SANTA CLARA, Calif., and HSINCHU, Taiwan, January 21, 2004 - Parama Networks, a fabless semiconductor company specializing in SOCs for the telecommunications transport equipment market, and UMC (NYSE: UMC), a leading global semiconductor foundry, today announced that the two companies have achieved first-pass silicon success of the industry's first ADM-on-a-ChipTM (add-drop multiplexer). Parama's new SoC for SONET/SDH architectures, introduced earlier this month (see http://www.paramanetworks.com/news/pr_jan05.shtm), is built on UMC's 0.13 micron process.

"Parama required close collaboration with its foundry provider to ensure we would deliver our innovative, high-quality chip to meet the needs of our sophisticated customer base of network equipment providers," said Hemant Bheda, CEO of Parama Networks. "We are thrilled with our selection of UMC as our foundry provider as we realized working silicon the first time out; no costly changes to the mask were required."

Fu Tai Liou, head of the America Business Group at UMC said, "Our efforts with Parama demonstrate how our emphasis on close customer partnerships is helping them achieve excellent silicon results on deep submicron processes within short market windows. The development of Parama's ADM implemented on a single piece of silicon is a significant feat for both companies. We are eager to continue working with Parama on further innovations that target the communications market."

The ADM-on-a-Chip offers -- for the first time on a single piece of silicon -- all of the functions necessary to build an ADM and other next-generation-network equipment, including cross-connect, line and tributary framers, and overhead processing. The SoC features an elegant architecture that simplifies the equipment design process, creates dramatic reductions in cost and power while providing scalability, flexibility, density and simplicity in building the next generation of data-aware SONET and SDH systems.

Parama Networks is a fabless semiconductor company specializing in System-on-a-chip solutions for the telecommunications transport equipment market. The company was funded in March 2001 with support from Azure Capital Partners, Cross Bridge Ventures, Menlo Ventures, Network Angel Capital and Sprout Group. Parama's unique products enable equipment vendors to deliver innovative products with faster time to market, and reduced cost, power and size. Led by a management team that has many years of experience in system-on-a-chip product development, SONET/SDH system design, software development, and marketing, the company has received 3 U.S. Patents and has 22 others pending.

UMC (NYSE: UMC, TSE: 2303) is a leading global semiconductor foundry that manufactures advanced process ICs for applications spanning every major sector of the semiconductor industry. UMC delivers cutting-edge foundry technologies that enable sophisticated system-on-chip (SOC) designs, including 90nm copper, 0.13um copper, embedded DRAM, and mixed signal/RFCMOS. UMC is also a leader in 300mm manufacturing; Fab 12A in Taiwan is currently in volume production for a variety of customer products, while Singapore-based UMCi is now in pilot production. UMC employs over 8,500 people worldwide and has offices in Taiwan, Japan, Singapore, Europe, and the United States. UMC can be found on the web at http://www.umc.com.