TSMC Plans to Increase Stake in Vanguard

Hsinchu, Taiwan, R.O.C., August 24, 2007 – TSMC’s Board of Directors held a special board meeting on Friday and approved a proposal to purchase no more than 11 percent of Vanguard International Semiconductor Corporation (“Vanguard”) shares via Block Trade, at a price not exceeding NT$5.55 billion, representing no more than NT$29.7 per share.

“This planned transaction will strengthen our business alliance with Vanguard and is part of our eight-inch wafer strategy,” said Ms. Lora Ho, TSMC Spokesperson and Chief Financial Officer. “Future purchases of shares in Vanguard, if any, will depend on Vanguard’s share price and the semiconductor industry’s environment,” Ms. Ho said. In addition, TSMC has no intention to merge Vanguard, she said.

TSMC currently owns approximately 26.8 percent of Vanguard’s shares.