TSMC Property TSMC, Ltd

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TSMC Property

TSMC

2010 Fourth Quarter

Investor Conference

January 27, 2011

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TSMC Property

Agenda

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Welcome

Elizabeth Sun

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4Q10 Financial Results and 1Q11 Outlook

Lora Ho

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4Q10 Financial Results and 1Q11 Outlook

Lora Ho

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CEO Comments

Morris Chang

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Q&A

Morris Chang /

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TSMC Property

Safe Harbor Notice

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TSMC’s statements of its current expectations are

forward-z

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

the forward looking statements.

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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

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, 2010 and such other documents as

TSMC may file with, or submit to, the SEC from time to time.

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Except as required by law, we undertake no obligation to

update any forward-looking statement, whether as a result of

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new information, future events, or otherwise.

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TSMC Property

4Q10 Financial Highlights

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4Q07 4Q07 QoQ YoY 4Q10 3Q10 4Q09 YoY 4Q10 QoQ

(In NT billions except otherwise noted) Results Guidance

Net Sales 93.86 92 - 94 5.5% 25.2%

Gross Margin 47 8% 46% 48% +2 ppt +1 8 ppt

QoQ YoY

(In NT billions except otherwise noted) Guidance Actual Actual

Net Sales 110.14 107 - 109 112.25 92.09 -1.9% 19.6% Gross Margin 49.8% 48% - 50% 50.0% 48.5% -0.2 ppt +1.3 ppts YoY 4Q10 QoQ Gross Margin 47.8% 46% - 48% +2 ppt +1.8 ppt Operating Margin 39.2% 37% - 39% +2.8 ppt +2.6 ppt EPS - Diluted (NT$) 1.31 14.3% 24.3% Operating Margin 37.7% 35.5% - 37.5% 38.4% 36.5% -0.7 ppt +1.2 ppts EPS - Diluted (NT$) 1.57 1.81 1.26 -13.3% 24.6% 12 9% 27 6%

Free Cash Flow 39.98 51.9% 12.9%

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Free Cash Flow 24.62 21.80 19.29 12.9% 27.6%

ROE (%) 29.3% 36.5% 27.3% -7.2 ppts +2.0 ppts

ROE (%)(1) 27.9% +2.9 ppt +5.3 ppt

Shipment (Kpcs, 8"-equiv. Wafer) 2,357 5.9% 37.2%

Shipment (Kpcs, 8"-equiv.

Wafer) 3,195 3,191 2,430 0.1% 31.5%

Average Exchange

Rate--30 40 31 94 32 32 4 8% 6 0%

( )

NTD/USD 30.40 31.94 32.32 -4.8% -6.0%

* Total outstanding shares were 25,910mn units at 12/31/10

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TSMC Property

Income Statements

(In NT billions except otherwise noted) 4Q10 3Q10 4Q09 QoQ YoY

Net Sales 110 14 112 25 92 09 -1 9% 19 6% Net Sales 110.14 112.25 92.09 1.9% 19.6% Gross Margin 49.8% 50.0% 48.5% -0.2 ppt +1.3 ppts Operating Expenses (13.31) (13.06) (11.05) 1.9% 20.4% Operating Margin 37.7% 38.4% 36.5% -0.7 ppt +1.2 ppts Non-Operating Items 0.68 5.71 1.43 -88.1% -52.4%

Long-Term Investment Gains 0.69 0.90 0.30 -23.5% 130.5%

Taxes (2.02) (2.55) (2.51) -21.0% -19.6%

Net Income 40.72 46.94 32.67 -13.2% 24.7%

Net Margin 37.0% 41.8% 35.5% -4.8 ppts +1.5 ppts

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TSMC Property

4Q10 Revenue by Applications

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Consumer Industrial/Others 18% Communications 11% Computer 24% 47% QoQ +3% Computer Communications Consumer QoQ -6% QoQ -26%

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TSMC Property

4Q10 Revenue by Technology

0.5um+ 3% 0.25/0.35um 7% 65nm/40nm Revenue 0 11/0 13um 0.15/0.18um 17% 40nm 0.11/0.13um 10% 90nm 11% 65nm 31% 21% 11% _31%

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TSMC Property

Balance Sheets & Key Indices

Selected Items from Balance Sheets

(In NT billions excepted otherwise noted) _Amount _% _Amount _% _Amount _%

4Q10 3Q10 4Q09

( p ) _Amount _% _Amount _% _Amount _%

Cash & Marketable Securities 181.57 25.3% 167.21 25.0% 195.80 32.9% Accounts Receivable - Trade 42.98 6.0% 47.38 7.1% 35.38 5.9%

Inventory 28.41 4.0% 26.66 4.0% 20.91 3.5% Long-Term Investment 39.78 5.5% 39.78 6.0% 37.85 6.4% Net PP&E 388.44 54.0% 349.18 52.3% 273.68 46.0% Total Assets 718.93 100.0% 667.55 100.0% 594.70 100.0% Current Liabilities 123 19 17 1% 109 24 16 4% 79 13 13 3% Current Liabilities 123.19 17.1% 109.24 16.4% 79.13 13.3% Long-Term Interest-bearing Debt 11.99 1.7% 12.18 1.8% 10.96 1.8%

Total Liabilities 140.22 19.5% 126.65 19.0% 95.65 16.1%

Total Shareholders' Equity 578 71 80 5% 540 90 81 0% 499 05 83 9%

Total Shareholders' Equity 578.71 80.5% 540.90 81.0% 499.05 83.9%

Key Indices

A/R Turnover Days 38 39 36

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Inventory Turnover Days Current Ratio (x)

