Registration No. 333-126380

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

To

FORM F-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

(Exact Name of Registrant as Specified in Its Charter)

Taiwan Semiconductor

Manufacturing Company Limited

(Translation of Registrant’s Name into English)

No. 8, Li-Hsin Road 6

Hsinchu Science Park

Hsinchu, Taiwan

(886-3) 563-6688

(Address and Telephone Number of Registrant’s Principal Executive Offices)

TSMC North America

2585 Junction Avenue

San Jose, CA 95134, USA

(408) 382-8000

(Name, Address and Telephone Number of Agent For Service)

With copies to:

      Approximate date of commencement of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective.

      If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.   o

      If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box.   o

      If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

      If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

      If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.   o

      The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Subject to Completion. Dated July 27, 2005.

Taiwan Semiconductor Manufacturing Company Limited

(Incorporated as a company limited by shares in the Republic of China)

       This is a global offering of 150,000,000 American depositary shares, or ADSs, representing common shares of Taiwan Semiconductor Manufacturing Company Limited, or Taiwan Semiconductor. The selling shareholders named on page 25 are selling all of the ADSs being offered in this offering. We will not receive any proceeds from the sale of ADSs by the selling shareholders. The ADSs are not being offered in the Republic of China, or ROC. Each ADS represents five common shares, par value NT$10 per share, of Taiwan Semiconductor. The ADSs are evidenced by American depositary receipts, or ADRs. Some of the underwriters are expected to offer the ADSs through their respective selling agents.

       Our ADSs are listed on The New York Stock Exchange under the symbol “TSM”. The last reported sale price of the ADSs on The New York Stock Exchange on July 26, 2005 was US$8.69 per ADS. Our outstanding common shares are listed on the Taiwan Stock Exchange under the symbol “2330”. The closing price of our common shares on the Taiwan Stock Exchange on July 26, 2005 was NT$55.60 per share, which is equivalent to approximately US$1.74, assuming an exchange rate of NT$31.94=US$1.00.

       See “Risk Factors” beginning on page 12 to read about factors you should consider before buying the ADSs.

       Neither the United States Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

       The selling shareholders have granted the underwriters an option exercisable within 30 days from the date of this prospectus to purchase up to an aggregate of 22,500,000 additional ADSs from them to cover overallotments, if any.

       The underwriters expect to deliver the ADRs evidencing the ADSs through the book-entry transfer facilities of The Depository Trust Company against payment in U.S. dollars in New York, New York on or about                     , 2005.

Sole Global Coordinator

Goldman Sachs International

Joint Bookrunners

Joint Lead Manager

Merrill Lynch & Co.

Co-Managers

Deutsche Bank Securities

Prospectus dated                     , 2005.

       This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). The ADSs are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such ADSs will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

       To the extent that the offer of the ADSs is made in any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the “Prospectus Directive”) before the date of publication of a prospectus in relation to the ADSs which has been approved by the competent authority in that Member State in accordance with the Prospectus Directive (or, where appropriate, published in accordance with the Prospectus Directive and notified to the competent authority in that Member State in accordance with the Prospectus Directive), the offer (including any offer pursuant to this document) is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive or has been or will be made otherwise in circumstances that do not require us to publish a prospectus pursuant to the Prospectus Directive.

       This prospectus, including the information summarized below, contains translations of some NT dollar amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from NT dollars to U.S. dollars and from U.S. dollars to NT dollars were made at the noon buying rate in The City of New York for cable transfers in NT dollars per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York, or the noon buying rate, as of June 30, 2005, which was NT$31.64 to US$1.00. We make no representation that the NT dollar or US dollar amounts referred to herein could have been or could be converted into U.S. dollars or NT dollars, as the case may be, at any particular rate or at all. On July 26, 2005, the noon buying rate was NT$31.94 to US$1.00.

       In connection with this offering, Goldman Sachs International and J.P. Morgan Securities Ltd., or any person acting for them, may overallot or effect transactions with a view to supporting the market price of the ADSs and, subject to applicable ROC Laws, the common shares at a level higher than that which might otherwise prevail for a limited period of time after the issue date. However, there is no obligation on Goldman Sachs International, J.P. Morgan Securities Ltd., or their agents, to do this. Such stabilizing, if commenced, may be discontinued at any time, and must be brought to an end after a limited period. See “Underwriting”.

       All references in this prospectus to silicon wafer quantities are specified in 200 mm wafer equivalents, unless otherwise specified. When we refer to the capacity of wafer fabrication facilities, we are referring to the installed capacity based on specifications established with the manufacturer of the equipment used in those facilities. We can exceed 100% of these capacity levels through, for example, enhanced productivity beyond that assumed when these specifications were initially established.

PROSPECTUS SUMMARY

       Financial and other information about us is set forth in our annual report on Form 20-F for the year ended December 31, 2004 and other documents incorporated herein by reference, copies of which may be obtained as indicated under “Where You Can Find More Information”.

Our Business

       We are currently the world’s largest dedicated semiconductor foundry. We were founded in 1987 as a joint venture among the ROC government, Koninklijke Philips Electronics N.V., or Philips, and other private investors and were incorporated in the ROC on February 21, 1987. Our common shares have been listed on the Taiwan Stock Exchange since September 5, 1994 and our ADSs have been listed on The New York Stock Exchange since October 8, 1997.

       As a foundry, we manufacture semiconductors using our advanced production processes for our customers based on their own or third parties’ proprietary integrated circuit designs. We offer a comprehensive range of leading edge wafer fabrication processes, including processes to manufacture CMOS logic, mixed-signal, radio frequency and embedded memory and BiCMOS mixed-signal and other semiconductors. IC Insights estimates that our revenue market share among dedicated foundries worldwide was 53% in 2003 and 47% in 2004. We also offer design, mask making, probing, testing and assembly services.

