TSMC Reports Third Quarter EPS of NT$1.17

Hsin-Chu, Taiwan, R.O.C., October 27, 2011-- TSMC today announced consolidated revenue of NT$106.48 billion, net income of NT$30.40 billion, and diluted earnings per share of NT$1.17 (US$0.20 per ADR unit) for the third quarter ended September 30, 2011.

Year-over-year, third quarter revenue decreased 5.1% while net income and diluted EPS decreased 35.2% and 35.3%, respectively. Compared to second quarter of 2011, third quarter of 2011 results represent a 3.6% decrease in revenue, and a 15.5% 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, third quarter revenue decreased 4.5% from the previous quarter and increased 4.0% year-over-year.

Gross margin for the quarter was 42%, operating margin was 29.7%, and net margin was 28.5%.

40-nanometer and 28-nanometer process technologies accounted for 27% of total wafer revenues, and 65-nanometer accounted for 27%. These advanced technologies accounted for 54% of total revenues.

“The outlook of the global economic condition continues to weaken, which has impacted the demand for our wafers in the fourth quarter of 2011. Relative to the third quarter, all major segments are expected to decline, except for the communication segment, thanks to the strength in the demand for smartphones,” said Lora Ho, SVP and Chief Financial Officer of TSMC. “Based on our current business outlook and exchange rate assumption of 1 US dollar to 30.3 NT dollars, management expects overall performance for fourth quarter 2011 to be as follows”:

· Revenue is expected to be between NT$103 billion and NT$105 billion;

· Gross profit margin is expected to be between 43.5% and 45.5%;

· Operating profit margin is expected to be between 30% and 32%.