TSMC Breaks Ground for Its First Twelve-Inch Fab in Hsin-Chu

December 15, 1999, Hsin-chu, Taiwan - The Taiwan Semiconductor Manufacturing Company Ltd. (TSMC or the "Company") (TAIEX: 2330, NYSE: TSM) announced today that after the groundbreaking ceremony in the Hsinchu Science-Based Industrial Park (HSIP) this morning, it has begun construction on its first 12-inch fab. This new fab construction is scheduled to complete with production commencing in early 2002.

The ground breaking ceremony was hosted by F.C. Tseng, President of TSMC. "In order to sustain leadership and increase barriers to competition, as well as to provide the best dedicated foundry services for our customers in the globe, TSMC always seeks to pursuit new technology development and capacity expansion," said FC Tzeng. " TSMC Fab12, an investment of more than 2 billion US dollars, will serve both as a fabrication base and a research and development center. In addition, our Fab 7 in Tainan Science-Based Park is also scheduled to have its ground breaking in early 2000. Also, our capacity next year is expected to increase by approximately 50 percent," FC Tseng continued.

TSMC stated that the construction project of Fab 12 is expected to be complete within two years. The major architecture will be built by the end of year 2000, followed by the installation of the cleanroom. The equipment move-in will start in the year 2001, and the mass production will commence in early 2002. Fab 12 will pilot run with 0.15/0.13£gm process technology, and then evolve to 0.1£gm. The product line of Fab 12 includes varieties of logic, memory, and chip set products, and the total capacity will reach 25,000 pieces of 12-inch wafers per month. In addition, there will also be capacity reserved in Fab 12 for research and development of the new 0.1£gm and more advanced process technology.

TSMC Fab 12 shares its fabrication site with TSMC's affiliated Vanguard International Semiconductor Corporation on a 40-hectare land in HSIP Phase III. Even though the two companies will build their own 12-inch fabs in different periods, TSMC and Vanguard have put into consideration on a joint plant design to provide each other with mutual support on Logic and DRAM fabrication, production capacity, and facility engineering.