TSMC Reports Third Quarter EPS of NT$1.15

    HSINCHU, Taiwan, Oct. 25 /Xinhua-PRNewswire-FirstCall/ -- TSMC (TAIEX:
 2330;  TSM) today announced consolidated revenue of NT$88.96 billion,
 net income of NT$30.37 billion, and diluted earnings per share of NT$1.15
 (US$0.17 per ADS unit) for the third quarter ended September 30, 2007.
     Year-over-year, third quarter revenue increased 7.9% while net income
 and diluted EPS decreased 6.5% and 6.6%, respectively. On a sequential
 basis, third quarter results represent an 18.7% increase in revenue, and an
 increase of 19.2% both in net income and in diluted EPS. All figures were
 prepared in accordance with R.O.C. GAAP on a consolidated basis.
     Due to stronger than expected demand overall from our customers, third
 quarter results exceeded the guidance given on July 26. Advanced process
 technologies (0.13-micron and below) accounted for 56% of wafer revenues
 with 90-nanometer process technology accounting for 27% and 65-nanometer
 reaching 7% of total wafer sales. Gross margin was 45.8%, operating margin
 was 36.4%, and net margin was 34.1%.
     ''Third quarter set a record for our business in terms of revenues and
 wafer shipment, where all our three major market segments (communication,
 computer, and consumer) saw double-digit growth sequentially, '' said Lora
 Ho, VP and Chief Financial Officer of TSMC. ''For the fourth quarter, we
 expect the demand from computer related applications to grow the strongest,
 followed by communication related applications, whereas consumer
 applications will decline, following their seasonal pattern,'' said Ho.
 ''Based on our current business outlook, management's expectations for
 fourth quarter 2007 performance are as follows'':
     -- Revenue is expected to be between NT$92 billion and NT$94 billion;
     -- Gross profit margin is expected to be between 46% and 48%;
     -- Operating profit margin is expected to be between 37% and 39%.
     Conference Call & Webcast Notice
     TSMC's quarterly review conference call will be held at 8 a.m. Eastern
 Time (8 p.m. Taiwan Time) on Thursday, October 25, 2007. 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 1-617-614-3946 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;  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 3Q07 Quarterly Management Report October 25, 2007
 
     Topics in This Report
 
     -- Revenue Analysis
     -- Capacity
     -- Profit & Expense Analysis
     -- Financial Condition Review
     -- Cash Flow & CapEx
     -- Recap of Recent Important Events & Announcements
 
     Operating Results Review:
 
 
 
     Summary:
 
     (Amounts are on consolidated basis and are in  NT$ billion except noted
      otherwise)
                                    3Q07    2Q07   3Q06     QoQ     YoY
 
     EPS (NT$ per common share)     1.15    0.96    1.23   19.2%   (6.6%)
         (US$ per ADR unit)         0.17    0.15    0.19     --      --
     Consolidated Net Sales        88.96   74.92   82.48   18.7%    7.9%
     Gross Profit                  40.72   32.18   41.13   26.6%   (1.0%)
     Gross Margin                   45.8%   43.0%  49.9%     --      --
     Operating Expense             (8.37)  (7.45)  (7.50)  12.4%   11.6%
     Operating Income              32.35   24.73   33.63   30.8%   (3.8%)
     Non-Operating Items            1.87    3.29    1.03  (43.3%)  80.8%
     Net Income                    30.37   25.48   32.49   19.2%   (6.5%)
     Net Profit Margin              34.1%   34.0%   39.4%    --      --
 
     Wafer Shipment
      (kpcs 8 inch-equiv.)        2,226    1,856   1,890   19.9%   17.8%
     Remarks:
     The third quarter diluted earnings per share were NT$1.15, representing
 a decline of 6.6% over the same period last year and a 19.2% increase
 sequentially. The consolidated operating results of 3Q07 are summarized
 below:
     Third quarter net sales exceeded our guidance provided on July 26 to
 reach NT$89 billion, an increase of 7.9% over the year ago quarter and an
 increase of 18.7% sequentially.
     Gross profit for the quarter was NT$41 billion with gross margin of
 45.8%, or 2.8 percentage points higher than the 43% gross margin reported
 in the prior quarter.
     Operating expenses were NT$8.4 billion or 9.4% of net sales. The
 combined result from non-operating income and long-term investments was a
 gain of NT$1.9 billion.
     Consolidated net income attributable to shareholders of the parent
 company was NT$30.4 billion, down 6.5% from a year ago level and up 19.2%
 from the previous quarter. Net profit margin was 34.1% for 3Q07.
     I. Revenue Analysis
 
