TSMC Reports Fourth Quarter EPS of NT$1.31

HSINCHU, Taiwan, Jan. 31 /Xinhua-PRNewswire-FirstCall/ -- TSMC today announced consolidated revenue of NT$93.9 billion, net income of NT$34.48 billion, and diluted earnings per share of NT$1.31 (US$0.20 per ADS unit) for the fourth quarter ended December 31, 2007.

Year-over-year, fourth quarter revenue increased 25.2% while net income and diluted EPS increased 23.5% and 24.3%, respectively. On a sequential basis, fourth quarter results represent a 5.5% increase in revenue, an increase of 13.5% in net income, and an increase of 14.3% in diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

Stronger than expected demand of TSMC's wafers across all major product segments (communication, computer, and consumer) led to the fourth quarter results approaching or exceeding the high end of the guidance. Advanced process technologies (0.13-micron and below) accounted for 59% of wafer revenues with 90-nanometer process technology accounting for 29% and 65- nanometer reaching 10% of total wafer sales. Gross margin was 47.8%, operating margin was 39.2%, and net margin was 36.7%.

'Fourth quarter set another record for our business in terms of revenues and wafer shipment, while our margins improved sequentially,' said Lora Ho, VP and Chief Financial Officer of TSMC. 'Although the global economy is facing a large degree of uncertainty, we expect our first quarter to follow a normal seasonal pattern and our results will track with normal seasonality,' said Ho. 'Based on our current business outlook, and the implementation of a new ROC accounting rule which requires the expensing of employee profit sharing, management's expectations for first quarter 2008 performance are as follows':

-- Revenue is expected to be between NT$87 billion and NT$89 billion; -- Gross profit margin is expected to be between 42% and 44%; -- Operating profit margin is expected to be between 32% and 34%.

Ho said management also expects that 2008 capital expenditure will be around US$1.8 billion.

Conference Call & Webcast Notice:

TSMC's quarterly review conference call will be held at 8 a.m. Eastern Time (9 p.m. Taiwan Time) on Thursday, January 31, 2008. The conference call will also be webcast live on the Internet. Investors wishing to access the live webcast should visit TSMC's web site at http://www.tsmc.com/ at least 15 minutes prior to the broadcast. Instructions will be provided on the web site to facilitate the download and installation of necessary audio applications. Investors without Internet access may listen to the conference call, in listen-only mode, by dialing 1-617-614-6204 in the U.S., 852-3002-1672 in Hong Kong, 65-6823-2164 in Singapore, and 44-207-365-8426 in the U.K. (Password: TSMC). An archived version of the webcast will be available on TSMC's web site for six months following the Company's quarterly review conference call and webcast.

Profile

TSMC (TAIEX: 2330; NYSE: TSM) is the world's largest dedicated semiconductor foundry, providing the industry's leading manufacturing capacity, process technology, and the foundry industry's largest portfolio of process- proven libraries, IP, design tools and reference flows. TSMC currently operates two twelve-inch wafer fabs, four eight-inch fabs and one six-inch fab. The Company also operates two eight-inch fabs at its wholly owned subsidiaries, WaferTech in the U.S. and TSMC (Shanghai) Company, Ltd. in China, and has substantial capacity commitments from a joint-venture fab, SSMC, in Singapore. Total managed capacity in 2007 exceeds eight million eight-inch equivalent wafers. TSMC is the first foundry to provide 65-nanometer production capabilities. TSMC's corporate headquarters are in Hsin-Chu, Taiwan. More information about TSMC is available at http://www.tsmc.com/ .

(Management Report and Tables Follow)

TSMC 4Q07 Quarterly Management Report January 31, 2008

Topics in This Report

-- Revenue Analysis -- Profit & Expense Analysis -- Financial Condition Review -- Cash Flow -- CapEx & Capacity -- Recap of Recent Important Events & Announcements

Operating Results Review:

Summary:

(Amounts are on consolidated basis and are in NT billions except otherwise noted)

4Q07 3Q07 4Q06 2007 2006

EPS (NT$ per common share) 1.31 1.15 1.06 4.14 4.81 (US$ per ADR unit) 0.20 0.17 0.16 0.63 0.74

Consolidated Net Sales 93.86 88.96 74.96 322.63 317.41 Gross Profit 44.84 40.72 34.45 142.35 155.81 Gross Margin 47.8% 45.8% 46.0% 44.1% 49.1%

Operating Expense (8.08) (8.37) (7.05) (30.63) (28.55) Operating Income 36.76 32.35 27.41 111.72 127.26 Operating Margin 39.2% 36.4% 36.6% 34.6% 40.1%

Net Income 34.48 30.37 27.91 109.18 127.01 Net Profit Margin 36.7% 34.1% 37.2% 33.8% 40.0%

