-1-
2007 | 2006 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
ASSETS |
||||||||||||||||
CURRENT ASSETS |
||||||||||||||||
Cash and cash equivalents (Notes 2 and 4) |
$ | 76,504,025 | 13 | $ | 77,785,750 | 14 | ||||||||||
Financial assets at fair value through profit or loss (Notes 2, 3 and 6) |
366,445 | | 45,295 | | ||||||||||||
Available-for-sale financial assets (Notes 2, 3 and 7) |
19,945,922 | 4 | 35,749,909 | 7 | ||||||||||||
Held-to-maturity financial assets (Notes 2 and 8) |
12,168,201 | 2 | 6,220,737 | 1 | ||||||||||||
Receivables from related parties (Note 24) |
23,833,351 | 4 | 22,030,420 | 4 | ||||||||||||
Notes and accounts receivable |
20,622,354 | 4 | 19,339,939 | 4 | ||||||||||||
Allowance for doubtful receivables (Notes 2 and 5) |
(688,972 | ) | | (975,705 | ) | | ||||||||||
Allowance for sales returns and others (Notes 2 and 5) |
(3,739,026 | ) | (1 | ) | (5,012,934 | ) | (1 | ) | ||||||||
Other receivables from related parties (Note 24) |
505,914 | | 1,042,223 | | ||||||||||||
Other financial assets |
476,026 | | 747,755 | | ||||||||||||
Inventories, net (Notes 2 and 9) |
22,013,215 | 4 | 18,369,130 | 3 | ||||||||||||
Deferred income tax assets (Notes 2 and 17) |
3,068,708 | 1 | 2,683,412 | 1 | ||||||||||||
Prepaid expenses and other current assets |
967,180 | | 704,492 | | ||||||||||||
Total current assets |
176,043,343 | 31 | 178,730,423 | 33 | ||||||||||||
LONG-TERM INVESTMENTS (Notes 2, 7, 8, 10 and 11) |
||||||||||||||||
Investments accounted for using equity method |
111,895,495 | 20 | 84,640,267 | 15 | ||||||||||||
Available-for-sale financial assets |
4,134,882 | 1 | 4,893,355 | 1 | ||||||||||||
Held-to-maturity financial assets |
16,167,443 | 3 | 30,747,122 | 6 | ||||||||||||
Financial assets carried at cost |
747,206 | | 769,411 | | ||||||||||||
Total long-term investments |
132,945,026 | 24 | 121,050,155 | 22 | ||||||||||||
PROPERTY, PLANT AND EQUIPMENT (Notes 2, 12 and 24) |
||||||||||||||||
Cost |
||||||||||||||||
Buildings |
100,832,628 | 18 | 95,576,337 | 17 | ||||||||||||
Machinery and equipment |
578,009,705 | 102 | 508,975,810 | 92 | ||||||||||||
Office equipment |
9,095,417 | 1 | 8,443,812 | 2 | ||||||||||||
687,937,750 | 121 | 612,995,959 | 111 | |||||||||||||
Accumulated depreciation |
(469,874,398 | ) | (83 | ) | (401,098,736 | ) | (73 | ) | ||||||||
Advance payments and construction in progress |
20,940,284 | 4 | 21,069,769 | 4 | ||||||||||||
Net property, plant and equipment |
239,003,636 | 42 | 232,966,992 | 42 | ||||||||||||
INTANGIBLE ASSETS |
||||||||||||||||
Goodwill (Note 2) |
1,567,756 | | 1,567,756 | | ||||||||||||
Deferred charges, net (Notes 2 and 13) |
5,166,482 | 1 | 5,639,776 | 1 | ||||||||||||
Total intangible assets |
6,734,238 | 1 | 7,207,532 | 1 | ||||||||||||
OTHER ASSETS |
||||||||||||||||
Deferred income tax assets (Notes 2 and 17) |
10,436,868 | 2 | 10,989,791 | 2 | ||||||||||||
Refundable deposits |
2,688,320 | | 83,738 | | ||||||||||||
Assets leased to others, net (Note 2) |
62,845 | | 68,579 | | ||||||||||||
Others |
| | 6,789 | | ||||||||||||
Total other assets |
13,188,033 | 2 | 11,148,897 | 2 | ||||||||||||
TOTAL |
$ | 567,914,276 | 100 | $ | 551,103,999 | 100 | ||||||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||
CURRENT LIABILITIES |
||||||||||||||||
Financial liabilities at fair value through profit or loss (Notes 2, 3
and 6) |
$ | 130,828 | | $ | 458,808 | | ||||||||||
Accounts payable |
8,722,415 | 1 | 6,641,641 | 1 | ||||||||||||
Payables to related parties (Note 24) |
3,308,642 | 1 | 3,894,488 | 1 | ||||||||||||
Income tax payable (Notes 2 and 17) |
7,395,744 | 1 | 6,535,446 | 1 | ||||||||||||
Accrued expenses and other current liabilities (Notes 15 and 26) |
11,163,015 | 2 | 7,477,769 | 2 | ||||||||||||
Payables to contractors and equipment suppliers |
10,711,333 | 2 | 15,299,614 | 3 | ||||||||||||
Current portion of bonds payable (Note 14) |
4,500,000 | 1 | 2,500,000 | | ||||||||||||
Total current liabilities |
45,931,977 | 8 | 42,807,766 | 8 | ||||||||||||
LONG-TERM LIABILITIES |
||||||||||||||||
Bonds payable (Note 14) |
12,500,000 | 2 | 17,000,000 | 3 | ||||||||||||
Other long-term payables (Note 15) |
1,021,824 | | 1,291,484 | | ||||||||||||
Other payables to related parties (Notes 24 and 26) |
| | 409,588 | | ||||||||||||
Total long-term liabilities |
13,521,824 | 2 | 18,701,072 | 3 | ||||||||||||
OTHER LIABILITIES |
||||||||||||||||
Accrued pension cost (Notes 2 and 16) |
3,621,795 | 1 | 3,502,475 | 1 | ||||||||||||
Guarantee deposits (Note 26) |
2,560,554 | 1 | 3,680,687 | 1 | ||||||||||||
Deferred credits (Notes 2 and 24) |
1,003,256 | | 1,275,872 | | ||||||||||||
Total other liabilities |
7,185,605 | 2 | 8,459,034 | 2 | ||||||||||||
Total liabilities |
66,639,406 | 12 | 69,967,872 | 13 | ||||||||||||
CAPITAL STOCK NT$10 PAR VALUE |
||||||||||||||||
Authorized: 28,050,000 thousand shares in 2007 |
||||||||||||||||
27,050,000 thousand shares in 2006 |
||||||||||||||||
Issued: 26,426,202 thousand shares in 2007 |
264,262,018 | 47 | 258,258,398 | 47 | ||||||||||||
25,825,840 thousand shares in 2006 |
||||||||||||||||
CAPITAL SURPLUS (Notes 2 and 19) |
53,713,165 | 9 | 53,857,667 | 10 | ||||||||||||
RETAINED EARNINGS (Note 19) |
||||||||||||||||
Appropriated as legal capital reserve |
56,406,684 | 10 | 43,705,711 | 8 | ||||||||||||
Appropriated as special capital reserve |
629,550 | | 640,742 | | ||||||||||||
Unappropriated earnings |
127,343,560 | 22 | 124,866,387 | 22 | ||||||||||||
184,379,794 | 32 | 169,212,840 | 30 | |||||||||||||
OTHERS (Notes 2, 3, 21 and 23) |
||||||||||||||||
Cumulative translation adjustments |
(690,056 | ) | | 223,105 | | |||||||||||
Unrealized gain on financial instruments |
528,024 | | 502,192 | | ||||||||||||
Treasury stock: 34,096 thousand shares in 2007 |
||||||||||||||||
33,926 thousand shares in 2006 |
(918,075 | ) | | (918,075 | ) | | ||||||||||
(1,080,107 | ) | | (192,778 | ) | | |||||||||||
Total shareholders equity |
501,274,870 | 88 | 481,136,127 | 87 | ||||||||||||
TOTAL |
$ | 567,914,276 | 100 | $ | 551,103,999 | 100 | ||||||||||
-2-
2007 | 2006 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
GROSS SALES (Notes 2 and 24) |
$ | 226,395,474 | $ | 245,148,192 | ||||||||||||
SALES RETURNS AND ALLOWANCES (Note 2) |
3,736,354 | 5,202,252 | ||||||||||||||
NET SALES |
222,659,120 | 100 | 239,945,940 | 100 | ||||||||||||
COST OF SALES (Notes 18 and 24) |
128,356,018 | 58 | 123,155,982 | 51 | ||||||||||||
GROSS PROFIT |
94,303,102 | 42 | 116,789,958 | 49 | ||||||||||||
UNREALIZED
GROSS PROFIT FROM AFFILIATES (Note 2) |
285,784 | | | | ||||||||||||
REALIZED GROSS PROFIT |
94,017,318 | 42 | 116,789,958 | 49 | ||||||||||||
OPERATING EXPENSES (Notes 18 and 24) |
||||||||||||||||
Research and development |
11,476,303 | 5 | 11,206,265 | 5 | ||||||||||||
General and administrative |
5,929,869 | 3 | 5,348,876 | 2 | ||||||||||||
Marketing |
911,225 | | 1,360,794 | 1 | ||||||||||||
Total operating expenses |
18,317,397 | 8 | 17,915,935 | 8 | ||||||||||||
INCOME FROM OPERATIONS |
75,699,921 | 34 | 98,874,023 | 41 | ||||||||||||
NON-OPERATING INCOME AND GAINS |
||||||||||||||||
Equity in earnings of equity method investees, net
(Notes 2 and 10) |
3,931,127 | 2 | 4,696,522 | 2 | ||||||||||||
Interest income (Note 2) |
1,989,402 | 1 | 2,734,401 | 1 | ||||||||||||
Technical service income (Notes 24 and 26) |
527,868 | | 514,995 | 1 | ||||||||||||
Settlement income (Note 26) |
491,385 | | 483,734 | | ||||||||||||
Rental income (Note 24) |
290,660 | | 153,059 | | ||||||||||||
Foreign exchange gain, net (Note 2) |
231,584 | | 28,165 | | ||||||||||||
Gain on disposal of property, plant and equipment
and
other assets (Notes 2 and 24) |
214,918 | | 480,944 | | ||||||||||||
Valuation gain on financial instruments, net
(Notes 2, 6
and 23) |
201,767 | | | | ||||||||||||
Others (Note 24) |
335,694 | | 189,175 | | ||||||||||||
Total non-operating income and gains |
8,214,405 | 3 | 9,280,995 | 4 | ||||||||||||
-3-
2007 | 2006 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
NON-OPERATING EXPENSES AND LOSSES |
||||||||||||||||
Provision for litigation loss (Note 26j) |
$ | 1,008,635 | | $ | | | ||||||||||
Loss on settlement and disposal of financial instruments,
net (Notes 2, 6 and 23) |
717,329 | | 1,395,264 | 1 | ||||||||||||
Interest expense |
450,023 | | 495,900 | | ||||||||||||
Valuation loss on financial instruments, net (Notes 2, 6
and 23) |
| | 413,514 | | ||||||||||||
Loss on disposal of property, plant and equipment
(Note 2) |
4,778 | | 225,781 | | ||||||||||||
Others (Note 2) |
45,175 | | 129,031 | | ||||||||||||
Total non-operating expenses and losses |
2,225,940 | | 2,659,490 | 1 | ||||||||||||
INCOME BEFORE INCOME TAX |
81,688,386 | 37 | 105,495,528 | 44 | ||||||||||||
INCOME TAX EXPENSE (Notes 2 and 17) |
6,996,070 | 3 | 6,151,303 | 3 | ||||||||||||
NET INCOME BEFORE CUMULATIVE EFFECT OF
CHANGES IN ACCOUNTING PRINCIPLES |
74,692,316 | 34 | 99,344,225 | 41 | ||||||||||||
CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES, NET OF TAX
BENEFIT OF $82,062 THOUSAND (Note 3) |
| | (246,186 | ) | | |||||||||||
NET INCOME |
$ | 74,692,316 | 34 | $ | 99,098,039 | 41 | ||||||||||
2007 | 2006 | |||||||||||||||
Before | After | Before | After | |||||||||||||
Income | Income | Income | Income | |||||||||||||
Tax | Tax | Tax | Tax | |||||||||||||
EARNINGS PER SHARE (NT$,
Note 22) |
||||||||||||||||
Basic earnings per share |
$ | 3.10 | $ | 2.83 | $ | 3.99 | $ | 3.76 | ||||||||
Diluted earnings per share |
$ | 3.09 | $ | 2.83 | $ | 3.98 | $ | 3.75 | ||||||||
-4-
2007 | 2006 | |||||||
NET INCOME BEFORE CUMULATIVE
EFFECT OF
CHANGES IN ACCOUNTING PRINCIPLES |
$ | 74,794,078 | $ | 99,426,545 | ||||
NET INCOME |
$ | 74,794,078 | $ | 99,180,359 | ||||
EARNINGS PER SHARE (NT$) |
||||||||
Basic earnings per share |
$ | 2.83 | $ | 3.76 | ||||
Diluted earnings per share |
$ | 2.83 | $ | 3.75 | ||||
The accompanying notes are an integral part of the financial statements. | (Concluded) |
-5-
2007 | 2006 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net income |
$ | 74,692,316 | $ | 99,098,039 | ||||
Adjustments to reconcile net income to net cash provided by operating
activities: |
||||||||
Depreciation and amortization |
54,359,150 | 48,809,141 | ||||||
Unrealized gross profit from affiliates |
285,784 | | ||||||
Amortization of premium/discount of financial assets |
(90,347 | ) | 16,004 | |||||
Loss (gain) on disposal of available-for-sale financial assets, net |
(260,367 | ) | 11,258 | |||||
Equity in earnings of equity method investees, net |
(3,931,127 | ) | (4,696,522 | ) | ||||
Dividends received from equity method investees |
677,147 | 626,367 | ||||||
Gain on disposal of property, plant and equipment and other assets,
net |
(210,140 | ) | (255,163 | ) | ||||
Deferred income tax |
87,551 | 99,752 | ||||||
Loss on idle assets |
| 37,283 | ||||||
Changes in operating assets and liabilities: |
||||||||
Decrease (increase) in: |
||||||||
Financial assets and liabilities at fair value through
profit or loss |
(201,767 | ) | 1,560,139 | |||||
Receivables from related parties |
(6,963,842 | ) | (979,816 | ) | ||||
Notes and accounts receivable |
(4,344,190 | ) | 1,251,879 | |||||
Allowance for doubtful receivables |
(1,959 | ) | (639 | ) | ||||
Allowance for sales returns and others |
987,961 | 742,965 | ||||||
Other receivables from related parties |
(56,648 | ) | 688,353 | |||||
Other financial assets |
177,286 | 105,781 | ||||||
Inventories |
(2,861,001 | ) | (2,111,175 | ) | ||||
Prepaid expenses and other current assets |
254,019 | 467,281 | ||||||
Increase (decrease) in: |
||||||||
Accounts payable |
2,578,736 | (1,410,465 | ) | |||||
Payables to related parties |
(18,274 | ) | (38,596 | ) | ||||
Income tax payable |
(454,674 | ) | 2,719,558 | |||||
Accrued expenses and other current liabilities |
2,319,917 | (513,289 | ) | |||||
Accrued pension cost |
91,679 | 41,083 | ||||||
Deferred credits |
26,592 | (71,808 | ) | |||||
Net cash provided by operating activities |
117,143,802 | 146,197,410 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Acquisitions of: |
||||||||
Available-for-sale financial assets |
(9,547,253 | ) | (78,666,694 | ) | ||||
Held-to-maturity financial assets |
| (16,141,019 | ) | |||||
Investments accounted for using equity method |
(7,220,679 | ) | (1,495,552 | ) | ||||
Financial assets carried at cost |
(35,379 | ) | (11,921 | ) | ||||
Property, plant and equipment |
(62,643,771 | ) | (59,945,807 | ) |
-6-
2007 | 2006 | |||||||
Proceeds from disposal or redemption of: |
||||||||
Available-for-sale financial assets |
$ | 18,344,519 | $ | 57,874,205 | ||||
Held-to-maturity financial assets |
9,200,400 | 8,512,000 | ||||||
Financial assets carried at cost |
| 50,000 | ||||||
Property, plant and equipment and others |
21,080 | 927,200 | ||||||
Proceeds from return of capital by investees |
207,172 | 162,354 | ||||||
Increase in deferred charges |
(2,028,206 | ) | (755,982 | ) | ||||
Increase in refundable deposits |
(1,382,086 | ) | (96 | ) | ||||
Net cash used in investing activities |
(55,084,203 | ) | (89,491,312 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Repayment of bonds payable |
(2,500,000 | ) | | |||||
Increase (decrease) in guarantee deposits |
(1,249,407 | ) | 787,742 | |||||
Cash dividends |
(77,489,064 | ) | (61,825,061 | ) | ||||
Cash bonus paid to employees |
(4,572,798 | ) | (3,432,129 | ) | ||||
Bonus to directors and supervisors |
(285,800 | ) | (257,410 | ) | ||||
Proceeds from exercise of employee stock options |
401,786 | 422,927 | ||||||
Net cash used in financing activities |
(85,695,283 | ) | (64,303,931 | ) | ||||
NET DECREASE IN CASH AND CASH EQUIVALENTS |
(23,635,684 | ) | (7,597,833 | ) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
100,139,709 | 85,383,583 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | 76,504,025 | $ | 77,785,750 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
||||||||
Interest paid |
$ | 420,000 | $ | 420,000 | ||||
Income tax paid |
$ | 7,285,717 | $ | 3,146,676 | ||||
INVESTING ACTIVITIES AFFECTING BOTH CASH AND NON-CASH
ITEMS |
||||||||
