Edgar Filing: TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD

Contract

Amount

Currency

Maturity Date

(in Thousands)

December 31, 2005

January 2006

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LTD

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 April 2007

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: .)

Taiwan Semiconductor Manufacturing Company Limited

Financial Statements for the
Years Ended December 31, 2006 and 2005 and
Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders
Taiwan Semiconductor Manufacturing Company Limited

We have audited the accompanying balance sheets of Taiwan Semiconductor Manufacturing Company Limited as of December 31, 2006 and 2005, and the related statements of income, changes in shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Taiwan Semiconductor Manufacturing Company Limited as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the years then ended in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, requirements of the Business Accounting Law and Guidelines Governing Business Accounting with respect to financial accounting standards, and accounting principles generally accepted in the Republic of China.

- 1 -

We have also audited, in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China, the consolidated financial statements of Taiwan Semiconductor Manufacturing Company Limited and subsidiaries as of and for the years ended December 31, 2006 and 2005, and have expressed an unqualified opinion on the consolidated financial statements.

January 11, 2007

Notice to Readers

The accompanying financial statements are intended only to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdiction. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China.

For the convenience of readers, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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Taiwan Semiconductor Manufacturing Company Limited

BALANCE SHEETS
DECEMBER 31, 2006 AND 2005
(In Thousands of New Taiwan Dollars, Except Par Value)


	2006						2005
	Amount			%			Amount			%
ASSETS

CURRENT ASSETS
Cash and cash equivalents (Notes 2 and 4)	$	100,139,709			17		$	85,383,583			17
Financial assets at fair value through profit or loss (Notes 2, 3 and 5)		44,601			—			1,380,905			1
Available-for-sale financial assets (Notes 2, 3 and 6)		25,967,061			5			46,452,838			9
Held-to-maturity financial assets (Notes 2, 3 and 7)		8,510,823			2			602,509			—
Notes and accounts receivable		16,278,164			3			20,591,818			4
Receivables from related parties (Note 23)		16,869,509			3			21,050,604			4
Allowance for doubtful receivables (Note 2)		(690,931	)		—			(976,344	)		—
Allowance for sales returns and others (Note 2)		(2,751,065	)		—			(4,269,969	)		(1	)
Other receivables from related parties (Note 23)		449,266			—			1,797,714			1
Other financial assets (Note 3)		653,460			—			1,106,030			—
Inventories, net (Notes 2 and 8)		19,152,214			3			16,257,955			3
Deferred income taxes assets (Notes 2 and 16)		7,832,000			1			7,013,000			1
Prepaid expenses and other current assets (Note 3)		1,221,199			—			1,171,773			—


Total current assets		193,676,010			34			197,562,416			39


LONG-TERM INVESTMENTS (Notes 2, 3, 6, 7, 9 and 10)
Investments accounted for using equity method		101,044,356			18			51,076,803			10
Available-for-sale financial assets		6,647,511			1			—			—
Held-to-maturity financial assets		28,973,495			5			28,775,308			6
Financial assets carried at cost		712,843			—			807,490			—


Total long-term investments		137,378,205			24			80,659,601			16


PROPERTY, PLANT AND EQUIPMENT (Notes 2, 11 and 23)
Cost
Buildings		96,961,851			17			90,769,622			18
Machinery and equipment		527,850,728			92			459,850,773			91
Office equipment		8,659,225			2			7,850,035			1

		633,471,804			111			558,470,430			110
Accumulated depreciation		(417,467,250	)		(73	)		(359,191,829	)		(71	)
Advance payments and construction in progress		12,230,805			2			14,867,032			3


Net property, plant and equipment		228,235,359			40			214,145,633			42


GOODWILL (Note 2)		1,567,756			—			1,567,756			—


OTHER ASSETS
Deferred income tax assets (Notes 2 and 16)		5,761,127			1			6,759,955			2
Deferred charges, net (Notes 2 and 12)		5,593,068			1			6,681,144			1
Refundable deposits		1,306,234			—			83,642			—
Assets leased to others, net (Note 2)		67,145			—			72,879			—
Others		—			—			6,789			—


Total other assets		12,727,574			2			13,604,409			3


TOTAL	$	573,584,904			100		$	507,539,815			100


	2006					2005
	Amount			%		Amount			%
LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES
Financial liabilities at fair value through profit or loss (Notes 2, 3 and 5)	$	10,751			—	$	234,279			—
Accounts payable		6,143,679			1		8,052,106			1
Payables to related parties (Note 23)		3,326,916			1		3,242,197			1
Income tax payable (Notes 2 and 16)		7,850,418			1		3,815,888			1
Accrued expenses and other current liabilities (Notes 3 and 14)		7,903,867			1		7,980,715			1
Payables to contractors and equipment suppliers		10,669,523			2		8,859,230			2
Current portion of bonds payable (Note 13)		7,000,000			1		—			—


Total current liabilities		42,905,154			7		32,184,415			6


LONG-TERM LIABILITIES
Bonds payable (Note 13)		12,500,000			2		19,500,000			4
Other long-term payables (Note 14)		1,271,896			—		1,511,100			—
Other payables to related parties (Notes 23 and 25)		403,375			—		1,100,475			—


Total long-term liabilities		14,175,271			2		22,111,575			4


OTHER LIABILITIES
Accrued pension cost (Notes 2 and 15)		3,530,116			1		3,461,392			1
Guarantee deposits (Note 25)		3,809,961			1		2,892,945			1
Deferred credits (Notes 2 and 23)		1,183,118			—		1,259,139			—


Total other liabilities		8,523,195			2		7,613,476			2


Total liabilities		65,603,620			11		61,909,466			12


CAPITAL STOCK - NT$10 PAR VALUE
Authorized: 27,050,000 thousand shares
Issued: 25,829,688 thousand shares in 2006 24,730,025 thousand shares in 2005		258,296,879			45		247,300,246			49


CAPITAL SURPLUS (Notes 2 and 18)		54,107,498			10		57,117,886			11


RETAINED EARNINGS (Note 18)
Appropriated as legal capital reserve		43,705,711			8		34,348,208			7
Appropriated as special capital reserve		640,742			—		2,226,427			—
Unappropriated earnings		152,778,079			26		106,196,399			21


		197,124,532			34		142,771,034			28


OTHERS (Notes 2, 3 and 22)
Cumulative translation adjustments		(1,191,165	)		—		(640,742	)		—
Unrealized gains on financial instruments		561,615			—		—			—


		(629,550	)		—		(640,742	)		—


TREASURY STOCK (AT COST, Notes 2 and 20) 33,926 thousand shares in 2006 and 32,938 thousand shares in 2005		(918,075	)		—		(918,075	)		—


Total shareholders’ equity		507,981,284			89		445,630,349			88


TOTAL	$	573,584,904			100	$	507,539,815			100

The accompanying notes are an integral part of the financial statements.

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Taiwan Semiconductor Manufacturing Company Limited

STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)


	2006				2005
	Amount		%		Amount		%
GROSS SALES (Notes 2 and 23)	$	319,210,148			$	270,315,064

SALES RETURNS AND ALLOWANCES (Note 2)		5,328,513				5,726,700


NET SALES		313,881,635		100		264,588,364		100

COST OF SALES (Notes 17 and 23)		164,163,235		52		149,344,315		56


GROSS PROFIT		149,718,400		48		115,244,049		44


OPERATING EXPENSES (Notes 17 and 23)
Research and development		14,601,385		5		13,395,801		5
General and administrative		7,190,422		2		7,485,011		3
Marketing		1,626,734		1		1,349,413		1


Total operating expenses		23,418,541		8		22,230,225		9


INCOME FROM OPERATIONS		126,299,859		40		93,013,824		35


NON-OPERATING INCOME AND GAINS
Equity in earnings of equity method investees, net (Notes 2 and 9)		5,526,727		2		—		—
Interest income (Notes 2 and 3)		3,382,868		1		2,506,769		1
Settlement income (Note 25)		967,506		1		950,046		—
Technical service income (Notes 23 and 25)		670,297		—		491,267		—
Gain on disposal of property, plant and equipment and other assets (Notes 2 and 23)		596,459		—		494,374		—
Valuation gain on financial instruments, net (Notes 2, 3, 5 and 22)		33,850		—		—		—
Foreign exchange gain, net (Notes 2 and 3)		—		—		2,572,560		1
Others (Note 23)		419,020		—		366,344		—

Total non-operating income and gains		11,596,727		4		7,381,360		2


NON-OPERATING EXPENSES AND LOSSES
Loss on settlement and disposal of financial instruments, net (Notes 2, 3 and 5)		1,623,882		1		3,742,312		2
Interest expense (Note 3)		661,200		—		1,180,484		—
Foreign exchange loss, net (Note 2)		412,726		—		—		—
Loss on disposal of property, plant and equipment (Note 2)		240,985		—		59,992		—
Equity in losses of equity method investees, net (Notes 2 and 9)		—		—		1,052,045		—

(Continued)

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Taiwan Semiconductor Manufacturing Company Limited

STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)


	2006						2005
	Amount			%			Amount			%
Valuation loss on financial instruments, net (Notes 2, 3, 5 and 22)	$	—			—		$	337,160			—
Others		151,294			—			203,768			—


Total non-operating expenses and losses		3,090,087			1			6,575,761			2


INCOME BEFORE INCOME TAX		134,806,499			43			93,819,423			35

INCOME TAX EXPENSE (Notes 2 and 16)		(7,550,582	)		(2	)		(244,388	)		—


NET INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES		127,255,917			41			93,575,035			35

CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES, NET OF TAX BENEFIT OF NT$82,062 THOUSAND (Note 3)		(246,186	)		—			—			—


NET INCOME	$	127,009,731			41		$	93,575,035			35


	2006				2005
	Before		After		Before		After
	Income		Income		Income		Income
	Tax		Tax		Tax		Tax
EARNINGS PER SHARE (NT$, Note 21)
Basic earnings per share	$	5.21	$	4.93	$	3.64	$	3.63

Diluted earnings per share	$	5.21	$	4.92	$	3.64	$	3.63

Certain pro forma information (after income tax) is shown as follows, based on the assumption that the Company’s stock held by subsidiaries is treated as an investment instead of treasury stock (Notes 2 and 20):


	2006		2005
NET INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES	$	127,338,237	$	93,881,698


NET INCOME	$	127,092,051	$	93,881,698


EARNINGS PER SHARE (NT$)
Basic earnings per share	$	4.92	$	3.64

Diluted earnings per share	$	4.92	$	3.64



The accompanying notes are an integral part of the financial statements.		(Concluded)

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Taiwan Semiconductor Manufacturing Company Limited

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
(In Thousands of New Taiwan Dollars, Except Dividends Per Share)


																			Others
								Retained Earnings														Unrealized
	Capital Stock							Legal		Special									Cumulative			Gain on								Total
	Shares (in				Capital			Capital		Capital			Unappropriated						Translation			Financial					Treasury			Shareholders’
	Thousands)		Amount		Surplus			Reserve		Reserve			Earnings			Total			Adjustments			Instruments		Total			Stock			Equity
BALANCE, JANUARY 1, 2005		23,251,964	$	232,519,637	$	56,537,259		$	25,528,007	$	—		$	88,202,009		$	113,730,016		$	(2,226,427	)	$	—	$	(2,226,427	)	$	(1,595,186	)	$	398,965,299

Appropriations of prior year’s earnings
Legal capital reserve		—		—		—			8,820,201		—			(8,820,201	)		—			—			—		—			—			—
Special capital reserve		—		—		—			—		2,226,427			(2,226,427	)		—			—			—		—			—			—
Employees’ profit sharing - in cash		—		—		—			—		—			(3,086,215	)		(3,086,215	)		—			—		—			—			(3,086,215	)
Employees’ profit sharing - in stock		308,622		3,086,215		—			—		—			(3,086,215	)		(3,086,215	)		—			—		—			—			—
Cash dividends to shareholders - NT$2.00 per share		—		—		—			—		—			(46,504,097	)		(46,504,097	)		—			—		—			—			(46,504,097	)
Stock dividends to shareholders - NT$0.50 per share		1,162,602		11,626,024		—			—		—			(11,626,024	)		(11,626,024	)		—			—		—			—			—
Bonus to directors and supervisors		—		—		—			—		—			(231,466	)		(231,466	)		—			—		—			—			(231,466	)
Net income in 2005		—		—		—			—		—			93,575,035			93,575,035			—			—		—			—			93,575,035
Adjustment arising from changes in percentage of ownership in investees		—		—		71,405			—		—			—			—			—			—		—			—			71,405
Translation adjustments		—		—		—			—		—			—			—			1,585,685			—		1,585,685			—			1,585,685
Issuance of stock from exercising stock options		6,837		68,370		202,559			—		—			—			—			—			—		—			—			270,929
Cash dividends received by subsidiaries from the Company		—		—		84,285			—		—			—			—			—			—		—			—			84,285
Treasury stock transactions - sales of the Company’s stock held by subsidiaries		—		—		222,378			—		—			—			—			—			—		—			677,111			899,489


BALANCE, DECEMBER 31, 2005		24,730,025		247,300,246		57,117,886			34,348,208		2,226,427			106,196,399			142,771,034			(640,742	)		—		(640,742	)		(918,075	)		445,630,349

Appropriations of prior year’s earnings
Legal capital reserve		—		—		—			9,357,503		—			(9,357,503	)		—			—			—		—			—			—
Special capital reserve		—		—		—			—		(1,585,685	)		1,585,685			—			—			—		—			—			—
Employees’ profit sharing - in cash		—		—		—			—		—			(3,432,129	)		(3,432,129	)		—			—		—			—			(3,432,129	)
Employees’ profit sharing - in stock		343,213		3,432,129		—			—		—			(3,432,129	)		(3,432,129	)		—			—		—			—			—
Cash dividends to shareholders - NT$2.50 per share		—		—		—			—		—			(61,825,061	)		(61,825,061	)		—			—		—			—			(61,825,061	)
Stock dividends to shareholders - NT$0.15 per share		370,950		3,709,504		—			—		—			(3,709,504	)		(3,709,504	)		—			—		—			—			—
Bonus to directors and supervisors		—		—		—			—		—			(257,410	)		(257,410	)		—			—		—			—			(257,410	)
Capital surplus transferred to capital stock		370,950		3,709,504		(3,709,504	)		—		—			—			—			—			—		—			—			—
Net income in 2006		—		—		—			—		—			127,009,731			127,009,731			—			—		—			—			127,009,731
Adjustment arising from changes in percentage of ownership in investees		—		—		187,095			—		—			—			—			—			—		—			—			187,095
Translation adjustments		—		—		—			—		—			—			—			(550,423	)		—		(550,423	)		—			(550,423	)
Issuance of stock from exercising stock options		14,550		145,496		429,701			—		—			—			—			—			—		—			—			575,197
Cash dividends received by subsidiaries from the Company		—		—		82,320			—		—			—			—			—			—		—			—			82,320
Valuation gain on available-for-sale financial assets		—		—		—			—		—			—			—			—			242,248		242,248			—			242,248
Equity in the valuation gain on available-for-sale financial assets of equity method investees		—		—		—			—		—			—			—			—			319,367		319,367			—			319,367


BALANCE, DECEMBER 31, 2006		25,829,688	$	258,296,879	$	54,107,498		$	43,705,711	$	640,742		$	152,778,079		$	197,124,532		$	(1,191,165	)	$	561,615	$	(629,550	)	$	(918,075	)	$	507,981,284

The accompanying notes are an integral part of the financial statements.

