Form 6-K
Table of Contents

 
 
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 January 2009
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:                     .)
 
 

 

TABLE OF CONTENTS

SIGNATURES

Table of Contents

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: January 22, 2009  By  /s/ Lora Ho    
    Lora Ho   
    Vice President & Chief Financial Officer   
 

 

Table of Contents

     
FOR IMMEDIATE RELEASE
(TSMC LOGO) 		  4Q08 Quarterly Management Report
January 22, 2009
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)   4Q08   3Q08   4Q07   2008   2007
EPS (NT$ per common share)
     0.48       1.18       1.29       3.83       4.06  
        (US$ per ADR unit)
     0.07       0.19       0.20       0.61       0.62  
 
                                        
Consolidated Net Sales
     64.56       92.98       93.86       333.16       322.63  
Gross Profit
     20.19       43.09       44.84       141.75       142.35  
Gross Margin
     31.3 %     46.3 %     47.8 %     42.5 %     44.1 %
 
                                        
Operating Expense
     (8.17 )     (10.18 )     (8.08 )     (37.31 )     (30.63 )
Operating Income
     12.02       32.92       36.76       104.44       111.72  
Operating Margin
     18.6 %     35.4 %     39.2 %     31.4 %     34.6 %
Non-Operating Items
     1.07       1.51       2.57       7.04       9.92  
 
                                        
Net Income
     12.45       30.57       34.48       99.93       109.18  
Net Profit Margin
     19.3 %     32.9 %     36.7 %     30.0 %     33.8 %
 
                                        
Wafer Shipment (kpcs 8 inch-equiv.)
     1,532       2,411       2,357       8,467       8,005  
 
Note:   Total outstanding shares were 25,625mn units on 12/31/08
Financial Highlights:
Fourth Quarter 2008
•   Consolidated net sales were NT$64.6 billion, declining 30.6% quarter-over-quarter and declining 31.2% year-over-year;
 
•   Gross margin was 31.3%, a decrease by 15.0 percentage points from 3Q08. Operating margin was 18.6%, declined by 16.8 percentage points from 3Q08. On a year-over-year basis, gross margin and operating margin declined by 16.5 and 20.6 percentage points respectively, although 4Q07 results did not include the expensing of employee profit sharing;
 
•   EPS was NT$0.48, with net profit margin of 19.3%
Full Year 2008
•   Consolidated net sales were NT$333.2 billion, up 3.3% from 2007;
 
•   Gross margin and operating margin were 42.5% and 31.4%, declining 1.6 and 3.2 percentage points from 2007 respectively. Notice however, 2007 results did not include expensing of employee profit sharing;
 
•   Earnings per share was NT$3.83, with net profit margin of 30.0%

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TSMC
January 22, 2009 		  Page 2
I. Revenue Analysis
     I. Wafer Sales Analysis
                         
By Application   4Q08   3Q08   4Q07
Computer
     32 %     33 %     35 %
Communication
     43 %     41 %     42 %
Consumer
     19 %     20 %     15 %
Industrial/Others
     6 %     6 %     8 %
                         
By Technology   4Q08   3Q08   4Q07
65nm and below
     27 %     25 %     10 %
90nm
     21 %     26 %     29 %
0.11/0.13um
     17 %     15 %     20 %
0.15/0.18um
     22 %     22 %     27 %
0.25/0.35um
     10 %     9 %     10 %
0.50um+
     3 %     3 %     4 %
                         
By Customer Type   4Q08   3Q08   4Q07
Fabless/System
     72 %     70 %     68 %
IDM
     28 %     30 %     32 %
                         
By Geography   4Q08   3Q08   4Q07
North America
     73 %     74 %     79 %
Asia Pacific
     13 %     13 %     11 %
Europe
     11 %     10 %     8 %
Japan
     3 %     3 %     2 %
Revenue Analysis:
Application—Fourth quarter revenue was NT$64.6 billion. 4Q08 business saw a sharp decline in the demand for wafer while the NT dollar depreciated 5.6% against the US dollar. Weakness in demand was seen across all applications during the quarter. On a sequential basis, revenues from consumer, computer, and communication applications decreased 39%, 34% and 32%, respectively.
Technology—Revenue from 65nm reached 27% of total wafer sales during the quarter, up from 25% in the previous quarter. Meanwhile, revenue from 90nm declined from 26% to 21% of total wafer sales. Overall, revenues from advanced technologies (0.13-micron and below) accounted for 65% of total wafer sales, slightly below the 66% in 3Q08.
Customer—Revenues from IDM customers accounted for 28% of total wafer sales in 4Q08, slightly lower than 3Q08, due to increasing in-sourcing of those customers in the weak business environment.
Geography—On a sequential basis, there were no major changes on the geographic breakdown, while revenues from customers based in North America accounted for 73% of total wafer sales.
II. Profit & Expense Analysis
     II — 1. Gross Profit Analysis
                                         
(In NT billions)   4Q08   3Q08   4Q07   2008   2007
COGS
     44.37       49.89       49.02       191.41       180.28  
Depreciation
     19.29       19.06       18.50       74.70       73.07  
Other MFG Cost
     25.08       30.83       30.52       116.71       107.21  
 
                                        
Gross Profit
     20.19       43.09       44.84       141.75       142.35  
 
                                        
Gross Margin
     31.3 %     46.3 %     47.8 %     42.5 %     44.1 %
Gross Profit Analysis:
Gross margin in 4Q08 was 31.3%, down 15.0 percentage points from 3Q08, mainly driven by a sharp decline of production activities, partially offset by cost improvement and a more favorable exchange rate.
Gross margin for full year 2008 was 42.5%, down 1.6 percentage points from 2007, reflecting the impact from the expensing of employee profit sharing (2.3 percentage points).

