UMC Reports 2008 Fourth Quarter Results
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UMC Reports 2008 Fourth Quarter Results

Customer demand stabilized, while UMC will continue with R&D efforts to maintain long-term competitiveness

    TAIPEI, Taiwan, Feb. 10 /PRNewswire-Asia-FirstCall/ --

    Fourth Quarter 2008 Overview (Note 1):

    -- Revenue decreased 25.1% sequentially to NT$18.54 billion (US$566
       million)
    -- Gross profit margin of 10.2%, operating margin of -6.3%
    -- Net loss of NT$23.51 billion (US$717 million)
    -- Net cash inflow of NT$10.93 billion, with cash & cash eq. of NT$36.12
       billion at Q4 end
    -- Loss per share of NT$1.81; Loss per ADS of US$0.276

    Note 1: Unless otherwise stated, all financial figures discussed in this
    announcement are prepared in accordance with ROC GAAP, which differ in
    some material respects from generally accepted accounting principles in
    the United States. They are un-audited, unconsolidated, and represent
    comparisons among the three-month period ending December 31, 2008, the
    three-month period ending September 30, 2008, and the equivalent three-
    month period that ended December 31, 2007. For all 4Q08 results, New
    Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the
    December 31, 2008 exchange rate of NT$32.77 per U.S. Dollar.

United Microelectronics Corporation (NYSE: UMC) (TSE: 2303) ("UMC" or "the Company"), a leading global semiconductor foundry, today announced its unconsolidated operating results for the fourth quarter of 2008.

Dr. Shih-Wei Sun, CEO of UMC said, "The global economic recession in 4Q08 also impacted UMC, characterized by a sharp drop in customer demand during the quarter. For the quarter, wafer shipments dropped to 567 thousand 8-inch equivalent wafers. Customers still remain conservative about end market demand and are strictly controlling their purchase orders and inventory levels. However, UMC's internal indicators have shown signs that the demand drop may have bottomed out, and we are closely watching for signs of recovery. Although it is difficult to predict upcoming industry conditions, UMC R&D for advanced technologies remains on schedule as originally planned. Many customers are adopting our 40/45nm technologies with customer products currently in pilot production using low-power and high-performance logic processes. In addition, we have already proven high-k/metal-gate (HK/MG) technology with yielding 45nm SRAM test products. This is an important milestone for UMC's HK/MG technology. We are also an industry leader in 28nm, having independently developed the foundry industry's first fully functional 28nm SRAM chip. These technology breakthroughs will further enhance our long-term competitiveness."

Mr. Chitung Liu, CFO of UMC said, "UMC always follows financial accounting standards strictly, and we hope that our financial report can timely reflect the company's overall financial status. UMC had net non-operating losses of NT$21.78 billion in 4Q08, separated into three main parts: (1) under the impact of the global financial crisis, we recognized investment losses of NT$12.32 billion and other-than-temporary losses on financial assets of NT$2.82 billion pursuant to ROC GAAP SFAS No. 5 and SFAS No. 34, respectively; (2) the impairment losses for goodwill and idle assets totaling NT$4.07 billion were recognized pursuant to SFAS No. 35; (3) the loss on decline in market value of inventories, NT$2.68 billion, was recognized pursuant to SFAS No. 10. However, UMC had net cash inflow of NT$10.93 billion during 4Q, since all of the aforementioned non-operating losses were non-cash charges."

Dr. Sun continued, "In the second half of 2008, UMC took solid steps towards enhancing UMC operations, including improving production efficiency, implementing cost rationalization policies, and streamlining human resource allocation. Through cost-control measures, we have lowered our operating breakeven point to approximately 60% utilization rate. Going forward, we will continue to enhance execution and monitor results to look for areas that can be further improved upon. UMC has independent R&D and solid manufacturing capabilities backed by a healthy financial structure, and supported through sufficient operating capital. We will continue to strengthen the development of our advanced technologies, and follow our Customer-Driven Foundry Solution strategy to provide customized solutions to our global foundry customers."

