6-K 1 h01374e6vk.htm TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LTD TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LTD
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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 2007
Taiwan Semiconductor Manufacturing Company Ltd.
(Translation of Registrant’s Name Into English)
No. 8, Li-Hsin Rd. 6,
Science-Based Industrial Park,
Hsin-Chu, 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:                     .)
 
 

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FOR IMMEDIATE RELEASE
         
(TSMC LOGO)
      2Q07 Quarterly Management Report
July 26, 2007
CONTACT
Elizabeth Sun / Harrison Hsueh
Julie Wei
Investor Relations Division
TSMC
invest@tsmc.com
886-3-568-2085/ 2088/2086
Topics in This Report
•   Revenue Analysis
 
•   Capacity
 
•   Profit & Expense Analysis
 
•   Financial Condition Review
 
•   Cash Flow & CapEx
 
•   Recap of Recent Important Events & Announcements
Operating Results Review:
Summary:
                                         
(Amounts are on consolidated basis and are in                    
NT billions except noted otherwise)   2Q07   1Q07   2Q06   QoQ   YoY
EPS (NT$  per common share)
     0.96       0.71       1.29       35.3 %     (25.1 %)
(US$  per ADR unit)
     0.15       0.11       0.20                  
 
                                        
Consolidated Net Sales
     74.92       64.90       82.12       15.4 %     (8.8 %)
Gross Profit
     32.18       24.61       42.50       30.8 %     (24.3 %)
Gross Margin
     43.0 %     37.9 %     51.8 %                
Operating Expense
     (7.45 )     (6.73 )     (7.18 )     10.6 %     3.8 %
Non-Operating Items
     3.29       2.19       0.95       50.2 %     246.7 %
Net Income
     25.48       18.84       34.00       35.3 %     (25.1 %)
Net Profit Margin
     34.0 %     29.0 %     41.4 %                
 
                                        
Wafer Shipment (kpcs 8 inch-equiv.)
     1,856       1,566       1,869       18.5 %     (0.7 %)
Remarks:
The second quarter diluted earnings per share were NT$0.96, representing a 25.1% decrease over the same period last year and a 35.3% sequential increase from the previous quarter. The consolidated operating results of 2Q07 are summarized below:
Second quarter net sales were NT$75 billion, a decline of 8.8% compared to net sales of NT$82 billion for the same period a year ago and an increase of 15.4% compared to net sales of NT$65 billion in the prior quarter.
Gross profit for 2Q07 was NT$32 billion, which represents a year-over-year decrease of 24.3% and a quarter-over-quarter increase of 30.8%. Second quarter gross margin was 43%, higher than the 37.9% gross margin reported in the first quarter of 2007.
Operating expenses were NT$7.4 billion or 10% of the net sales. The combined result from non-operating income and long-term investments was a gain of NT$3.3 billion.
Consolidated net income attributable to shareholders of the parent company was NT$25 billion, down 25.1% from a year ago level and up 35.3% from the previous quarter. Net profit margin was 34% for 2Q07.

 

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TSMC
July 26, 2007 		  Page 2
I. Revenue Analysis
I. Wafer Sales Analysis
                         
By Application   2Q07   1Q07   2Q06
Computer
     29 %     30 %     30 %
Communication
     44 %     42 %     44 %
Consumer
     18 %     17 %     20 %
Industrial/Others
     6 %     7 %     5 %
Memory
     3 %     4 %     1 %
                         
By Technology   2Q07   1Q07   2Q06
65nm and below
     3 %     1 %     —  
90nm
     26 %     22 %     24 %
0.11/0.13um
     24 %     26 %     25 %
0.15/0.18um
     30 %     30 %     32 %
0.25/0.35um
     12 %     15 %     14 %
0.50um+
     5 %     6 %     5 %
                         
By Customer Type   2Q07   1Q07   2Q06
Fabless/System
     68 %     65 %     72 %
IDM
     32 %     35 %     28 %
                         
By Geography   2Q07   1Q07   2Q06
North America
     74 %     77 %     77 %
Asia Pacific
     13 %     11 %     10 %
Europe
     9 %     7 %     9 %
Japan
     4 %     5 %     4 %
Revenue Analysis:
Second quarter consolidated net sales came in at the high end of our expectation to reach NT$75 billion.
Businesses from the three main applications recovered from the inventory correction. On a sequential basis, revenues from communication and consumer applications both increased by 25%, while revenues from computer applications increased by 13%.Revenues from 65nm and 90nm accounted for 3% and 26% of total wafer sales, respectively, higher than that in the previous quarter. Revenues from advanced technologies (0.13-micron and below) accounted for 53% of total wafer sales, up four percentage points from the first quarter of 2007.
Revenues from IDM customers accounted for 32% of total wafer sales during the quarter, compared to 35% in the previous quarter.
Geographically, revenues from North America accounted for 74% of total wafer sales. Meanwhile, sales from Asia Pacific, Europe and Japan accounted for 13%, 9% and 4% of wafer sales, respectively.

