1Q Results Top Guidance on Better than Expected Demand, Momentum Continues into 2Q

First Quarter 2014 Overview[1]:

• Revenue: NT$31.69 billion (US$1.04 billion)
• Gross margin: 18.6%; operating margin: 3.0%
• Foundry capacity utilization rate: 81%
• Net income attributable to the stockholders of the parent: NT$1.18 billion (US$38.7 million)
• Earnings per share: NT$0.09; earnings per ADS: US$0.015

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 2014.

Revenue was NT$31.69 billion, with gross margin at 18.6% and operating margin at 3.0%. Net income attributable to the stockholders of the parent was NT$1.18 billion, with earnings per ordinary share of NT$0.09.

Mr. Po-Wen Yen, CEO of UMC, said, "In the first quarter of 2014, UMC recorded NT$28.71 billion in revenue from the foundry segment, with operating margin from foundry operations of 4.0%. Wafer shipments reached 1.258 million 8-inch equivalent wafers."

CEO Yen added, "In a seasonally quiet quarter, UMC's first quarter of 2014 foundry performance exceeded guidance, driven by continuous chip demand that brought overall capacity utilization to 81%. Growth was led by the computing sector. As a result, contribution from 65nm and below technologies represented 51% of sales, including 20% from 40nm. For 28nm, our communication and consumer customers continue to be encouraged by our sustained yield improvement. While the average 28nm yields have shown stable performance, the continuous rise in our peak wafer yields will be a convincing factor for customers to enter pilot production in the coming months. UMC also continues to focus on capturing fast growing opportunities and further expanding our market share in China. Recently, UMC hosted its 2014 China Technology Forum in Shanghai to demonstrate our manufacturing excellence and comprehensive coverage of semiconductor applications. With 20 years of pure-play foundry experience, our technology leadership in logic and specialty solutions will help us gain additional design-wins in the Chinese fabless industry."

CEO Yen continued, "For the second quarter of 2014, UMC will benefit from the continued growth in customer demand, especially from the communication segment. We expect increased wafer shipments and higher capacity utilization rates to drive better profitability. At the leading-edge, 40nm demand continues to show strength while 28nm business is gaining momentum. We are confident that our engineering team's steady progress in 28nm yield enhancement activities will help UMC to capture key business and achieve strategic goals in the near future. We will continue to execute and take the necessary steps to propel our future growth. In the long run, we will further strengthen our technology solutions and service quality to enhance shareholder returns."