Edgar Filing: TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD

e6vk

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 July 2005

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 IN TAIWAN
Elizabeth Sun / Julie Chan
Eric Chiang / Harrison Hsueh
Investor Relations Division
TSMC
invest@tsmc.com
886-3-568-2085/ 2080/ 2087/ 2088

Topics in This Report

•		Revenue Analysis

•		Utilization & Capacity

•		Profit & Expense Analysis

•		Financial Condition Review

•		Cash Flow & CapEx

•		Recap of Recent Important Events & Announcements


		2Q05		Quarterly Management Report
				July 26, 2005

Operating Results Review:

Summary:


*(Amount in NT$ billion except noted otherwise)*	2Q05			1Q05			2Q04			QoQ			YoY
EPS (NT$ per com. shr.)		0.74			0.68			0.95			9.2	%		(21.3	%)
(US$ per ADR unit)		0.12			0.11			0.14

Net Sales		58.52			55.65			64.87			5.1	%		(9.8	%)
Gross Profit		23.21			21.65			28.14			7.2	%		(17.5	%)
Operating Expense		(5.42	)		(5.57	)		(6.01	)		(2.7	%)		(9.7	%)
Non-Operating Items		(0.05	)		0.19			0.99
Net Income		18.37			16.82			23.41			9.2	%		(21.5	%)

Wafers Shipped (kpcs 8 inch-equiv.)		1,275			1,113			1,282			14.5	%		(0.6	%)
Capacity Utilization		85	%		78	%		106	%

Net Profit Margin		31.4	%		30.2	%		36.1	%

Remarks:

The second quarter EPS of NT$0.74 represents a 9.2% increase compared with 1Q05. The unconsolidated operating results of 2Q05 are summarized below:

Net sales increased 5.1% to NT$58.52 billion compared with NT$55.65 billion in the first quarter of 2005. The increase mainly reflected a 14.5% increase in wafer shipments against a 5.4% decline of the wafer average selling price (ASP).

Gross profit increased to NT$23.21 billion, representing a 7.2% increase from the previous quarter. Gross margin improved to 39.7% from 38.9% in 1Q05 due mainly to higher levels of wafer output, partially offset by an unfavorable ASP movement.

Operating expenses decreased slightly to NT$5.42 billion, representing 9.3% of revenue.

The combined result from non-operating income and long-term investment was a loss of NT$51 million; while a gain of NT$189 million was reported in the previous quarter.

Income before tax increased 9% sequentially to NT$17.73 billion. The Company’s provision for tax expenses of NT$2.60 billion was more than offset by an investment tax credit of NT$3.24 billion. TSMC’s 2Q05 net income was NT$18.37 billion with a net margin of 31.4%.


TSMC July 26, 2005		Page 2

I. Revenue Analysis

I — 1. Wafer Sales Analysis


By Application	2Q05			1Q05			2Q04
Computer		38	%		34	%		27	%
Communication		37	%		41	%		45	%
Consumer		18	%		17	%		22	%
Industrial/Others		6	%		6	%		5	%
Memory		1	%		2	%		1	%


By Technology	2Q05			1Q05			2Q04
0.13um-		43	%		45	%		25	%
0.15/0.18um		34	%		31	%		42	%
0.25um		10	%		12	%		15	%
0.35um		7	%		6	%		10	%
0.50um+		6	%		6	%		8	%


By Customer Type	2Q05			1Q05			2Q04
Fabless/System		74	%		69	%		69	%
IDM		26	%		31	%		31	%


By Geography	2Q05			1Q05			2Q04
North America		77	%		79	%		73	%
Asia Pacific		9	%		8	%		12	%
Europe		8	%		6	%		7	%
Japan		6	%		7	%		8	%

Revenue Analysis:

Net sales increased 5.1% to NT$58.52 billion compared with NT$55.65 billion in the first quarter 2005. The increase in second quarter revenue resulted from a 14.5% increase in wafer shipments, offset by a 5.4% decline of the wafer average selling price (ASP), a lower level of other sales, a higher provision for sales returns, and a slightly (0.4%) weaker US dollar against the local currency.

Revenues increased in computer and consumer applications in this quarter due mainly to stronger demand from customers in anticipation of a better sales season ahead. Revenues in communication applications declined due mainly to continuing inventory digestion in this segment. As a result, revenue mix for communication decreased to 37% from 41% in the previous quarter.

Revenue from advanced technologies — defined as 0.13-micron and below – increased slightly from the previous quarter. However, as a percentage of total wafer sales, it decreased to 43% from 45% previously.

IDM accounted for 26% of wafer sales during the quarter, down from 31% in the previous quarter.

Geographically, North America accounted for 77% of wafer sales, down from 79% in 1Q05.

ASP Trend:

ASP declined 5.4% sequentially in 2Q05. This is the combined result of a less favorable product mix and price erosion.


TSMC July 26, 2005		Page 3

II. Utilization & Capacity

Utilization Rate:

Overall capacity utilization improved to 85% in this quarter from 78% in 1Q05 due mainly to stronger demand from customers.

