TSMC Reports Fourth Quarter EPS of NT$1.26

Jan 28, 2010, 02:00 ET from Taiwan Semiconductor Manufacturing Company Limited

HSIN-CHU, Taiwan, Jan. 28 /PRNewswire-Asia-FirstCall/ -- TSMC (TAIEX: 2330; NYSE: TSM) today announced consolidated revenue of NT$92.09 billion, net income of NT$32.67 billion, and diluted earnings per share of NT$1.26 (US$0.19 per ADS unit) for the fourth quarter ended December 31, 2009.

Year-over-year, fourth quarter revenue increased 42.6% while net income increased 162.5% and diluted EPS increased 162.7%. Compared to third quarter of 2009, fourth quarter results represent a 2.4% increase in revenue, a 6.9% increase in net income, and a 7.2% increase in diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

Gross margin for the quarter was 48.5%, operating margin was 36.5%, and net margin was 35.5%.

As the global economy gradually recovered, fourth quarter saw a continued improvement in wafer sales with computer related applications growing strongly and consumer related applications declining seasonally.

Advanced process technologies (0.13-micron and below) accounted for 70% of wafer revenues. 90-nanometer process technology accounted for 16% of wafer revenues, 65-nanometer 30%, and 40-nanometer exceeded 9% of total wafer sales.

"Although first quarter normally is a sequentially declining quarter for all three major semiconductor applications, we expect the demand from consumer related applications to grow in first quarter of 2010, while computer and communication related applications will decline following their seasonal pattern," said Lora Ho, VP and Chief Financial Officer of TSMC. "Based on our current business outlook, management expects":

    * First quarter revenue to be between NT$89 billion and NT$91 billion,
      gross profit margin to be between 46.5% and 48.5%, and operating profit
      margin to be between 35% and 37%;
    * 2010 capital expenditure to be around US$4.8 billion, due to strong
      demand outlook for our advanced technologies.

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 28, 2010. 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 1-617-213-8895 in the U.S., 852-3002-1672 in Hong Kong, 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 is the world's largest dedicated semiconductor foundry, providing the industry's leading process technology and the foundry's largest portfolio of process-proven libraries, IPs, design tools and reference flows. The Company's managed capacity in 2009 totaled 9.96 million (8-inch equivalent) wafers, including capacity from two advanced 12-inch GIGAFABs(TM), four eight-inch fabs, one six-inch fab, as well as TSMC's wholly owned subsidiaries, WaferTech and TSMC China, and its joint venture fab, SSMC. TSMC is the first foundry to provide 40nm production capabilities. Its corporate headquarters are in Hsinchu, Taiwan. For more information about TSMC please visit http://www.tsmc.com .

                  (Management Report and Tables Follow)

    TSMC 4Q09 Quarterly Management Report January 28, 2010

    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)                     4Q09    3Q09   4Q08    2009    2008

    EPS (NT$ per common share)            1.26    1.18   0.48    3.44    3.81
        (US$ per ADR unit)                0.19    0.18   0.07    0.52    0.61

    Consolidated Net Sales               92.09   89.94  64.56  295.74  333.16
    Gross Profit                         44.70   42.86  20.19  129.33  141.75
    Gross Margin                         48.5%   47.7%  31.3%   43.7%   42.5%

    Operating Expense                   (11.05) (10.87) (8.17) (37.37) (37.31)
    Operating Income                     33.64   31.99  12.02   91.96  104.44
    Operating Margin                     36.5%   35.6%  18.6%   31.1%   31.4%
    Non-Operating Items                   1.73    0.97   1.07    3.50    7.04

    Net Income                           32.67   30.55  12.45   89.22   99.93
    Net Profit Margin                    35.5%   34.0%  19.3%   30.2%   30.0%

    Wafer Shipment (kpcs 8 inch-equiv.)  2,430   2,445  1,532   7,737   8,467

    Note: Total outstanding shares were 25,903mn units on 12/31/09


    Financial Highlights:

    Fourth Quarter 2009
    -- Consolidated net sales were NT$92.09 billion, increased 2.4% from
       NT$89.94 billion in the prior quarter and 42.6% from NT$64.56 billion
       in the year-ago quarter.
    -- Gross margin was 48.5%, showing 0.8 percentage point increase from 3Q09
       and a 17.2 percentage point increase from 4Q08.
    -- Operating margin was 36.5%, 0.9 percentage point higher than 3Q09 and
       17.9 percentage points higher than 4Q08.
    -- Consolidated net income attributable to shareholders of the parent
       company was NT$32.67 billion, increased 6.9% from 3Q09. Net profit
       margin was 35.5% and diluted EPS was NT$1.26.

    Full Year 2009
    -- Consolidated net sales were NT$295.74 billion, representing an 11.2%
       decline from 2008.
    -- In spite of lower net sales, gross margin was 43.7%, increased 1.2
       percentage points from 42.5% in 2008. Operating margin was 31.1%,
       declined 0.3 percentage point from 2008.
    -- Earnings per share was NT$3.44, with net profit margin of 30.2%.

