TSMC Secondary Offering of 240 Million ADSs Priced at US$10.68 Per Share

Hsinchu, Taiwan, R.O.C.–May 18, 2007 -- TSMC (TAIEX: 2330, NYSE: TSM) today announced that in the afternoon of May 17, 2007 New York time, the Company’s secondary offering of 240 million American Depositary Shares (“ADSs”) by Royal Philips Electronics (NYSE: PHG, AEX: PHI) was priced at US$10.68 per ADS. Each TSMC ADS represents five common shares of TSMC.

The offering price of US$10.68 per ADS (equivalent to NT$71.28 per common share) represents a 5.29 percent premium to the May 17, 2007 closing price of NT$67.7 for the TSMC common shares that trade on the Taiwan Stock Exchange and no discount to the May 17, 2007 closing price of TSMC’s ADSs that trade on the New York Stock Exchange. There is no over-allotment option in connection with this offering. TSMC expects the delivery of the ADSs by Philips to occur on May 23, 2007.

The offering of the above-mentioned TSMC ADSs by Philips forms part of the multi-phased plan to facilitate an orderly exit by Philips from its shareholding in TSMC announced by TSMC and Philips on March 9, 2007.

This release does not constitute an offer of any securities for sale. Any offer or sale of securities shall only be made in accordance with the requirements of the US Securities Act of 1933.

The final prospectus relating to this offering may be obtained by persons outside the United States from Goldman Sachs International, Peterborough Court, 133 Fleet Street, London, EC4A 2BB, England or J.P. Morgan Securities Ltd., 10 Aldermanbury, London EC2V 7RF, United Kingdom (Attn: Equity Capital Markets Syndicate Desk), or, by persons in the United States, from Goldman, Sachs & Co., Attn: Prospectus Dept., 85 Broad Street, New York, NY 10004, Fax: 212 902 9316 or email at prospectus-ny@ny.email.gs.com, or J.P. Morgan Securities Inc., Chase Distribution & Support Service, Attn: Charles Buckheit/Bob Foley, 4 Chase Metrotech Center, CS Level, Brooklyn, NY 11245.