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Taiwan Semiconductor Manufacturing Company Limited

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
(In Thousands of New Taiwan Dollars)


	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	127,009,731		$	93,575,035
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		66,699,455			67,991,423
Amortization of premium/discount of financial assets		2,399			120,872
Loss on disposal of available-for-sale financial assets, net		485			150,081
Equity in losses (earnings) of equity method investees, net		(5,526,727	)		1,052,045
Dividends received from equity method investees		626,367			668,464
Gain on disposal of investments accounted for using equity method investees, net		(26,031	)		(583	)
Gain on disposal of financial assets carried at cost, net		(212	)		(2,919	)
Loss on impairment of financial assets carried at cost		36,608			—
Gain on disposal of property, plant and equipment and other assets, net		(355,474	)		(434,382	)
Deferred income taxes		179,828			(3,278,952	)
Loss on idle assets		44,072			131,849
Donation of idle assets		—			7,207
Changes in operating assets and liabilities:
Decrease (increase) in:
Financial assets and liabilities at fair value through profit or loss		1,112,776			10,739
Notes and accounts receivable		4,313,654			(5,264,937	)
Receivables from related parties		4,181,095			(4,914,565	)
Allowance for doubtful receivables		(285,413	)		(4,117	)
Allowance for sales returns and others		(1,518,904	)		942,055
Other receivables from related parties		985,419			(1,243,126	)
Other financial assets		(99,109	)		64,288
Inventories		(2,894,259	)		(2,086,010	)
Prepaid expenses and other current assets		(49,426	)		(84,341	)
Increase (decrease) in:
Accounts payable		(1,908,427	)		1,563,489
Payables to related parties		(612,381	)		(1,224,371	)
Income tax payable		4,034,530			3,435,985
Accrued expenses and other current liabilities		157,262			(1,001,293	)
Accrued pension cost		68,724			360,196
Deferred credits		(95,745	)		95,744


Net cash provided by operating activities		196,080,297			150,629,876


CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Available-for-sale financial assets		(98,679,832	)		(99,436,242	)
Held-to-maturity financial assets		(18,554,027	)		(14,199,142	)
Financial assets carried at cost		(12,940	)		(48,536	)
Investments accounted for using equity method		(5,515,466	)		(3,392,619	)
Property, plant and equipment		(77,215,811	)		(73,659,014	)

(Continued)

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Taiwan Semiconductor Manufacturing Company Limited

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
(In Thousands of New Taiwan Dollars)


	2006			2005
Proceeds from disposal of:
Available-for-sale financial assets	$	73,212,019		$	101,609,384
Financial assets carried at cost		71,191			16,599
Investments accounted for using equity method		37,946			65,076
Property, plant and equipment and other assets		1,277,729			2,087,236
Redemption of held-to-maturity financial assets upon maturity		10,410,000			14,595,394
Proceeds from return of capital by investee		162,354			—
Increase in deferred charges		(1,272,355	)		(847,721	)
Decrease (increase) in refundable deposits		(1,222,592	)		1,771


Net cash used in investing activities		(117,301,784	)		(73,207,814	)


CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid for common stock		(61,825,061	)		(46,504,097	)
Cash bonus paid to employees		(3,432,129	)		(3,086,215	)
Increase in guarantee deposits		917,016			2,480,552
Proceeds from exercise of employee stock options		575,197			270,929
Bonus to directors and supervisors		(257,410	)		(231,466	)
Repayment of long-term bonds payable		—			(10,500,000	)


Net cash used in financing activities		(64,022,387	)		(57,570,297	)


NET DECREASE IN CASH AND CASH EQUIVALENTS		14,756,126			19,851,765

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		85,383,583			65,531,818


CASH AND CASH EQUIVALENTS, END OF YEAR	$	100,139,709		$	85,383,583


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	$	661,200		$	1,212,449

Income tax paid	$	3,189,528		$	87,351


INVESTING ACTIVITIES AFFECTING BOTH CASH AND NON-CASH ITEMS
Acquisition of property, plant, and equipment	$	79,026,104		$	51,363,935
Decrease (increase) in payables to contractors and equipment suppliers		(1,810,293	)		22,295,079

Cash paid	$	77,215,811		$	73,659,014


NON-CASH INVESTING AND FINANCING ACTIVITIES
Current portion of bonds payable	$	7,000,000		$	—

Current portion of other payables to related parties (under payables to related parties)	$	688,591		$	693,956

Current portion of other long-term payable (under accrued expenses and other current liabilities)	$	617,892		$	869,072

Transfer of available-for-sale financial assets and other net assets to investments accounted for using equity method (Note 6)	$	39,687,637		$	—



The accompanying notes are an integral part of the financial statements.		(Concluded)

- 8 -

Taiwan Semiconductor Manufacturing Company Limited

NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1.		GENERAL

		Taiwan Semiconductor Manufacturing Company Limited (the Company or TSMC), a Republic of China (R.O.C.) corporation, was incorporated as a venture among the Government of the R.O.C., acting through the Development Fund of the Executive Yuan; Philips Electronics N.V. and certain of its affiliates (Philips); and certain other private investors. On September 5, 1994, its shares were listed on the Taiwan Stock Exchange (TSE). On October 8, 1997, TSMC listed some of its shares of stock on the New York Stock Exchange (NYSE) in the form of American Depositary Shares (ADSs).

		The Company is engaged mainly in the manufacturing, selling, packaging, testing and computer-aided designing of integrated circuits and other semiconductor devices and the manufacturing of masks.

		As of December 31, 2006 and 2005, the Company had 20,202 and 19,460 employees, respectively.

2.		SIGNIFICANT ACCOUNTING POLICIES

		The financial statements are presented in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, Business Accounting Law, Guideline Governing Business Accounting, and accounting principles generally accepted in the R.O.C.

		For the convenience of readers, the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the R.O.C. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language financial statements shall prevail.

		Significant accounting policies are summarized as follows:

		Use of Estimates

		The preparation of financial statements in conformity with the aforementioned guidelines, law and principles requires management to make reasonable assumptions and estimates of matters that are inherently uncertain. The actual results may differ from management’s estimates.

		Classification of Current and Noncurrent Assets and Liabilities

		Current assets are assets held for trading purposes and assets expected to be converted to cash, sold or consumed within one year from the balance sheet date. Current liabilities are obligations incurred for trading purposes and obligations expected to be settled within one year from the balance sheet date. Assets and liabilities that are not classified as current are noncurrent assets and liabilities, respectively.

		Cash Equivalents

		Repurchase agreements collateralized by government bonds and corporate notes acquired with maturities of less than three months from the date of purchase are classified as cash equivalents. The carrying amount approximates fair value.

- 9 -

Financial Assets/Liabilities at Fair Value Through Profit or Loss

Derivatives that do not meet the criteria for hedge accounting are initially recognized at fair value, with transaction costs expensed as incurred. The derivatives are remeasured at fair value subsequently with the changes in fair value recognized in earnings. A regular way purchase or sale of financial assets is accounted for using settlement date accounting.

Fair value is estimated using valuation techniques incorporating estimates and assumptions that are consistent with prevailing market conditions. When the fair value is positive, the derivative is recognized as a financial asset; when the fair value is negative, the derivative is recognized as a financial liability.

Available-for-sale Financial Assets

Investments designated as available-for-sale financial assets include debt securities and equity securities. Available-for-sale financial assets are initially recognized at fair value plus transaction costs that are directly attributable to the acquisition. Changes in fair value from subsequent remeasurement are reported as a separate component of shareholders’ equity. The corresponding accumulated gains or losses are recognized in earnings when the financial asset is derecognized from the balance sheet. A regular way purchase or sale of financial assets is accounted for using settlement date accounting.

Except structured time deposits whose fair value is estimated using valuation techniques, fair values of open-end mutual funds and publicly traded stocks are determined using the net assets value and the closing-price at the end of the year, respectively. For debt securities, fair value is determined using the average of bid and asked prices at the end of the year.

Cash dividends are recognized as investment income upon resolution of shareholders of an investee but are accounted for as reductions to the original cost of investments if such dividends are declared on the earnings of the investees attributable to periods prior to the purchase of the investments. Stock dividends are recorded as an increase in the number of shares held and do not affect investment income. The cost per share is recalculated based on the new total number of shares. Any difference between the initial carrying amount of a debt security and the amount due at maturity is amortized using the effective interest method, with the amortization recognized in earnings.

If there is objective evidence which indicates that a financial asset is impaired, a loss is recognized. If, in a subsequent period, the amount of the impairment loss decreases, for equity securities, the previously recognized impairment loss is reversed to the extent of the decrease and recorded as an adjustment to shareholders’ equity; for debt securities, the amount of the decrease is recognized in earnings, provided that the decrease is clearly attributable to an event which occurred after the impairment loss was recognized.

Held-to-maturity Financial Assets

Debt securities for which the Company has a positive intention and ability to hold to maturity are categorized as held-to-maturity financial assets and are carried at amortized cost under the effective interest method. Those financial assets are initially recognized at fair value plus transaction costs that are directly attributable to the acquisition. Gains or losses are recognized at the time of derecognition, impairment or amortization. A regular way purchase or sale of financial assets is accounted for using settlement date accounting.

If there is objective evidence which indicates that a financial asset is impaired, a loss is recognized. If, in a subsequent period, the amount of the impairment loss decreases and the decrease is clearly attributable to an event which occurred after the impairment loss was recognized, the previously recognized impairment loss is reversed to the extent of the decrease. The reversal may not result in a carrying amount that exceeds the amortized cost that would have been determined as if no impairment loss had been recognized.

- 10 -

Allowance for Doubtful Receivables

An allowance for doubtful receivables is provided based on a review of the collectibility of accounts receivable. The Company determines the amount of allowance for doubtful receivables by examining the aging analysis of outstanding accounts receivable and current trends in the credit quality of its customers as well as its internal credit policies.

Revenue Recognition and Allowance for Sales Returns and Others

The Company recognizes revenue when evidence of an arrangement exists, shipment is made, price is fixed or determinable, and collectibility is reasonably assured. Revenues from the design and manufacture of photo masks, which are used as manufacturing tools in the fabrication process, are recognized when the photo masks are qualified by customers. Provisions for estimated sales returns and others are generally recorded in the period the related revenue is recognized based on historical experience, management’s judgment, and any known factors that would significantly affect the allowance.

Sales prices are determined using fair value taking into account related sales discounts agreed to by the Company and its customers. Sales agreements typically provide that payment is due 30 days from invoice date for a majority of the customers and 30 to 45 days after the end of the month in which sales occur for some customers. Since the receivables from sales are collectible within one year and such transactions are frequent, fair value of the receivables is equivalent to the nominal amount of the cash to be received.

Inventories

Inventories are stated at the lower of cost or market value. Inventories are recorded at standard cost and adjusted to the approximate weighted-average cost at the balance sheet date. Market value represents replacement cost for raw materials, supplies and spare parts and net realizable value for work in process and finished goods. The Company assesses the impact of changing technology on its inventories on hand and writes off inventories that are considered obsolete. Year-end inventories are evaluated for estimated excess quantities and obsolescence based on a demand forecast within a specific time horizon, which is generally 180 days or less. Estimated losses on scrap and slow-moving items are recognized and included in the allowance for losses.

Investments Accounted for Using Equity Method

Investments in companies wherein the Company exercises significant influence over the operating and financial policy decisions are accounted for using the equity method. The Company’s share of the net income or net loss of an investee is recognized in the “equity in earnings/losses of equity method investees, net” account. Prior to January 1, 2006, the difference, if any, between the cost of investment and the Company’s proportionate share of the investee’s equity was amortized by the straight-line method over five years, with the amortization recorded in the “equity in earnings/losses of equity method investees, net” account. Effective January 1, 2006, pursuant to the revised Statement of Financial Accounting Standards No. 5, “Long-term Investments in Equity Securities” (SFAS No. 5), the cost of an investment shall be analyzed and the difference between the cost of investment and the fair value of identifiable net assets acquired, representing goodwill, shall not be amortized and instead shall be tested for impairment annually. The accounting treatment for the investment premiums acquired before January 1, 2006 is the same as that for goodwill which is no longer being amortized; while investment discounts continue to be amortized over the remaining periods. When an indication of impairment is identified, the carrying amount of the investment is reduced, with the related impairment loss recognized in earnings.

When the Company subscribes for additional investee’s shares at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment in the investee differs from the amount of the Company’s share of the investee’s equity. The Company records such a difference as an adjustment to long-term investments with the corresponding amount charged or credited to capital surplus.

- 11 -

Gains or losses on sales from the Company to equity method investees are deferred in proportion to the Company’s ownership percentage in the investees until such gains or losses are realized through transactions with third parties. The entire amount of the gains or losses on sales to investees over which the Company has a controlling interest is deferred until such gains or losses are realized through subsequent sales of the related products to third parties. Gains or losses on sales from equity method investees to the Company are deferred in proportion to the Company’s ownership percentages in the investees until they are realized through transactions with third parties.

Gains or losses on sales between equity method investees are deferred in proportion to the Company’s weighted-average ownership percentages in the investees that record such gains or losses until they are realized through transactions with third parties.

If an investee’s functional currency is a foreign currency, translation adjustments will result from the translation of the investee’s financial statements into the reporting currency of the Company. Such adjustments are accumulated and reported as a separate component of shareholders’ equity.

Financial Assets Carried at Cost

Investments in which the Company does not exercise significant influence and that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are carried at their original cost, such as non-publicly traded stocks and mutual funds. The costs of mutual funds and non-publicly traded stocks are determined using the weighted-average method. If there is objective evidence which indicates that a financial asset is impaired, a loss is recognized. A subsequent reversal of such impairment loss is not allowed.

The accounting treatment for cash dividends and stock dividends arising from financial assets carried at cost is the same as that for cash and stock dividends arising from available-for-sale financial assets.

Property, Plant and Equipment and Assets Leased to Others

Property, plant, and equipment and assets leased to others are stated at cost less accumulated depreciation. When an indication of impairment is identified, any excess of the carrying amount of an asset over its recoverable amount is recognized as a loss. If the recoverable amount increases in a subsequent period, the amount previously recognized as impairment would be reversed and recognized as a gain. However, the adjusted amount may not exceed the carrying amount that would have been determined, net of depreciation, as if no impairment loss had been recognized. Significant additions, renewals and betterments incurred during the construction period are capitalized. Maintenance and repairs are expensed as incurred.

Depreciation is computed using the straight-line method over the following estimated service lives: buildings - 10 to 20 years; machinery and equipment - 5 years; and office equipment - 3 to 5 years.

