Geneva, Switzerland, and Hsinchu, Taiwan, July 18, 2002 - STMicroelectronics (NYSE: STM), one of the world's largest semiconductor manufacturers, and UMC (NYSE: UMC), a world leading semiconductor foundry, today announced that the two companies have extended their manufacturing relationship by signing a multi-year manufacturing agreement, which also includes cooperation on manufacturing science. This agreement ensures that STMicroelectronics has continued access to a stable source of supply for advanced technology manufacturing.

In addition to UMC providing ST with reserved wafer capacity on a flexible basis, the agreement defines the mutual access to manufacturing and engineering methodologies developed by both companies. As part of the agreement, the two companies will put in place the necessary resources to improve the manufacturing processes of the two companies by sharing manufacturing experiences and related costs.

Specifically, the cooperation between the two companies will include common work on: manufacturing performance enhancement and defect reduction (facility, equipment, and automation), product characterization and yield enhancement, and quality assurance.

"This new agreement is a complement to ST's own world-class advanced manufacturing capabilities and will provide ST with the flexible wafer capacity it needs to supply leading-edge products to its customers," said Laurent Bosson, Corporate Vice President of Front-End Manufacturing, STMicroelectronics. "The teams of both companies have worked very well together over the last few years. UMC's customer oriented approach and its responsiveness have been the cornerstones of this very successful relationship between the two companies."

Dr. Fu Tai Liou, Chief Officer of worldwide sales and marketing at UMC, said "We have been working with STMicroelectronics for over three years, and are pleased to broaden and extend our relationship with this agreement. Cooperative supply and manufacturing alliances such as this are essential in order to address the dynamic market demands of the semiconductor industry. We look forward to further working with the STMicroelectronics team."

About STMicroelectronics
STMicroelectronics, the world's third largest semiconductor company, is a global leader in developing and delivering semiconductor solutions across the spectrum of microelectronics applications. An unrivalled combination of silicon and system expertise, manufacturing strength, Intellectual Property (IP) portfolio and strategic partners positions the Company at the forefront of System-on-Chip (SoC) technology and its products play a key role in enabling today's convergence markets. The Company's shares are traded on the New York Stock Exchange, on Euronext Paris and on the Milan Stock Exchange. In 2001, the Company's net revenues were $6.36 billion and net earnings were $257.1 million. Further information on ST can be found at www.st.com.

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