Wafer Shipment (kpcs 8 inch-equiv.) 2,357 2,226 1,718 8,005 7,215

Financial Highlights:

Fourth Quarter 2007

-- Record revenue of NT$93.9 billion, up 25.2% year-over-year and up 5.5% quarter-over-quarter; -- Gross margin of 47.8%, up 1.8 percentage points over the same period last year and up 2 percentage points sequentially; -- Operating margin of 39.2%, up 2.6 percentage points year-over-year and up 2.8 percentage points quarter-over-quarter; -- EPS of NT$1.31, with net profit margin of 36.7%

Full Year 2007

-- Record revenue of NT$322.6 billion, up 1.6% year-over-year; -- Gross margin of 44.1%, down 5 percentage points from 2006; -- Operating margin of 34.6%, down 5.5 percentage points from the prior year; -- Earnings per share of NT$4.14, net profit margin of 33.8%

I. Revenue Analysis

I. Wafer Sales Analysis

By Application 4Q07 3Q07 4Q06

Computer 35% 32% 32% Communication 42% 42% 42% Consumer 15% 17% 16% Industrial/Others 5% 5% 7% Memory 3% 4% 3%

By Technology 4Q07 3Q07 4Q06

65nm and below 10% 7% -- 90nm 29% 27% 23% 0.11/0.13um 20% 22% 25% 0.15/0.18um 27% 28% 33% 0.25/0.35um 10% 11% 14% 0.50um+ 4% 5% 5%

By Customer Type 4Q07 3Q07 4Q06

Fabless/System 68% 66% 72% IDM 32% 34% 28%

By Geography 4Q07 3Q07 4Q06

North America 79% 74% 78% Asia Pacific 11% 13% 11% Europe 8% 10% 7% Japan 2% 3% 4%

Revenue Analysis:

Fourth quarter 2007 revenue came in at the high end of our guidance to reach NT$93.9 billion. Demand from computer related applications grew the strongest during the quarter, followed by communication applications. On a sequential basis, revenue from computer and communication applications increased by 15% and 5%, respectively. On the other hand, demand for consumer applications declined by 7% quarter-over-quarter, reflecting their seasonal pattern.

As a result of continued strong ramp for our 65nm technology, revenue from 65nm reached 10% of total wafer sales during the quarter, up from 7% in the previous quarter. Meanwhile, revenue from 90nm also increased during the quarter and accounted for 29% of total wafer sales. Overall, revenues from advanced technologies (0.13-micron and below) accounted for 59% of total wafer sales, up three percentage points from the third quarter of 2007.

Revenues from IDM customers accounted for 32% of total wafer sales during the quarter, compared to 34% in the previous quarter.

From a geographic perspective, revenues from customers headquartered in North America accounted for 79% of total wafer sales, up 5 percentage points from the previous quarter. Meanwhile, as a percentage of wafer sales, sales from customers in Asia Pacific, Europe and Japan all declined during the quarter and accounted for 11%, 8% and 2% of wafer sales, respectively.

II. Profit & Expense Analysis

II - 1. Gross Profit Analysis

(In NT billions) 4Q07 3Q07 4Q06 2007 2006

COGS 49.0 48.2 40.5 180.3 161.6 Depreciation 18.5 18.2 18.2 73.1 67.7 Other MFG Cost 30.5 30.0 22.3 107.2 93.9 Gross Profit 44.8 40.7 34.5 142.4 155.8

Gross Margin 47.8% 45.8% 46.0% 44.1% 49.1%

Gross Profit Analysis:

Gross margin for the fourth quarter 2007 was 47.8%, up 2 percentage points from the previous quarter, reflecting a higher level of capacity utilization and our continued efforts in cost improvements, offset in part by a depreciation in U.S. dollar.

Gross margin for full year 2007 was 44.1%, down 5 percentage points from the 2006 level, mostly due to lower overall utilization and price decline, offset partially by cost improvements.

II - 2. Operating Expenses *

(In NT billions) 4Q07 3Q07 4Q06 2007 2006

Total Operating Exp. 8.08 8.37 7.05 30.63 28.55 SG&A 3.07 3.68 3.22 12.68 12.47 Research & Development 5.01 4.69 3.83 17.95 16.08

Total Operating Exp. as a % of Sales 8.6% 9.4% 9.4% 9.5% 9.0%

* Certain prior period amounts have been reclassified to conform with current period presentation.

Operating Expenses:

Total operating expenses for the fourth quarter 2007 declined by 3.5% sequentially to reach NT$8.1 billion, or 8.6% of net sales, compared with 9.4% of net sales in the previous quarter.

Research and development expenditures increased by NT$321 million quarter- over-quarter, driven by increased R&D spending on 45nm and 32nm related projects.

SG&A expenses declined by NT$614 million sequentially, mostly due to lower legal fees.

On a full year basis, total operating expenses accounted for 9.5% of net sales in 2007, compared with 9% of net sales in 2006, reflecting our continued investments in R&D.