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TSMC
January 22, 2009 		  Page 3
     II — 2. Operating Expenses
                                         
(In NT billions)   4Q08   3Q08   4Q07   2008   2007
Total Operating Exp.
     8.17       10.18       8.08       37.31       30.63  
SG&A
     3.34       4.20       3.07       15.83       12.68  
Research & Development
     4.83       5.98       5.01       21.48       17.95  
Total Operating Exp. as a % of Sales
     12.7 %     10.9 %     8.6 %     11.1 %     9.5 %
Operating Expenses:
Total operating expenses for 4Q08 decreased by 19.7% sequentially to NT$8.2 billion, or 12.7% of net sales, compared with 10.9% of net sales in 3Q08.
Research and development expenses decreased by NT$1.2 billion quarter-over-quarter, mainly due to a lower level of employee profit sharing.
SG&A expenses decreased by NT$849 million from 3Q08, also due to a sharply lower level of employee profit sharing.
On a full year basis, total operating expenses accounted for 11.1% of net sales in 2008, compared with 9.5% of net sales in 2007, mainly reflecting the impact from expensing of employee profit sharing in 2008 (2.2 percentage points).
     II — 3. Non-Operating Items
                                         
(In NT billions)   4Q08   3Q08   4Q07   2008   2007
Non-Operating Inc./(Exp.)
     1.41       1.33       1.69       6.34       7.41  
Net Interest Income/(Exp.)
     1.18       1.15       1.21       4.76       4.81  
Other Non-Operating
     0.23       0.18       0.48       1.58       2.60  
 
                                        
L-T Investments
     (0.34 )     0.18       0.88       0.70       2.51  
SSMC
     (0.07 )     0.15       0.47       0.76       1.18  
Others
     (0.27 )     0.03       0.41       (0.06 )     1.33  
 
                                        
Total Non-Operating Items
     1.07       1.51       2.57       7.04       9.92  
Non-Operating Items:
For 4Q08, combined result from non-operating income and long-term investments income was a gain of NT$1.1 billion.
Non-operating income was NT$1.4 billion, up from NT$1.3 billion in 3Q08, primarily due to foreign exchange gains and no additional impairment losses on idle assets as compared to 3Q08. Meanwhile, the gains were partially offset by impairment losses of financial assets from venture capital funds by about NT$481 million in this quarter.
Net investment losses in the quarter were NT$340 million, mainly from VIS and SSMC.
For full year 2008, non-operating income decreased by NT$1.1 billion to NT$6.3 billion, mostly due to impairment losses on financial assets and lower valuation on certain marketable securities, partially offset by an increase of foreign exchange gains. Net investment gains decreased by NT$1.8 billion to NT$702 million, mainly due to VIS and SSMC. Combining results from non-operating income and long-term investments, the gain was NT$7.0 billion in 2008, compared with a gain of NT$9.9 billion in 2007.

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TSMC
January 22, 2009 		  Page 4
     II — 4. PSE Impact
                                         
    4Q08   3Q08   4Q07   2008   2007
Gross Margin w/ PSE
     31.3 %     46.3 %     43.0 %     42.5 %     39.7 %
Gross Margin w/o PSE
     32.8 %     48.9 %     47.8 %     44.8 %     44.1 %
PSE Impact
     -1.5 %     -2.6 %     -4.8 %     -2.3 %     -4.4 %
 
                                        
Operating Margin w/ PSE
     18.6 %     35.4 %     29.8 %     31.4 %     26.0 %
Operating Margin w/o PSE
     21.5 %     40.3 %     39.2 %     35.9 %     34.6 %
PSE Impact
     -2.9 %     -4.9 %     -9.4 %     -4.5 %     -8.6 %
 
*   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 4Q08 was 1.5 percentage points, down 1.1 percentage points from 3Q08, due to an overall decrease in net income. Similarly, total PSE impact on operating margin was 2.9 percentage points in 4Q08.
For full year 2008, total impacts from PSE on gross margin and operating margin were 2.3 percentage points and 4.5 percentage points, respectively
III. Financial Condition Review
     III — 1. Liquidity Analysis
                (Selected Balance Sheet Items)
                         
(In NT billions)   4Q08   3Q08   4Q07
Cash & Marketable Securities
     211.45       158.17       174.83  
Accounts Receivable — Trade
     18.50       45.33       42.42  
Inventory
     14.88       21.82       23.86  
Total Current Assets
     252.62       232.35       249.82  
Accounts Payable
     14.04       17.75       19.33  
Current Portion of Bonds Payable
     8.00       8.00       0.00  
Accrued Bonus to Employees, Directors and Supervisors
     15.37       13.46       0.00  
Accrued Liabilities and Others
     19.40       22.92       29.38  
Total Current Liabilities
     56.81       62.13       48.71  
Current Ratio (x)
     4.4       3.7       5.1  
Net Working Capital
     195.81       170.22       201.11  
Liquidity Analysis:
At the end of 4Q08, total current assets increased by NT$ 20.3 billion to NT$252.6 billion, mainly due to the free cash flow of NT$52.0 billion generated in this quarter.
Total current liabilities decreased by NT$5.3 billion in 4Q08, primarily due to declines in accounts payable and in accruals due to lower levels of production activities.
Net working capital was NT$195.8 billion and current ratio increased to 4.4 at the end of this quarter.
     III — 2. Receivable/Inventory Days
                         
(In Number of Days)   4Q08   3Q08   4Q07
Days of Receivable
     46       43       42  
Days of Inventory
     40       45       48  
Receivable and Inventory Days:
Sequentially, days of receivable increased by three days to 46 days in 4Q08, mainly due to a sharp decline of revenue in the quarter.
Days of inventory decreased by five days to 40 days, mostly due to a lower level of production activities resulted from continued weaker demand environment.