    I.  Revenue Analysis



        I.  Wafer Sales Analysis
        By Application                      4Q09        3Q09        4Q08
        Computer                             33%         28%         30%
        Communication                        39%         42%         39%
        Consumer                             13%         16%         16%
        Industrial/Others                    15%         14%         15%

        By Technology                       4Q09        3Q09        4Q08
        45/40nm                               9%          4%          0%
        65nm                                 30%         31%         27%
        90nm                                 16%         18%         21%
        0.11/0.13um                          15%         14%         17%
        0.15/0.18um                          18%         21%         22%
        0.25/0.35um                           9%          9%         10%
        0.50um+                               3%          3%          3%

        By Customer Type                    4Q09        3Q09        4Q08
        Fabless/System                       79%         80%         72%
        IDM                                  21%         20%         28%

        By Geography                        4Q09        3Q09        4Q08
        North America                        71%         70%         72%
        Asia Pacific                         13%         13%         11%
        China                                 3%          3%          2%
        Europe                               10%         11%         11%
        Japan                                 3%          3%          4%


Revenue Analysis:

4Q09 marked the third consecutive growth quarter, mainly driven by strong demand from Computer related applications during the quarter. Revenues from Computer applications grew 22% sequentially, while Communication declined 8% after strong momentum in the prior two quarters and Consumer declined 15% following seasonal pattern.

As demand for 40/45nm technology remained strong and yield continued to improve, revenues from 40/45nm again more than doubled during the quarter and accounted for 9% of total wafer sales. Meanwhile, demand from 65nm and 90nm continued to be robust and accounted for 30% and 16%, respectively. Overall, revenues from 0.13-micron and below increased three percentage points sequentially and represented 70% of total wafer sales.

Revenues from IDM customers accounted for 21% of total wafer sales in 4Q09, up one percentage point from 3Q09.

From a geographic perspective, revenues from customers based in North America accounted for 71% of total wafer sales, while sales from Asia Pacific, China, Europe and Japan accounted for 13%, 3%, 10%, and 3% of total wafer sales, respectively.

    II. Profit & Expense Analysis



    II - 1. Gross Profit Analysis

    (In NT billions)                       4Q09   3Q09   4Q08    2009    2008

    COGS                                  47.39  47.08  44.37  166.41  191.41
    Depreciation                          18.60  18.37  19.29   74.48   74.70
    Other MFG Cost                        28.79  28.71  25.08   91.93  116.71

    Gross Profit                          44.70  42.86  20.19  129.33  141.75

    Gross Margin                          48.5%  47.7%  31.3%   43.7%   42.5%


Gross Profit Analysis:

Gross margin for the quarter was 48.5%, increased by 0.8 percentage point from 47.7% in 3Q09, due to a higher level of capacity utilization and continued cost improvement, partially offset by the unfavorable exchange rate.

On a full year basis, gross margin for 2009 was 43.7%, increased 1.2 percentage points from 2008, mainly due to a favorable exchange rate and cost improvement, partially offset by an adverse inventory valuation adjustment under ROC SFAS No.10.



    II - 2. Operating Expenses

    (In NT billions)                       4Q09   3Q09   4Q08    2009    2008

    Total Operating Exp.                  11.05  10.87   8.17   37.37   37.31
    SG&A                                   4.48   4.67   3.34   15.78   15.83
    Research & Development                 6.57   6.20   4.83   21.59   21.48
    Total Operating Exp. as a % of Sales  12.0%  12.1%  12.7%   12.6%   11.1%


Operating Expenses:

Total operating expenses for 4Q09 increased by NT$0.18 billion to NT$11.05 billion, representing 12.0% of net sales.

SG&A expenses decreased by NT$0.19 billion from 3Q09, primarily due to lower legal fees.

Research and development expenditures increased by NT$0.37 billion sequentially, mainly due to increased development activities in 28nm and 22nm technologies.

For full year 2009, total operating expenses were NT$37.37 billion, similar to that in 2008. However, due to a lower net sales base, total operating expenses accounted for 12.6% of net sales in 2009, compared with 11.1% in the prior year.



    II - 3. Non-Operating Items

    (In NT billions)                      4Q09  3Q09   4Q08   2009   2008

    Non-Operating Inc./(Exp.)             1.43  0.52   1.41   3.45   6.34
       Net Interest Income/(Exp.)         0.35  0.42   1.18   2.21   4.76
       Other Non-Operating                1.08  0.10   0.23   1.24   1.58

    L-T Investments                       0.30  0.45  (0.34)  0.05   0.70
       SSMC                               0.29  0.26  (0.07)  0.43   0.76
       Others                             0.01  0.19  (0.27) (0.38) (0.06)

    Total Non-Operating Items             1.73  0.97   1.07   3.50   7.04


Non-Operating Items:

Combined result from non-operating income and long-term investments was a gain of NT$1.73 billion for 4Q09.