 

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TSMC
July 26, 2007 		  Page 3
II. Capacity
II. Capacity
                                         
    1Q07   2Q07   3Q07   4Q07   2007
Fab / (Wafer size)   (A)   (A)   (F)   (F)   (F)
Fab-2 (6”)1
     257       257       273       273       1,060  
Fab-3 (8”)
     259       262       267       269       1,057  
Fab-5 (8”)
     144       155       163       166       627  
Fab-6 (8”)
     245       255       274       279       1,053  
Fab-8 (8”)
     239       239       260       265       1,004  
Fab-12 (12”)2
     169       180       198       221       768  
Fab-14 (12”)2
     103       113       154       176       546  
WaferTech (8”)
     104       105       106       106       419  
TSMC (Shanghai) (8”)
     90       94       99       106       389  
TSMC total capacity (8” equiv. Kpcs)
     1,836       1,913       2,113       2,237       8,099  
SSMC (8”)
     53       55       56       61       226  
Total managed capacity (8” equiv. Kpcs)
     1,890       1,967       2,169       2,298       8,325  
 
Note: 1.    Figues represent number of 6” wafers. Conversion to 8”-equivalent wafers is by dividing this number by 1.78
 
2.   Figues represent number of 12” wafers. Conversion to 8”-equivalent wafers is by multiplying this number by 2.25
Capacity :
Total TSMC managed capacity was 1,967K 8-inch equivalent wafers in 2Q07, 4% higher than 1Q07. TSMC managed capacity in 3Q07 will increase by 10% sequentially to reach 2,169K 8-inch equivalent wafers.
Total managed capacity for year 2007 is expected to be 8,325K 8-inch equivalent wafers, up 18% from 7,062K 8-inch equivalent wafers in year 2006.
III. Profit & Expense Analysis
III — 1. Gross Profit Analysis
                         
(In NT billions)   2Q07   1Q07   2Q06
COGS
     42.7       40.3       39.6  
Depreciation
     17.9       18.5       16.5  
Other MFG Cost
     24.8       21.8       23.1  
 
                        
Gross Profit
     32.2       24.6       42.5  
 
                        
Gross Margin
     43.0 %     37.9 %     51.8 %
Gross Profit Analysis:
Consolidated gross profit for the second quarter 2007 was NT$32 billion, or 43% of net sales, up from a gross profit of NT$25 billion, or 37.9% of net sales, in the previous quarter. Second quarter gross margin improved by 5.1 percentage points primarily due to higher capacity utilization and lower depreciation expenses, offset slightly by a lower average selling price.

 

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TSMC
July 26, 2007 		  Page 4
III — 2. Operating Expenses *
                         
(In NT billions)   2Q07   1Q07   2Q06
Total Operating Exp.
     7.45       6.73       7.18  
SG&A
     3.15       2.79       3.08  
Research & Development
     4.30       3.94       4.10  
 
*   Certain prior period amounts have been reclassified to conform with current period presentation.
Operating Expenses:
Total operating expenses for 2Q07 were NT$7.4 billion, compared to NT$6.7 billion in the prior quarter. Total operating expenses represented 10% of net sales, down slightly from 10.4% in first quarter of 2007.
Research and development expenditures increased by NT$359 million sequentially, largely due to increased R&D spending on 45nm and 32nm related projects.
SG&A expenses were NT$3.1 billion for the quarter, an increase of NT$354 million quarter-over-quarter, mainly due to higher level of business activities.
III — 3. Non-Operating Items
                         
(In NT millions)   2Q07   1Q07   2Q06
Non-Operating Income/(Exp.)
     2,802       1,830       299  
Net Interest Income/(Exp.)
     1,338       1,162       924  
Other Non-Operating
     1,464       668       (625 )
 
                        
L-T Investments
     488       361       650  
SSMC
     233       70       471  
Others
     255       291       179  
 
                        
Total Non-Operating Items
     3,290       2,191       949  
Non-Operating Items:
Combined result from non-operating income and long-term investments was a gain of NT$3.3 billion for second quarter of 2007.
Compared to 1Q07, higher non-operating income was mainly due to higher interest income, an increase in mark-to-market adjustment on certain marketable securities, and lawsuit settlement received from SMIC.
Net investment income increased slightly to reach NT$488 million in the quarter, reflecting improved operating performance at SSMC.