    Summary of Operating Results



    Operating Results
                                                     QoQ%              YoY%
    (Amount: NT$ million)      4Q08       3Q08      change    4Q07    change

    Revenue                   18,541     24,748     (25.1)   27,621    (32.9)
    Gross Profit               1,899      4,368     (56.5)    5,649    (66.4)
    Operating Expenses        (3,073)    (3,421)    (10.2)   (4,323)   (28.9)
    Operating Income (Loss)   (1,174)       947        --     1,326       --
    Non-op. Income
     (Expenses)              (21,784)    (2,105)    934.9     1,097       --
    Net Income (Loss)        (23,510)    (1,413)   1563.8     1,359       --
    EPS   (NT$ per share)      (1.81)     (0.11)       --      0.14       --
          (US$ per ADS)       (0.276)    (0.017)       --     0.021       --


Revenue decreased 25.1% QoQ to NT$18.54 billion, from NT$24.75 billion in 3Q08, and decreased 32.9% YoY, from NT$27.62 billion in 4Q07. Weaker-than- expected wafer shipments were a key factor to the significant decrease in revenues. Gross profit was NT$1.9 billion, or 10.2% of revenue, compared to NT$4.37 billion, or 17.6% of 3Q08 revenue. Operating loss for the quarter was NT$1.17 billion, or 6.3% of revenue, compared to an operating profit of 947 million, or 3.8% of 3Q08 revenue. Net loss in 4Q08 was NT$23.51 billion, mainly due to a net non-operating loss of NT$21.78 billion.

Loss per ordinary share for the quarter was NT$1.81. Loss per ADS was US$0.276. One ADS represents five Taiwan-listed ordinary shares. The basic weighted average number of outstanding shares in 4Q08 was 12,971,740,926, compared with 13,129,987,534 shares in 3Q08 and 13,100,167,505 shares in 4Q07. The diluted weighted average number of outstanding shares was 12,971,740,926 in 4Q08, compared with 13,129,987,534 shares in 3Q08 and 13,578,655,652 shares in 4Q07. The fully diluted share count on December 31, 2008 was 13,614,857 thousand. During 4Q08, UMC retired 555,715,736 treasury shares, or 4.1% of total issued shares, acquired from the 9th, 11th, and 12th share buy-back program. UMC announced its 13th share buy-back program on December 16, 2008, with a plan to repurchase a maximum of 300,000,000 shares within the 2008/12/17~2009/02/16 period.

    Detailed Financials Section



    COGS & Expenses
                                                    QoQ%               YoY%
    (Amount: NT$ million)     4Q08      3Q08       change     4Q07    change

    Revenue                   18,541    24,748     (25.1)   27,621     (32.9)
    CoGS                     (16,642)  (20,380)    (18.3)  (21,972)    (24.3)
      Depreciation            (7,682)   (8,086)     (5.0)   (7,985)     (3.8)
      Other Mfg. Costs        (8,960)  (12,294)    (27.1)  (13,987)    (35.9)
    Gross Profit               1,899     4,368     (56.5)    5,649     (66.4)
    Gross Margin (%)           10.2%     17.6%        --     20.5%        --
    Total Operating Exp.      (3,073)   (3,421)    (10.2)   (4,323)    (28.9)
      G&A                       (428)     (639)    (33.0)     (906)    (52.8)
      Sales & Marketing         (679)     (673)      1.0      (882)    (23.0)
      R&D                     (1,966)   (2,109)     (6.8)   (2,535)    (22.4)
    Operating Income          (1,174)      947        --     1,326        --
    Operating Margin (%)       (6.3%)     3.8%        --      4.8%        --


Depreciation and amortization expenses totaled NT$9.15 billion in 4Q08, compared to NT$9.22 billion in 3Q08. Depreciation within COGS decreased by 5% to NT$7.68 billion. General & administration and R&D expenses decreased largely because of expense control activities in 4Q08. The increase on sales & marketing expenses was mainly due to increase in IP amortization. As a result, total operating expenses decreased 10.2% to NT$3.07 billion. The total R&D expense was 10.6% of revenue in 4Q08.



    Non-operating Income (Expenses)
    (Amount: NT$ million)                          4Q08      3Q08       4Q07
    Net Non-operating Income (Exp.)             (21,784)   (2,105)     1,097
     Net Interest Income (Expense)                  115       108        143
     Net Investment Income (Loss)               (15,465)   (2,860)    (1,124)
     Gain on Disposal of Investment                  52       611      2,025
     Exchange Gain (Loss)                           345       735        108
     Others                                      (6,831)     (699)       (55)


Net non-operating losses during 4Q08 were NT$21.78 billion. Net investment losses were NT$15.47 billion, including NT$12.32 billion of investment losses accounted for under the equity method, NT$2.82 billion of other-than-temporary impairment losses on financial assets pursuant to ROC GAAP SFAS No.34, and a NT$387 million loss from valuation of ProMos shares. Gains on the disposal of investments were NT$52 million, mainly coming from the sale of ITE shares. Other losses included NT$4.07 billion impairment loss on goodwill and idle assets pursuant to SFAS No.35, and NT$2.68 billion loss from decline in market value of inventories pursuant to SFAS No.10.



