treasury activities are reviewed by Audit Committees and/or Board of
Directors in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, Corporate Treasury function must comply with certain treasury procedures that provide guiding principles for
overall financial risk management and segregation of duties.
The Company is exposed to the market risks arising from changes in foreign
exchange rates, interest rates and the prices in equity investments, and utilizes some derivative financial instruments to reduce the related risks.
Foreign currency risk
Most of the Companys operating activities are denominated in foreign currencies. Consequently, the Company is exposed to foreign currency
risk. To protect against reductions in value and the volatility of future cash flows caused by changes in foreign exchange rates, the Company utilizes derivative financial instruments, including currency forward contracts and cross currency swaps,
to hedge its currency exposure. These instruments help to reduce, but do not eliminate, the impact of foreign currency exchange rate movements.
The Company also holds short-term borrowings in foreign currencies in proportion to its expected future cash flows. This allows
foreign-currency-denominated borrowings to be serviced with expected future cash flows and provides a partial hedge against transaction translation exposure.
The Companys sensitivity analysis to foreign currency risk mainly focuses on the foreign currency monetary items at the end of the
reporting period. Assuming an unfavorable 10% movement in the levels of foreign exchanges against the New Taiwan dollar, the net income for the years ended December 31, 2014, 2015 and 2016 would have decreased by NT$331.5 million, NT$902.1
million and NT$111.3 million, respectively, after taking into consideration of the hedging contracts and the hedged items.
Interest
rate risk
The Company is exposed to interest rate risk arising from borrowing at both fixed and floating interest rates and from
investments in fixed income securities. All of the Companys bonds payable have fixed interest rates and are measured at amortized cost. As such, changes in interest rates would not affect the future cash flows. On the other hand, because
interest rates of the Companys long-term bank loans are floating, changes in interest rates would affect the future cash flows but not the fair value.
Assuming the amount of floating interest rate bank loans at the end of the reporting period had been outstanding for the entire period and all
other variables were held constant, a hypothetical increase in interest rates of 100 basis point (1%) would have resulted in an increase in the interest expense, net of tax, by approximately NT$0.3 million for all the years ended
December 31, 2014, 2015 and 2016, respectively.
The Company classified its investments in fixed income securities as held-to-maturity
and available-for-sale financial assets. Because held-to-maturity fixed income securities are measured at amortized cost, changes in interest rates would not affect the fair value. On the other hand, available-for-sale fixed income securities are
exposed to fair value fluctuations caused by changes in interest rates. To manage its exposure to the fair value fluctuations, the Company enters into interest rate futures contract to hedge against price risk caused by changes in risk-free interest
rates in the Companys investments in available-for-sale fixed income securities.
F - 68
Assuming a hypothetical increase of 100 basis point (1%) in interest rates of
available-for-sale fixed income securities at the end of the reporting period, the net income for the years ended December 31, 2015 and 2016 would have been unaffected as they were classified as available-for-sale; however, the other
comprehensive income for the years ended December 31, 2015 and 2016 would have decreased by NT$271.5 million and NT$1,600.9 million, respectively.
Other price risk
The
Company is exposed to equity price risk arising from available-for-sale equity investments.
Assuming a hypothetical decrease of 5% in
equity prices of the equity investments at the end of the reporting period, the net income for the years ended December 31, 2014, 2015 and 2016 would have been unaffected as they were classified as available-for-sale; however, the other
comprehensive income for the years ended December 31, 2014, 2015 and 2016 would have decreased by NT$148.7 million, NT$260.0 million and NT$342.6 million, respectively.
|
d.
|
Credit risk management
|
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from operating activities, primarily trade receivables, and from investing activities, primarily deposits, fixed-income investments and other
financial instruments with banks. Credit risk is managed separately for business related and financial related exposures. As of the end of the reporting period, the Companys maximum credit risk exposure is mainly from the carrying amount of
financial assets recognized in the consolidated statements of financial position.
Business related credit risk
The Company has considerable trade receivables outstanding with its customers worldwide. A substantial majority of the Companys
outstanding trade receivables are not covered by collateral or credit insurance. While the Company has procedures to monitor and limit exposure to credit risk on trade receivables, there can be no assurance such procedures will effectively limit its
credit risk and avoid losses. This risk is heightened during periods when economic conditions worsen.
As of December 31, 2015 and
2016, the Companys ten largest customers accounted for 68% and 74% of accounts receivable, respectively. The Company believes the concentration of credit risk is not material for the remaining accounts receivable.