 

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TSMC
July 26, 2007 		  Page 5
IV. Financial Condition Review
IV — 1. Liquidity Analysis
(Selected Balance Sheet Items)
                         
(In NT billions)   2Q07   1Q07   2Q06
Cash & Marketable Securities
     233.1       217.4       211.6  
Accounts Receivable — Trade
     37.1       33.1       38.0  
Inventory
     24.0       22.3       20.1  
Total Current Assets
     304.6       286.1       279.7  
Accounts Payable
     28.2       19.2       27.5  
Current Portion of Bonds Payable
     4.5       4.5       2.5  
Accrued Cash Dividend & Profit Sharing
     82.1       0.0       65.2  
Accrued Liabilities and Others
     17.6       21.4       15.1  
Total Current Liabilities
     132.4       45.1       110.3  
Current Ratio (x)
     2.3       6.3       2.5  
Net Working Capital
     172.2       241.0       169.4  
Liquidity Analysis:
Total cash and marketable securities increased by NT$16 billion in the second quarter of 2007, mainly due to free cash flows generated during the quarter. As a result, TSMC ended the quarter with NT$305 billion in total current assets, compared to NT$286 billion at the end of the previous quarter.
Total current liabilities were NT$132 billion at the end of the quarter, compared to NT$45 billion at the end of the previous quarter. The increase was mainly due to NT$ 77.5 billion and NT$4.6 billion payables accrued for cash dividends and employee bonuses, respectively.
As a result, net working capital decreased to NT$172 billion with a current ratio of 2.3.
IV — 2. Receivable/Inventory Days
                         
    2Q07   1Q07   2Q06
Days of Receivable
     44       47       44  
Days of Inventory
     52       52       47  
Receivable/Inventory Days Trend:
Days of receivable were 44 days in 2Q07, compared to 47 days in the previous quarter.
Days of inventory remained flat at 52 days.
IV — 3. Debt Service
                         
(In NT billions)   2Q07   1Q07   2Q06
Cash & Marketable Securities
     233.1       217.4       211.6  
Interest-Bearing Debt
     26.3       26.2       27.2  
Net Cash Reserves
     206.8       191.2       184.4  
Debt Service:
As a result of the free cash flows generated during the quarter, net cash reserves — defined as the excess of cash and short-term marketable securities over interest-bearing debt — increased by NT$16 billion to reach NT$207 billion in 2Q07.

 

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Page 6
TSMC
July 26, 2007
V. Cash Flow & CapEx
V — 1. Cash Flow Analysis
                         
(In NT billions)   2Q07     1Q07     2Q06  
                         
Net Income
     25.5       18.8       34.0  
Depreciation & Amortization
     19.6       20.3       17.9  
Other Op Sources/(Uses)
     (10.4 )     (1.0 )     (1.5 )
Total Op Sources/(Uses)
     34.7       38.1       50.4  
 
                  
 
                        
Capital Expenditure
     (25.3 )     (14.0 )     (21.4 )
Marketable Financial Instruments
     15.8       3.5       (7.8 )
Other Investing Sources/(Uses)
     (0.7 )     (2.9 )     (1.1 )
Net Investing Sources/(Uses)
     (10.2 )     (13.4 )     (30.3 )
 
                  
 
                        
Repayment of Bonds Payable
     0.0       (2.5 )     0.0  
Other Financing Sources/(Uses)
     (0.5 )     (0.3 )     0.1  
Net Financing Sources/(Uses)
     (0.5 )     (2.8 )     0.1  
 
                  
 
                        
Net Cash Position Changes
     24.0       21.9       20.2  
 
                        
Exchange Rate Changes & Others
     (0.9 )     0.6       (0.0 )
 