II — 2. Capacity


			1Q05		2Q05		3Q05
Fab / (Wafer size)			(Act.)		(Act.)		(Fcst.)
Fab-2	(6”	)¹		238		249		251
Fab-3	(8”	)		234		245		247
Fab-5	(8”	)		119		125		126
Fab-6	(8”	)		203		214		217
Fab-7	(8”	)		36		39		40
Fab-8	(8”	)		222		217		227
Fab-12	(12”	)²		85		103		122
Fab-14	(12”	)²		18		36		46
TSMC — owned capacity8”-equivalent Kpcs				1,180		1,292		1,374
WaferTech	(8”	)		95		96		100
SSMC	(8”	)		41		42		47
TSMC (Shanghai)	(8”	)		9		22		30
Total TSMC — managed 8"-equivalent Kpcs				1,324		1,451		1,550


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

Capacity :

Total TSMC managed capacity in 2Q05 was 1,451K 8-inch equivalent wafers, 9.6% higher than the 1,324K wafers in 1Q05.

TSMC managed capacity in 3Q05 is estimated to increase to 1,550K wafers, representing a 6.8% sequential growth. The newly added capacity in 3Q05 will be mainly from the continuing ramp up of advanced capacity in Fab 12 and 14.

Overall installed capacity for year 2005 is expected to reach 5.96 million 8-inch equivalent wafers, a 24% year-on-year growth.


TSMC July 26, 2005		Page 4

III. Profit & Expense Analysis

III — 1. Gross Profit Analysis


(Amount: NT$ billion)	2Q05			1Q05			2Q04
COGS		35.3			34.0			36.7
Depreciation		16.0			15.2			14.0
Other MFG Cost		19.3			18.8			22.7

Gross Profit		23.2			21.6			28.1

Gross Margin
- TSMC		39.7	%		38.9	%		43.4	%
- TSMC w/o affiliates		42.9	%		42.1	%		49.1	%

Gross Profit Analysis:

Gross profit increased 7.2% from the previous quarter to NT$23.2 billion. Gross margin improved to 39.7% from 38.9% in 1Q05 mainly due to higher levels of wafer output, partially offset by an unfavorable ASP movement.

During the quarter, the gross margin from TSMC’s own fab manufacturing activities increased to 42.9% from 42.1% in 1Q05.

III — 2. Operating Expense Analysis

(Amount: NT$ billion)

2Q05

1Q05

2Q04

Total Operating Exp.

5.4

5.6

6.0

SG&A

2.1

2.2

3.0

Research & Development

3.3

3.4

3.0

Operating Expenses:

Operating expenses decreased slightly to NT$5.4 billion in this quarter, representing 9.3% of net sales.

III — 3. Non-Operating Items


(Amount: NT$ million)	2Q05			1Q05			2Q04
Non-Operating Income/(Exp.)		537			387			(264	)
Net Interest Income/(Exp.)		42			197			30
Other Non-Operating		495			190			(294	)

L-T Investments		(588	)		(198	)		1,251
WaferTech*		352			195			1,433
SSMC		140			104			288
Vanguard		87			293			257
TSMC (Shanghai)		(789	)		(280	)		(102	)
Miscellaneous		(378	)		(510	)		(625	)

Total Non-Operating Items		(51	)		189			987


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

Non-Operating Items:

Combined result from non-operating income and long-term investment decreased to a loss of NT$51 million from a gain of NT$189 million in the previous quarter.

During the quarter, non-operating income increased to NT$537 million from last quarter’s NT$387 million. This increase was due mainly to the reverse of revaluation losses of short-term investments in marketable securities and a foreign exchange gain from hedging activities, partially offset by lower net interest income and smaller scheduled payment from the settlement of the lawsuit against SMIC.

Long-term investment incurred a higher loss of NT$588 million in this quarter, compared to NT$198 million in 1Q05. The differences were mainly attributable to lower levels of profitability in VIS and higher amount of losses in TSMC (Shanghai), partially offset by an improvement in WaferTech.


TSMC July 26, 2005		Page 5

IV. Financial Condition Review

IV — 1. Liquidity Analysis


(Amount: NT$ billion)	2Q05		1Q05		2Q04
Cash & S-T Investments		128.0		111.9		120.0
Accounts Receivable — Trade		30.1		22.4		30.7
Inventory		14.1		13.4		11.7
Total Current Assets		181.8		159.7		170.5
Accounts Payable		17.8		19.1		20.6
Accrued Liabilities and Others		68.9		18.8		28.4
Total Current Liabilities		86.7		37.9		49.0
Current Ratio (x)		2.1		4.2		3.5
Net Working Capital		95.1		121.9		121.5

Liquidity Analysis:

Total current assets were NT$22.1 billion higher on a sequential basis. The increase was mainly attributable to higher amount in cash & short-term investments and in accounts receivable.

Total current liabilities were NT$48.8 billion higher sequentially, due mainly to the NT$49.6 billion payables accrued for cash dividends and employee bonuses.

As a result, net working capital decreased to NT$95.1 billion and current ratio decreased to 2.1x.

Receivable/Inventory Days Trend:

Days of Receivable increased slightly to 43 days in 2Q05 compared to 42 days in the previously quarter.

Days of Inventory improved to 41 days from 42 days in the first quarter 2005.

IV — 3. Debt Service


(Amount: NT$ billion)	2Q05		1Q05		2Q04

Cash & S-T Investments		128.0		111.9		120.0

Interest-Bearing Debt		30.0		30.0		35.0

Net Cash Reserves		98.0		81.9		85.0

Debt Service:

Net cash reserves, defined as the excess of cash and short-term investments over interest-bearing debt, increased by NT$16.1 billion to NT$98 billion in 2Q05. The increase reflected higher levels of cash & short-term investments in this quarter.

