UMC Raises $302 Million Through Zero-Coupon Convertible Bond Offering

Taipei, Taiwan, R.O.C. - December 5, 2001 - UMC (NYSE: UMC; TAIEX: 2303), a world leading semiconductor foundry, today announced that it has successfully launched and priced an offering of zero-coupon convertible bonds in the principal amount of US$302 million, maturing March 1, 2004. The offering is the second largest convertible bond ever issued by a Taiwanese company and the largest ever with a non-putable structure. The bonds were issued at 100 percent of par and are convertible into 129 million treasury shares held by UMC in either ordinary share or American Depositary Share (ADS) form at the option of the holder (one ADS equals five ordinary shares). This marks the first Taiwanese convertible bond to use treasury stock as conversion property.

Amid strong demand, the deal was already over 17 times oversubscribed in only 5 hours of marketing. UMC achieved a yield to maturity of 0.75 percent, the tight end of the indicative range and the lowest yield to maturity ever achieved on an Asia Pacific convertible or exchangeable bond that did not feature a rolling put provision for investors. The Bonds are convertible at a premium of 40 percent over the ADS price and 86 percent over the ordinary share price, with a reference ADS price of US$8.37 on December 4. The conversion premium of 40 percent was above the indicative range of 30-35 percent and the highest conversion premium ever for an Asia Pacific issuer. The Bonds are callable after June 12, 2003, subject to a 130 percent hurdle.

Important Notice

This release and the information contained herein is not an offer to sell or a solicitation of any offer to buy securities in the United States. Securities may not be offered or sold in the United States in the absence of registration under the United States Securities Act of 1993, as amended (the "Securities Act") or an exemption from such registration requirement. Any public offering of securities by our company will be made by means of a prospectus meeting the requirements of the Securities Act. Such prospectus, copies of which may be obtained from our company, will contain, among other things, detailed information regarding our company, business and management, as well as financial statements and other financial information regarding our company. No money, securities or other consideration is being solicited by this release or the information contained herein and, if sent in response to this release or the information contained herein will not be accepted.

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