                        
Ending Cash Balance
     163.4       140.3       141.5  
Summary of Cash Flow:
During second quarter of 2007, TSMC generated NT$35 billion in cash from operating activities, mainly from net income of NT$25 billion and depreciation & amortization of NT$20 billion, offset in part by the change in net working capital.
Net cash used in investment activities totaled NT$10 billion, mainly due to capital expenditures of NT$25 billion, partially offset by an NT$16 billion in net proceeds from the disposition of marketable financial instruments.
Net cash used in financing activities was NT$1 billion during the quarter.
As a result, TSMC ended the quarter with a cash balance of NT$163 billion, NT$23 billion higher than in 1Q07.
(FLOW CHART)
Operating and Free Cash Flows:
TSMC continues to generate strong operating cash flows and free cash flows. Cash flows generated from operating activities were NT$35 billion. Free cash flows, defined as the excess of operating cash flows over capital expenditures, totaled NT$9 billion in 2Q07, compared to NT$24 billion generated in the previous quarter, mainly due to higher level of capital expenditures in 2Q07.
V — 3. Capital Expenditures
                         
(In US millions)   2Q07     1Q07     YTD  
                         
TSMC
     747       419       1,166  
XinTec and GUC
     13       3       16  
TSMC Shanghai & WaferTech
     4       2       6  
Other TSMC Subsidiaries
     2       0       2  
 
                  
Total TSMC
     766       424       1,190  
Capital Expenditures:
Capital expenditures for TSMC consolidated group totaled US$766 million during the quarter. Most of the spending was for the purchase of 12-inch production equipment.
For year 2007, total capital expenditures for TSMC consolidated group is expected to be in the range of US$2.6 billion to US$2.8 billion, unchanged from our previous guidance.

 

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Page 7
TSMC
July 26, 2007
VI. Recap of Recent Important Events & Announcements

l       TSMC Announces Winners of Second TSMC Outstanding Student Research Award (2007/06/29)
 
l       TSMC Announces Active Accuracy Assurance Initiative (2007/06/04)
 
l       TSMC Unveils Reference Flow 8.0 to Address 45nm Design Challenges (2007/06/04)
 
l       AMD Chooses TSMC 65nm Process for GPU Product Line (2007/05/22)
 
l       TSMC Successfully Completes Secondary Offering of 240 Million ADSs Priced at US$10.68 Per Share (2007/05/18)
 
l       TSMC and Spansion Sign Joint Development Agreement to Expand MirrorBit Technology Applicability at 40nm and Below
    (2007/05/15)
 
l       TSMC Board Approves Expansion of 45 Nanometer Capacity (2007/05/08)
 
l       TSMC Shareholders Approve 3.0 Cash and 0.5% Stock Dividend (2007/05/07)
 
*   Please visit TSMC’s Web site (http://www.tsmc.com) for details about these and other announcements.

 

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(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)


                                                                                         
    June 30, 2007 (audited)     March 31, 2007 (unaudited)     June 30, 2006 (audited)     QoQ     YoY  
    USD     NTD     %     NTD     %     NTD     %     Amount     %     Amount     %  
ASSETS
                                                                                        
Current Assets
                                                                                        
Cash and Cash Equivalents
   $ 4,991     $ 163,391       25.6     $ 140,274       23.0     $ 141,452       23.8     $ 23,117       16.5     $ 21,939       15.5  
Investments in Marketable Financial Instruments
     2,129       69,685       10.9       77,096       12.7       70,139       11.8       (7,411 )     -9.6       (454 )     (0.6 )
Accounts Receivable — Trade
     1,132       37,054       5.8       33,094       5.4       37,969       6.4       3,960       12.0       (915 )     -2.4  
Inventories, Net
     735       24,045       3.8       22,259       3.7       20,051       3.4       1,786       8.0       3,994       19.9  
Other Current Assets
     319       10,464       1.7       13,356       2.2       10,079       1.7       (2,892 )     (21.6 )     385       3.8  
 
                                                                  
Total Current Assets
     9,306       304,639       47.8       286,079       47.0       279,690       47.1       18,560       6.5       24,949       8.9  
 
                                                                  
 
                                                                                        
Long-Term Investments
     1,379       45,153       7.1       52,185       8.6       42,778       7.2       (7,032 )     -13.5       2,375       5.6  
 
                                                                                        
Property, Plant and Equipment
     23,434       767,100       120.3       734,182       120.6       681,123       114.7       32,918       4.5       85,977       12.6  
Less: Accumulated Depreciation
     (15,351 )     (502,495 )     -78.8       (483,834 )     -79.5       (429,993 )     -72.4       (18,661 )     3.9       (72,502 )     16.9  
 
