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

Taiwan Semiconductor Manufacturing Company Ltd.

(Translation of Registrant’s Name Into English)

(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:                     .)

 

 

FOR IMMEDIATE RELEASE

				2Q07 Quarterly Management Report July 26, 2007

CONTACT
Elizabeth Sun / Harrison Hsueh
Julie Wei
Investor Relations Division
TSMC
invest@tsmc.com
886-3-568-2085/ 2088/2086

Topics in This Report

•		Revenue Analysis
•		Capacity
•		Profit & Expense Analysis
•		Financial Condition Review
•		Cash Flow & CapEx
•		Recap of Recent Important Events & Announcements

Operating Results Review:

Summary:

(Amounts are on consolidated basis and are in
NT billions except noted otherwise)		2Q07				1Q07				2Q06				QoQ				YoY
EPS (NT$  per common share)			0.96				0.71				1.29				35.3	%			(25.1	%)
(US$  per ADR unit)			0.15				0.11				0.20
Consolidated Net Sales			74.92				64.90				82.12				15.4	%			(8.8	%)
Gross Profit			32.18				24.61				42.50				30.8	%			(24.3	%)
Gross Margin			43.0	%			37.9	%			51.8	%
Operating Expense			(7.45	)			(6.73	)			(7.18	)			10.6	%			3.8	%
Non-Operating Items			3.29				2.19				0.95				50.2	%			246.7	%
Net Income			25.48				18.84				34.00				35.3	%			(25.1	%)
Net Profit Margin			34.0	%			29.0	%			41.4	%
Wafer Shipment (kpcs 8 inch-equiv.)			1,856				1,566				1,869				18.5	%			(0.7	%)

Remarks:

The second quarter diluted earnings per share were NT$0.96, representing a 25.1% decrease over the same period last year and a 35.3% sequential increase from the previous quarter. The consolidated operating results of 2Q07 are summarized below:

Second quarter net sales were NT$75 billion, a decline of 8.8% compared to net sales of NT$82 billion for the same period a year ago and an increase of 15.4% compared to net sales of NT$65 billion in the prior quarter.

Gross profit for 2Q07 was NT$32 billion, which represents a year-over-year decrease of 24.3% and a quarter-over-quarter increase of 30.8%. Second quarter gross margin was 43%, higher than the 37.9% gross margin reported in the first quarter of 2007.

Operating expenses were NT$7.4 billion or 10% of the net sales. The combined result from non-operating income and long-term investments was a gain of NT$3.3 billion.

Consolidated net income attributable to shareholders of the parent company was NT$25 billion, down 25.1% from a year ago level and up 35.3% from the previous quarter. Net profit margin was 34% for 2Q07.

TSMC July 26, 2007		Page 2

I. Revenue Analysis

I. Wafer Sales Analysis

By Application		2Q07				1Q07				2Q06
Computer			29	%			30	%			30	%
Communication			44	%			42	%			44	%
Consumer			18	%			17	%			20	%
Industrial/Others			6	%			7	%			5	%
Memory			3	%			4	%			1	%

By Technology		2Q07				1Q07				2Q06
65nm and below			3	%			1	%			—
90nm			26	%			22	%			24	%
0.11/0.13um			24	%			26	%			25	%
0.15/0.18um			30	%			30	%			32	%
0.25/0.35um			12	%			15	%			14	%
0.50um+			5	%			6	%			5	%

By Customer Type		2Q07				1Q07				2Q06
Fabless/System			68	%			65	%			72	%
IDM			32	%			35	%			28	%

By Geography		2Q07				1Q07				2Q06
North America			74	%			77	%			77	%
Asia Pacific			13	%			11	%			10	%
Europe			9	%			7	%			9	%
Japan			4	%			5	%			4	%

Revenue Analysis:

Second quarter consolidated net sales came in at the high end of our expectation to reach NT$75 billion.

