Taiwan Semiconductor Manufacturing Company Ltd.
 



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 January 2005

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: __________.)



 


 

FOR IMMEDIATE RELEASE

(TSMC LOGO)

CONTACT IN TAIWAN
Elizabeth Sun/Julie Chan/Eric Chiang
Investor Relations Division
TSMC
invest@tsmc.com
886-3-568-2085/2080/2087

Topics in This Report

•   Revenue Analysis
 
•   Utilization & Capacity
 
•   Profit & Expense Analysis
 
•   Financial Condition Review
 
•   Cash Flow & CapEx
 
•   Recap of Recent Important Events & Announcements

4Q04 Quarterly Management Report
January 27, 2005

Operating Results Review:

                                         
Summary:                              
(Amount in NT$ billion except noted otherwise)   4Q04     3Q04     4Q03     QoQ     YoY  
EPS (NT$  per com. shr.)
    0.96       1.20       0.68       -20.5 %     40.1 %
(US$  per ADR unit)
    0.15       0.18       0.10                  
 
                                       
Net Sales
    63.87       69.74       57.78       -8.4 %     10.5 %
Gross Profit
    27.15       32.14       22.71       -15.5 %     19.6 %
Operating Expense
    (6.12 )     (6.02 )     (6.08 )     1.8 %     0.7 %
Non-Operating Items
    1.07       2.01       0.94       -46.9 %     13.0 %
Net Income
    22.18       27.93       16.00       -20.6 %     38.6 %
 
                                       
Wafers Shipped (kpcs 8 inch-equiv.)
    1,220       1,333       1,127       -8.5 %     8.3 %
Capacity Utilization
    88 %     103 %     101 %     -14.7 %     -12.6 %
 
                                       
Net Profit Margin
    34.7 %     40.1 %     27.7 %                

Remarks:

The fourth quarter EPS of NT$0.96 represents a 20.5% decrease compared with 3Q04. The unconsolidated operating results of 4Q04 are summarized below:

Net sales declined 8.4% to NT$63.9 billion compared with NT$69.7 billion in the third quarter. The decrease in fourth quarter revenue mainly reflected an 8.5% decrease in wafer shipments and a 2.9% depreciation of the US dollar against local currency, ameliorated by a 1.7% increase in wafer average selling price (ASP).

Gross profit decreased to NT$27.2 billion, representing a 15.5% decline from the previous quarter. Gross margin reduced to 42.5% from 46.1% in 3Q04 due mainly to lower levels of wafer output, an unfavorable exchange rate, and the ramp-up of Fab 14, a new 12-inch wafer fab.

Operating expenses increased slightly to NT$6.1 billion from the previous quarter’s NT$6.0 billion. The increase is the result of 14.3% higher R&D expenses netted by an 11.7% decline of SG&A expenses.

Combined non-operating income and long-term investment gains of NT$1.1 billion was 46.9% lower than in the previous quarter. The reduction was mainly the result of less profitable operating performance by TSMC subsidiary/affiliates and lower gains from other non-operating items.

Income before tax declined 21.5% sequentially to NT$22.1 billion. The Company’s provision for tax expenses of NT$2.6 billion was more than offset by an investment tax credit of NT$2.7 billion. TSMC’s 4Q04 net income was NT$22.2 billion with a net margin of 34.7%.

 


 

TSMC
January 27, 2005
  Page 2

I. Revenue Analysis

I — 1. Wafer Sales Analysis

                         
By Application   4Q04     3Q04     4Q03  
Computer
    35 %     31 %     35 %
Communication
    41 %     42 %     42 %
Consumer
    16 %     20 %     17 %
Industrial/Others
    6 %     5 %     4 %
Memory
    2 %     2 %     2 %
                         
By Technology   4Q04     3Q04     4Q03  
0.13um-
    36 %     30 %     18 %
0.15/0.18um
    34 %     38 %     45 %
0.25um
    14 %     14 %     20 %
0.35um+
    9 %     10 %     10 %
0.50um+
    7 %     8 %     7 %
                         
By Customer Type   4Q04     3Q04     4Q03  
Fabless
    66 %     69 %     71 %
IDM
    33 %     31 %     29 %
System
    1 %     0 %     0 %
                         
By Geography   4Q04     3Q04     4Q03  
North America
    75 %     75 %     75 %
Asia Pacific
    10 %     11 %     12 %
Europe
    7 %     7 %     5 %
Japan
    8 %     7 %     8 %

Revenue Analysis:

Net sales decreased 8.4% to NT$63.9 billion compared with NT$69.7 billion in the third quarter. The decrease in fourth quarter revenue mainly resulted from an 8.5% decrease in wafer shipments and a 2.9% depreciation of the US dollar against local currency, ameliorated by a 1.7% increase in wafer average selling price (ASP).