Acquisition of property, plant, and equipment |
$ | 62,685,581 | $ | 66,386,191 | ||||
Increase in payables to contractors and equipment suppliers |
(41,810 | ) | (6,440,384 | ) | ||||
Cash paid |
$ | 62,643,771 | $ | 59,945,807 | ||||
NON-CASH INVESTING AND FINANCING ACTIVITIES |
||||||||
Current portion of bonds payable |
$ | 4,500,000 | $ | 2,500,000 | ||||
Current portion of other payables to related parties (under payables to
related parties) |
$ | | $ | 699,195 | ||||
Current portion of other long-term payables (under accrued expenses and
other current liabilities) |
$ | 1,488,860 | $ | 971,596 | ||||
Transfer of available-for-sale financial assets and other net assets
to investments accounted for using equity method (Note 7) |
$ | | $ | 26,821,648 | ||||
The accompanying notes are an integral part of the financial statements. | (Concluded) |
-7-
1. | GENERAL | |
Taiwan Semiconductor Manufacturing Company Limited (the Company or TSMC), a Republic of China (R.O.C.) corporation, was incorporated as a venture among the Government of the R.O.C., acting through the Development Fund of the Executive Yuan; Philips Electronics N.V. and certain of its affiliates (Philips); and certain other private investors. On September 5, 1994, its shares were listed on the Taiwan Stock Exchange (TSE). 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 Company is engaged mainly in the manufacturing, selling, packaging, testing and computer-aided designing of integrated circuits and other semiconductor devices and the manufacturing of masks. | ||
As of September 30, 2007 and 2006, the Company had 20,523 and 20,266 employees, respectively. | ||
2. | SIGNIFICANT ACCOUNTING POLICIES | |
The financial statements are presented in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, Business Accounting Law, Guidelines Governing Business Accounting, and accounting principles generally accepted in the R.O.C. | ||
For the convenience of readers, the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the R.O.C. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language financial statements shall prevail. | ||
Significant accounting policies are summarized as follows: | ||
Use of Estimates | ||
The preparation of financial statements in conformity with the aforementioned guidelines, law and principles requires management to make reasonable assumptions and estimates of matters that are inherently uncertain. The actual results may differ from managements estimates. | ||
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 balance sheet date. Current liabilities are obligations incurred for trading purposes and obligations expected to be settled within one year from the balance sheet date. Assets and liabilities that are not classified as current are noncurrent assets and liabilities, respectively. | ||
Cash Equivalents | ||
Repurchase agreements collateralized by government bonds, asset-backed commercial papers and corporate notes acquired with maturities of less than three months from the date of purchase are classified as cash equivalents. The carrying amount approximates fair value. |
-8-
Financial Assets/Liabilities at Fair Value Through Profit or Loss | ||
Derivatives that do not meet the criteria for hedge accounting are initially recognized at fair value, with transaction costs expensed as incurred. The derivatives are remeasured at fair value subsequently with changes in fair value recognized in earnings. A regular way purchase or sale of financial assets is accounted for using settlement date accounting. | ||
Fair value is estimated using valuation techniques incorporating estimates and assumptions that are consistent with prevailing market conditions. When the fair value is positive, the derivative is recognized as a financial asset; when the fair value is negative, the derivative is recognized as a financial liability. | ||
Available-for-Sale Financial Assets | ||
Investments designated as available-for-sale financial assets include debt securities and equity securities. Available-for-sale financial assets are initially recognized at fair value plus transaction costs that are directly attributable to the acquisition. Changes in fair value from subsequent remeasurement are reported as a separate component of shareholders equity. The corresponding accumulated gains or losses are recognized in earnings when the financial asset is derecognized from the balance sheet. A regular way purchase or sale of financial assets is accounted for using settlement date accounting. | ||
Except structured time deposits whose fair value is estimated using valuation techniques, fair values of open-end mutual funds and publicly traded stocks are determined using the net assets value and the closing-price at the end of the period, respectively. For debt securities, fair value is determined using the average of bid and asked prices at the end of the period. | ||
Cash dividends are recognized as investment income upon resolution of shareholders of an investee but are accounted for as a reduction to the original cost of investment if such dividends are declared on the earnings of the investee attributable to the period prior to the purchase of the investment. Stock dividends are recorded as an increase in the number of shares held and do not affect investment income. The cost per share is recalculated based on the new total number of shares. Any difference between the initial carrying amount of a debt security and the amount due at maturity is amortized using the effective interest method, with the amortization recognized in earnings. | ||
If there is objective evidence which indicates that a financial asset is impaired, a loss is recognized. If, in a subsequent period, the amount of the impairment loss decreases, for equity securities, the previously recognized impairment loss is reversed to the extent of the decrease and recorded as an adjustment to shareholders equity; for debt securities, the amount of the decrease is recognized in earnings, provided that the decrease is clearly attributable to an event which occurred after the impairment loss was recognized. | ||
Held-to-Maturity Financial Assets | ||
Debt securities for which the Company has a positive intention and ability to hold to maturity are categorized as held-to-maturity financial assets and are carried at amortized cost under the effective interest method except for structured time deposits which are carried at acquisition cost. Those financial assets are initially recognized at fair value plus transaction costs that are directly attributable to the acquisition. Gains or losses are recognized at the time of derecognition, impairment or amortization. A regular way purchase or sale of financial assets is accounted for using settlement date accounting. | ||
If there is objective evidence which indicates that a financial asset is impaired, a loss is recognized. If, in a subsequent period, the amount of the impairment loss decreases and the decrease is clearly attributable to an event which occurred after the impairment loss was recognized, the previously recognized impairment loss is reversed to the extent of the decrease. The reversal may not result in a carrying amount that exceeds the amortized cost that would have been determined as if no impairment loss had been recognized. |
-9-
Allowance for Doubtful Receivables | ||
An allowance for doubtful receivables is provided based on a review of the collectibility of notes and accounts receivable. The Company determines the amount of the allowance for doubtful receivables by examining the aging analysis of outstanding notes and accounts receivable and current trends in the credit quality of its customers as well as its internal credit policies. | ||
Revenue Recognition and Allowance for Sales Returns and Others | ||
The Company recognizes revenue when evidence of an arrangement exists, shipment is made, price is fixed or determinable, and collectibility is reasonably assured. Revenues from the design and manufacturing of photo masks, which are used as manufacturing tools in the fabrication process, are recognized when the photo masks are qualified by customers. Provisions for estimated sales returns and others are generally recorded in the period the related revenue is recognized, based on historical experience, managements judgment, and any known factors that would significantly affect the allowance. | ||
Sales prices are determined using fair value taking into account related sales discounts agreed to by the Company and its customers. Sales agreements typically provide that payment is due 30 days from invoice date for a majority of the customers and 30 to 45 days after the end of the month in which sales occur for some customers. Since the receivables from sales are collectible within one year and such transactions are frequent, fair value of the receivables is equivalent to the nominal amount of the cash to be received. | ||
Inventories | ||
Inventories are stated at the lower of cost or market value. Inventories are recorded at standard cost and adjusted to the approximate weighted-average cost at the balance sheet date. Market value represents replacement cost for raw materials, supplies and spare parts and net realizable value for work in process and finished goods. The Company assesses the impact of changing technology on its inventories on hand and writes off inventories that are considered obsolete. Period-end inventories are evaluated for estimated excess quantities and obsolescence based on a demand forecast within a specific time horizon, which is generally 180 days or less. Estimated losses on scrap and slow-moving items are recognized and included in the allowance for losses. | ||
Investments Accounted for Using Equity Method | ||
Investments in companies wherein the Company exercises significant influence over the operating and financial policy decisions are accounted for using the equity method. The Companys share of the net income or net loss of an investee is recognized in the equity in earnings/losses of equity method investees, net account. Prior to January 1, 2006, the difference, if any, between the cost of investment and the Companys proportionate share of the investees equity was amortized by the straight-line method over five years, with the amortization recorded in the equity in earnings/losses of equity method investees, net account. Effective January 1, 2006, pursuant to the revised Statement of Financial Accounting Standards No. 5, Long-term Investments Accounted for Using the Equity Method (SFAS No. 5), the cost of an investment shall be analyzed and the cost of investment in excess of the fair value of identifiable net assets acquired, representing goodwill, shall not be amortized and instead shall be tested for impairment annually. If the fair value of identifiable net assets acquired exceeds the cost of investment, the excess shall be proportionately allocated as reductions to fair values of non-current assets (except for financial assets other than investments accounted for using the equity method and deferred income tax assets). The accounting treatment for the investment premiums paid before January 1, 2006 is the same as that for goodwill which is no longer being amortized; while investment discounts continue to be amortized over the remaining periods. When an indication of impairment is identified, the carrying amount of the investment is reduced, with the related impairment loss recognized in earnings. |
-10-
When the Company subscribes for additional investees shares at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment in the investee differs from the amount of the Companys share of the investees equity. The Company records such a difference as an adjustment to long-term investments with the corresponding amount charged or credited to capital surplus. | ||
Gains or losses on sales from the Company to equity method investees are deferred in proportion to the Companys ownership percentage in the investees until such gains or losses are realized through transactions with third parties. The entire amount of the gains or losses on sales to investees over which the Company has a controlling interest is deferred until such gains or losses are realized through subsequent sales of the related products to third parties. Gains or losses on sales from equity method investees to the Company are deferred in proportion to the Companys ownership percentages in the investees until they are realized through transactions with third parties. Gains or losses on sales between equity method investees are deferred in proportion to the Companys weighted-average ownership percentages in the investees with which the Company has a controlling interest. In transactions between equity method investees with which the Company has no controlling interest, gains or losses on sales are deferred in proportion to the multiplication of the Companys weighted-average ownership percentages in the investees. Such gains or losses are recorded until they are realized through transactions with third parties. | ||
If an investees functional currency is a foreign currency, differences will result from the translation of the investees financial statements into the reporting currency of the Company. Such differences are charged or credited to cumulative translation adjustments, a separate component of shareholders equity. | ||
Financial Assets Carried at Cost | ||
Investments for which the Company does not exercise significant influence and that do not have a quoted market price in an active market and whose fair value cannot be reliably measured, such as non-publicly traded stocks and mutual funds, are carried at their original cost. The costs of non-publicly traded stocks and mutual funds are determined using the weighted-average method. If there is objective evidence which indicates that a financial asset is impaired, a loss is recognized. A subsequent reversal of such impairment loss is not allowed. | ||
