6-K 1 h04586e6vk.htm FORM 6-K
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 October 2010
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: ______.)

#####

FOR IMMEDIATE RELEASE
CONTACT
Elizabeth Sun
Corporate Communication Division
TSMC
invest@tsmc.com
886-3-568-2085
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) |  | 3Q10 |  | 2Q10 |  | 3Q09 |  | QoQ |  | YoY
EPS (NT$ per common share) |  |  | 1.81 |  |  |  | 1.55 |  |  |  | 1.18 |  |  |  | 16.5 | % |  |  | 54.0 | %
(US$ per ADR unit) |  |  | 0.28 |  |  |  | 0.24 |  |  |  | 0.18 |  |  |  |  |  |  |  |  |
Consolidated Net Sales |  |  | 112.25 |  |  |  | 104.96 |  |  |  | 89.94 |  |  |  | 6.9 | % |  |  | 24.8 | %
Gross Profit |  |  | 56.13 |  |  |  | 51.93 |  |  |  | 42.86 |  |  |  | 8.1 | % |  |  | 31.0 | %
Gross Margin |  |  | 50.0 | % |  |  | 49.5 | % |  |  | 47.7 | % |  |  |  |  |  |  |  |
Operating Expense |  |  | (13.06 | ) |  |  | (11.46 | ) |  |  | (10.87 | ) |  |  | 14.0 | % |  |  | 20.1 | %
Operating Income |  |  | 43.07 |  |  |  | 40.47 |  |  |  | 31.99 |  |  |  | 6.4 | % |  |  | 34.6 | %
Operating Margin |  |  | 38.4 | % |  |  | 38.6 | % |  |  | 35.6 | % |  |  |  |  |  |  |  |
Non-Operating Items |  |  | 6.61 |  |  |  | 1.94 |  |  |  | 0.97 |  |  |  |  |  |  |  |  |
Net Income |  |  | 46.94 |  |  |  | 40.28 |  |  |  | 30.55 |  |  |  | 16.5 | % |  |  | 53.6 | %
Net Profit Margin |  |  | 41.8 | % |  |  | 38.4 | % |  |  | 34.0 | % |  |  |  |  |  |  |  |
Wafer Shipment (kpcs 8 inch-equiv.) |  |  | 3,191 |  |  |  | 2,927 |  |  |  | 2,445 |  |  |  | 9.0 | % |  |  | 30.5 | %

Note: Total outstanding shares were 25,907mn units on 9/30/10
Financial Highlights:
Third Quarter 2010

• |  | Consolidated net sales were NT$112.25 billion, representing a 6.9% increase from NT$104.96 billion in 2Q10 and a 24.8% increase from NT$89.94 billion in 3Q09.
• |  | Gross margin was 50.0%, 0.5 percentage point higher than 2Q10 and 2.3 percentage points higher than 3Q09 level.
• |  | Operating margin was 38.4%, down 0.2 percentage point from 2Q10, and up 2.8 percentage points from 3Q09.
• |  | Non-operating income and long-term investment combined were a gain of NT$6.61 billion, compared to a gain of NT$1.94 billion in 2Q10, and NT$0.97 billion in 3Q09.
• |  | Consolidated net income attributable to shareholders of the parent company was NT$46.94 billion, up 16.5% from 2Q10. Net profit margin was 41.8% and diluted EPS was NT$1.81.

#####

TSMC |  |
October 28, 2010 |  | Page 2

I. Revenue Analysis
I. Wafer Sales Analysis

By Application |  | 3Q10 |  | 2Q10 |  | 3Q09
Computer |  |  | 25 | % |  |  | 29 | % |  |  | 28 | %
Communication |  |  | 44 | % |  |  | 41 | % |  |  | 42 | %
Consumer |  |  | 14 | % |  |  | 15 | % |  |  | 16 | %
Industrial/Others |  |  | 17 | % |  |  | 15 | % |  |  | 14 | %

By Technology |  | 3Q10 |  | 2Q10 |  | 3Q09
40/45nm |  |  | 17 | % |  |  | 16 | % |  |  | 4 | %
65nm |  |  | 29 | % |  |  | 27 | % |  |  | 31 | %
90nm |  |  | 14 | % |  |  | 16 | % |  |  | 18 | %
0.11/0.13um |  |  | 12 | % |  |  | 13 | % |  |  | 14 | %
0.15/0.18um |  |  | 17 | % |  |  | 17 | % |  |  | 21 | %
0.25/0.35um |  |  | 8 | % |  |  | 8 | % |  |  | 9 | %
0.50um+ |  |  | 3 | % |  |  | 3 | % |  |  | 3 | %

By Customer Type |  | 3Q10 |  | 2Q10 |  | 3Q09
Fabless/System |  |  | 78 | % |  |  | 79 | % |  |  | 80 | %
IDM |  |  | 22 | % |  |  | 21 | % |  |  | 20 | %

By Geography |  | 3Q10 |  | 2Q10 |  | 3Q09
North America |  |  | 67 | % |  |  | 66 | % |  |  | 70 | %
Asia Pacific |  |  | 15 | % |  |  | 15 | % |  |  | 13 | %
China |  |  | 3 | % |  |  | 3 | % |  |  | 3 | %
Europe |  |  | 11 | % |  |  | 11 | % |  |  | 11 | %
Japan |  |  | 4 | % |  |  | 5 | % |  |  | 3 | %

Revenue Analysis:
Third quarter revenue was NT$112.25 billion, representing a 6.9% increase from the prior quarter. Communication continued its strong momentum with a 13% QoQ growth. Consumer and Industrial increased 4% and 19% from 2Q10, respectively, while Computer declined 7% due to weaker-than-seasonal demand.
In terms of technology, we continued to see strong demand from customers adopting TSMC’s leading edge technologies. 40/45nm and 65nm continued to grow and represented 17% and 29% of total wafer sales, respectively. Revenues from 0.13-micron and below accounted for 72% of total wafer sales.
Revenues from IDM customers grew 14% in 3Q10, much stronger than the overall growth. IDM customers accounted for 22% of total wafer sales during the quarter.
From a geographic perspective, revenues from customers based in North America accounted for 67% of total wafer sales, while sales from Asia Pacific, China, Europe and Japan accounted for 15%, 3%, 11%, and 4% of total wafer sales, respectively.
II . Profit & Expense Analysis
II — 1. Gross Profit Analysis

(In NT billions) |  | 3Q10 |  | 2Q10 |  | 3Q09
COGS |  |  | 56.12 |  |  |  | 53.03 |  |  |  | 47.08 |
Depreciation |  |  | 20.40 |  |  |  | 19.26 |  |  |  | 18.37 |
Other MFG Cost |  |  | 35.72 |  |  |  | 33.77 |  |  |  | 28.71 |
Gross Profit |  |  | 56.13 |  |  |  | 51.93 |  |  |  | 42.86 |
Gross Margin |  |  | 50.0 | % |  |  | 49.5 | % |  |  | 47.7 | %

Gross Profit Analysis:
Gross margin was 50.0% in 3Q10, up 0.5 percentage point from the prior quarter, primarily due to continued cost improvement and a favorable foreign exchange rate.

