Edgar Filing: TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD

FORM 6-K

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 2008

Taiwan Semiconductor Manufacturing
Company Ltd.

(Translation of Registrant’s Name Into English)

No. 8, Li-Hsin Rd. 6,
Science-Based Industrial Park,
Hsin-Chu, Taiwan
(Address of Principal Executive Offices)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F þ Form 40-F o

(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes o No þ

(If “Yes” is marked, indicated below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82: ________.)


*FOR IMMEDIATE RELEASE*		3Q08 Quarterly Management Report October 30, 2008

CONTACT
Elizabeth Sun / Harrison Hsueh

Investor Relations Division
TSMC
invest@tsmc.com
886-3-568-2085/ 2088

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)	3Q08			2Q08			3Q07			QoQ			YoY
EPS (NT$per common share)		1.18			1.10			1.13			7.5	%		4.9	%
(US$per ADR unit)		0.19			0.18			0.17

Consolidated Net Sales		92.98			88.14			88.96			5.5	%		4.5	%
Gross Profit		43.09			40.22			40.72			7.1	%		5.8	%
Gross Margin		46.3	%		45.6	%		45.8	%

Operating Expense		(10.18	)		(9.85	)		(8.37	)		3.3	%		21.6	%
Operating Income		32.92			30.37			32.35			8.4	%		1.7	%
Operating Margin		35.4	%		34.5	%		36.4	%
Non-Operating Items		1.51			2.00			1.87			(24.5	%)		(18.9	%)

Net Income		30.57			28.77			30.37			6.3	%		0.7	%
Net Profit Margin		32.9	%		32.6	%		34.1	%

Wafer Shipment (kpcs 8 inch-equiv.)		2,411			2,329			2,226			3.5	%		8.3	%


*Note: Total outstanding shares were 25,625mn units on 9/30/08*

Remarks:

The diluted earnings per share in 3Q08 were NT$1.18, representing an increase of 4.9% over the same period last year and an increase of 7.5% from the previous quarter. The consolidated operating results of 3Q08 are summarized below:

Net sales in the third quarter were NT$93.0 billion, up 4.5% from NT$89.0 billion in 3Q07 and up 5.5% from NT$88.1 billion in 2Q08.

Gross profit for the quarter was NT$43.1 billion with gross margin of 46.3%, 0.7 percentage point higher than the 45.6% gross margin in 2Q08, mainly due to a favorable change of the exchange rate.

Operating expenses, including expenses accrued for employee profit sharing, were NT$10.2 billion or 10.9% of net sales. The combined result from non-operating income and long-term investments was a gain of NT$1.5 billion.

Consolidated net income attributable to shareholders of the parent company, including an accrual of employee profit sharing, was NT$30.6 billion, slightly up 0.7% from a year ago level and up 6.3% from the previous quarter. Net profit margin was 32.9% for 3Q08.


TSMC October 30, 2008		Page 2

I. Revenue Analysis

I. Wafer Sales Analysis


By Application	3Q08			2Q08			3Q07
Computer		33	%		31	%		32	%
Communication		41	%		41	%		42	%
Consumer		20	%		21	%		17	%
Industrial/Others		6	%		7	%		9	%


By Technology	3Q08			2Q08			3Q07
65nm and below		25	%		18	%		7	%
90nm		26	%		28	%		27	%
0.11/0.13um		15	%		17	%		22	%
0.15/0.18um		22	%		23	%		28	%
0.25/0.35um		9	%		10	%		11	%
0.50um+		3	%		4	%		5	%


By Customer Type	3Q08			2Q08			3Q07
Fabless/System		70	%		71	%		66	%
IDM		30	%		29	%		34	%


By Geography	3Q08			2Q08			3Q07
North America		74	%		73	%		74	%
Asia Pacific		13	%		13	%		13	%
Europe		10	%		11	%		10	%
Japan		3	%		3	%		3	%

Revenue Analysis:

In-line with our guidance, the third quarter 2008 revenue reached NT$93.0 billion. 3Q08 business saw a continued improvement and revenue benefited from a 2.4% depreciation in the NT dollar against the US dollar. Demand grew across the board during the quarter. On a quarter-over-quarter basis, revenues from computer, communication, and consumer applications increased 9%, 7% and 1%, respectively.

