TSMC Board of DirectorsApproves Increase in WaferTech Stake

HSIN-CHU, Taiwan, November 7, 2000 - Taiwan Semiconductor Manufacturing Company Ltd. (“ TSMC” or “ the Company”) (TAIEX: 2330, NYSE: TSM) today held a meeting of the Board of Directors, at which the directors approved the acquisition of WaferTech, LLC ("WaferTech") shares from other shareholders at a price not exceeding US$6 per share, through a subsidiary of TSMC. TSMC's stake in WaferTech is expected to increase after the share acquisition to a maximum of 99% from the current 66.89%.

Ms. KC Chen, TSMC spokesperson, noted that TSMC decided to increase its stake in WaferTech to increase the Company's flexibility to implement future strategic and capacity expansion plans for North America. TSMC has been negotiating this share acquisition with all of WaferTech's other major shareholders, including ADI, Altera, and ISSI, for the past few months. TSMC has reached consensus in principle with each of the other major share holders in WaferTech, and the acquisitions are expected to take place after each party completes necessary procedures.

Ms. Chen also outlined several other important decisions made by the Board of Directors.

The Board approved a capital expenditure in the amount of NT$3,435 million to conduct the following expansion projects: To conduct fab design and shell construction for Fab 15 (12-inch fab) in the Tainan Science-Based Industrial Park. The basic construction work for Fab15 is expected to begin in the fourth quarter of 2000. To expand TSMC's dormitory and construct an activity center for employees in the Company's Tainan site, as well as to accommodate future fab expansion, personnel growth, and employee benefits programs. To expand the capacity of emergency generators installed in TSMC's fabs with the goal of providing non-interrupted foundry services to TSMC's customers.

The Board of Directors approved an investment of no more than US$50 million for the establishment of a venture capital company. The management of the venture capital company will be contracted to a professional fund manager in the future. The primary objective of this fund is to invest in emerging companies that have core design competency, are potential customers of TSMC, or from which TSMC may benefit through such investment relationship.

The Board authorized the Company's Chairman to decide, within the limit of NT$15 billion, to issue Corporate Bonds in the domestic Taiwan market to finance TSMC's capacity expansion and other long-term investments. TSMC will, in accordance with market practices and relevant regulations, apply for approval from governmental authorities to list and trade the Corporate Bonds on the Taiwan Stock Exchange or the Over-The-Counter market.

In order to acquire the WaferTech interests from other interest holders, the Board of Directors approved a provision of guarantee for TSMC Development, Inc. ("TSMC Development") to facilitate its long-term credit advances from banks and an increase of equity investment in TSMC International Investment Ltd. ("TSMC International"). The aggregate amount of the guaranty provided for TSMC Development and the increased investment in TSMC International shall not exceed US$500 million.

To facilitate the operation of TSMC North America (TSMC N.A.), a wholly owned subsidiary of TSMC, the Board of Directors approved the provision of a guarantee by TSMC for TSMC N.A.'s procurement of US$40 million in short-term funds from banks.

The Board of Directors approved the promotion of Dr. S.Y. Chiang as the senior vice president of TSMC Research and Development.