TSMC Board of Directors Approves Capital Appropriation for Projects

Science-Based Industrial Park, Hsin-Chu, Taiwan, May 7, 2002 - Taiwan Semiconductor Manufacturing Company Ltd. (TSMC or the “Company”) (NYSE: TSM) today held a meeting of the Board of Directors, at which the Board approved a capital appropriation for a number of projects in the amount of NT$ 69,275 million. Part of this appropriation was targeted to expand production capacity for its 0.15-micron process and the advanced copper process, and to increase its mask-making capacity for 0.13-micron and 90nm processes, thereby enhancing the Company's product mix.

In addition, the capital appropriation includes the installation of process equipment for Fab 14 (phase I), as well as building construction and facility setup for Fab 12 (phase II) and Fab 14 (phase II).

  1. 1. Approved the increase of normal capital appropriation of NT$1,112 million for 2002. This includes R&D investments, production improvements and information technology updates as the major items.

  2. 2. Approved the investment of US$20 million in Extreme Ultra Violet (EUV) LLC. EUV, a private industry consortium led by Advanced Micro Devices, IBM, Infineon Technologies, Intel, Micron Technologies, Motorola and TSMC, is dedicated to developing EUV lithography technology.

  3. 3. Approved TSMC's 2002 Employee Stock Options Plan (the Plan), an issuance not to exceed 100,000,000 options in accordance with the Plan. Each unit of stock option will be entitled to purchase one TSMC common share. The total number of common shares of the Company to be reserved for granting the options will be 100,000,000 shares. The stock options will be granted to full-time employees of either the Company or any of its domestic or foreign subsidiaries, in which the Company's shareholding with voting rights, directly or indirectly, is more than fifty percent, to attract and retain talented high-tech engineers and other professionals.

  4. 4. Confirmed the appointment of Ms. Chiam Wu as Vice President.