TSMC Completed “The Analysis of the Effect of High Speed Rail Vibration on IC Fabrication.“Study confirmed viability of TSMC investments, Fab sites in Tainan Science Park

Hsinchu, Taiwan, Oct. 25, 2001 --Emphasizing on Taiwan’s ongoing high-tech industry development, Chen Shui-bian, President of the Republic of China, today re-visited the newest manufacturing operations of Taiwan Semiconductor Manufacturing Company Ltd. (TSMC or the "Company") (NYSE: TSM) in the Tainan Science-based Industrial Park (TSIP). TSMC Chairman Dr. Morris Chang and Deputy Chief Executive Officer Dr. F.C. Tseng received President Chen and elaborated on TSMC’s multi-hundred billion NT Dollar investment plan in Taiwan for the next several years.

In his welcoming speech, Dr. Chang reiterated that Taiwan has proven itself to be a suitable location for IC manufacturing “As long as corporate enterprise and the government continue to work together, Taiwan will maintain its competitive edge. Historically, TSMC has focused its investments in the Hsinchu Science-based Industrial Park,” said Dr. Chang. “Going forward, the Tainan Science-based Industrial Park will be TSMC’s most important site for its future semiconductor fab construction in Taiwan.”

Dr. Chang added that TSMC’s first TSIP fab, Fab 6, began volume production in January 1999. Construction of the second TSIP fab, Fab 14, was postponed largely due to concerns regarding possible vibrations from a nearby high-speed rail project. However, a recent study conducted by TSMC reports that, through engineering technology, the effects of high-speed rail vibrations on TSMC’s chip fabrication would be eliminated. As a result of this study, Dr. Chang today confirmed that Fab 14 has resumed its construction schedule and TSMC’s investment in TSIP will proceed as planned.

Dr. Tseng further outlined the results of the study of high-speed rail vibration and elaborated on TSMC’s future investment project. Dr. Tseng stated that TSMC has always faced the issue of high-speed rail vibration with the utmost caution since it takes NT 100 billion to invest in a sate-of –the-art 12-inch fab. TSMC hopes to be completely in control of the situation and make the right decisions. Over the past six months, TSMC formed an unprecedented project team combined of experts in the fields of internal process, equipment and fab operations at TSMC as well as professional consultants of geology, construction, and semiconductor manufacturing equipment. With the full cooperation of Taiwan High Speed Railway Company, the team finally completed a comprehensive study of the issue of “background vibrations”, the first of its kind in the global IC industry. Through detailed data collection, on-site testing, analysis and research, the team confirmed that, through the correct use of standard engineering techniques, TSMC’s IC fabrication facilities will not be impacted by high-speed rail vibrations.

Moreover, TSMC has also accurately controlled factors in a variety of vibration models related to IC fabrication. The team also developed equipment and fab facility specifications that correspond to these vibration models. These specifications are expected to improve TSMC’s IC fabrication techniques, increasing the precision of TSMC’s IC manufacturing as the company embarks on new fab construction.

Dr. Tseng emphasized that TSMC responded positively to the Taiwan government’s call for “balancing between the North and South” by beginning construction at TSIP in early 1997. At the time, TSMC launched an NT$400 billion investment project over the span of a decade. Over the past four years, TSMC has invested a total of NT$260 billion in building new fabs and in expanding capacity. In compliance with the future market demand, TSMC will continue to expand Fab 12 to full capacity, as well as begin plans to build six new 12-inch fabs in Taiwan, representing an investment of NT$ 700 billion in total.

Dr. Chang concluded that, “The dedicated foundry indu