Financial credit risk
The Company regularly monitors and reviews the transaction limit applied to counterparties and adjusts the concentration limit according to
market conditions and the credit standing of the counterparties. The Company mitigates its exposure by selecting counterparties with investment-grade credit ratings.
|
e.
|
Liquidity risk management
|
The objective of liquidity risk management is to ensure the Company
has sufficient liquidity to fund its business requirements associated with existing operations over the next 12 months. The Company manages its liquidity risk by maintaining adequate cash and cash equivalent, short-term available-for-sale financial
assets and short-term held-to-maturity financial assets.
The table below summarizes the maturity profile of the Companys financial
liabilities based on contractual undiscounted payments, including principal and interest.
F - 69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less Than
1 Year
|
|
|
2-3 Years
|
|
|
4-5 Years
|
|
|
5+ Years
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term loans
|
|
$
|
39,488.9
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
39,488.9
|
|
Accounts payable (including related parties)
|
|
|
19,725.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,725.3
|
|
Payables to contractors and equipment suppliers
|
|
|
26,012.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,012.2
|
|
Accrued expenses and other current liabilities
|
|
|
18,900.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,900.1
|
|
Bonds payable
|
|
|
26,495.0
|
|
|
|
104,462.4
|
|
|
|
68,378.8
|
|
|
|
25,981.3
|
|
|
|
225,317.5
|
|
Long-term bank loans
|
|
|
8.8
|
|
|
|
21.5
|
|
|
|
12.8
|
|
|
|
|
|
|
|
43.1
|
|
Other long-term payables (classified under accrued expenses and other current liabilities)
|
|
|
18.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18.0
|
|
Guarantee deposits (including those classified under accrued expenses and other current
liabilities)
|
|
|
6,167.8
|
|
|
|
13,341.1
|
|
|
|
8,223.7
|
|
|
|
|
|
|
|
27,732.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
136,816.1
|
|
|
|
117,825.0
|
|
|
|
76,615.3
|
|
|
|
25,981.3
|
|
|
|
357,237.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows
|
|
|
23,192.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,192.5
|
|
Inflows
|
|
|
(23,135.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(23,135.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
136,873.0
|
|
|
$
|
117,825.0
|
|
|
$
|
76,615.3
|
|
|
$
|
25,981.3
|
|
|
$
|
357,294.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term loans
|
|
$
|
57,974.6
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
57,974.6
|
|
Accounts payable (including related parties)
|
|
|
27,324.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,324.5
|
|
Payables to contractors and equipment suppliers
|
|
|
63,154.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63,154.5
|
|
Accrued expenses and other current liabilities
|
|
|
20,713.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,713.3
|
|
Bonds payable
|
|
|
40,669.5
|
|
|
|
99,161.5
|
|
|
|
35,340.7
|
|
|
|
22,979.4
|
|
|
|
198,151.1
|
|
Long-term bank loans
|
|
|
10.5
|
|
|
|
20.1
|
|
|
|
2.5
|
|
|
|
|
|
|
|
33.1
|
|
Guarantee deposits (including those classified under accrued expenses and other current
liabilities)
|
|
|
12,000.2
|
|
|
|
13,060.5
|
|
|
|
1,609.9
|
|
|
|
|
|
|
|
26,670.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
221,847.1
|
|
|
|
112,242.1
|
|
|
|
36,953.1
|
|
|
|
22,979.4
|
|
|
|
394,021.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows
|
|
|
40,571.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,571.8
|
|
Inflows
|
|
|
(40,586.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(40,586.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross currency swap contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows
|
|
|
5,478.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,478.0
|
|
Inflows
|
|
|
(5,487.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,487.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
221,823.0
|
|
|
$
|
112,242.1
|
|
|
$
|
36,953.1
|
|
|
$
|
22,979.4
|
|
|
$
|
393,997.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
f.
