TSMC Announces Its Updated 2001 Financial Forecast

Hsinchu, Taiwan, December 3, 2001– Taiwan Semiconductor Manufacturing Company Ltd. (“ TSMC” or “ the Company” ) (TAIEX: 2330, NYSE: TSM) today held a special meeting of the board of directors, during which the board approved its updated financial forecast for fiscal year 2001. TSMC’s latest 2001 forecast, reviewed by auditors, indicates that the Company’s net sales, operating income, income before tax, net income, and earnings per share are expected to be approximately NT$125.56 billion, NT$17.66 billion, NT$9.35 billion, NT$13.2 billion, and NT$0.76, respectively.

Ms. K. C. Chen, TSMC spokesperson and senior vice president, stated that according to the Company’s previous forecast that was released on September 27, 2001, TSMC 2001 net sales, operating income, income before tax, net income, and earnings per share were NT$121.89 billion, NT$14.28 billion, NT$6.04 billion, NT$10.99 billion, and NT$0.63, respectively.

“Trends in the semiconductor industry changed swiftly over the course of the year, with TSMC realizing a substantial increase in customer orders starting in early October. The Company’s utilization rate for the fourth quarter of 2001 therefore is expected to go up, which will generate significant improvement in gross profits for the same quarter. TSMC’s income before tax for 2001 is now expected to be 54.8% higher than what was estimated on September 27, 2001. In compliance with ROC government regulations, TSMC has updated its financial forecast for fiscal year 2001 accordingly,” said Ms. Chen.

Forward-Looking Statements

Except for statements in respect of historical matters, the statements contained in this Release are “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of Taiwan Semiconductor Manufacturing Company Limited to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. Such factors include, among others, the factors set forth in “Item 3: Risk Factors” of the Form 20-F filed with the United States Securities and Exchange Commission on June 21, 2001 and other factors disclosed in our other documents filed or submitted to the United States Securities and Exchange Commission including, without limitation, our Form 6-K dated July 26, 2001. This revised forecasted financial statements included herein were published on September 27, 2001 in accordance with the Republic of China Securities and Futures Commission’s “Guidelines for Publication of Financial Forecasts of Public Companies”. The attached financial forecasts reflect the current belief of TSMC as of this date and TSMC undertakes no obligation to update this forecast for events or circumstances that occur subsequent to this date.