UMC Reports Third Quarter 2010 Results

Year-to-date EPS of NT$1.40; double-digit advanced process revenue growth to continue

Oct 27, 2010, 01:45 ET from United Microelectronics Corporation

    TAIPEI, Taiwan, Oct. 27 /PRNewswire-Asia/--

    Third Quarter 2010 Highlights(1):
     -- Revenue increase: 9.8% QoQ to NT$32.65 billion (US$1.05 billion)
     -- Gross margin: 32.6%; operating margin: 22.0%
     -- Capacity utilization: >99%
     -- Net income: NT$8.72 billion (US$279.13 million)
     -- Earnings per share: NT$0.70; earnings per ADS: US$0.112

    (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 September 30,
        2010, the three-month period ending June 30, 2010, and the equivalent
        three-month period that ended September 30, 2009. For all 3Q10 results,
        New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars
        at the September 30, 2010 exchange rate of NT$31.24 per U.S. Dollar.

United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) ("UMC" or "The Company"), a leading global semiconductor foundry, today announced its unconsolidated operating results for the third quarter of 2010.

Revenue increased 9.8% quarter-over-quarter to NT$32.65 billion, from NT$29.75 billion in 2Q10, and increased 19.1% year-over-year, from NT$27.41 billion in 3Q09. Gross margin was 32.6%, operating margin was 22.0%, net income was NT$8.72 billion, and earnings per ordinary share were NT$0.70.

Dr. Shih-Wei Sun, CEO of UMC, said, "UMC's revenue from the first three quarters of this year has already surpassed 2009's full-year revenue. Total earnings per ordinary share for the three quarters were NT$1.40, with full-year earnings for 2010 expected to grow significantly from last year. Robust growth momentum for Q3 continued from the previous six quarters, with capacity utilization remaining full. Shipment volume reached a record of 1,202K 8-inch equivalent wafers. As a result, third quarter revenue exceeded US$1 billion, with revenue and income from foundry operations both reaching 6-year highs. UMC's accelerated advanced capacity expansion and product mix optimization continue to show positive results. Revenue contribution from 65nm and below products has reached 30%, with 40nm growing to 4.2% of revenue. ROE for the quarter reached 16.6%."

Dr. Sun continued, "Looking ahead to Q4, advanced process capacity will remain fully utilized. Product mix optimization will push blended ASP even higher. We do expect that seasonality, NT dollar fluctuations, and other uncertainties may slightly affect revenue, but remain cautiously optimistic about the Q4 foundry market. UMC will continue to closely monitor industry conditions in order to adapt to any changes. According to UMC's initial budget projection for fiscal year 2011, next year's semiconductor industry outlook and customer demand remain quite healthy. UMC's US$1.8 billion CAPEX this year shall significantly boost advanced capacity expansion and 28nm and 20nm R&D, enabling the company to greatly enhance its competitiveness. We will also continue our efforts on ROE and plan to deliver favorable dividend yield to UMC shareholders."

    Summary of Operating Results



    Operating Results
                                                    QoQ %                YoY %
    (Amount: NT$ million)        3Q10     2Q10     change      3Q09     change

    Revenue                    32,652   29,745        9.8    27,406     19.1
    Gross Profit               10,648    8,805       20.9     7,655     39.1
    Operating Expenses         (3,461)  (3,368)       2.8    (3,446)     0.4
    Operating Income            7,187    5,437       32.2     4,209     70.8
    Non-Operating Income
     (Expenses)                 1,937      199      873.4     2,180    (11.1)
    Net Income                  8,720    5,273       65.4     6,091     43.2
    EPS   (NT$ per share)        0.70     0.42         --      0.48       --
           (US$ per ADS)        0.112    0.067         --     0.077       --


Revenue increased 9.8% QoQ to NT$32.65 billion from NT$29.75 billion in 2Q10, and increased 19.1% YoY from NT$27.41 billion in 3Q09. Gross profit was NT$10.65 billion, or 32.6% of revenue, compared to NT$8.81 billion, or 29.6% of 2Q10 revenue. Operating income for the quarter was NT$7.19 billion, or 22.0% of revenue, compared to NT$5.44 billion, or 18.3% of 2Q10 revenue. The increase in revenue was mainly due to improved product mix and increased wafer shipments. Net income in 3Q10 was NT$8.72 billion, compared to NT$5.27 billion in 2Q10.

