United Microelectronics Corporation 2020 Annual Report Printed on February 24, 2021 UMC Annual Report Information Can Be Accessed from the Following Websites: https://www.umc.com https://mops.twse.com.tw

Annual Report

TSE Code: 2303 NYSE Symbol: UMC 2020 Spokesperson Fab 8F Securities Dealing Institution Chitung Liu 3 Li-Hsin 6th Rd., Hsinchu Science Park, Hsinchu, Horizon Securities Co., Ltd. Senior Vice President and Taiwan 30078, R.O.C. Stock Registration Department Chief Financial Officer 886 (3) 578 2258 3F, No.236 Hsin-Yi Rd. Sec. 4, Taipei, Taiwan 886 (2) 2658 9168 10680, R.O.C. [email protected] Fab 8S 886 (2) 2326 8818 16 Creation 1st Rd., Hsinchu Science Park, http://www.honsec.com.tw Acting Spokesperson(s) Hsinchu, Taiwan 30077, R.O.C. Jinhong Lin 886 (3) 578 2258 ADR Depositary and Registrar Finance Division J.P. Morgan Depositary Receipts Senior Director Fab 12A 383 Madison Avenue, 11th Floor 886 (2) 2658 9168 18, 20 Nan-Ke 2nd Rd., & 57 Nan-Ke 3rd Rd., New York, NY 10179, U.S.A. [email protected] Southern Taiwan Science Park, Sinshih, Tainan, General Contact：1 (800) 990 1135 Taiwan 74147, R.O.C. Outside the USA：1 (651) 453 2128 David Wong 886 (6) 505 4888 http://www.adr.com Finance Division Manager Singapore Branch ADR Exchange Marketplace 886 (2) 2658 9168 3 Pasir Ris Drive 12, Singapore 519528 NYSE Euronext [email protected] 65 6213 0018 11 Wall Street, New York, NY 10005, U.S.A. Subsidiary in Mainland China Headquarters 1 (212) 656 3000 HJ 3 Li-Hsin 2nd Rd., Hsinchu Science http://www.nyse.com 333 Xinghua St., Suzhou Industrial Park, Suzhou, Park, Hsinchu, Taiwan 30078, R.O.C. Ticker/Search Code: UMC 886 (3) 578 2258 Jiangsu Province 215025, P.R.C. 0512 65931299 Euro Convertible Bond Exchange Taipei Office Marketplace Subsidiary in Mainland China 8F, 68 Sec. 1, Neihu Rd., Taipei, Taiwan Singapore Exchange Securities Trading USCXM 11493, R.O.C. Limited 899 Wan Jia Chun Road, Xiang’an District, Xiamen, 886 (2) 2658 9168 2 Shenton Way Fujian Province, P.R.C. #02-02 SGX Centre 1 0592 7687888 Fab 8A Singapore 068804 3, 5 Li-Hsin 2nd Rd., Hsinchu Science 65 6236 8888 Subsidiary in Japan Park, Hsinchu, Taiwan 30078, R.O.C. USJC http://www.sgx.com 886 (3) 578 2258 ECB Search Code: ISIN XS1228110000 3-1 Kinko-cho, Kanagawa-ku, Yokohama, Kanagawa, Japan Fab 8C & Fab 8D Auditors 81 45 620 2682 6, 8 Li-Hsin 3rd Rd., Hsinchu Science Ernst & Young, Taiwan Park, Hsinchu, Taiwan 30078, R.O.C. Wan-Ju Chiu, Hsin-Min Hsu Wavetek 886 (3) 578 2258 9F, No. 333, Sec. 1 Keelung Road, 10 Chuangxin 1st Rd., Hsinchu Science Park, Taipei, Taiwan 11012, R.O.C. Fab 8E Baoshan Township, Hsinchu, 886 (2) 2757 8888 17 Li-Hsin Rd., Hsinchu Science Park, Taiwan 30076, R.O.C. http://www.ey.com Hsinchu, Taiwan 30078, R.O.C. 886 (3) 578 1259 886 (3) 578 2258 Corporate Website https://www.umc.com

United Microelectronics Corporation | Annual Report 2020

Table of Contents

Letter to Shareholders 4 Capital Overview 99 100 Capital and Shares Corporate Profile 8 106 Issuance of Corporate Bonds 9 Corporate Profile and Date of Establishment 111 Preferred Shares 10 Corporate Milestones 112 American Depositary Receipts 114 Employee Stock Option Handling Status 114 Issuance of New Restricted Employee Shares Corporate Governance Report 13 115 Status of New Shares Issuance in Connection with 14 Corporate Organization Mergers and Acquisitions 16 Directors’ and Managers’ Information 115 Financing Plans and Execution Status 37 Corporate Governance Practices 93 Certified Public Accountant (CPA) Fee Information Operations Overview 120 93 Information of CPA Change 121 Business Activities 93 UMC’s Chairman, Presidents, Chief Financial Officer, and 128 Overview of Market, Production, and Sales Managers in Charge of Its Finance and Accounting Operations Did Not Hold Any Positions in UMC’s Independent Auditing Firm or Its 134 Employees Affiliates in the Most Recent Year 135 Environmental Expenditure Information 94 Change in Shareholding of Directors, Managers and Major 135 Labor Relations Shareholders Who Own 10% or More of UMC Shares 139 Major Contracts 96 Relationship Among the Top 10 Shareholders 97 Shares Held by the Company, Directors, Managers and Companies Directly or Indirectly Controlled by the Company, and the Comprehensive Shareholding Ratio Based on Combined Calculation

2 Review of Financial Position, Operating 141 Financial Review 182 Results, Risk Management 183 Condensed Balance Sheets 142 Financial Position 185 Condensed Statements of Comprehensive Income 143 Financial Performance 187 Financial Analysis 144 Cash Flow 191 Audit Committee’s Review Report 144 Major Capital Expenditures from Recent Years and 192 Financial Statements – Consolidated Impact on Company’s Finance and Business 269 Financial Statements – Parent Company 144 Main Reasons and Improvement Plans for Recent Annual Reinvestment Policies and Profit or Loss, and Investment Plans for the Coming Year 145 Risk Management and Evaluation 154 Other Necessary Supplements

Social Responsibility 155 156 Description of Corporate Social Responsibility

158 About Social Charity 162 Environmental Protection, Safety and Health Management Instructions

Special Disclosures 168 169 Summary of Affiliated Enterprises 181 Issuance of Private Placement Securities 181 Acquisition or Disposal of UMC Shares by Subsidiaries 181 Other Necessary Supplements 181 Disclosures of Events Which May Have a Significant Influence on Stockholders’ Equity or Share Price, in Compliance with Item 3, Paragraph 2 in Article 36 of the Securities and Exchange Law of the R.O.C.

3 Dear Shareholders,

In 2020, global confirmed cases and deaths from COVID-19 continued to rise, dealing the economy a major setback and significantly impacting people’s lives. UMC’s management team addressed this unsteady situation by imposing corporate safety policies that met or exceeded those set forth by the government, confronting the epidemic head-on with our employees and working together to maintain normal operations and stable growth.

2020 Business Summary After adjusting UMC’s business strategy, the company has transformed Advanced Technologies Development into a semiconductor foundry leader focusing on specialty technologies. UMC’s advanced technology platforms including 14FFC (14nm FinFET We accomplished this by first strengthening the company’s financial Compact), 22nm ultra-low power (22ULP), 22nm ultra-low leakage structure, then expanding production capacity in a cost-competitive (22ULL) and 28nm High Performance Compact (28HPC+) process manner and optimizing our product portfolio. Examining the current technologies have already entered production. 28HPC+ was designed results reveals solid performance in the areas of strategic positioning, to support image signal processor (ISP) in 2020 and is undergoing an technology, production capacity, yield, profitability and sustainable engineering upgrade for 2021. Other newly released processes in 2020 operation. UMC’s 2020 revenue grew 19% over the prior year. Our include mmWave using 55nm, 40nm and 28nm to fulfill high performance foundry segment shipped a total of 8.9 million 8-inch equivalent wafers and low power product requirements for mobile devices, Internet of for the year, growing 24% YoY. Capacity utilization reached 97% in Things (IoT), 5G, automotive electronics and industrial radar that use 2020, growing 8% YoY. Full year revenue reached NTD 176.8 billion, mmWave. with 22.05% gross margin rate and 12.45% operating margin rate. Profit attributable to the parent company was NTD 29.19 billion or an Specialty Process Technologies Pipeline earnings per share of NTD 2.42. In 2020, UMC invested NTD 12.9 billion For specialty processes, UMC’s 28nm high voltage (HV) platform was in R&D. The cash based capex in 2020 was USD 1 billion, which was the industry’s first such technology to enter mass production and is being mainly invested in new R&D process equipment and production capacity utilized for driver ICs used in high resolution organic light-emitting display expansion at Southern Taiwan Science Park Fab 12A, Xiamen Fab 12X (AMOLED) panels. 22nm embedded high voltage (22eHV) development and Suzhou Fab 8N, as well as product mix optimization across all fabs. is also underway and on schedule.

4 Letter to Shareholders

Our Radio Frequency Silicon On Insulator (RFSOI) technology has met the stringent requirements of all 4G/5G mobile phones for RF switches. Currently, 90nm RFSOI is in mass production with 55nm RFSOI under development. At the same time, 40nm RFSOI development has begun with the intent to capture the 5G/mmWave mega-trend. For embedded flash memory technology (eFlash), 40nm SST has been introduced into mass production, while 28nm SST development progress is in line with expectations and will fulfill the demand for IoT products. 40nm Resistive Random Access Memory (ReRAM) has entered mass production. Development of 22nm Resistive Random Access Memory (ReRAM) and 22nm Embedded Magneto-resistive Random Access Memory (eMRAM) technologies are progressing as planned and will be designed into Al Internet of Things (AIoT) applications. In addition, we are actively investing in the development of gallium nitride (GaN) and microwave platforms to penetrate high-efficiency power component and 5G microwave component markets.

Growing Intellectual Property Portfolio Facing intense global competition, UMC has paid special attention patents and IP protection. The overall number of patents granted to UMC has maintained steady growth. A total of 484 domestic and foreign patents were obtained in 2020, including 271 US patents, 96 ROC patents, and 117 patents from mainland China. The total number of patents granted to UMC over the years is 13,991, supporting a strong and comprehensive intellectual property portfolio that solidifies the company’s manufacturing process know-how.

5 United Microelectronics Corporation | Annual Report 2020

Corporate Governance and Sustainability UMC adheres to the sustainable vision of “people-oriented, symbiosis with the environment, and prosperity with society.” While pursuing profitable growth, we are committed to the balanced development of the three-ESG dimensions of “environment, society, and governance” and actively follow the sustainability and development goals of the United Nations.

In 2020, UMC received many honors and recognitions from domestic and international institutions, governments and associations in sustainability and development, information disclosure, corporate governance, environmental protection, and customer service:

Listed on the “DJSI Dow Jones Sustainability Index World Index” for 13 consecutive years Continuously selected as constituent stocks on the FTSE4Good Emerging Market and Taiwan Perpetual Indexes Received the “Taiwan Business Sustainability Report Award” for 13 consecutive years and the highest platinum award for the third time Achieved the top 5% in the “Corporate Governance Evaluation” for 6 consecutive years Received the “Green Chemistry Innovation and Application Award” from the Environmental Protection Agency for 2 consecutive years Won the “Second National Enterprise Environmental Protection Award-Giant Award”

The pandemic has led to different work behaviors and spurred new market demand in several areas; artificial intelligence, advanced manufacturing, 5G communications, and quantum information technology will play a vital role in the use of semiconductor technology. UMC will

6 Letter to Shareholders

continue to strengthen the company’s competitive advantages, grasp In closing, we would like to thank our customers and shareholders new market trends and provide innovative services after the pandemic for their support, and the efforts of all employees that enabled UMC is over. We will strive to maintain the established business strategy of to realize record breaking revenues in 2020 despite the impact of the improving financial strength and continuous growth. In sustainability epidemic. We will continue to pursue growth and progress and set and development, UMC’s core strategies include: (1) Optimize risk higher benchmarks, continue to invest, deepen our roots in Taiwan, and management and compliance with laws and regulations and the serve our customers across the globe so that we can create a win-win pursuit of sustainable corporate value; (2) Continue to master the key situation for shareholders, colleagues, customers, and the society. We supply chain role by establishing effective partnerships and developing would like to express our sincere gratitude to all shareholders, and we innovative business models; (3) Remain committed to technological wish you good health and happiness. innovation, combining advanced manufacturing, smart factories, data assets and core talents.

President: SC Chien Chairman: Stan Hung President: Jason Wang

7 United Microelectronics Corporation | Annual Report 2020

Corporate Profile

9 Corporate Profile and Date of Establishment 10 Corporate Milestones

8 Corporate Profile

Corporate Profile and Date of Establishment

Founded on May 22, 1980 as Taiwan’s first semiconductor company, UMC has 12 wafer fabs located throughout Asia, including four advanced UMC has grown to become a leading global semiconductor foundry. The 12-inch fabs. Fab 12A was Taiwan’s first 12-inch fab, and has been in company provides high quality IC production with a focus on both logic volume production for customer products since 2002. This advanced and specialty technologies to serve every major sector of the electronics facility consists of Phases 1-6 and is currently manufacturing customer industry. UMC’s comprehensive technology and manufacturing solutions products using 28-nanometer High-K/Metal gate technologies. UMC’s include Logic/RF, embedded high voltage, embedded flash, RFSOI/ second 12-inch fab, Fab 12i, is located in Singapore. This facility is the BCD and IATF-16949 automotive manufacturing certification for all its company’s specialty technology center that provides highly specialized manufacturing facilities. UMC operates 12 fabs that are strategically processes on 12-inch manufacturing to serve a diverse range of product located throughout Asia with a maximum capacity of more than 750,000 applications. United Semi, located in Xiamen, China, was established as 8-inch equivalent wafers per month. The company has offices in Taiwan, southern China’s first 12-inch foundry fab and began volume production China, Europe, Japan, Korea, Singapore, and the United States. in 2016. United Semi serves China’s vast IC market and provides high quality, geographically diversified manufacturing for our foundry UMC led the development of the commercial semiconductor industry customers. Japan-based USJC, fully acquired in October of 2019, is in Taiwan. It was the first local company to offer foundry services, as UMC’s fourth 300mm fab. USJC offers foundry volume production for well as the first semiconductor company to list on the Taiwan Stock mature specialty nodes ranging from 90-nanometer to 40-nanometer. Exchange (1985). UMC has an extensive network of service offices in Taiwan, China, Europe, Japan, Korea, Singapore, and the United States In addition, UMC’s manufacturing expertise and over 40 years of with approximately 19,000 employees worldwide to meet the needs of experience ensure industry-leading cycle times and defect densities. its global customer base. UMC will continue to provide customers with Comprehensive process control systems with advanced methodologies robust process technologies and comprehensive foundry solutions, and a strong engineering team support fast product ramp. UMC’s enabling customers to continuously strengthen their competitive advanced automation, mature defect density, fast cycle times and ample advantage in today’s rapidly changing industry. capacity enable UMC to provide the most competitive manufacturing advantages for our foundry customers.

Company establishment date: May 22, 1980.

9 United Microelectronics Corporation | Annual Report 2020

Corporate Milestones

May, 1980 Established

July, 1985 Officially listed on the TWSE

July, 1995 Transformed into a pure-play foundry company

July-September, 1995 Formed joint ventures with 11 IC design houses from North America to establish three foundry companies

September, 1995 8-inch fab started mass production

January, 1996 0.35-micron technology process started production

October, 1997 0.25-micron technology process started production

April, 1998 Acquired Holtek Semiconductor fab (now known as Fab 8E)

December, 1998 Acquired Nippon Steel Semiconductor Corp. fab (renamed UMCJ in 2001)

March, 1999 0.18-micron technology process started production

November, 1999 Official construction began for UMC's 12-inch fab in Tainan Science Park

January, 2000 UMC Group 5-in-1 Millennium (Consolidated UMC, United Semiconductor Corp. (USC), United Integrated Circuits Corp. (UICC), United Silicon, Inc. (USIC) and UTEK Semiconductor Corp. into a single UMC)

March, 2000 Manufactured first IC using all-copper interconnects

May, 2000 Manufactured first 0.13-micron process IC

September, 2000 Listed on the New York Stock Exchange

December, 2000 Groundbreaking for the world's most advanced 12-inch fab in Singapore (UMCi)

January, 2003 UMCi announced 12-inch fab equipment move-in

March, 2003 Manufactured the first 90nm process IC

March, 2004 UMCi started mass production

May, 2004 90nm process was fully verified and started mass production

July, 2004 UMC acquired SiS Microelectronics (now known as Fab 8S)

December, 2004 Acquired its subsidiary UMCi and changed its name to Fab 12i

10 Corporate Profile

June, 2005 Manufactured the first 65nm customer IC

August, 2005 90nm wafer shipments exceeded 100,000

June, 2006 Became the first semiconductor manufacturer in the world to complete QC-080000 IECQ HSPM certification for all company-wide sites

November, 2006 Manufactured the first 45nm IC

January, 2007 Expanded production site and completed a new R&D building in Tainan Science Park

September, 2008 Listed as a constituent stock by Dow Jones Sustainability Indexes

October, 2008 Announced foundry industry's first 28nm SRAMs

April, 2009 Delivered customer ICs produced on its high performance 40nm logic technology

December, 2009 Announced completion of tender offer to UMC Japan

May, 2010 Celebrated 30th Anniversary

December, 2010 12-inch fab Fab 12A Phase 3 began production

October, 2011 28nm process began pilot production

May, 2012 Groundbreaking ceremony for Fab 12A's new Phase 5 & 6 in Tainan Science Park

March, 2013 Acquired HeJian Fab based in Suzhou, China

May, 2013 Established its Specialty Technology Center of Excellence in Singapore

August, 2014 Joined Fujitsu’s new foundry company

March, 2015 Groundbreaking of United Semi (Xiamen) Fab

November, 2016 Held grand opening ceremony for new 12-inch fab in Xiamen, China and the fab started mass production

February, 2017 Entered mass production for 14nm customer ICs

June, 2018 Board approved 100% acquisition of MIFS fab in Japan from Fujitsu

October, 2019 Acquired 100% of MIFS 300mm fab, renamed USJC

May, 2020 Celebrated 40th Anniversary

November, 2020 Selected as a DJSI Global Component for 13th Consecutive Year 11 United Microelectronics Corporation | Annual Report 2020

12 Corporate Governance Report

Corporate Governance Report 14 Corporate Organization 16 Directors’ and Managers’ Information 37 Corporate Governance Practices 93 Certified Public Accountant (CPA) Fee Information 93 Information of CPA Change 93 UMC’s Chairman, Presidents, Chief Financial Officer, and Managers in Charge of Its Finance and Accounting Operations Did Not Hold Any Positions in UMC’s Independent Auditing Firm or Its Affiliates in the Most Recent Year 94 Change in Shareholding of Directors, Managers and Major Shareholders Who Own 10% or More of UMC Shares 96 Relationship Among the Top 10 Shareholders 97 Shares Held by the Company, Directors, Managers and Companies Directly or Indirectly Controlled by the Company, and the Comprehensive Shareholding Ratio Based on Combined Calculation

13 United Microelectronics Corporation | Annual Report 2020

Corporate Organization

Board of Directors Audit Committee Chairman

Remuneration Committee Auditing

Capital Budget Committee President

Nominating Committee

Quality & Foreign Global Sales Manufacturing Technology Engineering Digital Reliability Subsidiaries & Marketing Integration Development Service Assurance

Organizational Functions

Foreign Subsidiaries Engineering Service • Responsible for client and regional market development in the • Responsible for product engineering, malfunction and material Americas, Europe, and Asia, and provide technical support and analysis, product introduction and yield improvement for all services. fabs. • Provide company-wide photomask service, management, quality Global Sales and Marketing control and improvements. • Responsible for global customer and operational management and • Provide company-wide back-end encapsulation testing, quality market development, and provide technical support and services. control and improvements. • Undertake UMC's objectives, analyze market information and integrate UMC's internal resources and external competition. Formulate Digital technical development blueprints, strategic recommendations and • Through innovative digital technologies, combined IoT, big data advanced market development to serve as reference for UMC's future and artificial intelligence and integrated semiconductor expertise business direction. (OT) and information technology (IT). Construct data-driven advanced semiconductor smart manufacturing systems to improve Manufacturing Integration product quality and yield. Improve and optimize production • Responsible for managing 8-inch and 12-inch operations, product efficiency and production costs to achieve world-class quality manufacturing, manufacturing technology development, and of production services. Ensure information security and service integration of production and services. quality to achieve customer satisfaction, company operational efficiency, and research and development momentum. Technology Development • Design, develop and manage intellectual property core for Quality and Reliability Assurance customer product needs. • Responsible for comprehensive quality management, strengthening • Research and develop advanced process technology platforms, quality awareness and improving product reliability testing to meet and develop and apply advanced material technology platforms. customer demand for quality and improve quality control for mass • Research and develop technologies for various mature and products. special process platforms.

14 Corporate Governance Report

Corporate Manufacturing Corporate Legal, IP & Human New Business & Operation Resource Finance Development Compliance Resources Development Planning Integration

Corporate and Operation Planning Human Resources • Develop capacity plans and operational resource integration, • Responsible for the selection, utilization, cultivation and and assist in production and sales coordination. retention of human resource and ensuring a suitable working environment for employees. Manufacturing Resource Integration • Responsible for ensuring the physical safety of UMC's personnel, • Responsible for company-wide plant operations, plant expansion affairs and objects through tangible actions. planning and environmental safety and risk management. New Business Development Finance • Responsible for developing, assessing and managing new • Responsible for UMC's finances and accounting management, ventures. and serve as spokesperson for UMC. Auditing Corporate Development • Responsible for assisting the Board of Directors and managers to independently and objectively assess the effectiveness of • Responsible for corporate development and strategy planning. designs and implementation of internal control system. Provide Legal, Intellectual Property and Compliance timely recommendations for improvement to ensure compliance with UMC's policies and relevant laws and regulations. • Responsible for domestic and international intellectual property rights management, legal affairs, and compliance with domestic and foreign laws and regulations.

15 United Microelectronics Corporation | Annual Report 2020

Directors' and Managers' Information Directors’ Information

Title Nationality Name Gender Date Elected Term Shareholding When Present /Place of (Date Expires Elected Shareholding Incorporation Assumed) Shares Shares

Chairman R.O.C. Stan Hung Male 2018.06.12 2021.06.11 16,341,452 0.13 49,301,452 0.40 ＜2008.07.16＞

Independent R.O.C. Cheng-Li Male 2018.06.12 2021.06.11 0 0 0 0 Director Huang ＜2009.06.10＞

Independent R.O.C. Wenyi Chu Female 2018.06.12 2021.06.11 0 0 0 0 Director ＜2015.06.09＞

Independent R.O.C. Lih J. Chen Male 2018.06.12 2021.06.11 0 0 0 0 Director ＜2018.06.12＞

Independent R.O.C. Jyuo-Min Shyu Male 2018.06.12 2021.06.11 0 0 0 0 Director ＜2018.06.12＞

16 Corporate Governance Report

Spouse & Minor Experience (Education) Selected Current Position at UMC and Other Companies Shareholding

Common % Shares

1,269,435 0.01 Chairman, UMC Chairman & Chief Strategic Officer, UMC; Bachelor in Accounting, Chairman, Fortune Venture Capital Corp.; Tamkang University Chairman, TLC Capital Co., Ltd.; Chairman, Faraday Technology Corporation; Chairman, UMC Capital Corp.; Director, Triknight Capital Corporation; Director, United Microelectronics (Europe) B.V.; Director, UnitedDS Semiconductor (Shandong) Co., Ltd.

0 0 Certified Public Accountant, Zheng Ji Accounting None Firm Professor, Department of Accounting, Tamkang University Ph.D. of Business School, the University of Warwick 0 0 Professor, Department of Business Administration, None National Taiwan University Ph.D. of London Business School 0 0 Academician, Academia Sinica None Distinguished Chair Professor, National Tsing Hua University Ph.D. in Physics, University of California, Berkeley

0 0 Emeritus Professor, National Tsing Hua University Independent Director, Qisda Corporation; Minister, Ministry of Science and Technology Director, Iridium Medical Technology Co., Ltd.; President, Industrial Technology Research Institute Director, GeoThings, Inc.; Ph.D. in Electrical Engineering and Computer Director, Modern Classic Limited Science, University of California, Berkeley

17 United Microelectronics Corporation | Annual Report 2020

Directors’ Information (Continue)

Title Nationality Name Gender Date Elected Term Shareholding When Present /Place of (Date Expires Elected Shareholding Incorporation Assumed) Shares Shares

Director R.O.C. Ting-Yu Lin Male 2018.06.12 2021.06.11 12,547,222 0.10 12,547,222 0.10 ＜2009.06.10＞

Director R.O.C. Hsun Chieh N/A 2018.06.12 2021.06.11 441,371,000 3.50 441,371,000 3.55 Investment Co., ＜1995.06.21＞ Ltd.

R.O.C. Representative: Male 2018.06.12 2021.06.11 1,894,648 0.02 9,294,648 0.07 SC Chien ＜2016.03.01＞

Director R.O.C. Silicon Integrated N/A 2018.06.12 2021.06.11 315,380,424 2.50 285,380,424 2.30 Systems Corp. ＜2005.06.13＞

U.S.A. Representative: Male 2018.06.12 2021.06.11 0 0 18,715,000 0.15 Jason Wang ＜2015.06.09＞

Former R.O.C. Chung Laung Liu Male 2018.06.12 2021.06.11 0 0 N/A N/A Director U.S.A. ＜2006.06.12＞

Note 1: Present shareholding figures are actual number of shares held on January 31, 2021. Note 2: Directors’ election date is the same date they assumed their positions. Note 3: Directors are not spouses or relatives within the second degree of kinship of other managers and directors.

18 Corporate Governance Report

Spouse & Minor Experience (Education) Selected Current Position at UMC and Other Companies Shareholding

Common % Shares

0 0 Chairperson, Sunrox International Inc. Director, Unimicron Technology Corp. Master in International Finance, Meiji University

N/A N/A N/A N/A

0 0 Director, UMC President, UMC; Bachelor in Chemical Engineering, National Taiwan Director, Fortune Venture Capital Corp.; University Director, TLC Capital Co., Ltd.; Director, Unimicron Technology Corp.; Director, UMC Capital Corp.

