Taiwan Semiconductor Manufacturing Company, Ltd.Taiwan Semiconductor Manufacturing Company, Ltd.

The Creator and Leader of the Foundry IndustryThe Creator and Leader of the Foundry Industry

TSMC Introduction

Market Overview

Technology Leadership

Capacity Leadership

Services Leadership

Introduction to TSMC -Introduction to TSMC -

TSMC Is The Creator And Leader of the IC Foundry Industry

We are committed to leadership in capacity, technology and service

Founded in 1987

“Our vision is to be the most reputable, service-oriented maximum-total-benefits silicon

foundry in the world, thereby earning the reward of also being the largest and most profitable

foundry. To this end, we maintain a consistent focus on our foundry business, concentrating

our commitment to being our customers’ “Virtual Fab”.

Dr. Morris Chang

Chairman

Taiwan Semiconductor Manufacturing Company, Ltd.Taiwan Semiconductor Manufacturing Company, Ltd.

TSMC Employee Growth TSMC Employee Growth

258586 809

13,138

7,455

5,9085,594

4,1173,412

2,6812,294

1,8931,5011,187

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

258586 809

13,138

7,455

5,9085,594

4,1173,412

2,6812,294

1,8931,5011,187

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

TSMC RevenueTSMC Revenue

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

1992-2000(

1992-2000(F

) CAGR = 50%

F) CAGR =

50%

4Q: NT$53.8 Bn

Year 2000 : NT$166.2 BnYear 2000 : NT$166.2 Bn

44QQ3Q3Q2Q2Q1Q1Q

NT $ M

Source: Dataquest, TSMCSource: Dataquest, TSMC

34.9

25.8

19.9

15.413.7

7.5

6.3

10.212.0

14.7

19.8

27.8

1999-2004 Foundry Wafer CAGR= 28%1999-2004 Foundry Market CAGR= 26%

Foundry Market DemandFoundry Market Demand

Foundry MarketFoundry Market

Foundry WaferFoundry Wafer

B US$B US$M 8” eq. WafersM 8” eq. Wafers

1999 2000 2001 2002 2003 20041999 2000 2001 2002 2003 2004

3535

3030

2525

2020

1515

1010

55

3535

3030

2525

2020

1515

1010

55

FoundryFoundry10-15%10-15%

IDM CaptiveIDM Captive85-90%85-90%

TSMCTSMC39%39%

UMCUMC24%24%

Chartered 8%Chartered 8%

IDM FoundryIDM Foundry20%20%

Anam 3%Anam 3%

Others 5%Others 5%

~ ~ U.S. $13.7 BillionU.S. $13.7 Billion

TSMC: The Market Share LeaderTSMC: The Market Share LeaderBy Revenue (WW Foundry Industry,2000)By Revenue (WW Foundry Industry,2000)By Revenue (WW Foundry Industry,2000)By Revenue (WW Foundry Industry,2000)

Source: IC Insights, TSMCSource: IC Insights, TSMC

Normalized to TSMC wafer shipment excluding memoryNormalized to TSMC wafer shipment excluding memory

TSMC Leadership in CommunicationsTSMC Leadership in Communications

Source: Company News, TSMC 2001/Q1Source: Company News, TSMC 2001/Q1

TSMCTSMC Competitor 1Competitor 1

11

56%56%

26%26%

Competitor 2Competitor 2

11

00

0%0%1%0%0%1%1%

36%40%

34%34%35%33%30%

64%65%66%65%66%69%

60%

Sales by Market SegmentSales by Market Segment

Net Sales 50.2 73.1 28.3 31.8 47.5 53.9 166.2(NT$Bn) Pre-merger)

% of Sales

System Co.System Co.IDMIDMFablessFabless

1998 1999 11998 1999 1QQ’’ 00 2Q 00 2Q’’ 00 3Q 00 3Q’’ 00 4Q 00 4Q’’ 00 00 20002000

80%80%

60%60%

40%40%

20%20%

0%0%

Based on Quantity Sold at 8”equivalentBased on Quantity Sold at 8”equivalent

Sales by ApplicationSales by Application Based on Quantity Sold at 8”equivalent

11%

33%

16%

4%36%

2000 2000 3,4083,408KK

20%

29%

14%

4%

33%

44Q’00 Q’00 1,001K1,001K

33%3%

17%

35%

12%

33Q’00 Q’00 942K942K

CommunicationsCommunications ConsumerConsumer OthersOthers MemoryMemory ComputerComputer

