Edgar Filing: TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD

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 October 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
Elizabeth Sun / Eric Chiang
Harrison Hsueh / Julie Wei
Investor Relations Division
TSMC
invest@tsmc.com
886-3-568-2085/ 2087/ 2088/ 2086

Topics in This Report

•		Revenue Analysis

•		Utilization & Capacity

•		Profit & Expense Analysis

•		Financial Condition Review

•		Cash Flow & CapEx

•		Recap of Recent Important Events & Announcements

Operating Results Review:

Summary:


*(Amount in NT$ billion except noted otherwise)*	3Q05			2Q05			3Q04			QoQ			YoY
EPS (NT$ per com. shr.)		0.99			0.74			1.13			33.3	%		(12.2	%)
(US$ per ADR unit)		0.15			0.12			0.17

Net Sales		69.26			58.52			69.74			18.4	%		(0.7	%)
Gross Profit		30.53			23.21			32.14			31.5	%		(5.0	%)
Operating Expense		(5.60	)		(5.42	)		(6.02	)		3.2	%		(7.0	%)
Non-Operating Items		(0.51	)		(0.05	)		2.01			899.3	%
Net Income		24.49			18.37			27.93			33.3	%		(12.3	%)

Wafers Shipped (kpcs 8 inch-equiv.)		1,527			1,275			1,333			19.8	%		14.5	%
Capacity Utilization		96	%		85	%		103	%

Net Profit Margin		35.4	%		31.4	%		40.1	%

Remarks:

The third quarter EPS of NT$0.99 represents a 33.3% increase compared with 2Q05.The unconsolidated operating results of 3Q05 are summarized below:

Net sales increased 18.4% to NT$69.26 billion compared with NT$58.52 billion in the second quarter of 2005. The increase mainly resulted from a 19.8% increase in wafer shipments, a 2.6% appreciation of the US dollar against the local currency, and a 4.9% decline of the wafer average selling price (ASP).

Gross profit increased to NT$30.53 billion, representing a 31.5% increase from the previous quarter. Gross margin jumped to 44.1% from 39.7% in 2Q05 mainly due to higher levels of capacity utilization and more favorable exchange rates, but a lower ASP partially reduced the magnitude of the improvement.

Operating expenses were NT$5.60 billion, representing 8.1% of revenue. The combined result from non-operating income and long-term investments was a loss of NT$510 million.

Income before tax increased 37.7% sequentially to NT$24.42 billion. The provision for tax expenses of NT$2.80 billion was completely offset by an investment tax credit of NT$2.87 billion. TSMC’s 3Q05 net income was NT$24.49 billion with a net margin of 35.4%.


TSMC October 27, 2005		Page 2

I. Revenue Analysis

I – 1. Wafer Sales Analysis


By Application	3Q05			2Q05			3Q04
Computer		30	%		38	%		31	%
Communication		41	%		37	%		42	%
Consumer		23	%		18	%		20	%
Industrial/Others		5	%		6	%		5	%
Memory		1	%		1	%		2	%


By Technology	3Q05			2Q05			3Q04
90nm-		10	%		2	%		0	%
0.11/0.13um		33	%		41	%		30	%
0.15/0.18um		35	%		34	%		38	%
0.25/0.35um		16	%		17	%		24	%
0.50um+		6	%		6	%		8	%


By Customer Type	3Q05			2Q05			3Q04
Fabless/System		71	%		74	%		69	%
IDM		29	%		26	%		31	%


By Geography	3Q05			2Q05			3Q04
North America		75	%		77	%		75	%
Asia Pacific		11	%		9	%		11	%
Europe		9	%		8	%		7	%
Japan		5	%		6	%		7	%

Revenue Analysis:

Net sales increased 18.4% to NT$69.26 billion compared to NT$58.52 billion in the second quarter 2005. The increase in third quarter revenue mainly resulted from a 19.8% increase of wafer shipments, a 2.6% appreciation of the US dollar against the local currency, and a 4.9% decline of the wafer average selling price (ASP).

Revenues from communication and consumer applications increased in this quarter mainly due to stronger seasonal demand and introduction of new products. Due to weaknesses in demand experienced in the PC Graphics sector, revenues from computer applications declined.

Revenue from advanced technologies — defined as 0.13-micron and below – accounted for 43% of total wafer sales. Meanwhile, percentage of revenue from 90nm increased to 10% from 2% previously.

IDM accounted for 29% of wafer sales during the quarter, up from 26% in the previous quarter.

Geographically, North America accounted for 75% of wafer sales, down from 77% in 2Q05. Meanwhile, sales from Asia Pacific increased to 11% of wafer sales from 9% previously.

ASP Trend:

We have some product mix factors that positively contributed to the blended average price, but the general price declines had led to a 4.9% sequential decline in ASP.


