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

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:                .)

 

 

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.

FOR IMMEDIATE RELEASE

		4Q09		Quarterly Management Report January 28, 2010

CONTACT
Elizabeth Sun

Investor Relations Division
TSMC
invest@tsmc.com
886-3-568-2085

Topics in This Report

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

Operating Results Review:

Summary:

(Amounts are on consolidated basis and are in NT billions except otherwise noted)		4Q09				3Q09				4Q08				2009				2008
EPS (NT$  per common share)			1.26				1.18				0.48				3.44				3.81
(US$  per ADR unit)			0.19				0.18				0.07				0.52				0.61
Consolidated Net Sales			92.09				89.94				64.56				295.74				333.16
Gross Profit			44.70				42.86				20.19				129.33				141.75
Gross Margin			48.5	%			47.7	%			31.3	%			43.7	%			42.5	%
Operating Expense			(11.05	)			(10.87	)			(8.17	)			(37.37	)			(37.31	)
Operating Income			33.64				31.99				12.02				91.96				104.44
Operating Margin			36.5	%			35.6	%			18.6	%			31.1	%			31.4	%
Non-Operating Items			1.73				0.97				1.07				3.50				7.04
Net Income			32.67				30.55				12.45				89.22				99.93
Net Profit Margin			35.5	%			34.0	%			19.3	%			30.2	%			30.0	%
Wafer Shipment (kpcs 8 inch-equiv.)			2,430				2,445				1,532				7,737				8,467

Financial Highlights:

Fourth Quarter 2009

•		Consolidated net sales were NT$92.09 billion, increased 2.4% from NT$89.94 billion in the prior quarter and 42.6% from NT$64.56 billion in the year-ago quarter.
•		Gross margin was 48.5%, showing 0.8 percentage point increase from 3Q09 and a 17.2 percentage point increase from 4Q08.
•		Operating margin was 36.5%, 0.9 percentage point higher than 3Q09 and 17.9 percentage points higher than 4Q08.
•		Consolidated net income attributable to shareholders of the parent company was NT$32.67 billion, increased 6.9% from 3Q09. Net profit margin was 35.5% and diluted EPS was NT$1.26.

Full Year 2009

•		Consolidated net sales were NT$295.74 billion, representing an 11.2% decline from 2008.
•		In spite of lower net sales, gross margin was 43.7%, increased 1.2 percentage points from 42.5% in 2008. Operating margin was 31.1%, declined 0.3 percentage point from 2008.
•		Earnings per share was NT$3.44, with net profit margin of 30.2%.

TSMC January 28, 2010		Page 2

I. Revenue Analysis

I. Wafer Sales Analysis

By Application		4Q09				3Q09				4Q08
Computer			33	%			28	%			30	%
Communication			39	%			42	%			39	%
Consumer			13	%			16	%			16	%
Industrial/Others			15	%			14	%			15	%

By Technology		4Q09				3Q09				4Q08
40/45nm			9	%			4	%			0	%
65nm			30	%			31	%			27	%
90nm			16	%			18	%			21	%
0.11/0.13um			15	%			14	%			17	%
0.15/0.18um			18	%			21	%			22	%
0.25/0.35um			9	%			9	%			10	%
0.50um+			3	%			3	%			3	%

By Customer Type		4Q09				3Q09				4Q08
Fabless/System			79	%			80	%			72	%
IDM			21	%			20	%			28	%

By Geography		4Q09				3Q09				4Q08
North America			71	%			70	%			72	%
Asia Pacific			13	%			13	%			11	%
China			3	%			3	%			2	%
Europe			10	%			11	%			11	%
Japan			3	%			3	%			4	%

Revenue Analysis:

4Q09 marked the third consecutive growth quarter, mainly driven by strong demand from Computer related applications during the quarter. Revenues from Computer applications grew 22% sequentially, while Communication declined 8% after strong momentum in the prior two quarters and Consumer declined 15% following seasonal pattern.