 
 
     I. Wafer Sales Analysis
 
          By Application           3Q07     2Q07    3Q06
          Computer                  32%     29%     28%
          Communication             42%     44%     45%
          Consumer                  17%     18%     20%
          Industrial/Others          5%      6%      5%
          Memory                     4%      3%      2%
 
 
          By Technology            3Q07     2Q07    3Q06
          65nm and below             7%      3%     --
          90nm                      27%     26%     24%
          0.11/0.13um               22%     24%     25%
          0.15/0.18um               28%     30%     33%
          0.25/0.35um               11%     12%     13%
          0.50um+                    5%      5%      5%
 
          By Customer Type         3Q07     2Q07    3Q06
          Fabless/System            66%     68%     71%
          IDM                       34%     32%     29%
 
 
          By Geography             3Q07     2Q07    3Q06
          North America             74%     74%     78%
          Asia Pacific              13%     13%     10%
          Europe                    10%      9%      8%
          Japan                      3%      4%      4%
     Revenue Analysis:
     Due to stronger than expected demand across our three major market
 segments (communication, computer, and consumer), third quarter revenue
 exceeded our guidance provided on July 26 to reach NT$89 billion.
     Businesses from all three major market segments had double-digit
 quarter- over-quarter growth in the third quarter. On a sequential basis,
 revenues from computer, consumer and communication applications increased
 by 29%, 15% and 12%, respectively.
     Revenue from 65nm more than doubled during the quarter to account for
 7% of total wafer sales, while revenue from 90nm accounted for 27% of total
 wafer sales. Revenues from advanced technologies (0.13-micron and below)
 accounted for 56% of total wafer sales, up three percentage points from the
 second quarter of 2007.
     Revenues from IDM customers accounted for 34% of total wafer sales
 during the quarter, compared to 32% in the previous quarter.
     From a geographic perspective, revenues from North America accounted
 for 74% of total wafer sales, flat from the previous quarter. Meanwhile,
 sales from Asia Pacific, Europe and Japan accounted for 13%, 10% and 3% of
 wafer sales, respectively.
     II. Capacity
 
 
 
     II. Capacity
                                  1Q07   2Q07   3Q07   4Q07   2007
         Fab/(Wafer size)          (A)    (A)    (A)    (A)    (F)
         Fab-2   (6")(Note 1)     257    257    273    273  1,060
         Fab-3   (8")             259    262    267    269  1,057
         Fab-5   (8")             144    155    163    166    627
         Fab-6   (8")             245    255    274    279  1,053
         Fab-8   (8")             239    239    260    265  1,004
         Fab-12  (12")(Note 2)    169    180    198    212    759
         Fab-14  (12")(Note 2)    103    113    154    176    546
         WaferTech (8'')           104    105    106    106    419
         TSMC (Shanghai) (8'')      90     94     99     92    375
         TSMC total capacity
          (8 equiv. Kpcs)        1,836  1,913  2,113  2,202  8,064
         SSMC    (8'')              53     55     56     61    226
         Total managed capacity
          (8 equiv. Kpcs)        1,890  1,967  2,169  2,263  8,290
 
 
         Note 1: Figures represent number of 6'' wafers.  Conversion to
                 8''-equivalent wafers is by dividing this number by 1.78
 
         Note 2: Figures represent number of 12'' wafers.  Conversion to
                 8''-equivalent wafers is by multiplying this number by 2.25
     Capacity:
     Total TSMC managed capacity was 2,169K 8-inch equivalent wafers in
 3Q07, 10% higher than 2Q07. TSMC managed capacity in 4Q07 is expected to
 increase by 4% sequentially to reach 2,263K 8-inch equivalent wafers.
     Total managed capacity for 2007 is expected to reach 8,290K 8-inch
 equivalent wafers, down slightly from the forecast provided in the previous
 quarter. On a full year basis, 2007 capacity is expected to increase by 17%
 from 7,062K 8-inch equivalent wafers in 2006.
     III. Profit & Expense Analysis
 
 
 
