Market risk is the risk of loss related to adverse changes in market prices, including interest rates and foreign exchange rates, of financial instruments. We are exposed to various types of market risks, including changes in interest rates and foreign currency exchange rates, in the normal course of business. We use financial instruments, including variable rate debt and swaps and foreign exchange spot transactions, to manage risks associated with our interest rate and foreign currency exposures through a controlled program of risk management in accordance with established policies. These policies are reviewed and approved by our board of directors and shareholders’ meeting. Our treasury operations are subject to internal audit on a regular basis. We do not hold or issue derivative financial instruments for speculatively purposes. Our primary market risk exposures relate to interest rate movements on borrowings and exchange rate movements on foreign currency-denominated accounts receivable, capital expenditures relating to equipment used in manufacturing processes (including lithography, etching and chemical vapor deposition) and purchased primarily from Europe, Japan and the United States. The following table provides information as of December 31, 2025 on our market risk sensitive financial instruments. As of December 31, 2025 Carrying Amount Fair Amount (in NT$ millions) Time Deposits 90,501 90,501 Accounts Receivable (denominated in foreign currency) 22,425 22,425 Accounts Payable (denominated in foreign currency) 4,735 4,735 Bonds Payable 50,228 50,254 Long-term Loans 14,332 14,332 Interest Rate Risk Our major market risk exposure is changing interest rates. Our exposure to market risk for changes in interest rates relates primarily to our long-term debt obligations. We primarily enter into debt obligations to support general corporate purposes including capital expenditures and working capital needs. The tables below provide information of our company as of December 31, 2025 about our financial instruments that are sensitive to changes in interest rates, including debt obligations and certain assets. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. The information is presented in the currencies in which the instruments are denominated. 77 Table of Contents Expected Maturity Dates As of December 31, 2025 2026 2027 2028 2029 2030 and thereunder Total Fair Value (in millions, except percentages) Time Deposits: Fixed Rate (US$) 556 556 556 Average Interest Rate 3.39 % 3.39 % 3.39 % Fixed Rate (NT$) 15,070 15,070 15,070 Average Interest Rate 1.53 % 1.53 % 1.53 % Short-term Loans: Variable Rate (NT$) 8,409 8,409 8,409 Average Interest Rate 1.96 % 1.96 % 1.96 % Unsecured Long-term Loans: Variable Rate (NT$) 1,705 1,900 4,670 2,055 1,362 11,692 11,692 Average Interest Rate 1.86 % 1.87 % 1.87 % 1.88 % 1.96 % 1.88 % 1.88 % Secured Long-term Loans: Variable Rate (NT$) 107 97 89 39 51 383 383 Average Interest Rate 2.67 % 2.36 % 2.27 % 1.66 % 1.66 % 2.26 % 2.26 % Variable Rate (RMB¥) 270 230 500 500 Average Interest Rate 2.34 % 2.34 % 2.34 % 2.34 % Bonds: Unsecured (NT$) 5,500 5,500 5,479 Fixed Rate 0.57 % 0.57 % 0.57 % Unsecured (NT$) 5,000 5,000 4,957 Fixed Rate 0.63 % 0.63 % 0.63 % Unsecured (NT$) 2,000 2,000 2,000 Fixed Rate 0.63 % 0.63 % 0.63 % Unsecured (NT$) 2,100 2,100 2,100 Fixed Rate 0.68 % 0.68 % 0.68 % Unsecured (NT$) 10,000 10,000 9,991 Fixed Rate 1.62 % 1.62 % 1.62 % Unsecured (NT$) 2,000 2,000 2,016 Fixed Rate 1.94 % 1.94 % 1.94 % Unsecured (NT$) 3,200 3,200 3,200 Fixed Rate 1.99 % 1.99 % 1.99 % Unsecured (NT$) 5,000 5,000 5,000 Fixed Rate 1.80 % 1.80 % 1.80 % Unsecured (NT$) 5,000 5,000 5,000 Fixed Rate 1.70 % 1.70 % 1.70 % Unsecured (NT$) 2,300 2,300 2,300 Fixed Rate 1.55 % 1.55 % 1.55 % Unsecured (NT$) 2,500 2,500 2,500 Fixed Rate 1.6 % 1.6 % 1.6 % 78 Table of Contents Foreign Currency Risk Although the majority of our transactions are in NT dollars, some transactions are based in other currencies. The primary foreign currency to which we are exposed is the U.S. dollar. We have in the past, and may in the future, enter into short-term, foreign currency forward contracts to hedge the impact of foreign currency fluctuations on certain underlying assets, liabilities, and firm commitments for operating expenses and capital expenditures denominated in U.S. dollars and other foreign currencies. The purpose of entering into these hedges is to minimize the impact of foreign currency fluctuations on the results of operations. We use the policy of natural hedging to reduce our foreign exchange exposure arising out of changes in the rates of exchange among the U.S. dollar and other foreign currencies. As a general matter, our natural hedging strategy relies on matching revenues and costs for the same currency or offsetting losses in one currency with gains in another. As of December 31, 2025, we had US$22 million outstanding in foreign currency forward contracts to sell U.S. dollars against NT dollars. Expected Maturity Dates As of December 31, 2025 2026 2027 2028 2029 2030 and thereunder Total Fair Value (in millions, except exchange rates) Foreign Currency Forward Contracts: Sell US$ against NT$ Contract Amount US$ 22 US$ 22 (US$ 0.653 ) Average Contractual Exchange Rate US$ 1=NT$31.447 US$ 1=NT$31.447 We believe we do not have material market risk as of December 31, 2025.