Wave Issue 2001 1/10/00 Article 5-02

***TSMC and TASMC Merger
(December 30)

Taiwan Semiconductor Manufacturing Company (TSMC) and TSMC-Acer
Manufacturing Corporation (TASMC) announced that they have signed
an agreement to merge TASMC with and into TSMC. The Consolidation
date of the merger is targeted on June 30, 2000.

The boards of directors of both TSMC and TASMC approved the
merger agreement. In June of 1999, TSMC acquired 30% of the
shares of Acer Semiconductor Manufacturing, Inc. (ASMI) from the
Acer Group, later renaming the facility TASMC. The Acer Group
continued to be the largest and most significant shareholder in
TASMC. Since June, TSMC has effectively taken over management of
the manufacturing facility, re-engineering it into a pure foundry
company. These re-engineering efforts, combined with a recovery
from the September 21, 1999 earthquake, have resulted in a
manufacturing facility with high performance.

The details of the merger agreements are as follows:

1. The consolidation date of this merger is targeted on June 30,
2000.

2. The exchange ratio for TASMC to TSMC would be 6 to 1, and will
be adjusted in a limited range according to TSMC's stock price.
Should the paid-in capital of TSMC be increased during the period
starting from the execution date of the Merger Agreement till the
Consolidation Date due to distribution of stock dividend, the
exchange ratios mentioned above shall be adjusted
proportionately.

3. The Chairman of the Board, Directors and Supervisors of TSMC
need not be reelected as a result of the merger.

The exchange ratio will be finalized by end of March 2000, before
the stockholders' meetings of both companies.

According to government regulations, the merger is subject to the
approval of regulatory authorities, and shall be carried out
after the stockholders' meetings of both companies.

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