Summary of Cash Flow:

Cash generated from operating activities totaled NT$63.2 billion during 4Q08, up from NT$55.9 billion in 3Q08, mainly due to a sharp decline of non- cash working capital as a result of much lowered levels of production activities.

Net cash generated from investing activities was NT$18.0 billion in 4Q08, reflecting the capital expenditure of NT$11.3 billion and a net decrease of NT$30.3 billion in marketable financial instruments.

As a result, TSMC ended 4Q08 with a cash balance of NT$194.6 billion.

On a full year basis, cash generated from operating activities increased by NT$37.7 billion in 2008, meanwhile, capital expenditures and marketable financial instruments decreased by NT$24.8 billion and NT$27.7 billion, respectively. Cash dividends paid in 2008 were NT$76.8 billion. TSMC also spent NT$33.5 billion in share buybacks.

    IV-2. Operating and Free Cash Flows:

Cash flows generated from operating activities were NT$63.2 billion during the quarter. Free cash flow, defined as the excess of operating cash flows over capital expenditures, totaled NT$52.0 billion in 4Q08, compared to NT$45.5 billion in 3Q08.

Total free cash flow generated in 2008 reached NT$162.3 billion, compared with NT$99.8 billion in 2007.

    Please refer to the link for the index charts:
    
www.tsmc.com/uploadfile/ir/quarterly/index_charts.pdf .



    V. CapEx & Capacity

    V-1. Capital Expenditures

    (In US millions)                   1Q08  2Q08  3Q08  4Q08   2008   2007

    TSMC                                452   712   317   326  1,807  2,475

    XinTec and GUC                       13     5     3     2     23     47

    TSMC Shanghai & WaferTech            18    11    11    12     52     31

    Other TSMC Subsidiaries               1     0     1     2      4      4

    Total TSMC                          484   728   332   342  1,886  2,557

Capital Expenditures:

Capital expenditures for TSMC on a consolidated basis totaled US$342 million in 4Q08.

For year 2008, total capital expenditures for TSMC consolidated group was US$1.9 billion, compared with US$2.6 billion spent in 2007.

    V-2. Capacity

    Fab / (Wafer size)       1Q08   2Q08   3Q08   4Q08   2008   1Q09
                              (A)    (A)    (A)    (A)    (A)    (F)
    Fab-2   (6") Note 1       248    267    270    272  1,056    274
    Fab-3   (8")              277    281    268    274  1,100    286
    Fab-5   (8")              163    165    161    161    650    162
    Fab-6   (8")              265    267    268    282  1,082    295
    Fab-8   (8")              262    275    267    272  1,076    275
    Fab-12  (12") Note 2      197    207    214    221    840    218
    Fab-14  (12") Note 2      167    185    229    236    818    238
    WaferTech        (8")     105    105    106    106    420    106
    TSMC (Shanghai)  (8")      88    110    128    128    453    128
    TSMC total capacity
     (8" equiv. Kpcs)       2,117  2,236  2,346  2,405  9,104  2,431
    SSMC             (8")      63     67     69     73    272     64
    Total managed capacity
     (8" equiv. Kpcs)       2,180  2,303  2,416  2,478  9,377  2,495


    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 2,478K 8-inch equivalent wafers in the fourth quarter, 3% more than 3Q08. TSMC managed capacity in 1Q09 is expected to increase by 1% to reach 2,495K 8-inch equivalent wafers, mainly due to productivity improvement.

Total managed capacity in 2008 was 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 increased by 27%.

    VI. Recap of Recent Important Events & Announcements

    -- TSMC Wins the Award of "Grand Prix for Best Overall Investor Relations
       at a Taiwanese Company - Large-Cap" by IR Magazine (2008/12/11)
    -- TSMC Chairman Dr. Morris Chang Receives Semiconductor Industry
       Association's Highest Honor "The 2008 Robert N. Noyce Award"
       (2008/11/18)
    -- TSMC Ramps 40nm Volume Production to Promote Innovation as Foundries
       Assume a Larger Role for $300 Billion Industry - Most Advanced Cellular,
       Wireless, and Consumer Electronic Innovations Targeted for Foundry's
       First 40 Nanometer (nm) Logic Process  (2008/11/17)
    -- TSMC Recognizes Outstanding Suppliers at Supply Chain Management Forum
      (2008/11/14)
    -- TSMC Board Approves Cancellation of Treasury  Shares  to  Reduce  Total
              Issued  Shares  by  1.07  Percent    (2008/11/11)
        --  TSMC  Adds  New  High  Voltage  Features  to  Advanced  0.13-micron  Processes
              Aimed  at  High  Resolution  Display  Drivers  (2008/11/05)
        --  TSMC  Holds  2008  Green  Forum  on  "Present  and  Future  of  Green  Factories"
              to  Launch  Taiwan  Corporate  Sustainability  Forum  Series    (2008/10/16)
        --  TSMC  and  MAPPER  Take  Next  Step  in  Exploring  Multiple  E-beam
              Lithography  for  IC  Manufacturing  at  22  nanometer  node  and  Beyond
              (2008/10/13)

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



          TAIWAN  SEMICONDUCTOR  MANUFACTURING  COMPANY  LIMITED  AND  SUBSIDIARIES
                                        Consolidated  Condensed  Balance  Sheets