TSMC Leads in VDSM (0.25um & below)Wafer Shipment in 2000TSMC Leads in VDSM (0.25um & below)Wafer Shipment in 2000

0

0.2

0.4

0.6

0.8

1

TSMC Nearest Competitor

0

0.2

0.4

0.6

0.8

1

TSMC Nearest Competitor

Normalized to TSMC Wafer shipmentNormalized to TSMC Wafer shipment

Source: Company News, TSMCSource: Company News, TSMC

Industry’s Leading Portfolio of Process Technologies

Logic Processes to 0.13um

Embedded Non-Volatile Memory to 0.18um

Mixed Signal & RF Processes

High Voltage Processes to 0.25um

Image Sensor Technology to 0.35um

Embedded DRAM to 0.25um

Copper and Low-K Dielectric Processes

TSMC Is the Technology Leader TSMC Is the Technology Leader

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1992 1993 1994 1995 1996 1997 1998 1999 20000

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1992 1993 1994 1995 1996 1997 1998 1999 2000

TSMC: The R&D Investment Leader

CAGR 54%

CAGR 54%

CAGR 54%

CAGR 54%

R&DR&D

R&D expense between 1992 and 1997 have not been restated under the current definitionR&D expense between 1992 and 1997 have not been restated under the current definition

NT $ M

TSMC RoadmapTSMC RoadmapLeading Foundry vs. SIA RoadmapLeading Foundry vs. SIA Roadmap

Minimum Feature Size of Production

TSMCTSMC

SIASIARoadmapRoadmap

’’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’0395 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03

11

0.50.5

0.40.4

0.30.3

0.20.2

0.10.1

Excellent yield (lot average>92%) demonstrated for 4Mb

6T SRAM vehicle

More than a dozen customer tape-outs (LV,G,LP)

First in offering 0.13um CyberShuttle (Nov.00)

5 customers received functional devices in 1st

silicon (CPU,communications & FPGA)

First in starting 0.13um risk production (multiple customer

products-WIP greater than 3,000 wafers)

Deploying 0.13um manufacturing to 2 fabs in 2001,and to 6 fabs in 2002 (incl. 300 fabs) with ample capacity to meet customer demand

0.130.13um Technology Leadershipum Technology Leadership 0.130.13um Technology Leadershipum Technology Leadership

TSMC Logic Technology Features(Front End)

1414202028.628.638386161Gate delay ( ps/gate )Gate delay ( ps/gate )

1717AA2020AA3232AA5050AA7070AAGate oxide thicknessGate oxide thickness

STISTISTISTISTISTISTISTILOCOSLOCOSIsolationIsolation

SSRSSRSSRSSRSSRSSRR wellR wellDiffused wellDiffused wellWell formationWell formation

YesYesYesYesYesYesNoNoNoNoPSMPSM

ArFArFDUV-ScannerDUV-ScannerDUV-ScannerDUV-ScannerDUV-stepperDUV-stepperI-LineI-LineLithographyLithography

1.01.0V, 2.5VV, 2.5V1.21.2V, 3.3VV, 3.3V1.8, 3.31.8, 3.3VV2.5, 3.3, 52.5, 3.3, 5VV3.3, 53.3, 5VVI/O VoltageI/O Voltage

1.01.0VV1.21.2VV1.81.8VV2.52.5VV3.33.3VVCore VoltageCore Voltage

8877665544# # of metal layersof metal layers

Q4, 2000*Q4, 2000*Q1, 2000Q1, 2000Q1, 1999Q1, 1999Jan., 1998Jan., 1998Nov., 1996Nov., 1996Risk ProductionRisk Production

CL013CL013CL015CL015CL018CL018CL025CL025CL035CL035

0.13 0.13 umum0.15 0.15 umum0.18 0.18 umum0.25 0.25 umum0.35 0.35 umumTechnologyTechnology

* For CL013G

TSMC Logic Technology Features(Back End)