    Cash Flow Summary
                                     For the 3-Month     For the 3-Month
    (Amount: NT$ million)            Period Ended        Period Ended
                                     Dec. 31, 2008       Sep. 30, 2008
    Cash Flow from Operations                12,729              13,792
      Net Income (Loss)                     (23,510)             (1,413)
      Depreciation & Amortization             9,154               9,224
      Changes in working capital              4,601                 865
      Others                                 22,484               5,116
    Cash Flow from Investing                 (2,330)             (2,143)
      Capital Expenditures                   (1,471)             (1,778)
      Others                                   (859)               (365)
    Cash Flow from Financing                    508             (12,225)
      Long term loan                            700                  --
      Cash Dividend                              --              (9,383)
      Purchase of treasury stock               (191)             (2,087)
      Others                                     (1)               (755)
    Effect of exchange rate                      23                 352
    Net Cash Flow                            10,930                (224)


Net cash inflow was NT$10.93 billion in 4Q08. Operating cash inflow was NT$12.73 billion. Most of the non-operating losses during 4Q08 were non-cash charges; they did not have any impact on the cash flow. Free cash flow (Note 2) for 4Q08 was NT$11.26 billion. Free cash flow for entire 2008 was NT$33.35 billion. Over the next 12 months, UMC expects to repay NT$66.7 million in term loans.

    Note 2: Free cash flow = Operating cash flow - Capital expenditures



    Current Assets
    (Amount: NT$ billion)                        4Q08       3Q08       4Q07
    Cash & Cash Equivalents                     36.12      25.19      37.45
    Notes & Accounts Receivable                  7.80      14.12      13.62
      Days Sales Outstanding                       54         53         51
    Inventory                                    7.77      11.76      11.33
      Avg. Inventory Turnover                      55         55         47
    Total Current Assets                        54.61      54.89      68.25



    Cash and cash equivalents increased NT$10.93 billion to NT$36.12 billion.
The decrease in notes & accounts receivable and inventory primarily reflected
the downward trend of the business.  Average inventory turnover remained at 55
days at the end of 4Q08.



    Liabilities
    (Amount: NT$ billion)                       4Q08       3Q08       4Q07
    Total Current Liabilities                  11.43      14.64      43.06
      Accounts Payable                          2.05       3.84       4.80
      Short-term Credit / Bonds                 0.07       0.00      22.89
      Others                                    9.31      10.80      15.37
    Long-term Liabilities                       8.13       7.50       7.60
    Total Liabilities                          23.31      25.85      54.30
    Debt to Equity                               13%        13%        23%


Total liabilities decreased by NT$2.54 billion to NT$23.31 billion in 4Q08. UMC's Debt to Equity ratio remained unchanged at 13%.

    Analysis of Revenue (Note 3)



                                     Revenue Breakdown by Region
    Region                      4Q08     3Q08     2Q08     1Q08     4Q07
    North America                57%      60%      50%      58%      51%
    Asia Pacific                 31%      32%      35%      29%      37%
    Europe                       10%       6%      13%      11%      10%
    Japan                         2%       2%       2%       2%       2%


The percentage of revenue from the North America and Asia Pacific regions decreased to 57% and 31% in 4Q08.



                                     Revenue Breakdown by Geometry
    Geometry                    4Q08     3Q08     2Q08     1Q08      4Q07
    65nm                          8%       7%       5%       7%       3%
    90nm                         27%      31%      31%      30%      23%
    90nm < x <=0.13um            22%      20%      21%      21%      22%
    0.13um < x <=0.18um          23%      21%      20%      22%      27%
    0.18um < x <=0.35um          15%      16%      18%      14%      18%
    0.5um and above               5%       5%       5%       6%       7%


The percentage of revenue from advanced 65nm business increased to 8%. The percentage of revenue from 90nm and below was 35% in 4Q08.



                                    Revenue Breakdown by Customer Type
    Customer Type                4Q08    3Q08     2Q08     1Q08     4Q07
    Fabless                       80%     74%      71%      70%      76%
    IDM                           20%     26%      29%      30%      24%
    System                         0%      0%       0%       0%       0%



    The percentage of revenue from Fabless customers increased to 80% in 4Q08
from 74% in 3Q08.