                                                                  
Property, Plant and Equipment, Net
     8,083       264,605       41.5       250,348       41.1       251,130       42.3       14,257       5.7       13,475       5.4  
 
                                                                  
 
Other Assets
     705       23,037       3.6       20,159       3.3       20,145       3.4       2,878       14.3       2,892       14.4  
 
                                                                  
Total Assets
   $ 19,473     $ 637,434       100.0     $ 608,771       100.0     $ 593,743       100.0     $ 28,663       4.7     $ 43,691       7.4  
 
                                                                  
 
                                                                                        
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                                                                        
Current Liabilities
                                                                                        
Short-Term Bank Loans
   $ 3     $ 99       —     $ 79       —     $ —       —     $ 20       24.4     $ 99          
Accounts Payables
     341       11,157       1.8       10,129       1.7       10,282       1.7       1,028       10.2       875       8.5  
Payables to Contractors and Equipment Suppliers
     520       17,010       2.7       9,094       1.5       17,214       2.9       7,916       87.1       (204 )     -1.2  
Accrued Expenses and Other Current Liabilities
     3,035       99,365       15.5       21,101       3.4       80,300       13.6       78,264       370.9       19,065       23.7  
Current Portion of Bonds Payable and Long-Term liabilities
     146       4,782       0.8       4,714       0.8       2,505       0.4       68       1.4       2,277       90.8  
 
                                                                  
Total Current Liabilities
     4,045       132,413       20.8       45,117       7.4       110,301       18.6       87,296       193.5       22,112       20.0  
 
                                                                  
Bonds Payable
     382       12,500       2.0       12,500       2.1       17,000       2.9       —       0.0       (4,500 )     -26.5  
Other Long-Term Liabilities
     570       18,649       2.9       19,415       3.2       18,943       3.1       (766 )     (3.9 )     (294 )     (1.6 )
 
                                                                  
Total Liabilities
     4,997       163,562       25.7       77,032       12.7       146,244       24.6       86,530       112.3       17,318       11.8  
 
                                                                  
 
                                                                                        
Shareholders’ Equity Attributable to Shareholders of the Parent
                                                                                        
Capital Stock
     8,072       264,235       41.5       258,330       42.4       258,234       43.5       5,905       2.3       6,001       2.3  
Capital Surplus
     1,641       53,726       8.4       54,231       8.9       53,822       9.1       (505 )     (0.9 )     (96 )     -0.2  
Retained Earnings
     4,705       154,010       24.2       215,963       35.5       136,723       23.0       (61,953 )     (28.7 )     17,287       12.6  
Treasury Stock
     (28 )     (918 )     -0.1       (918 )     -0.2       (918 )     -0.1       —       0.0       —       —  
Others
     (5 )     (167 )     -0.1       1,020       0.2       (1,029 )     -0.2       (1,187 )     -116.3       862       -83.8  
 
                                                                  
Total Equity Attributable to Shareholders of the Parent
     14,385       470,886       73.9       528,626       86.8       446,832       75.3       (57,740 )     (10.9 )     24,054       5.4  
Minority Interest
     91       2,986       0.4       3,113       0.5       667       0.1       (127 )     (4.1 )     2,319       347.7  
 
                                                                  
Total Shareholders’ Equity
     14,476       473,872       74.3       531,739       87.3       447,499       75.4       (57,867 )     (10.9 )     26,373       5.9  
 
                                                                  
Total Liabilities & Shareholders’ Equity
   $ 19,473     $ 637,434       100.0     $ 608,771       100.0     $ 593,743       100.0     $ 28,663       4.7     $ 43,691       7.4  
 
                                                                  
 
Note:   (1) Amounts in New Taiwan dollars have been translated into U.S. dollars at the rate of NT$32.735 as of June 30, 2007.
2.Financial StatementBS

 

Table of Contents

     
(TSMC LOGO)
  TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Unaudited Consolidated Condensed Income Statements
For the Three Months Ended June 30, 2007, March 31, 2007, and June 30, 2006
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”) (1)
Except for Per Share Amounts and Shares Outstanding)
                                                                                         
    Q2 2007     Q1 2007     Q2 2006     QoQ     YoY  
    USD     NTD     %     NTD     %     NTD     %     Amount     %     Amount     %  
Net Sales
   $ 2,261     $ 74,918       100.0     $ 64,897       100.0     $ 82,118       100.0     $ 10,021       15.4       ($7,200 )     -8.8  
Cost of Sales
     (1,290 )     (42,738 )     -57.0       (40,287 )     -62.1       (39,620 )     -48.2       (2,451 )     6.1       (3,118 )     7.9  
 
