Edgar Filing: TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LTD

1934 Act Registration No. 1-14700

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2008

Taiwan Semiconductor Manufacturing Company Ltd.

(Translation of Registrant’s Name Into English)

No. 8, Li-Hsin Rd. 6,
Hsinchu Science Park,
Taiwan
(Address of Principal Executive Offices)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F þ Form 40-F o

(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes o No þ

(If “Yes” is marked, indicated below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82: _______.)

FOR IMMEDIATE RELEASE


		2Q08		Quarterly Management Report July 31, 2008

CONTACT
Elizabeth Sun / Harrison Hsueh

Investor Relations Division
TSMC
invest@tsmc.com
886-3-568-2085/ 2088

Topics in This Report

•		Revenue Analysis

•		Profit & Expense Analysis

•		Financial Condition Review

•		Cash Flow

•		CapEx & Capacity

•		Recap of Recent Important Events & Announcements

Operating Results Review:


*Summary:*

*(Amounts are on consolidated basis and are in*
*NT billions except otherwise noted)*	2Q08			1Q08			2Q07			QoQ			YoY

EPS (NT$ per common share)		1.12			1.10			0.96			2.1	%		16.3	%
(US$ per ADR unit)		0.18			0.17			0.15

Consolidated Net Sales		88.14			87.48			74.92			0.8	%		17.6	%
Gross Profit		40.22			38.24			32.18			5.2	%		25.0	%
Gross Margin		45.6	%		43.7	%		43.0	%

Operating Expense		(9.85	)		(9.12	)		(7.45	)		8.0	%		32.3	%
Operating Income		30.37			29.12			24.73			4.3	%		22.8	%
Operating Margin		34.5	%		33.3	%		33.0	%
Non-Operating Items		2.00			2.45			3.29			(18.2	%)		(39.1	%)

Net Income		28.77			28.14			25.48			2.2	%		12.9	%
Net Profit Margin		32.6	%		32.2	%		34.0	%

Wafer Shipment (kpcs 8 inch-equiv.)		2,329			2,196			1,856			6.0	%		25.5	%

Remarks:

The diluted earnings per share in 2Q08 were NT$1.12, representing an increase of 16.3% over the same period last year and an increase of 2.1% from the previous quarter. The consolidated operating results of 2Q08 are summarized below:

Net sales in the second quarter were NT$88.1 billion, up 17.6% from NT$74.9 billion in 2Q07 and up 0.8% from NT$87.5 billion in 1Q08.

Gross profit for the quarter was NT$40.2 billion with gross margin of 45.6%, 1.9 percentage points higher than the 43.7% gross margin in 1Q08, mainly due to significant cost improvement and higher levels of wafer movements but partially offset by an unfavorable change of the exchange rate.

Operating expenses, including expenses accrued for employee profit sharing, were NT$9.8 billion or 11.1% of net sales. The combined result from non-operating income and long-term investments was a gain of NT$2.0 billion.

Consolidated net income attributable to shareholders of the parent company, including an accrual of employee profit sharing, was NT$28.8 billion, up 12.9% from a year ago level and up 2.2% from the previous quarter. Net profit margin was 32.6% for 2Q08.


TSMC
July 31, 2008		Page 2

I. Revenue Analysis

I. Wafer Sales Analysis


By Application	2Q08			1Q08			2Q07
Computer		31	%		34	%		29	%
Communication		41	%		42	%		44	%
Consumer		21	%		17	%		18	%
Industrial/Others		7	%		7	%		9	%


By Technology	2Q08			1Q08			2Q07
65nm and below		18	%		15	%		3	%
90nm		28	%		28	%		26	%
0.11/0.13um		17	%		20	%		24	%
0.15/0.18um		23	%		23	%		30	%
0.25/0.35um		10	%		10	%		12	%
0.50um+		4	%		4	%		5	%


By Customer Type	2Q08			1Q08			2Q07
Fabless/System		71	%		71	%		68	%
IDM		29	%		29	%		32	%


By Geography	2Q08			1Q08			2Q07
North America		73	%		76	%		74	%
Asia Pacific		13	%		12	%		13	%
Europe		11	%		9	%		9	%
Japan		3	%		3	%		4	%

Revenue Analysis:

In-line with our guidance, the second quarter 2008 revenue reached NT$88.1 billion. 2Q08 business saw a solid improvement but revenue was negatively impacted by a 3.7% appreciation in the NT dollar against the US dollar. Demand from consumer related applications grew but communication and computer applications declined during the quarter. On a sequential basis, revenue from consumer applications increased 24%, while revenues for communication and computer applications declined 2% and 8%, respectively.