       We believe that we are the technology leader among the dedicated foundries in terms of our net sales of advanced semiconductors with a resolution of 0.13 micron and below, and are one of the leaders in the semiconductor industry generally. For example, in February 2004, we announced that our industry-leading low-k technology had entered commercial production and that we were the first semiconductor foundry with proven low-k technology in commercial production, in both the 0.13 micron process technology and the 90-nanometer Nexsys^sm technology. The 90-nanometer Nexsys^sm technology is the first process technology based entirely on low-k dielectrics. We also believe that our large capacity, particularly for advanced technologies, is a major competitive advantage.

       We currently operate one 150mm wafer fab, seven 200mm wafer fabs and two 300 mm wafer fabs, including Fab 14, where we commenced production in the fourth quarter of 2004. As of December 31, 2004, our monthly capacity was 479,734 wafers, compared to 402,774 wafers at the end of 2003. This increase was primarily due to the expansion of our 0.18, 0.15, 0.13 and 0.09 micron advanced technologies. Based upon preliminary estimates, we currently expect our monthly capacity to be approximately 585,100 wafers at the end of 2005.

       We count among our customers many of the world’s leading semiconductor companies, ranging from fabless semiconductor companies such as Altera Corporation, ATI Technology Inc., Broadcom Corporation, NVIDIA Corporation, Qualcomm and VIA Technology, Inc., to integrated device manufacturing companies such as Analog Devices, Inc., Freescale Semiconductor Inc. and Philips, and systems companies. Fabless semiconductor companies and integrated device manufacturers accounted for approximately 68% and 31%, respectively, of our net sales in 2004, and approximately 71% and 28%, respectively, of our net sales in 2003.

       Our principal executive office is currently located at No. 8, Li-Hsin Road 6, Hsinchu Science Park, Taiwan, Republic of China. Our telephone number at that office is (886-3) 563-6688. Our web site is www.tsmc.com. Information contained on our web site does not constitute part of this prospectus.

THE OFFERING

       See “Selling Shareholders” on page 25 for a list of the selling shareholders.

SUMMARY CONSOLIDATED FINANCIAL INFORMATION AND OPERATING DATA

       The summary financial information below should be read in conjunction with “Item 5. Operating and Financial Reviews and Prospects” and the consolidated financial statements, notes to the consolidated financial statements and other financial information included in our Form 20-F for the year ended December 31, 2004, incorporated by reference in this prospectus. The summary income statement data and cash flow data for the years ended December 31, 2002, 2003 and 2004 and the summary balance sheet data as of December 31, 2003 and 2004 set forth below are derived from our audited consolidated financial statements included in our Form 20-F for the year ended December 31, 2004, incorporated by reference in this prospectus, and should be read in conjunction with, and are qualified in their entirety by reference to, these consolidated financial statements, including the notes to these consolidated financial statements. The summary income statement data and cash flow data for the years ended December 31, 2000 and 2001 and the summary balance sheet data as of December 31, 2000, 2001 and 2002 set forth below are derived from our audited consolidated financial statements not included in our Form 20-F for the year ended December 31, 2004. The consolidated financial statements set forth below have been prepared and presented in accordance with generally accepted accounting principles in the Republic of China, also called ROC GAAP, which differ in some material respects from generally accepted accounting principles in the United States of America, also called US GAAP. Please see note 27 to our audited consolidated financial statements included in our Form 20-F for the year ended December 31, 2004, incorporated by reference in this prospectus, for a description of the principal differences between ROC GAAP and US GAAP for the periods covered by these financial statements.

       Change of Chief Executive Officer and Other Key Management. Effective July 1, 2005, Mr. Rick Tsai replaced Mr. Morris Chang as our Chief Executive Officer. Mr. Rick Tsai continues to serve also as a director and President, but ceased to serve as our Chief Operating Officer. Mr. Morris Chang continues to serve as our Chairman. Moreover, also effective July 1, 2005, Mr. F.C. Tseng ceased to serve as our Deputy Chief Executive Officer and assumed the position as our Vice Chairman.

       Audit Committee Financial Expert. Due to the resignation of Mr. Robbert Brakel, our previous audit committee financial expert, as a member of our audit committee, effective since June 1, 2005, our audit committee consists of three members, each of which is an independent director. In addition, Mr. Michel Besseau has been appointed to serve as an outside financial expert consultant to the audit committee effective June 1, 2005.

       Stock Dividend. A stock dividend of approximately 4.99971 common shares per 100 common shares in respect of net income in the year ended December 31, 2004 was paid on July 7, 2005 to holders of common shares and on July 12, 2005 to holders of ADSs. Since the record date for such stock dividend was June 19, 2005 for common shares and June 15, 2005 for ADSs, the numbers of common shares and ADSs owned, the numbers of common shares and ADSs outstanding and the related percentage amounts as of June 30, 2005 include such stock dividend. Accordingly, as of June 30, 2005, a total of 24,726,128,803 common shares was outstanding, 3,508,832,129 of which were represented by ADSs.