     III - 1. Gross Profit Analysis
 
     (In NT billions)                3Q07     2Q07     3Q06
 
     COGS                            48.2     42.7     41.3
     Depreciation                    18.2     17.9     16.8
     Other MFG Cost                  30.0     24.8     24.5
     Gross Profit                    40.7     32.2     41.1
     Gross Margin                   45.8%    43.0%    49.9%
     Gross Profit Analysis:
     Gross margin for the third quarter 2007 was 45.8%, up from 43% in the
 previous quarter. Third quarter gross margin improved by 2.8 percentage
 points primarily due to increased wafer shipment and a higher level of
 capacity utilization, offset in part by a decline in pure price.
     III - 2. Operating Expenses *
 
     (In NT billions)                 3Q07     2Q07     3Q06
 
     Total Operating Exp.             8.37     7.45     7.50
     SG&A                             3.68     3.15     3.19
     Research & Development           4.69     4.30     4.31
 
     * Certain prior period amounts have been reclassified to conform with
       current period presentation.
     Operating Expenses:
     Total operating expenses for 3Q07 were NT$8.4 billion, compared to
 NT$7.4 billion in the prior quarter. Total operating expenses represented
 9.4% of net sales, down slightly from 10% in the second quarter of 2007.
     Research and development expenditures increased by NT$390 million
 quarter- over-quarter, largely due to increased R&D spending on 65nm and
 55nm related projects.
     SG&A expenses were NT$3.7 billion for the quarter, an increase of
 NT$535 million quarter-over-quarter, mainly due to higher legal fees.
     III - 3. Non-Operating Items
 
     (In NT millions)                 3Q07      2Q07    3Q06
 
     Non-Operating Income/(Exp.)      1,083    2,802     322
        Net Interest Income/(Exp.)    1,097    1,338     923
        Other Non-Operating             (14)   1,464    (601)
     L-T Investments                    782      488     709
        SSMC                            405      233     403
        Others                          377      255     306
     Total Non-Operating Items        1,865    3,290   1,031
     Non-Operating Items:
     Combined result from non-operating income and long-term investments was
 a gain of NT$1.9 billion for third quarter of 2007.
     Non operating income was NT$1.1 billion, down from NT$2.8 billion in
 the previous quarter, primarily due to an accrual of litigation loss
 related to the TSMC-UniRAM case, lawsuit settlement received from SMIC in
 the previous quarter, and a reduction in mark-to-market adjustment on
 certain marketable securities.
     Net investment income increased by NT$294 million in the quarter,
 reflecting improved operating performance at SSMC and increased ownership
 percentage in Vanguard.
     IV. Financial Condition Review
 
 
 
     IV - 1. Liquidity Analysis (Selected Balance Sheet Items)
 
     (In NT billions)                     3Q07        2Q07        3Q06
 
     Cash & Marketable Securities        176.4       233.1       164.1
     Accounts Receivable - Trade          42.4        37.1        37.7
     Inventory                            24.5        24.0        20.3
     Total Current Assets                250.1       304.6       228.3
     Accounts Payable                     24.2        28.2        26.2
     Current Portion of Bonds Payable      4.5         4.5         2.5
     Accrued Cash Dividend &
     Profit Sharing                        0.0        82.1         0.0
     Accrued Liabilities and Others       22.2        17.6        16.9
     Total Current Liabilities            50.9       132.4        45.6
     Current Ratio (x)                     4.9         2.3         5.0
     Net Working Capital                 199.2       172.2       182.7
     Liquidity Analysis:
     Total cash and marketable securities decreased by NT$57 billion in the
 third quarter of 2007, as we paid NT$77 billion in cash dividends during
 the quarter. As a result, TSMC ended the quarter with NT$250 billion in
 total current assets, compared to NT$305 billion at the end of the previous
 quarter.
     Mainly due to the payment of cash dividends accrued in the previous
 quarter, total current liabilities decreased by NT$82 billion in third
 quarter 2007.
     Net working capital stood at NT$199 billion at the end of the quarter,
 with a current ratio of 4.9.
     IV. - 2 Receivable/ Inventory Days
 
                                       3Q07        2Q07        3Q06
     Days of Receivable                  42          44          43
     Days of Inventory                   48          52          48
     Receivable/Inventory Days Trend:
     Days of receivable were 42 days in 3Q07, down from 44 days in the
 previous quarter.
     Days of inventory declined by 4 days to reach 48 days
 
 
 
     IV - 3. Debt Service
 
     (In NT billions)                  3Q07        2Q07        3Q06
 
     Cash & Marketable Securities     176.4       233.1       164.1
     Interest-Bearing Debt             26.7        26.3        27.6
     Net Cash Reserves                149.7       206.8       136.5
     Debt Service:
     As a result of the cash dividends paid and free cash flows generated
 during the quarter, net cash reserves -- defined as the excess of cash and
 short-term marketable securities over interest-bearing debt -- decreased by
 NT$57 billion to reach NT$150 billion in 3Q07.
     V. Cash Flow & CapEx
 