Interest-bearing debt remained at the same level of NT$30 billion as in the previous quarter.


TSMC July 26, 2005		Page 6

V. Cash Flow & CapEx

V — 1. Cash Flow Analysis


(Amount: NT$ billion)	2Q05			1Q05			2Q04
Net Income		18.4			16.8			23.4
Depreciation & Amortization		17.7			16.7			16.0
Other Op Sources/(Uses)		(8.4	)		2.5			(3.3	)
Total Op Sources/(Uses)		27.7			36.0			36.1


Capital Expenditure		(13.0	)		(38.2	)		(22.8	)
Short Term Investment		2.2			1.4			(24.8	)
Long Term Investment		(0.6	)		(4.3	)		(9.1	)
Other Investing Sources/(Uses)		1.1			(0.2	)		(0.2	)
Net Investing Sources/(Uses)		(10.3	)		(41.3	)		(56.9	)


Treasury Stock		0.0			0.0			(6.6	)
Paid to directors and supervisors		(0.2	)		0.0			(0.1	)
Cash dividends paid to preferred stocks		0.0			0.0			(0.2	)
Other Financing Sources/(Uses)		1.2			(0.0	)		0.0

Net Financing Sources/(Uses)		1.0			(0.0	)		(6.9	)


Net Cash Position Changes		18.4			(5.3	)		(27.7	)

Ending Cash Balance		78.6			60.2			78.8

Summary of Cash Flow:

During this quarter, TSMC generated NT$27.7 billion operating cash inflow, mainly from net income of NT$18.4 billion and depreciation & amortization of NT$17.7 billion, partially offset by changes in working capital resulted mainly from increased accounts receivable.

Net cash used in investing activities totaled NT$10.3 billion, mainly in capital spending of NT$13 billion.

There was no material financing activity during this quarter.

As a result, TSMC ended the quarter with a cash balance of NT$78.6 billion, NT$18.4 billion higher than in 1Q05.

Operating Cash Flow Trend:

Operating cash flow of NT$27.7 billion was lower than the NT$36 billion generated in the previous quarter. The decrease was due mainly to the working capital requirement for increased accounts receivable.

V — 3. Capital Expenditure


TSMC	US$	415 m
TSMC (Shanghai)	US$	42 m
WaferTech	US$	1 m

TSMC & Affiliates	US$	458 m

Capital Spending:

Capital expenditures for TSMC alone during the quarter totaled US$415 million. Most of the spending was for 12-inch production equipment.

Capital spending was US$42 million for TSMC (Shanghai), and US$1 million for WaferTech.

For year 2005, total capital expenditure for TSMC as a group is expected to be in the range of US$2.5 billion to US$2.7 billion, unchanged from our previous guidance.


TSMC July 26, 2005		Page 7

VI. Recap of Recent Important Events & Announcements


l		TSMC and Kodak Sign License Agreement for CMOS Image Sensors (2005/07/08)


l		TSMC Reference Flow 6.0 Opens Door to 65nm Design (2005/06/09)


l		TSMC Introduces Foundry Industry’s First Comprehensive DFM Toolkits (2005/06/09)


l		Cadence Supports TSMC Reference Flow 6.0 To Accelerate 65-Nanometer Design (2005/06/09)


l		Key Synopsys Low Power And DFM Technologies Support TSMC Reference Flow 6.0 (2005/06/09)


l		Mentor Graphics TestKompress Supports TSMC Reference Flow 6.0 (2005/06/09)


l		Apache Supports TSMC Reference Flow 6.0 with Dynamic Power Integrity for Advanced Low Power Designs (2005/06/09)


l		TSMC Announces May 2005 Sales and Revises Upward 2Q2005 Guidance (2005/06/08)


l		TSMC and RMI Collaborate on 90nm Process for RMI’s XLRTM Processor Family (2005/06/07)


l		Magma Introduces Quartz DRC (2005/06/01)


l		TSMC Sets June 19 Record Date for Common Share Dividend (2005/05/30)


l		TSMC Shareholders Approved NT$2.5 Dividend (2005/05/10)


l		Dr. Rick Tsai Appointed Chief Executive Officer of TSMC; Dr. F.C. Tseng Elected Vice Chairman of TSMC (2005/05/10)


l		TSMC Unveils Nexsys 65nm Process Technology Plans (2005/04/27)


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

*		Starting from 1Q05, TSMC will post quarterly consolidated financial statements, in addition to the unconsolidated financial statements, on our web site.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
Unconsolidated Balance Sheet

As of June 30, 2005 and 2004
(Figures in Million of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) ⁽¹⁾


	June 30, 2005									June 30, 2004						YoY
	USD			NTD			%			NTD			%			Move			Inc(Dec)%
ASSETS
Cash		2,486			78,597			15.8			78,778			17.9			(181	)		(0.2	)
Short Term Investment		1,563			49,409			9.9			41,199			9.4			8,210			19.9
Accounts Receivable — Trade		953			30,116			6.0			30,694			7.0			(578	)		(1.9	)
Inventories		446			14,114			2.8			11,725			2.6			2,389			20.4
Other Current Assets		303			9,591			1.9			8,055			1.8			1,536			19.1

