| 38. | RELATED PARTY TRANSACTIONS |
Intercompany balances and transactions between TSMC and its subsidiaries, which are related parties of TSMC, have been eliminated upon consolidation; therefore those items are not disclosed in this note. The following is a summary of significant transactions between the Company and other related parties:
| a. | Related party name and categories |
|
Related Party Name |
Related Party Categories |
|
| GUC | Associates | |
| VIS | Associates | |
| SSMC | Associates | |
| Xintec | Associates | |
| Mutual-Pak | Associates | |
| VisEra Tech | Joint venture (Note) | |
| TSMC Education and Culture Foundation | Other related parties | |
| TSMC Charity Foundation | Other related parties |
| Note: | The Company has obtained control over VisEra Tech and consolidated VisEra Tech since November 20, 2015. |
| b. | Net revenue |
| Years Ended December 31 | ||||||||||||||
| 2015 | 2016 | 2017 | ||||||||||||
| NT$ | NT$ | NT$ | ||||||||||||
| (In Millions) | (In Millions) | (In Millions) | ||||||||||||
|
Item |
Related Party Categories |
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|
Net revenue from sale of goods |
Associates | $ | 4,254.0 | $ | 5,929.1 | $ | 8,496.0 | |||||||
| Other related parties | — | — | 0.1 | |||||||||||
| Joint venture | 1.2 | — | — | |||||||||||
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| $ | 4,255.2 | $ | 5,929.1 | $ | 8,496.1 | |||||||||
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Net revenue from royalties |
Associates | $ | 489.4 | $ | 516.7 | $ | 482.5 | |||||||
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| c. | Purchases |
| Years Ended December 31 | ||||||||||||||
| 2015 | 2016 | 2017 | ||||||||||||
| NT$ | NT$ | NT$ | ||||||||||||
| (In Millions) | (In Millions) | (In Millions) | ||||||||||||
|
Related Party Categories |
|
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|
Associates |
$ | 11,126.4 | $ | 10,108.2 | $ | 9,904.6 | ||||||||
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| d. | Receivables from related parties |
| December 31, 2016 |
December 31, 2017 |
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| NT$ | NT$ | |||||||||
| (In Millions) | (In Millions) | |||||||||
|
Item |
Related Party Name/Categories | |||||||||
|
Receivables from related parties |
GUC | $ | 969.1 | $ | 1,022.9 | |||||
| Xintec | 0.4 | 161.2 | ||||||||
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| $ | 969.5 | $ | 1,184.1 | |||||||
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Other receivables from related parties |
SSMC | $ | 60.7 | $ | 83.1 | |||||
| VIS | 86.0 | 78.2 | ||||||||
| Other Associates | 0.1 | 9.8 | ||||||||
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| $ | 146.8 | $ | 171.1 | |||||||
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| e. | Payables to related parties |
| December 31, 2016 |
December 31, 2017 |
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| NT$ | NT$ | |||||||||
| (In Millions) | (In Millions) | |||||||||
|
Item |
Related Party Name/Categories | |||||||||
|
Payables to related parties |
Xintec | $ | 124.6 | $ | 817.9 | |||||
| VIS | 587.4 | 410.0 | ||||||||
| SSMC | 506.1 | 407.0 | ||||||||
| Other Associates | 44.1 | 21.5 | ||||||||
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| $ | 1,262.2 | $ | 1,656.4 | |||||||
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| f. | Acquisition of property, plant and equipment |
| Acquisition Price | ||||||||||||||
| Years Ended December 31 | ||||||||||||||
| 2015 | 2016 | 2017 | ||||||||||||
| NT$ | NT$ | NT$ | ||||||||||||
| (In Millions) | (In Millions) | (In Millions) | ||||||||||||
|
Related Party Categories |
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|
Associates |
$ | 26.2 | $ | — | $ | — | ||||||||
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| g. | Others |
| Years Ended December 31 | ||||||||||||||
| 2015 | 2016 | 2017 | ||||||||||||
| NT$ | NT$ | NT$ | ||||||||||||
| (In Millions) | (In Millions) | (In Millions) | ||||||||||||
|
Item |
Related Party Categories | |||||||||||||
|
Manufacturing expenses |
Associates | $ | 2,321.9 | $ | 1,389.2 | $ | 2,196.1 | |||||||
| Joint venture | 12.8 | — | — | |||||||||||
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| $ | 2,334.7 | $ | 1,389.2 | $ | 2,196.1 | |||||||||
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|
Research and development expenses |
Associates | $ | 142.8 | $ | 161.7 | $ | 69.8 | |||||||
| Joint venture | 1.4 | — | — | |||||||||||
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| $ | 144.2 | $ | 161.7 | $ | 69.8 | |||||||||
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|
General and administrative expenses |
Other related parties | $ | 60.0 | $ | 60.0 | $ | 101.5 | |||||||
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The sales prices and payment terms to related parties were not significantly different from those of sales to third parties. For other related party transactions, price and terms were determined in accordance with mutual agreements.
The Company leased machinery and equipment, factory and office from associates. The lease terms and prices were both determined in accordance with mutual agreements. The rental expenses were paid to associates quarterly or monthly; the related expenses were both classified under manufacturing expenses.
The Company deferred the disposal gain/loss derived from sales of property, plant and equipment to related parties (transactions with associates and joint venture), and then recognized such gain/loss over the depreciable lives of the disposed assets.
| h. | Compensation of key management personnel |
The compensation to directors and other key management personnel for the years ended December 31, 2015, 2016 and 2017 were as follows:
| Years Ended December 31 | ||||||||||||||
| 2015 | 2016 | 2017 | ||||||||||||
| NT$ | NT$ | NT$ | ||||||||||||
| (In Millions) | (In Millions) | (In Millions) | ||||||||||||
|
Short-term employee benefits |
$ | 1,883.0 | $ | 2,024.0 | $ | 2,170.3 | ||||||||
|
Post-employment benefits |
10.9 | 4.0 | 3.7 | |||||||||||
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| $ | 1,893.9 | $ | 2,028.0 | $ | 2,174.0 | |||||||||
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The compensation to directors and other key management personnel were determined by the Compensation Committee of TSMC in accordance with the individual performance and the market trends.