2.43 2.43 umum223.42 3.42 umum224.65 4.65 umum227.56 7.56 umum2215.25 15.25 umum22

Emb 6T SRAM cellEmb 6T SRAM cell

CuCuAlCu/CuAlCu/CuAlCu/CuAlCu/CuAlCuAlCuAlCuAlCuMetal SchemeMetal Scheme

CuCuW CMP / CuW CMP / CuW CMP / Cu W CMP / Cu W CMPW CMPW E.B.W E.B.Via FillVia Fill

low K <= 2.9~3.6low K <= 2.9~3.6low K <= 3.6low K <= 3.6low K <= 3.7low K <= 3.7Undoped OxUndoped OxUndoped OxUndoped OxInter Metal DielectricInter Metal Dielectric

CoSiCoSi22CoSiCoSi22CoSiCoSi22TiSiTiSi22TiSiTiSi22SilicideSilicide

8877665544# # of metal layersof metal layers

Q4, 2000Q4, 2000Q1, 2000Q1, 2000Q1, 1999Q1, 1999Jan., 1998Jan., 1998Nov., 1996Nov., 1996Risk ProductionRisk Production

CL013CL013CL015CL015CL018CL018CL025CL025CL035CL035

0.13 0.13 umum0.15 0.15 umum0.18 0.18 umum0.25 0.25 umum0.35 0.35 umumTechnologyTechnology

TSMC Industry Leading Capacity (by Fab)

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

’90 ’92 ’94 ’96 ’98 ’00 ’02 ’04

Fab23Fab22

Fab21Fab20

Fab19Fab18Fab17

Fab16Fab15

Fab14Fab12

300PLSSMCWT

VISFab8

Fab7Fab6Fab5

Fab4Fab3

Fab2Fab1

Note : Fab-1/2 : 6" Wafer Fab-3/4/5/6/7/8/VIS/WT/SSMC: 8" Wafer Fab12~23 and 300PL: 12" Wafer 2000-2005 Installed Capacity Plan

Unit: K pcs, 8" Equivalent Wafer

374 528 680 8441,2061,212

16399 228

ActualOutput

1,838

5,873

7,329

9,166

11,460

12”Fab

8”Fab

6”Fab

1990-1999 Actual Output,

4,520

3,409

InstalledPlan

TSMC Is The Capacity Leader

In 2001 TSMC will continue to be the foundry industry’s

largest manufacturer of wafers

But leadership is more than planned capacity

Flexibility

Timely expansion

Consistency across fabs

The company has one 300mm pilot line running and

three full scale 300mm fabs under construction

TSMC Industry Leading Capacity Plan (by Technology)

ActualOutput

InstalledPlan

=0.07um

=0.10um

=0.13um

=0.15um

=0.18um

<=0.25um

<=0.35um

<=0.5um

0.6um

0.8um

>=1.0um

>=2.0um99 163 228 374 528 680 844

1,206 1,212

7,329

5,873

9,166

11,460

’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

Unit: K pcs, 8" Equivalent Wafer

1,838

3,409

4,520

Capacity by Fabs TSMC & Affiliates

Installed Capacity:Installed Capacity: Annual (Monthly)Annual (Monthly)

FABFAB 19981998 19991999 20002000

(8” (8” equiv, k)equiv, k)

FAB-1FAB-1

FAB-2FAB-2

FAB-3FAB-3

FAB-4FAB-4

FAB-5FAB-5

FAB-8AFAB-8A

Total Installed CapacityTotal Installed Capacity

Annual Growth RateAnnual Growth Rate

FAB-8BFAB-8B

WaferTechWaferTech

SSMCSSMC

VISVIS

FAB-6FAB-6

FAB-7AFAB-7A

FAB-7BFAB-7B

233.0233.0 (19.6)(19.6)

943.0943.0 (79.0)(79.0)

455.0455.0 (39.0)(39.0)

348.0348.0 (31.0)(31.0)

222.0222.0 (28.0)(28.0)

1,8951,895

15%15%

154.0154.0 (20.3)(20.3)

0.00.0

205.0205.0 (17.1)(17.1)

936.0936.0 (77.5)(77.5)