Businesses from the three main applications recovered from the inventory correction. On a sequential basis, revenues from communication and consumer applications both increased by 25%, while revenues from computer applications increased by 13%.Revenues from 65nm and 90nm accounted for 3% and 26% of total wafer sales, respectively, higher than that in the previous quarter. Revenues from advanced technologies (0.13-micron and below) accounted for 53% of total wafer sales, up four percentage points from the first quarter of 2007.

Revenues from IDM customers accounted for 32% of total wafer sales during the quarter, compared to 35% in the previous quarter.

Geographically, revenues from North America accounted for 74% of total wafer sales. Meanwhile, sales from Asia Pacific, Europe and Japan accounted for 13%, 9% and 4% of wafer sales, respectively.

TSMC July 26, 2007		Page 3

II. Capacity

II. Capacity

		1Q07				2Q07				3Q07				4Q07				2007
Fab / (Wafer size)		(A)				(A)				(F)				(F)				(F)
Fab-2 (6”)1			257				257				273				273				1,060
Fab-3 (8”)			259				262				267				269				1,057
Fab-5 (8”)			144				155				163				166				627
Fab-6 (8”)			245				255				274				279				1,053
Fab-8 (8”)			239				239				260				265				1,004
Fab-12 (12”)2			169				180				198				221				768
Fab-14 (12”)2			103				113				154				176				546
WaferTech (8”)			104				105				106				106				419
TSMC (Shanghai) (8”)			90				94				99				106				389
TSMC total capacity (8” equiv. Kpcs)			1,836				1,913				2,113				2,237				8,099
SSMC (8”)			53				55				56				61				226
Total managed capacity (8” equiv. Kpcs)			1,890				1,967				2,169				2,298				8,325

Capacity :

Total TSMC managed capacity was 1,967K 8-inch equivalent wafers in 2Q07, 4% higher than 1Q07. TSMC managed capacity in 3Q07 will increase by 10% sequentially to reach 2,169K 8-inch equivalent wafers.

Total managed capacity for year 2007 is expected to be 8,325K 8-inch equivalent wafers, up 18% from 7,062K 8-inch equivalent wafers in year 2006.

III. Profit & Expense Analysis

III — 1. Gross Profit Analysis

(In NT billions)		2Q07				1Q07				2Q06
COGS			42.7				40.3				39.6
Depreciation			17.9				18.5				16.5
Other MFG Cost			24.8				21.8				23.1
Gross Profit			32.2				24.6				42.5
Gross Margin			43.0	%			37.9	%			51.8	%

Gross Profit Analysis:

Consolidated gross profit for the second quarter 2007 was NT$32 billion, or 43% of net sales, up from a gross profit of NT$25 billion, or 37.9% of net sales, in the previous quarter. Second quarter gross margin improved by 5.1 percentage points primarily due to higher capacity utilization and lower depreciation expenses, offset slightly by a lower average selling price.

TSMC July 26, 2007		Page 4

III — 2. Operating Expenses *

(In NT billions)		2Q07				1Q07				2Q06
Total Operating Exp.			7.45				6.73				7.18
SG&A			3.15				2.79				3.08
Research & Development			4.30				3.94				4.10

Operating Expenses:

Total operating expenses for 2Q07 were NT$7.4 billion, compared to NT$6.7 billion in the prior quarter. Total operating expenses represented 10% of net sales, down slightly from 10.4% in first quarter of 2007.

Research and development expenditures increased by NT$359 million sequentially, largely due to increased R&D spending on 45nm and 32nm related projects.

SG&A expenses were NT$3.1 billion for the quarter, an increase of NT$354 million quarter-over-quarter, mainly due to higher level of business activities.

III — 3. Non-Operating Items

(In NT millions)		2Q07				1Q07				2Q06
Non-Operating Income/(Exp.)			2,802				1,830				299
Net Interest Income/(Exp.)			1,338				1,162				924
Other Non-Operating			1,464				668				(625	)
L-T Investments			488				361				650
SSMC			233				70				471
Others			255				291				179
Total Non-Operating Items			3,290				2,191				949

Non-Operating Items:

Combined result from non-operating income and long-term investments was a gain of NT$3.3 billion for second quarter of 2007.

