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Wafer Supply Agreement - ALTERA CORP - 8-14-1995

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Wafer Supply Agreement - ALTERA CORP - 8-14-1995 Powered By Docstoc
					EXHIBIT 10.39 WAFER SUPPLY AGREEMENT BETWEEN ALTERA CORPORATION AND TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. JUNE 26, 1995

WAFER SUPPLY AGREEMENT PREAMBLE This agreement ("Agreement") is entered into effective June 26, 1995 (the "Effective Date") by and between the following parties (the "Parties"): TAIWAN SEMICONDUCTOR MANUFACTURING CO. LTD, a corporation organized under the laws of Taiwan, with its principal place of business located at the following address: No. 121, Park Avenue 3 Science Based Industrial Park Hsin-Chu, Taiwan, R.O.C. (hereinafter referred to as "TSMC"); and ALTERA CORPORATION, a corporation organized under the laws of the State of California U.S.A., with its principal place of business located at the following address: 2610 Orchard Parkway San Jose, California 95134-2020 (hereinafter referred to as "Altera"). RECITALS A. Altera designs and markets integrated circuit products, and desires to obtain an additional manufacturing source for certain of its products. B. TSMC manufactures integrated circuits designed and marketed by other parties and possesses wafer fabrication facilities suitable for manufacturing the Altera products. TSMC desires to manufacture and supply these products to Altera. AGREEMENT Now, therefore, the Parties agree as follows: 1.0 Definitions 1.1 "Device" shall mean good die of Altera integrated circuits meeting the parametric and electrical specifications set forth in Exhibit 1.1. Good die are those which meet agreed to specifications.

WAFER SUPPLY AGREEMENT PREAMBLE This agreement ("Agreement") is entered into effective June 26, 1995 (the "Effective Date") by and between the following parties (the "Parties"): TAIWAN SEMICONDUCTOR MANUFACTURING CO. LTD, a corporation organized under the laws of Taiwan, with its principal place of business located at the following address: No. 121, Park Avenue 3 Science Based Industrial Park Hsin-Chu, Taiwan, R.O.C. (hereinafter referred to as "TSMC"); and ALTERA CORPORATION, a corporation organized under the laws of the State of California U.S.A., with its principal place of business located at the following address: 2610 Orchard Parkway San Jose, California 95134-2020 (hereinafter referred to as "Altera"). RECITALS A. Altera designs and markets integrated circuit products, and desires to obtain an additional manufacturing source for certain of its products. B. TSMC manufactures integrated circuits designed and marketed by other parties and possesses wafer fabrication facilities suitable for manufacturing the Altera products. TSMC desires to manufacture and supply these products to Altera. AGREEMENT Now, therefore, the Parties agree as follows: 1.0 Definitions 1.1 "Device" shall mean good die of Altera integrated circuits meeting the parametric and electrical specifications set forth in Exhibit 1.1. Good die are those which meet agreed to specifications.

1.2 "Packaged Devices" shall mean Devices packaged and tested in accordance with Altera specifications. 1.3 "TSMC Processes" shall mean TSMC's 0.6um SPDM, 0.6um SPTM and 0.5um SPTM processes, and/or such other processes or successor processes as may be mutually acceptable. 1.4 "Device Family" shall mean any group of products using the same base layers. 1.5 "Wafers" shall mean 6-inch, 8-inch, and other sized silicon wafers manufactured by TSMC using any of the TSMC Processes and an Altera design and mask set (or database tape) for integrated circuits. 1.6 "Proprietary Information" shall mean (i) this Agreement, including all exhibits; and any technical specifications, prices, schedules, specifications and the like negotiated in implementation of this Agreement, and (ii) any information including but not limited to technical information, database tapes, specifications, test tapes, masks and supporting documentation provided either orally, in writing or in machine readable format and masks or reticles generated by or for TSMC using Altera's database tapes, provided that all such information is marked

1.2 "Packaged Devices" shall mean Devices packaged and tested in accordance with Altera specifications. 1.3 "TSMC Processes" shall mean TSMC's 0.6um SPDM, 0.6um SPTM and 0.5um SPTM processes, and/or such other processes or successor processes as may be mutually acceptable. 1.4 "Device Family" shall mean any group of products using the same base layers. 1.5 "Wafers" shall mean 6-inch, 8-inch, and other sized silicon wafers manufactured by TSMC using any of the TSMC Processes and an Altera design and mask set (or database tape) for integrated circuits. 1.6 "Proprietary Information" shall mean (i) this Agreement, including all exhibits; and any technical specifications, prices, schedules, specifications and the like negotiated in implementation of this Agreement, and (ii) any information including but not limited to technical information, database tapes, specifications, test tapes, masks and supporting documentation provided either orally, in writing or in machine readable format and masks or reticles generated by or for TSMC using Altera's database tapes, provided that all such information is marked "Confidential" or similarly, or, if oral, identified as proprietary at the time of disclosure. Notwithstanding the foregoing, Proprietary Information does not include information generally available to the public, information independently developed or known by the receiving Party without reference to information disclosed hereunder, provided that the receiving Party can demonstrate such independent development or knowledge by substantial documentation, information rightfully received from a third party without confidentiality obligations, information authorized in writing for release by the disclosing Party hereunder, or information required to be disclosed pursuant to law or governmental regulation provided that the disclosing Party is given reasonable notice prior to any such disclosure. 1.7 "Code Layer" shall mean mask layers which make a device unique to a custom requirement and different from others of the same device family. 1.8 "Altera Products" shall mean the products listed in Exhibit 1.1 as modified from time to time by agreement between Altera and TSMC. 2.0 Process Technology 2.1 TSMC will transfer to Altera the process design rules and related information, as more fully described in Exhibit 2.1.1., to enable Altera to design products to be manufactured by TSMC. Altera will transfer to TSMC product design files and related information, as more fully described in Exhibit 2.1.2. It is understood that the information of each disclosing Party is the Proprietary Information of the disclosing Party and will remain the property of the disclosing Party. -2-

2.2 TSMC will run the TSMC Processes pursuant to this Agreement for the purpose of manufacturing Wafers exclusively for Altera in accordance with the qualification plan described in Exhibit 2.2.1. All Wafers shall meet the reliability and quality specifications described in Exhibit 2.2.2. 2.3 TSMC will provide Altera with a list of TSMC's acceptable mask vendors. Altera will provide one of these mask vendors, as mutually agreed, with device database tapes. TSMC will provide the mask vendor with mask alignment and test structure database, and oversee merging of device and mask alignment databases by the mask vendor. Altera will bear the cost of original mask sets, subject to its advance approval of the cost. 2.4 After TSMC has provided Altera with sufficient Wafers for qualification, but prior to completion of full qualification, Altera may request that TSMC provide a mutually agreed quantity of additional Wafers or "risk starts." TSMC will provide these additional Wafers to Altera at the prices determined pursuant to Article 8.0. 2.5 During qualification, Altera may stop production of Wafers for any or all Altera integrated circuits by giving notice to TSMC. TSMC will stop production following completion of the process steps at which Wafers reside at the time of notification. Altera will pay TSMC for all Wafers started prior to TSMC receiving such notice.

2.2 TSMC will run the TSMC Processes pursuant to this Agreement for the purpose of manufacturing Wafers exclusively for Altera in accordance with the qualification plan described in Exhibit 2.2.1. All Wafers shall meet the reliability and quality specifications described in Exhibit 2.2.2. 2.3 TSMC will provide Altera with a list of TSMC's acceptable mask vendors. Altera will provide one of these mask vendors, as mutually agreed, with device database tapes. TSMC will provide the mask vendor with mask alignment and test structure database, and oversee merging of device and mask alignment databases by the mask vendor. Altera will bear the cost of original mask sets, subject to its advance approval of the cost. 2.4 After TSMC has provided Altera with sufficient Wafers for qualification, but prior to completion of full qualification, Altera may request that TSMC provide a mutually agreed quantity of additional Wafers or "risk starts." TSMC will provide these additional Wafers to Altera at the prices determined pursuant to Article 8.0. 2.5 During qualification, Altera may stop production of Wafers for any or all Altera integrated circuits by giving notice to TSMC. TSMC will stop production following completion of the process steps at which Wafers reside at the time of notification. Altera will pay TSMC for all Wafers started prior to TSMC receiving such notice. Prices for such Wafers will be equitably prorated based on the stage of production of the Wafers. 2.6 Wafers delivered for qualification must meet all agreed Altera standards, specifications and requirements. If TSMC successfully completes qualification, then upon written notice from Altera of successful completion, TSMC will proceed to manufacture and deliver Wafers in accordance with Article 3.0, at a rate which is agreed upon by TSMC and Altera. 2.7 During qualification, TSMC and Altera will agree upon parametric and process flow specifications, which will be finalized before TSMC begins production. TSMC will not modify agreed upon specifications in any way without the prior written consent of Altera. 3.0 Production 3.1 Product Identification. TSMC will manufacture the Altera Products with the TSMC Processes. Any Altera Products requiring a unique parametric specification shall be listed separately. 3.2 Capacity Guaranty. Subject to Altera's qualification of TSMC Processes, TSMC will produce wafers to fill Altera's orders for Wafers and Devices up to a maximum per-month production capacity, as determined pursuant to the procedure set forth below in this Article 3.0. 3.3 Production Purchase Orders. Orders shall be provided to TSMC by Altera as follows: -3-

3.3.1 As soon as practicable following the Effective Date and updated each six months thereafter, Altera and TSMC shall agree on a business commitment under which TSMC will attempt in good faith to reserve a maximum capacity for the next 12 months and Altera will forecast minimum monthly loadings which Altera will attempt in good faith to use. 3.3.2 It is agreed and understood that the purchase of Wafers and/or Devices pursuant to this Agreement shall be accomplished by means of Altera individual purchase orders and/or other release documents hereinafter collectively referred to as "purchase orders." The purchase orders placed by Altera will be open purchase orders for a fixed quantity of wafers based upon the Altera forecast. 3.3.3 To determine release schedules, Altera will provide TSMC, on a monthly basis, with a rolling six-month forecast of Altera requirements for Wafers. The first two months of this forecast shall be firm, and covered by released purchase orders, unless this procedure is modified as mutually agreed by the Parties. 3.4 Partial Shipments. Altera will accept deliveries made in timely installments from TSMC. Such partial shipments will be billed as made; and payments therefor are subject to the terms of payment noted below.

