TSMC to Supply Products and Services for Future Microsoft Game Consoles

Hsin-Chu, Taiwan – April 6, 2004 – Microsoft Corporation (MSFT) and Taiwan Semiconductor Manufacturing Company (NYSE:TSM) have reached an agreement for TSMC to provide semiconductor manufacturing services for Microsoft’s future Xbox products.

The breakthrough agreement expands an ongoing relationship between the two companies by providing Microsoft with direct, collaborative access to TSMC’s advanced semiconductor process technologies.

“TSMC has consistently demonstrated industry leadership in the development and deployment of highly advanced semiconductor process technologies for high-volume manufacturing,” said Todd Holmdahl, Xbox General Manager of Microsoft Corporation. “It was this solid record of achievement that led us to work directly with TSMC on semiconductors targeted to our future game consoles products.”

Founded in 1987, TSMC is the largest semiconductor foundry in the world, specializing in manufacturing semiconductors for its customers in a wide variety of end markets. Its foundry services also include a broad range of silicon-proven intellectual property cores and tight integration with leading electronic design automation (EDA) design tools that allow chip designers to achieve faster time-to-volume.

“Microsoft's future Xbox products and services will require leading-edge semiconductor technologies," said Dr. Rick Tsai, president of TSMC. "This agreement underscores the importance of a partnership between the two companies to identify the best technology platforms for Microsoft's future products. We look forward to a long and productive collaboration with Microsoft.”

About TSMC

TSMC is the world's largest dedicated semiconductor foundry, providing the industry's leading process technology and the foundry industry's largest portfolio of process-proven library, IP, design tools and reference flows. The company operates one advanced 300mm wafer fab, five eight-inch fabs and one six-inch wafer fab. TSMC also has substantial capacity commitments at venture fab SSMC and at its wholly-owned subsidiary, WaferTech. TSMC’s Nexsys Technology for SoC describes a suite of semiconductor process technologies and foundry services used in advanced technology semiconductor manufacturing. TSMC's corporate headquarters are in Hsinchu, Taiwan. For more information about TSMC see http://www.tsmc.com.

About Xbox

Xbox (http://www.xbox.com) is the video game system from Microsoft that brings people together for the most exhilarating game and entertainment experiences. Xbox delivers an expansive collection of breakthrough games, powerful hardware and the unified Xbox Live online service. The new tagline, "it's good to play together," captures the spirit of Xbox as the social hub of the new digital entertainment lifestyle. Xbox is now available in North America, Asia, Europe and Australia.

Xbox is a registered trademark of Microsoft Corporation in the United States and/or other countries.

Microsoft Contact:

Cinthia Portugal, Public Relations Manager

Microsoft Corporation