Non-operating income was NT$1.43 billion for 4Q09, a NT$0.91 billion increase from 3Q09, primarily due to the receipt of litigation compensation.

Net investment gain was NT$0.30 billion, lower than NT$0.45 billion in the prior quarter, mainly due to lower profits from certain invested companies.

On a full year basis, total non-operating items decreased by NT$3.54 billion to NT$3.50 billion in 2009, mostly due to less interest income and weaker business in certain invested companies.

    III. Financial Condition Review



      III - 1. Liquidity Analysis
              (Selected Balance Sheet Items)
      (In NT billions)                         4Q09        3Q09        4Q08

      Cash & Marketable Securities           195.80      180.32      211.45
      Accounts Receivable - Trade             35.38       35.88       18.50
      Inventory                               20.91       19.18       14.88
      Total Current Assets                   259.80      244.24      252.62
      Accounts Payable                        40.61       26.30       14.04
      Current Portion of Bonds Payable         0.00        0.00        8.00
      Accrued Bonus to Employees              13.43        8.62       15.37
      Accrued Liabilities and Others          25.09       20.09       19.40
      Total Current Liabilities               79.13       55.01       56.81
      Current Ratio (x)                         3.3         4.4         4.4
      Net Working Capital                    180.67      189.23      195.81


Liquidity Analysis:

At the end of 4Q09, cash and marketable securities totaled NT$195.80 billion, increased by NT$15.48 billion from 3Q09, primarily due to NT$19.29 billion of free cash flow generated during this quarter.

Total current liabilities increased NT$24.12 billion in this quarter, primarily due to increase in accounts payables to contractors and equipment suppliers and accruals for employee profit sharing/bonus during the quarter.

Net working capital was NT$180.67 billion and current ratio decreased to 3.3x.



    III - 2. Receivable/Inventory Days
    (In Number of Days)
                                           4Q09        3Q09        4Q08

     Days of Receivable                      36          36          46
     Days of Inventory                       42          41          40



    Receivable and Inventory Days:
    Days of receivable remained stable at 36 days in 4Q09.
    Days of inventory increased by one day from prior quarter to 42 days.



     III - 3. Debt Service
     (In NT billions)                       4Q09        3Q09        4Q08

      Cash & Marketable Securities        195.80      180.32      211.45
      Interest-Bearing Debt                15.09       15.33       23.44
      Net Cash Reserves                   180.71      164.99      188.01


Debt Service:

Net cash reserves, defined as the excess of cash and short-term marketable securities over interest-bearing debt, increased by NT$15.72 billion to NT$180.71 billion at the end of 4Q09, primarily due to NT$19.29 billion of free cash flow generated during this quarter.

    IV. Cash Flow



    IV - 1.1. Cash Flow Analysis

      (In NT billions)                          4Q09        3Q09         4Q08

      Net Income                               32.67       30.55        12.45
      Depreciation & Amortization              20.28       20.00        20.96
      Employee Profit Sharing Payment*           n.a       (7.49)         n.a
      Other Operating Sources/(Uses)            9.05        3.60        29.83
      Total Operating Sources/(Uses)           62.00       46.66        63.24

      Capital Expenditure                     (42.71)     (32.04)      (11.26)
      Marketable Financial Instruments         (3.59)     (18.94)       30.31
      Other Investing Sources/(Uses)           (0.80)      (0.53)       (1.04)
      Net Investing Sources/(Uses)            (47.10)     (51.51)       18.01

      Cash Dividends                            0.00      (76.88)        0.00
      Other Financing Sources/(Uses)           (0.28)      (0.11)       (0.30)

      Net Financing Sources/(Uses)             (0.28)     (76.99)       (0.30)

      Net Cash Position Changes                14.62      (81.84)       80.95

      Exchange Rate Changes & Others           (0.28)      (0.74)        1.21

      Ending Cash Balance                     171.28      156.94       194.61

      *Starting 2008, Taiwan accounting rule requires company to expense
       employee profit sharing


Summary of Cash Flow:

Cash generated from operating activities totaled NT$62.00 billion during the quarter, an increase of NT$15.34 billion from 3Q09, mainly due to the increase in net income, the absence of the cash payment of employee profit sharing, and a decrease in net working capital.

Net cash used in investing activities decreased NT$4.41 billion to NT$47.10 billion in 4Q09, primarily reflecting less purchases of marketable financial instruments, partially offset by an increase in capital expenditures.

Net cash used in financing activities was NT$0.28 billion during the quarter.

    As a result, TSMC ended 4Q09 with a cash balance of NT$171.28 billion.



      IV - 1.2. Cash Flow Analysis

      (In NT billions)                         2009        2008        Diff.