     V - 1. Cash Flow Analysis
 
     (In NT billions)                  3Q07        2Q07        3Q06
 
     Net Income                        30.4        25.5        32.5
     Depreciation & Amortization       19.9        19.6        18.4
     Other Op Sources/(Uses)            0.8       (10.4)        1.8
     Total Op Sources/(Uses)           51.1        34.7        52.7
 
     Capital Expenditure              (24.9)      (25.3)      (28.3)
     Marketable Financial Instruments  (2.8)       15.8        (8.6)
     Other Investing Sources/(Uses)    (6.8)       (0.7)       (0.1)
     Net Investing Sources/(Uses)     (34.5)      (10.2)      (37.0)
 
     Cash Dividends                   (77.4)        0.0       (61.7)
     Employee Profit Sharing           (4.6)        0.0        (3.2)
     Other Financing Sources/(Uses)    (0.0)       (0.5)        0.2
     Net Financing Sources/(Uses)     (82.0)       (0.5)      (64.7)
 
     Net Cash Position Changes        (65.4)       24.0       (49.0)
 
     Exchange Rate Changes & Others     0.3        (0.9)        0.5
 
     Ending Cash Balance               98.3       163.4        92.9
 
 
     Summary of Cash Flow:
     Cash generated from operating activities totaled NT$51 billion during
 the quarter, up from NT$35 billion in the second quarter 2007.
     TSMC spent NT$25 billion in capital expenditures in 3Q07, bringing
 total capital expenditures to US$1.9 billion on a year-to-date basis. TSMC
 also invested an additional NT$5 billion in Vanguard International
 Semiconductor Corporation during the quarter.
     Net cash used in financing activities was NT$82 billion during the
 quarter, as we paid NT$77 billion in cash dividends and NT$5 billion in
 cash bonuses to employees.
     As a result, TSMC ended the quarter with a cash balance of NT$98 billion.
 
     V - 2. 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$51 billion. Free
 cash flow, defined as the excess of operating cash flows over capital
 expenditures, totaled NT$26 billion in 3Q07.
      V - 3. Capital Expenditures
 
 
 
     (In US millions)                 3Q07     2Q07     1Q07       YTD
 
     TSMC                              732      747      419     1,898
     XinTec and GUC                     15       13        3        31
     TSMC Shanghai & WaferTech           8        4        2        14
     Other TSMC Subsidiaries             1        2        0         3
     Total TSMC                        756      766      424     1,946
     Capital Expenditures:
     Capital expenditures for TSMC consolidated group totaled US$756 million
 during the quarter.
     For year 2007, total capital expenditures for TSMC consolidated group
 will be at the low end of our previous guidance to be around US$2.6
 billion, which includes the US$82 million acquisition of eight-inch
 equipment that we announced recently.
     VI. Recap of Recent Important Events & Announcements
 
     -- TSMC Signs Contract with Atmel to Purchase Eight-inch Wafer Fabrication
        Equipment (2007/10/09)
     -- TSMC Joins SOI Industry Consortium (2007/10/08)
     -- U.S. District Court Issues Verdict on TSMC-UniRAM Case (2007/09/26)
     -- California Court Issues Order on TSMC Motion for Preliminary Injunction
        Against SMIC (2007/09/14)
     -- TSMC Increases Stake in Vanguard (2007/08/27)
     -- TSMC Starts Production of 0.13-micron Embedded Flash Process
        (2007/08/21)
     -- Microsoft Embraces TSMC 90nm Embedded DRAM Process for Xbox 360
        (2007/08/15)
     * 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)
                                        September 30, 2007     June 30, 2007
                                           (unaudited)           (audited)
                                       USD      NTD       %      NTD       %
 
     ASSETS
     Current Assets
       Cash and Cash Equivalents     $3,010   $98,328   16.8  $163,391   25.6
       Investments in Marketable
        Financial Instruments         2,390    78,064   13.3    69,685   10.9
       Accounts Receivable - Trade    1,297    42,357    7.2    37,054    5.8
       Inventories, Net                 751    24,532    4.2    24,045    3.8
       Other Current Assets             207     6,775    1.2    10,464    1.7
          Total Current Assets        7,655   250,056   42.7   304,639   47.8
 