TSMC October 27, 2005		Page 3

II. Utilization & Capacity

II.2. Capacity


	1Q05		2Q05		3Q05		4Q05		2005
Fab / (Wafer size)	(Act.)		(Act.)		(Act.)		(Fcst.)		(Fcst.)
Fab-2 (6")¹		238		249		251		251		989
Fab-3 (8")		234		245		247		247		973
Fab-5 (8")		119		125		126		126		496
Fab-6 (8")		203		214		217		217		850
Fab-7 (8")		36		39		40		40		155
Fab-8 (8")		222		217		227		227		893
Fab-12 (12")²		85		103		122		139		448
Fab-14 (12")²		18		36		46		56		156
TSMC — owned capacity 8"-equivalent Kpcs		1,180		1,292		1,374		1,437		5,282
Wafer Tech (8")		95		96		100		100		389
SSMC (8")		41		42		47		49		179
TSMC (Shanghai)(8")		9		22		30		44		105
Total TSMC — managed 8"-equivalent Kpcs		1,324		1,451		1,550		1,629		5,955


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

Utilization Rate:

Overall capacity utilization improved by 11 percentage points to 96% in this quarter, reflecting stronger demand from customers across the board.

Capacity :

Total TSMC managed capacity in 3Q05 was 1,550K 8-inch equivalent wafers, 6.8% higher than the 1,451K wafers in 2Q05.

TSMC managed capacity in 4Q05 will increases to 1,629K wafers, representing a 5.1% sequential growth. The newly added capacity in 4Q05 will be mainly for the continuing ramp up of advanced capacities in Fab 12 and Fab 14.

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


TSMC October 27, 2005		Page 4

III. Profit & Expense Analysis

III — 1. Gross Profit Analysis


(Amount: NT$ billion)	3Q05			2Q05			3Q04
COGS		38.7			35.3			37.6
Depreciation		15.5			16.0			13.7
Other MFG Cost		23.2			19.3			23.9

Gross Profit		30.5			23.2			32.1

Gross Margin
- TSMC		44.1	%		39.7	%		46.1	%
- TSMC w/o affiliates		47.6	%		42.9	%		51.9	%

III — 2. Operating Expense Analysis

(Amount: NT$ billion)

3Q05

2Q05

3Q04

Total Operating Exp.

5.6

5.4

6.0

SG&A

2.3

2.1

2.9

Research & Development

3.3

3.1

III — 3. Non-Operating Items


(Amount: NT$ million)	3Q05			2Q05			3Q04
Non-Operating Income/(Exp.)		(19	)		537			630
Net Interest Income/(Exp.)		(41	)		42			228
Other Non-Operating		22			495			402

L-T Investments		(491	)		(588	)		1,378
WaferTech*		487			352			1,643
SSMC		210			140			268
Vanguard		61			87			326
TSMC (Shanghai)		(760	)		(789	)		(237	)
Miscellaneous		(489	)		(378	)		(622	)


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

Gross Profit Analysis:

Gross profit was NT$30.5 billion and gross margin improved to 44.1% from 39.7% in 2Q05. The improvement in gross profit was mainly due to higher levels of capacity utilization and a stronger US dollar against the local currency, partially offset by an unfavorable ASP movement.

During the quarter, the gross margin from TSMC’s own fabs increased to 47.6% from 42.9% in 2Q05.

Operating Expenses:

Operating expenses were NT$5.6 billion in this quarter, representing 8.1% of net sales.

Non-Operating Items:

Combined result from non-operating income and long-term investments was a loss of NT$510 million.

During this quarter, the non-operating expenses were NT$19 million, compared to last quarter’s income of NT$537 million. This difference was mainly due to unrealized revaluation losses in certain marketable securities.

Loss from long-term investments was NT$491 million in this quarter, compared to a loss of NT$588 million in 2Q05. The differences were mainly attributable to better performance in WaferTech and SSMC.


TSMC October 27, 2005		Page 5

IV. Financial Condition Review

IV — 1. Liquidity Analysis


(Amount: NT$ billion)	3Q05		2Q05		3Q04
Cash & S-T Investments		107.3		128.0		116.5
Accounts Receivable — Trade		37.2		30.1		33.3
Inventory		15.1		14.1		12.6
Total Current Assets		165.1		181.8		169.8
Accounts Payable		20.9		17.8		28.3
Accrued Liabilities and others		22.0		68.9		16.0
Total Current Liabilities		42.9		86.7		44.3
Current Ratio (x)		3.8		2.1		3.8
Net Working Capital		122.2		95.1		125.5

IV — 3. Debt Service


(Amount: NT$ billion)	3Q05		2Q05		3Q04
Cash & S-T Investments		107.3		128.0		116.5
Interest-Bearing Debt		30.0		30.0		35.0
Net Cash Reserves		77.3		98.0		81.5

Liquidity Analysis:

Cash & short-term investments declined NT$20.7 billion in this quarter mainly due to payments of cash dividends and employee profit sharing. Meanwhile, accounts receivable and inventory increased. As a result, total current assets were NT$16.7 billion lower on a sequential basis.

Total current liabilities were NT$43.8 billion lower sequentially, mainly due to the payment of NT$46.5 billion for cash dividends and NT$3.1 billion for employee profit sharing.

As a result, net working capital increased to NT$122.2 billion and current ratio increased to 3.8x.

Receivable/Inventory Days Trend:

Days of Receivable increased to 46 days in 3Q05 compared to 43 days in the previous quarter.

Days of Inventory decreased to 40 days from 41 days in the second quarter 2005.

Debt Service:

Due to lower levels of cash & short-term investments,net cash reserves — defined as the excess of cash and short-term investments over interest-bearing debt — decreased by NT$20.7 billion to NT$77.3 billion in 3Q05.

Interest-bearing debt remained at the same level of NT$30.0 billion as in the previous quarter.


