TSMC Reports Fourth Quarter EPS of NT$1.73

Hsinchu, Taiwan, R.O.C., January 16, 2014 –TSMC today announced consolidated revenue of NT$145.81 billion, net income of NT$44.81 billion, and diluted earnings per share of NT$1.73 (US$0.29 per ADR unit) for the fourth quarter ended December 31, 2013.

Year-over-year, fourth quarter revenue increased 10.9% while net income and diluted EPS both increased 7.7%. Compared to third quarter of 2013, fourth quarter results represent a 10.3% decrease in revenue, and a 13.7% decrease in net income. All figures were prepared in accordance with TIFRS on a consolidated basis.

In US dollars, fourth quarter revenue decreased 9.3% from the previous quarter and increased 9.5% year-over-year.

Gross margin for the quarter was 44.5%, operating margin was 32.8%, and net profit margin was 30.7%.

Shipments of 28-nanometer process technology reached 34% of total wafer revenues. 40/45-nanometer accounted for 17% of total wafer revenues. Advanced technologies, defined as 40/45-nanometers and more advanced technologies, accounted for 51% of total wafer revenues.

“In the fourth quarter, TSMC’s business was impacted by semiconductor supply chain’s inventory management,” said Lora Ho, SVP and Chief Financial Officer of TSMC. “Due to IC companies’ weak seasonal demand and the continuing inventory reductions by the fabless companies, we expect our first quarter revenue will decline sequentially by about 6%, with our structural profitability improving. We are confident to grow both our revenue and profit in 2014. Based on our current business outlook and exchange rate assumption of 1 US dollar to 30 NT dollars, management expects overall performance for first quarter 2014 to be as follows”:

• Revenue is expected to be between NT$136 billion and NT$138 billion;

• Gross profit margin is expected to be between 44.5 % and 46.5%;

• Operating profit margin is expected to be between 32% and 34%.

TSMC further expects the capital expenditures for 2014 to be between US$9.5 billion and US$10 billion.