TSMC Board Proposes Distribution of NT$2.5 Cash And 3% Stock Per Share

Hsinchu, Taiwan, R.O.C. -- February 14, 2006 – Taiwan Semiconductor Manufacturing Company Ltd’s (TSMC) (NYSE: TSM) Board of Directors today adopted a proposal recommending distribution of NT$2.5 cash dividend per common share and 3 percent stock (30 shares for every 1,000 owned). The proposal will be discussed and brought to a vote at the Company’s regular shareholders' meeting scheduled for May 16, 2006.

TSMC’s Vice President and Chief Financial Officer, Ms. Lora Ho said that at its meeting today the Board of Directors:

1. Approved the 2005 Business Report and Financial Statements. Revenue for 2005 totaled NT$264,588 million and net income was NT$93,575 million, with earnings per share of NT$3.79.

2. Approved a proposal for distribution of 2005 profits and capitalization of capital surplus:
(1) Cash dividend of NT$2.5 per share and 1.5% stock dividend will be proposed to common shareholders. In addition, the board will propose another 1.5% share issuance from capitalization of capital surplus. Combined, common shareholders will be entitled to a 3% stock distribution, or 30 shares for every 1,000 held.
(2) Employees’ profit sharing will be distributed in both stock and cash. Profit sharing will amount to approximately 343.2 million new shares and NT$3,432 million cash.
(3) After the distribution, TSMC’s total shares outstanding will increase by approximately 1.085 billion shares.

3. Approved capital appropriation of NT$6,625 million for R&D projects and sustaining capital in 2006.

4. Approved capital appropriation of US$565.3 million for twelve-inch wafer capacity at 90nm and 65nm processes.

5. Approved capital appropriation of US$120 million for expanding mask production capacity at 90nm, 65nm and 45nm.

6. Approved scheduling of the 2006 Regular Shareholders’ Meeting for 9:30 a.m. on May 16, 2006 at the Auditorium in the Activity Center of the Hsinchu Science Park.