524.0524.0 (45.0)(45.0)

426.0426.0 (36.0)(36.0)

417.0417.0

334.0334.0

3,4093,409

80%80%

77.077.0

282.0282.0

0.40.4

184.0 184.0

(39.0)(39.0)

(31.0)(31.0)

(17.0)(17.0)

(28.0)(28.0)

(32.0)(32.0)

( 0.4)( 0.4)

(22.0)(22.0)

26.026.0 366.0366.0 (44.0)(44.0)(10.0)(10.0)

0.00.0 0.00.0

0.00.0

0.00.0

252.0252.0 (21.2)(21.2)

940.0940.0 (79.0)(79.0)

478.0478.0 (41.0)(41.0)

353.0353.0 (31.0)(31.0)

116.0116.0 (13.0)(13.0)

1,6441,644

38%38%

0.00.0

0.00.0

0.00.0

26.026.0 (8.0)(8.0)

0.00.0

0.00.0

30.030.0 (9.0)(9.0)

158.0158.0

Total Installed CapacityTotal Installed Capacity

Annual Growth RateAnnual Growth Rate

TSMC Emerging As Capacity Leader

Year 2001Year 2001

WW Total 88M Wafers (8”eq.)WW Total 79M Wafers (8”eq.)

Year 2000Year 2000

Source: Semico, SICAS, Dataquest, TSMCSource: Semico, SICAS, Dataquest, TSMC

3.43.4M(4.3%)M(4.3%) TSMC TSMC ▲▲4.5M(5.2%)4.5M(5.2%)

5.15.1M(6.5%)M(6.5%) Hyundai Hyundai ▲▲5.4M(6.1%)5.4M(6.1%)

3.73.7M(4.7%)M(4.7%) Intel Intel ▲▲4.5M(5.1%)4.5M(5.1%)

4.14.1M(5.3%)M(5.3%) Toshiba Toshiba ▲▲4.3M(4.9%)4.3M(4.9%)

3.93.9M(5.0%)M(5.0%) Samsung Samsung ▲▲4.3M(4.8%)4.3M(4.8%)

3.83.8M(4.8%)M(4.8%) NEC NEC ▲▲4.0M(4.6%)4.0M(4.6%)

2.52.5M(3.2%)M(3.2%) STM STM ▲▲3.4M(3.9%)3.4M(3.9%)

3.73.7M(4.7%)M(4.7%) Hitachi Hitachi ▲▲3.8M(4.3%)3.8M(4.3%)

3.13.1M(4.0%)M(4.0%) Philips Philips ▲▲3.1M(3.6%)3.1M(3.6%)

2.42.4M(3.0%)M(3.0%) UMC UMC ▲▲2.8M(3.2%)2.8M(3.2%)

2.52.5M(3.1%)M(3.1%) Motorola Motorola ▲▲2.7M(3.0%)2.7M(3.0%)

15.215.2M(19.3%)M(19.3%) Others Others 16M((▼ 18.1%)16M((▼ 18.1%)

TSMC Is The Foundry IndustryService Leader

The Industry’s Leading Design Service Alliance

The Industry’s Leading Prototype Service, CyberShuttle

The Industry’s Award Winning Quality Assurance Program

The Industry’s Leading Mask Making Service

Turnkey Assembly and Test Services

The Industry Leader in Internet Services via eFoundry Suite

………………….

TSMC Design ServicesTSMC Design Services

EDA Alliances Technology Files, Design Kits

Library / IP Alliances Library, Embedded Memory Service

EDA Alliances Reference Flow

IC Design Alliances Implementation Service

Design Service Portal

Prototype Verification Service

Fab 1 Fab 2 Fab 3 Fab 4 Fab 5 WaferTech

Fab 6 Fab 7 Fab 11

Pure Foundry Service

your Virtual Fab - Technology, Capacity, Service

3rd PartyAlliances

TSMCServices

eFoundry™ Suite eFoundry™ Suite

Close Collaboration in Design, Engineering and LogisticsClose Collaboration in Design, Engineering and Logistics

eFoundry™Suite

TSMC-Online

TSMC-Direct

TSMC-YES

TSMC-Internet Layout Viewer

TSMC-eJobView

Logistics Collaboration

Engineering Collaboration

Design Collaboration

Design Collaboration

Design Collaboration

Engineering Collaboration

Logistics Collaboration

Engineering Collaboration

eFoundry™ --- Your Virtual FabeFoundry™ --- Your Virtual Fab

TSMC-Online

E-Commerce center for logistics, engineering and design collaboration

TSMC-Direct

System-to-system integration for collaborative planning and engineering data sharing