N/A N/A N/A N/A

0 0 Director, UMC President, UMC; Business Administration, San Jose State University Director, Fortune Venture Capital Corp.; Director, TLC Capital Co., Ltd.; Director, UMC Group (USA); Director, United Microelectronics (Europe) B.V.; Director, UMC Capital Corp.; Director, United Microtechnology Corporation (California); Director, Sino Paragon Limited

N/A N/A Academician, Academia Sinica N/A Honorary Chair Professor, National Tsing Hua University Sc.D. of Massachusetts Institute of Technology

Note 4: Directors did not hold shares through other parties. Note 5: Presidents and Chairman are not the same person, spouses or relatives within the first degree of kinship. Note 6: Director Chung Laung Liu was dismissed on November 7, 2020.

19 United Microelectronics Corporation | Annual Report 2020

Major Shareholders of UMC’s Institutional Shareholders

Name of Institutional Shareholders Major Shareholders (Holding Percentage)

Hsun Chieh Investment Co., Ltd. Shieh Yong Capital Co., Ltd. (63.51%); UMC (36.49%)

Silicon Integrated Systems Corp. UMC (19.01%); Hsun Chieh Investment Co., Ltd. (3.16%); Hsing-Sen Liu (1.38%); Vanguard Emerging Markets Stock Index Fund, a series of Vanguard International Equity Index Funds (1.12%); Credit Suisse Securities (Europe) Limited (1.10%); JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds (1.04%); Yung Chin Investment Corporation (0.63%); JPMorgan Securities Plc (0.51%); Tsung-Ming Chuang (0.48%); Wen-Hsi Chen (0.45%)

Major Shareholders of UMC’s Major Institutional Shareholders

Name of Institutional Shareholders Major Shareholders (Holding Percentage)

Shieh Yong Capital Co., Ltd. Unimicron Technology Corp. (16.67%); Silicon Integrated Systems Corp. (16.67%); Novatek Microelectronics Corp. (15.15%); Yann Yuan Investment Co., Ltd. (12.20%); Faraday Technology Corporation (12.12%); King Yuan Electronics Co., Ltd. (7.58%) Yung Chin Investment Corporation Yung-Ken Chu (25.00%); Hsing-Chin Chen (25.00%); Wen-Ping Fan (25.00%); Ya-Feng Chuang (25.00%)

20 Corporate Governance Report

Directors’ Professional Knowledge and Independence Information

Criteria Five or More Years of Experience or Professional Independence Status (Note) Number of Qualification Companies also Lecturer or Qualification Experience 1 2 3 4 5 6 7 8 9 10 11 12 Serves as Above in of Justice, in Business, Independent Business, Procurator, Law, Finance, Director for Law, Finance, Attorney, CPA, Accounting Accounting Specialist or or Corporate or Corporate Technician Business Business of National Related Fields Related Fields Examination in Corporate Business Related Name Fields

Stan Hung Yes - - - 0

SC Chien Yes - - - 0

Jason Wang Yes - - - 0

Cheng-Li Huang Yes Yes Yes 0

Wenyi Chu Yes Yes 0

Lih J. Chen Yes Yes 0

Jyuo-Min Shyu Yes Yes 1

Ting-Yu Lin Yes - 0

Note: For those directors who match the condition listed below during and two years before assuming period, “ ” is marked in the appropriate space. (1) Is not an employee of the Company or its affiliates. (2) Is not a director or supervisor of the Company or its affiliates (the same does not apply, however, in cases where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the laws of Taiwan or with the laws of the country of the parent company, subsidiary or subsidiary of the same parent company). (3) Does not directly or indirectly own more than 1% of the Company’s outstanding shares, nor is one of the top ten non-institutional shareholders of the Company. (4) Is not a spouse, relative within the second degree of kinship or lineal relative within the third degree of kinship of managers specified in column (1) or any person specified in columns (2) and (3). (5) Is not a director, supervisor or employee of a legal entity which directly owns more than 5% of the Company’s issued shares or are the top five owners of the Company’s issued shares, nor a director, supervisor or employee of a legal entity which designates a representative to serve as a director or supervisor of the Company in accordance with Article 27, paragraph 1 or 2 of the Company Act (the same does not apply, however, in cases where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the laws of Taiwan or with the laws of the country of the parent company, subsidiary or subsidiary of the same parent company). (6) Is not a director, supervisor or employee of another company, and more than half of directors or voting shares of the other company are controlled by the same person (the same does not apply, however, in cases where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the laws of Taiwan or with the laws of the country of the parent company, subsidiary or subsidiary of the same parent company). (7) Is not a director, supervisor or employee of another company, and Chairman, President or Manager with equivalent position of the other company are the same person or spouse (the same does not apply, however, in cases where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the laws of Taiwan or with the laws of the country of the parent company, subsidiary or subsidiary of the same parent company). (8) Is not a director, supervisor, or manager of a company which has a business relationship with the Company, nor a shareholder who owns more than 5% of such a company (the same does not apply, however, in cases where a company owns more than 20% but less than 50% of the Company’s issued shares and the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the laws of Taiwan or with the laws of the country of the parent company, subsidiary or subsidiary of the same parent company). (9) Is not an owner, partner, director, supervisor, manager or spouse of any sole proprietor business, partnership, company or institution which has provided the Company and its affiliates with auditing or services in finance, business consultation and legal affairs for which the accumulated remuneration in the past two years does not exceed NTD 500,000, provided that this restriction does not apply to any member of the compensation committee, public tender offer review committee, or special committee on mergers and acquisitions who exercises powers pursuant to related regulations such as the “Securities and Exchange Act” or the “Business Mergers and Acquisitions Act.” (10) Is not a spouse or relative within the second degree of kinship of any of the directors. (11) Is not under any condition pursuant to Article 30 of the Company Act. (12) Is not a legal entity owner or its representative pursuant to Article 27 of the Company Act.

21 United Microelectronics Corporation | Annual Report 2020

Managers’ Information

Title Nationality Name Gender Date Present Shareholding Spouse & Elected Minor Shareholding (Date Assumed) Common ％ Common ％ Shares Shares

Chairman & Chief R.O.C. Stan Hung Male 2008.07.16 49,301,452 0.40 1,269,435 0.01 Strategic Officer

President R.O.C. SC Chien Male 2004.11.23 9,294,648 0.07 0 0

President U.S.A. Jason Wang Male 2014.12.24 18,715,000 0.15 0 0

Executive Vice R.O.C. Ming Hsu Male 2015.06.08 2,553,000 0.02 0 0 President

Senior Vice President R.O.C. Oliver Chang Male 2020.02.26 1,483,589 0.01 0 0

Senior Vice President R.O.C. Chitung Liu Male 2005.10.20 3,280,217 0.03 150,000 0.00 & Chief Financial Officer

Senior Vice President R.O.C. Lucas S Chang Male 2018.01.01 600,000 0.00 0 0 & General Counsel

Vice President R.O.C. TS Wu Male 2013.01.01 1,572,809 0.01 304 0.00

Vice President R.O.C. C C Hsu Male 2013.01.01 2,052,068 0.02 0 0

Vice President R.O.C. M C Lai Male 2015.03.30 2,426,863 0.02 0 0

Vice President R.O.C. G C Hung Male 2015.01.28 1,940,791 0.02 0 0

Vice President R.O.C. Wenchi Ting Male 2017.01.03 150,000 0.00 0 0

22 Corporate Governance Report

Experience/Education Selected Current Position at Other Companies

Chairman & Chief Strategic Officer, UMC Chairman, Fortune Venture Capital Corp.; Bachelor in Accounting, Chairman, TLC Capital Co., Ltd.; Tamkang University Chairman, Faraday Technology Corporation; Chairman, UMC Capital Corp.; Director, Triknight Capital Corporation; Director, United Microelectronics (Europe) B.V.; Director, UnitedDS Semiconductor (Shandong) Co., Ltd.

President, UMC Director, Fortune Venture Capital Corp.; Director, TLC Capital Co., Ltd.; Bachelor in Chemical Engineering, Director, Unimicron Technology Corp.; Director, UMC Capital Corp. National Taiwan University President, UMC Director, Fortune Venture Capital Corp.; Director, TLC Capital Co., Ltd.; Business Administration, Director, UMC Group (USA); Director, United Microelectronics (Europe) B.V.; San Jose State University Director, UMC Capital Corp.; Director, United Microtechnology Corporation (California); Director, Sino Paragon Limited

Executive Vice President, UMC Director, United Semiconductor Japan Co., Ltd. Master in Science Electrical Engineering, University of Southern California Senior Vice President, UMC None Bachelor in Physics, Chinese Culture University Senior Vice President & Director, Fortune Venture Capital Corp.; Director, TLC Capital Co., Ltd.; Chief Financial Officer, UMC Director, Unimicron Technology Corp.; Director, Novatek Microelectronics Corp.; EMBA in Business Administration, Director, HeJian Technology (Suzhou) Co., Ltd.; Director, UMC Group (USA); National Taiwan University Director, Green Earth Limited; Director, ECP Vita Pte. Ltd.; Director, Omni Global Limited; Director, UMC Capital Corp.; Director, United Microchip Corporation; Director, Sino Paragon Limited; Director, United Semiconductor Japan Co., Ltd.

Senior Vice President & General Counsel, UMC Director, Alpha and Omega Semiconductor Limited J.D. in Law, University of Santa Clara Vice President, UMC None Master in Electronic Engineering, National Chiao Tung University Vice President, UMC Vice Chairman, United Semiconductor (Xiamen) Co., Ltd. Master in Materials Science & Engineering, National Tsing Hua University Vice President, UMC Chairman, Wavetek Microelectronics Corporation; Bachelor in Materials Science & Engineering, Director, Wavetek Microelectronics Investment (Samoa) Limited; National Tsing Hua University Director, HeJian Technology (Suzhou) Co., Ltd. Vice President, UMC Director, Wavetek Microelectronics Corporation Master in Chemical Engineering, National Taiwan University Vice President, UMC Director, Asia Pacific Microsystems, Inc. Ph.D. in Computer Information Science, University of Texas at Austin

23 United Microelectronics Corporation | Annual Report 2020

Managers’ Information (Continue)

Title Nationality Name Gender Date Present Shareholding Spouse & Elected Minor Shareholding (Date Assumed) Common ％ Common ％ Shares Shares

Vice President R.O.C. Jerry CJ Hu Male 2013 .04.02 1,245,000 0.01 0 0

Vice President R.O.C. Y S Shen Male 2014.01.13 950,000 0.01 0 0

Vice President R.O.C. Steven S Liu Male 2017.04.24 1,800,000 0.01 0 0

Vice President R.O.C. SR Sheu Male 2008.07.16 1,418,892 0.01 786,017 0.01

Vice President R.O.C. M L Liao Male 2008.07.16 3,190,809 0.03 152,138 0.00

Vice President R.O.C. S S Hong Male 2013.01.01 616,406 0.00 0 0

Vice President R.O.C. Francia Hsu Female 2016.03.16 1,321,000 0.01 0 0

Vice President R.O.C. Mindy Lin Female 2018.05.14 1,643,925 0.01 781,408 0.01

Vice President & Chief R.O.C. Eric Chen Male 2 0 11. 02.14 1,550,000 0.01 0 0 Human Resources Officer Associate Vice R.O.C. Johnson Liu Male 2 0 14 .11.04 536,413 0.00 401,631 0.00 President

Associate Vice R.O.C. Victor Chuang Male 2019.03.28 464,671 0.00 13,943 0.00 President

Associate Vice R.O.C. Chuck Chen Male 2019.03.28 550,000 0.00 0 0 President

Associate Vice R.O.C. S F Tzou Male 2013.01.01 1,679,108 0.01 0 0 President

Associate Vice R.O.C. Le Tien Jung Male 2013.01.01 880,000 0.01 20,000 0.00 President

Associate Vice R.O.C. Yau Kae Sheu Male 2014.01.13 1,320,000 0.01 0 0 President

24 Corporate Governance Report

Experience/Education Selected Current Position at Other Companies

Vice President, UMC None Ph.D. in Materials Science & Engineering, Stanford University Vice President, UMC Director, Faraday Technology Corporation Bachelor in Electronic Engineering, Feng Chia University Vice President, UMC None Master in Science Electrical Engineering, University of Southern California Vice President, UMC None Master in Electrical Engineering, The University of New Mexico Vice President, UMC None Bachelor in Electronic Engineering, National Taiwan Institute of Technology Vice President, UMC Chairman, United Semiconductor Japan Co., Ltd. Bachelor in Materials Science & Engineering, National Tsing Hua University Vice President, UMC None Master in Industrial Engineering, National Chiao Tung University Vice President, UMC None Master in Business Administration, University of Leicester Vice President & Director, Best Elite International Limited Chief Human Resources Officer, UMC EMBA in Finance, National Taiwan University Associate Vice President, UMC None Bachelor in Physics, Tamkang University Associate Vice President, UMC None Bachelor in Electrical Engineering, National Cheng Kung University Associate Vice President, UMC None Master in Engineering Science, National Cheng Kung University Associate Vice President, UMC None Master in Materials Science & Engineering, National Tsing Hua University Associate Vice President, UMC None Ph.D. in Electrical Engineering, University of Texas at Austin Associate Vice President, UMC None Master in Electrical Engineering, University of Missouri

25 United Microelectronics Corporation | Annual Report 2020

Managers’ Information (Continue)

Title Nationality Name Gender Date Present Shareholding Spouse & Elected Minor Shareholding (Date Assumed) Common ％ Common ％ Shares Shares

Associate Vice R.O.C. J Y Wu Male 2014.05.01 1,000,191 0.01 587 0.00 President

Associate Vice R.O.C. Osbert Cheng Male 2014.08.01 755,000 0.01 0 0 President

Associate Vice R.O.C. Steven Hsu Male 2016.03.16 510,000 0.00 2,889 0.00 President

Associate Vice Singapore Purakh Raj Verma Male 2017.08.09 0 0 0 0 President

Associate Vice R.O.C. Yanan Mou Male 2019.07.01 0 0 140,146 0.00 President

Associate Vice R.O.C. Remi Yu Male 2019.1 1 . 1 5 383,000 0.00 0 0 President

Associate Vice R.O.C. Michael CY Wang Male 2019.1 2 . 3 1 0 0 0 0 President

Associate Vice R.O.C. Ji Fu Kung Male 2013.01.01 827,741 0.01 0 0 President

Associate Vice R.O.C. C P Yen Male 2015.09.16 758,645 0.01 512,000 0.00 President

Associate Vice R.O.C. Pang Min Wang Male 2018.09.14 221,126 0.00 16 0.00 President

Associate Vice R.O.C. Ray Yang Male 2020.07.01 376,274 0.00 117 0.00 President

Associate Vice R.O.C. Bellona Chen Female 2020.08.01 555,126 0.00 0 0 President

Associate Vice R.O.C. Louis Hsieh Male 2020.10.01 200,000 0.00 0 0 President

Former Associate Vice R.O.C. C Y Hsu Male 2017.04.17 N/A N/A N/A N/A President

Note 1: CY Hsu, former manager, was dismissed in 2020. Note 2: Present shareholding figures are actual number of shares held on January 31, 2021. Note 3: Managers did not hold shares through other parties. Note 4: Managers are not spouses or relatives within the second degree of kinship of other managers. Note 5: Managers’ election date is the same date they assumed their positions. Note 6: Presidents and Chairman are not the same person, spouses or relatives within the first degree of kinship.

26 Corporate Governance Report

Experience/Education Selected Current Position at Other Companies

Associate Vice President, UMC None Master in Physics, Tamkang University Associate Vice President, UMC None Ph.D. in Electrical Engineering, National Chiao Tung University Associate Vice President, UMC None Master in Electronic Engineering, National Chiao Tung University Associate Vice President, UMC None Master in Microelectronics, Nanyang Technological University Associate Vice President, UMC None Master in Electrical Engineering, State University of New York at Stony Brook Associate Vice President, UMC None Bachelor in Electrophysics, National Chiao Tung University Associate Vice President, UMC None Master in Chemical Engineering, Cornell University Associate Vice President, UMC None Ph.D. in Materials Science, University of Connecticut Associate Vice President, UMC None Master in Engineering Science, National Cheng Kung University Associate Vice President, UMC None Master in Integrated Manufacturing Systems Engineering, North Carolina State University Associate Vice President, UMC None Master in Electrical Engineering, The Ohio State University Associate Vice President, UMC Director, ITE Tech Inc.; Master in Business Administration, Director, ECP Vita Pte. Ltd.; Columbia University Supervisor, Fortune Venture Capital Corp. Associate Vice President, UMC None Master in Chemistry department, University of Missouri_Rolla Campus Former Associate Vice President, UMC N/A EMBA. National Chiao Tung University

27 United Microelectronics Corporation | Annual Report 2020

Remuneration Paid to Directors (Including Independent Directors), Presidents and Vice Presidents Directors’ Remuneration (Including Independent Directors’)

Title Name Director's Remuneration Ratio of Total Remuneration (A+B+C+D) to Net Base Compensation Severance Pay and Compensation to Business Execution Income (%) (A) Pensions(B) Directors(C) Expenses(D)

The Companies The Companies The Companies The Companies The Companies Company in the Company in the Company in the Company in the Company in the Consolidated Consolidated Consolidated Consolidated Consolidated Financial Financial Financial Financial Financial Statements Statements Statements Statements Statements

Chairman Stan Hung

Independent Cheng-Li Huang Director

Independent Wenyi Chu Director

Independent Lih J. Chen Director

Independent Jyuo-Min Shyu Director 0 173 0 0 32,369 55,369 9,800 9,890 0.14 0.22 Director Ting-Yu Lin Director Hsun Chieh Investment Co., Ltd. Representative: SC Chien

Director Silicon Integrated Systems Corp. Representative: Jason Wang

Former Director Chung Laung Liu

In addition to the information disclosed in the table above, has any Director of the Company provided services to any of the companies included in the Financial Statements and received compensation for such services (e.g. provided consultation services in a non-employee capacity): None.

28 Corporate Governance Report

In Thousand NTD Compensation Earned by a Director Who Is an Employee of UMC or Ratio of Total Compensation UMC’s Consolidated Entities Compensation from (A+B+C+D+E+F+G) to Net Other Non- Base Compensation Severance Pay Employees' Profit Sharing Bonus (G) Income (%) Consolidated Bonuses and Entities and Special Pensions (F) Invested Expenses etc. (E) by the Company The Companies The Companies The Companies in the The Companies in Company in the Company in the Company Consolidated Company the Consolidated Consolidated Consolidated Financial Statements Financial Financial Financial Statements Statements Statements Cash Stock Cash Stock

150,339 159,875 292 292 25,110 0 25,110 0 0.75 0.86 2,987

29 United Microelectronics Corporation | Annual Report 2020

Remuneration Paid to Directors (Including Independent Directors), Presidents and Vice Presidents (Continue)

Remuneration Range for Each Names of Directors Director in the Company Sum of the First 4 Items (A+B+C+D) Sum of the First 7 Items (A+B+C+D+E+F+G)

The Companies The Companies Company in the Company in the Consolidated Consolidated Financial Financial Statements Statements

Lower than NTD 1,000,000 SC Chien Jason Wang

NTD 1,000,000 (inclusive)~ NTD 2,000,000 (exclusive)

NTD 2,000,000 (inclusive)~ NTD 3,500,000 (exclusive)

NTD 3,500,000 (inclusive)~ Stan Hung Hsun Chieh Hsun Chieh Investment Hsun Chieh Investment NTD 5,000,000 (exclusive) Hsun Chieh Investment Investment Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Silicon Integrated Silicon Integrated Silicon Integrated Silicon Integrated Systems Systems Corp. Systems Corp. Systems Corp. Corp. Chung Laung Liu Chung Laung Liu Chung Laung Liu Chung Laung Liu NTD 5,000,000 (inclusive)~ Cheng-Li Huang SC Chien Cheng-Li Huang Cheng-Li Huang NTD 10,000,000 (exclusive) Wenyi Chu Jason Wang Wenyi Chu Wenyi Chu Lih J. Chen Cheng-Li Huang Lih J. Chen Lih J. Chen Jyuo-Min Shyu Wenyi Chu Jyuo-Min Shyu Jyuo-Min Shyu Ting-Yu Lin Lih J. Chen Ting-Yu Lin Ting-Yu Lin Jyuo-Min Shyu Ting-Yu Lin

NTD 10,000,000 (inclusive)~ Stan Hung NTD 15,000,000 (exclusive)

NTD 15,000,000 (inclusive)~ NTD 30,000,000 (exclusive)

NTD 30,000,000 (inclusive)~ NTD 50,000,000 (exclusive)

NTD 50,000,000 (inclusive)~ Stan Hung Stan Hung NTD 100,000,000 (exclusive) SC Chien SC Chien Jason Wang Jason Wang

NTD 100,000,000 or More

Total 11 11 11 11

30 Corporate Governance Report

31 United Microelectronics Corporation | Annual Report 2020

Remuneration Paid to Directors (Including Independent Directors), Presidents and Vice Presidents (Continue)

Compensation Paid to Presidents and Vice Presidents

Title Name Salary(A) Severance Pay and Pensions(B) Bonuses and Special Expenses etc. (C)

The Companies in the The Companies in the The Companies in the Company Consolidated Company Consolidated Company Consolidated Financial Financial Financial Statements Statements Statements

Chairman & Chief Stan Hung Strategic Officer

President SC Chien President Jason Wang

Executive Vice Ming Hsu President

Senior Vice President Oliver Chang Senior Vice President Chitung Liu & Chief Financial Officer Senior Vice President Lucas S Chang & General Counsel 81,257 101,233 2,255 2,255 390,037 402,553 Vice President TS Wu Vice President C C Hsu Vice President M C Lai Vice President G C Hung Vice President Wenchi Ting Vice President Jerry CJ Hu Vice President Y S Shen Vice President Steven S Liu Vice President SR Sheu Vice President M L Liao Vice President S S Hong Vice President Francia Hsu Vice President Mindy Lin

Vice President & Chief Eric Chen Human Resources Officer

32 Corporate Governance Report

In Thousand NTD Employees' Profit Sharing Bonus(D) Ratio of Total Compensation (A+B+C+D) Compensation from Other Non- to Net Income (%) Consolidated Entities Invested by the Company

The Companies in the The Companies in the Company Consolidated Company Consolidated Financial Statements Financial Statements

Cash Stock Cash Stock

113,700 0 113,700 0 2.01 2.12 4,362

33 United Microelectronics Corporation | Annual Report 2020

Remuneration Paid to Directors (Including Independent Directors), Presidents and Vice Presidents (Continue)

Compensation Range for Each President Names of Presidents and and Vice President in the Company Vice Presidents

The Company Companies in the Consolidated Financial Statements

Lower than NTD 1,000,000

NTD 1,000,000 (inclusive)~ NTD 2,000,000 (exclusive)

NTD 2,000,000 (inclusive)~ NTD 3,500,000 (exclusive)

NTD 3,500,000 (inclusive)~ NTD 5,000,000 (exclusive)

NTD 5,000,000 (inclusive)~ NTD 10,000,000 (exclusive)

NTD 10,000,000 (inclusive)~ Mindy Lin Mindy Lin NTD 15,000,000 (exclusive)

NTD 15,000,000 (inclusive)~ Oliver Chang, Chitung Liu, Lucas S Chang, TS Wu Oliver Chang, Chitung Liu, Lucas S Chang, TS Wu NTD 30,000,000 (exclusive) C C Hsu, M C Lai, G C Hung, Wenchi Ting C C Hsu, M C Lai, G C Hung, Wenchi Ting Jerry CJ Hu, Y S Shen, Steven S Liu, SR Sheu Jerry CJ Hu, Y S Shen, Steven S Liu, SR Sheu M L Liao, S S Hong, Francia Hsu, Eric Chen M L Liao, S S Hong, Francia Hsu, Eric Chen

NTD 30,000,000 (inclusive)~ Ming Hsu Ming Hsu NTD 50,000,000 (exclusive)

NTD 50,000,000 (inclusive)~ Stan Hung, SC Chien, Jason Wang Stan Hung, SC Chien, Jason Wang NTD 100,000,000 (exclusive)

NTD 100,000,000 or More

Total 21 21

34 Corporate Governance Report

Remuneration Paid to Directors (Including Independent Directors), Presidents and Vice Presidents (Continue)

Employees’ Profit Sharing Bonus Paid to Management Team In Thousand NTD Title Name Stock Cash Total Ratio of Total Profit Sharing Bonus to Net Income (%)

Chairman & Chief Strategic Stan Hung Officer

President SC Chien President Jason Wang Executive Vice President Ming Hsu Senior Vice President Oliver Chang Senior Vice President & Chief Chitung Liu Financial Officer Senior Vice President & General Lucas S Chang Counsel Vice President TS Wu Vice President C C Hsu Vice President M C Lai Vice President G C Hung Vice President Wenchi Ting Vice President Jerry CJ Hu Vice President Y S Shen Vice President Steven S Liu Vice President SR Sheu Vice President M L Liao Vice President S S Hong Vice President Francia Hsu Vice President Mindy Lin Vice President & Chief Human Eric Chen 0 174,660 174,660 0.60 Resources Officer Associate Vice President Johnson Liu Associate Vice President Victor Chuang Associate Vice President Chuck Chen Associate Vice President S F Tzou Associate Vice President Le Tien Jung Associate Vice President Yau Kae Sheu Associate Vice President J Y Wu Associate Vice President Osbert Cheng Associate Vice President Steven Hsu Associate Vice President Purakh Raj Verma Associate Vice President Yanan Mou Associate Vice President Remi Yu Associate Vice President Michael CY Wang Associate Vice President Ji Fu Kung Associate Vice President C P Yen Associate Vice President Pang Min Wang Associate Vice President Ray Yang Associate Vice President Bellona Chen Associate Vice President Louis Hsieh Former Associate Vice C Y Hsu President

35 United Microelectronics Corporation | Annual Report 2020

Comparison of Compensation of Directors, Presidents and Vice Presidents in the Past Two Years 2020 2019

The Company Companies in The Company Companies in the Consolidated the Consolidated Financial Statements Financial Statements

Net Income Stated in the Parent Company Only Financial Reports 29,189,489 29,189,489 9,707,614 9,707,614 (In Thousand NTD)

The Percentage of Directors’ Remuneration to Net Income (%) 0.14 0.22 0.18 0.30

The Percentage of Executive Officer’s Compensation 2.01 2.12 2.13 2.42 to Net Income (%)

Note: The directors’ remuneration includes Base Compensation, Severance Pay and Pensions, Compensation to Directors and Business Execution Expenses. The managerial officer’s compensation includes Salary, Severance Pay and Pensions, Bonuses and Special Expenses etc., and Employees’ Profit Sharing Bonus.