II - 3. Non-Operating Items

(In NT billions) 4Q07 3Q07 4Q06 2007 2006

Non-Operating Income/(Exp.) 1.7 1.1 1.7 7.4 3.8 Net Interest Income/(Exp.) 1.2 1.1 1.0 4.8 3.7 Other Non-Operating 0.5 (0.0) 0.7 2.6 0.1 L-T Investments 0.9 0.8 0.4 2.5 2.3 SSMC 0.5 0.4 0.1 1.2 1.4 Others 0.4 0.4 0.3 1.3 0.9 Total Non-Operating Items 2.6 1.9 2.1 9.9 6.1

Non-Operating Items:

Combined result from non-operating income and long-term investments was a gain of NT$2.6 billion for fourth quarter 2007.

Non-operating income was NT$1.7 billion, up from NT$1.1 billion in the previous quarter, primarily due to an accrual of litigation contingency in the previous quarter, lawsuit settlement received from SMIC during the fourth quarter, offset in part by lower gains on disposal of investments and lower mark-to-market gains as a result of the decline in the market value of certain marketable securities held through TSMC venture capital funds.

Net investment income increased by NT$95 million in the quarter to reach NT$877 million.

For full year 2007, non-operating income increased by 98% to reach NT$7.4 billion, mostly due to an increase in mark-to-market adjustment for unrealized gains on certain marketable securities, higher interest income, and lower hedging cost, offset partially by an accrual of litigation contingency in 2007. As a result, combined results from non-operating income and long-term investments were a gain of NT$9.9 billion, compared with a gain of NT$6.1 billion in 2006.

III. Financial Condition Review

III - 1. Liquidity Analysis (Selected Balance Sheet Items)

(In NT billions) 4Q07 3Q07 4Q06

Cash & Marketable Securities 174.8 176.4 195.1 Accounts Receivable - Trade 42.4 42.4 31.6 Inventory 23.9 24.5 21.4 Total Current Assets 249.8 250.1 260.3 Accounts Payable 19.3 24.2 20.6 Current Portion of Bonds Payable 0.0 4.5 7.0 Accrued Liabilities and Others 29.4 22.2 19.3 Total Current Liabilities 48.7 50.9 46.9 Current Ratio (x) 5.1 4.9 5.6 Net Working Capital 201.1 199.2 213.5

Liquidity Analysis:

At the end of fourth quarter 2007, total cash and marketable securities and total current assets were NT$174.8 billion and NT$249.8 billion, respectively, essentially flat from the previous quarter.

Total current liabilities declined by NT$2.2 billion in fourth quarter 2007, primarily as a result of the repayment of corporate bonds, a decline in payables to contractors and equipment suppliers, offset partially by an increase in income tax payables and an accrual for treasury share purchases executed in 2007 but settled in 2008.

Net working capital stood at NT$201.1 billion at the end of the quarter, current ratio improved slightly to reach 5.1.

III - 2. Receivable/Inventory Days (In Number of Days) 4Q07 3Q07 4Q06

Days of Receivable 42 44 43 Days of Inventory 48 48 50

Receivable and Inventory Days:

Both days of receivable and days of inventory were essentially unchanged from the levels in the previous quarter.

III - 3. Debt Service (In NT billions) 4Q07 3Q07 4Q06

Cash & Marketable Securities 174.8 176.4 195.1 Interest-Bearing Debt 23.1 26.7 27.6 Net Cash Reserves 151.7 149.7 167.5

Debt Service:

As a result of the repayment of corporate bonds during the quarter, net cash reserves -- defined as the excess of cash and short-term marketable securities over interest-bearing debt -- increased slightly to reach NT$151.7 billion at the end of the fourth quarter.

IV. Cash Flow

IV - 1. Cash Flow Analysis

(In NT billions) 4Q07 3Q07 4Q06

Net Income 34.5 30.4 27.9 Depreciation & Amortization 20.3 19.9 19.7 Other Op Sources/(Uses) 5.0 0.8 5.4 Total Op Sources/(Uses) 59.8 51.1 53.0 Capital Expenditure (19.8) (24.9) (17.6) Marketable Financial Instruments 8.2 (2.8) (6.7) Other Investing Sources/(Uses) (1.1) (6.8) (4.1) Net Investing Sources/(Uses) (12.7) (34.5) (28.4)

Cash Dividends 0.0 (77.4) 0.0 Employee Profit Sharing 0.0 (4.6) 0.0 Repayment of Bonds Payable (4.5) 0.0 0.0 Repurchase of Treasury Stock (45.4) 0.0 0.0 Other Financing Sources/(Uses) (0.2) (0.0) 0.8 Net Financing Sources/(Uses) (50.1) (82.0) 0.8 Net Cash Position Changes (3.0) (65.4) 25.4 Exchange Rate Changes & Others (0.3) 0.3 (0.5) Ending Cash Balance 95.0 98.3 117.8