#####

TSMC |  |
October 28, 2010 |  | Page 3

II — 2. Operating Expenses

(In NT billions) |  | 3Q10 |  | 2Q10 |  | 3Q09
Total Operating Exp. |  |  | 13.06 |  |  |  | 11.46 |  |  |  | 10.87 |
SG&A |  |  | 5.02 |  |  |  | 4.27 |  |  |  | 4.67 |
Research & Development |  |  | 8.04 |  |  |  | 7.19 |  |  |  | 6.20 |
Total Operating Exp. as a % of Sales |  |  | 11.6 | % |  |  | 10.9 | % |  |  | 12.1 | %

Operating Expenses:
Total operating expenses were NT$13.06 billion, representing 11.6% of net sales.
SG&A expenses increased NT$0.75 billion from 2Q10, primarily due to higher opening expenses for Fab 12 Phase 5.
Research and development expenditures increased NT$0.85 billion sequentially, mainly reflecting a higher level of development activities for 28nm and 20nm technologies.
II — 3. Non-Operating Items

(In NT billions) |  | 3Q10 |  | 2Q10 |  | 3Q09
Non-Operating Inc./(Exp.) |  |  | 5.71 |  |  |  | 1.41 |  |  |  | 0.52 |
Net Interest Income/(Exp.) |  |  | 0.30 |  |  |  | 0.33 |  |  |  | 0.42 |
Other Non-Operating |  |  | 5.41 |  |  |  | 1.08 |  |  |  | 0.10 |
L-T Investments |  |  | 0.90 |  |  |  | 0.53 |  |  |  | 0.45 |
SSMC |  |  | 0.35 |  |  |  | 0.33 |  |  |  | 0.26 |
Others |  |  | 0.55 |  |  |  | 0.20 |  |  |  | 0.19 |
Total Non-Operating Items |  |  | 6.61 |  |  |  | 1.94 |  |  |  | 0.97 |

Non-Operating Items:
Total non-operating items were a gain of NT$6.61 billion for 3Q10.
Non-operating income was NT$5.71 billion, up NT$4.30 billion from 2Q10, primarily accounting for the receipt of SMIC shares valued at NT$4.43 billion from the SMIC litigation settlement.
Net investment gain was NT$0.90 billion, up NT$0.37 billion from the prior quarter, reflecting business improvement among certain invested companies.
III. Financial Condition Review
III — 1. Liquidity Analysis
(Balance Sheet Items)

(In NT billions) |  | 3Q10 |  | 2Q10 |  | 3Q09
Cash & Marketable Securities |  |  | 167.21 |  |  |  | 206.54 |  |  |  | 180.32 |
Accounts Receivable — Trade |  |  | 47.38 |  |  |  | 48.06 |  |  |  | 35.88 |
Inventory |  |  | 26.66 |  |  |  | 24.80 |  |  |  | 19.18 |
Other Current Assets |  |  | 5.39 |  |  |  | 7.22 |  |  |  | 8.86 |
Total Current Assets |  |  | 246.64 |  |  |  | 286.62 |  |  |  | 244.24 |
Short Term Loans |  |  | 37.91 |  |  |  | 18.08 |  |  |  | 0.00 |
Accounts Payable |  |  | 39.74 |  |  |  | 38.79 |  |  |  | 26.30 |
Dividends Payable |  |  | 0.00 |  |  |  | 77.89 |  |  |  | 0.00 |
Accrued Employee Profit Sharing/Bonus |  |  | 11.50 |  |  |  | 14.57 |  |  |  | 8.62 |
Accrued Liabilities and Others |  |  | 20.09 |  |  |  | 16.94 |  |  |  | 20.09 |
Total Current Liabilities |  |  | 109.24 |  |  |  | 166.27 |  |  |  | 55.01 |
Current Ratio (x) |  |  | 2.3 |  |  |  | 1.7 |  |  |  | 4.4 |
Net Working Capital |  |  | 137.40 |  |  |  | 120.35 |  |  |  | 189.23 |

Liquidity Analysis:
At the end of 3Q10, total cash and marketable securities decreased by NT$39.33 billion to NT$167.21 billion, primarily due to cash dividends payment of NT$77.71 billion during this quarter.
Accounts receivable decreased slightly, while inventory increased NT$1.86 billion.
Total current liabilities decreased NT$57.03 billion in this quarter, primarily due to payment of cash dividends, partially offset by an increase of short-term loans.
Net working capital was NT$137.4 billion and current ratio was 2.3x.

#####

TSMC October 28, 2010 |  | Page 4

III - 2. Receivable/Inventory Days

(In Number of Days) |  | 3Q10 |  | 2Q10 |  | 3Q09
Days of Receivable |  |  | 39 |  |  |  | 39 |  |  |  | 36 |
Days of Inventory |  |  | 47 |  |  |  | 45 |  |  |  | 41 |

Receivable and Inventory Days:
Days of receivable remained flat at 39 days in this quarter, while days of inventory increased by 2 days to 47 days.
III - 3. Debt Service

(In NT billions) |  | 3Q10 |  | 2Q10 |  | 3Q09
Cash & Marketable Securities |  |  | 167.21 |  |  |  | 206.54 |  |  |  | 180.32 |
Interest-Bearing Debt |  |  | 51.59 |  |  |  | 31.96 |  |  |  | 15.33 |
Net Cash Reserves |  |  | 115.62 |  |  |  | 174.58 |  |  |  | 164.99 |

Debt Service:
Net cash reserves, defined as cash and short-term marketable securities minus interest-bearing debt, decreased NT$58.96 billion to NT$115.62 billion in 3Q10. The decrease was mainly due to a decrease of NT$39.33 billion in cash and marketable securities and an increase of NT$19.83 billion in short-term loans for the purpose of hedging an increased portion of the company’s US dollar position.
IV. Cash Flow
IV - 1.1. Cash Flow Analysis

(In NT billions) |  | 3Q10 |  | 2Q10 |  | 3Q09
Net Income |  |  | 46.94 |  |  |  | 40.28 |  |  |  | 30.55 |
Depreciation & Amortization |  |  | 22.37 |  |  |  | 21.13 |  |  |  | 20.00 |
Employee Profit Sharing Payment |  |  | n.a |  |  |  | n.a |  |  |  | (7.49 | )
Other Operating Sources/(Uses) |  |  | (5.36 | ) |  |  | (12.48 | ) |  |  | 3.60 |
Total Operating Sources/(Uses) |  |  | 63.95 |  |  |  | 48.93 |  |  |  | 46.66 |
Capital Expenditure |  |  | (42.15 | ) |  |  | (52.72 | ) |  |  | (32.04 | )
Marketable Financial Instruments |  |  | 4.37 |  |  |  | 0.17 |  |  |  | (18.94 | )
Long Term Investment |  |  | 0.00 |  |  |  | (1.62 | ) |  |  | n.a |
Other Investing Sources/(Uses) |  |  | (7.25 | ) |  |  | (0.04 | ) |  |  | (0.53 | )
Net Investing Sources/(Uses) |  |  | (45.03 | ) |  |  | (54.21 | ) |  |  | (51.51 | )
Proceeds from Short Term Loans |  |  | 19.83 |  |  |  | 17.76 |  |  |  | 0.00 |
Cash Dividends |  |  | (77.71 | ) |  |  | 0.00 |  |  |  | (76.88 | )
Other Financing Sources/(Uses) |  |  | (0.23 | ) |  |  | (0.15 | ) |  |  | (0.11 | )
Net Financing Sources/(Uses) |  |  | (58.11 | ) |  |  | 17.61 |  |  |  | (76.99 | )
Net Cash Position Changes |  |  | (39.19 | ) |  |  | 12.33 |  |  |  | (81.84 | )
Exchange Rate Changes & Others |  |  | (1.03 | ) |  |  | 0.36 |  |  |  | (0.74 | )
Ending Cash Balance |  |  | 132.27 |  |  |  | 172.49 |  |  |  | 156.94 |

Summary of Cash Flow:
Cash generated from operating activities totaled NT$63.95 billion during the quarter, up NT$15.02 billion from 2Q10, mainly due to the increase in net income and decreased uses in non-cash net working capital.
Net cash used in investing activities totaled NT$45.03 billion, mostly for capital expenditures of NT$42.15 billion and other investing uses of NT$7.25 billion, which mainly reflect the deposits paid to equipment vendors.
Net cash used in financing activities totaled NT$58.11 billion during the quarter, mainly due to the payment of cash dividends, partially offset by proceeds from short-term loans.
As a result, TSMC ended 3Q10 with a cash balance of NT$132.27 billion.