The Company’ s compensation for Directors and Executive officers is based on UMC’s Articles of Incorporation and formulations, and is distributed in proper ratios.

The Standards and Policies, and Portfolios for Payment of Emoluments, Procedures for Setting Emoluments, and Correlations with Business Performance and Future Risks.

Policy for Directors’ (Including Independent Directors) UMC shall assess the performance of directors and officers according Compensation to the Rules for Performance Assessment of the Board of Directors Pursuant to UMC’s Articles of Incorporation, Article 21-1, the Company and the Performance Appraisal for employees of UMC, in order to shall allocate no more than 0.2% of profit as directors’ (including decide their compensation. An adequate compensation scheme will be Independent Directors) compensation for each profitable fiscal year calculated by referencing the Company’s operation results, future risks, after offsetting any cumulative losses. Directors (including Independent corporate strategies, industry trends, and also individual contribution. The Directors) may only receive compensation in cash. In accordance performance assessment and compensation proposals were reviewed with Article 17, remunerations for all directors (including Independent and approved by Remuneration Committee and Board of Directors. Directors) shall be decided by the Board of Directors authorized by a The Company will review the remuneration policy foresaid based on meeting of shareholders according to involvements and contributions to macroeconomics and business strategies to achieve both corporate the Companies’ operation and at the normal rate adopted by other firms sustainability and interest of stakeholders. of the same industry.

Policy for Management Team’s Compensation The Company annually evaluates its salary level with similar industries to ensure the Company’s salary is competitive. The Company’s salary structure can be divided into fixed and variable. The compensation is set to fully reflect the achievements for individuals and teams.

36 Corporate Governance Report

Corporate Governance Practices Information of Board Meeting Operation Board Meetings were held 8 times in 2020; all independent directors attended each meeting in person; the average attendance rate of all directors was 97.18%; the attendances of directors were as follows:

Title Name Attendance in By Proxy Attendance Rate (%) Remarks Person

Chairman Stan Hung 8 0 100.00

Independent Cheng-Li Huang 8 0 100.00 Director Independent Wenyi Chu 7 1 87.50 Director Independent Lih J. Chen 8 0 100.00 Director Independent Jyuo-Min Shyu 8 0 100.00 Director Former Chung Laung Liu 7 0 100.00 Dismissed on Director November 7, 2020 Director Ting-Yu Lin 8 0 100.00

Director Hsun Chieh Investment Co., Ltd.

8 0 100.00 Representative: SC Chien

Director Silicon Integrated Systems Corp. 8 0 100.00 Representative: Jason Wang

Other mentionable items: 1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the company’s response should be specified: (1) Matters referred to in Article 14-3 of the Securities and Exchange Act: The Company has established an Audit Committee, and Article 14-3 of the Securities and Exchange Act is not applicable to the Company. Please refer to Page 39-41 of the Annual Report for related information of the operation status of the Audit Committee. (2) Other matters involving objections or expressed reservations by independent directors that were recorded or stated in writing that require a resolution by the board of directors: None. 2. If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: (1) Proposal for UMC’s donation to UMC Science and Culture Foundation on February 26, 2020: Chairman Stan Hung and Director SC Chien were in conflict of interest and avoided the discussion and vote of the proposal since Chairman Stan Hung and Director SC Chien also served concurrently as the Directors of UMC Science and Culture Foundation. The proposal was approved without dissent by all other Directors in attendance. (2) Proposal for approving the distributable compensation for managerial officers on February 26, 2020, June 17, 2020, July 29, 2020, and September 2, 2020: Directors who also served concurrently as the Company’s managerial officers were in conflict of interest and avoided the discussion and vote of the proposal. The proposal was approved without dissent by all other Directors in attendance. 3. For the information of evaluation cycles, periods, scope, method and content of self-evaluation of the Board of Directors, please refer to the execution status of self-evaluation of the Board of Directors. 4. Measures taken to strengthen the functionality of the board: To implement corporate governance and enhance the Nomination and Election of the Board, the Company designated a Company Secretary in 2019, and the “Policy for Nomination and Election of Directors” and “Skill Matrix of Board Members,” which are references for composition structure of the Board, are established by the Nominating Committee. In addition to conducting a board performance evaluation every year, the Company also engaged with TAIWAN CORPORATE GOVERNANCE ASSOCIATION to implement performance evaluation of the Board of Directors in 2020; please refer to the Company’s website for the evaluation report: https://www.umc.com/en/IR_Director/directors_information

Note : Attendance rate is calculated using the number of meetings each board member actually attends and total number of board meetings held within his or her service period.

37 United Microelectronics Corporation | Annual Report 2020

Execution Status of the Board Evaluation

Evaluation Cycle Evaluation Period Evaluation Scope Evaluation Method Evaluation Content

Annually 2020/1/1~2020/12/31 The Company’s board Self-evaluation of the board, 1. The self-evaluation of the board of directors includes self-evaluation scope covers its functional committees and the following aspects: the evaluation of the board, individual board members’ (1) Participation in the operation of the company; functional committees and performance (2) Improvement of the quality of the board of individual board members. directors’ decision making; (3) Composition and structure of the board of directors; (4) Election and continuing education of the directors; and (5) Internal control.

2. The self-evaluation of the functional committees includes the following aspects: (1) Participation in the operation of the company; (2) Awareness of the duties of the functional committee; (3) Improvement of quality of decisions made by the functional committee; (4) Composition of the functional committee and election of its members; and (5) Internal control.

3. The self-evaluation of board members includes the following aspects: (1) Familiarity with the goals and missions of the company; (2) Awareness of the duties of a director; (3) Participation in the operation of the company; (4) Management of internal relationships and communication; (5) The director’s professionalism and continuing education; and (6) Internal control.

38 Corporate Governance Report

Operation of the Audit Committee

The Audit Committee assists the Board of Directors in performing The Audit Committee is responsible for periodic review of the following its supervision functions. It is also responsible for tasks defined by important annual matters： the Company Act, Securities and Exchange Act and other relevant • Financial statements regulations. Since UMC is listed on the NYSE, it also has to comply with • Internal control system the U.S. regulations regarding foreign issuers. The Audit Committee is • Material transactions of assets, derivatives, loans, comprised of all independent directors, with 2 financial experts and endorsements, guarantees operating according to the Audit Committee Charter (please refer to the • Audit plans of internal and external auditors and their Company’s website at https://www.umc.com/upload/media/08_Investors/ execution status Corporate_Governance/Audit_Committee/Audit_Committee_Charter_ • Engaging and removing the Company’s independent Eng.pdf). auditors and accessing such auditors’ remuneration and According to the relevant regulations, the Audit Committee shall convene independence at least four regular meetings per year. In 2020 a total of five meetings • Risks and control procedures of compliance with were convened; it shall also maintain good communication channels with government law the Company’s internal auditors, independent auditors, and management. • Execution of documentation that involves government agencies • Implementation of Whistleblower Program and Code of Conduct

Information of Audit Committee Operation There were five Audit Committee meetings in 2020, and the attendance status is shown in the following table:

Title Name Attendance Proxy Attendance Actual Attendance Note Rate (%)

Independent Cheng-Li Huang 5 0 100.00 Audit Committee convener Director

Independent Wenyi Chu 4 1 80.00 Director

Independent Lih J. Chen 5 0 100.00 Director

Independent Jyuo-Min Shyu 5 0 100.00 Director

39 United Microelectronics Corporation | Annual Report 2020

Operation of the Audit Committee (Continue)

Other Matters to Be Recorded: 1. If the Audit Committee operates in any of the following circumstances, the date and session of the Board meeting, the content of motion, the resolution of Audit Committee, and the company’s response to the opinion of the Audit Committee should be specified: (1) Items listed in Article 14-5 of Securities and Exchange Act:

Date/Session of Content of Motion Resolution of the Company’s Response Board Meeting Audit Committee to the Opinion of the Audit Committee

February 26, 2020, 1. Approved the 2019 Consolidated Financial Statements (including Parent Approved by all Approved by directors the 13th meeting of Company only Financial Statements). members present participating in the the 14th session 2. Approved the 2019 Statement of Internal Control System. in the meeting. discussion and voting in 3. Approved for UMC’s Singapore branch to lend funds to United the board meeting. Semiconductor (Xiamen) Co., Ltd. 4. Approved issuing Restricted Stock Awards for employees. 5. Approved the content of appointed service and fee for the independent auditor appointed in 2020. 6. Approved the Company’s donation to UMC Science and Culture Foundation.

April 27, 2020, 1. Approved the Q1, 2020 Consolidated Financial Statements. Approved by all Approved by directors the 14th meeting of 2. Approved the proposal for private placement based on future operation members present participating in the the 14th session needs and will propose this at the 2020 Annual General Meeting for in the meeting. discussion and voting in discussion. the board meeting.

July 29, 2020, 1. Approved the Q2, 2020 Consolidated Financial Statements. Approved by all Approved by directors the 17th meeting of 2. Approved to adjust the endorsement and guarantee of the loan for members present participating in the the 14th session United Semiconductor (Xiamen) Co., Ltd. in the meeting. discussion and voting in 3. Approved the disposal of machinery equipment to United Semiconductor the board meeting. (Xiamen) Co., Ltd.

40 Corporate Governance Report

Operation of the Audit Committee (Continue)

Date/Session of Content of Motion Resolution of the Company’s Response Board Meeting Audit Committee to the Opinion of the Audit Committee

October 29, 2020, 1. Approved the Q3, 2020 Consolidated Financial Statements. Approved by all Approved by directors the 19th meeting of 2. Approved to decrease the endorsement and guarantee of the loan for members present participating in the the 14th session United Semiconductor (Xiamen) Co., Ltd. in the meeting. discussion and voting in 3. Approved the Company to proceed with a potential investment to the board meeting. expand capacity.

December 16, 2020, 1. Approved the revision of the internal control system and internal audit Approved by all Approved by directors the 20th meeting of implementation rules. members present participating in the the 14th session 2. Approved for UMC’s Singapore branch to lend funds to United in the meeting. discussion and voting in Semiconductor (Xiamen) Co., Ltd. the board meeting. 3. Approved to adjust the endorsement and guarantee of the loan for United Semiconductor (Xiamen) Co., Ltd. 4. Approved the loan commitment to banks for United Semiconductor (Xiamen) Co., Ltd.

February 24, 2021, 1. Approved the 2020 Consolidated Financial Statements (including Parent Approved by all Approved by directors the 21st meeting of Company only Financial Statements). members present participating in the the 14th session 2. Approved the 2020 Statement of Internal Control System. in the meeting. discussion and voting in 3. Approved the content of appointed service and fee for the independent the board meeting. auditor appointed in 2021. 4. Approved the Company’s donation to UMC Science and Culture Foundation. 5. Approved termination of the issuance plan for private placement, which was approved at the 2020 Annual General Meeting. 6. Approved the proposal for private placement based on future operation needs and will propose this at the 2021 Annual General Meeting for discussion. 7. Approved the acquisition of the Right-of-Use Asset from subsidiary Wavetek Microelectronics Corporation. 8. Approved the issuance of unsecured straight corporate bonds. 9. Approved engagement in derivatives trading.

(2) There were no other resolutions that were not approved by the Audit Committee but were approved by two thirds or more of all directors in 2020. 2. Implementation of avoidance of independent director with respect to motion of stake: there was no such situation in the Audit Committee in 2020. 3. The communication channels between the independent directors, internal auditors, and independent auditors: (1) The Company's Audit Division sends the audit reports and follow-up reports on deficiencies to independent directors each month. Besides these measures, the Internal Audit head presents the findings of all audit reports and communicates follow-up reports with independent directors during the Audit Committee’s quarterly meetings and semi-annually separate meeting. (2) The Company’s independent auditors present the findings of their review or audit reports regarding the financial results and internal control of the Company and its subsidiaries during the Audit Committee’s quarterly meetings and separate meeting at least once a year. The independent auditors are also required to communicate to the Audit Committee the impact of IFRSs updates and announcements, any issues under applicable laws and regulations that might affect the financial reports, and whether to adjust the entries. (3) The Internal Audit head, the independent auditors and independent directors can contact each other as needed. The communication channels are seamless.

For the communication between independent directors, internal audit head, and independent auditors, please refer to the Company’s website: https://www.umc.com/en/IR_Audit/audit_committee.

41 United Microelectronics Corporation | Annual Report 2020

Corporate Governance Implementation Status and Deviations from “The Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

Evaluation Item

Yes No

1. Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Practice Principles for TWSE/TPEx Listed Companies?”

2. Shareholding Structure & Shareholders’ Rights (1) Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement it based on the procedure?

(2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares?

(3) Does the company establish and execute the risk management and firewall system within its conglomerate structure?

(4) Does the company establish internal rules against insiders trading with undisclosed information?

3. Composition and Responsibilities of the Board of Directors

(1) Does the Board develop and implement a diversified policy for the composition of its members?

(2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?

42 Corporate Governance Report

Implementation Status Deviations from “The Corporate Governance Best-Practice Abstract Explanation Principles for TWSE/TPEx Listed Companies” and Reasons

The UMC Corporate Governance Practice Principles is posted on the Corporate Governance section of UMC’s website for None stakeholders to download. Please refer to: https://www.umc.com/upload/media/08_Investors/Corporate_Governance/ Major_Internal_Policies/UMC_Corporate_Governance_Practice_Principles_20191030_eng.pdf.

UMC has designated a specific contact window ([email protected]) and included an Investor Relations section on the UMC deals with shareholders’ suggestions, Stakeholder Contacts of the Company’s website to deal with shareholders’ suggestions, doubts, disputes and litigations. doubts, disputes and litigation based Please refer to the Company’s website for stakeholders’ contact: https://www.umc.com/en/Html/stakeholder_contacts. on “The Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.” UMC does not establish an internal operating procedure.

UMC possesses the list of its major shareholders as well as the ultimate owners of those shares. None

UMC has established relevant control mechanisms within its internal regulations and internal control systems in None accordance with laws and regulations (including “Rules for Regulating Related Party Transactions”).

UMC has formulated the Provisions on Insider Trading Prevention Policies and Control Procedures and is committed to None advocating policies against insider trading.

UMC has established the Policy for Nomination and Election of Directors that takes into account the Company’s None organizational culture, business model and long-term development, and also established criteria to ensure the diversity of the Board members. The UMC Board of Directors comprises of 8 members, including 4 seats for independent directors and 1 for a non-executive director; 3 serve as administrative directors. More than half of the director seats are filled by members of outside companies. There is 1 seat currently reserved for a female director. Based on our policy of gender equality, UMC will increase the female director seats progressively. The tenures of independent directors are also diversified; there is 1 director that has served for 12 years, 1 director for 6 years and 2 directors for 3 years. The Board of UMC is composed of members with diversified backgrounds of industry, government and academy. The experiences of Board members include the president of national university, academician of Academia Sinica, the Minister of Science and Technology, the president of ITRI, financial experts in finance, accounting and strategy management fields, and professionals from the semiconductor industry and ICT business administration. The directors satisfy basic criteria and professionalism requirements, and through activities of the sub-committees, can also contribute their experiences to supervise and govern issues related to corporate governance, environmental sustainability, corporate social responsibility, legal compliance and human rights protection. Please refer to UMC’s Policy for Nomination and Election of Directors for UMC Board diversification criteria, the Directors’ Information and the Skill Matrix of Board members for implementation of Board diversification on the Company’s website: https://www.umc.com/en/IR_Director/directors_information.

To meet the needs of industrial characteristics and operations, UMC has established the Capital Budget Committee. The None Committee currently comprises of four independent directors and one external directors responsible for assisting UMC with its long-term development strategy, financial planning and business performance. For the sustainable development of UMC and assisting the Board with enhancing its management mechanism and improving corporate governance, UMC established the Nominating Committee. The Committee comprises of all independent directors who are responsible for searching and reviewing the candidate list of the directors and executives accordingly, executing the performance assessment of the directors and executives, and supervision of corporate governance. For information on the Capital Budget Committee and the Nominating Committee, please refer to UMC’s website at https://www.umc.com/en/Html/ capital_budget_committee and https://www.umc.com/en/Html/nominating_committee.

43 United Microelectronics Corporation | Annual Report 2020

Corporate Governance Implementation Status and Deviations from “The Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” (Continue)

Evaluation Item

Yes No

(3) Does the company establish a standard to measure the performance of the Board, and implement it annually? Are the implemented results reported to the Board, and used as a reference for individual directors’ compensation and nomination renewal?

(4) Does the company regularly evaluate the independence of CPAs?

4. Does the company have an adequate number of corporate governance personnel with appropriate qualifications and appoint a chief corporate governance officer to be in charge of corporate governance affairs (including but not limited to providing information for directors and supervisors to perform their functions, assisting directors and supervisors with legal compliance, handling matters relating to board meetings and shareholders meetings according to laws, producing minutes of board meetings and shareholders meetings)?

44 Corporate Governance Report

Implementation Status Deviations from “The Corporate Governance Best-Practice Abstract Explanation Principles for TWSE/TPEx Listed Companies” and Reasons

UMC has formulated Rules for Performance Evaluation of the Board of Directors and implemented it accordingly. None A. The Company conducted annual self-evaluation of the BOD, its functional committees and individual board members’ performance. In 2020, the Nominating Committee conducted the self-evaluation of the Board of Directors, functional committees and individual board members and reported the result to the Nominating Committee and Board of Directors on February 24, 2021. The performance result was “Excellent.” For a new director, the board provides proper orientation to enable him or her to understand his or her duties and to familiarize him or her with the Company’s operation and environment. B. The performance of the Board is also implemented by an external independent professional institution or a panel of external experts and scholars at least once every three years. After the first performance evaluation conducted by an external assessment institution in 2018, the Company re-engaged with an external assessment institution to implement performance evaluation of the Board of Directors in 2020. Please refer to the Company’s website for “The Rules for Performance Evaluation of the Board of Directors”: https://www.umc.com/en/IR_Director/directors_information. The Company’s Directors’ Compensation is regulated in the Company’s Articles of Incorporation. The Company shall allocate no more than 0.2% of profit as directors’ compensation for each profitable fiscal year, and Directors’ Compensation is linked to the performance of the Company’s operation and the Board. According to the Policy for Nomination and Election of Directors, performance assessment of the board is used as a reference for nomination and election of Directors.

UMC’s Audit Committee regularly evaluates the internal quality control procedures and independence of independent None auditors, and is evaluated by the Board of Directors. The evaluation results of the most recent two years were completed on February 26, 2020 and February 24, 2021. The evaluation items are as follows: A. Auditor Independence Declaration. B. All audit and non-audit services provided by independent auditors are first reviewed by the Audit Committee to ensure that non-audit services do not influence audit outcome. C. The same independent auditor has not performed audit services for more than five consecutive years. D. UMC evaluates the independence and competence of the external auditor annually, including the size and reputation of the accounting firm, the nature and extent of providing non-audit services, peer review, quality of audit services, and external auditors’ experience as well as the communication and interaction between external auditors, management and internal audit supervisors. The external auditor and the Audit Committee should have regular communication and interaction. Whether UMC’s independent directors and relevant senior executives are independent from the external auditor. The Company does not appoint any individual who have served as an auditor in an accounting firm as a senior financial supervisor or who has the authority to make major decisions, or if there are any legal proceedings, etc.

Upon nomination by the Nominating Committee of UMC, the Board of Directors appointed Mr. Chitung Liu, the Senior Vice None President and CFO of UMC, as the Chief Corporate Governance Officer on March 6, 2019. The position is accountable for corporate governance matters, including preparation and execution of agenda and matters relating to the Shareholders’ Meeting, the Board, Audit Committee, Remuneration Committee, Capital Budget Committee and Nominating Committee, assistance in fulfilling requests by directors to perform duties and provide information, and is also responsible for ensuring legal compliance of the Board, promoting communication and dialogue between the management team and the directors, and among the board members, and communicating with the independent directors on corporate governance-related affairs on a regular basis every year. The Chief Corporate Governance Officer has been in a managerial position for at least three years in a public company in handling financial and stock affairs, and completed professional training in accordance with laws and regulations.

45 United Microelectronics Corporation | Annual Report 2020

Corporate Governance Implementation Status and Deviations from “The Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” (Continue)

Evaluation Item

Yes No

5. Does the company establish a communication channel and build a designated section on its website for stakeholders (including but not limited to shareholders, employees, customers, and suppliers), as well as handle all the issues they care for in terms of corporate social responsibilities?

6. Does the company appoint a professional shareholder service agency to deal with shareholder affairs?

7. Information Disclosure

(1) Does the company have a corporate website to disclose both financial standings and the status of corporate governance?

(2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)?

(3) Does the company announce the annual financial report within 2 months after the end of the fiscal year, and announce the Q1, Q2, Q3 financial reports and monthly operation status before the deadlines?

8 Is there any other important information to facilitate a better understanding of the company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?

9. Please explain the improvements which have been made in accordance with the results of the Corporate Governance Evaluation System released by the Corporate Governance Center, Taiwan Stock Exchange, and provide the priority enhancement measures.

46 Corporate Governance Report

Implementation Status Deviations from “The Corporate Governance Best-Practice Abstract Explanation Principles for TWSE/TPEx Listed Companies” and Reasons

UMC’s Corporate Sustainability Committee is responsible for stakeholders and identifying issues across the Company. The None Committee is also responsible for establishing consultation and communication channels with stakeholders in accordance with internal operational mechanisms, designating specialists to receive, record and respond to messages and input from various stakeholders. The Corporate Sustainability Committee conducts annual review of key corporate social responsibility issues and contingency plans to determine appropriate responses and publicly discloses relevant stakeholder communication information through the annual Corporate Social Responsibility Report and UMC’s website, and at the same time reports key stakeholder concerns and countermeasures at Board meetings.

UMC has appointed Horizon Securities Co., Ltd., a professional shareholder service agency, to deal with shareholder affairs. None

The Company has built a corporate website and exclusive webpage to publish up-to-date information for both financial None standings and the status of corporate governance at all times for investors’ reference. Please refer to the Company’s website for related information: https://www.umc.com/en/IR/ir_overview. The Company has built Chinese and English websites and appointed a designated person to handle information collection None and disclosure, including the information of investor conferences. The Company also has designated a spokesperson, acting spokesperson(s), and a specific contact window ([email protected]) to deal with shareholders’ suggestions as per regulation. Please refer to the Company’s website for related information: https://www.umc.com.

The Company announces its monthly operation status within the prescribed deadlines and announces the annual and the None quarterly financial reports before the deadlines. The Company’s announcement of the 2020 annual financial report was completed on February 24, 2021. (1) Continuing Education/Training of Directors: To strengthen the competency of the Board, UMC informs its directors None periodically of professional courses held by relevant organizations. For Continuing Education/Training of Directors, please refer to pages 48-50 of this annual report. (2) Board meeting attendance: Please refer to Page 37-41 on Board of Directors Operations and Audit Committee Operations, and Page 57-59 on Remuneration Committee Operations in this annual report. (3) Risk management policies and risk measurement standards implementation: Please refer to Page 145 on Risk Management and Evaluation in this annual report. (4) Customer policy implementation: Please refer to Page 128 on Overview of Market, Production, and Sales in this annual report and the Corporate Social Responsibility Report on the UMC website at https://www.umc.com/en/Download/ corporate_sustainability_reports. (5) Employee Rights, Employment Care, Investor Relations, Supplier Relationships and Stakeholders Rights Implementation: Please refer to the Corporate Social Responsibility Report on the UMC website at https://www.umc. com/en/Download/corporate_sustainability_reports. (6) The status of liability insurance for directors and supervisors purchased by the Company: UMC has purchased liability insurance for directors since 2000. The renewal of liability insurance for directors was completed in 2020 and was reported during the last Board Meeting. (7) UMC website for corporate governance policies and implementation: https://www.umc.com/en/Html/ir_corporate_ governance.

UMC was in the top 5% of rankings in “Corporate Governance Evaluation” for six consecutive years since 2015. To implement corporate governance and enhance the Company’s board functions, the Company designated a Company Secretary in 2019, and “Policy for Nomination and Election of Directors” and “Skill Matrix of Board Members” which are references for the composition structure of the Board are established by the Nominating Committee. To improve information transparency, the Company announces its financial reports within two months after the end of the fiscal year.

