TSMC Welcomes Government Approval for 0.18 Micron Generation Technology Transfer to China

Hsinchu, Taiwan, December 29, 2006 - TSMC (TAIEX: 2330, NYSE: TSM) The government of Taiwan, R.O.C., approved on December 29 TSMC’s application to transfer 0.18 micron generation semiconductor process technology to China for production. TSMC welcomes the decision and believes that it will help our competitiveness in the China market.

“TSMC greatly welcomes the government’s decision,” said TSMC Spokesperson and Vice President Ms. Lora Ho. “The addition of 0.18 micron process technology to our existing 0.35 micron and 0.25 micron process capabilities will help us meet the manufacturing needs of our customers in China, and we believe that we will win more orders and expand TSMC’s market share in China.”

Ms. Ho added that while TSMC will build 0.18 micron semiconductor manufacturing capacity in China in line with government regulations, the company will also expand investment in Taiwan according to its established plans. These include additional construction of advanced 12-inch wafer fabs, as well as continued progress into leading technologies such as the 65 nanometer, 45 nanometer, and 32 nanometer nodes.