#####

TSMC October 28, 2010 |  | Page 5

Operating and Free Cash Flows:
Free cash flow, defined as the excess of operating cash flows over capital expenditures, was NT$21.80 billion in 3Q10, compared to negative NT$3.79 billion in 2Q10 and NT$14.62 billion in 3Q09.
V. CapEx & Capacity
V-1. Capital Expenditures

(In US millions) |  | 1Q10 |  | 2Q10 |  | 3Q10 |  | YTD
TSMC |  |  | 1,433 |  |  |  | 1,645 |  |  |  | 1,275 |  |  |  | 4,353 |
XinTec and GUC |  |  | 2 |  |  |  | 4 |  |  |  | 10 |  |  |  | 16 |
TSMC China & WaferTech |  |  | 8 |  |  |  | 7 |  |  |  | 34 |  |  |  | 49 |
Other TSMC Subsidiaries |  |  | 1 |  |  |  | 1 |  |  |  | 0 |  |  |  | 2 |
Total TSMC |  |  | 1,444 |  |  |  | 1,657 |  |  |  | 1,319 |  |  |  | 4,420 |

Capital Expenditures:
Capital expenditures for TSMC on a consolidated basis were US$1.32 billion in 3Q10.
Total capital expenditures in the first three quarters of 2010 reached US$4.42 billion.
V-2. Capacity

|  | 2009 |  | 1Q10 |  | 2Q10 |  | 3Q10 |  | 4Q10 |  | 2010
Fab / (Wafer size) |  | (A) |  | (A) |  | (A) |  | (A) |  | (F) |  | (F)
Fab-2 (6")(1) |  |  | 1,121 |  |  |  | 254 |  |  |  | 236 |  |  |  | 255 |  |  |  | 255 |  |  |  | 1,000 |
Fab-3 (8") |  |  | 1,150 |  |  |  | 267 |  |  |  | 282 |  |  |  | 300 |  |  |  | 300 |  |  |  | 1,149 |
Fab-5 (8") |  |  | 599 |  |  |  | 139 |  |  |  | 144 |  |  |  | 141 |  |  |  | 141 |  |  |  | 564 |
Fab-6 (8") |  |  | 1,154 |  |  |  | 269 |  |  |  | 280 |  |  |  | 282 |  |  |  | 282 |  |  |  | 1,113 |
Fab-8 (8") |  |  | 1,066 |  |  |  | 247 |  |  |  | 253 |  |  |  | 254 |  |  |  | 255 |  |  |  | 1,009 |
Fab-12 (12")(2) |  |  | 879 |  |  |  | 269 |  |  |  | 300 |  |  |  | 309 |  |  |  | 315 |  |  |  | 1,194 |
Fab-14 (12")(2) |  |  | 958 |  |  |  | 261 |  |  |  | 299 |  |  |  | 360 |  |  |  | 406 |  |  |  | 1,326 |
WaferTech (8") |  |  | 431 |  |  |  | 106 |  |  |  | 107 |  |  |  | 108 |  |  |  | 108 |  |  |  | 429 |
TSMC China (8") |  |  | 531 |  |  |  | 132 |  |  |  | 134 |  |  |  | 145 |  |  |  | 147 |  |  |  | 557 |
TSMC total capacity (8" equiv. Kpcs) |  |  | 9,695 |  |  |  | 2,497 |  |  |  | 2,680 |  |  |  | 2,879 |  |  |  | 2,997 |  |  |  | 11,053 |
SSMC (8") |  |  | 259 |  |  |  | 69 |  |  |  | 69 |  |  |  | 69 |  |  |  | 69 |  |  |  | 276 |
Total managed capacity (8" equiv. Kpcs) |  |  | 9,955 |  |  |  | 2,566 |  |  |  | 2,749 |  |  |  | 2,948 |  |  |  | 3,066 |  |  |  | 11,329 |

(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:
During the third quarter, Fab 14 successfully accelerated productivity improvement on certain advanced technology ahead of our original schedule, which led to an upward revision of our annual capacity plan.
Total managed capacity in 2010 is now expected to increase 14% sequentially to 11,329K 8-inch equivalent wafers, compared with 11,299K 8-inch equivalent wafers planned in the prior quarter. 12-inch wafer capacity is expected to increase 37% in 2010.
Total managed capacity was 2,948K 8-inch equivalent wafers in 3Q10, increased by 7% from 2,749K in 2Q10.

#####

TSMC October 28, 2010 |  | Page 6

VI. Recap of Recent Important Events & Announcements

• |  | TSMC Begins Building Solar R&D Center and Fab in Central Taiwan ( 2010/09/16 )
• |  | TSMC Was Named the Semiconductor Sector Leader in 2010 Dow Jones Sustainability Index (DJSI) Survey and Included as Index Component for the 10th Consecutive Year ( 2010/09/09 )
• |  | ARM and TSMC Sign Long-Term Strategic Agreement That Enables Broad Processor and Physical IP Optimization on TSMC’s Most Advanced Technology Nodes ( 2010/07/20 )
• |  | TSMC Begins Construction on GigafabTM In Central Taiwan ( 2010/07/16 )

#####

|  | 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)