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TSMC
January 22, 2009 		 
Page 5
     III — 3. Debt Service
                         
(In NT billions)   4Q08   3Q08   4Q07
Cash & Marketable Securities
     211.45       158.17       174.83  
Interest-Bearing Debt
     23.44       23.41       23.06  
Net Cash Reserves
     188.01       134.76       151.77  
Debt Service:
Net cash reserves — defined as the excess of cash and short-term marketable securities over interest-bearing debt — increased by NT$53.2 billion to NT$188.0 billion at the end of 4Q08, primarily due to free cash flow of NT$52.0 billion generated in this quarter.
IV. Cash Flow
     IV — 1.1. Cash Flow Analysis
                         
(In NT billions)   4Q08   3Q08   4Q07
Net Income
     12.45       30.57       34.49  
Depreciation & Amortization
     20.96       20.69       20.28  
Other Operating Sources/(Uses)
     29.83       4.64       4.99  
Total Operating Sources/(Uses)
     63.24       55.90       59.76  
 
                        
 
                        
Capital Expenditure
     (11.26 )     (10.38 )     (19.78 )
Marketable Financial Instruments
     30.31       (18.07 )     8.20  
Other Investing Sources/(Uses)
     (1.04 )     1.93       (1.08 )
Net Investing Sources/(Uses)
     18.01       (26.52 )     (12.66 )
 
                        
 
                        
Cash Dividends
     0.00       (76.78 )     0.00  
 
                        
Employee Profit Sharing
     0.00       (3.94 )     0.00  
 
                        
Repayment of Bonds Payable
     0.00       0.00       (4.50 )
 
                        
Purchase of Treasury Stock
     0.00       (23.81 )     (45.41 )
Other Financing Sources/(Uses)
     (0.30 )     (0.43 )     (0.20 )
Net Financing Sources/(Uses)
     (0.30 )     (104.96 )     (50.11 )
 
                        
 
                        
Net Cash Position Changes
     80.95       (75.58 )     (3.01 )
 
                        
Exchange Rate Changes & Others
     1.21       2.68       (0.33 )
 
                        
Ending Cash Balance
     194.61       112.45       94.99  
     IV — 1.2. Cash Flow Analysis
                 
(In NT billions)   2008   2007
Net Income
     99.93       109.18  
Depreciation & Amortization
     81.51       80.01  
Other Operating Sources/(Uses)
     40.05       (5.42 )
Total Operating Sources/(Uses)
     221.49       183.77  
 
                
 
                
Capital Expenditure
     (59.22 )     (84.00 )
Marketable Financial Instruments
     52.35       24.68  
Other Investing Sources/(Uses)
     (1.17 )     (11.37 )
Net Investing Sources/(Uses)
     (8.04 )     (70.69 )
 
                
 
                
Cash Dividends
     (76.78 )     (77.39 )
 
                
Employee Profit Sharing
     (3.94 )     (4.57 )
 
                
Repayment of Bonds Payable
     0.00       (7.00 )
 
                
Repurchase of Treasury Stock
     (33.48 )     (45.41 )
Other Financing Sources/(Uses)
     (1.19 )     (1.04 )
Net Financing Sources/(Uses)
     (115.39 )     (135.41 )
 
                
 
                
Net Cash Position Changes
     98.06       (22.33 )
 
                
Exchange Rate Changes & Others
     1.56       (0.52 )
 
                
Ending Cash Balance
     194.61       94.99  
Summary of Cash Flow:
Cash generated from operating activities totaled NT$63.2 billion during 4Q08, up from NT$55.9 billion in 3Q08, mainly due to a sharp decline of non-cash working capital as a result of much lowered levels of production activities.
Net cash generated from investing activities was NT$18.0 billion in 4Q08, reflecting the capital expenditure of NT$11.3 billion and a net decrease of NT$30.3 billion in marketable financial instruments.
As a result, TSMC ended 4Q08 with a cash balance of NT$194.6 billion.
On a full year basis, cash generated from operating activities increased by NT$37.7 billion in 2008, meanwhile, capital expenditures and marketable financial instruments decreased by NT$24.8 billion and NT$27.7 billion, respectively. Cash dividends paid in 2008 were NT$76.8 billion. TSMC also spent NT$33.5 billion in share buybacks.

 

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TSMC
January 22, 2009 		 
Page 6
     IV — 2. Operating and Free Cash Flows
(CHART)
Operating and Free Cash Flows:
Cash flows generated from operating activities were NT$63.2 billion during the quarter. Free cash flow, defined as the excess of operating cash flows over capital expenditures, totaled NT$52.0 billion in 4Q08, compared to NT$45.5 billion in 3Q08.
Total free cash flow generated in 2008 reached NT$162.3 billion, compared with NT$99.8 billion in 2007.
V. CapEx & Capacity
     V — 1. Capital Expenditures
                                                 
(In US millions)   1Q08   2Q08   3Q08   4Q08   2008   2007
TSMC
     452       712       317       326       1,807       2,475  
XinTec and GUC
     13       5       3       2       23       47  
TSMC Shanghai & WaferTech
     18       11       11       12       52       31  
Other TSMC Subsidiaries
     1       0       1       2       4       4  
 
                                                
Total TSMC
     484       728       332       342       1,886       2,557  
Capital Expenditures:
Capital expenditures for TSMC on a consolidated basis totaled US$342 million in 4Q08.
For year 2008, total capital expenditures for TSMC consolidated group was US$1.9 billion, compared with US$2.6 billion spent in 2007.
     V — 2. Capacity
                                                 
    1Q08   2Q08   3Q08   4Q08   2008   1Q09
Fab / (Wafer size)   (A)   (A)   (A)   (A)   (A)   (F)
Fab-2 (6")(1)
    248       267       270       272       1,056       274  
Fab-3 (8")
    277       281       268       274       1,100       286  
Fab-5 (8")
    163       165       161       161       650       162  
Fab-6 (8")
    265       267       268       282       1,082       295  
Fab-8 (8")
    262       275       267       272       1,076       275  
Fab-12 (12")(2)
    197       207       214       221       840       218  
Fab-14 (12")(2)
    167       185       229       236       818       238  
WaferTech (8")
    105       105       106       106       420       106  
TSMC (Shanghai) (8")
    88       110       128       128       453       128  
TSMC total capacity (8" equiv. Kpcs)
    2,117       2,236       2,346       2,405       9,104       2,431  
SSMC (8")
    63       67       69       73       272       64  
Total managed capacity (8" equiv. Kpcs)
    2,180       2,303       2,416       2,478       9,377       2,495  
 
(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
Capacity:
Total TSMC managed capacity was 2,478K 8-inch equivalent wafers in the fourth quarter, 3% more than 3Q08. TSMC managed capacity in 1Q09 is expected to increase by 1% to reach 2,495K 8-inch equivalent wafers, mainly due to productivity improvement.
Total managed capacity in 2008 was 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 increased by 27%.

