TSMC Board of Directors Approves Capital Appropriation for 90nm Copper Processes

Science-Based Industrial Park, Hsin-Chu, Taiwan, August 6, 2002 - Taiwan Semiconductor Manufacturing Company Ltd. (“ TSMC” or “ the Company”) (TAIEX: 2330, NYSE: TSM) today held a meeting of the Board of Directors, at which the directors approved a capital appropriation to ramp capacity for TSMC’s 90nm copper processes at Fab 12 (Phase I), and to set up first-stage facility equipment for Fab 12 (Phase II).

TSMC Spokesperson Mr. Harvey Chang noted that, at its meeting, the Board of Directors also:

1. Approved the semi-annual financial statements for the first half of 2002 prepared by the auditors. Net sales for the first half of 2002 were NT$79,972 million; net income was NT$15,897 million. Earnings per share for the first six months of 2002 were NT$0.84 based on the current 18,580,886 thousand weighted average outstanding shares.

2. Approved capital appropriation in the amount of NT$17,028 million to ramp capacity for TSMC’s 90nm advanced copper processes at Fab 12 (Phase I). An additional appropriation provides for first-stage facility equipment for Fab 12 (Phase II).

3. Approved the Company’s sponsorship of the issuance of American Depository Receipts (”ADRs”) by certain shareholders to dispose, in accordance with the “Policy for TSMC Conversion Sale Program”, a portion of their TSMC common shares in the form of ADRs in an aggregate amount not to exceed 0.5% of TSMC’s total outstanding common shares.

4. Approved the establishment of an Audit Committee of the Board of Directors and the Audit Committee Charter to further strengthen the Company’s corporate governance. The Board of Directors in the meantime assigned Sir Peter L. Bonfield, Professor Lester C. Thurow, Professor Michael E. Porter, and Mr. Robbert Brakel as members of the Audit Committee, with Sir Peter L. Bonfield as the chairman of this Committee.

Mr. Chang also indicated that Fab 12 (Phase II) is the Company's second full-scale 300mm manufacturing facility in the Hsin-Chu Science-Based Industrial Park. The capital appropriation approved by the Board at this time is not expected to impact TSMC’s recent announcement that the Company’s total capital expenditure in 2002 would not exceed US$ 2 billion dollars.