|  | September 30, 2010 (unaudited) |  |  | June 30, 2010 (audited) |  |  | September 30, 2009 (unaudited) |  |  | QoQ |  |  | YoY |
|  | USD |  |  | NTD |  |  | % |  |  | NTD |  |  | % |  |  | NTD |  |  | % |  |  | Amount |  |  | % |  |  | Amount |  |  | % |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and Cash Equivalents |  | $ | 4,222 |  |  | $ | 132,269 |  |  |  | 19.8 |  |  | $ | 172,486 |  |  |  | 25.3 |  |  | $ | 156,935 |  |  |  | 29.0 |  |  |  | ($40,217 | ) |  |  | (23.3 | ) |  |  | ($24,666 | ) |  |  | (15.7 | )
Investments in Marketable Financial Instruments |  |  | 1,115 |  |  |  | 34,940 |  |  |  | 5.2 |  |  |  | 34,056 |  |  |  | 5.0 |  |  |  | 23,384 |  |  |  | 4.3 |  |  |  | 884 |  |  |  | 2.6 |  |  |  | 11,556 |  |  |  | 49.4 |
Accounts Receivable — Trade |  |  | 1,512 |  |  |  | 47,381 |  |  |  | 7.1 |  |  |  | 48,062 |  |  |  | 7.1 |  |  |  | 35,881 |  |  |  | 6.6 |  |  |  | (681 | ) |  |  | (1.4 | ) |  |  | 11,500 |  |  |  | 32.1 |
Inventories |  |  | 851 |  |  |  | 26,663 |  |  |  | 4.0 |  |  |  | 24,800 |  |  |  | 3.6 |  |  |  | 19,176 |  |  |  | 3.5 |  |  |  | 1,863 |  |  |  | 7.5 |  |  |  | 7,487 |  |  |  | 39.0 |
Other Current Assets |  |  | 172 |  |  |  | 5,384 |  |  |  | 0.8 |  |  |  | 7,211 |  |  |  | 1.1 |  |  |  | 8,865 |  |  |  | 1.7 |  |  |  | (1,827 | ) |  |  | (25.3 | ) |  |  | (3,481 | ) |  |  | (39.3 | )
Total Current Assets |  |  | 7,872 |  |  |  | 246,637 |  |  |  | 36.9 |  |  |  | 286,615 |  |  |  | 42.1 |  |  |  | 244,241 |  |  |  | 45.1 |  |  |  | (39,978 | ) |  |  | (13.9 | ) |  |  | 2,396 |  |  |  | 1.0 |
Long-term Investments |  |  | 1,270 |  |  |  | 39,784 |  |  |  | 6.0 |  |  |  | 40,962 |  |  |  | 6.0 |  |  |  | 38,553 |  |  |  | 7.1 |  |  |  | (1,178 | ) |  |  | (2.9 | ) |  |  | 1,231 |  |  |  | 3.2 |
Properties, Plant and Equipment |  |  | 35,197 |  |  |  | 1,102,720 |  |  |  | 165.2 |  |  |  | 1,062,915 |  |  |  | 156.1 |  |  |  | 911,844 |  |  |  | 168.3 |  |  |  | 39,805 |  |  |  | 3.7 |  |  |  | 190,876 |  |  |  | 20.9 |
Less: Accumulated Depreciation |  |  | (24,052 | ) |  |  | (753,541 | ) |  |  | (112.9 | ) |  |  | (734,445 | ) |  |  | (107.8 | ) |  |  | (675,028 | ) |  |  | (124.6 | ) |  |  | (19,096 | ) |  |  | 2.6 |  |  |  | (78,513 | ) |  |  | 11.6 |
Properties, Plant and Equipment, Net |  |  | 11,145 |  |  |  | 349,179 |  |  |  | 52.3 |  |  |  | 328,470 |  |  |  | 48.3 |  |  |  | 236,816 |  |  |  | 43.7 |  |  |  | 20,709 |  |  |  | 6.3 |  |  |  | 112,363 |  |  |  | 47.4 |
Intangible and Other Assets |  |  | 1,020 |  |  |  | 31,952 |  |  |  | 4.8 |  |  |  | 24,729 |  |  |  | 3.6 |  |  |  | 22,287 |  |  |  | 4.1 |  |  |  | 7,223 |  |  |  | 29.2 |  |  |  | 9,665 |  |  |  | 43.4 |
Total Assets |  | $ | 21,307 |  |  | $ | 667,552 |  |  |  | 100.0 |  |  | $ | 680,776 |  |  |  | 100.0 |  |  | $ | 541,897 |  |  |  | 100.0 |  |  |  | ($13,224 | ) |  |  | (1.9 | ) |  | $ | 125,655 |  |  |  | 23.2 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term Loans |  | $ | 1,210 |  |  | $ | 37,910 |  |  |  | 5.7 |  |  | $ | 18,083 |  |  |  | 2.7 |  |  | $ | — |  |  |  | — |  |  | $ | 19,827 |  |  |  | 109.7 |  |  | $ | 37,910 |  |  |  | — |
Accounts Payables |  |  | 418 |  |  |  | 13,092 |  |  |  | 2.0 |  |  |  | 12,867 |  |  |  | 1.9 |  |  |  | 10,633 |  |  |  | 2.0 |  |  |  | 225 |  |  |  | 1.8 |  |  |  | 2,459 |  |  |  | 23.1 |
Payables to Contractors and Equipment Suppliers |  |  | 850 |  |  |  | 26,645 |  |  |  | 4.0 |  |  |  | 25,922 |  |  |  | 3.8 |  |  |  | 15,666 |  |  |  | 2.9 |  |  |  | 723 |  |  |  | 2.8 |  |  |  | 10,979 |  |  |  | 70.1 |
Accrued Expenses and Other Current Liabilities |  |  | 980 |  |  |  | 30,718 |  |  |  | 4.6 |  |  |  | 108,504 |  |  |  | 15.9 |  |  |  | 28,401 |  |  |  | 5.2 |  |  |  | (77,786 | ) |  |  | (71.7 | ) |  |  | 2,317 |  |  |  | 8.2 |
Current Portion of Bonds Payable and Long-term Debts |  |  | 28 |  |  |  | 871 |  |  |  | 0.1 |  |  |  | 889 |  |  |  | 0.1 |  |  |  | 309 |  |  |  | 0.1 |  |  |  | (18 | ) |  |  | (2.1 | ) |  |  | 562 |  |  |  | 182.2 |
Total Current Liabilities |  |  | 3,486 |  |  |  | 109,236 |  |  |  | 16.4 |  |  |  | 166,265 |  |  |  | 24.4 |  |  |  | 55,009 |  |  |  | 10.2 |  |  |  | (57,029 | ) |  |  | (34.3 | ) |  |  | 54,227 |  |  |  | 98.6 |
Bonds Payable |  |  | 144 |  |  |  | 4,500 |  |  |  | 0.7 |  |  |  | 4,500 |  |  |  | 0.7 |  |  |  | 4,500 |  |  |  | 0.8 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other Long-term Liabilities |  |  | 412 |  |  |  | 12,912 |  |  |  | 1.9 |  |  |  | 13,138 |  |  |  | 1.9 |  |  |  | 15,761 |  |  |  | 2.9 |  |  |  | (226 | ) |  |  | (1.7 | ) |  |  | (2,849 | ) |  |  | (18.1 | )
Total Liabilities |  |  | 4,042 |  |  |  | 126,648 |  |  |  | 19.0 |  |  |  | 183,903 |  |  |  | 27.0 |  |  |  | 75,270 |  |  |  | 13.9 |  |  |  | (57,255 | ) |  |  | (31.1 | ) |  |  | 51,378 |  |  |  | 68.3 |
Shareholders’ Equity Attributable to Shareholders of the Parent |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital Stock at Par Value |  |  | 8,269 |  |  |  | 259,074 |  |  |  | 38.8 |  |  |  | 259,050 |  |  |  | 38.0 |  |  |  | 259,007 |  |  |  | 47.8 |  |  |  | 23 |  |  |  | 0.0 |  |  |  | 66 |  |  |  | 0.0 |
Capital Surplus |  |  | 1,776 |  |  |  | 55,634 |  |  |  | 8.3 |  |  |  | 55,567 |  |  |  | 8.2 |  |  |  | 55,440 |  |  |  | 10.2 |  |  |  | 67 |  |  |  | 0.1 |  |  |  | 194 |  |  |  | 0.4 |
Legal Capital Reserve (2) |  |  | 2,753 |  |  |  | 86,239 |  |  |  | 12.9 |  |  |  | 86,239 |  |  |  | 12.7 |  |  |  | 77,317 |  |  |  | 14.3 |  |  |  | — |  |  |  | — |  |  |  | 8,922 |  |  |  | 11.5 |
Special Capital Reserve (2) |  |  | 42 |  |  |  | 1,313 |  |  |  | 0.2 |  |  |  | 1,313 |  |  |  | 0.2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,313 |  |  |  | — |
Unappropriated Earnings (2) |  |  | 4,389 |  |  |  | 137,506 |  |  |  | 20.6 |  |  |  | 90,567 |  |  |  | 13.3 |  |  |  | 71,899 |  |  |  | 13.3 |  |  |  | 46,940 |  |  |  | 51.8 |  |  |  | 65,608 |  |  |  | 91.2 |
Others |  |  | (104 | ) |  |  | (3,243 | ) |  |  | (0.5 | ) |  |  | (52 | ) |  |  | — |  |  |  | (778 | ) |  |  | (0.2 | ) |  |  | (3,190 | ) |  |  | 6091.5 |  |  |  | (2,464 | ) |  |  | 316.9 |
Equity Attributable to Shareholders of the Parent |  |  | 17,125 |  |  |  | 536,523 |  |  |  | 80.3 |  |  |  | 492,684 |  |  |  | 72.4 |  |  |  | 462,885 |  |  |  | 85.4 |  |  |  | 43,840 |  |  |  | 8.9 |  |  |  | 73,639 |  |  |  | 15.9 |
Minority Interests |  |  | 140 |  |  |  | 4,381 |  |  |  | 0.7 |  |  |  | 4,189 |  |  |  | 0.6 |  |  |  | 3,742 |  |  |  | 0.7 |  |  |  | 191 |  |  |  | 4.6 |  |  |  | 638 |  |  |  | 17.1 |
Total Shareholders’ Equity |  |  | 17,265 |  |  |  | 540,904 |  |  |  | 81.0 |  |  |  | 496,873 |  |  |  | 73.0 |  |  |  | 466,627 |  |  |  | 86.1 |  |  |  | 44,031 |  |  |  | 8.9 |  |  |  | 74,277 |  |  |  | 15.9 |
Total Liabilities & Shareholders’ Equity |  | $ | 21,307 |  |  | $ | 667,552 |  |  |  | 100.0 |  |  | $ | 680,776 |  |  |  | 100.0 |  |  | $ | 541,897 |  |  |  | 100.0 |  |  |  | ($13,224 | ) |  |  | (1.9 | ) |  | $ | 125,655 |  |  |  | 23.2 |

