TSMC Secondary Offering of approximately 79 million ADSs at US$10.40 per share

Hsinchu, Taiwan, July 9, 2003 - On the evening of July 8, 2003 New York time, an offering by the Development Fund of Taiwan and certain other shareholders of Taiwan Semiconductor Manufacturing Company Ltd. (TAIEX: 2330, NYSE: TSM) (“TSMC”) of approximately 79 million American Depositary Shares (ADSs) was priced at US$10.40 per ADS. Each TSMC ADS represents five common shares of TSMC.

Mr. Harvey Chang, TSMC spokesperson and senior vice president, stated that the success of TSMC’s secondary offering of ADSs shows the recognition by global investors of TSMC’s performance. After this successful offering, TSMC’s outstanding ADSs increased to approximately 12 percent from approximately 10 percent of its total share capital. The offering was primarily secondary shares by the Development Fund of Taiwan and certain other shareholders.

Goldman Sachs International and Merrill Lynch & Co., the joint global coordinators and book runners responsible for the TSMC ADS offering, indicated that the offering price of US$10.40 per ADS (equivalent to NT$71.53 per common share) represents a 15.37 percent premium to the July 8, 2003 closing price of NT$62.00 for the TSMC common shares that trade on the Taiwan Stock Exchange. In addition, the offering price of US$10.40 per ADS represents a 0.67 percent discount to the July 8, 2003 closing price of US$10.47 for TSMC’s ADSs that trade on the New York Stock Exchange. The TSMC ADS offering totals US$822.2 million. The underwriters also have an over-allotment option to purchase up to 11,761,861 additional ADSs within 30 days.

The Final prospectus relating to this offering may be obtained from Goldman Sachs International at Peterborough Court, 133 Fleet Steet, London, EC4A 2BB, England or Merrill Lynch & Co. at North Tower, World Financial Center, New York, New York, 10281.