- 1 -
- 2 -
2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
ASSETS |
||||||||||||||||
CURRENT ASSETS |
||||||||||||||||
Cash and cash equivalents (Notes 2 and 4) |
$ | 102,286,286 | 20 | $ | 71,356,901 | 13 | ||||||||||
Financial assets at fair value through profit or loss (Notes 2, 5 and 23) |
367,461 | | 12,970 | | ||||||||||||
Available-for-sale financial assets (Notes 2, 6 and 23) |
| | 16,936,633 | 3 | ||||||||||||
Held-to-maturity financial assets (Notes 2, 7 and 23) |
8,374,389 | 2 | 5,063,096 | 1 | ||||||||||||
Receivables from related parties (Note 24) |
22,464,807 | 4 | 27,255,916 | 5 | ||||||||||||
Notes and accounts receivable |
20,825,053 | 4 | 22,662,860 | 4 | ||||||||||||
Allowance for doubtful receivables (Notes 2 and 8) |
(436,000 | ) | | (686,143 | ) | | ||||||||||
Allowance for sales returns and others (Notes 2 and 8) |
(8,874,199 | ) | (2 | ) | (5,339,469 | ) | (1 | ) | ||||||||
Other receivables from related parties (Note 24) |
321,499 | | 315,293 | | ||||||||||||
Other financial assets (Note 25) |
903,842 | | 564,972 | | ||||||||||||
Inventories (Notes 2, 3 and 9) |
17,194,184 | 3 | 19,429,551 | 4 | ||||||||||||
Deferred income tax assets (Notes 2 and 17) |
4,287,040 | 1 | 2,915,006 | 1 | ||||||||||||
Prepaid expenses and other current assets |
613,580 | | 1,208,644 | | ||||||||||||
Total current assets |
168,327,942 | 32 | 161,696,230 | 30 | ||||||||||||
LONG-TERM INVESTMENTS (Notes 2, 6, 7, 10, 11 and 23) |
||||||||||||||||
Investments accounted for using equity method |
105,085,064 | 20 | 109,129,339 | 21 | ||||||||||||
Available-for-sale financial assets |
1,033,473 | | 4,003,970 | 1 | ||||||||||||
Held-to-maturity financial assets |
13,278,683 | 3 | 11,416,050 | 2 | ||||||||||||
Financial assets carried at cost |
501,563 | | 748,263 | | ||||||||||||
Total long-term investments |
119,898,783 | 23 | 125,297,622 | 24 | ||||||||||||
PROPERTY, PLANT AND EQUIPMENT (Notes 2, 12 and 24) |
||||||||||||||||
Cost |
||||||||||||||||
Buildings |
123,783,029 | 24 | 113,146,254 | 21 | ||||||||||||
Machinery and equipment |
674,274,132 | 129 | 632,130,632 | 119 | ||||||||||||
Office equipment |
10,337,123 | 2 | 9,597,292 | 2 | ||||||||||||
808,394,284 | 155 | 754,874,178 | 142 | |||||||||||||
Accumulated depreciation |
(610,117,838 | ) | (117 | ) | (538,829,638 | ) | (101 | ) | ||||||||
Advance payments and construction in progress |
18,320,302 | 4 | 10,960,925 | 2 | ||||||||||||
Net property, plant and equipment |
216,596,748 | 42 | 227,005,465 | 43 | ||||||||||||
INTANGIBLE ASSETS |
||||||||||||||||
Goodwill (Note 2) |
1,567,756 | | 1,567,756 | | ||||||||||||
Deferred charges, net (Notes 2 and 13) |
5,453,680 | 1 | 6,466,929 | 1 | ||||||||||||
Total intangible assets |
7,021,436 | 1 | 8,034,685 | 1 | ||||||||||||
OTHER ASSETS |
||||||||||||||||
Deferred income tax assets (Notes 2 and 17) |
6,973,800 | 1 | 7,504,585 | 1 | ||||||||||||
Refundable deposits |
2,754,296 | 1 | 2,666,676 | 1 | ||||||||||||
Others (Note 2) |
487,358 | | 57,111 | | ||||||||||||
Total other assets |
10,215,454 | 2 | 10,228,372 | 2 | ||||||||||||
TOTAL |
$ | 522,060,363 | 100 | $ | 532,262,374 | 100 | ||||||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||
CURRENT LIABILITIES |
||||||||||||||||
Financial liabilities at fair value through profit or loss (Notes 2, 5 and 23) |
$ | | | $ | 314,630 | | ||||||||||
Accounts payable |
8,297,913 | 1 | 6,948,805 | 1 | ||||||||||||
Payables to related parties (Note 24) |
2,294,155 | | 2,573,875 | 1 | ||||||||||||
Income tax payable (Notes 2 and 17) |
5,726,656 | 1 | 9,071,046 | 2 | ||||||||||||
Bonuses payable to employees and directors (Notes 2, 3 and 19) |
8,618,411 | 2 | 13,265,568 | 3 | ||||||||||||
Payables to contractors and equipment suppliers |
15,520,005 | 3 | 7,390,905 | 1 | ||||||||||||
Accrued expenses and other current liabilities (Note 15) |
8,675,196 | 2 | 11,153,920 | 2 | ||||||||||||
Current portion of bonds payable (Note 14) |
| | 8,000,000 | 1 | ||||||||||||
Total current liabilities |
49,132,336 | 9 | 58,718,749 | 11 | ||||||||||||
LONG-TERM LIABILITIES |
||||||||||||||||
Bonds payable (Note 14) |
4,500,000 | 1 | 4,500,000 | 1 | ||||||||||||
Other long-term payables (Note 15) |
579,600 | | 1,071,214 | | ||||||||||||
Total long-term liabilities |
5,079,600 | 1 | 5,571,214 | 1 | ||||||||||||
OTHER LIABILITIES |
||||||||||||||||
Accrued pension cost (Notes 2 and 16) |
3,786,616 | 1 | 3,695,766 | 1 | ||||||||||||
Guarantee deposits (Note 27) |
1,104,704 | | 1,618,686 | | ||||||||||||
Deferred credits (Notes 2 and 24) |
71,809 | | 582,206 | | ||||||||||||
Total other liabilities |
4,963,129 | 1 | 5,896,658 | 1 | ||||||||||||
Total liabilities |
59,175,065 | 11 | 70,186,621 | 13 | ||||||||||||
CAPITAL STOCK NT$10 PAR VALUE (Notes 19 and 21) |
||||||||||||||||
Authorized: 28,050,000 thousand shares |
||||||||||||||||
Issued: 25,900,662 thousand shares in 2009
|
||||||||||||||||
25,904,166 thousand shares in 2008 |
259,006,623 | 50 | 259,041,660 | 49 | ||||||||||||
CAPITAL SURPLUS (Notes 2 and 19) |
55,439,919 | 10 | 50,463,438 | 9 | ||||||||||||
RETAINED EARNINGS (Note 19) |
||||||||||||||||
Appropriated as legal capital reserve |
77,317,710 | 15 | 67,324,393 | 13 | ||||||||||||
Appropriated as special capital reserve |
| | 391,857 | | ||||||||||||
Unappropriated earnings |
71,898,923 | 14 | 103,062,463 | 19 | ||||||||||||
149,216,633 | 29 | 170,778,713 | 32 | |||||||||||||
OTHERS (Notes 2, 21 and 23) |
||||||||||||||||
Cumulative translation adjustments |
(1,272,298 | ) | | (1,584,029 | ) | | ||||||||||
Unrealized gain/loss on financial instruments |
494,421 | | (124,039 | ) | | |||||||||||
Treasury stock: 278,875 thousand shares |
| | (16,499,990 | ) | (3 | ) | ||||||||||
(777,877 | ) | | (18,208,058 | ) | (3 | ) | ||||||||||
Total shareholders equity |
462,885,298 | 89 | 462,075,753 | 87 | ||||||||||||
TOTAL |
$ | 522,060,363 | 100 | $ | 532,262,374 | 100 | ||||||||||
- 3 -
2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
GROSS SALES (Notes 2 and 24) |
$ | 206,462,258 | $ | 266,527,657 | ||||||||||||
SALES RETURNS AND ALLOWANCES (Notes 2 and 8) |
9,715,735 | 5,586,784 | ||||||||||||||
NET SALES |
196,746,523 | 100 | 260,940,873 | 100 | ||||||||||||
COST OF SALES (Notes 3, 9, 18 and 24) |
113,516,518 | 58 | 142,456,953 | 55 | ||||||||||||
GROSS PROFIT |
83,230,005 | 42 | 118,483,920 | 45 | ||||||||||||
UNREALIZED GROSS PROFIT FROM AFFILIATES (Note
2) |
128,152 | | 164,705 | | ||||||||||||
REALIZED GROSS PROFIT |
83,101,853 | 42 | 118,319,215 | 45 | ||||||||||||
OPERATING EXPENSES (Notes 18 and 24) |
||||||||||||||||
Research and development |
13,686,108 | 7 | 15,359,634 | 5 | ||||||||||||
General and administrative |
7,246,047 | 3 | 7,829,752 | 3 | ||||||||||||
Marketing |
1,427,041 | 1 | 1,845,955 | 1 | ||||||||||||
Total operating expenses |
22,359,196 | 11 | 25,035,341 | 9 | ||||||||||||
INCOME FROM OPERATIONS |
60,742,657 | 31 | 93,283,874 | 36 | ||||||||||||
NON-OPERATING INCOME AND GAINS |
||||||||||||||||
Interest income (Note 2) |
938,369 | 1 | 2,084,519 | 1 | ||||||||||||
Valuation gain on financial instruments,
net (Notes 2, 5 and 23) |
576,910 | | | | ||||||||||||
Settlement income (Note 27) |
494,070 | | 456,195 | | ||||||||||||
Technical service income (Notes 24 and 27) |
279,644 | | 521,366 | | ||||||||||||
Gain on settlement and disposal of
financial assets, net (Notes 2 and 23) |
53,364 | | 396,865 | | ||||||||||||
Equity in earnings of equity method
investees, net (Notes 2 and 10) |
| | 1,306,897 | 1 | ||||||||||||
Foreign exchange gain, net (Note 2) |
| | 146,196 | | ||||||||||||
Others (Notes 2 and 24) |
355,793 | | 651,716 | | ||||||||||||
Total non-operating income and gains |
2,698,150 | 1 | 5,563,754 | 2 | ||||||||||||
- 4 -
2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
NON-OPERATING EXPENSES AND LOSSES |
||||||||||||||||
Equity in losses of equity method investees,
net (Notes 2 and 10) |
$ | 2,772,157 | 1 | $ | | | ||||||||||
Foreign exchange loss, net (Note 2) |
611,098 | | | | ||||||||||||
Interest expense |
108,276 | | 266,250 | | ||||||||||||
Valuation loss on financial instruments, net
(Notes 2, 5 and 23) |
| | 299,565 | | ||||||||||||
Loss on idle assets (Note 2) |
| | 210,477 | | ||||||||||||
Provision for litigation loss |
| | 99,126 | | ||||||||||||
Others (Note 2) |
102,553 | | 89,369 | | ||||||||||||
Total non-operating expenses and losses |
3,594,084 | 1 | 964,787 | | ||||||||||||
INCOME BEFORE INCOME TAX |
59,846,723 | 31 | 97,882,841 | 38 | ||||||||||||
INCOME TAX EXPENSE (Notes 2 and 17) |
3,294,936 | 2 | 10,395,449 | 4 | ||||||||||||
NET INCOME |
$ | 56,551,787 | 29 | $ | 87,487,392 | 34 | ||||||||||
2009 | 2008 | |||||||||||||||
Before | After | Before | After | |||||||||||||
Income | Income | Income | Income | |||||||||||||
Tax | Tax | Tax | Tax | |||||||||||||
EARNINGS PER SHARE (NT$, Note 22) |
||||||||||||||||
Basic earnings per share |
$ | 2.32 | $ | 2.19 | $ | 3.74 | $ | 3.35 | ||||||||
Diluted earnings per share |
$ | 2.30 | $ | 2.18 | $ | 3.72 | $ | 3.33 | ||||||||
2008 | ||||
NET INCOME |
$ | 87,589,671 | ||
EARNINGS PER SHARE (NT$) |
||||
Basic earnings per share |
$ | 3.35 | ||
Diluted earnings per share |
$ | 3.33 | ||
(With Deloitte & Touche review report dated October 9, 2009) | (Concluded) |
- 5 -
2009 | 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net income |
$ | 56,551,787 | $ | 87,487,392 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
55,547,956 | 55,280,082 | ||||||
Unrealized gross profit from affiliates |
128,152 | 164,705 | ||||||
Amortization of premium/discount of financial assets |
(6,248 | ) | (75,112 | ) | ||||
Gain on disposal of available-for-sale financial assets, net |
(37,370 | ) | (397,535 | ) | ||||
Gain on held-to-maturity financial assets redeemed by the issuer |
(16,091 | ) | | |||||
Loss on disposal of financial assets carried at cost |
97 | 670 | ||||||
Equity in losses (earnings) of equity method investees, net |
2,772,157 | (1,306,897 | ) | |||||
Dividends received from equity method investees |
1,402,592 | 1,804,351 | ||||||
Gain on disposal of property, plant and equipment and other assets,
net |
(77,173 | ) | (236,265 | ) | ||||
Loss on idle assets |
| 210,477 | ||||||
Deferred income tax |
(1,112,168 | ) | 2,090,342 | |||||
Changes in operating assets and liabilities: |
||||||||
Decrease (increase) in: |
||||||||
Financial assets and liabilities at fair value through profit or loss |
(408,619 | ) | 96,097 | |||||
Receivables from related parties |
(10,736,603 | ) | (554,268 | ) | ||||
Notes and accounts receivable |
(9,383,877 | ) | (4,751,532 | ) | ||||
Allowance for doubtful receivables |
(746 | ) | (2,829 | ) | ||||
Allowance for sales returns and others |
3,005,617 | 1,482,784 | ||||||
Other receivables from related parties |
160,152 | 218,106 | ||||||
Other financial assets |
(192,087 | ) | (233,274 | ) | ||||
Inventories |
(4,386,248 | ) | 1,557,591 | |||||
Prepaid expenses and other current assets |
578,895 | (346,833 | ) | |||||
Increase (decrease) in: |
||||||||
Accounts payable |
4,306,139 | (2,537,013 | ) | |||||
Payables to related parties |
1,091,805 | (425,755 | ) | |||||
Income tax payable |
(3,496,155 | ) | (1,917,918 | ) | ||||
Bonuses payable to employees and directors |
965,342 | 13,265,568 | ||||||
Accrued expenses and other current liabilities |
641,917 | 31,466 | ||||||
Accrued pension cost |
76,607 | 38,087 | ||||||
Deferred credits |
(206,551 | ) | (71,809 | ) | ||||
Net cash provided by operating activities |
97,169,279 | 150,870,678 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Acquisitions of: |
||||||||
Property, plant and equipment |
(44,452,382 | ) | (45,995,935 | ) | ||||
Available-for-sale financial assets |
| (21,697,000 | ) | |||||
Held-to-maturity financial assets |
(9,405,409 | ) | (5,989,999 | ) | ||||
Investments accounted for using equity method |
(262,922 | ) | (380,569 | ) | ||||
Financial assets carried at cost |
(986 | ) | (1,884 | ) |
- 6 -
2009 | 2008 | |||||||
Proceeds from disposal or redemption of: |
||||||||
Available-for-sale financial assets |
$ | 1,037,370 | $ | 24,638,222 | ||||
Held-to-maturity financial assets |
5,418,000 | 9,773,000 | ||||||
Financial assets carried at cost |
18,828 | 1,111 | ||||||
Property, plant and equipment and other assets |
68,579 | 2,033,745 | ||||||
Proceeds from return of capital by investees |
20,201 | 2,460,122 | ||||||
Cash from merger of subsidiaries |
| 270,650 | ||||||
Increase in deferred charges |
(438,308 | ) | (2,243,684 | ) | ||||
Decrease (increase) in refundable deposits |
(34,559 | ) | 74,862 | |||||
Net cash used in investing activities |
(48,031,588 | ) | (37,057,359 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Repayment of bonds payable |
(8,000,000 | ) | | |||||
Decrease in guarantee deposits |
(374,448 | ) | (621,991 | ) | ||||
Proceeds from exercise of employee stock options |
190,995 | 222,552 | ||||||
Cash dividends |
(76,876,312 | ) | (76,881,311 | ) | ||||
Cash bonus paid to employees |
| (3,939,883 | ) | |||||
Bonus to directors |
| (176,890 | ) | |||||
Repurchase of treasury stock |
| (33,480,997 | ) | |||||
Net cash used in financing activities |
(85,059,765 | ) | (114,878,520 | ) | ||||
NET DECREASE IN CASH AND CASH EQUIVALENTS |
(35,922,074 | ) | (1,065,201 | ) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
138,208,360 | 72,422,102 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | 102,286,286 | $ | 71,356,901 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
||||||||
Interest paid |
$ | 351,803 | $ | 355,000 | ||||
Income tax paid |
$ | 7,770,195 | $ | 10,228,005 | ||||