Total Current Assets		5,751			181,827			36.4			170,451			38.7			11,376			6.7


Long Term Investment		2,417			76,434			15.3			52,581			12.0			23,853			45.4


Fixed Assets		17,582			555,917			111.3			475,348			108.0			80,569			16.9
Less Accumulated Depreciation		(10,464	)		(330,854	)		(66.2	)		(275,066	)		(62.5	)		(55,788	)		20.3

Net Fixed Assets		7,118			225,063			45.1			200,282			45.5			24,781			12.4


Other Assets		510			16,108			3.2			16,513			3.8			(405	)		(2.5	)

Total Assets		15,796			499,432			100.0			439,827			100.0			59,605			13.6


LIABILITIES
Accounts Payables		248			7,827			1.6			11,971			2.7			(4,144	)		(34.6	)
Payables to Contractors and Equipment Suppliers		316			10,004			2.0			8,658			2.0			1,346			15.5
Accrued Expenses and Other Current Liabilities		1,847			58,393			11.7			23,418			5.3			34,975			149.4
Current Portion of Bonds Payable		332			10,500			2.1			5,000			1.2			5,500			110.0

Total Current Liabilities		2,743			86,724			17.4			49,047			11.2			37,677			76.8

Bonds Payable		617			19,500			3.9			30,000			6.8			(10,500	)		(35.0	)
Other Long Term Liabilities		285			9,008			1.8			9,706			2.2			(698	)		(7.2	)

Total Liabilities		3,645			115,232			23.1			88,753			20.2			26,479			29.8


SHAREHOLDERS’ EQUITY
Capital Stock		7,820			247,261			49.5			233,766			53.2			13,495			5.8
Capital Surplus		1,794			56,721			11.3			56,886			12.9			(165	)		(0.3	)
Legal Reserve		1,086			34,348			6.9			25,528			5.8			8,820			34.6
Special Reserve		71			2,226			0.4			0			0.0			2,226			0.0
Retained Earnings		1,512			47,809			9.6			43,517			9.9			4,292			9.9
Treasury Stock		(49	)		(1,552	)		(0.3	)		(8,676	)		(2.0	)		7,124			(82.1	)
Cumulated Translation Adjustment		(83	)		(2,613	)		(0.5	)		53			0.0			(2,666	)		0.0

Total Equity		12,151			384,200			76.9			351,074			79.8			33,126			9.4

Total Liabilities & Shareholders’ Equity		15,796			499,432			100.0			439,827			100.0			59,605			13.6

Note : (1) New Taiwan dollar amounts have been translated into U.S. dollars at the rate of NT$31.62 per U.S. dollar as of June 30, 2005

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
Unconsolidated Balance Sheet

As of June 30, 2005 and March 31, 2005
(Figures in Million of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) ⁽¹⁾


	June 30, 2005									March 31, 2005						QoQ
	USD			NTD			%			NTD			%			Move			Inc(Dec)%
ASSETS
Cash		2,486			78,597			15.8			60,219			12.5			18,378			30.5
Short Term Investment		1,563			49,409			9.9			51,638			10.7			(2,229	)		(4.3	)
Accounts Receivable — Trade		953			30,116			6.0			22,429			4.7			7,687			34.3
Inventories		446			14,114			2.8			13,429			2.8			685			5.1
Other Current Assets		303			9,591			1.9			12,029			2.5			(2,438	)		(20.3	)

Total Current Assets		5,751			181,827			36.4			159,744			33.2			22,083			13.8



Long Term Investment		2,417			76,434			15.3			76,877			16.0			(443	)		(0.6	)


Fixed Assets		17,582			555,917			111.3			545,308			113.4			10,609			1.9
Less Accumulated Depreciation		(10,464	)		(330,854	)		(66.2	)		(315,454	)		(65.6	)		(15,400	)		4.9

Net Fixed Assets		7,118			225,063			45.1			229,854			47.8			(4,791	)		(2.1	)


Other Assets		510			16,108			3.2			14,199			3.0			1,909			13.4

Total Assets		15,796			499,432			100.0			480,674			100.0			18,758			3.9


LIABILITIES
Accounts Payables		248			7,827			1.6			8,208			1.7			(381	)		(4.6	)
Payables to Contractors and Equipment Suppliers		316			10,004			2.0			10,920			2.3			(916	)		(8.4	)
Accrued Expenses and Other Current Liabilities		1,847			58,393			11.7			8,263			1.7			50,130			606.7
Current Portion of Bonds Payable		332			10,500			2.1			10,500			2.2			0			0.0

Total Current Liabilities		2,743			86,724			17.4			37,891			7.9			48,833			128.9

Bonds Payable		617			19,500			3.9			19,500			4.1			0			0.0
Other Long Term Liabilities		285			9,008			1.8			7,929			1.6			1,079			13.6

Total Liabilities		3,645			115,232			23.1			65,320			13.6			49,912			76.4


SHAREHOLDERS’ EQUITY
Capital Stock		7,820			247,261			49.5			232,529			48.4			14,732			6.3
Capital Surplus		1,794			56,721			11.3			56,574			11.8			147			0.3
Legal Reserve		1,086			34,348			6.9			25,528			5.3			8,820			34.6
Special Reserve		71			2,226			0.4			0			0.0			2,226			—
Retained Earnings		1,512			47,809			9.6			105,021			21.8			(57,212	)		(54.5	)
Treasury Stock		(49	)		(1,552	)		(0.3	)		(1,572	)		(0.3	)		20			(1.3	)
Cumulated Translation Adjustment		(83	)		(2,613	)		(0.5	)		(2,726	)		(0.6	)		113			(4.1	)