The accounting treatment for cash dividends and stock dividends arising from financial assets carried at cost is the same as that for cash and stock dividends arising from available-for-sale financial assets. | ||
Property, Plant and Equipment and Assets Leased to Others | ||
Property, plant and equipment and assets leased to others are stated at cost less accumulated depreciation. When an indication of impairment is identified, any excess of the carrying amount of an asset over its recoverable amount is recognized as a loss. If the recoverable amount increases in a subsequent period, the amount previously recognized as impairment would be reversed and recognized as a gain. However, the adjusted amount may not exceed the carrying amount that would have been determined, net of depreciation, as if no impairment loss had been recognized. Significant additions, renewals and betterments incurred during the construction period are capitalized. Maintenance and repairs are expensed as incurred. | ||
Depreciation is computed using the straight-line method over the following estimated service lives: Buildings 10 to 20 years; machinery and equipment 5 years; and office equipment 3 to 5 years. | ||
Upon sale or disposal of property, plant and equipment, the related cost and accumulated depreciation are deducted from the corresponding accounts, with any gain or loss recorded as non-operating gains or losses in the period of sale or disposal. |
-11-
Intangible Assets | ||
Goodwill represents the excess of the consideration paid for acquisition over the fair value of identifiable net assets acquired. Prior to January 1, 2006, goodwill was amortized using the straight-line method over the estimated life of 10 years. Effective January 1, 2006, pursuant to the newly revised Statement of Financial Accounting Standards No. 25, Business Combinations Accounting Treatment under Purchase Method (SFAS No. 25), goodwill is no longer amortized and instead is tested for impairment annually. If an event occurs or circumstances change which indicated that the fair value of goodwill is more likely than not below its carrying amount, an impairment loss is recognized. A subsequent reversal of such impairment loss is not allowed. | ||
Deferred charges consist of technology license fees, software and system design costs and other charges. The amounts are amortized over the following periods: Technology license fees the shorter of the estimated life of the technology or the term of the technology transfer contract; software and system design costs and other charges 3 years. When an indication of impairment is identified, any excess of the carrying amount of an asset over its recoverable amount is recognized as a loss. If the recoverable amount increases in a subsequent period, the previously recognized impairment loss would be reversed and recognized as a gain. However, the adjusted amount may not exceed the carrying amount that would have been determined, net of amortization, as if no impairment loss had been recognized. | ||
Effective January 1, 2007, the Company adopted the newly released Statement of Financial Accounting Standards No. 37, Accounting for Intangible Assets. The Company had reassessed the useful lives and the amortization method of its recognized intangible assets at the effective date. Expenditures related to research activities and those related to development activities that do not meet the criteria for capitalization are charged to expense when incurred. | ||
Pension Costs | ||
For employees who participate in defined contribution pension plans, pension costs are recorded based on the actual contributions made to employees individual pension accounts during their service periods. For employees who participate in defined benefit pension plans, pension costs are recorded based on actuarial calculations. | ||
Income Tax | ||
The Company applies intra-period and inter-period allocations for its income tax whereby (1) a portion of current periods income tax expense is allocated to the cumulative effect of changes in accounting principles; and (2) deferred income tax assets and liabilities are recognized for the tax effects of temporary differences and unused tax credits. Valuation allowances are provided to the extent, if any, that it is more likely than not that deferred income tax assets will not be realized. A deferred tax asset or liability is classified as current or noncurrent in accordance with the classification of its related asset or liability. However, if a deferred tax asset or liability does not relate to an asset or liability in the financial statements, then it is classified as either current or noncurrent based on the expected length of time before it is realized or settled. | ||
Any tax credits arising from purchases of machinery, equipment and technology, research and development expenditures, personnel training expenditures, and investments in important technology-based enterprises are recognized using the flow-through method. | ||
Adjustments of prior years tax liabilities are added to or deducted from the current periods tax provision. | ||
Income tax on unappropriated earnings at a rate of 10% is expensed in the year of shareholder approval which is the year subsequent to the year the earnings are generated. |
-12-
The R.O.C. government enacted the Alternative Minimum Tax Act (the AMT Act), which became effective on January 1, 2006. The alternative minimum tax (AMT) imposed under the AMT Act is a supplemental tax levied at a rate of 10% which is payable if the income tax payable determined pursuant to the Income Tax Law is below the minimum amount prescribed under the AMT Act. The taxable income for calculating the AMT includes most of the tax-exempt income under various laws and statutes. The Company has considered the impact of the AMT Act in the determination of its tax liabilities. | ||
Stock-based Compensation | ||
Employee stock option plans that are amended or have options granted on or after January 1, 2004 are accounted for by the interpretations issued by the Accounting Research and Development Foundation of the Republic of China. The Company adopted the intrinsic value method and any compensation cost determined using this method is recognized in earnings over the employee vesting period. | ||
Treasury Stock | ||
The Companys stock held by its subsidiaries is treated as treasury stock and reclassified from investments accounted for using equity method to treasury stock. The gains resulted from disposal of the treasury stock held by subsidiaries and cash dividends received by subsidiaries from the Company are recorded under capital surplus treasury stock transactions. | ||
Foreign-currency Transactions | ||
Foreign-currency transactions are recorded in New Taiwan dollars at the rates of exchange in effect when the transactions occur. Exchange gains or losses derived from foreign-currency transactions or monetary assets and liabilities denominated in foreign currencies are recognized in earnings. | ||
At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are revalued at prevailing exchange rates with the resulting gains or losses recognized in earnings. | ||
Recent Accounting Pronouncements | ||
In March 2007, the Accounting Research and Development Foundation of the Republic of China issued an interpretation that requires companies to record the bonus paid to directors, supervisors and employees as an expense rather than an appropriation of earnings. This interpretation should be applied to financial statements for the fiscal year beginning on or after January 1, 2008. | ||
The Accounting Research and Development Foundation of the Republic of China also issued Statement of Financial Accounting Standards No. 39, Accounting for Share-based Payment (SFAS No.39) in August 2007, which requires companies to record share-based payment transactions in the financial statements at fair value. SFAS No.39 should be applied to financial statements for the fiscal year beginning on or after January 1, 2008. | ||
3. | ACCOUNTING CHANGES | |
On January 1, 2006, the Company adopted the newly released Statements of Financial Accounting Standards No. 34, Financial Instruments: Recognition and Measurement (SFAS No. 34) and No. 36, Financial Instruments: Disclosure and Presentation. | ||
The Company had categorized its financial assets and liabilities upon initial adoption of the newly released SFASs. The adjustments made to the carrying amounts of the financial instruments categorized as financial assets or liabilities at fair value through profit or loss were included in the cumulative effect of |
-13-
Recognized as | ||||||||
Cumulative | ||||||||
Effect of | Recognized as | |||||||
Changes in | a Separate | |||||||
Accounting | Component of | |||||||
Principles | Shareholders | |||||||
(Net of Tax) | Equity | |||||||
Financial assets or liabilities at fair value through profit or loss |
$ | (246,186 | ) | $ | | |||
Available-for-sale financial assets |
| | ||||||
$ | (246,186 | ) | $ | | ||||
September 30 | ||||||||
2007 | 2006 | |||||||
Cash and deposits in banks |
$ | 44,552,995 | $ | 56,452,326 | ||||
Repurchase agreements collaterized by government bonds |
31,354,207 | 21,200,915 | ||||||
Asset-backed commercial papers |
596,823 | | ||||||
Corporate notes |
| 132,509 | ||||||
$ | 76,504,025 | $ | 77,785,750 | |||||
Nine Months Ended | ||||||||
September 30 | ||||||||
2007 | 2006 | |||||||
Balance, beginning of period |
$ | 690,931 | $ | 976,344 | ||||
Write-off |
(1,959 | ) | (639 | ) | ||||
Balance, end of period |
$ | 688,972 | $ | 975,705 | ||||
-14-
Nine Months Ended | ||||||||
September 30 | ||||||||
2007 | 2006 | |||||||
Balance, beginning of period |
$ | 2,751,065 | $ | 4,269,969 | ||||
Provision |
3,736,354 | 5,202,252 | ||||||
Write-off |
(2,748,393 | ) | (4,459,287 | ) | ||||
Balance, end of period |
$ | 3,739,026 | $ | 5,012,934 | ||||
September 30 | ||||||||
2007 | 2006 | |||||||
Derivatives financial assets |
||||||||
Forward exchange contracts |
$ | | $ | 45,295 | ||||
Cross currency swap contracts |
366,445 | | ||||||
$ | 366,445 | $ | 45,295 | |||||
Derivatives financial liabilities |
||||||||
Forward exchange contracts |
$ | 127,588 | $ | | ||||
Cross currency swap contracts |
3,240 | 458,808 | ||||||
$ | 130,828 | $ | 458,808 | |||||
Contract | ||||
Amount | ||||
Maturity Date | (in Thousands) | |||
September 30, 2007 |
||||
Sell EUR/buy NT$
|
October 2007 to July 2008 | EUR 70,040 | ||
September 30, 2006 |
||||
Sell NT$/buy US$
|
October 2006 to November 2006 | US$145,000 |
-15-
Contract | Range of | Range of | ||||
Amount | Interest Rates | Interest Rates | ||||
Maturity Date | (in Thousands) | Paid | Received | |||
September 30, 2007 |
||||||
October 2007 to November 2007
|
US$930,000 | 3.76%-5.80% | 1.6%-3.69% | |||
September 30, 2006 |
||||||
October 2006 to November 2006
|
US$1,550,000 | 3.34%-5.50% | 0.60%-2.72% |
September 30 | ||||||||
2007 | 2006 | |||||||
Open-end mutual funds |
$ | 15,403,622 | $ | 21,781,496 | ||||
Government bonds |
4,139,554 | 1,200,097 | ||||||
Corporate bonds |
4,039,041 | 9,137,742 | ||||||
Structured time deposits |
498,587 | 499,549 | ||||||
Agency bonds |
| 4,786,766 | ||||||
Corporate issued asset-backed securities |
| 3,237,614 | ||||||
24,080,804 | 40,643,264 | |||||||
Current portion |
(19,945,922 | ) | (35,749,909 | ) | ||||
$ | 4,134,882 | $ | 4,893,355 | |||||
-16-
Principal | Carrying | |||||||||||||||
Amount | Amount | Interest Rate | Maturity Date | |||||||||||||
September 30, 2007 |
||||||||||||||||
Step-up callable deposits |
||||||||||||||||
Domestic deposits |
$ | 500,000 | $ | 498,587 | 1.76 | % | March 2008 | |||||||||
September 30, 2006 |
||||||||||||||||
Step-up callable deposits |
||||||||||||||||
Domestic deposits |
$ | 500,000 | $ | 499,549 | 1.76 | % | March 2008 | |||||||||
September 30 | ||||||||
2007 | 2006 | |||||||
Corporate bonds |
$ | 11,540,506 | $ | 14,670,013 | ||||
Structured time deposits |
8,726,720 | 11,281,560 | ||||||
Government bonds |
8,068,418 | 11,016,286 | ||||||
28,335,644 | 36,967,859 | |||||||
Current portion |
(12,168,201 | ) | (6,220,737 | ) | ||||
$ | 16,167,443 | $ | 30,747,122 | |||||
Principal | Interest | Range of | ||||||||||||||
Amount | Receivable | Interest Rates | Maturity Date | |||||||||||||
September 30, 2007 |
||||||||||||||||
Step-up callable deposits |
||||||||||||||||
Domestic deposits |
$ | 3,500,000 | $ | 13,340 | 1.69%-1.83 | % | October 2007 to October 2008 | |||||||||
Callable range accrual deposits |
||||||||||||||||
Domestic deposits |
3,266,700 | 14,265 | (See below) | October 2009 to December 2009 | ||||||||||||
Foreign deposits |
1,960,020 | 6,016 | (See below) | October 2009 to December 2009 | ||||||||||||
$ | 8,726,720 | $ | 33,621 | |||||||||||||
September 30, 2006 |
||||||||||||||||
Step-up callable deposits |
||||||||||||||||
Domestic deposits |
$ | 4,000,000 | $ | 35,459 | 1.40%-2.01 | % | June 2007 to March 2009 | |||||||||
Callable range accrual deposits |
||||||||||||||||
Domestic deposits |
3,971,760 | 15,004 | (See below) | September 2009 to December 2009 | ||||||||||||
Foreign deposits |
3,309,800 | 7,585 | (See below) | October 2009 to January 2010 | ||||||||||||
$ | 11,281,560 | $ | 58,048 | |||||||||||||
-17-
September 30 | ||||||||
2007 | 2006 | |||||||
Finished goods |
$ | 3,711,693 | $ | 4,499,585 | ||||
Work in process |
17,183,031 | 12,806,387 | ||||||
Raw materials |
1,508,536 | 1,403,443 | ||||||
Supplies and spare parts |
460,266 | 483,892 | ||||||
22,863,526 | 19,193,307 | |||||||
Allowance for losses |
(850,311 | ) | (824,177 | ) | ||||
$ | 22,013,215 | $ | 18,369,130 | |||||
September 30 | ||||||||||||||||
2007 | 2006 | |||||||||||||||
% of | % of | |||||||||||||||
Carrying | Owner- | Carrying | Owner- | |||||||||||||
Amount | ship | Amount | ship | |||||||||||||
TSMC Global (Note 7) |
$ | 44,234,333 | 100 | $ | 28,423,113 | 100 | ||||||||||
TSMC International Investment Ltd. (TSMC
International) |
27,553,919 | 100 | 27,017,212 | 100 | ||||||||||||
Vanguard International Semiconductor Corporation
(VIS) |
10,760,885 | 36 | 5,359,803 | 27 | ||||||||||||
Systems on Silicon Manufacturing Company Pte Ltd.