IV - 2. Cash Flow Analysis (In NT billions) 2007 2006

Net Income 109.2 127.0 Depreciation & Amortization 80.0 73.7 Other Operating Sources/(Uses) (5.4) 4.3 Total Operating Sources/(Uses) 183.8 205.0 Capital Expenditure (84.0) (78.7) Marketable Financial Instruments 24.7 (35.8) Other Investing Sources/(Uses) (11.4) (5.2) Net Investing Sources/(Uses) (70.7) (119.7)

Cash Dividends (77.4) (61.7) Employee Profit Sharing (4.6) (3.4) Repayment of Bonds Payable (7.0) 0.0 Repurchase of Treasury Stock (45.4) 0.0 Other Financing Sources/(Uses) (1.0) 1.3 Net Financing Sources/(Uses) (135.4) (63.8) Net Cash Position Changes (22.3) 21.5 Exchange Rate Changes & Others (0.5) (0.1) Ending Cash Balance 95.0 117.8

Summary of Cash Flow:

Cash generated from operating activities totaled NT$59.8 billion during the quarter, up from NT$51.1 billion in the third quarter 2007.

TSMC spent NT$19.8 billion in capital expenditures in 4Q07, bringing 2007 total capital expenditures to NT$84 billion or US$2.6 billion.

Net cash used in financing activities was NT$50.1 billion during the quarter, as we spent NT$45.4 billion in share buybacks and NT$4.5 billion in repayment of corporate bonds.

As a result, TSMC ended the quarter with a cash balance of NT$95 billion.

On a full year basis, cash generated from operating activities declined by NT$21.2 billion in 2007, meanwhile, capital expenditures increased by NT$5.3 billion. Cash dividends per share was raised from NT$2.5 in 2006 to NT$3 in 2007, as a result, total cash dividends paid during 2007 increased by NT$15.6 billion. TSMC also spent NT$45.4 billion in share buybacks.

IV - 3. Operating and Free Cash Flows

Please refer to the link for the index charts: http://www.tsmc.com/uploadfile/ir/quarterly/index_charts.pdf

Operating and Free Cash Flows:

Cash flows generated from operating activities were NT$59.8 billion during the quarter. Free cash flow, defined as the excess of operating cash flows over capital expenditures, totaled NT$40 billion in 4Q07, bringing total free cash flow generated in 2007 to NT$99.8 billion.

V. CapEx & Capacity

V - 1. Capital Expenditures

(In US millions) 1Q07 2Q07 3Q07 4Q07 2007 2006

TSMC 419 747 732 577 2,475 2,410 XinTec and GUC 3 13 15 16 47 3 TSMC Shanghai & WaferTech 2 4 8 17 31 42 Other TSMC Subsidiaries 0 2 1 1 4 2 Total TSMC 424 766 756 611 2,557 2,457

Capital Expenditures:

Capital expenditures for TSMC consolidated group totaled US$611 million during the quarter.

For year 2007, total capital expenditures for TSMC consolidated group came in at US$2.6 billion, compared with US$2.5 billion spent in 2006.

V - 2. Capacity

Fab / (Wafer size) 1Q07 2Q07 3Q07 4Q07 2007 1Q08 (A) (A) (A) (A) (A) (F)

Fab-2 (6") (Note 1) 257 257 273 273 1,060 248 Fab-3 (8") 259 262 267 269 1,057 277 Fab-5 (8") 144 155 163 166 627 165 Fab-6 (8") 245 255 274 279 1,053 265 Fab-8 (8") 239 239 260 265 1,004 262 Fab-12 (12") (Note 2) 169 180 198 212 759 197 Fab-14 (12") (Note 2) 103 113 154 176 546 167 WaferTech (8") 104 105 106 106 419 105 TSMC (Shanghai)(8") 90 94 99 92 375 88 TSMC total capacity (8" equiv. Kpcs) 1,836 1,913 2,113 2,202 8,064 2,120 SSMC (8") 53 55 56 61 226 63 Total managed capacity (8" equiv. Kpcs) 1,890 1,967 2,169 2,263 8,290 2,182

Note: 1. Figures represent number of 6" wafers. Conversion to 8"-equivalent wafers is by dividing this number by 1.78 2. Figures represent number of 12" wafers. Conversion to 8"-equivalent wafers is by multiplying this number by 2.25

Capacity:

In line with our guidance, total TSMC managed capacity was 2,263K 8-inch equivalent wafers in the fourth quarter, 4% higher than 3Q07. TSMC managed capacity in 1Q08 is expected to decrease by 4% sequentially to reach 2,182K 8-inch equivalent wafers, mostly due to scheduled maintenance and certain adjustment of capacity due to change in technology mix.