As demand for 40/45nm technology remained strong and yield continued to improve, revenues from 40/45nm again more than doubled during the quarter and accounted for 9% of total wafer sales. Meanwhile, demand from 65nm and 90nm continued to be robust and accounted for 30% and 16%, respectively. Overall, revenues from 0.13-micron and below increased three percentage points sequentially and represented 70% of total wafer sales.

Revenues from IDM customers accounted for 21% of total wafer sales in 4Q09, up one percentage point from 3Q09.

From a geographic perspective, revenues from customers based in North America accounted for 71% of total wafer sales, while sales from Asia Pacific, China, Europe and Japan accounted for 13%, 3%, 10%, and 3% of total wafer sales, respectively.

II. Profit & Expense Analysis

II — 1. Gross Profit Analysis

(In NT billions)		4Q09				3Q09				4Q08				2009				2008
COGS			47.39				47.08				44.37				166.41				191.41
Depreciation			18.60				18.37				19.29				74.48				74.70
Other MFG Cost			28.79				28.71				25.08				91.93				116.71
Gross Profit			44.70				42.86				20.19				129.33				141.75
Gross Margin			48.5	%			47.7	%			31.3	%			43.7	%			42.5	%

Gross Profit Analysis:

Gross margin for the quarter was 48.5%, increased by 0.8 percentage point from 47.7% in 3Q09, due to a higher level of capacity utilization and continued cost improvement, partially offset by the unfavorable exchange rate.

On a full year basis, gross margin for 2009 was 43.7%, increased 1.2 percentage points from 2008, mainly due to a favorable exchange rate and cost improvement, partially offset by an adverse inventory valuation adjustment under ROC SFAS No.10.

TSMC January 28, 2010		Page 3

II — 2. Operating Expenses

(In NT billions)		4Q09				3Q09				4Q08				2009				2008
Total Operating Exp.			11.05				10.87				8.17				37.37				37.31
SG&A			4.48				4.67				3.34				15.78				15.83
Research & Development			6.57				6.20				4.83				21.59				21.48
Total Operating Exp. as a % of Sales			12.0	%			12.1	%			12.7	%			12.6	%			11.1	%

Operating Expenses:

Total operating expenses for 4Q09 increased by NT$0.18 billion to NT$11.05 billion, representing 12.0% of net sales.

SG&A expenses decreased by NT$0.19 billion from 3Q09, primarily due to lower legal fees.

Research and development expenditures increased by NT$0.37 billion sequentially, mainly due to increased development activities in 28nm and 22nm technologies.

For full year 2009, total operating expenses were NT$37.37 billion, similar to that in 2008. However, due to a lower net sales base, total operating expenses accounted for 12.6% of net sales in 2009, compared with 11.1% in the prior year.

II — 3. Non-Operating Items

(In NT billions)		4Q09				3Q09				4Q08				2009				2008
Non-Operating Inc./(Exp.)			1.43				0.52				1.41				3.45				6.34
Net Interest Income/(Exp.)			0.35				0.42				1.18				2.21				4.76
Other Non-Operating			1.08				0.10				0.23				1.24				1.58
L-T Investments			0.30				0.45				(0.34	)			0.05				0.70
SSMC			0.29				0.26				(0.07	)			0.43				0.76
Others			0.01				0.19				(0.27	)			(0.38	)			(0.06	)
Total Non-Operating Items			1.73				0.97				1.07				3.50				7.04

Non-Operating Items:

Combined result from non-operating income and long-term investments was a gain of NT$1.73 billion for 4Q09.

Non-operating income was NT$1.43 billion for 4Q09, a NT$0.91 billion increase from 3Q09, primarily due to the receipt of litigation compensation.

Net investment gain was NT$0.30 billion, lower than NT$0.45 billion in the prior quarter, mainly due to lower profits from certain invested companies.

On a full year basis, total non-operating items decreased by NT$3.54 billion to NT$3.50 billion in 2009, mostly due to less interest income and weaker business in certain invested companies.

