: Chitung Liu, Chief Financial Officer Richard Yu, Investor Relations Manager

Randy Abrams - Credit Suisse Donald Liu - Goldman Sachs Emily Liu of Arete Capital Mehdi Hosseini - Susquehanna

Welcome everyone, to the United Microelectronics Conference call. (Operator Instructions) I would now like to turn the call over to Mr. Chitung Liu, CFO of UMC. Mr. Liu, you may begin.

Thank you, and welcome to UMC Conference call for the third quarter. With me today is CEO of UMC, Dr. Shih-Wei Sun, and IR Manager, Mr. Richard Yu. During this conference we may make forward looking statements based on management’s current expectations and beliefs. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially including risks that may be beyond company’s control. For these risks please refer to UMC’s filing with the SEC in the US and the ROC security authorities. Now I would like to start with the Q3 2010 business results. For Q3 of 2010, capacity utilization rate remained almost full. Revenue increased 9.8% quarter over quarter, to NT $32.65 billion, from NT $29.75 billion in Q2 2010, and increased by 19.1% year over year, from NT $27.41 billion in Q3 2009. Gross margin was 32.6% , operating margin was 22%. Net income was NT $8.72 billion, and earnings per ordinary shares were NT $0.7. So this is the short summary for the results on Q3 2010. More details are available in the quarterly report, which has been posted on our website. I will now turn the call over to Dr. Sun. Shih-Wei Sun: Thanks, Chitung. Good morning, good afternoon, and good evening. Thank you all for joining us today. As always, we appreciate your interest in UMC. I will start with a brief summary of UMC’s 2010 Q3 operating results. I will share with you our general operating status. After that, I will provide you with the guidance for Q4 2010. We will then have a Q & A session to answer your questions. Okay, let’s get started. We are very excited about UMC’s Q3 results. 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 first three quarters were NT $1.4, 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 volume of 1.2 million in the 2000 8 inch equipment and wafers. Other results, Q3 revenue exceeded US $1 billion, with revenue and income from foundry operations both reaching six year highs. UMC’s accelerated advanced the capacity expansion, and the product mix optimization continue to show positive results. Revenue contribution from 65 nanometer and below products has reached 30% with 40 nanometer growing to 4.2% of revenue. Return of stake-holders equity for the quarter reached a 16.6%. Looking ahead to Q4, advanced process capacity will remain fully utilized, product mix optimization will push wafer ASP even higher. We do expect that seasonality, NT dollar fluctuation 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, (inaudible) semi conductor industry outlook and the customer demand remain quite healthy. UMC’s US$1.8 billion CapEX this year shall significantly boost the vast capacity expansion in 28 nanometer and the 20 nanometer R & D, enabling the company to greatly enhance its competitiveness. We will also continue our efforts on ROE and plan to deliver favorable dividends to UMC shareholders. Now let me provide you with the guidance for Q4 2010. Wafer shipments will decline by mid single digit percentage due to seasonality. Wafer ASP will show a mid single digit percentage increase. Revenue decline will be in accordance with NT dollar appreciation. Capacity utilization will be in the mid to low 90% range. UMC’s gross margin will be in the low 30% range, the computer segment will be relatively weaker than the consumer and the communication sectors. Revenue contribution from 65 nanometer and below will be approximately 35%, CapEX for 2010 will remain at US $1.8 billion. That concludes my comments, we are now ready for questions. Operator, please open the lines up. Thanks.

(Operator Instructions.) Your first question comes from the line of Randy Abrams with Credit Suisse. Randy Abrams - Credit Suisse: Yes, thank you. Good evening. The blended pricing, you’ve had a good year for price and several good quarters. I want to see if you negotiate out for 2011, what type of pricing environment you’re seeing, whether you expect the strength to hold up. And then, if we look ahead to Q1, should we factor in the normal step down, annual step down in pricing in Q1? Shih-Wei Sun: Randy, our plan in the SP improvement, we have been discussing, it’s mostly coming from our mix improvement. So for next year, next quarter, the pricing is all being discussed on a case by case basis now. We did a guided queue for the plan, the SP will continue to increase in the mid single digit range. Randy Abrams - Credit Suisse: Okay, and as you look to the CapEx, you maintain $1.8 billion, but now you look ahead to next year. Should we be thinking about roughly similar levels for spending, and for your phase III and IV that you’re starting to build out, if you could update us on how much headroom you have to expand capacity to those facts? Shih-Wei Sun: As you know, we are expanding capacity in phase III of our 12A very aggressively. In the meantime, we are expanding capacity to improve the mix in (inaudible) and Singapore, so also in some of the 8 inch fabs. Going back to the CapEx question, we will guide next year’s CapEx maybe next quarter, but in essence, since UMC’s a profit earning, everybody has much improved, so we’ll be more aggressive in our CapEx looking forward, moving forward. But we also have boundaries for the CapEx. For example, with our profit and depreciation and cash income, we will probably be able to sustain our CapEx without any equity financing. In the meantime, we can still provide our stockholders a reasonable cash dividend return. That’s a kind of a general framework. Randy Abrams - Credit Suisse: Okay, two follow ups to that. Could you discuss how depreciation would be affected for Q4, and maybe a rough framework for 2011? And then given the better earnings this year, a rough idea of what we should be looking at for dividends going into next year?