INVESTING AND FINANCING ACTIVITIES AFFECTING BOTH CASH AND
NON-CASH ITEMS |
||||||||
Acquisition of property, plant, and equipment |
$ | 52,075,005 | $ | 47,997,100 | ||||
Increase in payables to contractors and equipment suppliers |
(7,622,623 | ) | (2,001,165 | ) | ||||
Cash paid |
$ | 44,452,382 | $ | 45,995,935 | ||||
Disposal of property, plant and equipment and other assets |
$ | 60,488 | $ | 2,041,836 | ||||
Decrease (increase) in other receivables from related parties |
8,091 | (8,091 | ) | |||||
Cash received |
$ | 68,579 | $ | 2,033,745 | ||||
- 7 -
2009 | 2008 | |||||||
Repurchase of treasury stock |
$ | | $ | 30,427,413 | ||||
Decrease in accrued expenses and other current liabilities |
| 3,053,584 | ||||||
Cash paid |
$ | | $ | 33,480,997 | ||||
NON-CASH FINANCING ACTIVITIES |
||||||||
Bonus to employees transferred to capital stock |
$ | 7,494,988 | $ | | ||||
Current portion of bonds payable |
$ | | $ | 8,000,000 | ||||
Current portion of other long-term payables (under
accrued expenses and
other current liabilities) |
$ | 775,567 | $ | 1,901,323 | ||||
(With Deloitte & Touche review report dated October 9, 2009) | (Concluded) |
- 8 -
1. | GENERAL | |
Taiwan Semiconductor Manufacturing Company Limited (the Company or TSMC), a Republic of China (R.O.C.) corporation, was incorporated on February 21, 1987. The Company is a dedicated foundry in the semiconductor industry which engaged mainly in the manufacturing, selling, packaging, testing and computer-aided designing of integrated circuits and other semiconductor devices and the manufacturing of masks. 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). | ||
As of September 30, 2009 and 2008, the Company had 20,566 and 20,702 employees, respectively. | ||
2. | SUMMARY OF 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 acquired with maturities of less than three months from the date of purchase are classified as cash equivalents. The carrying amount approximates fair value. |
- 9 -
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 | ||
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. | ||
The fair value of structured time deposits is estimated using valuation techniques. Fair value of open-end mutual funds is determined using the net assets value at the end of the period. For debt securities, fair value is determined using the average of bid and asked prices at the end of the period. | ||
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. | ||
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. |
- 10 -
Revenue Recognition and Allowance for Sales Returns and Others | ||
The Company recognizes revenue when evidence of an arrangement exists, the rewards of ownership and significant risk of the goods has been transferred to the buyer, price is fixed or determinable, and collectibility is reasonably assured. Provisions for estimated sales returns and others are 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 recorded at standard cost and adjusted to approximate weighted-average cost on the balance sheet date. | ||
Prior to January 1, 2009, inventories were stated at the lower of cost or market value. Any write-down was made on a total-inventory basis. Market value represented replacement cost for raw materials, supplies and spare parts and net realizable value for work in process and finished goods. | ||
As stated in note 3, effective January 1, 2009, inventories are stated at the lower of cost or net realizable value. Inventory write-downs are made on an item-by-item basis, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and necessary selling costs. | ||
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. 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. 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). When an indication of impairment is identified, the carrying amount of the investment is reduced, with the related impairment loss recognized in earnings. | ||
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. |
- 11 -
Gains or losses on sales from the Company to equity method investees are deferred in proportion to the Companys ownership percentages 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 over each of which the Company has control are deferred in proportion to the Companys weighted-average ownership percentage in the investee which records gains or losses. In transactions between equity method investees over either or both of which the Company has no control, 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. | ||
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. | ||
Property, Plant and Equipment, Assets Leased to Others and Idle Assets | ||
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 and assets leased to others, 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. | ||
When property, plant and equipment are determined to be idle or useless, they are transferred to idle assets at the lower of the net realizable value or carrying amount. Depreciation on the idle assets is provided continuously, and the idle assets are tested for impairment on a periodical basis. |
- 12 -
Intangible Assets | ||
Goodwill represents the excess of the consideration paid for acquisition over the fair value of identifiable net assets acquired. Goodwill is no longer amortized and instead is tested for impairment annually. If an event occurs or circumstances change which indicate 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. | ||
Expenditures related to research activities and those related to development activities that do not meet the criteria for capitalization are charged to expenses 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 an inter-period allocation for its income tax whereby 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. | ||
Stock-based Compensation | ||
Employee stock options that were granted or modified in the period from January 1, 2004 to December 31, 2007 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. Employee stock option plans that were granted or modified after December 31, 2007 are accounted for using fair value method in accordance with Statement of Financial Accounting Standards No. 39, Accounting for Share-based Payment. The Company did not grant or modify any employee stock options since January 1, 2008. |
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Bonuses to Employees and Directors | ||
Effective January 1, 2008, the Company adopted Interpretation 2007-052, Accounting for Bonuses to Employees, Directors and Supervisors, which requires companies to record bonuses paid to employees and directors as an expense rather than as an appropriation of earnings. | ||
Treasury Stock | ||
Treasury stock is stated at cost and shown as a deduction in shareholders equity. When the Company retires treasury stock, the treasury stock account is reduced and the common stock as well as the capital surplus additional paid-in capital are reversed on a pro rata basis. When the book value of the treasury stock exceeds the sum of the par value and additional paid-in capital, the difference is charged to capital surplus treasury stock transactions and to retained earnings for any remaining amount. | ||
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 other than derivative contracts 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. | ||
3. | ACCOUNTING CHANGES | |
Effective January 1, 2009, the Company adopted the newly revised SFAS No. 10, Accounting for Inventories. The main revisions are (1) inventories are stated at the lower of cost or net realizable value, and inventories are written down to net realizable value item-by-item except when the grouping of similar or related items is appropriate; (2) unallocated overheads are recognized as expenses in the period in which they are incurred; and (3) abnormal cost, write-downs of inventories and any reversal of write-downs are recorded as cost of sales for the period. Such changes in accounting principle did not have significant effect on the Companys financial statements for the nine months ended September 30, 2009. | ||
Effective January 1, 2008, the Company adopted Interpretation 2007-052, Accounting for Bonuses to Employees, Directors and Supervisors, issued in March 2007 by the ARDF, which requires companies to record bonuses paid to employees, directors and supervisors as an expense rather than as an appropriation of earnings. The adoption of this interpretation resulted in a decrease in net income and earnings per share (after income tax and retroactively adjusted for the issuance of stock dividend) of NT$11,055,454 thousand and NT$0.42, respectively, for the nine months ended September 30, 2008. | ||
Effective January 1, 2008, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 39, Accounting for Share-based Payment, which requires companies to record share-based payment transactions in the financial statements at fair value. Such a change in accounting principle did not have any effect on the Companys financial statements as of and for the nine months ended September 30, 2008. |
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4. | CASH AND CASH EQUIVALENTS |
September 30 | ||||||||
2009 | 2008 | |||||||
Cash and deposits in banks |
$ | 91,703,367 | $ | 64,366,513 | ||||
Repurchase agreements collateralized by government bonds |
10,582,919 | 6,990,388 | ||||||
$ | 102,286,286 | $ | 71,356,901 | |||||
5. | FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS |
September 30 | ||||||||
2009 | 2008 | |||||||
Trading financial assets |
||||||||
Forward exchange contracts |
$ | | $ | 12,970 | ||||
Cross currency swap contracts |
367,461 | | ||||||
$ | 367,461 | $ | 12,970 | |||||
Trading financial liabilities |
||||||||
Forward exchange contracts |
$ | | $ | 136,050 | ||||
Cross currency swap contracts |
| 178,580 | ||||||
$ | | $ | 314,630 | |||||
Contract Amount | ||||
Maturity Date | (in Thousands) | |||
Sell EUR/buy NT$
|
October 2008 | EUR15,000/NT$691,465 | ||
Sell EUR/buy US$
|
October 2008 | EUR7,000/US$10,175 | ||
Sell US$/buy NT$
|
October 2008 to December 2008 | US$565,000/NT$18,054,010 |
Range of | Range of | |||||||||||
Contract Amount | Interest Rates | Interest Rates | ||||||||||
Maturity Date | (in Thousands) | Paid | Received | |||||||||
September 30, 2009 |
||||||||||||
October 2009 to December 2009 |
US$ | 950,000/NT$30,935,532 | 0.30%-1.00 | % | 0.00%-0.61 | % | ||||||
September 30, 2008 |
||||||||||||
October 2008 to November 2008 |
US$ | 536,000/NT$17,080,480 | 2.48%-14.00 | % | 0.00%-2.40 | % |
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6. | AVAILABLE-FOR-SALE FINANCIAL ASSETS |
September 30 | ||||||||
2009 | 2008 | |||||||
Corporate bonds |
$ | 1,033,473 | $ | 2,790,337 | ||||
Open-end mutual funds |
| 14,146,296 | ||||||
Structured time deposits |
| 4,003,970 | ||||||
1,033,473 | 20,940,603 | |||||||
Current portion |
| (16,936,633 | ) | |||||
$ | 1,033,473 | $ | 4,003,970 | |||||
Principal | Carrying | |||||||||||||||
Amount | Amount | Interest Rate | Maturity Date | |||||||||||||
September 30, 2008 |
||||||||||||||||
Callable deposits
Domestic deposits |
$ | 4,000,000 | $ | 4,003,970 | 2.71%-2.80 | % | September 2011 | |||||||||
7. | HELD-TO-MATURITY FINANCIAL ASSETS |
September 30 | ||||||||
2009 | 2008 | |||||||
Corporate bonds |
$ | 12,748,902 | $ | 10,778,406 | ||||
Structured time deposits |
6,000,000 | 3,500,000 | ||||||
Government bonds |
2,904,170 | 2,200,740 | ||||||
21,653,072 | 16,479,146 | |||||||
Current portion |
(8,374,389 | ) | (5,063,096 | ) | ||||
$ | 13,278,683 | $ | 11,416,050 | |||||
Range of | ||||||||||||||||
Principal | Interest | Interest | ||||||||||||||
Amount | Receivable | Rates | Maturity Date | |||||||||||||
September 30, 2009 |
||||||||||||||||
Callable domestic deposits |
$ | 6,000,000 | $ | 3,404 | 0.67%-0.95 | % | March 2011 to August 2011 | |||||||||
September 30, 2008 |
||||||||||||||||
Callable domestic deposits |
||||||||||||||||
$ | 3,500,000 | $ | 12,287 | 1.83%-2.90 | % | October 2008 to September 2011 | ||||||||||
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8. | ALLOWANCES FOR DOUBTFUL RECEIVABLES, SALES RETURNS AND OTHERS |
Nine Months Ended | ||||||||
September 30 | ||||||||
2009 | 2008 | |||||||
Balance, beginning of period |
$ | 436,746 | $ | 688,972 | ||||
Provision |
243,061 | | ||||||
Write-off |
(243,807 | ) | (2,829 | ) | ||||
Balance, end of period |
$ | 436,000 | $ | 686,143 | ||||
Nine Months Ended | ||||||||
September 30 | ||||||||
2009 | 2008 | |||||||
Balance, beginning of period |
$ | 5,868,582 | $ | 3,856,685 | ||||
Provision |
9,715,735 | 5,586,784 | ||||||
Write-off |
(6,710,118 | ) | (4,104,000 | ) | ||||
Balance, end of period |
$ | 8,874,199 | $ | 5,339,469 | ||||
9. | INVENTORIES |
September 30 | ||||||||
2009 | 2008 | |||||||
Finished goods |
$ | 2,013,527 | $ | 4,054,388 | ||||
Work in process |
13,654,961 | 13,966,641 | ||||||
Raw materials |
907,655 | 863,378 | ||||||
Supplies and spare parts |
618,041 | 545,144 | ||||||
$ | 17,194,184 | $ | 19,429,551 | |||||
- 17 -
10. | INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD |
September 30 | ||||||||||||||||
2009 | 2008 | |||||||||||||||
% of | % of | |||||||||||||||
Carrying | Owner- | Carrying | Owner- | |||||||||||||
Amount | ship | Amount | ship | |||||||||||||
TSMC Global Ltd. (TSMC Global) |
$ | 45,492,790 | 100 | $ | 44,368,847 | 100 | ||||||||||
TSMC Partners, Ltd. (TSMC Partners) |
32,627,788 | 100 | 3,667,050 | 100 | ||||||||||||
Vanguard International Semiconductor Corporation
(VIS) |
9,410,696 | 37 | 10,151,846 | 37 | ||||||||||||
Systems on Silicon Manufacturing Company Pte Ltd.