TSMC January 28, 2010		Page 4

III. Financial Condition Review

III — 1. Liquidity Analysis

(Selected Balance Sheet Items)

(In NT billions)		4Q09				3Q09				4Q08
Cash & Marketable Securities			195.80				180.32				211.45
Accounts Receivable — Trade			35.38				35.88				18.50
Inventory			20.91				19.18				14.88
Total Current Assets			259.80				244.24				252.62
Accounts Payable			40.61				26.30				14.04
Current Portion of Bonds Payable			0.00				0.00				8.00
Accrued Employee Profit Sharing / Bonus			13.43				8.62				15.37
Accrued Liabilities and Others			25.09				20.09				19.40
Total Current Liabilities			79.13				55.01				56.81
Current Ratio (x)			3.3				4.4				4.4
Net Working Capital			180.67				189.23				195.81

Liquidity Analysis:

At the end of 4Q09, cash and marketable securities totaled NT$195.80 billion, increased by NT$15.48 billion from 3Q09, primarily due to NT$19.29 billion of free cash flow generated during this quarter.

Total current liabilities increased NT$24.12 billion in this quarter, primarily due to increase in accounts payables to contractors and equipment suppliers and accruals for employee profit sharing/bonus during the quarter.

Net working capital was NT$180.67 billion and current ratio decreased to 3.3x.

III — 2. Receivable/Inventory Days

(In Number of Days)		4Q09				3Q09				4Q08
Days of Receivable			36				36				46
Days of Inventory			42				41				40

Receivable and Inventory Days:

Days of receivable remained stable at 36 days in 4Q09.

Days of inventory increased by one day from prior quarter to 42 days.

III — 3. Debt Service

(In NT billions)		4Q09				3Q09				4Q08
Cash & Marketable Securities			195.80				180.32				211.45
Interest-Bearing Debt			15.09				15.33				23.44
Net Cash Reserves			180.71				164.99				188.01

Debt Service:

Net cash reserves, defined as the excess of cash and short-term marketable securities over interest-bearing debt, increased by NT$15.72 billion to NT$180.71 billion at the end of 4Q09, primarily due to NT$19.29 billion of free cash flow generated during this quarter.

TSMC January 28, 2010		Page 5

IV. Cash Flow

IV — 1.1. Cash Flow Analysis

(In NT billions)		4Q09				3Q09				4Q08
Net Income			32.67				30.55				12.45
Depreciation & Amortization			20.28				20.00				20.96
Employee Profit Sharing Payment*			n.a				(7.49	)			n.a
Other Operating Sources/(Uses)			9.05				3.60				29.83
Total Operating Sources/(Uses)			62.00				46.66				63.24
Capital Expenditure			(42.71	)			(32.04	)			(11.26	)
Marketable Financial Instruments			(3.59	)			(18.94	)			30.31
Other Investing Sources/(Uses)			(0.80	)			(0.53	)			(1.04	)
Net Investing Sources/(Uses)			(47.10	)			(51.51	)			18.01
Cash Dividends			0.00				(76.88	)			0.00
Other Financing Sources/(Uses)			(0.28	)			(0.11	)			(0.30	)
Net Financing Sources/(Uses)			(0.28	)			(76.99	)			(0.30	)
Net Cash Position Changes			14.62				(81.84	)			80.95
Exchange Rate Changes & Others			(0.28	)			(0.74	)			1.21
Ending Cash Balance			171.28				156.94				194.61

Summary of Cash Flow:

Cash generated from operating activities totaled NT$62.00 billion during the quarter, an increase of NT$15.34 billion from 3Q09, mainly due to the increase in net income, the absence of the cash payment of employee profit sharing, and a decrease in net working capital.

Net cash used in investing activities decreased NT$4.41 billion to NT$47.10 billion in 4Q09, primarily reflecting less purchases of marketable financial instruments, partially offset by an increase in capital expenditures.

Net cash used in financing activities was NT$0.28 billion during the quarter.

As a result, TSMC ended 4Q09 with a cash balance of NT$171.28 billion.