TSMC October 27, 2005		Page 6

V. Cash Flow & CapEx

V — 1. Cash Flow Analysis


(Amount: NT$ billion)	3Q05			2Q05			3Q04
Net Income		24.5			18.4			27.9
Depreciation & Amortization		17.1			17.7			15.4
Other Op Sources/(Uses)		(3.7	)		(8.4	)		(5.1	)
Total Op Sources/(Uses)		37.9			27.7			38.2


Capital Expenditure		(9.1	)		(13.0	)		(16.5	)
Short Term Investment		0.6			2.2			(4.9	)
Long Term Investment		(0.7	)		(0.6	)		(11.9	)
Other Investing Sources/(Uses)		(0.2	)		1.1			(0.3	)
Net Investing Sources/(Uses)		(9.4	)		(10.3	)		(33.6	)


Cash dividends — Common stock		(46.5	)		0.0			(12.2	)
Employees Bonus		(3.1	)		0.0			(0.7	)
Other Financing Sources/(Uses)		0.9			1.0			(0.1	)
Net Financing Sources/(Uses)		(48.7	)		1.0			(12.9	)


Net Cash Position Changes		(20.1	)		18.4			(8.3	)

Ending Cash Balance		58.5			78.6			70.4

V — 3. Capital Expenditure


TSMC				US$275 m

TSMC (Shanghai)				US$44 m

WaferTech				US$0 m


TSMC & Affiliates				US$319 m

Summary of Cash Flow:

During this quarter, TSMC generated NT$37.9 billion operating cash inflow, mainly from net income of NT$24.5 billion and depreciation & amortization of NT$17.1 billion, partially offset by changes in working capital.

Net cash used in investment activities totaled NT$9.4 billion, mainly resulting from NT$9.1 billion of capital spending.

A net financing charge of NT$48.7 billion during this quarter was largely attributable to the payments of NT$46.5 billion for cash dividends and NT$3.1 billion for employee profit sharing.

As a result, TSMC ended the quarter with a cash balance of NT$58.5 billion, NT$20.1 billion lower than in 2Q05.

Operating Cash Flow Trend:

Operating cash flow of NT$37.9 billion was higher than the NT$27.7 billion generated in the previous quarter, mainly due to the increase of net income.

Capital Spending:

Capital expenditures for TSMC alone during the quarter totaled US$275 million.Most of the spending was for purchasing 12-inch production equipment. Capital spending for TSMC (Shanghai) in this quarter was US$44 million.

For year 2005, total capital expenditure for TSMC and affiliates is expected to be in the range of US$2.5 billion to US$2.7 billion, as guided.


TSMC October 27, 2005		Page 7

VI. Recap of Recent Important Events & Announcements


l		TSMC ranks #11 of BusinessWeek’s “Top 150 Leading Asian Companies” ( 2005/10/24 )

l		TSMC joins IMEC’s sub-45nm CMOS R&D project ( 2005/10/18 )

l		TSMC is voted the “Most Admired Company” by CommonWealth Magazine ( 2005/10/13 )

l		TSMC produces industry’s first 1.3 megapixel CMOS image sensor for Agilent Technologies with Enhanced-Performance Pixel Architecture ( 2005/10/10 )

l		TSMC September 2005 sales set record high ( 2005/10/07 )

l		TSMC launches foundry industry’s first 65nm prototype run ( 2005/10/05 )

l		TSMC announces production-ready 90nm X Architecture ( 2005/10/04 )

l		TSMC enters volume production of 90nm graphics chips for ATI ( 2005/09/26 )

l		TSMC R&D team receives first Outstanding Nano-Tech Award from Ministry of Economic Affairs of Republic of China ( 2005/09/21 )

l		TSMC recognizes its suppliers at 2005 SCM Forum ( 2005/09/15 )

l		TSMC completes secondary offering of 151.655 million ADSs at US$8.60 per share ( 2005/08/05 )


*	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.
		Unaudited Condensed Balance Sheet (Unconsolidated)
		As of September 30, 2005 and 2004
		(Figures in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) ⁽¹⁾


	September 30, 2005									September 30, 2004 ⁽²⁾						YoY
	USD			NTD			%			NTD			%			Amount			%
ASSETS
Cash and Cash Equivalents		1,762			58,467			12.1			70,372			15.2			(11,905	)		(16.9	)
Short Term Investments		1,471			48,822			10.1			46,128			10.0			2,694			5.8
Accounts Receivable — Trade		1,122			37,248			7.7			33,335			7.2			3,913			11.7
Inventories		454			15,070			3.1			12,629			2.7			2,441			19.3
Other Current Assets		164			5,447			1.2			7,300			1.6			(1,853	)		(25.4	)

Total Current Assets		4,973			165,054			34.2			169,764			36.7			(4,710	)		(2.8	)


Long Term Investment		2,379			78,958			16.3			66,104			14.3			12,854			19.4


Fixed Assets		17,037			565,426			117.0			492,964			106.6			72,462			14.7
Less Accumulated Depreciation		(10,441	)		(346,517	)		(71.7	)		(285,808	)		(61.8	)		(60,709	)		21.2

