TSMC and Compaq Japan Initiate the B2B service “TSMC-Direct” in JapanAgreement enables tightly-coupled supply chain integration for semiconductor manufacturing depending the business trend

Tokyo, Japan, August 21, 2001 -- Taiwan Semiconductor Manufacturing Company Ltd. (NYSE: TSM), the world's largest dedicated semiconductor foundry, and Compaq Computer K.K. (Head Office: Shinagawa Ward, Tokyo, President: Hajime Takayanagi, hereafter referred to as Compaq) today announced an agreement in which Compaq will make co-market and support “TSMC-Direct”, a system-to-system integration solution of semiconductor manufacturers for Japanese Integrated Device Manufacturers (IDM) and fabless companies requiring advanced collaboration in supply chain management.

TSMC-Direct is a system-to-system integration service using Peregrine’s “Extricity B2B” software to establish effective relationship and link mission-critical business processes between TSMC and its business partners’ back office applications. TSMC-Direct acts as an extension of TSMC’s internal systems, enabling collaborative planning, work-in-progress (WIP) tracking, engineering data sharing, real-time order placement and confirmation, and other important business control features, which improves cycle time and reduces inventory levels.

Since the world’s semiconductor market rapidly changes with industry performance and economic trends, semiconductor manufacturers should build tightly coupled supply chain solution for creating demand forecasting and capital budgeting, which comes from collaborating business process with their partners. Many semiconductor makers in the world are outsourcing to TSMC’s fab, and already use TSMC-Direct in order to optimize their business processes such as procurement.

Compaq has contracted with Peregrine systems regarding the Extricity B2B software, which is a core application of TSMC-Direct. Compaq has over 180 consultants and engineers focusing on the semiconductor manufacturing, which is one of the largest such professional service sections in Japan, and Compaq will provide “TSMC-Direct introductory service”, including match-gap analysis, business modeling, installation service and integration service for live operations. Furthermore, Compaq will provide the solution service using Extricity B2B for "RosettaNet", the standard for B2B application integration in the electronics components industry.

TSMC and Compaq, based on agreement for this common marketing, will promote implementations of TSMC-Direct to Japanese semiconductor makers and fabless makers, and promote the improvement of a domestic semiconductor and the electronic components industry at the competitive international market.

About TSMC

TSMC is the world's largest dedicated semiconductor foundry, providing the industry’s leading process technology, library and IP options and other leading-edge foundry services. TSMC operates two six-inch wafer fabs and six eight-inch wafer fabs. The Company also has substantial capacity commitments at two joint ventures fabs (Vanguard and SSMC) and WaferTech. In 2000, TSMC produced the foundry industry's first 300mm customer wafers and began constructing two dedicated 300mm fabs. TSMC's corporate headquarters are in Hsin-Chu, Taiwan. TSMC-Direct is part of the TSMC eFoundry strategy that uses advanced Internet business-to-business capabilities to enable companies to reduce cycle times, become more productive and reduce production costs. More information about TSMC is available through the World Wide Web at http://www.tsmc.com.

About Compaq Computer K.K.

Compaq Computer K.K., is the Japan subsidiary of Compaq Corporation, a Fortune Global 100 company, which is a leading global provider of technology and solutions. Compaq is engaged in systems integration, services and support based on its industry-leading enterprise computing solutions, fault-tolerant business-critical solutions, and communications products, commercial desktop and portable products, and consumer PCs. Compaq is