TSMC Adjusted 1996 Financial Forecasts

Hsin-Chu, Taiwan, September 17, 1996 -- Taiwan Semiconductor Manufacturing Company (TSMC) today announced the unveiling of the Virtual Fab, the latest in automation technology that provides customers with complete access to their production and shipping schedules, simulating the convenience of having their own in-house fab. The Total Order Management system (TOM) is the first step toward the ultimate realization of the Virtual Fab, a concept which will enhance the efficiency of client booking procedures, resulting in shorter delivery time and superior quality of service.

"Our company focuses on process technology and manufacturing excellence, but equally important is the quality of service," said Donald Brooks, president of TSMC. "Since TSMC was founded, we have treated our customers as partners. In order to differentiate our quality of service, we organized a dedicated team to develop the Virtual Fab concept." The Virtual Fab is the ultimate goal of a dedicated foundry. Because of the complete access it provides customers to their production orders and schedules, the Virtual Fab strongly enhances TSMC's partnerships with its customers. The increased flexibility and control over booking procedures help TSMC customers obtain the same level of information access that they would require for their own in-house fab.

By providing customers with increased flexibility and control to meet their production requirements, the Virtual Fab enhances the partnership between TSMC and its customers. With the newly implemented TOM system, customers will be able to track their production and shipping schedules, and make adjustments as needed to their orders, thus enabling TSMC to control and allocate its capacity more efficiently.

The Total Order Management system, consisting of more than 20 sub-systems, is customer-oriented, highly efficient and user-friendly. For example, the scheduling sub-system has a built-in function specifying product availability, quantity and date. Once customers place their orders through the computers, the scheduling sub-system will check the preset priority, confirm the order and then place it on the schedule. This automatic process will save three to five days compared to the previous method. In addition, the automatic scheduling and early warning systems will track orders and ensure expeditious and accurate deliveries.

Through its extensive experience with worldwide customers and leading-edge technology, TSMC has developed solid expertise in manufacturing and information automation. With the unveiling of the Virtual Fab, TSMC can help customers maintain their competitive edge by delivering high quality services.

TSMC is the world's largest and fastest growing dedicated semiconductor foundry manufacturing more than one million six-inch wafers per year in 1995. The company offers CMOS fabrication processes that focus on advanced logic, mixed signal and a wide array of memory processes. The company posted growth of 57 percent in 1994 and 49 percent in 1995. Currently, the company's 6-inch fabs (Fabs 1, 2A and 2B) run at full capacity putting out 100,000 wafers per month. Fab 3, which commenced 8-inch wafer output in September of 1995, will be in volume production for a variety of customers ramping to 25,000 8-inch wafers per month by the end of 1996. TSMC fabs are located in Hsin-Chu, Taiwan. The company has subsidiaries in the United States and Europe. In July, TSMC broke ground on its first U.S. foundry, WaferTech - a $1.2 billion joint venture with Altera, Analog Devices and ISSI.