Total managed capacity for 2007 reached 8,290K 8-inch equivalent wafers, representing an increase of 17% from 7,062K 8-inch equivalent wafers in 2006.

VI. Recap of Recent Important Events & Announcements

-- TSMC Completes Share Buyback Plan (2007/12/31) -- TSMC Announces Multi-layer Mask Service (2007/12/27) -- TSMC Ships One-Millionth 12-Inch 90NM Wafer (2007/12/03) -- TSMC Unveils New 65-Nanometer Mixed-Signal and RF Tool Qualification Program (2007/12/13) -- TSMC and NXP Unveil Seven Innovations at IEDM Conference (2007/12/12) -- TSMC Reports Foundry's First 32-Nanometer Technology with Functional SRAM (2007/12/11) -- NetLogic Microsystems and TSMC Collaborate on Industry-Leading 55nm Technology for Advanced Low-Power Knowledge-based Processors (2007/11/27) -- TSMC Appoints Maria Marced President of TSMC Europe (2007/11/16) -- Qualcomm Makes First Call with Chips Using TSMC's 45nm Technology (2007/11/14) -- TSMC Board of Directors Approves Plan to Buy Back Shares from Open Market (2007/11/13) -- TSMC Recognizes Outstanding Suppliers at Supply Chain Management Forum (2007/11/02)

* Please visit TSMC's Web site ( http://www.tsmc.com/ ) for details about these and other announcements.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Consolidated Condensed Balance Sheets

(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD))(1)

December 31, 2007 September 30, 2007 (audited) (unaudited) USD NTD % NTD % ASSETS Current Assets Cash and Cash Equivalents $2,928 $94,986 16.6 $98,328 16.8 Investments in Marketable Financial Instruments 2,461 79,848 14.0 78,064 13.3 Accounts Receivable - Trade 1,308 42,424 7.4 42,357 7.2 Inventories, Net 735 23,862 4.2 24,532 4.2 Other Current Assets 268 8,702 1.5 6,775 1.2 Total Current Assets 7,700 249,822 43.7 250,056 42.7

Long-Term Investments 1,124 36,461 6.4 45,991 7.8

Property, Plant and Equipment 24,670 800,352 140.2 786,850 134.2 Less: Accumulated Depreciation (16,648) (540,100) -94.6 (521,614) -89.0 Property, Plant and Equipment, Net 8,022 260,252 45.6 265,236 45.2

Other Assets 750 24,330 4.3 25,124 4.3 Total Assets $17,596 $570,865 100.0 $586,407 100.0

LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-Term Bank Loans $-- $-- -- $98 -- Accounts Payables 403 13,078 2.3 12,492 2.1 Payables to Contractors and Equipment Suppliers 193 6,257 1.1 11,745 2.0 Accrued Expenses and Other Current Liabilities 896 29,090 5.1 21,776 3.8 Current Portion of Bonds Payable and Long-Term liabilities 9 281 -- 4,782 0.8 Total Current Liabilities 1,501 48,706 8.5 50,893 8.7 Bonds Payable 385 12,500 2.2 12,500 2.1 Other Long-Term Liabilities 585 18,973 3.3 18,395 3.1 Total Liabilities 2,471 80,179 14.0 81,788 13.9

Shareholders' Equity Attributable to Shareholders of the Parent Capital Stock 8,146 264,271 46.3 264,262 45.1 Capital Surplus 1,656 53,733 9.4 53,713 9.2 Retained Earnings 6,746 218,864 38.3 184,380 31.4 Treasury Stock (1,522) (49,385) -8.7 (918) -0.2 Others (12) (391) 0.0 (162) 0.0 Total Equity Attributable to Shareholders of the Parent 15,014 487,092 85.3 501,275 85.5 Minority Interest 111 3,594 0.7 3,344 0.6 Total Shareholders' Equity 15,125 490,686 86.0 504,619 86.1 Total Liabilities & Shareholders' Equity $17,596 $570,865 100.0 $586,407 100.0

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Consolidated Condensed Balance Sheets

(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD))(1)

December 31, 2006 (audited) QoQ YoY NTD % Amount % Amount % ASSETS Current Assets Cash and Cash Equivalents $117,837 20.1 ($3,342) -3.4 ($22,851) (19.4) Investments in Marketable Financial Instruments 77,242 13.1 1,784 2.3 2,606 3.4 Accounts Receivable --Trade 31,589 5.4 67 0.2 10,835 34.3 Inventories, Net 21,431 3.6 (670) (2.7) 2,431 11.3 Other Current Assets 12,218 2.1 1,927 28.4 (3,516) (28.8) Total Current Assets 260,317 44.3 (234) -0.1 (10,495) (4.0)