3.3.1 As soon as practicable following the Effective Date and updated each six months thereafter, Altera and TSMC shall agree on a business commitment under which TSMC will attempt in good faith to reserve a maximum capacity for the next 12 months and Altera will forecast minimum monthly loadings which Altera will attempt in good faith to use. 3.3.2 It is agreed and understood that the purchase of Wafers and/or Devices pursuant to this Agreement shall be accomplished by means of Altera individual purchase orders and/or other release documents hereinafter collectively referred to as "purchase orders." The purchase orders placed by Altera will be open purchase orders for a fixed quantity of wafers based upon the Altera forecast. 3.3.3 To determine release schedules, Altera will provide TSMC, on a monthly basis, with a rolling six-month forecast of Altera requirements for Wafers. The first two months of this forecast shall be firm, and covered by released purchase orders, unless this procedure is modified as mutually agreed by the Parties. 3.4 Partial Shipments. Altera will accept deliveries made in timely installments from TSMC. Such partial shipments will be billed as made; and payments therefor are subject to the terms of payment noted below. 3.5 Quantity Variance. If the monthly quantity shipped by TSMC of each product ordered by Altera is within =/5 percent of the quantity ordered, such quantity shall constitute compliance with Altera's order. Larger overshipments or undershipments may be accepted at Altera's discretion, in which case the respective quantity of such overshipment or undershipment may be subtracted or added to the following months' quantity at Altera's discretion even if this results in quantities below or above respective minimum or maximum quantities. Billing for partial orders shipped as described in this Section 3.5 will be at the established purchase price per wafer times the total quantity of wafers delivered. 3.6 Modifications. If Altera determines that modifications to the specifications are required, including modifications to mask tooling, process or testing, TSMC agrees to make such modifications within a reasonable period of time after notification in writing by Altera. The Parties will negotiate adjustment to price and delivery schedule as well as charges for retooling costs if warranted by such modifications. 3.7 Substitutions. Altera may add or substitute product types using the process flow approved by Altera and TSMC for existing production at any time, provided that the agreed upon quantities of Wafer shipments required by Altera will not be in excess; of those determined pursuant to Section 3.2 except with the consent of TSMC. Such product types are ones which can be manufactured using the same process and in accordance with the same qualification plan as Altera Wafers currently manufactured by TSMC under this Agreement. TSMC will provide Devices and Wafers of such similar product types under the same terms as specified herein. -4-

3.8 Parametric Failure. If Wafers or Devices fail to meet the agreed upon parametric specifications, and in Altera's reasonable opinion such failure appears material, Altera may request TSMC to stop production. If TSMC is unable to correct such failures within a reasonable time, Altera may cancel such particular orders. Altera will notify TSMC in writing of its intention to suspend or cancel such orders and will include any substantiating data. 3.9 Reports. TSMC shall provide Altera with a report of wafer fabrication work in process for each product weekly unless otherwise mutually agreed, the details to be as agreed upon by the Parties. To enable Altera to track process control, TSMC shall periodically provide, at least quarterly, data summarizing the history of the DC parametric measurements for TSMC's manufacturing process. Altera shall be provided continuous modem access to the computer database maintained by TSMC for purposes of these reports. 3.10 Requalifications. With respect to any material change which TSMC makes in its manufacturing process which affects the performance, yield, and/or physical structure of the devices within the wafers, TSMC shall notify Altera in writing of each such change at least ninety (90) days in advance of the implementation of such change in the production of the wafers to allow Altera to impose reasonable requirements for requalifying the wafers for acceptance hereunder.

3.8 Parametric Failure. If Wafers or Devices fail to meet the agreed upon parametric specifications, and in Altera's reasonable opinion such failure appears material, Altera may request TSMC to stop production. If TSMC is unable to correct such failures within a reasonable time, Altera may cancel such particular orders. Altera will notify TSMC in writing of its intention to suspend or cancel such orders and will include any substantiating data. 3.9 Reports. TSMC shall provide Altera with a report of wafer fabrication work in process for each product weekly unless otherwise mutually agreed, the details to be as agreed upon by the Parties. To enable Altera to track process control, TSMC shall periodically provide, at least quarterly, data summarizing the history of the DC parametric measurements for TSMC's manufacturing process. Altera shall be provided continuous modem access to the computer database maintained by TSMC for purposes of these reports. 3.10 Requalifications. With respect to any material change which TSMC makes in its manufacturing process which affects the performance, yield, and/or physical structure of the devices within the wafers, TSMC shall notify Altera in writing of each such change at least ninety (90) days in advance of the implementation of such change in the production of the wafers to allow Altera to impose reasonable requirements for requalifying the wafers for acceptance hereunder. 3.11 Order Cancellation. 3.11.1 If Altera fails to make any material payment hereunder when due or fails to accept any material value of product properly furnished hereunder, and such default is not cured within thirty (30) days after TSMC gives Altera written notice thereof, TSMC may decline to make further shipments and/or may terminate Altera's order without affecting any other rights or remedies available to TSMC. If TSMC continues to make shipments after such default, TSMC's actions shall not constitute a waiver nor affect TSMC's remedies for such default. 3.11.2 If Altera cancels an order that is firm pursuant to Section 3.3, Altera shall pay in full and complete satisfaction of any claim arising therefrom, a cancellation charge per wafer equal to: (number of mask steps completed) ------------------------------------ x (wafer price),

(total number of mask steps) unless the parties mutually agree to a rescheduling of the order, in which case no claim shall arise unless the order as rescheduled is cancelled. Claims for the cancelling of rescheduled orders shall also be governed as set forth above on the new date of cancellation. 3.11.3 Altera may cancel any purchase order in whole or in part if TSMC fails to deliver products as covered by such purchase order placed hereunder by Altera, which failure is not corrected within sixty (60) days after written notice thereof. If such failure is not corrected within the above sixty-day period and is not excused pursuant to Article 10.0, -5-

Altera shall have the rights of cover as provided by the California Uniform Commercial Code with respect to the reprocurement of all products that Altera would have been entitled to buy from TSMC pursuant to this Agreement. The foregoing shall not affect any other rights or remedies available to Altera. If Altera continues to maintain or place orders after such default, Altera's actions shall not constitute a waiver nor affect Altera's remedies for such default. 4.0 On-Site Inspection and Vendor Information 4.1 Altera representatives shall be allowed to visit TSMC's wafer fabrication and test facilities during normal working hours upon reasonable notice to TSMC.

Altera shall have the rights of cover as provided by the California Uniform Commercial Code with respect to the reprocurement of all products that Altera would have been entitled to buy from TSMC pursuant to this Agreement. The foregoing shall not affect any other rights or remedies available to Altera. If Altera continues to maintain or place orders after such default, Altera's actions shall not constitute a waiver nor affect Altera's remedies for such default. 4.0 On-Site Inspection and Vendor Information 4.1 Altera representatives shall be allowed to visit TSMC's wafer fabrication and test facilities during normal working hours upon reasonable notice to TSMC. 4.2 Upon Altera's request, TSMC will allow Altera to perform an audit of TSMC's manufacturing facility, and TSMC will provide Altera with process control information, including but not limited to: process and electrical test yield results, current process specifications and conformance to specifications; calibration schedules and logs for equipment; environmental monitor information for air, gases and DI water; documentation of operator qualification and training; documentation of traceability through TSMC's operation, TSMC process verification information, and TSMC's trouble reports. The foregoing shall be in accordance with the format of Exhibit 4.2. 5.0 Term and Termination 5.1 The term of this Agreement shall continue in effect through December 31, 1999, subject to automatic extension under Section 5.3, unless sooner terminated pursuant to Section 5.2. 5.2 This Agreement may be terminated immediately by either Party if the other Party (i) breaches any material provision of this Agreement and does not remedy such breach within sixty (60) days of notice of breach; or (ii) becomes the subject of a voluntary or involuntary petition in bankruptcy or any proceeding relating to insolvency, receivership, liquidation, or composition for the benefit of creditors, if that petition or proceeding is not dismissed within sixty (60) days after filing. 5.3 Automatic Extension 5.3.1 On January 1, 1998, and on each anniversary thereof, this Agreement shall be automatically extended for an additional one year (thereby constituting an annually rolling three year agreement), unless either Party gives the other Party prior written notice (i.e., on or before such date or anniversary thereof) that such Party is terminating the Agreement effective at the end of two years following such date or anniversary thereof. If such prior notice is given, the Agreement shall so terminate at the end of such two year period. -6-