(SSMC) |
5,899,305 | 39 | 6,761,630 | 39 | ||||||||||||
TSMC China Company Limited (TSMC China) |
3,606,012 | 100 | 7,308,098 | 100 | ||||||||||||
TSMC North America |
2,686,753 | 100 | 2,390,713 | 100 | ||||||||||||
Xintec Inc. (Xintec) |
1,372,699 | 41 | 1,445,512 | 42 | ||||||||||||
VentureTech Alliance Fund III, L.P. (VTAF III) |
1,341,398 | 98 | 1,208,584 | 98 | ||||||||||||
VentureTech Alliance Fund II, L.P. (VTAF II) |
1,059,820 | 98 | 1,016,435 | 98 | ||||||||||||
Global UniChip Corporation (GUC) |
960,442 | 36 | 891,783 | 36 | ||||||||||||
Emerging Alliance Fund, L.P. (Emerging Alliance) |
319,571 | 99 | 418,709 | 99 | ||||||||||||
Taiwan Semiconductor Manufacturing Company
Europe B.V. (TSMC Europe) |
152,965 | 100 | 116,122 | 100 | ||||||||||||
TSMC Japan Limited (TSMC Japan) |
136,710 | 100 | 116,484 | 100 | ||||||||||||
TSMC Korea Limited (TSMC Korea) |
18,115 | 100 | 14,940 | 100 | ||||||||||||
TSMC International Investment Ltd. (TSMC
International) |
| | 29,252,586 | 100 | ||||||||||||
$ | 105,085,064 | $ | 109,129,339 | |||||||||||||
TSMC Partners and TSMC International were both 100% owned subsidiaries of the Company. To simplify the organization structure of investment, TSMC Partners merged TSMC International in June 2009. | ||
Chi Cherng and Hsin Ruey, both 100% owned subsidiaries of the Company, were engaged in investing activities. To simplify the organization structure of investment, the Company merged Chi Cherng and Hsin Ruey in the third quarter of 2008. | ||
For the nine months ended September 30, 2009 and 2008, equity in earnings/losses of equity method investees was a net loss of NT$2,772,157 thousand and a net gain of NT$1,306,897 thousand, respectively. Related equity in earnings/losses of equity method investees were determined based on the reviewed financial statements, except those of Emerging Alliance, TSMC Japan, TSMC Europe and TSMC Korea for the nine months ended September 30, 2009. The Company believes that, had Emerging Alliance, TSMC Japan, TSMC Europe and TSMC Koreas financial statements been reviewed, any adjustments arising would have had no material effect on the Companys financial statements. | ||
As of September 30, 2009 and 2008, fair value of publicly traded stocks in investments accounted for using equity method (VIS and GUC) was NT$15,891,684 thousand and NT$15,446,393 thousand, respectively. |
- 18 -
Movements of the difference between the cost of investments and the Companys share in investees net assets allocated to depreciable assets were as follows: |
Nine Months Ended | ||||||||
September 30 | ||||||||
2009 | 2008 | |||||||
Balance, beginning of period |
$ | 2,053,253 | $ | 2,677,388 | ||||
Amortization |
(468,101 | ) | (468,101 | ) | ||||
Balance, end of period |
$ | 1,585,152 | $ | 2,209,287 | ||||
Nine Months Ended | ||||||||
September 30 | ||||||||
2009 | 2008 | |||||||
Balance, beginning of period |
$ | 1,061,885 | $ | 987,349 | ||||
From merger of subsidiaries |
| 74,536 | ||||||
Balance, end of period |
$ | 1,061,885 | $ | 1,061,885 | ||||
11. | FINANCIAL ASSETS CARRIED AT COST |
September 30 | ||||||||
2009 | 2008 | |||||||
Non-publicly traded stocks |
$ | 338,584 | $ | 364,913 | ||||
Mutual Funds |
162,979 | 383,350 | ||||||
$ | 501,563 | $ | 748,263 | |||||
12. | PROPERTY, PLANT AND EQUIPMENT |
Nine Months Ended September 30, 2009 | ||||||||||||||||||||
Balance, | ||||||||||||||||||||
Beginning of | Balance, | |||||||||||||||||||
Period | Additions | Disposals | Reclassification | End of Period | ||||||||||||||||
Cost |
||||||||||||||||||||
Buildings |
$ | 114,014,588 | $ | 9,778,198 | $ | (9,823 | ) | $ | 66 | $ | 123,783,029 | |||||||||
Machinery and equipment |
635,008,261 | 40,995,876 | (1,732,570 | ) | 2,565 | 674,274,132 | ||||||||||||||
Office equipment |
9,748,869 | 738,667 | (150,347 | ) | (66 | ) | 10,337,123 | |||||||||||||
758,771,718 | $ | 51,512,741 | $ | (1,892,740 | ) | $ | 2,565 | 808,394,284 | ||||||||||||
Accumulated depreciation |
||||||||||||||||||||
Buildings |
65,351,514 | $ | 6,067,051 | $ | (9,823 | ) | $ | 66 | 71,408,808 | |||||||||||
Machinery and equipment |
484,046,160 | 47,404,997 | (1,129,563 | ) | 2,565 | 530,324,159 | ||||||||||||||
Office equipment |
7,849,580 | 685,519 | (150,162 | ) | (66 | ) | 8,384,871 | |||||||||||||
557,247,254 | $ | 54,157,567 | $ | (1,289,548 | ) | $ | 2,565 | 610,117,838 | ||||||||||||
Advance payments and construction
in progress |
17,758,038 | $ | 562,264 | $ | | $ | | 18,320,302 | ||||||||||||
$ | 219,282,502 | $ | 216,596,748 | |||||||||||||||||
- 19 -
Nine Months Ended September 30, 2008 | ||||||||||||||||||||
Balance, | ||||||||||||||||||||
Beginning of | Additions | Balance, | ||||||||||||||||||
Period | (Deductions) | Disposals | Reclassification | End of Period | ||||||||||||||||
Cost |
||||||||||||||||||||
Buildings |
$ | 101,907,892 | $ | 11,247,197 | $ | (8,524 | ) | $ | (311 | ) | $ | 113,146,254 | ||||||||
Machinery and equipment |
589,131,625 | 46,276,182 | (3,143,000 | ) | (134,175 | ) | 632,130,632 | |||||||||||||
Office equipment |
9,167,107 | 595,749 | (165,621 | ) | 57 | 9,597,292 | ||||||||||||||
700,206,624 | $ | 58,119,128 | $ | (3,317,145 | ) | $ | (134,429 | ) | 754,874,178 | |||||||||||
Accumulated depreciation |
||||||||||||||||||||
Buildings |
57,349,828 | $ | 5,901,060 | $ | (8,524 | ) | $ | (4 | ) | 63,242,360 | ||||||||||
Machinery and equipment |
422,278,071 | 46,820,532 | (1,025,129 | ) | (119,347 | ) | 467,954,127 | |||||||||||||
Office equipment |
7,097,120 | 701,627 | (165,622 | ) | 26 | 7,633,151 | ||||||||||||||
486,725,019 | $ | 53,423,219 | $ | (1,199,275 | ) | $ | (119,325 | ) | 538,829,638 | |||||||||||
Advance payments and construction
in progress |
21,082,953 | $ | (10,122,028 | ) | $ | | $ | | 10,960,925 | |||||||||||
$ | 234,564,558 | $ | 227,005,465 | |||||||||||||||||
13. | DEFERRED CHARGES, NET |
Nine Months Ended September 30, 2009 | ||||||||||||||||||||||||
Balance, | ||||||||||||||||||||||||
Beginning of | Balance, | |||||||||||||||||||||||
Period | Additions | Amortization | Disposals | Reclassification | End of Period | |||||||||||||||||||
Technology license fees |
$ | 3,786,251 | $ | | $ | (614,959 | ) | $ | | $ | | $ | 3,171,292 | |||||||||||
Software and system
design costs |
1,559,857 | 438,308 | (569,672 | ) | | | 1,428,493 | |||||||||||||||||
Patent and others |
1,055,353 | | (201,458 | ) | | | 853,895 | |||||||||||||||||
$ | 6,401,461 | $ | 438,308 | $ | (1,386,089 | ) | $ | | $ | | $ | 5,453,680 | ||||||||||||
Nine Months Ended September 30, 2008 | ||||||||||||||||||||||||
Balance, | ||||||||||||||||||||||||
Beginning of | Balance, | |||||||||||||||||||||||
Period | Additions | Amortization | Disposals | Reclassification | End of Period | |||||||||||||||||||
Technology license fees |
$ | 5,349,937 | $ | | $ | (1,172,765 | ) | $ | | $ | | $ | 4,177,172 | |||||||||||
Software and system
design costs |
1,309,272 | 670,031 | (509,931 | ) | (14,279 | ) | 59 | 1,455,152 | ||||||||||||||||
Patent and others |
513,204 | 454,125 | (132,724 | ) | | | 834,605 | |||||||||||||||||
$ | 7,172,413 | $ | 1,124,156 | $ | (1,815,420 | ) | $ | (14,279 | ) | $ | 59 | $ | 6,466,929 | |||||||||||
14. | BONDS PAYABLE |
September 30 | ||||||||
2009 | 2008 | |||||||
Domestic unsecured bonds: |
||||||||
Issued in January 2002 and repayable in January 2009 and 2012
in two installments, 2.75% and 3.00% interest payable annually,
respectively |
$ | 4,500,000 | $ | 12,500,000 | ||||
Current portion |
| (8,000,000 | ) | |||||
$ | 4,500,000 | $ | 4,500,000 | |||||
- 20 -
15. | OTHER LONG-TERM PAYABLES | |
Most of the Companys long-term payables resulted from license agreements for certain semiconductor-related patents. As of September 30, 2009, future payments for other long-term payables were as follows: |
Year of Payment | Amount | |||
2009 (4th quarter) |
$ | 442,619 | ||
2010 |
493,948 | |||
2011 |
418,600 | |||
1,355,167 | ||||
Current portion (classified under accrued expenses and other current liabilities) |
(775,567 | ) | ||
$ | 579,600 | |||
16. | PENSION PLANS | |
The pension mechanism under the Labor Pension Act is deemed a defined contribution plan. Pursuant to the Act, the Company has made monthly contributions equal to 6% of each employees monthly salary to employees pension accounts and recognized pension costs of NT$441,429 thousand and NT$495,468 thousand for the nine months ended September 30, 2009 and 2008, respectively. | ||
The Company has a defined benefit plan under the Labor Standards Law that provides benefits based on an employees length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to a pension fund (the Fund), which is administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committees name in the Bank of Taiwan. The Company recognized pension costs of NT$216,482 thousand and NT$201,741 thousand for the nine months ended September 30, 2009 and 2008, respectively. | ||
Movements of the Fund and accrued pension cost under the defined benefit plan were summarized as follows: |
Nine Months Ended | ||||||||
September 30 | ||||||||
2009 | 2008 | |||||||
The Fund |
||||||||
Balance, beginning of period |
$ | 2,389,519 | $ | 2,145,010 | ||||
Contributions |
143,540 | 157,390 | ||||||
Interest |
52,445 | 71,236 | ||||||
Payments |
(37,801 | ) | (28,990 | ) | ||||
Balance, end of period |
$ | 2,547,703 | $ | 2,344,646 | ||||
Accrued pension cost |
||||||||
Balance, beginning of period |
$ | 3,710,009 | $ | 3,657,679 | ||||
Accruals |
76,607 | 38,087 | ||||||
Balance, end of period |
$ | 3,786,616 | $ | 3,695,766 | ||||
- 21 -
17. | INCOME TAX |
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 | ||||||||
2009 | 2008 | |||||||
Income tax expense based on income before income tax at
statutory rate (25%) |
$ | 14,961,671 | $ | 24,470,700 | ||||
Tax effect of the following: |
||||||||
Tax-exempt income |
(6,678,202 | ) | (7,412,660 | ) | ||||
Temporary and permanent differences |
2,854,793 | 778,663 | ||||||
Others |
69,174 | 41,235 | ||||||
Income tax credits used |
(5,603,718 | ) | (8,938,969 | ) | ||||
Income tax currently payable |
$ | 5,603,718 | $ | 8,938,969 | ||||
b. Income tax expense consisted of the following: |
||||||||
Income tax currently payable |
$ | 5,603,718 | $ | 8,938,969 | ||||
Income tax adjustments on prior years |
(1,155,113 | ) | (707,255 | ) | ||||
Other income tax adjustments |
(41,501 | ) | 73,393 | |||||
Net change in deferred income tax assets |
||||||||
Investment tax credits |
(3,159,546 | ) | 3,227,924 | |||||
Temporary differences |
