Carrying Out the UN Sustainable
Development Goals

Letter from the ESG Committee Chairperson

Humanity now faces grave challenges. In the face of such challenges, TSMC is focusing on improving core business competencies through our ten business philosophies and four core values. We are striving to fulfill our five sustainability roles and drive SDGs throughout the semiconductor industry by influencing the three major stages of upstream procurement, TSMC operations, and customer use. With guidance from the ESG Steering Committee, TSMC has set five ESG goals and selected nine primary SDGs. With the ESG Committee, we were able to integrate inter-organizational resources and capabilities to formulate 44 timely and quantifiable long-term goals and implement 24 corresponding actions toward sustainability. We are integrating SDGs into our organizational culture and daily operations, and with Goal 17 of the SDGs – global partnerships – at the core, we are collaborating with internal/external stakeholders through participation, cooperation, and engagement to uncover opportunities for growth in the governance/economic, environmental, and social dimensions. We hope that we can join together in a sustainable future with shared values.

An Innovation Pioneer A Responsible Purchaser A Practitioner of Green Power An Admired Employer Power to Change Society Upstream Procurement TSMC Operations Customer Use

Linking SDGs and TSMC's Sustainable Development Goals for 2030

Offer Better Medical Care to Seniors Living Alone Provide 12,000 service visits to seniors living alone Good Health and Well-being Promote Filial Piety Among Our Youth Promote filial piety education in 120 educational institutions Care for the Educationally Disadvantaged Continuous collaboration with public and private educational organizations and provide no less than NT$15 million in resources annually Volunteer Readers for Children in Remote Areas Provide more than 10,000 hours of reading services each year Quality Education Reduce Water Risks Reduce unit water consumption (liter/12-inch equivalent wafer mask layers) by 30% (Base year: 2010) Help suppliers implement water conservation measures and reach 3.5 million metric tons in cumulative amount of water conserved (Base year: 2020) NEW Raise Effluent Standards Water pollution composite indicator 50% above effluent standards Increase Usage of Reclaimed Water Increase the replacement rate of reclaimed water by more than 30% Clean Water and Sanitation Produce with Greater Energy Efficiency Double energy efficiency after five years of mass production for each process technology Save 5,000 GWh cumulatively between 2016 and 2030 through new energy-saving measures Work with Suppliers Toward Energy Conservation Help suppliers implement energy conservation measures and reduce energy consumption by a cumulative total of 1,500 GWh (Base year: 2018) Use Renewable Energy Renewable energy to account for 20% of energy consumption in new fabs after adopting 3nm processes. Continue increasing renewable energy purchases annually until 25% of fabs' power consumption is supplied from renewable energy and non-fab power consumption is 100% from renewable energy Affordable and Clean Energy Offer Competitive Compensation Maintain position above 75th   percentile among industry peers in total compensation Facilitate Sustainability Across the Supply Chain Tier 1 suppliers required to complete Sustainability Management Self-assessment Questionnaire; completion rate 100% Tier 1 suppliers required to sign TSMC Supplier Code of Conduct every three years; completion rate: 100% Suppliers required to receive third-party (RBA-certified agencies) audits every three years: completion rate 100% Conduct due diligence for responsible mineral supply chains on three suppliers each year; 30 cumulative suppliers surveyed NEW Promote Workplace Safety Disabling Injuries Frequency Rate (FR) < 0.3 Disabling Severity Rate (SR) < 3 Incident Rate per 1,000 Employees <0.20 All waste treatment vendors to acquire ISO14001 or other international EHS Management certifications Supporting high-risk operation suppliers with health and safety; completion rate: 100% Assist high-risk operation contractors with ISO 45001 certification for occupational safety and health management system; completion rate: 100% Ensure a cumulative total of 1,500 local suppliers participate in the ESH training program (Base year: 2016) Support Local Suppliers Ensure a cumulative total of 145 local raw materials suppliers receive support on process enhancement and quality improvement (Base year: 2016) Encourage all major local raw materials suppliers and 75% of back-end packaging materials suppliers to participate in the Taiwan Continuous Improvement Competition with 60% of them advancing to the finals Decent Work and Economic Growth Encourage Innovation Maintain TSMC's technology leadership and invest 8.5% of revenue R&D expenses annually Over 50,000 global patents granted Offer 1,200 process technologies and 170 packaging technologies in line with TSMC technology roadmap Green Product Innovation Decrease the Product Environmental Footprint by 30% for each unit product (Base year: 2010) Industry, Innovation and Infrastructure Reduce Industrial Waste Output Outsource ≦ 0.5 of unit waste disposal per wafer (kg/12-inch equivalent wafer mask layers) Promote a Circular Economy Develop multiple types of electronics-grade chemicals for recycling within TSMC Reduce waste production among major local suppliers by 35% (Base year: 2014) Chemicals Management Develop analytical abilities for carcinogenic, mutagenic, and reprotoxic substances for all materials and assist major suppliers in developing such abilities Replace NMP 100% (Base year: 2016) Ensure that all processes are free from PFASs with more than 4 carbon atoms Better Recycling Reduce air pollutant emissions per unit product by 50% (Base year: 2015) >98% reduction rate of volatile organic gases Facilitate Health Management Ensure zero cases of occupational hazard caused by exposure to chemicals Responsible Consumption and Implement Mitigation Strategies to Climate Risks Reduce GHG emissions per unit product (MTCO2e/12-inch equivalent wafer mask layers) by 40% Ensure all high-energy-consumption suppliers receives ISO 14064-1 certification for GHG emissions; completion rate: 100% NEW 0 days of production interruption due to climate disasters Strengthen Supply Chain Climate Resilience Invite suppliers to observe our annual emergency response drill; cumulative total of 300 suppliers have observed the drill (Base year: 2016) Environmental/Energy-saving Volunteers Ensure 1,200 volunteer services annually for environmental causes Climate Action