47 United Microelectronics Corporation | Annual Report 2020

Continuing Education/Training of Directors in 2020:

Title Name Study Period Sponsoring Course Training Compliance Organization Hours with Regulations From To （Note）

Chairman Stan Hung 2020.07.24 2020.07.24 TAIWAN CORPORATE The Development Trend, Model 3 Yes GOVERNANCE and Practice of Corporate ASSOCIATION Governance and Corporate Social Responsibility

2020.10.27 2020.10.27 INDEPENDENT The Strategy and Tool 3 Yes DIRECTOR ASSOCIATION Application of Employee Reward TAIWAN 2020.11.25 2020.11.25 TAIWAN CORPORATE The Trend, Impact and Adaptive 3 Yes GOVERNANCE Strategy of U.S.-China Trade ASSOCIATION War and Global Change Independent Cheng-Li 2020.09.21 2020.09.21 TAIWAN STOCK Corporate Governance 3.0 3 Yes Director Huang EXCHANGE -Sustainable Development CORPORATION Roadmap Forum 2020.09.22 2020.09.22 TAIWAN INSTITUTE OF KPMG Leadership Institute 3 Yes DIRECTORS Forum: Response of Upheaval Risk and Enhancement of Corporate Governance 2020.09.24 2020.09.24 SECURITIES & FUTURES Insider Trading Prevention and 3 Yes INSTITUTE Insider Equity Trading Advocacy Meeting in 2020 2020.11.25 2020.11.25 TAIWAN CORPORATE The Trend, Impact and Adaptive 3 Yes GOVERNANCE Strategy of U.S.-China Trade ASSOCIATION War and Global Change Independent Wenyi Chu 2020.10.16 2020.10.16 TAIWAN STOCK 2020 Corporate Governance 3 Yes Director EXCHANGE and Anti-corruption Seminar CORPORATION 2020.11.25 2020.11.25 TAIWAN CORPORATE The Trend, Impact and Adaptive 3 Yes GOVERNANCE Strategy of U.S.-China Trade ASSOCIATION War and Global Change Independent Lih J. Chen 2020.09.11 2020.09.11 SECURITIES & FUTURES Insider Trading Prevention and 3 Yes Director INSTITUTE Insider Equity Trading Advocacy Meeting in 2020 2020.11.25 2020.11.25 TAIWAN CORPORATE The Trend, Impact and Adaptive 3 Yes GOVERNANCE Strategy of U.S.-China Trade ASSOCIATION War and Global Change

48 Corporate Governance Report

Continuing Education/Training of Directors in 2020:

Title Name Study Period Sponsoring Course Training Compliance Organization Hours with Regulations From To （Note）

Independent Director Jyuo-Min 2020.03.24 2020.03.24 TAIWAN CORPORATE The Introduction of Ethical 1.5 Yes Shyu GOVERNANCE Corporate Management ASSOCIATION Best Practice Principles for TWSE/GTSM Listed Companies and ISO 37001 Anti-bribery management systems

2020.05.12 2020.05.12 TAIWAN CORPORATE The Impact of COVID-19 1.5 Yes GOVERNANCE on the Economy, Trade ASSOCIATION and Industry and its future prospects

2020.08.18 2020.08.18 TAIWAN INSTITUTE OF Corporate Transformation 3 Yes DIRECTORS in Revolution Age 2020.09.21 2020.09.21 TAIWAN STOCK Corporate Governance 3.0 3 Yes EXCHANGE -Sustainable Development CORPORATION Roadmap Forum 2020.11.25 2020.11.25 TAIWAN CORPORATE The Trend, Impact and 3 Yes GOVERNANCE Adaptive Strategy of ASSOCIATION U.S.-China Trade War and Global Change

Director Ting-Yu Lin 2020.09.24 2020.09.24 SECURITIES & FUTURES Insider Trading Prevention 3 Yes INSTITUTE and Insider Equity Trading Advocacy Meeting in 2020

2020.11.25 2020.11.25 TAIWAN CORPORATE The Trend, Impact and 3 Yes GOVERNANCE Adaptive Strategy of ASSOCIATION U.S.-China Trade War and Global Change

49 United Microelectronics Corporation | Annual Report 2020

Continuing Education/Training of Directors in 2020:

Title Name Study Period Sponsoring Course Training Compliance Organization Hours with Regulations From To （Note）

Representative SC Chien 2020.09.11 2020.09.11 SECURITIES & FUTURES Insider Trading Prevention 3 Yes of Juristic-Person INSTITUTE and Insider Equity Trading Director Advocacy Meeting in 2020 2020.11.25 2020.11.25 TAIWAN CORPORATE The Trend, Impact and 3 Yes GOVERNANCE Adaptive Strategy of ASSOCIATION U.S.-China Trade War and Global Change

Representative Jason Wang 2020.07.24 2020.07.24 TAIWAN CORPORATE The Development Trend, 3 Yes of Juristic-Person GOVERNANCE Model and Practice of Director ASSOCIATION Corporate Governance and Corporate Social Responsibility

2020.10.27 2020.10.27 INDEPENDENT The Strategy and Tool 3 Yes DIRECTOR ASSOCIATION Application of Employee TAIWAN Reward Former Director Chung 2020.04.28 2020.04.28 TAIWAN CORPORATE Adaptive Strategy of 3 Yes Laung Liu GOVERNANCE Corporate Restructuring ASSOCIATION 2020.07.24 2020.07.24 TAIWAN CORPORATE The Development Trend, 3 Yes GOVERNANCE Model and Practice of ASSOCIATION Corporate Governance and Corporate Social Responsibility

Note: Regulations are Applicable Subjects, Continuing Education Hours, Continuing Education Scope, Continuing Education System and Continuing Education Arrangements and Information Disclosure specified in “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.”

50 Corporate Governance Report

Continuing Education/Training of Managers in 2020: Title Name Course Date Organizer Course Title Course Hours

Senior Vice President & Chitung Liu 2020.01.14 ACCOUNTING The Competent Authority Requires the 3 Chief Financial Officer RESEARCH AND Establishment of“Corporate Governance Director/ DEVELOPMENT Personnel”Practice Analysis FOUNDATION 2020.01.16 ACCOUNTING Corporate Governance Practices: The Impact and 3 RESEARCH AND Response of the Newly Released“Labor Litigation DEVELOPMENT Act”on Companies FOUNDATION 2020.04.28 ACCOUNTING Enhancing the Self-Editing Ability of Financial 3 RESEARCH AND Reports: Internal Control, Internal Audit and DEVELOPMENT Information Technology FOUNDATION 2020.06.16 ACCOUNTING Common Corporate Governance Deficiencies and 3 RESEARCH AND Related Laws and Regulations DEVELOPMENT FOUNDATION President SC Chien Executive Vice Ming Hsu President Vice President M C Lai Vice President SR Sheu Vice President Mindy Lin Vice President & Chief Eric Chen Human Resources Officer Associate Victor Chuang Vice President Associate Chuck Chen Vice President 2020.07.03 UNITED 【2020 Master Forum】Global Economic Trends: 1.5 Associate Le Tien Jung MICROELECTRONICS Populism, COVID-19 and Negative Interest Rates Vice President CORP. Associate Yau Kae Sheu Vice President Associate J Y Wu Vice President Associate Osbert Cheng Vice President Associate Remi Yu Vice President Associate Michael CY Vice President Wang Associate Ji Fu Kung Vice President Associate C P Yen Vice President Associate Pang Min Wang Vice President Associate Ray Yang Vice President

51 United Microelectronics Corporation | Annual Report 2020

Continuing Education/Training of Managers in 2020: Title Name Course Date Organizer Course Title Course Hours

President SC Chien President Jason Wang Executive Vice Ming Hsu President Senior Vice President Oliver Chang Senior Vice President & Chitung Liu Chief Financial Officer Vice President TS Wu Vice President G C Hung Vice President Jerry CJ Hu Vice President SR Sheu Vice President M L Liao Vice President S S Hong Vice President Francia Hsu Vice President Mindy Lin

Vice President & Chief Eric Chen Human Resources Officer Associate Victor Chuang Vice President Associate Chuck Chen 2020.07.07 UNITED 【Legal Course】 Introduction of Trade Secrets 2 Vice President MICROELECTRONICS Act Associate S F Tzou CORP. Vice President Associate Le Tien Jung Vice President Associate Yau Kae Sheu Vice President Associate J Y Wu Vice President Associate Steven Hsu Vice President Associate Yanan Mou Vice President Associate Remi Yu Vice President Associate Michael CY Wang Vice President Associate Ji Fu Kung Vice President Associate C P Yen Vice President Associate Pang Min Wang Vice President Associate Ray Yang Vice President Former Associate C Y Hsu Vice President

52 Corporate Governance Report

Continuing Education/Training of Managers in 2020: Title Name Course Date Organizer Course Title Course Hours

Vice President TS Wu Vice President M C Lai Vice President Jerry CJ Hu Vice President Mindy Lin Vice President & Chief Eric Chen Human Resources Officer Associate Victor Chuang Vice President 2020.08.07 UNITED 【Executive Program】Financial-Driven Capital 4 2020.08.14 MICROELECTRONICS Budgeting and Management Decision Quality Associate Chuck Chen CORP. Vice President Associate S F Tzou Vice President Associate J Y Wu Vice President Associate Osbert Cheng Vice President Associate Michael CY Vice President Wang Associate Pang Min Wang Vice President Associate Ray Yang Vice President Chairman & Chief Stan Hung Strategic Officer President SC Chien President Jason Wang Executive Ming Hsu Vice President Senior Vice President Oliver Chang Senior Vice President & Chitung Liu Chief Financial Officer Vice President TS Wu Vice President G C Hung Vice President Wenchi Ting Vice President Jerry CJ Hu 2020.11.25 UNITED China-US Economic and Trade Confrontation and 3 MICROELECTRONICS Global Changes: Trends and Impact Strategies Vice President Y S Shen CORP. Vice President Steven S Liu Vice President M L Liao Vice President S S Hong Vice President Mindy Lin Vice President & Chief Eric Chen Human Resources Officer

53 United Microelectronics Corporation | Annual Report 2020

Continuing Education/Training of Managers in 2020: Title Name Course Date Organizer Course Title Course Hours

President SC Chien President Jason Wang Executive Vice Ming Hsu President Senior Vice Oliver Chang President Vice President TS Wu Vice President M C Lai Vice President Wenchi Ting Vice President Jerry CJ Hu Vice President SR Sheu Vice President M L Liao Vice President Mindy Lin Associate Victor Chuang Vice President 2020.12.01 UNITED 【2020 Master Forum】Business Changes and 1.5 Associate Chuck Chen MICROELECTRONICS Challenges in the Next Ten Years Vice President CORP. Associate S F Tzou Vice President Associate Yau Kae Sheu Vice President Associate Osbert Cheng Vice President Associate Steven Hsu Vice President Associate Remi Yu Vice President Associate Michael CY Wang Vice President Associate Ji Fu Kung Vice President Associate Pang Min Wang Vice President Associate Ray Yang Vice President Associate Louis Hsieh Vice President

54 Corporate Governance Report

Continuing Education/Training of Managers in 2020: Title Name Course Date Organizer Course Title Course Hours

Senior Vice President Oliver Chang Senior Vice President & Chitung Liu Chief Financial Officer Vice President TS Wu Vice President Jerry CJ Hu Vice President SR Sheu Vice President M L Liao Vice President Francia Hsu Vice President & Eric Chen Chief Human 2020.12.02 UNITED Three lines of Defense of Internal Control and 2 Resources Officer MICROELECTRONICS Practical Case Sharing Associate Victor Chuang CORP. Vice President Associate Chuck Chen Vice President Associate Le Tien Jung Vice President Associate Osbert Cheng Vice President Associate Remi Yu Vice President Associate Pang Min Wang Vice President Associate Ray Yang Vice President

Note: The implementation of the development plan for senior executives of each department was carried out, and the senior management training program planning will be based on the results in 2020. The senior executive courses are as follows: 【2020 Master Forum】A total of two sessions were held, with a total of 166 supervisors participating, and a course satisfaction rating of 92.8%. 【Executive Program】A total of two sessions were held, with a total of 59 supervisors participating, and a course satisfaction rating of 92.9%.

55 United Microelectronics Corporation | Annual Report 2020

If the Company Has Adopted Corporate Governance Best-Practice Principles and Related Bylaws, Disclose How These Are to Be Searched

UMC’s website has established a “Corporate Governance” section to explain the corporate governance policies and implementation. Investors can inquire about and download Corporate Governance related information from: https://www.umc.com/en/Html/ir_corporate_governance. For corporate governance implementation status, please refer to pages 37-92 of this annual report.

Procedures for Handling Proprietary/Strictly Confidential Information

These procedures were established to create an effective system for the handling and disclosure of proprietary/strictly confidential information to prevent inappropriate disclosure, ensure the consistency and accuracy of all information publicly released by the company and provide timely education for all directors, managers and employees to follow. Please refer to the Company’s website for related information: https://www.umc.com/en/Download/major_internal_policies.

56 Corporate Governance Report

Information on the Members of the Remuneration Committee

Status Name/ Has at Least 5 Years of Work Experience and the Meet Criteria of Independence Number of Condition Following Professional Qualifications (Note) Other Public Companies An A Judge, Work Experience 1 2 3 4 5 6 7 8 9 10 Where the Instructor Prosecutor, Necessary for Member or Higher Lawyer, CPA or Business Concurrently Position in Other Specialist Administration, Serves as a Private or Technical Legal Affairs, a Member in or Public Professional Who Finance, the College or Is Necessary for Accounting, or Remuneration University the Company's Business Committee in the Field Business and Has Sector of the of Business, Been Certified Company Law, by National Finance, Examinations Accounting, and Licensed by or the the Competent Business Authorities Sector of the Company

Independent Cheng-Li Huang Yes Yes Yes 0 Director Independent Wenyi Chu Yes Yes 0 Director Independent Lih J. Chen Yes Yes 0 Director Independent Jyuo-Min Shyu Yes Yes 1 Director Note: For those members who match the condition listed below during and two years before the assuming period, “ ” is marked in the appropriate space. （1）Is not an employee of the Company or its affiliates. （2）Is not a director or supervisor of the Company or its affiliates (the same does not apply, however, in cases where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the laws of Taiwan or with the laws of the country of the parent company, subsidiary or subsidiary of the same parent company). （3）Does not directly or indirectly own more than 1% of the Company’s outstanding shares, nor is one of the top ten non-institutional shareholders of the Company. （4）Is not a spouse, relative within the second degree of kinship or lineal relative within the third degree of kinship of managers specified in column (1) or any person specified in columns (2) and (3). （5）Is not a director, supervisor or employee of a legal entity which directly owns more than 5% of the Company’s issued shares or are among the top five owners of the Company’s issued shares, nor a director, supervisor or employee of a legal entity which designates a representative to serve as a director or supervisor of the Company in accordance with Article 27, paragraph 1 or 2 of the Company Act (the same does not apply, however, in cases where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the laws of Taiwan or with the laws of the country of the parent company, subsidiary or subsidiary of the same parent company). （6）Is not a director, supervisor or employee of other company, and more than half of directors or voting shares of other company are controlled by the same person (the same does not apply, however, in cases where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the laws of Taiwan or with the laws of the country of the parent company, subsidiary or subsidiary of the same parent company). （7）Is not a director, supervisor or employee of other company, and Chairman, President or Manager with equivalent position of other company are the same person or spouse (the same does not apply, however, in cases where the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the laws of Taiwan or with the laws of the country of the parent company, subsidiary or subsidiary of the same parent company). （8）Is not a director, supervisor, or manager of a company which has a business relationship with the Company, nor a shareholder who owns more than 5% of such a company (the same does not apply, however, in cases where a company owns more than 20% but less than 50% of the Company’s issued shares and the person is an independent director of the Company who serves concurrently as an independent director of its parent company, subsidiary, or subsidiary of the same parent company in accordance with the laws of Taiwan or with the laws of the country of the parent company, subsidiary or subsidiary of the same parent company). （9）Is not an owner, partner, director, supervisor, manager or spouse of any sole proprietor business, partnership, company or institution which has provided the Company and its affiliates with auditing or services of finance, business consultation and legal affairs for which the accumulated remuneration in the past two years does not exceed NTD 500,000, provided that this restriction does not apply to any member of the compensation committee, public tender offer review committee, or special committee on mergers and acquisitions who exercises powers pursuant to related regulations such as the “Securities and Exchange Act” or the “Business Mergers And Acquisitions Act.” （10）Is not under any condition pursuant to Article 30 of the Company Act.

57 United Microelectronics Corporation | Annual Report 2020

Operation of the Remuneration Committee: The goal of the Remuneration Committee’s operation is to strengthen corporate governance and risk control, and to evaluate and monitor the Company’s remuneration system for its directors and executive officers while considering the provision of incentives to facilitate talent retention. The main functions are to periodically review the policies and regulations for performance appraisal and remuneration of directors and executive officers, and to evaluate and prescribe the remuneration of directors and executive officers.

Annual Focus of the Remuneration Committee: • Approval of directors’ remuneration • Manager performance and compensation structure review • Approval of manager’s salary and reward

Information of the Remuneration Committee Operation 1. The Company has a Remuneration Committee composed of four members. 2. Term of the current Committee: From June 12, 2018 to June 11, 2021. The Company convened 5 Remuneration Committee meetings in 2020 with the following attendance:

Title Name Number of Number of Proxy Rate of Actual Note Actual Attendance Attendance (%) Attendance Independent Wenyi Chu 4 1 80.00 Remuneration Committee convener Director Independent Cheng-Li Huang 5 0 100.00 Director Independent Lih J. Chen 5 0 100.00 Director Independent Jyuo-Min Shyu 5 0 100.00 Director

Note: Attendance Rate (%) is based on the committee member’s attendance during her/his term of service.

Other Items That Shall Be Recorded: 1. If the Board of Directors chooses not to adopt or revise recommendations proposed by the Remuneration Committee, the date of the Directors’ Meeting, session, contents of proposals, results of meeting resolutions, and the Company’s disposition of opinions provided by the Remuneration Committee shall be described in detail (also, where the salary and compensation approved by the Directors’ Meeting is better than that recommended by the Remuneration Committee, the differences and the reason for the approval shall be described in detail): None. 2. For the decisions made by the Remuneration Committee, if there are members who hold objection or reservation to a resolution and such objection or reservation is on record or raised through a written statement, the date, session, contents of proposals, all members’ opinions, and ways in handling these opinions should be elaborated: None. 3.Major resolutions of the Remuneration Committee in 2020:

Date/ Meeting Proposal Resolution The Company's Handling of the Opinions of the Remuneration Committee

February 26, 2020, 1. Directors’ 2019 remuneration Approved by all Approved by directors participating in the discussion The 6th meeting of 2. Review the structure of management team’s members present and voting in the board meeting. the 4th session compensation and performance evaluation in the meeting. system, and also propose the management team’s compensation. 3. Revise the Remuneration Committee Charter.

April 27, 2020, 1. Revise UMC Corporate Governance statement. Approved by all Approved by directors participating in the discussion The 7th meeting of the members present and voting in the board meeting. 4th session in the meeting. June 17, 2020, 1. Management team’s 2020 salary review Approved by all Approved by directors participating in the discussion The 8th meeting of the 2. Proposal of management team’s compensation members present and voting in the board meeting. 4th session structure in the meeting.

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Date/ Meeting Proposal Resolution The Company's Handling of the Opinions of the Remuneration Committee

July 29, 2020, 1. Proposal of the management team’s Approved by all Approved by directors participating in the discussion The 9th meeting of the compensation members present and voting in the board meeting. 4th session in the meeting.

September 2, 2020, 1. Proposal of the management team’s Approved by all Approved by directors participating in the discussion The 10th meeting of the compensation members present and voting in the board meeting. 4th session in the meeting.

Nominating Committee The Nominating Committee, comprised of independent directors, shall assist the Board to enhance the management mechanism and to improve corporate governance with regard to the Company’s sustainable development. The objectives of the Committee include: 1. To incorporate the nomination policy and succession plans of the directors and the executives and then search for, review and propose the candidate list of the directors and executives accordingly; 2. To construct and develop the operation of the Board and the sub-committees, as well as to plan and execute the performance assessment of the Board, the sub-committees and the executive(s); 3. To enhance corporate sustainability strategies, corporate governance system and practices in order to protect the interests of stakeholders.

Information of Nominating Committee Operation 1. There are 4 members in the Nominating Committee. 2. The term for elected committee members is 3 years, starting from June 12, 2018 to June 11, 2021. A total of 2 Nominating Committee meetings were held in 2020. The attendance of the committee members was as follows:

Title Name Attendance By Proxy Attendance Rate Remarks in Person (%)

Convener Lih J. Chen 2 0 100.00

Committee Cheng-Li Huang 2 0 100.00 Member

Committee Wenyi Chu 1 1 50.00 Joined the meeting through conference call Member

Committee Jyuo-Min Shyu 2 0 100.00 Member

Other mentionable items: 1. If the Board of Directors declines to adopt or modifies a recommendation of the Nominating Committee, it should specify the date of the meeting, session, content of the motion, resolution by the Board of Directors, and the Company’s response to the Nominating Committee’s opinion: None. 2. Resolutions of the Nominating Committee objected to by members or expressed reservations and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: None. 3. Major resolutions of Nominating Committee in 2020: Meeting on February 26, 2020 (1) Approved the Company’s Policy and Procedures of Risk Management.

Note: Attendance Rate (%) is based on the committee member’s attendance during her/his term of service.

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Corporate Social Responsibility and Deviations from “The Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies”

Evaluation Item

Yes No

1. Does the company identify environmental, social and corporate governance issues related to the company’s operations in accordance with the materiality principle?

2. Does the company establish exclusively (or concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reporting to the board?

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Through the Corporate Sustainability Committee, the Company keeps abreast of the development of domestic and None foreign corporate social responsibility standards and changes in the corporate environment, reviews and improves the corporate social responsibility system of UMC, and identifies environmental, social and corporate governance issues related to the company’s operations in accordance with the materiality principle. In addition, the Enterprise Risk Management Committee has also formulated enterprise risk management policies. Through risk management methods and organizations, the committee effectively prevents and controls enterprise risks, comprehensively implements them in daily operations, shapes and deepens the risk culture, and establishes complete and transparent risk communication to maintain steady operations. It also develops response strategies for major risk issues, regularly submits them to the Board of Directors for approval, and reviews and updates relevant standard operating procedures to ensure the effectiveness of risk management. For related risks (including environmental, social and corporate governance issues), please refer to the section “Risk Management and Evaluation” of this annual report and UMC Corporate Social Responsibility Report.

The Corporate Sustainability Committee is the highest-level corporate sustainability organization within UMC. With None the Co-President as Chair, the Committee coordinates UMC’s sustainable development and formulates corporate social responsibility strategies and objectives. The Committee conducts semi-annual reviews to improve performance and goal achievement. The representative reports promotion outcome and plans, and key stakeholder issues and countermeasures to the Board of Directors annually. The Corporate Sustainability Committee comprises of seven sub-committees, namely the Corporate Governance Committee, Customer Relationship Management Committee, Supplier Management Committee, Innovation Technology Committee, Human Rights and Social Participation Committee, Environment Committee and Green Manufacturing Committee. The functions of each sub-committee are briefly described below: • Corporate Governance Committee Helps strengthen the function of the Board and shareholder equity, integrates related regulations and policies of relevant departments, and helps complete and implement the Company’s internal control system to ensure information transparency and disclosure, and compliance with regulations. • Customer Relationship Management Committee Refines customer service and quality control, improves service quality and customer satisfaction, and protects customer interests and relevant trade secrets. • Supplier Management Committee To establish a protective environment and emphasize the obligation to society, labor rights, security and health while pursuing the goal of a continuously evolving supply chain, this sub-committee develops long-term partnerships with vendors for quality, cost leadership, delivery, service/response, and sustainability. • Innovation Technology Committee Promotes green product research and development and innovations, and leads in cutting-edge green technology. • Human Rights and Social Participation Committee Responsible for protecting the basic rights of employees and promoting communication with outside communities and society. Integrates the UMC Science and Culture Foundation, and with focus on education, arts, sports, public service and environmental protection, strives to promote technological research and development cooperation, long- term educational assistance, arts and sports activities and other social welfare events. • Environment Committee Promotes company-wide environmental, safety and health, energy, water and greenhouse gas emission management to enhance sustainable competitiveness. • Green Manufacturing Committee Promotes company-wide green processes, such as hazardous materials management and increases in resource productivity.

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Evaluation Item

Yes No

3. Environmental Issues (1) Doest the company establish proper environmental management systems based on the characteristics of their industries?

(2) Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment?

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To promote its environmental safety and health management system, UMC combines daily management and None comprehensive quality management activities, and incorporates environmental safety management plans in to actual plant operations to achieve implementation goals. In terms of environmental safety and health risks in its operations, UMC systematically assesses the possible impact of all process activities from raw material use to waste production on the environment and employees. Projects with potentially significant environmental impact are managed and controlled through raw material assessment, substitution and reduction, process pollution source control and reduction, effective treatment of end-of-pipe pollution, and reuse of surplus by-products. Employee safety and health are fundamentally managed through equipment safety, chemical safety and operational safety. To achieve sustainable operations, UMC adopts a clean production and zero disasters approach to environmental protection and safety and health, and sets environmental health and safety management system goals every year. By promoting programs that reduce environmental impact and strengthen safety and health, UMC continuously improves its performance in environmental protection and safety and health management. In 2001, UMC became the first company in Taiwan’s semiconductor industry to pass integrated environmental protection, None safety and health management system certifications. Please refer to the Environmental Protection, Safety and Health Management chapters in this annual report for details on greenhouse gas reduction and management, energy conservation management, water conservation management, waste and resource recovery management, and pollution discharge and control. For more detailed descriptions of various energy efficiency measures, please refer to UMC’s Corporate Social Responsibility Report, which is summarized below: • Green Building: UMC has incorporated energy conservation, carbon reduction and green building into its operational guidelines and goals, and introduced green building certification into all its new fabs. • Green Production: To achieve the goal of zero pollution, UMC has established a comprehensive new material evaluation process to effectively screen and control new materials introduced into the development of new processes so as to avoid or reduce the use of raw materials with environmental impact. • Green Process: The semiconductor process uses a wide variety of raw materials and requires high purity and high quality. Through improving process design and technology, UMC reduces raw material consumption, which not only reduces pollution emissions at the source, but also reduces operating costs. UMC has established a comprehensive information database to manage the incoming and requisition of raw materials for processing. In addition, in special projects to promote carbon credit, source reduction is achieved through process optimization, workflow improvement and target management. • Green Design: As a leader in semiconductor wafer technology, UMC not only ensures that its output wafers meet the low toxicity requirements of customers, but is also committed to reducing the environmental impact of manufacturing and developing numerous high-performance and low-cost chip design processes. • Green Products: Although UMC does not produce its own brands through its wafer process manufacturing, it continues to develop and incorporate numerous low-toxicity, low-energy green product technologies to provide customers with the most complete service for meeting the arrival of the green energy era. In 2006, UMC led global semiconductor manufacturers in completing third-party verification and audit of the Hazardous Substance Process Management (HSPM) system, becoming the first semiconductor manufacturer company in the world to obtain QC-080000 IECQ HSPM certification for all its fabs. • Packaging Material Management The materials used for shipping UMC products are in full compliance with the requirements of the European RoHS (Restriction of the use of certain Hazardous Substances in electrical and electronic equipment). All packaging materials are supplied by raw material suppliers, and are verified by impartial laboratory reports. Packaging materials with low environmental impact are used as often as possible. • Resource Recycling and Reuse Research UMC prioritizes the reuse of recycled output waste, and continuously evaluates and introduces new technologies for reuse. UMC collaborates with qualified recycling vendors in applying for numerous recycling projects, and makes on- site improvements (such as changing liquid waste pipelines and segregated collection) to increase the types of recyclable waste.

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Evaluation Item

Yes No

(3) Does the company evaluate the potential risks and oppertunities of climate change on its operations and take actions?

(4) Does the company conduct inspections about greenhouse gas, water consumption, and total weight of waste for last two years, as well as establish company strategies for energy conservation, carbon reduction, management of water consumption, and total weight of waste?

4. Social Issues (1) Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?

(2) Does the company declare reasonable employee welfare measures (including salary remuneration policy, regulations for leaves and others) and integrate the company’s performance with employees’ reward?