 

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TSMC
January 22, 2009 		 
Page 7
VI. Recap of Recent Important Events & Announcements
l   TSMC Wins the Award of “Grand Prix for Best Overall Investor Relations at a Taiwanese Company — Large-Cap” by IR Magazine (2008/12/11)
 
l   TSMC Chairman Dr. Morris Chang Receives Semiconductor Industry Association’s Highest Honor “The 2008 Robert N. Noyce Award” (2008/11/18)
 
l   TSMC Ramps 40nm Volume Production to Promote Innovation as Foundries Assume a Larger Role for $300 Billion Industry — Most Advanced Cellular, Wireless, and Consumer Electronic Innovations Targeted for Foundry’s First 40 Nanometer (nm) Logic Process (2008/11/17)
 
l   TSMC Recognizes Outstanding Suppliers at Supply Chain Management Forum (2008/11/14)
 
l   TSMC Board Approves Cancellation of Treasury Shares to Reduce Total Issued Shares by 1.07 Percent (2008/11/11)
 
l   TSMC Adds New High Voltage Features to Advanced 0.13-micron Processes Aimed at High Resolution Display Drivers (2008/11/05)
 
l   TSMC Holds 2008 Green Forum on “Present and Future of Green Factories” to Launch Taiwan Corporate Sustainability Forum Series (2008/10/16)
 
l   TSMC and MAPPER Take Next Step in Exploring Multiple E-beam Lithography for IC Manufacturing at 22 nanometer node and Beyond (2008/10/13)
 
*   Please visit TSMC’s Web site (http://www.tsmc.com) for details about these and other announcements.

 

Table of Contents

(TSMC LOGO)
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)
                                                                                         
    December 31, 2008 (audited)     September 30, 2008 (unaudited)     December 31, 2007 (audited)     QoQ     YoY  
    USD     NTD     %     NTD     %     NTD     %     Amount     %     Amount     %  
ASSETS
                                                                                        
Current Assets
                                                                                        
Cash and Cash Equivalents
   $ 5,922     $ 194,614       34.8     $ 112,446       20.4     $ 94,986       16.6     $ 82,168       73.1     $ 99,628       104.9  
Investments in Marketable Financial Instruments
     512       16,836       3.0       45,724       8.3       79,848       14.0       (28,888 )     (63.2 )     (63,012 )     (78.9 )
Accounts Receivable — Trade, Net
     563       18,497       3.3       45,333       8.2       42,424       7.4       (26,836 )     (59.2 )     (23,927 )     (56.4 )
Inventories, Net
     453       14,877       2.7       21,817       4.0       23,862       4.2       (6,940 )     (31.8 )     (8,985 )     (37.7 )
Other Current Assets
     237       7,795       1.4       7,029       1.3       8,702       1.5       766       10.9       (907 )     (10.4 )
 
                                                                  
Total Current Assets
     7,687       252,619       45.2       232,349       42.2       249,822       43.7       20,270       8.7       2,797       1.1  
 
                                                                  
 
                                                                                        
Long-Term Investments
     1,217       39,982       7.2       41,874       7.6       36,461       6.4       (1,892 )     (4.5 )     3,521       9.7  
 
                                                                                        
Property, Plant and Equipment
     26,247       862,461       154.3       849,818       154.5       800,352       140.2       12,643       1.5       62,109       7.8  
Less: Accumulated Depreciation
     (18,832 )     (618,816 )     (110.7 )     (597,523 )     (108.6 )     (540,100 )     (94.6 )     (21,293 )     3.6       (78,716 )     14.6  
 
                                                                  
Property, Plant and Equipment, Net
     7,415       243,645       43.6       252,295       45.9       260,252       45.6       (8,650 )     (3.4 )     (16,607 )     (6.4 )
 
                                                                  
 
                                                                                        
Other Assets
     690       22,671       4.0       23,481       4.3       24,330       4.3       (810 )     (3.4 )     (1,659 )     (6.8 )
 
                                                                  
Total Assets
   $ 17,009     $ 558,917       100.0     $ 549,999       100.0     $ 570,865       100.0     $ 8,918       1.6     ($ 11,948 )     (2.1 )
 
                                                                  
 
                                                                                        
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                                                                        
Current Liabilities
                                                                                        
Accounts Payable
   $ 184     $ 6,043       1.1     $ 9,671       1.8     $ 13,078       2.3       ($3,628 )     (37.5 )     ($7,035 )     (53.8 )
Payables to Contractors and Equipment Suppliers
     244       7,999       1.4       8,082       1.4       6,257       1.1       (83 )     (1.0 )     1,742       27.8  
Accrued Expenses and Other Current Liabilities
     1,051       34,543       6.2       36,124       6.6       29,090       5.1       (1,581 )     (4.4 )     5,453       18.7  
Current Portion of Bonds Payable and Long-Term Liabilities
     250       8,222       1.5       8,258       1.5       281       —       (36 )     (0.4 )     7,941       2828.1  
 
                                                                  
Total Current Liabilities
     1,729       56,807       10.2       62,135       11.3       48,706       8.5       (5,328 )     (8.6 )     8,101       16.6  
 
                                                                  
Bonds Payable
     137       4,500       0.8       4,500       0.8       12,500       2.2       —       —       (8,000 )     (64.0 )
Other Long-Term Liabilities
     524       17,237       3.1       17,541       3.2       18,973       3.3       (304 )     (1.7 )     (1,736 )     (9.2 )
 
                                                                  
Total Liabilities
     2,390       78,544       14.1       84,176       15.3       80,179       14.0       (5,632 )     (6.7 )     (1,635 )     (2.0 )
 
                                                                  
 