Revenues from computer applications continued to grow in this quarter while revenues from both communication applications and consumer applications declined.

Demand from advanced technologies — defined as 0.13-micron and below — strengthened further in 4Q04 with 90nm commencing volume production with very high yield and good quality. Revenue contribution from advanced technology wafers increased to 36% of total wafer sales, compared to 30% in the previous quarter.

IDM wafer sales weighting during the quarter rose to 33% from 31% in the previous quarter while Fabless accounted for 66%. The increase in IDM weighting was mainly attributable to continuous IDM outsourcing in advanced technology.

Geographically, the distribution remained similar to the previous quarter.

(I-2. ASP TREND LINE CHART)

ASP Trend:

Continuing from 3Q04’s 1.4% increase, ASP rose again by 1.7% in this quarter. This quarter’s ASP increase was attributable to a better product mix.

 


 

TSMC
January 27, 2005
  Page 3

II. Utilization & Capacity

(II-1. UTILIZATION RATE BAR CHART)

Utilization Rate:

Overall capacity utilization decreased to 88% in this quarter from 103% in the third quarter.

II — 2. Capacity

                         
    4Q04     2004     1Q05  
Fab / (Wafer size)   (Act.)     (Act.)     (Est.)  
Fab-2 (6")1
    248       930       238  
Fab-3 (8")
    247       922       234  
Fab-5 (8")
    124       470       119  
Fab-6 (8")
    217       813       203  
Fab-7 (8")
    40       165       36  
Fab-8 (8")
    224       823       215  
Fab-12 (12")2
    80       244       85  
Fab-14 (12")2
    6       6       18  
TSMC — owned capacity 8"-equivalent Kpcs
    1,184       4,279       1,172  
Wafer Tech (8")
    97       373       95  
SSMC (8")
    39       136       41  
TSMC (Shanghai) (8")
    1       1       9  
Total TSMC — managed 8"-equivalent Kpcs
    1,320       4,788       1,317  

    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 in 4Q04 was 1,320 kpcs/quarter in terms of 8-inch equivalent wafers, representing 4.8% sequential capacity growth, where 12-inch wafer capacity increased 24.6% sequentially.

Overall installed capacity for year 2004 was about 4.8 million 8-inch equivalent wafers.

While the majority of TSMC fabs will conduct annual maintenance in 1Q05, TSMC managed capacity is expected to remain about the same at 1,317 kpcs 8-inch equivalent wafers.

Overall installed capacity for year 2005 is expected to reach 5.95 million 8-inch equivalent wafers, representing 24% year-on-year growth. Capacity for 90 nanometers, which are produced only from 12-inch wafers, will increase 18 times, and the overall 12-inch wafer capacity will more than double.

 


 

TSMC
January 27, 2005
  Page 4

III. Profit & Expense Analysis

III — 1. Gross Profit Analysis

                         
(Amount: NT$ billion)   4Q04     3Q04     4Q03  
COGS
    36.7       37.6       35.1  
Depreciation
    14.9       13.7       13.9  
Other MFG Cost
    21.8       23.9       21.2  
 
                       
Gross Profit
    27.2       32.1       22.7  
 
                       
Gross Margin
                       
- TSMC
    42.5 %     46.1 %     39.3 %
- TSMC w/o affiliates
    47.8 %     51.9 %     44.2 %

Gross Profit Analysis:

Gross profit decreased to NT$27.2 billion, representing a 15.5% decline from the previous quarter. Gross margin reduced to 42.5% from 46.1% in 3Q04 mainly due to lower levels of wafer output, an unfavorable exchange rate, and the ramp-up of Fab 14.

During the quarter, the gross margin from TSMC’s own fab manufacturing activities declined to 47.8% from 51.9% in 3Q04.

III — 2. Operating Expense Analysis

                         
(Amount: NT$ billion)   4Q04     3Q04     4Q03  
Total Operating Exp.
    6.12       6.02       6.08  
 
                       
SG&A
    2.56       2.90       2.03  
 
                       
Research & Development
    3.57       3.12       4.06  

Operating Expenses:

Operating expenses increased slightly to NT$6.1 billion. R&D expenditures were sequentially higher due mainly to further development efforts related to 65-nm process technology and more engineering wafers to support the Fab14 ramp-up. SG&A expenditures were sequentially lower mainly because Fab14 stopped incurring opening expenses as it commenced commercial production during 4Q04. Overall, operating expenses represented 9.6% of net sales, compared to last quarter’s 8.6%.