(SSMC) |
8,674,862 | 39 | 5,611,199 | 32 | ||||||||||||
TSMC (Shanghai) Company Limited (TSMC-
Shanghai) |
8,567,668 | 100 | 9,250,288 | 100 | ||||||||||||
TSMC Partners, Ltd. (TSMC Partners) |
4,667,437 | 100 | 4,397,781 | 100 | ||||||||||||
TSMC North America (TSMC-North America) |
2,227,896 | 100 | 1,876,355 | 100 | ||||||||||||
Xintec Inc. (Xintec) |
1,429,804 | 43 | | | ||||||||||||
VentureTech Alliance Fund II, L.P. (VTAF II) |
1,026,700 | 98 | 717,136 | 98 | ||||||||||||
VentureTech Alliance Fund III, L.P. (VTAF III) |
786,064 | 98 | 224,580 | 98 | ||||||||||||
Global UniChip Corporation (GUC) |
750,200 | 37 | 468,150 | 44 | ||||||||||||
Emerging Alliance Fund, L.P. (Emerging Alliance) |
683,002 | 99 | 908,370 | 99 | ||||||||||||
Chi Cherng Investment Co., Ltd. (Chi Cherng) |
170,542 | 36 | 115,347 | 36 | ||||||||||||
Hsin Ruey Investment Co., Ltd. (Hsin Ruey) |
168,918 | 36 | 114,548 | 36 | ||||||||||||
TSMC Japan Limited (TSMC-Japan) |
102,257 | 100 | 97,810 | 100 | ||||||||||||
Taiwan Semiconductor Manufacturing Company
Europe B.V. (TSMC-Europe) |
74,994 | 100 | 44,143 | 100 | ||||||||||||
TSMC Korea Limited (TSMC-Korea) |
16,014 | 100 | 14,432 | 100 | ||||||||||||
$ | 111,895,495 | $ | 84,640,267 | |||||||||||||
-18-
September 30 | ||||||||
2007 | 2006 | |||||||
Non-publicly traded stocks |
$ | 364,913 | $ | 422,500 | ||||
Funds |
382,293 | 346,911 | ||||||
$ | 747,206 | $ | 769,411 | |||||
Nine Months Ended September 30, 2007 | ||||||||||||||||||||
Advance | ||||||||||||||||||||
Payments and | ||||||||||||||||||||
Machinery and | Office | Construction in | ||||||||||||||||||
Buildings | Equipment | Equipment | Progress | Total | ||||||||||||||||
Cost |
||||||||||||||||||||
Balance, beginning of period |
$ | 96,961,851 | $ | 527,850,728 | $ | 8,659,225 | $ | 12,230,805 | $ | 645,702,609 | ||||||||||
Addition |
3,899,788 | 49,970,603 | 612,079 | 8,203,111 | 62,685,581 | |||||||||||||||
Deduction |
(31,835 | ) | (332,641 | ) | (164,684 | ) | | (529,160 | ) | |||||||||||
Reclassification |
2,824 | 521,015 | (11,203 | ) | 506,368 | 1,019,004 | ||||||||||||||
Balance, end of period |
100,832,628 | 578,009,705 | 9,095,417 | 20,940,284 | 708,878,034 | |||||||||||||||
Accumulated depreciation |
||||||||||||||||||||
Balance, beginning of period |
49,595,917 | 361,401,800 | 6,469,533 | | 417,467,250 | |||||||||||||||
Addition |
5,879,548 | 45,786,652 | 734,081 | | 52,400,281 | |||||||||||||||
Deduction |
(30,958 | ) | (316,480 | ) | (164,527 | ) | | (511,965 | ) | |||||||||||
Reclassification |
1,036 | 520,161 | (2,365 | ) | | 518,832 | ||||||||||||||
Balance, end of period |
55,445,543 | 407,392,133 | 7,036,722 | | 469,874,398 | |||||||||||||||
Balance, end of period, net |
$ | 45,387,085 | $ | 170,617,572 | $ | 2,058,695 | $ | 20,940,284 | $ | 239,003,636 | ||||||||||
-19-
Nine Months Ended September 30, 2006 | ||||||||||||||||||||
Advance | ||||||||||||||||||||
Payments and | ||||||||||||||||||||
Machinery and | Office | Construction in | ||||||||||||||||||
Buildings | Equipment | Equipment | Progress | Total | ||||||||||||||||
Cost |
||||||||||||||||||||
Balance, beginning of period |
$ | 90,769,622 | $ | 459,850,773 | $ | 7,850,035 | $ | 14,867,032 | $ | 573,337,462 | ||||||||||
Addition |
5,751,950 | 53,627,240 | 804,264 | 6,202,737 | 66,386,191 | |||||||||||||||
Deduction |
(941,642 | ) | (4,235,410 | ) | (169,313 | ) | | (5,346,365 | ) | |||||||||||
Reclassification |
(3,593 | ) | (266,793 | ) | (41,174 | ) | | (311,560 | ) | |||||||||||
Balance, end of period |
95,576,337 | 508,975,810 | 8,443,812 | 21,069,769 | 634,065,728 | |||||||||||||||
Accumulated depreciation |
||||||||||||||||||||
Balance, beginning of period |
42,902,526 | 310,626,317 | 5,662,986 | | 359,191,829 | |||||||||||||||
Addition |
5,504,100 | 40,755,310 | 746,943 | | 47,006,353 | |||||||||||||||
Deduction |
(725,584 | ) | (3,931,539 | ) | (169,184 | ) | | (4,826,307 | ) | |||||||||||
Reclassification |
(177 | ) | (265,921 | ) | (7,041 | ) | | (273,139 | ) | |||||||||||
Balance, end of period |
47,680,865 | 347,184,167 | 6,233,704 | | 401,098,736 | |||||||||||||||
Balance, end of period, net |
$ | 47,895,472 | $ | 161,791,643 | $ | 2,210,108 | $ | 21,069,769 | $ | 232,966,992 | ||||||||||
Nine Months Ended September 30, 2007 | ||||||||||||||||
Software and | ||||||||||||||||
Technology | System Design | |||||||||||||||
License Fees | Costs | Others | Total | |||||||||||||
Balance, beginning of period |
$ | 4,038,551 | $ | 1,517,575 | $ | 36,942 | $ | 5,593,068 | ||||||||
Addition |
825,075 | 789,738 | 413,393 | 2,028,206 | ||||||||||||
Amortization |
(1,250,158 | ) | (631,054 | ) | (73,357 | ) | (1,954,569 | ) | ||||||||
Deduction |
| (51 | ) | | (51 | ) | ||||||||||
Reclassification |
(296,451 | ) | (500,172 | ) | 296,451 | (500,172 | ) | |||||||||
Balance, end of period |
$ | 3,317,017 | $ | 1,176,036 | $ | 673,429 | $ | 5,166,482 | ||||||||
Nine Months Ended September 30, 2006 | ||||||||||||||||
Technology | Software and | |||||||||||||||
License | System Design | |||||||||||||||
Fees | Costs | Others | Total | |||||||||||||
Balance, beginning of period |
$ | 4,985,806 | $ | 1,623,276 | $ | 72,062 | $ | 6,681,144 | ||||||||
Addition |
373,054 | 382,928 | | 755,982 | ||||||||||||
Amortization |
(985,343 | ) | (786,171 | ) | (26,974 | ) | (1,798,488 | ) | ||||||||
Reclassification |
| 1,138 | | 1,138 | ||||||||||||
Balance, end of period |
$ | 4,373,517 | $ | 1,221,171 | $ | 45,088 | $ | 5,639,776 | ||||||||
-20-
September 30 | ||||||||
2007 | 2006 | |||||||
Domestic unsecured bonds: |
||||||||
Issued in December 2000 and repayable in December 2007, 5.36%
interest payable annually |
$ | 4,500,000 | $ | 4,500,000 | ||||
Issued in January 2002 and repayable in January 2007, 2009 and
2012
in three installments, 2.60%, 2.75% and 3.00% interest payable
annually, respectively |
12,500,000 | 15,000,000 | ||||||
17,000,000 | 19,500,000 | |||||||
Current portion |
(4,500,000 | ) | (2,500,000 | ) | ||||
$ | 12,500,000 | $ | 17,000,000 | |||||
Year of Repayment | Amount | |||
2007 (4th quarter) |
$ | 4,500,000 | ||
2009 |
8,000,000 | |||
2012 |
4,500,000 | |||
$ | 17,000,000 | |||
Year of Payment | Amount | |||
2007 (4th quarter) |
$ | 459,496 | ||
2008 |
1,029,364 | |||
2009 |
422,711 | |||
2010 |
337,777 | |||
2011 |
261,336 | |||
2,510,684 | ||||
Current portion (classified under accrued expenses and other current liabilities) |
(1,488,860 | ) | ||
$ | 1,021,824 | |||
-21-
Nine Months Ended | ||||||||
September 30 | ||||||||
2007 | 2006 | |||||||
The Fund |
||||||||
Balance, beginning of period |
$ | 1,913,002 | $ | 1,658,864 | ||||
Contributions |
154,573 | 183,810 | ||||||
Interest |
46,279 | 34,383 | ||||||
Payments |
| (7,407 | ) | |||||
Balance, end of period |
$ | 2,113,854 | $ | 1,869,650 | ||||
Accrued pension cost |
||||||||
Balance, beginning of period |
$ | 3,530,116 | $ | 3,461,392 | ||||
Accruals |
91,679 | 41,083 | ||||||
Balance, end of period |
$ | 3,621,795 | $ | 3,502,475 | ||||
a. | A reconciliation of income tax expense based on income before income tax at statutory rate and income tax currently payable was as follows: |
Nine Months Ended | ||||||||
September 30 | ||||||||
2007 | 2006 | |||||||
Income tax expense based on income before income tax at
statutory rate (25%) |
$ | 20,422,097 | $ | 26,373,882 | ||||
Tax effect of the following: |
||||||||
Tax-exempt income |
(5,167,274 | ) | (8,871,751 | ) | ||||
Temporary and permanent differences |
(380,451 | ) | (1,347,129 | ) | ||||
Additional tax at 10% on unappropriated earnings |
2,686,561 | 1,156,130 | ||||||
Cumulative effect of changes in accounting principles |
| (82,062 | ) | |||||
Income tax credits used |
(10,279,817 | ) | (10,799,894 | ) | ||||
Income tax currently payable |
$ | 7,281,116 | $ | 6,429,176 | ||||
-22-
b. | Income tax expense consisted of the following: |
Nine Months Ended | ||||||||
September 30 | ||||||||
2007 | 2006 | |||||||
Income tax currently payable |
$ | 7,281,116 | $ | 6,429,176 | ||||
Other income tax adjustments |
(372,597 | ) | (377,625 | ) | ||||
Net change in deferred income tax assets |
||||||||
Investment tax credits |
2,745,686 | 4,483,230 | ||||||
Temporary differences |
(1,275,433 | ) | (1,822,230 | ) | ||||
Valuation allowance |
(1,382,702 | ) | (2,561,248 | ) | ||||
Income tax expense |
$ | 6,996,070 | $ | 6,151,303 | ||||
c. | Net deferred income tax assets consisted of the following: |
September 30 | ||||||||
2007 | 2006 | |||||||
Current deferred income tax assets |
||||||||
Investment tax credits |
$ | 3,068,708 | $ | 2,683,412 | ||||
Noncurrent deferred income tax assets |
||||||||
Investment tax credits |
$ | 14,142,498 | $ | 16,699,129 | ||||
Temporary differences |
2,115,897 | 1,139,960 | ||||||
Valuation allowance |
(5,821,527 | ) | (6,849,298 | ) | ||||
$ | 10,436,868 | $ | 10,989,791 | |||||
d. | Integrated income tax information: |
e. | All earnings generated prior to December 31, 1997 have been appropriated. |
-23-
f. | As of September 30, 2007, investment tax credits consisted of the following: |
Total | Remaining | |||||||||||||||
Creditable | Creditable | Expiry | ||||||||||||||
Law/Statute | Item | Amount | Amount | Year | ||||||||||||
Statute for Upgrading |
Purchase of machinery and equipment | $ | 238,012 | $ | | 2007 | ||||||||||
Industries |
3,177,526 | | 2008 | |||||||||||||
6,029,482 | 3,003,151 | 2009 | ||||||||||||||
6,463,688 | 6,463,688 | 2010 | ||||||||||||||
3,032,860 | 3,032,860 | 2011 | ||||||||||||||
$ | 18,941,568 | $ | 12,499,699 | |||||||||||||
Statute for Upgrading |
Research and development expenditures | $ | 1,245,142 | $ | | 2007 | ||||||||||
Industries |
2,560,454 | | 2008 | |||||||||||||
1,486,845 | 1,486,845 | 2009 | ||||||||||||||
1,781,376 | 1,781,376 | 2010 | ||||||||||||||
1,276,100 | 1,276,100 | 2011 | ||||||||||||||
$ | 8,349,917 | $ | 4,544,321 | |||||||||||||
Statute for Upgrading |
Personnel training expenditures | $ | 16,197 | $ | | 2007 | ||||||||||
Industries |
16,155 | | 2008 | |||||||||||||
46,130 | 46,130 | 2009 | ||||||||||||||
41,252 | 41,252 | 2010 | ||||||||||||||
$ | 119,734 | $ | 87,382 | |||||||||||||
Statute for Upgrading |
Investments in important technology-based enterprises | $ | 79,804 | $ | 79,804 | 2010 | ||||||||||
Industries |
g. | The profits generated from the following projects are exempt from income tax for a four-year or five-year period: |
Tax-Exemption Period | ||
Construction of Fab 12 Module A
|
2004 to 2007 | |
Construction of Fab 14 Module A
|
2006 to 2010 |
h. | The tax authorities have examined income tax returns of the Company through 2004. |
-24-
Nine Months Ended September 30, 2007 | ||||||||||||
Classified as | ||||||||||||
Classified as | Operating | |||||||||||
Cost of Sales | Expenses | Total | ||||||||||
Labor cost |
||||||||||||
Salary |
$ | 6,634,163 | $ | 3,282,577 | $ | 9,916,740 | ||||||
Labor and health insurance |
445,387 | 244,836 | 690,223 | |||||||||
Pension |
452,851 | 249,138 | 701,989 | |||||||||
Meal |
323,299 | 123,426 | 446,725 | |||||||||
Welfare |
159,946 | 96,478 | 256,424 | |||||||||
Others |
116,956 | 8,591 | 125,547 | |||||||||
$ | 8,132,602 | $ | 4,005,046 | $ | 12,137,648 | |||||||
Depreciation |
$ | 49,558,115 | $ | 2,812,106 | $ | 52,370,221 | ||||||
Amortization |
$ | 1,353,135 | $ | 600,537 | $ | 1,953,672 | ||||||
Nine Months Ended September 30, 2006 | ||||||||||||
Classified as | ||||||||||||
Classified as | Operating | |||||||||||
Cost of Sales | Expenses | Total | ||||||||||
Labor cost |
||||||||||||
Salary |
$ | 7,383,078 | $ | 3,140,749 | $ | 10,523,827 | ||||||
Labor and health insurance |
514,883 | 262,833 | 777,716 | |||||||||
Pension |
462,022 | 235,806 | 697,828 | |||||||||
Meal |
335,397 | 117,518 | 452,915 | |||||||||
Welfare |
141,602 | 76,398 | 218,000 | |||||||||
Others |
167,104 | 17,644 | 184,748 | |||||||||
$ | 9,004,086 | $ | 3,850,948 | $ | 12,855,034 | |||||||
Depreciation |
$ | 44,547,208 | $ | 2,454,035 | $ | 47,001,243 | ||||||
Amortization |
$ | 1,075,802 | $ | 711,017 | $ | 1,786,819 | ||||||
-25-
September 30 | ||||||||
2007 | 2006 | |||||||
From merger |
$ | 24,003,546 | $ | 24,003,546 | ||||
Additional paid-in capital |
19,500,470 | 19,860,644 | ||||||
From convertible bonds |
9,360,424 | 9,360,424 | ||||||
From treasury stock transactions |
490,950 | 389,188 | ||||||
From long-term investments |
357,720 | 243,810 | ||||||
Donations |
55 | 55 | ||||||
$ | 53,713,165 | $ | 53,857,667 | |||||
a. | Legal capital reserve at 10% of the profits left over, until the accumulated legal capital reserve has equaled the Companys paid-in capital; | ||
b. | Special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge; | ||
c. | Bonus to directors and bonus to employees of the Company of not more than 0.3% and not less than 1% of the remainder, respectively. Directors who also serve as executive officers of the Company are not entitled to receive the bonus to directors. The Company may issue stock bonuses to employees of an affiliated company meeting the conditions set by the Board of Directors or, by the person duly authorized by the Board of Directors; | ||