Earnings per ordinary share for the quarter were NT$0.70. Earnings per ADS(2) were US$0.112. The basic weighted average number of outstanding shares in 3Q10 was 12,449,924,578, compared with 12,449,924,578 shares in 2Q10 and 12,671,692,578 shares in 3Q09. The diluted weighted average number of outstanding shares was 12,569,431,682 in 3Q10, compared with 12,638,413,042 shares in 2Q10 and 12,793,329,223 shares in 3Q09. The fully diluted share count on September 30, 2010 was approximately 13,723,888,000. On September 30, 2010, UMC held 522 million treasury shares acquired from the 13th and 14th share buy-back programs.

    (2) One ADS represents five Taiwan-listed ordinary shares.

    Detailed Financials Section



    COGS & Expenses
                                                  QoQ %                YoY %
    (Amount: NT$ million)        3Q10     2Q10   change     3Q09      change

    Revenue                    32,652   29,745      9.8   27,406        19.1
    COGS                      (22,004) (20,940)     5.1  (19,751)       11.4
      Depreciation             (6,561)  (6,832)    (3.5)  (7,529)      (12.5)
      Other Mfg. Costs        (15,443) (14,108)     9.3  (12,222)       26.1
    Gross Profit               10,648    8,805     20.9    7,655        39.1
    Gross Margin (%)            32.6%    29.6%       --    27.9%          --
    Total Operating Exp.       (3,461)  (3,368)     2.8   (3,446)        0.4
      G&A                        (692)    (679)     1.9     (593)       16.7
      Sales & Marketing          (567)    (553)     2.5     (629)       (9.9)
      R&D                      (2,202)  (2,136)     3.1   (2,224)       (1.0)
    Operating Income            7,187    5,437     32.2    4,209        70.8


Depreciation within COGS decreased to NT$6.56 billion. Total operating expenses increased 2.8% to NT$3.46 billion, mainly due to R&D expense increasing to NT$2.20 billion. The total R&D expense was 6.7% of revenue in 3Q10.



    Non-Operating Income (Expenses)

    (Amount: NT$ million)                           3Q10      2Q10      3Q09

    Net Non-Operating Income (Exp.)                1,937       199     2,180
      Net Interest Income                             30        26        (4)
      Net Investment Income (Loss)                 1,778      (203)    1,736
      Gain on Disposal of Investment                 460       157       307
      Exchange Gain (Loss)                          (111)       50      (227)
      Other Gain                                    (220)      169       368


Net non-operating income during 3Q10 increased to NT$1.94 billion mainly due to an increase in dividends and interest from equity method investments.



    Cash Flow Summary

                                         For the 3-Month     For the 3-Month
                                            Period Ended        Period Ended
    (Amount: NT$ million)                  Sep. 30, 2010       Jun. 30, 2010

    Cash Flow from Operations                     15,954              12,089
      Net Income                                   8,720               5,273
      Depreciation & Amortization                  7,404               7,725
      Changes in Working Capital                     666              (1,271)
      Other                                         (836)                362
    Cash Flow from Investing                     (18,171)             (8,529)
      Capital Expenditures                       (19,368)             (8,873)
      Other                                        1,197                 344
    Cash Flow from Financing                      (4,331)             (6,583)
      Short-Term Loans                             1,901                 721
      Cash Dividend                               (6,233)                 --
      Redemption of bonds                             --              (7,500)
      Other                                            1                 196
    Effect of Exchange Rate                          (27)                 (7)
    Net Cash Flow                                 (6,575)             (3,030)


Net cash outflow was NT$6.58 billion in 3Q10. Operating cash inflow was NT$15.95 billion. The rise in investing cash outflow primarily reflects the CAPEX in 3Q10 of NT$19.37 billion. The NT$4.33 billion of financing cash outflow was primarily from the payment of cash dividend. Free cash flow(3) for 3Q10 was negative NT$3.41 billion.