III — 3. Non-Operating Items

                         
(Amount: NT$ million)   4Q04     3Q04     4Q03  
Non-Operating Income/(Exp.)
    457       630       (193 )
Net Interest Income/(Exp.)
    227       228       (14 )
Other Non-Operating
    230       402       (178 )
 
                       
L-T Investments
    609       1,378       1,135  
WaferTech*
    891       1,643       549  
SSMC
    31       268       131  
Vanguard
    423       326       99  
TSMC (Shanghai)
    (359 )     (237 )     (1 )
Miscellaneous
    (377 )     (622 )     357  
 
                       
Total Non-Operating Items
    1,066       2,008       942  

*   Operation results only; does not include amortization of impaired assets.

Non-Operating Items:

Combined non-operating income and long-term investment gains decreased 46.9% to NT$1.1 billion from NT$2.0 billion in the previous quarter.

During the quarter, non-operating income amounted to NT$457 million, NT$173 million lower than last quarter’s income of NT$630 million. This decrease was due mainly to lower royalty income accrued and the revaluation losses of short-term investments in marketable securities, offset partially by higher foreign exchange gains from hedging activities.

Long-term investment gains declined to NT$609 million, compared to NT$1,378 million in 3Q04. The decrease mainly resulted from lower utilization levels at WaferTech and SSMC, and higher expenses incurred at TSMC (Shanghai). These were offset partially by the continuous improvement in Vanguard and smaller losses in miscellaneous others.

 


 

TSMC
January 27, 2005
  Page 5

IV. Financial Condition Review

IV — 1. Liquidity Analysis

                         
(Amount: NT$ billion)   4Q04     3Q04     4Q03  
Cash & S-T Investments
    118.5       124.4       110.8  
Accounts Receivable — Trade
    27.2       33.4       25.6  
Inventory
    14.2       12.6       10.9  
Deferred Income Tax Assets
    8.8       2.5       8.3  
Total Current Assets
    173.7       177.7       158.5  
 
                       
Accounts Payable
    40.8       28.3       17.7  
Current Portion of Bonds Payable
    10.5       5.0       5.0  
Accrued Liabilities and Others
    9.3       11.0       7.8  
Total Current Liabilities
    60.6       44.2       30.5  
 
                       
Current Ratio (x)
    2.9       4.0       5.2  
 
                       
Net Working Capital
    113.0       133.4       128.0  

Liquidity Analysis:

Total current assets were NT$4.0 billion lower on a sequential basis. The decrease was mainly attributable to lower cash & short-term investment and accounts receivable, partially offset by higher inventory and deferred income tax assets. The NT$5.9 billion decrease in cash and short-term investment was due mainly to a long-term investment of NT$5.6 billion in a structured note during this quarter, and a reclassification of NT$4.9 billion of such notes from short-term to long-term investment made in the previous quarter.

Meanwhile, total current liabilities increased significantly due mainly to the increase of accounts payable resulting from the faster move-in of 12-inch production equipment in this quarter and the increase of the current portion of bonds payable.

As a result, the Company’s current ratio declined to 2.9x and net working capital reduced to NT$113.0 billion, a decrease of NT$20.4 billion over the previous quarter.

(IV-2. RECEIVABLE -- INVENTORY DAYS TREND LINE CHART)

Receivable/Inventory Days Trend:

Days of receivables increased to 45 days compared with 43 days in 3Q04, reflecting slower business activities during 4Q04.

Days of Inventory increased to 41 days as compared to 38 days in the previous quarter. The increase was due mainly to the combination of higher values of WIP for increased 12-inch production and higher finished goods.

IV — 3. Debt Service

                         
(Amount: NT$ billion)   4Q04     3Q04     4Q03  
Cash & S-T Investments
    118.5       124.4       110.8  
 
                       
Interest-Bearing Debt
    30.0       35.0       35.0  
 
                       
Net Cash Reserves
    88.5       89.4       75.8  

Debt Service:

Net cash reserves, defined as the excess of cash and short-term investments over interest-bearing debt, decreased by NT$0.9 billion to NT$88.5 billion in 4Q04.

Interest-bearing debt reduced to NT$30 billion as NT$5 billion bonds were redeemed in this quarter.