                                                                                        
Shareholders’ Equity Attributable to Shareholders of the Parent
                                                                                        
Capital Stock at Par Value
     7,798       256,254       45.8       259,042       47.1       264,271       46.3       (2,788 )     (1.1 )     (8,017 )     (3.0 )
Capital Surplus
     1,518       49,875       8.9       50,463       9.2       53,733       9.4       (588 )     (1.2 )     (3,858 )     (7.2 )
Legal Capital Reserve (2)
     2,049       67,324       12.0       67,324       12.2       56,406       9.9       —       —       10,918       19.4  
Special Capital Reserve (2)
     12       392       0.1       392       0.1       630       0.1       —       —       (238 )     (37.8 )
Unappropriated Earnings (2)
     3,114       102,338       18.3       103,063       18.7       161,828       28.3       (725 )     (0.7 )     (59,490 )     (36.8 )
Treasury Stock
     —       —       —       (16,500 )     (3.0 )     (49,385 )     (8.7 )     16,500       (100.0 )     49,385       (100.0 )
Others
     6       194       0.1       (1,708 )     (0.3 )     (391 )     —       1,902       (111.3 )     585       (149.5 )
 
                                                                  
Total Equity Attributable to Shareholders of the Parent
     14,497       476,377       85.2       462,076       84.0       487,092       85.3       14,301       3.1       (10,715 )     (2.2 )
Minority Interests
     122       3,996       0.7       3,747       0.7       3,594       0.7       249       6.6       402       11.2  
 
                                                                  
Total Shareholders’ Equity
     14,619       480,373       85.9       465,823       84.7       490,686       86.0       14,550       3.1       (10,313 )     (2.1 )
 
                                                                  
Total Liabilities & Shareholders’ Equity
   $ 17,009     $ 558,917       100.0     $ 549,999       100.0     $ 570,865       100.0     $ 8,918       1.6       ($11,948 )     (2.1 )
 
                                                                  
 
Note :
 
(1)   Amounts in New Taiwan dollars have been translated into U.S. dollars at the rate of NT$32.860 as of December 31, 2008.
 
(2)   Certain prior period balances have been reclassified to conform to the current period presentation.

Table of Contents

     
(TSMC LOGO)
     
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Unaudited Consolidated Condensed Income Statements
For the Three Months Ended December 31, 2008, September 30, 2008, December 31, 2007
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”) (1)
Except for Per Share Amounts and Shares Outstanding)
                                                                                         
    4Q 2008     3Q 2008     4Q 2007     QoQ     YoY  
    USD     NTD     %     NTD     %     NTD     %     Amount     %     Amount     %  
Net Sales
   $ 1,962     $ 64,562       100.0     $ 92,979       100.0     $ 93,860       100.0     ($ 28,417 )     (30.6 )   ($ 29,298 )     (31.2 )
Cost of Sales
     (1,348 )     (44,367 )     (68.7 )     (49,885 )     (53.7 )     (49,024 )     (52.2 )     5,518       (11.1 )     4,657       (9.5 )
 
                                                                  
Gross Profit
     614       20,195       31.3       43,094       46.3       44,836       47.8       (22,899 )     (53.1 )     (24,641 )     (55.0 )
 
                                                                  
Operating Expenses
                                                                                        
Research and Development Expenses
     (147 )     (4,826 )     (7.5 )     (5,981 )     (6.4 )     (5,012 )     (5.3 )     1,155       (19.3 )     186       (3.7 )
General and Administrative Expenses
     (70 )     (2,285 )     (3.5 )     (2,979 )     (3.2 )     (2,039 )     (2.2 )     694       (23.3 )     (246 )     12.1  
Sales and Marketing Expenses
     (32 )     (1,062 )     (1.7 )     (1,217 )     (1.3 )     (1,027 )     (1.1 )     155       (12.7 )     (35 )     3.4  
 
                                                                  
Total Operating Expenses
     (249 )     (8,173 )     (12.7 )     (10,177 )     (10.9 )     (8,078 )     (8.6 )     2,004       (19.7 )     (95 )     1.2  
 
                                                                  
 
                                                                                        
Income from Operations
     365       12,022       18.6       32,917       35.4       36,758       39.2       (20,895 )     (63.5 )     (24,736 )     (67.3 )
 
                                                                  
Non-Operating Income, Net
     43       1,412       2.2       1,328       1.4       1,697       1.8       84       6.4       (285 )     (16.8 )
Investment Gains (Loss)
     (10 )     (340 )     (0.5 )     185       0.2       877       0.9       (525 )     (283.6 )     (1,217 )     (138.8 )
 
                                                                  
Income before Income Tax
     398       13,094       20.3       34,430       37.0       39,332       41.9       (21,336 )     (62.0 )     (26,238 )     (66.7 )
 
                                                                                        
Income Tax Expenses
     (14 )     (452 )     (0.7 )     (3,658 )     (3.9 )     (4,608 )     (4.9 )     3,206       (87.6 )     4,156       (90.2 )
 
                                                                                        
 
                                                                  
Net Income
     384       12,642       19.6       30,772       33.1       34,724       37.0       (18,130 )     (58.9 )     (22,082 )     (63.6 )
 
                                                                                        
Minority Interests
     (6 )     (196 )     (0.3 )     (198 )     (0.2 )     (239 )     (0.3 )     2       (1.1 )     43       (18.0 )
 
                                                                  
Net Income Attributable to Shareholders of the Parent
     378       12,446       19.3       30,574       32.9       34,485       36.7       (18,128 )     (59.3 )     (22,039 )     (63.9 )
 
                                                                  
 
                                                                                        
Earnings per Share — Diluted
   $ 0.01     $ 0.48             $ 1.18             $ 1.29             ($ 0.70 )     (59.0 )   ($ 0.81 )     (62.3 )
 
                                                                  
Earnings per ADR — Diluted (2)
   $ 0.07     $ 2.43             $ 5.91             $ 6.44             ($ 3.48 )     (59.0 )   ($ 4.01 )     (62.3 )
 
                                                                  
 
                                                                                        
Weighted Average Outstanding Shares — Diluted (’M) (3)
             25,655               25,850               26,773                                          
 
Note:
 
(1)   Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 32.912 for the fourth quarter of 2008.
 