Net Fixed Assets		6,596			218,909			45.3			207,156			44.8			11,753			5.7


Other Assets		609			20,185			4.2			19,484			4.2			701			3.6

Total Assets		14,557			483,106			100.0			462,508			100.0			20,598			4.5


LIABILITIES
Accounts Payables		303			10,042			2.1			12,997			2.8			(2,955	)		(22.7	)
Payables to Contractors and Equipment Suppliers		326			10,815			2.2			15,261			3.3			(4,446	)		(29.1	)
Accrued Expenses and Other Current Liabilities		348			11,547			2.4			10,974			2.4			573			5.2
Current Portion of Bonds Payable		316			10,500			2.2			5,000			1.1			5,500			110.0

Total Current Liabilities		1,293			42,904			8.9			44,232			9.6			(1,328	)		(3.0	)

Bonds Payable		588			19,500			4.0			30,000			6.5			(10,500	)		(35.0	)
Other Long Term Liabilities		288			9,591			2.0			9,013			1.9			578			6.4

Total Liabilities		2,169			71,995			14.9			83,245			18.0			(11,250	)		(13.5	)


SHAREHOLDERS’ EQUITY
Capital Stock		7,451			247,273			51.2			232,519			50.3			14,754			6.3
Capital Surplus		1,711			56,777			11.7			56,529			12.2			248			0.4
Legal Reserve		1,035			34,348			7.1			25,528			5.5			8,820			34.6
Special Reserve		67			2,226			0.5			—			—			2,226			—
Unappropriated Retained Earnings		2,178			72,297			15.0			66,007			14.3			6,290			9.5
Treasury Stock		(47	)		(1,550	)		(0.3	)		(1,617	)		(0.4	)		67			(4.1	)
Unrealized Loss on Long-term Investments		—			—			—			(3	)		—			3			(100.0	)
Cumulated Translation Adjustment		(7	)		(260	)		(0.1	)		300			0.1			(560	)		(186.6	)

Total Equity		12,388			411,111			85.1			379,263			82.0			31,848			8.4

Total Liabilities & Shareholders’ Equity		14,557			483,106			100.0			462,508			100.0			20,598			4.5


Note :	(1)	Amounts in new Taiwan dollars have been translated into U.S. dollars at the rate of NT$33.19 per U.S. dollar as of September 30, 2005

	(2)	Certain prior period balances have been reclassified to conform to the current period presentation.


		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
		Unaudited Condensed Balance Sheet (Unconsolidated)
		As of September 30, 2005 and June 30, 2005
		(Figures in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD))⁽¹⁾


	September 30, 2005									June 30, 2005						QoQ
	USD			NTD			%			NTD			%			Amount			%
ASSETS
Cash and Cash Equivalents		1,762			58,467			12.1			78,597			15.8			(20,130	)		(25.6	)
Short Term Investments		1,471			48,822			10.1			49,409			9.9			(587	)		(1.2	)
Accounts Receivable — Trade		1,122			37,248			7.7			30,116			6.0			7,132			23.7
Inventories		454			15,070			3.1			14,114			2.8			956			6.8
Other Current Assets		164			5,447			1.2			9,591			1.9			(4,144	)		(43.2	)

Total Current Assets		4,973			165,054			34.2			181,827			36.4			(16,773	)		(9.2	)


Long Term Investment		2,379			78,958			16.3			76,434			15.3			2,524			3.3


Fixed Assets		17,037			565,426			117.0			555,917			111.3			9,509			1.7
Less Accumulated Depreciation		(10,441	)		(346,517	)		(71.7	)		(330,854	)		(66.2	)		(15,663	)		4.7

Net Fixed Assets		6,596			218,909			45.3			225,063			45.1			(6,154	)		(2.7	)


Other Assets		609			20,185			4.2			16,108			3.2			4,077			25.3

Total Assets		14,557			483,106			100.0			499,432			100.0			(16,326	)		(3.3	)


LIABILITIES
Accounts Payables		303			10,042			2.1			7,827			1.6			2,215			28.3
Payables to Contractors and Equipment Suppliers		326			10,815			2.2			10,004			2.0			811			8.1
Accrued Expenses and Other Current Liabilities		348			11,547			2.4			58,393			11.7			(46,846	)		(80.2	)
Current Portion of Bonds Payable		316			10,500			2.2			10,500			2.1			—			—

Total Current Liabilities		1,293			42,904			8.9			86,724			17.4			(43,820	)		(50.5	)

Bonds Payable		588			19,500			4.0			19,500			3.9			—			—
Other Long Term Liabilities		288			9,591			2.0			9,008			1.8			583			6.5

Total Liabilities		2,169			71,995			14.9			115,232			23.1			(43,237	)		(37.5	)


SHAREHOLDERS’ EQUITY
Capital Stock		7,451			247,273			51.2			247,261			49.5			12			—
Capital Surplus		1,711			56,777			11.7			56,721			11.3			56			0.1
Legal Reserve		1,035			34,348			7.1			34,348			6.9			—			—
Special Reserve		67			2,226			0.5			2,226			0.4			—			—
Unappropriated Retained Earnings		2,178			72,297			15.0			47,809			9.6			24,488			51.2
Treasury Stock		(47	)		(1,550	)		(0.3	)		(1,552	)		(0.3	)		2			0.2
Cumulated Translation Adjustment		(7	)		(260	)		(0.1	)		(2,613	)		(0.5	)		2,353			90.0

Total Equity		12,388			411,111			85.1			384,200			76.9			26,911			7.0

Total Liabilities & Shareholders’ Equity		14,557			483,106			100.0			499,432			100.0			(16,326	)		(3.3	)


Note :		(1)	Amounts in new Taiwan dollars have been translated into U.S. dollars at the rate of NT$33.19 per U.S. dollar as of September 30, 2005.