143,079 | (326,907 | ) | |||||
Valuation allowance |
1,904,299 | (810,675 | ) | |||||
Income tax expense |
$ | 3,294,936 | $ | 10,395,449 | ||||
c. | Net deferred income tax assets consisted of the following: |
September 30 | ||||||||
2009 | 2008 | |||||||
Current deferred income tax assets |
||||||||
Investment tax credits |
$ | 3,442,000 | $ | 2,915,006 | ||||
Temporary differences |
845,040 | | ||||||
$ | 4,287,040 | $ | 2,915,006 | |||||
Noncurrent deferred income tax assets |
||||||||
Investment tax credits |
$ | 13,329,764 | $ | 8,693,825 | ||||
Temporary differences |
1,947,981 | 1,470,218 | ||||||
Valuation allowance |
(8,303,945 | ) | (2,659,458 | ) | ||||
$ | 6,973,800 | $ | 7,504,585 | |||||
In May 2009, the amendment of Article 5 of the Income Tax Law of the Republic of China announced that the income tax rate of profit-seeking enterprises will be reduced from 25% to 20%, and will be effective starting in 2010. The Company recalculated its deferred tax assets and liabilities in accordance with the amended Article and adjusted the resulting difference as an income tax benefit and expense. |
- 22 -
d. | Integrated income tax information: | |
The balance of the imputation credit account as of September 30, 2009 and 2008 was NT$214,826 thousand and NT$1,602,560 thousand, respectively. | ||
The estimated and actual creditable ratio for distribution of earnings of 2008 and 2007 was 9.10% and 9.83%, respectively. | ||
The imputation credit allocated to shareholders is based on its balance as of the date of dividend distribution. The estimated creditable ratio may change when the actual distribution of imputation credit is made. | ||
e. | All earnings generated prior to December 31, 1997 have been appropriated. | |
f. | As of September 30, 2009, investment tax credits consisted of the following: |
Total | Remaining | |||||||||||||||
Creditable | Creditable | Expiry | ||||||||||||||
Law/Statute | Item | Amount | Amount | Year | ||||||||||||
Statute for Upgrading Industries |
Purchase of machinery and equipment |
$ | 500,000 | $ | 500,000 | 2009 | ||||||||||
1,216,551 | | 2010 | ||||||||||||||
4,592,615 | 2,892,378 | 2011 | ||||||||||||||
3,142,459 | 3,142,459 | 2012 | ||||||||||||||
2,049,992 | 2,049,992 | 2013 | ||||||||||||||
$ | 11,501,617 | $ | 8,584,829 | |||||||||||||
Statute for Upgrading Industries |
Research and development expenditures |
$ | 2,663,784 | $ | | 2010 | ||||||||||
2,687,841 | 2,687,841 | 2011 | ||||||||||||||
2,688,201 | 2,688,201 | 2012 | ||||||||||||||
2,580,384 | 2,580,384 | 2013 | ||||||||||||||
$ | 10,620,210 | $ | 7,956,426 | |||||||||||||
Statute for Upgrading Industries |
Personnel training expenditures |
$ | 23,146 | $ | | 2010 | ||||||||||
36,568 | 36,568 | 2011 | ||||||||||||||
27,036 | 27,036 | 2012 | ||||||||||||||
$ | 86,750 | $ | 63,604 | |||||||||||||
Statute for Upgrading Industries |
Investments in important technology-based enterprises |
$ | 87,101 | $ | 87,101 | 2009 | ||||||||||
79,804 | 79,804 | 2010 | ||||||||||||||
$ | 166,905 | $ | 166,905 | |||||||||||||
g. | The profits generated from the following projects are exempt from income tax for a five-year period: |
Tax-exemption Period | ||
Construction of Fab 14 Module A
|
2006 to 2010 | |
Construction of Fab 12 Module B and expansion of Fab 14 Module A
|
2007 to 2011 | |
Construction of Fab 14 Module B and expansion of Fab 12 and others
|
2008 to 2012 |
h. | The tax authorities have examined income tax returns of the Company through 2006. All investment tax credit adjustments assessed by the tax authorities have been recognized accordingly. |
- 23 -
Nine Months Ended September 30, 2009 | ||||||||||||
Classified as | ||||||||||||
Classified as | Operating | |||||||||||
Cost of Sales | Expenses | Total | ||||||||||
Labor cost |
||||||||||||
Salary and bonus |
$ | 11,010,069 | $ | 8,299,658 | $ | 19,309,727 | ||||||
Labor and health insurance |
458,611 | 278,310 | 736,921 | |||||||||
Pension |
409,387 | 248,524 | 657,911 | |||||||||
Meal |
305,276 | 132,322 | 437,598 | |||||||||
Welfare |
107,465 | 67,310 | 174,775 | |||||||||
Others |
79,471 | 14,697 | 94,168 | |||||||||
$ | 12,370,279 | $ | 9,040,821 | $ | 21,411,100 | |||||||
Depreciation |
$ | 51,354,934 | $ | 2,790,434 | $ | 54,145,368 | ||||||
Amortization |
$ | 897,733 | $ | 488,356 | $ | 1,386,089 | ||||||
Nine Months Ended September 30, 2008 | ||||||||||||
Classified as | ||||||||||||
Classified as | Operating | |||||||||||
Cost of Sales | Expenses | Total | ||||||||||
Labor cost |
||||||||||||
Salary and bonus |
$ | 14,026,566 | $ | 10,006,675 | $ | 24,033,241 | ||||||
Labor and health insurance |
506,692 | 285,693 | 792,385 | |||||||||
Pension |
445,831 | 251,378 | 697,209 | |||||||||
Meal |
332,621 | 134,159 | 466,780 | |||||||||
Welfare |
141,981 | 83,180 | 225,161 | |||||||||
Others |
140,675 | 11,378 | 152,053 | |||||||||
$ | 15,594,366 | $ | 10,772,463 | $ | 26,366,829 | |||||||
Depreciation |
$ | 50,585,293 | $ | 2,825,532 | $ | 53,410,825 | ||||||
Amortization |
$ | 1,332,761 | $ | 482,659 | $ | 1,815,420 | ||||||
- 24 -
September 30 | ||||||||
2009 | 2008 | |||||||
Additional paid-in capital |
$ | 23,408,710 | $ | 18,154,782 | ||||
From merger |
22,805,390 | 23,053,576 | ||||||
From convertible bonds |
8,893,190 | 8,989,973 | ||||||
From long-term investments |
332,574 | 265,052 | ||||||
Donations |
55 | 55 | ||||||
$ | 55,439,919 | $ | 50,463,438 | |||||
a. | Legal capital reserve at 10% of the profits left over, until the accumulated legal capital reserve equals 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. |
- 25 -
Dividends Per Share | ||||||||||||||||
Appropriation of Earnings | (NT$) | |||||||||||||||
For Fiscal | For Fiscal | For Fiscal | For Fiscal | |||||||||||||
Year 2008 | Year 2007 | Year 2008 | Year 2007 | |||||||||||||
Legal capital reserve |
$ | 9,993,317 | $ | 10,917,709 | ||||||||||||
Special capital reserve |
(391,857 | ) | (237,693 | ) | ||||||||||||
Bonus to employees in cash |
| 3,939,883 | ||||||||||||||
Bonus to employees in stock |
| 3,939,883 | ||||||||||||||
Cash dividends to shareholders |
76,876,312 | 76,881,311 | $ | 3.00 | $ | 3.00 | ||||||||||
Stock dividends to shareholders |
512,509 | 512,542 | 0.02 | 0.02 | ||||||||||||
Bonus to directors |
| 176,890 | ||||||||||||||
$ | 86,990,281 | $ | 96,130,525 | |||||||||||||
- 26 -
Weighted- | ||||||||
average | ||||||||
Number of | Exercise | |||||||
Options | Price | |||||||
(in Thousands) | (NT$) | |||||||
Nine months ended September 30, 2009 |
||||||||
Balance, beginning of period |
36,234 | $ | 34.0 | |||||
Options granted |
175 | 34.0 | ||||||
Options exercised |
(5,228 | ) | 36.5 | |||||
Options canceled |
(321 | ) | 46.5 | |||||
Balance, end of period |
30,860 | 33.5 | ||||||
Nine months ended September 30, 2008 |
||||||||
Balance, beginning of period |
41,875 | $ | 35.6 | |||||
Options granted |
767 | 35.2 | ||||||
Options exercised |
(5,880 | ) | 37.8 | |||||
Options canceled |
(302 | ) | 46.3 | |||||
Balance, end of period |
36,460 | 35.3 | ||||||
- 27 -
Options Outstanding | ||||||||||||
Weighted- | Weighted- | |||||||||||
average | average | |||||||||||
Range of | Number of | Remaining | Exercise | |||||||||
Exercise | Options (in | Contractual | Price | |||||||||
Price (NT$) | Thousands) | Life (Years) | (NT$) | |||||||||
$22.8- $32.0 |
22,685 | 3.41 | $ | 29.2 | ||||||||
38.0- 50.1 |
8,175 | 5.14 | 45.5 | |||||||||
30,860 | 33.5 | |||||||||||
Nine Months Ended | ||||||||
September 30 | ||||||||
2009 | 2008 | |||||||
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 |
$ | 56,551,787 | $ | 87,487,392 | ||||
Pro forma net income |
56,173,879 | 87,482,618 | ||||||
Earnings per share (EPS) after income tax (NT$): |
||||||||
Basic EPS as reported |
$ | 2.19 | $ | 3.35 | ||||
Pro forma basic EPS |
2.18 | 3.35 | ||||||
Diluted EPS as reported |
2.18 | 3.33 | ||||||
Pro forma diluted EPS |
2.16 | 3.33 |
(Shares in Thousands) | ||||||||||||||||||||
Beginning | Stock | Ending | ||||||||||||||||||
Shares | Addition | Dividends | Retirement | Shares | ||||||||||||||||
Nine months ended September 30, 2008 |
||||||||||||||||||||
Parent company stock held by subsidiaries |
34,096 | | 171 | 34,267 | | |||||||||||||||
Repurchase under share buyback plan |
800,000 | 495,549 | | 1,016,674 | 278,875 | |||||||||||||||
834,096 | 495,549 | 171 | 1,050,941 | 278,875 | ||||||||||||||||
- 28 -
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, 2009 |
||||||||||||||||||||
Basic EPS |
||||||||||||||||||||
Earnings available to common shareholders |
$ | 59,846,723 | $ | 56,551,787 | 25,813,614 | $ | 2.32 | $ | 2.19 | |||||||||||
Effect of dilutive potential common shares |
||||||||||||||||||||
Bonus to employees |
| | 153,069 | |||||||||||||||||
Stock options |
| | 14,459 | |||||||||||||||||
Diluted EPS |
||||||||||||||||||||
Earnings available to common shareholders (including
effect of dilutive potential common shares) |
$ | 59,846,723 | $ | 56,551,787 | 25,981,142 | $ | 2.30 | $ | 2.18 | |||||||||||
Nine months ended September 30, 2008 |
||||||||||||||||||||
Basic EPS |
||||||||||||||||||||
Earnings available to common shareholders |
$ | 97,882,841 | $ | 87,487,392 | 26,139,848 | $ | 3.74 | $ | 3.35 | |||||||||||
Effect of dilutive potential common shares |
||||||||||||||||||||
Bonus to employees |
| | 133,161 | |||||||||||||||||
Stock options |
| | 17,001 | |||||||||||||||||
Diluted EPS |
||||||||||||||||||||
Earnings available to common shareholders (including
effect of dilutive potential common shares) |
$ | 97,882,841 | $ | 87,487,392 | 26,290,010 | $ | 3.72 | $ | 3.33 | |||||||||||
- 29 -
a. | Fair values of financial instruments were as follows: |
September 30 | ||||||||||||||||
2009 | 2008 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||
Assets |
||||||||||||||||
Financial assets at fair value
through profit or loss |
$ | 367,461 | $ | 367,461 | $ | 12,970 | $ | 12,970 | ||||||||
Available-for-sale financial assets |
1,033,473 | 1,033,473 | 20,940,603 | 20,940,603 | ||||||||||||
Held-to-maturity financial assets |
21,653,072 | 21,747,720 | 16,479,146 | 16,604,176 | ||||||||||||
Liabilities |
||||||||||||||||
Financial liabilities at fair value
through profit or loss |
| | 314,630 | 314,630 | ||||||||||||
Bonds payable (including current
portion) |
4,500,000 | 4,583,826 | 12,500,000 | 12,630,945 | ||||||||||||
Other long-term payables (including
current portion) |
1,355,167 | 1,355,167 | 2,972,537 | 2,972,537 |