Upon sale or disposal of property, plant and equipment, the related cost and accumulated depreciation are deducted from the corresponding accounts, with any gain or loss recorded as to non-operating gains or losses in the period of sale or disposal.

Goodwill

Goodwill represents the excess of the consideration paid for acquisition over the fair value of identifiable net assets acquired. Prior to January 1, 2006, goodwill was amortized using the straight-line method over the estimated life of 10 years. Effective January 1, 2006, pursuant to the newly revised SFAS No. 25, “Business Combinations - Accounting Treatment under Purchase Method” (SFAS No. 25), goodwill is no longer amortized and instead is tested for impairment annually. If an event occurs or circumstances change which indicated that the fair value of goodwill is more likely than not below its carrying amount, an impairment loss is recognized. A subsequent recovery in fair value of goodwill is not allowed.

- 12 -

Deferred Charges

Deferred charges consist of technology license fees, software and system design costs and other charges. The amounts are amortized over the following periods: Technology license fees - the shorter of the estimated life of the technology or the term of the technology transfer contract; software and system design costs and other charges - 3 years. When an indication of impairment is identified, any excess of the carrying amount of an asset over its recoverable amount is recognized as a loss. If the recoverable amount increases in a subsequent period, the previously recognized impairment loss would be reversed and recognized as a gain. However, the adjusted amount may not exceed the carrying amount that would have been determined, net of amortization, as if no impairment loss had been recognized.

Pension Costs

For employees under defined contribution pension plans, pension costs are recorded based on the actual contributions made to employees’ individual pension accounts during their service periods. For employees under defined benefit pension plans, pension costs are recorded based on actuarial calculations.

Income Tax

The Company applies intra-period and inter-period allocations for its income tax, whereby (1) a portion of current income tax expense is allocated to the cumulative effect of changes in accounting principles; and (2) deferred income tax assets and liabilities are recognized for the tax effects of temporary differences and unused tax credits. Valuation allowances are provided to the extent, if any, that it is more likely than not that deferred income tax assets will not be realized. A deferred tax asset or liability is classified as current or noncurrent in accordance with the classification of its related asset or liability. However, if a deferred tax asset or liability does not relate to an asset or liability in the financial statements, then it is classified as either current or noncurrent based on the expected length of time before it is realized or settled.

Any tax credits arising from purchases of machinery, equipment and technology, research and development expenditures, personnel training, and investments in important technology-based enterprises are recognized using the flow-through method.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

Income tax on unappropriated earnings at a rate of 10% is expensed in the year of shareholder approval which is the year subsequent to the year the earnings are generated.

The R.O.C. government enacted the Alternative Minimum Tax Act (the AMT Act), which became effective on January 1, 2006. The alternative minimum tax (AMT) imposed under the AMT Act is a supplemental tax levied at a rate of 10% which is payable if the income tax payable determined pursuant to the Income Tax Law is below the minimum amount prescribed under the AMT Act. The taxable income for calculating the AMT includes most of the income that is exempted from income tax under various laws and statutes. The Company has considered the impact of the AMT Act in the determination of its tax liabilities.

Stock-based Compensation

Employee stock option plans that are amended or have options granted on or after January 1, 2004 are accounted for by the interpretations issued by the Accounting Research and Development Foundation. The Company adopted the intrinsic value method and any compensation cost determined using this method is recognized in earnings over the employee vesting period.

- 13 -

		Treasury Stock

		The Company’s stock held by subsidiaries is treated as treasury stock and reclassified from investments accounted for using equity method to treasury stock. The gains resulted from disposal of the treasury stock held by subsidiaries and cash dividends received by subsidiaries from the Company are recorded under capital surplus - treasury stock transactions.

		Foreign-currency Transactions

		Foreign-currency transactions are recorded in New Taiwan dollars at the rates of exchange in effect when the transactions occur. Exchange gains or losses derived from foreign-currency transactions or monetary assets and liabilities denominated in foreign currencies are recognized in earnings. At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are revalued at prevailing exchange rates with the resulting gains or losses recognized in earnings.

3.		ACCOUNTING CHANGES

		On January 1, 2006, the Company adopted the newly released Statements of Financial Accounting Standards No. 34, “Financial Instruments: Recognition and Measurement” (SFAS No. 34) and No. 36, “Financial Instruments: Disclosure and Presentation” and related revisions of previously released SFASs.

	a.		Effect of adopting the newly released SFASs and related revisions of previously released SFASs

			The Company had categorized its financial assets and liabilities upon initial adoption of the newly released SFASs. The adjustments made to the carrying amounts of the financial instruments categorized as financial assets or financial liabilities at fair value through profit or loss were included in the cumulative effect of changes in accounting principles; the adjustments made to the carrying amounts of those categorized as available-for-sale financial assets were recognized as adjustments to shareholders’ equity.

			The effect of adopting the newly released SFASs is summarized as follows:


	Recognized as
	Cumulative
	Effect of			Recognized as
	Changes in			a Separate
	Accounting			Component of
	Principles			Shareholders’
	(Net of Tax)			Equity
Financial assets or liabilities at fair value through profit or loss	$	(246,186	)	$	—
Available-for-sale financial assets		—			—


	$	(246,186	)	$	—

The adoption of the newly released SFASs resulted in a increase in net income before cumulative effect of changes in accounting principles of NT$280,036 thousand, a increase in net income of NT$33,850 thousand, and a increase in basic earnings per share (after income tax) of NT$0.001, for the year ended December 31, 2006.

Effective January 1, 2006, the Company adopted the newly revised SFAS No. 5 and SFAS No. 25, which prescribe that investment premiums, representing goodwill, be assessed for impairment at least on an annual basis instead of being amortized. Such a change in accounting principle did not have a material effect on the Company’s financial statements as of and for the year ended December 31, 2006.

- 14 -

	b.		Reclassifications

			Upon adoption of SFAS No. 34, certain accounts in the financial statements as of and for the year ended December 31, 2005 were reclassified to conform with the financial statements as of and for the year ended December 31, 2006. The previously issued financial statements as of and for the year ended December 31, 2005 need not be restated.

			Certain accounting policies prior to the adoption of the newly released SFASs are summarized as follows:

	1)		Short-term investments

			Short-term investments that were publicly-traded, easily converted to cash, and not acquired for the purpose of controlling the investees or establishing close business relationship with the investees were carried at the lower of cost or market value at the balance sheet date, with any temporary decline in value charged to current income. The market value of publicly-traded stocks was determined using the average-closing prices for the last month of the year.

	2)		Derivative financial instruments

			The Company entered into forward exchange contracts to manage foreign exchange exposures on foreign-currency-denominated assets and liabilities. The contracts were recorded in New Taiwan dollars at the current rate of exchange at the contract date. The differences in the New Taiwan dollar amounts translated using the current rates and the amounts translated using the contracted forward rates were amortized over the terms of the forward contracts using the straight-line method. At the end of each year, the receivables or payables arising from forward contracts were restated using the prevailing exchange rates with the resulting differences credited or charged to income. In addition, the receivables and payables related to the same forward contracts were netted with the resulting amount presented as either an asset or a liability. Any resulting gain or loss upon settlement was credited or charged to income in the year of settlement.

			The Company entered into cross currency swap contracts to manage currency exposures on foreign-currency-denominated assets and liabilities. The principal amount was recorded using the current rates of exchange at the contract date. The differences in the New Taiwan dollar amounts translated using the current rates and the amounts translated using the contracted rates were amortized over the terms of the contracts using the straight-line method. At the end of each year, the receivables or payables arising from cross-currency swap contracts were restated using prevailing exchange rate with the resulting differences credited or charged to income. In addition, the receivables and payables related to the contracts of the same counter party were netted with the resulting amount presented as either an asset or a liability. The difference in interest computed pursuant to the contracts on each settlement date or the balance sheet date was recorded as an adjustment to the interest income or expense associated with the hedged items. Any resulting gain or loss upon settlement was credited or charged to income in the year of settlement.

			The Company entered into interest rate swap contracts to manage exposures to changes in interest rates on existing assets or liabilities. These transactions were accounted for on an accrual basis, in which the cash settlement receivable or payable was recorded as an adjustment to interest income or expense associated with the hedged items.

- 15 -

Certain accounts in the financial statements as of and for the year ended December 31, 2005 have been reclassified to conform to the classifications prescribed by the newly released SFASs. The reclassifications of the whole or a part of the account balances of certain accounts are summarized as follows:


	Before			After
	Reclassification			Reclassification
Balance sheet

Short-term investments, net	$	47,055,347		$	—
Other financial assets		2,403,929			1,106,030
Prepaid expenses and other current assets		1,254,779			1,171,773
Long-term investments accounted for using cost method		807,490			—
Long-term bond investments		18,548,308			—
Other long-term investments		10,227,000			—
Accrued expenses and other current liabilities		(8,214,994	)		(7,980,715	)
Financial assets at fair value through profit or loss		—			1,380,905
Financial liabilities at fair value through profit or loss		—			(234,279	)
Available-for-sale financial assets		—			46,452,838
Held-to-maturity financial assets		—			29,377,817
Financial assets carried at cost		—			807,490


	$	72,081,859		$	72,081,859


Statement of income

Interest income	$	2,769,978		$	2,506,769
Foreign exchange gain (loss), net		(34,379	)		2,572,560
Interest expense		(2,429,568	)		(1,180,484	)
Unrealized valuation loss on short-term investments		(337,160	)		—
Loss on disposal of investments, net		(149,498	)		—
Valuation loss on financial instruments, net		—			(337,160	)
Loss on settlement and disposal of financial instruments, net		—			(3,742,312	)


	$	(180,627	)	$	(180,627	)

4. CASH AND CASH EQUIVALENTS


	December 31
	2006		2005
Cash and deposits in banks	$	68,898,115	$	37,007,192
Repurchase agreements collaterized by government bonds		31,241,594		47,963,226
Corporate notes		—		413,165


	$	100,139,709	$	85,383,583

- 16 -

5. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS


	December 31
	2006		2005
Derivatives - financial assets

Forward exchange contracts	$	—	$	26,720
Cross currency swap contracts		44,601		1,354,185


	$	44,601	$	1,380,905


Derivatives - financial liabilities

Cross currency swap contracts	$	10,751	$	234,279

The Company entered into derivative contracts during the years ended December 31, 2006 and 2005 to manage exposures due to fluctuations of foreign exchange rates. The derivative contracts entered into by the Company did not meet the criteria for hedge accounting prescribed by SFAS No. 34. Therefore, effective from January 1, 2006, the Company discontinued applying hedge accounting treatment for its derivative contracts.

Outstanding forward contracts as of December 31, 2005:

Outstanding cross currency swap contracts as of December 31, 2006 and 2005:


	Contract		Range of
	Amount	Range of	Interest Rates
Maturity Date	(in Thousands)	Interest Rates Paid	Received
December 31, 2006

January 2007 to February 2007	US$820,000	3.19%-5.91%	0.90%-3.25%

December 31, 2005

January 2006 to March 2006	US$2,089,000	4.15%-4.54%	0.02%-2.12%

The Company did not enter into any interest rate swap contract during the year ended December 31, 2006. The Company rescinded all interest rate swap contracts in the first quarter of 2005 before their original maturities. The rescission loss of NT$28,295 thousand has been reclassified and included in the “loss on settlement and disposal of financial instruments” account.

Net losses arising from derivative financial instruments for the year ended December 31, 2006 were NT$1,615,796 thousand (including realized settlement losses of NT$1,649,646 thousand and a valuation gain of NT$33,850 thousand).

- 17 -

6. AVAILABLE-FOR-SALE FINANCIAL ASSETS


	December 31
	2006			2005
Open-end mutual funds	$	25,967,061		$	6,198,982
Corporate bonds		4,150,202			11,853,044
Government bonds		1,998,067			1,776,279
Structured time deposits		499,242			—
Agency bonds		—			14,496,728
Corporate issued asset-backed securities		—			11,582,590
Corporate notes		—			263,249
Money market funds		—			260,686
Publicly-traded stocks		—			21,280

		32,614,572			46,452,838
Current portion		(25,967,061	)		(46,452,838	)


	$	6,647,511		$	—

Starting from 2004, the Company entered into investment management agreements with three well-known financial institutions (fund managers) to manage its investment portfolios. In accordance with the investment guidelines and terms specified in these agreements, the securities invested by the fund managers cannot be below a pre-defined credit rating. Beginning from the third quarter of 2006, the Company transferred investment portfolios managed by the fund managers of US$1,277,789 thousand to TSMC Global Ltd. (TSMC-Global), a subsidiary of TSMC. The transferred investment portfolios held by TSMC Global are still being managed by the same fund managers in accordance with the aforementioned investment guidelines and terms.

As of December 31, 2006, structured time deposits categorized as available-for-sale financial assets consisted of the following:

Principal

Carrying

Range of

Amount

Interest Rates

Maturity Date

Step-up callable deposits

Domestic deposits

500,000

499,242

1.76

March 2008

The interest rate of the step-up callable deposits was pre-determined by the Company and the banks.

7.		HELD-TO-MATURITY FINANCIAL ASSETS


	December 31
	2006			2005
Corporate bonds	$	13,742,541		$	8,927,317
Structured time deposits		11,671,120			10,227,000
Government bonds		12,070,657			10,223,500

		37,484,318			29,377,817
Current portion		(8,510,823	)		(602,509	)


	$	28,973,495		$	28,775,308

- 18 -

Structured time deposits categorized as held-to-maturity financial assets consisted of the following:


	Principal		Interest		Range of
	Amount		Receivable		Interest Rates			Maturity Date
December 31, 2006

Step-up callable deposits
Domestic deposits	$	4,500,000	$	13,928		1.40%-1.83	%	June 2007 to October 2008
Callable range accrual deposits
Domestic deposits		3,911,520		4,808	(See below)			September 2009 to December 2009
Foreign deposits		3,259,600		4,998	(See below)			October 2009 to January 2010

	$	11,671,120	$	23,734

December 31, 2005

Step-up callable deposits
Domestic deposits	$	3,000,000	$	8,145		1.40%-1.50	%	June 2007 to October 2007
Callable range accrual deposits
Domestic deposits		3,942,000		4,928	(See below)			September 2009 to December 2009
Foreign deposits		3,285,000		5,023	(See below)			October 2009 to January 2010

	$	10,227,000	$	18,096

		The amount of interest earned by the Company for the callable range accrual deposits is based on a pre-defined range as determined by the 3-month or 6-month LIBOR plus an agreed upon rate ranging between 2.10% and 3.45%. Based on the terms of the contracts, if the 3-month or 6-month LIBOR moves outside of the pre-defined range, the interest paid to the Company is at a fixed rate between zero and 1.5%. Under the terms of the contracts, the bank has the right to cancel the contracts prior to the maturity date.

		As of December 31, 2006 and 2005, the principal of the deposits that resided in banks located in Hong Kong amounted to US$80,000 thousand; those resided in banks located in Singapore amounted to US$20,000 thousand.

