TSMC Reports First Quarter EPS of NT$1.40

Hsin-Chu, Taiwan, R.O.C., April 28, 2011 -- TSMC today announced consolidated revenue of NT$105.38 billion, net income of NT$36.28 billion, and diluted earnings per share of NT$1.40 (US$0.24 per ADR unit) for the first quarter ended March 31, 2011.

Year-over-year, first quarter revenue increased 14.3% while net income increased 7.8% and diluted EPS increased 7.7%. Compared to fourth quarter of 2010, first quarter of 2011 results represent a 4.3% decrease in revenue, and a 10.9% decrease in both net income and diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

In US dollars, first quarter revenue declined 0.7% from the previous quarter and increased 24.7% year-over-year.

Gross margin for the quarter was 49%, operating margin was 37.2%, and net margin was 34.4%.

First quarter revenue and margins were obtained based on the exchange rate of NTD 29.3 to 1 USD, as compared to the exchange rate of NTD 31.96 to 1 USD in 1Q 2010, and NTD 30.4 to 1 USD in the previous quarter. All exchange rates were calculated based on a transaction-based weighted average of the NTD to USD exchange rate over the quarter.

40-nanometer process technology accounted for 22% of total wafer revenues, 65-nanometer accounted for 32%. These advanced technologies accounted for 54% of total revenues.

The March 11 earthquake in Japan, a tragic event, is not expected to cause any interruptions in our supply lines and is not expected to have a significant effect on our demand.

“For the second quarter of 2011, we expect to increase wafer sales. Relative to the first quarter, the computer and consumer segments will increase while communication segment will decline slightly,” said Lora Ho, SVP and Chief Financial Officer of TSMC. “Based on our current business outlook and exchange rate assumption, management expects overall performance for second quarter 2011 to be as follows”:

• Revenue is expected to be between NT$109 billion and NT$111 billion;

• Gross profit margin is expected to be between 45.5% and 47.5%;

• Operating profit margin is expected to be between 33.5% and 35.5%.