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, refundable deposits, payables and guarantee deposits. The carrying amounts of these financial instruments approximate their fair values due to their short maturities. | ||
2) | Except for derivatives and structured time deposits, fair values of financial assets at fair value through profit or loss, available-for-sale and held-to-maturity financial assets were based on their quoted market prices. | ||
3) | For those derivatives and structured time deposits with no quoted market prices, their fair values are determined using valuation techniques incorporating estimates and assumptions that were consistent with prevailing market conditions. | ||
4) | Fair value of bonds payable was based on their quoted market price. |
- 30 -
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 of derivatives contracts which was outstanding as of September 30, 2009 and 2008 estimated using valuation techniques were recognized as gains of NT$367,461 thousand and losses of NT$301,660 thousand, respectively. | ||
d. | As of September 30, 2009 and 2008, financial assets exposed to fair value interest rate risk were NT$23,054,006 thousand and NT$37,432,719 thousand, respectively and financial liabilities exposed to fair value interest rate risk were NT$4,500,000 thousand and NT$12,814,630 thousand, respectively. | ||
e. | Movements of the unrealized gains or losses on financial instruments for the nine months ended September 30, 2009 and 2008 were as follows: |
Nine Months Ended September 30, 2009 | ||||||||||||
From | From | |||||||||||
Available- | Available-for- | |||||||||||
for-sale | sale Financial | |||||||||||
Financial | Assets Held by | |||||||||||
Assets | Investees | Total | ||||||||||
Balance, beginning of period |
$ | 32,658 | $ | (320,000 | ) | $ | (287,342 | ) | ||||
Recognized directly in shareholders equity |
38,185 | 780,948 | 819,133 | |||||||||
Removed from shareholders equity and recognized
in earnings |
(37,370 | ) | | (37,370 | ) | |||||||
Balance, end of period |
$ | 33,473 | $ | 460,948 | $ | 494,421 | ||||||
Nine Months Ended September 30, 2008 | ||||||||||||
From | From | |||||||||||
Available- | Available-for- | |||||||||||
for-sale | sale Financial | |||||||||||
Financial | Assets Held by | |||||||||||
Assets | Investees | Total | ||||||||||
Balance, beginning of period |
$ | 266,573 | $ | 414,424 | $ | 680,997 | ||||||
Recognized directly in shareholders equity |
179,779 | (587,280 | ) | (407,501 | ) | |||||||
Removed from shareholders equity and recognized
in earnings |
(397,535 | ) | | (397,535 | ) | |||||||
Balance, end of period |
$ | 48,817 | $ | (172,856 | ) | $ | (124,039 | ) | ||||
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. Subject to turmoils in the global financial market, the Company had evaluated its financial instruments and the Company believed the exposure to market risk as of September 30, 2009 was not significant. |
- 31 -
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. Subject to turmoils in the global financial market, the Company evaluated whether the financial instruments for any possible counter-party or third-parties are reputable financial institutions, business enterprises, and government agencies and accordingly, the Company believed that the Companys exposure to credit risk as of September 30, 2009 was not significant. | ||
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. | ||
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. | Subsidiaries | ||
TSMC North America TSMC China TSMC Europe TSMC Japan TSMC Korea |
|||
b. | Investees | ||
GUC (with a controlling financial interest) Xintec (with a controlling financial interest) VIS (accounted for using equity method) SSMC (accounted for using equity method) |
|||
c. | Indirect subsidiaries | ||
WaferTech, LLC (WaferTech) TSMC Technology, Inc. (TSMC Technology) TSMC Design Technology Canada Inc. (TSMC Canada) |
|||
d. | Indirect investee | ||
VisEra Technology Company, Ltd. (VisEra), an indirect investee accounted for using equity method. | |||
e. | Others | ||
Related parties over which the Company has control or exercises significant influence but with which the Company had no material transactions. |
- 32 -
2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
Nine months ended September 30 |
||||||||||||||||
Sales |
||||||||||||||||
TSMC North America |
$ | 111,683,024 | 54 | $ | 156,727,226 | 59 | ||||||||||
Others |
1,662,378 | 1 | 1,333,072 | | ||||||||||||
$ | 113,345,402 | 55 | $ | 158,060,298 | 59 | |||||||||||
Purchases |
||||||||||||||||
WaferTech |
$ | 3,872,117 | 18 | $ | 6,776,756 | 21 | ||||||||||
TSMC China |
2,611,248 | 12 | 3,882,384 | 12 | ||||||||||||
SSMC |
2,530,044 | 11 | 3,624,887 | 11 | ||||||||||||
VIS |
2,433,937 | 11 | 2,584,615 | 8 | ||||||||||||
$ | 11,447,346 | 52 | $ | 16,868,642 | 52 | |||||||||||
Manufacturing expenses outsourcing |
||||||||||||||||
VisEra |
$ | 22,550 | | $ | 66,328 | | ||||||||||
Marketing expenses commission |
||||||||||||||||
TSMC Europe |
$ | 234,892 | 16 | $ | 299,045 | 16 | ||||||||||
TSMC Japan |
166,109 | 12 | 195,344 | 11 | ||||||||||||
TSMC Korea |
10,667 | 1 | 13,522 | 1 | ||||||||||||
$ | 411,668 | 29 | $ | 507,911 | 28 | |||||||||||
Research and development expenses |
||||||||||||||||
TSMC Technology (primarily consulting fee) |
$ | 299,636 | 2 | $ | 263,287 | 2 | ||||||||||
TSMC Canada (primarily consulting fee) |
115,534 | 1 | 138,515 | 1 | ||||||||||||
Others |
41,778 | | 13,319 | | ||||||||||||
$ | 456,948 | 3 | $ | 415,121 | 3 | |||||||||||
Sales of property, plant and equipment and other
assets |
||||||||||||||||
Xintec |
$ | 58,450 | 97 | $ | | | ||||||||||
TSMC China |
| | 1,849,317 | 91 | ||||||||||||
Others |
263 | | 10,665 | | ||||||||||||
$ | 58,713 | 97 | $ | 1,859,982 | 91 | |||||||||||
Non-operating income and gains |
||||||||||||||||
VIS (primarily technical service income, see
Note 27e) |
$ | 179,168 | 7 | $ | 262,132 | 5 | ||||||||||
TSMC China |
146,585 | 5 | 233,761 | 4 | ||||||||||||
SSMC (primarily technical service income, see
Note 27d) |
98,806 | 4 | 193,039 | 3 | ||||||||||||
Others |
263 | | 85,277 | 2 | ||||||||||||
$ | 424,822 | 16 | $ | 774,209 | 14 | |||||||||||
- 33 -
2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
As of September 30 |
||||||||||||||||
Receivables |
||||||||||||||||
TSMC North America |
$ | 22,009,288 | 98 | $ | 26,903,610 | 99 | ||||||||||
Others |
455,519 | 2 | 352,306 | 1 | ||||||||||||
$ | 22,464,807 | 100 | $ | 27,255,916 | 100 | |||||||||||
Other receivables |
||||||||||||||||
VIS |
$ | 141,358 | 44 | $ | 86,918 | 28 | ||||||||||
TSMC China |
119,544 | 37 | 115,766 | 37 | ||||||||||||
SSMC |
42,588 | 13 | 63,490 | 20 | ||||||||||||
TSMC North America |
13,851 | 5 | 18,985 | 6 | ||||||||||||
WaferTech |
3,921 | 1 | 25,958 | 8 | ||||||||||||
Others |
237 | | 4,176 | 1 | ||||||||||||
$ | 321,499 | 100 | $ | 315,293 | 100 | |||||||||||
Payables |
||||||||||||||||
VIS |
$ | 759,737 | 33 | $ | 668,215 | 26 | ||||||||||
WaferTech |
605,006 | 26 | 800,324 | 31 | ||||||||||||
TSMC China |
456,026 | 20 | 370,154 | 14 | ||||||||||||
SSMC |
273,184 | 12 | 574,010 | 22 | ||||||||||||
TSMC Technology |
126,074 | 6 | 64,799 | 3 | ||||||||||||
Others |
74,128 | 3 | 96,373 | 4 | ||||||||||||
$ | 2,294,155 | 100 | $ | 2,573,875 | 100 | |||||||||||
Deferred credits |
||||||||||||||||
TSMC China |
$ | 43,730 | 61 | $ | 230,617 | 40 | ||||||||||
VisEra |
| | 15,544 | 2 | ||||||||||||
$ | 43,730 | 61 | $ | 246,161 | 42 | |||||||||||
- 34 -
Year | Amount | |||
2009 (4th quarter) |
$ | 75,328 | ||
2010 |
256,543 | |||
2011 |
254,962 | |||
2012 |
287,491 | |||
2013 |
265,847 | |||
2014 and thereafter |
2,014,873 | |||
$ | 3,155,044 | |||
a. | Under a technical cooperation agreement with ITRI, the R.O.C. Government or its designee approved by the Company can use up to 35% of the Companys capacity if the Companys 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. | ||
b. | 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, 2009 the Company had a total of US$32,654 thousand of guarantee deposits. | ||
c. | 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.) are required, in the aggregate, to purchase at least 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 fall below a specific percentage of its capacity, the defaulting party is required to compensate SSMC for all related unavoidable costs. | ||
d. | The Company provides technical services to SSMC under a Technical Cooperation Agreement (the Agreement) effective March 30, 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 will be automatically renewed for successive periods of five years each unless pre-terminated by either party under certain conditions. |
- 35 -
e. | 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. | ||
f. | 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, 2009, SMIC had paid US$135 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 September 2006, SMIC filed a cross-complaint against TSMC, TSMC North America 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. In January 2009, the court in the California action held a four-day bench trial to determine whether a Settlement Agreement existed between the parties, and if there were an agreement, the interpretation of certain terms. SMIC contended that there was no binding Settlement Agreement, and TSMC, TSMC North America and WaferTech contended that the Settlement Agreement signed on January 30, 2005 and finalized shortly thereafter and repeatedly ratified bound the parties. On March 10, 2009, the Court issued its Statement of Decision. The Court rejected SMICs contention, and found that the parties were bound by the Settlement Agreement identified by TSMC, TSMC North America and WaferTech. The Court also interpreted the meaning of certain provisions within the Settlement Agreement. Regarding the claims raised by SMIC in the Beijing lawsuit, the Beijing Peoples High Court has on June 10, 2009 rejected those claims and dismissed the lawsuit. SMIC has appealed. The matters are pending in both courts. The result of the above-mentioned litigation cannot be determined at this time. |
a. | Financing provided: None; | ||
b. | Endorsement/guarantee provided: None; | ||
c. | Marketable securities held: Please see Table 1 attached; |
- 36 -
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: None; | ||
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 3 attached; | ||
h. | Receivable from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please see Table 4 attached; | ||