8.		INVENTORIES, NET


	December 31
	2006			2005
Finished goods	$	4,754,342		$	2,768,575
Work in process		13,251,174			12,407,286
Raw materials		1,515,996			1,700,314
Supplies and spare parts		421,648			786,772

		19,943,160			17,662,947
Allowance for losses		(790,946	)		(1,404,992	)


	$	19,152,214		$	16,257,955

- 19 -

9. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD


	December 31
	2006				2005
			% of				% of
	Carrying		Owner-		Carrying		Owner-
	Amount		ship		Amount		ship
TSMC Global (Note 6)	$	42,496,592		100	$	—		—
TSMC International Investment Ltd. (TSMC International)		26,593,749		100		23,912,812		100
TSMC (Shanghai) Company Limited (TSMC- Shanghai)		9,027,984		100		9,438,856		100
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC)		7,960,869		39		4,215,200		32
Vanguard International Semiconductor Corporation (VIS)		5,741,870		27		5,419,747		27
TSMC Partners, Ltd. (TSMC Partners)		4,433,819		100		4,091,166		100
TSMC North America (TSMC-North America)		2,014,990		100		1,790,186		100
Emerging Alliance Fund, L.P. (Emerging Alliance)		793,585		99		850,534		99
VentureTech Alliance Fund II, L.P. (VTAF II)		733,130		98		642,479		98
Global UniChip Corporation (GUC)		629,755		38		442,233		46
VentureTech Alliance Fund III, L.P. (VTAF III)		228,005		98		—		—
Chi Cherng Investment Co., Ltd. (Chi Cherng)		115,507		36		78,139		36
Hsin Ruey Investment Co., Ltd. (Hsin Ruey)		114,297		36		77,415		36
TSMC Japan K. K. (TSMC-Japan)		95,757		100		94,949		100
Taiwan Semiconductor Manufacturing Company Europe B.V. (TSMC-Europe)		49,741		100		23,087		100
Taiwan Semiconductor Manufacturing Company Korea (TSMC-Korea)		14,706		100		—		—

	$	101,044,356			$	51,076,803

		In November 2006, the Company acquired 81 thousand shares in SSMC from EDB Investments Pte Ltd. under a Shareholders Agreement. After the acquisition, the number of SSMC shares owned by the Company increased from 382 thousand to 463 thousand; the percentage of ownership increased from 32% to 39%.

		For the years ended December 31, 2006 and 2005, net equity in earnings of NT$5,526,727 thousand and net equity in losses of NT$1,052,045 thousand were recognized, respectively. The carrying amounts of the investments accounted for using the equity method and the related equity in earnings or losses of equity method investees were determined based on the audited financial statements of the investees as of and for the same periods ended as the Company.

10.		FINANCIAL ASSETS CARRIED AT COST


	December 31
	2006		2005
Non-publicly traded stocks	$	364,913	$	472,500
Mutual funds		347,930		334,990


	$	712,843	$	807,490

- 20 -

11.		PROPERTY, PLANT AND EQUIPMENT

		Accumulated depreciation consisted of the following:


	December 31
	2006		2005
Buildings	$	49,595,917	$	42,902,526
Machinery and equipment		361,401,800		310,626,317
Office equipment		6,469,533		5,662,986


	$	417,467,250	$	359,191,829

		No interest was capitalized during the years ended December 31, 2006 and 2005.

12.		DEFERRED CHARGES, NET


	December 31
	2006		2005
Technology license fees	$	4,038,551	$	4,985,806
Software and system design costs		1,517,575		1,623,276
Others		36,942		72,062


	$	5,593,068	$	6,681,144

13.

BONDS PAYABLE


	December 31
	2006			2005
Domestic unsecured bonds:
Issued in December 2000 and repayable in December 2005 and 2007 in two installments, 5.25% and 5.36% interest payable annually, respectively	$	4,500,000		$	4,500,000
Issued in January 2002 and repayable in January 2007, 2009 and 2012 in three installments, 2.60%, 2.75% and 3.00% interest payable annually, respectively		15,000,000			15,000,000

		19,500,000			19,500,000
Current portion		(7,000,000	)		—


	$	12,500,000		$	19,500,000

As of December 31, 2006, future principal repayments for the Company’s bonds were as follows:


Year of Repayment	Amount
2007	$	7,000,000
2009		8,000,000
2012		4,500,000

	$	19,500,000

- 21 -

14.		OTHER LONG-TERM PAYABLES

		Most of the payables resulted from license agreements for certain semiconductor-related patents. As of December 31, 2006, future payments for other long-term payables were as follows:


Year of Payment	Amount
2007	$	617,892
2008		337,043
2009		337,043
2010		337,043
2011		260,767

		1,889,788
Current portion (classified under accrued expenses and other current liabilities)		(617,892	)


	$	1,271,896

15.		PENSION PLANS

		The Labor Pension Act (the Act) became effective on July 1, 2005. The employees who were subject to the Labor Standards Law prior to July 1, 2005 were allowed to choose to be subject to the pension mechanism under the Act with their seniority as of July 1, 2005 retained or continue to be subject to the pension mechanism under the Labor Standards Law. Employees who joined the Company after July 1, 2005 can only be subject to the pension mechanism under the Act.

		The pension mechanism under the Act is deemed a defined contribution plan. Pursuant to the Act, the Company has made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts starting from July 1, 2005, and recognized pension costs of NT$618,975 thousand and NT$261,096 thousand for the years ended December 31, 2006 and 2005, respectively.

		The Company has a defined benefit plan under the Labor Standards Law that provides benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to a pension fund (the Fund), which is administered by the pension fund monitoring committee (the Committee) and deposited in the Committee’s name in the Central Trust of China.

		Pension information on the defined benefit plan is summarized as follows:

Components of net periodic pension cost for the year


	2006			2005
Service costs	$	178,432		$	468,044
Interest costs		163,740			163,294
Projected return on plan assets		(49,115	)		(49,627	)
Amortization		12,339			8,300


Net periodic pension costs	$	305,396		$	590,011

- 22 -

Reconciliation of funded status of the plan and accrued pension cost at December 31, 2006 and 2005


	2006			2005
Benefit obligation
Vested benefit obligation	$	102,920		$	62,302
Nonvested benefit obligation		3,873,239			3,356,213

Accumulated benefit obligation		3,976,159			3,418,515
Additional benefits based on future salaries		2,964,923			2,546,186

Projected benefit obligation		6,941,082			5,964,701
Fair value of plan assets		(1,945,572	)		(1,681,365	)

Funded status		4,995,510			4,283,336
Unrecognized net transition obligation		(116,191	)		(124,491	)
Unrecognized net loss		(1,349,203	)		(697,453	)


Accrued pension cost	$	3,530,116		$	3,461,392


Vested benefits	$	106,645		$	67,752

c. Actuarial assumptions at December 31, 2006 and 2005
Discount rate used in determining present values		2.25	%		2.75	%
Future salary increase rate		3.00	%		3.00	%
Expected rate of return on plan assets		2.50	%		2.75	%

d. Contributions to the Fund for the year	$	230,577		$	223,654


e. Payments from the Fund for the year	$	10,823		$	8,419

16.

INCOME TAX

A reconciliation of income tax expense based on “income before income tax” at statutory rate and income tax currently payable was as follows:


	Years Ended
	December 31
	2006			2005
Income tax expense based on “income before income tax” at statutory rate (25%)	$	(33,701,625	)	$	(23,454,856	)
Tax effect of the following:
Tax-exempt income		12,274,041			12,243,435
Temporary and permanent differences		2,080,110			(860,918	)
Cumulative effect of changes in accounting principles		82,062			—
Additional tax at 10% on unappropriated earnings		(1,156,130	)		(1,489,709	)
Income tax credits		12,715,377			10,110,561


Income tax currently payable	$	(7,706,165	)	$	(3,451,487	)

- 23 -

Income tax expense consisted of the following:


	Years Ended
	December 31
	2006			2005
Income tax currently payable	$	(7,706,165	)	$	(3,451,487	)
Other income tax adjustments		335,411			(71,853	)

Net change in deferred income tax assets
Investment tax credits		(3,908,879	)		(2,018,813	)
Temporary differences		1,522,734			1,768,265
Adjustment in valuation allowance		2,206,317			3,529,500


Income tax expense	$	(7,550,582	)	$	(244,388	)

Net deferred income tax assets consisted of the following:


	December 31
	2006			2005

Current deferred income tax assets
Investment tax credits	$	7,832,000		$	7,013,000



Noncurrent deferred income tax assets, net
Investment tax credits	$	12,124,892		$	16,852,771
Temporary differences		840,464			(682,270	)
Valuation allowance		(7,204,229	)		(9,410,546	)


	$	5,761,127		$	6,759,955

	d.		Integrated income tax information:

			The balance of the imputation credit account as of December 31, 2006 and 2005 was NT$ 828,612 thousand and NT$20,087 thousand, respectively.

			The estimated creditable ratio for distribution of earnings of 2006 and 2005 was 0.54% and 2.88%, respectively.

			The imputation credit allocated to shareholders is based on its balance as of the date of dividend distribution. The estimated creditable ratio may change when the actual distribution of imputation credit is made.

	e.		All earnings generated prior to December 31, 1997 have been appropriated.

- 24 -

As of December 31, 2006, investment tax credits consisted of the following:


		Total		Remaining
		Creditable		Creditable		Expiry
Regulation	Item	Amount		Amount		Year
Statute for Upgrading	Purchase of machinery and	$	2,685,805	$	—	2006
Industries	equipment		4,113,439		—	2007
			6,802,469		3,955,466	2008
			6,030,309		6,030,309	2009
			5,114,762		5,114,762	2010


		$	24,746,784	$	15,100,537


Statute for Upgrading	Research and development	$	1,780,480	$	—	2006
Industries	expenditures		1,245,142		—	2007
			1,627,095		1,627,095	2008
			1,534,230		1,534,230	2009
			1,534,050		1,534,050	2010


		$	7,720,997	$	4,695,375


Statute for Upgrading	Personnel training	$	27,311	$	—	2006
Industries			16,197		—	2007
			40,734		40,734	2008
			40,442		40,442	2009


		$	124,684	$	81,176


Statute for Upgrading	Investments in important	$	79,804	$	79,804	2010

Industries	technology-based enterprises

The profits generated from the following expansion and construction projects are exempt from income tax:


	Tax-Exemption Period
Construction of Fab 8 — modules B	2002 to 2005
Expansion of Fab 2 — modules A and B, Fab 3, Fab 4, Fab 5 and Fab 6	2003 to 2006
Construction of Fab 12	2004 to 2007

The tax authorities have examined income tax returns of the Company through 2003.

- 25 -

17.

LABOR COST, DEPRECIATION AND AMORTIZATION


	Year Ended December 31, 2006
			Classified as
	Classified as		Operating
	Cost of Sales		Expenses		Total
Labor cost
Salary	$	9,877,603	$	4,172,915	$	14,050,518
Labor and health insurance		686,125		352,085		1,038,210
Pension		610,873		313,416		924,289
Meal		449,505		159,302		608,807
Welfare		184,560		99,323		283,883
Others		225,615		19,784		245,399


	$	12,034,281	$	5,116,825	$	17,151,106


Depreciation	$	61,028,727	$	3,296,764	$	64,325,491

Amortization	$	1,430,069	$	918,011	$	2,348,080


	Year Ended December 31, 2005
			Classified as
	Classified as		Operating
	Cost of Sales		Expenses		Total
Labor cost
Salary	$	9,160,576	$	3,682,390	$	12,842,966
Labor and health insurance		625,744		297,483		923,227
Pension		576,776		274,280		851,056
Meal		429,307		141,259		570,566
Welfare		167,218		95,208		262,426
Others		159,724		44,783		204,507


	$	11,119,345	$	4,535,403	$	15,654,748


Depreciation	$	61,576,001	$	3,031,796	$	64,607,797

Amortization	$	1,763,527	$	1,603,496	$	3,367,023

18.		SHAREHOLDERS’ EQUITY

		As of December 31, 2006, 889,740 thousand ADSs of the Company were traded on the NYSE. The number of common shares represented by the ADSs is 4,448,702 thousand (one ADS represents five common shares).

		Capital surplus can only be used to offset a deficit under the Company Law. However, the capital surplus generated from donations and the excess of the issuance price over the par value of capital stock (including the stock issued for new capital, mergers, convertible bonds and the surplus from treasury stock transactions) may be appropriated as stock dividends, which are limited to a certain percentage of the Company’s paid-in capital.

- 26 -

Capital surplus consisted of the following:


	December 31
	2006		2005
From merger	$	24,003,546	$	24,003,546
Additional paid-in capital		19,974,431		23,254,234
From convertible bonds		9,360,424		9,360,424
From treasury stock transactions		389,188		306,868
From long-term investments		379,854		192,759
Donations		55		55


	$	54,107,498	$	57,117,886

The Company’s Articles of Incorporation as revised on May 10, 2005 provide that, when allocating the net profits for each fiscal year, the Company shall first offset its losses in previous years and then set aside the following items accordingly:

Legal capital reserve at 10% of the profits left over, until the accumulated legal capital reserve has equaled the Company’s paid-in capital;

Special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge;

Bonus to directors and supervisors and bonus to employees of the Company of not more than 0.3% and not less than 1% of the remainder, respectively. Directors who also serve as executive officers of the Company are not entitled to receive the bonus to directors and supervisors. The Company may issue stock bonuses to employees of an affiliated company meeting the conditions set by the Board of Directors or, by the person duly authorized by the Board of Directors;

Any balance left over shall be allocated according to the resolution of the shareholders’ meeting.

The Company’s Articles of Incorporation also provide that profits of the Company may be distributed by way of cash dividend and/or stock dividend. However, distribution of profits shall be made preferably by way of cash dividend. Distribution of profits may also be made by way of stock dividend; provided that the ratio for stock dividend shall not exceed 50% of the total distribution.

Any appropriations of the profits are recorded in the year of shareholder approval and given effect to in the financial statements of that year.

The appropriation for legal capital reserve shall be made until the reserve equals the Company’s paid-in capital. The reserve may be used to offset a deficit, or be distributed as dividends and bonuses for the portion in excess of 50% of the paid-in capital if the Company has no unappropriated earnings and the reserve balance has exceeded 50% of the Company’s paid-in capital. The Company Law also prescribes that, when the reserve has reached 50% of the Company’s paid-in capital, up to 50% of the reserve may be transferred to capital.

A special capital reserve equivalent to the net debit balance of the other components of shareholders’ equity (for example, cumulative translation adjustments and unrealized loss on financial assets, but excluding treasury stock) shall be made from unappropriated earnings pursuant to existing regulations promulgated by the Securities and Futures Bureau (SFB). Any special reserve appropriated may be reversed to the extent that the net debit balance reverses.

