Letter from the ESG Committee Chairperson

Letter from the ESG Committee Chairperson

Sustainability is a journey without end. As the company continues to grow, we find ourselves with growing responsibilities as well. We will continue to hold true to our ESG vision to uplift society as we move forward with steadfast resolve.

The year 2021 was a year of global upheaval as the world faced the COVID-19 pandemic, war, and political instability. As a global citizen, we have shared the impact of these changes.

The year 2021 was also a year of growth for TSMC. Benefitting from the strong demand for advanced process technologies from 5G mobile networks and high-performance computing, TSMC was able to achieve record high revenue for the 12th consecutive year. As COVID-19 continued to ravage the world, TSMC launched the COVID-19 global epidemic prevention program to protect colleagues, suppliers and contractors working in TSMC fabs and ensure normal operations at our global wafer fabs. In 2021, TSMC shipped 14.2 million 12-inch equivalent wafers and realized 12,302 product innovations for our customers, providing humanity a safer and more convenient lifestyle. TSMC also supported the Sustainable Development Goals proposed by the United Nations with tangible actions and has remained steadfast to our five ESG directions.

In terms of "Green Manufacturing", in 2021, TSMC updated our Climate Change Statement to include a commitment to Net Zero Emissions by 2050, invested NT$28.9731 billion into environmental protection, and successfully promoted 780 innovative programs for energy conservation, water conservation, and waste reduction. TSMC also achieved the target of net zero emissions from energy consumption at all overseas subsidiaries for the fourth consecutive year and responded to Taiwan's drought in the first half of 2021 with outstanding water management capabilities, ensuring that our production capacity was unaffected. In addition, we are currently building a Zero Waste Manufacturing Center to realize a low-carbon business model and circular economy.

As for "Build A Responsible Supply Chain," in 2021, TSMC continued to strengthen supplier sustainability through the Supply Online 360 global responsible supply chain management platform and the TSMC Supplier Sustainability Academy, promoting EP&L across the supply chain and uncovering opportunities to lower our impact on the environment. In 2021, TSMC also became the first semiconductor company in Taiwan to release the Supplier Transportation Management White Paper. Our efforts in the supply chain also included safety and health support and training to all critical high-risk suppliers and helping suppliers establish long-term sustainability targets. To increase climate resiliency across the supply chain, TSMC also joined the CDP Supply Chain Program.

In terms of "Create a Diverse & Inclusive Workplace," in 2021, TSMC introduced 8,536 job opportunities across the world and drew on our Human Rights Policy and Diversity and Inclusion Statement to develop Women@tsmc, an employee resource group aimed at achieving equality in the workplace. Looking ahead, TSMC will continue to make timely responses to employee needs and suggestions through the Engagement Survey and other diverse reporting channels to support employee work-life balance . For "Develop Talent," TSMC adopted the 70-20-10 rule to empower employees and cultivate talents for the future. TSMC also continued to expand university programs such as the Semiconductor Programs, Advanced IC Design Program, and University Research Center as well as the TSMC Journeys of Female Scientists Lectures for female high school students in an effort to cultivate the next generation of STEAM professionals. In terms of "Care for the Disadvantaged," the TSMC Education and Culture Foundation and TSMC Charity Foundation have long been investing in this area by tapping into the power of our employees' volunteer services. We consulted the impact principles of the London Benchmark group and evaluated the impact of all social participation programs along the two dimensions of "depth" and "type" to create a strong foundation of common good for social progress.

As the Chairperson of the ESG Committee, I look forward to strengthening and expanding our sustainable actions to bring about innovative breakthroughs. The Sustainability Report that we compile each year keeps pace with global sustainability trends and has become a guide for organizations to continue advancing their ESG efforts. We expanded our information disclosure and external communications and continued to accumulate our ESG intellectual property. In addition to the existing EP&L Report and TCFD Report, TSMC also released, for the first time this year, Materiality Analysis Report and the UN SDGs Action Report.

Sustainability is a journey without end. TSMC is the only semiconductor company in the world to be selected for the Dow Jones Sustainability Index (DJSI) for 21 consecutive years. As the company continues to grow, we find ourselves with growing responsibilities as well. We will continue to hold true to our ESG vision to uplift society as we strive on forward with steadfast resolve.

Lora Ho Senior Vice President and ESG Committee Chairperson