Total Equity		12,151			384,200			76.9			415,354			86.4			(31,154	)		(7.5	)

Total Liabilities & Shareholders’ Equity		15,796			499,432			100.0			480,674			100			18,758			3.9

Note : (1) New Taiwan dollar amounts have been translated into U.S. dollars at the rate of NT$31.62 per U.S. dollar as of June 30, 2005

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
UNCONSOLIDATED INCOME STATEMENT

For the Three Months Ended June 30, 2005, June 30, 2004, and March 31, 2005
(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
	Q2 2005						% of			Q2 2004			YoY			Q2 2005						% of			Q1 2005			QoQ
	USD			NTD			Sales			NTD			Inc(Dec) %			USD			NTD			Sales			NTD			Inc(Dec) %
Net Sales		1,863			58,516			100.0			64,869			(9.8	)		1,863			58,516			100.0			55,653			5.1
Cost of Sales		(1,124	)		(35,311	)		(60.3	)		(36,730	)		(3.9	)		(1,124	)		(35,311	)		(60.3	)		(34,004	)		3.8

Gross Profit		739			23,205			39.7			28,139			(17.5	)		739			23,205			39.7			21,649			7.2

Operating Expenses
Research and Development Expenses		(105	)		(3,283	)		(5.6	)		(2,964	)		10.8			(105	)		(3,283	)		(5.6	)		(3,349	)		(2.0	)
General and Administrative Expenses		(57	)		(1,799	)		(3.1	)		(2,604	)		(30.9	)		(57	)		(1,799	)		(3.1	)		(1,945	)		(7.4	)
Selling and Marketing Expenses		(11	)		(339	)		(0.6	)		(437	)		(22.4	)		(11	)		(339	)		(0.6	)		(279	)		21.5

Total Operating Expenses		(173	)		(5,421	)		(9.3	)		(6,005	)		(9.7	)		(173	)		(5,421	)		(9.3	)		(5,573	)		(2.7	)


Income from Operations		566			17,784			30.4			22,134			(19.7	)		566			17,784			30.4			16,076			10.6


Net Non-operating Income (Expenses)		17			537			0.9			(264	)		—			17			537			0.9			387			38.7
Investment Gain (Loss)		(18	)		(588	)		(1.0	)		1,251			—			(18	)		(588	)		(1.0	)		(198	)		197.0

Income before Income Tax		565			17,733			30.3			23,121			(23.3	)		565			17,733			30.3			16,265			9.0


Income Tax Credit		20			636			1.1			289			120.1			20			636			1.1			553			15.0


Net Income		585			18,369			31.4			23,410			(21.5	)		585			18,369			31.4			16,818			9.2


Diluted Earnings Per Ordinary Share		0.02			0.74						0.95			(21.3	)		0.02			0.74						0.68			9.2

Earnings Per ADR ⁽²⁾		0.12			3.72						4.73						0.12			3.72						3.41

Weighted Average Outstanding Shares (‘M) ⁽³⁾					24,687						24,770									24,687						24,684

Note:(1) New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD31.41 per U.S. dollar for the second quarter of 2005.

	(2)		1 ADR equals 5 ordinary shares.

	(3)		Total weighted average outstanding shares were 24,687M shares for the second quarter of 2005, 24,684M shares for the first quarter of 2005, and 24,770M shares for the second quarter of 2004 after the retroactive adjustments for stock dividends and stock bonus.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
UNCONSOLIDATED INCOME STATEMENT

For the Six Months Ended June 30, 2005 and 2004
(Expressed in Million New Taiwan Dollars (NTD) and U.S. Dollars (USD) ⁽¹⁾
Except for Per Share Amounts and Shares Outstanding


	6 months ended June 30
	2005			2005			% of			2004			YoY
	USD			NTD			Sales			NTD			Inc(Dec)
Net Sales		3,628			114,169			100.0			122,382			(6.7	)
Cost of Sales		(2,203	)		(69,315	)		(60.7	)		(71,514	)		(3.1	)

Gross Profit		1,425			44,854			39.3			50,868			(11.8	)

Operating Expenses Research and Development Expenses		(211	)		(6,632	)		(5.8	)		(5,825	)		13.9
General and Administrative Expenses		(119	)		(3,744	)		(3.3	)		(4,636	)		(19.2	)
Selling and Marketing Expenses		(19	)		(618	)		(0.5	)		(733	)		(15.7	)

Total Operating Expenses		(349	)		(10,994	)		(9.6	)		(11,194	)		(1.8	)


Income from Operations		1,076			33,860			29.7			39,674			(14.7	)


Net Non-operating Expenses		29			924			0.8			(172	)		—
Investment Loss		(25	)		(786	)		(0.7	)		2,054			—

Income before Income Tax		1,080			33,998			29.8			41,556			(18.2	)


Income Tax Credit		38			1,189			1.0			643			84.9


Net Income		1,118			35,187			30.8			42,199			(16.6	)


Diluted Earnings Per Ordinary Share		0.05			1.43						1.70			(15.9	)

Earnings Per ADR ⁽²⁾		0.23			7.13						8.52

Weighted Average Outstanding Shares (‘M) ⁽³⁾					24,687						24,770

Note: (1) New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.47 per U.S. dollar for the six months ended June 30, 2005.