                                     Revenue Breakdown by Application (1)
    Application                    4Q08     3Q08    2Q08    1Q08    4Q07
    Computer                         15%     16%     17%     21%     19%
    Communication                    61%     59%     58%     56%     56%
    Consumer                         22%     23%     22%     21%     23%
    Memory                            1%      1%      1%      1%      1%
    Others                            1%      1%      2%      1%      1%

    (1) Computer consists of ICs such as HDD controllers, DVD-ROM/CD-ROM
        drives ICs, LCD drivers, graphic processors, and PDAs. Communication
        consists of xDSL, DSP, WLAN, LAN controllers, handset components,
        caller ID devices, etc. Consumer consists of ICs used for DVD players,
        game consoles, digital cameras, smart cards, toys, etc. Memory
        consists of DRAM, SRAM, Flash, EPROM, ROM, and EEPROM.


Revenue from the communication segment increased to 61% of total revenue in 4Q08. The percentage of revenue from the computer segment decreased to 15% due to weak demand for PC related components.

    Note 3: Revenue in this section represents wafer sales.


Blended Average Selling Price Trend

The blended average selling price (ASP) increased by 1% in US dollar terms during 4Q08, due to changes in the process technology mix.

    (To view ASP trend, visit:
http://www.umc.com/english/investors/4Q08_ASP_trend.asp )



    Shipment and Utilization Rate (Note 4)



                                            Wafer Shipments
                               4Q08     3Q08      2Q08      1Q08      4Q07
    Wafer Shipments
    ('000 8-inch eq.)           567      883       875       807       921



                                   Quarterly Capacity Utilization Rate
                               4Q08     3Q08      2Q08      1Q08      4Q07
    Utilization Rate            48%      79%       85%       73%       86%
    Total Capacity
    ('000 8-inch eq.)         1,151    1,149     1,107     1,100     1,100


Wafer shipments dropped 35.8% sequentially to 567 thousand, a decrease from 883 thousand 8-inch equivalent wafers in the previous quarter. Overall utilization rate for the quarter was 48%.

    Note 4: Utilization Rate = Quarterly Wafer Out / Quarterly Capacity


Capacity (Note 5)

Capacity for 4Q08 was 1,151 thousand 8-inch equivalent wafers. The incremental increase in capacity was due to the expansion at Fab 12A. The estimated installed capacity in 1Q09 remains unchanged at 1,151 thousand 8- inch equivalent wafers, although additional 65nm capacity will be converted from existing 90nm and 0.13um capacity.

    Note 5: Estimated capacity numbers are based on calculated maximum output
    rather than designed capacity. The actual capacity numbers may differ
    depending upon equipment delivery schedules, pace of migration to more
    advanced process technologies, and other factors affecting production ramp
    up.


    Annual Capacity in thousands of 8-inch wafer equivalents

       FAB          Geometry       2008   2007  2006  2005
                     (um)
    Fab 6A     6"    3.5 - 0.45     328   328   328   344
    Fab 8AB    8"    0.5 - 0.25     816   816   816   816
    Fab 8C     8"   0.35 - 0.15     411   400   400   401
    Fab 8D     8"   0.18 - 0.09     263   260   252   274
    Fab 8E     8"    0.5 - 0.18     408   408   406   404
    Fab 8F     8"   0.25 - 0.15     372   372   372   378
    Fab 8S(1)  8"   0.25 - 0.15     291   276   276   278
    Fab 12A   12"   0.18 -0.065     876   847   754   597
    Fab 12i(2)12"   0.13 -0.065     742   601   413   363
    Total (3)                     4,507 4,308 4,017 3,855
    YoY Growth Rate                  5%    7%    4%   22%



    Quarterly Capacity in thousands of 8-inch wafer equivalents

    FAB       1Q09E    4Q08   3Q08   2Q08
    Fab 6A      82      82     82     82
    Fab 8AB    204     204    204    204
    Fab 8C     111     111    108    101
    Fab 8D      60      60     63     66
    Fab 8E     102     102    102    102
    Fab 8F      93      93     93     93
    Fab 8S      75      75     75     72
    Fab 12A    222     222    220    218
    Fab 12i    202     202    202    169
    Total(3) 1,151   1,151  1,149  1,107

    (1) Former fab of SiSMC, which was acquired from Silicon Integrated
        Systems in July 2004.
    (2) Former fab of UMCi, a UMC wholly owned subsidiary in December 2004
        that was merged into UMC in April 2005
    (3) One 6-inch wafer is converted into 0.5625(6sq/8sq) 8-inch equivalent
        wafer; one 12-inch wafer is converted into 2.25(12sq/8sq) 8-inch
        equivalent wafers.