(2)   1 ADR equals 5 ordinary shares.
 
(3)   Total diluted weighted average outstanding shares was and 26,773M shares for 4Q07 after the retroactive adjustments for stock dividends and stock bonus.

Table of Contents

(TSMC LOGO)
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Audited Consolidated Condensed Income Statements
For the Year Ended December 31, 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 Year Ended December 31
    2008     2007     YoY  
    USD     NTD     %     NTD     %     Amount     %  
Net Sales
   $ 10,608     $ 333,158       100.0     $ 322,630       100.0     $ 10,528       3.3  
Cost of Sales
     (6,095 )     (191,408 )     (57.5 )     (180,280 )     (55.9 )     (11,128 )     6.2  
 
                                          
Gross Profit
     4,513       141,750       42.5       142,350       44.1       (600 )     (0.4 )
 
                                          
Operating Expenses
                                                        
Research and Development Expenses
     (684 )     (21,481 )     (6.4 )     (17,946 )     (5.5 )     (3,535 )     19.7  
General and Administrative Expenses
     (353 )     (11,097 )     (3.3 )     (8,964 )     (2.8 )     (2,133 )     23.8  
Sales and Marketing Expenses
     (151 )     (4,737 )     (1.4 )     (3,718 )     (1.2 )     (1,019 )     27.4  
 
                                          
Total Operating Expenses
     (1,188 )     (37,315 )     (11.1 )     (30,628 )     (9.5 )     (6,687 )     21.8  
 
                                          
 
                                                        
Income from Operations
     3,325       104,435       31.4       111,722       34.6       (7,287 )     (6.5 )
 
                                          
 
                                                        
Non-Operating Income, Net
     202       6,335       1.9       7,412       2.3       (1,077 )     (14.5 )
Investment Gains
     22       702       0.2       2,508       0.8       (1,806 )     (72.0 )
 
                                          
Income before Income Tax
     3,549       111,472       33.5       121,642       37.7       (10,170 )     (8.4 )
 
                                                        
Income Tax Expenses
     (348 )     (10,949 )     (3.3 )     (11,710 )     (3.6 )     761       (6.5 )
 
                                                        
 
                                          
Net Income
     3,201       100,523       30.2       109,932       34.1       (9,409 )     (8.6 )
 
                                                        
Minority Interest
     (19 )     (590 )     (0.2 )     (755 )     (0.3 )     165       (21.9 )
 
                                                        
 
                                          
Net Income Attributable to Shareholders of the Parent
     3,182       99,933       30.0       109,177       33.8       (9,244 )     (8.5 )
 
                                          
 
                                                        
Earnings per Share — Diluted
   $ 0.12     $ 3.83             $ 4.06             ($ 0.23 )     (5.7 )
 
                                              
Earnings per ADR — Diluted (2)
   $ 0.61     $ 19.14             $ 20.30             ($ 1.16 )     (5.7 )
 
                                              
 
                                                        
Weighted Average Outstanding Shares — Diluted (’M) (3)
             26,107               26,892                          
 
Note:
 
(1)   Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.406 for the year ended December 31, 2008.
 
(2)   1 ADR equals 5 ordinary shares.
 
(3)   Total diluted weighted average outstanding shares were 26,892M shares for the year ended December 31, 2007 after the retroactive adjustments for stock dividends and stock bonus.

Table of Contents

(TSMC LOGO)
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
For the Year Ended December 31, 2008 and for the Three Months Ended December 31, 2008, September 30, 2008, and December 31, 2007
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”)) (1)
                                         
    Twelve Months 2008     4Q 2008     3Q 2008     4Q 2007  
    (audited)     (unaudited)     (unaudited)     (unaudited)  
    USD     NTD     NTD     NTD     NTD  
Cash Flows from Operating Activities:
                                        
Net Income
   $ 3,182     $ 99,933     $ 12,446     $ 30,574     $ 34,485  
Net Income Attributable to Minority Interest
     19       590       196       198       239  
Depreciation & Amortization
     2,595       81,512       20,961       20,686       20,281  
Deferred Income Tax
     73       2,279       154       410       877  
Equity in Loss (Earnings) of Equity Method Investees, Net
     (22 )     (702 )     340       (185 )     (877 )
Changes in Working Capital & Others
     1,206       37,882       29,147       4,220       4,754  
 
                              
Net Cash Provided by Operating Activities
     7,053       221,494       63,244       55,903       59,759  
 
                                        
Cash Flows from Investing Activities:
                                        
Acquisitions of:
                                        
Marketable Financial Instruments
     (3,241 )     (101,797 )     (33,059 )     (40,201 )     (32,478 )
Investments Accounted for Using Equity Method
     (2 )     (56 )     (1 )     (55 )     6  
Property, Plant and Equipment
     (1,886 )     (59,223 )     (11,258 )     (10,378 )     (19,781 )
Financial Assets Carried at Cost
     (15 )     (463 )     (73 )     (87 )     (103 )
Proceeds from Disposal or Maturity of:
                                        
Marketable Financial Instruments
     4,908       154,150       63,368       22,126       40,680  
Property, Plant and Equipment
     6       195       24       140       34  
Financial Assets Carried at Cost
     6       199       73       —       141  
Others
     (33 )     (1,047 )     (1,061 )     1,930       (1,160 )
 
                              
Net Cash Provided by (Used In) Investing Activities
     (257 )     (8,042 )     18,013       (26,525 )     (12,661 )
 
                                        
Cash Flows from Financing Activities:
                                        
Decrease in Guarantee Deposits
     (24 )     (759 )     (140 )     (83 )     (321 )
Proceeds from Exercise of Stock Options
     7       227       5       51       35  
Bonus Paid to Directors and Supervisors
     (6 )     (177 )     —       (177 )     —  
Repayment of Long-Term Bonds Payable
     —       —       —       —       (4,500 )
Cash Dividends Paid for Common Stock
     (2,445 )     (76,779 )     —       (76,779 )     —  
Repurchase of Treasury Stock
     (1,066 )     (33,481 )     —       (23,812 )     (45,413 )
Cash Bonus Paid to Employees
     (125 )     (3,940 )     —       (3,940 )     —  
Others
     (15 )     (484 )     (163 )     (222 )     90  
 