TSMC-YES

Collaborative yield enhancement effort between customers and TSMC engineering

community

TSMC-Internet Layout Viewer

Web-based pre-tapeout design layout review between TSMC and customers

TSMC-eJobView

Web-based post-tapeout mask data inspection between TSMC and customers

CyberShuttle ServiceCyberShuttle Service

Reduced prototyping costs by as much as 10-fold.

Shorter prototyping time through expedited lot processing.

In-house backend ceramic packaging and bare die dicing service available

per customers’ request.

Broad spectrum of leading edge technologies with

frequent launches:0.25um down to 0.13um technology and derivatives such as RF,

mixed-signal, and embedded-flash technologies.

Frequent launches and dependable schedule announced in advance.

Fast prototyping and shared cost :

TSMC Quality PolicyTSMC Quality Policy

TSMC will strive to provide superior semiconductor

manufacturing services for worldwide customers and establish

mutually beneficial, long-term partnership.

TSMC will spread the dedication to quality throughout every facet of the company and achieve a culture of continual improvement to assure customer satisfaction. There is only one ultimate goal: Zero defect - in everything we do.

TSMC will adopt expedient containment programs to shield our customer from any insufficiency until each has been permanently corrected. We are responsible for and to each other regarding this goal.

Reliability AssuranceReliability Assurance

Process Monitor

Process Qualification

Build in Reliability

All new technologies are developed according to “TSMC technology development methodology” which includes manufacturability verification (Cp/Cpk study), T0 pre-qualification plan and T1 qualification plan.

All new technologies will be qualified prior to the mass production.

Every released mature process will be monitored and reported on monthly basis to ensure TSMC wafers quality and reliability. Continuous improvement activities will be conducted as well.

Technology SupportConsult and support on reliability related design and application issue.

Quality and Reliability OverviewQuality and Reliability Overview

ManufacturingTechnologyDevelopment

ProductQuality Gating

CustomerSatisfaction

Build InReliability

TechnologyRelease

Qualification

IncomingQualityControl

ProcessReliabilityMonitor

In-ProcessQuality Control

OutgoingQuality

Assurance

Backend Quality

Assurance

CustomerSatisfaction

MeasurementProgram

CustomerCorrective

ActionResponse

ProductReliabilityMonitor

FailureAnalysis

SupplierQuality

Assistance

StatisticalProcessControl

CustomerFeedback

CustomerSatisfaction

Advisory Board

LAB

Total Quality Management

Develop and integrate leading edge and cost effective wafer,

test and assembly technologies.

Assembly & Test Assembly & Test Services Strategy

Provide a seamless communication and data link throughout

the entire assembly and test operation.

Continuous quality and service improvement through

internal monitoring and sound supplier management

methodology.

Quality & Engineering

Assembly & Test Assembly & Test Customer Benefits

Single point responsibility from order to unit shipmentComplete WIP visibility throughout the entire processCompetitive cycle times from wafer start to unit shipProven drop ship system through fab, sort, assembly, and final test

Competitive pricingReduced inventory cost

Advanced manufacturing services include mask making, wafer sort, assembly, and final testTSMC extends QRA / test engineering / product engineering support to cover assembly and final testResponsible for yield improvement and failure analysisA single contact for engineering, quality, and reliability issues

Service

Cost

Assembly

Assembly & Test CapabilitiesAssembly & Test Capabilities

Test

Alliance with leading assembly housesMainstream and high-performance IC packagingReliability Qual Capability

Digital, Mixed Signal, and Memory TestIn-House Wafer Sort and Probe Card Making and MaintenanceAlliance with Leading Test Subcontractors for Final Test ServicesTest Program Correlation and Conversion

Taiwan Semiconductor Manufacturing Company

www.tsmc.com