    (3) Free cash flow = Operating cash flow - Capital expenditures



    Current Assets

    (Amount: NT$ billion)                         3Q10       2Q10       3Q09

    Cash & Cash Equivalents                      38.93      45.51      44.64
    Notes & Accounts Receivable                  18.55      18.53      16.23
      Days Sales Outstanding                        52         54         50
    Inventories                                  10.67      10.30       8.42
      Avg. Inventory Turnover                       44         44         40
    Total Current Assets                         78.41      83.84      73.51


Cash and cash equivalents decreased to NT$38.93 billion due increased investment cash outflow. During 3Q10, inventory turnover remained at 44 days.



    Liabilities

    (Amount: NT$ billion)                         3Q10       2Q10       3Q09

    Total Current Liabilities                    41.90      38.01      22.97
      Accounts Payable                            6.16       5.66       4.42
      Short-Term Credit / Bonds                   8.21       6.30       7.52
      Cash Dividends Payable                        --       6.23         --
      Payable on Equipment                       14.26       7.57       3.44
      Other                                      13.27      12.25       7.59
    Long-Term Liabilities                         0.81       0.92       0.88
    Total Liabilities                            46.20      42.42      27.37
    Debt to Equity                                 21%        21%        13%


Current liabilities increased to NT$41.9 billion, mainly due to the payable on equipment increasing to NT$14.26 billion. Total liabilities increased to NT$46.2 billion in 3Q10. UMC's debt to equity ratio remained at 21%.

    Analysis of Revenue(4)



                         Revenue Breakdown by Region

    Region                    3Q10      2Q10      1Q10      4Q09      3Q09

    North America              46%       46%       47%       51%       49%
    Asia Pacific               40%       42%       42%       40%       41%
    Europe                     13%       11%       10%        8%        9%
    Japan                       1%        1%        1%        1%        1%


The percentage of revenue from Europe increased to 13%, while the percentage of revenue from the Asia Pacific region decreased slightly to 40%.



                        Revenue Breakdown by Geometry

    Geometry                  3Q10      2Q10      1Q10      4Q09      3Q09

    40nm and below              4%        3%        1%        --        --
    40nm < x <=65nm            26%       21%       17%       17%       14%
    65nm < x <=90nm            14%       18%       22%       25%       26%
    90nm < x <=0.13um          24%       22%       25%       23%       21%
    0.13um < x <=0.18um        15%       18%       18%       19%       21%
    0.18um < x <=0.35um        12%       13%       11%       11%       13%
    0.5um and above             5%        5%        6%        5%        5%


Revenue from 65nm and below increased to 30% of total revenue, with 40nm accounting for 4% of UMC's Q3 revenue contribution as strong demand for advanced process nodes continues.



                      Revenue Breakdown by Customer Type

    Customer Type             3Q10      2Q10      1Q10      4Q09      3Q09

    Fabless                    78%       81%       81%       80%       79%
    IDM                        22%       19%       19%       20%       21%


The percentage of revenue from IDM customers increased to 22% in 3Q10 due to increased IDM outsourcing.



                     Revenue Breakdown by Application (1)

    Application               3Q10      2Q10      1Q10      4Q09      3Q09

    Computer                   12%       13%       13%       11%       17%
    Communication              53%       54%       59%       62%       59%
    Consumer                   32%       31%       26%       25%       23%
    Memory                      1%        1%        1%        0%        0%
    Others                      2%        1%        1%        2%        1%

    (1) Computer consists of ICs such as HDD controllers, DVD/CD-RW control
        ICs, graphic processors, PC chipset, audio codec, keyboard controller,
        monitor scaler, USB, I/O chipset. Communication consists of handset
        components, broadband, WLAN, bluetooth, switch, LAN, DSP, etc.
        Consumer consists of ICs used for DVD players, DTV, STB, MP3/MP4,
        flash controller, game consoles, DSC, smart cards, toys, etc. Memory
        consists of DRAM, SRAM, Flash, ROM, and EEPROM.


Revenue from the consumer sector grew to 32% of total revenue in 3Q10, positively reflecting UMC's efforts to diversify product mix.

(4) Revenue in this section represents wafer sales.

Blended Average Selling Price Trend

The blended average selling price (ASP) increased in US dollar terms during 3Q10, mainly due to product mix shifting to more advanced technology.