                              
Net Cash Used in Financing Activities
     (3,674 )     (115,393 )     (298 )     (104,962 )     (50,109 )
 
                                        
 
                              
Net Increase (Decrease) in Cash and Cash Equivalents
     3,122       98,059       80,959       (75,584 )     (3,011 )
 
                              
 
                                        
Effect of Exchange Rate Changes and Others
     51       1,569       1,209       2,684       (331 )
 
                                        
Cash and Cash Equivalents at Beginning of Period
     3,024       94,986       112,446       185,346       98,328  
 
                              
 
                                        
Cash and Cash Equivalents at End of Period
   $ 6,197     $ 194,614     $ 194,614     $ 112,446     $ 94,986  
 
                              
 
Note: (1)  Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.406 for the year ended December 31, 2008.

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TSMC 2008 Fourth Quarter Investor Conference January 22, 2009

 

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Agenda Welcome Elizabeth Sun 4Q08 Financial Results and 1Q09 Outlook Lora Ho CEO Comments Rick Tsai Q&A Rick Tsai / Lora Ho

 

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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.

 

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4Q08 Financial Highlights (In NT billions except otherwise noted) Guidance Net Sales 93.86 92 — 94 5.5% 25.2% Gross Margin 47.8% 46% — 48% +2 ppt +1.8 ppt Operating Margin 39.2% 37% — 39% +2.8 ppt +2.6 ppt EPS — Diluted (NT$)1.31 14.3% 24.3% Free Cash Flow 39.98 51.9% 12.9% ROE (%) (1) 27.9% +2.9 ppt +5.3 ppt Shipment (Kpcs, 8"-equiv. Wafer) 2,357 5.9% 37.2% QoQ YoY (1) Before expensing of employee profit sharing (2) Total outstanding shares were 25,625mn units on 12/31/08 (3) Annualized ROE for the quarter based on average equity attributable to shareholders of the parent. 4Q08 3Q08 4Q07 (In NT billions except otherwise noted) Guidance Actual Actual(1) Net Sales 64.56 63 — 65 92.98 93.86 -30.6% -31.2% Gross Margin 31.3% 30% — 32% 46.3% 47.8% -15.0 ppt -16.5 ppt Operating Margin 18.6% 17% — 19% 35.4% 39.2% -16.8 ppt -20.6 ppt EPS — Diluted (NT$)(2) 0.48 1.18 1.29 -59.0% -62.3% Free Cash Flow 51.98 45.52 39.98 14.2% 30.0% ROE (%) (3) 10.6% 27.0% 27.9% -16.4 ppt -17.3 ppt Shipment (Kpcs, 8"-equiv. Wafer) 1,532 2,411 2,357 -36.4% -35.0% Average Exchange Rate— NTD/USD 32.91 31.16 32.44 5.6% 1.5% QoQ YoY 4Q08

 

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Income Statements (1) 4Q07 results do not include expensing of employee profit sharing. (In NT billions except otherwise noted) 4Q08 3Q08 4Q07(1) QoQ YoY Net Sales 64.56 92.98 93.86 -30.6% -31.2% Gross Margin 31.3% 46.3% 47.8% -15.0 ppt -16.5 ppt Operating Expenses (8.17) (10.18) (8.08) -19.7% 1.2% Operating Margin 18.6% 35.4% 39.2% -16.8 ppt -20.6 ppt Non-Operating Items 1.41 1.33 1.69 6.4% -16.8% Long-Term Investment Gains (0.34) 0.18 0.88 -283.6% -138.8% Taxes (0.45) (3.66) (4.61) -87.6% -90.2% Net Income 12.45 30.57 34.48 -59.3% -63.9% Net Margin 19.3% 32.9% 36.7% -13.6 ppt -17.4 ppt EPS (NT Dollar) 0.48 1.18 1.29 -59.0% -62.3%

 

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4Q08 Revenue by Applications 0.0 40.0 3Q08 4Q08 Revenue (NT$B) Communications 43% Consumer 19% Computer 32% Industrial/Others 6% QoQ -32% 0.0 40.0 3Q08 4Q08 Revenue (NT$B) QoQ -34% 0.040.03Q08 4Q08 Revenue (NT$B) QoQ -39% Computer Communications Consumer 0.0 40.0 3Q08 4Q08 Revenue (NT$B) Communications 43% Consumer 19% Computer 32% Industrial/Others 6% QoQ -32% 0.0 40.0 3Q08 4Q08 Revenue (NT$B) QoQ -34% 0.0 40.0 3Q08 4Q08 Revenue (NT$B) QoQ -39% Computer Communications Consumer

 

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4Q08 Revenue by Technology 0.11/0.13um 17% 0.15/0.18um 22% 90nm 21% 0.5um+ 3% 0.25/0.35um 10% 65nm 27% 0 5 10 15 20 25 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Revenue (NT$B) 0% 5% 10% 15% 20% 25% 30% % of Sales (%) Rev (NT$B) % of Sales 65nm Revenue 0.11/0.13um 17% 0.15/0.18um 22% 90nm 21% 0.5um+ 3% 0.25/0.35um 10% 65nm 27% 0 5 10 15 20 25 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Revenue (NT$B) 0% 5% 10% 15% 20% 25% 30% % of Sales (%) Rev (NT$B) % of Sales 65nm Revenue

 

