Tokyo, Japan, November 2, 2000 - Sharp Corporation and Nippon Foundry Incorporated (NFI), a UMC Group foundry company (TAIEX: 2303, NYSE: UMC), announced today a long term foundry supply agreement aimed at meeting Sharp's fast-rising demand for flash memory and other advanced semiconductor devices required for cellular telephones and other digital equipment. Sharp has agreed to invest 7 billion yen (US$ 64 Million) in NFI to ensure it has access to the capacity it requires.

In order to optimize its resource allocation, Sharp will leverage the combination of advanced process technology and manufacturing efficiency offered by NFI to meet the rising demand for its flash memory products. The initial capacity agreement is for 6,000 wafers per month (8-inch equivalents), with this number expected to increase to 10,000 wafers per month by 2002. Production will take place at NFI's Tateyama, Chiba facility, and is expected to begin in the second half of 2001.

Sharp's capital investment of 7 billion yen will supplement NFI's expansion to meet Sharp's manufacturing requirements. The NFI Tateyama facility will be upgraded from the current planned capacity of 34,000 8-inch wafers per month to 40,000 wafers per month. Total required investment for the NFI expansion is 26.0 billion yen (US$ 238 million).

This alliance between Sharp and NFI symbolizes the trend towards strategic long-term foundry partnerships between suppliers and purchasers, and away from contracts for simple procurement purposes. The joint investment by Sharp and NFI to expand capacity is intended to serve as the foundation for a long-term relationship between the two companies. UMC has also committed to fully support this relationship by giving Sharp direct access to its industry leading sub-0.18-micron capacity.