 


 

TSMC
January 27, 2005
  Page 6

V. Cash Flow & CapEx

V — 1. Cash Flow Analysis

                         
(Amount: NT$ billion)   4Q04     3Q04     4Q03  
Net Income
    22.2       27.9       16.0  
Depreciation & Amortization
    16.6       15.4       15.5  
Other Op Sources/(Uses)
    (2.1 )     (5.1 )     (0.0 )
Total Op Sources/(Uses)
    36.7       38.2       31.5  
 
                 
 
                       
Capital Expenditure
    (20.5 )     (16.5 )     (12.8 )
Short Term Investment
    (6.9 )     (4.9 )     (0.9 )
Long Term Investment
    (17.0 )     (7.3 )     (2.0 )
Other Investing Sources/(Uses)
    (0.0 )     (0.4 )     (0.2 )
Net Investing Sources/(Uses)
    (44.4 )     (29.1 )     (15.9 )
 
                 
 
                       
Cash dividends paid to common stocks
    0.0       (12.2 )     0.0  
Bonus paid to Employees
    0.0       (0.7 )     0.0  
Payment on long-term bonds payable
    (5.0 )     0.0       0.0  
Other Financing Sources/(Uses)
    (0.1 )     (0.1 )     (0.1 )
Net Financing Sources/(Uses)
    (5.1 )     (12.9 )     (0.1 )
 
                 
 
                       
Net Cash Position Changes
    (12.8 )     (3.9 )     15.6  
 
                       
Cash Balance
    65.5       78.3       98.3  

Summary of Cash Flow:

During the quarter, TSMC generated NT$36.7 billion operating cash inflow mainly from net income of NT$22.2 billion and depreciation & amortization of NT$16.6 billion. This was partially offset by increases in working capital.

Net cash used in investing activities totaled NT$44.4 billion including (i) capital spending of NT$20.5 billion, (ii) a continued accumulation of NT$6.9 billion in short-term investments, and (iii) long-term investments of NT$3.5 billion in government and corporate bonds, NT$2.9 billion capital injection to TSMC (Shanghai), and NT$5.6 billion in a structured note and a NT$4.9 billion reclassification of such notes.

A net cash outflow of NT$5.1 billion in financing activities was largely attributable to the Company’s NT$5.0 billion bond redemption.

As a result, TSMC ended the quarter with a cash balance of NT$65.5 billion.

(V-2. OPERATING CASH FLOW TREND LINE CHART)

Operating Cash Flow Trend:

Operating cash flow of NT$36.7 billion was slightly lower than the previous quarter due mainly to lower net income.

                                         
CapEx                              
(in US$ million)   1Q04     2Q04     3Q04     4Q04     2004  
TSMC
    489       683       484       621       2,277  
WaferTech
    14       27       26       5       72  
TSMC (Shanghai)     1       9       8       51       69  
Total
    504       719       518       677       2,418  

Capital Spending:

Capital expenditures for TSMC alone during the quarter totaled US$621 million. Most of the spending was for 12-inch capacity ramp-up in Fab 12 and Fab 14.

Capital spending for WaferTech was US$5 million, and US$51 million for TSMC (Shanghai).

For Year 2004, total capital expenditures for TSMC as a group amounted to US$2.4 billion, including US$2.3 billion for TSMC, US$72 million for WaferTech, and US$69 million for TSMC (Shanghai).

 


 

TSMC
January 27, 2005
  Page 7

VI. Recap of Recent Important Events & Announcements

•   TSMC Verifies Fully Functional 90 Nanometer Chips Using Immersion Lithography Tools (2004/12/22 )
 
•   TSMC Holds A Special Shareholders’ Meeting To Approve Amendment of Dividend Policy (2004/12/21 )
 
•   TSMC 0.18-Micron High-Voltage Technology Goes to Volume Production (2004/11/23)
 
•   TSMC Is Awarded Best IR by A Taiwan Company by IR Magazine (2004/11/04)
 
•   TSMC Board of Directors Proposes Amendment of Dividend Policy (2004/11/02)
 
•   TSMC Aims to be Best Partner in “Invented/Made in China” Arena (2004/10/28)
 
•   Freescale and TSMC to Develop Silicon-on-Insulator Technology (2004/10/12)

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

 


 

(TSMC LOGO)

TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD.
Unconsolidated Balance Sheet

As of December 31, 2004 and 2003
(Figures in Million of New Taiwan Dollars (NTD) and U.S. Dollars (USD))
(1)
                                                         
    December 31, 2004     December 31, 2003     YoY  
ASSETS   USD     NTD     %     NTD     %     Move     Inc.(Dec.)%  
Cash
    2,053       65,532       13.4       98,288       24.8       (32,756 )     (33.3 )
Short Term Investment
    1,660       52,979       10.9       12,559       3.2       40,420       321.8  
Accounts Receivable — Trade
    852       27,205       5.6       25,643       6.5       1,562       6.1  
Inventories
    444       14,172       2.9       10,907       2.8       3,265       29.9  
Other Current Assets
    432       13,779       2.8       11,129       2.7       2,650       23.8  
 
