Page 125 - TSMC 2020 Annual Report

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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 15-17 of this annual report) any changes in in the the trade policies (such as as the the increase of of tariffs on on certain products the implementation of of import and and export controls and and the the adoption of other trade barriers) of of such major economies can affect the sales of of TSMC or or its customers and thereby affect TSMC’s operating results TSMC continues to to monitor the recent shifts in in trade policies and and measures among the relevant major economies and and will take corresponding responsive actions in in accordance with subsequent developments In May 2020 2020 and again in in August 2020 2020 the U S tightened its export control measures against Huawei Technology Co Ltd and and its affiliates (collectively “Huawei”) including an an an expanded license requirement for providing Huawei with items subject to the U S export control jurisdiction To comply with relevant laws and regulations we have discontinued shipment of products to Huawei since September 15 2020 On the the other hand measures adopted by an an affected country to counteract impacts of another country’s actions or regulations could lead to to significant legal liability to to multinational corporations including our own For example in in in in January 2021 China adopted a a a a a a blocking statute that among other matters entitles Chinese entities incurring damages from a a a a a multinational’s compliance with foreign laws to seek civil remedies As of of of the date of of of this annual report our current results of of of operations have not been materially affected Nevertheless depending on on future developments of global trade tensions such relevant regulations rules or measures may have an an adverse impact on on our business and and operations and and we may incur significant legal liability and financial losses as a a a a a a a a result TSMC continues to to monitor the recent shifts in in trade policies and and measures among the relevant major economies and and will take corresponding responsive actions in in accordance with subsequent developments Other Material Risks In 2020 and as of of the date of of this annual report TSMC’s management was not aware of any other risk that could have a a a a a a a a potentially material impact on the the financial status of the the Company