    CAPEX



    UMC Capital Expenditure by Year -- in US$ billion
        Year         2008      2007       2006      2005      2004      2003
       CAPEX        $0.35      $0.9       $1.0    $0.7(1)     $1.5      $0.4

    (1) 2005 CAPEX contained UMC 2005 full year CAPEX and UMCi CAPEX during
        1Q05.



    2008 CAPEX
                     8" fab            12" fab                Total
    UMC                17%              83%              US$349 million



    2009 CAPEX Plan
                     8" fab            12" fab                Total
    UMC                 7%               93%      Not to exceed US$400 million


The total capital expenditure for 2008 was US$349 million, which is lower than the original capex plan of US$400-500 million. Diminished chip demand was the primary reason for the 2008 CAPEX cut. The capital expenditure budget for 2009 is not expected to exceed US$400 million.



    Brief Summary of Full Year 2008 Results



    Operating Results
                                                                       YoY%
    (Amount: NT$ million)                       2008        2007      change

    Revenue                                   92,530     106,771       (13.3)
    Gross Profit                              15,638      22,506       (30.5)
    Operating Expenses                       (13,334)    (15,701)      (15.1)
    Operating Income                           2,304       6,805       (66.1)
    Non-op. Income (Expenses)                (23,698)     12,762          --
    Income Tax Expense                          (926)     (2,605)      (64.5)
    Net Income(Loss)                         (22,320)     16,962          --
    EPS   (NT$ per share)                      (1.70)       1.03          --
          (US$ per ADS)                       (0.259)      0.157          --



    -- Revenue decreased 13.3% YoY to NT$92.53 billion, from NT$106.77 billion
       in 2007
    -- Gross profit margin was 16.9%, compared to 21.1% in 2007
    -- Operating profit margin was 2.5%, compared to 6.4% in 2007
    -- Net loss was NT$22.32 billion for 2008
    -- Net loss per share was NT$1.70, or net loss per ADS was US$0.259 for
       2008.  This compared to EPS of NT$1.03 or EPADS of US$0.157 for 2007
    -- The percentage of revenue from 65nm sales was 7% in 2008; the
       percentage of revenue from 90nm and below sales increased to 37%, from
       23% in 2007



                        Annual Sales Breakdown in Revenue

    Region              2008    2007    Technology             2008    2007
    North America        56%    48%     65nm                    7%      2%
    Asia Pacific         32%    40%     90nm                   30%     21%
    Europe               10%     9%     90nm < x <=0.13um      21%     22%
    Japan                 2%     3%     0.13um < x <=0.18um    21%     27%
                                        0.18um < x <=0.35um    16%     21%
                                        0.5um and above         5%      7%


    Application         2008    2007    Customer Type          2008     2007
    Computer             18%    18%     Fabless                 73%     75%
    Communication        58%    56%     IDM                     27%     25%
    Consumer             22%    24%     System                   0%      0%
    Memory                1%     1%
    Others                1%     1%



    Recent Developments / Announcements

    Dec. 30, 2008    UMC's CSR Report Wins Taiwan Corporate Sustainability
                     Report Honors
    Dec. 09, 2008    UMC Revised 4Q08 Guidance and Reports Sales for November
                     2008
    Nov. 25, 2008    UMC Advances its High-k/Metal-Gate Process Solution
    Nov. 18, 2008    Actel Leverages UMC Foundry Solutions for 65nm eFlash
                     FPGAs
    Feb. 9, 2009     UMC 12i Wins MediaTek's 2008 Best Fab Award

Please visit UMC's website http://www.umc.com/english/news/index.asp for further details regarding the above announcements.

    First Quarter of 2009 Outlook & Guidance

    Quarter-over-quarter Guidance:

    -- Wafer shipments: to decrease by approximately 40-42% points
    -- Wafer ASP in NT$: to decrease by approximately 3-5% points
    -- Sustain positive cash flow generation
    -- Weakness across the three major applications
    -- 2009 capex budget: will not exceed US$400 million

    Conference Call / Webcast Announcement

    Tuesday, February 10, 2009
    Time:  9:00 PM (Taipei) / 8:00 AM (New York) / 1:00 PM (London)

    Dial-in numbers and Access Codes:
    USA Toll Free:              1866 519 4004
    UK Toll Free:               0808 234 6646
    Singapore and Other Areas:  +65 6735 7955

    Access Code:                UMC

A live webcast and replay of the 4Q08 results announcement will be available at http://www.umc.com under the "Investor Relations \ Investor Events" section.