                                         
Total Current Assets
    5,441       173,667       35.6       158,526       40.0       15,141       9.6  
 
                                         
 
                                                       
Long Term Investment
    2,297       73,293       15.0       37,965       9.6       35,328       93.1  
 
                                         
 
                                                       
Fixed Assets
    16,543       527,982       108.4       435,801       109.9       92,181       21.2  
Less Accumulated Depreciation
    (9,400 )     (300,006 )     (61.6 )     (247,514 )     (62.4 )     (52,492 )     21.2  
 
                                         
Net Fixed Assets
    7,143       227,976       46.8       188,287       47.5       39,689       21.1  
 
                                         
 
                                                       
Other Assets
    395       12,617       2.6       11,639       2.9       978       8.4  
 
                                         
Total Assets
    15,276       487,553       100.0       396,417       100       91,136       23.0  
 
                                         
LIABILITIES
                                                       
Accounts Payable
    304       9,687       2.0       10,584       2.7       (897 )     (8.5 )
Payables to Contractors and Equipment Suppliers
    976       31,154       6.4       7,118       1.8       24,036       337.7  
Accrued Expenses and Other Current Liabilities
    291       9,298       1.9       7,836       1.9       1,462       18.7  
Current Portion of Bonds Payable
    329       10,500       2.2       5,000       1.3       5,500       31.9  
 
                                         
Total Current Liabilities
    1,900       60,639       12.5       30,538       7.7       30,101       98.6  
 
                                         
Bonds Payable
    611       19,500       4.0       30,000       7.6       (10,500 )     (35.0 )
Other Long Term Liabilities
    265       8,449       1.7       6,665       1.7       1,784       26.8  
 
                                         
Total Liabilities
    2,776       88,588       18.2       67,203       17.0       21,385       31.8  
 
                                         
SHAREHOLDERS’ EQUITY
                                                       
Capital Stock
    7,285       232,520       47.7       202,666       51.1       29,854       14.7  
Capital Surplus
    1,771       56,537       11.6       56,856       14.3       (319 )     (0.6 )
Legal Reserve
    800       25,528       5.2       20,802       5.2       4,726       22.7  
Special Reserve
                      69       0.0       (69 )      
Retained Earnings
    2,763       88,202       18.1       50,229       12.7       37,973       75.6  
Treasury Stock
    (50 )     (1,595 )     (0.3 )     (1,633 )     (0.4 )     38       (2.3 )
Unrealized Loss on Long-term Investments
                      (0 )     (0.0 )     0        
Cumulated Translation Adjustment
    (69 )     (2,227 )     (0.5 )     225       0.1       (2,452 )      
 
                                         
Total Equity
    12,500       398,965       81.8       329,214       83.0       69,751       21.2  
 
                                         
Total Liabilities & Shareholders’ Equity
    15,276       487,553       100.0       396,417       100       91,136       23.0  
 
                                         

Note: (1)  New Taiwan dollar amounts have been translated into U.S. dollars at the rate of NT$31.92 per U.S. dollar as of December 31, 2004

 


 

(TSMC LOGO)

TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD.
Unconsolidated Balance Sheet

As of December 31 and September 30, 2004
(Figures in Million of New Taiwan Dollars (NTD) and U.S. Dollars (USD))(1)
                                                         
    December 31, 2004     September 30, 2004     QoQ  
ASSETS   USD     NTD     %     NTD     %     Move     Inc.(Dec.)%  
Cash
    2,053       65,532       13.4       78,290       16.9       (12,758 )     (16.3 )
Short Term Investment
    1,660       52,979       10.9       46,128       10.0       6,851       14.9  
Accounts Receivable — Trade
    852       27,205       5.6       33,415       7.2       (6,210 )     (18.6 )
Inventories
    444       14,172       2.9       12,629       2.7       1,544       12.2  
Other Current Assets
    432       13,779       2.8       7,220       1.6       6,558       90.8  
 
                                         
Total Current Assets
    5,441       173,667       35.6       177,682       38.4       (4,015 )     (2.3 )
 
                                         
 
                                                       
Long Term Investment
    2,297       73,293       15.0       58,186       12.6       15,107       26.0  
 
                                         
 
                                                       
Fixed Assets
    16,543       527,982       108.4       492,964       106.6       35,018       7.1  
Less Accumulated Depreciation
    (9,400 )     (300,006 )     (61.6 )     (285,808 )     (61.8 )     (14,198 )     5.0  
 
                                         
Net Fixed Assets
    7,143       227,976       46.8       207,156       44.8       20,820       10.1  
 
                                         
 