5.3.2 The following examples illustrate the operation of Section 5.3.1. If a Party desires to terminate the Agreement on December 31, 1999, such Party must give notice thereof prior to January 1, 1998; otherwise the Agreement will automatically extend to December 31, 2000. Then if a Party desires to terminate the Agreement on December 31, 2000, such Party must give notice thereof prior to January 1, 1999; otherwise the Agreement will automatically extend to December 31, 2001. The Agreement will continue, in this manner, to extend in one year increments until two years prior notice is given by either Party. 5.3.3 In the event of termination as provided in this Section 5.3, Altera will have the right for "last time buy," time and volume to be mutually agreed to up to a maximum of twice the previous six (6) months' order quantity. 6.0 Proprietary Information 6.1 Both TSMC and Altera agree that Proprietary Information of the other will be used by them solely for the purpose of manufacturing Wafers hereunder and will not be disclosed to any third party without the prior written permission of the disclosing Party. 6.2 Upon termination or expiration of this Agreement for whatever reason, the receiving Party must (i) return to the other Party the original and all copies of any Proprietary Information of the disclosing Party and (ii) at the

5.3.2 The following examples illustrate the operation of Section 5.3.1. If a Party desires to terminate the Agreement on December 31, 1999, such Party must give notice thereof prior to January 1, 1998; otherwise the Agreement will automatically extend to December 31, 2000. Then if a Party desires to terminate the Agreement on December 31, 2000, such Party must give notice thereof prior to January 1, 1999; otherwise the Agreement will automatically extend to December 31, 2001. The Agreement will continue, in this manner, to extend in one year increments until two years prior notice is given by either Party. 5.3.3 In the event of termination as provided in this Section 5.3, Altera will have the right for "last time buy," time and volume to be mutually agreed to up to a maximum of twice the previous six (6) months' order quantity. 6.0 Proprietary Information 6.1 Both TSMC and Altera agree that Proprietary Information of the other will be used by them solely for the purpose of manufacturing Wafers hereunder and will not be disclosed to any third party without the prior written permission of the disclosing Party. 6.2 Upon termination or expiration of this Agreement for whatever reason, the receiving Party must (i) return to the other Party the original and all copies of any Proprietary Information of the disclosing Party and (ii) at the disclosing Party's request, have one of its officers certify in writing that it will not make any further disclosure or use of such Proprietary Information and specifically will not manufacture or have manufactured for it any product incorporating such Proprietary Information. 6.3 These confidentiality provisions as to any item of Proprietary Information shall survive the termination of this Agreement for a period of five (5) years from the date of disclosure of such item of Proprietary Information. 6.4 TSMC retains the right to incorporate into its generic manufacturing process any and all process developments made by TSMC in the course of its performance under this Agreement, provided that no Altera Proprietary Information is thereby used or disclosed. Altera retains the right to incorporate into its generic device design methodology any and all device design methodology developments made by Altera in the course of its performance under this Agreement, provided no TSMC Proprietary Information is thereby used or disclosed. 7.0 Warranty/Acceptance Testing. 7.1 TSMC warrants that Wafers and/or Devices delivered hereunder will meet the mutually agreed specifications and shall be free from defects in material and workmanship under normal use and service for a period of one (1) year from the date of receipt from TSMC's facility. If, during such one year period (i) TSMC is notified with reasonable promptness in writing upon discovery of any defect in the Wafers and/or Devices, including a reasonably detailed description of such defect; (ii) such Wafers and/or Devices are returned to TSMC's facility, transportation prepaid; -7-

and (iii) TSMC's reasonable examination of such Wafers and/or Devices discloses that such Wafers and/or Devices are defective and such defects are not caused by accident, abuse, misuse, neglect, improper installation, repair or alteration not authorized by TSMC, improper testing or use contrary to any reasonable instructions issued by TSMC, then within a reasonable time TSMC shall, as mutually agreed, either repair, replace, or credit Altera for such Wafers and/or Devices. TSMC shall return any Wafers and/or Devices repaired or replaced under this warranty to Altera transportation prepaid, and reimburse Altera for the transportation charges paid by Altera for such Wafers and/or Devices. The performance of this warranty does not extend the warranty period for any Wafers and/or Devices beyond that period applicable to the Wafers and/or Devices originally delivered. 7.1.1 The foregoing warranty constitutes TSMC's exclusive liability, and the exclusive remedy of Altera, for any breach of any warranty or other nonconformity of the Wafers and/or Devices. This warranty is exclusive and in lieu of all other warranties, express, implied or statutory, including but not limited to the warranties for merchantability and fitness for a particular purpose, which are hereby expressly disclaimed. 7.1.2 Prior to any return of Wafers and/or Devices by Altera pursuant to this paragraph, Altera shall afford

and (iii) TSMC's reasonable examination of such Wafers and/or Devices discloses that such Wafers and/or Devices are defective and such defects are not caused by accident, abuse, misuse, neglect, improper installation, repair or alteration not authorized by TSMC, improper testing or use contrary to any reasonable instructions issued by TSMC, then within a reasonable time TSMC shall, as mutually agreed, either repair, replace, or credit Altera for such Wafers and/or Devices. TSMC shall return any Wafers and/or Devices repaired or replaced under this warranty to Altera transportation prepaid, and reimburse Altera for the transportation charges paid by Altera for such Wafers and/or Devices. The performance of this warranty does not extend the warranty period for any Wafers and/or Devices beyond that period applicable to the Wafers and/or Devices originally delivered. 7.1.1 The foregoing warranty constitutes TSMC's exclusive liability, and the exclusive remedy of Altera, for any breach of any warranty or other nonconformity of the Wafers and/or Devices. This warranty is exclusive and in lieu of all other warranties, express, implied or statutory, including but not limited to the warranties for merchantability and fitness for a particular purpose, which are hereby expressly disclaimed. 7.1.2 Prior to any return of Wafers and/or Devices by Altera pursuant to this paragraph, Altera shall afford TSMC the opportunity to inspect such Wafers and/or Devices at Altera's location. Upon verification of defects by TSMC, any such Wafers and/or Devices so inspected shall be returned to TSMC. TSMC shall make any such inspection with reasonable promptness. 7.2 TSMC shall immediately advise Altera whenever TSMC has reason to believe that wafers and/or Devices may not conform to the applicable specifications. 7.3 Altera may carry out acceptance testing of Wafers and/or Devices at Altera's facilities. Acceptance tests shall be performed under conditions as described in Exhibit 7.3 attached hereto. If any Wafers and/or Devices are not either accepted or rejected by Altera within forty-five (45) days of receipt of such Wafers and/or Devices, then such shipments of the Wafers and/or Devices shall be deemed accepted. Neither acceptance nor such deemed acceptance shall constitute a waiver of the requirements of Section 7.1. 8.0 Prices/Payment 8.1 Prices in U.S. dollars will be negotiated annually in coordination with the business commitment referred to in Section 3.3.1, and taking into consideration any material fluctuations in the currency exchange rate that may have occurred. It is the expectation of both Parties that prices for Wafers and Devices using a given Process will decrease from year to year. 8.2 Prices do not include customs, duties or sales, use, excise or other similar taxes. Altera shall pay, in addition to these prices, the amount of any present or future customs duties or sale, use, excise, or other similar tax applicable to the sale of goods or performance of services covered by this Agreement, or in lieu thereof Altera shall supply TSMC with an appropriate tax exemption certificate. -8-

8.3 Payment terms shall be net due 30 days after receipt of a valid invoice by Altera. 8.4 If following the effective date of any price determination pursuant to Section 8.1 (but prior to the next determination), the number N(2) of Taiwan dollars per U.S. dollar, as quoted in the Wall Street Journal, at the end of any month has changed from the corresponding Number N(1) on the effective date by five percent (5%) or more, the U.S. dollar price P(2) for payment of invoices rendered in the following months shall be adjusted with respect to the existing price P(1), according to the following formula (under which each Party bears one-half of the currency fluctuation): [ (N(1) - N(2)) ] P(2) + P(1) [ 1 + ------------- ] [ 2N(1) ] (For example, if N(1) = 26.0 Taiwan dollars per U.S. dollar, and it decreased 5% to N(2) = 24.7, P(2) would be 1.025 P(1). If it increased 5% to N(2) = 27.3, P(2) would be .975 P(1).) If at the end of any subsequent

