TSMC Board of Directors Approves Financial Statements for the First Half of 2003

Science-Based Industrial Park, Hsinchu, Taiwan, September 2, 2003 - 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 Company’s financial statements for the first half of 2003. The Board affirmed that net sales for the first half of 2003 were NT$89,247 million and net income totaled NT$16,088 million. Earnings per share for the first six months of 2003 were NT$0.79 based on the current 20,221,270 thousand weighted average outstanding shares.

TSMC Spokesperson Mr. Harvey Chang noted that, at its meeting, the Board of Directors also:

1. Approved the Compensation Committee Charter for TSMC Board of Directors’ Compensation Committee to further strengthen the Company’s corporate governance.

2. Approved TSMC’s 2003 Employee Stock Options Plan, including the issuance of no more than 120,000,000 options in accordance with the 2003 Plan. The stock options will be granted to employees of TSMC and TSMC’s domestic and overseas subsidiaries.

3. Approved the promotion of Ms. Lora Ho, currently TSMC controller and senior director, as Vice President and Chief Financial Officer of TSMC, as well as the appointment of Mr. James Chen, currently deputy director at TSMC Accounting, as Controller of TSMC, effective as of September 8, 2003.