As a result of continued strong ramp for our 65nm technology, revenue from 65nm reached 25% of total wafer sales during the quarter, up from 18% in the previous quarter. Meanwhile, revenue from 90nm declined slightly to 26% of total wafer sales. Overall, revenues from advanced technologies (0.13-micron and below) accounted for 66% of total wafer sales, up from 63% in 2Q08.

Revenues from IDM customers accounted for 30% of total wafer sales in 3Q08, slightly up from 2Q08.

From a geographic perspective, revenues from customers based in North America accounted for 74% of total wafer sales. Meanwhile, sales from customers in Asia Pacific, Europe and Japan accounted for 13%, 10% and 3% of wafer sales, respectively.

II. Profit & Expense Analysis

II — 1. Gross Profit Analysis

(In NT billions)

3Q08

2Q08

3Q07

COGS

49.89

47.92

48.23

Depreciation

19.06

18.23

18.20

Other MFG Cost

30.83

29.69

30.03

Gross Profit

43.09

40.22

40.72

Gross Margin

46.3

45.6

45.8

Gross Profit Analysis:

Gross margin in 3Q08 was 46.3%, up 0.7 percentage point from the previous quarter, mainly reflecting a favorable change of the exchange rate.


TSMC October 30, 2008		Page 3

II — 2. Operating Expenses

(In NT billions)

3Q08

2Q08

3Q07

Total Operating Exp.

10.18

9.85

8.37

SG&A

4.20

4.45

3.68

Research & Development

5.98

5.40

4.69

Total Operating Exp. as a % of Sales

10.9

11.1

9.4

Operating Expenses:

Total operating expenses for 3Q08 increased by 3.3% sequentially to reach NT$10.2 billion, or 10.9% of net sales, compared with 11.1% of net sales in the previous quarter.

Research and development expenditures increased by NT$577 million quarter-over-quarter, mainly due to 32nm technology development and 45nm technology transfer.

SG&A expenses decreased by NT$248 million from the previous quarter, primarily due to less spending in this quarter for the ramp-up of Fab 14 Phase 3 and for the promotion of world-wide technology marketing activities.

II — 3. Non-Operating Items


(In NT billions)	3Q08		2Q08			3Q07
Non-Operating Inc./(Exp.)		1.33		1.72			1.09
Net Interest Income/(Exp.)		1.15		1.24			1.10
Other Non-Operating		0.18		0.48			(0.01	)

L-T Investments		0.18		0.28			0.78
SSMC		0.15		0.30			0.41
Others		0.03		(0.02	)		0.37

Total Non-Operating Items		1.51		2.00			1.87

Non-Operating Items:

Combined result from non-operating income and long-term investments income was a gain of NT$1.5 billion for the third quarter 2008.

Non-operating income was NT$1.3 billion, down from NT$1.7 billion in 2Q08, primarily due to an increase of valuation losses on financial instruments, less gains from disposal of financial assets, and recognition of losses from idle tools, but partially offset by less impairment losses of financial assets.

Net investment income decreased by NT$94 million in the quarter to NT$185 million.

II — 4. PSE Impact


	3Q08			2Q08			3Q07
Gross Margin w/ PSE		46.3	%		45.6	%		41.3	%
Gross Margin w/o PSE		48.9	%		48.2	%		45.8	%
PSE Impact		-2.6	%		-2.6	%		-4.5	%

Operating Margin w/ PSE		35.4	%		34.5	%		27.7	%
Operating Margin w/o PSE		40.3	%		39.4	%		36.4	%
PSE Impact		-4.9	%		-4.9	%		-8.7	%


*		PSE: Profit Sharing Expenses

**		2007 PSE impact is estimated using the 6/12/2008 closing share price adjusted for dividends

The Impact of Employee Profit Sharing:

Total impact from employee profit sharing expensing (PSE) on gross margin in 3Q08 was 2.6 percentage points, flat comparing to the previous quarter.

Similarly, total PSE impact on operating margin was 4.9 percentage points in 3Q08.


