<PAGE>   1
                                                                   EXHIBIT 10.26

                         Amendment to Option I Agreement


         This Amendment, made to Option I Agreement between Integrated Silicon
Solution (Taiwan), Inc. and Taiwan Semiconductor Manufacturing Co, Ltd., dated
April 21, 1995 (the "Option Agreement"), is effective as of September 23, 1996
(the "Effective Date") by and between Integrated Silicon Solution (Taiwan),
Inc., a company organized under the laws of the R.O.C, with its registered
address at IF, No. 10, Prosperity Rd. 11, Science-Based Industrial Park,
Hsinchu, Taiwan, R.O.C ("Customer"), and Taiwan Semiconductor Manufacturing Co.,
Ltd., a company organized under the laws of the R.O.C., with its registered
address at No. 121, Park Ave. 3, Science-Based Industrial Park, Hsinchu, Taiwan,
R.O.C ("TSMC").

         In consideration of mutual covenants and condition, both parties agree
         to amend the Option Agreement as follows:


I.       Defined terms to be used herein but not defined herein shall have the
         meaning set forth in the Option Agreement.

II.      Amend Sections 1 (d), 5, 6, 12 and 16 as follows:

         l(d).    "Option Fee"**

         5.       The Option Fee is set forth in Exhibit D.**

                  To guarantee Customer's commitment to purchase the Option
                  Capacity, Customer shall cause to be delivered by Integrated
                  Silicon Solution Inc. ("ISSI"), with its principal office at
                  680 Almanor Ave., Sunnyvale, CA 94086-9513, an irrevocable
                  standby L/C to TSMC covering the yearly Option Fee for the
                  years from and after 1997. The standby L/C shall be issued
                  before every November 1, covering 18 months starting from
                  every November 1, by an internationally reputable bank
                  mutually agreed upon by the parties in the amount of the
                  Option Fee for the subsequent calendar year, and promptly
                  submitted to TSMC for approval. Customer shall cause ISSI to
                  make the standby L/C in the form and substance as attached
                  hereto as Exhibit F.** In the event Customer fails to pay the
                  foregoing Option Fee within 30 days of receiving TSMC's notice
                  of payment, TSMC has the right to draw on the applicable
                  standby L/C the foregoing Option Fee.

         6.       Upon TSMC's acceptance of the standby L/C from Customer for
                  1997 Option Fee, TSMC will return to Customer all the
                  promissory notes already made to TSMC pursuant to this
                  Agreement.


**Confidential treatment requested for certain portions of this exhibit.


<PAGE>   2



         12.      This Agreement, including Exhibits A-F and the Amendment,
                  constitutes the entire agreement between the parties with
                  respect to the subject matter hereof, and supersedes and
                  replaces all prior or contemporaneous understanding,
                  agreements, dealings and negotiations, oral or written,
                  regarding the subject matter hereof. In the event, any
                  provision of this Agreement conflicts with the Amendment, the
                  Amendment shall govern with respect to the subject matter
                  therein. No modification, alteration or amendment of this
                  Agreement shall be effective unless made 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.

         16.      Both parties shall keep in strict confidence the existence and
                  contents of this Agreement and the Amendment, and take best
                  precaution possible to prevent any Unauthorized disclosure or
                  use thereof. Both parties agree, that no disclosure of this
                  Agreement, the Amendment or any matters relating hereto may be
                  made without the disclosing party first providing the proposed
                  disclosure to the other party two weeks in advance for consent
                  and reasonable changes. In the event disclosure is required by
                  laws or governmental regulations, the disclosing party shall
                  provide the other party two weeks prior written notice and
                  give the other party the opportunity to protest, participate
                  in preparing disclosure or make reasonable changes thereto.