		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
		Unaudited Condensed Income Statement (Unconsolidated)
		For the Three Months Ended September 30, 2005, September 30, 2004 and June 30, 2005
		(Expressed in Millions New Taiwan Dollars (NTD) and U.S. Dollars (USD) ⁽¹⁾
		Except for Per Share Amounts and Shares Outstanding)


	Year over Year Comparison															Sequential Comparison
	Q3 2005						% of			Q3 2004			YoY			Q3 2005						% of			Q2 2005			QoQ
	USD			NTD			Sales			NTD			%			USD			NTD			Sales			NTD			%
Net Sales		2,149			69,258			100.0			69,735			(0.7	)		2,149			69,258			100.0			58,516			18.4
Cost of Sales		(1,202	)		(38,733	)		(55.9	)		(37,595	)		3.0			(1,202	)		(38,733	)		(55.9	)		(35,311	)		9.7

Gross Profit		947			30,525			44.1			32,140			(5.0	)		947			30,525			44.1			23,205			31.5

Operating Expenses
Research and Development Expenses		(104	)		(3,341	)		(4.8	)		(3,123	)		7.0			(104	)		(3,341	)		(4.8	)		(3,283	)		1.7
General and Administrative Expenses		(58	)		(1,881	)		(2.8	)		(2,578	)		(27.0	)		(58	)		(1,881	)		(2.8	)		(1,799	)		4.6
Sales and Marketing Expenses		(12	)		(373	)		(0.5	)		(318	)		17.8			(12	)		(373	)		(0.5	)		(339	)		10.2

Total Operating Expenses		(174	)		(5,595	)		(8.1	)		(6,019	)		(7.0	)		(174	)		(5,595	)		(8.1	)		(5,421	)		3.2


Income from Operations		773			24,930			36.0			26,121			(4.6	)		773			24,930			36.0			17,784			40.2


Net Non-Operating Income(Expenses)		—			(19	)		—			630			(102.9	)		—			(19	)		—			537			(103.4	)
Investment Gains (Losses)		(15	)		(491	)		(0.7	)		1,378			(135.6	)		(15	)		(491	)		(0.7	)		(588	)		(16.4	)

Income before Income Tax		758			24,420			35.3			28,129			(13.2	)		758			24,420			35.3			17,733			37.7


Income Tax Benefits (Expenses)		2			68			0.1			(196	)		134.3			2			68			0.1			636			(89.5	)


Net Income		760			24,488			35.4			27,933			(12.3	)		760			24,488			35.4			18,369			33.3


Diluted Earnings Per Ordinary Share		0.03			0.99						1.13			(12.2	)		0.03			0.99						0.74			33.3

Earnings Per ADR ⁽²⁾		0.15			4.96						5.65						0.15			4.96						3.72

Diluted Weighted Average Outstanding Shares (‘M) ⁽³⁾					24,690						24,739									24,690						24,687


Note:	(1)	Amounts in new Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD32.23 per U.S. dollar for the third quarter of 2005.

	(2)	1 ADR equals 5 ordinary shares.

	(3)	Total diluted weighted average outstanding shares were 24,690M shares for 3Q05 and 24,739M shares for 3Q04 after the retroactive adjustments for stock dividends and stock bonus.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
Unaudited Condensed Income Statement (Unconsolidated)
For the Nine Months Ended September 30, 2005 and 2004
(Expressed in Millions New Taiwan Dollars (NTD) and U.S. Dollars (USD)⁽¹⁾
Except for Per Share Amounts and Shares Outstanding)


	9 months ended September 30
	2005			2005			% of			2004			YoY
	USD			NTD			Sales			NTD			%
Net Sales		5,782			183,427			100.0			192,117			(4.5	)
Cost of Sales		(3,406	)		(108,048	)		(58.9	)		(109,109	)		(1.0	)

Gross Profit		2,376			75,379			41.1			83,008			(9.2	)

Operating Expenses
Research and Development Expenses		(314	)		(9,973	)		(5.4	)		(8,948	)		11.5
General and Administrative Expenses		(178	)		(5,625	)		(3.1	)		(7,214	)		(22.0	)
Sales and Marketing Expenses		(31	)		(991	)		(0.5	)		(1,051	)		(5.6	)

Total Operating Expenses		(523	)		(16,589	)		(9.0	)		(17,213	)		(3.6	)


Income from Operations		1,853			58,790			32.1			65,795			(10.6	)


Net Non-Operating Expenses		28			905			0.4			458			97.6
Investment Gains (Losses)		(40	)		(1,277	)		(0.7	)		3,432			(137.2	)

Income before Income Tax		1,841			58,418			31.8			69,685			(16.2	)


Income Tax Benefits		40			1,257			0.7			447			181.1


Net Income		1,881			59,675			32.5			70,132			(14.9	)


Diluted Earnings Per Ordinary Share		0.08			2.42						2.83			(14.7	)

Earnings Per ADR⁽²⁾		0.38			12.08						14.17

Diluted Weighted Average Outstanding Shares (‘M)⁽³⁾					24,690						24,739


Note :



(1)		Amounts in new Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.73 per U.S. dollar for the nine months ended September 30, 2005.

(2)		1 ADR equals 5 ordinary shares.