d. | Any balance left over shall be allocated according to the resolution of the shareholders meeting. |
-26-
Dividends Per Share | ||||||||||||||||
Appropriation of Earnings | (NT$) | |||||||||||||||
For Fiscal | For Fiscal | For Fiscal | For Fiscal | |||||||||||||
Year 2006 | Year 2005 | Year 2006 | Year 2005 | |||||||||||||
Legal capital reserve |
$ | 12,700,973 | $ | 9,357,503 | ||||||||||||
Special capital reserve |
(11,192 | ) | (1,585,685 | ) | ||||||||||||
Bonus to employees in cash |
4,572,798 | 3,432,129 | ||||||||||||||
Bonus to employees in stock |
4,572,798 | 3,432,129 | ||||||||||||||
Cash dividends to shareholders |
77,489,064 | 61,825,061 | $ | 3.00 | $ | 2.50 | ||||||||||
Stock dividends to shareholders |
516,594 | 3,709,504 | 0.02 | 0.15 | ||||||||||||
Bonus to directors and supervisors |
285,800 | 257,410 | ||||||||||||||
$ | 100,126,835 | $ | 80,428,051 | |||||||||||||
-27-
Weighted- | ||||||||
average | ||||||||
Number of | Exercise | |||||||
Options | Price | |||||||
(in Thousands) | (NT$) | |||||||
Nine months ended September 30, 2007 |
||||||||
Balance, beginning of period |
52,814 | $ | 37.9 | |||||
Options granted |
1,094 | 37.9 | ||||||
Options exercised |
(10,086 | ) | 39.8 | |||||
Options canceled |
(781 | ) | 45.4 | |||||
Balance, end of period |
43,041 | 37.5 | ||||||
Nine months ended September 30, 2006 |
||||||||
Balance, beginning of period |
67,758 | $ | 39.4 | |||||
Options granted |
2,758 | 40.1 | ||||||
Options exercised |
(10,701 | ) | 39.5 | |||||
Options canceled |
(3,020 | ) | 44.0 | |||||
Balance, end of period |
56,795 | 39.6 | ||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted- | Weighted- | Weighted- | ||||||||||||||||||
average | average | average | ||||||||||||||||||
Range of | Number of | Remaining | Exercise | Number of | Exercise | |||||||||||||||
Exercise | Options (in | Contractual | Price | Options (in | Price | |||||||||||||||
Price (NT$) | Thousands) | Life (Years) | (NT$) | Thousands) | (NT$) | |||||||||||||||
$25.9-$36.4
|
29,146 | 3.41 | $ | 33.1 | 29,146 | $ | 33.1 | |||||||||||||
$38.9-$51.3
|
13,895 | 5.15 | 46.6 | 8,537 | 46.2 | |||||||||||||||
43,041 | 37.5 | 37,683 | 36.1 | |||||||||||||||||
-28-
Nine Months Ended | ||||
September 30 | ||||
2007 | 2006 | |||
Assumptions: |
||||
Expected dividend yield |
1.00%-3.44% | 1.00%-3.44% | ||
Expected volatility |
43.77%-46.15% | 43.77%-46.15% | ||
Risk free interest rate |
3.07%-3.85% | 3.07%-3.85% | ||
Expected life |
5 years | 5 years | ||
Net income: |
||||
Net income as reported |
$74,692,316 | $99,098,039 | ||
Pro forma net income |
74,655,212 | 99,010,630 | ||
Earnings per share (EPS) after income tax (NT$): |
||||
Basic EPS as reported |
$2.83 | $3.76 | ||
Pro forma basic EPS |
2.83 | 3.75 | ||
Diluted EPS as reported |
2.83 | 3.75 | ||
Pro forma diluted EPS |
2.83 | 3.75 |
(Shares in Thousands) | ||||||||||||||||
Beginning | Stock | Ending | ||||||||||||||
Shares | Dividends | Disposal | Shares | |||||||||||||
Nine months ended September 30, 2007 |
||||||||||||||||
Parent company stock held by subsidiaries |
33,926 | 170 | | 34,096 | ||||||||||||
Nine months ended September 30, 2006 |
||||||||||||||||
Parent company stock held by subsidiaries |
32,938 | 988 | | 33,926 | ||||||||||||
-29-
Nine Months Ended September 30 | ||||||||||||||||
2007 | 2006 | |||||||||||||||
Before | After | Before | After | |||||||||||||
Income | Income | Income | Income | |||||||||||||
Tax | Tax | Tax | Tax | |||||||||||||
Basic EPS (NT$) |
||||||||||||||||
Income before cumulative effect of changes in accounting
principles |
$ | 3.10 | $ | 2.83 | $ | 4.00 | $ | 3.77 | ||||||||
Cumulative effect of changes in accounting principles |
| | (0.01 | ) | (0.01 | ) | ||||||||||
Income for the period |
$ | 3.10 | $ | 2.83 | $ | 3.99 | $ | 3.76 | ||||||||
Diluted EPS (NT$) |
||||||||||||||||
Income before cumulative effect of changes in accounting
principles |
$ | 3.09 | $ | 2.83 | $ | 3.99 | $ | 3.76 | ||||||||
Cumulative effect of changes in accounting principles |
| | (0.01 | ) | (0.01 | ) | ||||||||||
Income for the period |
$ | 3.09 | $ | 2.83 | $ | 3.98 | $ | 3.75 | ||||||||
Number of | EPS (NT$) | |||||||||||||||||||
Amounts (Numerator) | Shares | Before | After | |||||||||||||||||
Before | After | (Denominator) | Income | Income | ||||||||||||||||
Income Tax | Income Tax | (in Thousands) | Tax | Tax | ||||||||||||||||
Nine months ended September 30, 2007 |
||||||||||||||||||||
Basic EPS |
||||||||||||||||||||
Income available to shareholders |
$ | 81,688,386 | $ | 74,692,316 | 26,387,270 | $ | 3.10 | $ | 2.83 | |||||||||||
Effect of dilutive potential common shares
- stock options |
| | 22,882 | |||||||||||||||||
Diluted EPS |
||||||||||||||||||||
Income available to shareholders (including
effect of dilutive potential common shares) |
$ | 81,688,386 | $ | 74,692,316 | 26,410,152 | $ | 3.09 | $ | 2.83 | |||||||||||
Nine months ended September 30, 2006 |
||||||||||||||||||||
Basic EPS |
||||||||||||||||||||
Income available to shareholders |
$ | 105,167,280 | $ | 99,098,039 | 26,372,979 | $ | 3.99 | $ | 3.76 | |||||||||||
Effect of dilutive potential common shares
- stock options |
| | 22,289 | |||||||||||||||||
Diluted EPS |
||||||||||||||||||||
Income available to shareholders (including
effect of dilutive potential common shares) |
$ | 105,167,280 | $ | 99,098,039 | 26,395,268 | $ | 3.98 | $ | 3.75 | |||||||||||
-30-
a. | Fair values of financial instruments were as follows: |
September 30 | ||||||||||||||||
2007 | 2006 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||
Assets |
||||||||||||||||
Financial assets at fair value
through profit or loss |
$ | 366,445 | $ | 366,445 | $ | 45,295 | $ | 45,295 | ||||||||
Available-for-sale financial assets |
24,080,804 | 24,080,804 | 40,643,264 | 40,643,264 | ||||||||||||
Held-to-maturity financial assets |
28,335,644 | 28,218,688 | 36,967,859 | 36,799,837 | ||||||||||||
Investments accounted for using
equity method (with market price) |
11,511,085 | 29,157,704 | 5,359,803 | 9,375,950 | ||||||||||||
Liabilities |
||||||||||||||||
Financial liabilities at fair value
through profit or loss |
130,828 | 130,828 | 458,808 | 458,808 | ||||||||||||
Bonds payable (including current
portion) |
17,000,000 | 17,202,682 | 19,500,000 | 19,851,716 | ||||||||||||
Other long-term payables (including
current portion) |
2,510,684 | 2,510,684 | 3,371,863 | 3,371,863 |
b. | Methods and assumptions used in estimating fair values of financial instruments |
1) | The aforementioned financial instruments do not include cash and cash equivalents, receivables, other financial assets, payables, and payables to contractors and equipment suppliers. The carrying amounts of these financial instruments approximate their fair values due to their short maturities. | ||
2) | Fair values of financial assets/liabilities at fair value through profit or loss were determined using valuation techniques incorporating estimates and assumptions that were consistent with prevailing market conditions. | ||
3) | Fair values of available-for-sale and held-to-maturity financial assets were based on their quoted market prices, except for structured time deposits of which the fair values were estimated using valuation techniques. | ||
4) | Fair value of bonds payable was based on their quoted market price. | ||
5) | Fair value of other long-term payables was based on the present value of expected cash flows, which approximates their carrying amount. |
c. | The changes in fair value during the nine months ended September 30, 2007 and 2006 of derivatives estimated using valuation techniques were recognized as gains of NT$201,767 thousand and losses of NT$413,514 thousand, respectively. |
d. | As of September 30, 2007 and 2006, financial assets exposed to fair value interest rate risk were NT$52,782,893 thousand and NT$77,656,418 thousand, respectively; financial liabilities exposed to fair value interest rate risk were NT$130,828 thousand and NT$458,808 thousand, respectively, and financial assets exposed to cash flow interest rate risk were NT$5,226,720 thousand and NT$7,281,560 thousand, respectively. |
-31-
e. | Movements of the unrealized gain on financial instruments for the nine months ended September 30, 2007 and 2006 were as follows: |
Nine Months Ended September 30, 2007 | ||||||||||||
Equity in | ||||||||||||
Valuation | Valuation | |||||||||||
Gain | Gain on | |||||||||||
on Available- | Available-for- | |||||||||||
for-sale | sale Financial | |||||||||||
Financial | Assets Held by | |||||||||||
Assets | Investees | Total | ||||||||||
Balance, beginning of period |
$ | 242,248 | $ | 319,367 | $ | 561,615 | ||||||
Recognized directly in shareholders equity |
224,877 | 1,899 | 226,776 | |||||||||
Removed from shareholders equity and recognized
in earnings |
(260,367 | ) | | (260,367 | ) | |||||||
Balance, end of period |
$ | 206,758 | $ | 321,266 | $ | 528,024 | ||||||
Nine Months Ended September 30, 2006 | ||||||||||||
Equity in | ||||||||||||
Valuation | Valuation | |||||||||||
Gain | Gain on | |||||||||||
on Available- | Available-for- | |||||||||||
for-sale | sale Financial | |||||||||||
Financial | Assets Held by | |||||||||||
Assets | Investees | Total | ||||||||||
Balance, beginning of period |
$ | | $ | | $ | | ||||||
Recognized directly in shareholders equity |
149,691 | 341,243 | 490,934 | |||||||||
Removed from shareholders equity and recognized
in losses |
11,258 | | 11,258 | |||||||||
Balance, end of period |
$ | 160,949 | $ | 341,243 | $ | 502,192 | ||||||
f. | Information about financial risks |
1) | Market risk. The derivative financial instruments categorized as financial assets/liabilities at fair value through profit or loss are mainly used to hedge the exchange rate fluctuations of foreign-currency assets and liabilities; therefore, the market risk of derivatives will be offset by the foreign exchange risk of these hedged items. Available-for-sale financial assets held by the Company are mainly fixed-interest-rate debt securities; therefore, the fluctuations in market interest rates will result in changes in fair values of these debt securities. | ||
2) | Credit risk. Credit risk represents the potential loss that would be incurred by the Company if the counter-parties or third-parties breached contracts. Financial instruments with positive fair values at the balance sheet date are evaluated for credit risk. The counter-parties or third-parties to the foregoing financial instruments are reputable financial institutions, business organizations, and government agencies. Management believes that the Companys exposure to default by those parties is low. | ||
3) | Liquidity risk. The Company has sufficient operating capital to meet cash needs upon settlement of derivative financial instruments and bonds payable. Therefore, the liquidity risk is low. |
-32-
4) | Cash flow interest rate risk. The Company mainly invests in fixed-interest-rate debt securities. Therefore, cash flows are not expected to fluctuate significantly due to changes in market interest rates. |
a. | Philips, a major shareholder of the Company, which became a non-related party since March 2007. | ||
b. | Subsidiaries | ||
TSMC-North America TSMC-Europe TSMC-Japan TSMC-Shanghai TSMC-Korea |
c. | Investees | ||
GUC (with a controlling interest) VIS (accounted for using equity method) SSMC (accounted for using equity method) |
|||
d. | Indirect subsidiaries | ||
WaferTech, LLC (WaferTech) TSMC Technology, Inc. (TSMC Technology) TSMC Design Technology Canada, Inc. (TSMC Canada) |
e. | Indirect investee | ||
VisEra Technology Company, Ltd. (VisEra), an indirect investee accounted for using equity method | |||
f. | Others | ||
Related parties over which the Company has control or exercises significant influence but with which the Company had no material transactions. |
2007 | 2006 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
Nine months ended September 30 |
||||||||||||||||
Sales |
||||||||||||||||
TSMC-North America |
$ | 134,957,821 | 60 | $ | 144,616,913 | 59 | ||||||||||
Philips |
| | 3,225,151 | 1 | ||||||||||||
Others |
783,463 | | 583,671 | | ||||||||||||
$ | 135,741,284 | 60 | $ | 148,425,735 | 60 | |||||||||||
-33-
2007 | 2006 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
Purchases |
||||||||||||||||
WaferTech |
$ | 7,419,547 | 21 | $ | 9,695,565 | 27 | ||||||||||
SSMC |
3,971,517 | 11 | 5,555,044 | 16 | ||||||||||||
TSMC-Shanghai |
3,947,089 | 11 | 3,099,850 | 9 | ||||||||||||
VIS |
2,956,489 | 8 | 2,818,795 | 8 | ||||||||||||
Others |
990 | | | | ||||||||||||
$ | 18,295,632 | 51 | $ | 21,169,254 | 60 | |||||||||||
Manufacturing expenses |
||||||||||||||||
VisEra |
$ | 28,496 | | $ | | | ||||||||||
Philips |
| | 566,928 | 1 | ||||||||||||
$ | 28,496 | | $ | 566,928 | 1 | |||||||||||
Marketing expenses commissions |
||||||||||||||||
TSMC-Europe |
$ | 216,545 | 24 | $ | 184,306 | 14 | ||||||||||
TSMC-Japan |
166,971 | 18 | 204,592 | 15 | ||||||||||||
TSMC-Korea |
16,251 | 2 | 5,903 | | ||||||||||||
$ | 399,767 | 44 | $ | 394,801 | 29 | |||||||||||