8.3 Payment terms shall be net due 30 days after receipt of a valid invoice by Altera. 8.4 If following the effective date of any price determination pursuant to Section 8.1 (but prior to the next determination), the number N(2) of Taiwan dollars per U.S. dollar, as quoted in the Wall Street Journal, at the end of any month has changed from the corresponding Number N(1) on the effective date by five percent (5%) or more, the U.S. dollar price P(2) for payment of invoices rendered in the following months shall be adjusted with respect to the existing price P(1), according to the following formula (under which each Party bears one-half of the currency fluctuation): [ (N(1) - N(2)) ] P(2) + P(1) [ 1 + ------------- ] [ 2N(1) ] (For example, if N(1) = 26.0 Taiwan dollars per U.S. dollar, and it decreased 5% to N(2) = 24.7, P(2) would be 1.025 P(1). If it increased 5% to N(2) = 27.3, P(2) would be .975 P(1).) If at the end of any subsequent month following such price adjustment (but prior to the next price determination under Section 8.1), the number of Taiwan dollars N(3) has changed from N(2) by 5% or more, the price P(3) for payment of invoices rendered in the following months shall be adjusted again in accordance with the preceding formula (with all subscripts being increased by one), and so forth for any additional 5% or more change. 9.0 Delivery 9.1 Unless otherwise provided herein, title to the Wafers and/or Devices and liability for loss or damage thereto shall pass to Altera upon TSMC's tender of delivery of such Wafers and/or Devices to a carrier for shipment to Altera pursuant to Altera's instructions, and any loss or damage thereafter shall not relieve Altera from any obligation hereunder. Delivery may be made in installments in accordance with Section 3.4. The date of the bill of lading or any receipt issued by the carrier, or the date of the Delivery Order shall be presumptive proof of the date of such shipment or delivery to Altera. 9.2 Subject to Section 3.11.3 and Article 10.0, default or delay by TSMC in shipping or delivering the whole or any part or installment of the Wafers and/or Devices under the purchase orders shall not affect any other portion thereof nor shall it affect any other purchase order between Altera and TSMC. Any delivery or shipment of the whole or any part of installment made within seven (7) calendar days before or after the date(s) specified therefor shall constitute timely delivery or shipment. 10.0 Contingencies Neither Party shall be in breach hereunder for any failure to perform due to unforeseen circumstances or to causes beyond its reasonable control, including but not limited to acts of God, -9-

war, riot, embargoes, labor stoppages, acts of civil and military authorities, fire, floods, earthquakes or accidents. However, Altera shall have the right to cancel any order as to which delivery is delayed by such causes for a period of more than 60 days. 11.0 Title to Proprietary Information All Proprietary Information and any copies thereof are and will remain the property of the disclosing Party. Any masks generated from Altera database tapes by TSMC, or the third party vendors under Section 2.3, shall be the property of Altera, will be returned to Altera on Altera's request, and will be used only to produce Wafers and/or Devices for Altera. All rights to improvements or modifications made by TSMC to the test tape are hereby assigned to Altera. 12.0 Intellectual Property Indemnity 12.1 Altera will, at its sole cost and expense, indemnify, defend, and hold TSMC harmless from and against any cost, loss, expense, or liability arising from any actual or alleged infringement of any patent, mask work right,

war, riot, embargoes, labor stoppages, acts of civil and military authorities, fire, floods, earthquakes or accidents. However, Altera shall have the right to cancel any order as to which delivery is delayed by such causes for a period of more than 60 days. 11.0 Title to Proprietary Information All Proprietary Information and any copies thereof are and will remain the property of the disclosing Party. Any masks generated from Altera database tapes by TSMC, or the third party vendors under Section 2.3, shall be the property of Altera, will be returned to Altera on Altera's request, and will be used only to produce Wafers and/or Devices for Altera. All rights to improvements or modifications made by TSMC to the test tape are hereby assigned to Altera. 12.0 Intellectual Property Indemnity 12.1 Altera will, at its sole cost and expense, indemnify, defend, and hold TSMC harmless from and against any cost, loss, expense, or liability arising from any actual or alleged infringement of any patent, mask work right, copyright, trademark, or other intellectual property right to the extent such actual or alleged infringement arises from TSMC's compliance with any of Altera's designs, specifications, instructions, or other contribution of Altera to the design or TSMC's manufacture or sale of product for Altera. 12.2 TSMC will, at its sole cost and expense, indemnify, defend, and hold Altera harmless from and against any cost, loss, expense, or liability arising from any actual or alleged infringement of any patent, mask work right, copyright, trademark, or other intellectual property right to the extent such actual or alleged infringement arises from TSMC processes. 12.3 The indemnifying Party will defend, at its sole costs and expense, including attorneys' fees, any action brought against the indemnified Party alleging any such infringement, and the indemnified Party agrees (i) to give prompt notice of any such action to the indemnifying Party, (ii) to allow the indemnifying Party, through competent counsel of its choice, to defend such action, and (iii) to provide the indemnifying Party all reasonable information, assistance, and authority requested by the indemnifying Party, at the indemnifying Party's expense, for the indemnifying Party to defend such action. 12.4 In the event that an injunction is issued in support of the infringement claim or the indemnified Party otherwise reasonably believes that the infringement claim is likely to be upheld, the indemnifying Party shall, at its expense, exercise commercially reasonable efforts to avoid the infringement claim, either by modifying its technology and/or design or by obtaining a license or nonassertion covenant from the claimant. If Altera is the indemnified Party, it shall have the right to return any allegedly infringing products to TSMC and receive a full refund therefor. If TSMC is the indemnified Party, it shall have the right to stop production for any allegedly infringing products by giving written notice to Altera and Altera shall pay TSMC for all Wafers started prior to such notice at the established purchase price. -10-

12.5 The foregoing states the entire obligation and the exclusive remedy of each Party with respect to any alleged infringement of intellectual property rights by any product furnished hereunder. 13.0 Limitation of Liability In no event shall either Party be liable for any indirect, special, incidental or consequential damages resulting from such Party's performance or failure to perform under this Agreement, or the furnishing, performance, or use of any goods or services sold pursuant hereto, whether due to a breach of contract, breach of warranty, negligence, or otherwise. ALL IMPLIED WARRANTIES, WHETHER OF MERCHANTABILITY, FITNESS, OR OTHERWISE ARE EXPRESSLY DISCLAIMED. 14.0 Export Controls TSMC will not transmit, directly or indirectly, any "technical information" acquired hereunder, or any direct

12.5 The foregoing states the entire obligation and the exclusive remedy of each Party with respect to any alleged infringement of intellectual property rights by any product furnished hereunder. 13.0 Limitation of Liability In no event shall either Party be liable for any indirect, special, incidental or consequential damages resulting from such Party's performance or failure to perform under this Agreement, or the furnishing, performance, or use of any goods or services sold pursuant hereto, whether due to a breach of contract, breach of warranty, negligence, or otherwise. ALL IMPLIED WARRANTIES, WHETHER OF MERCHANTABILITY, FITNESS, OR OTHERWISE ARE EXPRESSLY DISCLAIMED. 14.0 Export Controls TSMC will not transmit, directly or indirectly, any "technical information" acquired hereunder, or any direct product of such information to Afghanistan, the Peoples Republic of China, or any "Q, S, W, Y, or Z" country, as such terms are defined in the Export Administration Regulations of the U.S. Department of Commerce. This Agreement is subject to compliance with all applicable export and import laws and regulations and the Parties agree to cooperate in complying therewith. 15.0 Shipment TSMC will deliver Wafers to Altera F.O.B. TSMC Taiwan as requested by Altera. TSMC will package all such Wafers for secure shipment according to good manufacturing practices in consideration of the method of shipment chosen. 16.0 Publicity Both Parties agree that the details of this Agreement will not be published or disclosed without the other Party's written permission. The foregoing shall not prohibit a Party from making any disclosure required by law or governmental regulation provided that the other Party is given reasonable notice prior to any such disclosure. 17.0 Assignment Neither Party shall delegate any obligations under this Agreement or assign this Agreement or any interest or rights hereunder without the prior written consent of the other Party, except incident to the sale or transfer of all or substantially all of such Party's business. 18.0 Controlling Law This Agreement will be governed by the laws of the State of California, U.S.A., as applied to agreements wholly negotiated and performed in the State by its residences, and litigation concerning -11-

this Agreement shall be brought exclusively in courts located in Santa Clara County, California, U.S.A. The Parties expressly reject any application of the United Nations Convention on Contracts for the International Sale of Goods. 19.0 Notices All notices required to be sent by either Party under this Agreement will be effective when received by the notified Party if delivered to the addresses set forth in the Preamble, attention General Counsel if to Altera and attention Legal Counsel if to TSMC, or to such other address and/or attention as may subsequently be designated in writing by notice complying with and specifically referring to this Article 19.0. 20.0 Dispute Resolution Process