As a result of continued strong ramp for our 65nm technology, revenue from 65nm reached 18% of total wafer sales during the quarter, up from 15% in the previous quarter. Meanwhile, revenue from 90nm remained strong at 28% of total wafer sales. Overall, revenues from advanced technologies (0.13-micron and below) accounted for 63% of total wafer sales.

Revenues from IDM customers accounted for 29% of total wafer sales in 2Q08, flat from 1Q08.

From a geographic perspective, revenues from customers based in North America accounted for 73% of total wafer sales. Meanwhile, sales from customers in Asia Pacific, Europe and Japan accounted for 13%, 11% and 3% of wafer sales, respectively.

II. Profit & Expense Analysis

II — 1. Gross Profit Analysis

(In NT billions)

2Q08

1Q08

2Q07

COGS

47.9

49.2

42.7

Depreciation

18.2

18.1

17.9

Other MFG Cost

29.7

31.1

24.8

Gross Profit

40.2

38.2

32.2

Gross Margin

45.6

43.7

43.0

Gross Profit Analysis:

Gross margin in 2Q08 was 45.6%, up 1.9 percentage points from the previous quarter, reflecting the significant cost improvement and higher levels of wafer movements, partially offset by a continued unfavorable change of the exchange rate.


TSMC
July 31, 2008		Page 3

II — 2. Operating Expenses

(In NT billions)

2Q08

1Q08

2Q07

Total Operating Exp.

9.85

9.12

7.45

SG&A

4.45

3.85

3.15

Research & Development

5.40

5.27

4.30

Total Operating Exp. as a % of Sales

11.1

10.4

10.0

Operating Expenses:

Total operating expenses for 2Q08 increased by 8.0% sequentially to reach NT$9.8 billion, or 11.1% of net sales, compared with 10.4% of net sales in the previous quarter.

Research and development expenditures increased by NT$134 million quarter-over-quarter, mainly due to 32nm technology development and 45nm technology transfer.

SG&A expenses increased by NT$598 million from the previous quarter, primarily due to the start-up cost for the accelerating ramp-up of Fab 14 Phase 3, the promotion expenses for world-wide technology marketing activities, and an accrual for higher legal litigation fees.

II — 3. Non-Operating Items

(In NT billions)

2Q08

1Q08

2Q07

Non-Operating Inc./(Exp.)

1.7

1.8

2.8

Net Interest Income/(Exp.)

1.2

1.3

Other Non-Operating

0.5

0.6

1.5

L-T Investments

0.3

0.6

0.5

SSMC

0.3

0.4

0.2

Others

(0.0

)

0.2

0.3

Total Non-Operating Items

2.0

2.4

3.3

Non-Operating Items:

Combined result from non-operating income and long-term investments income was a gain of NT$2.0 billion for the second quarter 2008.

Non-operating income was NT$1.7 billion, slightly down from NT$1.8 billion in the previous quarter.

Net investment income decreased by NT$298 million in the quarter to NT$279 million.

II — 4. PSE Impact


	2Q08			1Q08			2Q07

Gross Margin w/ PSE		45.6	%		43.7	%		38.5	%
Gross Margin w/o PSE		48.2	%		46.2	%		43.0	%
PSE Impact		-2.6	%		-2.5	%		-4.5	%

Operating Margin w/ PSE		34.5	%		33.3	%		24.3	%
Operating Margin w/o PSE		39.4	%		38.1	%		33.0	%
PSE Impact		-4.9	%		-4.8	%		-8.7	%

*		PSE: Profit Sharing Expenses

**		2007 PSE impact is estimated using the 6/12/2008 closing share price adjusted for dividends

The Impact of Employee Profit Sharing:

Total impact from employee profit sharing expensing (PSE) on gross margin in 2Q08 was 2.6 percentage points, slightly up from the level in previous quarter.

Similarly, total PSE impact on operating margin was 4.9 percentage points in 2Q08.