                                                       
Other Assets
    395       12,617       2.6       19,484       4.2       (6,867 )     (35.2 )
 
                                         
Total Assets
    15,276       487,553       100.0       462,508       100.0       25,045       5.4  
 
                                         
LIABILITIES
                                                       
Accounts Payable
    304       9,687       2.0       12,997       2.8       (3,310 )     (25.5 )
Payables to Contractors and Equipment Suppliers
    976       31,154       6.4       15,261       3.3       15,893       104.1  
Accrued Expenses and Other Current Liabilities
    291       9,298       1.9       10,974       2.4       (1,676 )     (15.3 )
Current Portion of Bonds Payable
    329       10,500       2.2       5,000       1.1       5,500       110.0  
 
                                         
Total Current Liabilities
    1,900       60,639       12.5       44,232       9.6       16,407       37.1  
 
                                         
Bonds Payable
    611       19,500       4.0       30,000       6.5       (10,500 )     (35.0 )
Other Long Term Liabilities
    265       8,449       1.7       9,013       1.9       (564 )     (6.3 )
 
                                         
Total Liabilities
    2,776       88,588       18.2       83,245       18.0       5,343       6.4  
 
                                         
SHAREHOLDERS’ EQUITY
                                                       
Capital Stock
    7,285       232,520       47.7       232,519       50.2       1       0.0  
Capital Surplus
    1,771       56,537       11.6       56,529       12.2       8       0.0  
Legal Reserve
    800       25,528       5.2       25,528       5.5             0.0  
Special Reserve
                                         
Retained Earnings
    2,763       88,202       18.1       66,007       14.3       22,195       33.6  
Treasury Stock
    (50 )     (1,595 )     (0.3 )     (1,617 )     (0.3 )     22       (1.4 )
Unrealized Loss on Long-term Investments
                      (3 )     (0.0 )     3        
Cumulated Translation Adjustment
    (69 )     (2,227 )     (0.5 )     300       0.1       (2,528 )      
 
                                         
Total Equity
    12,500       398,965       81.8       379,263       82.0       19,702       5.2  
 
                                         
Total Liabilities & Shareholders’ Equity
    15,276       487,553       100.0       462,508       100.0       25,045       5.4  
 
                                         

Note: (1)    New Taiwan dollar amounts have been translated into U.S. dollars at the rate of NT$31.92 per U.S. dollar as of December 31, 2004

 


 

(TSMC LOGO)

TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD.
UNCONSOLIDATED INCOME STATEMENT

For the Three Months Ended December 31, 2004, December 31, 2003 and September 30, 2004
(Expressed in Million New Taiwan Dollars (NTD) and U.S. Dollars (USD)
(1)
Except for Per Share Amounts and Shares Outstanding)
                                                                                 
    Year over Year Comparison     Sequential Comparison  
    Q4 2004     % of     Q4 2003     YoY     Q4 2004     % of     Q3 2004     QoQ  
    USD     NTD     Sales     NTD     Inc.(Dec.) %     USD     NTD     Sales     NTD     Inc.(Dec.) %  
Net Sales
    1,936       63,875       100.0       57,780       10.5       1,936       63,875       100.0       69,735       (8.4 )
Cost of Sales
    (1,113 )     (36,722 )     (57.5 )     (35,073 )     4.7       (1,113 )     (36,722 )     (57.5 )     (37,595 )     (2.3 )
 
                                                           
Gross Profit
    823       27,153       42.5       22,707       19.6       823       27,153       42.5       32,140       (15.5 )
 
                                                           
Operating Expenses
                                                                               
Research and Development Expenses
    (108 )     (3,568 )     (5.6 )     (4,055 )     (12.0 )     (108 )     (3,568 )     (5.6 )     (3,123 )     14.3  
General and Administrative Expenses
    (65 )     (2,153 )     (3.4 )     (1,765 )     21.9       (65 )     (2,153 )     (3.4 )     (2,578 )     (16.5 )
Selling and Marketing Expenses
    (13 )     (404 )     (0.6 )     (262 )     54.4       (13 )     (404 )     (0.6 )     (318 )     27.1  
 
                                                           
Total Operating Expenses
    (186 )     (6,125 )     (9.6 )     (6,082 )     0.7       (186 )     (6,125 )     (9.6 )     (6,019 )     1.8  
 
                                                           
Income from Operations
    637       21,028       32.9       16,625       26.5       637       21,028       32.9       26,121       (19.5 )
 
                                                           
Net Non-operating Income (Expenses)
    15       457       0.7       (192 )           15       457       0.7       630       (27.4 )
Investment Gain (Loss)
    18       609       1.0       1,135       (46.4 )     18       609       1.0       1,378       (55.8 )
 
