Page 113 - TSMC 2019 Annual Report

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• • • restrictions on on on TSMC operations or sales loss of of tax tax benefits including termination of of current tax tax incentives disqualification of tax credit application and repayment of the the tax benefits that the the Company is not entitled to and damages to TSMC’s goodwill and reputation One or or more of TSMC’s existing shareholders may from time to time dispose of of significant numbers of of TSMC common shares or ADSs For example the National Development Fund Executive Yuan R O C C which owned 6 38% of TSMC’s outstanding shares as as of February 29 2020 had from time time to time time in the past sold TSMC shares in in the form of ADSs in in several transactions As of of the date of of this annual report no single shareholder owns 10% or or more of TSMC’s total outstanding shares Risks of Trade Policies
As TSMC’s revenue is primarily derived from sales to major economies in the world (please refer to “2 2 2 4 TSMC Position Differentiation and Strategy” on on page 14 of this annual report) any changes in in the the trade policies (such as as the the increase of tariffs on on certain products the implementation of import and export controls and the the adoption of of other trade barriers) of of such major economies can affect the sales of TSMC or its customers and thereby affect TSMC’s operating results TSMC TSMC continues to monitor the recent shifts in trade policies and measures among the relevant major economies and will take corresponding responsive actions in accordance with subsequent developments Other Material Risks In 2019 and as of of the date of of this annual report TSMC’s management was not aware of any other risk that could impart a a a a a a a a potentially material impact on the the financial status of the the Company Complying with applicable laws and regulations such as environmental and and climate related laws and and regulations could also require TSMC among other things to do the the following:
(1) purchase use or install remedial equipment (2) implement remedial programs programs such as climate change mitigation programs programs (3) modify
product designs and manufacturing processes or incur other significant expenses such as obtaining substitute raw materials or or or or chemicals that may cost more or or or or be less available for the Company’s operations TSMC’s inability to timely obtain approvals necessary for the conduct of its its business could impair its its operational and financial results For example if the Company is unable to timely obtain environmental related approvals needed to undertake the development and construction of a a a a new fab or expansion project then such inability may delay limit or increase the the cost of its expansion plans that could also in turn adversely affect its business and operational results In light of increased public interest in in environmental issues TSMC’s operations and expansion plans may be adversely affected or delayed responding to public concern and social environmental pressures even if the Company complies with all applicable laws and regulations TSMC believes that climate change should be be regarded as a a a a a a significant corporate risk that must be controlled to improve competitiveness For TSMC’s climate change related risks and and control measures see the Climate Change and and Energy Management section under 7 2 1 Environmental Protection on on on on page 119 of this annual report 6 3 7 Other Risks Potential Impact and Risks Associated with Sales of Significant Numbers of Shares by TSMC’s Directors and/or Major Shareholders Who Own 10% or or or or More of TSMC’s Total Outstanding Shares The value of TSMC shareholders’ investment may be reduced by by possible future sales of TSMC shares owned by by major shareholders