TSMC
July 31, 2008		Page 4

III. Financial Condition Review

III — 1. Liquidity Analysis

(Selected Balance Sheet Items)


(In NT billions)	2Q08		1Q08		2Q07

Cash & Marketable Securities		224.0		210.3		233.1
Accounts Receivable — Trade		41.9		38.0		37.1
Inventory		23.4		21.9		24.0
Total Current Assets		299.8		281.5		304.6
Accounts Payable		21.1		22.6		28.2
Current Portion of Bonds Payable		8.0		8.0		4.5
Dividends Payable		77.0		0.0		77.5
Accrued Bonus to Employees, Directors and Supervisors		13.0		4.4		4.6
Accrued Liabilities and Others		27.9		27.0		17.6
Total Current Liabilities		147.0		62.0		132.4
Current Ratio (x)		2.0		4.5		2.3
Net Working Capital		152.8		219.4		172.2

Liquidity Analysis:

At the end of 2Q08, total current assets increased by NT$ 18.3 billion to reach NT$299.8 billion, mainly due to the increase of NT$13.7 billion in cash and marketable securities.

Total current liabilities increased by NT$84.9 billion in 2Q08, primarily due to higher accruals of NT$ 77.0 billion and NT$8.6 billion payables for cash dividends and bonuses of employees, directors, and supervisors, respectively.

Net working capital was NT$152.8 billion at the end of the quarter, current ratio declined to 2.0.

III — 2. Receivable/Inventory Days


(In Number of Days)	2Q08		1Q08		2Q07

Days of Receivable		42		43		44
Days of Inventory		47		46		52

Receivable and Inventory Days:

Sequentially, days of receivable decreased by one day to 42 days in 2Q08 while days of inventory increased by one day to 47 days.

III — 3. Debt Service


(In NT billions)	2Q08		1Q08		2Q07

Cash & Marketable Securities		224.0		210.3		233.1
Interest-Bearing Debt		22.9		22.9		26.3
Net Cash Reserves		201.1		187.4		206.8

Debt Service:

Net cash reserves — defined as the excess of cash and short-term marketable securities over interest-bearing debt — increased by NT$13.7 billion to NT$201.1 billion at the end of 2Q08.


TSMC July 31, 2008		Page 5

IV. Cash Flow

IV — 1. Cash Flow Analysis


(In NT billions)	2Q08			1Q08			2Q07
Net Income		28.8			28.1			25.5
Depreciation & Amortization		20.0			19.8			19.6
Other Operating Sources/(Uses)		(3.8	)		9.4			(10.4	)
Total Operating Sources/(Uses)		45.0			57.3			34.7


Capital Expenditure		(22.3	)		(15.3	)		(25.3	)
Marketable Financial Instruments		27.2			12.9			15.8
Other Investing Sources/(Uses)		(1.3	)		(0.7	)		(0.7	)
Net Investing Sources/(Uses)		3.6			(3.1	)		(10.2	)


Purchase of Treasury Stock		(6.6	)		(3.1	)		0.0
Other Financing Sources/(Uses)		(0.2	)		(0.2	)		(0.5	)
Net Financing Sources/(Uses)		(6.8	)		(3.3	)		(0.5	)


Net Cash Position Changes		41.8			50.9			24.0

Exchange Rate Changes & Others		(0.8	)		(1.6	)		(0.9	)

Ending Cash Balance		185.3			144.3			163.4

Summary of Cash Flow:

Cash generated from operating activities totaled NT$45.0 billion during the quarter, down from NT$57.3 billion in 1Q08, mainly due to tax payment of NT$10.0 billion and inventory increase of NT$1.5 billion.

Net cash generated in investing activities was NT$3.6 billion in 2Q08, reflecting capital expenditure of NT$22.3 billion and a net increase of NT$27.2 billion in marketable financial instruments.

Net cash used in financing activities was NT$6.8 billion during the quarter, as we spent NT$6.6 billion in share buyback.

As a result, TSMC ended the quarter with a cash balance of NT$185.3 billion.

IV—2. Operating and Free Cash Flows

Operating and Free Cash Flows:

Cash flows generated from operating activities were NT$45.0 billion during the quarter. Free cash flow, defined as the excess of operating cash flows over capital expenditures, totaled NT$22.8 billion in 2Q08, compared to NT$42.0 billion in 1Q08.