- 27 -

The appropriations of earnings for 2005 and 2004 had been approved in the shareholders’ meetings held on May 16, 2006 and May 10, 2005, respectively. The appropriations and dividends per share were as follows:


						Dividends Per Share
	Appropriation of Earnings					(NT$)
	For Fiscal			For Fiscal		For Fiscal		For Fiscal
	Year 2005			Year 2004		Year 2005		Year 2004
Legal capital reserve	$	9,357,503		$	8,820,201
Special capital reserve		(1,585,685	)		2,226,427
Employees’ profit sharing — in cash		3,432,129			3,086,215
Employees’ profit sharing — in stock		3,432,129			3,086,215
Cash dividends to shareholders		61,825,061			46,504,097	$	2.50	$	2.00
Stock dividends to shareholders		3,709,504			11,626,024		0.15		0.50
Bonus to directors and supervisors		257,410			231,466


	$	80,428,051		$	75,580,645

		The shareholders’ meeting held on May 16, 2006 also resolved to distribute stock dividends out of capital surplus in the amount of NT$3,709,504 thousand.

		The amounts of the above appropriations of earnings for 2005 and 2004 are consistent with the resolutions of the meetings of the Board of Directors held on February 14, 2006 and February 22, 2005, respectively. If the above bonus to employees, directors and supervisors had been paid entirely in cash and charged to earnings of 2005 and 2004, the basic earnings per share (after income tax) for the years ended December 31, 2005 and 2004 shown in the respective financial statements would have decreased from NT$3.79 to NT$3.50 and NT$3.97 to NT$3.70, respectively.

		The shares distributed as a bonus to employees represented 1.39% and 1.33% of the Company’s total outstanding common shares as of December 31, 2005 and 2004, respectively.

		As of January 11, 2007, the Board of Directors had not resolved the appropriation for earnings of 2006.

		The above information about the appropriations of bonus to employees, directors and supervisors is available at the Market Observation Post System website.

		Under the Integrated Income Tax System that became effective on January 1, 1998, R.O.C. resident shareholders are allowed a tax credit for their proportionate share of the income tax paid by the Company on earnings generated since January 1, 1998.

19.		STOCK-BASED COMPENSATION PLANS

		The Company’s Employee Stock Option Plans under the 2004 Plan, 2003 Plan and 2002 Plan were approved by the SFB on January 6, 2005, October 29, 2003 and June 25, 2002, respectively. The maximum number of options authorized to be granted under the 2004 Plan, 2003 Plan and 2002 Plan was 11,000 thousand, 120,000 thousand and 100,000 thousand, respectively, with each option eligible to subscribe for one common share when exercisable. The options may be granted to qualified employees of the Company or any of its domestic or foreign subsidiaries, in which the Company’s shareholding with voting rights, directly or indirectly, is more than fifty percent (50%). The options of all the plans are valid for ten years and exercisable at certain percentages subsequent to the second anniversary of the grant date. Under the terms of the plans, the options are granted at an exercise price equal to the closing price of the Company’s common shares listed on the TSE on the grant date.

- 28 -

		Options of the aforementioned plans that had never been granted or had been granted but subsequently cancelled had expired as of December 31, 2006.

		Information about outstanding options for the years ended December 31, 2006 and 2005 was as follows:


				Weighted-
				Average
	Number of			Exercise
	Options			Price
	(in Thousands)			(NT$)
Year ended December 31, 2006

Balance, beginning of year		67,758		$	39.4
Options granted		2,758			40.1
Options exercised		(14,550	)		40.1
Options cancelled		(3,152	)		43.7


Balance, end of year		52,814			39.6


Year ended December 31, 2005

Balance, beginning of year		64,367		$	40.5
Options granted		14,864			48.4
Options exercised		(6,837	)		39.6
Options cancelled		(4,636	)		44.1


Balance, end of year		67,758			42.1

The number of outstanding options and exercise prices have been adjusted to reflect the appropriations of dividends in accordance with the plans.

As of December 31, 2006, information about outstanding and exercisable options was as follows:

Options Outstanding

Options Exercisable

Weighted-

average

Range of

Number of

Remaining

Exercise

Number of

Exercise

Options (in

Contractual

Price

Options (in

Price

Price (NT$)

Thousands)

Life (Years)

(NT$)

Thousands)

(NT$)

$27.6-$39.7

34,584

5.15

35.5

28,351

35.5

45.1- 52.3

18,230

6.88

47.5

4,390

45.7

52,814

32,741

- 29 -

No compensation cost was recognized under the intrinsic value method for the years ended December 31, 2006 and 2005. Had the Company used the fair value based method (based on the Black-Scholes model) to evaluate the options granted after January 1, 2004, the assumptions and pro forma results of the Company for the years ended December 31, 2006 and 2005 would have been as follows:


	Years Ended
	December 31
	2006			2005
Assumptions:
Expected dividend yield		1.00%-3.44	%		1.00%-3.44	%
Expected volatility		43.77%-46.15	%		43.77%-46.15	%
Risk free interest rate		3.07%-3.85	%		3.07%-3.85	%
Expected life	5 years			5 years

Net income:
Net income as reported	$	127,009,731		$	93,575,035
Pro forma net income		126,889,209			93,458,191

Earnings per share (EPS) — after income tax (NT$):
Basic EPS as reported	$	4.93		$	3.63
Pro forma basic EPS		4.92			3.63
Diluted EPS as reported		4.92			3.63
Pro forma diluted EPS		4.92			3.63

20.

TREASURY STOCK

(Shares in Thousands)


	Beginning		Stock				Ending
	Shares		Dividends		Disposal		Shares
Year ended December 31, 2006

Parent company stock held by subsidiaries		32,938		988		—		33,926


Year ended December 31, 2005

Parent company stock held by subsidiaries		45,521		2,242		14,825		32,938

Proceeds from sales of treasury stock for the year ended December 31, 2005 were NT$899,489 thousand. As of December 31, 2006 and 2005, the book value of the treasury stock was NT$918,075 thousand; the market value was NT$ 2,290,026 thousand and NT$2,047,126 thousand, respectively. The Company’s stock held by subsidiaries is treated as treasury stock and the holders are entitled to the rights of shareholders, except that starting from June 24, 2005, pursuant to the revised Company Law, the holders are no longer entitled to vote in shareholders’ meetings.

- 30 -

21.

EARNINGS PER SHARE


	Years Ended December 31
	2006						2005
	Before			After			Before		After
	Income			Income			Income		Income
	Tax			Tax			Tax		Tax
Basic EPS (NT$)
Income before cumulative effect of changes in accounting principles	$	5.22		$	4.94		$	3.64	$	3.63
Cumulative effect of changes in accounting principles		(0.01	)		(0.01	)		—		—


Income for the year	$	5.21		$	4.93		$	3.64	$	3.63


Diluted EPS (NT$)
Income before cumulative effect of change in accounting principles	$	5.22		$	4.93		$	3.64	$	3.63
Cumulative effect of changes in accounting principles		(0.01	)		(0.01	)		—		—


Income for the year	$	5.21		$	4.92		$	3.64	$	3.63


EPS is computed as follows:


					Number of		EPS (NT$)
	Amounts (Numerator)				Shares		Before		After
	Before		After		(Denominator)		Income		Income
	Income Tax		Income Tax		(in Thousands)		Tax		Tax
Year ended December 31, 2006

Basic EPS
Income available to common shareholders	$	134,478,251	$	127,009,731		25,788,555	$	5.21	$	4.93

Effect of dilutive potential common stock — stock options		—		—		24,628


Diluted EPS
Income available to common shareholders (including effect of dilutive potential common stock)	$	134,478,251	$	127,009,731		25,813,183	$	5.21	$	4.92


Year ended December 31, 2005

Basic EPS
Income available to common shareholders	$	93,819,423	$	93,575,035		25,763,320	$	3.64	$	3.63

Effect of dilutive potential common stock — stock options		—		—		12,647


Diluted EPS
Income available to common shareholders (including effect of dilutive potential common stock)	$	93,819,423	$	93,575,035		25,775,967	$	3.64	$	3.63

- 31 -

22.

DISCLOSURES FOR FINANCIAL INSTRUMENTS

Fair values of financial instruments were as follows:


	December 31
	2006				2005
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Assets

Financial assets at fair value through profit or loss	$	44,601	$	44,601	$	1,380,905	$	818,550
Available-for-sale financial assets		32,614,572		32,614,572		46,452,838		46,452,838
Held-to-maturity financial assets		37,484,318		37,375,517		29,377,817		29,063,831
Investments accounted for using equity method (with market price)		6,371,625		17,044,040		5,419,747		10,991,064

Liabilities

Financial liabilities at fair value through profit or loss		10,751		10,751		234,279		173
Bonds payable (including current portion)		19,500,000		19,817,149		19,500,000		19,924,923
Other long-term payables (including current portion)		2,981,754		2,981,754		4,174,603		4,174,603

Methods and assumptions used in the determination of fair values of financial instruments

	1)		The aforementioned financial instruments do not include cash and cash equivalents, receivables, other financial assets, payables, and payables to contractors and equipment suppliers. The carrying amounts of these financial instruments approximate their fair values.

	2)		Fair values of financial assets/liabilities at fair value through profit or loss were determined using valuation techniques incorporating estimates and assumptions that were consistent with prevailing market conditions.

	3)		Fair values of available-for-sale and held-to-maturity financial assets were based on their quoted market prices; while fair values of structured time deposits were estimated using valuation techniques.

	4)		Fair value of bonds payable was based on their quoted market price.

	5)		Fair value of other long-term payables was based on the present value of expected cash flows, which approximates their carrying amount.

	c.		Gains recognized for the changes in fair value of derivatives estimated using valuation techniques were NT$33,850 thousand for the year ended December 31, 2006.

	d.		As of December 31, 2006 and 2005, financial assets exposed to fair value interest rate risk were NT$70,143,491 thousand and NT$77,190,280 thousand, respectively, financial liabilities exposed to fair value interest rate risk were NT$10,751 thousand and NT$234,279 thousand, respectively, and financial assets exposed to cash flow interest rate risk were NT$7,171,120 thousand and NT$7,227,000 thousand, respectively.

- 32 -

	e.		The Company recognized an unrealized gain of NT$242,248 thousand in shareholders’ equity for the changes in fair value of available-for-sale financial assets for the year ended December 31, 2006. The Company also recognized an unrealized gain of NT$319,367 thousand in shareholders’ equity for the changes in available-for-sale financial assets held by equity method investees for the year ended December 31, 2006.

	f.		Information about financial risks

	1)		Market risk. The derivative financial instruments categorized as financial assets/liabilities at fair value through profit or loss are mainly used to hedge the exchange rate fluctuations of foreign-currency- denominated assets and liabilities. Therefore, the market risk of derivatives will be offset by the foreign exchange risk of these assets and liabilities. Available-for-sale financial assets held by the Company are mainly fixed-interest-rate debt securities. Therefore, the fluctuations in market interest rates would result in changes in fair values of these debt securities.

	2)		Credit risk. Credit risk represents the potential loss that would be incurred by the Company if the counter-parties or third-parties breached contracts. Financial instruments with positive fair values at the balance sheet date are evaluated for credit risk. The counter-parties or third-parties to the foregoing financial instruments are reputable financial institutions, business organizations, and government agencies. Management believes that the Company’s exposure to default by those parties is low.

	3)		Liquidity risk. The Company has sufficient operating capital to meet cash needs upon settlement of derivative financial instruments and bonds payable. Therefore, the liquidity risk is low.

	4)		Cash flow interest rate risk. The Company mainly engages in investments in fixed-interest-rate debt securities. Therefore, cash flows are not expected to fluctuate significantly due to changes in market interest rates.

23.		RELATED PARTY TRANSACTIONS

		The Company engages in business transactions with the following related parties:

	a.		Industrial Technology Research Institute (ITRI), the chairman of the Company was one of its supervisors, who resigned in October 2006.

	b.		Philips, a major shareholder of the Company.

	c.		Subsidiaries

TSMC-North America
TSMC-Shanghai
TSMC-Europe
TSMC-Japan
TSMC-Korea

Investees

GUC (with a controlling interest)
VIS (accounted for using equity method)
SSMC (accounted for using equity method)

- 33 -

Indirect subsidiaries

WaferTech, LLC (WaferTech)
TSMC Technology, Inc. (TSMC Technology)

Indirect investee

VisEra, originally an investee over which the Company had a controlling interest; beginning in November 2005, VisEra became an indirect investee accounted for using the equity method due to changes in investment structure.

Transactions with the aforementioned parties, other than those disclosed in other notes, are summarized as follows:


	2006			2005
	Amount		%	Amount		%
For the year
Sales
TSMC-North America	$	190,459,073	60	$	153,618,916	57
Philips		4,024,990	1		3,298,770	1
Others		972,872	—		650,239	—


	$	195,456,935	61	$	157,567,925	58


Purchases
WaferTech	$	12,530,552	27	$	11,137,313	28
SSMC		6,820,632	15		5,729,672	15
TSMC-Shanghai		4,405,843	10		1,405,030	4
VIS		3,911,838	8		4,142,457	10


	$	27,668,865	60	$	22,414,472	57


Manufacturing expenses — technical assistance fees
Philips (Note 25a)	$	755,904	1	$	581,059	—


Marketing expenses — commission
TSMC-Japan	$	254,758	16	$	243,646	18
TSMC-Europe		236,454	15		221,164	16
TSMC-Korea		9,981	—		—	—


	$	501,193	31	$	464,810	34


General and administrative expenses — rental expense
GUC	$	14,606	—	$	16,744	—


Research and development expenses
GUC	$	39,421	—	$	19,467	—
TSMC Technology		37,559	—		—	—


	$	76,980	—	$	19,467	—

(Continued)

- 34 -


	2006			2005
	Amount		%	Amount		%
Sales of property, plant and equipment
TSMC-Shanghai	$	401,561	44	$	125,381	13
VisEra		—	—		534,279	52


	$	401,561	44	$	659,660	65


Non-operating income and gains
SSMC (primarily technical service income, see Note 25e)	$	314,953	3	$	316,243	4
TSMC-Shanghai		278,295	2		180,234	3
VIS (primarily technical service income, see Note 25h)		261,237	2		210,720	3
VisEra		246,242	2		308,071	4


	$	1,100,727	9	$	1,015,268	14


As of December 31

Receivables
TSMC-North America	$	16,461,956	97	$	20,407,621	97
Philips		250,919	2		573,565	3
Others		156,634	1		69,418	—


	$	16,869,509	100	$	21,050,604	100


Other receivables
TSMC-Shanghai	$	123,853	28	$	28,593	2
VIS		121,911	27		74,457	4
SSMC		69,568	15		149,251	8
TSMC-North America		59,547	13		198,505	11
VisEra		58,980	13		374,202	21
TSMC Technology		3,785	1		972,563	54
Others		11,622	3		143	—


	$	449,266	100	$	1,797,714	100


Payables
WaferTech	$	864,733	26	$	1,133,217	35
VIS		717,562	22		563,240	17
Philips		688,591	21		693,956	21
TSMC-Shanghai		478,714	14		274,820	9
SSMC		459,305	14		485,873	15
Others		118,011	3		91,091	3


	$	3,326,916	100	$	3,242,197	100


Other long-term payables
Philips (Note 25a)	$	403,375	100	$	1,100,475	100

(Continued)

- 35 -


	2006			2005
	Amount		%	Amount		%
Deferred credits
TSMC-Shanghai	$	723,661	61	$	641,762	51
VisEra		124,350	11		186,525	15


	$	848,011	72	$	828,287	66

(Concluded)

The terms of sales to related parties were not significantly different from those of sales to third parties. For other related party transactions, prices were determined in accordance with mutual agreements.

