Strong 28nm demand to fuel 2Q16 revenue growth

First Quarter 2016 Overview¹:

• Revenue: NT$34.40 billion (US$1.07 billion)
• Gross margin: 14.6%
• Foundry revenue from 28nm: 8%; Foundry operating margin: 0.5%
• Foundry capacity utilization rate: 82%
• Net income attributable to the stockholders of the parent: NT$0.21 billion (US$6.5 million)
• Earnings per share: NT$0.02; earnings per ADS: US$0.003

TAIPEI, Taiwan — (BUSINESS WIRE) — April 27, 2016 — United Microelectronics Corporation (NYSE: UMC) (TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the first quarter of 2016.

First quarter consolidated revenue was NT$34.40 billion, up 1.6% sequentially from NT$33.85 billion in 4Q15 and down 8.6% YoY from NT$37.65 billion in 1Q15. 1Q16 consolidated gross margin was 14.6%. Net income attributable to the stockholders of the parent was NT$0.21 billion, with earnings per ordinary share of NT$0.02.

Mr. Po-Wen Yen, CEO of UMC, said “In the first quarter of 2016, our foundry revenue grew 2.1% sequentially to NT$34.31 billion. Foundry operating margin was 0.5%. Overall capacity utilization was 82%, bringing wafer shipments to 1.43 million 8-inch equivalent wafers. Towards the end of 2015, we saw signs that the inventory cycle was hitting bottom. Since then, the inventory correction has completed its course, with normal seasonal patterns resuming for 1H16. On February 6, just as Chinese New Year was beginning, Southern Taiwan experienced a severe earthquake that impacted UMC’s 300mm Fab 12A in Tainan Science Park. However, due to UMC’s stringent safety protocols, efficient execution of our earthquake recovery SOP and dedicated personnel, we returned to normal production in just a few working days to sustain 1Q16 revenues within our original guidance. In compliance with our ISO 22301 certification, UMC’s business continuity practices ensured accountability on property damage as well as the safety & health of our employees. We will continue to ensure a state of readiness by implementing disaster protocols that introduce business continuity elements within our foundry operations.”

CEO Yen continued, “UMC recently announced an agreement with ARM to develop multiple physical IP platforms to accelerate customers’ implementation of ARM Artisan IP on our 55nm ultra low power, 40nm and 28nm technologies for mobile, embedded and IoT chip designs. The partnership will further strengthen UMC’s IP portfolio to deliver optimized design support solutions across a broad range of applications. Looking into 2Q16, new product launches in wireless devices will serve as a positive catalyst, leading to stronger end market demand. As a result, we foresee a significant increase in 28nm shipments for the second quarter. We also expect to receive many new 28nm tape outs during 2016 that include mobile and consumer applications, which will further diversify our 28nm product pipeline and contribute to 28nm revenue growth. While we continue to work towards business growth and market share expansion, the Board of Directors recently proposed to distribute a NT$0.55 per share cash dividend to achieve a balance between shareholders’ interests and company expansion. We continue to believe that our efforts in advanced and specialty processes will serve as a long-term catalyst to bring new prosperity and profitability for UMC employees, customers and shareholders.”

Summary of Operating Results