TSMC October 30, 2008		Page 4

III. Financial Condition Review

III — 1. Liquidity Analysis
(Selected Balance Sheet Items)


(In NT billions)	3Q08		2Q08		3Q07
Cash & Marketable Securities		158.17		223.99		176.39
Accounts Receivable — Trade		45.33		41.86		42.36
Inventory		21.82		23.36		24.53
Total Current Assets		232.35		299.76		250.06
Accounts Payable		17.75		21.14		24.24
Current Portion of Bonds Payable		8.00		8.00		4.50
Dividends Payable		0.00		77.04		0.00
Accrued Bonus to Employees, Directors and Supervisors		13.46		12.96		0.00
Accrued Liabilities and Others		22.92		27.84		22.15
Total Current Liabilities		62.13		146.98		50.89
Current Ratio (x)		3.7		2.0		4.9
Net Working Capital		170.22		152.78		199.17

Liquidity Analysis:

At the end of 3Q08, total current assets decreased by NT$ 67.4 billion to NT$232.3 billion, mainly due to the decrease of NT$65.8 billion in cash and marketable securities as we paid cash dividend of NT$76.8 billion in this quarter.

Total current liabilities decreased by NT$84.8 billion in this quarter, primarily due to the payment of cash dividends accrued in the previous quarter.

Net working capital was NT$170.2 billion and current ratio increased to 3.7 at the end of this quarter.

III — 2. Receivable/Inventory Days


(In Number of Days)	3Q08		2Q08		3Q07
Days of Receivable		43		42		42
Days of Inventory		45		47		48

Receivable and Inventory Days:

Sequentially, days of receivable increased by one day to 43 days in 3Q08 while days of inventory decreased by two days to 45 days.

III — 3. Debt Service


(In NT billions)	3Q08		2Q08		3Q07
Cash & Marketable Securities		158.17		223.99		176.39
Interest-Bearing Debt		23.41		22.90		26.66
Net Cash Reserves		134.76		201.09		149.73

Debt Service:

Net cash reserves — defined as the excess of cash and short-term marketable securities over interest-bearing debt — decreased by NT$66.3 billion to NT$134.8 billion at the end of 3Q08, primarily due to the payment of cash dividends.


TSMC October 30, 2008		Page 5

IV. Cash Flow

IV — 1. Cash Flow Analysis


(In NT billions)	3Q08			2Q08			3Q07
Net Income		30.57			28.77			30.37
Depreciation & Amortization		20.69			20.03			19.86
Other Operating Sources/(Uses)		4.64			(3.75	)		0.98
Total Operating Sources/(Uses)		55.90			45.05			51.21


Capital Expenditure		(10.38	)		(22.27	)		(24.92	)
Marketable Financial Instruments		(18.07	)		27.20			(2.76	)
Other Investing Sources/(Uses)		1.93			(1.33	)		(6.78	)
Net Investing Sources/(Uses)		(26.52	)		3.60			(34.46	)


Cash Dividends		(76.78	)		0.00			(77.39	)

Employee Profit Sharing		(3.94	)		0.00			(4.57	)

Purchase of Treasury Stock		(23.81	)		(6.62	)		0.00
Other Financing Sources/(Uses)		(0.43	)		(0.23	)		(0.02	)
Net Financing Sources/(Uses)		(104.96	)		(6.85	)		(81.98	)


Net Cash Position Changes		(75.58	)		41.80			(65.23	)

Exchange Rate Changes & Others		2.68			(0.73	)		0.17

Ending Cash Balance		112.45			185.35			98.33

Summary of Cash Flow:

Cash generated from operating activities totaled NT$55.9 billion during the quarter, up from NT$45.1 billion in 2Q08.

Net cash used in investing activities was NT$26.5 billion in 3Q08, reflecting the capital expenditure of NT$10.4 billion and a net increase of NT$18.1 billion in marketable financial instruments.

Net cash used in financing activities was NT$105.0 billion during the quarter, as we paid NT$80.7 billion for cash dividends and employee profit sharing as well as NT$23.8 billion in share buyback.

As a result, TSMC ended the quarter with a cash balance of NT$112.4 billion.

Operating and Free Cash Flows:

Cash flows generated from operating activities were NT$55.9 billion during the quarter. Free cash flow, defined as the excess of operating cash flows over capital expenditures, totaled NT$45.5 billion in 3Q08, compared to NT$22.8 billion in 2Q08.


