TSMC And Development Fund Jointly Nominate Candidates for Vanguard International Semiconductor Board Election

Hsinchu, Taiwan, R.O.C. -- May 5, 2006 – TSMC announced today the Company and the Development Fund of the Executive Yuan have jointly nominated a slate of candidates for Vanguard International Semiconductor Corporation’s Board of Directors and Supervisors (see table below), and hope the nominated candidates will win majority support from shareholders at Vanguard’s Annual General Meeting on May 11.

The Board of Directors sets a corporation’s development goals, supervises the management team, and ensures shareholders’ rights and interests, and a solid Board of Directors is the cornerstone of good corporate governance. TSMC and the Development Fund are Vanguard’s two largest shareholders, with TSMC holding a 27.2 percent share and the Development Fund holding 26.9 percent for a total of 54.1 percent. TSMC and the Development Fund have agreed on the Development Fund’s nomination of former Minister of Finance Chuan Lin as Chairman of Vanguard’s Board of Directors, while TSMC will seek an appropriate external candidate for the position of Vanguard President.

The Development Fund nominated four Directors to the Board, including the Chairman, two representatives and one unaffiliated Director. TMSC has nominated two representatives and one unaffiliated Director. In addition, TSMC and the Development Fund have each nominated one Supervisor.

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TSMC and the Development Fund of the Executive Yuan nominated candidates for Vanguard International Semiconductor’s Board of Directors and Supervisors Election.