TSMC to Issue NT$4 Billion Straight Bonds

December 31, 1997, Hsin-chu, Taiwan -- Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE: TSM) announced today its plan for the issuance of NT$4Billion unsecured straight bonds. The bonds will be offered and sold only in Taiwan, and no action will be taken to register or permit sales outside Taiwan.

Mr. YC Huang, the spokesman of TSMC, noted that this is the first time in ten years that the Company will issue a straight bond for fund-raising. The purpose is to improve the Company's balance sheet structure by refinancing existing debts with a relatively low-funding-cost debt.

The bonds will have a term of five years and a face value of NT$1Million per bond. The coupon rate is tentatively set to be the yield of the 5-year Taiwanese government bond plus 1.25%. Citicorp International Securities Limited, Taipei Branch, will be the sole underwriter and International Commercial Bank of China will be the trustee for this issue.

TSMC is the world's largest dedicated integrated circuit ("IC") foundry and offers a comprehensive set of IC fabrication processes, including processes to manufacture CMOS logic, mixed-mode, volatile and non-volatile memory and BiCMOS chips.