General and administrative expenses rental |
||||||||||||||||
GUC |
$ | 6,451 | | $ | 11,133 | | ||||||||||
Research and development expenses |
||||||||||||||||
TSMC Technology (primarily consulting fees) |
$ | 264,868 | 2 | $ | | | ||||||||||
TSMC Canada (primarily consulting fees) |
56,623 | 1 | | | ||||||||||||
GUC |
49,519 | 1 | 37,142 | | ||||||||||||
Others |
36,828 | | | | ||||||||||||
$ | 407,838 | 4 | $ | 37,142 | | |||||||||||
Sales of property, plant and equipment |
||||||||||||||||
TSMC-Shanghai |
$ | 2,378 | 11 | $ | 401,332 | 48 | ||||||||||
Non-operating income and gains
VIS (primarily technical service income, see
Note 26h) |
$ | 270,794 | 3 | $ | 176,084 | 2 | ||||||||||
VisEra (primarily rental income) |
254,125 | 3 | 187,189 | 2 | ||||||||||||
TSMC-Shanghai (primarily technical service
income) |
251,421 | 3 | 197,400 | 2 | ||||||||||||
SSMC (primarily technical service income, see
Note 26e) |
180,692 | 2 | 268,298 | 3 | ||||||||||||
$ | 957,032 | 11 | $ | 828,971 | 9 | |||||||||||
-34-
2007 | 2006 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
As of September 30 |
||||||||||||||||
Receivables |
||||||||||||||||
TSMC-North America |
$ | 23,713,567 | 100 | $ | 21,680,057 | 98 | ||||||||||
Philips |
| | 224,516 | 1 | ||||||||||||
Others |
119,784 | | 125,847 | 1 | ||||||||||||
$ | 23,833,351 | 100 | $ | 22,030,420 | 100 | |||||||||||
Other receivables |
||||||||||||||||
VIS |
$ | 126,319 | 25 | $ | 88,717 | 9 | ||||||||||
VisEra |
98,418 | 19 | | | ||||||||||||
TSMC-North America |
91,029 | 18 | 228,451 | 22 | ||||||||||||
SSMC |
88,372 | 18 | 142,521 | 14 | ||||||||||||
TSMC-Shanghai |
81,808 | 16 | 482,542 | 46 | ||||||||||||
Others |
19,968 | 4 | 99,992 | 9 | ||||||||||||
$ | 505,914 | 100 | $ | 1,042,223 | 100 | |||||||||||
Payables |
||||||||||||||||
VIS |
$ | 904,635 | 27 | $ | 806,789 | 21 | ||||||||||
WaferTech |
779,480 | 24 | 1,045,183 | 27 | ||||||||||||
TSMC-Shanghai |
733,801 | 22 | 545,706 | 14 | ||||||||||||
SSMC |
639,524 | 19 | 636,181 | 16 | ||||||||||||
TSMC Technology |
136,607 | 4 | 5,099 | | ||||||||||||
Philips |
| | 699,195 | 18 | ||||||||||||
Others |
114,595 | 4 | 156,335 | 4 | ||||||||||||
$ | 3,308,642 | 100 | $ | 3,894,488 | 100 | |||||||||||
Other long-term payables |
||||||||||||||||
Philips (Note 26a) |
$ | | | $ | 409,588 | 100 | ||||||||||
Deferred credits |
||||||||||||||||
TSMC-Shanghai |
$ | 563,839 | 56 | $ | 776,935 | 61 | ||||||||||
VisEra |
77,718 | 8 | 139,893 | 11 | ||||||||||||
$ | 641,557 | 64 | $ | 916,828 | 72 | |||||||||||
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25. | SIGNIFICANT LONG-TERM LEASES | |
The Company leases several parcels of land from the Science Park Administration. These operating leases expire on various dates from December 2007 to December 2026 and can be renewed upon expiration. | ||
As of September 30, 2007, future lease payments were as follows: |
Year | Amount | |||
2007 (4th quarter) |
$ | 85,359 | ||
2008 |
301,926 | |||
2009 |
292,960 | |||
2010 |
243,762 | |||
2011 |
242,180 | |||
2012 and thereafter |
1,820,594 | |||
$ | 2,986,781 | |||
26. | SIGNIFICANT COMMITMENTS AND CONTINGENCIES | |
The significant commitments and contingencies of the Company as of September 30, 2007, except those disclosed in other notes, were as follows: |
a. | On June 20, 2004, the Company and Philips (Philips parted with its semiconductor company which was renamed as NXP B.V. in September 2006) amended the Technical Cooperation Agreement, which was originally signed on May 12, 1997. The amended Technical Cooperation Agreement is for five years beginning from January 1, 2004. Upon expiration, this amended Technical Cooperation Agreement will be terminated and will not be automatically renewed; however, the patent cross license arrangement between the Company and Philips (now NXP B.V.) will survive the expiration of the amended Technical Cooperation Agreement. Under this amended Technical Cooperation Agreement, the Company will pay Philips (now NXP B.V.) royalties based on a fixed amount mutually agreed-on, rather than under a certain percentage of the Companys annual net sales. The Company and Philips (now NXP B.V.) agreed to cross license the patents owned by each party. The Company also obtained through Philips (now NXP B.V.) a number of cross patent licenses. | ||
b. | Under a technical cooperation agreement with ITRI, the R.O.C. Government or its designee approved by TSMC can use up to 35% of TSMCs capacity if 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. The agreement was automatically renewed in 1992, 1997, 2002 and on January 1, 2007. | ||
c. | Under several foundry agreements, the Company shall reserve a portion of its production capacity for certain major customers that have guarantee deposits with the Company. As of September 30, 2007, the Company had a total of US$76,933 thousand of guarantee deposits. |
-36-
d. | 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. The Companys equity interest in SSMC was 32%. Nevertheless, Philips parted with its semiconductor company which was renamed as NXP B.V. in September 2006. The Company 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, the Company and NXP B.V. currently own approximately 39% and 61% of the SSMC shares, respectively. The Company and Philips (now NXP B.V.) committed to buy specific percentages of the production capacity of SSMC. The Company and Philips (now NXP B.V.) are required, in the aggregate, to purchase up to 70% of SSMCs capacity, but the Company 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. | ||
e. | The Company provides technical services to SSMC under a Technical Cooperation Agreement (the Agreement) entered into on May 12, 1999. The Company receives compensation for such services computed at a specific percentage of net selling price of all products sold by SSMC. The Agreement shall remain in force for ten years and may be automatically renewed for successive periods of five years each unless pre-terminated by either party under certain conditions. | ||
f. | Under a Technology Transfer Agreement (TTA) with National Semiconductor Corporation (National) entered into on June 27, 2000, the Company shall receive payments for the licensing of certain technology to National. The agreement was to remain in force for ten years and could be automatically renewed for successive periods of two years thereafter unless either party gives written notice for early termination under certain conditions. In January 2003, the Company and National entered into a Termination Agreement whereby the TTA was terminated. Under the Termination Agreement, the Company will be relieved of any further obligation to transfer any additional technology. In addition, the Company granted National an option to request the transfer of certain technologies under the same terms and conditions as the terminated TTA. The option will expire in January 2008. | ||
g. | In December 2003, the Company entered into a Technology Development and License Agreement with Freescale Semiconductor, Inc. to jointly develop 65-nm SOI (silicon on insulator) technology. The Company will also license related 90-nm SOI technology from Freescale Semiconductor, Inc. Any intellectual properties arising out of the co-development project shall be jointly owned by the parties. In accordance with the agreement, the Company will pay royalties to Freescale Semiconductor, Inc. and will share a portion of the costs associated with the joint development project. | ||
h. | The Company provides a technology transfer to VIS under a Manufacturing License and Technology Transfer Agreement entered into on April 1, 2004. The Company receives compensation for such technology transfer in the form of royalty payments from VIS computed at specific percentages of net selling price of certain products sold by VIS. VIS agreed to reserve its certain capacity to manufacture for the Company certain products at prices as agreed by the parties. | ||
i. | TSMC, TSMC-North America and WaferTech filed a series of lawsuits in late 2003 and 2004 against Semiconductor Manufacturing International Corporation, SMIC (Shanghai) and SMIC Americas (aggregately referring to as SMIC). The lawsuits alleged that SMIC infringed multiple TSMC, TSMC-North America and WaferTech patents and misappropriated TSMC, TSMC-North America and WaferTechs trade secrets. These suits were settled out of court on January 30, 2005. As part of the settlement, Semiconductor Manufacturing International Corporation shall pay US$175 million over six years to resolve TSMC, TSMC-North America and WaferTechs claims. As of September 30, 2007, SMIC had paid US$75 million in accordance with the terms of this settlement agreement. In August 2006, TSMC, TSMC-North America and WaferTech filed a lawsuit against SMIC in Alameda County Superior Court in California for breach of aforementioned settlement agreement, breach of promissory notes and trade secret misappropriation, seeking injunctive relief and monetary damages. In |
-37-
September 2006, SMIC filed a cross-complaint against TSMC, TSMC-North Amercia and WaferTech in the same court, alleging TSMC, TSMC-North America and WaferTech of breach of the settlement agreement and implied covenant of good faith and fair dealing, in response to TSMC, TSMC-North America and WaferTechs August complaint. In November 2006, SMIC filed a complaint with Beijing Peoples High Court against TSMC, TSMC-North America and WaferTech, alleging defamation and breach of good faith. The California State Superior Court of Alameda County issued an Order on TSMC, TSMC-North America and WaferTechs pre-trial motion for a preliminary injunction against SMIC on September 7, 2007. In the Order, the Court found TSMC has demonstrated a significant likelihood that it will ultimately prevail on the merits of its claim for breach of certain paragraphs of the (2005) Settlement Agreement with SMIC. The Court also found TSMC has demonstrated a significant probability of establishing that SMIC retains and is using TSMC Information in SMICs 0.13um and smaller technologies, and there is significant threat of serious irreparable harm to TSMC if SMIC were to disclose or transfer that information before final resolution of the case. Therefore, the Court ordered that, effective immediately, SMIC must provide advance notice and an opportunity for TSMC, TSMC-North America and WaferTech to object before disclosing items enumerated in the Court Order to SMICs third party partners. The Court, however, did not grant a preliminary injunction as requested by TSMC, TSMC-North America and WaferTech. The result of the above-mentioned litigation cannot be determined at this time. | |||
j. | In April 2004, UniRAM Technology, Inc. filed an action with the US District Court in the Northern District of California against TSMC and TSMC North America, alleging patent infringement and trade secret misappropriation and seeking injunctive relief and damages. A jury in the District Court made a verdict in September 2007, awarding US$30.5 million to the plaintiff. TSMC intends to pursue remedies against this verdict. | ||
k. | Amounts available under unused letters of credit as of September 30, 2007 were NT$6,480 thousand. |
27. | ADDITIONAL DISCLOSURES | |
Following are the additional disclosures required by the SFB for the Company and its investees: |
a. | Financing provided: None; | ||
b. | Endorsement/guarantee provided: None; | ||
c. | Marketable securities held: Please see Table 1 attached; | ||
d. | Marketable securities acquired or disposed of at costs or prices of at least NT$100 million or 20% of the paid-in capital: Please see Table 2 attached; | ||
e. | Acquisition of individual real estate properties at costs of at least NT$100 million or 20% of the paid-in capital: Please see Table 3 attached; | ||
f. | Disposal of individual real estate properties at prices of at least NT$100 million or 20% of the paid-in capital: None; | ||
g. | Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: Please see Table 4 attached; | ||
h. | Receivable from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please see Table 5 attached; | ||
i. | Names, locations, and related information of investees on which the Company exercises significant |
-38-
influence: Please see Table 6 attached; | |||
j. | Information about derivatives of investees over which the Company has a controlling interest: | ||
TSMC-Shanghai entered into forward exchange contracts during the nine months ended September 30, 2007 to manage exposures due to foreign exchange rate fluctuations. | |||
Outstanding forward exchange contracts as of September 30, 2007: |
Contract | ||||||||
Amount | ||||||||
Maturity Date | (in Thousands) | |||||||
Sell US$/buy JPY |
October 2007 | JPY 12,000 |
For the nine months ended September 30, 2007, net gains arising from forward exchange contracts of TSMC-Shanghai were NT$1,572 thousand (including realized settlement gains of NT$1,458 thousand and valuation gains of NT$114 thousand). | |||