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Balance Sheets & Key Indices (1) Asset productivity = Annualized net sales / Average net fixed assets. Selected Items from Balance Sheets (In NT billions excepted otherwise noted) Amount % Amount % Amount % Cash & Marketable Securities 211.45 37.8% 158.17 28.7% 174.83 30.6% Accounts Receivable — Trade 18.50 3.3% 45.33 8.2% 42.42 7.4% Inventory 14.88 2.7% 21.82 4.0% 23.86 4.2% Long-Term Investment 39.98 7.2% 41.87 7.6% 36.46 6.4% Net PP&E 243.65 43.6% 252.29 45.9% 260.25 45.6% Total Assets 558.92 100.0% 550.00 100.0% 570.87 100.0% Current Liabilities 56.81 10.2% 62.13 11.3% 48.71 8.5% Long-Term Interest-bearing Debt 15.22 2.7% 15.15 2.8% 22.78 4.0% Total Liabilities 78.54 14.1% 84.18 15.3% 80.18 14.0% Total Shareholders’ Equity 480.37 85.9% 465.82 84.7% 490.69 86.0% Key Indices A/R Turnover Days Inventory Turnover Days Current Ratio (x) Asset Productivity (x) (1) 4Q08 3Q08 4Q07 46 43 42 40 45 48 4.4 3.7 5.1 1.0 1.4 1.4

 

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Cash Flows (1) Free cash flow = Operating cash flow — Capital expenditures. (In NT billions except otherwise noted) 4Q08 3Q08 4Q07 Beginning Balance 112.45 185.35 98.33 Cash from operating activities 63.24 55.90 59.76 Capital expenditures (11.26) (10.38) (19.78) Cash dividends 0.00 (76.78) 0.00 Share buyback 0.00 (23.81) (45.41) Repayment of corporate bonds 0.00 0.00 (4.50) Short-term investments/others 30.18 (17.83) 6.59 Ending Balance 194.61 112.45 94.99 Free Cash Flow(1) 51.98 45.52 39.98

 

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Installed Capacity 2008 Overall Capacity +13%; Advanced Capacity +27% (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. Fab-2 ( 6”) (1) 248 267 270 272 1,056 274 Fab-3 ( 8”) 277 281 268 274 1,100 286 Fab-5 ( 8”) 163 165 161 161 650 162 Fab-6 ( 8”) 265 267 268 282 1,082 295 Fab-8 ( 8”) 262 275 267 272 1,076 275 Fab-12 ( 12”) (2) 197 207 214 221 840 218 Fab-14 ( 12”) (2) 167 185 229 236 818 238 WaferTech ( 8”) 105 105 106 106 420 106 TSMC (Shanghai) ( 8”) 88 110 128 128 453 128 TSMC & Subsidiaries 2,117 2,236 2,346 2,405 9,104 2,431 (8” Equivalent Kpcs) SSMC ( 8”) 63 67 69 73 272 64 Total TSMC-managed 2,180 2,303 2,416 2,478 9,377 2,495 (8” Equivalent Kpcs) 3Q08 (A) 4Q08 (A) 2008 (A) 2Q08 (A) 1Q08 (A) FAB / (Wafer size) 1Q09 (F)

 

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Capital Expenditures (In US millions) 4Q08 2008 2007 TSMC 326 1,807 2,475 XinTec and GUC 2 23 47 TSMC Shanghai & WaferTech 12 52 31 Other TSMC Subsidiaries 2 4 4 TSMC Consolidated 342 1,886 2,557 Note: 2008 CapEx was based on the weighted average exchange rate of NT$31.406 per US dollar.

 

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2008 Financial Highlights Delivered 7th consecutive year of top line growth Profitability declined due to employee profit sharing expensing in 2008 Continued cash returned to shareholders Balance sheet strength to weather the financial tsunami ROE > 20% for the 5th consecutive year (1) 2007 number Includes share buybacks executed in 2007 but settled in 2008. (In NT billions except otherwise noted) Net Sales 333.16 322.63 Gross Margin 42.5% 44.1% Operating Margin 31.4% 34.6% EPS — Diluted (NT$)3.83 4.06 Free Cash Flow (FCF)162.27 99.76 Cash Dividends 76.78 77.39 Share Buybacks(1) 30.43 48.47 Cash & Marketable Securities 211.45 174.83 ROE 20.7% 21.9% 2008 2007

 

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Cash Returned to Shareholders Cumulative NT$361B (US$11.2B) Since 2004 US$0.2B US$1.5B US$1.0B 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 2004 2007 2008 Increasing Cash Dividend Increasing Cash Dividend Share Buybacks Share Buybacks NT$3.0 NT$0.6 NT$2.0 NT$2.5 NT$3.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2004 2005 2006 2007 2008 Year Paid Cash Dividend per Share (NT$) Note: 2007 share buyback number Includes shares bought in 2007 but settled in 2008. US$0.2B US$1.5B US$1.0B 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 2004 2007 2008 Increasing Cash Dividend Increasing Cash Dividend Share Buybacks Share Buybacks NT$3.0 NT$0.6 NT$2.0 NT$2.5 NT$3.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2004 2005 2006 2007 2008 Year Paid Cash Dividend per Share (NT$) Note: 2007 share buyback number Includes shares bought in 2007 but settled in 2008.

 

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1Q09 Guidance Revenue is expected to be between NT$32 billion and NT$35 billion, at a forecast exchange rate of 32.66 NT dollars to 1 US dollar averaged over 1Q09. Gross profit margin is expected to be between 1% and 5%. Operating profit margin is expected to be between -19% and -15%.

 

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Recap of Recent Major Events TSMC Wins the Award of “Grand Prix for Best Overall Investor Relations at a Taiwanese Company — Large-Cap” by IR Magazine (2008/12/11) TSMC Chairman Dr. Morris Chang Receives Semiconductor Industry Association’s Highest Honor “The 2008 Robert N. Noyce Award” (2008/11/18) TSMC Ramps 40nm Volume Production to Promote Innovation as Foundries Assume a Larger Role for $300 Billion Industry (2008/11/17) TSMC Board Approves Cancellation of Treasury Shares to Reduce Total Issued Shares by 1.07 Percent (2008/11/11) TSMC Adds New High Voltage Features to Advanced 0.13-micron Processes Aimed at High Resolution Display Drivers (2008/11/05) TSMC and MAPPER Take Next Step in Exploring Multiple E-beam Lithography for IC Manufacturing at 22 nanometer node and Beyond (2008/10/13) * Please visit TSMC’s Web site (http://www.tsmc.com) for details and other announcements.

 

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