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In the face of climate change, UMC has formulated the UMC Climate Change Policy as the Company’s highest guiding None principle for responding to climate change. UMC has also formulated the UMC Low Carbon Commitment as a guide for future carbon reduction projects. • Climate Change Policy Expectations to reach carbon neutral To be the low carbon solutions provider To promote the development of a low carbon economy • Low carbon Commitment Low-carbon design process Energy efficiency optimization Installing high efficiency FCs abatement in new tools Adopting green building standard for new buildings Carbon partnerships with customers and suppliers Complete carbon footprint inventory for all fabs Investing in the green technology industry • Greenhouse gas emission reduction goals 1. (2013-2025) Reduce fluorinated greenhouse gas emissions intensity by 65%. Note: 2010 is the base year. 2. (2016-2025) Reduce electricity consumption intensity by 15% in ten years. Note: 2015 is the base year. In addition to the disclosure of greenhouse gas emissions, potential risks and opportunities of climate change, and related management and responding measures in the Corporate Social Responsibility Report, UMC also disclosed relevant information through involvement in international CDP organization initiatives.

The environmental information of UMC in the past five years, such as greenhouse gas emissions, water consumption, None and total weight of waste, will be disclosed in the “UMC Corporate Social Responsibility Report” every year, and verified by a third party. UMC has also formulated the environmental protection policy, climate change policy and water resources management policy, and promoted the reduction plans and targets at various stages as a guideline for continuous improvement.

UMC supports and respects international initiatives such as the International Labor Office Tripartite Declaration of None Principles, the OECD Guidelines for Multinational Enterprises, the UN Universal Declaration of Human Rights, the UN Global Compact, the Responsible Business Alliance (RBA) and other labor and gender equality laws for the workplace, and formulates relevant policies to protect human and labor rights. The UMC Human Rights and Social Participation Committee is responsible for promoting and overseeing human rights policies and specific management plans. For related information, please refer to the UMC website at https://www.umc.com/en/Html/UMC_code_of_conduct. UMC conducts and implements a reasonable employee welfare system; please refer to the employee benefits None of operations overview in this annual report. The factors that decide the salaries of employees include educational background, work performance and market value. No employee will be discriminated against because of their gender, race, religious beliefs, political stance or marital status. UMC complies with local statutory regulations and systems related to leaves, minimum wage, pension, and other mandatory benefits to safeguard the rights of our employees. In order to achieve personal, departmental and company performance goals as well as understand the job performance of employees, UMC conducts a performance evaluation of all employees every year. The information obtained can be used as a reference during employee promotions, training and when distributing compensation.

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Evaluation Item

Yes No

(3) Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis?

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The safety and health education and training at UMC are divided into three categories depending on the nature None of the work: • General safety and health education and training for the entire company • Factory area safety and health education and training organized by each fab • Safety and health education and training formulated by each department depending on its characteristics “Safety First; Safety is Above Production!” is UMC’s commitment to its employees, and is also the basis for UMC to carry out the planning and implementation of necessary safety and health education and training for its work and hazard prevention operations. Based on the organizational structure of UMC, the general training courses for the entire company; the factory area training courses for each fab; and the specific training courses for each department were formulated, allowing employees to develop a safety culture, raising their awareness in work safety, and reducing accidents caused by unsafe behaviors. In addition to the planned courses, topic-based training courses for specific events or major cases are also conducted on a rolling basis from time to time. For instance, the “executive safety culture seminars” for senior executives, the “supervisor safety awareness courses” for specific departments, and the professional trainings carried out by external occupational safety and health experts and scholars for UMC’s occupational safety and health management personnel were organized in 2020. In 2020, a total of 2,082 sessions of education and training were conducted, with 38,776 participants completing the training. The offered education and training also include e-learning courses, allowing employees to acquire safety and health knowledge without being limited by the schedule of the physical courses. In the spirit of “Benefit from Society, Give Back to Society,” UMC actively promotes healthy workplace-related activities. In 2020, UMC promoted a healthy workplace lifestyle themed “2020 Health Care 2.0.” 1. The themed health promoting activities attracted 21,296 participants, and overall satisfaction rate was 95%. Specifically, Q1 Spring - Epidemic Prevention Class In response to the spread of the COVID-19 epidemic, on-site activities in the first quarter have been cancelled and changed to online. At the same time, considering the severity of the epidemic, in order to strengthen colleagues’ understanding of the Company’s epidemic prevention policies, the online e-Check “Epidemic Prevention Class” questionnaire filling activity was conducted to strengthen employees’ correct concept of epidemic prevention. A total of 5,965 colleagues participated in the event, and a total of 5,677 colleagues who answered the correct answers were drawn to obtain small epidemic prevention gifts (multifunctional mask storage clips) and a total of 1,000 gifts were issued. Q2 Summer – Family Care The epidemic has slowed and continued to implement a new life for epidemic prevention. UMC invited authoritative medical doctors from the National Taiwan University Zhudong Hospital to give a speech and teach UMC colleagues how to take care of their parents with the greatest peace of mind, so as to improve the quality of health and living at home. A total of 172 people participated, with an average total satisfaction score of 90.2. Q3 Autumn- Weight Loss and Fat Loss The “Weight Loss and Fat Loss Campaign” is aimed at the health check-up groups concerned for health care activities (BMI greater than 24) and the target physical check-up improvement rate is 5%. A total of 179 colleagues participated in the weight loss class, reaching a weight loss rate of ≥ 5%; a total weight loss of 266.5 kg, and an achievement rate of about 14.5%. A total of 150 people participated in the “Daily Ten Thousand Steps of Healthy Good Habit Activity” and 47 people reached the standard; the total number of days reached was 3,019, the achievement rate was about 31.1%. A total of 329 people participated in the third quarter activities. Q4 Winter - Heart and Liver Defense A total of 7,393 people participated in the reading activities on the “Health Information U-info” platform; a total of 14,373 people participated in the reading activities, 2,202 people clocked in from July to September, and the on- the-job participation rate was 56.1%. “Health Seminar U-Class” theme “Chinese Medicine” Autumn Health Post and “Western Medicine” Cancer Gene Decryption; a total of 457 employees participated and a satisfaction score of 96.2 was achieved. A total of 14,830 people overall participated. 2. 3,829 utilized massage services by visually impaired masseurs 3. 3,568 consulted with in-house physicians 4. 456 donated blood, totaling 722 bags of blood 5. 727 received abdominal ultrasound exam, and satisfaction rate was 96.5% 6. 582 received flu vaccinations, and satisfaction rate was 98% 7. A total of 440 training courses for emergency personnel were conducted, and the training rate was 100%. 8. There were 412 injuries and illnesses and emergency notifications. 9. There were 1,018 new medical examinations. 10. There were 262 high-level health examinations. 11. Administrative services (group health insurance) totaled 2,585 occasions

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Evaluation Item

Yes No

(4) Does the company provide its employees with career development and training sessions?

(5) Does the company comply with relevant regulations and international standards about customers’ health, safety, privacy, advertise and label of goods and services and establish consumer protection policy?

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• Protecting the health of employees and their families The Company provides physical and health checkups for employees, and based on the results, organizes health promotion activities for health management. Special operation inspectors are classified for case management, and doctors are hired to provide on-site health consultation services for employees. Effective health risk management and case management are implemented for all employees with abnormal test results. They are also included into the information system for monitoring and integrate the “health care system,” thereby achieving 100% care rate. 1. In 2020, a total of 3,269 employees in the Company received physical checkup, and satisfaction rate was 93.8%. 2. Health examination reports and questionnaire outcomes were classified according to the risks. Health management and consultation by on-site doctors are then arranged accordingly to achieve 100% follow-up care. • Employee consulting and assistance program To assist employees with physical, mental and spiritual issues, the Company provides each employee with 6 free sessions of individual counseling per year. Appointments for individual counseling are arranged through a one-on-one privacy protection mechanism. In 2020, a total of 310 individuals received the free counseling service and 114 individuals received paid services. In 2020, the UMC Health Center continued to implement health promotion activities that were well-received and supported by employees. UMC’s promotion and cultivation of a healthy workplace is deeply recognized by enterprises. In 2020, the UT site received the Excellent Self-Managed Healthy Workplace certification and obtained the health promotion badge. This award symbolizes the hard work that UMC put into cultivating a healthy workplace. It demonstrates UMC’s active protection of employee health and concern for their physical and psychological well-being.

The UMC training blueprints are based on different job categories and ranks. In addition, to encourage ongoing learning None and career development, company-wide education and training plans for the following year are formulated according to the outcome of the annual executive and employee training needs survey.

UMC commits to continuously strengthen world-class process technology, manufacturing capability, and excellent None service to enhance customer service value. Since the beginning, UMC always valued customers as partners and creates an exceptional business philosophy based on the spirit of “United for Excellence.” UMC works closely with customers to achieve win-win mission and goals, hence rendering customer satisfaction as one of the core company’s values. Customer-oriented behavior is to provide total solutions from a customer perspective to realize and satisfy customer requirements for product and service quality. To achieve this end, UMC has introduced the MyUMC, MyHJTC (for HJ only) and MyUSC (for USCXM only) online service platforms for customers to easily check product status such as order production status, shipping date and product quality data. In addition, the website also provides an Engineering Data Analysis function for customers to analyze product data as needed. In addition to providing customers with information on the process materials for their products through the MyUMC, MyHJTC, MyUSC and MyUSJC online service platforms, UMC has also incorporated the Voice of Customer (VOC) instant online complaint system within the MyUMC, MyHJTC, MyUSC and MyUSJC service platforms for customers to easily access. This interface allows customers to make requests, comments or suggestions about the Company’s products or services at any time. The system replies to the customer within one working day regarding when their request has been processed by the corresponding division. A dedicated person then assigns the customer input to the appropriate division for handling and response, and customers can check the progress at any time on the website.

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Evaluation Item

Yes No

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UMC’s measures for responding to customer complaints must meet customer demand for product and service quality. To this end, there is a regular review for customer complaints, handling progress and the quality of response to ensure that each division not only offers corresponding measures but also provides a subsequent series of related solutions to enhance overall customer satisfaction. UMC collects customer voice feedback in the VOC system and translates them into specific improvement actions for continuous and comprehensive improvement of the Company’s product competitiveness and service quality. MyUMC

MyHJTC (For HJ only)

MyUSC (For USCXM only)

My USJC (For USJC only)

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Evaluation Item

Yes No

(6) Does the company establish a supplier management policy and ask to comply with regulations about environmental protection, labor and human rights, safety, and health?

5. Does the company prepare a Social Responsibility Report that complies with international guidelines and is verified by a third party?

6. If the Company has established the corporate social responsibility principles based on “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies,” please describe any discrepancy between the principles and their implementation:

7. Other important information to facilitate better understanding of the company’s corporate social responsibility practices:

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For consumer protection mechanisms, in order to strictly protect customer-related information, UMC has established an external document management procedure. All specifications and technical documents from customers are strictly controlled by UMC’s internal system. Therefore, we can prevent leakage of customer document and ensure the document is utilized and proceeded appropriately. In the future, UMC will continue to accumulate smart assets, provide better products and services, work with customers to challenge more difficult targets in technology development and production, and share win-win results with customers. UMC is certified with ISO 9001 & IATF 16949 & QC-080000 IECQ HSPM international standards. The Company’s quality policies are based on these standards to provide customers with excellent product quality, reasonable price and excellent and timely service to enhance customer competitiveness. UMC adheres to the principle of continuous improvement. Through cultivating awareness in all employees, and control and technical improvement in design and production, UMC offers products that meet regulatory and customer demand for no harmful substance management, thereby fulfilling the Company’s role as a responsible global citizens to ensure environmental protection and human health and safety. Certificates

Based on UMC’s GG-026-004-C sustainable supply chain management review guidelines for achieving supply chains that None fulfill environmental protection, social responsibility, labor and human rights, safety, health and sustainable development, UMC has formulated evaluations for reviewing the sustainable development of supply chains. The evaluation comprises a set of assessments to rate the sustainability of suppliers, and includes indicators such as delivery time, quality, finance and operations. Suppliers with unfavorable review outcome are offered audit counseling for improvement, and in the case of severe issues, procurement or status as qualified suppliers are terminated. UMC achieved fruitful results in the implementation of its sustainable management strategy 2020. We have been listed on the “DJSI-World” of the Dow Jones Sustainability Indices (DJSI) for 13 consecutive years, keeping pace with the world’s top companies. In Taiwan, we continue to receive the greatest honor of being selected for the “FTSE4Good TIP Taiwan ESG Index” and winning the “Taiwan Corporate Sustainability Report Award” every year. Moreover, we continue to cultivate the aspects of “environment, society and governance,” and have attracted tremendous external recognition.

As of 2020, UMC has publicly issued a non-financial related sustainability annual report for 20 consecutive years. At the None same time, the 2019 UMC Corporate Social Responsibility Report is the 15th annual report disclosing UMC’s corporate sustainable development. This report is compiled according to the GRI Standards of the Global Reporting Initiative, and is verified by a third party (certification body) in accordance with the Account Ability 1000 Assurance Standard. In 2021, UMC will compile the 2020 UMC Corporate Social Responsibility Report that will address major corporate social responsibility issues and stakeholder concerns, and will commission a third party to verify the report. For details of the Corporate Social Responsibility Practice Principles formulated by UMC, please refer to https://www.umc.com/en/Download/major_internal_policies on the UMC website. The UMC corporate sustainable operations found on the UMC website shows no significance inconsistency from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx for Listed Companies. For other details, please refer to the “Corporate Social Responsibility” of this Annual Report and UMC Corporate Social Responsibility Report on the UMC website.

UMC is a current member of Business Council for Sustainable Development of Taiwan (BCSD-Taiwan), Taiwan Corporate Sustainability Forum (TCSF), The Allied Association for Science Park Industries (ASIP) and Taiwan Semiconductor Industry Association (TSIA). In addition to actively promoting environmental safety and health and corporate sustainability activities, UMC also serves as a representative to provide recommendations to government and academic institutions in their formulation and development of corporate social responsibility policies. For other details, please refer to the UMC Corporate Social Responsibility Report and the Corporate Sustainability webpage at https://www.umc.com/en/CSR/ sustainability_overview on the UMC website.

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Ethical Corporate Management and Deviations from “The Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies”

Evaluation Item

Yes No

1. Establishment of ethical corporate management policies and programs (1) Does the company declare its ethical corporate management policies and procedures approved by the Board of Directors, in its guidelines and external documents, implement the policies?

(2) Does the company establish policies to prevent unethical conduct, analyze and evaluate the risk of unethical conduct in operating scope periodically, at least including appropriate precautions against high-potential unethical conduct or listed activities stated in Article 2, Paragraph 7 of the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies? (3) Does the company establish policies to prevent unethical conduct with clear statements regarding relevant procedures, guidelines of conduct, punishment for violation, rules of appeal, and the commitment to implement the policies and recheck the policies periodically?

2. Fulfill operations integrity policy (1) Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts?

(2) Does the company establish an exclusively (or concurrently) dedicated unit supervised by the Board of Directors to be in charge of corporate integrity, implementation, and regularly report to the Board, at least one time a year?

(3) Does the company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it?

(4) Has the company established effective systems for both accounting and internal control to facilitate ethical corporate management, and are they audited by Audit Division based on the results of assessment of the risk of involvement in unethical conduct to examine accordingly the compliance with the prevention programs? Or engage CPAs to carry out the audit?

(5) Does the company regularly hold internal and external educational trainings on operational integrity?

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UMC has formulated the Code of Ethics for Directors and Officers, the Employee Code of Conduct, and the Ethical None Corporate Management Best Practice Principles with approval by the Board of Directors, and the UMC Code of Conduct as regulatory guidelines for all directors, managers and employees of the Company. Please refer to the UMC websites at https://www.umc.com/en/Html/ir_corporate_governance and https://www.umc.com/en/Html/UMC_code_of_conduct.

The Employee Code of Conduct and the UMC Ethical Corporate Management Best Practice Principles are provisions None for addressing moral integrity, conflict of interest avoidance and business entertainment. The Company also establishes a risk assessment mechanism against unethical conduct. Other relevant education, training or tests are conducted from time to time for employee education.

All suppliers have signed the Employment Ethics Terms and Conditions Agreement in which policies and reporting None channels are clearly stated. Furthermore, to strengthen and implement policies on quality, penalties for violating the above Process Change Notification (PCN) are clearly stated in the purchase order in accordance with the UMC Raw Material Supplier PCN Application Management Method (GG-Q12-008-E).

The Corporate Sustainability Committee is the highest-level corporate social responsibility organization within UMC. None The committee formulates the direction and objectives of the Company’s corporate social responsibility and sustainable development, and reports to the Board of Directors annually. (Report Date is Oct. 29, 2020.) Ethical management is only one part of corporate sustainability. For further information, please refer to UMC website at https://www.umc.com/en/ Html/UMC_code_of_conduct.

Please refer to Pages 81-85 of the Employee Code of Conduct for policies and reporting channels. None

In order to facilitate ethical corporate management and issue a reliable, transparent and compliant report, UMC None established an effective accounting system and designed relevant internal control systems based on evaluation results of risks including unethical conduct, code of conduct and regulations compliance. UMC Audit Division directly under the Board of Directors/Audit Committee performs relevant operation audits according to annual audit plans and regularly reports the audit results and improvement follow-up to the Board of Directors/Audit Committee. And through annual internal control and self-assessment, UMC has also conducted a self-review of all fab, department and subsidiary operations to achieve the effectiveness of internal control systems’ design and implementation. In addition, UMC is also listed on the New York Stock Exchange (NYSE) and subject to US regulations for foreign issuers. Since 2006, UMC has complied with the SOX 404 Act and has been audited by the independent auditors annually. To date, the independent auditors have issued unqualified audit reports for UMC’s internal control design and implementation performance.

In accordance with the philosophy of ethical management, UMC has formulated the Code of Ethics for Directors and None Officers, the Employee Code of Conduct and the Ethical Corporate Management Best Practice Principles as regulatory guidelines for all its directors, managers and employees. From top down, these regulations enhance the quality of conduct and professional ethics of the Company and its entire staff. The abovementioned Employee Code of Conduct is implemented in the daily tasks and businesses of all employees through physical and on-line training courses and online self-tests. In 2020, UMC fabs in Taiwan and Singapore have completed the training courses and passed relevant tests.

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Evaluation Item

Yes No

3. Operation of the integrity channel (1) Does the company establish both a reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up?

(2) Does the company establish standard operating procedures for confidential reporting on investigating accusation cases and follow-up?

(3) Does the company provide proper whistleblower protection?

4. Strengthening information disclosure Does the company disclose its ethical corporate management policies and the results of its implementation on the company’s website and MOPS?

5. The company has established its ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies; please describe any discrepancy between the policies and their implementation.

6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies).

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Implementation Status Deviations from “The Corporate Governance Best-Practice Abstract Explanation Principles for TWSE/TPEx Listed Companies” and Reasons

Article 6 of the Employee Code of Conduct describes measures against ethics and fraud violations, and protective and None anti-retaliation measures for reporting. Employees may report violations to relevant management and supervisory units through e-mail or hotlines, and the head of the Audit Division is promptly notified of the report.

After receiving a fraud report, UMC will convene an investigative team to investigate the suspected fraud described in None the report. Once the investigation results are confirmed, those found violating or breaching the Code of Conduct are to face adequate corrective action by the Company depending on the severity of the incident. The Company will protect any employee reporting ethics violation or fraud and members of the investigative team from unfair treatment or retaliation. For details, please refer to Pages 81-85 of the Employee Code of Conduct. The Company will protect any employee reporting ethics violation or fraud and members of the investigative team from None unfair treatment or retaliation. For details, please refer to Pages 81-85 of the Employee Code of Conduct.

UMC discloses its principles on ethical corporate management, relevant regulations and status of implementation on its None website and MOPS. In addition, UMC discloses relevant information in its CSR Report.

UMC has formulated the Code of Ethics for Directors and Officers, the Employee Code of Conduct and the Ethical Corporate Management Best Practice Principles. All directors, managers and employees of the Company shall abide by the provisions of these Codes and related regulations. For employee compliance with the Employee Code of Conduct, please refer to Pages 81-85 of the Employee Code of Conduct in this annual report. For other relevant communications such as employee rights, employee care, investor relations, supplier relationships and stakeholder rights, please refer to the UMC Corporate Social Responsibility Report and the Corporate Sustainability webpage at https://www.umc.com/en/CSR/sustainability_overview on the UMC website.

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Specific Measures for Ethical Management in 2019-2020

Item Implementation Status

Legal Compliance • Inter-division regulatory compliance is coordinated by the Legal and Compliance Division, and other regulations are regularly reviewed by relevant divisions. • In 2019, the Legal and Compliance Division coordinated overall regulatory compliance with the EU General Data Protection Regulation. • With respect to the frequent rule changes of the Export Administration Regulations of the United States in 2020 and in the future, the Legal and Compliance Division coordinate overall legal compliance in this regard. • Legal and Compliance Division expects China will in the near future enact new export control related laws and/or regulations to counteract the rule changes to the Export Administration Regulations of the United States, and will coordinate overall legal compliance in this regard. • In 2020, the Legal and Compliance Division conducted trainings for insider trading targeting all employees, managers and executives.

UMC Code of Conduct • The content of the Codes is reviewed biennially: Implementation 1. Review of the Employee Code of Conduct was completed in February 2020. 2. Relevant penal provisions were added to the Employee Code of Conduct in December 2017. • Major violations of employee ethics are reported to the Audit Committee on a quarterly basis. In 2020, no major ethical violations were reported. • Employee Code of Conduct education and testing were conducted in July 2020, with 100% completion rate. • Employee Code of Conduct training course for new employees: 224 participants and a total of 336 hours in 2019; and 305 participants and a total of 457.5 hours in 2020.

UMC fair competition, intellectual • Litigation cases in each quarter of 2020 were reported to the Audit Committee. property rights violations • The UMC Antitrust Policy for promoting fair competition can be found on the UMC website, and online testing is conducted regularly. Online testing for the Fair Trade Law (i.e. the Antitrust Law) was conducted in December 2020. • For intellectual property rights education, three weekly training courses are offered to new employees: Introduction to UMC Intellectual Property Rights, Trade Secret and Basic Legal and Risk Awareness for Incoming Data. In the first half of 2019 we conducted in-depth advocacy of protection of intellectual property rights via the eUMC intranet site for all employees and the Company will maintain such advocacy through electronic checks or a dedicated compliance column. • Introduction to UMC Intellectual Property Rights training course for new employees: 285 participants and a total of 71.3 hours in 2019; and 797 participants and a total of 199.3 hours in 2020. • Trade Secrets training course for new employees: separate from UMC Intellectual Property Rights as an individual course since December 2018 with 285 participants and a total of 45.6 hours in 2019; and 797 participants and a total of 127.5 hours in 2020. • Basic Legal and Risk Awareness for Incoming Data training course for new employees: implemented since April 2018. A total of 285 participants and a total of 71.3 hours in 2019; and 797 participants and a total of 199.3 hours in 2020.

Financial reporting related internal • Annual audit by external auditors and internal Audit Division. control • Results of internal audits for 2020 were reported at the Audit Committee/Board of Directors meetings on a quarterly basis.

