TAIPEI, TAIWAN, July 15, 1999 - United Microelectronics Corporation (UMC) announced today the appointment of Peter Chang as CEO of foundry operations for UMC Group. Peter Chang is currently President of UMC Group company United Semiconductor Corporation (USC), and his appointment is an important step in the consolidation of the 5 Taiwan-based UMC Group foundry companies. In his first major decision since taking his new position, Peter Chang announced UMC Group's decision to start construction of a 12-inch wafer fab in the newly opened Tainan Science-based Industrial Park. Total investment for the fab is expected to reach US$3 billion, and construction of the facility will be completed by the fourth quarter of 2000.

Peter Chang is one of the most successful of the US-trained semiconductor professionals that returned to build up Taiwan's fledgling IC industry at a time many people doubted the feasibility of developing a domestic high technology industry. As fab manager for UMC, and later as President of USC, Peter Chang's contributions have been instrumental in the phenomenal growth of semiconductor technology in Taiwan and in UMC Group's development as one of the world's largest semiconductor foundries.

"The appointment of Peter Chang as CEO of foundry operations at UMC Group will be welcomed by our customers and employees. His professionalism during his association with UMC Group has set the benchmark for foundry management worldwide. We believe that his appointment and the decision to start construction on our first 12-inch wafer fab are clear signs of our commitment to customers, as well as our confidence in the long-term strength of the fabless/foundry model," said Bob Tsao, Chairman of UMC Group (USA).

Peter Chang said, "I am excited about this new challenge and strongly believe that the consolidation of our operations in Taiwan will allow UMC Group to create even greater competitive advantages for our many foundry customers around the world. We believe that continued investment in state-of-the-art facilities is the best way to respond to our customers needs for advanced technology foundry services, and our decision to start construction of a 12-inch wafer fab is clearly directed at meeting those needs."

Peter Chang has a long history in the semiconductor industry having worked in the USA for companies such as Hewlett-Packard, Zilog, SeeQ, and Paradigm, where he specialized in process module development, process integration and fab operations. He returned to Taiwan to join UMC in 1989 as a consultant, and later served as Vice President in charge of operations at UMC's Fab 1 and Fab 2. In 1996, he took the position of President at the first UMC Group joint venture company USC. USC is recognized in Taiwan as one of the world's most profitable foundry companies, and was the first foundry worldwide to offer 0.25-um production. In addition to his responsibilities as CEO of Foundry Operations, Peter Chang will maintain his position as President of USC until the consolidation is completed.

Under Peter Chang's leadership, USC turned profitable within 6 months of start-up of operations, and has consistently led the foundry industry in yields and production for advanced processes. Last month, USC partners, S3 Inc. and Alliance Semiconductor, announced that their equity share in USC was worth in excess of US$500 million each based on current valuations.

Jim Kupec, President of UMC Group (USA) said, "We believe that the consolidation of UMC Group's foundry operations under Peter Chang's leadership is the best indication of our commitment to improve our operations and increase customer satisfaction. This move reinforces UMC Group's identity as a performance-driven organization, unafraid to move quickly and boldly to strengthen it competitiveness."

Peter Chang's appointment as CEO of UMC Group's foundry operations is effective immediately.