this Agreement shall be brought exclusively in courts located in Santa Clara County, California, U.S.A. The Parties expressly reject any application of the United Nations Convention on Contracts for the International Sale of Goods. 19.0 Notices All notices required to be sent by either Party under this Agreement will be effective when received by the notified Party if delivered to the addresses set forth in the Preamble, attention General Counsel if to Altera and attention Legal Counsel if to TSMC, or to such other address and/or attention as may subsequently be designated in writing by notice complying with and specifically referring to this Article 19.0. 20.0 Dispute Resolution Process Should any dispute not be resolved within thirty (30) days to the satisfaction of both Parties, both Parties agree to elevate the issue to a senior executive officer of the respective Parties prior to initiating any litigation with respect to such issue. 21.0 Entire Agreement This document, including the exhibits, is the entire understanding between Altera and TSMC with respect to the subject matter hereof and merges all prior agreements, dealings, and negotiations. The terms of this Agreement shall govern the contract between the Parties for the sale and purchase of wafers (the "Sales Contract"). Any terms or conditions printed on the face or reverse side of any purchase order form and/or any acknowledgment or acceptance form shall not be part of this Agreement nor shall constitute the terms and conditions of the Sales Contract, even in case such form as provided by one Party is signed and returned by the other Party, unless both Parties hereto expressly agree in writing to include. any terms or conditions in this Agreement or the Sales Contract. No modification, alteration, or amendment shall be effective unless in writing and signed by a duly authorized representative of each Party. No waiver of any breach shall be held to be a waiver of any other or subsequent breach. 22.0 Exhibits The following exhibits attached hereto are incorporated herein by reference:
Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit 1.l 2.1.1 2.1.2 2.2.1 2.2.2 4.2 7.3 Altera parametric Test Specifications and Procedures TSMC Process Design Information Altera Product Design Information Process/Product Qualification Plan Reliability and Quality Specifications Audit Procedures Device Acceptance Testing Criteria

-12-

Authorized Signatures For the purpose of binding the Parties to the terms and conditions of this Agreement as of the Effective Date, the duly authorized representatives of the Parties have signed their names on the indicated dates.
TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. ALTERA CORPORATION

By: /S/DONALD BROOKS ---------------------------------Donald Brooks President

By: /S/RODNEY SMITH ---------------------------------Rodney Smith President

Authorized Signatures For the purpose of binding the Parties to the terms and conditions of this Agreement as of the Effective Date, the duly authorized representatives of the Parties have signed their names on the indicated dates.
TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. ALTERA CORPORATION

By: /S/DONALD BROOKS ---------------------------------Donald Brooks President

By: /S/RODNEY SMITH ---------------------------------Rodney Smith President

-13-

EXHIBIT 1.1 *** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBITS [TO BE PREPARED]
2.1 2.2.1 2.2.2 DESIGN RULE AND PARAMETRIC PROCESS AND PRODUCT QUALIFICATION PLAN RELIABILITY AND QUALITY SPECIFICATIONS

EXHIBIT 4.2 *** CONFIDENTIAL TREATEMENT REQUESTED ***

EXHIBIT 7.3 *** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT 10.40 OPTION AGREEMENT BETWEEN ALTERA CORPORATION AND TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD.

EXHIBIT 1.1 *** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBITS [TO BE PREPARED]
2.1 2.2.1 2.2.2 DESIGN RULE AND PARAMETRIC PROCESS AND PRODUCT QUALIFICATION PLAN RELIABILITY AND QUALITY SPECIFICATIONS

EXHIBIT 4.2 *** CONFIDENTIAL TREATEMENT REQUESTED ***

EXHIBIT 7.3 *** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT 10.40 OPTION AGREEMENT BETWEEN ALTERA CORPORATION AND TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. JUNE 26, 1995

OPTION AGREEMENT THIS AGREEMENT is made and becomes effective as of June 26, 3995 (the "Effective Date") by Taiwan Semiconductor Manufacturing Co., Ltd. ("TSMC"), a company organized under the laws of the Republic of China, with its registered address at No. 121, Park Ave. 3, Science Based Industrial Park, Hsinchu, Taiwan, and Altera Corporation, a company organized under the laws of California, with its registered address at 2610 Orchard Parkway, San Jose, California 95134-2020 ("Customer"). RECITALS WHEREAS, TSMC will supply Customer with wafers pursuant to the Wafer Supply Agreement between TSMC and Customer dated June 26, 1995, (the "Supply Agreement"), and Customer wishes to increase the volume of wafers to be purchased from TSMC;

EXHIBITS [TO BE PREPARED]
2.1 2.2.1 2.2.2 DESIGN RULE AND PARAMETRIC PROCESS AND PRODUCT QUALIFICATION PLAN RELIABILITY AND QUALITY SPECIFICATIONS

EXHIBIT 4.2 *** CONFIDENTIAL TREATEMENT REQUESTED ***

EXHIBIT 7.3 *** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT 10.40 OPTION AGREEMENT BETWEEN ALTERA CORPORATION AND TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. JUNE 26, 1995

OPTION AGREEMENT THIS AGREEMENT is made and becomes effective as of June 26, 3995 (the "Effective Date") by Taiwan Semiconductor Manufacturing Co., Ltd. ("TSMC"), a company organized under the laws of the Republic of China, with its registered address at No. 121, Park Ave. 3, Science Based Industrial Park, Hsinchu, Taiwan, and Altera Corporation, a company organized under the laws of California, with its registered address at 2610 Orchard Parkway, San Jose, California 95134-2020 ("Customer"). RECITALS WHEREAS, TSMC will supply Customer with wafers pursuant to the Wafer Supply Agreement between TSMC and Customer dated June 26, 1995, (the "Supply Agreement"), and Customer wishes to increase the volume of wafers to be purchased from TSMC; WHEREAS, in order to increase its output, TSMC must accelerate its ramp up in Fab 3 and advance the start of Fab 4; WHEREAS, as a condition to TSMC's acceleration of these facilities, TSMC has asked that Customer make a capacity commitment and advance payment for the right to buy additional capacity, and Customer is willing to do

EXHIBIT 4.2 *** CONFIDENTIAL TREATEMENT REQUESTED ***

EXHIBIT 7.3 *** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT 10.40 OPTION AGREEMENT BETWEEN ALTERA CORPORATION AND TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. JUNE 26, 1995

OPTION AGREEMENT THIS AGREEMENT is made and becomes effective as of June 26, 3995 (the "Effective Date") by Taiwan Semiconductor Manufacturing Co., Ltd. ("TSMC"), a company organized under the laws of the Republic of China, with its registered address at No. 121, Park Ave. 3, Science Based Industrial Park, Hsinchu, Taiwan, and Altera Corporation, a company organized under the laws of California, with its registered address at 2610 Orchard Parkway, San Jose, California 95134-2020 ("Customer"). RECITALS WHEREAS, TSMC will supply Customer with wafers pursuant to the Wafer Supply Agreement between TSMC and Customer dated June 26, 1995, (the "Supply Agreement"), and Customer wishes to increase the volume of wafers to be purchased from TSMC; WHEREAS, in order to increase its output, TSMC must accelerate its ramp up in Fab 3 and advance the start of Fab 4; WHEREAS, as a condition to TSMC's acceleration of these facilities, TSMC has asked that Customer make a capacity commitment and advance payment for the right to buy additional capacity, and Customer is willing to do so: AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties agree as follows: 1. DEFINITIONS (a) "Base Capacity" used in this Agreement shall mean the annualized run rate that TSMC has previously committed to Customer, as set forth in Exhibit B.

EXHIBIT 7.3 *** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT 10.40 OPTION AGREEMENT BETWEEN ALTERA CORPORATION AND TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. JUNE 26, 1995

OPTION AGREEMENT THIS AGREEMENT is made and becomes effective as of June 26, 3995 (the "Effective Date") by Taiwan Semiconductor Manufacturing Co., Ltd. ("TSMC"), a company organized under the laws of the Republic of China, with its registered address at No. 121, Park Ave. 3, Science Based Industrial Park, Hsinchu, Taiwan, and Altera Corporation, a company organized under the laws of California, with its registered address at 2610 Orchard Parkway, San Jose, California 95134-2020 ("Customer"). RECITALS WHEREAS, TSMC will supply Customer with wafers pursuant to the Wafer Supply Agreement between TSMC and Customer dated June 26, 1995, (the "Supply Agreement"), and Customer wishes to increase the volume of wafers to be purchased from TSMC; WHEREAS, in order to increase its output, TSMC must accelerate its ramp up in Fab 3 and advance the start of Fab 4; WHEREAS, as a condition to TSMC's acceleration of these facilities, TSMC has asked that Customer make a capacity commitment and advance payment for the right to buy additional capacity, and Customer is willing to do so: AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties agree as follows: 1. DEFINITIONS (a) "Base Capacity" used in this Agreement shall mean the annualized run rate that TSMC has previously committed to Customer, as set forth in Exhibit B. (b) "Customer Committed Capacity" used in this Agreement shall mean the total capacity that Customer agrees to purchase from TSMC pursuant to this Agreement, as set forth in Exhibit B, subject to the applicable provisions of this Agreement and the Supply Agreement. (c) "Option Capacity" used in this Agreement shall mean the firm capacity commitment made by Customer

EXHIBIT 10.40 OPTION AGREEMENT BETWEEN ALTERA CORPORATION AND TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. JUNE 26, 1995