Unconsolidated Financial Information as of and for the Six Months Ended June 30, 2004 and 2005

       As a result of our common shares being publicly issued, we are required on an on-going basis to file with the ROC Financial Supervisory Commission and the Taiwan Stock Exchange unaudited unconsolidated financial statements as of and for the year-to-date period ending on each of March 31 and September 30. We also regularly release unconsolidated financial statements as of and for the six months ended June 30 and as of and for the year ended December 31, prepared in accordance with accounting principles generally accepted in the ROC (“ROC GAAP”). ROC GAAP differ in some material respects from US GAAP. Please see note 27 to our audited consolidated financial statements included in our Form 20-F for the year ended December 31, 2004, which is incorporated by reference in this prospectus, for a discussion of the material differences between ROC GAAP and US GAAP for the periods covered by these financial statements. In addition, by their nature, unconsolidated financial statements are not comparable in material respects with consolidated financial statements, and should not be compared to the consolidated financial statements for prior periods. Because we have released certain unconsolidated financial information as of and for the six months ended June 30, 2005, we are required under applicable rules of the SEC to include this unconsolidated financial information in this prospectus.

       The unconsolidated financial information summarized below does not consolidate the financial position and operations of any of our subsidiaries. Instead, on an unconsolidated basis, we account for our investments in our subsidiaries, including TSMC International Investment Ltd. and TSMC Development, Inc., our holding companies for WaferTech, by using equity method accounting, which differs materially from consolidation. Other differences resulting from non-consolidation include:

       Because we account for subsidiaries in our unconsolidated accounts based on the equity method, our unconsolidated net assets and net income would generally be the same as in our consolidated accounts. Other amounts in other line items may be materially different in our

Summary Unconsolidated Financial Information

Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004

Net Sales and Gross Margin

       Our unconsolidated net sales for the first half of 2005 decreased by NT$8,213 million, or 6.7%, from the first half of 2004. This decrease was primarily due to a decrease in customer demand compared with the first half of 2004, which resulted in a 2.7% decrease in wafers sold for the first half of 2005, from 2,454 thousand in the first half of 2004 to 2,387 thousand in the first half of 2005. The decrease in sales volume was partially offset by a 1.5% increase in the average selling price of our wafers in US dollar terms for the first half of 2005. The increase in the average selling price of our wafers in US dollar terms was mainly the result of a more favorable product mix as we saw a shift in product mix toward higher priced products using more advanced technology, partially offset by a decline in pure pricing. Our net sales for the first half of 2005 compared with the first half of 2004 were also negatively impacted by a stronger NT dollar against the US dollar, as the majority of our sales are denominated in US dollars. We currently expect our wafer shipments to increase by a mid-teen percentage point and the average selling price to decline by a low to mid single digit percentage point in the third quarter of 2005 compared with the second quarter of 2005.

       Our unconsolidated gross margin fluctuates, depending on the level of utilization of manufacturing capacity, wafer shipments and product mix, among other factors. Our gross margin decreased to 39.3% of net sales for the first half of 2005 from 41.6% of net sales for the first half of 2004. This decrease was mainly attributable to lower capacity utilization, as we saw our capacity utilization decrease to 82% in the first half of 2005 from 106% in the first half of 2004. Depreciation and amortization expenses related to cost of sales increased from NT$28,760 million in the first half of 2004 to NT$31,973 million (US$1,011 million) in the first half of 2005. This increase in depreciation and amortization expenses in the first half of 2005 reflects our capital investment in order to ramp up Fab 12 (Phase I and II) and Fab 14 (Phase I). The unfavorable impact of lower

Operating Expenses

       Our unconsolidated operating expenses decreased by NT$200 million in the first half of 2005, or 1.8%, from the first half of 2004.

Research and Development Expenses

       Unconsolidated research and development expenses increased by NT$807 million, or 13.9%, to NT$6,632 million (US$210 million) in the first half of 2005 from NT$5,825 million in the first half of 2004. This increase in research and development expenses was primarily due to the increase in expenses relating to development activities in 65 nanometer technologies in the first half of 2005. We currently anticipate that our annual research and development expenses will remain at a similar absolute level in 2005 as in 2004.

Marketing, General and Administrative Expenses

       Unconsolidated marketing, general and administrative expenses decreased by NT$1,007 million, or 18.8%, to NT$4,362 million (US$138 million) in the first half of 2005 from NT$5,369 million in the first half of 2004. The decrease in marketing, general and administrative expenses was mainly due to the decrease in expenses in connection with the opening of Fab 14 (Phase I).

Non-Operating Income and Expenses

       Unconsolidated non-operating income and gains decreased by NT$222 million in the first half of 2005, or 7.2%, from the first half of 2004. This decrease primarily resulted from a NT$2,054 million decrease in net investment income recognized by the equity method as a result of lower levels of profit from investees, partially offset by a NT$1,067 million increase in interest income reflecting the addition of a significant amount of interest bearing instruments to our investment portfolio and the additional hedging activities using cross currency swap (“CSS”) agreements, and a NT$711 million settlement income as a result of the receipt of payments from the settlement of the lawsuit against Semiconductor Manufacturing International (Shanghai) Corporation and SMIC Americas.

       Unconsolidated non-operating expenses and losses increased by NT$1,522 million in the first half of 2005, or 127.6%, from the first half of 2004. This increase was mainly attributable to a NT$786 increase in net investment loss recognized by the equity method as a result of lower levels of performance of investees and a NT$784 million increase in interest expenses as a result of the aforementioned CCS hedging activities.

Income Tax Benefit

       Unconsolidated income tax benefit increased by NT$547 million in the first half of 2005, or 85%, from the first half of 2004. This increase mainly resulted from an increase in tax credits as a result of increased capital expenditures in the first half of 2005 compared with the first half of 2004.

