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To: Peter H. Mack who wrote (7717)	6/12/2000 2:31:00 PM
From: Peter H. Mack	Read Replies (2) \| Respond to of 9582

The following text was lifted from the UMC site regarding seismic risk.. (Pete) Risk Management UMC is fully aware of the threats posed by natural disasters, in particular its exposure to seismic activity in Taiwan, and has been extremely proactive in establishing best-in-class risk management procedures. In early 1998, UMC formed its Group Risk Management Division to address these issues. UMC has not only set up its own internal teams to deal with these issues, but has has also enlisted leading international authorities in the field of risk management. UMC is currently engaging the services of EQE, an engineering consulting firm specializing in structural engineering services aimed at addressing risks posed by earthquakes. EQE has been engaged to help us evaluate and reduce our seismic exposure for buildings, facility equipment, piping and process tools. EQE's home office is located in the San Francisco Bay Area and the company has offices worldwide. The overall conclusion of an EQE study of existing UMC facilities was that severe earthquakes represent a moderate risk to UMC fabs. In particular, certain key seismic issues were identified which needed to be addressed. As a result, all existing fabs will be retrofitted to bring them to a moderately low seismic risk level in the instance of the theoretical worst case scenario, a 475 year earthquake. This level of risk is acceptable from a life safety, asset protection and business interruption standpoint. The retrofit program is ongoing and scheduled for completion in all UMC fabs by year-end 2000. UMC's newest fabs, including Fab 8F and 8D, have been constructed in accordance with all the necessary earthquake protection requirements prescribed in the 1977 Uniform Building Code, and EQE reviewed our vendor's seismic protection design prior to construction. UMC's proactive efforts in the area of earthquake damage prevention contributed to our quick and exemplary recovery from the recent 921 Earthquake. Our insurers and reinsurers are very pleased in the way we managed our earthquake exposure, and by the fact that our 921 earthquake claims were well below their expectations.