i. | Names, locations, and related information of investees on which the Company exercises significant influence: Please see Table 5 attached; | ||
j. | Information about derivatives of investees over which the Company has a controlling interest: |
Contract Amount | ||||
Maturity Date | (in Thousands) | |||
Sell US$/Buy RMB
|
October 2009 | US$3,950/RMB26,974 |
Contract Amount | ||||
Maturity Date | (in Thousands) | |||
Sell US$/Buy NT$
|
October 2009 to November 2009 | US$9,100/NT$295,973 |
k. | Information on investment in Mainland China |
1) | The name of the investee in Mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, equity in the net gain or net loss, ending balance, amount received as dividends from the investee, and the limitation on investee: Please see Table 6 attached. | ||
2) | Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in Mainland China on financial reports: Please see Note 24. |
- 37 -
September 30, 2009 | ||||||||||||||||||||||||||||||
Market Value or Net | ||||||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | Asset Value | |||||||||||||||||||||||||||
Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | (in Thousands) | (US$ in Thousands) | Ownership (%) | (US$ in Thousands) | Note | ||||||||||||||||||||||
The Company | Corporate bond |
|||||||||||||||||||||||||||||
Taiwan Mobile Co., Ltd. |
| Available-for-sale financial assets |
| $ | 1,033,473 | N/A | $ | 1,033,473 | ||||||||||||||||||||||
Taiwan Power Company |
| Held-to-maturity financial assets |
| 3,384,845 | N/A | 3,393,121 | ||||||||||||||||||||||||
Formosa Petrochemical Corporation |
| ² | | 3,179,081 | N/A | 3,206,644 | ||||||||||||||||||||||||
Nan Ya Plastics Corporation |
| ² | | 1,999,746 | N/A | 2,031,690 | ||||||||||||||||||||||||
Formosa Plastics Corporation |
| ² | | 1,671,881 | N/A | 1,688,217 | ||||||||||||||||||||||||
China Steel Corporation |
| ² | | 1,513,313 | N/A | 1,532,465 | ||||||||||||||||||||||||
CPC Corporation, Taiwan |
| ² | | 1,000,036 | N/A | 999,854 | ||||||||||||||||||||||||
Government bond |
||||||||||||||||||||||||||||||
European Investment Bank Bonds |
| Held-to-maturity financial assets |
| 2,015,610 | N/A | 2,025,500 | ||||||||||||||||||||||||
2003 Asian Development Bank Govt. Bond |
| ² | | 888,560 | N/A | 875,103 | ||||||||||||||||||||||||
Stocks |
||||||||||||||||||||||||||||||
TSMC Global |
Subsidiary | Investments accounted for using equity method |
1 | 45,492,790 | 100 | 45,492,790 | ||||||||||||||||||||||||
TSMC Partners |
Subsidiary | ² | 988,268 | 32,627,788 | 100 | 32,627,788 | ||||||||||||||||||||||||
VIS |
Investee accounted for using equity method |
″ | 628,223 | 9,410,696 | 37 | 8,795,129 | ||||||||||||||||||||||||
SSMC |
Investee accounted for using equity method |
″ | 314 | 5,899,305 | 39 | 5,274,907 | ||||||||||||||||||||||||
TSMC North America |
Subsidiary | ² | 11,000 | 2,686,753 | 100 | 2,686,753 | ||||||||||||||||||||||||
Xintec |
Investee with a controlling financial interest |
″ | 93,081 | 1,372,699 | 41 | 1,328,827 | ||||||||||||||||||||||||
GUC |
Investee with a controlling financial interest |
″ | 46,688 | 960,442 | 36 | 7,096,555 | ||||||||||||||||||||||||
TSMC Europe |
Subsidiary | ² | | 152,965 | 100 | 152,965 | ||||||||||||||||||||||||
TSMC Japan |
Subsidiary | ² | 6 | 136,710 | 100 | 136,710 | ||||||||||||||||||||||||
TSMC Korea |
Subsidiary | ² | 80 | 18,115 | 100 | 18,115 | ||||||||||||||||||||||||
United Industrial Gases Co., Ltd. |
| Financial assets carried at cost |
16,783 | 193,584 | 10 | 288,159 | ||||||||||||||||||||||||
Shin-Etsu Handotai Taiwan Co., Ltd. |
| ² | 10,500 | 105,000 | 7 | 328,546 | ||||||||||||||||||||||||
W.K. Technology Fund IV |
| ² | 4,000 | 40,000 | 2 | 43,413 | ||||||||||||||||||||||||
Fund |
||||||||||||||||||||||||||||||
Horizon Ventures Fund |
| Financial assets carried at cost |
| 103,992 | 12 | 103,992 | ||||||||||||||||||||||||
Crimson Asia Capital |
| ² | | 58,987 | 1 | 58,987 | ||||||||||||||||||||||||
Capital |
||||||||||||||||||||||||||||||
TSMC China |
Subsidiary | Investments accounted for using equity method |
| 3,606,012 | 100 | 3,607,259 | ||||||||||||||||||||||||
VTAF III |
Subsidiary | ² | | 1,341,398 | 98 | 1,324,195 | ||||||||||||||||||||||||
VTAF II |
Subsidiary | ² | | 1,059,820 | 98 | 1,055,364 | ||||||||||||||||||||||||
Emerging Alliance |
Subsidiary | ² | | 319,571 | 99 | 319,571 |
- 38 -
September 30, 2009 | ||||||||||||||||||||||||||||
Market Value or Net | ||||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | 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 | ||||||||||||||||||||
TSMC Partners | Corporate bond |
|||||||||||||||||||||||||||
General Elec Cap Corp. Mtn |
| Held-to-maturity financial assets |
| US$ | 20,606 | N/A | US$ | 21,412 | ||||||||||||||||||||
General Elec Cap Corp. Mtn |
| ² | | US$ | 20,239 | N/A | US$ | 21,078 | ||||||||||||||||||||
Common Stocks |
||||||||||||||||||||||||||||
TSMC Development, Inc. (TSMC Development) |
Subsidiary | Investments accounted for using equity method |
1 | US$ | 690,624 | 100 | US$ | 690,624 | ||||||||||||||||||||
VisEra Holding Company |
Investee accounted for using equity method |
² | 43,000 | US$ | 68,198 | 49 | US$ | 68,198 | ||||||||||||||||||||
InveStar Semiconductor Development Fund, Inc. (II)LDC. (ISDF II) |
Subsidiary | ² | 32,289 | US$ | 28,133 | 97 | US$ | 28,133 | ||||||||||||||||||||
TSMC Technology |
Subsidiary | ² | 1 | US$ | 8,932 | 100 | US$ | 8,932 | ||||||||||||||||||||
InveStar Semiconductor Development Fund, Inc. (ISDF) |
Subsidiary | ² | 7,680 | US$ | 7,746 | 97 | US$ | 7,746 | ||||||||||||||||||||
TSMC Canada |
Subsidiary | ² | 2,300 | US$ | 3,057 | 100 | US$ | 3,057 | ||||||||||||||||||||
Mcube Inc. |
Investee accounted for using equity method |
² | 5,333 | US$ | 800 | 74 | US$ | 800 | ||||||||||||||||||||
Preferred stock |
||||||||||||||||||||||||||||
Mcube Inc. |
Investee accounted for using equity method |
Investments accounted for using equity method |
1,000 | US$ | 1,000 | 10 | US$ | 1,000 | ||||||||||||||||||||
TSMC Development | Corporate bond |
|||||||||||||||||||||||||||
GE Capital Corp. |
| Held-to-maturity financial assets |
| US$ | 20,363 | N/A | US$ | 21,078 | ||||||||||||||||||||
JP Morgan Chase & Co. |
| ² | | US$ | 15,000 | N/A | US$ | 15,246 | ||||||||||||||||||||
Stocks |
||||||||||||||||||||||||||||
WaferTech |
Subsidiary | Investments accounted for using equity method |
293,637 | US$ | 196,675 | 100 | US$ | 196,675 | ||||||||||||||||||||
Emerging Alliance | Common stock |
|||||||||||||||||||||||||||
RichWave Technology Corp. |
| Financial assets carried at cost |
4,247 | US$ | 1,648 | 10 | US$ | 1,648 | ||||||||||||||||||||
Global Investment Holding Inc. |
| ² | 10,000 | US$ | 3,065 | 6 | US$ | 3,065 | ||||||||||||||||||||
Preferred stock |
||||||||||||||||||||||||||||
Audience, Inc. |
| Financial assets carried at cost |
1,654 | US$ | 250 | 1 | US$ | 250 | ||||||||||||||||||||
Axiom Microdevices, Inc. |
| ² | 1,000 | US$ | 24 | 1 | US$ | 24 | ||||||||||||||||||||
Mosaic Systems, Inc. |
| ² | 2,481 | US$ | 12 | 6 | US$ | 12 | ||||||||||||||||||||
Next IO, Inc. |
| ² | 800 | US$ | 500 | 1 | US$ | 500 | ||||||||||||||||||||
Optichron, Inc. |
| ² | 1,281 | US$ | 1,072 | 2 | US$ | 1,072 | ||||||||||||||||||||
Optimal Corporation |
| ² | | US$ | 229 | | US$ | 229 | ||||||||||||||||||||
Pixim, Inc. |
| ² | 4,642 | US$ | 1,137 | 2 | US$ | 1,137 | ||||||||||||||||||||
QST Holdings, LLC |
| ² | | US$ | 131 | 4 | US$ | 131 | ||||||||||||||||||||
Teknovus, Inc. |
| ² | 6,977 | US$ | 1,327 | 2 | US$ | 1,327 | ||||||||||||||||||||
Capital |
||||||||||||||||||||||||||||
VentureTech Alliance Holdings, LLC (VTA Holdings) |
Subsidiary | Investments accounted for using equity method |
| | 7 | |
- 39 -
September 30, 2009 | ||||||||||||||||||||||||||||
Market Value or Net | ||||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | 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 | ||||||||||||||||||||
VTAF II | Common stock |
|||||||||||||||||||||||||||
Leadtrend |
| Available-for-sale financial assets |
1,515 | US$ | 9,204 | 5 | US$ | 9,204 | ||||||||||||||||||||
RichWave Technology Corp. |
| Financial assets carried at cost |
1,043 | US$ | 730 | 1 | US$ | 730 | ||||||||||||||||||||
Sentelic |
| ² | 1,200 | US$ | 2,040 | 15 | US$ | 2,040 | ||||||||||||||||||||
Preferred stock |
||||||||||||||||||||||||||||
5V Technologies, Inc. |
| Financial assets carried at cost |
2,890 | US$ | 2,168 | 15 | US$ | 2,168 | ||||||||||||||||||||
Aquantia |
| ² | 2,108 | US$ | 2,573 | 5 | US$ | 2,573 | ||||||||||||||||||||
Audience, Inc. |
| ² | 7,956 | US$ | 1,838 | 2 | US$ | 1,838 | ||||||||||||||||||||
Axiom Microdevices, Inc. |
| ² | 7,017 | US$ | 741 | 13 | US$ | 741 |
- 40 -
September 30, 2009 | ||||||||||||||||||||||||||
Market Value or Net | ||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | 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 | ||||||||||||||||||
VTAF II | Preferred stock | |||||||||||||||||||||||||
Beceem Communications | | Financial assets carried at cost |
834 | US$ | 1,701 | 1 | US$ | 1,701 | ||||||||||||||||||
Impinj, Inc. | | ² | 475 | US$ | 1,000 | | US$ | 1,000 | ||||||||||||||||||
Next IO, Inc. | | ² | 3,795 | US$ | 953 | 2 | US$ | 953 | ||||||||||||||||||
Optichron, Inc. | | ² | 2,784 | US$ | 2,664 | 4 | US$ | 2,664 | ||||||||||||||||||
Pixim, Inc. | | ² | 33,347 | US$ | 1,878 | 2 | US$ | 1,878 | ||||||||||||||||||
Power Analog Microelectronics | | ² | 6,249 | US$ | 3,185 | 18 | US$ | 3,185 | ||||||||||||||||||
QST Holdings, LLC | | ² | | US$ | 593 | 19 | US$ | 593 | ||||||||||||||||||
Teknovus, Inc. | | ² | 1,599 | US$ | 454 | | US$ | 454 | ||||||||||||||||||
Xceive | | ² | 3,800 | US$ | 1,496 | 2 | US$ | 1,496 | ||||||||||||||||||
Capital | ||||||||||||||||||||||||||
VTA Holdings | Subsidiary |
Investments accounted for using equity method |
| | 31 | | ||||||||||||||||||||
VTAF III | Common stock | |||||||||||||||||||||||||
Mutual-Pak Technology Co., Ltd. |
Subsidiary |
Investments accounted for using equity method |
4,590 | US$ | 1,055 | 51 | US$ | 1,055 | ||||||||||||||||||
Acionn Technology Corporation | Investee accounted for using equity method |
² | 4,500 | US$ | 730 | 41 | US$ | 730 | ||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||
Auramicro, Inc. | | Financial assets carried at cost |
3,816 | US$ | 1,145 | 20 | US$ | 1,145 | ||||||||||||||||||
BridgeLux, Inc. | | ² | 4,955 | US$ | 6,391 | 4 | US$ | 6,391 | ||||||||||||||||||
Exclara, Inc. | | ² | 21,708 | US$ | 4,568 | 18 | US$ | 4,568 | ||||||||||||||||||
GTBF, Inc. | | ² | 1,154 | US$ | 1,500 | N/A | US$ | 1,500 | ||||||||||||||||||