Xintec entered into forward exchange contracts during the nine months ended September 30, 2007 to manage exposures due to foreign exchange rate fluctuations. | |||
Outstanding forward exchange contracts as of September 30, 2007: |
Contract | ||||||||
Amount | ||||||||
Maturity Date | (in Thousands) | |||||||
Sell US$/buy NT$ |
October 2007 | US$ | 2,000 |
For the nine months ended September 30, 2007, net losses arising from forward exchange contracts of Xintec were NT$1,064 thousand (including realized settlement losses of NT$1,820 thousand and valuation gains of NT$756 thousand). |
k. | Information on investment in Mainland China |
1) | The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, equity in the net gain or net loss, ending balance, amount received as dividends from the investee, and the limitation on investee: Please see Table 7 attached. | ||
2) | Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: Please see Note 24. |
-39-
September 30, 2007 | ||||||||||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||||||||||
The Company | Open-end mutual funds |
|||||||||||||||||||||||||||||||
NITC Bond Fund |
| Available-for-sale financial assets | 12,239 | $ | 2,037,514 | N/A | $ | 2,037,514 | ||||||||||||||||||||||||
Fuh Hwa Bond |
| | 144,073 | 1,943,446 | N/A | 1,943,446 | ||||||||||||||||||||||||||
NITC Taiwan Bond |
| | 103,016 | 1,468,675 | N/A | 1,468,675 | ||||||||||||||||||||||||||
ING Taiwan Bond Fund |
| | 85,581 | 1,304,561 | N/A | 1,304,561 | ||||||||||||||||||||||||||
Prudential Financial Bond Fund |
| | 83,306 | 1,231,721 | N/A | 1,231,721 | ||||||||||||||||||||||||||
President James Bond |
| | 77,128 | 1,203,732 | N/A | 1,203,732 | ||||||||||||||||||||||||||
ING Taiwan Income Fund |
| | 63,947 | 1,024,476 | N/A | 1,024,476 | ||||||||||||||||||||||||||
JF Taiwan Bond Fund |
| | 59,049 | 911,461 | N/A | 911,461 | ||||||||||||||||||||||||||
Dresdner Bond DAM Fund |
| | 71,368 | 836,828 | N/A | 836,828 | ||||||||||||||||||||||||||
Taishin Lucky Fund |
| | 68,945 | 715,509 | N/A | 715,509 | ||||||||||||||||||||||||||
AIG Taiwan Bond Fund |
| | 54,469 | 702,353 | N/A | 702,353 | ||||||||||||||||||||||||||
Cathay Bond |
| | 60,126 | 701,010 | N/A | 701,010 | ||||||||||||||||||||||||||
JF Taiwan First Bond Fund |
| | 35,324 | 502,101 | N/A | 502,101 | ||||||||||||||||||||||||||
HSBC Taiwan Money Management |
| | 27,416 | 411,812 | N/A | 411,812 | ||||||||||||||||||||||||||
INVESCO Bond Fund |
| | 27,176 | 408,423 | N/A | 408,423 | ||||||||||||||||||||||||||
Government bond |
||||||||||||||||||||||||||||||||
2003 Government Bond Series B |
| Available-for-sale financial assets | | 2,346,950 | N/A | 2,346,950 | ||||||||||||||||||||||||||
2004 Government Bond Series B |
| | | 1,194,550 | N/A | 1,194,550 | ||||||||||||||||||||||||||
2006 Government Bond Series D |
| | | 399,200 | N/A | 399,200 | ||||||||||||||||||||||||||
2004 Government Bond Series G |
| | | 198,854 | N/A | 198,854 | ||||||||||||||||||||||||||
2006 Government Bond Series D |
| Held-to-maturity financial assets | | 3,653,229 | N/A | 3,642,704 | ||||||||||||||||||||||||||
2003 Government Bond Series B |
| | | 1,647,923 | N/A | 1,645,861 | ||||||||||||||||||||||||||
2003 Asian Development Bank Govt. Bond |
| | | 850,276 | N/A | 875,103 | ||||||||||||||||||||||||||
2003 Government Bond Series F |
| | | 798,605 | N/A | 795,194 | ||||||||||||||||||||||||||
2003 Government Bond Series H |
| | | 400,927 | N/A | 399,782 | ||||||||||||||||||||||||||
European Investment Bank Bonds |
| | | 377,938 | N/A | 400,000 | ||||||||||||||||||||||||||
2004 Kaohsiung Municipal Series B |
| | | 249,998 | N/A | 250,004 | ||||||||||||||||||||||||||
2003European
Bank for Reconstruction and Development Govt. Bond Series A |
| | | 89,522 | N/A | 90,000 | ||||||||||||||||||||||||||
Corporate bond |
-40-
September 30, 2007 | ||||||||||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||||||||||
Hua Nan Bank |
| Available-for-sale financial assets | | 1,566,347 | N/A | 1,566,347 | ||||||||||||||||||||||||||
Cathay Bank |
| | | 1,175,130 | N/A | 1,175,130 | ||||||||||||||||||||||||||
Taiwan Power Company |
| | | 898,630 | N/A | 898,630 | ||||||||||||||||||||||||||
Formosa Petrochemical Corporation |
| | | 398,934 | N/A | 398,934 | ||||||||||||||||||||||||||
Formosa Petrochemical Corporation |
| Held-to-maturity financial assets | | 3,577,937 | N/A | 3,542,148 | ||||||||||||||||||||||||||
Taiwan Power Company |
| | | 3,078,978 | N/A | 3,078,790 | ||||||||||||||||||||||||||
Nan Ya Plastics Corporation |
| | | 2,003,029 | N/A | 1,994,730 | ||||||||||||||||||||||||||
CPC Corporation, Taiwan |
| | | 1,200,368 | N/A | 1,199,372 |
-41-
September 30, 2007 | ||||||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||||||
China Steel Corporation | | Held-to-maturity financial assets | | $ | 1,000,000 | N/A | $ | 986,583 | ||||||||||||||||||||
Formosa Plastic Corporation | | | | 389,056 | N/A | 388,927 | ||||||||||||||||||||||
Shanghai commercial & Saving Bank | | | | 291,138 | N/A | 291,067 | ||||||||||||||||||||||
Stocks | ||||||||||||||||||||||||||||
TSMC Global | Subsidiary | Investment accounted for using equity method | 1 | 44,234,333 | 100 | 44,234,333 | ||||||||||||||||||||||
TSMC International | Subsidiary | | 987,968 | 27,553,919 | 100 | 27,553,919 | ||||||||||||||||||||||
SSMC | Investee accounted for using equity method | | 463 | 8,674,862 | 39 | 7,656,468 | ||||||||||||||||||||||
VIS | Investee accounted for using equity method | | 616,240 | 10,760,885 | 36 | 18,025,034 | ||||||||||||||||||||||
TSMC Partners | Subsidiary | | 300 | 4,667,437 | 100 | 4,667,437 | ||||||||||||||||||||||
TSMC-North America | Subsidiary | | 11,000 | 2,227,896 | 100 | 2,227,896 | ||||||||||||||||||||||
Xintec | Investee with a controlling financial interest | | 91,703 | 1,429,804 | 43 | 1,339,493 | ||||||||||||||||||||||
GUC | Investee with a controlling financial interest | | 42,572 | 750,200 | 37 | 11,132,670 | ||||||||||||||||||||||
TSMC-Japan | Subsidiary | | 6 | 102,257 | 100 | 102,257 | ||||||||||||||||||||||
TSMC-Europe | Subsidiary | | | 74,994 | 100 | 74,994 | ||||||||||||||||||||||
TSMC-Korea | Subsidiary | | 80 | 16,014 | 100 | 16,014 | ||||||||||||||||||||||
United Industrial Gases Co., Ltd. | | Financial assets carried at cost | 16,783 | 193,584 | 10 | 282,525 | ||||||||||||||||||||||
Shin-Etsu Handotai Taiwan Co., Ltd. | | | 10,500 | 105,000 | 7 | 292,174 | ||||||||||||||||||||||
W.K. Technology Fund IV | | | 4,000 | 40,000 | 2 | 56,641 | ||||||||||||||||||||||
Hontung Venture Capital Co., Ltd. | | | 2,633 | 26,329 | 10 | 24,196 | ||||||||||||||||||||||
Fund | ||||||||||||||||||||||||||||
Horizon Ventures Fund | | Financial assets carried at cost | | 312,950 | 12 | 312,950 | ||||||||||||||||||||||
Crimson Asia Capital | | | | 69,344 | 1 | 69,344 | ||||||||||||||||||||||
Capital | ||||||||||||||||||||||||||||
TSMC-Shanghai | Subsidiary | Investment accounted for using equity method | | 8,567,668 | 100 | 8,565,232 | ||||||||||||||||||||||
VTAF II | Subsidiary | | | 1,026,700 | 98 | 1,022,244 | ||||||||||||||||||||||
VTAF III | Subsidiary | | | 786,064 | 98 | 777,625 | ||||||||||||||||||||||
Emerging Alliance | Subsidiary | | | 683,002 | 99 | 683,002 | ||||||||||||||||||||||
Chi Cheng | Subsidiary | | | 170,542 | 36 | 629,106 | Treasury stock of NT$458,564 thousand is deducted from the carrying value | |||||||||||||||||||||
Hsin Ruey | Subsidiary | | | 168,918 | 36 | 628,429 | Treasury stock of NT$459,511 thousand is deducted from the carrying value | |||||||||||||||||||||
Chi Cherng |
Stocks | |||||||||||||||||||||||||||
TSMC | Parent Company | Available-for-sale financial assets | 17,032 | 1,078,125 | | 1,078,125 | ||||||||||||||||||||||
VIS | Investments accounted for using equity method | Investee accounted for using equity method | 5,082 | 106,841 | | 148,646 |
-42-
September 30, 2007 | ||||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||||
Hsin Ruey |
Stocks | |||||||||||||||||||||||||
TSMC | Parent Company | Available-for-sale financial assets | 17,064 | $ | 1,080,146 | | $ | 1,080,146 | ||||||||||||||||||
VIS | Investee accounted for using equity method | Investments accounted for using equity method | 3,748 | 83,524 | | 109,617 | ||||||||||||||||||||
TSMC International |
Stocks | |||||||||||||||||||||||||
InveStar | Subsidiary | Investments accounted for using equity method | 9,207 | US$ | 46,802 | 97 | US$ | 46,802 | ||||||||||||||||||
InveStar II | Subsidiary | | 51,300 | US$ | 60,456 | 97 | US$ | 60,456 | ||||||||||||||||||
TSMC Development | Subsidiary | | 1 | US$ | 668,997 | 100 | US$ | 668,997 | ||||||||||||||||||
TSMC Technology | Subsidiary | | 1 | US$ | 6,444 | 100 | US$ | 6,444 | ||||||||||||||||||
TSMC Development |
WaferTech | Subsidiary | Investments accounted for using equity method | | US$ | 264,777 | 100 | US$ | 264,777 | |||||||||||||||||
TSMC Partners |
Common stock | |||||||||||||||||||||||||
VisEra Holding Company | Investee accounted for using equity method | Investments accounted for using equity method | 43,000 | US$ | 65,629 | 49 | US$ | 65,629 | ||||||||||||||||||
TSMC Canada | Investee accounted for using equity method | | 2,300 | US$ | 2,622 | 100 | US$ | 2,622 | ||||||||||||||||||
Emerging Alliance |
Common stock | |||||||||||||||||||||||||
NetLogic Microsystems, Inc. | | Financial assets at fair value through profit or loss | 18 | US$ | 650 | | US$ | 650 | ||||||||||||||||||
Ikanos Communication, Inc. | | Available-for-sale financial assets | 280 | US$ | 1,568 | 1 | US$ | 1,568 | ||||||||||||||||||
Global Investment Holding, Inc. | | Financial assets carried at cost | 10,800 | $ | 100,000 | 6 | $ | 100,000 | ||||||||||||||||||
RichWave Technology Corp. | | | 4,247 | US$ | 1,648 | 13 | US$ | 1,648 | ||||||||||||||||||
Pixim, Inc. | | | 1,036 | US$ | 275 | | US$ | 275 | ||||||||||||||||||
SiRF Technology Holdings | | | 93 | US$ | 1,743 | 3 | US$ | 1,743 | ||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||
Pixim, Inc. | | Financial assets carried at cost | 3,606 | US$ | 862 | 2 | US$ | 862 | ||||||||||||||||||
Mosaic Systems, Inc. | | | 2,481 | US$ | 12 | 6 | US$ | 12 | ||||||||||||||||||
Miradia, Inc. | | | 3,040 | US$ | 1,000 | 3 | US$ | 1,000 | ||||||||||||||||||
Axiom Microdevices, Inc. | | | 1,000 | US$ | 1,000 | 1 | US$ | 1,000 | ||||||||||||||||||
Optichron, Inc. | | | 714 | US$ | 1,000 | 4 | US$ | 1,000 | ||||||||||||||||||
NuCORE Technology Inc. | | | 2,254 | US$ | 1,388 | 2 | US$ | 1,388 | ||||||||||||||||||
Next IO, Inc. | | | 800 | US$ | 500 | 2 | US$ | 500 | ||||||||||||||||||
Audience, Inc. | | | 1,654 | US$ | 250 | 1 | US$ | 250 | ||||||||||||||||||
Teknovus, Inc. | | | 6,977 | US$ | 1,327 | 3 | US$ | 1,327 | ||||||||||||||||||
Optimal Corporation | | | 583 | US$ | 600 | 4 | US$ | 600 | ||||||||||||||||||
Mobilygen | | | 1,415 | US$ | 750 | 1 | US$ | 750 | ||||||||||||||||||
VTAF II |
Common stock | |||||||||||||||||||||||||
Yobon | | Financial assets carried at cost | 1,875 | US$ | 919 | 13 | US$ | 919 | ||||||||||||||||||
Sentelic | | | 1,200 | US$ | 2,040 | 15 | US$ | 2,040 | ||||||||||||||||||
Leadtrend | | | 1,265 | US$ | 660 | 5 | US$ | 660 | ||||||||||||||||||
RichWave Technology Corp. | | | 500 | US$ | 231 | 2 | US$ | 231 |
- 43 -
September 30, 2007 | ||||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||
Powerprecise Solutions, Inc. | | Financial assets carried at cost | 1,445 | US$ | 1,400 | 11 | US$ | 1,400 | ||||||||||||||||||
Tzero Technologies, Inc. | | | 730 | US$ | 1,500 | 2 | US$ | 1,500 | ||||||||||||||||||
Miradia, Inc. | | | 3,416 | US$ | 3,106 | 3 | US$ | 3,106 | ||||||||||||||||||
Axiom Microdevices, Inc. | | | 5,044 | US$ | 2,088 | 4 | US$ | 2,088 | ||||||||||||||||||
Next IO, Inc. | | | 216 | US$ | 182 | | US$ | 182 | ||||||||||||||||||
Ageia Technologies, Inc. | | | 2,030 | US$ | 2,074 | 2 | US$ | 2,074 | ||||||||||||||||||
Audience, Inc. | | | 2,988 | US$ | 664 | 1 | US$ | 664 | ||||||||||||||||||
GemFire Corporation | | | 600 | US$ | 68 | 1 | US$ | 68 | ||||||||||||||||||
Optichron, Inc. | | | 1,050 | US$ | 1,844 | 2 | US$ | 1,844 | ||||||||||||||||||
Xceive | | | 714 | US$ | 1,000 | 2 | US$ | 1,000 | ||||||||||||||||||
5V Technologies, Inc. | | | 2,357 | US$ | 1,768 | 11 | US$ | 1,768 | ||||||||||||||||||
Power Analog Microelectronics | | | 3,039 | US$ | 2,409 | 13 | US$ | 2,409 | ||||||||||||||||||
Impinj, Inc. | | | 475 | US$ | 1,000 | | US$ | 1,000 | ||||||||||||||||||
Beceem Communications | | | 650 | US$ | 1,600 | 1 | US$ | 1,600 | ||||||||||||||||||
Teknovus, Inc. | | | 1,599 | US$ | 454 | | US$ | 454 | ||||||||||||||||||
Aquantia Corporation | | | 1,786 | US$ | 2,273 | 5 | US$ | 2,273 | ||||||||||||||||||
Pixim, Inc. | | | 3,279 | US$ | 641 | 2 | US$ | 641 | ||||||||||||||||||
VTAF III |
Common stock | |||||||||||||||||||||||||
Mutual-Pak, Technology Co. LTD | | Investment accounted for using equity method | 4,090 | US$ | 1,240 | 45 | US$ | 1,240 | ||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||
Quellan, Inc. | | Financial assets carried at cost | 2,991 | US$ | 3,498 | 7 | US$ | 3,498 | ||||||||||||||||||
M2000, Inc. | | | 1,500 | US$ | 1,500 | 4 | US$ | 1,500 | ||||||||||||||||||
