TSMC Board of Directors Proposes NT$2 Dividend Including NT$1.4 Stock and NT$0.6 Cash Dividend

Taiwan Semiconductor Manufacturing Company Ltd. (TSMC or the “Company”) (NYSE: TSM) today held a meeting of the Board of Directors, at which the Board adopted a proposal recommending distribution of a dividend of NT$2 per common share, including a stock dividend of NT$1.4 per share and a cash dividend of NT$0.6 per share. The proposal will be discussed and brought to a vote at the Company’s regular shareholders' meeting scheduled for May 11, 2004.

TSMC Spokesperson and Vice President Ms. Lora Ho noted that, at its meeting, the Board of Directors also:

1. Approved the 2003 Business Report and Financial Statements. Revenue for 2003 totaled NT$201,904 million and net income was NT$47,259 million, with earnings per share of NT$2.33.

2. Approved a proposal for distribution of 2003 profits : (1) A dividend of NT$2 per share will be proposed to the common shareholders, including a stock dividend of NT$1.4 per share and a cash dividend of NT$0.6 per share. (2) Cash dividends of NT$184 million will be proposed to the Preferred A shareholders. (3) Employees’ profit sharing will be distributed in both stock and cash. Profit sharing will amount to NT$2,726 million distributed in stock at par value and NT$681 million distributed in cash. (4) After the distribution, the Company’s paid-in capital will be increased from NT$202,666,189,840 to NT$233,765,970,050.

3. Approved the 2004 R&D Projects and Sustaining Capital Appropriation of NT$6,188 million.

4. Approved a capital appropriation in the amount of US$311 million for expanding the capacity of 90nm copper process lines of Fab 12 (Phase II).

5. Approved scheduling of the 2004 Regular Shareholders’ Meeting for 9:30 a.m. on May 11, 2004 at the Auditorium in the Activity Center of the Hsinchu Science Park.

6. Approved the promotion of Mr. P. H. Chang as Vice President of Human Resources for TSMC.