	(2)		1 ADR equals 5 ordinary shares.

	(3)		Total weighted average outstanding shares were 24,687M shares for the six months ended June 30, 2005 and 24,770M shares for the six months ended June 30, 2004 after the retroactive adjustments for stock dividends and stock bonus.

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

For the Six Months and Three Months Ended June 30, 2005 and 2004
(Figures in Million of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) ⁽¹⁾


	6 Months 2005						2Q 2005			1Q 2005			2Q 2004
	USD			NTD			NTD			NTD			NTD
Cash Flows from Operating Activities:
Net Income		1,118			35,187			18,369			16,818			23,409
Depreciation & Amortization		1,091			34,330			17,661			16,669			15,997
Deferred Income Tax		(37	)		(1,149	)		(596	)		(553	)		(567	)
Investment Loss Recognized by Equity Method		25			786			588			198			(1,251	)
Gain on Sale of Long-Term Investments		—			—			—			—			(2	)
Changes in Working Capital & Others		(174	)		(5,478	)		(8,302	)		2,824			(1,500	)

Net Cash Provided from Operating Activities		2,023			63,676			27,720			35,956			36,086

Cash Flows from Investing Activities:
Decrease(Increase) in Short-Term Investments		113			3,570			2,229			1,341			(24,773	)
Increase in Long-Term Investments		(204	)		(6,419	)		(2,142	)		(4,277	)		(9,139	)
Acquisition of Fixed Assets		(1,627	)		(51,194	)		(13,033	)		(38,161	)		(22,828	)
Proceeds from Sales of Long-Term Investments		48			1,515			1,515			—			8
Proceeds from Disposal of Properties		46			1,431			1,310			121			182
Increase in Deferred Assets		(16	)		(503	)		(217	)		(286	)		(314	)
Increase in Deposit-Out		—			(2	)		(2	)		—			—

Net Cash Used in Investing Activities		(1,640	)		(51,602	)		(10,340	)		(41,262	)		(56,864	)

Cash Flows from Financing Activities:
Increase(Decrease) in Guarantee Deposits & Others		35			1,105			1,147			(42	)		(57	)
Proceeds from Exercise of Stock Options		4			117			82			35			—
Increase in Treasury Stocks		—			—			—			—			(6,583	)
Cash Dividend — Preferred Shares		—			—			—			—			(184	)
Bonus Paid to Directors and Supervisors		(7	)		(231	)		(231	)		—			(128	)

Net Cash Provided(Used) in Financing Activities		32			991			998			(7	)		(6,952	)


Net Increase (Decrease) in Cash and Cash Equivalents		415			13,065			18,378			(5,313	)		(27,730	)


Cash and Cash Equivalents at Beginning of Period		2,082			65,532			60,219			65,532			106,508

Cash and Cash Equivalents at End of Period		2,497			78,597			78,597			60,219			78,778

Note: (1) New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD31.47 per U.S. dollar for the six months ended June 30, 2005.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
Consolidated Balance Sheet
As of June 30, 2005 and March 31, 2005
(Figures in Million of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) ⁽¹⁾


	June 30, 2005									March 31, 2005						QoQ
	USD			NTD			%			NTD			%			Move			Inc.(Dec.)%
ASSETS
Cash		2,796			88,405			17.3			71,540			14.5			16,865			23.6
Short Term Investment		1,567			49,558			9.7			52,893			10.7			(3,335	)		(6.3	)
Accounts Receivable-Trade		1,015			32,095			6.3			23,846			4.8			8,249			34.6
Inventories		479			15,159			3.0			14,688			3.0			471			3.2
Other Current Assets		277			8,740			1.7			10,044			2.0			(1,304	)		(13.0	)

Total Current Assets		6,134			193,957			37.9			173,011			35.0			20,946			12.1


Long Term Investment		1,241			39,251			7.7			39,253			8.0			(2	)		(0.0	)


Fixed Assets		19,673			622,025			121.6			609,806			123.5			12,219			2.0
Less Accumulated Depreciation		(11,545	)		(365,019	)		(71.4	)		(347,885	)		(70.5	)		(17,134	)		4.9

Net Fixed Assets		8,128			257,006			50.3			261,921			53.1			(4,915	)		(1.9	)


Other Assets		671			21,207			4.1			19,522			4.0			1,685			8.6

Total Assets		16,174			511,421			100.0			493,707			100.0			17,714			3.6


LIABILITIES
Short-term Bank Loans		10			316			0.1			378			0.1			(62	)		(16.4	)
Accounts Payable		241			7,605			1.5			8,322			1.7			(717	)		(8.6	)
Payables to Contractors and Equipment Suppliers		360			11,384			2.2			12,293			2.5			(909	)		(7.4	)
Accrued Expenses and Other Current Liabilities		1,906			60,251			11.8			9,789			2.0			50,462			515.5
Current Portion of Bonds Payable		332			10,505			2.1			10,505			2.1			0			0.0

Total Current Liabilities		2,849			90,061			17.6			41,287			8.4			48,774			118.1


Long-term Bank Loans		30			958			0.2			1,902			0.4			(944	)		(49.6	)
Bonds Payable		617			19,500			3.8			19,500			4.0			0			0.0
Other Long Term Liabilities		505			15,961			3.1			14,930			2.9			1,031			6.9


