TSMC Material Information

July 3, 2008 -- Due to recent market information and rumors that have led to diverging views of TSMC’s business outlook, TSMC would like to make the following clarification:

“According to our current estimates, TSMC’s second-quarter revenue, gross profit margin, and operating profit margin are all in line with or slightly higher than guidance announced at the end of April,” said Lora Ho, TSMC’s spokesperson and Chief Financial Officer. “Third quarter revenue is expected to grow from the second quarter, while gross profit margin and operating profit margin are expected to maintain second-quarter levels. In addition, TSMC maintains its forecast of approximately 5 percent growth in semiconductor industry revenues this year.”

In addition, TSMC announced a share buyback program on May 13 as part of a plan to facilitate Philips’ orderly exit from its shareholding in TSMC. The announced program stated that TSMC would repurchase its own common shares from the open market between May 14 and July 13, 2008, and cancel the repurchased shares.

In order to distribute the dividend approved at the Company’s June 13 shareholder meeting in a timely fashion, TSMC set July 22 as the 2008 dividend record date, and notified the Taiwan Stock Exchange of the ex-dividend date on July 1 in accordance with exchange regulations. As required by the Taiwan Securities and Future Bureau, a company may not repurchase shares between the announcement of its ex-dividend date and two days before the shareholders’ register is closed. Due to this requirement, TSMC could not carry out further share buybacks beginning July 1. At the same time, Philips also ceased selling TSMC shares beginning July 1.

According to TSMC and Philips’ consensus, Philips will not conduct any future sales of TSMC shares on the open market without the agreement of TSMC.