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Code of Ethics for Directors and Officers

The Board of Directors (the “Board”) of United Microelectronics by the Chairman of the Board or as part of an approved compensation Corporation (the “Company”) has adopted the following Code of Ethics or expense reimbursement program. (the “Code”) for directors and officers of the Company. This Code applies 2. Corporate opportunities. to all directors and officers. Directors and officers are prohibited from: (a) taking for themselves personal opportunities that are discovered through the use of the No code or policy can anticipate every situation that may arise. Accordingly, Company’s property, information or position; (b) using the Company's this Code is intended to serve as a source of guiding principles for property, information, or position for personal gain; or (c) competing with directors and officers. Directors and officers are encouraged to bring the Company. questions about particular circumstances that may involve one or more of 3. Corporate assets; confidentiality. the provisions of this Code to the attention of the Chairman of the Board, Directors and officers are expected to protect the assets of the Company who may consult with inside or outside legal counsel as appropriate. and use them efficiently to advance the interests of the Company. Those assets include tangible and intangible assets, such as confidential Directors who also serve as officers of the Company should read this Company information. Directors and officers should maintain the Code in conjunction with the Code of Ethics for employees governing the confidentiality of information entrusted to them by the Company and any business conduct of Company employees. other confidential information about the Company that comes to them, 1. Conflict of Interest. from whatever source in the course of the Company’s business, in their Directors and officers must avoid any conflicts of interest between the capacity as director or officer except when disclosure is authorized or director or officer and the Company. Any situation that involves, or legally mandated. For purposes of this Code, “confidential information” may reasonably be expected to involve, a conflict of interest with the includes all non-public information relating to the Company, its customers Company should be disclosed promptly to the Chairman of the Board, or suppliers. such as extending a loan to, providing a guarantee of the obligations of, 4. Compliance with laws, rules and regulations; fair dealing. conducting a material transaction with, selling products to or purchasing Appropriate policies and procedures are in place for compliance by products from a director or officer (or a member of his or her immediate directors and officers, with laws, rules and regulations applicable to the family1). Company, including insider trading laws. Transactions in the Company’s A “conflict of interest” can occur when a director or officer’s personal securities are governed by the Company's policies with respect to trading interest is adverse to - or may appear to be adverse to - the interests of such securities. the Company as a whole. Conflicts of interest also arise when a director Directors and officers shall endeavor to deal fairly with the Company's or officer, or a member of his or her immediate family, receives improper customers, suppliers, competitors and employees. No director or personal benefits as a result of his or her position as a director or officer officer should take unfair advantage of anyone through manipulation, of the Company. concealment, abuse of privileged information, misrepresentation of This Code does not attempt to describe all possible conflicts of interest material facts, or any other intentional unfair-dealing influence. that could develop. Some of the more common conflicts from which 5. Accurate Reports and other Public Communications. directors or officers must refrain are set out below: It is crucial that all books of accounts, financial statements and records • Relationship of the Company with third parties. Directors or officers of the Company reflect the underlying transactions and any disposition of may not engage in any conduct or activities that are inconsistent with assets in a full, fair, accurate and timely manner. All officers and directors the Company's best interests or that disrupt or impair the Company's who are involved in the Company’s disclosure process are required to relationship with any person or entity with which the Company has or know and understand the disclosure requirements applicable to the proposes to enter into a business or contractual relationship. Company that are within the scope of their responsibilities, and must • Compensation from non-Company sources. Directors or officers may endeavor to ensure that information in documents that the Company files not accept compensation (in any form) for services performed for the with or submits to the ROC Securities and Futures Bureau and the U.S. Company from any source other than the Company. Securities and Exchange Commission, or otherwise disclosed to the public, • Gifts. Directors or officers and members of their immediate families is presented in a full, fair, accurate, timely and understandable manner. may not accept gifts from persons or entities who deal with the Additionally, each individual involved in the preparation of the Company’s Company in those cases where any such gift has more than a nominal financial statements must prepare those statements in accordance value or where acceptance of the gifts could create the appearance of with our internal accounting policies, which take into account generally a conflict of interest. accepted accounting policies set forth by the IFRSs, IASs, IFRIC and • Personal use of Company assets. Directors or officers may not use SIC, which are endorsed by Financial Supervisory Commission (TIFRSs) Company assets, labor or information for personal use unless approved and relevant laws and regulations applicable to the Company, ensure

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Code of Ethics for Directors and Officers (Continue)

they are consistently applied, and follow any other applicable accounting severity of the violation, whether the violation appears to have been standards and rules so that the financial statements materially, fairly and intentional or inadvertent and whether the individual in question had been completely reflect the business transactions and financial condition of the advised prior to the violation. Company. 6. Encouraging the reporting of any illegal or unethical behavior. 1. "Immediate family" shall include a person's spouse, parents, children, Directors and officers should promote ethical behavior and take steps to and relatives within three degrees of kinship. ensure the Company: (a) encourages employees to talk to managers and other appropriate personnel when in doubt about the best course of action in a particular https://www.umc.com/upload/media/08_Investors/Corporate_ situation; (b) encourages employees to report violations of laws, rules, Governance/Major_Internal_Policies/Code_of_Ethics_chi.pdf for the regulations, the Company's internal rules, or the Code of Ethics for information shown above. employees to appropriate personnel; and (c) informs employees that the Company will not allow retaliation for reports made in good faith. 7. Compliance Procedures. Any suspected violations of this Code should be reported promptly to managers, the internal auditor, the Audit Committee or other personnel as appropriate, or in the case of an officer in accordance with the procedures set forth in the Code of Ethics for employees. No one will be subject to retaliation because of a good faith report of a suspected violation. Violations will be investigated by the Board or by a person or persons designated by the Board. Any waiver of this Code may be made only by the Board and the details of the waiver, including name and title of the receiving party of the waiver, date of the board meeting when the waiver is granted, the validity period of waiver, reason to grant the waiver and principle for granting waiver, will be promptly disclosed to shareholders and others, as required by applicable law and the Taiwan Stock Exchange listing standards. All requests for waivers or review by the Board should be made to one of the Company’s independent directors. 8. Enforcement of this Code of Ethics The Board shall determine appropriate actions to be taken in the event of violations of this Code and set forth procedure for the person who is determined to have violated the Code in the event of disagreement with the determination. Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to this Code. In determining the proper course of action in a particular case, the Board shall take into account all relevant information, including the nature and

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Employee Code of Conduct

I. Objective: The company’s objective in establishing this "Code of Conduct" is to promote ethics, honesty and professionalism within the company and among its employees. The company believes in being an integrated organization and that the action of every employee affects its entire organization and reputation. Any employee is obligated to strive for the extension of the Company’s interests within legal limits, and is responsible for preventing damages or loss to the Company’s interests. The company expects all employees to abide by this Code in carrying out their duties and functions so as to preserve public trust and to ensure the company’s sustainable growth and development. II. Scope: This policy and its related procedures and measures are applicable to all employees (including senior executives and officers). III. Content: 1. Morality and integrity 1-1. The company dedicates itself to abide by commercial ethics and firmly believes in the values of an integrated organization. This guideline has been introduced to outline applicable legal requirements and company policy required of the company and all employees. Any company employee with any query concerning ethics or legal matters is advised to consult with his or her division head or the company’s legal division for guidance. 1-2. Ethical standards shall not be confined to legal compliance. Each individual shall be obligated to conduct all businesses ethically and to avoid any activity that would lead to a conflict of interest. 1-3. The principles governing ethics and integrity are comprised of: 1-3-1. Conducting all business with integrity and truthfully recording the process of all business dealings. 1-3-2. Ensuring proper confidentiality of all commercial information when executing a mission and retaining complete commercial and operational records, as well as respecting the commercial assets and intellectual properties of the company, each client and each strategic partner of the company. 1-3-3. All company accounting ledgers, invoices, records, accounting entries, capital and assets must be securely cataloged and safeguarded to ensure that all company transactions and business dealings can be fairly and accurately reflected. It is strictly forbidden to fabricate, falsify or create misleading claims or to fabricate or falsify any accounting entries, records, financial reports or any other related documents, or to make any misleading claims or records, or intentionally hide or cover the state of the company’s transactions; nor it is permitted to open, maintain or access any illegitimate accounts with any bank or a third party institution with which to conduct account transactions related to the company. 1-3-4. It is forbidden to destroy, alter or forge any pertinent records that may likely be linked to an investigation, litigation or legal related settlement proceeding. 1-3-5. When coming across incidents involving alleged unethical conduct or suspicions of violation to this rule, all personnel are obligated to inform the company’s management. 2. Respect for individuals and customers: 2-1. The company respects the privacy and integrity of every employee and upholds strict standards of privacy and confidentiality for individual personal data. Treatment of customers and commercial data concerning other individuals shall also be bound by this principle of confidentiality. 2-2. Each employee should endeavor to deal fairly with the company’s customers, suppliers, competitors and other employees. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice. 2-3. The company is to maintain open communication channels that would encourage all employees to participate in company affairs and to express their opinions to supervisors of all levels.

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3. Avoidance of conflict of interest: 3-1. Prior to engaging in any business, investment or related activity that may lead to a conflict of interest between personal and professional relationships, the employee must fully disclose such conflict of interest to, and the potential conflict must be subject to review by, the chairman & president’s office. More detailed guidelines on conflicts of interest are set forth in the company’s Rules of Integrity for the employees (as appendix I). All company personnel are obligated to file a report with the Human Resources Division of the company citing any probable conflict of interest that might concern the individual or the company. 3-2. Employees should avoid incidents that may involve a probable conflict of interest - for instance, an employee moonlighting at a non-affiliated company, or an employee negotiating or conducting business transactions with the company which would benefit such employee or the employee’s family or relatives personally. Employees are prohibited to (a) take for themselves personal opportunities that are discovered through the use of corporate property, information or position, (b) use corporate property, information or position for personal gain and (c) compete with the company. 3-3. Any action that may possibly transfer the Company’s resources or interests to employees, their relatives or friends is, in principle, prohibited. If such action is considered as beneficial for both the individual and the Company, it may be exceptionally permitted and proceeds only after obtaining the Chairman’s approval. Please file a report with Appendix II. 3-4. All employees are prohibited to provide or disclose openly company confidential information without securing proper authorization from the company. It is strictly forbidden to trade confidential or insider information for individual gain, or to benefit others or put the company’ s interest in jeopardy. 3-5. All employees are forbidden to engage in any of the aforesaid activities through an agent, partner or any representative only to circumvent this guideline. 3-6. All personnel that participate in the review, evaluation and selection of vendors should avoid any circumstance that has the potential to bias a fair decision. 3-7. Unless otherwise approved by the board of directors in advance and in compliance with all applicable laws, employees are not permitted to take out or accept company loans on behalf of oneself or one’s relative, or demand the company to issue a liability guarantee. 3-8. Unless for company business, advanced authorization shall be sought prior to accessing any of the company’s services, equipment, facilities, properties or any other form of resources. All employees should protect the company’s assets and ensure their efficient use. The company’s assets, whether tangible or intangible, are to be used only by authorized employees or their designees and only for the legitimate business purposes of the company. 3-9. We request employees who have specific business and selected positions for management’s needs and employees of designated departments to make an annual declaration of interests. If employees themselves or their relatives (up to the third degree) have investments in and/or are currently employed by UMC customers, distributors, distributors’ customers, suppliers, or competitors, the status of such investments and/or employment should be reported in the "declaration of interests" system. The Human Resources Division will then be responsible for data collection and summarization in order to report results to senior executives, the President and the Chairman. However, in the case where such investment is made on firms that the Company invests in, have openly agreed to be invested in, or are of publicly listed companies, the report to superiors is not required. 3-10. All employees shall not exploit opportunities for information access (including but not limited to attendance at meetings related to sales and production, annual planning, policy launching) to disclose the Company's confidential information to any external parties (including but not limited to the Company's customers, suppliers, or any other parties who are not obliged to know). 4. Gratuity and business reception: 4-1. All employees are prohibited to accept from or give to any customer, supplier or contingent party related to the company any kickbacks or any other form of illicit gain. 4-2. All employees are strictly forbidden to accept gifts from the company’s vendors valued at over one thousand N.T. dollars (NTD 1,000), or any cash, or any equivalent in monetary goods, i.e. gift certificates, check, stock certificate and the like. 4-3. All employees are forbidden to accept lavish entertainment or reception. 4-4. For the purpose of maintaining a normal business relationship, gifts that are to be presented to business counterparts should be imprinted with the company’s logo. 4-5. It is prudent to conform to the general practice of common business decorum when accepting or arranging any type of business reception, and all employees shall refrain from being excessively lavish and refrain from incurring significant or unnecessary expenses.

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5. Full, fair, accurate, timely and understandable disclosure: 5-1. It is crucial that all books of account, financial statements and records of the company reflect the underlying transactions and any disposition of assets in a full, fair, accurate and timely manner. 5-2. All employees who are involved in the company’s disclosure process are required to know and understand the disclosure requirements applicable to the company that are within the scope of their responsibilities, and must endeavor to ensure that information in documents that the company files with or submits to the Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan, ROC and the U.S. Securities and Exchange Commission, or that is otherwise disclosed to the public, is presented in a full, fair, accurate, timely and understandable manner. 5-3. It is critically important that financial statements and related disclosures be free of material errors. Employees are prohibited from knowingly making or causing others to make a materially misleading, incomplete or false statement to an accountant or an attorney in connection with an audit or any filing with any governmental or regulatory entity (such as the ROC Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan, ROC, the U.S. Securities and Exchange Commission or the New York Stock Exchange). 5-4. No individual, or any person acting under his or her direction, shall directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any of the company’s auditors if he or she knows (or should know) that his or her actions, if successful, could result in rendering the company’s financial statements materially misleading. 6. Safeguard Associated with the Implementation of Code of Conduct and Reporting of Fraudulent Act: 6-1. All employees are to comply with applicable governmental laws, rules and regulations, and the company’s regulations and procedures. 6-2. Employees, suppliers, customers or other related stakeholders can report illegal activity or major misconduct by UMC managers or staff (“whistleblowing report”) through any of the following channels: 6-2-1. Send an email report to the email address [email protected] which will then automatically forward a copy of the report to the Audit Committee, ADT Level 1 Manager, HR Level 1 Manager, and Legal and Compliance Level 1 Manager. 6-2-2. Send an email report directly to any of the following: ADT Level 1 Manager: [email protected]; HR Level 1 Manager: HR_ [email protected]; Legal and Compliance Level 1 Manager :[email protected]; or the Audit Committee: Audit_committee@umc. com). 6-2-3. Report the issue by calling the whistleblowing direct phone line at: 0800-024-399 (toll free) or 03-5782258 ext 31425. 6-2-4. Report the issue directly to a manager in HR or any other appropriate department/division. Once the manager receives the report, they will immediately notify the ADT Level 1 Manager. Once a whistleblowing report has been received, the Company will assemble an investigation team to conduct a thorough inquiry into the allegations made in the report. More detailed guidelines on reporting processes are set forth in the company’s Whistleblower Program. 6-3. For the person reporting a violation of the Code of Conduct or engagement in fraud as well as any other related employee involved in all subsequent investigations of the violation, the company will provide safeguard measures ensuring them against any unfair retaliation or treatment. 6-4. Those found violating or breaching the Code of Conduct are to face adequate corrective action by the company depending on the severity of the incident. It is the responsibility of each employee to carefully read, understand and comply with this Code of Conduct and, as needed, to seek clarification on any point. Questions regarding any legal or ethical requirements should be directed to the director of the Human Resources or the company’s legal division. 7. Waivers and amendments: 7-1. The company may waive application of this Code of Conduct to employees in certain limited situations. Any waivers of the provisions of this Code of Conduct for executive officers may be granted only in exceptional circumstances by the board of directors. The company will promptly disclose to its shareholders any such waivers granted to any of its executive officers and the reason for such waiver. 7-2. Amendments to this Code of Conduct shall be promptly disclosed by the company. It is each individual’s responsibility to maintain familiarity with this Code of Conduct as the company reviews and revises its content from time to time.

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Employee Code of Conduct (Continue)

(Appendix) Rules of Employee Integrity 1. Objective: To maintain the common practice of integrity and business efficiency, the Rules of Employee Integrity has been specially stipulated. 2. While employees of the Company are engaged in all sorts of business practices, they should conform to the following principles: 2-1. Any employee is obligated to strive for the extension of the Company’s interests within legal limits. 2-2. Any employee is responsible of preventing damages or loss of the Company’s interests. 3. Rules of Integrity: 3-1. Employees undertaking the business with vendors should adhere to the following principles: 3-1-1. Be honest and fair while selecting vendors. Select those who present products/services with the most competitive quality, prices, and delivery. 3-1-2. No accepting of rake-offs or other illegitimate interests from vendors. 3-1-3. Employees and relatives are strictly forbidden to accept any gifts, cash, or other valuables worth of NTD 1,000 or above from vendors. 3-1-4. In principle, employees are prohibited from accepting entertainment reception apart from simple meals. For any question regarding this principle, ask a direct superior. 3-2. Employees in marketing or sales-related departments should adhere to the following principles when dealing with customers: 3-2-1. Be honest and fair while transacting with customers. 3-2-2. Customers’ offer of gifts, cash, or other valuables should be courteously declined. In the case where such offer cannot be declined or returned and its value exceeds USD 100.00, please turn the item to the Employee Welfare Committee to be handled on a case-by-case basis. 3-3. All employees should prevent any of the following from occurring and affecting the Company’s interests: 3-3-1. Through access to one’s own duties, directly or indirectly seeking illegitimate interests or engaging in fraudulent activities. 3-3-2. Seeking illegitimate interests through one’s authority or identity to access duties not run or supervised by oneself. 3-3-3. Defrauding others through access to one’s own duties. 3-3-4. Invading or stealing equipment or property from the company. 3-3-5. Engaging in fraudulent activities such as over-filing for traveling expenses or overtime compensations or applying for inaccurate expenses. 3-4. All employees have the responsibility of maintaining a clean image of the Company, which includes no gossiping about colleagues or superiors outside of the office. 3-5. All supervisors must possess the ability of judging the rights and wrongs on integrity issues and should never use not regulated as excuses for any debatable conduct. Besides being honest themselves, they should lead subordinates in establishing a work environment practicing integrity. 3-6. Acceptance inspectors or authenticator of each business operation as well as accounting examiners have the responsibility of reporting upon discover of those violating the Rules of Integrity.

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4. Rewards and Punishment: 4-1. Rewards for reporting: Correcting or reporting on violations of integrity rules is an action of protecting the rights of employees, shareholders, and the Company. Once found to be factual, suitable rewards will be given to the reporter. 4-2. Punishment: 4-2-1. Punishment will be administered under any of the following occurrences: A. When an employee violates the Rules of Integrity. B. When a direct supervisor: a. Causes his subordinate’s violation of the integrity rules due to his improper supervision and guidance. b. Shelters a violator of the integrity rules with knowledge of the incident. C. When an acceptance inspector, authenticator, or examiner of each business operation: a. Overlooks a violation of the integrity rules due to his negligence on the job. b. Fails to report on any violation of the integrity rules found during acceptance inspecting, authenticating, or examining. 4-2-2. Provisions on Punishment: In addition to recovering and returning the illegitimate benefits to the original owner or company, violators of the integrity rules will be inflicted, in proportion to the weight of the incident, with the following different punishments or the combination of them. A. According to internal punishment regulations B. Withholding of the performance cash award, year-end award and bonus C. Demotion of job grade D. Removal from post E. Legal action 4-3. Confession 4-3-1. In the case where the violator of the integrity rules makes the confession afterwards, his punishment may be reduced or waived. 4-3-2. In the case of a group violation of the integrity rules, the first one making the confession may be waived from his punishment.

Please refer to the website https://www.umc.com/upload/media/08_Investors/Corporate_Governance/Major_Internal_Policies/Employee_Code_of_Conduct-e.pdf.

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UMC Ethical Corporate Management Best Practice Principles

Article 1 Article 7 In order to foster a corporate culture of ethical management and Company shall establish a risk assessment mechanism against sound development , the company is advised to adopt these principles unethical conduct, analyze and assess on a regular basis business applicable to its subsidiaries and other institutions or juridical persons activities within their business scope which are at a higher risk of which are substantially controlled by such company. being involved in unethical conduct, and establish prevention Article 2 programs accordingly and review their adequacy and effectiveness on When engaging in its commercial activities, directors, managers, a regular basis. employees, and agents or persons having substantial control over Article 8 such companies ("company personnel") shall not directly or indirectly The company shall request their directors and senior management offer, promise to offer, request or accept any improper benefits, nor to issue a statement of compliance with the ethical management policy commit unethical acts including breach of ethics, illegal acts, or and require in the terms of employment that employees comply breach of fiduciary duty ("unethical conduct") for purposes of acquiring with such policy. The company clearly specifies in its rules and or maintaining benefits. external documents the ethical corporate management policies and Article 3 the commitment by the board of directors and the management on "Benefits" in these Principles means any element of value, including rigorous and thorough implementation of such policies, and carries money, endowments, commission, positions, services, preferential out the policies in internal management and in commercial activities. treatment or rebates of any type or in any name. Benefits received or The company shall compile documented information on the ethical given occasionally in accordance with accepted social customs management policy, statement, commitment and implementation and that do not adversely affect specific rights and obligations shall be mentioned in the first and second paragraphs and retain said excluded. information properly. Article 4 Article 9 The company shall comply with the Company Act, Securities and The company engages in commercial activities in a fair and transparent Exchange Act, Business Entity Accounting Act, Political Donations Act, manner based on the principle of ethical management. Anti-Corruption Statute, Government Procurement Act, Act on Recusal Prior to any commercial transactions, the company will take into of Public Servants Due to Conflicts of Interest, TWSE/GTSM listing consideration the legality of their agents, suppliers, clients, or other rules, or other laws or regulations regarding commercial activities, as trading counterparties and whether any of them are involved in the underlying basic premise to facilitate ethical corporate unethical conduct, and will avoid any dealings with persons so management. involved. Article 5 Article 10 The company shall abide by the operational philosophies of honesty, When conducting business, the company and its personnel may transparency and responsibility, base policies on the principle of not directly or indirectly offer, promise to offer, request, or accept any good faith and establish good corporate governance, risk control improper benefits in whatever form to or from clients, agents, and management mechanisms to create an operational environment contractors, suppliers, public servants, or other stakeholders. for sustainable development. Article 11 Article 6 When directly or indirectly offering a donation to political parties, According to its preceding policy, the company shall prescribe specific organizations or individuals participating in political activities, the ethical management practices and programs to deter unethical company and its personnel shall comply with the Political Donations conduct ("prevention programs"), including operational procedures, Act and their own relevant internal operational procedures, and shall guidelines, and training. not make such donations in exchange for commercial gains or business advantages.

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UMC Ethical Corporate Management Best Practice Principles (Continue)

Article 12 supervising the implementation of the ethical corporate management When making or offering donations and sponsorship, the company policies and prevention programs, and report to the board of directors and its personnel shall comply with relevant laws and regulations and annually. internal operational procedures, and shall not surreptitiously engage Article 18 in bribery. The personnel of the company shall comply with laws and regulations Article 13 and the prevention programs when conducting business. The company and its personnel shall not directly or indirectly offer Article 19 or accept any unreasonable gifts, hospitality or other improper benefits The company shall adopt policies for preventing conflicts of interest to establish business relationship or influence commercial to identify, monitor, and manage risks possibly resulting from unethical transactions. conduct, and shall also offer appropriate means for directors, Article 14 managers, and other stakeholders attending or present at board The company and its personnel shall observe applicable laws and meetings to voluntarily explain whether their interests would potentially regulations, internal operational procedures, and contractual conflict with those of the company. provisions concerning intellectual property, and may not use, disclose, Article 20 dispose, or damage intellectual property or otherwise infringe The company shall establish effective accounting systems and internal intellectual property rights without the prior consent of the intellectual control systems for business activities that may possibly be at higher property rights holder. risk of being involved in unethical conduct, not have under-the-table Article 15 or secret accounts, and conduct reviews regularly so as to ensure that The company shall engage in business activities in accordance with the design and enforcement of the systems are showing results. applicable competition laws and regulations, and may not make rigged The internal audit unit of the company shall devise relevant audit plans bids, establish output restrictions or quotas, or share or divide markets based on the results of assessment of the risk of involvement by allocating customers, suppliers, territories, or lines of commerce. in unethical conduct, which plans shall include parties to audit and Article 16 audit scope, items and frequency etc., and examine accordingly the In the course of research and development, procurement, manufacture, compliance with the prevention programs. The internal audit unit provision, or sale of products and services, the company and its may engage a certified public accountant to carry out the audit, personnel observe applicable laws and regulations and international and may engage professionals to assist if necessary. The results standards to ensure the transparency of information about, and of examination in the preceding paragraph shall be reported to senior safety of, their products and services. They shall also adopt and management and the ethical management team and reduced to writing publish a policy on the protection of the rights and interests of in the form of an audit report to be submitted to the board of directors. consumers or other stakeholders, and carry out the policy in their Article 21 operations, with a view to prevent their products and services from The company establishes "UMC Code of Conduct", "UMC Board of directly or indirectly damaging the rights and interests, health, and Directors and Managers Code of Ethics", and "UMC Employee Code safety of consumers or other stakeholders. of Conduct" to guide directors, supervisors, managers, employees, Article 17 and substantial controllers on how to conduct business. The personnel of the company shall exercise the due care of good Article 22 administrators to urge the company to prevent unethical conduct, The company shall periodically organize training and awareness while always reviewing the results of the preventive measures and programs for company personnel, and should execute reward and continually making adjustments so as to ensure thorough discipline systems according to the relevant rules of the company, implementation of its ethical corporate management policies. so they understand the companies' resolve to implement ethical To achieve sound ethical corporate management, the relevant corporate management, related policies, prevention programs, and competent authority shall be responsible for establishing and the consequences of engaging in unethical conduct.

87 United Microelectronics Corporation | Annual Report 2020

UMC Ethical Corporate Management Best Practice Principles (Continue)

Article 23 The company shall establish a whistle-blowing system and guarantee the confidentiality of the identity of whistle-blowers and the content of reported cases. Article 24 The company shall adopt and publish a well-defined disciplinary and appeal system for handling violations of the ethical corporate management rules, and shall properly make the announcement on the company's internal website including the title and details of the violation, and the actions taken in response. Article 25 The company shall continuously assess the promotional effectiveness promotion of its ethical management policy. The company shall also disclose the measures taken for implementing ethical corporate management, the status of implementation, and the effectiveness of promotion on company websites, annual reports, and prospectuses, and shall disclose ethical corporate management best practice principles on the Market Observation Post System (MOPS). Article 26 The company shall at all times monitor the development of relevant local and international regulations concerning ethical corporate management and encourage their directors, managers, and employees to make suggestions, which the company will base its review and improvements for its adopted ethical corporate management policies and measures in order to achieve better implementation of ethical management. Article 27 The principles shall be implemented after the board of directors grants approval. The same procedure shall be followed when the principles have been amended. Please refer to the website https://www.umc.com/upload/media/08_ Investors/Corporate_Governance/Major_Internal_Policies/UMC_ Ethical_Corporate_Management_Best_Practice_Principles_eng.pdf

88 Corporate Governance Report

Internal Control System Execution Status Statement of Internal Control System 5. Base on the findings of the assessment mentioned in the preceding Based on the findings of self-assessment, UMC states the following with paragraph, UMC believes that, on December 31, 2020, its internal regard to its internal control system during the year 2020. control system (including its supervision and management of 1. UMC acknowledges and understands that establishing, operating subsidiaries), had effectively assured that the following objectives had and maintaining an internal control system are the responsibilities of been reasonably achieved during the assessing period: effectiveness its Board of Directors and management, and such a system has been and efficiency of operations, reliability, timeliness, transparency of our established. The purpose of establishing the internal control system reporting, and compliance with applicable rulings, laws and regulations. is to reasonably assure the following objectives: The effectiveness 6. This Statement is an integral part of the UMC’s annual report and and efficiency of operations (including profitability, performance and prospectus, and will be made public. Any falsehood, concealment, or the safeguarding assets); reliability, timeliness, transparency of our other illegality in the content made public will entail legal liability under reporting, and compliance with applicable rulings, laws and regulations. Articles 20, 32, 171 and 174 of the Securities and Exchange Act. 2. The internal control system has inherent limitations. No matter how 7. This Statement was passed by the Board of Directors in their meeting perfectly designed, an effective internal control system can only held on Feb. 24, 2021, with none of eight attending directors expressing provide reasonable assurance of accomplishing the aforementioned dissenting opinions, and the remainder all affirming the content of this three objectives. Moreover, the effectiveness of an internal control Statement. system may be subject to changes of environmental or circumstances. Nevertheless, our internal control system contains self-monitoring mechanism and UMC takes corrective actions whenever a deficiency United Microelectronics Corporation is identified. 3. UMC evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing Establishment of Internal Control Systems by Public Companies (herein below, the “Regulations”). The criteria adopted by the Regulations identify five components of internal control based on the process of management control: (1) control environment, (2) risk Chairman: Stan Hung assessment, (3) control activities, (4) information and communication, and (5) monitoring activities. Each component further contains several items. Please refer to the Regulations for details. 4. UMC has evaluated the design and operating effectiveness of its President: S C Chien internal control system according to the aforesaid Regulations.

President: Jason S Wang

Feb. 24, 2021

If a Certified Public Accountant (CPA) was Engaged to Conduct a Special Audit of the Internal Control System, Provide its Audit Report: According to “Regulations Governing Establishment of Internal Control Systems by Public Companies,” the Company was not required to engage a certified public accountant (CPA) to conduct any special audit of the internal control system in 2020.