TSMC October 30, 2008		Page 6

V. CapEx & Capacity

V — 1. Capital Expenditures


(In US millions)	1Q08		2Q08		3Q08		YTD
TSMC		452		712		317		1,481
XinTec and GUC		13		5		3		21
TSMC Shanghai & WaferTech		18		11		11		40
Other TSMC Subsidiaries		1		0		1		2

Total TSMC		484		728		332		1,544

Capital Expenditures:

Capital expenditures for TSMC on a consolidated basis totaled US$332 million during the quarter.

First quarter through third quarter 2008, total capital expenditure reached US$1.5 billion.

V—2. Capacity


	1Q08		2Q08		3Q08		4Q08		2008
Fab / (Wafer size)	(A)		(A)		(A)		(F)		(F)
Fab-2 (6")¹		248		267		270		272		1,056
Fab-3 (8")		277		281		268		274		1,100
Fab-5 (8")		163		165		161		161		650
Fab-6 (8")		265		267		268		282		1,082
Fab-8 (8")		262		275		267		272		1,076
Fab-12 (12")²		197		207		214		221		840
Fab-14 (12")²		167		185		229		236		818
WaferTech (8")		105		105		106		106		420
TSMC (Shanghai) (8")		88		110		128		128		453
TSMC total capacity (8" equiv. Kpcs)		2,117		2,236		2,346		2,405		9,104
SSMC (8")		63		67		69		73		272
Total managed capacity (8” equiv. Kpcs)		2,180		2,303		2,416		2,478		9,377


Note:	1.	Figures represent number of 6" wafers. Conversion to 8"-equivalent wafers is obtained by dividing this number by 1.78

	2.	Figures represent number of 12" wafers. Conversion to 8"-equivalent wafers is obtained by multiplying this number by 2.25

Capacity:

Total TSMC managed capacity was 2,416K 8-inch equivalent wafers in the third quarter, 5% more than 2Q08. TSMC managed capacity in 4Q08 will increase by 3% to reach 2,478K 8-inch equivalent wafers.

Total managed capacity for 2008 is expected to reach 9,377K 8-inch equivalent wafers, representing an increase of 13% from 8,290K 8-inch equivalent wafers in 2007, while capacity for 12-inch wafer fabs will increase by 27%.


TSMC October 30, 2008		Page 7

VI. Recap of Recent Important Events & Announcements

l		TSMC Wins Asia’s Best Companies Poll 2008 Held by FinanceAsia to Be Taiwan’s Best Managed Companies, Best Corporate Governance, Best Investor Relations, And Most Committed to a Strong Dividend Policy (2008/09/30)

l		TSMC’s 28nm Will Be a Full Node Process to Provide First Comprehensive Manufacturing Platform Featuring Both High-K Metal Gate And Silicon Oxynitride (2008/09/29)

l		TSMC Was Selected As DJSI Member For Eighth Straight Year and Joins Carbon Disclosure Leadership Index For First Time (2008/09/26)

l		Philips Completes Exit of TSMC Shareholding (2008/08/14)

l		TSMC Board Approves Plan to Buy Back Shares Up to NT$16.5 Billion (Approximately US$542 Million), or No More Than 283 Million Shares, of The Company’s Common Shares from The Open Market (2008/08/12)

l		TSMC Fab 14, Phase 3 Wins LEED Green Building Certification With “Gold Class” Score (2008/08/07)

l		TSMC Announces Material Information About Clarification of TSMC’s Business Outlook for The Second And Third Quarters 2008 (2008/07/03)

l		TSMC Announces Common Share Ex-dividend Date at July 16^th, 2008 (2008/07/01)


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

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⁾


	September 30, 2008 (unaudited)									June 30, 2008 (audited)						September 30, 2007 (unaudited)						QoQ						YoY
	USD			NTD			%			NTD			%			NTD			%			Amount			%			Amount			%
ASSETS
Current Assets
Cash and Cash Equivalents	$	3,500		$	112,446			20.4		$	185,346			30.1		$	98,328			16.8		($	72,900	)		(39.3	)	$	14,118			14.4
Investments in Marketable Financial Instruments		1,423			45,724			8.3			38,642			6.3			78,064			13.3			7,082			18.3			(32,340	)		(41.4	)
Accounts Receivable — Trade		1,411			45,333			8.2			41,858			6.8			42,357			7.2			3,475			8.3			2,976			7.0
Inventories, Net		679			21,817			4.0			23,359			3.8			24,532			4.2			(1,542	)		(6.6	)		(2,715	)		(11.1	)
Other Current Assets		219			7,029			1.3			10,558			1.7			6,775			1.2			(3,529	)		(33.4	)		254			3.8