TSMC July 31, 2008		Page 6

V. CapEx & Capacity

V — 1. Capital Expenditures


(In US millions)	1Q08		2Q08		YTD

TSMC		452		712		1,164
XinTec and GUC		13		5		18
TSMC Shanghai & WaferTech		18		11		29
Other TSMC Subsidiaries		1		0		1

Total TSMC		484		728		1,212

Capital Expenditures:

Capital expenditures for TSMC on a consolidated basis totaled US$728 million during the quarter.

In the first half of 2008, total capital expenditure reached US$1.2 billion.

V—2. Capacity


Fab / (Wafer size)	1Q08 (A)		2Q08 (A)		3Q08 (F)		4Q08 (F)		2008 (F)
Fab-2 (6")¹		248		267		270		272		1,056
Fab-3 (8")		277		281		268		274		1,100
Fab-5 (8")		163		165		161		161		650
Fab-6 (8")		265		267		268		282		1,082
Fab-8 (8")		262		275		267		272		1,076
Fab-12 (12")²		197		207		214		221		840
Fab-14 (12")²		167		185		229		236		818
WaferTech (8")		105		105		106		106		420
TSMC (Shanghai) (8")		88		110		128		128		453
TSMC total capacity (8" equiv. Kpcs)		2,117		2,236		2,346		2,405		9,104
SSMC (8")		63		67		69		73		272
Total managed capacity (8" equiv. Kpcs)		2,180		2,303		2,416		2,478		9,377


Note:	1.	Figues represent number of 6" wafers. Conversion to 8"-equivalent wafers is obtained by dividing this number by 1.78

	2.	Figues represent number of 12" wafers. Conversion to 8"-equivalent wafers is obtained by multiplying this number by 2.25

Capacity:

Total TSMC managed capacity was 2,303K 8-inch equivalent wafers in the second quarter, 6% more than 1Q08. TSMC managed capacity in 3Q08 will increase by 5% to reach 2,416K 8-inch equivalent wafers.

Total managed capacity for 2008 is expected to reach 9,377K 8-inch equivalent wafers, representing an increase of 13% from 8,290K 8-inch equivalent wafers in 2007, while capacity for 12-inch wafer fabs will increase by 27%.


TSMC July 31, 2008		Page 7

VI. Recap of Recent Important Events & Announcements

l		TSMC Wins Corporate Governance Asia Annual Recognition Award 2008 (2008/06/26)

l		TSMC Shareholders Approve NT$3.0 Cash and 0.5% Stock Dividend (2008/06/13)

l		TSMC Unified DFM Architecture Promises Improved Yields and Accelerated Time-to-Market (2008/06/09)

l		New TSMC Reference Flow 9.0 Supports 40nm Process Technology (2008/06/03)

l		TSMC Board Approves Plan to Buy Back and Cancel Shares up to US$1 billion (2008/05/13)

l		TSMC Board Approves Capital Appropriation of US$995 Million to Expand Fab 12 and Increase Its Advanced Process Capacity (2008/05/13)

l		Intel, Samsung Electronics, TSMC Reach Agreement For 450mm Wafer Manufacturing Transition (2008/05/06)

l		TSMC Unveils New 40/65-Nanometer SPICE Tool Qualification Program (2008/04/22)

l		TSMC and NTHU Celebrate Opening of College of Technology Management TSMC Building (2008/04/18)

l		TSMC Announces Power Trim Service for Advanced Chip Leakage Power Reduction (2008/04/15)


*		Please visit TSMC’s Web site (http://www.tsmc.com) for details about these and other announcements.