About UMC

UMC (NYSE: UMC) (TSE: 2303) is a leading global semiconductor foundry that provides advanced technology and manufacturing services for applications spanning every major sector of the IC industry. UMC's customer-driven foundry solutions allow chip designers to leverage the strength of the company's leading-edge processes, which include production proven 65nm, 45/40nm, mixed signal/RFCMOS, and a wide range of specialty technologies. Production is supported through 10 wafer manufacturing facilities that include two advanced 300mm fabs; Fab 12A in Taiwan and Singapore-based Fab 12i are both in volume production for a variety of customer products. The company employs approximately 12,000 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 .

Safe Harbor Statements

This release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward- looking statements by use of words such as "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "intends," "projects," "goals," "targets" and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of UMC to be materially different from what is stated or may be implied in such forward-looking statements. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to: (i) our dependence upon the frequent introduction of new services and technologies based on the latest developments in our industry; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international global business activities; (iv) our dependence upon key personnel; (v) general economic and political conditions; (vi) possible disruptions in commercial activities caused by natural and human-induced events and disasters, including terrorist activity, armed conflict and highly contagious diseases; (vii) reduced end-user purchases relative to expectations and orders; and (viii) fluctuations in foreign currency exchange rates. Further information regarding these and other risks is included in UMC's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.

The financial statements included in this release are unaudited and unconsolidated, and prepared and published in accordance with ROC GAAP. Investors are cautioned that there are many differences between ROC GAAP and US GAAP.

The forward-looking statements in this release reflect the current belief of UMC as of the date of this release, and 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.

                       -- FINANCIAL TABLES TO FOLLOW --



                     UNITED MICROELECTRONICS CORPORATION
                  Unaudited Condensed Unconsolidated Balance Sheet
                             As of Dec 31, 2008
    Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

                                                    Dec 31, 2008
                                             US$         NT$          %
    ASSETS
    Current Assets
     Cash and Cash Equivalents             1,102       36,124       17.4%
     Financial assets at fair value
      through profit or loss, current         53        1,741        0.8%
     Notes & Accounts Receivable             238        7,795        3.8%
     Inventories                             237        7,770        3.7%
     Other Current Assets                     37        1,185        0.6%
      Total Current Assets                 1,667       54,615       26.3%

    Non-Current Assets
     Funds and Long-term Investments       1,424       46,657       22.4%
     Property, Plant and Equipment         3,065      100,443       48.3%
     Other Assets                            191        6,273        3.0%
      Total Non-Current Assets             4,680      153,373       73.7%
    TOTAL ASSETS                           6,347      207,988      100.0%

    LIABILITIES
    Current Liabilities
     Financial liabilities at fair
      value through profit or loss,
      current                                  1           33        0.0%
     Payables                                341       11,167        5.4%
     Current Portion of Long-term
      Liabilities                              2           67        0.0%
     Other Current Liabilities                 5          162        0.1%
      Total Current Liabilities              349       11,429        5.5%

    Non-Current Liabilities
     Bonds Payable                           229        7,497        3.6%
     Long-term Loans                          19          633        0.3%
     Other Liabilities                       114        3,753        1.8%
      Total Non-Current Liabilities          362       11,883        5.7%
    TOTAL LIABILITIES                        711       23,312       11.2%

    STOCKHOLDERS' EQUITY
    Capital Stock                          3,964      129,878       62.5%
    Additional Paid-in Capital             1,775       58,150       28.0%
    Retained Earnings, Unrealized Gain
     on Financial Assets and
     Translation Adjustment                  (99)      (3,232)      (1.6%)
    Treasury Stock                            (4)        (120)      (0.1%)
    TOTAL STOCKHOLDERS' EQUITY             5,636      184,676       88.8%
    TOTAL LIABILITIES AND
     STOCKHOLDERS' EQUITY                  6,347      207,988      100.0%


    Note: New Taiwan Dollars have been translated into U.S. Dollars at the
          December 31, 2008 exchange rate of NT $32.77 per U.S. Dollar.
          All figures are in ROC GAAP.