InvenSense, Inc. | | ² | 816 | US$ | 1,000 | 1 | US$ | 1,000 | ||||||||||||||||||
LiquidLeds Lighting Corp. | | ² | 1,600 | US$ | 800 | 11 | US$ | 800 | ||||||||||||||||||
M2000, Inc. | | ² | 3,000 | US$ | 3,000 | 5 | US$ | 3,000 | ||||||||||||||||||
Neoconix, Inc. | | ² | 3,283 | US$ | 4,608 | 6 | US$ | 4,608 | ||||||||||||||||||
Powervation, Ltd. | | ² | 310 | US$ | 4,678 | 19 | US$ | 4,678 | ||||||||||||||||||
Quellan, Inc. | | ² | 3,106 | US$ | 495 | 6 | US$ | 495 | ||||||||||||||||||
Silicon Technical Services, LLC | | ² | 1,055 | US$ | 1,208 | 2 | US$ | 1,208 | ||||||||||||||||||
Tilera, Inc. | | ² | 3,222 | US$ | 2,781 | 3 | US$ | 2,781 | ||||||||||||||||||
Validity Sensors, Inc. | | ² | 8,070 | US$ | 3,089 | 3 | US$ | 3,089 | ||||||||||||||||||
Capital | ||||||||||||||||||||||||||
Growth Fund Limited (Growth Fund) |
Subsidiary |
Investments accounted for using equity method |
| US$ | 856 | 100 | US$ | 856 | ||||||||||||||||||
VTA Holdings | Subsidiary |
² | | | 62 | | ||||||||||||||||||||
Growth Fund | Common stock | |||||||||||||||||||||||||
Staccato | | Financial assets carried at cost |
10 | US$ | 25 | | US$ | 25 | ||||||||||||||||||
SiliconBlue Technologies Inc. | | ² | 5,107 | US$ | 762 | 2 | US$ | 762 |
- 41 -
September 30, 2009 | ||||||||||||||||||||||||||
Market Value or Net | ||||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | 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 | ||||||||||||||||||
ISDF | Common stock | |||||||||||||||||||||||||
Memsic, Inc. | | Available-for-sale financial assets |
1,364 | US$ | 5,113 | 6 | US$ | 5,113 | ||||||||||||||||||
Capella Microsystems (Taiwan), Inc. |
| Financial assets carried at cost |
557 | 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. | | ² | 1,008 | US$ | 290 | 1 | US$ | 290 | ||||||||||||||||||
NanoAmp Solutions, Inc. | | ² | 541 | US$ | 327 | 2 | US$ | 327 | ||||||||||||||||||
Sonics, Inc. | | ² | 230 | US$ | 730 | 2 | US$ | 730 |
- 42 -
September 30, 2009 | ||||||||||||||||||||||||
Market Value or Net | ||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | 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 | ||||||||||||||||
ISDF II |
Common stock | |||||||||||||||||||||||
Memsic, Inc. | | Available-for-sale financial assets | 1,145 | US$ | 4,292 | 5 | US$ | 4,292 | ||||||||||||||||
Treadchip Technologies Corp. | | ² | 503 | US$ | 1,306 | 1 | US$ | 1,306 | ||||||||||||||||
Sonics, Inc. | | Financial assets carried at cost | 278 | US$ | 32 | 3 | US$ | 32 | ||||||||||||||||
Epic Communication, Inc. | | ² | 50 | US$ | 23 | | US$ | 23 | ||||||||||||||||
EON Technology, Corp. | | ² | 2,494 | US$ | 691 | 3 | US$ | 691 | ||||||||||||||||
Goyatek Technology, Corp. | | ² | 932 | US$ | 545 | 6 | US$ | 545 | ||||||||||||||||
Capella Microsystems (Taiwan), Inc. | | ² | 561 | US$ | 210 | 2 | US$ | 210 | ||||||||||||||||
Auden Technology MFG. Co., Ltd. | | ² | 1,049 | US$ | 223 | 3 | US$ | 223 | ||||||||||||||||
Preferred stock | ||||||||||||||||||||||||
Alchip Technologies Limited | | Financial assets carried at cost | 6,979 | US$ | 3,664 | 18 | US$ | 3,664 | ||||||||||||||||
FangTek, Inc. | | ² | 7,064 | US$ | 3,428 | 16 | US$ | 3,428 | ||||||||||||||||
Kilopass Technology, Inc. | | ² | 3,887 | US$ | 500 | 5 | US$ | 500 | ||||||||||||||||
NanoAmp Solutions, Inc. | | ² | 375 | US$ | 227 | 1 | US$ | 227 | ||||||||||||||||
Sonics, Inc. | | ² | 264 | US$ | 926 | 3 | US$ | 926 | ||||||||||||||||
GUC |
Open-end mutual funds | |||||||||||||||||||||||
Jih Sun Bond Fund | | Available-for-sale financial assets | 5,671 | $ | 80,010 | | $ | 80,010 | ||||||||||||||||
FSITC Taiwan Bond Fund | | ² | 294 | 50,004 | | 50,004 | ||||||||||||||||||
Cathay Bond Fund | | ² | 1,674 | 20,005 | | 20,005 | ||||||||||||||||||
Common stock | ||||||||||||||||||||||||
GUC-NA | Subsidiary | Investments accounted for using equity method | 800 | 36,870 | 100 | 36,870 | ||||||||||||||||||
GUC-Japan | Subsidiary | ² | 1 | 13,062 | 100 | 13,062 | ||||||||||||||||||
GUC-Europe | Subsidiary | ² | | 5,281 | 100 | 5,281 | ||||||||||||||||||
GUC-BVI | Subsidiary | ² | 50 | 1,485 | 100 | 1,485 | ||||||||||||||||||
Xintec |
Capital | |||||||||||||||||||||||
Compositech Ltd. | | Financial assets carried at cost | 587 | | 3 | | ||||||||||||||||||
TSMC Global |
Money market funds | |||||||||||||||||||||||
Ssga Cash Mgmt Global Offshore | | Available-for-sale financial assets | 225,978 | US$ | 225,978 | N/A | US$ | 225,978 | ||||||||||||||||
Government bond | ||||||||||||||||||||||||
US Treasury N/B | | Available-for-sale financial assets | 25,000 | US$ | 25,019 | N/A | US$ | 25,019 | ||||||||||||||||
United States Treas Nts | | ² | 10,496 | US$ | 10,595 | N/A | US$ | 10,595 | ||||||||||||||||
WI Treasury | | ² | 107,500 | US$ | 107,100 | N/A | US$ | 107,100 | ||||||||||||||||
Societe De Financement De Lec | | Held-to-maturity financial assets | 15,000 | US$ | 15,000 | N/A | US$ | 15,081 | ||||||||||||||||
Corporate bond | ||||||||||||||||||||||||
Ab Svensk Exportkredit Swedish | | Available-for-sale financial assets | 5,000 | US$ | 5,189 | N/A | US$ | 5,189 | ||||||||||||||||
American Exp Bk Fdic Gtd Tlgp | | ² | 1,750 | US$ | 1,786 | N/A | US$ | 1,786 | ||||||||||||||||
Bear Stearns Cos Inc. | | ² | 5,000 | US$ | 4,965 | N/A | US$ | 4,965 | ||||||||||||||||
Citibank NA | | ² | 5,000 | US$ | 4,997 | N/A | US$ | 4,997 | ||||||||||||||||
General Elec Cap Corp. | | ² | 5,000 | US$ | 4,817 | N/A | US$ | 4,817 | ||||||||||||||||
General Elec Cap Corp. | | ² | 7,000 | US$ | 7,002 | N/A | US$ | 7,002 | ||||||||||||||||
Keycorp Fdic Gtd Tlgp | | ² | 5,000 | US$ | 5,061 | N/A | US$ | 5,061 | ||||||||||||||||
Met Life Glob Funding I | | ² | 500 | US$ | 505 | N/A | US$ | 505 |
- 43 -
September 30, 2009 | ||||||||||||||||||||||||
Market Value or Net | ||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | 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 | ||||||||||||||||
Metropolitan Life Global Fdg I | | ² | 1,750 | US$ | 1,646 | N/A | US$ | 1,646 | ||||||||||||||||
Royal Bk of Scotland Plc | | ² | 5,000 | US$ | 5,071 | N/A | US$ | 5,071 | ||||||||||||||||
Royal Bk Scotland Grp Plc 144A | | ² | 6,500 | US$ | 6,597 | N/A | US$ | 6,597 | ||||||||||||||||
Suncorp Metway Ltd. | | ² | 5,000 | US$ | 5,187 | N/A | US$ | 5,187 | ||||||||||||||||
Wachovia Corp. New | | ² | 4,000 | US$ | 4,238 | N/A | US$ | 4,238 | ||||||||||||||||
Nationwide Building Society | | Held-to-maturity financial assets | 8,000 | US$ | 8,000 | N/A | US$ | 8,010 |
- 44 -
September 30, 2009 | ||||||||||||||||||||||||
Market Value or Net | ||||||||||||||||||||||||
Shares/Units | Carrying Value | Percentage of | 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 | ||||||||||||||||
TSMC Global |
Corporate issued note | |||||||||||||||||||||||
Royal bk of scotland | | Available-for-sale financial assets | 5,000 | US$ | 4,982 | N/A | US$ | 4,982 | ||||||||||||||||
Barclays U.S. Fdg LLC | | ² | 4,500 | US$ | 4,489 | N/A | US$ | 4,489 | ||||||||||||||||
Agency bonds | ||||||||||||||||||||||||
Finma Pool 852347 | | Available-for-sale financial assets | 3,805 | US$ | 4,033 | N/A | US$ | 4,033 |
- 45 -
Beginning Balance | Acquisition | Disposal (Note 2) | Ending Balance (Note 3) | |||||||||||||||||||||||||||||||||||||||||||||||||
Financial | Amount | Shares/Units | Amount | Amount | Carrying Value | Gain (Loss) or | ||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities Type and | Statement | Nature of | Shares/Units | (US$ in | (in Thousands) | (US$ in | Shares/Units | (US$ in | (US$ in | Disposal (US$ | Shares/Units | Amount (US$ | ||||||||||||||||||||||||||||||||||||||||
Company Name | Name | Account | Counter-party | Relationship | (in Thousands) | Thousands) | (Note 1) | Thousands) | (In Thousands) | Thousands) | Thousands) | in Thousands) | (In Thousands) | in Thousands) | ||||||||||||||||||||||||||||||||||||||
The Company |
Corporate bond | |||||||||||||||||||||||||||||||||||||||||||||||||||
Taiwan Mobile Co., Ltd. | Available-for-sale financial assets | Grand
Cathay Securities Corp. and several financial institutions |
| | $ | 2,032,658 | | $ | | | $ | 1,037,370 | $ | 1,000,000 | $ | 37,370 | | $ | 1,033,473 | |||||||||||||||||||||||||||||||||
Taiwan Power Company | Held-to-maturity financial assets | ² | | | 4,209,629 | | 203,892 | | | | | | 3,384,845 | |||||||||||||||||||||||||||||||||||||||
Formosa Petrochemical Corporation | ² | ² | | | 3,554,908 | | 457,351 | | | | | | 3,179,081 | |||||||||||||||||||||||||||||||||||||||
Formosa Plastic Corporation | ² | ² | | | 2,385,285 | | 203,994 | | | | | | 1,671,881 | |||||||||||||||||||||||||||||||||||||||
China Steel Corporation | ² | ² | | | 1,000,000 | | 514,672 | | | | | | 1,513,313 | |||||||||||||||||||||||||||||||||||||||
Government bond | ||||||||||||||||||||||||||||||||||||||||||||||||||||
European Investment Bank Bonds | Held-to-maturity financial assets | Grand
Cathay Securities Corp. and several financial institutions |
| | 383,387 | | 2,025,500 | | 400,000 | 383,909 | 16,091 | | 2,015,610 | |||||||||||||||||||||||||||||||||||||||
Capital | ||||||||||||||||||||||||||||||||||||||||||||||||||||
VTAF III | Investments accounted for using equity method | | Subsidiary | | 1,305,605 | | 262,922 | | | | | | 1,341,398 | |||||||||||||||||||||||||||||||||||||||
TSMC |
Corporate bond | |||||||||||||||||||||||||||||||||||||||||||||||||||
Development |
JP Morgan Chase & Co. | Held-to-maturity financial assets | JP
Morgan Securitied Inc. |
| | | | US$ | 15,000 | | | | | | US$ | 15,000 | ||||||||||||||||||||||||||||||||||||
GUC |
Open-end mutual funds | |||||||||||||||||||||||||||||||||||||||||||||||||||
Jih Sun Bond Fund | Available-for-sale financial assets | Jih
Sun Investment Trust Co., Ltd. |
| | | 13,475 | 190,000 | 7,804 | 110,075 | 110,000 | 75 | 5,671 | 80,010 | |||||||||||||||||||||||||||||||||||||||
FSITC Taiwan Bond Fund | ² | First
Securities Investment Trust Co., Ltd. |
| | | 794 | 135,000 | 500 | 85,193 | 85,000 | 193 | 294 | 50,004 | |||||||||||||||||||||||||||||||||||||||
Prudential
Financial Bond Fund |
² | Prudential
Financial Securities Investment Trust Enterprise |
| | | 11,261 | 170,000 | 11,261 | 170,319 | 170,000 | 319 | | | |||||||||||||||||||||||||||||||||||||||
PCA Well Pool Fund | ² | PCA
Securities Investment Trust Co., Ltd. |
| | | 13,121 | 170,000 | 13,261 | 170,241 | 170,000 | 241 | | | |||||||||||||||||||||||||||||||||||||||
Hua Nan Phoenix Bond Fund | ² | Hua
Nan Investment Trust Co., Ltd. |