OPTION AGREEMENT THIS AGREEMENT is made and becomes effective as of June 26, 3995 (the "Effective Date") by Taiwan Semiconductor Manufacturing Co., Ltd. ("TSMC"), a company organized under the laws of the Republic of China, with its registered address at No. 121, Park Ave. 3, Science Based Industrial Park, Hsinchu, Taiwan, and Altera Corporation, a company organized under the laws of California, with its registered address at 2610 Orchard Parkway, San Jose, California 95134-2020 ("Customer"). RECITALS WHEREAS, TSMC will supply Customer with wafers pursuant to the Wafer Supply Agreement between TSMC and Customer dated June 26, 1995, (the "Supply Agreement"), and Customer wishes to increase the volume of wafers to be purchased from TSMC; WHEREAS, in order to increase its output, TSMC must accelerate its ramp up in Fab 3 and advance the start of Fab 4; WHEREAS, as a condition to TSMC's acceleration of these facilities, TSMC has asked that Customer make a capacity commitment and advance payment for the right to buy additional capacity, and Customer is willing to do so: AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties agree as follows: 1. DEFINITIONS (a) "Base Capacity" used in this Agreement shall mean the annualized run rate that TSMC has previously committed to Customer, as set forth in Exhibit B. (b) "Customer Committed Capacity" used in this Agreement shall mean the total capacity that Customer agrees to purchase from TSMC pursuant to this Agreement, as set forth in Exhibit B, subject to the applicable provisions of this Agreement and the Supply Agreement. (c) "Option Capacity" used in this Agreement shall mean the firm capacity commitment made by Customer pursuant to this Agreement, for which capacity Customer agrees to pay the Option Fee as defined in Section 1(d) below. (d) "Option Fee" used in this Agreement shall mean the deposit that Customer agrees to place with TSMC as the advance payment for the Option Capacity.

OPTION AGREEMENT THIS AGREEMENT is made and becomes effective as of June 26, 3995 (the "Effective Date") by Taiwan Semiconductor Manufacturing Co., Ltd. ("TSMC"), a company organized under the laws of the Republic of China, with its registered address at No. 121, Park Ave. 3, Science Based Industrial Park, Hsinchu, Taiwan, and Altera Corporation, a company organized under the laws of California, with its registered address at 2610 Orchard Parkway, San Jose, California 95134-2020 ("Customer"). RECITALS WHEREAS, TSMC will supply Customer with wafers pursuant to the Wafer Supply Agreement between TSMC and Customer dated June 26, 1995, (the "Supply Agreement"), and Customer wishes to increase the volume of wafers to be purchased from TSMC; WHEREAS, in order to increase its output, TSMC must accelerate its ramp up in Fab 3 and advance the start of Fab 4; WHEREAS, as a condition to TSMC's acceleration of these facilities, TSMC has asked that Customer make a capacity commitment and advance payment for the right to buy additional capacity, and Customer is willing to do so: AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties agree as follows: 1. DEFINITIONS (a) "Base Capacity" used in this Agreement shall mean the annualized run rate that TSMC has previously committed to Customer, as set forth in Exhibit B. (b) "Customer Committed Capacity" used in this Agreement shall mean the total capacity that Customer agrees to purchase from TSMC pursuant to this Agreement, as set forth in Exhibit B, subject to the applicable provisions of this Agreement and the Supply Agreement. (c) "Option Capacity" used in this Agreement shall mean the firm capacity commitment made by Customer pursuant to this Agreement, for which capacity Customer agrees to pay the Option Fee as defined in Section 1(d) below. (d) "Option Fee" used in this Agreement shall mean the deposit that Customer agrees to place with TSMC as the advance payment for the Option Capacity.

(e) "TSMC committed capacity" used in this Agreement shall mean the total capacity that TSMC agrees to provide to Customer pursuant to this Agreement, and as set forth in Exhibit B. (f) "Wafer Equivalent" used in this Agreement shall mean the number of six-inch wafers based on the equivalency factor for TSMC's 0.5 micron, single poly, triple level metal process. For details of the equivalency factor, please refer to Exhibit A. Any and all capacity commitments referred to in this Agreement shall be measured in Wafer Equivalent. For an example of the application of the equivalency factor refer to Exhibit A-1. 2. VOLUME COMMITMENT (a) Subject to the applicable provisions of this Agreement and the Supply Agreement, Customer agrees to purchase from TSMC, and TSMC agrees to supply, the Customer Committed Capacity, and subject to the payment of the Option Fee by Customer under Section 5 below, TSMC agrees to provide to Customer the TSMC Committed Capacity, as set forth in Exhibit B. In any calendar year, the orders placed by Customer shall

(e) "TSMC committed capacity" used in this Agreement shall mean the total capacity that TSMC agrees to provide to Customer pursuant to this Agreement, and as set forth in Exhibit B. (f) "Wafer Equivalent" used in this Agreement shall mean the number of six-inch wafers based on the equivalency factor for TSMC's 0.5 micron, single poly, triple level metal process. For details of the equivalency factor, please refer to Exhibit A. Any and all capacity commitments referred to in this Agreement shall be measured in Wafer Equivalent. For an example of the application of the equivalency factor refer to Exhibit A-1. 2. VOLUME COMMITMENT (a) Subject to the applicable provisions of this Agreement and the Supply Agreement, Customer agrees to purchase from TSMC, and TSMC agrees to supply, the Customer Committed Capacity, and subject to the payment of the Option Fee by Customer under Section 5 below, TSMC agrees to provide to Customer the TSMC Committed Capacity, as set forth in Exhibit B. In any calendar year, the orders placed by Customer shall first apply to fulfill the Base Capacity portion of the Customer Committed Capacity, and then the Option Capacity. (b) Each month, Customer agrees to provide to TSMC a six-month rolling forecast of the number of wafers that Customer expects to purchase, with the volume for the first twelve weeks being frozen (i.e., Customer must purchase all of the quantity forecast for delivery in the first twelve weeks of the forecast). The forecast must be based on wafers out or deliveries expected to be made by TSMC. (c) TSMC will use its reasonable effort to cause its fabs to be capable of producing wafers of more advanced specifications, as set forth in the TSMC Technology Road Map attached as Exhibit C. 3. WAFER PRICE (a) The wafer price for the Customer Committed Capacity shall not be more than TSMC's average wafer prices to optionees (i.e., customers that are parties to option agreements similar to this Agreement) for the same or comparable technology, same wafer fab and the same period of time. Customer shall have the right at any time, but no more frequently than once per year, on at least thirty days prior written notice, to have an independent party acceptable to TSMC (such acceptance not to be unreasonably delayed or withheld) examine TSMC's records relating to the above pricing. Any price change will apply to unfilled or future orders only. (b) The parties shall negotiate in good faith each year the wafer prices for the Customer Committed Capacity of the following year in coordination with the annual negotiation under the Supply Agreement. In the course of such negotiations, TSMC shall make available relevant information in its possession regarding wafer market prices and TSMC's average wafer prices for the same or comparable technology in the same fab. If no agreement on these prices is reached by the -2-

parties within three months following written notice of request for negotiation by either party (the "Negotiation Request"), the parties agree to submit the dispute to the binding arbitration pursuant to Section 13 below, and under such circumstances, neither party shall have the right to terminate this Agreement under Section 7 below. 4. OTHER PURCHASE TERMS AND CONDITIONS The Supply Agreement will apply to all purchases of wafers by Customer from TSMC, except that the provisions of this Agreement will supersede the Supply Agreement with respect to the subject matter hereof. 5. OBLIGATION TO PAY OPTION FEE FOR OPTION CAPACITY (a) Customer agrees to pay to TSMC the Option Fee in the amount of *** *** for the right to purchase the Option Capacity pursuant to this Agreement, which TSMC hereby agrees to supply. The Option Fee is set forth in Exhibit D, and shall be paid in cash by no later than every June 30 during the term of this Agreement for the Option Capacity of the following year. Except that TSMC exercises its first right of refusal or Customer assigns

parties within three months following written notice of request for negotiation by either party (the "Negotiation Request"), the parties agree to submit the dispute to the binding arbitration pursuant to Section 13 below, and under such circumstances, neither party shall have the right to terminate this Agreement under Section 7 below. 4. OTHER PURCHASE TERMS AND CONDITIONS The Supply Agreement will apply to all purchases of wafers by Customer from TSMC, except that the provisions of this Agreement will supersede the Supply Agreement with respect to the subject matter hereof. 5. OBLIGATION TO PAY OPTION FEE FOR OPTION CAPACITY (a) Customer agrees to pay to TSMC the Option Fee in the amount of *** *** for the right to purchase the Option Capacity pursuant to this Agreement, which TSMC hereby agrees to supply. The Option Fee is set forth in Exhibit D, and shall be paid in cash by no later than every June 30 during the term of this Agreement for the Option Capacity of the following year. Except that TSMC exercises its first right of refusal or Customer assigns its purchase rights and obligations, pursuant to Section 6 below, the Option Fee, once paid, shall be nonrefundable except as provided in Section 7(d), but will be credited against payments due for wafers purchased by Customer from the Option Capacity provided by TSMC under this Agreement. (b) Customer further agrees to deliver to TSMC, within seven (7) days following the Effective Date, four (4) promissory notes each in an amount of the Option Fee due every year, and payable to TSMC or order on each June 30, which promissory notes are in the form of Exhibit E. The promissory notes shall be returned by TSMC to Customer within seven (7) days upon receipt of the corresponding Option Fee by TSMC. (c) Neither the payment of the Option Fee nor the delivery of the promissory notes shall prejudice Customer's right to any damages or other remedy to which Customer may be entitled by law. 6. FAILURE TO PURCHASE THE OPTION CAPACITY; FIRST RIGHT OF REFUSAL. (a) If in any calendar year, for any reason, Customer is not able to use or purchase all or a portion of the Customer Committed Capacity of that year, or any other year(s) during the term of this Agreement, Customer shall promptly notify TSMC of such in writing and first offer TSMC such Capacity or portion thereof for sales to any third parties. TSMC may, at its option, accept such offer, in whole or in part, within thirty (30) days following Customer's notification, and if TSMC so accepts, or if TSMC, in fact, sells such Capacity or portion thereof tothird parties, the corresponding Option Fee, if paid, will be returned without interest (notwithstanding Section 6 (b)). ***CONFIDENTIAL TREATMENT REQUESTED -3-