Randy, this is Chitung. First of all, in terms of depreciation, we expect something around NT $30 billion for the whole year, 2010. And Q4 should show a few percentage decrease, quarter over quarter, compared to Q3. And for the whole 2011, the final CapEx number for 2011 hasn’t really finalized yet, however we do expect to see no more than up to 10% increase in the 2011 depreciation. And as for the dividends, UMC intends to have a steady and healthy cash dividend flow, and we also intend to maintain a high payout ratio, and someone was asking some mark off like 50% payout ratio during this afternoon’s conference call, and we think it’s not too aggressive to use 50% as the beginning. Randy Abrams - Credit Suisse: Okay, thanks a lot guys.

Your next question comes from the line of Mehdi Housseini of Susquehanna. Mehdi Hosseini – Susquehanna: Thank you, two questions. First, on the CapEx, is your decision making process any different than prior years? I’m asking you this because by now it’s obvious that some of your customers, or customers of your customers have been going through some inventory adjustment, so as we look into next year, not only such customers will have to figure out their restocking, but also have to figure out the overall demand picture. So does that make the capacity planning this year any more difficult than prior years? Shih-Wei Sun: I think our capacity planning is really a multi-year, multi-cycle kind of efforts, so for example we are discussing internally our next three years overall company, the rationing (inaudible) So the near term, seasonality will not affect our long term capacity decision, as I mentioned earlier, UMCs profit earning capabilities are getting stronger. We will consider that as well, for our future investment. Mehdi Hosseini – Susquehanna: And in the meantime, equipment availability is also better, especially next year, as compared to earlier this year. Correct? Shih-Wei Sun: Actually, our equipment procurement, we have a long term road map with our major equipment suppliers. It’s really the whole total consideration point. Actually in the past year, we don’t have much difficulty either, as long as we discuss them with the equipment supplier, a long term road map basis. Mehdi Hosseini – Susquehanna: And just one quick question on the 8 inch 200 nanometer. capacity. I see more and more of the Taiwan based (inaudible) players increasing the foundry mix of their capacity. Especially the same kind of trend is going on in mainland China. Does that worry you, that at some point we could see a more than expected pricing threshold for the threading agent, also, adverse impact on the overall gross margin profile? Shih-Wei Sun: Not really, this kind of a situation has been the case in the past many, many years. It’s really nothing new for us. So 8 inch domain, we are also working very hard to reach our mix, for example, we are pushing our product when capacity mix to where the .11 micron technology, so we are reaching our mix with many different specialty technologies. Now, those will include the IDN outsourcing from 8 inch perspective. So the impact should not be that much. Mehdi Hosseini – Susquehanna: Okay, thanks so much.