		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Consolidated Condensed Balance Sheets (Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”)) ⁽¹⁾


	June 30, 2008 (audited)									March 31, 2008 (unaudited)						June 30, 2007 (audited)						QoQ						YoY
	USD			NTD			%			NTD			%			NTD			%			Amount			%			Amount			%
ASSETS
Current Assets
Cash and Cash Equivalents	$	6,106		$	185,346			30.1		$	144,277			24.2		$	163,391			25.6		$	41,069			28.5		$	21,955			13.4
Investments in Marketable Financial Instruments		1,273			38,642			6.3			66,034			11.1			69,685			10.9			(27,392	)		(41.5	)		(31,043	)		(44.5	)
Accounts Receivable — Trade		1,379			41,858			6.8			37,950			6.3			37,054			5.8			3,908			10.3			4,804			13.0
Inventories, Net		770			23,359			3.8			21,890			3.7			24,045			3.8			1,469			6.7			(686	)		(2.9	)
Other Current Assets		348			10,558			1.7			11,304			1.9			10,464			1.7			(746	)		(6.6	)		94			0.9

Total Current Assets		9,876			299,763			48.7			281,455			47.2			304,639			47.8			18,308			6.5			(4,876	)		(1.6	)


Long-Term Investments		1,052			31,937			5.2			33,693			5.6			45,153			7.1			(1,756	)		(5.2	)		(13,216	)		(29.3	)

Property, Plant and Equipment		27,573			836,936			136.0			817,464			136.9			767,100			120.3			19,472			2.4			69,836			9.1
Less: Accumulated Depreciation		(18,935	)		(574,738	)		(93.4	)		(555,854	)		(93.1	)		(502,495	)		(78.8	)		(18,884	)		3.4			(72,243	)		14.4

Property, Plant and Equipment, Net		8,638			262,198			42.6			261,610			43.8			264,605			41.5			588			0.2			(2,407	)		(0.9	)


Other Assets		702			21,325			3.5			20,285			3.4			23,037			3.6			1,040			5.1			(1,712	)		(7.4	)

Total Assets	$	20,268		$	615,223			100.0		$	597,043			100.0		$	637,434			100.0		$	18,180			3.0			($22,211	)		(3.5	)


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-Term Bank Loans	$	—		$	—			—		$	—			—		$	99			—		$	—			—			($99	)		(100.0	)
Accounts Payable ⁽²⁾		383			11,632			1.9			10,338			1.7			11,064			1.8			1,294			12.5			568			4.3
Payables to Contractors and Equipment Suppliers ⁽²⁾		313			9,511			1.5			12,256			2.1			17,103			2.7			(2,745	)		(22.4	)		(7,592	)		(44.1	)
Accrued Expenses and Other Current Liabilities		3,874			117,576			19.2			31,162			5.2			99,365			15.5			86,414			277.3			18,211			18.3
Current Portion of Bonds Payable and Long-Term Liabilities		272			8,262			1.3			8,280			1.4			4,782			0.8			(18	)		(0.2	)		3,480			72.8

Total Current Liabilities		4,842			146,981			23.9			62,036			10.4			132,413			20.8			84,945			136.9			14,568			11.0

Bonds Payable		148			4,500			0.7			4,500			0.8			12,500			2.0			—			—			(8,000	)		(64.0	)
Other Long-Term Liabilities		562			17,055			2.8			17,537			2.9			18,649			2.9			(482	)		(2.7	)		(1,594	)		(8.5	)

Total Liabilities		5,552			168,536			27.4			84,073			14.1			163,562			25.7			84,463			100.5			4,974			3.0


Shareholders’ Equity Attributable to Shareholders of the Parent
Capital Stock		8,616			261,535			42.5			256,292			42.9			264,235			41.5			5,243			2.0			(2,700	)		(1.0	)
Capital Surplus		1,677			50,917			8.3			51,696			8.7			53,726			8.4			(779	)		(1.5	)		(2,809	)		(5.2	)
Retained Earnings		5,006			151,953			24.7			208,633			34.9			154,010			24.2			(56,680	)		(27.2	)		(2,057	)		(1.3	)
Treasury Stock		(489	)		(14,845	)		(2.4	)		(918	)		(0.2	)		(918	)		(0.1	)		(13,927	)		1517.0			(13,927	)		1517.0
Others		(208	)		(6,319	)		(1.1	)		(6,410	)		(1.0	)		(167	)		(0.1	)		91			(1.4	)		(6,152	)		3701.9

Total Equity Attributable to Shareholders of the Parent		14,602			443,241			72.0			509,293			85.3			470,886			73.9			(66,052	)		(13.0	)		(27,645	)		(5.9	)
Minority Interests		114			3,446			0.6			3,677			0.6			2,986			0.4			(231	)		(6.3	)		460			15.4

Total Shareholders’ Equity		14,716			446,687			72.6			512,970			85.9			473,872			74.3			(66,283	)		(12.9	)		(27,185	)		(5.7	)

Total Liabilities & Shareholders’ Equity	$	20,268		$	615,223			100.0		$	597,043			100.0		$	637,434			100.0		$	18,180			3.0			($22,211	)		(3.5	)


Note:	(1)	Amounts in New Taiwan dollars have been translated into U.S. dollars at the rate of NT$30.354 as of June 30, 2008.