Total Current Assets		7,232			232,349			42.2			299,763			48.7			250,056			42.7			(67,414	)		(22.5	)		(17,707	)		(7.1	)


Long-Term Investments		1,303			41,874			7.6			31,937			5.2			45,991			7.8			9,937			31.1			(4,117	)		(9.0	)

Property, Plant and Equipment		26,449			849,818			154.5			836,936			136.0			786,850			134.2			12,882			1.5			62,968			8.0
Less: Accumulated Depreciation		(18,597	)		(597,523	)		(108.6	)		(574,738	)		(93.4	)		(521,614	)		(89.0	)		(22,785	)		4.0			(75,909	)		14.6

Property, Plant and Equipment, Net		7,852			252,295			45.9			262,198			42.6			265,236			45.2			(9,903	)		(3.8	)		(12,941	)		(4.9	)


Other Assets		731			23,481			4.3			21,325			3.5			25,124			4.3			2,156			10.1			(1,643	)		(6.5	)

Total Assets	$	17,118		$	549,999			100.0		$	615,223			100.0		$	586,407			100.0		($	65,224	)		(10.6	)	($	36,408	)		(6.2	)


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-Term Bank Loans	$	—		$	—			—		$	—			—		$	98			—		$	—			—		($	98	)		(100.0	)
Accounts Payable		301			9,671			1.8			11,632			1.9			12,492			2.1			(1,961	)		(16.9	)		(2,821	)		(22.6	)
Payables to Contractors and Equipment Suppliers		252			8,082			1.4			9,511			1.5			11,745			2.0			(1,429	)		(15.0	)		(3,663	)		(31.2	)
Accrued Expenses and Other Current Liabilities		1,124			36,124			6.6			117,576			19.2			21,776			3.8			(81,452	)		(69.3	)		14,348			65.9
Current Portion of Bonds Payable and Long-Term Liabilities		257			8,258			1.5			8,262			1.3			4,782			0.8			(4	)		(0.0	)		3,476			72.7

Total Current Liabilities		1,934			62,135			11.3			146,981			23.9			50,893			8.7			(84,846	)		(57.7	)		11,242			22.1

Bonds Payable		140			4,500			0.8			4,500			0.7			12,500			2.1			—			—			(8,000	)		(64.0	)
Other Long-Term Liabilities		546			17,541			3.2			17,055			2.8			18,395			3.1			486			2.9			(854	)		(4.6	)

Total Liabilities		2,620			84,176			15.3			168,536			27.4			81,788			13.9			(84,360	)		(50.1	)		2,388			2.9


Shareholders’ Equity Attributable to Shareholders of the Parent
Capital Stock		8,062			259,042			47.1			261,535			42.5			264,262			45.1			(2,493	)		(1.0	)		(5,220	)		(2.0	)
Capital Surplus		1,571			50,463			9.2			50,917			8.3			53,713			9.2			(454	)		(0.9	)		(3,250	)		(6.1	)
Retained Earnings		5,315			170,779			31.0			151,953			24.7			184,380			31.4			18,826			12.4			(13,601	)		(7.4	)
Treasury Stock		(514	)		(16,500	)		(3.0	)		(14,845	)		(2.4	)		(918	)		(0.2	)		(1,655	)		11.1			(15,582	)		1697.2
Others		(53	)		(1,708	)		(0.3	)		(6,319	)		(1.1	)		(162	)		—			4,611			(73.0	)		(1,546	)		954.2

Total Equity Attributable to Shareholders of the Parent		14,381			462,076			84.0			443,241			72.0			501,275			85.5			18,835			4.2			(39,199	)		(7.8	)
Minority Interests		117			3,747			0.7			3,446			0.6			3,344			0.6			301			8.7			403			12.1