Total Liabilities		4,001			126,480			24.7			77,619			15.6			48,861			62.9


SHAREHOLDERS’ EQUITY
Shareholder’s Equity-Parent Company
Capital Stock		7,820			247,261			48.3			232,529			47.2			14,732			6.3
Capital Surplus		1,794			56,721			11.1			56,574			11.5			147			0.3
Legal Reserve		1,086			34,348			6.7			25,528			5.2			8,820			34.6
Special Reserve		70			2,226			0.4			0			0.0			2,226			0.0
Retained Earnings		1,512			47,809			9.3			105,021			21.3			(57,212	)		(54.5	)
Treasury Stock		(49	)		(1,552	)		(0.3	)		(1,572	)		(0.3	)		20			(1.3	)
Cumulated Translation Adjustment		(83	)		(2,613	)		(0.5	)		(2,726	)		(0.6	)		113			(4.1	)

Total Equity		12,150			384,200			75.1			415,354			84.3			(31,154	)		(7.5	)
Minority Interest		23			741			0.2			734			0.1			7			1.0

Total Equity		12,173			384,941			75.3			416,088			84.4			(31,147	)		(7.5	)

Total Liabilities & Shareholders’ Equity		16,174			511,421			100.0			493,707			100.0			17,714			56.4

Note : (1) New Taiwan dollar amounts have been translated into U.S. dollars at the rate of NT$31.62 per U.S. dollar as of June 30, 2005

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
CONSOLIDATED INCOME STATEMENT
For the Three Months Ended June 30, 2005
(Expressed in Million New Taiwan Dollars (NTD) and U.S. Dollars (USD) ⁽¹⁾
Except for Per Share Amounts and Shares Outstanding)


	Sequential Comparison
	Q2 2005						% of			Q1 2005			QoQ
	USD			NTD			Sales			NTD			Inc.(Dec.) %
Net Sales		1,910			59,978			100.0			56,858			5.5
Cost of Sales		(1,137	)		(35,724	)		(59.6	)		(35,180	)		1.5

Gross Profit		773			24,254			40.4			21,678			11.9

Operating Expenses
Research and Development Expenses		(113	)		(3,561	)		(5.9	)		(3,412	)		4.4
General and Administrative Expenses		(72	)		(2,253	)		(3.8	)		(2,513	)		(10.4	)
Selling and Marketing Expenses		(39	)		(1,227	)		(2.0	)		(584	)		110.0

Total Operating Expenses		(224	)		(7,041	)		(11.7	)		(6,509	)		8.2


Income from Operations		549			17,213			28.7			15,169			13.5


Net Non-operating Income (Expenses)		15			464			0.8			739			(37.2	)
Investment Gain		7			226			0.4			397			—

Income before Income Tax and Minority Interest		571			17,903			29.8			16,305			9.8

Income Tax Credit		16			491			0.8			513			(4.2	)


Income before Minority Interest		587			18,394			30.7			16,818			9.4


Minority Interest in Loss of Subsidiaries		-1			(25	)		(0.0	)		0			(5,435.1	)

Consolidated Net Income		586			18,369			30.6			16,818			9.2


Diluted Earnings Per Ordinary Share		0.02			0.74						0.68			9.2

Earnings Per ADR⁽²⁾		0.12			3.72						3.41

Weighted Average Outstanding Shares (‘M)⁽³⁾					24,687						24,684

Note:(1) New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD31.41 per U.S. dollar for the second quarter of 2005.

(2)

1 ADR equals 5 ordinary shares.

(3)

Total weighted average outstanding shares were 24,687M shares for the second quarter of 2005 and 24,684M shares for the first quarter of 2005 after the retroactive adjustments for stock dividends and stock bonus.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
CONSOLIDATED INCOME STATEMENT
For the Six Months Ended June 30, 2005
(Expressed in Million New Taiwan Dollars (NTD) and U.S. Dollars (USD) ⁽¹⁾
Except for Per Share Amounts and Shares Outstanding)


	6 months ended June 30, 2005
							% of
	USD			NTD			Sales
Net Sales		3,713			116,836			100.0
Cost of Sales		(2,253	)		(70,904	)		(60.7	)

Gross Profit		1,460			45,932			39.3

Operating Expenses
Research and Development Expenses		(222	)		(6,973	)		(6.0	)
General and Administrative Expenses		(151	)		(4,766	)		(4.1	)
Selling and Marketing Expenses		(58	)		(1,811	)		(1.5	)

Total Operating Expenses		(431	)		(13,550	)		(11.6	)


Income from Operations		1,029			32,382			27.7


Net Non-operating Income (Expenses)		38			1,203			1.0
Investment Gain		20			623			0.5

Income before Income Tax and Minority Interest		1,087			34,208			29.3

Income Tax Credit		32			1,004			0.9


Income before Minority Interest		1,119			35,212			30.1


Minority Interest in Loss of Subsidiaries		(1	)		(25	)		(0.0	)

Consolidated Net Income		1,118			35,187			30.1


Diluted Earnings Per Ordinary Share		0.05			1.43

Earnings Per ADR⁽²⁾		0.23			7.13

Weighted Average Outstanding Shares (‘M)					24,687

Note: (1) New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.47 per U.S. dollar for the six months ended June 30, 2005.