Compared to 1Q07, higher non-operating income was mainly due to higher interest income, an increase in mark-to-market adjustment on certain marketable securities, and lawsuit settlement received from SMIC.

Net investment income increased slightly to reach NT$488 million in the quarter, reflecting improved operating performance at SSMC.

TSMC July 26, 2007		Page 5

IV. Financial Condition Review

IV — 1. Liquidity Analysis
(Selected Balance Sheet Items)

(In NT billions)		2Q07				1Q07				2Q06
Cash & Marketable Securities			233.1				217.4				211.6
Accounts Receivable — Trade			37.1				33.1				38.0
Inventory			24.0				22.3				20.1
Total Current Assets			304.6				286.1				279.7
Accounts Payable			28.2				19.2				27.5
Current Portion of Bonds Payable			4.5				4.5				2.5
Accrued Cash Dividend & Profit Sharing			82.1				0.0				65.2
Accrued Liabilities and Others			17.6				21.4				15.1
Total Current Liabilities			132.4				45.1				110.3
Current Ratio (x)			2.3				6.3				2.5
Net Working Capital			172.2				241.0				169.4

Liquidity Analysis:

Total cash and marketable securities increased by NT$16 billion in the second quarter of 2007, mainly due to free cash flows generated during the quarter. As a result, TSMC ended the quarter with NT$305 billion in total current assets, compared to NT$286 billion at the end of the previous quarter.

Total current liabilities were NT$132 billion at the end of the quarter, compared to NT$45 billion at the end of the previous quarter. The increase was mainly due to NT$ 77.5 billion and NT$4.6 billion payables accrued for cash dividends and employee bonuses, respectively.

As a result, net working capital decreased to NT$172 billion with a current ratio of 2.3.

IV — 2. Receivable/Inventory Days

		2Q07				1Q07				2Q06
Days of Receivable			44				47				44
Days of Inventory			52				52				47

Receivable/Inventory Days Trend:

Days of receivable were 44 days in 2Q07, compared to 47 days in the previous quarter.

Days of inventory remained flat at 52 days.

IV — 3. Debt Service

(In NT billions)		2Q07				1Q07				2Q06
Cash & Marketable Securities			233.1				217.4				211.6
Interest-Bearing Debt			26.3				26.2				27.2
Net Cash Reserves			206.8				191.2				184.4

Debt Service:

As a result of the free cash flows generated during the quarter, net cash reserves — defined as the excess of cash and short-term marketable securities over interest-bearing debt — increased by NT$16 billion to reach NT$207 billion in 2Q07.

Page 6

TSMC
July 26, 2007

V. Cash Flow & CapEx

V — 1. Cash Flow Analysis

(In NT billions)		2Q07				1Q07				2Q06
Net Income			25.5				18.8				34.0
Depreciation & Amortization			19.6				20.3				17.9
Other Op Sources/(Uses)			(10.4	)			(1.0	)			(1.5	)
Total Op Sources/(Uses)			34.7				38.1				50.4
Capital Expenditure			(25.3	)			(14.0	)			(21.4	)
Marketable Financial Instruments			15.8				3.5				(7.8	)
Other Investing Sources/(Uses)			(0.7	)			(2.9	)			(1.1	)
Net Investing Sources/(Uses)			(10.2	)			(13.4	)			(30.3	)
Repayment of Bonds Payable			0.0				(2.5	)			0.0
Other Financing Sources/(Uses)			(0.5	)			(0.3	)			0.1
Net Financing Sources/(Uses)			(0.5	)			(2.8	)			0.1
Net Cash Position Changes			24.0				21.9				20.2
Exchange Rate Changes & Others			(0.9	)			0.6				(0.0	)
Ending Cash Balance			163.4				140.3				141.5

Summary of Cash Flow:

During second quarter of 2007, TSMC generated NT$35 billion in cash from operating activities, mainly from net income of NT$25 billion and depreciation & amortization of NT$20 billion, offset in part by the change in net working capital.

Net cash used in investment activities totaled NT$10 billion, mainly due to capital expenditures of NT$25 billion, partially offset by an NT$16 billion in net proceeds from the disposition of marketable financial instruments.