III.     Add New Section 18:

         18.      Within forty (40) days upon expiration or termination of the
                  Customer/TSMC Wafer Production Agreement dated November 8,
                  1993, both parties agree to use their best efforts to
                  negotiate and enter into a new wafer production agreement or
                  to renew the above Agreement. Both parties agree to apply such
                  agreement to all purchase of wafers by Customer from TSMC
                  under this Agreement, except that the provisions of this
                  Agreement will supersede the above Agreement or any similar
                  agreement to the subject matter hereof.

IV.      Delete Section 8(b) and Renumber Original Sections 8(c) and 8(d) as
         Sections 8(b) and 8(c).

V.       Add to the End of New Section 8(c): "In no event shall either party
         liable for indirect, consequential, or special damage arising from this
         Agreement or its performance."


<PAGE>   3


VI.      Replace Original Exhibit D with New Exhibit D.


Integrated Silicon Solution (Taiwan), Inc.        Taiwan Semiconductor
                                                  Manufacturing Co., Ltd.



/s/ K.Y. Han                                      /s/ Donald Brooks
------------                                      -----------------
K.Y. Han                                          Donald Brooks
President                                         President


<PAGE>   4


                                    EXHIBIT D
                                   OPTION FEE

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
  Year             Option Capacity                    Option Fee                       Standby L/C
               (Unit: Wafer Equivalent)          (US$) for Standby L/C                  Due Date
--------------------------------------------------------------------------------------------------------------
<S>                       <C>                             <C>               <C> 
1996                      **                              **                Paid
--------------------------------------------------------------------------------------------------------------
1997                      **                              **                Amendment Effective Date
--------------------------------------------------------------------------------------------------------------
1998                      **                              **                November 1, 1997
--------------------------------------------------------------------------------------------------------------
1999                      **                              **                November 1, 1998
--------------------------------------------------------------------------------------------------------------
</TABLE>


** Confidential treatment requested for certain portions of this exhibit


<PAGE>   5
                                   EXHIBIT F


                                   [Not Used]
<PAGE>   6


                        Amendment to Option II Agreement


         This Amendment, made to Option II Agreement between Integrated Silicon
Solution (Taiwan), Inc. and Taiwan Semiconductor Manufacturing Co. Ltd., dated
April 21, 1995 (the "Option Agreement"), is effective as of September 23, 1996
(the "Effective Date") by and between Integrated Silicon Solution (Taiwan),
Inc., a company organized under the laws of the R.O.C., with its registered
address at IF, No. 10, Prosperity Rd. II, Science-Based Industrial Park,
Hsinchu, Taiwan, R.O.C. ("Customer"), and Taiwan Semiconductor Manufacturing
Co., Ltd., a company organized under the laws of the R.O.C. with its registered
address at No. 121, Park Ave. 3, Science-Based Industrial Parkway, Hsinchu,
Taiwan, R.O.C ("TSMC").

         In consideration of mutual covenants and conditions, both parties agree
         to amend the Option Agreement as follows:

I.       Defined terms used herein but not defined herein shall have the meaning
         set forth in the Option Agreement.

II.      Amend Sections 1(d), 5 , 6, 12 and 16 as follows:

         1(d).    "Option Fee" **

         5.       The Option Fee is set forth in Exhibit D.**

                  To guarantee Customer's commitment to purchase the Option
                  Capacity, Customer shall cause to be delivered by Integrated
                  Silicon Solution, Inc. ("ISSI"), with its principal office at
                  680 Almanor Ave., Sunnyvale, CA 94086-9513, an irrevocable
                  standby L/C to TSMC covering the yearly Option Fee for the
                  years from and after 1997. The standby L/C shall be issued
                  before every November 1, covering 18 months starting from
                  every November 1, by an internationally reputable bank
                  mutually agreed upon by the parties in the amount of the
                  Option Fee for the subsequent calendar year, and promptly
                  submitted to TSMC for approval. Customer shall cause ISSI to
                  make the standby L/C in the form and substance as attached
                  hereto as Exhibit F.** In the event Customer fails to pay the
                  foregoing Option Fee within 30 days of receiving TSMC's notice
                  of payment, TSMC has the right to draw on the applicable
                  standby L/C the foregoing Option Fee-

         6.       Upon TSMC's acceptance of the standby L/C. from Customer for
                  1997 Option Fee, TSMC will return to Customer all the
                  promissory notes already made to TSMC pursuant to this
                  Agreement.


