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 March 2003
Taiwan Semiconductor Manufacturing Company Ltd.
(Translation of Registrant's Name Into English)
No.121 Park Avenue III
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 X Form 40-F ______
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(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 ________ No X
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(If "Yes" is marked, indicated below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82: _______.)
Taiwan Semiconductor Manufacturing Company Limited
TSMC yesterday held a meeting of the Board of Directors, at which the Board
adopted a proposal recommending distribution of a stock dividend of NT$0.80 per
common share (i.e. every 1000 common shares are entitled to 80 common shares).
In addition, the Board adopted a proposal to distribute approximately 153
million shares in 100 percent stock at par value for its 2003 employee profit
sharing. These two proposals will seek shareholders' approval at the Company's
annual shareholders' meeting scheduled on June 3, 2003.
In order to avoid the confusion caused by the media's different coverage and
comments today, TSMC decided to make further explanations below:
1. According to the regulations, the profits of NT$ 19,495 million can be
appropriated from TSMC's net income after tax of NT$21,610 million in 2002.
Based on our continuing commitment to our employees and the practice of previous
years, TSMC plans to appropriate approximately 8 percent of 2002 earnings
available for distribution as employees' profit sharing for 2003, equivalent to
around 153 million common shares. The employee profit sharing dilution is
estimated at 0.76 percent. Compared to other companies in the industry,
regardless the different practices using stock bonus, stock options or the two
combined for employee profit sharing, TSMC's employee profit sharing dilution
rate is lower than average.
2. It has been TSMC's practice for the past several years to take eight percent
of its earnings available for distribution in the previous year for employees'
stock bonus in the existing year. As a result, the employee profit sharing
dilution rate is directly related to the earnings in the previous year.
As shown in the following table, the dilution rates for 2002 and 2003 are 0.57
percent and 0.76 percent, respectively. The two figures are relatively low when
compared to 1.97 percent, the average for the past 10 years. This is due to the
fact that the earnings per share for 2002 and 2003 were NT$0.83 and NT$1.14,
which were lower than those for the previous years, not that TSMC has changed
its practice for employees' profit sharing. By the same token, TSMC's 2002
profits of NT$ 21,610 million were higher than that of NT$14,484 million for
2001. As a result, the dilution rate of 0.76 percent for 2003 is higher than
that of 0.57 percent for 2002. Therefore, certain medias' report claiming that
TSMC changed its profit sharing practice and substantially raised its employees'
profit sharing for this year is not correct.
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Year Earning Per Share Dilution Rate
in the Previous Year Due to the Employee Profit Sharing
(NT$) (%)
==========================================================================================
2003 1.14 0.76
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2002 0.83 0.57
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2001 5.71 2.78
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2000 3.24 1.47
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1999 2.54 1.46
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1998 4.40 2.14
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1997 7.31 2.45
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1996 10.48 2.41
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1995 10.86 2.34
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1994 6.98 2.67
==========================================================================================
Average Dilution Rate -- 1.97
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3. In carrying out the past profit sharing distribution practice, the Company
has taken into considerations the constantly evolving market sentiments and
regulatory environment and the heavy discussions across the board regarding what
should be the best form of employee compensation. However, given that each
method of compensation has its pros and cons, and each country and region has a
different background and is under different situations, the discussions so far
has been inconclusive. Since the Company is traded on both the Taiwan Stock
Exchange and the New York Stock Exchange, the Company will adhere to the
regulatory and accounting rules in the two respective regions. Thus, the Company
does not rule out the possibility that it will change its employee profit
sharing produce in the future.
4. Regarding the Company's cash position, the Company currently has around NT$63
billion cash on hand. Approximately US$1.0 to 1.5 billion will be needed for
this year's capital expenditures (NT$ 35 to 53 billion). At the end of May,
another NT$13 billion will be needed to redeem the preferred shares. Thus, the
Company expects total cash outflow of NT$48 to 66 billion for this year and
believes that maintaining its current cash position is very reasonable.
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: March 6, 2003 By /s/ Harvey Chang
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Harvey Chang
Senior Vice President & Chief Financial
Officer