TSMC Secondary Offering of 151.655 million ADSs at US$8.60 per share

Hsinchu, Taiwan, R.O.C. – August 5, 2005 -- TSMC (TAIEX: 2330, NYSE: TSM) today announced that in the evening of August 4, 2005 New York time, the Company’s secondary offering of 151.655 million American Depositary Shares (ADSs) by Royal Philips Electronics (“Philips”), Taiwan Development Fund and other shareholders was priced at US$8.60 per ADS. Each TSMC ADS represents five common shares of TSMC.

Ms. Lora Ho, TSMC spokesperson, vice president and chief financial officer, noted that the success of TSMC’s secondary offering of ADSs shows the recognition by global investors of TSMC’s performance. After this successful offering, TSMC’s outstanding ADSs increased to approximately 17.3 percent from approximately 14.2 percent of its total share capital. The offering was entirely secondary shares from the above-mentioned shareholders. Both Philips and Taiwan Development Fund have agreed not to sell any more TSMC shares at least until the end of 2006 either in the Taiwan or international markets.

The offering price of US$8.60 per ADS (equivalent to NT$54.78 per common share) represents a 0.15 percent premium to the August 4, 2005 closing price of NT$54.7 for the TSMC common shares that trade on the Taiwan Stock Exchange and a 0.58 percent discount to the US$8.65 for TSMC’s ADSs that trade on the New York Stock Exchange on August 4, 2005. The TSMC ADS offering totals US$1,304 million. The underwriters also have an over-allotment option to purchase up to 22.745 million additional ADSs within 30 days.

The final prospectus relating to this offering may be obtained from Goldman Sachs & Co. at 85 Broad Street, New York, New York 10004, USA or JP Morgan Securities Inc. at 277 Park Avenue, New York, NY 10172, USA.