UMC Reports 2005 First Quarter Results: Company Foresees a Gradual Recovery in Volume for 2Q05


The amount of capital expenditure spent in 1Q05 was US$113 million for UMC and US$84 million for UMCi. UMC's 2005 CAPEX is still expected to be between US$1 billion and US$1.5 billion.

Long-term Investments(6)
        Consolidated Long-term Investments as of March 31, 2005

                          As of End of 1Q05      As of End of 4Q04
----------------------------------------------------------------------
(Amount: NT$ million)    Book        Fair       Book        Fair
                          value  %   value  %    value  %   value  %
======================================================================
Foundry Industry         35,673  56 32,584  38  41,235  59 36,281  41
----------------------------------------------------------------------
Strategic Semiconductor
 Investments             11,138  18 33,454  39  12,028  17 33,232  38
----------------------------------------------------------------------
Other Investments        16,854  26 19,884  23  16,515  24 18,813  21
======================================================================
Total                    63,665 100 85,922 100  69,778 100 88,326 100
----------------------------------------------------------------------


As of March 31, 2005, the total book value of long-term investments held by UMC was NT$63.67 billion, and the estimated fair value of long-term investments was NT$85.92 billion. The decrease in book value of foundry industry investments was mainly due to the recognition of losses in the Company's investments in UMCi and UMCJ. The decrease in book value of strategic semiconductor investments is mainly due to the disposal of several investments. The increase in other investments is due to an increase in the share price of several investments. By the end of 2Q05, the book value of foundry industry investments will decrease significantly after we transferred all of UMCi's business, operations and assets, with a book value NT$21.87 billion as of 1Q05, to UMC's Singapore branch in April 2005.

Recent Developments / Announcements
Apr. 11, 2005     UMC Expands X Architecture Support -- First Pure-
                  Play Foundry to Provide Qualified 90-nm Design
                  Rules

Apr. 1, 2005      UMC and UMCi Complete Merger

Mar. 17, 2005     UMC Board of Directors Announces Proposals for its
                  Annual Shareholders Meeting

Mar. 7, 2005      UMC and Virage Logic Announce Qualification of
                  Embedded Non-Volatile Memory Technology on UMC's
                  0.18um Logic Process

Feb. 24, 2005     JMicron Develops Serial ATA II (3.0 Gbps) PHY Core
                  on UMC's 0.13 Micron Process

Feb. 16, 2005     UMC Under Investigation related to Hejian Technology
                  Corporation in Mainland China. The investigation
                  had no influence on the operation of the Company

Feb. 2, 2005      UMC 4Q 2004 Financial Results

Feb. 1, 2005      UMC and Ansoft Address RFCMOS Design Requirements
                  with On-Chip Spiral Inductor Library

Please visit UMC's website 
http://www.umc.com/english/news/index.asp
for further details regarding the above announcements.


Second Quarter of 2005 Outlook & Guidance

Quarter-over-quarter Guidance:

-- Wafer shipments: to increase by low single digit % points

-- Wafer ASP in US$: to decline by high single digit % points

-- Capacity utilization rate: approximately 60%

-- Profitability: approaching gross profit breakeven

-- Percentage of 0.18um & below revenues: temporary contraction due to stronger demand for mature technology, though sales from 90nm is expected to exceed 10%

-- The consumer segment is expected to be the strongest while the computer segment is expected to show a seasonal slowdown

Conference Call / Webcast Announcement
Wednesday, April 27, 2005

Time: 8:00 PM (Taipei) / 8:00 AM (New York) / 1:00 PM (London)

Dial-in numbers and Access Codes:
Asia/Europe:       +1-617-847-8706
North America:     800-237-9752
Access Code:       UMCCall

  A live webcast and replay of the 1Q05 results announcement will be
   available at 
www.umc.com under the "Investor Relations \ Investor
                           Events" section.


About UMC

UMC (NYSE: UMC, TSE: 2303) is a leading global semiconductor foundry that manufactures advanced process ICs for applications spanning every major sector of the semiconductor industry. UMC delivers cutting-edge foundry technologies that enable sophisticated system-on-chip (SoC) designs, including 90nm copper, 0.13um copper, and mixed signal/RFCMOS. UMC is also a leader in 300mm manufacturing; Fab 12A in Taiwan and Singapore-based Fab 12i are both in volume production for a variety of customer products. UMC employs approximately 10,500 people worldwide and has offices in Taiwan, Japan, Singapore, Europe, and the United States. UMC can be found on the web at http://www.umc.com.

(1) Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with ROC GAAP, which differ in some material respects from generally accepted accounting principles in the United States. They are unaudited, unconsolidated, and represent comparisons among the three-month period ending March 31, 2005, the three-month period ending December 31, 2004, and the equivalent three-month period that ended March 31, 2004. For all 1Q05 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. dollars at the exchange rate of NT$31.57 to one U.S. dollar.

(2) Days Sales Outstanding = 365/ ((Operating revenues for the three-month period end *4)/((Beginning NR&AR balance, net + Ending NR&AR balance, net)/2))

Average Inventory Turnover = 365/((COGS for the three-month period end *4)/((Beginning Inventory balance, net + Ending Inventory balance, net)/2))

(3) Revenue in this section represents net wafer sales. All revenue breakdown tables exclude JV's and subsidiaries.

(4) Estimated capacity numbers are based on calculated maximum output rather than designed capacity. The actual capacity numbers may differ depending upon equipment delivery schedules, pace of migration to more advanced process technologies, and other factors affecting production ramp-up.

(5) Quarterly utilization rate = Quarterly wafer out / Estimated quarterly capacity

(6) The long-term investment information disclosed is UMC Group consolidated data, which includes UMC, Hsun Chieh Investment Corp., Fortune Venture Capital Corp. and UMC Capital Corp. For publicly quoted investments, fair value is calculated by multiplying the average daily closing price of the last month of the accounting period (March of 2004) with the number of shares owned by the UMC Group as of March 31, 2005. Otherwise, book value or underlying equity net value of investments is taken as recorded on the balance sheet at the end of the accounting period (March 31, 2005) and is used as the fair value.

Safe Harbor Statements

Except for statements in respect of historical matters, the statements in this release contain "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of UMC to be materially different from what is stated or may be implied in such forward-looking statements. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors, including, among other things: our dependence upon the frequent introduction of new services and technologies based on the latest developments in our industry; the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; the risks associated with international global business activities; our dependence upon key personnel; general economic and political conditions, including those related to the semiconductor, communications, consumer electronics and computer industries; possible disruptions in commercial activities caused by natural and human-induced events and disasters, including terrorist activity, armed conflict and highly contagious diseases, such as SARS; reduced end-user purchases relative to expectations and orders; fluctuations in foreign currency exchange rates; and those risks identified in the section entitled "Risk Factors" in UMC's Annual Report on Form 20-F for the year ended December 31, 2003 filed with the U.S. Securities and Exchange Commission on June 17, 2004.

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