89 United Microelectronics Corporation | Annual Report 2020

Legal Liabilities of Company and Employees, Company Penalties Toward Employee Violation of Company Regulations, Key Oversights and Improvement

None.

Major Resolutions and Implementation Status of the Shareholders’ Meeting and the Board of Directors’ Meetings The Major Resolutions from the Shareholders’ Meeting The Company’s 2020 Annual General Meeting was held at No.2, Prosperity 1st Rd., Hsinchu Science Park (101 Meeting Room of the Allied Association for Science Park Industries) on June 10, 2020. The resolutions approved by the shareholders present in person or by proxy and its implementation status were as follows:

Items Resolutions from the Annual General Meeting Implementation Status

1. Acceptance of the 2019 business report and financial • In 2019, UMC’s sales revenue was NTD 148,201,641 thousand, and full-year net income statements. reached NTD 9,707,614 thousand, leading to an earnings per share of NTD 0.82.

2. Acceptance of the 2019 Earning Distribution Chart. • Distribution of 2019 earnings with cash dividend of NTD 9,765,154,720. • The ex-dividend record date was set for July 21, 2020, and cash dividend for common shares was paid on August 5, 2020.

3. Approval of issuing Restricted Stock Awards for • Implemented in accordance with resolution and issued gratuitously 200,030,000 shares of employees. common stock on September 1, 2020.

4. Approval of the amendment of the Company’s Articles • Implemented in accordance with resolution. of Incorporation.

5. Approval of the issuance plan of private placement for • Considering market conditions, it was resolved to terminate the private placement offering by common shares, preferred shares (including convertible the 21st meeting of the Board of Directors, 14th term. preferred shares), DRs (including but not limited to ADS), or Euro/Domestic convertible bonds (including secured or unsecured corporate bonds). The amount of shares is proposed to be no more than 10% of total common shares issued plus the total common shares represented by the above equity-type securities which are fully issued.

90 Corporate Governance Report

Major Resolutions and Implementation Status of the Shareholders’ Meeting and the Board of Directors’ Meeting (Continue)

The Major Resolutions from the Board of Directors’ Meetings Meeting Date Major Resolutions

2020.02.26 • Approved the 2019 Business Report and Financial Statements. • Approved the 2019 distributable compensation for employees and directors. • Approved the 2019 Dividend Distribution. • Approved capital budget execution. • Approved issuing Restricted Stock Awards for employees. • Approved the date of convening the 2020 Annual General Meeting, meeting agenda and submission period for shareholder proposals. • Approved for UMC’s Singapore branch to lend funds to UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. • Approved UMC’s donation to UMC Science and Culture Foundation. 2020.04.27 • Approved the Q1, 2020 Consolidated Financial Statements. • Approved capital budget execution. • Approved the proposal for private placement based on future operation needs and will propose at the 2020 Annual General Meeting for discussion. • Approved addition of proposals of the 2020 Annual General Meeting and change of the location for convening the 2020 Annual General Meeting. 2020.06.05 • Approved the Company’s 21st share repurchase program.

2020.06.17 • Approved to release the managerial officer from non-competition restrictions.

2020.07.29 • Approved the Q2, 2020 Consolidated Financial Statements. • Approved capital budget execution.

2020.10.29 • Approved the Q3, 2020 Consolidated Financial Statements. • Approved capital budget execution. • Approved the Company to proceed with a potential investment to expand capacity. 2020.12.16 • Approved capital budget execution. • Approved for UMC’s Singapore branch to lend funds to UNITED SEMICONDUCTOR (XIAMEN) CO., LTD.

2021.02.24 • Approved the 2020 Business Report and Financial Statements. • Approved the 2020 distributable compensation for employees and directors. • Approved the 2020 Dividend Distribution. • Approved termination of the issuance plan for private placement, which was approved at the 2020 Annual General Meeting. • Approved the proposal for private placement based on future operation needs and will propose at the 2021 Annual General Meeting for discussion. • Approved the date of convening the 2021 Annual General Meeting, meeting agenda and submission period for shareholder proposals. • Approved capital budget execution. • Approved the acquisition of the Right-of-Use Asset from subsidiary Wavetek Microelectronics Corporation. • Approved the issuance of unsecured straight corporate bonds. • Approved UMC's donation to UMC Science and Culture Foundation.

91 United Microelectronics Corporation | Annual Report 2020

Major Issues of Record or Written Statements Made by Any Director Dissenting to Important Resolutions Passed by the Board of Directors During 2020 and as of the Annual Report Printing Date: None.

Resignation or Dismissal of Chairman, President, and Heads of Accounting, Finance, Internal Audit, Corporate Governance and R&D During 2020 and as of the Annual Report Printing Date: None.

Certification of Employees Whose Jobs Are Related to the Release of the Company's

Financial Information Number of Employees Certification Name Audit Accounting Finance

Certified Public Accountants (CPA) 2 18 1

US Certified Public Accountants (US CPA) 6 1

Association of Chartered Certified Accountants Singapore (ACCA Singapore) 1

Certified Internal Auditor (CIA) 1 3

CABIAV Certificate of Certified Business Valuator 2 1

92 Corporate Governance Report Certified Public Accountant (CPA) Fee Information For the Non-audit Fee Paid to the CPA, CPA Firm, and Its Affiliate Greater than 1/4 of the Audit Fee, the Amount of Audit and Non-audit Fee and Content of Non-audit Service Should Be Disclosed

None. Please refer to the following table. In Thousand NTD Name of CPA Firm Name of CPA Audit Non-audit Fees CPA Audit Remarks Fee Period System Business Human Others Subtotal Design Registration Resources （Note）

Ernst & Young, Taiwan Wan-Ju Chiu, 65,485 - 414 30 11,094 11,538 2020.01.01~ - Hsin-Min Hsu 2020.12.31

Note: The “Others” category within the non-audit fees mainly includes fees paid for consulting service, services to review the checklist of public disclosure and filing and reading of the annual report and prospectuses.

If the CPA Firm Changes, and the Audit Fee Paid in the Year of Such Change Is Reduced from the Audit Fee of the Previous Year, the Amounts of the Audit Fees Before and After such Change and the Reason of Such Change Should Be Disclosed None.

If the Audit Fee Is Reduced by More than 10% from Last Year, the Amount, Ratio, and Reason for the Reduction of the Audit Fee Should Be Disclosed None.

Information of CPA Change None.

UMC’s Chairman, Presidents, Chief Financial Officer, and Managers in Charge of Its Finance and Accounting Operations Did Not Hold Any Positions in UMC’s Independent Auditing Firm or Its Affiliates in the Most Recent Year.

93 United Microelectronics Corporation | Annual Report 2020

Change in Shareholding of Directors, Managers and Major Shareholders Who Own 10% or More of UMC Shares Unit: Shares Title Name 2021 2020

Holding Pledged Holding Pledged Increase Holding Increase Holding (Decrease) Increase (Decrease) Increase (Decrease) (Decrease)

Chairman, CSO Stan Hung 0 0 9,385,000 0 Director Hsun Chieh Investment Co., Ltd. 0 0 0 0 Director Silicon Integrated Systems Corp. 0 0 0 0 Independent Director Cheng-Li Huang 0 0 0 0 Independent Director Wenyi Chu 0 0 0 0 Independent Director Lih J. Chen 0 0 0 0 Independent Director Jyuo-Min Shyu 0 0 0 0 Director Ting-Yu Lin 0 0 0 0 President SC Chien 0 0 2,300,000 0 President Jason Wang 0 0 10,315,000 14,200,000 Executive Vice President Ming Hsu 0 0 1,430,000 0 Senior Vice President Oliver Chang 0 0 1,021,000 0 Senior Vice President, CFO Chitung Liu 0 0 390,000 0 Senior Vice President, General Lucas S Chang 0 0 150,000 0 Counsel

Vice President TS Wu 0 0 1,013,000 0 Vice President C C Hsu 0 0 900,000 0 Vice President M C Lai 0 0 1,350,000 1,350,000 Vice President G C Hung 0 0 890,000 0 Vice President Wenchi Ting 0 0 (750,000) 0 Vice President Jerry CJ Hu 0 0 650,000 0 Vice President Y S Shen 0 0 425,000 0 Vice President Steven S Liu 0 470,000 1,350,000 0 Vice President SR Sheu 0 0 0 0 Vice President M L Liao 0 0 100,000 0

94 Corporate Governance Report

Change in Shareholding of Directors, Managers and Major Shareholders Who Own 10% or More of UMC Shares (Continue)

Unit: Shares Title Name 2021 2020

Holding Pledged Holding Pledged Increase Holding Increase Holding (Decrease) Increase (Decrease) Increase (Decrease) (Decrease)

Vice President S S Hong 0 0 0 0

Vice President Francia Hsu 0 0 811,000 0 Vice President Mindy Lin 0 0 716,000 0 Vice President, Chief Human Eric Chen 0 0 750,000 0 Resources Officer

Associate Vice President Johnson Liu 0 0 30,000 0 Associate Vice President Victor Chuang 0 0 220,000 0 Associate Vice President Chuck Chen 0 0 161,799 0 Associate Vice President S F Tzou 0 0 100,000 0 Associate Vice President Le Tien Jung 0 0 330,000 0 Associate Vice President Yau Kae Sheu 0 0 770,000 0 Associate Vice President J Y Wu 0 0 450,000 0 Associate Vice President Osbert Cheng 0 0 204,062 0 Associate Vice President Steven Hsu 0 0 (40,000) 0 Associate Vice President Purakh Raj Verma 0 0 0 0 Associate Vice President Yanan Mou 0 0 0 0 Associate Vice President Remi Yu 0 0 383,000 0 Associate Vice President Michael CY Wang 0 0 0 0 Associate Vice President Ji Fu Kung 0 0 277,000 0 Associate Vice President C P Yen 0 0 106,000 0 Associate Vice President Pang Min Wang 0 0 (77,000) 0 Associate Vice President Ray Yang 0 0 370,000 0 Associate Vice President Bellona Chen 0 0 420,000 0 Associate Vice President Louis Hsieh 0 0 (700,000) 0 Former Director Chung Laung Liu N/A N/A 0 0 Former Associate Vice President C Y Hsu N/A N/A 0 0

Note 1: No shareholder owns 10% or more of UMC shares. Note 2: The data presented for 2021 was gathered until January 31, 2021. Note 3: Counterparts of the shareholding transferred or pledged are not related parties. Note 4: The share changes for Oliver Chang, Ray Yang, Bellona Chen and Louis Hsieh are calculated starting from the assumed date. Note 5: The shares change for Chung Laung Liu and C Y Hsu are reported until their resignation. Note 6: The Holding Increase (Decrease) data consists of shares under Trust with Discretion Reserved.

95 United Microelectronics Corporation | Annual Report 2020

Relationship Among the Top 10 Shareholders

Name Shares Held Shares Held Total Shares Relationship Between Remarks by Spouse Held in the the Company’s Top 10 or Underage Name of Other Shareholders Who Are Either Children Persons Related Parties, Spouses, or Relatives Within the Second Degree of Kinship, His/ Her/Its Title (or Name) and Relationship Shares % Shares % Shares % Title Relationships (or Name) JPMorgan Chase Bank, N.A. acting in its 670,779,035 5.49 N/A N/A N/A N/A None None capacity as depositary and representative to the holders of ADRs

Hsun Chieh Investment Co., Ltd. 441,371,000 3.61 N/A N/A N/A N/A None None

Representative: 93,998 0.00 0 0 0 0 None None Chun Kuan

Nan Shan Life Insurance Company, Ltd. 317,538,000 2.60 N/A N/A N/A N/A None None

Representative: Data unavailable Ying Tsung Tu

Silicon Integrated Systems Corp. 285,380,424 2.33 N/A N/A N/A N/A None None

Representative: 1,858 0.00 0 0 0 0 None None Cheng Chien Chien

Fubon Life Insurance Co., Ltd. 232,206,000 1.90 N/A N/A N/A N/A None None

Representative: Data unavailable Ming Hsing Tsai

Yann Yuan Investment Co., Ltd. 200,000,000 1.64 N/A N/A N/A N/A None None Representative: Data unavailable Wen Ching Lin

Taiwan Life Insurance Co., Ltd. 192,555,000 1.58 N/A N/A N/A N/A None None

Representative: Data unavailable Ssu Kuo Huang

JPMorgan Chase Bank N.A., Taipei Branch in 175,192,905 1.43 N/A N/A N/A N/A None None custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds Norges Bank - internal - NBIM PF EQ INTERNAL 174,274,110 1.43 N/A N/A N/A N/A None None CFD

Labor Pension Fund 133,116,000 1.09 N/A N/A N/A N/A None None

Note: The data shown above was recorded on July 21, 2020, which was the record date for the distribution of 2020 cash dividend.

96 Corporate Governance Report Shares Held by the Company, Directors, Managers and Companies Directly or Indirectly Controlled by the Company, and the Comprehensive Shareholding Ratio Based on Combined Calculation

Investee Companies UMC Shares Held by Directors, Comprehensive Shareholding Managers and Companies Directly or Indirectly Controlled by the Company

Number of Percentage of Number of Shares Percentage of Number of Percentage of Shares Ownership Ownership Shares Ownership （％） （％） （％）

UMC Group (USA) 16,437,500 100.00 0 0 16,437,500 100.00

United Microelectronics (Europe) B.V. 9,000 100.00 0 0 9,000 100.00

UMC Capital Corp. 71,662,977 100.00 0 0 71,662,977 100.00

TLC Capital Co., Ltd. 400,167,103 100.00 0 0 400,167,103 100.00

Green Earth Limited 977,000,000 100.00 0 0 977,000,000 100.00

Fortune Venture Capital Corp. 401,734,448 100.00 0 0 401,734,448 100.00

UMC Investment (Samoa) Limited 1,520,000 100.00 0 0 1,520,000 100.00

MTIC Holdings Pte. Ltd. 12,000,000 45.44 0 0 12,000,000 45.44

Unitech Capital Inc. 21,000,000 42.00 2,500,000 5.00 23,500,000 4 7.00

Hsun Chieh Investment Co., Ltd. 364,102,314 36.49 0 0 364,102,314 36.49

Best Elite International Limited 664,966,275 100.00 0 0 664,966,275 100.00

Wavetek Microelectronics Corporation 148,112,434 80.75 3,150,936 1.72 151,263,370 82.47

UMC Korea Co., Ltd. 110,000 100.00 0 0 110,000 100.00

Omni Global Limited 4,300,000 100.00 0 0 4,300,000 100.00

United Semiconductor (Xiamen) Co., Ltd. 0 0 N/A 67.76 N/A 67.76

Faraday Technology Corporation 34,240,213 13.78 2,973 0.00 34,243,186 1 3.78

Yann Yuan Investment Co., Ltd. 46,000,000 30.87 0 0 46,000,000 30.87

Sino Paragon Limited 2,600,000 100.00 0 0 2,600,000 100.00

Triknight Capital Corporation 234,280,000 40.00 0 0 234,280,000 40.00

United Semiconductor Japan Co., Ltd. 116,246,616 100.00 0 0 116,246,616 100.00

Unimicron Technology Corp. 196,136,008 13.36 4,545,000 0.30 200,681,008 13.66

Note 1: The investee companies are the investees under the equity method and funds. Note 2: The number of shares is based on the actual number of shares held on December 31, 2020.

97 United Microelectronics Corporation | Annual Report 2020

98 Capital Overview

Capital Overview

100 Capital and Shares 106 Issuance of Corporate Bonds 111 Preferred Shares 112 American Depositary Receipts 114 Employee Stock Option Handling Status 114 Issuance of New Restricted Employee Shares 115 Status of New Shares Issuance in Connection with Mergers and Acquisitions 115 Financing Plans and Execution Status

99 United Microelectronics Corporation | Annual Report 2020

Capital and Shares Source of Capital

Month/Year Issue Authorized Paid-in Capital Remarks Price Capital (Per Share) Shares Amount Shares Amount Source of Capital Other (In Thousand) (In Thousand (In Thousand) (In Thousand Capital Increased by NTD) NTD) Assets Other than Cash

March, 2020 NTD 10 26,000,000 260,000,000 11,773,994 117,739,944 Note 1 None None

May, 2020 NTD 10 26,000,000 260,000,000 12,222,371 122,223,715 Note 2 None None

September, 2020 NTD 10 26,000,000 260,000,000 12,422,401 124,224,015 Note 3 None None

Note 1: On March 11, 2020, the Hsinchu Science Park Bureau, Ministry of Science and Technology approved the capital increase of NTD 496,757 thousand due to conversion of convertible bonds during the 4th quarter of 2020. The Company’s paid-in capital was increased to NTD 117,739,944 thousand. Note 2: On May 12, 2020, the Hsinchu Science Park Bureau, Ministry of Science and Technology approved the capital increase of NTD 4,483,771 thousand due to conversion of convertible bonds during the 1st quarter of 2021. The Company’s paid-in capital was increased to NTD 122,223,715 thousand. Note 3: On September 15, 2020, the Hsinchu Science Park Bureau, Ministry of Science and Technology approved the capital increase of NTD 2,000,300 thousand due to issuance of new Restricted Stock Awards for employees. The Company’s paid-in capital was increased to NTD 124,224,015 thousand. Note 4: The data shown above was gathered until February 24, 2021.

Type of Stock

Share Type Authorized Capital Allotment for Stock Option Certificate Issued Shares(Note 1) Un-Issued Shares Total Shares (Units)

Common Stock 12,422,401,493 13,577,598,507 26,000,000,000 2,000,000,000

Note 1: The Company’s issued shares are listed stock. Note 2: The data shown above was gathered until February 24, 2021.

Information for Shelf Registration

Not Applicable.

Status of Shareholders Common Shares

Item Government Financial Other Juridical Natural Persons Foreign Total Agencies Institutions Persons Institutions and Natural Persons

Number of 14 73 721 504,773 1,753 507,334 Shareholders

Shareholding (Shares) 200,322,662 1,102,458,871 1,391,480,887 3,259,878,227 6,268,230,846 12,222,371,493

Percentage (%) 1.64 9.02 11.39 26.67 51.28 100.00

Note: The data shown above was recorded on July 21, 2020, which was the record date for the distribution of 2020 cash dividend.

100 Capital Overview

Capital and Shares (Continue)

Shareholding Distribution Status Common Shares Class of Shareholding Number of Shareholders Shareholding Percentage (%) (Unit: Shares) (Shares) 1~ 999 188,169 56,450,686 0.46

1,000~ 5,000 213,209 490,789,812 4.02

5,001~ 10,000 51,379 382,625,952 3.13

10,001~ 15,000 18,701 229,873,355 1.88

15,001~ 20,000 10,394 185,976,409 1.52

20,001~ 30,000 9,856 242,587,779 1.98

30,001~ 50,000 7,024 275,119,274 2.25

50,001~ 100,000 4,534 318,523,644 2.61

100,001~ 200,000 1,975 273,930,534 2.24

200,001~ 400,000 846 234,253,042 1.92

400,001~ 600,000 294 144,896,143 1.18

600,001~ 800,000 142 99,079,262 0.81

800,001~ 1,000,000 100 90,081,910 0.74

Over 1,000,001 711 9,198,183,691 75.26

Total 507,334 12,222,371,493 100.00

Note: The data shown above was recorded on July 21, 2020, which was the record date for the distribution of 2020 cash dividend.

Preferred Shares

None.

List of Major Shareholders

Shareholder's Name Shareholding

Shares Percentage (%)

JPMorgan Chase Bank, N.A. acting in its capacity as depositary and representative to the 670,779,035 5.49 holders of ADRs

Hsun Chieh Investment Co., Ltd. 441,371,000 3.61

Nan Shan Life Insurance Company, Ltd. 317,538,000 2.60

Silicon Integrated Systems Corp. 285,380,424 2.33

Fubon Life Insurance Co., Ltd. 232,206,000 1.90

Yann Yuan Investment Co., Ltd. 200,000,000 1.64

Taiwan Life Insurance Co., Ltd. 192,555,000 1.58

JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International 175,192,905 1.43 Stock Index Fund, a series of Vanguard Star Funds

Norges Bank - internal - NBIM PF EQ INTERNAL CFD 174,274,110 1.43

Labor Pension Fund 133,116,000 1.09

Note: The data shown above was recorded on July 21, 2020, which was the record date for the distribution of 2020 cash dividend.

101 United Microelectronics Corporation | Annual Report 2020

Capital and Shares (Continue)

Market Price, Net Worth, Earnings, and Dividends Per

Common Share In NTD Item 2021 (Note 7) 2020 2019

Market Price Per Highest 59.40 51.70 17.05 Share (Note 1) Lowest 44.00 13.10 10.55 Average 52.04 28.13 13.63

Net Worth Per Share Before Distribution - 19.00 17.61

After Distribution - * 16.78

Earnings Per Share Weighted Average Shares - 12,072,969,148 11,785,108,150 (shares)

Earnings Per Share (Note 2) - 2.42 0.82

Earnings Per Share (Note 3) - * 0.82

Dividends Per Share Cash Dividends - * 0.80395653

Stock Dividends Earning Distribution - * -

Capital Distribution - * -

Accumulated Undistributed - - - Dividend

Return on Investment Price/Earnings Ratio - 9.45 16.24 (Note 4)

Price/Dividend Ratio - * 16.57 (Note 5)

Cash Dividend Yield - * 0.06 (Note 6)

*Subject to change based on resolutions of the 2021 shareholders’ meeting.

Note 1: Referred to TWSE website. Note 2: EPS calculation was based on weighted average shares outstanding for the year. Note 3: EPS calculation was based on retroactive adjustment for capitalization of unappropriated earnings, additional paid-in capital and employees’ compensation - stock. Note 4: Price/Earnings Ratio = Average Market Price/Earnings Per Share. Note 5: Price/Dividend Ratio = Average Market Price/Cash Dividends Per Share. Note 6: Cash Dividend Yield = Cash Dividends Per Share/Average Market Price. Note 7: The data represented for 2021 was gathered until February 24, 2021. Note 8: The average closing prices for years 2019, 2020 and 2021 were NTD 13.32, NTD 22.88, and NTD 52.06, respectively.

102 Capital Overview

Capital and Shares (Continue)

Dividend Policy and Status

1. Dividend Policy in Company’s Articles of Incorporation year. The distribution of shareholders’ dividend shall be allocated as cash According to the Company’s Articles of Incorporation, current year’s dividend in the range of 20% to 100%, and stock dividend in the range of earning, if any, shall be distributed in the following order: 0% to 80%. (1) Payment of taxes. 2. The Company’s operating status, funding requirements, capital (2) Making up for loss in preceding years. expenditure forecast, changes in the overall internal and external (3) Setting aside 10% for legal reserve, except for when accumulated legal environment, as well as shareholders’ interest shall be taken into reserve has reached the Company’s paid-in capital. account to determine the Company’s dividend policy; distribution of (4) Appropriating or reversing special reserve by government officials or dividend is determined by the Board of Directors, and the principle of other regulations. distribution shall not be lower than 50% of the Company’s earnings (5) The remaining, plus the previous year’s unappropriated earnings, shall after tax of the year without considering other extraordinary situations. be distributed according to the distribution plan proposed by the Board of Directors according to the dividend policy in paragraph two of this Proposed Distribution of Dividend clause and submitted to the shareholders’ meeting for approval. The Company’s proposal for 2020 earnings distribution was passed The dividend policy of the Company shall be determined pursuant to during the 21st board meeting of the 14th term. This proposal, a cash factors such as the investment environment, its funding requirements, dividend of NTD 19,875,842,389 from retained earnings (NTD 1.60 per domestic and overseas competitive landscape and its capital expenditure share), will be discussed at the Annual General Meeting. forecast, as well as shareholders’ interest, balancing dividends and UMC’s long-term financial planning. The Board of Directors shall propose the distribution plan and submit it to the shareholders’ meeting every

Effect of Share Dividends to Operating Performance and EPS Not applicable.

103 United Microelectronics Corporation | Annual Report 2020

Capital and Shares (Continue)

Employees’ and Directors’ Compensation

Related Information of Employees’ and Directors’ the number of stock distributed is calculated based on total employee Compensation in the Company’s Articles of Incorporation compensation divided by the closing price of the day before the Board Employees’ and Directors’ Compensation Policy in the Company’s of Directors meeting. If the Board of Directors subsequently modifies Articles of Incorporation is as follows: the estimates significantly, the Company will recognize the change as The Company shall allocate no less than 5% of profit as employees’ an adjustment in the profit or loss in the subsequent period. Information compensation and no more than 0.2% of profit as directors’ compensation relevant to the aforementioned employees and directors’ compensation for each profitable fiscal year after offsetting any cumulative losses. can be obtained from the “Market Observation Post System” on the The aforementioned employees’ compensation will be distributed in website of the TWSE. shares or cash. The employees of the Company’s subsidiaries who fulfill specific requirements stipulated by the Board of Directors may be granted The Distributable Compensation for Employees and such compensation. Directors may only receive compensation in cash. Directors Passed During the Board Meeting. The Company may, by a resolution adopted by a majority vote at a The Company’s 2020 distributable compensation for employees and meeting of the Board of Directors attended by two-thirds of the total directors was passed during the 21st board meeting of the 14th term. The number of directors, distribute the aforementioned employees’ and distribution status is as follows: directors’ compensation and report to the shareholders’ meeting for such The Company is to distribute NTD 2,581,674,949 as employee cash distribution. compensation and NTD 32,368,656 as directors’ compensation. There is no difference between the amount passed during the Board The Basis for Estimating the Amount of Employees meeting and the recognized amount during 2020 of the aforementioned and Directors’ Compensation, the Basis for Calculating employees’ and directors’ compensation. the Number of Shares to Be Distributed as Employees’ Compensation, and the Accounting Treatment of the Discrepancy Between the Actual Distributed and the Estimated Amount. The Company recognizes the employees and directors’ compensation in the profit or loss during the periods when earned. The Board of Directors estimates the amount by taking into consideration the Articles of Incorporation, government regulations and industry averages. If the Board of Directors resolves to distribute employee compensation through stock,

The Amount of Employees’ Compensation Distributed in Stocks, and Such Amount as a Percentage of the Sum of Net Income Stated in the Parent Company Only Financial Reports and Total Employees’ Compensation: None.

Distribution of Employees and Directors’ Compensation for 2019: In Thousand NTD Item Board Resolution (February 26, 2020)

Employees’ compensation distributed in Cash 1,132,952

Directors’ compensation 10,259

Note: The actual distribution of employees and directors’ compensation for 2019 were consistent with the resolutions of the Board of Directors meeting held on February 26, 2020.