** Confidential treatment requested for certain portions of this exhibit.


<PAGE>   7



         12.      This Agreement, including Exhibits A-F, and the Amendment,
                  constitutes the entire agreement between the parties with
                  respect to the subject matter hereof, and supersedes and
                  replaces all prior or contemporaneous understanding,
                  agreements, dealings and negotiations, oral or written,
                  regarding the subject matter hereof. In the event, any
                  provision of this Agreement conflicts with the Amendment, the
                  Amendment shall govern with respect to the subject matter
                  therein. No modification, alteration or amendment of this
                  Agreement shall be effective unless made 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.

         16.      Both parties shall keep in strict confidence the existence and
                  contents of this Agreement and the Amendment, and take best
                  precaution possible to prevent any unauthorized disclosure or
                  use thereof. Both parties agree that no disclosure of this
                  Agreement, the Amendment or any matters relating hereto may be
                  made without the disclosing party first providing the opposed
                  disclosure to the other party two weeks in advance for consent
                  and reasonable changes. In the event disclosure is required by
                  laws or governmental regulations, the disclosing party shall
                  provide the other party two weeks prior written notice and
                  give the other party the opportunity to protest, participate
                  in preparing disclosure or make reasonable changes thereto.

111.     Add New Section 18:

         18.      Within forty (40) days upon expiration or termination of the
                  Customer/TSMC Wafer Production Agreement dated November 8,
                  1993, both parties agree to use their best efforts to
                  negotiate and enter into a new wafer production agreement or
                  to renew the above Agreement. Both parties agree to apply such
                  agreement to all purchase of wafers by Customer from TSMC
                  under this Agreement, except that the provisions of this
                  Agreement will supersede the above Agreement or any similar
                  agreement with respect to the subject matter hereof

IV.      Delete Section 8(b) and Remember Original Sections 8(c) and 8(d) as
         Sections 8(b) and 8(c).

V.       Add to the End of New Section 8(c): "In no event shall either party be
         liable for indirect, consequential, or special damage arising from this
         Agreement or its performance."

VI.      Replace Original Exhibit D with New Exhibit D.


<PAGE>   8



Integrated Silicon Solution (Taiwan), Inc.        Taiwan Semiconductor
                                                  Manufacturing Co., Ltd.,



/s/K.Y. Han                                       /s/Donald Brooks
-----------                                       ----------------
K.Y. Han                                          Donald Brooks

President                                         President




Date: September 23, 1996



<PAGE>   9


                                    EXHIBIT D
                                   OPTION II FEE

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
  Year             Option Capacity                    Option Fee                       Standby L/C
               (Unit: Wafer Equivalent)          (US$) for Standby L/C                  Due Date
--------------------------------------------------------------------------------------------------------------
<S>                       <C>                             <C>               <C> 
1996                      --                              --                       --
--------------------------------------------------------------------------------------------------------------
1997                      --                              --                       --
--------------------------------------------------------------------------------------------------------------
1998                      **                              **                November 1, 1997
--------------------------------------------------------------------------------------------------------------
1999                      **                              **                November 1, 1998
--------------------------------------------------------------------------------------------------------------
2000                      **                              **                November 1, 1999
--------------------------------------------------------------------------------------------------------------
2001                      **                              **                November 1, 2000
--------------------------------------------------------------------------------------------------------------
</TABLE>


** Confidential treatment requested for certain portions of this exhibit


<PAGE>   10

                                  EXHIBIT F


                                  [NOT USED]