     Long-Term Investments            1,408    45,991    7.8    45,153    7.1
 
     Property, Plant and Equipment   24,087   786,850  134.2   767,100  120.3
     Less: Accumulated
            Depreciation            (15,968) (521,614) -89.0  (502,495) -78.8
      Property, Plant and
       Equipment, Net                 8,119   265,236   45.2   264,605   41.5
 
     Other Assets                       769    25,124    4.3    23,037    3.6
     Total Assets                   $17,951  $586,407  100.0  $637,434  100.0
 
     LIABILITIES AND SHAREHOLDERS'
      EQUITY
     Current Liabilities
       Short-Term Bank Loans             $3       $98     --       $99     --
       Accounts Payables (2)            382    12,492    2.1    11,064    1.8
       Payables to Contractors and
        Equipment Suppliers (2)         360    11,745    2.0    17,103    2.7
       Accrued Expenses and Other
        Current Liabilities             667    21,776    3.8    99,365   15.5
       Current Portion of Bonds
        Payable and Long-Term
         liabilities                    146     4,782    0.8     4,782    0.8
          Total Current Liabilities   1,558    50,893    8.7   132,413   20.8
     Bonds Payable                      383    12,500    2.1    12,500    2.0
     Other Long-Term Liabilities        563    18,395    3.1    18,649    2.9
          Total Liabilities           2,504    81,788   13.9   163,562   25.7
 
     Shareholders' Equity
      Attributable to Shareholders
       of the Parent
       Capital Stock                  8,090   264,262   45.1   264,235   41.5
       Capital Surplus                1,644    53,713    9.2    53,726    8.4
       Retained Earnings              5,644   184,380   31.4   154,010   24.2
       Treasury Stock                   (28)     (918)  -0.2      (918)  -0.1
       Others                            (5)     (162)   0.0      (167)  -0.1
         Total Equity Attributable
          to Shareholders of the
          Parent                     15,345   501,275   85.5   470,886   73.9
       Minority Interest                102     3,344    0.6     2,986    0.4
         Total Shareholders' Equity  15,447   504,619   86.1   473,872   74.3
     Total Liabilities &
      Shareholders' Equity          $17,951  $586,407  100.0  $637,434  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)
                              September 30,
                             2006 (unaudited)        QoQ             YoY
                                NTD       %     Amount     %    Amount     %
     ASSETS
     Current Assets
      Cash and Cash
       Equivalents           $92,903   16.5  ($65,063) -39.8   $5,425    5.8
      Investments in
       Marketable Financial
       Instruments            71,192   12.6     8,379   12.0    6,872    9.7
      Accounts Receivable
       -- Trade               37,726    6.7     5,303   14.3    4,631   12.3
      Inventories, Net        20,338    3.6       487    2.0    4,194   20.6
      Other Current Assets     6,149    1.1    (3,689) -35.3      626   10.1
         Total Current
          Assets             228,308   40.5   (54,583) -17.9   21,748    9.5
 
     Long-Term Investments    51,060    9.1       838    1.9   (5,069)  -9.9
 
     Property, Plant and
      Equipment              706,191  125.4    19,750    2.6   80,659   11.4
     Less: Accumulated
           Depreciation     (445,525) -79.1   (19,119)   3.8  (76,089)  17.1
      Property, Plant
       and Equipment, Net    260,666   46.3       631    0.2    4,570    1.8
 
     Other Assets             23,314    4.1     2,087    9.1    1,810    7.8
     Total Assets           $563,348  100.0  ($51,027)  -8.0  $23,059    4.1
 
     LIABILITIES AND
      SHAREHOLDERS' EQUITY
     Current Liabilities
      Short-Term Bank Loans     $ --     --       ($1)  -0.7      $98     --
      Accounts Payables (2)   10,587    1.9     1,428   12.9    1,905   18.0
      Payables to
       Contractors and
       Equipment
       Suppliers (2)          15,589    2.8    (5,358) -31.3   (3,844) -24.7
      Accrued Expenses and
       Other Current
       Liabilities            16,885    3.0   (77,589) -78.1    4,891   29.0
      Current Portion of
       Bonds Payable and
       Long-Term
       liabilities             2,505    0.4        --    0.0    2,277   90.9
         Total Current
          Liabilities         45,566    8.1   (81,520) -61.6    5,327   11.7
     Bonds Payable            17,000    3.0        --    0.0   (4,500) -26.5
     Other Long-Term
      Liabilities             18,919    3.4      (254)  -1.4     (524)  -2.8
         Total Liabilities    81,485   14.5   (81,774) -50.0      303    0.4
 