Net cash used in financing activities was NT$1 billion during the quarter.

As a result, TSMC ended the quarter with a cash balance of NT$163 billion, NT$23 billion higher than in 1Q07.

Operating and Free Cash Flows:

TSMC continues to generate strong operating cash flows and free cash flows. Cash flows generated from operating activities were NT$35 billion. Free cash flows, defined as the excess of operating cash flows over capital expenditures, totaled NT$9 billion in 2Q07, compared to NT$24 billion generated in the previous quarter, mainly due to higher level of capital expenditures in 2Q07.

V — 3. Capital Expenditures

(In US millions)		2Q07				1Q07				YTD
TSMC			747				419				1,166
XinTec and GUC			13				3				16
TSMC Shanghai & WaferTech			4				2				6
Other TSMC Subsidiaries			2				0				2
Total TSMC			766				424				1,190

Capital Expenditures:

Capital expenditures for TSMC consolidated group totaled US$766 million during the quarter. Most of the spending was for the purchase of 12-inch production equipment.

For year 2007, total capital expenditures for TSMC consolidated group is expected to be in the range of US$2.6 billion to US$2.8 billion, unchanged from our previous guidance.

Page 7

TSMC
July 26, 2007

VI. Recap of Recent Important Events & Announcements

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

		June 30, 2007 (audited)												March 31, 2007 (unaudited)								June 30, 2006 (audited)								QoQ								YoY
		USD				NTD				%				NTD				%				NTD				%				Amount				%				Amount				%
ASSETS
Current Assets
Cash and Cash Equivalents		$	4,991			$	163,391				25.6			$	140,274				23.0			$	141,452				23.8			$	23,117				16.5			$	21,939				15.5
Investments in Marketable Financial Instruments			2,129				69,685				10.9				77,096				12.7				70,139				11.8				(7,411	)			-9.6				(454	)			(0.6	)
Accounts Receivable — Trade			1,132				37,054				5.8				33,094				5.4				37,969				6.4				3,960				12.0				(915	)			-2.4
Inventories, Net			735				24,045				3.8				22,259				3.7				20,051				3.4				1,786				8.0				3,994				19.9
Other Current Assets			319				10,464				1.7				13,356				2.2				10,079				1.7				(2,892	)			(21.6	)			385				3.8
Total Current Assets			9,306				304,639				47.8				286,079				47.0				279,690				47.1				18,560				6.5				24,949				8.9
Long-Term Investments			1,379				45,153				7.1				52,185				8.6				42,778				7.2				(7,032	)			-13.5				2,375				5.6
Property, Plant and Equipment			23,434				767,100				120.3				734,182				120.6				681,123				114.7				32,918				4.5				85,977				12.6
Less: Accumulated Depreciation			(15,351	)			(502,495	)			-78.8				(483,834	)			-79.5				(429,993	)			-72.4				(18,661	)			3.9				(72,502	)			16.9
Property, Plant and Equipment, Net			8,083				264,605				41.5				250,348				41.1				251,130				42.3				14,257				5.7				13,475				5.4
Other Assets			705				23,037				3.6				20,159				3.3				20,145				3.4				2,878				14.3				2,892				14.4
Total Assets		$	19,473			$	637,434				100.0			$	608,771				100.0			$	593,743				100.0			$	28,663				4.7			$	43,691				7.4
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-Term Bank Loans		$	3			$	99				—			$	79				—			$	—				—			$	20				24.4			$	99
Accounts Payables			341				11,157				1.8				10,129				1.7				10,282				1.7				1,028				10.2				875				8.5
Payables to Contractors and Equipment Suppliers			520				17,010				2.7				9,094				1.5				17,214				2.9				7,916				87.1				(204	)			-1.2
Accrued Expenses and Other Current Liabilities			3,035				99,365				15.5				21,101				3.4				80,300				13.6				78,264				370.9				19,065				23.7
Current Portion of Bonds Payable and Long-Term liabilities			146				4,782				0.8				4,714				0.8				2,505				0.4				68				1.4				2,277				90.8
Total Current Liabilities			4,045				132,413				20.8				45,117				7.4				110,301				18.6				87,296				193.5				22,112				20.0
Bonds Payable			382				12,500				2.0				12,500				2.1				17,000				2.9				—				0.0				(4,500	)			-26.5
Other Long-Term Liabilities			570				18,649				2.9				19,415				3.2				18,943				3.1				(766	)			(3.9	)			(294	)			(1.6	)
Total Liabilities			4,997				163,562				25.7				77,032				12.7				146,244				24.6				86,530				112.3				17,318				11.8
Shareholders’ Equity Attributable to Shareholders of the Parent
Capital Stock			8,072				264,235				41.5				258,330				42.4				258,234				43.5				5,905				2.3				6,001				2.3
Capital Surplus			1,641				53,726				8.4				54,231				8.9				53,822				9.1				(505	)			(0.9	)			(96	)			-0.2
Retained Earnings			4,705				154,010				24.2				215,963				35.5				136,723				23.0				(61,953	)			(28.7	)			17,287				12.6
Treasury Stock			(28	)			(918	)			-0.1				(918	)			-0.2				(918	)			-0.1				—				0.0				—				—
Others			(5	)			(167	)			-0.1				1,020				0.2				(1,029	)			-0.2				(1,187	)			-116.3				862				-83.8
Total Equity Attributable to Shareholders of the Parent			14,385				470,886				73.9				528,626				86.8				446,832				75.3				(57,740	)			(10.9	)			24,054				5.4
Minority Interest			91				2,986				0.4				3,113				0.5				667				0.1				(127	)			(4.1	)			2,319				347.7
Total Shareholders’ Equity			14,476				473,872				74.3				531,739				87.3				447,499				75.4				(57,867	)			(10.9	)			26,373				5.9
Total Liabilities & Shareholders’ Equity		$	19,473			$	637,434				100.0			$	608,771				100.0			$	593,743				100.0			$	28,663				4.7			$	43,691				7.4