|
Fair value of financial instruments
|
|
1)
|
Fair value measurements recognized in the consolidated statements of financial position
|
Fair
value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
|
|
|
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
F - 70
|
|
|
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices); and
|
|
|
|
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
|
2)
|
Fair value of financial instruments that are measured at fair value on a recurring basis
|
Fair value hierarchy
The following table presents the Companys financial assets and liabilities measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Financial assets at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
$
|
|
|
|
$
|
6.0
|
|
|
$
|
|
|
|
$
|
6.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
$
|
6,267.8
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
6,267.8
|
|
Asset-backed securities
|
|
|
|
|
|
|
3,154.4
|
|
|
|
|
|
|
|
3,154.4
|
|
Agency bonds/Agency mortgage-backed securities
|
|
|
2,627.3
|
|
|
|
|
|
|
|
|
|
|
|
2,627.3
|
|
Publicly traded stocks
|
|
|
1,371.5
|
|
|
|
|
|
|
|
|
|
|
|
1,371.5
|
|
Government bonds
|
|
|
878.4
|
|
|
|
|
|
|
|
|
|
|
|
878.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11,145.0
|
|
|
$
|
3,154.4
|
|
|
$
|
|
|
|
$
|
14,299.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivative financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate futures contracts
|
|
$
|
1.7
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
$
|
|
|
|
$
|
72.6
|
|
|
$
|
|
|
|
$
|
72.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Financial assets at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
$
|
|
|
|
$
|
142.4
|
|
|
$
|
|
|
|
$
|
142.4
|
|
Cross currency swap contracts
|
|
|
|
|
|
|
11.0
|
|
|
|
|
|
|
|
11.0
|
|
Designated as at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time deposit
|
|
|
|
|
|
|
6,297.7
|
|
|
|
|
|
|
|
6,297.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
6,451.1
|
|
|
$
|
|
|
|
$
|
6,451.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
F - 71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Available-for-sale financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
$
|
29,999.5
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
29,999.5
|
|
Agency bonds/Agency mortgage-backed securities
|
|
|
14,880.5
|
|
|
|
|
|
|
|
|
|
|
|
14,880.5
|
|
Asset-backed securities
|
|
|
|
|
|
|
11,254.7
|
|
|
|
|
|
|
|
11,254.7
|
|
Government bonds
|
|
|
8,457.4
|
|
|
|
|
|
|
|
|
|
|
|
8,457.4
|
|
Publicly traded stocks
|
|
|
3,196.7
|
|
|
|
|
|
|
|
|
|
|
|
3,196.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
56,534.1
|
|
|
$
|
11,254.7
|
|
|
$
|
|
|
|
$
|
67,788.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivative financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate futures contracts
|
|
$
|
5.6
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
$
|
|
|
|
$
|
91.6
|
|
|
$
|
|
|
|
$
|
91.6
|
|
Designated as at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
|
|
|
|
|
99.5
|
|
|
|
|
|
|
|
99.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
191.1
|
|
|
$
|
|
|
|
$
|
191.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
There were no transfers between Level 1 and Level 2 for the years ended December 31, 2015 and 2016, respectively.
There were no purchases and disposals for assets classified as Level 3 for the years ended December 31, 2014, 2015 and 2016,
respectively.
Valuation techniques and assumptions used in fair value measurement
The fair values of financial assets and financial liabilities are determined as follows:
|
|
|
The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices (includes interest rate futures
contracts, publicly traded stocks, money market funds, government bonds, agency bonds/agency mortgage-backed securities and corporate bonds).
|
|
|
|
Forward exchange contracts and cross currency swap contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contracts. For investments in
asset-backed securities and time deposit designated as FVTPL, the fair value are determined by quoted market prices or the present value of future cash flows based on the observable yield curves.
|
|
3)
|
Fair value of financial instruments that are not measured at fair value
|
Except as detailed in
the following table, the Company considers that the carrying amounts of financial instruments that are not measured at fair value recognized in the consolidated financial statements approximate their fair values.