Long-Term Investments 53,895 9.2 (9,530) -20.7 (17,434) -32.3

Property, Plant and Equipment 717,132 122.1 13,502 1.7 83,220 11.6 Less: Accumulated Depreciation (463,038) -78.8 (18,486) 3.5 (77,062) 16.6 Property, Plant and Equipment, Net 254,094 43.3 (4,984) -1.9 6,158 2.4

Other Assets 19,179 3.2 (794) -3.2 5,151 26.9 Total Assets $587,485 100.0 ($15,542) -2.7 ($16,620) (2.8)

LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-Term Bank Loans $-- -- ($98) -100.0 $-- -- Accounts Payables 9,802 1.7 586 4.7 3,276 33.4 Payables to Contractors and Equipment Suppliers 10,769 1.8 (5,488) -46.7 (4,512) -41.9 Accrued Expenses and Other Current Liabilities 19,286 3.3 7,314 33.6 9,804 50.8 Current Portion of Bonds Payable and Long-Term liabilities 7,004 1.2 (4,501) -94.1 (6,723) (96.0) Total Current Liabilities 46,861 8.0 (2,187) -4.3 1,845 3.9 Bonds Payable 12,500 2.1 -- 0.0 -- 0.0 Other Long-Term Liabilities 18,986 3.2 578 3.1 (13) -0.1 Total Liabilities 78,347 13.3 (1,609) -2.0 1,832 2.3

Shareholders' Equity Attributable to Shareholders of the Parent Capital Stock 258,297 44.0 9 0.0 5,974 2.3 Capital Surplus 54,107 9.2 20 0.0 (374) -0.7 Retained Earnings 197,125 33.6 34,485 18.7 21,740 11.0 Treasury Stock (918) -0.2 (48,467) 5,279.6 (48,467) 5279.6 Others (630) -0.1 (230) 142.0 238 -37.8 Total Equity Attributable to Shareholders of the Parent 507,981 86.5 (14,183) (2.8) (20,889) (4.1) Minority Interest 1,157 0.2 250 7.5 2,437 210.6 Total Shareholders' Equity 509,138 86.7 (13,933) (2.8) (18,452) (3.6) Total Liabilities & Shareholders' Equity $587,485 100.0 ($15,542) -2.7 ($16,620) (2.8)

Note: (1) Amounts in New Taiwan dollars have been translated into U.S.

dollars at the rate of NT$32.443 as of December 31, 2007.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Unaudited Consolidated Condensed Income Statements For the Three Months Ended December 31, 2007, September 30, 2007, and December 31, 2006 (Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD)(1) Except for Per Share Amounts and Shares Outstanding)

Q4 2007 Q3 2007 USD NTD % NTD %

Net Sales $2,894 $93,860 100.0 $88,955 100.0 Cost of Sales (1,512) (49,024) -52.2 (48,231) -54.2 Gross Profit 1,382 44,836 47.8 40,724 45.8 Operating Expenses Research and Development Expenses (4) (154) (5,012) -5.3 (4,691) -5.3 General and Administrative Expenses (4) (63) (2,039) -2.2 (2,872) -3.2 Sales and Marketing Expenses (32) (1,027) -1.1 (808) -0.9 Total Operating Expenses (249) (8,078) -8.6 (8,371) -9.4

Income from Operations 1,133 36,758 39.2 32,353 36.4

Non-Operating Income, Net 52 1,697 1.8 1,083 1.2 Investment Gains 27 877 0.9 782 0.9 Income before Income Tax 1,212 39,332 41.9 34,218 38.5

Income Tax (Expenses) Benefits (142) (4,608) -4.9 (3,600) -4.1

Net Income 1,070 34,724 37.0 30,618 34.4

Minority Interest (7) (239) -0.3 (248) -0.3

Net Income Attributable to Shareholders of the Parent 1,063 34,485 36.7 30,370 34.1

Earnings per Share - Diluted $0.04 $1.31 -- $1.15 -- Earnings per ADR - Diluted (2) $0.20 $6.57 -- $5.75 --

Weighted Average Outstanding Shares - Diluted ('M)(3) -- 26,243 -- 26,410 --

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Unaudited Consolidated Condensed Income Statements For the Three Months Ended December 31, 2007, September 30, 2007, and December 31, 2006 (Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD)(1) Except for Per Share Amounts and Shares Outstanding)

Q4 2006 QoQ YoY NTD % Amount % Amount %

Net Sales $74,963 100.0 $4,905 5.5 $18,897 25.2 Cost of Sales (40,510) -54.0 (793) 1.6 (8,514) 21.0 Gross Profit 34,453 46.0 4,112 10.1 10,383 30.1 Operating Expenses Research and Development Expenses (4) (3,831) -5.1 (321) 6.9 (1,181) 30.8 General and Administrative Expenses (4) (2,421) -3.2 833 -29.0 382 -15.8 Sales and Marketing Expenses (794) -1.1 (219) 27.1 (233) 29.3 Total Operating Expenses (7,046) -9.4 293 -3.5 (1,032) 14.7