Total Shareholders’ Equity		14,498			465,823			84.7			446,687			72.6			504,619			86.1			19,136			4.3			(38,796	)		(7.7	)

Total Liabilities & Shareholders’ Equity	$	17,118		$	549,999			100.0		$	615,223			100.0		$	586,407			100.0		($	65,224	)		(10.6	)	($	36,408	)		(6.2	)


Note :		(1) Amounts in New Taiwan dollars have been translated into U.S. dollars at the rate of NT$32.130 as of September 30, 2008.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Unaudited Consolidated Condensed Income Statements
For the Three Months Ended September 30, 2008, June 30, 2008, September 30, 2007
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”) ⁽¹⁾
Except for Per Share Amounts and Shares Outstanding)


	3Q 2008									2Q 2008						3Q 2007						QoQ						YoY
	USD			NTD			%			NTD			%			NTD			%			Amount			%			Amount			%
Net Sales	$	2,984		$	92,979			100.0		$	88,137			100.0		$	88,955			100.0		$	4,842			5.5		$	4,024			4.5
Cost of Sales		(1,601	)		(49,885	)		(53.7	)		(47,916	)		(54.4	)		(48,231	)		(54.2	)		(1,969	)		4.1			(1,654	)		3.4

Gross Profit		1,383			43,094			46.3			40,221			45.6			40,724			45.8			2,873			7.1			2,370			5.8

Operating Expenses
Research and Development Expenses		(192	)		(5,981	)		(6.4	)		(5,404	)		(6.1	)		(4,691	)		(5.3	)		(577	)		10.7			(1,290	)		27.5
General and Administrative Expenses		(96	)		(2,979	)		(3.2	)		(3,170	)		(3.6	)		(2,872	)		(3.2	)		191			(6.0	)		(107	)		3.7
Sales and Marketing Expenses		(39	)		(1,217	)		(1.3	)		(1,274	)		(1.4	)		(808	)		(0.9	)		57			(4.5	)		(409	)		50.5

Total Operating Expenses		(327	)		(10,177	)		(10.9	)		(9,848	)		(11.1	)		(8,371	)		(9.4	)		(329	)		3.3			(1,806	)		21.6


Income from Operations		1,056			32,917			35.4			30,373			34.5			32,353			36.4			2,544			8.4			564			1.7


Non-Operating Income, Net		43			1,328			1.4			1,725			1.9			1,083			1.2			(397	)		(23.0	)		245			22.5
Investment Gains		6			185			0.2			279			0.3			782			0.9			(94	)		(33.6	)		(597	)		(76.3	)

Income before Income Tax		1,105			34,430			37.0			32,377			36.7			34,218			38.5			2,053			6.3			212			0.6

Income Tax Expenses		(118	)		(3,658	)		(3.9	)		(3,503	)		(4.0	)		(3,600	)		(4.1	)		(155	)		4.4			(58	)		1.6


Net Income		987			30,772			33.1			28,874			32.7			30,618			34.4			1,898			6.6			154			0.5

Minority Interests		(6	)		(198	)		(0.2	)		(103	)		(0.1	)		(248	)		(0.3	)		(95	)		91.4			50			(20.2	)



Net Income Attributable to Shareholders of the Parent		981			30,574			32.9			28,771			32.6			30,370			34.1			1,803			6.3			204			0.7


Earnings per Share — Diluted	$	0.04		$	1.18					$	1.10					$	1.13					$	0.08			7.5		$	0.05			4.9

Earnings per ADR — Diluted ⁽²⁾	$	0.19		$	5.91					$	5.50					$	5.64					$	0.41			7.5		$	0.27			4.9


Weighted Average Outstanding Shares — Diluted (’M) ⁽³⁾					25,850						26,153						26,932


Note:

(1)		Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD31.162 for the third quarter of 2008.

(2)		1 ADR equals 5 ordinary shares.