(2)

1 ADR equals 5 ordinary shares.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months and Three Months Ended June 30, 2005
(Figures in Million of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) ⁽¹⁾


	6 Months 2005						Q2 2005			Q1 2005
	USD			NTD			NTD			NTD
Cash Flows from Operating Activities:
Consolidated Net Income		1,118			35,187			18,369			16,818
Depreciation & Amortization		1,207			37,980			19,490			18,490
Deferred Income Tax		(37	)		(1,180	)		(634	)		(546	)
Investment Gain Recognized by Equity Method		(20	)		(623	)		(226	)		(397	)
Accrued Pension Cost		10			311			171			140
Changes in Working Capital & Others		(148	)		(4,662	)		(8,686	)		4,024

Net Cash Provided from Operating Activities		2,130			67,013			28,484			38,529

Cash Flows from Investing Activities:
Decrease in Short-Term Investments		151			4,751			3,337			1,414
Increase in Long-Term Investments		(107	)		(3,364	)		(2,003	)		(1,361	)
Acquisition of Fixed Assets		(1,769	)		(55,662	)		(14,115	)		(41,547	)
Proceeds from Sales of Long-Term Investments		49			1,533			1,525			8
Proceeds from Disposal of Properties		4			127			(54	)		181
Increase in Deferred Assets		(16	)		(518	)		(232	)		(286	)
Increase in Deposit-Out		0			(7	)		(6	)		(1	)
Decrease in Other Assets		0			5			(62	)		67

Net Cash Used in Investing Activities		(1,688	)		(53,135	)		(11,610	)		(41,525	)

Cash Flows from Financing Activities:
Decrease in Short-Term Bank Loans		(2	)		(63	)		(63	)		0
Decrease in Long-Term Bank Loans		(30	)		(946	)		(945	)		(1	)
Proceeds From Disposal of Treasury Stocks		2			49			23			26
Decrease in Guarantee Deposits & Others		35			1,106			1,147			(41	)
Bonus Paid to Directors and Supervisors		(7	)		(231	)		(231	)		0
Increase in Minority Interest		0			11			11			0
Issuance of Stocks Option		4			117			82			35

Net Cash Provided from Financing Activities		2			43			24			19


Net Decrease in Cash and Cash Equivalents		444			13,921			16,898			(2,977	)


Effect of Exchange Rate Changes		(1	)		(47	)		(33	)		(14	)

Cash and Cash Equivalents at Beginning of Period		2,368			74,531			0			74,531

Cash and Cash Equivalents at End of Period		2,811			88,405			16,865			71,540

Note : (1) New Taiwan dollar amounts have been translated into U.S. dollars at the rate of NTD31.47 per U.S. dollar, the weighted average exchange rate for the six months of 2005.

TSMC 2005 Second Quarter Results Investor Conference July 26th, 2005

Agenda Welcome 2005 2Q Financial Results Lora Ho, CFO (unconsolidated) Remarks Rick Tsai, CEO 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 16, 2005, 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. 2Q’05 Result Highlights

Income Statement - QoQ Comparison

Income Statement - YoY Comparison

Balance Sheet & Key Indices

Cash Flows

Capital Expenditures 2005 CapEx is expected to remain in the range of US$2.5 -2.7 billion

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 and Kodak Sign License Agreement for CMOS Image Sensors (2005/07/08) TSMC Reference Flow 6.0 Opens Door to 65nm Design (2005/06/09) TSMC Introduces Foundry Industry's First Comprehensive DFM Toolkits (2005/06/09) Cadence Supports TSMC Reference Flow 6.0 To Accelerate 65nm Design (2005/06/09) Key Synopsys Low Power and DFM Technologies Support TSMC Reference Flow 6.0 (2005/06/09) Mentor Graphics TestKompress Supports TSMC Reference Flow 6.0 (2005/06/09) Apache Supports TSMC Reference Flow 6.0 with Dynamic Power Integrity for Advanced Low Power Designs (2005/06/09) * Please visit TSMC's Web site (http://www.tsmc.com) for details and other announcements. * Starting from 1Q05, TSMC will post quarterly consolidated financial statements, in addition to the unconsolidated financial statements, on our web site.

Recap of Recent Major Events - Cont. TSMC Announces May 2005 Sales and Revises Upward 2Q2005 Guidance (2005/06/08) TSMC and RMI Collaborate on 90nm Process for RMI's XLRTM Processor Family (2005/06/07) Magma Introduces Quartz DRC (2005/05/30) TSMC Sets June 19 Record Date for Common Share Dividend (2005/05/30) TSMC Shareholders Approved NT$2.5 Dividend (2005/05/30) TSMC Board Appoints Dr. Rick Tsai as Chief Executive Officer of TSMC and Dr. F.C. Tseng as Vice Chairman of TSMC (2005/05/10) TSMC Unveils Nexsys 65nm Process Technology Plans (2005/04/27) * Please visit TSMC's Web site (http://www.tsmc.com) for details and other announcements. * Starting from 1Q05, TSMC will post quarterly consolidated financial statements, in addition to the unconsolidated financial statements, on our web site.

3Q’05 Guidance Wafer shipments to increase by a mid-teen percentage point sequentially; Overall utilization rate to exceed 90%; Gross profit margin to be in the range of 41% to 43%; ASP to decline by a low to mid single digit percentage point sequentially.

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

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: July 26, 2005	By	/s/ Lora Ho
		Lora Ho
		Vice President & Chief Financial Officer