                       UNITED MICROELECTRONICS CORPORATION
               Unaudited Condensed Unconsolidated Income Statement
      Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
                        Except Per Share and Per ADS Data


                                            Year over Year Comparison

                                         Three-Month Period Ended
                                      Dec 31, 2008     Dec 31, 2007      %
                                      US$      NT$     US$     NT$      Chg.
    Net Sales                         566   18,541    843   27,621     (32.9%)
    Cost of Goods Sold               (508) (16,642)  (671) (21,972)    (24.3%)
    Net Gross Profit                   58    1,899    172    5,649     (66.4%)
                                    10.2%    10.2%  20.5%    20.5%         --
    Operating Expenses
      -- Sales & Marketing             21      679     27      882     (23.1%)
      -- General & Administrative      13      428     28      906     (52.8%)
      -- Research & Development        60    1,966     77    2,535     (22.4%)
                                       94    3,073    132    4,323     (28.9%)
    Operating Income (Loss)           (36)  (1,174)    40    1,326    (188.5%)
                                    (6.3%)   (6.3%)  4.8%     4.8%         --

    Net Non-Operating Income
     (Expenses)                      (664) (21,784)    34    1,097  (2,085.8%)
    Income (Loss) from continuing
     operations before income tax    (700) (22,958)    74    2,423  (1,047.5%)
                                  (123.8%) (123.8%)  8.8%     8.8%         --

    Income Tax (Expense) Benefit      (17)    (552)   (33)  (1,064)    (48.1%)
    Net Income (Loss)                (717) (23,510)    41    1,359  (1,829.9%)
                                  (126.8%) (126.8%)  4.9%     4.9%         --

    Earnings per Share             (0.055)   (1.81) 0.004     0.14         --
    Earnings per ADS (2)           (0.276)   (9.05) 0.021     0.70         --
    Weighted Average Number of
     Shares Outstanding
     (in millions)                     --   12,972     --   13,100         --



                       UNITED MICROELECTRONICS CORPORATION
               Unaudited Condensed Unconsolidated Income Statement (CONTINUED)
      Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
                        Except Per Share and Per ADS Data


                                          Quarter over Quarter Comparison

                                        Three-Month Period Ended
                                      Dec 31, 2008     Sep 30, 2008       %
                                      US$      NT$     US$      NT$      Chg.
    Net Sales                         566   18,541     755   24,748    (25.1%)
    Cost of Goods Sold               (508) (16,642)   (622) (20,380)   (18.3%)
    Net Gross Profit                   58    1,899     133    4,368    (56.5%)
                                    10.2%    10.2%   17.6%    17.6%        --
    Operating Expenses
      -- Sales & Marketing             21      679      21      673      0.8%
      -- General & Administrative      13      428      19      639    (33.1%)
      -- Research & Development        60    1,966      64    2,109     (6.8%)
                                       94    3,073     104    3,421    (10.2%)
    Operating Income (Loss)           (36)  (1,174)     29      947   (224.0%)
                                    (6.3%)   (6.3%)   3.8%     3.8%        --

    Net Non-Operating Income
     (Expenses)                      (664) (21,784)    (64)  (2,105)   934.9%
    Income (Loss) from continuing
     operations before income tax    (700) (22,958)    (35)  (1,158) 1,882.6%
                                  (123.8%) (123.8%)  (4.7%)   (4.7%)       --

    Income Tax (Expense) Benefit      (17)    (552)     (8)    (255)   116.5%
    Net Income (Loss)                (717) (23,510)    (43)  (1,413) 1,563.8%
                                  (126.8%) (126.8%)  (5.7%)   (5.7%)       --

    Earnings per Share             (0.055)   (1.81) (0.003)   (0.11)       --
    Earnings per ADS (2)           (0.276)   (9.05) (0.017)   (0.55)       --
    Weighted Average Number of
     Shares Outstanding
     (in millions)                     --    12,972     --   13,130        --


    Note:
    (1) New Taiwan Dollars have been translated into U.S. Dollars at the
        December 31, 2008 exchange rate of NT $32.77 per U.S. Dollar.
        All figures are in ROC GAAP.
    (2) 1 ADS equals 5 common shares.



                       UNITED MICROELECTRONICS CORPORATION
               Unaudited Condensed Unconsolidated Income Statement
      Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
                        Except Per Share and Per ADS Data


                    For the Three-Month Period Ended    For the year Ended
                                  Dec 31, 2008               Dec 31, 2008
                               US$     NT$      %       US$      NT$      %
    Net Sales                  566   18,541   100.0%   2,824   92,530  100.0%
    Cost of Goods Sold        (508) (16,642)  (89.8%) (2,347) (76,892) (83.1%)
    Net Gross Profit            58    1,899    10.2%     477   15,638   16.9%