    (To view ASP trend, visit
http://www.umc.com/english/investors/3Q10_ASP_trend.asp )

    Shipment and Utilization Rate (5)



                               Wafer Shipments

                              3Q10      2Q10      1Q10      4Q09      3Q09

    Wafer Shipments
     (8" K equivalents)      1,202     1,156     1,033       990     1,017



                     Quarterly Capacity Utilization Rate

                              3Q10      2Q10      1Q10      4Q09      3Q09

    Utilization Rate          >99%      100%       88%       86%       89%
    Total Capacity
     (8" K equivalents)      1,220     1,183     1,154     1,132     1,152


Wafer shipments increased 4.0% sequentially to 1,202K in 3Q10, compared to 1,156K 8-inch equivalent wafers shipped in 2Q10. The overall utilization rate for the quarter was over 99%.

    (5) Utilization Rate = Quarterly Wafer Out / Quarterly Capacity


Capacity (6)

Capacity during the third quarter was 1,220K 8-inch equivalent wafers. The increase of total capacity is mainly due to expansion of 65/55nm at Fab 12i. The estimated installed capacity in 4Q10 will increase to 1,234K 8-inch equivalent wafers mainly due to the continuous expansion plan at Fab12i.



    Annual Capacity in
    thousands of 8-inch wafer equivalents

              FAB            Geometry (um)   2010E    2009     2008     2007

    Fab6A            6"       3.5 - 0.45      331      328      328      328
    Fab8A            8"       0.5 - 0.25      816      816      816      816
    Fab8C            8"      0.35 - 0.11      366      405      417      400
    Fab8D            8"      0.13 - 0.09      314      267      257      260
    Fab8E            8"       0.5 - 0.18      410      408      408      408
    Fab8F            8"      0.18 - 0.11      388      381      372      372
    Fab8S (1)        8"      0.18 - 0.11      304      300      291      276
    Fab12A           12"     0.18 - 0.040     841      866      876      847
    Fab12i (2)       12"     0.13 - 0.065   1,021      815      742      601
    Total (3)                               4,791    4,586    4,507    4,308
    YoY Growth Rate                            4%       2%       5%       7%



    Quarterly Capacity in
    thousands of 8-inch wafer equivalents

        FAB                   4Q10E     3Q10     2Q10     1Q10

    Fab6A                        83       83       83       82
    Fab8A                       204      204      204      204
    Fab8C                        90       90       90       96
    Fab8D                        84       81       78       71
    Fab8E                       104      102      102      102
    Fab8F                        98       98       96       96
    Fab8S                        77       77       75       75
    Fab12A                      213      210      209      209
    Fab12i                      282      275      245      219
    Total (3)                 1,234    1,220    1,183    1,154

    (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 since December 2004
        that was merged into UMC in April 2005
    (3) One 6-inch wafer is converted into 0.5625(6 sq/8 sq) 8-inch equivalent
        wafer; one 12-inch wafer is converted into 2.25(12 sq /8 sq) 8-inch
        equivalent wafers.



    (6) 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.



    CAPEX

               UMC Capital Expenditure by Year - in US$ billion

        Year         2009      2008       2007      2006      2005     2004

       CAPEX        $0.55     $0.35       $0.9      $1.0    $0.7(1)    $1.5

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



    2010 CAPEX Plan

                              8"              12"            Total

    UMC                      12%              88%      US$1.8 billion


The capital expenditure budget for 2010 will remain at US$1.8 billion. By the end of the third quarter, UMC's year-to-date CAPEX totaled US$1.2 billion.

    Recent Developments / Announcements


    Sep. 16, 2010 Dow Jones Sustainability Index Scores UMC First among All
                  Semiconductor Companies for Total Points in the
                  Environmental Sector
    Sep. 08, 2010 UMC Receives Outstanding Enterprise Innovation Award from
                  Ministry of Economic Affairs
    Aug. 04, 2010 UMC 2Q 2010 Financial Results

Please visit UMC's website for further details regarding the above announcements.