	(2)	Certain prior period balances have been reclassified to conform to the current period presentation.


		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Unaudited Consolidated Condensed Income Statements For the Three Months Ended June 30, 2008, March 31, 2008, and June 30, 2007 (Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”) ⁽¹⁾ Except for Per Share Amounts and Shares Outstanding)


	Q2 2008									Q1 2008						Q2 2007						QoQ						YoY
	USD			NTD			%			NTD			%			NTD			%			Amount			%			Amount			%
Net Sales	$	2,896		$	88,137			100.0		$	87,480			100.0		$	74,918			100.0		$	657			0.8		$	13,219			17.6
Cost of Sales		(1,574	)		(47,916	)		(54.4	)		(49,241	)		(56.3	)		(42,738	)		(57.0	)		1,325			(2.7	)		(5,178	)		12.1

Gross Profit		1,322			40,221			45.6			38,239			43.7			32,180			43.0			1,982			5.2			8,041			25.0

Operating Expenses
Research and Development Expenses		(178	)		(5,404	)		(6.1	)		(5,270	)		(6.0	)		(4,301	)		(5.7	)		(134	)		2.5			(1,103	)		25.6
General and Administrative Expenses		(104	)		(3,170	)		(3.6	)		(2,662	)		(3.0	)		(2,151	)		(2.9	)		(508	)		19.1			(1,019	)		47.3
Sales and Marketing Expenses		(42	)		(1,274	)		(1.4	)		(1,184	)		(1.4	)		(994	)		(1.4	)		(90	)		7.7			(280	)		28.2

Total Operating Expenses		(324	)		(9,848	)		(11.1	)		(9,116	)		(10.4	)		(7,446	)		(10.0	)		(732	)		8.0			(2,402	)		32.3


Income from Operations		998			30,373			34.5			29,123			33.3			24,734			33.0			1,250			4.3			5,639			22.8


Non-Operating Income, Net		57			1,725			1.9			1,872			2.1			2,802			3.7			(147	)		(7.8	)		(1,077	)		(38.5	)
Investment Gains		9			279			0.3			577			0.7			488			0.7			(298	)		(51.6	)		(209	)		(42.8	)

Income before Income Tax		1,064			32,377			36.7			31,572			36.1			28,024			37.4			805			2.6			4,353			15.5

Income Tax (Expenses) Benefits		(115	)		(3,503	)		(4.0	)		(3,336	)		(3.8	)		(2,394	)		(3.2	)		(167	)		5.0			(1,109	)		46.3


Net Income		949			28,874			32.7			28,236			32.3			25,630			34.2			638			2.3			3,244			12.7

Minority Interests		(4	)		(103	)		(0.1	)		(93	)		(0.1	)		(146	)		(0.2	)		(10	)		11.7			43			(29.3	)


Net Income Attributable to Shareholders of the Parent		945			28,771			32.6			28,143			32.2			25,484			34.0			628			2.2			3,287			12.9


Earnings per Share — Diluted	$	0.04		$	1.12					$	1.10					$	0.96					$	0.02			2.1		$	0.16			16.3

Earnings per ADR — Diluted ⁽²⁾	$	0.18		$	5.61					$	5.49					$	4.82					$	0.12			2.1		$	0.79			16.3


Weighted Average Outstanding Shares — Diluted (‘M)					25,634						25,610						26,409


Note:

(1)		Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NT$30.437 for the second quarter of 2008.

(2)		1 ADR equals 5 ordinary shares.