(3)		Total diluted weighted average outstanding shares were 26,153M and 26,932M shares for 2Q08 and 3Q07 respectively after the retroactive adjustments for stock dividends and stock bonus.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Unaudited Consolidated Condensed Income Statements
For the Nine Months End September 30, 2008 and 2007
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”)⁽¹⁾
Except for Per Share Amounts and Shares Outstanding)


	For the Nine Months Ended September 30
	2008									2007						YoY
	USD			NTD			%			NTD			%			Amount			%
Net Sales	$	8,647		$	268,595			100.0		$	228,771			100.0		$	39,824			17.4
Cost of Sales		(4,734	)		(147,041	)		(54.7	)		(131,256	)		(57.4	)		(15,785	)		12.0

Gross Profit		3,913			121,554			45.3			97,515			42.6			24,039			24.7

Operating Expenses
Research and Development Expenses		(536	)		(16,655	)		(6.2	)		(12,934	)		(5.7	)		(3,721	)		28.8
General and Administrative Expenses		(284	)		(8,811	)		(3.3	)		(6,926	)		(3.0	)		(1,885	)		27.2
Sales and Marketing Expenses		(118	)		(3,674	)		(1.4	)		(2,691	)		(1.1	)		(983	)		36.5

Total Operating Expenses		(938	)		(29,140	)		(10.9	)		(22,551	)		(9.8	)		(6,589	)		29.2


Income from Operations		2,975			92,414			34.4			74,964			32.8			17,450			23.3


Non-Operating Income, Net		158			4,923			1.8			5,715			2.5			(792	)		(13.9	)
Investment Gains		34			1,042			0.4			1,631			0.7			(589	)		(36.1	)

Income before Income Tax		3,167			98,379			36.6			82,310			36.0			16,069			19.5

Income Tax Expenses		(338	)		(10,497	)		(3.9	)		(7,102	)		(3.1	)		(3,395	)		47.8


Net Income		2,829			87,882			32.7			75,208			32.9			12,674			16.9

Minority Interest		(13	)		(395	)		(0.1	)		(516	)		(0.2	)		121			(23.7	)


Net Income Attributable to Shareholders of the Parent		2,816			87,487			32.6			74,692			32.7			12,795			17.1


Earnings per Share — Diluted	$	0.11		$	3.34					$	2.77					$	0.57			20.6

Earnings per ADR — Diluted ⁽²⁾	$	0.54		$	16.72					$	13.87					$	2.85			20.6


Weighted Average Outstanding Shares — Diluted (’M) ⁽³⁾					26,156						26,932


Note:

(1)		Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.064 for nine month ended September 30, 2008.

(2)		1 ADR equals 5 ordinary shares.

(3)		Total diluted weighted average outstanding shares were 26,932M shares for the nine months ended September 30, 2007 after the retroactive adjustments for stock dividends and stock bonus.

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 2008 and for the Three Months Ended September 30, 2008,
June 30, 2008, and September 30, 2007
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”)) ⁽¹⁾


	Nine Months 2008						3Q 2008			2Q 2008			3Q 2007
	(unaudited)						(unaudited)			(unaudited)			(unaudited)
	USD			NTD			NTD			NTD			NTD
Cash Flows from Operating Activities:
Net Income	$	2,816		$	87,487		$	30,574		$	28,771		$	30,369
Net Income Attributable to Minority Interest		13			394			198			103			248
Depreciation & Amortization		1,949			60,551			20,686			20,034			19,857
Deferred Income Tax		68			2,125			410			1,280			668
Equity in Earnings of Equity Method Investees, Net		(34	)		(1,042	)		(185	)		(280	)		(782	)
Changes in Working Capital & Others⁽²⁾		282			8,735			4,220			(4,857	)		852

Net Cash Provided by Operating Activities		5,094			158,250			55,903			45,051			51,212

Cash Flows from Investing Activities:
Acquisitions of:
Marketable Financial Instruments		(2,213	)		(68,738	)		(40,201	)		(14,635	)		(25,042	)
Investments Accounted for Using Equity Method		(2	)		(55	)		(55	)		—			(5,810	)
Property, Plant and Equipment		(1,544	)		(47,965	)		(10,378	)		(22,274	)		(24,917	)
Financial Assets Carried at Cost		(12	)		(390	)		(87	)		(90	)		(378	)
Proceeds from Disposal or maturity of:
Marketable Financial Instruments		2,922			90,782			22,126			41,840			22,282
Investments Accounted for Using Equity Method		—			—			—			—			—
Property, Plant and Equipment		6			171			140			30			15
Financial Assets Carried at Cost		4			126			—			35			255
Others		—			14			1,930			(1,310	)		(866	)