IV — 1.2. Cash Flow Analysis

(In NT billions)		2009				2008				Diff.
Net Income			89.22				99.93				(10.71	)
Depreciation & Amortization			80.81				81.51				(0.70	)
Employee Profit Sharing Payment*			(7.49	)			0.00				(7.49	)
Other Operating Sources/(Uses)			(2.57	)			40.05				(42.62	)
Total Operating Sources/(Uses)			159.97				221.49				(61.52	)
Capital Expenditure			(87.78	)			(59.22	)			(28.56	)
Marketable Financial Instruments			(7.04	)			52.35				(59.39	)
Other Investing Sources/(Uses)			(1.65	)			(1.17	)			(0.48	)
Net Investing Sources/(Uses)			(96.47	)			(8.04	)			(88.43	)
Cash Dividends			(76.88	)			(76.78	)			(0.10	)
Employee Profit Sharing*			0.00				(3.94	)			3.94
Repayment of Bonds Payable			(8.00	)			0.00				(8.00	)
Repurchase of Treasury Stock			0.00				(33.48	)			33.48
Other Financing Sources/(Uses)			(0.59	)			(1.19	)			0.60
Net Financing Sources/(Uses)			(85.47	)			(115.39	)			29.92
Net Cash Position Changes			(21.97	)			98.06				(120.03	)
Exchange Rate Changes & Others			(1.36	)			1.56				(2.92	)
Ending Cash Balance			171.28				194.61				(23.33	)

On a full year basis, cash generated from operating activities decreased NT$61.52 billion to NT$159.97 billion in 2009. The decrease mainly reflected the decrease in net income, the cash payment of 2008 employee profit sharing made in 2009, and increases in net working capital due to acceleration of business momentum.

Net cash used in investing activities was NT$96.47 billion in 2009, NT$88.43 billion higher than that in 2008, primarily reflecting redemptions of marketable financial instruments in 2008 and the increase in capital expenditures during 2009.

Meanwhile, net cash used in financing activities decreased by NT$29.92 billion to NT$85.47 billion during 2009, mainly due to the absence of repurchase of treasury stock and the reclassification of employee profit sharing from financing activities to operating activities starting 2009, partially offset by the repayment of corporate bonds in the first quarter.

TSMC January 28, 2010		Page 6

IV-2. Operating and Free Cash Flows

Operating and Free Cash Flows:

Cash flows generated from operating activities were NT$62.00 billion during the quarter. Free cash flow, defined as the excess of operating cash flows over capital expenditures, totaled NT$19.29 billion in 4Q09, compared to NT$14.62 billion in 3Q09.

Total free cash flow generated in 2009 was NT$72.19 billion, declined NT$90.08 billion from NT$162.27 billion in 2008. The year-over-year decline was primarily due to lower business activities resulting from the economic downturn and the increased capital expenditures.

V. CapEx & Capacity

V — 1. Capital Expenditures

(In US millions)		1Q09				2Q09				3Q09				4Q09				2009				2008
TSMC			161				218				963				1,304				2,646				1,807
XinTec and GUC			2				3				6				1				12				23
TSMC China & WaferTech			3				3				0				4				10				52
Other TSMC Subsidiaries			0				0				2				1				3				4
Total TSMC			166				224				971				1,310				2,671				1,886

Capital Expenditures:

Capital expenditures for TSMC on a consolidated basis totaled US$1,310 million in 4Q09.

For year 2009, total capital expenditures for TSMC consolidated group totaled US$2.67 billion, compared with US$1.89 billion spent in 2008.

V-2. Capacity

		1Q09				2Q09				3Q09				4Q09				2009				1Q10
Fab / (Wafer size)		(A)				(A)				(A)				(A)				(A)				(F)
Fab-2 (6²)(1)			274				280				283				283				1,121				263
Fab-3 (8²)			286				289				292				283				1,150				268
Fab-5 (8²)			162				149				144				144				599				139
Fab-6 (8²)			295				284				287				287				1,154				269
Fab-8 (8²)			275				271				265				255				1,066				247
Fab-12 (12²)(2)			218				219				199				243				879				269
Fab-14 (12²)(2)			238				238				239				243				958				255
WaferTech (8²)			106				107				109				109				431				106
TSMC China (8²)			128				134				135				135				531				132
TSMC total capacity (8² equiv. Kpcs)			2,431				2,419				2,379				2,467				9,695				2,488
SSMC (8²)			64				65				65				65				259				69
Total managed capacity (8² equiv. Kpcs)			2,495				2,483				2,444				2,532				9,955				2,557