    Fourth Quarter of 2010 Outlook & Guidance

    Quarter-over-Quarter Guidance:

    -- Wafer shipments: mid single-digit percentage decline due to seasonality
    -- Wafer ASP: mid single-digit percentage increase
    -- Revenue: decline in accordance with NT$ appreciation
    -- Capacity utilization: mid to low 90% range
    -- Gross margin: low 30% range
    -- Segments: computer will be relatively weaker than consumer and
       communication
    -- Revenue contribution from 65nm and below: approximately 35%
    -- 2010 CAPEX budget: US$1.8 billion

    Conference Call / Webcast Announcement

    Wednesday, October 27, 2010

    Time: 8:00 PM (Taipei) / 8:00 AM (New York) / 1:00 PM (London)

    Dial-in numbers and Access Codes:
    USA Toll Free:                 1 866 519 4004
    UK Toll Free:                  0808 234 6646
    Singapore and Other Areas:     +65 6723 9381

    Access Code:                   UMC

A live webcast and replay of the 3Q10 results announcement will be available at http://www.umc.com under the "Investor Relations \ Investor Events" section.

About UMC

UMC (NYSE: UMC, TWSE: 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; Fab12A in Taiwan and Singapore-based Fab12i are both in volume production for a variety of customer products. The company employs approximately 13,000 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 registration statements on Form F-1, F-3, F-6 and 20-F, in each case as amended. 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.

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.

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

                        - FINANCIAL TABLES TO FOLLOW -



                     UNITED MICROELECTRONICS CORPORATION
               Unaudited Condensed Unconsolidated Balance Sheet
                           As of September 30, 2010
    Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)


                                                      September 30, 2010
                                                US$          NT$           %
       ASSETS
       Current Assets
        Cash and Cash Equivalents             1,246       38,931       14.8%
        Financial Assets at Fair Value
         through Profit or Loss, current         46        1,443        0.6%
        Available-for-Sale Financial
         Assets, current                        216        6,742        2.6%
        Notes & Accounts Receivable, net        594       18,553        7.1%
        Inventories, net                        342       10,670        4.1%
        Other Current Assets                     66        2,066        0.7%
           Total Current Assets               2,510       78,405       29.9%

       Non-Current Assets
        Funds and Investments                 2,146       67,026       25.6%
        Property, Plant and Equipment,
         net                                  3,546      110,783       42.2%
        Other Assets                            193        6,036        2.3%
           Total Non-Current Assets           5,885      183,845       70.1%
       TOTAL ASSETS                           8,395      262,250      100.0%

       LIABILITIES
       Current Liabilities
        Short-term Loans                         84        2,632        1.0%
        Financial Liabilities at Fair
         Value through Profit or Loss,
         current                                 64        1,988        0.8%
        Payables                                990       30,936       11.8%
        Current Portion of Long-term
         Liabilities                            179        5,580        2.1%
        Other Current Liabilities                24          759        0.3%
           Total Current Liabilities          1,341       41,895       16.0%

       Non-Current Liabilities
        Long-term Loans                          26          808        0.3%
        Other Liabilities                       112        3,497        1.3%
           Total Non-Current Liabilities        138        4,305        1.6%
       TOTAL LIABILITIES                      1,479       46,200       17.6%

       STOCKHOLDERS' EQUITY
       Capital Stock                          4,157      129,879       49.5%
       Additional Paid-in Capital             1,436       44,873       17.1%
       Retained Earnings, Unrealized Gain
        or Loss on Financial
         Instruments and Cumulative
         Translation Adjustment               1,539       48,032       18.4%
       Treasury Stock                          (216)      (6,734)      (2.6%)
       TOTAL STOCKHOLDERS' EQUITY             6,916      216,050       82.4%
       TOTAL LIABILITIES AND
        STOCKHOLDERS' EQUITY                  8,395      262,250      100.0%

       Note  New Taiwan Dollars have been translated into U.S. Dollars at the
             September 30, 2010 exchange rate of NT $31.24 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
                                        September 30,    September 30,
                                             2010            2009          %
                                         US$      NT$    US$      NT$    Chg.
    Net Sales                          1,045   32,652    877   27,406   19.1%
    Cost of Goods Sold                  (704) (22,004)  (632) (19,751)  11.4%
    Net Gross Profit                     341   10,648    245    7,655   39.1%
                                       32.6%    32.6%  27.9%    27.9%      --
    Operating Expenses
      - Sales & Marketing                (18)    (567)   (20)    (629)  (9.9%)
      - General & Administrative         (22)    (692)   (19)    (593)  16.7%
      - Research & Development           (71)  (2,202)   (71)  (2,224)  (1.0%)
                                        (111)  (3,461)  (110)  (3,446)   0.4%
    Operating Income                     230    7,187    135    4,209   70.8%
                                       22.0%    22.0%  15.4%    15.4%      --