Note:		(1) Amounts in New Taiwan dollars have been translated into U.S. dollars at the rate of NT$32.735 as of June 30, 2007.

2.Financial StatementBS

		TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES Unaudited Consolidated Condensed Income Statements For the Three Months Ended June 30, 2007, March 31, 2007, and June 30, 2006 (Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”) (1) Except for Per Share Amounts and Shares Outstanding)

		Q2 2007												Q1 2007								Q2 2006								QoQ								YoY
		USD				NTD				%				NTD				%				NTD				%				Amount				%				Amount				%
Net Sales		$	2,261			$	74,918				100.0			$	64,897				100.0			$	82,118				100.0			$	10,021				15.4				($7,200	)			-8.8
Cost of Sales			(1,290	)			(42,738	)			-57.0				(40,287	)			-62.1				(39,620	)			-48.2				(2,451	)			6.1				(3,118	)			7.9
Gross Profit			971				32,180				43.0				24,610				37.9				42,498				51.8				7,570				30.8				(10,318	)			-24.3
Operating Expenses
Research and Development Expenses (4)			(130	)			(4,301	)			-5.7				(3,942	)			-6.1				(4,096	)			-5.0				(359	)			9.1				(205	)			5.0
General and Administrative Expenses (4)			(65	)			(2,151	)			-2.9				(1,902	)			-2.9				(2,086	)			-2.5				(249	)			13.1				(65	)			3.1
Sales and Marketing Expenses (4)			(30	)			(994	)			-1.4				(889	)			-1.4				(993	)			-1.3				(105	)			11.7				(1	)			0.1
Total Operating Expenses			(225	)			(7,446	)			-10.0				(6,733	)			-10.4				(7,175	)			-8.8				(713	)			10.6				(271	)			3.8
Income from Operations			746				24,734				33.0				17,877				27.5				35,323				43.0				6,857				38.4				(10,589	)			-30.0
Non-Operating Income, Net			85				2,802				3.7				1,830				2.8				299				0.4				972				53.1				2,503				835.4
Investment Gains			15				488				0.7				361				0.6				650				0.8				127				35.4				(162	)			-24.8
Income before Income Tax			846				28,024				37.4				20,068				30.9				36,272				44.2				7,956				39.6				(8,248	)			-22.7
Income Tax (Expenses) Benefits			(73	)			(2,394	)			-3.2				(1,107	)			-1.7				(2,281	)			-2.8				(1,287	)			116.2				(113	)			5.0
Net Income Before Cumulative Effect of Changes in Accounting Principles			773				25,630				34.2				18,961				29.2				33,991				41.4				6,669				35.2				(8,361	)			-24.6
Cumulative Effect of Changes in Accounting Principles (Net of Tax)			—				—				—				—				—				—				—				—				—				—				—
Net Income			773				25,630				34.2				18,961				29.2				33,991				41.4				6,669				35.2				(8,361	)			-24.6
Minority Interest			(4	)			(146	)			-0.2				(122	)			-0.2				11				0.0				(24	)			19.9				(157	)			—
Net Income Attributable to Shareholders of the Parent			769				25,484				34.0				18,839				29.0				34,002				41.4				6,645				35.3				(8,518	)			-25.1
Earnings per Share — Diluted		$	0.03			$	0.96							$	0.71							$	1.29							$	0.25				35.3				-$0.32				-25.1
Earnings per ADR — Diluted (2)		$	0.15			$	4.82							$	3.57							$	6.44							$	1.26				35.3				-$1.62				-25.1
Weighted Average Outstanding Shares — Diluted (‘M) (3)							26,409								26,406								26,394