Income from Operations 27,407 36.6 4,405 13.6 9,351 34.1

Non-Operating Income, Net 1,713 2.3 614 56.7 (16) -0.9 Investment Gains 388 0.5 95 12.1 489 125.9 Income before Income Tax 29,508 39.4 5,114 14.9 9,824 33.3

Income Tax (Expenses) Benefits (1,494) -2.0 (1,008) 28.0 (3,114) 208.4

Net Income 28,014 37.4 4,106 13.4 6,710 23.9

Minority Interest (102) -0.2 9 -3.7 (137) 132.7

Net Income Attributable to Shareholders of the Parent 27,912 37.2 4,115 13.5 6,573 23.5

Earnings per Share - Diluted $1.06 -- $0.16 14.3 $0.26 24.3 Earnings per ADR - Diluted (2) $5.29 -- $0.82 14.3 $1.28 24.3

Weighted Average Outstanding Shares - Diluted ('M)(3) 26,401 -- -- -- -- --

Note: (1) Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD32.435 for the fourth quarter of 2007.

(2) 1 ADR equals 5 ordinary shares.

(3) Total diluted weighted average outstanding shares were 26,401M shares for 4Q06 after the retroactive adjustments for stock dividends and stock bonus.

(4) Certain prior period balances have been reclassified to conform to the current period presentation.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Audited Consolidated Condensed Income Statements For the Year Ended December 31, 2007 and 2006

(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1)

Except for Per Share Amounts and Shares Outstanding)

For The Year Ended December 31 2007 USD NTD %

Net Sales $9,820 $322,630 100.0 Cost of Sales (5,487) (180,280) -55.9 Gross Profit 4,333 142,350 44.1 Operating Expenses Research and Development Expenses (546) (17,946) -5.5 General and Administrative Expenses (273) (8,964) -2.8 Sales and Marketing Expenses (113) (3,718) -1.2 Total Operating Expenses (932) (30,628) -9.5

Income from Operations 3,401 111,722 34.6

Non-Operating Income, Net 226 7,412 2.3 Investment Gains 76 2,508 0.8 Income before Income Tax 3,703 121,642 37.7

Income Tax (Expenses) Benefits (357) (11,710) -3.6

Net Income before Cumulative Effect of Changes in Accounting Principles 3,346 109,932 34.1

Cumulative Effect of Changes in Accounting Principles (Net of Tax) 0 0 0.0

Net Income 3,346 109,932 34.1

Minority Interest (23) (755) -0.3

Net Income Attributable to Shareholders of the Parent 3,323 109,177 33.8

Earnings per Share - Diluted $0.13 $4.14 -- Earnings per ADR - Diluted (2) $0.63 $20.70 --

Weighted Average Outstanding Shares - Diluted ('M) (3) -- 26,368 --

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Audited Consolidated Condensed Income Statements For the Year Ended December 31, 2007 and 2006

(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1)

Except for Per Share Amounts and Shares Outstanding)

For The Year Ended December 31 2006 YoY NTD % Amount %

Net Sales $317,407 100.0 $5,224 1.6 Cost of Sales (161,597) -50.9 (18,684) 11.6 Gross Profit 155,810 49.1 (13,460) -8.6 Operating Expenses Research and Development Expenses (16,076) -5.1 (1,870) 11.6 General and Administrative Expenses (8,717) -2.7 (247) 2.8 Sales and Marketing Expenses (3,752) -1.2 34 -0.9 Total Operating Expenses (28,545) -9.0 (2,083) 7.3

Income from Operations 127,265 40.1 (15,543) -12.2

Non-Operating Income, Net 3,750 1.2 3,662 97.6 Investment Gains 2,347 0.7 161 6.8 Income before Income Tax 133,362 42.0 (11,720) -8.8

Income Tax (Expenses) Benefits (7,774) -2.4 (3,936) 50.6

Net Income before Cumulative Effect of Changes in Accounting Principles 125,588 39.6 (15,656) -12.5

Cumulative Effect of Changes in Accounting Principles (Net of Tax) 1,607 0.5 (1,607) -100.0

Net Income 127,195 40.1 (17,263) -13.6

Minority Interest (185) -0.1 (570) 307.1

Net Income Attributable to Shareholders of the Parent 127,010 40.0 (17,833) -14.0

Earnings per Share - Diluted $4.81 -- -$0.67 -13.9 Earnings per ADR - Diluted (2) $24.06 -- -$3.35 -13.9

Weighted Average Outstanding Shares - Diluted ('M)(3) 26,399 -- -- --

Note: (1) Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 32.853 for the year ended December 31, 2007.

(2) 1 ADR equals 5 ordinary shares.