    Net Non-Operating Income
     (Expenses)                           62    1,937     70    2,180  (11.1%)
    Income from Continuing Operations
     before Income Tax                   292    9,124    205    6,389   42.8%
                                       27.9%    27.9%  23.3%    23.3%      --

    Income Tax Expense                   (13)    (404)   (10)    (298)  35.6%
    Income from Continuing Operations    279    8,720    195    6,091   43.2%
    Extraordinary Gain                    --       --     --       --      --
    Net Income                           279    8,720    195    6,091   43.2%
                                       26.7%    26.7%  22.2%    22.2%      --

    Earnings per Share                 0.022     0.70  0.015     0.48      --
    Earnings per ADS (2)               0.112     3.50  0.077     2.40      --
    Weighted Average Number of Shares
      Outstanding (in millions)           --   12,450     --   12,672      --


    Notes:
    (1) New Taiwan Dollars have been translated into U.S. Dollars at the
        September 30, 2010 exchange rate of NT $31.24 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
                                 (Continued)

                                          Quarter over Quarter Comparison
                                              Three-Month Period Ended
                                        September 30,       June 30,
                                                2010            2010       %
                                        US$      NT$    US$      NT$     Chg.
    Net Sales                         1,045   32,652    952   29,745     9.8%
    Cost of Goods Sold                 (704) (22,004)  (670) (20,940)    5.1%
    Net Gross Profit                    341   10,648    282    8,805    20.9%
                                      32.6%    32.6%  29.6%    29.6%       --
    Operating Expenses
      - Sales & Marketing               (18)    (567)   (18)    (553)    2.5%
      - General & Administrative        (22)    (692)   (22)    (679)    1.9%
      - Research & Development          (71)  (2,202)   (68)  (2,136)    3.1%
                                       (111)  (3,461)  (108)  (3,368)    2.8%
    Operating Income                    230    7,187    174    5,437    32.2%
                                      22.0%    22.0%  18.3%    18.3%       --

    Net Non-Operating Income
     (Expenses)                          62    1,937      4      130   100.0%
    Income from Continuing Operations
     before Income Tax                  292    9,124    178    5,567    63.9%
                                      27.9%    27.9%  18.7%    18.7%       --

    Income Tax Expense                  (13)    (404)   (11)    (363)   11.3%
    Income from Continuing Operations   279    8,720    167    5,204    67.6%
    Extraordinary Gain                   --       --      2       69  (100.0%)
    Net Income                          279    8,720    169    5,273    65.4%
                                      26.7%    26.7%  17.7%    17.7%       --

    Earnings per Share                0.022     0.70  0.013     0.42       --
    Earnings per ADS (2)              0.112     3.50  0.067     2.10       --
    Weighted Average Number of Shares
      Outstanding (in millions)          --   12,450     --   12,450       --


    Notes:
    (1) New Taiwan Dollars have been translated into U.S. Dollars at the
        September 30, 2010 exchange rate of NT $31.24 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   For the Nine-Month Period
                                   Period Ended                Ended
                                September 30, 2010      September 30, 2010
                                US$      NT$       %      US$      NT$      %
    Net Sales                 1,045   32,652  100.0%   2,852   89,112  100.0%
    Cost of Goods Sold         (704) (22,004) (67.4%) (2,019) (63,100) (70.8%)
    Net Gross Profit            341   10,648   32.6%     833   26,012   29.2%


    Operating Expenses
      - Sales & Marketing       (18)    (567)  (1.7%)    (53)  (1,665)  (1.9%)
      - General &
          Administrative        (22)    (692)  (2.1%)    (63)  (1,973)  (2.2%)
      - Research &
          Development           (71)  (2,202)  (6.7%)   (204)  (6,346)  (7.1%)
                               (111)  (3,461) (10.6%)   (320)  (9,984) (11.2%)
    Operating Income            230    7,187   22.0%     513   16,028   18.0%