Consolidated Financial Information as of and for the Six Months Ended June 30, 2005

       Beginning from 2005, in addition to annual consolidated financial statement as of and for the year ended December 31, we are also required under applicable rules issued by the ROC Financial Supervisory Commission to file interim consolidated financial statements as of and for the six months ended June 30, prepared in accordance with ROC GAAP, which differ in some material respects from US GAAP. Please see note 27 to our audited consolidated financial statements included in our Form 20-F for the year ended December 31, 2004, which is incorporated by reference in this prospectus for a discussion of the material differences between ROC GAAP and US GAAP for the periods covered by these financial statements. Because this requirement of the ROC Financial Supervisory Commission has come into effect for the first time in 2005, we have not prepared comparative consolidated financial statements as of and for the six months ended June 30, 2004.

       In addition, consolidated results of operations for the six months ended June 30, 2005 may not be indicative of our unconsolidated or consolidated results of operations for the full year ending December 31, 2005.

Summary Consolidated Financial Information

RISK FACTORS

       We wish to caution readers that the following important factors, and those important factors described in other reports submitted to, or filed with, the Securities and Exchange Commission, among other factors, could affect our actual results and could cause our actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. In particular, as we are a non-U.S. company, there are risks associated with investing in our ADSs that are not typical for investments in the shares of U.S. companies. Prior to making an investment decision, you should carefully consider all of the information contained in this prospectus, including the following risk factors.

Risks Relating to Our Business

       Since we are dependent on the highly cyclical semiconductor and microelectronics industries, which have experienced significant and sometimes prolonged downturns, our revenues, earnings and margins may fluctuate significantly.

       Our semiconductor foundry business is affected by market conditions in the highly cyclical semiconductor and microelectronics industries. Most of our customers operate in these industries. Variations in order levels from our customers result in volatility in our revenues and earnings. From time to time, the semiconductor and microelectronics industries have experienced significant, and sometimes prolonged, downturns. Because our business is, and will continue to be, dependent on the requirements of semiconductor and microelectronics companies for our services, downturns in the semiconductor and microelectronics industries lead to reduced demand for our services. If we cannot take appropriate actions such as reducing our costs to sufficiently offset declines in demand, our revenues and earnings will suffer during downturns.

       Overcapacity in the semiconductor industry may reduce our revenues, earnings and margins.

       The prices we can charge our customers for our services are significantly dependent on the overall worldwide supply of integrated circuits and semiconductor products, which is outside of our control. In a period of overcapacity, we may have to lower the prices we charge our customers for our services and/or we may have to operate at significantly less than full capacity. Such actions could reduce our margin and weaken our financial condition and results of operations. For example, due to the decreased annualized demand for semiconductors in 2001 and 2002, our average capacity utilization rate decreased to 51% during 2001, and 73% during 2002 as compared with 106% during 2000.

       Decreases in demand and average selling prices for products that contain semiconductors may adversely affect demand for our products and may result in a decrease in our revenues and earnings.

       A vast majority of our sales revenue is derived from customers who use our products in personal computers, communications devices and consumer electronics. Any significant decrease in the demand for these products may decrease the demand for our products and adversely affect our revenues. In addition, the historical and continuing trend of declining average selling prices of end use applications places pressure on the prices of the components that go into these end use applications. If the average selling prices of end use applications continue to decrease, the pricing pressure on components produced by us may lead to a reduction of our revenue.

       If we are unable to compete effectively in the highly competitive foundry segment of the semiconductor industry, we may lose customers and our profit margin and earnings may decrease.

       The markets for our foundry services are highly competitive both in Taiwan and internationally. We compete with other dedicated foundry service providers, as well as integrated device manufacturers. Some of these companies may have access to more advanced technologies and greater financial and other resources than us. Increases in competition may cause us to lose customers or to decrease our average selling prices.

       The semiconductor industry and the technologies used in it are constantly changing. If we do not anticipate these changes in technologies and rapidly develop new and innovative technologies, we may not be able to provide advanced foundry services on competitive terms. If we fail to achieve advances in technology or processes, or to obtain access to advanced technologies or processes developed by others, we may become less competitive.

       If we are unable to manage our expansion and the modification of our production facilities effectively, our growth prospects may be limited.

       We have recently been ramping up production at the Fab 12 (Phase II and III) facility in the Hsinchu Science Park and the Fab 14 (Phase I) facility in the Southern Taiwan Science Park. We have also recently completed the exterior construction of our Fab 14 (Phase II) facility in the Southern Taiwan Science Park.

       Although we have studied the potential effects of vibration from the high speed railway currently planned to pass through the Southern Taiwan Science Park and believe that the vibrations will not affect our yield rate for production in the Southern Taiwan Science Park, we can give no assurances that our yield will not be negatively affected after the high-speed railway has commenced operation.

       Expansion and modification of our production facilities will increase our costs. We will need to purchase additional equipment, train personnel to operate the new equipment or hire additional personnel. If we do not increase our net sales accordingly in order to offset these higher costs, our financial performance may be adversely affected.

       We may not be able to implement our planned growth or development if we are unable to accurately forecast and sufficiently meet our future capital requirements.

       Capital requirements are difficult to plan in the highly cyclical and rapidly changing semiconductor industry. We will continue to need capital to fund our operations and growth. Our ability to obtain external financing in the future is subject to a variety of uncertainties, including:

       Sufficient external financing may not be available to us on a timely basis, on acceptable terms, or at all. As a result, we may be forced to curtail our expansion and modification plans or delay the deployment of our services.

       We are dependent upon hiring and retaining qualified management and skilled technical and service personnel and our business could suffer if we are unable to retain and recruit such personnel.