The Company deferred the gains (classified under the deferred credits) derived from sales of property, plant and equipment to TSMC-Shanghai and VisEra, and then recognized such gains (classified under the non-operating income and gains) over the depreciable lives of the disposed assets.

The Company leased part of its office space from GUC with a quarterly rental of NT$4,186 thousand; beginning from June 2006, the renewed quarterly rental was NT$3,473 thousand. The Company also leased certain buildings and facilities to VisEra with a monthly rental of NT$7,684 thousand (classified under the non-operating income and gains).

24. SIGNIFICANT LONG-TERM LEASES

The Company leases several parcels of land from the Science Park Administration. These operating leases expire on various dates from March 2008 to December 2020 and can be renewed upon expiration.

As of December 31, 2006, future lease payments were as follows:


Year	Amount
2007	$	291,646
2008		260,249
2009		251,671
2010		204,603
2011		203,089
2012 and thereafter		1,487,039


	$	2,698,297

25. SIGNIFICANT COMMITMENTS AND CONTINGENCIES

The significant commitments and contingencies of the Company as of December 31, 2006, excluding those disclosed in other notes, were as follows:

On June 20, 2004, the Company and Philips amended the Technical Cooperation Agreement, which was originally signed on May 12, 1997. The amended Technical Cooperation Agreement is for five years beginning from January 1, 2004. Upon expiration, this amended Technical Cooperation Agreement will be terminated and will not be automatically renewed; however, the patent cross license arrangement between the Company and Philips will survive the expiration of the amended Technical Cooperation Agreement. Under this amended Technical Cooperation Agreement, the Company will pay Philips royalties based on a fixed amount mutually agreed-on, rather than under a certain percentage of the Company’s annual net sales. The Company and Philips agreed to cross license the patents owned by each party. The Company also obtained through Philips a number of cross patent licenses.

- 36 -

	b.		Under a technical cooperation agreement with ITRI, the R.O.C. Government or its designee approved by TSMC can use up to 35% of TSMC’s capacity if TSMC’s outstanding commitments to its customers are not prejudiced. The term of this agreement is for five years beginning from January 1, 1987 and is automatically renewed for successive periods of five years unless otherwise terminated by either party with one year prior notice. The agreement was automatically renewed in 1992, 1997, 2002 and on January 1, 2007.

	c.		Under several foundry agreements, the Company shall reserve a portion of its production capacity for certain major customers that have guarantee deposits with the Company. As of December 31, 2006, the Company had a total of US$116,297 thousand of guarantee deposits.

	d.		Under a Shareholders Agreement entered into with Philips and EDB Investments Pte Ltd. on March 30, 1999, the parties formed a joint venture company, SSMC, which is an integrated circuit foundry in Singapore. The Company’s equity interest in SSMC was 32%. Nevertheless, Philips parted with its semiconductor company which was renamed as NXP B.V. in September, 2006. The Company and NXP purchased all the SSMC shares owned by EDB Investments Pte Ltd. Pro rata according to the Shareholders Agreement on November 15, 2006. After the purchase, the Company and NXP B.V. currently own approximately 39% and 61% of the SSMC shares respectively. The Company and Philips (now NXP) committed to buy specific percentages of the production capacity of SSMC. The Company and Philips (now NXP) are required, in the aggregate, to purchase up to 70% of SSMC’s capacity, but the Company alone is not required to purchase more than 28% of the capacity. If any party defaults on the commitment and the capacity utilization of SSMC fall below a specific percentage of its capacity, the defaulting party is required to compensate SSMC for all related unavoidable costs.

	e.		The Company provides technical services to SSMC under a Technical Cooperation Agreement (the Agreement) entered into on May 12, 1999. The Company receives compensation for such services computed at a specific percentage of net selling price of all products sold by SSMC. The Agreement shall remain in force for ten years and may be automatically renewed for successive periods of five years each unless pre-terminated by either party under certain conditions.

	f.		Under a Technology Transfer Agreement (TTA) with National Semiconductor Corporation (National) entered into on June 27, 2000, the Company shall receive payments for the licensing of certain technology to National. The agreement was to remain in force for ten years and could be automatically renewed for successive periods of two years thereafter unless either party gives written notice for early termination under certain conditions. In January 2003, the Company and National entered into a Termination Agreement whereby the TTA was terminated. Under the Termination Agreement, the Company will be relieved of any further obligation to transfer any additional technology. In addition, the Company granted National an option to request the transfer of certain technologies under the same terms and conditions as the terminated TTA. The option will expire in January 2008.

	g.		In December 2003, the Company entered into a Technology Development and License Agreement with Freescale Semiconductor, Inc. to jointly develop 65-nm SOI (silicon on insulator) technology. The Company will also license related 90-nm SOI technology from Freescale Semiconductor, Inc. Any intellectual properties arising out of the co-development project shall be jointly owned by the parties. In accordance with the agreement, the Company will pay royalties to Freescale Semiconductor, Inc. and will share a portion of the costs associated with the joint development project.

	h.		The Company provides a technology transfer to VIS under a Manufacturing License and Technology Transfer Agreement entered into on April 1, 2004. The Company receives compensation for such technology transfer in the form of royalty payments from VIS computed at specific percentages of net selling price of certain products sold by VIS. VIS agreed to reserve its certain capacity to manufacture for the Company certain products at prices as agreed by the parties.

- 37 -

	i.		TSMC, TSMC-North America and WaferTech filed a series of lawsuits in late 2003 and 2004 against Semiconductor Manufacturing International Corporation (“SMIC”), SMIC (Shanghai) and SMIC Americas. The lawsuits alleged that SMIC companies infringed multiple TSMC patents and misappropriated TSMC’s trade secrets. These suits were settled out of court on January 30, 2005. As part of the settlement, SMIC shall pay TSMC US$175,000 thousand over six years to resolve TSMC’s claims. As of December 31, 2006, SMIC had paid US$ 60,000 thousand in accordance with the terms of this settlement agreement. In August 2006, TSMC, TSMC-North America and Wafertech filed a lawsuit against SMIC in Alameda County Superior Court in California for breach of aforementioned settlement agreement, breach of promissory notes and trade secret misappropriation, seeking injunctive relief and monetary damages. In September 2006, SMIC filed a cross-complaint against TSMC in the same court, alleging TSMC of breach of the settlement agreement and implied covenant of good faith and fair dealing, in response to TSMC’s August complaint. The outcome of this litigation cannot be determined at this time.

	j.		Amounts available under unused letters of credit as of December 31, 2006 were NT$6,480 thousand.

26.

ADDITIONAL DISCLOSURES

Following are the additional disclosures required by the SFB for the Company and its investees:

	a.		Financing provided: Please see Table 1 attached;

	b.		Endorsement/guarantee provided: Please see Table 2 attached;

	c.		Marketable securities held: Please see Table 3 attached;

	d.		Marketable securities acquired or disposed of at costs or prices of at least NT$100 million or 20% of the paid-in capital: Please see Table 4 attached;

	e.		Acquisition of individual real estate properties at costs of at least NT$100 million or 20% of the paid-in capital: Please see Table 5 attached;

	f.		Disposal of individual real estate properties at prices of at least NT$100 million or 20% of the paid-in capital: None;

	g.		Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: Please see Table 6 attached;

	h.		Receivable from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please see Table 7 attached;

	i.		Names, locations, and related information of investees on which the Company exercises significant influence: Please see Table 8 attached;

	j.		Information about derivatives of investees over which the Company has a controlling interest:

			TSMC-Shanghai entered into forward exchange contracts during the year ended December 31, 2006 to manage exposures due to foreign exchange rate fluctuations.

- 38 -

Outstanding forward exchange contracts as of December 31, 2006:

Net realized settlement gains arising from TSMC-Shanghai’s forward transactions for the year ended December 31, 2006 were NT$2,543 thousand.

Information on investment in Mainland China

	1)		The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, equity in the net gain or net loss, ending balance, amount received as dividends from the investee, and the limitation on investee: Please see Table 9 attached.

	2)		Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: Please see Note 23.

27. SEGMENT FINANCIAL INFORMATION

	a.		Industry financial information

			The Company operates in one industry. Therefore, the disclosure of industry financial information is not applicable to the Company.

	b.		Export sales


	Years Ended December 31
Area	2006		2005

Americas	$	153,974,683	$	119,838,520
Asia		102,121,046		99,594,071
Europe and others		29,109,649		20,041,920


	$	285,205,378	$	239,474,511

			The export sales information is based on the amounts billed to customers within the areas.

	c.		Major customers representing at least 10% of gross sales


	Years Ended December 31
	2006				2005
	Amount		%		Amount		%

Customer A	$	190,459,073		60	$	153,618,916		57
Customer B		25,214,878		8		29,258,338		11

-39-

TABLE 1

Taiwan Semiconductor Manufacturing Company Limited and Investees

FINANCING PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2006
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Financing

Company's

Maximum

Financing

Balance for

Ending

Limit for

Amount

Financial

the Period

Balance

Type of

Reasons for

Each

Limits

Statement

(US$ in

Interest

Financing

Transaction

Short-term

Allowance for

Collateral

Borrowing

(US$ in

No.

Financing Name

Counter-party

Account

Thousands)

Rate

(Note 1)

Amounts

Financing

Bad Debt

Item

Value

Company

Thousands)

TSMC International

TSMC Development

Other receivables

1,140,860

—

1.50

—

Operating capital

—

N/A

32,203,805

( US $35,000)

(US$987,968)

(Note 2)


Note 1: The type No. 2 represents necessary for short-term financing.

Note 2: Not exceeding the issued capital of the Company.

- 40 -

TABLE 2

Taiwan Semiconductor Manufacturing Company Limited

ENDORSEMENT/GUARANTEE PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2006
(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Ratio of Accumulated

Counter-party

Amount of Collateral

Maximum

Nature of

Limits on Each Counter-party’s

Maximum

Value of Collateral

to Net Equity of the

Collateral/Guarantee

Endorsement/

Relationship

Endorsement/

Balance for the Period

Ending Balance

Property, Plant and

Latest Financial

Amounts Allowable

No.

Guarantee Provider

Name

(Note 2)

Guarantee Amounts

(US$ in Thousands)

Equipment

Statement

(Note 1)

TSMC

TSMC-North America

TSMC Development

2

3

Not exceed 10% of the net worth of the Company, and be also limited to the paid-in capital of the endorsement/guarantee company, unless otherwise approved by Board of Directors.

$
(US$

$
(US$

1,303,840
40,000

1,955,760
60,000

)

)

—

—

126,995,321


Note 1: 25% of the net worth of the Company as of December 31, 2006.

Note 2: The No. 2 represents a subsidiary in which the Company holds directly over 50% of the equity interest. The No. 3 represents an investee in which the Company holds directly and indirectly over 50% of the equity interest.

- 41 -

TABLE 3

Taiwan Semiconductor Manufacturing Company Limited and Investees

MARKETABLE SECURITIES HELD
DECEMBER 31, 2006
(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)


				December 31, 2006
									Market Value or
Held Company		Relationship with the		Shares/Units		Carrying Value		Percentage of	Net Asset Value
Name	Marketable Securities Type and Name	Company	Financial Statement Account	(in Thousands)		(US$ in Thousands)		Ownership	(US$ in Thousands)		Note
The Company	Government bond
	2004 Government Bond Series B	—	Available-for-sale financial assets		—	$	999,779	N/A	$	999,779
	2003 Government Bond Series B	—	”		—		998,288	N/A		998,288
	2006 Government Bond Series D	—	Held-to-maturity financial assets		—		3,657,320	N/A		3,657,446
	2005 Government Bond Series A	—	”		—		3,049,919	N/A		3,049,726
	2003 Government Bond Series B	—	”		—		1,647,851	N/A		1,645,179
	2003 Asian Development Bank Govt. Bond	—	”		—		835,840	N/A		875,103
	2003 Government Bond Series F	—	”		—		797,299	N/A		796,354
	2004 Kaohsiung Municipal Series A	—	”		—		620,000	N/A		618,760
	2003 Government Bond Series H	—	”		—		401,568	N/A		400,920
	European Investment Bank Bonds	—	”		—		372,265	N/A		400,000
	2002 Government Bond Series B	—	”		—		350,399	N/A		350,378
	2004 Kaohsiung Municipal Series B	—	”		—		249,998	N/A		250,004
	2003 European Bank for Recomspruction and Developement Govt. Bond Series A	—	”		—		88,198	N/A		90,000
	Open-end mutual funds
	NITC Bond Fund	—	Available-for-sale financial assets		22,219		3,655,939	N/A		3,655,939
	ABN AMRO Bond Fund	—	”		175,156		2,639,459	N/A		2,639,459
	Fuh Hwa Bond	—	”		125,122		1,667,908	N/A		1,667,908
	Mega Diamond Bond Fund	—	”		139,333		1,602,947	N/A		1,602,947
	Prudential Financial Bond Fund	—	”		103,751		1,516,294	N/A		1,516,294
	NITC Taiwan Bond	—	”		93,312		1,314,669	N/A		1,314,669
	JF Taiwan Bond Fund	—	”		85,145		1,299,088	N/A		1,299,088
	Cathay Bond	—	”		109,720		1,265,092	N/A		1,265,092
	Jih Sun Bond Fund	—	”		88,165		1,202,901	N/A		1,202,901
	Dresdner Bond DAM Fund	—	”		95,553		1,107,206	N/A		1,107,206
	ABN AMRO Income	—	”		63,947		1,012,377	N/A		1,012,377
	President James Bond	—	”		65,496		1,010,426	N/A		1,010,426
	AIG Taiwan Bond Fund	—	”		78,629		1,002,595	N/A		1,002,595
	JF Taiwan First Bond Fund	—	”		66,826		939,082	N/A		939,082
	Shinkong Chi Shin Bond Fund	—	”		62,183		890,660	N/A		890,660

(Continued)