Exclara, Inc. (Formerly SynDiTec, Inc.) | | | 14,477 | US$ | 2,412 | 19 | US$ | 2,412 | ||||||||||||||||||
Validity Sensors, Inc. | | | 5,333 | US$ | 2,000 | 7 | US$ | 2,000 | ||||||||||||||||||
Silicon Technical Services, LLC. | | | 915 | US$ | 1,000 | 2 | US$ | 1,000 | ||||||||||||||||||
Neoconix, Inc. | | | 2,458 | US$ | 4,000 | 6 | US$ | 4,000 | ||||||||||||||||||
Advasense Sensors, Inc. | | | 1,624 | US$ | 1,500 | 6 | US$ | 1,500 | ||||||||||||||||||
Tilera, Inc. | | | 1,698 | US$ | 2,360 | 3 | US$ | 2,360 | ||||||||||||||||||
Auramicro, Inc. | | | 2,500 | US$ | 750 | 17 | US$ | 750 | ||||||||||||||||||
Convertible bond | ||||||||||||||||||||||||||
GTBF, Inc. | | Financial assets carried at cost | | US$ | 1,500 | N/A | US$ | 1,500 | ||||||||||||||||||
InveStar |
Common stock | |||||||||||||||||||||||||
Monolithic Power Systems, Inc. | | Financial assets at fair value through profit or loss | 1,352 | US$ | 34,337 | 4 | US$ | 34,337 | ||||||||||||||||||
Advanced Power Electronics Corp. | | Available-for-sale financial assets | 58 | US$ | 19 | | US$ | 19 |
- 44 -
September 30, 2007 | ||||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||||
Capella Microsystems (Taiwan), Inc. | | Financial assets carried at cost | 530 | US$ | 154 | 2 | US$ | 154 | ||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||
Integrated Memory Logic, Inc. | | Financial assets carried at cost | 2,872 | US$ | 1,221 | 9 | US$ | 1,221 | ||||||||||||||||||
IP Unity, Inc. | | | 1,008 | US$ | 494 | 1 | US$ | 494 | ||||||||||||||||||
Sonics, Inc. | | | 1,843 | US$ | 3,530 | 2 | US$ | 3,530 | ||||||||||||||||||
NanoAmp Solutions, Inc. | | | 541 | US$ | 853 | 2 | US$ | 853 | ||||||||||||||||||
Memsic, Inc. | | | 2,727 | US$ | 1,500 | 9 | US$ | 1,500 |
- 45 -
September 30, 2007 | ||||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||||
InveStar II |
Common stock | |||||||||||||||||||||||||
Monolithic Power Systems, Inc. | | Financial assets at fair value through profit or loss | 864 | US$ | 21,958 | 3 | US$ | 21,958 | ||||||||||||||||||
Geo Vision, Inc. | | | 6 | US$ | 55 | | US$ | 55 | ||||||||||||||||||
Rich Tek Technology Corp. | | | 152 | US$ | 1,819 | | US$ | 1,819 | ||||||||||||||||||
Geo Vision, Inc. | | Available-for-sale financial assets | 15 | US$ | 127 | | US$ | 127 | ||||||||||||||||||
Rich Tek Technology Corp. | | | 261 | US$ | 3,133 | | US$ | 3,133 | ||||||||||||||||||
Ralink Technology (Taiwan), Inc. | | Financial assets carried at cost | 2,383 | US$ | 791 | 3 | US$ | 791 | ||||||||||||||||||
Capella Microsystems (Taiwan), Inc. | | | 534 | US$ | 210 | 2 | US$ | 210 | ||||||||||||||||||
Auden Technology MFG. Co., Ltd. | | | 1,049 | US$ | 223 | 4 | US$ | 223 | ||||||||||||||||||
EoNEX Technologies, Inc. | | | 55 | US$ | 3,048 | 5 | US$ | 3,048 | ||||||||||||||||||
Goyatek Technology, Corp. | | | 2,088 | US$ | 545 | 7 | US$ | 545 | ||||||||||||||||||
Trendchip Technologics Corp. | | | 1,000 | US$ | 574 | 4 | US$ | 574 | ||||||||||||||||||
EON Technology, Corp. | | | 4,243 | US$ | 1,175 | 6 | US$ | 1,175 | ||||||||||||||||||
eLCOS Microdisplay Technology, Ltd. | | | 270 | US$ | 27 | 1 | US$ | 27 | ||||||||||||||||||
Epic Communication, Inc. | | | 191 | US$ | 37 | 1 | US$ | 37 | ||||||||||||||||||
Sonics, Inc. | | | 2,220 | US$ | 32 | 3 | US$ | 32 | ||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||
Memsic, Inc. | | Financial assets carried at cost | 2,289 | US$ | 1,560 | 7 | US$ | 1,560 | ||||||||||||||||||
NanoAmp Solutions, Inc. | | | 375 | US$ | 1,500 | 1 | US$ | 1,500 | ||||||||||||||||||
Kilopass Technology, Inc. | | | 3,887 | US$ | 2,000 | 6 | US$ | 2,000 | ||||||||||||||||||
FangTek, Inc. | | | 6,931 | US$ | 3,250 | 16 | US$ | 3,250 | ||||||||||||||||||
Sonics, Inc. | | | 2,115 | US$ | 3,082 | 3 | US$ | 3,082 | ||||||||||||||||||
eLCOS Microdisplay Technology, Ltd. | | | 3,500 | US$ | 3,500 | 8 | US$ | 3,500 | ||||||||||||||||||
Alchip Technologies Limited | | | 6,128 | US$ | 2,950 | 15 | US$ | 2,950 | ||||||||||||||||||
Convertible bond | ||||||||||||||||||||||||||
eLCOS Microdisplay Technology, Ltd. | | Financial assets carried at cost | | US$ | 200 | N/A | US$ | 200 | ||||||||||||||||||
TSMC Global |
Agency bonds | |||||||||||||||||||||||||
Fed Hm Ln Pc Pool 1b1107 | | Available-for-sale financial assets | | US$ | 558 | N/A | US$ | 558 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1b1150 | | | | US$ | 1,043 | N/A | US$ | 1,043 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1b1225 | | | | US$ | 145 | N/A | US$ | 145 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1b2566 | | | | US$ | 170 | N/A | US$ | 170 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1b2632 | | | | US$ | 185 | N/A | US$ | 185 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1b2642 | | | | US$ | 249 | N/A | US$ | 249 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1b2776 | | | | US$ | 347 | N/A | US$ | 347 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1b2792 | | | | US$ | 234 | N/A | US$ | 234 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1b2810 | | | | US$ | 305 | N/A | US$ | 305 |
- 46 -
September 30, 2007 | ||||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||||
Fed Hm Ln Pc Pool 1g0038 | | | | US$ | 306 | N/A | US$ | 306 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1g0053 | | | | US$ | 381 | N/A | US$ | 381 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1g0104 | | | | US$ | 148 | N/A | US$ | 148 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1g1282 | | | | US$ | 4,199 | N/A | US$ | 4,199 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1g1411 | | | | US$ | 3,829 | N/A | US$ | 3,829 | ||||||||||||||||||
Fed Hm Ln Pc Pool 1g1616 | | | | US$ | 4,451 | N/A | US$ | 4,451 |
- 47 -
September 30, 2007 | ||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||
Fed Hm Ln Pc Pool 1g1921 | | Available-for-sale financial assets | | US$ | 4,353 | N/A | US$ | 4,353 | ||||||||||||||||
Fed Hm Ln Pc Pool 1g2162 | | | | US$ | 5,787 | N/A | US$ | 5,787 | ||||||||||||||||
Fed Hm Ln Pc Pool 1g2593 | | | | US$ | 5,595 | N/A | US$ | 5,595 | ||||||||||||||||
Fed Hm Ln Pc Pool 1h2520 | | | | US$ | 2,753 | N/A | US$ | 2,753 | ||||||||||||||||
Fed Hm Ln Pc Pool 1h2524 | | | | US$ | 2,062 | N/A | US$ | 2,062 | ||||||||||||||||
Fed Hm Ln Pc Pool 1j0410 | | | | US$ | 5,881 | N/A | US$ | 5,881 | ||||||||||||||||
Fed Hm Ln Pc Pool 780870 | | | | US$ | 765 | N/A | US$ | 765 | ||||||||||||||||
Fed Hm Ln Pc Pool 781959 | | | | US$ | 4,264 | N/A | US$ | 4,264 | ||||||||||||||||
Fed Hm Ln Pc Pool 782785 | | | | US$ | 264 | N/A | US$ | 264 | ||||||||||||||||
Fed Hm Ln Pc Pool 782837 | | | | US$ | 518 | N/A | US$ | 518 | ||||||||||||||||
Fed Hm Ln Pc Pool 782968 | | | | US$ | 1,182 | N/A | US$ | 1,182 | ||||||||||||||||
Fed Hm Ln Pc Pool 783022 | | | | US$ | 551 | N/A | US$ | 551 | ||||||||||||||||
Fed Hm Ln Pc Pool 783026 | | | | US$ | 315 | N/A | US$ | 315 | ||||||||||||||||
Fed Hm Ln Pc Pool 847628 | | | | US$ | 3,299 | N/A | US$ | 3,299 | ||||||||||||||||
Fed Hm Ln Pc Pool B19205 | | | | US$ | 7,288 | N/A | US$ | 7,288 | ||||||||||||||||
Fed Hm Ln Pc Pool E89857 | | | | US$ | 1,361 | N/A | US$ | 1,361 | ||||||||||||||||
Fed Hm Ln Pc Pool G11295 | | | | US$ | 1,167 | N/A | US$ | 1,167 | ||||||||||||||||
Fed Hm Ln Pc Pool G12009 | | | | US$ | 3,760 | N/A | US$ | 3,760 | ||||||||||||||||
Fed Hm Ln Pc Pool M80855 | | | | US$ | 3,037 | N/A | US$ | 3,037 | ||||||||||||||||
Fed Home Ln Bank | | | | US$ | 5,081 | N/A | US$ | 5,081 | ||||||||||||||||
Federal Farm Cr Bks | | | | US$ | 3,446 | N/A | US$ | 3,446 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 8,928 | N/A | US$ | 8,928 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 8,891 | N/A | US$ | 8,891 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 4,938 | N/A | US$ | 4,938 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 5,939 | N/A | US$ | 5,939 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 4,956 | N/A | US$ | 4,956 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 3,029 | N/A | US$ | 3,029 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 6,183 | N/A | US$ | 6,183 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 5,450 | N/A | US$ | 5,450 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 5,982 | N/A | US$ | 5,982 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 4,552 | N/A | US$ | 4,552 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 9,008 | N/A | US$ | 9,008 | ||||||||||||||||
Federal Home Ln Bks | | | | US$ | 8,205 | N/A | US$ | 8,205 | ||||||||||||||||
Federal Home Ln Mtg | | | | US$ | 5,671 | N/A | US$ | 5,671 | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 1,380 | N/A | US$ | 1,380 | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 3,531 | N/A | US$ | 3,531 |
- 48 -
September 30, 2007 | ||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 2,234 | N/A | US$ | 2,234 | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 856 | N/A | US$ | 856 | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 3,532 | N/A | US$ | 3,532 | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 76 | N/A | US$ | 76 | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 2,574 | N/A | US$ | 2,574 | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 2,992 | N/A | US$ | 2,992 | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 2,414 | N/A | US$ | 2,414 | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 1,183 | N/A | US$ | 1,183 | ||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 7,278 | N/A | US$ | 7,278 |
- 49 -
September 30, 2007 | ||||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||||
Federal Home Ln Mtg Corp. | | Available-for-sale financial assets | | US$ | 2,296 | N/A | US$ | 2,296 | ||||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 3,953 | N/A | US$ | 3,953 | ||||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 2,332 | N/A | US$ | 2,332 | ||||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 3,589 | N/A | US$ | 3,589 | ||||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 3,588 | N/A | US$ | 3,588 | ||||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 3,500 | N/A | US$ | 3,500 | ||||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 3,354 | N/A | US$ | 3,354 | ||||||||||||||||||
Federal Home Ln Mtg Corp. | | | | US$ | 3,900 | N/A | US$ | 3,900 | ||||||||||||||||||
Federal Home Ln Mtg Disc Nts | | | | US$ | 22,161 | N/A | US$ | 22,161 | ||||||||||||||||||
Federal Home Loan Bank | | | | US$ | 4,556 | N/A | US$ | 4,556 | ||||||||||||||||||
Federal Home Loan Bank | | | | US$ | 3,460 | N/A | US$ | 3,460 | ||||||||||||||||||
Federal Home Loan Bank | | | | US$ | 8,121 | N/A | US$ | 8,121 | ||||||||||||||||||
Federal National Mort Assoc | | | | US$ | 3,035 | N/A | US$ | 3,035 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 4,439 | N/A | US$ | 4,439 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 2,230 | N/A | US$ | 2,230 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 2,400 | N/A | US$ | 2,400 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 1,298 | N/A | US$ | 1,298 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 5,011 | N/A | US$ | 5,011 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 6,515 | N/A | US$ | 6,515 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 8,550 | N/A | US$ | 8,550 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 5,019 | N/A | US$ | 5,019 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 5,027 | N/A | US$ | 5,027 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 3,349 | N/A | US$ | 3,349 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 2,006 | N/A | US$ | 2,006 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 3,703 | N/A | US$ | 3,703 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 4,503 | N/A | US$ | 4,503 | ||||||||||||||||||
Federal Natl Mtg Assn | | | | US$ | 48 | N/A | US$ | 48 | ||||||||||||||||||
Federal Natl Mtg Assn Gtd | | | | US$ | 1,844 | N/A | US$ | 1,844 | ||||||||||||||||||
Federal Natl Mtg Assn Medium | | | | US$ | 3,473 | N/A | US$ | 3,473 | ||||||||||||||||||
Federal Natl Mtg Assn Mtn | | | | US$ | 2,962 | N/A | US$ | 2,962 | ||||||||||||||||||
Federal Natl Mtg Assn Mtn | | | | US$ | 3,152 | N/A | US$ | 3,152 | ||||||||||||||||||
Federal Natl Mtg Assn Mtn | | | | US$ | 5,383 | N/A | US$ | 5,383 | ||||||||||||||||||
Federal Natl Mtg Assn Mtn | | | | US$ | 3,766 | N/A | US$ | 3,766 | ||||||||||||||||||
Federal Natl Mtg Assn Mtn | | | | US$ | 3,027 | N/A | US$ | 3,027 | ||||||||||||||||||
Fnma Pool 254507 | | | | US$ | 1,254 | N/A | US$ | 1,254 | ||||||||||||||||||
Fnma Pool 254834 | | | | US$ | 1,236 | N/A | US$ | 1,236 |
- 50 -
September 30, 2007 | ||||||||||||||||||||||||||
Market Value or | ||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Net Asset Value | |||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership | (US$ in Thousands) | Note | ||||||||||||||||||
Fnma Pool 255883 | | | | US$ | 3,189 | N/A | US$ | 3,189 | ||||||||||||||||||
Fnma Pool 555549 | | | | US$ | 1,409 | N/A | US$ | 1,409 | ||||||||||||||||||
Fnma Pool 555715 | | | | US$ | 176 | N/A | US$ | 176 |