       We depend on the continued services of our executive officers and skilled technical and other personnel. Our business could suffer if we lose the services of some of these personnel and we cannot adequately replace them. Moreover, we may be required to increase the number of employees in connection with any expansion, and there is intense competition for the services of these personnel.

       We may be unable to obtain in a timely manner and at a reasonable cost the equipment necessary for us to remain competitive.

       Our operations and expansion plans depend on our ability to obtain a significant amount of equipment from a limited number of suppliers and in a market that is characterized, from time to time, by intense demand, limited supply and long delivery cycles. During times of significant demand for this type of equipment, lead times for delivery can be as long as four to ten months or more. Shortages of equipment could result in an increase in their prices and longer delivery times. If we are unable to obtain equipment in a timely manner and at a reasonable cost, we may be unable to fulfill our customers’ orders, which could negatively impact our financial condition and results of operations.

       Our production operations require that we obtain adequate supplies of raw materials, such as silicon wafers, gases and chemicals, and photoresistors, on a timely basis. Shortages in the supply of some materials experienced by the semiconductor industry have in the past resulted in occasional price adjustments and delivery delays. Our revenue and earnings could decline if we are unable to obtain adequate supplies of high quality raw materials in a timely manner or if there are significant increases in the costs of raw materials that we cannot pass on to our customers.

       If the Ministry of Economic Affairs uses a substantial portion of our production capacity, we will not be able to service our other customers.

       According to our agreement with the Industrial Technology Research Institute of Taiwan, or ITRI, the Ministry of Economic Affairs of the ROC, or an entity designated by the Ministry of Economic Affairs, has an option to purchase up to 35% of our capacity. Although the Ministry of Economic Affairs has never exercised this option, if this option is exercised to any significant degree during tight market conditions, we may not be able to provide services to all of our other customers unless we are able to increase our capacity accordingly or outsource such increased demand and in a timely manner.

       Any inability to obtain, preserve and defend our intellectual property rights could harm our competitive position.

       Our ability to compete successfully and to achieve future growth will depend, in part, on our ability to protect our proprietary technologies and to secure on commercially reasonable terms certain technologies that we do not already own or license. In this regard, we are the beneficiary of both technology licenses and a significant number of patent cross license agreements that provide us with technologies or patent protection, as the case may be, that may be material to our business.

       We cannot ensure that we will be able to develop independently, or secure from any third party, all of the technologies required for upgrading our production capabilities.

       Litigation may also be necessary to enforce or defend our manufacturing processes, patents or other intellectual property rights. We have no means of knowing what patent applications have been filed in Taiwan, the United States or other jurisdictions until they are published or granted. Because of the complexity of the technologies used and the multitude of patents, copyrights and other overlapping intellectual property rights, it is often difficult for semiconductor companies to determine infringement. Therefore, the semiconductor industry is characterized by frequent litigation regarding patent, trade secret and other intellectual property rights. We have received, from time-to-time, communications from third parties asserting that our technologies, manufacturing processes, the design of the integrated circuits made by us or the use by our customers of semiconductors made by us may infringe their patents or other intellectual property rights. And, because of the nature of the industry, we may continue to receive such communications in the future. In some instances, these disputes have resulted in litigation. In the event any third party were to assert infringement claims against us or our customers, we may have to consider alternatives including, but not limited to:

       Any one or several of these and other developments could place substantial financial and administrative burdens on us and hinder our business. If we fail to obtain certain licenses and if

       We are subject to the risk of loss due to explosion and fire because some of the materials we use in our manufacturing processes are highly combustible.

       We use highly combustible materials such as silane and hydrogen in our manufacturing processes and are therefore subject to the risk of loss arising from explosion and fire which cannot be completely eliminated. Although we maintain comprehensive fire and casualty insurance up to policy limits, including insurance for loss of property and loss of profit resulting from business interruption, our insurance coverage may not be sufficient to cover all of our potential losses. If any of our fabs were to be damaged or cease operations as a result of an explosion and fire, it could reduce our manufacturing capacity and may cause us to lose important customers.

       Any impairment charges required under US GAAP may have a material adverse effect on our net income on a US GAAP reconciled basis.

       Under US GAAP, we are required to evaluate our equipment and other long-lived assets for impairment whenever there is an indication of impairment. If certain criteria are met, we are required to record an impairment charge. Please see note 27.c. to our consolidated financial statements included in our Form 20-F for the year ended December 31, 2004, which is incorporated by reference in this prospectus, for a discussion of the criteria which, if met, may require impairment charges.

       We currently are not able to estimate the extent or timing of any impairment charge for future years. Any impairment charge required under US GAAP may have a material adverse effect on our net income for subsequent periods on a US GAAP reconciled basis.

       The determination of an impairment charge at any given time is based significantly on our expected results of operations over a number of years subsequent to that time. As a result, an impairment charge is more likely to occur during a period when our operating results are otherwise already depressed. See “Item 5. Operating and Financial Review and Prospects — Critical Accounting Policies” included in our Form 20-F for the year ended December 31, 2004, which is incorporated by reference in this prospectus, for a discussion of our estimates made for determining an impairment charge.

       Any significant decrease in sales to one or more of our major customers may decrease our net sales and net income.

       In 2003 and 2004, our ten largest customers have accounted for 54% and 49%, respectively, of our net sales. In particular, our largest customer in 2003, NVIDIA Corporation, accounted for approximately 15% of our net sales in 2003. In 2004, no customer accounted for 10% or more of our net sales, and our five largest customers accounted for 32% of our net sales. The fact that a relatively limited number of customers constitute a significant portion of our revenue may remain as a business characteristic inherent to our extensive presence in the dedicated foundry segment of the semiconductor market. Also, we are the sole foundry service provider for certain of our customers. We cannot assure you that there will be no loss or cancellation of business from any of our major customers, in the future. Loss or cancellation of business from our most significant customers, should there be any, could significantly reduce our net sales and net income.