- 42 -


				December 31, 2006
										Market Value or
Held Company		Relationship with the		Shares/Units		Carrying Value		Percentage of		Net Asset Value
Name	Marketable Securities Type and Name	Company	Financial Statement Account	(in Thousands)		(US$ in Thousands)		Ownership		(US$ in Thousands)		Note
	ABN AMRO Select Bond Fund	—	Available-for-sale financial assets		76,593	$	868,076	NA		$	868,076
	Taishin Lucky Fund	—	”		78,624		806,386	NA			806,386
	Polaris De-Bao Fund	—	”		63,273		701,069		N/A		701,069
	TIIM High Yield	—	”		44,685		554,863		N/A		554,863
	HSBC Taiwan Money Management	—	”		34,093		506,250		N/A		506,250
	Invesco Bond Fund	—	”		27,176		403,774		N/A		403,774
	Corporate bond
	Hua Nan Bank	—	Available-for-sale financial assets		—		1,545,864		N/A		1,545,864
	Cathay Bank	—	”		—		1,159,576		N/A		1,159,576
	Taiwan Power Company	—	”		—		1,046,799		N/A		1,046,799
	Formosa Petrochemical Corporation	—	”		—		397,963		N/A		397,963
	Taiwan Power Company	—	Hold-to-maturity financial assets		—		4,080,391		N/A		4,087,276
	Formosa Petrochemical Corporation	—	”		—		3,566,946		N/A		3,563,249
	Nan Ya Plastics Corporation	—	”		—		2,773,810		N/A		2,781,223
	Chinese Petroleum Corporation	—	”		—		1,451,378		N/A		1,450,722
	China Steel Corporation	—	”		—		1,000,000		N/A		999,689
	Formosa Plastic Corporation	—	”		—		516,663		N/A		519,076
	Shanghai commercial & Saving Bank	—	”		—		286,497		N/A		286,408
	Formosa Chemicals & Fiber Corporation	—	”		—		66,856		N/A		68,123
	Stocks
	TSMC Global	Subsidiary	Invest accounted for using equity method		1		42,496,592		100		42,496,592
	TSMC International	Subsidiary	”		987,968		26,593,749		100		26,593,749
	SSMC	Investee accounted for using equity method	”		463		7,960,869		39		6,794,726
	VIS	Investee accounted for using equity method	”		442,262		5,741,870		27		10,813,301
	TSMC Partners	Subsidiary	”		300		4,433,819		100		4,433,819
	TSMC-North America	Subsidiary	”		11,000		2,014,990		100		2,014,990
	GUC	Investee with controlling financial interest	”		41,263		629,755		38		6,230,739
	TSMC-Japan	Subsidiary	”		6		95,757		100		95,757
	TSMC-Europe	Subsidiary	”		—		49,741		100		49,741
	TSMC-Korea	Subsidiary	”		80		14,706		100		14,706
	United Industrial Gases Co., Ltd.	—	Financial assets carried at cost		16,783		193,584		10		299,493
	Shin-Etsu Handotai Taiwan Co., Ltd.	—	”		10,500		105,000		7		223,062
	W.K. Technology Fund IV	—	”		4,000		40,000		2		51,398
	Hontung Venture Capital Co., Ltd.	—	”		2,633		26,329		10		26,310

(Continued)

- 43 -


				December 31, 2006
										Market Value or
Held Company		Relationship with the		Shares/Units		Carrying Value		Percentage of		Net Asset Value
Name	Marketable Securities Type and Name	Company	Financial Statement Account	(in Thousands)		(US$ in Thousands)		Ownership		(US$ in Thousands)		Note
	Fund
	Horizon Ventures Fund	—	Financial assets carried at cost		—	$	280,179		12	$	280,179
	Crimson Asia Capital	—	”		—		67,751		1		67,751
	Capital
	TSMC-Shanghai	Subsidiary	Investment accounted for using equity method		—		9,027,984		100		9,027,984
	Emerging Alliance	Subsidiary	”		—		793,585		99		793,585
	VTAF II	Subsidiary	”		—		733,130		98		731,808
	VTAF III	Subsidiary	”		—		228,005		98		225,545
	Chi Cheng	Subsidiary	”		—		115,507		36		574,071
	Hsin Ruey	Subsidiary	”		—		114,297		36		573,809
Chi Cherng	Stock
	TSMC	Parent Company	Available-for-sale financial assets		16,947		1,143,941		N/A		1,143,941	Treasury stock of NT$458,564 thousand is deducted from the carrying value
Hsin Ruey	VIS	Equity method investee	Investments accounted for using equity method		5,032		107,224		—		107,224
	Stock
	TSMC	Parent Company	Available-for-sale financial assets		16,979		1,146,085		N/A		1,146,085	Treasury stock of NT$459,511 thousand is deducted from the carrying value
	VIS	Equity method investee	Investments accounted for using equity method		3,711		82,661		—		82,661
TSMC International	Stock
	InveStar	Subsidiary	Investments accounted for using equity method		9,207	US$	26,185		97	US$	26,185
	InveStar II	Subsidiary	”		51,300	US$	46,195		97	US$	46,195
	TSMC Development	Subsidiary	”		1	US$	659,356		100	US$	659,356
	TSMC Technology	Subsidiary	”		1	US$	6,058		100	US$	4,473
TSMC Development	WaferTech	Subsidiary	Investments accounted for using equity method		—	US$	282,420		100	US$	282,420
Partners	Common stock
	VisEra Holdings	Equity method investee	Investments accounted for using equity method		25,000	US$	34,000		49	US$	34,000

(Continued)

- 44 -


				December 31, 2006
										Market Value or
Held Company		Relationship with the		Shares/Units		Carrying Value		Percentage of		Net Asset Value
Name	Marketable Securities Type and Name	Company	Financial Statement Account	(in Thousands)		(US$ in Thousands)		Ownership		(US$ in Thousands)		Note
Emerging Alliance	Common stock
	NetLogic Microsystems,Inc.	—	Financial assets at fair value through profit or loss		84	US$	1,828		—	US$	1,828
	Pixim, Inc.	—	Financial assets carried at cost		1,924	US$	512		4	US$	512
	RichWave Technology Corp.	—	”		4,247	US$	1,648		13	US$	1,648
	Global Investment Holding Inc.	—	”		10,800	$	100,000		6	$	100,000
	Preferred stock
	Ikanos Communication,Inc.	—	Available-for-sale financial assets		515	US$	4,473		2	US$	4,473
	Audience, Inc.	—	Financial assets carried at cost		1,654	US$	250		1	US$	250
	Axiom Microdevices,Inc.	—	”		1,000	US$	1,000		3	US$	1,000
	Centrality Communications	—	”		1,325	US$	1,800		3	US$	1,800
	Miradia,Inc.	—	”		3,040	US$	1,000		3	US$	1,000
	Mobilygen	—	”		1,415	US$	750		1	US$	750
	Mosaic Systems,Inc.	—	”		2,481	US$	12		6	US$	12
	Next IO, Inc.	—	”		800	US$	500		2	US$	500
	NuCORE Technology Inc.	—	”		2,254	US$	1,455		2	US$	1,455
	Optichron,Inc.	—	”		714	US$	1,000		4	US$	1,000
	Optimal Corporation	—	”		582	US$	600		4	US$	600
	Pixim, Inc.	—	”		2,193	US$	583		—	US$	583
	Reflectivity,Inc.	—	”		4,848	US$	531		4	US$	531
	Teknovus,Inc.	—	”		6,977	US$	1,327		3	US$	1,327
	Zenasis Technologies, Inc.	—	”		2,410	US$	1,399		5	US$	1,399
	Option
	Pixim, Inc.	—	Financial assets carried at cost		242	US$	—	NA		US$	—
VTAF II	Common stock
	Beceem Communications	—	Financial assets carried at cost		650	US$	1,600		1	US$	1,600
	Leadtrend	—	”		1,150	US$	660		6	US$	660
	Yobon	—	”		1,675	US$	787		13	US$	787
	Sentelic	—	”		1,200	US$	2,040		15	US$	2,040
	Preferred stock
	5V Technologies,Inc.	—	Financial assets carried at cost		2,357	US$	1,768		11	US$	1,768
	Ageia Technologies, Inc.	—	”		2,030	US$	2,074		2	US$	2,074
	Aquantia Corporation	—	”		1,264	US$	1,150		5	US$	1,150
	Audience, Inc.	—	”		2,208	US$	474		1	US$	474
	Axiom Microdevices, Inc.	—	”		3,015	US$	1,466		2	US$	1,466
	GemFire Corporation	—	”		600	US$	68		1	US$	68
	Impinj, Inc.	—	”		257	US$	500		—	US$	500

(Continued)

- 45 -


				December 31, 2006
										Market Value or
Held Company		Relationship with the		Shares/Units		Carrying Value		Percentage of		Net Asset Value
Name	Marketable Securities Type and Name	Company	Financial Statement Account	(in Thousands)		(US$ in Thousands)		Ownership		(US$ in Thousands)		Note
	Miradia, Inc.	—	Financial assets carried at cost		2,740	US$	2,424		3	US$	2,424
	Next IO, Inc.	—	"		216	US$	182		—	US$	182
	Optichron, Inc.	—	"		353	US$	869		2	US$	869
	Power Analog Microelectronics	—	"		2,000	US$	1,500		13	US$	1,500
	Powerprecise Solutions,Inc.	—	"		1,445	US$	1,400		11	US$	1,400
	RichWave Technology Corp.	—	"		500	US$	231		2	US$	231
	Teknovus,Inc.	—	"		518	US$	119		—	US$	119
	Tzero Technologies, Inc.	—	"		730	US$	1,500		2	US$	1,500
	Xceive	—	"		714	US$	1,000		2	US$	1,000
VTAF III	Common stock
	M2000, Inc.	—	Financial assets carried at cost		1,500	US$	1,500		4	US$	1,500
	Mutual-Pak Limited	—	"		170	US$	52		13	US$	52
	Quellan, Inc	—	"		2,231	US$	2,500		7	US$	2,500
	SynDiTec, Inc.	—	"		4,332	US$	720		7	US$	720
	Validity-Pak Limited	—	"		5,333	US$	2,000		7	US$	2,000
Investar	Common stock
	Monolithic Power Systems, Inc.	—	Financial assets at fair value through profit or loss		1,975	US$	21,939		7	US$	21,939
	Broadtek Electronics Corp.	—	"		29	US$	10		—	US$	10
	Broadtek Electronics Corp.	—	Available-for-sale financial assets		116	US$	40		—	US$	40
	Capella Microsystems (Taiwan), Inc.	—	Financial assets carried at cost		530	US$	154		2	US$	154
	Preferred stock
	Integrated Memory Logic,Inc.	—	Financial assets carried at cost		1,831	US$	1,221		9	US$	1,221
	IP Unity,Inc.	—	"		1,008	US$	494		1	US$	494
	Memsic,Inc.	—	"		2,724	US$	1,500		9	US$	1,500
	NanoAmp Solutions, Inc.	—	"		541	US$	853		2	US$	853
	Sonics,Inc.	—	"		1,843	US$	3,530		2	US$	3,530
Investar II	Common stock
	Monolithic Power Systems, Inc.	—	Financial assets at fair value through profit or loss		864	US$	9,604		3	US$	9,604
	RichTek Technology Corp.	—	"		255	US$	2,045		—	US$	2,045
	Geo Vision, Inc.	—	"		46	US$	229		—	US$	229
	RichTek Technology Corp.	—	Available-for-sale financial assets		227	US$	1,824		—	US$	1,824
	Geo Vision, Inc.	—	"		15	US$	73		—	US$	73
	eChannelOpen Holding,Inc.	—	Financial assets carried at cost		358	US$	251		4	US$	251
	eLCOS Microdisplay Technology, Ltd.	—	"		270	US$	27		1	US$	27
	EoNEX Technologies,Inc.	—	"		55	US$	3,048		5	US$	3,048

(Continued)

- 46 -


				December 31, 2006
										Market Value or
Held Company		Relationship with the		Shares/Units		Carrying Value		Percentage of		Net Asset Value
Name	Marketable Securities Type and Name	Company	Financial Statement Account	(in Thousands)		(US$ in Thousands)		Ownership		(US$ in Thousands)		Note
	Sonics, Inc.	—	Financial assets carried at cost		2,220	US$	32		—	US$	32
	Epic Communications, Inc.	—	”		191	US$	37		1	US$	37
	EON Technology, Corp.	—	”		4,247	US$	1,175		7	US$	1,175
	Goyatek Technology, Corp.	—	”		2,088	US$	545		7	US$	545
	Capella Microsystems (Taiwan), Inc.	—	”		534	US$	210		2	US$	210
	Trendchip Technologies Corp.	—	”		2,000	US$	574		4	US$	574
	Ralink Technology (Taiwan), Inc.	—	”		1,833	US$	791		3	US$	791
	Auden Technology MFG Co., Ltd.	—	”		953	US$	223		4	US$	223
	Preferred stock
	eLCOS Microdisplay Technology, Ltd.	—	Financial assets carried at cost		2,667	US$	3,500		8	US$	3,500
	Alchip Technologies Limited	—	”		3,531	US$	2,950		15	US$	2,950
	FangTek, Inc.	—	”		6,930	US$	3,250		20	US$	3,250
	Kilopass Technology, Inc.	—	”		3,887	US$	2,000		6	US$	2,000
	Memsic, Inc.	—	”		2,289	US$	1,560		7	US$	1,560
	NanoAmp Solutions, Inc.	—	”		375	US$	1,500		1	US$	1,500
	Sonics, Inc.	—	”		2,115	US$	3,082		6	US$	3,082
GUC	Open-end mutual funds
	ABN AMRO Bond Fund	—	Available-for-sale financial assets		2,352	$	35,041		N/A	$	35,041
	Ta Chong Bond Fund	—	”		2,306		30,037		N/A		30,037
	Dresdner Bond DAM Fund	—	”		2,592		30,036		N/A		30.036
	NITC Taiwan Bond	—	”		2,132		30,035		N/A		30,035
	AIG Taiwan Bond Fund	—	”		2,355		30,031		N/A		30,031
	Fuh Hwa You Li Bond Fund	—	”		2,018		25,035		N/A		25,035
	Stock
	Global Unichip Corporation — North America	Subsidiary	Investments accounted for using equity method		100		6,396		100		6,396
	Global Unichip Japan	Subsidiary	”		—		2,681		100		2,681
TSMC Global	Government bond
	United States Treas Nts	—	Available-for-sale financial assets		—	US$	151,045		N/A	US$	151,045
	Corporate bonds
	Abbott Labs	—	Available-for-sale financial assets		—	US$	1,505		N/A	US$	1,505
	Abbott Labs	—	”		—	US$	2,547		N/A	US$	2,547
	Ace Ltd.	—	”		—	US$	1,001		N/A	US$	1,001
	Aig Sunamerica Global Fing Ix	—	”		—	US$	1,000		N/A	US$	1,000
	Allstate Life Global Fdg Secd	—	”		—	US$	2,956		N/A	US$	2,956

(Continued)