(3)		Total diluted weighted average outstanding shares were 24,690M shares for the nine months ended September 30, 2005 and 24,739M shares for the nine months ended September 30, 2004 after the retroactive adjustments for stock dividends and stock bonus.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
Unaudited Condensed Statement of Cash Flows (Unconsolidated)
For the Nine Months Ended September 30, 2005
(Figures in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) ⁽¹⁾


	9 Months 2005						3Q 2004			2Q 2005			3Q 2004⁽²⁾
	USD			NTD			NTD			NTD			NTD
Cash Flows from Operating Activities:
Net Income		1,881			59,675			24,488			18,369			27,933
Depreciation & Amortization		1,621			51,437			17,107			17,661			15,370
Deferred Income Tax		(73	)		(2,329	)		(1,179	)		(597	)		47
Investment Loss(Income) Recognized by Equity Method		40			1,277			491			588			(1,378	)
Changes in Working Capital & Others		(266	)		(8,436	)		(2,959	)		(8,301	)		(3,813	)

Net Cash Provided from Operating Activities		3,203			101,624			37,948			27,720			38,159

Cash Flows from Investing Activities:
Decrease(Increase) in Short-Term Investments		131			4,157			587			2,229			(4,929	)
Increase in Long-Term Investments		(318	)		(10,102	)		(3,683	)		(2,142	)		(11,892	)
Acquisition of Fixed Assets		(1,902	)		(60,336	)		(9,142	)		(13,033	)		(16,471	)
Proceeds from Sales of Long-Term Investments		143			4,529			3,014			1,515			(243	)
Proceeds from Disposal of Properties		47			1,502			71			1,310			302
Increase in Deferred Assets		(23	)		(736	)		(233	)		(217	)		(413	)
Decrease(Increase) in Deposit-Out		—			2			4			(2	)		(3	)

Net Cash Used in Investing Activities		(1,922	)		(60,984	)		(9,382	)		(10,340	)		(33,649	)

Cash Flows from Financing Activities:
Cash Dividend — Common Shares		(1,466	)		(46,504	)		(46,504	)		—			(12,159	)
Bonus Paid to Employees		(97	)		(3,086	)		(3,086	)		—			(682	)
Increase(Decrease) in Guarantee Deposits & Others		61			1,950			845			1,147			(75	)
Bonus Paid to Directors and Supervisors		(7	)		(231	)		—			(231	)		—
Proceeds from Exercise of Stock Options		5			166			49			82			—

Net Cash Provided(Used) in Financing Activities		(1,504	)		(47,705	)		(48,696	)		998			(12,916	)


Net Increase (Decrease) in Cash and Cash Equivalents		(223	)		(7,065	)		(20,130	)		18,378			(8,406	)

Cash and Cash Equivalents at Beginning of Period		2,066			65,532			78,597			60,219			78,778

Cash and Cash Equivalents at End of Period		1,843			58,467			58,467			78,597			70,372


Note :	(1)	Amounts in new Taiwan dollars have been translated into U.S. dollars at the rate of NTD31.73 per U.S. dollar, the weighted average rate for the nine months ended September 30, 2005.

	(2)	Certain prior period amounts have been reclassified to conform to the current period presentation.


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


	September 30, 2005									June 30, 2005									QoQ
	USD			NTD			%			USD			NTD			%			Amount			%
ASSETS
Cash	$	2,097		$	69,582			14.0		$	2,796		$	88,405			17.3		$	(18,823	)		(21.3	)
Short Term Investment		1,484			49,260			9.9			1,567			49,558			9.7			(298	)		(0.6	)
Accounts Receivable-Trade		1,180			39,140			7.9			1,015			32,095			6.3			7,045			22.0
Inventories		489			16,239			3.3			479			15,159			3.0			1,080			7.1
Other Current Assets		147			4,879			1.0			277			8,740			1.7			(3,861	)		(44.2	)

Total Current Assets		5,397			179,100			36.1			6,134			193,957			37.9			(14,857	)		(7.7	)


Long Term Investment		1,215			40,331			8.1			1,241			39,251			7.7			1,080			2.8


Fixed Assets		19,149			635,513			128.1			19,673			622,025			121.6			13,488			2.2
Less Accumulated Depreciation		(11,576	)		(384,200	)		(77.4	)		(11,545	)		(365,019	)		(71.4	)		(19,181	)		5.3

Net Fixed Assets		7,573			251,313			50.7			8,128			257,006			50.3			(5,693	)		(2.2	)


Other Assets		765			25,372			5.1			671			21,207			4.1			4,165			19.6

Total Assets	$	14,950		$	496,116			100.0		$	16,174		$	511,421			100.0		$	(15,305	)		(3.0	)


LIABILITIES
Short-term Bank Loans	$	34		$	1,124			0.2		$	10		$	316			0.1		$	808			255.6
Accounts Payable		297			9,851			2.0			241			7,605			1.5			2,246			29.5
Payables to Contractors and Equipment Suppliers		339			11,247			2.3			360			11,384			2.2			(137	)		(1.2	)
Accrued Expenses and Other Current Liabilities		417			13,848			2.8			1,906			60,251			11.8			(46,403	)		(77.0	)
Current Portion of Bonds Payable		317			10,505			2.1			332			10,505			2.1			0			0.0

Total Current Liabilities		1,404			46,575			9.4			2,849			90,061			17.6			(43,486	)		(48.3	)