		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
		Audited Consolidated Condensed Income Statements
		For the Six Months Ended June 30, 2008 and 2007
		(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”)⁽¹⁾
		Except for Per Share Amounts and Shares Outstanding)


	For the Six Months Ended June 30
	2008									2007						YoY
	USD			NTD			%			NTD			%			Amount			%
Net Sales	$	5,663		$	175,617			100.0		$	139,815			100.0		$	35,802			25.6
Cost of Sales		(3,133	)		(97,156	)		(55.3	)		(83,025	)		(59.4	)		(14,131	)		17.0

Gross Profit		2,530			78,461			44.7			56,790			40.6			21,671			38.2

Operating Expenses
Research and Development Expenses		(344	)		(10,674	)		(6.1	)		(8,243	)		(5.9	)		(2,431	)		29.5
General and Administrative Expenses		(188	)		(5,833	)		(3.3	)		(4,053	)		(2.9	)		(1,780	)		43.9
Sales and Marketing Expenses		(80	)		(2,458	)		(1.4	)		(1,883	)		(1.3	)		(575	)		30.5

Total Operating Expenses		(612	)		(18,965	)		(10.8	)		(14,179	)		(10.1	)		(4,786	)		33.7


Income from Operations		1,918			59,496			33.9			42,611			30.5			16,885			39.6


Non-Operating Income, Net		116			3,596			2.0			4,632			3.3			(1,036	)		(22.4	)
Investment Gains		28			857			0.5			849			0.6			8			0.9

Income before Income Tax		2,062			63,949			36.4			48,092			34.4			15,857			33.0

Income Tax (Expenses) Benefits		(220	)		(6,839	)		(3.9	)		(3,501	)		(2.5	)		(3,338	)		95.3


Net Income		1,842			57,110			32.5			44,591			31.9			12,519			28.1

Minority Interest		(7	)		(196	)		(0.1	)		(268	)		(0.2	)		72			(26.9	)



Net Income Attributable to Shareholders of the Parent		1,835			56,914			32.4			44,323			31.7			12,591			28.4


Earnings per Share — Diluted	$	0.07		$	2.22					$	1.68					$	0.54			32.1

Earnings per ADR — Diluted ⁽²⁾	$	0.36		$	11.08					$	8.39					$	2.69			32.1


Weighted Average Outstanding Shares — Diluted (‘M)					25,676						26,409


Note:

(1)		Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.012 for the six months ended June 30, 2008.
(2)		1 ADR equals 5 ordinary shares.


		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
		Consolidated Condensed Statements of Cash Flows
		For the Six Months Ended June 30, 2008 and for the Three Months Ended June 30, 2008, March 31, 2008, and June 30, 2007
		(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”))⁽¹⁾


	Six Months 2008						2Q 2008			1Q 2008			2Q 2007
	(Audited)						(Unaudited)			(Unaudited)			(Unaudited)
	USD			NTD			NTD			NTD			NTD
Cash Flows from Operating Activities:
Net Income	$	1,835		$	56,914		$	28,771		$	28,143		$	25,484
Net Income Attributable to Minority Interest		6			196			103			93			146
Depreciation & Amortization		1,285			39,865			20,034			19,831			19,616
Deferred Income Tax		55			1,715			1,280			435			371
Equity in Earnings of Equity Method Investees, Net		(28	)		(857	)		(280	)		(577	)		(488	)
Changes in Working Capital & Others⁽²⁾		147			4,513			(4,857	)		9,370			(10,478	)

Net Cash Provided by Operating Activities		3,300			102,346			45,051			57,295			34,651

Cash Flows from Investing Activities:
Acquisitions of:
Marketable Financial Instruments		(920	)		(28,537	)		(14,635	)		(13,902	)		(14,234	)
Investments Accounted for Using Equity Method		—			—			—			—			—
Property, Plant and Equipment		(1,212	)		(37,587	)		(22,274	)		(15,313	)		(25,345	)
Financial Assets Carried at Cost		(10	)		(303	)		(90	)		(213	)		(218	)
Proceeds from Disposal or maturity of:
Marketable Financial Instruments		2,214			68,656			41,840			26,816			30,013
Investments Accounted for Using Equity Method		—			—			—			—			—
Property, Plant and Equipment		1			31			30			1			10
Financial Assets Carried at Cost		4			128			35			93			—
Others		(62	)		(1,917	)		(1,310	)		(607	)		(383	)

Net Cash Provided by (Used In) Investing Activities		15			471			3,596			(3,125	)		(10,157	)