F - 72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
December 31, 2016
|
|
|
|
Carrying
Amount
|
|
|
Fair Value
|
|
|
Carrying
Amount
|
|
|
Fair Value
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds/Bank debentures
|
|
$
|
8,143.1
|
|
|
$
|
8,146.8
|
|
|
$
|
23,849.7
|
|
|
$
|
23,996.4
|
|
Commercial paper
|
|
|
|
|
|
|
|
|
|
|
8,628.2
|
|
|
|
8,630.8
|
|
Negotiable certificate of deposit
|
|
|
4,934.3
|
|
|
|
4,945.9
|
|
|
|
4,829.9
|
|
|
|
4,847.8
|
|
Structured product
|
|
|
3,000.0
|
|
|
|
2,995.7
|
|
|
|
1,609.9
|
|
|
|
1,609.7
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured at amortized cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds payable
|
|
|
215,475.2
|
|
|
|
216,223.7
|
|
|
|
191,193.6
|
|
|
|
192,845.3
|
|
Fair value hierarchy
The table below sets out the balances for the Companys assets and liabilities that are not measured at fair value but for which the fair
value is disclosed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds/Bank debentures
|
|
$
|
8,146.8
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
8,146.8
|
|
Negotiable certificate of deposit
|
|
|
|
|
|
|
4,945.9
|
|
|
|
|
|
|
|
4,945.9
|
|
Structured product
|
|
|
|
|
|
|
2,995.7
|
|
|
|
|
|
|
|
2,995.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,146.8
|
|
|
$
|
7,941.6
|
|
|
$
|
|
|
|
$
|
16,088.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured at amortized cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds payable
|
|
$
|
216,223.7
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
216,223.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds/Bank debentures
|
|
$
|
23,996.4
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
23,996.4
|
|
Commercial paper
|
|
|
|
|
|
|
8,630.8
|
|
|
|
|
|
|
|
8,630.8
|
|
Negotiable certificate of deposit
|
|
|
|
|
|
|
4,847.8
|
|
|
|
|
|
|
|
4,847.8
|
|
Structured product
|
|
|
|
|
|
|
1,609.7
|
|
|
|
|
|
|
|
1,609.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
23,996.4
|
|
|
$
|
15,088.3
|
|
|
$
|
|
|
|
$
|
39,084.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured at amortized cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds payable
|
|
$
|
192,845.3
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
192,845.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 73
Fair value measurement
For investments in bonds, the fair value is determined using active market prices.
For investments in commercial paper, negotiable certificate of deposit and structured product, the fair value is determined using the present
value of future cash flows based on the observable yield curves.
The fair value of the Companys bonds payable is determined using
active market prices.
37.
|
RELATED PARTY TRANSACTIONS
|
Intercompany balances and transactions between TSMC and its
subsidiaries, which are related parties of TSMC, have been eliminated upon consolidation; therefore those items are not disclosed in this note. The following is a summary of significant transactions between the Company and other related parties:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Item
|
|
Related Party Categories
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue from sale of goods
|
|
Associates
|
|
$
|
4,009.3
|
|
|
$
|
4,254.0
|
|
|
$
|
5,929.1
|
|
|
|
Joint venture
|
|
|
1.3
|
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,010.6
|
|
|
$
|
4,255.2
|
|
|
$
|
5,929.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue from royalties
|
|
Associates
|
|
$
|
522.0
|
|
|
$
|
489.4
|
|
|
$
|
516.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Related Party Categories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associates
|
|
|
|
$
|
11,644.2
|
|
|
$
|
11,126.4
|
|
|
$
|
10,108.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 74
|
c.
|
Receivables from related parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Item
|
|
Related Party Categories
|
|
|
|
|
|
|
|
|
Receivables from related parties
|
|
Associates
|
|
$
|
505.7
|
|
|
$
|
969.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Other receivables from related parties
|
|
Associates
|
|
$
|
125.0
|
|
|
$
|
146.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d.
|
Payables to related parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Item
|
|
Related Party Categories
|
|
|
|
|
|
|
|
|
Payables to related parties
|
|
Associates
|
|
$
|
1,150.0
|
|
|
$
|
1,262.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
e.
|
Acquisition of property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition Price
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Related Party Categories
|
|
|
|
|
|
|
|
|
|
|
|
|
Associates
|
|
$
|
|
|
|
$
|
26.2
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
f.
|
Disposal of property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Related Party Categories
|
|
|
|
|
|
|
|
|
|
|
|
|
Associates
|
|
$
|
23.4
|
|
|
$
|
|
|
|
$
|
|
|
Joint venture
|
|
|
|
|
18.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
41.4
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Related Party Categories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associates
|
|
|
|
$
|
20.0
|
|
|
$
|
|
|
|
$
|
|
|
Joint venture
|
|
|
|
|
17.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
37.5
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Item
|
|
Related Party Categories
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing expenses
|
|
Associates
|
|
$
|
2,437.4
|
|
|
$
|
2,321.9
|
|
|
$
|
1,389.2
|
|
|
|
Joint venture
|
|
|
7.9
|
|
|
|
12.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,445.3
|
|
|
$
|
2,334.7
|
|
|
$
|
1,389.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
Associates
|
|
$
|
87.9
|
|
|
$
|
142.8
|
|
|
$
|
161.7
|
|
|
|
Joint venture
|
|
|
1.1
|
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
89.0
|
|
|
$
|
144.2
|
|
|
$
|
161.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The sales prices and payment terms to related parties were not significantly different from those of
sales to third parties. For other related party transactions, price and terms were determined in accordance with mutual agreements.
