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To: Johnny Canuck who wrote (43062)	2/14/2006 3:23:00 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68187

UMC to ‘Reinvent’ Itself Online staff -- Electronic News, 2/14/2006 After a turbulent, but highly financially successful, final quarter of 2005, Taiwan’s United Microelectronics Corp. (UMC) said it plans to “reinvent itself in the spirit of a start-up company” for better use of the Taiwanese business environment. The company saw positive Q4 results with both revenue and net income seeing double-digit growth despite a chaotic year amid accounting scandals and executive indictment. UMC reported revenue growth of 16.5 percent sequentially over the three-month period ending Dec. 31, 2005 to $837 million (27.47 billion Taiwanese dollars), from $730.6 million (23.58 billion TWD) in Q3 2005. Q4 revenue decreased 2.7 percent year-on-year from $874.67 million (28.23 billion TWD) in Q4 2004. Revenue from 90nm technology increased to 15 percent of total revenue in the quarter. Net income increased 40.6 percent sequentially to $93 million (3.04 billion TWD) compared to $67.23 million (2.17 billion TWD) in Q3 2005. Q4 net income increased 128.4 percent year-on-year from $41.21 million (1.33 billion TWD) in Q4 2004. Q4 growth was attributed to increased demand for wireless communication products, PC chipsets and LCD drivers in the computer segment. Wafer shipments increased 9.3 percent sequentially to 810 thousand 8-inch equivalent wafers, according to the number two foundry. But the Q4 growth followed serious troubles in December when the Hsinchu District Prosecutor’s Office announced it planned to indict former UMC Chairman Bob Tsao and former UMC Vice Chairman John Hsuan based on alleged accounting inaccuracies. "In order to best leverage Taiwan's unique environment and business culture, UMC will reinvent itself in the spirit of a start-up company,” said UMC Chairman and CEO Jackson Hu, in a statement. “The attributes of a start-up company include solid execution, a low profile attitude, a strong focus on customer satisfaction, and the ability to quickly deliver the technologies and services that customers require. We are fully prepared to use the considerable financial strength that we have accumulated over the years to fund aggressive research and development programs, expand production capacity, and retain and hire the best people in the industry." For the full year, revenue decreased 22.6 percent year-on-year to $2.8 billion (90.78 billion TWD) from $3.6 billion (117.31 billion TWD) in 2004. Net income decreased 77.9 percent year-on-year to $217.17 million (7.03 billion TWD) from $983.5 million (31.84 billion TWD) in 2004. Revenue from 90nm increased significantly and accounted for 11 percent of total wafer sales in 2005, compared to 3 percent in 2004, UMC noted. Revenue from 0.18um and below accounted for 60 percent of total revenue, up from 55 percent in 2004. UMC’s Q1 expectations are somewhat bleaker than its Q4 performance. Wafer shipments are expected to decrease by 7 percent to 8 percent with average selling price decreasing 1 percent to 2 percent. Profitability is anticipated to break even at the operating level.