Long-term Bank Loans		30			1,003			0.2			30			958			0.2			45			4.7
Bonds Payable		588			19,500			3.9			617			19,500			3.8			0			0.0
Other Long Term Liabilities		516			17,141			3.5			505			15,961			3.1			1,180			7.4


Total Liabilities		2,538			84,219			17.0			4,001			126,480			24.7			(42,261	)		(33.4	)


SHAREHOLDERS’ EQUITY
Shareholders’ Equity
Capital Stock		7,451			247,274			49.9			7,820			247,261			48.3			13			0.0
Capital Surplus		1,711			56,777			11.4			1,794			56,721			11.1			56			0.1
Legal Reserve		1,035			34,348			6.9			1,086			34,348			6.7			0			0.0
Special Reserve		67			2,226			0.4			70			2,226			0.4			0			0.0
Unappropriated Retained Earnings		2,178			72,296			14.6			1,512			47,809			9.3			24,487			51.2
Treasury Stock		(46	)		(1,550	)		(0.3	)		(49	)		(1,552	)		(0.3	)		2			(0.2	)
Cumulated Translation Adjustment		(8	)		(260	)		(0.1	)		(83	)		(2,613	)		(0.5	)		2,353			(90.0	)

Total Shareholders’ Equity before Minority Interest		12,388			411,111			82.8			12,150			384,200			75.1			26,911			7.0
Minority Interest		24			786			0.2			23			741			0.2			45			6.0

Total Shareholders’ Equity		12,412			411,897			83.0			12,173			384,941			75.3			26,956			7.0

Total Liabilities & Shareholders’ Equity	$	14,950		$	496,116			100.0		$	16,174		$	511,421			100.0		$	(15,305	)		(3.0	)


Note	: (1)	New Taiwan dollar amounts have been translated into U.S. dollars at the rate of NT$33.19 per U.S. dollar as of September 30, 2005


		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
		Unaudited Condensed Income Statements (Consolidated)
		For the Three Months Ended September 30 and 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
	Q3 2005						% of			Q2 2005			% of			QoQ
	USD			NTD			Sales			NTD			Sales			Inc.(Dec.) %
Net Sales		2,187			70,501			100.0			59,978			100.0			17.5
Cost of Sales		(1,227	)		(39,544	)		(56.1	)		(35,724	)		(59.6	)		10.7

Gross Profit		960			30,957			43.9			24,254			40.4			27.6

Operating Expenses
Research and Development Expenses		(107	)		(3,473	)		(4.9	)		(3,561	)		(5.9	)		(2.5	)
General and Administrative Expenses		(75	)		(2,410	)		(3.4	)		(2,253	)		(3.8	)		7.0
Sales and Marketing Expenses		(28	)		(897	)		(1.3	)		(1,227	)		(2.0	)		(26.9	)

Total Operating Expenses		(210	)		(6,780	)		(9.6	)		(7,041	)		(11.7	)		(3.7	)


Income from Operations		750			24,177			34.3			17,213			28.7			5.2


Net Non-operating Income (Expenses)		1			19			0.0			464			0.8			(96.0	)
Investment Gain		8			271			0.4			226			0.4			—

Income before Income Tax and Minority Interest		759			24,467			34.7			17,903			29.8			36.7

Income Tax Credit		2			57			0.1			491			0.8			(88.3	)


Income before Minority Interest		761			24,524			34.8			18,394			30.7			33.3


Minority Interest in Loss of Subsidiaries		(1	)		(36	)		(0.1	)		(25	)		(0.0	)		47.4

Consolidated Net Income		760			24,488			34.7			18,369			30.6			33.3


		Note:(1)	New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 32.23 per U.S. dollar for the third quarter of 2005.


		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
		Unaudited Condensed Income Statements (Consolidated)
		For the Nine Months Ended September 30, 2005
		(Expressed in Million New Taiwan Dollars (NTD) and U.S. Dollars (USD) ⁽¹⁾
		Except for Per Share Amounts and Shares Outstanding)


	9 months ended September 30, 2005
							% of
	USD			NTD			Sales
Net Sales	$	5,905		$	187,337			100.0
Cost of Sales		(3,481	)		(110,448	)		(59.0	)

Gross Profit		2,424			76,889			41.0

Operating Expenses
Research and Development Expenses		(329	)		(10,446	)		(5.6	)
General and Administrative Expenses		(226	)		(7,176	)		(3.8	)
Sales and Marketing Expenses		(86	)		(2,708	)		(1.4	)

Total Operating Expenses		(641	)		(20,330	)		(10.9	)


Income from Operations		1,783			56,559			30.2


Net Non-operating Income (Expenses)		39			1,222			0.6
Investment Gain		28			894			0.5

Income before Income Tax and Minority Interest		1,850			58,675			31.3

Income Tax Credit		33			1,061			0.6

Income before Minority Interest		1,883			59,736			31.9


Minority Interest in Loss of Subsidiaries		(2	)		(61	)		(0.0	)

Consolidated Net Income	$	1,881		$	59,675			31.9


Diluted Earnings Per Ordinary Share	$	0.08		$	2.42

Earnings Per ADR ⁽²⁾	$	0.38		$	12.08

Weighted Average Outstanding Shares (‘M)					24,690

Note: (1) New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.73 per U.S. dollar for the nine months ended September 30, 2005.