| | | 6,434 | 100,000 | 6,434 | 100,131 | 100,000 | 131 | | | |||||||||||||||||||||||||||||||||||||||
TSMC Global |
Money market funds | |||||||||||||||||||||||||||||||||||||||||||||||||||
Ssga Cash Mgmt Global Offshore | Available-for-sale financial assets | | | 30,435 | US$ | 30,435 | 471,418 | US$ | 471,418 | 275,875 | US$ | 275,875 | US$ | 275,875 | | 225,978 | US$ | 225,978 | ||||||||||||||||||||||||||||||||||
Government bond | ||||||||||||||||||||||||||||||||||||||||||||||||||||
US Treasury N/B | Available-for-sale financial assets | | | | | 25,000 | US$ | 25,014 | | | | | 25,000 | US$ | 25,019 | |||||||||||||||||||||||||||||||||||||
WI Treasury | ² | | | | | 107,500 | US$ | 107,100 | | | | | 107,500 | US$ | 107,100 | |||||||||||||||||||||||||||||||||||||
Societe De Financement De Lec | Held-to-maturity financial assets | | | | | 15,000 | US$ | 15,000 | | | | | 15,000 | US$ | 15,000 |
- 46 -
Beginning Balance | Acquisition | Disposal (Note 2) | Ending Balance (Note 3) | |||||||||||||||||||||||||||||||||||||||||||||
Financial | Amount | Shares/Units | Amount | Amount | Carrying Value | Gain (Loss) or | ||||||||||||||||||||||||||||||||||||||||||
Marketable Securities Type and | Statement | Nature of | Shares/Units | (US$ in | (in Thousands) | (US$ in | Shares/Units | (US$ in | (US$ in | Disposal (US$ | Shares/Units | Amount (US$ | ||||||||||||||||||||||||||||||||||||
Company Name | Name | Account | Counter-party | Relationship | (in Thousands) | Thousands) | (Note 1) | Thousands) | (In Thousands) | Thousands) | Thousands) | in Thousands) | (In Thousands) | in Thousands) | ||||||||||||||||||||||||||||||||||
TSMC Global |
Corporate bond | |||||||||||||||||||||||||||||||||||||||||||||||
Ab Svensk Exportkredit Swedish | Available-for-sale
financial assets |
| | | $ | | 5,000 | US$ | 5,185 | | $ | | $ | | $ | | 5,000 | US$ | 5,189 | |||||||||||||||||||||||||||||
Bear Stearns Cos Inc. | ² | | | | | 5,000 | US$ | 4,965 | | | | | 5,000 | US$ | 4,965 | |||||||||||||||||||||||||||||||||
Chase Manhattan Corp. New | ² | | | 3,250 | US$ | 3,353 | | US$ | | 3,250 | US$ | 3,380 | US$ | 3,480 | US$ | (100 | ) | | US$ | | ||||||||||||||||||||||||||||
Citibank NA | ² | | | | | 5,000 | US$ | 4,995 | | | | | 5,000 | US$ | 4,997 | |||||||||||||||||||||||||||||||||
Deutsche Bank Ag London | ² | | | 2,995 | US$ | 3,013 | | | 2,995 | US$ | 3,021 | US$ | 3,041 | US$ | (20 | ) | | | ||||||||||||||||||||||||||||||
General Elec Cap Corp. | ² | | | | | 5,000 | US$ | 4,834 | | | | | 5,000 | US$ | 4,817 | |||||||||||||||||||||||||||||||||
General Elec Cap Corp. | ² | | | | | 7,000 | US$ | 7,002 | | | | | 7,000 | US$ | 7,002 | |||||||||||||||||||||||||||||||||
Keycorp Fdic Gtd Tlgp | ² | | | | | 5,000 | US$ | 5,061 | | | | | 5,000 | US$ | 5,061 | |||||||||||||||||||||||||||||||||
Morgan Stanley | ² | | | 4,855 | US$ | 4,552 | | | 4,855 | US$ | 4,751 | US$ | 4,768 | US$ | (17 | ) | | | ||||||||||||||||||||||||||||||
Royal Bk of Scotland Plc | ² | | | | | 5,000 | US$ | 5,106 | | | | | 5,000 | US$ | 5,071 | |||||||||||||||||||||||||||||||||
Royal Bk Scotland Grp Plc 144A | ² | | | | | 6,500 | US$ | 6,597 | | | | | 6,500 | US$ | 6,597 | |||||||||||||||||||||||||||||||||
Suncorp Metway Ltd. | ² | | | | | 5,000 | US$ | 5,192 | | | | | 5,000 | US$ | 5,187 | |||||||||||||||||||||||||||||||||
Wachovia Corp. New | ² | | | | | 4,000 | US$ | 4,239 | | | | | 4,000 | US$ | 4,238 | |||||||||||||||||||||||||||||||||
Wachovia Corp. New | ² | | | 3,130 | US$ | 3,135 | | | 3,130 | US$ | 3,195 | US$ | 3,100 | US$ | 95 | | | |||||||||||||||||||||||||||||||
Wells Fargo + Co. New Med Trm | ² | | | 4,500 | US$ | 4,493 | | | 4,500 | US$ | 4,524 | US$ | 4,282 | US$ | 242 | | | |||||||||||||||||||||||||||||||
Nationwide Building Society | Held-to-maturity
financial assets |
| | | | 8,000 | US$ | 8,000 | | | | | 8,000 | US$ | 8,000 | |||||||||||||||||||||||||||||||||
Corporate issued note | ||||||||||||||||||||||||||||||||||||||||||||||||
Royal bk of scotland | Available-for-sale
financial assets |
| | | | 5,000 | US$ | 4,982 | | | | | 5,000 | US$ | 4,982 | |||||||||||||||||||||||||||||||||
Barclays U.S. Fdg LLC | ² | | | | | 4,500 | US$ | 4,489 | | | | | 4,500 | US$ | 4,489 | |||||||||||||||||||||||||||||||||
Agency bonds | ||||||||||||||||||||||||||||||||||||||||||||||||
Fed Hm Ln Pc Pool 1g1282 | Available-for-sale
financial assets |
| | 3,215 | US$ | 3,285 | | | 3,179 | US$ | 3,281 | US$ | 3,171 | US$ | 110 | 36 | | |||||||||||||||||||||||||||||||
Fed Hm Ln Pc Pool B19205 | ² | | | 5,449 | US$ | 5,501 | | | 5,335 | US$ | 5,511 | US$ | 5,225 | US$ | 286 | 114 | | |||||||||||||||||||||||||||||||
Federal Home Ln Mtg Corp. | ² | | | 3,060 | US$ | 3,108 | | | 3,005 | US$ | 3,078 | US$ | 3,003 | US$ | 75 | 55 | | |||||||||||||||||||||||||||||||
Fnma Pool 257245 | ² | | | 3,456 | US$ | 3,513 | | | 3,415 | US$ | 3,513 | US$ | 3,437 | US$ | 76 | 41 | | |||||||||||||||||||||||||||||||
Fnma Pool 691283 | ² | | | 2,963 | US$ | 3,039 | | | 2,932 | US$ | 3,028 | US$ | 2,920 | US$ | 108 | 31 | | |||||||||||||||||||||||||||||||
Fnma Pool 852347 | ² | | | | | 3,805 | US$ | 4,038 | | | | | 3,805 | US$ | 4,033 | |||||||||||||||||||||||||||||||||
Fnma Pool 888738 | ² | | | 3,669 | US$ | 3,776 | | | 3,659 | US$ | 3,828 | US$ | 3,801 | US$ | 27 | 10 | | |||||||||||||||||||||||||||||||
Fnma Pool 888793 | ² | | | 4,105 | US$ | 4,242 | | | 4,071 | US$ | 4,265 | US$ | 4,207 | US$ | 58 | 34 | | |||||||||||||||||||||||||||||||
Fed Home Ln Bank | ² | | | 5,000 | US$ | 5,305 | | | 5,000 | US$ | 5,282 | US$ | 5,035 | US$ | 247 | | | |||||||||||||||||||||||||||||||
Federal Farm Cr Bks | ² | | | 3,400 | US$ | 3,610 | | | 3,400 | US$ | 3,590 | US$ | 3,411 | US$ | 179 | | | |||||||||||||||||||||||||||||||
Federal Farm Credit Bank | ² | | | 3,375 | US$ | 3,433 | | | 3,375 | US$ | 3,430 | US$ | 3,370 | US$ | 60 | | | |||||||||||||||||||||||||||||||
Federal Home Ln Bks | ² | | | 3,725 | US$ | 3,854 | | | 3,725 | US$ | 3,852 | US$ | 3,721 | US$ | 131 | | | |||||||||||||||||||||||||||||||
Federal Home Ln Bks | ² | | | 5,000 | US$ | 5,320 | | | 5,000 | US$ | 5,312 | US$ | 5,098 | US$ | 214 | | | |||||||||||||||||||||||||||||||
Federal Home Ln Bks | ² | | | 4,000 | US$ | 4,148 | | | 4,000 | US$ | 4,151 | US$ | 4,136 | US$ | 15 | | | |||||||||||||||||||||||||||||||
Federal Home Ln Mtg | ² | | | 5,000 | US$ | 5,340 | | | 5,000 | US$ | 5,334 | US$ | 5,186 | US$ | 148 | | | |||||||||||||||||||||||||||||||
Federal Home Ln Mtg Corp. | ² | | | 3,340 | US$ | 3,428 | | | 3,340 | US$ | 3,432 | US$ | 3,336 | US$ | 96 | | | |||||||||||||||||||||||||||||||
Federal Home Ln Mtg Corp. | ² | | | 3,500 | US$ | 3,560 | | | 3,500 | US$ | 3,561 | US$ | 3,494 | US$ | 67 | | | |||||||||||||||||||||||||||||||
Federal Home Ln Mtg Corp. | ² | | | 3,500 | US$ | 3,743 | | | 3,500 | US$ | 3,749 | US$ | 3,786 | US$ | (37 | ) | | |
- 47 -
Beginning Balance | Acquisition | Disposal (Note 2) | Ending Balance (Note 3) | |||||||||||||||||||||||||||||||||||||||||||||
Financial | Amount | Shares/Units | Amount | Amount | Carrying Value | Gain (Loss) or | ||||||||||||||||||||||||||||||||||||||||||
Marketable Securities Type and | Statement | Nature of | Shares/Units | (US$ in | (in Thousands) | (US$ in | Shares/Units | (US$ in | (US$ in | Disposal (US$ | Shares/Units | Amount (US$ | ||||||||||||||||||||||||||||||||||||
Company Name | Name | Account | Counter-party | Relationship | (in Thousands) | Thousands) | (Note 1) | Thousands) | (In Thousands) | Thousands) | Thousands) | in Thousands) | (In Thousands) | in Thousands) | ||||||||||||||||||||||||||||||||||
Federal Home Loan Bank | ² | | | 4,500 | US$ | 4,710 | | | 4,500 | US$ | 4,709 | US$ | 4,518 | US$ | 191 | | | |||||||||||||||||||||||||||||||
Federal Natl Mtg Assn | ² | | | 3,700 | US$ | 3,713 | | | 3,700 | US$ | 3,712 | US$ | 3,700 | US$ | 12 | | | |||||||||||||||||||||||||||||||
Federal Natl Mtg Assn | ² | | | 4,000 | US$ | 4,169 | | | 4,000 | US$ | 4,179 | US$ | 4,116 | US$ | 63 | | | |||||||||||||||||||||||||||||||
Federal Natl Mtg Assn | ² | | | 3,500 | US$ | 3,809 | | | 3,500 | US$ | 3,801 | US$ | 3,645 | US$ | 156 | | | |||||||||||||||||||||||||||||||
Federal Natl Mtg Assn | ² | | | 3,750 | US$ | 4,134 | | | 3,750 | US$ | 4,127 | US$ | 4,151 | US$ | (24 | ) | | |
- 48 -
Beginning Balance | Acquisition | Disposal (Note 2) | Ending Balance (Note 3) | ||||||||||||||||||||||||||||||||||||||||||||
Financial | Amount | Shares/Units | Amount | Amount | Carrying Value | Gain (Loss) or | |||||||||||||||||||||||||||||||||||||||||
Marketable Securities Type and | Statement | Nature of | Shares/Units | (US$ in | (in Thousands) | (US$ in | Shares/Units | (US$ in | (US$ in | Disposal (US$ | Shares/Units | Amount (US$ | |||||||||||||||||||||||||||||||||||
Company Name | Name | Account | Counter-party | Relationship | (in Thousands) | Thousands) | (Note 1) | Thousands) | (In Thousands) | Thousands) | Thousands) | in Thousands) | (In Thousands) | in Thousands) | |||||||||||||||||||||||||||||||||
Corporate issued asset-backed securities | |||||||||||||||||||||||||||||||||||||||||||||||
Banc Amer Coml Mtg Inc. | Available-for-sale financial assets |
| | 4,597 | US$ | 4,584 | | $ | | 4,472 | US$ | 4,480 | US$ | 4,584 | US$ | (104 | ) | 125 | $ | | |||||||||||||||||||||||||||
Cit Equip Coll Tr | ² | | | 4,000 | US$ | 3,884 | | | 4,000 | US$ | 3,925 | US$ | 3,996 | US$ | (71 | ) | | | |||||||||||||||||||||||||||||
Credit Suisse First Boston Mtg | ² | | | 4,353 | US$ | 4,349 | | | 4,090 | US$ | 4,085 | US$ | 4,188 | US$ | (103 | ) | 263 | | |||||||||||||||||||||||||||||
First Un Natl Bk Coml Mtg Tr | ² | | | 4,788 | US$ | 4,715 | | | 4,774 | US$ | 4,780 | US$ | 4,954 | US$ | (174 | ) | 14 | | |||||||||||||||||||||||||||||
Lb Ubs Coml Mtg Tr | ² | | | 3,737 | US$ | 3,495 | | | 3,725 | US$ | 3,537 | US$ | 3,697 | US$ | (160 | ) | 12 | | |||||||||||||||||||||||||||||
Tiaa Seasoned Coml Mtg Tr | ² | | | 3,397 | US$ | 3,163 | | | 3,375 | US$ | 3,283 | US$ | 3,392 | US$ | (109 | ) | 22 | | |||||||||||||||||||||||||||||
Wamu Mtg | ² | | | 3,214 | US$ | 2,925 | | | 3,172 | US$ | 3,106 | US$ | 3,114 | US$ | (8 | ) | 42 | |
Note 1: | The shares/units and amount of marketable securities acquired do not include stock dividends from investees. | |
Note 2: | The data for marketable securities disposed exclude bonds maturities and capital return from subsidiaries. | |
Note 3: | The ending balance includes the amortization of premium/discount on bonds investments, unrealized valuation gains/ losses on financial assets, translation adjustments or equity in earnings/ losses of equity method investees. |