TSMC Reports First Quarter EPS of NT$0.73

Hsinchu, Taiwan, R.O.C., April 26, 2007 -- TSMC today announced consolidated revenue of NT$64.90 billion, net income of NT$18.84 billion, and diluted earnings per share of NT$0.73 (US$0.11 per ADS unit) for the first quarter ended March 31, 2007.

Year-over-year, first quarter revenue decreased 16.6% while net income and diluted EPS decreased 42.2% and 42.3%, respectively. On a sequential basis, first quarter results represent a 13.4% decrease in revenue, and a decrease of 32.5% both in net income and in diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

First quarter business was affected by inventory correction and seasonality, but revenue slightly exceeded the guidance given on January 25. Advanced process technologies (0.13-micron and below) accounted for 49% of wafer revenues with 90-nanometer process technology accounting for 22% and 65-nanometer about 1% of total wafer sales. Gross margin of 37.9% reached the mid point of the guidance, while operating margin of 27.5% was close to the high end of guidance. Net margin decreased 8.2 percentage points to 29% from the previous quarter.

“A majority of our customers’ excess inventory has been worked through in the first quarter and the recovery of our business is already in place,” said Lora Ho, VP and Chief Financial Officer of TSMC. “Relative to the first quarter, the communication and consumer segments will rebound quite well while the computer segment will grow at a lower pace,” said Ho. “Based on our current business outlook, management’s expectations for second quarter 2007 performance are as follows”:

· Revenue is expected to be between NT$73 billion and NT$75 billion;
· Gross profit margin is expected to be between 42% and 44%;
· Operating profit margin is expected to be between 32% and 34%.

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