                                                                  
Gross Profit
     971       32,180       43.0       24,610       37.9       42,498       51.8       7,570       30.8       (10,318 )     -24.3  
 
                                                                  
Operating Expenses
                                                                                        
Research and Development Expenses (4)
     (130 )     (4,301 )     -5.7       (3,942 )     -6.1       (4,096 )     -5.0       (359 )     9.1       (205 )     5.0  
General and Administrative Expenses (4)
     (65 )     (2,151 )     -2.9       (1,902 )     -2.9       (2,086 )     -2.5       (249 )     13.1       (65 )     3.1  
Sales and Marketing Expenses (4)
     (30 )     (994 )     -1.4       (889 )     -1.4       (993 )     -1.3       (105 )     11.7       (1 )     0.1  
 
                                                                  
Total Operating Expenses
     (225 )     (7,446 )     -10.0       (6,733 )     -10.4       (7,175 )     -8.8       (713 )     10.6       (271 )     3.8  
 
                                                                  
 
                                                                                        
Income from Operations
     746       24,734       33.0       17,877       27.5       35,323       43.0       6,857       38.4       (10,589 )     -30.0  
 
                                                                  
 
                                                                                        
Non-Operating Income, Net
     85       2,802       3.7       1,830       2.8       299       0.4       972       53.1       2,503       835.4  
Investment Gains
     15       488       0.7       361       0.6       650       0.8       127       35.4       (162 )     -24.8  
 
                                                                  
Income before Income Tax
     846       28,024       37.4       20,068       30.9       36,272       44.2       7,956       39.6       (8,248 )     -22.7  
 
                                                                                        
Income Tax (Expenses) Benefits
     (73 )     (2,394 )     -3.2       (1,107 )     -1.7       (2,281 )     -2.8       (1,287 )     116.2       (113 )     5.0  
 
                                                                  
 
                                                                                        
Net Income Before Cumulative Effect of Changes in Accounting Principles
     773       25,630       34.2       18,961       29.2       33,991       41.4       6,669       35.2       (8,361 )     -24.6  
 
                                                                                        
Cumulative Effect of Changes in Accounting Principles (Net of Tax)
     —       —       —       —       —       —       —       —       —       —       —  
 
 
                                                                  
Net Income
     773       25,630       34.2       18,961       29.2       33,991       41.4       6,669       35.2       (8,361 )     -24.6  
 
                                                                                        
Minority Interest
     (4 )     (146 )     -0.2       (122 )     -0.2       11       0.0       (24 )     19.9       (157 )     —  
 
 
                                                                  
Net Income Attributable to Shareholders of the Parent
     769       25,484       34.0       18,839       29.0       34,002       41.4       6,645       35.3       (8,518 )     -25.1  
 
                                                                  
 
                                                                                        
Earnings per Share — Diluted
   $ 0.03     $ 0.96             $ 0.71             $ 1.29             $ 0.25       35.3       -$0.32       -25.1  
 
                                                                        
Earnings per ADR — Diluted (2)
   $ 0.15     $ 4.82             $ 3.57             $ 6.44             $ 1.26       35.3       -$1.62       -25.1  
 
                                                                        
 
Weighted Average Outstanding Shares — Diluted (‘M) (3)
             26,409               26,406               26,394                                          
 
Note:    
 
(1)   Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD33.142 for the second quarter of 2007.
 
(2)   1 ADR equals 5 ordinary shares.
 
(3)   Total diluted weighted average outstanding shares were 26,394M shares for 2Q06 after the retroactive adjustments for stock dividends and stock bonus.
 
(4)   Certain prior period balances have been reclassified to conform to the current period presentation.
2.Financial StatementIS (Q)

Table of Contents

(TSMC LOGO)
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Audited Consolidated Condensed Income Statements
For the Six Months End June 30, 2007 and 2006
(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  
    2007     2006     YoY  
    USD     NTD     %     NTD     %     Amount     %  
Net Sales
   $ 4,235     $ 139,815       100.0     $ 159,968       100.0       ($20,153 )     -12.6  
Cost of Sales
     (2,515 )     (83,025 )     -59.4       (79,743 )     -49.8       (3,282 )     4.1  
 
                                          
Gross Profit
     1,720       56,790       40.6       80,225       50.2       (23,435 )     -29.2  
 