Risks Relating to the ROC

       Relations between the Republic of China and the People’s Republic of China (“PRC”) could negatively affect our business and financial status and therefore the market value of your investment.

       Taiwan has a unique international political status. The PRC does not recognize the sovereignty of the ROC. Although significant economic and cultural relations have been established during recent years between Taiwan and the PRC, relations have often been strained. The government of the PRC

       Our principal executive officers and our principal production facilities are located in Taiwan and a substantial majority of our net revenues are derived from our operations in Taiwan. Therefore, factors affecting military, political or economic conditions in Taiwan could have a material adverse effect on our results of operations, as well as the market price and the liquidity of our ADSs and common shares.

       Our production may be interrupted if we do not have access to sufficient amounts of fresh water or a sufficient supply of electricity.

       The semiconductor manufacturing process uses extensive amounts of fresh water and electricity. Due to the growth in semiconductor manufacturing capacity in Hsinchu Science Park and Southern Taiwan Science Park, the requirements for fresh water and power in these industrial parks have grown substantially. Taiwan experiences droughts from time to time, and in 2002 and 2003, Taiwan experienced serious droughts. In addition, we have sometimes suffered power outages caused by our major electricity supplier, the Taiwan Power Company, or other power consumers on the same power supply line, which have caused interruptions in our production schedule. For example, on April 10, 2004, a power outage caused by a circuit trip of a high voltage underground cable line of Taiwan Power Company affected our fabs in Hsinchu Science Park. Material power outages or water insufficiencies could disrupt the normal operation of our business and have an adverse effect on our financial condition and results of operations.

       We are vulnerable to natural disasters which could severely disrupt the normal operation of our business and adversely affect our earnings.

       Most of our production facilities, as well as many of our suppliers and customers and upstream providers of complementary semiconductor manufacturing services, are located in Taiwan. Taiwan is susceptible to earthquakes and typhoons. On September 21, 1999, Taiwan experienced a severe earthquake that caused significant property damage and loss of life, particularly in the central part of Taiwan. This earthquake caused damage to production facilities and adversely affected the operations of many companies in the semiconductor and other industries, including our own. Although we maintain comprehensive natural perils insurance up to policy limits, including insurance for loss of property and loss of profit resulting from business interruption, our insurance coverage may not be sufficient to cover all of our potential losses. A major earthquake or natural disaster in Taiwan could severely disrupt the normal operation of our business and have a material adverse effect on our financial condition and results of operations.

       Fluctuations in exchange rates could result in foreign exchange losses.

       Over half of our capital expenditures and manufacturing costs are denominated in currencies other than NT dollars, primarily U.S. dollars, Japanese yen and Euros. A larger portion of our sales are denominated in U.S. dollars and currencies other than NT dollars. Therefore, any significant fluctuation to our disadvantage in such exchange rate may have an adverse effect on our financial condition. In addition, fluctuations in the exchange rate between the U.S. dollar and the NT dollar will affect the U.S. dollar value of our common shares and the market price of the ADSs and of any cash dividends paid in NT dollars on our common shares represented by ADSs.

       Any future outbreak of new or unusual diseases may materially affect our operations and business.

       Any outbreak of a contagious disease such as severe acute respiratory syndrome for which there is no known cure or vaccine, may potentially result in a quarantine of infected employees and related persons, and may affect the operations at one or more of our facilities. We cannot predict at this time the impact any future outbreak could have on our financial condition and results of operations. In particular, we cannot assure you that our business or prospects would not be materially and adversely affected.

       Your voting rights as a holder of ADSs will be limited.

       Holders of American Depositary Receipts (ADRs) evidencing ADSs may exercise voting rights with respect to the common shares represented by these ADSs only in accordance with the provisions of our ADS deposit agreement. The deposit agreement provides that, upon receipt of notice of any meeting of holders of our common shares, the depositary bank will, as soon as practicable thereafter, mail to the holders (i) the notice of the meeting sent by us, (ii) voting instruction forms and (iii) a statement as to the manner in which instructions may be given by the holders.

       ADS holders will not generally be able to exercise the voting rights attaching to the deposited securities on an individual basis. According to the ROC Company Law, the voting rights attaching to the deposited securities must be exercised as to all matters subject to a vote of shareholders collectively in the same manner, except in the case of an election of directors and supervisors. Election of directors and supervisors is by means of cumulative voting. See “Description of American Depositary Receipts” for a more detailed discussion of the manner in which a holder of ADSs can exercise its voting rights.

       You may not be able to participate in rights offerings and may experience dilution of your holdings.

       We may, from time to time, distribute rights to our shareholders, including rights to acquire securities. Under our ADS deposit agreement, the depositary bank will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the United States Securities Act of 1933, as amended, or the Securities Act, with respect to all holders of ADSs, or are registered under the provisions of the Securities Act. Although we may be eligible to take advantage of certain exemptions for rights offerings by certain foreign companies, we can give no assurance that we can establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to have such a registration statement declared effective. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result.

       If the depositary bank is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case you will receive no value for these rights.

       The value of your investment may be reduced by possible future sales of common shares or ADSs by us or our shareholders.