      Net Income                              89.22       99.93      (10.71)
      Depreciation & Amortization             80.81       81.51       (0.70)
      Employee Profit Sharing Payment*        (7.49)       0.00       (7.49)
      Other Operating Sources/(Uses)          (2.57)      40.05      (42.62)
      Total Operating Sources/(Uses)         159.97      221.49      (61.52)

      Capital Expenditure                    (87.78)     (59.22)     (28.56)
      Marketable Financial Instruments        (7.04)      52.35      (59.39)
      Other Investing Sources/(Uses)          (1.65)      (1.17)      (0.48)
      Net Investing Sources/(Uses)           (96.47)      (8.04)     (88.43)

      Cash Dividends                         (76.88)     (76.78)      (0.10)
      Employee Profit Sharing*                 0.00       (3.94)       3.94
      Repayment of Bonds Payable              (8.00)       0.00       (8.00)
      Purchase of Treasury Stock               0.00      (33.48)      33.48
      Other Financing Sources/(Uses)          (0.59)      (1.19)       0.60
      Net Financing Sources/(Uses)           (85.47)    (115.39)      29.92

      Net Cash Position Changes              (21.97)      98.06     (120.03)

      Exchange Rate Changes & Others          (1.36)       1.56       (2.92)

      Ending Cash Balance                    171.28      194.61      (23.33)

      *Starting 2008, Taiwan accounting rule requires company to expense
       employee profit sharing


On a full year basis, cash generated from operating activities decreased NT$61.52 billion to NT$159.97 billion in 2009. The decrease mainly reflected the decrease in net income, the cash payment of 2008 employee profit sharing made in 2009, and increases in net working capital due to acceleration of business momentum.

Net cash used in investing activities was NT$96.47 billion in 2009, NT$88.43 billion higher than that in 2008, primarily reflecting redemptions of marketable financial instruments in 2008 and the increase in capital expenditures during 2009.

Meanwhile, net cash used in financing activities decreased by NT$29.92 billion to NT$85.47 billion during 2009, mainly due to the absence of repurchase of treasury stock and the reclassification of employee profit sharing from financing activities to operating activities starting 2009, partially offset by the repayment of corporate bonds in the first quarter.

IV - 2. Operating and Free Cash Flows:

Operating and Free Cash Flows:

Cash flows generated from operating activities were NT$62.00 billion during the quarter. Free cash flow, defined as the excess of operating cash flows over capital expenditures, totaled NT$19.29 billion in 4Q09, compared to NT$14.62 billion in 3Q09.

Total free cash flow generated in 2009 was NT$72.19 billion, declined NT$90.08 billion from NT$162.27 billion in 2008. The year-over-year decline was primarily due to lower business activities resulting from the economic downturn and the increased capital expenditures.

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

    V. CapEx & Capacity



      V - 1. Capital Expenditures

      (In US millions)                  1Q09  2Q09  3Q09  4Q09    2009   2008

      TSMC                               161   218   963  1,304  2,646  1,807
      XinTec and GUC                       2     3     6      1     12     23
      TSMC Shanghai & WaferTech            3     3     0      4     10     52
      Other TSMC Subsidiaries              0     0     2      1      3      4
      Total TSMC                         166   224   971  1,310  2,671  1,886


Capital Expenditures:

Capital expenditures for TSMC on a consolidated basis totaled US$1,310 million in 4Q09.

For year 2009, total capital expenditures for TSMC consolidated group totaled US$2.67 billion, compared with US$1.89 billion spent in 2008.



    V-2 . Capacity
                                   1Q09   2Q09   3Q09   4Q09   2009   1Q10
    Fab / (Wafer size)              (A)    (A)    (A)    (A)    (A)    (F)
    Fab-2         (6") Note1        274    280    283    283  1,121    263
    Fab-3         (8")              286    289    292    283  1,150    268
    Fab-5         (8")              162    149    144    144    599    139
    Fab-6         (8")              295    284    287    287  1,154    269
    Fab-8         (8")              275    271    265    255  1,066    247
    Fab-12        (12") Note 2      218    219    199    243    879    269
    Fab-14        (12") Note 2      238    238    239    243    958    255
    WaferTech     (8")              106    107    109    109    431    106
    TSMC China    (8")              128    134    135    135    531    132
    TSMC total capacity (8"
     equiv. Kpcs)                 2,431  2,419  2,379  2,467  9,695  2,488
    SSMC           (8")              64     65     65     65    259     69
    Total managed capacity (8"
     equiv. Kpcs)                 2,495  2,483  2,444  2,532  9,955  2,557

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


Capacity:

Total managed capacity was 2,532K 8-inch equivalent wafers in 4Q09, increased by 3.6% from 2,444K in 3Q09. TSMC managed capacity in 1Q10 is expected to increase by 1% to reach 2,557K 8-inch equivalent wafers. 12" wafer capacity will increase by 38K (12''). However, due to scheduled annual maintenance and capacity migration to higher nodes, total legacy fabs capacity will decrease by 60K (8'') in the first quarter of 2010.

Total managed capacity in 2009 reached 9,955K 8-inch equivalent wafers, representing an increase of 6.2% from 9,377K 8-inch equivalent wafers in 2008, while capacity for 12-inch wafer fabs increased by 10.8% year-over-year, reaching 41.5% of total 2009 capacity.