(operator instructions) Your next question comes from the line of Donald Liu with Goldman Sachs. Donald Liu - Goldman Sachs: Good evening. First, congratulations on your very good results and execution. My first question is more long term. It seems like this year we see your peers, TSMC, Global Foundries, and also FMIC have increased CapEx, and also into next year, based on what the equipment vendors are talking about, it seems like foundries CapEx will remain very high, and so I just want to see what you see like long term, mid term strategy for UMC now for advanced technology for 12 inch, going forward? Shih-Wei Sun: So UMC’s strategy in the past two years has been very clear, which is to provide customer driven foundry solutions timely. So from business perspective we are working very hard to enhance our business composition, enrich our customer mix, product mix, and the technology mix. And also lower the barrier for customer engagement, and then capacity and technology wise, our capacity we are investing $1.8 billion this year, and this will give us good revenue and with good profit earning capability. So the capacity investment there has to be supported by later adequate capacity and revenue growth, and profits. Technology wise, we have been doing the technology development by ourselves, which has been very successful so far. We set a rollout of a 65 nanometer with the capacity, and also business ramping. For 40 nanometer we are ramping also, and today’s capped by our supply constraint, so we are releasing the 40 nanometer capacity, so everything moves along pretty well. On 28 nanometer, we have about eight firmly engaged customers doing (inaudible) and actually as we are speaking today, this month we are launching and taking out another (inaudible) 28 nanometer shadow program, with many customers IP and test circuits on the shadow. So moving forward, as I mentioned earlier, UMC’s profit earnings have (inaudible). So we will look at our CapEx situation more carefully and move forward, provide timely adequate capacity and technology where we can add value to our customers. Donald Liu - Goldman Sachs: Great. Can you give us some color on 12 inch ROE, given that you have been running at full capacity (inaudible) at the 12 inch for two to three quarters now? And also, the ROE for 8 inch? If not ROE, then maybe margins, so we can see how the 12 inch profitability is progressing? Shih-Wei Sun: We cannot really give you the number, because it’s really dynamic, and all we can say is our 12 inch wafer margins is at all time high, and it’s continuing to improve, and currently our range margin, because of light depreciation expenses still higher than that of 12 inch, but 12 inch has been key drivers for overall profitability improvement. The past year the 12 inch ROE has been improved quite a bit. Donald Liu - Goldman Sachs: I’ll ask the last question here. For 12 inch you just commented that there are several things that you’re doing, which is quite – is working very well. Can you get more color on like each of the items you are doing? For example, you said the lower the customer’s effort to engage UMC, can you explain more in detail? Shih-Wei Sun: I think every customer has their own thoughts and their own strategy. Basically, customer by customer, we are just trying to consider from their shoes and provide true value in their supply chain, where we can, but when it grows together. In some other cases, maybe it is different strategy. With our UMC position we may not have some common denominator. In those cases, we may just look elsewhere. So those kind of adjustment then needs improvement, really helped us a lot in the past year or two. Donald Liu - Goldman Sachs: Great, thank you. Oh, is there any like 10% customers in the quarter? Shih-Wei Sun: We mentioned we now have seven 5% and above customers now. Which is also an improvement from the past. Donald Liu - Goldman Sachs: I see, great. Thank you very much.

Your next question comes from the line of Emily Liu of Arete Capital. Emily Liu -- Arete Capital: Hi, thanks for taking my question, and congratulations on a very good set of numbers this quarter. I have a few questions, really. First of all, I noted that the revenue contribution for IDM has been going up, actually went up pretty noticeably Q3, do you see that going – the trend to continue? If that’s the case, can you comment on the driver for this trend? And second question is do you have an internal target for going to global market share next year? Shih-Wei Sun: For the IDN number this quarter is somewhat higher, certainly IDN outsourcing for the rest of technology in 12 inch has been happening for years, it’s actually no difference, it’s just continuing. However, last year’s global economic crisis really helped IDN to outsource their 8 inch, also. So we are definitely benefitting from that. Other than that, it’s just a fluctuation or it’s a trend, and we have to look more quarters since the (inaudible) is also growing strong. Emily Liu -- Arete Capital: Okay, okay. What about, do you have an internal target on your Google market share next year? Do you have a view on your market share this year, in the foundry space? Shih-Wei Sun: It’s a good deal more difficult to track the market share for foundries, because some foundries, they don’t have the public information. Last year we definitely gained the market share, very clearly, during the global economic crisis. This year, the numbers is sometimes difficult to get hold of, but I think we are holding about – pretty good. Emily Liu -- Arete Capital: Okay, what about the market share within Taiwan, of this year? Shih-Wei Sun: We don’t track those now. It’s three of us, we have to look into that. Public information, but I think we are doing pretty good. Emily Liu -- Arete Capital: And how do you see next year? You intend to reduce or maintain your market share? Or you want to expand your market share, globally? Shih-Wei Sun: Well, we discuss also this afternoon. In the past two years our focus is really to return good cash dividend year to our stockholders, the return of equity is the number one priority. However, during the process, when we focus on the ROE and also providing customer treatment solution and service, actually our market share also gained last year. So it’s not a tradeoff. Emily Liu -- Arete Capital: And my final question, do you have an internal target regarding the revenue contributions, from an event, technology level 65 nanometer.? Shih-Wei Sun: So for example, next quarter we are guiding 35 (crosstalk) 65 mm. below. Internal we do have numbers for next year, but we will guide you quarter by quarter. Emily Liu -- Arete Capital: Okay, okay. Thanks. Shih-Wei Sun: Thank you.

