Spansion and TSMC Sign Joint Development Agreement to Expand MirrorBit Technology Applicability at 40nm and Below

Sunnyvale Calif, and Hsinchu Taiwan– May 15, 2007, Spansion Inc. (NASDAQ:SPSN), the world’s largest pure-play provider of Flash memory solutions, and Taiwan Semiconductor Manufacturing Company, Ltd. (TSE: 2330, NYSE: TSM) today announced that they have signed a definitive agreement to begin joint development of variations of MirrorBit® technology at 40nm and below. Under the agreement, Spansion will use the jointly developed variations of MirrorBit technology to expand its applicablility in new areas, while TSMC will make the processes production-proven and plans to bring Spansion’s advanced Flash memory technologies to volume. Specific terms of the agreement were not disclosed.

“MirrorBit® is a logic-based platform technology that allows massive amounts of integration,” said Bertrand Cambou, president and chief executive officer of Spansion. “TSMC has remarkable process technology development expertise and we look forward to working with them to leverage MirrorBit technology into new areas.”

Spansion and TSMC have a prior agreement for 110nm and 90nm MirrorBit® technology. TSMC has been producing Spansion Flash memory wafers at 110nm since the second quarter of 2006. The production ramp for 90nm MirrorBit® technology is expected to be built on 300mm wafers in the middle of 2007.

“Spansion’s technology and design expertise have made it a Flash memory leader,” said Rick Tsai, president and chief executive officer of TSMC. “Collaborating with Spansion expands our technology portfolio and increases our participation in the fast-growing Flash memory business. With our extensive 300mm manufacturing experience, the joint force marks a new milestone in advancing the development and production of Flash technology.”

About MirrorBit Technology

Spansion’s MirrorBit technology delivers value-added code and data storage solutions for customers across the integrated electronics market. When compared with floating-gate NOR technology, MirrorBit technology offers a simpler memory cell, which requires fewer critical manufacturing steps to produce. Compared to traditional floating gate, MirrorBit technology offers higher yields and scales more easily to higher densities. Spansion recently shipped its MirrorBit Quad technology, the world’s first four-bit-per-cell Flash memory, as the next step for data storage within the integrated electronics market, with plans for a variety of different interfaces and capabilities that will expand the Flash memory storage capabilities of devices with integrated Flash memory.

About Spansion

Spansion is a leading Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in the wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing and selling Flash memory solutions. For more information, visit

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 libraries, IP, design tools and reference flows. The Company’s total managed capacity in 2006 exceeded seven million (8-inch equivalent) wafers, including capacity from two advanced 12-inch GigaFabs, four eight-inch fabs, one six-inch fab, as well as TSMC’s wholly owned subsidiaries, WaferTech and TSMC (Shanghai), and its joint venture fab, SSMC. TSMC is the first foundry to provide 65nm production capabilities. Its corporate headquarters are in Hsinchu, Taiwan. For more information about TSMC please visit

Cautionary Statement

Cautionary Statement This release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding plans to expand MirrorBit technology applicability in new areas; TSMC’s plans to bring Spansion’s advanced Flash memory technologies to volume; and the target production ramp for 90nm MirrorBit technology on 300mm wafers at TSMC. Investors are cautioned that the forward-looking statements in this release involve risks and uncertainties that could cause actual results to differ materially from the company’s current expectations. Risks that the company considers to be the important factors that could cause actual results to differ materially from those set forth in the forward- looking statements include the possibility that demand for the company's Flash memory products will be lower than currently expected; that the company will lose rights to key intellectual property arrangements and be subject to intellectual property infringement claims; that the Flash memory market is highly cyclical and has experienced severe downturns; that average selling prices may decline; that the company will not be able to reduce expenses; that OEMs will increasingly choose NAND-based Flash memory products over NOR- and MirrorBit ORNAND architecture- based Flash memory products for their applications; that competitors may introduce new memory or other technologies that may make our Flash memory products uncompetitive or obsolete; that the company will fail to develop, or there will be a lack of customer acceptance of, MirrorBit NOR, MirrorBit ORNAND or MirrorBit Quad architecture-based Flash memory products; that the company will lose a significant customer; that the company will be adversely affected by its substantial indebtedness; that the company will not be able to raise sufficient capital to enable it to establish leading-edge capacity to meet product demand and maintain market share; that the company may not achieve facilities and capacity implementation schedules; that the company will not successfully develop, introduce and commercialize new products and technologies or to accelerate our product development cycle; that the company may experience manufacturing constraints; that the company may be unable to diversify its customer base; that the company's investments in research and development may not lead to timely improvements in technology; that the company may not maintain manufacturing efficiency; the company's reliance on third-party manufacturers may harm it; that industry overcapacity may affect the company's prices and manufacturing capacity; and that the company's operations in foreign countries may be subject to economic and geopolitical risks. The company urges investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and Quarterly Report on Form 10-Q for the fiscal quarter ended April 1, 2007. The company assumes no obligation to update any forward-looking statements or information included in this press release.

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Spansion® , the Spansion Logo® , MirrorBit® , ORNAND™, HD-SIM™, Eclipse™ and combinations thereof, are trademarks of Spansion LLC. Spansion, the Spansion Logo and MirrorBit are registered in the US and other countries. Other names used are for informational purposes only and may be trademarks of their respective owners.