     Shareholders' Equity
      Attributable to
      Shareholders of the
      Parent
       Capital Stock         258,258   45.8        27     --    6,004     2.3
       Capital Surplus        53,858    9.6       (13)    --     (145)   -0.3
       Retained Earnings     169,213   30.0    30,370   19.7   15,167     9.0
       Treasury Stock           (918)  -0.2        --    0.0       --      --
       Others                    725    0.2         5   -2.5     (887) -122.3
         Total Equity
          Attributable to
          Shareholders of
          the Parent         481,136   85.4    30,389    6.5   20,139     4.2
       Minority Interest         727    0.1       358   12.0    2,617   359.7
        Total
         Shareholders'
         Equity              481,863   85.5    30,747    6.5   22,756     4.7
     Total Liabilities &
      Shareholders' Equity  $563,348  100.0  ($51,027)  -8.0  $23,059     4.1
 
 
     Note: (1) Amounts in New Taiwan dollars have been translated into
               U.S. dollars at the rate of NT$32.667 as of September 30, 2007.
           (2) Certain prior period balances have been reclassified
               to conform to the current period presentation.
 
 
 
 
       TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
               Unaudited Consolidated Condensed Income Statements
        For the Three Months Ended September 30, 2007, June 30, 2007, and
                               September 30, 2006
 (Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1)
              Except for Per Share Amounts and Shares Outstanding)
 
 
                                               Q3 2007             Q2 2007
                                         USD      NTD      %      NTD      %
 
     Net Sales                         $2,700  $88,955  100.0  $74,918  100.0
     Cost of Sales                     (1,464) (48,231) -54.2  (42,738) -57.0
       Gross Profit                     1,236   40,724   45.8   32,180   43.0
     Operating Expenses
       Research and Development
        Expenses (4)                     (142)  (4,691)  -5.3   (4,301)  -5.7
       General and Administrative
        Expenses (4)                      (87)  (2,872)  -3.2   (2,151)  -2.9
       Sales and Marketing Expenses (4)   (25)    (808)  -0.9     (994)  -1.4
     Total Operating Expenses            (254)  (8,371)  -9.4   (7,446) -10.0
 
          Income from Operations          982   32,353   36.4   24,734   33.0
 
     Non-Operating Income, Net             33    1,083    1.2    2,802    3.7
     Investment Gains                      24      782    0.9      488    0.7
     Income before Income Tax           1,039   34,218   38.5   28,024   37.4
 
     Income Tax (Expenses) Benefits      (109)  (3,600)  -4.1   (2,394)  -3.2
 
          Net Income                      930   30,618   34.4   25,630   34.2
 
     Minority Interest                     (8)    (248)  -0.3     (146)  -0.2
 
     Net Income Attributable to
      Shareholders of the Parent          922   30,370   34.1   25,484   34.0
 
 
 
     Earnings per Share - Diluted       $0.03    $1.15     --    $0.96     --
     Earnings per ADR - Diluted (2)     $0.17    $5.75     --    $4.82     --
 
     Weighted Average Outstanding
      Shares - Diluted ('M) (3)            --   26,410     --   26,409     --
 
 
 
       TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
               Unaudited Consolidated Condensed Income Statements
        For the Three Months Ended September 30, 2007, June 30, 2007, and
                               September 30, 2006
 (Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1)
              Except for Per Share Amounts and Shares Outstanding)
 
 
                                     Q3 2006           QoQ             YoY
                                    NTD      %    Amount     %    Amount    %
     Net Sales                   $82,476  100.0  $14,037   18.7  $6,479    7.9
     Cost of Sales               (41,344) -50.1   (5,493)  12.9  (6,887)  16.7
       Gross Profit               41,132   49.9    8,544   26.6    (408)  -1.0
     Operating Expenses
       Research and Development
        Expenses (4)              (4,309)  -5.2     (390)   9.1    (382)   8.9
       General and
        Administrative Expenses
        (4)                       (2,346)  -2.8     (721)  33.5    (526)  22.4
       Sales and Marketing
        Expenses (4)                (845)  -1.1      186  -18.6      37   -4.3
     Total Operating Expenses     (7,500)  -9.1     (925)  12.4    (871)  11.6
 