                                          
Operating Expenses
                                                       
Research and Development Expenses (4)
     (250 )     (8,243 )     -5.9       (7,936 )     -5.0       (307 )     3.9  
General and Administrative Expenses (4)
     (123 )     (4,053 )     -2.9       (3,950 )     -2.5       (103 )     2.6  
Sales and Marketing Expenses (4)
     (56 )     (1,883 )     -1.3       (2,114 )     -1.3       231       -10.9  
 
                                          
Total Operating Expenses
     (429 )     (14,179 )     -10.1       (14,000 )     -8.8       (179 )     1.3  
 
                                          
 
                                                        
Income from Operations
     1,291       42,611       30.5       66,225       41.4       (23,614 )     -35.7  
 
                                          
 
                                                        
Non-Operating Income, Net
     140       4,632       3.3       1,716       1.1       2,916       170.0  
Investment Gains
     26       849       0.6       1,250       0.8       (401 )     -32.1  
 
                                          
Income before Income Tax
     1,457       48,092       34.4       69,191       43.3       (21,099 )     -30.5  
 
                                                        
 
Income Tax (Expenses) Benefits
     (106 )     (3,501 )     -2.5       (4,136 )     -2.6       635       -15.3  
 
                                          
 
Net Income before Cumulative Effect of Changes in Accounting Principles
     1,351       44,591       31.9       65,055       40.7       (20,464 )     -31.5  
 
Cumulative Effect of Changes in Accounting Principles (Net of Tax)
     0       0       0.0       1,607       1.0       (1,607 )     -100.0  
 
                                          
 
                                                        
Net Income
     1,351       44,591       31.9       66,662       41.7       (22,071 )     -33.1  
 
                                                        
Minority Interest
     (9 )     (268 )     -0.2       (53 )     -0.1       (215 )     403.9  
 
                                          
 
Net Income Attributable to Shareholders of the Parent
     1,342       44,323       31.7       66,609       41.6       (22,286 )     -33.5  
 
                                          
 
                                                        
Earnings per Share — Diluted
   $ 0.05     $ 1.68             $ 2.52               -$0.85       -33.5  
 
                                              
Earnings per ADR — Diluted (2)
   $ 0.25     $ 8.39             $ 12.62               -$4.23       -33.5  
 
                                              
 
                                                        
Weighted Average Outstanding Shares — Diluted (‘M) (3)
             26,409               26,394                          
 
Note:    
 
(1)   Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 33.015 for six months ended June 30, 2007.
 
(2)   1 ADR equals 5 ordinary shares.
 
(3)   Total diluted weighted average outstanding shares were 26,394M shares for the six months ended June 30, 2006
 
    after the retroactive adjustments for stock dividends and stock bonus.
 
(4)   Certain prior period balances have been reclassified to conform to the current period presentation.

2.Financial StatementIS (YTD)

Table of Contents

(TSMC LOGO)
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
For the Six Months Ended June 30, 2007 and for the Three Months Ended June 30, 2007, March 31, 2007, and June 30, 2006
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”)) (1)


                                         
    Six Months 2007     2Q 2007     1Q 2007     2Q 2006  
    (Audited)     (Unaudited)     (Unaudited)     (Unaudited)  
    USD     NTD     NTD     NTD     NTD  
Cash Flows from Operating Activities:
                                        
Net Income
   $ 1,342     $ 44,323     $ 25,484     $ 18,839     $ 34,002  
Net Income Attributable to Minority Interest
     8       268       146       122       (11 )
Depreciation & Amortization
     1,208       39,867       19,616       20,251       17,888  
Deferred Income Tax
     (18 )     (601 )     371       (972 )     860  
Equity in Earnings of Equity Method Investees, Net
     (26 )     (849 )     (488 )     (361 )     (650 )
Changes in Working Capital & Others
     (306 )     (10,119 )     (10,384 )     265       (1,698 )
 
                              
Net Cash Provided by Operating Activities
     2,208       72,889       34,745       38,144       50,391  
 
                                        
Cash Flows from Investing Activities:
                                        
Acquisitions of:
                                        
Marketable Financial Instruments
     (910 )     (30,030 )     (14,234 )     (15,796 )     (39,850 )
Investments Accounted for Using Equity Method
     —       —       —       —       (48 )
Property, Plant and Equipment
     (1,190 )     (39,303 )     (25,345 )     (13,959 )     (21,391 )
Financial Assets Carried at Cost
     (13 )     (430 )     (218 )     (212 )     (168 )
Proceeds from Disposal or maturity of:
                                        