       Except for the sale of ADSs by the selling shareholders, the selling shareholders have agreed, during the period beginning from the date of this prospectus to and including December 31, 2006 with respect to Philips and The Development Fund and 90 days after the date of this prospectus with respect to Messrs. Morris Chang, F.C. Tseng, Stephen T. Tso, J.B. Chen, M.C. Tzeng and Richard Thurston, not to, and not to announce an intention to, offer, sell, contract to sell or otherwise dispose of, or file a registration statement or similar document relating to, any common shares or depositary shares representing our common shares, or any securities that are substantially similar to common shares or ADSs representing our common shares, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, any of these securities or any substantially similar securities, without the prior written consent of Goldman Sachs International and J.P. Morgan Securities Ltd. We have also agreed, during the period beginning from the date of this prospectus to and including the date 90 days after the date of this prospectus, not to, and not to announce an intention to, issue any common shares, including common shares represented by ADSs (other than pursuant to employee stock option plans that we may adopt or have already adopted or any common shares to be issued as an annual dividend to shareholders or annual bonus to employees which is approved by our shareholders), without the prior written consent of Goldman Sachs International and J.P. Morgan Securities Ltd. Although we have no current plans to make

       One or more of our existing shareholders may, from time to time, dispose of significant numbers of common shares or ADSs. One of our two largest shareholders, Philips, which currently owns 18.74% of our outstanding common shares, sold an aggregate of 100,000,000 ADSs in November 2003 and is offering in this prospectus to sell an aggregate of 104,450,000 ADSs. Since October 1997, Philips has sold a total of 124,000,000 ADSs (without adjustment for subsequent dividend distributions) in two transactions. In October 2003, Philips announced its intention to gradually and orderly reduce its equity interest in us and reiterated this intention in May 2005. Therefore, further sales, which may be sales similar to the present sale, by Philips of our common shares or ADSs may occur in the coming years after the expiration of the above lock-up period. Moreover, the Development Fund, which as of June 30, 2005 owned approximately 7.29% of our outstanding common shares, has sold a total of 187,532,800 ADSs (without adjustments for subsequent stock dividends) in several transactions since 1997 and is offering in this prospectus to sell an aggregate of 40,643,000 ADSs.

       In addition, we have in place a conversion sale program that allows some of our shareholders to sell their common shares in ADS form to a specified financial intermediary during a 30-day period not more than once every three months. Since the establishment of the program in 1999, a total of 42,076,000 ADSs (without adjustments for subsequent stock dividends) were sold in several transactions under the program. We cannot predict the effect, if any, that future sales of ADSs or common shares, or the availability of ADSs or common shares for future sale, will have on the market price of ADSs or common shares prevailing from time to time. Sales of substantial amounts of ADSs or common shares in the public market, or the perception that such sales may occur, could depress the prevailing market price of our ADSs or common shares and could reduce the premium, if any, that the price per ADS on the New York Stock Exchange represents over the corresponding aggregate price of the underlying five common shares on the Taiwan Stock Exchange.

       The market value of our shares may fluctuate due to the volatility of, and government intervention in, the ROC securities market.

       The Taiwan Stock Exchange has experienced substantial fluctuations in the prices and volumes of sales of listed securities and there are currently limits on the range of daily price movements on the Taiwan Stock Exchange. In response to past declines and volatility in the securities markets in Taiwan, and in line with similar activities by other countries in Asia, the government of the ROC formed the Stabilization Fund, which has purchased and may from time to time purchase shares of Taiwan companies to support these markets. In addition, other funds associated with the ROC government have in the past purchased, and may from time to time purchase, shares of Taiwan companies on the Taiwan Stock Exchange or other markets. In the future, market activity by government entities, or the perception that such activity is taking place, may take place or has ceased, may cause fluctuations in the market prices of our ADSs and common shares.

USE OF PROCEEDS

       We will not receive any proceeds from the sale of ADSs by the selling shareholders.

WHERE YOU CAN FIND MORE INFORMATION

       As required by the United States Securities Act of 1933, we have filed a registration statement on Form F-3 relating to the securities offered by this prospectus with the United States Securities and Exchange Commission, or the SEC. This prospectus is a part of that registration statement, which includes additional information.

       We file annual reports on Form 20-F with, and furnish periodic reports on Form 6-K to, the SEC. You may read and copy this information at the SEC’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You can also request copies of the documents, upon payment of a duplicating fee, by writing to the public reference section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Our filings with the SEC are also available to the public from the SEC’s website at http://www.sec.gov. The SEC website contains reports, proxy and information statements and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. Since November 4, 2002, we have been required to file annual reports on Form 20-F with, and submit reports on Form 6-K and other information to, the SEC through the EDGAR system.

       The SEC allows us to “incorporate by reference” the information we file with the SEC. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this prospectus. Any information that we file later with the SEC and that is deemed incorporated by reference will automatically update and supersede the information in this prospectus. In all such cases, you should rely on the later information over different information included in this prospectus.

       This prospectus will be deemed to incorporate by reference the following documents:

       You may request a copy of these filings, at no cost, by writing or telephoning us at No.8, Li-Hsin Road 6, Hsinchu Science Park, Hsinchu, Taiwan, Attention: Wendell Huang or Diane Kao, telephone number: (886-3) 666-5920 or (886-3) 666-5923.

       We will furnish to Citibank, N.A., as depositary of the ADSs, our annual reports. When the depositary receives these reports, it will upon our request promptly provide them to all holders of record of ADSs. We also will furnish the depositary with all notices of shareholders’ meetings and other reports and communications that we make available to our shareholders (or English language translations thereof, if necessary). The depositary will make these notices, reports and communications available to holders of ADSs and will upon our request mail to all holders of record of ADSs the information contained in any notice of a shareholders’ meeting it receives.