          Income from Operations  33,632   40.8    7,619   30.8  (1,279)  -3.8
 
     Non-Operating Income, Net       322    0.3   (1,719) -61.3     761  236.1
     Investment Gains                709    0.9      294   60.1      73   10.3
     Income before Income Tax     34,663   42.0    6,194   22.1    (445)  -1.3
 
     Income Tax (Expenses)
      Benefits                    (2,144)  -2.6   (1,206)  50.4  (1,456)  67.9
 
          Net Income              32,519   39.4    4,988   19.5  (1,901)  -5.8
 
     Minority Interest               (30)   0.0     (102)  69.5    (218) 738.0
 
     Net Income Attributable to
      Shareholders of the Parent  32,489   39.4    4,886   19.2  (2,119)  -6.5
 
     Earnings per Share
      - Diluted                    $1.23     --    $0.19   19.2  -$0.08   -6.6
     Earnings per ADR
      - Diluted (2)                $6.15     --    $0.93   19.2  -$0.40   -6.6
 
     Weighted Average
      Outstanding Shares -
      Diluted ('M) (3)            26,395     --       --     --      --     --
 
 
     Note:
     (1) Amounts in New Taiwan dollars have been translated into U.S.
         dollars at the weighted average rate of NTD32.948 for the third
         quarter of 2007.
     (2) 1 ADR equals 5 ordinary shares.
     (3) Total diluted weighted average outstanding shares were 26,395M
         shares for 3Q06 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 Nine Months End September 30, 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 Nine Months Ended September 30
                                               2007                 2006
                                       USD      NTD       %      NTD       %
 
     Net Sales                        $6,934  $228,771  100.0  $242,444  100.0
     Cost of Sales                    (3,978) (131,256) -57.4  (121,087) -49.9
       Gross Profit                    2,956    97,515   42.6   121,357   50.1
     Operating Expenses
       Research and Development
        Expenses (4)                    (392)  (12,934)  -5.7   (12,245)  -5.1
       General and Administrative
        Expenses (4)                    (210)   (6,926)  -3.0    (6,297)  -2.6
       Sales and Marketing Expenses      (81)   (2,691)  -1.1    (2,958)  -1.2
     Total Operating Expenses           (683)  (22,551)  -9.8   (21,500)  -8.9
 
          Income from Operations       2,273    74,964   32.8    99,857   41.2
 
     Non-Operating Income, Net           173     5,715    2.5     2,038    0.8
     Investment Gains                     49     1,631    0.7     1,959    0.8
     Income before Income Tax          2,495    82,310   36.0   103,854   42.8
 
     Income Tax (Expenses) Benefits     (215)   (7,102)  -3.1    (6,280)  -2.6
 
     Net Income before Cumulative
      Effect of Changes in
       Accounting Principles           2,280    75,208   32.9    97,574   40.2
 
     Cumulative Effect of Changes in
      Accounting Principles (Net of
      Tax)                                 0         0    0.0     1,607    0.7
 
       Net Income                      2,280    75,208   32.9    99,181   40.9
 
     Minority Interest                   (16)     (516)  -0.2       (83)   0.0
 
     Net Income Attributable to
      Shareholders of the Parent       2,264    74,692   32.7    99,098   40.9
 
 
 
     Earnings per Share - Diluted      $0.09     $2.83     --     $3.75     --
     Earnings per ADR - Diluted (2)    $0.43    $14.14     --    $18.77     --
 
     Weighted Average Outstanding
      Shares - Diluted ('M) (3)           --    26,410     --    26,395     --
 
 
 
      TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
               Audited Consolidated Condensed Income Statements
              For the Nine Months End September 30, 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 Nine Months Ended September 30
                                                      YoY
                                             Amount               %
 
     Net Sales                              ($13,673)            -5.6
     Cost of Sales                           (10,169)             8.4
       Gross Profit                          (23,842)           -19.6
     Operating Expenses
       Research and Development Expenses (4)    (689)             5.6
       General and Administrative Expenses (4)  (629)            10.0
       Sales and Marketing Expenses              267             -9.0
     Total Operating Expenses                 (1,051)             4.9
 
          Income from Operations             (24,893)           -24.9
 
     Non-Operating Income, Net                 3,677            180.4
     Investment Gains                           (328)           -16.7
     Income before Income Tax                (21,544)           -20.7
 
     Income Tax (Expenses) Benefits             (822)            13.1
 
     Net Income before Cumulative Effect
      of Changes in Accounting Principles    (22,366)           -22.9
 
     Cumulative Effect of Changes in
      Accounting Principles (Net of Tax)      (1,607)          -100.0
 