    VI. Recap of Recent Important Events & Announcements

        -- TSMC Announces Process Technologies For Integrated LED Drivers
           ( 2009/12/15 )
        -- TSMC and Motech Announce Strategic Partnership ( 2009/12/09 )
        -- TSMC Recognizes Supplier Excellence at Supply Chain Management
           Forum ( 2009/12/04 )
        -- TSMC Launches Automotive Process Qualification Specification and
           Service Package in China Market ( 2009/11/27 )
        -- TSMC Announces Settlement of SMIC Trade Secret Litigation
           ( 2009/11/10 )
        -- Infineon and TSMC Extend Technology And Production Partnership
           Agreement; Will Jointly Develop 65nm Embedded Flash Process
           Technology For Automotive and Chip Card Applications ( 2009/11/05 )



     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, 2009        September 30, 2009
                                        (audited)               (unaudited)
    ASSETS                          USD      NTD        %        NTD      %
    Current Assets
      Cash and Cash Equivalents    $5,347  $171,276    28.8  $156,935    29.0
      Investments in Marketable
       Financial Instruments          766    24,521     4.1    23,384     4.3
      Accounts Receivable - Trade   1,105    35,382     5.9    35,881     6.6
      Inventories, Net                653    20,914     3.5    19,176     3.5
      Other Current Assets            240     7,711     1.4     8,865     1.7
         Total Current Assets       8,111   259,804    43.7   244,241    45.1

    Long-Term Investments           1,182    37,845     6.4    38,553     7.1

    Properties, Plant and
     Equipment                     30,204   967,419   162.7   911,844   168.3
    Less: Accumulated
     Depreciation                 (21,660) (693,744) (116.7) (675,028) (124.6)
         Properties, Plant and
          Equipment, Net            8,544   273,675    46.0   236,816    43.7

    Other Assets                      730    23,372     3.9    22,287     4.1
    Total Assets                  $18,567  $594,696   100.0  $541,897   100.0

    LIABILITIES AND SHAREHOLDERS'
     EQUITY
    Current Liabilities
      Accounts Payables              $365   $11,689     2.0   $10,633     2.0
      Payables to Contractors and
       Equipment Suppliers            903    28,924     4.9    15,666     2.9
      Accrued Expenses and Other
       Current Liabilities          1,173    37,571     6.2    28,401     5.2
      Current Portion of Bonds
       Payable and Long-Term
       Debts                           30       949     0.2       309     0.1
         Total Current
          Liabilities               2,471    79,133    13.3    55,009    10.2
    Bonds Payable                     140     4,500     0.8     4,500     0.8
    Other Long-Term Liabilities       375    12,015     2.0    15,761     2.9
         Total Liabilities          2,986    95,648    16.1    75,270    13.9

    Shareholders' Equity
     Attributable to Shareholders
     of the Parent
      Capital Stock at Par Value    8,087   259,027    43.6   259,007    47.8
      Capital Surplus               1,732    55,486     9.3    55,440    10.2
      Legal Capital Reserve (2)     2,414    77,317    13.0    77,317    14.3
      Special Capital Reserve (2)      --        --      --        --      --
      Unappropriated Earnings (2)   3,265   104,565    17.5    71,899    13.3
      Treasury Stock                   --        --      --        --      --
      Others                          (41)   (1,312)   (0.2)     (778)   (0.2)
         Total Equity
          Attributable to
          Shareholders of the
          Parent                   15,457   495,083    83.2   462,885    85.4
      Minority Interests              124     3,965     0.7     3,742     0.7
         Total Shareholders'
          Equity                   15,581   499,048    83.9   466,627    86.1
    Total Liabilities &
     Shareholders' Equity         $18,567  $594,696   100.0  $541,897   100.0


    Note :
    (1) Amounts in New Taiwan dollars have been translated into U.S. dollars
        at the rate of NT$32.030 as of December 31, 2009.
    (2) Certain prior period balances have been reclassified to conform to
        the current period presentation.



     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) (Continued)


                          December 31, 2008
                               (audited)           QoQ              YoY
    ASSETS                   NTD        %     Amount     %     Amount     %
    Current Assets
      Cash and Cash
       Equivalents         $194,614    34.8  $14,341    9.1  ($23,338)  (12.0)
      Investments in
       Marketable
       Financial
       Instruments           16,836     3.0    1,137    4.9     7,685    45.6
      Accounts Receivable
       - Trade               18,497     3.3     (499)  (1.4)   16,885    91.3
      Inventories, Net       14,877     2.7    1,738    9.1     6,037    40.6
      Other Current Assets    7,795     1.4   (1,154) (13.0)      (84)   (1.1)
         Total Current
          Assets            252,619    45.2   15,563    6.4     7,185     2.8

    Long-Term Investments    39,982     7.2     (708)  (1.8)   (2,137)   (5.3)