                                                           
Income before Income Tax
    670       22,094       34.6       17,568       25.8       670       22,094       34.6       28,129       (21.5 )
 
                                                           
Income Tax Credit (Expenses)
    2       90       0.1       (1,566 )           2       90       0.1       (196 )      
 
                                                           
Net Income
    672       22,184       34.7       16,002       38.6       672       22,184       34.7       27,933       (20.6 )
 
                                                           
 
                                                                               
Diluted Earnings Per Ordinary Share
    0.03       0.96               0.68       40.1       0.03       0.96               1.20       (20.5 )
 
                                                               
Earnings Per ADR (2)
    0.15       4.77               3.40               0.15       4.77               3.72          
 
                                                                               
Weighted Average Outstanding Shares (‘M) (3)
            23,255               23,337                       23,255               23,270          

Note: (1)  New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD32.99 per U.S. dollar for the fourth quarter of 2004.
 
(2)   1 ADR equals 5 ordinary shares.
 
(3)   Total weighted average outstanding shares for 4Q ‘03 has been retroactively adjusted for stock dividends and stock bonus.

 


 

(TSMC LOGO)

TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD.
UNCONSOLIDATED INCOME STATEMENT

For the Twelve Months Ended December 31, 2004 and 2003
(Expressed in Million New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1)
Except for Per Share Amounts and Shares Outstanding)
                                         
    2004     % of     2003     YoY  
    USD     NTD     Sales     NTD     Inc.(Dec.) %  
Net Sales
    7,653       255,992       100.0       201,904       26.8  
Cost of Sales
    (4,360 )     (145,831 )     (57.0 )     (129,012 )     13.0  
 
                             
Gross Profit
    3,294       110,161       43.0       72,892       51.1  
 
                             
Operating Expenses
                                       
Research and Development Expenses
    (374 )     (12,516 )     (4.9 )     (12,713 )     (1.5 )
General and Administrative Expenses
    (280 )     (9,367 )     (3.7 )     (6,338 )     47.8  
Selling and Marketing Expenses
    (43 )     (1,455 )     (0.6 )     (1,193 )     21.9  
 
                             
Total Operating Expenses
    (698 )     (23,338 )     (9.1 )     (20,244 )     15.3  
 
                                       
 
                             
Income from Operations
    2,596       86,823       33.9       52,648       64.9  
 
                             
 
                                       
Net Non-operating Expenses
    27       916       0.4       (2,411 )      
Investment Loss
    121       4,040       1.6       791       410.5  
 
                             
Income before Income Tax
    2,744       91,779       35.9       51,028       79.9  
 
                             
 
                                       
Income Tax Credit (Expenses)
    16       537       0.2       (3,769 )      
 
                             
Net Income
    2,760       92,316       36.1       47,259       95.3  
 
                             
 
                                       
Diluted Earnings Per Ordinary Share (2)
    0.12       3.97               2.02       96.8  
 
                               
Earnings Per ADR (3)
    0.59       19.85               10.09          
 
                                       
Weighted Average Outstanding Shares (’M) (4)
            23,255               23,337          

Note: (1) New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 33.45 per U.S. dollar for the twelve months of 2004.
 
(2)   EPS calculation for 2003 is after deducting a cash dividend payment on NT$13,000 million of preferred stock paying an annual rate of 3.5% at the period from January 1 to May 29, 2003. The preferred stock was redeemed on May 29, 2003.
 
(3)   1 ADR equals 5 ordinary shares.
 
(4)   Total weighted average outstanding shares were 23,255M shares for the twelve months ended December 31, 2004 and 23,337M shares for the twelve months ended December 31, 2003 after the retroactive adjustments for stock dividends and stock bonus.

 


 

(TSMC LOGO)

TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD.
UNCONSOLIDATED STATEMENT OF CASH FLOWS

For the Twelve Months Ended December 31, 2004
(Figures in Million of New Taiwan Dollars (NTD) and U.S. Dollars (USD))
(1)
                                         
    12 Months 2004     4Q 2004     3Q 2004     4Q 2003  
    USD     NTD     NTD     NTD     NTD  
Cash Flows from Operating Activities:
                                       
Net Income
    2,760       92,316       22,184       27,933       16,002  
Depreciation & Amortization
    1,886       63,072       16,615       15,371       15,495  
Deferred Income Tax
    (33 )     (1,101 )     (226 )     46       1,566  
Investment Loss (Gain) Recognized by Equity Method
    (121 )     (4,040 )     (608 )     (1,378 )     (1,135 )
Gain on Sale of Long-Term Investments
          (2 )           0       (13 )
Changes in Working Capital & Others
    (196 )     (6,565 )     (1,231 )     (3,813 )     (432 )
 