The
Company leased machinery and equipment, factory and office from Xintec and VIS. The lease terms and prices were both determined in accordance with mutual agreements. The rental expenses were paid to Xintec and VIS quarterly or monthly; the related
expenses were both classified under manufacturing expenses.
The Company deferred the disposal gain/loss derived from sales of property,
plant and equipment to related parties (transactions with associates and joint venture), and then recognized such gain/loss over the depreciable lives of the disposed assets.
F - 76
|
h.
|
Compensation of key management personnel
|
The compensation to directors and other key
management personnel for the years ended December 31, 2014, 2015 and 2016 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Short-term employee benefits
|
|
|
|
$
|
1,787.8
|
|
|
$
|
1,883.0
|
|
|
$
|
2,024.0
|
|
Post-employment benefits
|
|
|
|
|
46.8
|
|
|
|
10.9
|
|
|
|
4.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,834.6
|
|
|
$
|
1,893.9
|
|
|
$
|
2,028.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The compensation to directors and other key management personnel were determined by the Compensation
Committee of TSMC in accordance with the individual performance and the market trends.
The Company provided certificate of deposits recorded in other financial
assets as collateral mainly for building lease agreements. As of December 31, 2015 and 2016, the aforementioned other financial assets amounted to NT$177.2 million and NT$185.7 million, respectively.
39.
|
SIGNIFICANT OPERATING LEASE ARRANGEMENTS
|
The Company leases several parcels of land,
office premises and certain office equipment. These operating leases expire between January 2017 and June 2066 and can be renewed upon expiration.
The Company expensed the lease payments as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Minimum lease payments
|
|
|
|
$
|
901.2
|
|
|
$
|
996.0
|
|
|
$
|
1,135.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future minimum lease payments under the above non-cancellable operating leases are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
December 31,
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Not later than 1 year
|
|
$
|
1,099.0
|
|
|
$
|
1,321.5
|
|
Later than 1 year and not later than 5 years
|
|
|
3,635.2
|
|
|
|
3,677.4
|
|
Later than 5 years
|
|
|
6,921.9
|
|
|
|
6,624.0
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11,656.1
|
|
|
$
|
11,622.9
|
|
|
|
|
|
|
|
|
|
|
F - 77
40.
|
SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS
|
Significant contingent
liabilities and unrecognized commitments of the Company as of the end of the reporting period, excluding those disclosed in other notes, were as follows:
|
a.
|
Under a technical cooperation agreement with Industrial Technology Research Institute, the R.O.C. Government or its designee approved by TSMC can use up to 35% of TSMCs capacity provided TSMCs outstanding
commitments to its customers are not prejudiced. The term of this agreement is for five years beginning from January 1, 1987 and is automatically renewed for successive periods of five years unless otherwise terminated by either party with one
year prior notice. As of December 31, 2016, the R.O.C. Government did not invoke such right.
|
|
b.
|
Under a Shareholders Agreement entered into with Philips and EDB Investments Pte Ltd. on March 30, 1999, the parties formed a joint venture company, SSMC, which is an integrated circuit foundry in Singapore.
TSMCs equity interest in SSMC was 32%. Nevertheless, in September 2006, Philips spun-off its semiconductor subsidiary which was renamed as NXP B.V. Further, TSMC and NXP B.V. purchased all the SSMC shares owned by EDB Investments Pte Ltd. pro
rata according to the Shareholders Agreement on November 15, 2006. After the purchase, TSMC and NXP B.V. currently own approximately 39% and 61% of the SSMC shares, respectively. TSMC and NXP B.V. are required, in the aggregate, to purchase at
least 70% of SSMCs capacity, but TSMC alone is not required to purchase more than 28% of the capacity. If any party defaults on the commitment and the capacity utilization of SSMC falls below a specific percentage of its capacity, the
defaulting party is required to compensate SSMC for all related unavoidable costs. There was no default from the aforementioned commitment as of December 31, 2016.
|
|
c.
