UMC Acquires 100% Ownership of Mie Fujitsu Semiconductor

Volume production fab will further diversify UMC’s 300mm manufacturing base

YOKOHAMA, Japan & HSINCHU, Taiwan — (BUSINESS WIRE) — June 29, 2018 — Fujitsu Semiconductor Limited (Fujitsu Semiconductor) and United Microelectronics Corporation (NYSE:UMC; TWSE:2303) ("UMC"), a leading global semiconductor foundry, today announced that UMC will acquire all of the shares of Mie Fujitsu Semiconductor Limited (MIFS), a 300mm wafer foundry joint venture between both companies.

In addition to the 15.9% of MIFS shares currently owned by UMC, Fujitsu Semiconductor will transfer the remaining 84.1% of its shares in MIFS to UMC, making MIFS a wholly-owned subsidiary of the Taiwan-based foundry. The consideration of the transaction will be around ¥ JPN 57.6 billion. The transfer is planned for January 1, 2019, pending approval by the relevant governmental authorities.

In 2014, both companies concluded an agreement for UMC to acquire a 15.9% stake in MIFS through progressive phases. Since then, besides equity investment, Fujitsu Semiconductor and UMC have been furthering their partnership through licensing of UMC’s 40nm technology and establishment of a 40nm logic production line at MIFS. After several years of joint operations, both companies have agreed on the benefits of integrating MIFS into UMC, which has a strong business foundation as a world leading semiconductor foundry with a broad customer portfolio, enhanced manufacturing expertise and extensive technology offerings enabling MIFS to maximize its values it can deliver to all stakeholders, including its customers.

As a member of UMC, MIFS will continue to provide foundry services of an even higher quality to its customers. While the name of the company and details of distribution after the transaction will soon be determined, for the present, MIFS will maintain its existing distribution channels for customers.

Jason Wang, co-president of UMC said, “UMC is experiencing high demand from mature 12" processes. With new applications in 5G, IoT, automotive and AI requiring these technologies, we anticipate the market conditions driving this demand to remain strong for the foreseeable future. The acquisition of a fully qualified, equipped, and volume production proven 12" facility provides greater time and ROI advantages compared to building a fab from scratch, which would cost several billion dollars and several years to construct and equip. With existing 300mm fabs in Taiwan, China and Singapore, Japan-based MIFS will help customers further diversify their manufacturing risk with a robust production base to ensure business continuity, which is especially important for automotive chip makers who require a stable and uninterrupted source of supply. UMC will also be able to leverage its decades of world class IC production experience with Japan's local talent and world-renowned quality standards to better serve Japanese and international customers. We are excited that the strong partnership between UMC and Fujitsu Semiconductor will enable us to achieve further growth and provide customers with higher value through the acquisition of MIFS.”

“With its strengths in technology, such as ultra-low power consumption process technology, non-volatile memory technology for embedded applications, and RF and mmWave technology, as well as its highly reliable production system, as accepted by automotive customers, and its outstanding and experienced workforce, MIFS has been providing its customers with high quality foundry services” said Kagemasa Magaribuchi, President and Representative Director of Fujitsu Semiconductor. “To sustain its growth in the future and deliver far greater values to its customers, Fujitsu Semiconductor and MIFS have determined that it is the best to further enhance its competitiveness as a pure-play foundry by becoming a member of the UMC Group, a leading global semiconductor foundry. I expect that, by fully leveraging the UMC Group’s strengths, including its expertise and its cost competitiveness driven both by capital investment backed by ample financial resources as well as its globally expanded businesses, MIFS will further grow as a global company. I believe that the further growth of MIFS will also contribute to maintaining and expanding a workforce and to the local economy in the regions MIFS resides.”

About UMC

UMC (NYSE:UMC, TWSE:2303) is a leading global semiconductor foundry that provides advanced IC production for applications spanning every major sector of the electronics industry. UMC’s comprehensive foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include world-class 28nm High-K/Metal Gate technology, 14nm FinFET volume production, specialty process platforms specifically developed for AI, 5G and IoT applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce nearly 600,000 wafers per month. The company employs over 20,000 people worldwide, with offices in Taiwan, China, Europe, Japan, Korea, Singapore, and the United States. UMC can be found on the web at http://www.umc.com.

Note from UMC Concerning Forward-Looking Statements

Some of the statements in the foregoing announcement are forward looking within the meaning of the U.S. Federal Securities laws, including statements about future outsourcing, wafer capacity, technologies, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC’s filings with the U.S. Securities and Exchange Commission, including its registration statements and reports on Forms F-1, F-3, F-6 and 20-F and 6-K, in each case as amended. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

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