Note:
(1) |  | Amounts in New Taiwan dollars have been translated into U.S. dollars at the rate of NT$31.330 as of September 30, 2010.
(2) |  | Certain prior period balances have been reclassified to conform to the current period presentation.

#####

|  | TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
| Unaudited Consolidated Condensed Income Statements
| For the Three Months Ended September 30, 2010, June 30, 2010, September 30, 2009
|  | (Expressed in Millions of New Taiwan Dollars ("NTD") and U.S. Dollars ("USD") (1)
|  | Except for Per Share Amounts and Shares Outstanding)

|  | 3Q 2010 |  |  | 2Q 2010 |  |  | 3Q 2009 |  |  | QoQ |  |  | YoY |
|  | USD |  |  | NTD |  |  | % |  |  | NTD |  |  | % |  |  | NTD |  |  | % |  |  | Amount |  |  | % |  |  | Amount |  |  | % |
Net Sales |  | $ | 3,515 |  |  | $ | 112,247 |  |  |  | 100.0 |  |  | $ | 104,962 |  |  |  | 100.0 |  |  | $ | 89,936 |  |  |  | 100.0 |  |  | $ | 7,285 |  |  |  | 6.9 |  |  | $ | 22,311 |  |  |  | 24.8 |
Cost of Sales |  |  | (1,758 | ) |  |  | (56,122 | ) |  |  | (50.0 | ) |  |  | (53,036 | ) |  |  | (50.5 | ) |  |  | (47,078 | ) |  |  | (52.3 | ) |  |  | (3,086 | ) |  |  | 5.8 |  |  |  | (9,044 | ) |  |  | 19.2 |
Gross Profit |  |  | 1,757 |  |  |  | 56,125 |  |  |  | 50.0 |  |  |  | 51,926 |  |  |  | 49.5 |  |  |  | 42,858 |  |  |  | 47.7 |  |  |  | 4,199 |  |  |  | 8.1 |  |  |  | 13,267 |  |  |  | 31.0 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and Development Expenses |  |  | (252 | ) |  |  | (8,035 | ) |  |  | (7.2 | ) |  |  | (7,190 | ) |  |  | (6.9 | ) |  |  | (6,202 | ) |  |  | (6.9 | ) |  |  | (845 | ) |  |  | 11.7 |  |  |  | (1,833 | ) |  |  | 29.6 |
General and Administrative Expenses |  |  | (112 | ) |  |  | (3,575 | ) |  |  | (3.1 | ) |  |  | (2,931 | ) |  |  | (2.8 | ) |  |  | (3,541 | ) |  |  | (3.9 | ) |  |  | (644 | ) |  |  | 22.0 |  |  |  | (34 | ) |  |  | 1.0 |
Sales and Marketing Expenses |  |  | (45 | ) |  |  | (1,449 | ) |  |  | (1.3 | ) |  |  | (1,337 | ) |  |  | (1.2 | ) |  |  | (1,131 | ) |  |  | (1.3 | ) |  |  | (112 | ) |  |  | 8.4 |  |  |  | (318 | ) |  |  | 28.1 |
Total Operating Expenses |  |  | (409 | ) |  |  | (13,059 | ) |  |  | (11.6 | ) |  |  | (11,458 | ) |  |  | (10.9 | ) |  |  | (10,874 | ) |  |  | (12.1 | ) |  |  | (1,601 | ) |  |  | 14.0 |  |  |  | (2,185 | ) |  |  | 20.1 |
Income from Operations |  |  | 1,348 |  |  |  | 43,066 |  |  |  | 38.4 |  |  |  | 40,468 |  |  |  | 38.6 |  |  |  | 31,984 |  |  |  | 35.6 |  |  |  | 2,598 |  |  |  | 6.4 |  |  |  | 11,082 |  |  |  | 34.6 |
Non-Operating Income, Net |  |  | 179 |  |  |  | 5,707 |  |  |  | 5.1 |  |  |  | 1,413 |  |  |  | 1.3 |  |  |  | 519 |  |  |  | 0.5 |  |  |  | 4,294 |  |  |  | 304.1 |  |  |  | 5,188 |  |  |  | 998.6 |
Equity in Earnings of Equity Method Investees, Net |  |  | 28 |  |  |  | 902 |  |  |  | 0.8 |  |  |  | 529 |  |  |  | 0.5 |  |  |  | 454 |  |  |  | 0.5 |  |  |  | 373 |  |  |  | 70.5 |  |  |  | 448 |  |  |  | 98.9 |
Income before Income Tax |  |  | 1,555 |  |  |  | 49,675 |  |  |  | 44.3 |  |  |  | 42,410 |  |  |  | 40.4 |  |  |  | 32,957 |  |  |  | 36.6 |  |  |  | 7,265 |  |  |  | 17.1 |  |  |  | 16,718 |  |  |  | 50.7 |
Income Tax Expenses |  |  | (79 | ) |  |  | (2,552 | ) |  |  | (2.3 | ) |  |  | (1,943 | ) |  |  | (1.8 | ) |  |  | (2,285 | ) |  |  | (2.5 | ) |  |  | (609 | ) |  |  | 31.3 |  |  |  | (267 | ) |  |  | 11.7 |
Net Income |  |  | 1,476 |  |  |  | 47,123 |  |  |  | 42.0 |  |  |  | 40,467 |  |  |  | 38.6 |  |  |  | 30,672 |  |  |  | 34.1 |  |  |  | 6,656 |  |  |  | 16.5 |  |  |  | 16,451 |  |  |  | 53.6 |
Net Income Attributable to Minority Interests |  |  | (6 | ) |  |  | (183 | ) |  |  | (0.2 | ) |  |  | (185 | ) |  |  | (0.2 | ) |  |  | (121 | ) |  |  | (0.1 | ) |  |  | 2 |  |  |  | (0.2 | ) |  |  | (62 | ) |  |  | 51.6 |
Net Income Attributable to Shareholders of the Parent |  |  | 1,470 |  |  |  | 46,940 |  |  |  | 41.8 |  |  |  | 40,282 |  |  |  | 38.4 |  |  |  | 30,551 |  |  |  | 34.0 |  |  |  | 6,658 |  |  |  | 16.5 |  |  |  | 16,389 |  |  |  | 53.6 |
Earnings per Share — Diluted |  | $ | 0.06 |  |  | $ | 1.81 |  |  |  |  |  |  | $ | 1.55 |  |  |  |  |  |  | $ | 1.18 |  |  |  |  |  |  | $ | 0.26 |  |  |  | 16.5 |  |  | $ | 0.63 |  |  |  | 54.0 |
Earnings per ADR — Diluted (2) |  | $ | 0.28 |  |  | $ | 9.06 |  |  |  |  |  |  | $ | 7.77 |  |  |  |  |  |  | $ | 5.88 |  |  |  |  |  |  | $ | 1.29 |  |  |  | 16.5 |  |  | $ | 3.18 |  |  |  | 54.0 |
Weighted Average Outstanding Shares - Diluted ("M)(3) |  |  |  |  |  |  | 25,919 |  |  |  |  |  |  |  | 25,917 |  |  |  |  |  |  |  | 25,983 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

