ROUND ROCK, Texas--Oct. 7, 1998 - DuPont Photomasks, Inc. (Nasdaq:DPMI), commonly referred to as DPI, and UMC Group, today announced the finalization of a merchant photomask joint venture to produce photomasks in Taiwan.

Named DuPont Photomasks Taiwan, Ltd., the joint venture is majority owned by DPI and will operate initially from UMC Group's existing photomask production facility in Taiwan's Hsin-Chu Science-based Industrial Park. The venture employs 40 people and plans to invest (US) $50 million over the next year, including upgrading the infrastructure and installing new photomask production equipment to support 0.25 micron design rules and below.

DuPont Photomasks Taiwan, Ltd. also plans to build a new, stand-alone photomask production facility in Taiwan to accommodate high volume, commercial production of sophisticated photomasks used for imaging of 0.18 micron and below integrated circuits.

"Taiwan remains one of the fastest growing semiconductor markets in the world, driven by both foundry and DRAM production,'' said Mike Hardinger, chairman and CEO of DuPont Photomasks. ``By entering into this joint venture and locating our initial photomask production facility in Hsin-Chu Science-based Industrial Park, DPI is better positioned to service our fabless and foundry customers, in addition to the integrated device manufacturers located in Taiwan.''

"This venture delivers world-class photomask technology to Taiwan and will provide to local semiconductor producers, including UMC Group companies, improved access to advanced binary, optical proximity correction and phase shift masks necessary to help accelerate our technology roadmap,'' said H.J. Wu, president of UMC.

"By creating this joint venture, UMC Group is better able to focus its internal resources on developing state-of-the-art wafer processes which will deliver superior value to our customers. We are pleased to join forces with DPI and look forward to working together to help make DuPont Photomasks Taiwan, Ltd. a success.''

The new venture, expected to begin operations by the end of the calendar year, will strengthen DPI's position in the Asia Pacific region where it currently maintains facilities in Ichon, Korea and Shanghai, China and announced in April of this year its intent to construct a new facility in Singapore.

DPI is the world's premier and largest photomask manufacturer with the infrastructure in all three regions of the world to support the production of advanced photomasks, including those employing optical proximity correction (OPC) and phase shift features. OPC and phase shift techniques are enabling technologies used to provide enhanced depth of focus and critical dimension control necessary to fabricate semiconductor devices with deep sub-micron feature sizes.

DPI is the world's largest photomask manufacturer, operating globally from ten strategically located facilities in North America, Europe and Asia. The company produces and supplies photomasks as well as photoblanks (photomask substrates) and pellicles (protective covers for photomasks). Headquartered in Round Rock, Texas, DPI posted worldwide sales of over $271 million in fiscal 1998. The company maintains a Web site at www.photomask.com

Note: This release includes forward-looking statements based on management's current plans and expectations. Such statements involve risks and uncertainties which may cause future activities and results of operations to differ from those suggested, including risks associated with industry trends, international currency fluctuations, capacity utilization and the need to manage growth. For additional information, please refer to DPI's filings with the Securities and Exchange Commission, specifically the company's most recent Form 10-K dated September 18, 1998, which identifies important risk factors that could cause actual results to differ from those contained in the forward looking statements. Results for interim periods are not necessarily indicative of results for the year.