Capacity:

Total managed capacity was 2,532K 8-inch equivalent wafers in 4Q09, increased by 3.6% from 2,444K in 3Q09. TSMC managed capacity in 1Q10 is expected to increase by 1% to reach 2,557K 8-inch equivalent wafers. 12² wafer capacity will increase by 38K (12²). However, due to scheduled annual maintenance and capacity migration to higher nodes, total legacy fabs capacity will decrease by 60K (8²) in the first quarter of 2010.

Total managed capacity in 2009 reached 9,955K 8-inch equivalent wafers, representing an increase of 6.2% from 9,377K 8-inch equivalent wafers in 2008, while capacity for 12-inch wafer fabs increased by 10.8% year-over-year, reaching 41.5% of total 2009 capacity.

TSMC January 28, 2010		Page 7

VI. Recap of Recent Important Events & Announcements

•		TSMC Announces Process Technologies For Integrated LED Drivers ( 2009/12/15 )
•		TSMC and Motech Announce Strategic Partnership ( 2009/12/09 )
•		TSMC Recognizes Supplier Excellence at Supply Chain Management Forum ( 2009/12/04 )
•		TSMC Launches Automotive Process Qualification Specification and Service Package in China Market ( 2009/11/27 )
•		TSMC Announces Settlement of SMIC Trade Secret Litigation ( 2009/11/10 )
•		Infineon and TSMC Extend Technology And Production Partnership Agreement; Will Jointly Develop 65nm Embedded Flash Process Technology For Automotive and Chip Card Applications ( 2009/11/05 )

		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Consolidated Condensed Balance Sheets (Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”)) (1)