Note:
(1) |  | Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD31.936 for the third quarter of 2010.
(2) |  | 1 ADR equals 5 ordinary shares.
(3) |  | Total diluted weighted average outstanding shares were 25,917M and 25,983M shares for 2Q10 and 3Q09 after the retroactive adjustments for exercise price of stock option.

#####

|  | TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
| Unaudited Consolidated Condensed Income Statements
| For the Nine Months Ended September 30, 2010 and 2009
| (Expressed in Millions of New Taiwan Dollars ("NTD") and U.S. Dollars ("USD") (1)
|  | Except for Per Share Amounts and Shares Outstanding)

|  | For The Nine Months Ended September 30 |
|  | 2010 |  |  | 2009 |  |  | YoY |
|  | USD |  |  | NTD |  |  | % |  |  | NTD |  |  | % |  |  | Amount |  |  | % |
Net Sales |  | $ | 9,699 |  |  | $ | 309,396 |  |  |  | 100.0 |  |  | $ | 203,648 |  |  |  | 100.0 |  |  | $ | 105,748 |  |  |  | 51.9 |
Cost of Sales |  |  | (4,927 | ) |  |  | (157,160 | ) |  |  | (50.8 | ) |  |  | (119,014 | ) |  |  | (58.4 | ) |  |  | (38,146 | ) |  |  | 32.1 |
Gross Profit |  |  | 4,772 |  |  |  | 152,236 |  |  |  | 49.2 |  |  |  | 84,634 |  |  |  | 41.6 |  |  |  | 67,602 |  |  |  | 79.9 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and Development Expenses |  |  | (678 | ) |  |  | (21,635 | ) |  |  | (7.0 | ) |  |  | (15,026 | ) |  |  | (7.4 | ) |  |  | (6,609 | ) |  |  | 44.0 |
General and Administrative Expenses |  |  | (281 | ) |  |  | (8,978 | ) |  |  | (2.9 | ) |  |  | (8,017 | ) |  |  | (4.0 | ) |  |  | (961 | ) |  |  | 12.0 |
Sales and Marketing Expenses |  |  | (125 | ) |  |  | (3,961 | ) |  |  | (1.3 | ) |  |  | (3,271 | ) |  |  | (1.6 | ) |  |  | (690 | ) |  |  | 21.1 |
Total Operating Expenses |  |  | (1,084 | ) |  |  | (34,574 | ) |  |  | (11.2 | ) |  |  | (26,314 | ) |  |  | (13.0 | ) |  |  | (8,260 | ) |  |  | 31.4 |
Income from Operations |  |  | 3,688 |  |  |  | 117,662 |  |  |  | 38.0 |  |  |  | 58,320 |  |  |  | 28.6 |  |  |  | 59,342 |  |  |  | 101.8 |
Non-Operating Income, Net |  |  | 254 |  |  |  | 8,118 |  |  |  | 2.7 |  |  |  | 2,028 |  |  |  | 1.0 |  |  |  | 6,090 |  |  |  | 300.3 |
Equity in Earnings (Losses) of Equity Method Investees, Net |  |  | 51 |  |  |  | 1,608 |  |  |  | 0.5 |  |  |  | (253 | ) |  |  | (0.1 | ) |  |  | 1,861 |  |  |  | (735.3 | )
Income before Income Tax |  |  | 3,993 |  |  |  | 127,388 |  |  |  | 41.2 |  |  |  | 60,095 |  |  |  | 29.5 |  |  |  | 67,293 |  |  |  | 112.0 |
Income Tax Expenses |  |  | (187 | ) |  |  | (5,973 | ) |  |  | (1.9 | ) |  |  | (3,489 | ) |  |  | (1.7 | ) |  |  | (2,484 | ) |  |  | 71.2 |
Net Income |  |  | 3,806 |  |  |  | 121,415 |  |  |  | 39.3 |  |  |  | 56,606 |  |  |  | 27.8 |  |  |  | 64,809 |  |  |  | 114.5 |
Net Income Attributable to Minority Interests |  |  | (17 | ) |  |  | (530 | ) |  |  | (0.2 | ) |  |  | (54 | ) |  |  | - |  |  |  | (476 | ) |  |  | 881.9 |
Net Income Attributable to Shareholders of the Parent |  |  | 3,789 |  |  |  | 120,885 |  |  |  | 39.1 |  |  |  | 56,552 |  |  |  | 27.8 |  |  |  | 64,333 |  |  |  | 113.8 |
Earnings per Share - Diluted |  | $ | 0.15 |  |  | $ | 4.66 |  |  |  |  |  |  | $ | 2.18 |  |  |  |  |  |  | $ | 2.48 |  |  |  | 114.3 |
Earnings per ADR - Diluted (2) |  | $ | 0.73 |  |  | $ | 23.32 |  |  |  |  |  |  | $ | 10.88 |  |  |  |  |  |  | $ | 12.44 |  |  |  | 114.3 |
Weighted Average Outstanding Shares - Diluted ("M) (3) |  |  |  |  |  |  | 25,918 |  |  |  |  |  |  |  | 25,981 |  |  |  |  |  |  |  |  |  |  |  |  |

Note:
(1) |  | Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.900 for the nine months ended September 30, 2010.
(2) |  | 1 ADR equals 5 ordinary shares.
(3) |  | Total diluted weighted average outstanding shares were 25,981M shares for the nine months ended September 30, 2009 after the retroactive adjustment for exercise price of stock option.