2.Financial StatementIS (Q)

		For The Six Months Ended June 30
		2007												2006								YoY
		USD				NTD				%				NTD				%				Amount				%
Net Sales		$	4,235			$	139,815				100.0			$	159,968				100.0				($20,153	)			-12.6
Cost of Sales			(2,515	)			(83,025	)			-59.4				(79,743	)			-49.8				(3,282	)			4.1
Gross Profit			1,720				56,790				40.6				80,225				50.2				(23,435	)			-29.2
Operating Expenses
Research and Development Expenses (4)			(250	)			(8,243	)			-5.9				(7,936	)			-5.0				(307	)			3.9
General and Administrative Expenses (4)			(123	)			(4,053	)			-2.9				(3,950	)			-2.5				(103	)			2.6
Sales and Marketing Expenses (4)			(56	)			(1,883	)			-1.3				(2,114	)			-1.3				231				-10.9
Total Operating Expenses			(429	)			(14,179	)			-10.1				(14,000	)			-8.8				(179	)			1.3
Income from Operations			1,291				42,611				30.5				66,225				41.4				(23,614	)			-35.7
Non-Operating Income, Net			140				4,632				3.3				1,716				1.1				2,916				170.0
Investment Gains			26				849				0.6				1,250				0.8				(401	)			-32.1
Income before Income Tax			1,457				48,092				34.4				69,191				43.3				(21,099	)			-30.5
Income Tax (Expenses) Benefits			(106	)			(3,501	)			-2.5				(4,136	)			-2.6				635				-15.3
Net Income before Cumulative Effect of Changes in Accounting Principles			1,351				44,591				31.9				65,055				40.7				(20,464	)			-31.5
Cumulative Effect of Changes in Accounting Principles (Net of Tax)			0				0				0.0				1,607				1.0				(1,607	)			-100.0
Net Income			1,351				44,591				31.9				66,662				41.7				(22,071	)			-33.1
Minority Interest			(9	)			(268	)			-0.2				(53	)			-0.1				(215	)			403.9
Net Income Attributable to Shareholders of the Parent			1,342				44,323				31.7				66,609				41.6				(22,286	)			-33.5
Earnings per Share — Diluted		$	0.05			$	1.68							$	2.52								-$0.85				-33.5
Earnings per ADR — Diluted (2)		$	0.25			$	8.39							$	12.62								-$4.23				-33.5
Weighted Average Outstanding Shares — Diluted (‘M) (3)							26,409								26,394