                             
Net Cash Provided from Operating Activities
    4,296       143,680       36,734       38,159       31,483  
 
                                       
Cash Flows from Investing Activities:
                                       
Increase in Short-Term Investments
    (1,310 )     (43,823 )     (6,851 )     (4,929 )     (865 )
Increase in Long-Term Investments
    (906 )     (30,291 )     (17,009 )     (7,339 )     (1,955 )
Acquisition of Fixed Assets
    (2,277 )     (76,171 )     (20,521 )     (16,471 )     (12,832 )
Proceeds from Sales of Long-Term Investments
          8             0       18  
Proceeds from Disposal of Properties
    51       1,714       1,404       60       18  
Increase in Deferred Assets
    (72 )     (2,404 )     (1,351 )     (412 )     (345 )
Decrease (Increase) in Deposit-Out
    3       92       (56 )     (3 )     110  
 
                             
Net Cash Used in Investing Activities
    (4,511 )     (150,875 )     (44,384 )     (29,094 )     (15,851 )
 
                                       
Cash Flows from Financing Activities:
                                       
Cash Dividend — Common Shares
    (364 )     (12,160 )           (12,160 )      
Increase in Treasury Stocks
    (211 )     (7,060 )                  
Repayment of corporate bonds
    (149 )     (5,000 )     (5,000 )            
Bonus Paid to Employees
    (20 )     (682 )           (682 )      
Cash Dividend — Preferred Shares
    (6 )     (184 )                  
Decrease in Guarantee Deposits & Others
    (10 )     (351 )     (112 )     (75 )     (75 )
Bonus Paid to Directors and Supervisors
    (4 )     (128 )                  
Issuance of stocks option
            4       4              
 
                             
Net Cash Used in Financing Activities
    (764 )     (25,561 )     (5,108 )     (12,917 )     (75 )
 
                             
 
                                       
 
                             
Net Increase (Decrease) in Cash and Cash Equivalents
    (979 )     (32,756 )     (12,758 )     (3,852 )     15,557  
 
                             
 
                                       
Cash and Cash Equivalents at Beginning of Period
    2,939       98,288       78,290       82,142       82,731  
 
                                       
Cash and Cash Equivalents at End of Period
    1,960       65,532       65,532       78,290       98,288  
 
                             

Note: (1)     New Taiwan dollar amounts have been translated into U.S. dollars at the rate of NTD33.45 per U.S. dollar, the weighted average exchange rate for the twelve months of 2004.


 

TSMC 2004 Fourth Quarter Results Investor Conference January 27th, 2005


 

Agenda Welcome 2004 4Q Financial Results Lora Ho (unconsolidated) Remarks Morris Chang Q&A


 

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 May 28, 2004, 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.


 

* Annualized ROE for the quarter. 4Q'04 Result Highlights


 

Income Statement - QoQ Comparison


 

Income Statement - YoY Comparison


 

2004 Income Statement


 

Balance Sheet & Key Indices


 

Cash Flows


 

Capital Expenditures


 

Sales Breakdown by Technology


 

Sales Breakdown by Application


 

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


 

Sales Breakdown by Customer


 

Fab Utilization and ASP Trend


 

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 by Fab


 

Recap of Recent Major Events TSMC Verifies Fully Functional 90 Nanometer Chips Using Immersion Lithography Tools ( 2004/12/22 ) TSMC Holds A Special Shareholders' Meeting To Approve Amendment of Dividend Policy ( 2004/12/21 ) TSMC 0.18-Micron High-Voltage Technology Goes to Volume Production ( 2004/11/23 ) TSMC Is Awarded Best IR by A Taiwan Company by IR Magazine ( 2004/11/04) TSMC Board of Directors Proposes Amendment of Dividend Policy ( 2004/11/02) TSMC Aims to be Best Partner in "Invented/Made in China" Arena ( 2004/10/28 ) Freescale and TSMC to Develop Silicon-on-Insulator Technology ( 2004/10/12 ) Please visit TSMC's Web site (http://www.tsmc.com) for details and other announcements.


 

1Q'05 Guidance Wafer shipments to decrease by a single digit percentage point sequentially; Overall utilization rate to be about 78%; Gross profit margin to be in the range of 38% to 40%; ASP to remain at about the same level sequentially; 2005 CapEx to be in the range of US$2.5 - 2.7 billion.


 

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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: January 27, 2005  By /s/ Lora Ho    
  Lora Ho   
  Vice President & Chief Financial Officer