       You should rely only on the information that we incorporate by reference or provide in this document. We have not authorized anyone to provide you with different information. You should not assume that the information in this document is accurate as of any date other than the date on the front of this document.

MARKET PRICE INFORMATION FOR OUR ADSS AND COMMON SHARES

       The principal trading market for our common shares is the Taiwan Stock Exchange. The common shares have been listed on the Taiwan Stock Exchange under the symbol “2330” since September 5, 1994, and the ADSs have been listed on The New York Stock Exchange under the symbol “TSM” since October 8, 1997. The outstanding ADSs are identified by the CUSIP number 874039100. The table below sets forth, for the periods indicated, the high and low closing prices and the average daily volume of trading activity on the Taiwan Stock Exchange for the common shares and the high and low closing prices and the average daily volume of trading activity on The New York Stock Exchange for the common shares represented by ADSs.

       The ADSs offered in this offering will be fully fungible with, will be identified by the same CUSIP number and will be eligible for trading under the same New York Stock Exchange trading symbol as, the existing ADSs.

       As of June 30, 2005, a total of 24,726,128,803 common shares were outstanding, including 3,508,832,129 common shares represented by ADSs (including a stock dividend of approximately 4.99971 common shares per 100 common shares in respect of net income in the year ended December 31, 2004, the record date for which was June 19, 2005 for common shares and June 15, 2005 for ADSs and which was paid on July 7, 2005 to holders of common shares and on July 12, 2005 to holders of ADSs).

CAPITALIZATION

       The following table sets forth our consolidated capitalization as of June 30, 2005 (including the appropriation from the earnings of 2004 approved by our shareholders as of May 10, 2005, comprised of the stock dividend of approximately 4.99971 common shares per 100 common shares, representing 1,162,602,422 common shares, cash dividend of NT$1.9998 per common share, employee bonus and remuneration to directors and supervisors). You should read this table together with our consolidated financial statements contained in our Form 20-F for the year ended December 31, 2004, which is incorporated by reference herein.

       We do not have any unguaranteed and secured long-term obligations, nor do we have any guaranteed and secured long-term obligations.

MAJOR SHAREHOLDERS

       The following table sets forth certain information as of June 30, 2005 with respect to our common shares owned by (i) each person who, according to our records, beneficially owned five percent or more of our common shares and by (ii) all directors, supervisors and executive officers as a group.

       Of our nine directors, two are representatives of Philips and one is a representative of the Development Fund. Philips and the Development Fund could each be deemed under the U.S. securities laws to be a controlling shareholder.

       In June 2001, the Development Fund sold 14,000,000 ADSs, representing 70,000,000 common shares, in November 2001, the Development Fund sold 20,000,000 ADSs, representing 100,000,000 common shares, in February 2002, the Development Fund sold an additional 30,207,200 ADSs, representing 151,036,000 common shares, and in July 2003, the Development Fund sold an additional 86,457,200 ADSs, representing 432,286,000 common shares. In November 2000, Philips purchased from us 1,299,925,653 Preferred A shares, par value NT$10 per share, which pay a cumulative annual cash dividend at the rate of 3.5% per annum. As a result, as of November 2000, Philips’ ownership percentage of our outstanding equity securities, including the Preferred A shares, increased from 22.47% to 30.23%. On May 29, 2003, we redeemed all of our Preferred A shares. In November 2003, Philips sold 100,000,000 ADSs, representing 500,000,000 common shares. As a result of our redemption of all our Preferred A shares on May 29, 2003 and this sale in November 2003, Philips’ ownership percentage decreased to 19.09%. In October 2003, Philips announced its intention to gradually and orderly reduce its equity interest in us and reiterated this intention in May 2005.

       As of June 30, 2005, a total of 24,726,128,803 common shares were outstanding (including shares issued as a stock dividend of approximately 4.99971 common shares per 100 common shares in respect of net income in the year ended December 31, 2004, the record date for which was on June 19, 2005 for common shares and on June 15, 2005 for ADSs and which was paid on July 7, 2005 to holders of common shares and on July 12, 2005 to holders of ADSs). With certain limited exceptions, holders of common shares that are not ROC persons are required to hold their common shares through a brokerage account in the ROC. As of June 30, 2005, 3,508,832,129 common shares were registered in the name of a nominee of Citibank, N.A., the depositary under our ADS deposit agreement (including the aforementioned shares issued as stock dividends).

Citibank, N.A., has advised us that, as of June 30, 2005, 668,350,778 ADSs, representing 3,341,753,899 common shares, were held of record by Cede & Co. and 268 other registered holders domiciled in and outside of the United States (excluding the aforementioned shares issued as stock dividends). We have no further information as to common shares held, or beneficially owned, by U.S. persons.

       Our major shareholders have the same voting rights as our other shareholders. For a description of the voting rights of our shareholders see “Item 10. Additional Information — Description of Common Shares — Voting Rights” in our annual report on Form 20-F for the year ended December 31, 2004, incorporated by reference in this prospectus.

       We are not aware of any arrangement that may at a subsequent date result in a change of control of us.

SELLING SHAREHOLDERS

       All of the ADSs being offered in this offering are being offered by the selling shareholders listed below. As of June 30, 2005, the selling shareholders held an aggregate of 6,641,734,759 of our common shares, representing 26.86% of the total common shares outstanding (including shares issued as stock dividends as disclosed in footnote 1 to the table below). Following this offering, the selling shareholders will own an aggregate of 5,891,734,759 of our common shares, representing 23.83% of the total common shares outstanding. The table below sets forth the beneficial ownership of our common shares by each of the selling shareholders prior to this offering and after giving effect to the sale of all of the ADSs offered in this offering.