    Net Non-Operating Income
     (Expenses)                  62    1,937    5.9%      73    2,264    2.5%
    Income from Continuing
     Operations before
       Income Tax               292    9,124   27.9%     586   18,292   20.5%

    Income Tax Expense          (13)    (404)  (1.2%)    (29)    (886)  (1.0%)
    Income from Continuing
     Operations                 279    8,720   26.7%     557   17,406   19.5%
    Extraordinary Gain           --       --    0.0%       2       69    0.1%
    Net Income                  279    8,720   26.7%     559   17,475   19.6%

    Earnings per Share        0.022     0.70      --   0.045     1.40      --
    Earnings per ADS (2)      0.112     3.50      --   0.224     7.00      --

    Weighted Average Number
     of Shares

     Outstanding
      (in millions)              --   12,450      --      --   12,512      --


    Notes:
    (1) New Taiwan Dollars have been translated into U.S. Dollars at the
        September 30, 2010 exchange rate of NT $31.24 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 Nine-Month Period Ended September 30, 2010
    Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

                                                       USD                NTD
    Cash flows from operating activities:

        Net Income                                     559             17,475
        Extraordinary gain                              (3)               (82)
        Depreciation & Amortization                    743             23,210
        Gain on recovery in market value
         and obsolescence of inventories                (9)              (268)
        Cash dividends received under the
         equity method                                  10                299
        Investment gain accounted for
         under the equity method                       (16)              (494)
        Loss on valuation of financial
         assets and liabilities                         10                298
        Gain on disposal of investments                (22)              (694)
        Gain on disposal of property,
         plant and equipment                            (1)               (41)
        Exchange gain on financial assets
         and liabilities                                (1)               (34)
        Exchange gain on long-term
         liabilities                                    (4)              (126)
        Amortization of bond discounts                   5                170
        Amortization of deferred income                 (4)              (115)
        Stock-based payment                             15                464
        Changes in assets, liabilities
         and others                                     (0)               (11)
    Net cash provided by operating
     activities                                      1,282             40,051

    Cash flows from investing activities:

        Proceeds from disposal of
         available-for-sales financial
         assets                                         52              1,624
        Proceed from sale of financial
         assets measured at cost                         3                 84
        Acquisition of long-term
         investments accounted for under
         the equity method                             (57)            (1,782)
        Proceeds from disposal of long-
         term investments accounted for
         the equity method                               1                 38
        Prepayment for long-term
         investments                                    (1)               (18)
        Proceeds from liquidation of
         long-term investments                           0                 10
        Acquisition of property, plant
         and equipment                              (1,224)           (38,241)
        Proceeds from disposal of
         property, plant and equipment                   2                 60
        Proceeds from disposal of non-
         current assets held for sale                   13                401
        Increase in deferred charges                   (10)              (322)
        Increase in other assets - others               (4)              (109)
    Net cash used in investing activities           (1,225)           (38,255)

    Cash flows from financing activities:

        Increase in short-term loans                    84              2,622
        Proceeds from long-term loans                   10                300
        Repayments of long-term loans                   (1)               (22)
        Redemption of bonds                           (240)            (7,500)
        Cash dividends                                (200)            (6,233)
        Exercise of employee stock
         options                                         0                  3
        Purchase of treasury stock                    (155)            (4,844)
        Proceeds from disposal of
         treasury stock                                  1                 21
        Increase in deposits-in                          0                  7
    Net cash used by financing activities             (501)           (15,646)

    Effect of exchange rate changes on
     cash and cash equivalents                          (0)               (11)
    Net decrease in cash and cash
     equivalents                                      (444)           (13,861)

    Cash and cash equivalents at
     beginning of period                             1,690             52,792

    Cash and cash equivalents at end of
     period                                          1,246             38,931


    Note: New Taiwan Dollars have been translated into U.S. Dollars at the
          September 30, 2010 exchange rate of NT $31.24 per U.S. Dollar.
          All figures are in ROC GAAP.



    Contacts:

     Richard Yu
     UMC, Investor Relations
     Tel:   +886-2-2700-6999, ext. 6951
     Email: richard_yu@umc.com

SOURCE United Microelectronics Corporation