|
In June 2010, Keranos, LLC. filed a complaint in the U.S. District Court for the Eastern District of Texas alleging that TSMC, TSMC North America, and several other leading technology companies infringe three expired
U.S. patents. In response, TSMC, TSMC North America, and several co-defendants in the Texas case filed a lawsuit against Keranos in the U.S. District Court for the Northern District of California in November 2010, seeking a judgment declaring that
they did not infringe the asserted patents, and that those patents were invalid. These two litigations have been consolidated into a single lawsuit in the U.S. District Court for the Eastern District of Texas. In February 2014, the Court entered a
final judgment in favor of TSMC and TSMC North America, dismissing all of Keranoss claims against TSMC and TSMC North America with prejudice. Keranos appealed the final judgment to the U.S. Court of Appeals for the Federal Circuit, and in
August 2015, the Federal Circuit remanded the case back to the Texas court for further proceedings. In January 2017, the Texas court dismissed all of Keranoss claims against TSMC and TSMC North America with prejudice, and dismissed TSMCs
and TSMC North Americas counterclaims without prejudice. The case is over as to TSMC and TSMC North America.
|
|
d.
|
In December 2010, Ziptronix, Inc. filed a complaint in the U.S. District Court for the Northern District of California accusing TSMC, TSMC North America and one other company of infringing several U.S. patents. In
September 2014, the Court granted summary judgment of noninfringement in favor of TSMC and TSMC North America. Ziptronix, Inc. can appeal the Courts order. In August 2015, Tessera Technologies, Inc. announced it had acquired Ziptronix. In
February 2017, the Court dismissed all of Ziptronixs claims against TSMC and TSMC North America with prejudice.
|
|
e.
|
TSMC joined the Customer Co-Investment Program of ASML and entered into the investment agreement in August 2012. The agreement includes an investment of EUR837.8 million by TSMC Global to acquire 5% of ASMLs
equity with a lock-up period of 2.5 years. TSMC Global has acquired the aforementioned equity on October 31, 2012. The lock-up period expired on May 1, 2015 and as of October 8, 2015, all ASML shares had been disposed.
|
Both parties also signed the research and development funding agreement whereby TSMC shall provide EUR276.0 million to
ASMLs research and development programs from 2013 to 2017. As of December 31, 2016, TSMC has paid EUR228.6 million to ASML under the research and development funding agreement.
F - 78
|
f.
|
In March 2014, DSS Technology Management, Inc. (DSS) filed a complaint in the U.S. District Court for the Eastern District of Texas alleging that TSMC, TSMC North America, TSMC Development and several other companies
infringe one U.S. patent. TSMC Development has subsequently been dismissed. In May 2015, the Court entered a final judgment of noninfringement in favor of TSMC and TSMC North America. DSS appealed the final judgment to the U.S. Court of Appeals for
the Federal Circuit (Federal Circuit). In November 2015, the Patent Trial and Appeal Board (PTAB) determined after concluding an Inter Partes Review (IPR) that the patent claims asserted by DSS in the District Court litigation are unpatentable. DSS
appealed the PTABs decision to the Federal Circuit in January 2016. In March 2016, the District Courts judgment of noninfringement was affirmed by the Federal Circuit. In April 2016, the District Court litigation between the parties and
the related Federal Circuit appeal were dismissed, and the appeal proceeding of the PTABs decision is also over as to TSMC.
|
|
g.
|
Amounts available under unused letters of credit as of December 31, 2015 and 2016 were NT$144.7 million and NT$122.4 million, respectively.
|
41.
|
SIGNIFICANT LOSS FROM DISASTER
|
On February 6, 2016, an earthquake struck Taiwan. The
resulting damage was mostly to inventories and equipment. The Company recognized earthquake losses of NT$2,492.1 million, net of insurance claim, for the year ended December 31, 2016. Such losses were primarily included in cost of revenue. The
related insurance claim was finalized in the first quarter of 2017, and the accumulated earthquake losses were NT$2,386.8 million, net of insurance claim. The Company recognized a reduction of such losses of NT$105.3 million for the three months
ended March 31, 2017.
42.
|
OPERATING SEGMENTS INFORMATION
|
The Companys only reportable segment is the foundry segment. The
foundry segment engages mainly in the manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing of masks. The Company also had other operating segments that did
not exceed the quantitative threshold for separate reporting. These segments mainly engaged in the researching, developing, designing, manufacturing and selling of solid state lighting devices, renewable energy and efficiency related technologies
and products.
From 2016, the Company has only one single operating segment, the segment revenue and operating results were the same as
those stated in the consolidated statements of profit or loss and other comprehensive income for the year ended December 31, 2016.