In the event that TSMC decides not to accept such offer, Customer may assign its right to purchase the Option Capacity or portion thereof for all or part of the remaining term of this Agreement to any third parties acceptable to TSMC (such acceptance not to be unreasonably delayed or withheld), within two months upon TSMC's written notice that it will not accept such offer, and if Customer fails to do so, Customer shall remain liable for the Option Fee for the remaining term of this Agreement under Section 5 above, and so long as Customer continues to pay the Option Fee it shall (regardless of any prior notification) retain the right to purchase the Option Capacity pursuant to this Agreement. (b) Any of Customer's rights or obligations set forth in Section 6(a) shall not affect its obligation to pay the Option Fee pursuant to Section 5 above, except that if the right to purchase all or part of the Option Capacity is assigned to any third parties acceptable to TSMC pursuant to Section 6(a) above, such third parties shall then have the exclusive obligation to pay the corresponding Option Fee and abide by the applicable terms and conditions of this Agreement.

In the event that TSMC decides not to accept such offer, Customer may assign its right to purchase the Option Capacity or portion thereof for all or part of the remaining term of this Agreement to any third parties acceptable to TSMC (such acceptance not to be unreasonably delayed or withheld), within two months upon TSMC's written notice that it will not accept such offer, and if Customer fails to do so, Customer shall remain liable for the Option Fee for the remaining term of this Agreement under Section 5 above, and so long as Customer continues to pay the Option Fee it shall (regardless of any prior notification) retain the right to purchase the Option Capacity pursuant to this Agreement. (b) Any of Customer's rights or obligations set forth in Section 6(a) shall not affect its obligation to pay the Option Fee pursuant to Section 5 above, except that if the right to purchase all or part of the Option Capacity is assigned to any third parties acceptable to TSMC pursuant to Section 6(a) above, such third parties shall then have the exclusive obligation to pay the corresponding Option Fee and abide by the applicable terms and conditions of this Agreement. 7. TERM AND TERMINATION (a) The term of this Agreement shall commence from the Effective Date, and continue until December 31, 1999. (b) Termination by TSMC for Customer's Failure to Pay the Option Fee. TSMC may terminate this Agreement if Customer fails to pay the Option Fee pursuant to Section 5 above, and does not cure or remedy such breach within thirty (30) days of receiving written notice of such breach. (c) Termination for Other Breach or for Bankruptcy. Either party may terminate this Agreement if, (i) the other party breaches any material provisions of this Agreement (other than the breach of Section 5 above), and does not cure or remedy such breach within sixty (60) days of receiving written notice of such breach, or (ii) becomes the subject of a voluntary or involuntary petition in bankruptcy or any proceeding relating to insolvency, receivership or liquidation, if such petition or proceeding is not dismissed with prejudice within sixty (60) days after filing. (d) Effect of Termination. Both parties shall remain liable to the other party for any outstanding and matured rights and obligations at the time of termination, including all outstanding payments of the Option Fee applicable to the used Option Capacity and for the wafers already ordered and/or shipped to customer. In the event Altera terminates this Agreement pursuant to Section 7(c) or Section 16, any advance payment of the Option Fee applicable to the unused and/or unprovided Option Capacity shall be refunded and any promissory notes therefor shall be returned. 8. LIMITATION OF LIABILITY In no event shall either party be liable for any indirect, special, incidental or consequential damages (including loss of profits and loss of use) resulting from, arising out of or in connection with its performance or failure to perform under this Agreement, or resulting from, arising out of or in -4-

connection with the production, supply, and/or purchase and sale of the wafers, whether due to a breach of contract, breach of warranty, tort, or negligence, or otherwise. 9. BOARD APPROVAL Customer shall obtain the approval of its Board of Directors of this Agreement, and submit to TSMC, at the time of executing this Agreement, an authentic copy of its Board resolution authorizing the representative designated below to execute this Agreement. 10. NOTICE All notices required or permitted to be sent by either party to the other party under this Agreement shall be sent

connection with the production, supply, and/or purchase and sale of the wafers, whether due to a breach of contract, breach of warranty, tort, or negligence, or otherwise. 9. BOARD APPROVAL Customer shall obtain the approval of its Board of Directors of this Agreement, and submit to TSMC, at the time of executing this Agreement, an authentic copy of its Board resolution authorizing the representative designated below to execute this Agreement. 10. NOTICE All notices required or permitted to be sent by either party to the other party under this Agreement shall be sent by registered mail postage prepaid, or by personal delivery, or by fax. Any notice given by fax shall be followed by a confirmation copy within ten (10) days. Unless changed by written notice given by either party to the other, the addresses and fax numbers of the respective parties shall be as follows: To TSMC: TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD. No. 121, Park Avenue 3 Science-Based Industrial Park Hsinchu, Taiwan Republic of China FAX: 886-35-781545 To Customer: ALTERA CORPORATION 2610 Orchard Parkway San Jose, California 95134-2020 USA FAX: 408-894-8000 11. ENTIRE AGREEMENT This Agreement, including Exhibits A-E, constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes and replaces all prior or contemporaneous understandings, agreements, dealings and negotiations, oral or written, regarding the subject matter hereof. No modification, alteration or amendment of this Agreement shall be effective unless in writing and signed by both parties. No waiver of any breach or failure by either party to enforce any provision of this Agreement shall be deemed a waiver of any other or subsequent breach, or a waiver of future enforcement of that or any other provision. -5-

12. GOVERNING LAW This Agreement will be governed and interpreted as set forth in Section 18.0 of the Supply Agreement. 13. ARBITRATION If the parties fail to agree on wafer prices within three months of any Negotiation Request given pursuant to Section 3, each party shall submit a written proposal to the other within 15 days following said three month period setting forth proposed prices and reasons in support thereof. If upon a review of these proposals, the parties are unable to reach agreement on the prices within 30 days following said three month period, the matter will be submitted to arbitration under the rules of the American Arbitration Association, but subject to the following special provisions. The arbitration shall be conducted by a panel of three arbitrators, one appointed by each party, and the third selected by the two appointed arbitrators. The arbitrators shall decide which proposal is

12. GOVERNING LAW This Agreement will be governed and interpreted as set forth in Section 18.0 of the Supply Agreement. 13. ARBITRATION If the parties fail to agree on wafer prices within three months of any Negotiation Request given pursuant to Section 3, each party shall submit a written proposal to the other within 15 days following said three month period setting forth proposed prices and reasons in support thereof. If upon a review of these proposals, the parties are unable to reach agreement on the prices within 30 days following said three month period, the matter will be submitted to arbitration under the rules of the American Arbitration Association, but subject to the following special provisions. The arbitration shall be conducted by a panel of three arbitrators, one appointed by each party, and the third selected by the two appointed arbitrators. The arbitrators shall decide which proposal is the most reasonable and the selected proposal shall thereupon become binding on both parties. The arbitrators shall not select any other prices nor decide any other issue, unless otherwise agreed in writing by both parties. All other disputes shall be resolved in accordance with Section 20.0 of the Supply Agreement. 14. ASSIGNMENT This Agreement shall be binding on and inure to the benefit of each party and its successors, and except that Customer may assign its purchase rights and obligations under this Agreement pursuant to Section 6 above, neither party shall assign any of its rights hereunder, nor delegate its obligations hereunder, to any third party, without the prior written consent of the other. 15. CONFIDENTIALITY Neither party shall disclose the existence or contents of this Agreement except as required by Customer's assignment of rights and obligations under this Agreement to any third parties pursuant to Section 6 above, in confidence to its advisers, as required by applicable law, or otherwise with the prior written consent of the other party. 16. FORCE MAJEURE Neither party shall be responsible for delays or failure in performance resulting from acts beyond the reasonable control of such party. Such acts shall include but not be limited to acts of God, war, riot, labor stoppages, governmental actions, fires, floods, and earthquakes. If such delays or failures on the part of either party continue for a period of more than one hundred twenty (120) days, the other party may terminate this Agreement upon written notice, subject to Section 7(d). -6-

IN WITNESS WHEREOF, the parties, have executed this Agreement as of the date first stated above.
TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. ALTERA CORPORATION

