TSMC 2002 Third Quarter Report

Taiwan Semiconductor Manufacturing Company Ltd. (TAIEX: 2330, NYSE: TSM) (TSMC) today announced its financial results for the third quarter of 2002. Net sales for its third quarter reached NT$39,835 million, while net income totaled NT$3,160 million. Earnings per share were NT$0.16 based on the current 18,580,637 thousand weighted average outstanding shares.

For the nine months ended September 30, 2002, the Company's net sales were NT$119,807 million and net income reached NT$19,058 million. Earnings per share for the first nine months of 2002 were NT$1.01.

Compared to the third quarter of 2001, TSMC’s net sales for the third quarter of 2002 grew 47.9%, while net income grew 155.5%. Earnings per share for the third quarter of 2002 increased 171.9% to NT$0.16 on a year-over-year basis.

TSMC spokesperson and senior vice president Mr. Harvey Chang noted that due to decreasing customer demand, wafer shipments for the third quarter of 2002 totaled 677,000 eight-inch equivalent wafers, a 6.0% decrease from the second quarter. The average utilization rate for the third quarter decreased to 79% from the second-quarter rate of 85%. Sales for the third quarter declined 9.8% from the second quarter, to NT$39,835 million. Net income decreased 66.1% in the same period.

Mr. Chang stated that TSMC revenue is expected to bottom-out in the next two quarters and annual revenues for 2003 is expected to represent double-digit growth over 2002 revenues. In addition, TSMC expects to see rapid growth in shipments from 0.13um technology, which could represent about 20% of TSMC’s total revenue in 2003.

TSMC’s 2002 third quarter results: (Unit: NT$million, except for EPS)