Marketable Financial Instruments
     1,492       49,272       30,013       19,259       32,075  
Investments Accounted for Using Equity Method
     —       —       —       —       —  
Property, Plant and Equipment
     —       11       10       1       (215 )
Financial Assets Carried at Cost
     —       14       0       14       —  
Others
     (93 )     (3,101 )     (383 )     (2,717 )     (653 )
 
                              
Net Cash Used In Investing Activities
     (714 )     (23,567 )     (10,157 )     (13,410 )     (30,250 )
 
                                        
Cash Flows from Financing Activities:
                                        
Increase (Decrease) in Guarantee Deposits
     (24 )     (806 )     (418 )     (388 )     139  
Proceeds from Exercise of Stock Options
     9       297       175       122       209  
Bonus Paid to Directors and Supervisors
     (9 )     (286 )     (286 )     —       (257 )
Repayment of Long-Term Bonds Payable
     (76 )     (2,500 )     —       (2,500 )     (2 )
Cash Dividends Paid for Common Stock
     —       —       —       —       —  
Cash Bonus Paid to Employees
     —       —       —       —       —  
Others
     (1 )     (26 )     2       (28 )     (15 )
 
                              
Net Cash Provided by (Used in) Financing Activities
     (101 )     (3,321 )     (527 )     (2,794 )     74  
 
                                        
 
                              
Net Increase in Cash and Cash Equivalents
     1,393       46,001       24,061       21,940       20,215  
 
                              
 
                                        
Effect of Exchange Rate Changes and Others
     (13 )     (447 )     (944 )     497       (14 )
 
                                        
Cash and Cash Equivalents at Beginning of Period
     3,569       117,837       140,274       117,837       121,251  
 
                              
 
                                        
Cash and Cash Equivalents at End of Period
   $ 4,949     $ 163,391     $ 163,391     $ 140,274     $ 141,452  
 
                              
 
Note:   (1) Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD33.015 for the six months ended June 30, 2007.

2.Financial StatementCF

Table of Contents

TSMC 2007 Second Quarter Results Investor Conference July 26, 2007

Table of Contents

Agenda Welcome 2007 2Q Consolidated Financial Results Q&A

Table of Contents

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 20, 2007 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.

Table of Contents

Net Income attributable to shareholders of the parent company Annualized ROE for the quarter based on average equity attributable to shareholders of the parent 2Q'07 Result Highlights

Table of Contents

Income Statements Net Income attributable to shareholders of the parent company

Table of Contents

Balance Sheets & Key Indices

Table of Contents

Cash Flows

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Note: 1 Figures represent number of 6" wafers. Conversion to 8"-equivalent wafers is by dividing this number by 1.78. 2 Figures represent number of 12" wafers. Conversion to 8"-equivalent wafers is by multiplying this number by 2.25. Installed Capacity

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Capital Expenditures 2007 CapEx to be in the range of US$2.6-2.8 billion

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Sales Breakdown by Technology

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Sales Breakdown by Application

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Note: This chart does not reflect the actual shipment destination of sales. Sales Breakdown by Geography

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Sales Breakdown by Customer

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3Q'07 Guidance Revenue is expected to be between NT$85 billion and NT$87 billion Gross profit margin is expected to be between 43% and 45%; Operating profit margin is expected to be between 33% and 35%.

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Recap of Recent Major Events TSMC Announces Winners of Second TSMC Outstanding Student Research Award (2007/06/29) TSMC Announces Active Accuracy Assurance Initiative (2007/06/04) TSMC Unveils Reference Flow 8.0 to Address 45nm Design Challenges (2007/06/04) AMD Chooses TSMC 65nm Process for GPU Product Line (2007/05/22) TSMC Successfully Completes Secondary Offering of 240 Million ADSs Priced at US$10.68 Per Share (2007/05/18) TSMC and Spansion Sign Joint Development Agreement to Expand MirrorBit Technology Applicability at 40nm and Below (2007/05/15) TSMC Board Approves Expansion of 45 Nanometer Capacity (2007/05/08) TSMC Shareholders Approve NT$3.0 Cash and 0.5% Stock Dividend (2007/05/07) * Please visit TSMC's Web site (http://www.tsmc.com) for details about these and other announcements.

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

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SIGNATURES

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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 26, 2007  By   /s/ Lora Ho    
        Lora Ho   
        Vice President & Chief Financial Officer