TSMC Decided Early Redemption of US$350 million ECB

Hsin-Chu, Taiwan, October 1, 1999- Taiwan Semiconductor Manufacturing Company Ltd. ("TSMC" or "the Company" ) (TAIEX: 2330, NYSE: TSM) today announced that the Company will redeem the US$350 million Eurodollar Convertible Bonds (the "Bonds") on November 8, 1999. The Bonds were issued on July 3, 1997.

The redemption details are set as follows:

Redemption date: November 8, 1999 Last conversion date: November 2, 1999 (All bond holders are urged to surrender their Bonds for conversion before November 2, 1999, if they elect not to be repaid.) Redemption price: 115.62% of the face value (which includes 100% of principal amount + 15.62% of redemption premium)

As of September 30, 1999, US$150,972,000 Bonds were converted into common shares of the Company, and US$199,028,000 Bonds are remaining outstanding.

Mr. YC Huang, Spokesman for TSMC, pointed out that the conversion will have very minimal impact on paid-in capital and earnings per share. Assuming all Bonds are tendered for conversion, the total number of outstanding common shares is expected to increase by approximately 125,327,000, which accounts for 1.67% of total outstanding common shares of the Company.

Further details of redemption notice are simultaneously published in the Financial Times and Luxembourg Wort of today.