By: /S/DONALD BROOKS ---------------------------------Donald Brooks President

By: /S/RODNEY SMITH ---------------------------------Rodney Smith President

-7-

EXHIBIT A

IN WITNESS WHEREOF, the parties, have executed this Agreement as of the date first stated above.
TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. ALTERA CORPORATION

By: /S/DONALD BROOKS ---------------------------------Donald Brooks President

By: /S/RODNEY SMITH ---------------------------------Rodney Smith President

-7-

EXHIBIT A ***CONFIDENTIAL TREATMENT REQUESTED***

EXHIBIT A-1 *** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT B CUSTOMER/TSMC COMMITTED CAPACITY Unit: Wafer Equivalent
1996 ---*** *** 1997 ---*** *** 1998 ---*** *** 1999 ---*** ***

Base Capacity X% of Base Capacity X = Option Capacity TSMC Committed Capacity (Base Capacity + Option Capacity) Customer Committed Capacity (X% Base Capacity + Option Capacity)

*** ***

*** ***

*** ***

*** ***

***

***

***

***

* *** *** CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT C *** CONFIDENTIAL TREATEMENT REQUESTED ***

EXHIBIT A ***CONFIDENTIAL TREATMENT REQUESTED***

EXHIBIT A-1 *** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT B CUSTOMER/TSMC COMMITTED CAPACITY Unit: Wafer Equivalent
1996 ---*** *** 1997 ---*** *** 1998 ---*** *** 1999 ---*** ***

Base Capacity X% of Base Capacity X = Option Capacity TSMC Committed Capacity (Base Capacity + Option Capacity) Customer Committed Capacity (X% Base Capacity + Option Capacity)

*** ***

*** ***

*** ***

*** ***

***

***

***

***

* *** *** CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT C *** CONFIDENTIAL TREATEMENT REQUESTED ***

EXHIBIT D OPTION FEE
OPTION CAPACITY OPTION FEE YEAR (UNIT: WAFER EQUIVALENT) (UNIT: US$) DUE DATE -------------------------------------------------------------------------------1996 *** *** June 30, 1995 1997 *** *** June 30, 1996 1998 *** *** June 30, 1997 1999 *** *** June 30, 1998

*** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT A-1 *** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT B CUSTOMER/TSMC COMMITTED CAPACITY Unit: Wafer Equivalent
1996 ---*** *** 1997 ---*** *** 1998 ---*** *** 1999 ---*** ***

Base Capacity X% of Base Capacity X = Option Capacity TSMC Committed Capacity (Base Capacity + Option Capacity) Customer Committed Capacity (X% Base Capacity + Option Capacity)

*** ***

*** ***

*** ***

*** ***

***

***

***

***

* *** *** CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT C *** CONFIDENTIAL TREATEMENT REQUESTED ***

EXHIBIT D OPTION FEE
OPTION CAPACITY OPTION FEE YEAR (UNIT: WAFER EQUIVALENT) (UNIT: US$) DUE DATE -------------------------------------------------------------------------------1996 *** *** June 30, 1995 1997 *** *** June 30, 1996 1998 *** *** June 30, 1997 1999 *** *** June 30, 1998

*** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT E STANDARD FORM OF PROMISSORY NOTE

EXHIBIT B CUSTOMER/TSMC COMMITTED CAPACITY Unit: Wafer Equivalent
1996 ---*** *** 1997 ---*** *** 1998 ---*** *** 1999 ---*** ***

Base Capacity X% of Base Capacity X = Option Capacity TSMC Committed Capacity (Base Capacity + Option Capacity) Customer Committed Capacity (X% Base Capacity + Option Capacity)

*** ***

*** ***

*** ***

*** ***

***

***

***

***

* *** *** CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT C *** CONFIDENTIAL TREATEMENT REQUESTED ***

EXHIBIT D OPTION FEE
OPTION CAPACITY OPTION FEE YEAR (UNIT: WAFER EQUIVALENT) (UNIT: US$) DUE DATE -------------------------------------------------------------------------------1996 *** *** June 30, 1995 1997 *** *** June 30, 1996 1998 *** *** June 30, 1997 1999 *** *** June 30, 1998

*** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT E STANDARD FORM OF PROMISSORY NOTE Amount US$ __________________ Due Date __________________ The undersigned ________________________ (the "Maker"), unconditionally (except as otherwise provided in the Option Agreement between TSMC and Maker dated __________________) promises to pay to Taiwan Semiconductor Manufacturing Co., Ltd. or its order the sum of U.S. Dollars ________________________ ($_________________), plus interest calculated from the due date stated herein to the date of full payment at the rate of 10% per annum on any unpaid portion of the principal amount stated herein, and said payment will be

EXHIBIT C *** CONFIDENTIAL TREATEMENT REQUESTED ***

EXHIBIT D OPTION FEE
OPTION CAPACITY OPTION FEE YEAR (UNIT: WAFER EQUIVALENT) (UNIT: US$) DUE DATE -------------------------------------------------------------------------------1996 *** *** June 30, 1995 1997 *** *** June 30, 1996 1998 *** *** June 30, 1997 1999 *** *** June 30, 1998

*** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT E STANDARD FORM OF PROMISSORY NOTE Amount US$ __________________ Due Date __________________ The undersigned ________________________ (the "Maker"), unconditionally (except as otherwise provided in the Option Agreement between TSMC and Maker dated __________________) promises to pay to Taiwan Semiconductor Manufacturing Co., Ltd. or its order the sum of U.S. Dollars ________________________ ($_________________), plus interest calculated from the due date stated herein to the date of full payment at the rate of 10% per annum on any unpaid portion of the principal amount stated herein, and said payment will be made at ______________________ (Place of Payment). This Note shall be governed in all respects by the laws of the State of California, U.S.A. The Maker of this Note agrees to waive protests and notice of whatever kind. Issuer Date __________________ Issuer Date __________________ Maker's Signature: ____________________________ Maker's Address: ______________________________

ARTICLE 5 MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH

3 MOS DEC 31 1995 APR 01 1995 JUN 30 1995 53,954

EXHIBIT D OPTION FEE
OPTION CAPACITY OPTION FEE YEAR (UNIT: WAFER EQUIVALENT) (UNIT: US$) DUE DATE -------------------------------------------------------------------------------1996 *** *** June 30, 1995 1997 *** *** June 30, 1996 1998 *** *** June 30, 1997 1999 *** *** June 30, 1998

*** CONFIDENTIAL TREATMENT REQUESTED ***

EXHIBIT E STANDARD FORM OF PROMISSORY NOTE Amount US$ __________________ Due Date __________________ The undersigned ________________________ (the "Maker"), unconditionally (except as otherwise provided in the Option Agreement between TSMC and Maker dated __________________) promises to pay to Taiwan Semiconductor Manufacturing Co., Ltd. or its order the sum of U.S. Dollars ________________________ ($_________________), plus interest calculated from the due date stated herein to the date of full payment at the rate of 10% per annum on any unpaid portion of the principal amount stated herein, and said payment will be made at ______________________ (Place of Payment). This Note shall be governed in all respects by the laws of the State of California, U.S.A. The Maker of this Note agrees to waive protests and notice of whatever kind. Issuer Date __________________ Issuer Date __________________ Maker's Signature: ____________________________ Maker's Address: ______________________________

ARTICLE 5 MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS

3 MOS DEC 31 1995 APR 01 1995 JUN 30 1995 53,954 269,699 52,903 895 38,283 435,758 79,660 35,180 503,839

EXHIBIT E STANDARD FORM OF PROMISSORY NOTE Amount US$ __________________ Due Date __________________ The undersigned ________________________ (the "Maker"), unconditionally (except as otherwise provided in the Option Agreement between TSMC and Maker dated __________________) promises to pay to Taiwan Semiconductor Manufacturing Co., Ltd. or its order the sum of U.S. Dollars ________________________ ($_________________), plus interest calculated from the due date stated herein to the date of full payment at the rate of 10% per annum on any unpaid portion of the principal amount stated herein, and said payment will be made at ______________________ (Place of Payment). This Note shall be governed in all respects by the laws of the State of California, U.S.A. The Maker of this Note agrees to waive protests and notice of whatever kind. Issuer Date __________________ Issuer Date __________________ Maker's Signature: ____________________________ Maker's Address: ______________________________

ARTICLE 5 MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS COMMON PREFERRED MANDATORY PREFERRED OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES

3 MOS DEC 31 1995 APR 01 1995 JUN 30 1995 53,954 269,699 52,903 895 38,283 435,758 79,660 35,180 503,839 78,486 230,000 75,751 0 0 119,602 503,839 92,165 92,165 37,489 37,489 24,691 0 (1,177) 31,162 11,530 0 0 0 0

ARTICLE 5 MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS COMMON PREFERRED MANDATORY PREFERRED OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

3 MOS DEC 31 1995 APR 01 1995 JUN 30 1995 53,954 269,699 52,903 895 38,283 435,758 79,660 35,180 503,839 78,486 230,000 75,751 0 0 119,602 503,839 92,165 92,165 37,489 37,489 24,691 0 (1,177) 31,162 11,530 0 0 0 0 19,632 .43 0