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Nov 09, 2018

UMC Issues Follow-up Statement Regarding Recent Legal Developments

Hsinchu, Taiwan, November 9, 2018 - UMC today issued a follow-up statement regarding recent legal developments:

“UMC is a Taiwan-based, internationally recognized semiconductor company. Since 38 years ago, it has been an indispensable player in the global supply chain, with volume production technologies down to an advanced 14nm. By comparison, the technology involved in the Micron dispute is 32nm-feature-size DRAM technology, which was already a few generations old when the project started.

“There is a misimpression that UMC did not have any DRAM knowledge or experience. This is emphatically untrue. From 1996 to 2010, UMC accumulated nearly 15 years of experience in manufacturing DRAM products. At one point, UMC’s internal DRAM team had well over 150 people. Thanks to its extraordinarily stable workforce, UMC has, ever since, possessed and preserved a wealth of DRAM knowledge and experience as an institution. As an example, in 1996, SC Chien, who is now UMC’s co-president, was the manager of the RAM Process Development group that developed DRAM products. One of the first UMC partners for DRAM licensing in 1996 was Alliance Semiconductor Corporation, a US-based DRAM chip design company that utilized UMC for DRAM manufacturing. In addition to traditional DRAM, through 2009, UMC successfully developed its own embedded DRAM foundry process, which is far more complicated and difficult than the process for making commodity DRAM.

“The joint development project under which UMC agreed to develop the DRAM process for Jinhua, which was a stand-alone project entirely separate from UMC’s pure-play foundry services, was nothing but a pure business transaction that made all the business sense for UMC at the time. It was duly submitted to the Taiwan authorities, which approved the project in its entirety in April 2016. Notably, that was a time when the U.S.-China trade war was unheard of.

“Since UMC began its contractual obligations to develop the DRAM process technology for Jinhua and itself, UMC has expended hundreds of millions of New Taiwan Dollars. Although the number of R&D team members working on this DRAM project was at times close to 300, less than 10% of them once worked for Micron.

“Contrary to any impressions that may have been given by the civil and criminal lawsuits, UMC’s DRAM technology is, fundamentally, based on a cell design entirely different from Micron’s design. In a nutshell, UMC developed a memory cell with a 3x2 layout, which is completely different from Micron's 2x3 memory cell.

“Another false impression is that Micron developed its 25nm DRAM technology in the United States. The reality is that Micron purchased its 25nm DRAM technology from Rexchip, a Taiwanese company, and Elpida, a Japanese company, in the early 2010’s.

“UMC will not litigate this case “in the press,” but it wants to assure our customers and stakeholders that UMC will vigorously defend itself against any false charges and misconceived allegations.”

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced IC production for applications spanning every major sector of the electronics industry. UMC’s comprehensive foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include world-class 28nm High-K/Metal Gate technology, 14nm FinFET volume production, specialty process platforms specifically developed for AI, 5G and IoT applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce over 600,000 wafers per month. The company employs more than 20,000 people worldwide, with offices in Taiwan, China, Europe, Japan, Korea, Singapore, and the United States. UMC can be found on the web at https://www.umc.com.

Note from UMC Concerning Forward-Looking Statements
Some of the statements in the foregoing announcement are forward-looking within the meaning of the U.S. Federal Securities laws, including statements about introduction of new services and technologies, future outsourcing, competition, wafer capacity, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC’s filings with the U.S. Securities and Exchange Commission. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.


UMC Corporate Communications

Richard Yu

+886-2-2658-9168 ext. 16951