The Company uses the income from operations as the measurement for segment profit and the basis of performance assessment. There was no
material differences between the accounting policies of the operating segment and the accounting policies described in Note 5.
F - 79
|
b.
|
Segment revenue and operating results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foundry
|
|
|
Others
|
|
|
Elimination
|
|
|
Total
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Year ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue from external customers
|
|
$
|
762,120.8
|
|
|
$
|
685.7
|
|
|
$
|
|
|
|
$
|
762,806.5
|
|
Net revenue from sales among intersegments
|
|
|
|
|
|
|
38.1
|
|
|
|
(38.1
|
)
|
|
|
|
|
Income (loss) from operations
|
|
|
298,633.6
|
|
|
|
(2,763.3
|
)
|
|
|
|
|
|
|
295,870.3
|
|
Share of profits (loss) of associates and joint venture
|
|
|
4,376.0
|
|
|
|
(456.2
|
)
|
|
|
|
|
|
|
3,919.8
|
|
Income tax expense
|
|
|
47,889.9
|
|
|
|
|
|
|
|
|
|
|
|
47,889.9
|
|
Year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue from external customers
|
|
$
|
842,690.2
|
|
|
$
|
807.2
|
|
|
$
|
|
|
|
$
|
843,497.4
|
|
Income (loss) from operations
|
|
|
320,833.2
|
|
|
|
(785.4
|
)
|
|
|
|
|
|
|
320,047.8
|
|
Share of profits (loss) of associates and joint venture
|
|
|
4,582.0
|
|
|
|
(385.6
|
)
|
|
|
|
|
|
|
4,196.4
|
|
Income tax expense (benefit)
|
|
|
47,646.5
|
|
|
|
(1.8
|
)
|
|
|
|
|
|
|
47,644.7
|
|
|
c.
|
Geographic information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue from External Customers
|
|
|
Non-current Assets
|
|
|
|
Years Ended December 31
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Taiwan
|
|
$
|
88,856.6
|
|
|
$
|
90,169.5
|
|
|
$
|
127,063.0
|
|
|
$
|
844,173.8
|
|
|
$
|
991,567.9
|
|
United States
|
|
|
524,984.1
|
|
|
|
566,600.2
|
|
|
|
610,371.1
|
|
|
|
8,892.8
|
|
|
|
8,245.0
|
|
Asia
|
|
|
99,916.6
|
|
|
|
123,705.9
|
|
|
|
146,907.4
|
|
|
|
15,890.0
|
|
|
|
14,071.3
|
|
Europe, the Middle East and Africa
|
|
|
46,776.6
|
|
|
|
57,065.0
|
|
|
|
58,042.3
|
|
|
|
8.2
|
|
|
|
8.7
|
|
Others
|
|
|
2,272.6
|
|
|
|
5,956.8
|
|
|
|
5,554.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
762,806.5
|
|
|
$
|
843,497.4
|
|
|
$
|
947,938.3
|
|
|
$
|
868,964.8
|
|
|
$
|
1,013,892.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company categorized the net revenue mainly based on the country in which the customer is
headquartered. Non-current assets include property, plant and equipment, intangible assets and other noncurrent assets.
|
d.
|
Production information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
Production
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
NT$
|
|
|
NT$
|
|
|
NT$
|
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
|
(In Millions)
|
|
Wafer
|
|
$
|
723,747.6
|
|
|
$
|
802,938.0
|
|
|
$
|
909,179.1
|
|
Others
|
|
|
39,058.9
|
|
|
|
40,559.4
|
|
|
|
38,759.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
762,806.5
|
|
|
$
|
843,497.4
|
|
|
$
|
947,938.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 80
|
e.
|
Major customers representing at least 10% of net revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
Amount
|
|
|
%
|
|
|
Amount
|
|
|
%
|
|
|
Amount
|
|
|
%
|
|
|
|
NT$
|
|
|
|
|
|
NT$
|
|
|
|
|
|
NT$
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
Customer A
|
|
$
|
71,184.6
|
|
|
|
9
|
|
|
$
|
134,117.2
|
|
|
|
16
|
|
|
$
|
157,185.4
|
|
|
|
17
|
|
Customer B
|
|
|
157,631.4
|
|
|
|
21
|
|
|
|
134,158.4
|
|
|
|
16
|
|
|
|
107,463.2
|
|
|
|
11
|
|
F - 81