TSMC Shareholders Approved Amendment of Dividend Policy

Hsinchu Science Park, Taiwan, December 21, 2004 - Taiwan Semiconductor Manufacturing Company Ltd. (“TSMC”) (TAIEX: 2330, NYSE: TSM) today held its 2004 special shareholders’ meeting, at which the shareholders approved a revision to Article 35 of TSMC’s Articles of Incorporation stating that TSMC’s future dividend distributions will be made preferably by way of cash. Moreover, the ratio for future stock dividends shall not exceed 50 percent of the total distributions. This revision is expected to allow TSMC more flexibility in planning future cash dividend distributions.