In looking out upon a fast changing industrial environment and new opportunities, TSMC and our Chairman, Dr. Morris Chang, has challenged every employee to implement a new corporate vision. That vision is to be the most advanced and largest foundry services provider to our customers, and in partnership with them, forge a powerful competitive force in the semiconductor industry. To bring this vision to reality, we must be a technology leader and the most reputable, service-orientated and maximum-total benefit dedicated foundry. While the new vision targets a stretch goal, a closer examination brings clarity and focus to the future. Interestingly, to bring clarity and focus, we must successfully manage some seemingly paradoxical parameters. 1. Diversity and focus - TSMC must provide diversified technologies and services to meet future market needs in a timely manner. In doing so, TSMC and each of its partner will collaborate by focusing on the strength of their individual core competency. The result will be a seamless and efficient collaboration through which both parties will be rewarded with profit and growth. 2. Advanced but affordable technology - At first, this may seem a paradoxical impossibility. But not so. We firmly believe that the answer lies in systematic alignment and an organized enhancement mechanism, that continuously draws closer our business relationship with each of our customers. 3. Integrated but agilely responsive - Through integrity and openness, TSMC will proactively provide value-add solutions to enhance differentiation and competitiveness to our total competence. We believe that while paradoxes are not easy to manage, the keys to their successful future resolution can be found in the lessons of the past. If we are to make your relationship with TSMC a profitable one, we must apply the same principals that have made us your foundry of choice today. Those principals are openness, trust, and integrity. To be successful, we must drive the extension of the vision that has created our mutual partnership ever since 1987, and pursue the new vision with equal vigor. The accomplishment of the collaborative nature of this new vision will require two other qualities important for partnership: candor and seamless communications. We will be even more diligent in seeking your advice and counsel. We will dialog with you even more on issues ranging from technologies, services, and collaboration. We will ensure effective communication through which we can reap mutual success and growth. We are entering the Year of Goat, which represents diligent, perservering, visionary and team work. Let each of us dedicate this same spirit to working together in the years ahead.

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