Cash Flows from Financing Activities:
Decrease in Guarantee Deposits		(17	)		(535	)		(164	)		(371	)		(418	)
Proceeds from Exercise of Stock Options		6			172			91			81			175
Bonus Paid to Directors and Supervisors		—			—			—			—			(286	)
Repayment of Long-Term Bonds Payable		—			—			—			—			—
Cash Dividends Paid for Common Stock		—			—			—			—			—
Repurchase of Treasury Stock		(312	)		(9,669	)		(6,615	)		(3,054	)		—
Cash Bonus Paid to Employees		—			—			—			—			—
Others		(3	)		(101	)		(159	)		58			2

Net Cash Used in Financing Activities		(326	)		(10,133	)		(6,847	)		(3,286	)		(527	)


Net Increase in Cash and Cash Equivalents		2,989			92,684			41,800			50,884			23,967


Effect of Exchange Rate Changes and Others ⁽²⁾		(75	)		(2,324	)		(731	)		(1,593	)		(850	)

Cash and Cash Equivalents at Beginning of Period		3,063			94,986			144,277			94,986			140,274


Cash and Cash Equivalents at End of Period	$	5,977		$	185,346		$	185,346		$	144,277		$	163,391


Note:		(1) Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.012 for the six months ended June 30, 2008.

		(2) Certain prior period balances have been reclassified to conform to the current period presentation.

TSMC 2008 Second Quarter Investor Conference July 31, 2008

Agenda Welcome Elizabeth Sun 2Q08 Financial Results and 3Q08 Outlook Lora Ho CEO Comments Rick Tsai Q&A Rick Tsai / Lora Ho

Safe Harbor Notice TSMC's statements of its current expectations are forward- looking statements subject to significant risks and uncertainties and actual results may differ materially from those contained in the forward-looking statements. Information as to those factors that could cause actual results to vary can be found in TSMC's Annual Report on Form 20-F filed with the United States Securities and Exchange Commission (the "SEC") on April 15, 2008 and such other documents as TSMC may file with, or submit to, the SEC from time to time. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

2Q08 Financial Highlights Annualized ROE for the quarter based on average equity attributable to shareholders of the parent.

Income Statements 2Q07 results do not include expenses of employee profit sharing.

2Q08 Revenue by Applications

2Q08 Revenue by Technology 65nm Revenue

Balance Sheets & Key Indices Asset productivity = Annualized net sales / Average net fixed assets.

Cash Flows Free cash flow = Operating cash flow - Capital expenditures.

Note: 1 Figures represent number of 6" wafers. Conversion to 8"-equivalent wafers is obtained by dividing this number by 1.78. 2 Figures represent number of 12" wafers. Conversion to 8"-equivalent wafers is obtained by multiplying this number by 2.25. Installed Capacity Overall Capacity +13%; Advanced Capacity +27%

Capital Expenditures

3Q08 Guidance Revenue is expected to be between NT$90 billion and NT$92 billion, at a forecast exchange rate of 30.20 NT dollars to 1 US dollar averaged over 3Q08. Gross profit margin is expected to be between 45% and 47%. Operating profit margin is expected to be between 34% and 36%.

Recap of Recent Major Events TSMC Wins Corporate Governance Asia Annual Recognition Award 2008 (2008/06/26) TSMC Unified DFM Architecture Promises Improved Yields and Accelerated Time-to-Market (2008/06/09) New TSMC Reference Flow 9.0 Supports 40nm Process Technology (2008/06/03) TSMC Board Approves Plan to Buy Back and Cancel Shares up to US$1 billion (2008/05/13) Intel, Samsung Electronics, TSMC Reach Agreement For 450mm Wafer Manufacturing Transition (2008/05/06) TSMC Unveils New 40/65-Nanometer SPICE Tool Qualification Program (2008/04/22) TSMC Announces Power Trim Service for Advanced Chip Leakage Power Reduction (2008/04/15) * Please visit TSMC's Web site (http://www.tsmc.com) for details and other announcements.

http://www.tsmc.com invest@tsmc.com

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Taiwan Semiconductor Manufacturing Company Ltd.
Date: July 31, 2008	By	/s/ Lora Ho
		Lora Ho
		Vice President & Chief Financial Officer