(3) Total diluted weighted average outstanding shares were 26,399M shares for the year ended December 31, 2006 after the retroactive adjustments for stock dividends and stock bonus.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows For the Year Ended December 31, 2007 and for the Three Months Ended December 31, 2007, September 30, 2007, and December 31, 2006

(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD))(1)

Twelve Months 2007 4Q 2007 3Q 2007 4Q 2006 (Audited) (Unaudited)(Unaudited)(Unaudited)

USD NTD NTD NTD NTD Cash Flows from Operating Activities: Net Income $3,323 $109,177 $34,485 $30,369 $27,912 Net Income Attributable to Minority Interest 23 755 239 248 103 Depreciation & Amortization 2,435 80,005 20,281 19,857 19,682 Deferred Income Tax 29 944 877 668 7 Equity in Earnings of Equity Method Investees, Net (76) (2,508) (877) (782) (388) Changes in Working Capital & Others (140) (4,607) 4,754 758 5,698 Net Cash Provided by Operating Activities 5,594 183,766 59,759 51,118 53,014

Cash Flows from Investing Activities: Acquisitions of: Marketable Financial Instruments (2,665) (87,550) (32,478) (25,042) (38,210) Investments Accounted for Using Equity Method (177) (5,804) 6 (5,810) (2,433) Property, Plant and Equipment (2,557) (84,001) (19,781) (24,917) (17,580) Financial Assets Carried at Cost (28) (911) (103) (378) (16) Proceeds from Disposal or maturity of: Marketable Financial Instruments 3,416 112,234 40,680 22,282 31,539 Investments Accounted for Using Equity Method -- -- -- -- -- Property, Plant and Equipment 2 61 34 15 54 Financial Assets Carried at Cost 12 410 141 255 21 Others (155) (5,128) (1,160) (866) (1,750) Net Cash Used In Investing Activities (2,152) (70,689) (12,661) (34,461) (28,375)

Cash Flows from Financing Activities: Increase (Decrease) in Guarantee Deposits (48) (1,574) (321) (447) 133 Proceeds from Exercise of Stock Options 13 437 35 105 152 Bonus Paid to Directors and Supervisors (9) (286) -- -- -- Repayment of Long-Term Bonds Payable (213) (7,000) (4,500) -- -- Cash Dividends Paid for Common Stock (2,356) (77,387) -- (77,387) -- Repurchase of Treasury Stock (1,382) (45,413) (45,413) -- -- Cash Bonus Paid to Employees (139) (4,573) -- (4,573) -- Others 12 386 90 322 480 Net Cash Provided by (Used in) Financing Activities (4,122) (135,410) (50,109) (81,980) 765

Net Increase (Decrease) in Cash and Cash Equivalents (680) (22,333) (3,011) (65,323) 25,404

Effect of Exchange Rate Changes and Others (16) (518) (331) 260 (470)

Cash and Cash Equivalents at Beginning of Period 3,587 117,837 98,328 163,391 92,903

Cash and Cash Equivalents at End of Period $2,891 $94,986 $94,986 $98,328 $117,837

Note:(1) Amounts in New Taiwan dollars have been translated into U.S.

dollars at the weighted average rate of NTD32.853 for the year ended December 31, 2007.

Safe Harbor Notice:

The statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. TSMC cautions readers that forward-looking statements are subject to significant risks and uncertainties and are based on TSMC's current expectations. Actual results may differ materially from those contained in such forward-looking statements for a variety of reasons including, among others, risks associated with cyclicality and market conditions in the semiconductor industry; demand and supply for TSMC's foundry manufacturing capacity in particular and for foundry manufacturing capacity in general; intense competition; the failure of one or more significant customers to continue to place the same level of orders with us; TSMC's ability to remain a technological leader in the semiconductor industry; TSMC's ability to manage its capacity; TSMC's ability to obtain, preserve and defend its intellectual property rights; natural disasters and other unexpected events which may disrupt production; and exchange rate fluctuations. Additional information as to these and other risk factors that may cause TSMC's actual results to differ materially from TSMC's forward-looking statements may be found in TSMC's Annual Report on Form 20-F, filed with the United States Securities and Exchange Commission (the 'SEC') on April 20, 2007, TSMC's registration statement on Form F-3, filed with the SEC on May 8, 2007, and such other documents as TSMC may file with, or submit to, the SEC from time to time. Except as required by law, we undertake no obligation to update any forward- looking statement, whether as a result of new information, future events, or otherwise.

CONTACT

Elizabeth Sun / Harrison Hsueh / Julie Wei Investor Relations Division TSMC Tel: +886-3-568-2085/ 2088/ 2086 Email:

DATASOURCE: Taiwan Semiconductor Manufacturing Company Limited

CONTACT: Elizabeth Sun or Harrison Hsueh or Julie Wei, all of TSMC,

, or +886-3-568-2085, or +886-3-568-2086, or

+886-3-568-2088