		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
		Unaudited Condensed Statements of Cash Flows (Consolidated)
		For the Nine Months and Six Months Ended September 30 and June 30, 2005
		(Figures in Million of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) ⁽¹⁾


	9 Months 2005						Q3 2005			6 Months 2005
	USD			NTD			NTD			USD			NTD
Cash Flows from Operating Activities:
Consolidated Net Income	$	1,881		$	59,675		$	24,488		$	1,118		$	35,187
Depreciation & Amortization		1,796			56,986			19,006			1,207			37,980
Deferred Income Tax		(76	)		(2,400	)		(1,220	)		(37	)		(1,180	)
Investment Gain Recognized by Equity Method		(28	)		(894	)		(271	)		(20	)		(623	)
Accrued Pension Cost		11			350			39			10			311
Changes in Working Capital & Others		(214	)		(6,790	)		(2,128	)		(148	)		(4,662	)

Net Cash Provided from Operating Activities		3,370			106,927			39,914			2,130			67,013

Cash Flows from Investing Activities:
Decrease in Short—Term Investments		163			5,175			424			151			4,751
Increase in Long-Term Investments		(223	)		(7,061	)		(3,697	)		(107	)		(3,364	)
Acquisition of Fixed Assets		(2,089	)		(66,260	)		(10,598	)		(1,769	)		(55,662	)
Proceeds from Sales of Long-Term Investments		144			4,568			3,035			49			1,533
Proceeds from Disposal of Properties		9			274			147			4			127
Increase in Deferred Assets		(23	)		(744	)		(226	)		(16	)		(518	)
(Increase)Decrease in Deposit-Out		0			(0	)		7			0			(7	)
(Increase)Decrease in Other Assets		0			(9	)		(14	)		0			5

Net Cash Used in Investing Activities		(2,019	)		(64,057	)		(10,922	)		(1,688	)		(53,135	)

Cash Flows from Financing Activities:
Cash Dividend — Common Shares		(1,463	)		(46,420	)		(46,420	)		—			0
Increase(Decrease) in Short-Term Bank Loans		19			611			674			(2	)		(63	)
Decrease in Long-Term Bank Loans		(31	)		(996	)		(50	)		(30	)		(946	)
Bonus Paid to Employees		(97	)		(3,086	)		(3,086	)		0			0
Proceeds From Disposal of Treasury Stocks		2			52			3			2			49
Decrease in Guarantee Deposits & Others		62			1,953			847			35			1,106
Bonus Paid to Directors and Supervisors		(7	)		(231	)		0			(7	)		(231	)
Increase(Decrease) in Minority Interest		0			0			(11	)		0			11
Issuance of Stocks Option		5			166			49			4			117

Net Cash (Used in) Provided from Financing Activities		(1,510	)		(47,951	)		(47,994	)		2			43


Net Decrease in Cash and Cash Equivalents		(159	)		(5,081	)		(19,002	)		444			13,921


Others		11			360			407			(1	)		(47	)

Cash and Cash Equivalents at Beginning of Period		2,342			74,303			(228	)		2,368			74,531

Cash and Cash Equivalents at End of Period	$	2,194		$	69,582		$	(18,823	)	$	2,811		$	88,405


Note :		(1)		New Taiwan dollar amounts have been translated into U.S. dollars at the rate of NTD31.73 per U.S. dollar, the weighted average exchange rate for the nine months ended September 30, 2005.

TSMC 2005 Third Quarter Results Investor Conference October 27th, 2005

Agenda Welcome 2005 3Q 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, TSMC's registration statement on Form F-3, filed with the SEC on July 5, 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. 3Q'05 Result Highlights

Income Statement - QoQ Comparison

Income Statement - YoY Comparison

Balance Sheet & Key Indices

Cash Flows

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

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

Improved Cost Structure Contributing to Higher Gross Margin Source: TSMC quarterly financials based on ROC GAAP (unconsolidated)

4Q'05 Guidance Revenues to be between NT$77 billion and NT$79 billion; Overall utilization rate to be about 100%; Gross profit margin to reach between 47% and 49%; Operating profit margin to be approximately 40%.

Recap of Recent Major Events - 1/2 TSMC ranks #11 of BusinessWeek's "Top 150 Leading Asian Companies" ( 2005/10/24 ) TSMC joins IMEC's sub-45nm CMOS R&D project ( 2005/10/18 ) TSMC is voted the "Most Admired Company" by CommonWealth Magazine ( 2005/10/13 ) TSMC produces industry's first 1.3 megapixel CMOS image sensor for Agilent Technologies with Enhanced-Performance Pixel Architecture ( 2005/10/10 ) TSMC September 2005 sales set record high ( 2005/10/07 ) TSMC launches foundry industry's first 65nm prototype run ( 2005/10/05 ) TSMC announces production-ready 90nm X Architecture ( 2005/10/04 )

Recap of Recent Major Events - 2/2 TSMC enters volume production of 90nm graphics chips for ATI ( 2005/09/26 ) TSMC R&D team receives first Outstanding Nano-Tech Award from Ministry of Economic Affairs of Republic of China ( 2005/09/21 ) TSMC recognizes its suppliers at 2005 SCM Forum ( 2005/09/15 ) TSMC completes secondary offering of 151.655 million ADSs at US$8.60 per share ( 2005/08/05 ) * 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.

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: October 27, 2005	By	/s/ Lora Ho
		Lora Ho

		Vice President & Chief Financial Officer