          Net Income                         (23,973)           -24.2
 
     Minority Interest                          (433)           523.2
 
     Net Income Attributable to
      Shareholders of the Parent             (24,406)           -24.6
 
     Earnings per Share - Diluted             -$0.93            -24.7
     Earnings per ADR - Diluted (2)           -$4.63            -24.7
 
     Weighted Average Outstanding Shares
      - Diluted ('M) (3)                          --               --
 
 
     Note:
     (1) Amounts in New Taiwan dollars have been translated into U.S.
         dollars at the weighted average rate of NTD 32.993 for nine months
         ended September 30, 2007.
     (2) 1 ADR equals 5 ordinary shares.
     (3) Total diluted weighted average outstanding shares were 26,395M
         shares for the nine months ended September 30, 2006
         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
                  Consolidated Condensed Statements of Cash Flows
       For the Nine Months Ended September 30, 2007 and for the Three Months
          Ended September 30, 2007, June 30, 2007, and September 30, 2006
   (Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD))(1)
 
                                 Nine Months
                                     2007     3Q 2007   2Q 2007     3Q 2006
                                (Unaudited) (Unaudited) (Unaudited)(Unaudited)
                                    USD      NTD      NTD      NTD       NTD
     Cash Flows from Operating
      Activities:
         Net Income                $2,264  $74,692  $30,369   $25,484  $32,489
         Net Income Attributable
          to Minority Interest         16      516      248       146       30
         Depreciation &
          Amortization              1,810   59,724   19,857    19,616   18,411
         Deferred Income Tax            2       67      668       371     (136)
         Equity in Earnings of
          Equity Method Investees,
          Net                         (49)  (1,631)    (782)     (488)    (709)
         Changes in Working
          Capital & Others           (284)  (9,361)     758   (10,384)   2,593
         Net Cash Provided by
          Operating Activities      3,759  124,007   51,118    34,745   52,678
 
     Cash Flows from Investing
      Activities:
       Acquisitions of:
        Marketable Financial
         Instruments               (1,669) (55,072) (25,042)  (14,234) (27,054)
        Investments Accounted
         for Using Equity Method     (176)  (5,810)  (5,810)       --     (132)
        Property, Plant and
         Equipment                 (1,946) (64,220) (24,917)  (25,345) (28,256)
        Financial Assets
         Carried at Cost              (25)    (808)    (378)     (218)    (205)
       Proceeds from Disposal or
        maturity of:
        Marketable Financial
         Instruments                2,169   71,554   22,282    30,013   18,486
        Investments Accounted
         for Using Equity Method       --       --       --        --       --
        Property, Plant and
         Equipment                      1       26       15        10      217
        Financial Assets
         Carried at Cost                8      269      255        --      105
        Others                       (121)  (3,967)    (866)     (383)    (147)
        Net Cash Used In
         Investing Activities      (1,759) (58,028) (34,461)  (10,157) (36,986)
 
     Cash Flows from Financing
      Activities:
       Increase (Decrease) in
        Guarantee Deposits            (38)  (1,253)    (447)     (418)     327
       Proceeds from Exercise of
        Stock Options                  12      402      105       175       97
       Bonus Paid to Directors
        and Supervisors                (9)    (286)      --      (286)      --
       Repayment of Long-Term
        Bonds Payable                 (76)  (2,500)      --        --       --
       Cash Dividends Paid for
        Common Stock                (2,345)(77,387) (77,387)       --  (61,743)
       Cash Bonus Paid to
        Employees                     (139) (4,573)  (4,573)        -   (3,432)
       Others                            9     296      322         2       13
       Net Cash Provided by
        (Used in) Financing
        Activities                  (2,586)(85,301) (81,980)      (527) (64,738)
 
     Net Increase in Cash and Cash
      Equivalents                     (586)(19,322) (65,323)    24,061  (49,046)
 
     Effect of Exchange Rate
      Changes and Others                (6)   (187)    260       (944)     497
 
     Cash and Cash Equivalents at
      Beginning of Period            3,572  117,837  163,391   140,274  141,452
 
     Cash and Cash Equivalents at
      End of Period                 $2,980  $98,328  $98,328  $163,391  $92,903
 
 
     Note: (1) Amounts in New Taiwan dollars have been translated into U.S.
               dollars at the weighted average rate of NTD32.993 for the nine
               months ended September 30, 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: invest@tsmc.com
 
 

SOURCE Taiwan Semiconductor Manufacturing Company Limited