- 47 -


				December 31, 2006
										Market Value or
Held Company		Relationship with the		Shares/Units		Carrying Value		Percentage of		Net Asset Value
Name	Marketable Securities Type and Name	Company	Financial Statement Account	(in Thousands)		(US$ in Thousands)		Ownership		(US$ in Thousands)		Note
	American Express Co.	—	Available-for-sale financial assets		—	US$	3,452		N/A	US$	3,452
	American Gen Fin Corp.	—	"		—	US$	1,620		N/A	US$	1,620
	American Gen Fin Corp. Mtn	—	"		—	US$	3,448		N/A	US$	3,448
	American Gen Fin Corp. Mtn	—	"		—	US$	1,971		N/A	US$	1,971
	American Gen Fin Corp. Mtn	—	"		—	US$	1,001		N/A	US$	1,001
	American Honda Fin Corp. Mtn	—	"		—	US$	3,092		N/A	US$	3,092
	American Honda Fin Corp. Mtn	—	"		—	US$	801		N/A	US$	801
	Ameritech Capital Funding Co.	—	"		—	US$	483		N/A	US$	483
	Amgen Inc.	—	"		—	US$	2,905		N/A	US$	2,905
	Anz Cap Tr I	—	"		—	US$	972		N/A	US$	972
	Associates Corp. North Amer	—	"		—	US$	2,541		N/A	US$	2,541
	Axa Finl Inc.	—	"		—	US$	2,151		N/A	US$	2,151
	Bank New York Inc.	—	"		—	US$	1,487		N/A	US$	1,487
	Bank One Corp.	—	"		—	US$	3,365		N/A	US$	3,365
	Bank One Corp.	—	"		—	US$	2,045		N/A	US$	2,045
	Bank Utd Houston Tx Mtbn	—	"		—	US$	528		N/A	US$	528
	Bear Stearns Cos Inc.	—	"		—	US$	3,379		N/A	US$	3,379
	Beneficial Corp. Mtn Bk Entry	—	"		—	US$	2,297		N/A	US$	2,297
	Berkshire Hathaway Fin Corp.	—	"		—	US$	1,486		N/A	US$	1,486
	Chase Manhattan Corp. New	—	"		—	US$	5,077		N/A	US$	5,077
	Chase Manhattan Corp. New	—	"		—	US$	2,115		N/A	US$	2,115
	Chubb Corp.	—	"		—	US$	2,116		N/A	US$	2,116
	Cit Group Hldgs Inc.	—	"		—	US$	3,027		N/A	US$	3,027
	Citicorp	—	"		—	US$	1,372		N/A	US$	1,372
	Cogentrix Energy Inc.	—	"		—	US$	3,751		N/A	US$	3,751
	Colonial Pipeline Co.	—	"		—	US$	1,494		N/A	US$	1,494
	Consolidated Edison Inc.	—	"		—	US$	2,910		N/A	US$	2,910
	Countrywide Fdg Corp. Mtn	—	"		—	US$	2,037		N/A	US$	2,037
	Credit Suisse Fincl Products	—	"		—	US$	1,500		N/A	US$	1,500
	Credit Suisse First Boston	—	"		—	US$	734		N/A	US$	734
	Credit Suisse First Boston Usa	—	"		—	US$	2,177		N/A	US$	2,177
	Daimlerchrysler North Amer	—	"		—	US$	977		N/A	US$	977
	Daimlerchrysler North Amer Hld	—	"		—	US$	751		N/A	US$	751
	Dayton Hudson Corp.	—	"		—	US$	2,020		N/A	US$	2,020
	Deere John Cap Corp.	—	"		—	US$	4,928		N/A	US$	4,928
	Dell Computer Corp.	—	"		—	US$	2,820		N/A	US$	2,820
	Den Danske Bk Aktieselskab	—	"		—	US$	2,019		N/A	US$	2,019
	Diageo Plc	—	"		—	US$	3,444		N/A	US$	3,444
	Emerson Elec Co.	—	"		—	US$	3,215		N/A	US$	3,215
	European Invt Bk	—	"		—	US$	3,970		N/A	US$	3,970

(Continued)

- 48 -


				December 31, 2006
									Market Value or
Held Company		Relationship with the		Shares/Units		Carrying Value		Percentage of	Net Asset Value
Name	Marketable Securities Type and Name	Company	Financial Statement Account	(in Thousands)		(US$ in Thousands)		Ownership	(US$ in Thousands)		Note
	European Invt Bk	—	Available-for-sale financial assets		—	US$	6,057	N/A	US$	6,057
	Federal Home Ln Bks	—	”		—	US$	7,937	N/A	US$	7,937
	Fifth Third Bk Cincinnati Oh	—	”		—	US$	2,427	N/A	US$	2,427
	Fleet Boston Corp.	—	”		—	US$	2,643	N/A	US$	2,643
	Fleet Finl Group Inc. New	—	”		—	US$	905	N/A	US$	905
	Fpl Group Cap Inc.	—	”		—	US$	849	N/A	US$	849
	Ge Global Ins Hldg Corp.	—	”		—	US$	1,915	N/A	US$	1,915
	General Elec Cap Corp. Mtn	—	”		—	US$	3,888	N/A	US$	3,888
	General Elec Cap Corp. Mtn	—	”		—	US$	8,759	N/A	US$	8,759
	General Elec Cap Corp. Mtn	—	”		—	US$	8,282	N/A	US$	8,282
	General Elec Cap Corp. Mtn	—	”		—	US$	2,119	N/A	US$	2,119
	General Re Corp.	—	”		—	US$	3,292	N/A	US$	3,292
	Goldman Sachs Group Inc.	—	”		—	US$	4,989	N/A	US$	4,989
	Goldman Sachs Group Inc.	—	”		—	US$	3,456	N/A	US$	3,456
	Greenpoint Finl Corp.	—	”		—	US$	968	N/A	US$	968
	Hancock John Global Fdg Ii Mtn	—	”		—	US$	2,896	N/A	US$	2,896
	Hancock John Global Fdg Ii Mtn	—	”		—	US$	5,132	N/A	US$	5,132
	Hancock John Global Fdg Mtn	—	”		—	US$	975	N/A	US$	975
	Hartford Finl Svcs Group Inc.	—	”		—	US$	5,037	N/A	US$	5,037
	Hartford Finl Svcs Group Inc.	—	”		—	US$	1,345	N/A	US$	1,345
	Hbos Plc Medium Term Sr Nts	—	”		—	US$	3,205	N/A	US$	3,205
	Hbos Plc Medium Term Sr Nts	—	”		—	US$	2,952	N/A	US$	2,952
	Heller Finl Inc.	—	”		—	US$	1,929	N/A	US$	1,929
	Hershey Foods Corp.	—	”		—	US$	1,504	N/A	US$	1,504
	Household Fin Corp.	—	”		—	US$	2,903	N/A	US$	2,903
	Household Fin Corp.	—	”		—	US$	501	N/A	US$	501
	Household Intl Inc.	—	”		—	US$	2,851	N/A	US$	2,851
	Hsbc Fin Corp.	—	”		—	US$	3,028	N/A	US$	3,028
	Hsbc Fin Corp. Mtn	—	”		—	US$	5,096	N/A	US$	5,096
	Huntington National Bank	—	”		—	US$	1,886	N/A	US$	1,886
	Ing Sec Life Instl Fdg	—	”		—	US$	2,483	N/A	US$	2,483
	International Business Machs	—	”		—	US$	2,217	N/A	US$	2,217
	Intl Lease Fin Corp. Mtn	—	”		—	US$	2,939	N/A	US$	2,939
	Intl Lease Fin Corp. Mtn	—	”		—	US$	4,138	N/A	US$	4,138
	J P Morgan Chase + Co.	—	”		—	US$	3,298	N/A	US$	3,298
	Jackson Natl Life Global Fdg	—	”		—	US$	1,000	N/A	US$	1,000
	Key Bk Na Med Term Nts Bk Entr	—	”		—	US$	4,401	N/A	US$	4,401
	KeyCorp. Mtn Book Entry	—	”		—	US$	3,010	N/A	US$	3,010
	Kraft Foods Inc.	—	”		—	US$	1,000	N/A	US$	1,000

(Continued)

- 49 -


				December 31, 2006
									Market Value or
Held Company		Relationship with the		Shares/Units		Carrying Value		Percentage of	Net Asset Value
Name	Marketable Securities Type and Name	Company	Financial Statement Account	(in Thousands)		(US$ in Thousands)		Ownership	(US$ in Thousands)		Note
	Lehman Brothers Hldgs Inc.	—	Available-for-sale financial assets		—	US$	1,626	N/A	US$	1,626
	Lehman Brothers Hldgs Inc.	—	”		—	US$	487	N/A	US$	487
	Lehman Brothers Hldgs Inc.	—	”		—	US$	989	N/A	US$	989
	Lehman Brothers Hldgs Inc.	—	”		—	US$	3,150	N/A	US$	3,150
	Lehman Brothers Hldgs Inc.	—	”		—	US$	1,077	N/A	US$	1,077
	Lincoln Natl Corp. In	—	”		—	US$	500	N/A	US$	500
	Marshall + Ilsley Corp.	—	”		—	US$	8,420	N/A	US$	8,420
	Mbna America Bank Na Y	—	”		—	US$	6,403	N/A	US$	6,403
	Merita Bk Ltd. Ny Brh	—	”		—	US$	501	N/A	US$	501
	Merrill Lynch + Co. Inc.	—	”		—	US$	3,453	N/A	US$	3,453
	Merrill Lynch + Co. Inc.	—	”		—	US$	1,985	N/A	US$	1,985
	Merrill Lynch + Co. Inc.	—	”		—	US$	4,865	N/A	US$	4,865
	Metropolitan Life Global Mtn	—	”		—	US$	3,369	N/A	US$	3,369
	Mgic Invt Corp.	—	”		—	US$	1,204	N/A	US$	1,204
	Monumental Global Fdg Ii	—	”		—	US$	1,468	N/A	US$	1,468
	Monumental Global Fdg Ii 2002a	—	”		—	US$	1,000	N/A	US$	1,000
	Monunmetal Global Fdg Ii	—	”		—	US$	1,961	N/A	US$	1,961
	Mony Group Inc.	—	”		—	US$	2,175	N/A	US$	2,175
	Morgan Stanley	—	”		—	US$	1,926	N/A	US$	1,926
	Morgan Stanley	—	”		—	US$	2,126	N/A	US$	2,126
	National City Corp.	—	”		—	US$	3,410	N/A	US$	3,410
	National Westminster Bk Plc	—	”		—	US$	1,323	N/A	US$	1,323
	Nationwide Bldg Soc	—	”		—	US$	3,537	N/A	US$	3,537
	Nationwide Life Global Fdg I	—	”		—	US$	3,501	N/A	US$	3,501
	Nationwide Life Global Mtn	—	”		—	US$	1,485	N/A	US$	1,485
	Nucor Corp.	—	”		—	US$	3,797	N/A	US$	3,797
	Oracle Corp. / Ozark Hldg Inc.	—	”		—	US$	1,973	N/A	US$	1,973
	Pepsico Inc. Mtn Book Entry	—	”		—	US$	3,619	N/A	US$	3,619
	Pnc Fdg Corp.	—	”		—	US$	1,007	N/A	US$	1,007
	Popular North Amer Inc.	—	”		—	US$	2,910	N/A	US$	2,910
	Praxair Inc.	—	”		—	US$	3,138	N/A	US$	3,138
	Premark Intl Inc.	—	”		—	US$	2,729	N/A	US$	2,729
	Pricoa Global Fdg I Mtn	—	”		—	US$	3,401	N/A	US$	3,401
	Principal Finl Group Australia	—	”		—	US$	1,013	N/A	US$	1,013
	Principal Life Global Fdg I Gl	—	”		—	US$	1,165	N/A	US$	1,165
	Protective Life Secd Trs	—	”		—	US$	2,913	N/A	US$	2,913
	Protective Life Secd Trs Mtn	—	”		—	US$	3,390	N/A	US$	3,390
	Prudential Ins Co. Amer	—	”		—	US$	2,629	N/A	US$	2,629
	Public Svc Elec Gas Co.	—	”		—	US$	3,682	N/A	US$	3,682
	Regions Finl Corp. New	—	”		—	US$	2,371	N/A	US$	2,371

(Continued)

- 50 -


				December 31, 2006
									Market Value or
Held Company		Relationship with the		Shares/Units		Carrying Value		Percentage of	Net Asset Value
Name	Marketable Securities Type and Name	Company	Financial Statement Account	(in Thousands)		(US$ in Thousands)		Ownership	(US$ in Thousands)		Note
	Safeco Corp.	—	Available-for-sale financial assets		—	US$	715	N/A	US$	715
	Sbc Communications Inc.	—	”		—	US$	1,041	N/A	US$	1,041
	Sbc Communications Inc.	—	”		—	US$	697	N/A	US$	697
	Simon Ppty Group Lp	—	”		—	US$	1,009	N/A	US$	1,009
	Slm Corp. Medium Term Nts	—	”		—	US$	8,998	N/A	US$	8,998
	Sp Powerassests Ltd. Global	—	”		—	US$	969	N/A	US$	969
	St Paul Cos Inc. Mtn Bk Ent	—	”		—	US$	2,550	N/A	US$	2,550
	Suntrust Bk Atlanta Ga Medium	—	”		—	US$	3,442	N/A	US$	3,442
	Tiaa Global Mkts Inc.	—	”		—	US$	500	N/A	US$	500
	Unitedhealth Group Inc.	—	”		—	US$	3,000	N/A	US$	3,000
	Us Bk Natl Assn Cincinnati Oh	—	”		—	US$	2,915	N/A	US$	2,915
	Vodafone Airtouch Plc	—	”		—	US$	4,449	N/A	US$	4,449
	Wachovia Corp. New	—	”		—	US$	2,040	N/A	US$	2,040
	Washington Mut Bk Fa	—	”		—	US$	3,997	N/A	US$	3,997
	Washington Mut Inc.	—	”		—	US$	1,692	N/A	US$	1,692
	Washington Mut Inc.	—	”		—	US$	1,000	N/A	US$	1,000
	Washington Post Co.	—	”		—	US$	3,001	N/A	US$	3,001
	Wells Fargo + Co. New	—	”		—	US$	2,943	N/A	US$	2,943
	Wells Fargo + Co. New Med Trm	—	”		—	US$	4,311	N/A	US$	4,311
	Westfield Cap Corp. Ltd.	—	”		—	US$	2,005	N/A	US$	2,005
	Wps Resources Corp.	—	”		—	US$	1,047	N/A	US$	1,047

	Corporate issued asset - backed securities
	American Home Mtg Invt Tr	—	Available-for-sale financial assets		—	US$	116	N/A	US$	116
	Americredit Auto Rec Tr	—	”		—	US$	1,004	N/A	US$	1,004
	Americredit Automobile Rec Tr	—	”		—	US$	1,116	N/A	US$	1,116
	Americredit Automobile Rec Tr	—	”		—	US$	2,598	N/A	US$	2,598
	Americredit Automobile Rec Tr	—	”		—	US$	3,269	N/A	US$	3,269
	Americredit Automobile Receiva	—	”		—	US$	4,609	N/A	US$	4,609
	Americredit Automobile Receivb	—	”		—	US$	2,891	N/A	US$	2,891
	Atlantic City Elc Trns Fdgllc	—	”		—	US$	420	N/A	US$	420
	Ba Cr Card Tr	—	”		—	US$	4,300	N/A	US$	4,300
	Banc Amer Coml Mtg Inc.	—	”		—	US$	2,869	N/A	US$	2,869
	Banc Amer Fdg 2006 I Tr	—	”		—	US$	4,332	N/A	US$	4,332
	Bank Of Amer Lease Equip Tr	—	”		—	US$	1,057	N/A	US$	1,057
	Bear Stearns Alt A Tr	—	”		—	US$	628	N/A	US$	628
	Bear Stearns Arm Tr	—	”		—	US$	3,480