    Properties, Plant and
     Equipment              862,461   154.3   55,575    6.1   104,958    12.2
    Less: Accumulated
     Depreciation          (618,816) (110.7) (18,716)   2.8   (74,928)   12.1
         Properties, Plant
          and Equipment,
          Net               243,645    43.6   36,859   15.6    30,030    12.3

    Other Assets             22,671     4.0    1,085    4.9       701     3.1
    Total Assets           $558,917   100.0  $52,799    9.7   $35,779     6.4

    LIABILITIES AND
     SHAREHOLDERS' EQUITY
    Current Liabilities
      Accounts Payables      $6,043     1.1   $1,056    9.9    $5,646    93.4
      Payables to
       Contractors and
       Equipment Suppliers    7,999     1.4   13,258   84.6    20,925   261.6
      Accrued Expenses and
       Other Current
       Liabilities           34,543     6.2    9,170   32.3     3,028     8.8
      Current Portion of
       Bonds Payable and
       Long-Term Debts        8,222     1.5      640  207.7    (7,273)  (88.5)
         Total Current
          Liabilities        56,807    10.2   24,124   43.9    22,326    39.3
    Bonds Payable             4,500     0.8       --     --        --      --
    Other Long-Term
     Liabilities             17,237     3.1   (3,746) (23.8)   (5,222)  (30.3)
         Total Liabilities   78,544    14.1   20,378   27.1    17,104    21.8

    Shareholders' Equity
     Attributable to
     Shareholders of the
     Parent
      Capital Stock at Par
       Value                256,254    45.8       20    0.0     2,773     1.1
      Capital Surplus        49,875     8.9       46    0.1     5,611    11.2
      Legal Capital
       Reserve (2)           67,324    12.0       --     --     9,993    14.8
      Special Capital
       Reserve (2)              392     0.1       --     --      (392) (100.0)
      Unappropriated
       Earnings (2)         102,338    18.3   32,666   45.4     2,227     2.2
      Treasury Stock             --      --       --     --        --      --
      Others                    194     0.1     (534)  68.8    (1,506) (777.5)
         Total Equity
          Attributable to
          Shareholders of
          the Parent        476,377    85.2   32,198    7.0    18,706     3.9
      Minority Interests      3,996     0.7      223    6.0       (31)   (0.7)
         Total
          Shareholders'
          Equity            480,373    85.9   32,421    6.9    18,675     3.9
    Total Liabilities &
     Shareholders' Equity  $558,917   100.0  $52,799    9.7   $35,779     6.4


    Note :
    (1) Amounts in New Taiwan dollars have been translated into U.S. dollars
        at the rate of NT$32.030 as of December 31, 2009.
    (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 December 31, 2009, September 30, 2009,
                              December 31, 2008
           (Expressed in Millions of New Taiwan Dollars ("NTD") and
                           U.S. Dollars ("USD") (1)
             Except for Per Share Amounts and Shares Outstanding)


                                              4Q 2009             3Q 2009
                                        USD      NTD      %      NTD      %
    Net Sales                          $2,849  $92,094  100.0  $89,936  100.0
    Cost of Sales                      (1,466) (47,399) (51.5) (47,078) (52.3)
      Gross Profit                      1,383   44,695   48.5   42,858   47.7
    Operating Expenses
      Research and Development
       Expenses                          (203)  (6,567)  (7.1)  (6,202)  (6.9)
      General and Administrative
       Expenses                          (101)  (3,269)  (3.6)  (3,541)  (3.9)
      Sales and Marketing Expenses        (38)  (1,217)  (1.3)  (1,131)  (1.3)
    Total Operating Expenses             (342) (11,053) (12.0) (10,874) (12.1)

         Income from Operations         1,041   33,642   36.5   31,984   35.6

    Non-Operating Income, Net              44    1,427    1.6      519    0.6
    Investment Gains                        9      299    0.3      454    0.5
    Income before Income Tax            1,094   35,368   38.4   32,957   36.6

    Income Tax Expenses                   (77)  (2,508)  (2.7)  (2,285)  (2.5)

         Net Income                     1,017   32,860   35.7   30,672   34.1

    Minority Interests                     (6)    (194)  (0.2)    (121)  (0.1)

    Net Income Attributable to
     Shareholders of
     the Parent                         1,011   32,666   35.5   30,551   34.0



    Earnings per Share - Diluted        $0.04    $1.26     --    $1.18     --
    Earnings per ADR - Diluted (2)      $0.19    $6.30     --    $5.88     --

    Weighted Average Outstanding
     Shares - Diluted ('M) (3)             --   25,916     --   25,984     --


    Note:
    (1) Amounts in New Taiwan dollars have been translated into U.S.
        dollars at the weighted average rate of NTD32.320 for the fourth
        quarter of 2009.
    (2) 1 ADR equals 5 ordinary shares.
    (3) Total diluted weighted average outstanding shares were 25,942M
        shares for 4Q08 after the retroactive adjustments for stock dividends
        and stock bonus.



     TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
              Unaudited Consolidated Condensed Income Statements
      For the Three Months Ended December 31, 2009, September 30, 2009,
                              December 31, 2008
           (Expressed in Millions of New Taiwan Dollars ("NTD") and
                           U.S. Dollars ("USD") (1)
       Except for Per Share Amounts and Shares Outstanding) (Continued)


                                  4Q 2008           QoQ             YoY
                                 NTD      %    Amount     %    Amount     %
    Net Sales                  $64,562  100.0  $2,158    2.4  $27,532    42.6
    Cost of Sales              (44,367) (68.7)   (321)   0.7   (3,032)    6.8
      Gross Profit              20,195   31.3   1,837    4.3   24,500   121.3
    Operating Expenses
      Research and Development
       Expenses                 (4,826)  (7.5)   (365)   5.9   (1,741)   36.1
      General and
       Administrative Expenses  (2,285)  (3.5)    272   (7.7)    (984)   43.0
      Sales and Marketing
       Expenses                 (1,062)  (1.6)    (86)   7.6     (155)   14.6
    Total Operating Expenses    (8,173) (12.7)   (179)   1.6   (2,880)   35.2

         Income from
          Operations            12,022   18.6   1,658    5.2   21,620   179.8

    Non-Operating Income, Net    1,412    2.2     908  174.7       15     1.0
    Investment Gains              (340)  -0.5    (155) (34.0)     639  (187.9)
    Income before Income Tax    13,094   20.3   2,411    7.3   22,274   170.1

    Income Tax Expenses           (452)  (0.7)   (223)   9.8   (2,056)  454.7

         Net Income             12,642   19.6   2,188    7.1   20,218   159.9

    Minority Interests            (196)  (0.3)    (73)  60.2        2    (0.8)

    Net Income Attributable to
     Shareholders of
     the Parent                 12,446   19.3   2,115    6.9   20,220   162.5



    Earnings per Share -
     Diluted                     $0.48          $0.08    7.2    $0.78   162.7
    Earnings per ADR -
     Diluted (2)                 $2.40          $0.42    7.2    $3.90   162.7

    Weighted Average
     Outstanding Shares -
     Diluted ('M) (3)           25,942             --     --       --      --


    Note:
    (1) Amounts in New Taiwan dollars have been translated into U.S.
        dollars at the weighted average rate of NTD32.320 for the fourth
        quarter of 2009.
    (2) 1 ADR equals 5 ordinary shares.
    (3) Total diluted weighted average outstanding shares were 25,942M
        shares for 4Q08 after the retroactive adjustments for stock dividends
        and stock bonus.



     TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
               Audited Consolidated Condensed Income Statements
                For the Year Ended December 31, 2009 and 2008
           (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
                                              2009                  2008
                                      USD      NTD       %      NTD       %
    Net Sales                        $8,998  $295,742  100.0  $333,158  100.0
    Cost of Sales                    (5,063) (166,413) (56.3) (191,408) (57.5)
      Gross Profit                    3,935   129,329   43.7   141,750   42.5
    Operating Expenses
      Research and Development
       Expenses                        (657)  (21,593)  (7.3)  (21,481)  (6.4)
      General and Administrative
       Expenses                        (343)  (11,286)  (3.8)  (11,097)  (3.3)
      Sales and Marketing Expenses     (137)   (4,488)  (1.5)   (4,737)  (1.4)
    Total Operating Expenses         (1,137)  (37,367) (12.6)  (37,315) (11.1)

         Income from Operations       2,798    91,962   31.1   104,435   31.4

    Non-Operating Income, Net           105     3,455    1.2     6,335    1.9
    Investment Gains (Losses)             1        46     --       702    0.2
    Income before Income Tax          2,904    95,463   32.3   111,472   33.5

    Income Tax Expenses                (182)   (5,997)  (2.0)  (10,949)  (3.3)

         Net Income                   2,722    89,466   30.3   100,523   30.2

    Minority Interests                   (8)     (248)  (0.1)     (590)  (0.2)

    Net Income Attributable to
     Shareholders of the Parent       2,714    89,218   30.2    99,933   30.0



    Earnings per Share - Diluted      $0.10     $3.44     --     $3.81     --
    Earnings per ADR - Diluted (2)    $0.52    $17.21     --    $19.05     --

    Weighted Average Outstanding
     Shares - Diluted ('M) (3)           --    25,914     --    26,236     --


    Note:
    (1) Amounts in New Taiwan dollars have been translated into U.S. dollars
        at the weighted average rate of NTD 32.868 for the year ended December
        31, 2009.
    (2) 1 ADR equals 5 ordinary shares.
    (3) Total diluted weighted average outstanding shares were 26,236M shares
        for the year ended December 31, 2008 after the retroactive adjustment
        for stock dividends.



     TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
               Audited Consolidated Condensed Income Statements
                For the Year Ended December 31, 2009 and 2008
           (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
                                                                YoY
                                                      Amount               %
    Net Sales                                       ($37,416)           (11.2)
    Cost of Sales                                     24,995            (13.1)
      Gross Profit                                   (12,421)            (8.8)
    Operating Expenses
      Research and Development Expenses                 (112)             0.5
      General and Administrative Expenses               (189)             1.7
      Sales and Marketing Expenses                       249             (5.3)
    Total Operating Expenses                             (52)             0.1

         Income from Operations                      (12,473)           (11.9)

    Non-Operating Income, Net                         (2,880)           (45.5)
    Investment Gains (Losses)                           (656)           (93.4)
    Income before Income Tax                         (16,009)           (14.4)

    Income Tax Expenses                                4,952            (45.2)

         Net Income                                  (11,057)           (11.0)

    Minority Interests                                   342            (57.9)

    Net Income Attributable to
     Shareholders of the Parent                      (10,715)           (10.7)


    Earnings per Share - Diluted                      ($0.37)            (9.6)
    Earnings per ADR - Diluted (2)                    ($1.84)            (9.6)

    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 32.868 for the year ended December
        31, 2009.
    (2) 1 ADR equals 5 ordinary shares.
    (3) Total diluted weighted average outstanding shares were 26,236M shares
        for the year ended December 31, 2008 after the retroactive adjustment
        for stock dividends.



     TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
               Consolidated Condensed Statements of Cash Flows
     For the Year Ended December 31, 2009 and for the Three Months Ended
         December 31, 2009, September 30, 2009, and December 31, 2008
           (Expressed in Millions of New Taiwan Dollars ("NTD") and
                          U.S. Dollars ("USD")) (1)

                                     2009      4Q 2009    3Q 2009    4Q 2008
                                  (audited)  (unaudited)(unaudited)(unaudited)
                                USD       NTD      NTD       NTD        NTD
    Cash Flows from Operating
     Activities:
        Net Income            $2,714   $89,218   $32,666   $30,551   $12,446
        Net Income
         Attributable to
         Minority Interest         8       248       194       121       196
        Depreciation &
         Amortization          2,459    80,815    20,277    20,001    20,961
        Deferred Income Tax      (53)   (1,752)     (630)     (426)      154
        Equity in Losses
         (Earnings) of Equity
         Method Investees,
         Net                      (1)      (46)     (299)     (454)      340
        Changes in Working
         Capital & Others       (260)   (8,517)    9,791    (3,138)   29,147
        Net Cash Provided by
         Operating Activities  4,867   159,966    61,999    46,655    63,244

    Cash Flows from Investing
     Activities:
        Acquisitions of:
           Marketable
            Financial
            Instruments       (1,552)  (51,025)  (19,979)  (20,827)  (33,059)
           Investments
            Accounted for
            Using Equity
            Method                (1)      (43)      (11)      (32)       (1)
           Property, Plant
            and Equipment     (2,671)  (87,785)  (42,715)  (32,038)  (11,258)
           Financial Assets
            Carried at Cost      (10)     (321)      (51)     (139)      (73)
        Proceeds from
         Disposal or maturity
         of:
           Marketable
            Financial
            Instruments        1,338    43,985    16,394     1,886    63,368
           Property, Plant
            and Equipment          1        24        17         2        24
           Financial Assets
            Carried at Cost        4       131        37        19        73
        Others                   (44)   (1,434)     (794)     (381)   (1,061)
        Net Cash Used In
         Investing Activities (2,935)  (96,468)  (47,102)  (51,510)   18,013

    Cash Flows from Financing
     Activities:
        Decrease in Guarantee
         Deposits                (15)     (478)     (151)      (77)     (140)
        Proceeds from
         Exercise of Stock
         Options                   8       261        70       162         5
        Bonus Paid to
         Directors and
         Supervisors              --        --        --        --        --
        Repayment of Long-
         Term Bonds Payable     (243)   (8,000)       --        --        --
        Cash Dividends Paid
         for Common Stock     (2,339)  (76,876)       --   (76,876)       --
        Repurchase of
         Treasury Stock           --        --        --        --        --
        Cash Bonus Paid to
         Employees                --        --        --        --        --
        Others                   (11)     (378)     (196)     (191)     (163)
        Net Cash Used in
         Financing Activities (2,600)  (85,471)     (277)  (76,982)     (298)

    Net Increase (Decrease)
     in Cash and Cash
     Equivalents                (668)  (21,973)   14,620   (81,837)   80,959

    Effect of Exchange Rate
     Changes and Others          (42)   (1,365)     (279)     (745)    1,209

    Cash and Cash Equivalents
     at Beginning of Period    5,921   194,614   156,935   239,517   112,446

    Cash and Cash Equivalents
     at End of Period         $5,211  $171,276  $171,276  $156,935  $194,614

    Note:
    (1) Amounts in New Taiwan dollars have been translated into U.S. dollars
        at the weighted average rate of NTD32.868 for the year ended December
        31, 2009.


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 17, 2009, 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
     Investor Relations Division
     TSMC
     Email: invest@tsmc.com
     Tel:   +886-3-568-2085

SOURCE Taiwan Semiconductor Manufacturing Company Limited



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