		December 31, 2009 (audited)												September 30, 2009 (unaudited)								December 31, 2008 (audited)								QoQ								YoY
		USD				NTD				%				NTD				%				NTD				%				Amount				%				Amount				%
ASSETS
Current Assets
Cash and Cash Equivalents		$	5,347			$	171,276				28.8			$	156,935				29.0			$	194,614				34.8			$	14,341				9.1				($23,338	)			(12.0	)
Investments in Marketable Financial Instruments			766				24,521				4.1				23,384				4.3				16,836				3.0				1,137				4.9				7,685				45.6
Accounts Receivable — Trade			1,105				35,382				5.9				35,881				6.6				18,497				3.3				(499	)			(1.4	)			16,885				91.3
Inventories, Net			653				20,914				3.5				19,176				3.5				14,877				2.7				1,738				9.1				6,037				40.6
Other Current Assets			240				7,711				1.4				8,865				1.7				7,795				1.4				(1,154	)			(13.0	)			(84	)			(1.1	)
Total Current Assets			8,111				259,804				43.7				244,241				45.1				252,619				45.2				15,563				6.4				7,185				2.8
Long-Term Investments			1,182				37,845				6.4				38,553				7.1				39,982				7.2				(708	)			(1.8	)			(2,137	)			(5.3	)
Properties, Plant and Equipment			30,204				967,419				162.7				911,844				168.3				862,461				154.3				55,575				6.1				104,958				12.2
Less: Accumulated Depreciation			(21,660	)			(693,744	)			(116.7	)			(675,028	)			(124.6	)			(618,816	)			(110.7	)			(18,716	)			2.8				(74,928	)			12.1
Properties, Plant and Equipment, Net			8,544				273,675				46.0				236,816				43.7				243,645				43.6				36,859				15.6				30,030				12.3
Other Assets			730				23,372				3.9				22,287				4.1				22,671				4.0				1,085				4.9				701				3.1
Total Assets		$	18,567			$	594,696				100.0			$	541,897				100.0			$	558,917				100.0			$	52,799				9.7			$	35,779				6.4
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts Payables		$	365			$	11,689				2.0			$	10,633				2.0			$	6,043				1.1			$	1,056				9.9			$	5,646				93.4
Payables to Contractors and Equipment Suppliers			903				28,924				4.9				15,666				2.9				7,999				1.4				13,258				84.6				20,925				261.6
Accrued Expenses and Other Current Liabilities			1,173				37,571				6.2				28,401				5.2				34,543				6.2				9,170				32.3				3,028				8.8
Current Portion of Bonds Payable and Long-Term Debts			30				949				0.2				309				0.1				8,222				1.5				640				207.7				(7,273	)			(88.5	)
Total Current Liabilities			2,471				79,133				13.3				55,009				10.2				56,807				10.2				24,124				43.9				22,326				39.3
Bonds Payable			140				4,500				0.8				4,500				0.8				4,500				0.8
Other Long-Term Liabilities			375				12,015				2.0				15,761				2.9				17,237				3.1				(3,746	)			(23.8	)			(5,222	)			(30.3	)
Total Liabilities			2,986				95,648				16.1				75,270				13.9				78,544				14.1				20,378				27.1				17,104				21.8
Shareholders’ Equity Attributable to Shareholders of the Parent
Capital Stock at Par Value			8,087				259,027				43.6				259,007				47.8				256,254				45.8				20				0.0				2,773				1.1
Capital Surplus			1,732				55,486				9.3				55,440				10.2				49,875				8.9				46				0.1				5,611				11.2
Legal Capital Reserve (2)			2,414				77,317				13.0				77,317				14.3				67,324				12.0				—				—				9,993				14.8
Special Capital Reserve (2)			—				—				—				—				—				392				0.1				—								(392	)			(100.0	)
Unappropriated Earnings (2)			3,265				104,565				17.5				71,899				13.3				102,338				18.3				32,666				45.4				2,227				2.2
Treasury Stock			—				—				—				—				—				—				—				—								—
Others			(41	)			(1,312	)			(0.2	)			(778	)			(0.2	)			194				0.1				(534	)			68.8				(1,506	)			(777.5	)
Total Equity Attributable to Shareholders of the Parent			15,457				495,083				83.2				462,885				85.4				476,377				85.2				32,198				7.0				18,706				3.9
Minority Interests			124				3,965				0.7				3,742				0.7				3,996				0.7				223				6.0				(31	)			(0.7	)
Total Shareholders’ Equity			15,581				499,048				83.9				466,627				86.1				480,373				85.9				32,421				6.9				18,675				3.9
Total Liabilities & Shareholders’ Equity		$	18,567			$	594,696				100.0			$	541,897				100.0			$	558,917				100.0			$	52,799				9.7			$	35,779				6.4

		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Unaudited Consolidated Condensed Income Statements For the Three Months Ended December 31, 2009, September 30, 2009, December 31, 2008 (Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”) (1) Except for Per Share Amounts and Shares Outstanding)