Asset Productivity (x) 1.2 1.3 1.4

50 47 42

2.1 2.3 3.3

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TSMC Property

Cash Flows

(In NT billions except otherwise noted)

4Q10

3Q10

4Q09

Beginning Balance 132.27 172.49 156.94

Cash from operating activities 70.56 63.95 62.00 Capital expenditures (45.94) (42.15) (42.71)

Cash dividends 0.00 (77.71)( ) 0.00

Short-term loans (6.70) 19.83 0.00

Investments and others (2.30) (4.14) (4.95)

Ending Balance 147 89 132 27 171 28

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Ending Balance 147.89 132.27 171.28

Free Cash Flow 24.62 21.80 19.29

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TSMC Property

Installed Capacity

2010 Overall Capacity +14%; Advanced Capacity +37%

1Q11

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FAB / (Wafer size)

1Q10

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2Q10

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3Q10

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4Q10

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2010

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Fab-2 ( 6") (1) 254 236 255 255 1,000 238 Fab-3 ( 8") 267 282 300 300 1,149 275 Fab-5 ( 8")( ) 139 144 141 141 564 137 Fab-6 ( 8") 269 280 282 282 1,113 274 Fab-8 ( 8") 247 253 254 255 1,009 241 Fab-12 ( 12") (2) 269 300 309 315 1,194 322 (2) Fab-14 ( 12") (2) 261 299 360 406 1,326 423 WaferTech ( 8") 106 107 108 108 429 106 TSMC China ( 8") 132 134 145 147 557 148

TSMC & Subsidiaries

2,497 2,680 2,879 2,997 11,053 2,993 (8" Equivalent Kpcs) SSMC ( 8") 69 69 69 69 276 64 SSMC ( 8") 69 69 69 69 276 64

Total TSMC-managed

2,566 2,749 2,948 3,066 11,329 3,057 (8" Equivalent Kpcs)

(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.

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TSMC Property

Capital Expenditures

(In US millions) 1Q10 2Q10 3Q10 4Q10 2010 TSMC 1,433 1,645 1,275 1,435 5,788 TSMC 1,433 1,645 1,275 1,435 5,788

XinTec and GUC 2 4 10 10 26

TSMC China & WaferTech 8 7 34 69 118

Other TSMC Subsidiaries 1 1 0 2 4

TSMC Consolidated 1,444 1,657 1,319 1,516 5,936

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TSMC Property

Cash Flow & Dividend

Increased Capex to fuel growth

Increased Capex to fuel growth Cash Dividend will continueCash Dividend will continue

77B 77B 77B 78B 90 3.5 205 221 229 250 62B 77B 77B 77B 78B 60 70 80 2.5 3.0 To ta l D ar e ( N T $ ) 144 152 184 161 187 150 200 46B 40 50 1.5 2.0 D iv id e n d P a id v id e nd pe r S h 76 ₇₄ 79 84 88 100 (NT$B) 12B 10 20 30 0.5 1.0 (N T $ B ) Ca s h Di v 59 50 0 0.0 2004 2005 2006 2007 2008 2009 2010 Year Paid

Dividend Per Share (LHS) Total Paid (RHS)

0

2004 2005 2006 2007 2008 2009 2010

Operating cash flow Capex

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TSMC Property

2010 Financial Highlights

g

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(In NT billions except otherwise noted)

N t S l 419 54 295 74 41 9% YoY 2010 2009

z Fully utilized capacity throughout

the year

Net Sales 419.54 295.74 41.9% Gross Margin 49.4% 43.7% +5.7 ppts Operating Margin 37.9% 31.1% +6.8 ppts EPS - Diluted (NT$) 6.23 3.44 81.1%

z Continued cash return to

shareholders

Free Cash Flow (FCF) 42.53 72.19 -41.1% Cash Dividends 77.71 76.88 1.1% C h & M k t bl

z Balance sheet strength to invest

for future growth

Cash & Marketable

Securities 181.57 195.80 -7.3% ROE 30.2% 18.4% +11.8 ppts

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TSMC Property

1Q11 Guidance

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Based on our current business outlook and exchange rate assumption,

management expects:

Revenue to be between NT$105 billion and NT$107 billion, at

a forecast exchange rate of 29.26 NT dollars to 1 US dollar

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Gross profit margin to be between 47% and 49%

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TSMC Property

Recap of Recent Major Events

NVIDIA and TSMC Ship One-Billionth GeForce Graphics Processor ( 2011/01/13 )

TSMC Board of Directors approved to acquire from Powerchip Technology Corporation the TSMC Board of Directors approved to acquire from Powerchip Technology Corporation the substructure of the building under construction ( 2011/01/12 )

TSMC and CENTROSOLAR Sign Solar Module Manufacturing Agreement ( 2011/01/11 )

Beijing Tsinghua University and TSMC join hands to reach 65nm R&D Milestone ( 2010/12/16 ) TSMC Awards Outstanding Suppliers at Supply Chain Management Forum ( 2010/12/03 )

TSMC Wins Taiwan CSR Awards’ “Gold Award” for manufacturing, the highest honor granted by the Taiwan Institute for Sustainable Energy ( 2010/11/19 )

TSMC Obtains Termination of ITC Investigation into 37nm and Smaller Products ( 2010/11/16 ) TSMC Obtains Termination of ITC Investigation into 37nm and Smaller Products ( 2010/11/16 ) TSMC Announces Mixed Signal/RF University Design Award ( 2010/10/20 )

TSMC Expands IP Alliance to Include Soft IP ( 2010/10/05 ) TSMC Expands IP Alliance to Include Soft IP ( 2010/10/05 )