UMC Group would like to report the following news regarding our earthquake recovery status:

As of today, UMC Group has returned to 100% pre-earthquake production levels in all of our facilities in Hsinchu. Furthermore, our power supply needs are being fully met and we foresee no further interruption of production.

There is no change in our earlier estimates for revenue losses resulting from interruption of production at UMC Group.

In addition to the NT$300 million (US$ 9.5 million) pledge from UMC Group, our employees continue to make individual donations towards disaster relief. Employees in our USA office have also donated about US$20,000 dollars to Taiwanese charitable institutes, and UMC Group (USA) has committed to match all employee donations with equal contributions. Finally, we would like to thank our equipment and material suppliers for their tremendous support and responsiveness during this crisis. Without their efforts, it would have been difficult for us to return to full production in such a short time frame. We would also like to thank all UMC Group customers and shareholders for their patience and understanding over the last ten days.

UMC Group continues its efforts to return to full production. We have also completed a more thorough estimate of the damage caused to UMC Group's operations. We would like to announce the following:

Based on a more complete estimation of losses, business interruption revenue loss for UMC Group's publicly listed companies UMC and UTEK will be 25% of revenues in September and 12.5% of revenues in October. Therefore, total revenue loss at UMC attributable to the earthquake is NT$1 billion (US$ 31.3 million), while the figure is NT$270 million (US$ 8.4 million) for UTEK.

Total profit loss resulting from loss in revenues at UMC is estimated at NT$ 400 million (US$ 12.5 million). Total profit loss for UTEK is estimated at about NT$ 60 million (US$ 1.9 million).

UMC Group has insurance coverage for damages caused by the earthquake, as well as for interruption of business operations. Therefore, the actual financial loss for UMC and UTEK will be significantly less than the above numbers.

Based on our current estimates, less than 10% of the total wafers in production at UMC Group fabs at the time of the earthquake will have to be scrapped.

UMC Group has completed its initial appraisal of the damages caused by the Sept. 21 earthquake that struck Taiwan. Generally speaking, we can report that the damages were significantly less severe than originally estimated. We would like to announce the following:

Power at UMC Group has been restored, and 90% of the machinery in UMC Group's fabs has already returned to production. We expect to return to full capacity production in the coming days, in response to extremely strong demand from our international customer base.

Based on our initial investigation, all of the fab installations and equipment are in good condition. However, there was some damage caused to certain materials required for the operation of some production equipment. NT$300 million has been allocated for the replacement of these materials, including the procurement of quartz furnace tubes. Most of these materials have already been installed in the appropriate equipment and are being used in production now.

As a result of the power loss associated with the earthquake, the overall monthly revenues for UMC Group will drop by approximately 25% for the month of September, or approximately NT$1.37 billion. However, since UMC Group has insurance coverage for natural disasters and the interruption of business operations, the actual financial loss will be below the above figure.

UMC Group would also like to thank the government and general public for their support and consideration. We thank everyone for helping us to keep our losses to the bare minimum, allowing us to quickly return to production

The Sunnyvale, California office of UMC Group has received many inquiries from customers, business associates, and other concerned citizens on how to assist earthquake victims in Taiwan. We are recommending that donations be made to:

The Taiwan Earthquake Relief Fund (or TERF)
c/o Bank of Canton
555 Montgomery Street
San Francisco, CA 94111

Please make checks payable to Taiwan Earthquake Relief Fund and note that the account number is 01-701-266. Also, for reference, the tax exemption number is 77-0522942. All donations by USA employees of UMC Group will be matched 100% by UMC Group

At the time of this announcement, the Hsinchu Science Park is still without power. However, UMC Group has already begun its inspection and recovery activities wherever possible. We expect that this will shorten the time needed to return to normal production. At present, we would like to report the following developments:

Taiwan Power Company estimates that 70% of UMC Group's power requirements in the Science Park will be restored by this afternoon (9/23 Taiwan time). This will allow us to begin the inspection process and make any necessary adjustments to our production equipment, accelerating the return to production.

UMC Group is already in the process of procuring miscellaneous components, such as quartz furnace tubes, necessary to replace those damaged in the earthquake.

According to our estimates, after Taiwan Power Company has begun supplying power, it will require three days to complete our inspection and maintenance operations before returning to normal production.

Finally, UMC Group would like to express its support for the families and individuals caught up in this terrible disaster. UMC Group has made a donation of 300 million New Taiwan Dollars to be used to aid the victims of the tragedy. Hopefully, it can help alleviate their pain and grief, and return their lives to normal as soon as possible.

From 9/24 through 9/26, it is a public holiday in Taiwan. Therefore, our next fab status update will be on Monday, Sept. 27th. Thank you for your understanding.

Initial Inspection Shows No Apparent Damage To Fabs After Earthquake

First of all, we are thankful to report that the earthquake in Taiwan caused no injuries to UMC Group employees. Also, based on initial inspections, there is no apparent damage to the fab buildings or machinery, except for some glass (e.g., quartz furnace tubes) breakage, and a few ceiling tiles. All process gas, water, air handling, and power lines appear to be fully intact. Our back-up power systems operated as intended in response to the disruption, allowing the clean room to maintain the required level of air purity. Due to the maintenance of the appropriate temperature and humidity within the clean room, the majority of wafers within the fab were unaffected. However, it is possible that some of the wafers that were in the production line during the power failure may have to be scrapped. It will only be possible to make an accurate assessment of the situation when the power supply has been fully restored. Please visit the UMC Group website (www.umcgroup.com) for the latest update on fab conditions.

At present, the government of the Republic of China has decided that restoring electricity to the general public is the first priority. Therefore, at this time, it is not exactly clear when electrical power will be restored to our facilities and normal production can resume. We also foresee that it will require a period of time for a full equipment inspection after Taiwan Power Company has resumed power supply to the facilities. Currently, we estimate that it will require three to five days after power restoration to return to full production. Thank you for your concern.