		4Q 2009												3Q 2009								4Q 2008								QoQ								YoY
		USD				NTD				%				NTD				%				NTD				%				Amount				%				Amount				%
Net Sales		$	2,849			$	92,094				100.0			$	89,936				100.0			$	64,562				100.0			$	2,158				2.4			$	27,532				42.6
Cost of Sales			(1,466	)			(47,399	)			(51.5	)			(47,078	)			(52.3	)			(44,367	)			(68.7	)			(321	)			0.7				(3,032	)			6.8
Gross Profit			1,383				44,695				48.5				42,858				47.7				20,195				31.3				1,837				4.3				24,500				121.3
Operating Expenses
Research and Development Expenses			(203	)			(6,567	)			(7.1	)			(6,202	)			(6.9	)			(4,826	)			(7.5	)			(365	)			5.9				(1,741	)			36.1
General and Administrative Expenses			(101	)			(3,269	)			(3.6	)			(3,541	)			(3.9	)			(2,285	)			(3.5	)			272				(7.7	)			(984	)			43.0
Sales and Marketing Expenses			(38	)			(1,217	)			(1.3	)			(1,131	)			(1.3	)			(1,062	)			(1.6	)			(86	)			7.6				(155	)			14.6
Total Operating Expenses			(342	)			(11,053	)			(12.0	)			(10,874	)			(12.1	)			(8,173	)			(12.7	)			(179	)			1.6				(2,880	)			35.2
Income from Operations			1,041				33,642				36.5				31,984				35.6				12,022				18.6				1,658				5.2				21,620				179.8
Non-Operating Income, Net			44				1,427				1.6				519				0.6				1,412				2.2				908				174.7				15				1.0
Investment Gains			9				299				0.3				454				0.5				(340	)			-0.5				(155	)			(34.0	)			639				(187.9	)
Income before Income Tax			1,094				35,368				38.4				32,957				36.6				13,094				20.3				2,411				7.3				22,274				170.1
Income Tax Expenses			(77	)			(2,508	)			(2.7	)			(2,285	)			(2.5	)			(452	)			(0.7	)			(223	)			9.8				(2,056	)			454.7
Net Income			1,017				32,860				35.7				30,672				34.1				12,642				19.6				2,188				7.1				20,218				159.9
Minority Interests			(6	)			(194	)			(0.2	)			(121	)			(0.1	)			(196	)			(0.3	)			(73	)			60.2				2				(0.8	)
Net Income Attributable to Shareholders of the Parent			1,011				32,666				35.5				30,551				34.0				12,446				19.3				2,115				6.9				20,220				162.5
Earnings per Share — Diluted		$	0.04			$	1.26							$	1.18							$	0.48							$	0.08				7.2			$	0.78				162.7
Earnings per ADR — Diluted (2)		$	0.19			$	6.30							$	5.88							$	2.40							$	0.42				7.2			$	3.90				162.7
Weighted Average Outstanding Shares — Diluted (‘M) (3)							25,916								25,984								25,942

		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Audited Consolidated Condensed Income Statements For the Year Ended December 31, 2009 and 2008 (Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”) (1) Except for Per Share Amounts and Shares Outstanding)

		For the Year Ended December 31
		2009												2008								YoY
		USD				NTD				%				NTD				%				Amount				%
Net Sales		$	8,998			$	295,742				100.0			$	333,158				100.0				($37,416	)			(11.2	)
Cost of Sales			(5,063	)			(166,413	)			(56.3	)			(191,408	)			(57.5	)			24,995				(13.1	)
Gross Profit			3,935				129,329				43.7				141,750				42.5				(12,421	)			(8.8	)
Operating Expenses
Research and Development Expenses			(657	)			(21,593	)			(7.3	)			(21,481	)			(6.4	)			(112	)			0.5
General and Administrative Expenses			(343	)			(11,286	)			(3.8	)			(11,097	)			(3.3	)			(189	)			1.7
Sales and Marketing Expenses			(137	)			(4,488	)			(1.5	)			(4,737	)			(1.4	)			249				(5.3	)
Total Operating Expenses			(1,137	)			(37,367	)			(12.6	)			(37,315	)			(11.1	)			(52	)			0.1
Income from Operations			2,798				91,962				31.1				104,435				31.4				(12,473	)			(11.9	)
Non-Operating Income, Net			105				3,455				1.2				6,335				1.9				(2,880	)			(45.5	)
Investment Gains (Losses)			1				46				—				702				0.2				(656	)			(93.4	)
Income before Income Tax			2,904				95,463				32.3				111,472				33.5				(16,009	)			(14.4	)
Income Tax Expenses			(182	)			(5,997	)			(2.0	)			(10,949	)			(3.3	)			4,952				(45.2	)
Net Income			2,722				89,466				30.3				100,523				30.2				(11,057	)			(11.0	)
Minority Interests			(8	)			(248	)			(0.1	)			(590	)			(0.2	)			342				(57.9	)
Net Income Attributable to Shareholders of the Parent			2,714				89,218				30.2				99,933				30.0				(10,715	)			(10.7	)
Earnings per Share — Diluted		$	0.10			$	3.44							$	3.81								($0.37	)			(9.6	)
Earnings per ADR — Diluted (2)		$	0.52			$	17.21							$	19.05								($1.84	)			(9.6	)
Weighted Average Outstanding Shares — Diluted (‘M) (3)							25,914								26,236