#####

|  | TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
| Consolidated Condensed Statements of Cash Flows
| For the Nine Months Ended September 30, 2010, and for the Three Months Ended September 30, 2010, June 30, 2010 and September 30, 2009
|  | (Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”)) (1)

|  | Nine Months 2010 |  |  | 3Q 2010 |  |  | 2Q 2010 |  |  | 3Q 2009 |
|  | (unaudited) |  |  | (unaudited) |  |  | (unaudited) |  |  | (unaudited) |
|  | USD |  |  | NTD |  |  | NTD |  |  | NTD |  |  | NTD |
Cash Flows from Operating Activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net Income Attributable to Shareholders of the Parent |  | $ | 3,789 |  |  | $ | 120,885 |  |  | $ | 46,940 |  |  | $ | 40,282 |  |  | $ | 30,551 |
Net Income Attributable to Minority Interest |  |  | 17 |  |  |  | 530 |  |  |  | 183 |  |  |  | 185 |  |  |  | 121 |
Depreciation & Amortization |  |  | 2,022 |  |  |  | 64,506 |  |  |  | 22,372 |  |  |  | 21,131 |  |  |  | 20,001 |
Deferred Income Tax |  |  | (8 | ) |  |  | (257 | ) |  |  | 599 |  |  |  | (138 | ) |  |  | (426 | )
Equity in Earnings of Equity Method Investees, Net |  |  | (50 | ) |  |  | (1,608 | ) |  |  | (902 | ) |  |  | (529 | ) |  |  | (454 | )
Changes in Working Capital & Others |  |  | (788 | ) |  |  | (25,144 | ) |  |  | (5,240 | ) |  |  | (12,005 | ) |  |  | (3,138 | )
Net Cash Provided by Operating Activities |  |  | 4,982 |  |  |  | 158,912 |  |  |  | 63,952 |  |  |  | 48,926 |  |  |  | 46,655 |
Cash Flows from Investing Activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acquisitions of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Marketable Financial Instruments |  |  | (1,427 | ) |  |  | (45,509 | ) |  |  | (9,074 | ) |  |  | (10,577 | ) |  |  | (20,827 | )
Investments Accounted for Using Equity Method |  |  | (196 | ) |  |  | (6,242 | ) |  |  | — |  |  |  | (13 | ) |  |  | (32 | )
Property, Plant and Equipment |  |  | (4,420 | ) |  |  | (141,008 | ) |  |  | (42,151 | ) |  |  | (52,721 | ) |  |  | (32,038 | )
Financial Assets Carried at Cost |  |  | (55 | ) |  |  | (1,754 | ) |  |  | (31 | ) |  |  | (1,612 | ) |  |  | (139 | )
Proceeds from Disposal or Redemption of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Marketable Financial Instruments |  |  | 1,455 |  |  |  | 46,413 |  |  |  | 13,443 |  |  |  | 10,750 |  |  |  | 1,886 |
Property, Plant and Equipment |  |  | 4 |  |  |  | 133 |  |  |  | 21 |  |  |  | 76 |  |  |  | 2 |
Financial Assets Carried at Cost |  |  | 7 |  |  |  | 222 |  |  |  | 42 |  |  |  | 154 |  |  |  | 19 |
Others |  |  | (244 | ) |  |  | (7,784 | ) |  |  | (7,281 | ) |  |  | (266 | ) |  |  | (381 | )
Net Cash Used In Investing Activities |  |  | (4,876 | ) |  |  | (155,529 | ) |  |  | (45,031 | ) |  |  | (54,209 | ) |  |  | (51,510 | )
Cash Flows from Financing Activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Increase in Short-term Loans |  |  | 1,188 |  |  |  | 37,910 |  |  |  | 19,827 |  |  |  | 17,765 |  |  |  | — |
Decrease in Guarantee Deposits |  |  | (6 | ) |  |  | (185 | ) |  |  | (57 | ) |  |  | (38 | ) |  |  | (77 | )
Proceeds from Exercise of Employee Stock Options |  |  | 5 |  |  |  | 151 |  |  |  | 65 |  |  |  | 49 |  |  |  | 162 |
Cash Dividends Paid for Common Stock |  |  | (2,436 | ) |  |  | (77,708 | ) |  |  | (77,708 | ) |  |  | — |  |  |  | (76,876 | )
Others |  |  | (47 | ) |  |  | (1,503 | ) |  |  | (235 | ) |  |  | (160 | ) |  |  | (191 | )
Net Cash Provided by (Used in) Financing Activities |  |  | (1,296 | ) |  |  | (41,335 | ) |  |  | (58,108 | ) |  |  | 17,616 |  |  |  | (76,982 | )
Net Increase (Decrease) in Cash and Cash Equivalents |  |  | (1,190 | ) |  |  | (37,952 | ) |  |  | (39,187 | ) |  |  | 12,333 |  |  |  | (81,837 | )
Effect of Exchange Rate Changes on Cash and Cash Equivalents |  |  | (33 | ) |  |  | (1,055 | ) |  |  | (1,030 | ) |  |  | 353 |  |  |  | (745 | )
Cash and Cash Equivalents at Beginning of Period |  |  | 5,369 |  |  |  | 171,276 |  |  |  | 172,486 |  |  |  | 159,800 |  |  |  | 239,517 |
Cash and Cash Equivalents at End of Period |  | $ | 4,146 |  |  | $ | 132,269 |  |  | $ | 132,269 |  |  | $ | 172,486 |  |  | $ | 156,935 |

Note:
(1) |  | Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD31.900 for the nine months ended September 30, 2010.

#####

TSMC Property TSMC 2010 Third Quarter Investor Conference October 28, 2010 © 2010 TSMC, Ltd

#####

Agenda Welcome 3Q10 Financial Results and 4Q10 Outlook ??CEO Comments ??Q&A Elizabeth Sun Lora Ho Morris Chang Morris Chang / Lora Ho © 2010 TSMC, Ltd

#####

TSMC Property TSMC Property 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, 2010 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.

© 2010 TSMC, Ltd

#####

3Q10 Financial Highlights TSMC Property

3Q104Q072Q104Q07 3Q09 3Q10 QoQ QoQ YoYYoY (In(InNTNTbillionsbillionsexceptexceptotherwiseotherwisenoted) noted) GuidanceResults ActualGuidanceActual Net NetSales Sales112.25109 93.86 — 111 104.96 92 — 94 89.94 5.5% 6.9% 25.2% 24.8% Gross Margin50.0%48% — 50% 49.5% 47.7% +0.5 ppt +2.3 ppts Gross Margin 47.8%46% — 48% +2 ppt +1.8 ppt Operating Margin38.4%36% — 38% 38.6% 35.6% -0.2 ppt +2.8 ppts Operating Margin 39.2%37% — 39% +2.8 ppt +2.6 ppt EPS — Diluted (NT$)1.81 1.55 1.18 16.5% 54.0% EPS — Diluted (NT$) 1.31 14.3% 24.3% Free Cash Flow21.80 -3.79 14.62 675.2% 49.1% Free Cash Flow 39.98 51.9% 12.9% ROE (%)36.5% 31.6%27.3% +4.9 ppts +9.2 ppts ShipmentROE (%)(Kpcs, (1) 8"-equiv. 27.9% +2.9 ppt +5.3 ppt Wafer)3,191 2,9272,445 9.0% 30.5% Average Exchange Rate— 2,357 5.9% 37.2% NTD/USD Shipment (Kpcs, 8"-equiv. Wafer)31.94 31.81 32.80 0.4% -2.6%