Net Cash Provided by (Used In) Investing Activities		(839	)		(26,055	)		(26,525	)		3,596			(34,461	)

Cash Flows from Financing Activities:
Decrease in Guarantee Deposits		(20	)		(619	)		(83	)		(164	)		(447	)
Proceeds from Exercise of Stock Options		8			223			51			91			105
Bonus Paid to Directors and Supervisors		(6	)		(177	)		(177	)		—			—
Repayment of Long-Term Bonds Payable		—			—			—			—			—
Cash Dividends Paid for Common Stock		(2,472	)		(76,779	)		(76,779	)		—			(77,387	)
Repurchase of Treasury Stock		(1,078	)		(33,481	)		(23,812	)		(6,615	)		—
Cash Bonus Paid to Employees		(127	)		(3,940	)		(3,940	)		—			(4,573	)
Others		(10	)		(322	)		(222	)		(159	)		322

Net Cash Used in Financing Activities		(3,705	)		(115,095	)		(104,962	)		(6,847	)		(81,980	)


Net Increase (Decrease) in Cash and Cash Equivalents		550			17,100			(75,584	)		41,800			(65,229	)


Effect of Exchange Rate Changes and Others ⁽²⁾		12			360			2,684			(731	)		166

Cash and Cash Equivalents at Beginning of Period		3,058			94,986			185,346			144,277			163,391


Cash and Cash Equivalents at End of Period	$	3,620		$	112,446		$	112,446		$	185,346		$	98,328


Note: (1)		Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.064 for the nine months ended September 30, 2008.

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

TSMC 2008 Third Quarter Investor Conference October 30, 2008

Agenda Welcome Elizabeth Sun 3Q08 Financial Results and 4Q08 Outlook Lora Ho CEO Comments Rick Tsai Q&A Rick Tsai / Lora Ho

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 April 15, 2008 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.

3Q08 Financial Highlights Before expensing of employee profit sharing Total outstanding shares were 25,625mn units on 9/30/08 Annualized ROE for the quarter based on average equity attributable to shareholders of the parent.

Income Statements 3Q07 results do not include expenses of employee profit sharing. (1)

3Q08 Revenue by Applications

3Q08 Revenue by Technology

Balance Sheets & Key Indices Asset productivity = Annualized net sales / Average net fixed assets. (1)

Cash Flows Free cash flow = Operating cash flow - Capital expenditures. (1)

Figures represent number of 6" wafers. Conversion to 8"-equivalent wafers is obtained by dividing this number by 1.78. Figures represent number of 12" wafers. Conversion to 8"-equivalent wafers is obtained by multiplying this number by 2.25. Installed Capacity Overall Capacity +13%; Advanced Capacity +27%

Capital Expenditures

4Q08 Guidance Revenue is expected to be between NT$69 billion and NT$71 billion, at a forecast exchange rate of 32.73 NT dollars to 1 US dollar averaged over 4Q08. Gross profit margin is expected to be between 34% and 36%. Operating profit margin is expected to be between 21% and 23%.

Recap of Recent Major Events TSMC Wins Asia's Best Companies Poll 2008 Held by FinanceAsia to Be Taiwan's Best Managed Companies, Best Corporate Governance, Best Investor Relations, And Most Committed to a Strong Dividend Policy (2008/09/30) TSMC's 28nm to Be a Full Node Process (2008/09/29) TSMC Selected As DJSI Member For Eighth Straight Year and Joins Carbon Disclosure Leadership Index For First Time (2008/09/26) Philips Completes Exit of TSMC Shareholding (2008/08/14) TSMC Board Approves Plan to Buy Back Shares (2008/08/12) TSMC Fab 14, Phase 3 Wins LEED Green Building Certification With "Gold Class" Score (2008/08/07) TSMC Announces Common Share Ex-dividend Date at July 16th, 2008 (2008/07/01) * Please visit TSMC's Web site (http://www.tsmc.com) for details and other announcements.

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 30, 2008	By	/s/ Lora Ho
		Lora Ho
		Vice President & Chief Financial Officer