    Operating Expenses
      -- Sales & Marketing      21      679     3.6%      82    2,688    2.9%
      -- General &
          Administrative        13      428     2.3%      75    2,447    2.6%
      -- Research &
          Development           60    1,966    10.6%     250    8,199    8.9%
                                94    3,073    16.5%     407   13,334   14.4%
    Operating Income (Loss)    (36)  (1,174)   (6.3%)     70    2,304    2.5%

    Net Non-Operating
     Income (Expenses)        (664) (21,784) (117.5%)   (723) (23,698) (25.6%)

    Income (Loss) from
     continuing operations
     before income tax        (700) (22,958) (123.8%)   (653) (21,394) (23.1%)

    Income Tax (Expense)
     Benefit                   (17)    (552)   (3.0%)    (28)    (926)  (1.0%)
    Net Income (Loss)         (717) (23,510) (126.8%)   (681) (22,320) (24.1%)

    Earnings per Share      (0.055)   (1.81)      --  (0.052)   (1.70)     --
    Earnings per ADS (2)    (0.276)   (9.05)      --  (0.259)   (8.50)     --

    Weighted Average Number
     of Shares Outstanding
     (in millions)             --    12,972       --      --   13,111      --


    Note:
    (1) New Taiwan Dollars have been translated into U.S. Dollars at the
        December 31, 2008 exchange rate of NT $32.77 per U.S. Dollar.
        All figures are in ROC GAAP.
    (2) 1 ADS equals 5 common shares.



                       UNITED MICROELECTRONICS CORPORATION
           Unaudited Condensed Unconsolidated Statement of Cash Flows
                    For The Twelve Months Ended Dec. 31, 2008
    Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

                                                 USD                NTD
    Cash flows from operating activities:
      Net Income                                (681)           (22,320)
      Depreciation & Amortization              1,141             37,387
      Loss on decline in market value
       and obsolescence of inventories            94              3,082
      Cash dividends received under the
       equity method                              15                493
      Investment loss accounted for
       under the equity method                   377             12,374
      Loss on valuation of financial
       assets and liabilities                    105              3,448
      Impairment loss                            311             10,192
      Gain on disposal of investments            (56)            (1,839)
      Gain on disposal of property,
       plant and equipment                        (1)               (47)
      Exchange gain on financial assets
       and liabilities                            (1)               (33)
      Exchange gain on long-term
       liabilities                                (5)              (179)
      Amortization of bond discounts               0                  8
      Amortization of deferred income             (5)              (173)
      Change in assets, liabilities and
       others                                     72              2,382
      Net cash provided by operating
       activities                              1,366             44,775

    Cash flows from investing activities:
      Proceeds from disposal of
       available-for-sales financial
       assets                                     63              2,075
      Acquisition of financial assets
       measured at cost                          (12)              (416)
      Proceeds from disposal of
       financial assets measured at
       cost                                        0                  8
      Acquisition of long-term
       investments accounted for under
       the equity method                         (66)            (2,176)
      Proceeds from disposal of long-
       term investments accounted for
       the equity method                           0                  0
      Proceeds from liquidation of
       long-term investments                       6                207
      Acquisition of property, plant
       and equipment                            (349)           (11,422)
      Proceeds from disposal of
       property, plant and equipment               5                164
      Increase in deferred charges               (23)              (767)
      Decrease in other assets -- others           0                  3
    Net cash used in investing activities       (376)           (12,324)

    Cash flows from financing activities:
      Proceeds from long-term Loans               21                700
      Redemption of bonds                       (693)           (22,717)
      Cash dividends                            (286)            (9,383)
      Payment of employee bonus                   (9)              (286)
      Remuneration paid to directors
       and supervisors                            (0)               (12)
      Purchase of treasury stock                 (70)            (2,278)
      Decrease in deposits-in                     (0)                (7)
    Net cash used in financing activities     (1,037)           (33,983)

    Effect of exchange rate changes on
     cash and cash equivalents                     6                203
    Net decrease in cash and cash
     equivalents                                 (41)            (1,329)

    Cash and cash equivalents at
     beginning of period                       1,143             37,453

    Cash and cash equivalents at end of
     period                                    1,102             36,124


    Note: New Taiwan Dollars have been translated into U.S. Dollars at the
          December 31, 2008 exchange rate of NT $32.77 per U.S. Dollar.
          All figures are in ROC GAAP.



    Contacts:

     Bowen Huang / Tien Yu Tseng
     UMC, Investor Relations
     Tel:   +886-2-2700-6999 ext. 6957
     Email: bowen_huang@umc.com
            tien_yu_tseng@umc.com

Web site: http://www.umc.com/
http://www.umc.com/english/investors/4Q08_ASP_trend.asp/