We have a followup question from the line of Mehdi Hosseini – Susquehanna Mehdi Hosseini – Susquehanna: Thank you, my followup question has to do (inaudible) remark regarding the Q4, you said that the pcm market is the weakest, relative to consumer and communication. My question is can you provide some color, a specific area in PC that is weak, and number two, is this the kind of weakness that was anticipated in the rolling forecast a few months ago, or is it a recent change to your expectations? Shih-Wei Sun: There are actually two aspects on this migration. The PC has been, in general, weak and this is well publicized and well reported in the media reports. But as I mentioned earlier in the afternote, actually very recently it seems they are picking up a little bit, but in general PC is just weak. But on the other hand, you know, the tablet and other touch screen based tablet and smart phones are getting very strong, and lucky the UMC’s also part of the supply chain for these segments. So for us, it’s a way we are doing pretty good. But also, from the second aspect is, for example, mix improvement for UMC, in the past computer segment we have been trying to do some mix improvement of our structure, so this is just in general. Computer segment is slightly weaker in Q4. Mehdi Hosseini – Susquehanna: Okay, thank you.

(Operator instructions) Your next question comes from the line of Lionel Lim of HSBC. Steven Pelayo - HSBC: It’s actually Steve Pelayo from HSBC, thanks for taking my question. I’m just playing around with my model, and I’m trying to think about next year, and the depreciation costs, I think you’ve already got it growing I think it was 10 to 15%, you might correct me there. But I’m curious, did that come through fairly steady, or as we get into Q1 do we see a step up in that quarterly depreciation in your cost of goods sold? Shih-Wei Sun: It’s a 10% increase and it’s kind of lenient, not like any special jump in any given quarter. Steven Pelayo - HSBC: Okay, so fairly smooth then. And then, also looking into my model, if you could comment on next year’s tax rate, as well as some thoughts about next year’s non-operating income line. If we think about this year, you just had a very large benefit in Q3, yet a lot of those portfolio companies are going to be paying you even larger amounts next year, so should I be thinking about Q3 2011 having an even higher non-operating income benefit, in 2011? Shih-Wei Sun: I think it’s a bit too early to talk about (inaudible) in 2011, however our goal is certainly to continue to divest our nonco housing, which is still rather substantial, relatively. So we wish – we do expect to see some kind of disposal dent in 2011, unless the stock market goes very differently. Now for the tax rate, the minimum tax in Taiwan for any company is 10%, and given our accumulated tax credit, we expect we can enjoy 5 to 10% tax rate for the next few years. Steven Pelayo - HSBC: Okay then, just a couple of quick questions on capacity. You guys are ramping up 12A, phase III and IV, could you give me some milestones along the way there? Where do you think that will be mid-2011, end of 2011? Shih-Wei Sun: We are now ramping phase III only in 12A, and today we are, for example, by the end of this year, December, we should have around 1K output from phase III, of 12A. Steven Pelayo - HSBC: And that goes by mid next year? Shih-Wei Sun: We will continue throughout the year next year, and forward even, to 2012. But the numbers, I don’t have it. Steven Pelayo - HSBC: I guess I’m just trying to understand – a year from today, will that phase III be running another 10K? Another 15, 20, I have no idea. What type of range would you be thinking about? Shih-Wei Sun: With adequate business, we want to ramp up to 20K as soon as we can, to reach a good economic scale, but I don’t have the exact schedule and the time next year. Steven Pelayo - HSBC: Okay, excellent. Thanks guys.

(operator instructions) At this time, there are no further audio questions, Mr. Liu, I’d like to turn it over to you for closing remarks. Shih-Wei Sun: Thank you, and thank everyone for your interest in UMC. Please feel free to contact us directly if you have additional questions. And operator, back to you for the closing remarks.

Thank you for your participation in UMC’s conference. There will be a webcast replay within an hour. Please visit www. umc.com under the investor relations, investor event section. You may now disconnect. Goodbye.