* Total outstanding shares were 25,907mn units at 9/30/10

** ROE figures are annualized based on average equity attributable to shareholders of the parent.

© 2010 TSMC, Ltd

#####

Income Statements

TSMC Property

(In NT billions except otherwise noted) 3Q10 2Q10 3Q09 QoQ YoY Net Sales112.25 104.96 89.94 6.9% 24.8% Gross Margin 50.0% 49.5% 47.7% +0.5 ppt +2.3 ppts Operating Expenses (13.06) (11.46) (10.87) 14.0% 20.1% Operating Margin 38.4% 38.6% 35.6% -0.2 ppt +2.8 ppts Non-Operating Items 5.71 1.41 0.52 304.1% 998.6% Long-Term Investment Gains 0.90 0.53 0.45 70.5% 98.9% Taxes(2.55) (1.94) (2.28) 31.3% 11.7% Net Income 46.94 40.28 30.55 16.5% 53.6% Net Margin 41.8% 38.4% 34.0% +3.4 ppt +7.8 ppts EPS (NT Dollar) 1.81 1.55 1.18 16.5% 54.0%

© 2010 TSMC, Ltd

#####

3Q10 Revenue by Applications

TSMC Property

Industrial/Others Consumer 17% Computer 14% 25%

Communications 44%

Communications Computer Consumer 50.0 QoQ +13% 50.0 50.0 B) B) $ $ B) (NT $ (NT (NT

QoQ -7%

Revenue Revenue Revenue QoQ +4% 0.0 0.0 0.0

2Q10 3Q10 2Q10 3Q10 2Q10 3Q10

© 2010 TSMC, Ltd

#####

3Q10 Revenue by Technology

TSMC Property

0.25/0.35um 0.5um+ 8% 3%

65nm/40nm Revenue

50 50% 45 40 40% 35 B) %

$30 30% of (NT

25 Sales Revenue 20 20% (%) 15

10 10% 5 0 0% 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 65nm 40nm Rev Rev (NT (NT$ $B) B) 40/65nm combined as % of Sales

0.15/0.18um 40nm 17% 17% 0.11/0.13um 12% 65nm 90nm 29% 14%

© 2010 TSMC, Ltd

#####

Balance Sheets & Key Indices

TSMC Property

Selected Items from Balance Sheets 3Q10 2Q10 3Q09 (In NT billions excepted otherwise noted) Amount % Amount % Amount % Cash & Marketable Securities 167.21 25.0% 206.54 30.3% 180.32 33.3% Accounts Receivable — Trade 47.38 7.1% 48.06 7.1% 35.88 6.6% Inventory26.664.0% 24.80 3.6% 19.18 3.5% Long-Term Investment 39.78 6.0% 40.96 6.0% 38.55 7.1% Net PP&E349.1852.3% 328.47 48.3% 236.82 43.7% Total Assets667.55 100.0% 680.78 100.0% 541.90 100.0% Current Liabilities109.24 16.4% 166.27 24.4% 55.01 10.2% Long-Term Interest-bearing Debt 12.18 1.8% 12.35 1.8% 14.35 2.6% Total Liabilities126.65 19.0% 183.90 27.0% 75.27 13.9% Total Shareholders’ Equity 540.90 81.0% 496.87 73.0% 466.63 86.1% Key Indices A/R Turnover Days39 39 36 Inventory Turnover Days 47 45 41 Current Ratio (x)2.3 1.7 4.4 Asset Productivity (x)(1) 1.3 1.3 1.6

(1) Asset productivity = Annualized net sales / Average net fixed assets.

© 2010 TSMC, Ltd

#####

Cash Flows

TSMC Property

(In NT billions except otherwise noted) 3Q10 2Q10 3Q09 Beginning Balance 172.49 159.80 239.52 Cash from operating activities 63.95 48.93 46.66 Capital expenditures (42.15) (52.72) (32.04) Cash dividends (77.71) 0.00 (76.88) Proceeds from short-term loans 19.83 17.76 0.00 Investments and others (4.14) (1.28) (20.32) Ending Balance 132.27 172.49 156.94 Free Cash Flow (1) 21.80 (3.79) 14.62

(1) Free cash flow = Operating cash flow — Capital expenditures.

© 2010 TSMC, Ltd

#####

Installed Capacity

2010 Overall Capacity +14%; Advanced Capacity +37%

TSMC Property

2009 1Q10 2Q10 3Q10 4Q10 2010

FAB / (Wafer size)(A) (A) (A) (A) (F) (F) Fab-2(6”) (1) 1,121 254 236 255 255 1,000 Fab-3(8”) 1,150 267 282 300 300 1,149 Fab-5(8”) 599 139 144 141 141 564 Fab-6(8”) 1,154 269 280 282 282 1,113 Fab-8(8”) 1,066 247 253 254 255 1,009 Fab-12( 12”) (2)879 269 300 309 315 1,194 Fab-14( 12”) (2)958 261 299 360 406 1,326

WaferTech( 8”)431 106 107 108 108 429 TSMC China( 8”) 531 132 134 145 147 557 TSMC & Subsidiaries 9,695 2,497 2,680 2,879 2,997 11,053 (8” Equivalent Kpcs) SSMC( 8”)259 69 69 69 69 276 Total TSMC-managed 9,955 2,566 2,749 2,948 3,066 11,329 (8” Equivalent Kpcs)

(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.

© 2010 TSMC, Ltd

#####

Capital Expenditures

TSMC Property

(In US millions) 1Q10 2Q10 3Q10 YTD TSMC1,433 1,645 1,275 4,353 XinTec and GUC 2 4 10 16 TSMC China & WaferTech 8 7 34 49 Other TSMC Subsidiaries 1 1 0 2 TSMC Consolidated 1,444 1,657 1,319 4,420

Note: 2010 CapEx was based on the weighted average exchange rate of NT$31.900 per US dollar.

© 2010 TSMC, Ltd

#####

4Q10 Guidance

Revenue to be between NT$107 billion and NT$109 billion, at a forecast exchange rate of 30.60 NT dollars to 1 US dollar

Gross profit margin to be between 48% and 50% Operating profit margin to be between 35.5% and 37.5%

TSMC Property

© 2010 TSMC, Ltd

#####

Recap of Recent Major Events

TSMC Begins Building Solar R&D Center and Fab in Central Taiwan ( 2010/09/16 ) TSMC Was Named the Semiconductor Sector Leader in 2010 Dow Jones

Sustainability Index (DJSI) Survey and Included as Index Component for the 10th Consecutive Year ( 2010/09/09 )

ARM and TSMC Sign Long-Term Strategic Agreement That Enables Broad Processor and Physical IP Optimization on TSMC’s Most Advanced Technology Nodes ( 2010/07/20 )

TSMC Begins Construction on GigafabTM In Central Taiwan ( 2010/07/16 )

TSMC Property

* Please visit TSMC’s Web site (http://www.tsmc.com) for details and other announcements

© 2010 TSMC, Ltd

#####

CEO Message

I. 3Q, 4Q and Year 2010 II. Supply Chain Inventory and 2011 Outlook III. Mission and Strategy IV. New Technologies V. New Businesses (LED and Solar)

#####

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

TSMC Property

© 2010 TSMC, Ltd

#####

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: October 28, 2010 | By | /s/ Lora Ho |
|  | Lora Ho |
|  | Senior Vice President & Chief Financial Officer |