104 Capital Overview

Buyback of Treasury Stock (1) Completed Share Buyback Program Instance 21st round

Purpose Transfer to employees Buyback period 2020.06.08~2020.08.07 Price range （NTD） 11.55~23.25 Classification and executed volume（Shares） 105,000,000 Common shares Executed amount（NTD） 1,678,271,840 Ratio of executed volume to the volume to be 52.50 repurchased (%)

Cancellation and transfer volume（Shares） 105,000,000 Cumulative holding（Shares） 0 Cumulative holding as a percentage of total issued shares（%） 0

Note: The data shown above was gathered until February 24, 2021.

(2) Uncompleted Share Buyback Program: None.

105 United Microelectronics Corporation | Annual Report 2020

Issuance of Corporate Bonds (Continue) Issuance of Corporate Bonds

Name of Bond United Microelectronics Corporation 1st Unsecured Straight Corporate Bond Issuance in 2013 Issue date March 15, 2013

Denomination NTD 1 million

Listing and trading Taipei Exchange

Issue price NTD 1 million

Total amount NTD 10,000 million; 5-year bond for NTD 7,500 million and 7-year bond for NTD 2,500 million

Coupon rate Fixed rate; 1.35% p.a. and 1.50% p.a. for 5-year and 7-year bonds, respectively

Tenor and maturity date 5-year bond: March 15, 2018 7-year bond: March 15, 2020 Guarantor None

Trustee Taiwan Cooperative Bank

Underwriter None

Transferring, paying or conversion agent None

Legal counsel Chen & Lin Attorneys-at-Law

Independent auditor Ernst & Young, Taiwan

Repayment The principal of 5-year and 7-year bonds will be repaid respectively in March 2018 and March 2020 upon maturity. Interest will be paid annually for both 5-year and 7-year bonds.

Outstanding amount None (Note)

Redemption clause None

Restrictive clause None

Name of credit rating agency, rating date and result of Taiwan Ratings Corporation rating November 30, 2012 twAA Other rights of bondholders None

Dilution effect or other adverse impact on existing None shareholders’ equity, if conversion, exchange, or subscription rights are attached

Custodian None

Note: NTD 7,500 million for the 5-year bond was repaid on March 15, 2018. NTD 2,500 million for the 7-year bond was repaid on March 15, 2020.

106 Capital Overview

Issuance of Corporate Bonds (Continue)

Name of Bond United Microelectronics Corporation 1st Unsecured Straight Corporate Bond Issuance in 2014 Issue date June 18, 2014

Denomination NTD 1 million

Listing and trading Taipei Exchange

Issue price NTD 1 million

Total amount NTD 5,000 million; 7-year bond for NTD 2,000 million and 10-year bond for NTD 3,000 million

Coupon rate Fixed rate; 1.70% p.a. and 1.95% p.a. for 7-year and 10-year bonds, respectively

Tenor and maturity date 7-year bond: June 18, 2021 10-year bond: June 18, 2024 Guarantor None

Trustee Taiwan Cooperative Bank

Underwriter None

Transferring, paying or conversion agent None

Legal counsel Chen & Lin Attorneys-at-Law

Independent auditor Ernst & Young, Taiwan

Repayment The principal of 7-year and 10-year bonds will be repaid respectively in June 2021 and June 2024 upon maturity. Interest will be paid annually for both 7-year and 10-year bonds.

Outstanding amount NTD 5,000 million

Redemption clause None

Restrictive clause None

Name of credit rating agency, rating date and result of Not applicable rating

Other rights of bondholders None

Dilution effect or other adverse impact on existing None shareholders’ equity, if conversion, exchange, or subscription rights are attached Custodian None

107 United Microelectronics Corporation | Annual Report 2020

Issuance of Corporate Bonds (Continue)

Name of Bond United Microelectronics Corporation 1st Unsecured Straight Corporate Bond Issuance in 2017 Issue date March 24, 2017 Denomination NTD 1 million Listing and trading Taipei Exchange Issue price NTD 1 million Total amount NTD 8,300 million; 5-year bond for NTD 6,200 million and 7-year bond for NTD 2,100 million

Coupon rate Fixed rate; 1.15% p.a. and 1.43% p.a. for 5-year and 7-year bonds, respectively

Tenor and maturity date 5-year bond: March 24, 2022 7-year bond: March 24, 2024 Guarantor None Trustee CTBC Bank Co., Ltd. Underwriter MasterLink Securities Corp. as the lead underwriter Transferring, paying or conversion agent None Legal counsel Chen & Lin Attorneys-at-Law Independent auditor Ernst & Young, Taiwan Repayment The principal of 5-year and 7-year bonds will be repaid respectively in March 2022 and March 2024 upon maturity. Interest will be paid annually for both 5-year and 7-year bonds.

Outstanding amount NTD 8,300 million Redemption clause None Restrictive clause None Name of credit rating agency, rating date and result of Not applicable rating

Other rights of bondholders None Dilution effect or other adverse impact on existing None shareholders’ equity, if conversion, exchange, or subscription rights are attached

Custodian None

108 Capital Overview

Issuance of Corporate Bonds (Continue)

Name of Bond United Microelectronics Corporation 2nd Unsecured Straight Corporate Bond Issuance in 2017 Issue date October 3, 2017 Denomination NTD 1 million Listing and trading Taipei Exchange Issue price NTD 1 million Total amount NTD 5,400 million; 5-year bond for NTD 2,000 million and 7-year bond for NTD 3,400 million

Coupon rate Fixed rate; 0.94% p.a. and 1.13% p.a. for 5-year and 7-year bonds, respectively

Tenor and maturity date 5-year bond: October 3, 2022 7-year bond: October 3, 2024 Guarantor None Trustee CTBC Bank Co., Ltd. Underwriter MasterLink Securities Corp. as the lead underwriter Transferring, paying or conversion agent None Legal counsel Chen & Lin Attorneys-at-Law Independent auditor Ernst & Young, Taiwan Repayment The principal of 5-year and 7-year bonds will be repaid respectively in October 2022 and October 2024 upon maturity. Interest will be paid annually for both 5-year and 7-year bonds.

Outstanding amount NTD 5,400 million Redemption clause None Restrictive clause None Name of credit rating agency, rating date and result of Not applicable rating

Other rights of bondholders None Dilution effect or other adverse impact on existing None shareholders’ equity, if conversion, exchange, or subscription rights are attached

Custodian None

109 United Microelectronics Corporation | Annual Report 2020

Issuance of Corporate Bonds (Continue)

Type Currency Linked Zero Coupon Convertible Bonds Due 2020 Issue date May 18, 2015 Face amount USD 200,000 Listing exchange Singapore Exchange Securities Trading Limited Issue amount USD 200,000 Issue size USD 600,000,000 Coupon rate 0% Maturity 5 years; May 18, 2020 Guarantor - Trustee Citicorp International Limited Underwriter Credit Suisse (Hong Kong) Limited, Morgan Stanley Service Pty Limited, The Hong Kong and Shanghai Banking Corporation Limited.

Legal counsel Chen & Lin Attorneys-at-law Auditor Ernst & Young, Taiwan Redemption Unless previously redeemed, converted, or repurchased and canceled, the Company will redeem the Bonds at the principal amount of the Bonds with an interest calculated (calculated semiannually) at the rate of -0.25% per annum on the maturity date (the Redemption Amount). The Redemption amount will be converted into NTD based in the Fixed Exchange Rate, and this fixed NTD amount will be converted using the Prevailing Rate for payment in USD. Principal payable None (Note) Redemption or early redemption clause (a) The Company will, at the option of bondholder, redeem such holder’s Bonds in whole or in part at the principal amount of the Bonds with an interest calculated (calculated semiannually) at the rate of -0.25% per annum on the date which is 3 years from the date of issue. The actual rates per annum are decided according to market conditions by the Company and joint underwriters overseas together on the pricing date. (b) Bondholders have the right to require the Company to redeem the bonds, in whole but not in part, at the principal amount of the Bonds with an interest calculated (calculated semiannually) at the rate of -0.25% per annum (Early Redemption Amount) if the Company’s common shares cease to be listed on the Taiwan Stock Exchange. The actual rates per annum are decided according to market conditions by the Company and joint underwriters overseas together on the pricing date. (c) In the event that a change of control (as defined in the indenture of the bonds) occurs to the Company, the bondholders shall have the right to require the Company to redeem the bonds, in whole but not in part, at the Early Redemption Amount. (d) The Redemption procedures of the exercise of the put right by the Bondholder and repurchase by the Company are all set in the Indenture. The Redemption Amount and The Early Redemption Amount will be paid in cash by the Company on the payment date set in the Indenture. (e) The Company may redeem the bonds, in whole or in part, after 3 years of the issuance and prior to the maturity date, at the Early Redemption Amount if the closing price of the Company’s common shares on the Taiwan Stock Exchange, for a period of 20 out of 30 consecutive trading days, is at least 125% of the conversion price. (f) The Company may redeem the bonds, in whole, but not in part, at the Early Redemption Amount if at least 90% in principal amount of the bonds has already been redeemed, repurchased and cancelled or converted. (g) The Company may redeem all, but not part, of the bonds, at the Early Redemption Amount at any time, in the event of certain changes in the ROC’s tax rules which would require the Company to gross up for payments of principal, or to gross up for payments of interest or premium. Bondholders may elect not to have their bonds redeemed by the Company in such event, in which case the bondholders shall not be entitled to receive payments of such additional amounts. The Redemption Amount/The Early Redemption Amount will be converted into NTD based on the Fixed Exchange Rate, and this fixed NTD amount will be converted using the Prevailing Rate for payment in USD.

110 Capital Overview

Issuance of Corporate Bonds (Continue)

Type Currency Linked Zero Coupon Convertible Bonds Due 2020 Covenant - Name of credit rating agency, rating date and result of rating -

Other obligation Balance of amount converted to USD 230,600,000 (exchangeable or warrant) shares, ADSs, or other types of securities as of the Annual Report Printing Date Policy of issuing or converting The bondholders may from June 28, 2015 to May 8, 2020 covert the bonds into the Company’s (exchangeable or warrant) common shares as a substitute for the issuer’s cash redemption. In addition, the bondholders will not be able to effect conversion into common shares during any closed period. Effect on the current shareholders due to dilution The underlying conversion for ECB is newly issued shares. If the ECB is fully converted, the dilution ratio to original shareholders is 8.63%. The impact to the dilution is minimal.

Name of custodian Citibank, N.A., London Branch

Note: The Currency Linked Zero Coupon Convertible Bonds Due 2020 was fully repaid on May 18, 2020.

Exchangeable Bonds Information None.

Euro Convertible Bonds Information

Type Currency Linked Zero Coupon Convertible Bonds Due 2020

Item Year

2020 2019 2018 2017 2016 2015 2015.05.18 (Note) (Issue Date)

Convertible Price NTD 14.2179 NTD 14.2179 NTD 14.8157 NTD 15.4320 NTD 15.9895 NTD 16.7408 NTD 17.50

Market Price High USD 121.726 USD 121.802 USD 124.583 USD 114.894 USD 95.625 USD 100.864 -

Low USD 99.507 USD 95.185 USD 95.662 USD 92.255 USD 88.052 USD 87.579 -

Average USD 107.971 USD 101.385 USD 110.480 USD 104.396 USD 92.453 USD 93.145 -

Issue Date May 18, 2015

Reference Shares Common shares

Note: The Currency Linked Zero Coupon Convertible Bonds Due 2020 was fully repaid on May 18, 2020.

Shelf Registration for Issuing Bonds

None.

Corporate Bonds with Warrants

None.

Preferred Shares

None.

111 United Microelectronics Corporation | Annual Report 2020

American Depositary Receipts

Issue Date 2008.09.19 2007.10.09 2006.11.06 2006.09.01 2005.09.01 2005.01.20 2004.11.16

Listing Exchange New York Stock New York Stock New York Stock New York Stock New York Stock New York Stock New York Stock Exchange Exchange Exchange Exchange Exchange Exchange Exchange

Issue Amount Stock dividend Capital Reduction USD 108.2 million Stock dividend Stock dividend USD 84.2 million USD 76.3 million

Listing Price/Unit - - USD 3.05 - - USD 3.33 USD 3.47

Issue Units 9,885,719 -95,425,183 35,456,000 2,831,465 25,833,137 25,290,000 22,000,000

Underlying Representing UMC common UMC common UMC common UMC common UMC common UMC common UMC common Shares shares shares shares shares shares shares shares

Number of Equivalent Local 5 shares 5 shares 5 shares 5 shares 5 shares 5 shares 5 shares Shares per ADS

Rights and Obligations of Same as Same as Same as Same as Same as Same as Same as ADS Holders the common the common the common the common the common the common the common shareholder shareholder shareholder shareholder shareholder shareholder shareholder

Trustee N/A N/A N/A N/A N/A N/A N/A

Depositary Bank Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A.

Custodian Bank Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Taipei Branch Taipei Branch Taipei Branch Taipei Branch Taipei Branch Taipei Branch Taipei Branch

Outstanding Balance (Units) The total outstanding balance is 140,000,865 units.

Issuing Expenses and Except for IPO and dividends, the issuing expense will be borne by the selling shareholders. The maintenance fees will be borne by the Maintenance Fees Company.

Important Terms and ------Conditions of Depositary Agreement and Custodian Agreement

Note 1: The data shown above was gathered until February 24, 2021. Note 2: On October 21, 2009, the Depositary bank was changed to JPMorgan Chase Bank, N.A., and the custodian bank was changed to JPMorgan Chase Bank, N.A. Taipei Branch.

American Depositary Receipt Trading Data

Closing Price per Share (USD) 2021 2020

High Low Average High Low Average

10.78 8.01 9.58 9.04 2.13 3.83

Note: The data represented for 2021 was gathered until February 24, 2021.

112 Capital Overview

American Depositary Receipts (Continue)

2004.08.19 2004.01.02 2003.12.23 2003.08.15 2002.09.09 2002.03.19 2001.08.17 2000.09.19

New York Stock New York Stock New York Stock New York Stock New York Stock New York Stock New York Stock New York Stock Exchange Exchange Exchange Exchange Exchange Exchange Exchange Exchange

Stock dividend USD 13.8 million USD 24.4 million Stock dividend Stock dividend USD 439.7 million Stock dividend USD 1,291.5 million

- USD 4.92 USD 4.75 - - USD 9.25 - USD 14.35

15,088,684 2,804,000 5,146,000 6,965,107 22,655,667 47,537,780 13,500,000 90,000,000

UMC common UMC common UMC common UMC common UMC common UMC common UMC common UMC common shares shares shares shares shares shares shares shares

5 shares 5 shares 5 shares 5 shares 5 shares 5 shares 5 shares 5 shares

Same as Same as Same as Same as Same as Same as Same as Same as the common the common the common the common the common the common the common the common shareholder shareholder shareholder shareholder shareholder shareholder shareholder shareholder

N/A N/A N/A N/A N/A N/A N/A N/A

Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A.

Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Citibank, N.A. Taipei Branch Taipei Branch Taipei Branch Taipei Branch Taipei Branch Taipei Branch Taipei Branch Taipei Branch

------

113 United Microelectronics Corporation | Annual Report 2020

Employee Stock Options Handling Status The processing situation and impact on shareholders’ rights from employee stock options that have not matured yet: None.

Issuance of New Restricted Employee Shares

Type of New Restricted Employee Shares 1st Tranche Date of Effective Registration 2020.07.09 Issue Date 2020.09.01 Number of New Restricted Employee Shares Issued 200,030,000 shares Issued Price (NTD) The current issue is gratuitous New Restricted Employee Shares as a Percentage of 1.64% Shares Issued Vesting Conditions of New Restricted Employee Shares 1. If an employee, after having been granted a restricted stock award, remains on the job on the vesting date, is determined by the Company as having not violated the employment contract, employee code of conduct, trust agreement, corporate governance best practice principles, ethical corporate management best practice principles, work handbook or non-compete and non-disclosure agreement of the Company or any agreement with the Company, and has fulfilled the personal performance indicators and operational goals set by the Company, the proportions of the vesting shares to be granted for such employee on the vesting date each year is as follows: 1-1. On the job for 2 years after granting: 33% 1-2. On the job for 3 years after granting: 33% 1-3. On the job for 4 years after granting: 34% 2. Personal performance indicator(s): A performance rating of A or higher for the most recent fiscal year prior to the end of each vesting period. 3. The operational goals of the Company use the return on equity (ROE%) % and operating margin % (OM%) as performance indicators. Listed below are the performance target for the two indicators, which shall be simultaneously fulfilled. Determination of fulfillment of the indicators will be based on the consolidated financial statements, audited by a certified public accountant, for the most recent fiscal year prior to the end of each vesting period. Indicator Return on equity Operating margin (ROE%) (OM%)

2 years after granting 6% or above 6% or above 3 years after granting 8% or above 8% or above 4 years after granting 10% or above 10% or above

Restricted Rights of New Restricted Employee Shares 1. Before any employee who has been granted restricted stock award shares fulfills the vesting conditions, except for the case of inheritance, the restricted stock award shares may not be sold, pledged, transferred, gifted to others, created any encumbrance, or otherwise disposed of. 2. Before any employee who has been granted restricted stock award shares fulfills the vesting conditions, his/her rights to attendance, proposal, statement, voting and election at the Shareholders’ Meeting shall be the same as those of the outstanding common shares of the Company, and shall be exercised according to a custodial trust agreement. 3. Where any employee has been granted restricted stock award shares pursuant to these Regulations, his/her other rights prior to fulfillment of the vesting conditions include, but are not limited to: the right to distribution of cash dividends, stock dividends, legal reserves and capital reserves, and employee stock option at cash capital increase. Such rights shall be the same as those of the outstanding common shares of the Company, and shall be exercised according to a custodial trust agreement. 4. During the period from the book closure date for stock dividends granted by the Company, the book closure date for cash dividends, the book closure date for shares purchased from a cash capital increase, the book closure period of the Shareholders’ Meeting as specified by Article 165, Paragraph 3 of the Company Act or any other statutory book closure date occurring based on the fact of the record date for distribution of rights, the time and process for lifting restrictions on the vested shares of any employee who has fulfilled the vesting conditions shall be subject to a custodial trust agreement or the applicable laws and regulations.

114 Capital Overview

Type of New Restricted Employee Shares 1st Tranche Custody Status of New Restricted Employee Shares Placed under custodial trust Measures to be Taken When Vesting Conditions are not Meet 1. Where an employee who has been granted restricted stock award shares is not on the job on the vesting date, has committed an act of gross negligence by violating any of the agreements under Article III, Paragraph (III), Sub-paragraph 1 of “2020 Regulations Governing the Issuance of Restricted Stock Awards for Employees”, or has failed to fulfill the personal performance indicators and operational goals set by the Company, the shares granted to him/ her but unfulfilled vesting conditions will be recovered and canceled by the Company without compensation. 2. During the vesting period, if an employee has voluntarily resigned or been dismissed or laid off, his/her unvested shares will be recovered and canceled by the Company without compensation.

Number of New Restricted Employee Shares that have been 0 share Redeemed or Bought Back

Number of Released New Restricted Employee Shares 0 share Number of Unreleased New Restricted Shares 200,030,000 shares Ratio of Unreleased New Restricted Shares to Total 1.64% Issued Shares (%)

Impact on Possible Dilution of Shareholdings The dilution of the Company’s EPS is limited, so there is no significant impact on the interest of shareholders.

Status of New Shares Issuance in Connection with Mergers and Acquisitions

The Company has not completed any merger or acquisition of another corporation to issue new shares according to the Company Act or Enterprises Mergers and Acquisition Act, nor has the Board of Directors approved any merger or acquisition of another corporation to issue new shares according to the Company Act or Enterprises Mergers and Acquisition Act during 2020 and as of the Annual Report Printing Date.

Financing Plans and Execution Status Not Applicable.

115 United Microelectronics Corporation | Annual Report 2020

List of Executives Receiving New Restricted Employee Shares and the Top 10 Employees with New Restricted Employee Shares

Title Name No. of New Restricted Shares New Restricted Shares as a Percentage of Shares Issued(%)

Manager Chairman & Chief Strategic Officer Stan Hung President SC Chien President Jason Wang Executive Vice President Ming Hsu Senior Vice President Oliver Chang Senior Vice President & Chitung Liu Chief Financial Officer Senior Vice President & General Lucas S Chang Counsel Vice President TS Wu Vice President C C Hsu Vice President M C Lai Vice President G C Hung Vice President Wenchi Ting Vice President Jerry CJ Hu Vice President Y S Shen Vice President Steven S Liu Vice President SR Sheu Vice President M L Liao Vice President S S Hong Vice President Francia Hsu Vice President Mindy Lin 119,850 0.965 Vice President & Chief Human Eric Chen Resources Officer Associate Vice President Johnson Liu Associate Vice President Victor Chuang Associate Vice President Chuck Chen Associate Vice President S F Tzou Associate Vice President Le Tien Jung Associate Vice President Yau Kae Sheu Associate Vice President J Y Wu Associate Vice President Osbert Cheng Associate Vice President Steven Hsu Associate Vice President Purakh Raj Verma Associate Vice President Yanan Mou Associate Vice President Remi Yu Associate Vice President Michael CY Wang Associate Vice President Ji Fu Kung Associate Vice President C P Yen Associate Vice President Pang Min Wang Associate Vice President Ray Yang Associate Vice President Bellona Chen Associate Vice President Louis Hsieh

116 Capital Overview

As of February 24, 2021/Unit: Thousand Shares Released Unreleased No. of Shares Issued Price Amount Released No. of Shares Strike Price Amount Unreleased (NTD) (Thousand NTD) Restricted Shares (NTD) (Thousand NTD) Restricted Shares as a Percentage of as a Percentage of Shares Issued Shares Issued (%) （%）

0 0 0 0.00 119,850 0 0 0.965

117 United Microelectronics Corporation | Annual Report 2020

List of Executives Receiving New Restricted Employee Shares and the Top 10 Employees with New Restricted Employee Shares (Continue)

Title Name No. of New Restricted Shares New Restricted Shares as a Percentage of Shares Issued(%)

Employee Senior Division Director M H Wang Senior Fab Director William Lu Senior Division Director Cedric Lee Senior Division Director JT Lin Senior Fab Director J H Lin Senior Division Director Jeffrey Lin

Senior Division Director Benjamin TM Lin

Senior Division Director Seanchy Chiu Senior Fab Director Y C Kuo 17,680 0.142 Senior Division Director David Chen Senior Division Director Stan Chen Senior Division Director Jeffrey Huang Senior Division Director Wunnshien Liao Senior Division Director Ming Hsing Liu Senior Division Director Wood Tsai Senior Division Director Yao Chin Cheng Senior Technical Director Alex Chien Senior Division Director Michael Tai Senior Division Director K C Su

118 Capital Overview

List of Executives Receiving New Restricted Employee Shares and the Top 10 Employees with New Restricted Employee Shares (Continue)

As of February 24, 2021/Unit: Thousand Shares Released Unreleased No. of Shares Issued Price Amount Released No. of Shares Strike Price Amount Unreleased (NTD) (Thousand NTD) Restricted Shares (NTD) (Thousand NTD) Restricted Shares as a Percentage of as a Percentage of Shares Issued Shares Issued (%) （%）

0 0 0 0.00 17,680 0 0 0.142

119 United Microelectronics Corporation | Annual Report 2020

Operations Overview

121 Business Activities 128 Overview of Market, Production, and Sales 134 Employees 135 Environmental Expenditure Information 135 Labor Relations 139 Major Contracts

120 Operations Overview

Business Activities

Business Scope

UMC provides wafer fabrication technology services through state-of-the- embedded non-volatile memory, high voltage, integrated bipolar/CMOS/ art manufacturing processes and produces chips for various applications depleted CMOS, MEMS sensor and mixed-signal/RF CMOS, RFSOI, within the IC industry. The Company provides logic and mixed-signal 2.5D/3D advanced package, GaAs, GaN…, to complete design tape out. process technologies from 0.6 micron to 14nm. UMC continuously introduces competitive process technologies and complete solutions In 2020, revenue contribution from UMC’s wafer fabrication accounted for to meet specific customer’s chip design requirements. Customers can the vast majority of the Company’s total sales revenue, with the remainder select different processes according to their product application, such as generated from new R&D ventures and manufacturing of solar energy.

Industry Overview

Current Status and Development of the Semiconductor they have increased the proportion of wafer manufacturing to foundry Industry outsourcing. Some makers of system products have also designed ICs The development of electronic products has been trending towards (such as cellphone chips and server processor) by themselves and enhanced functionality, light weight, energy saving and carbon reduction, outsourced to wafer foundry. These industrial trends all have a positive and smart AI. The incorporation of IoT, artificial intelligence concepts, impact on the sustainable development of the professional wafer foundry deep learning and voice control in recent years has also affected the industry. direction of chip design. Therefore, the complexity of chip designs For 2020, the global semiconductor industry was impacted by positive has significantly increased due to the considerations of functional and negative factors. Generally speaking, COVID-19 lowered global integration, performance enhancement, low power consumption, and GDP and economic contraction negatively impacted many areas of commercial introduction of hybrid packaging. In addition, due to the electronic consumption. However, the China-US trade dispute resulted constant miniaturization of semiconductor fabrication processes and in an industrial structure change, with many new applications triggered cost considerations, this trend has caused the entry barrier into by COVID-19, such as Work from Home and Remote e-learning, which semiconductor fabrication process technology to continuously increase, significantly increased chip demand. In addition to high 5G smartphone and the investment required has also been growing exponentially. sales, this rare strong rebound in chip demand was welcome. Reduced With the constantly rising entry barriers of various semiconductor sectors tourism and business travel negatively affected automotive sales, with from design, fabrication, packaging, and test, under the considerations of car makers closing production lines and even laying off employees, professional division of labor and production efficiency, the semiconductor resulting in declining automotive semiconductor sales. Summarizing the industry’s move towards a vertical division of labor system is becoming views from all major industries, SIA (Semiconductor Industry Association) more and more obvious. The development cost of advanced process reported worldwide semiconductor would grow around 5.1% in 2020. technologies and the capital expenditure of new tools and equipment Under the applications driven by 5G, IoT, automotive, and AI, those are have risen significantly, such that the industrial structure of professional expected as major growth momentum for semiconductor industry. The division of labor has been formed. This phenomenon has resulted in many continuous and steady growth of domestic and international economies existing Integrated Device Manufacturers (IDMs) to announce that they can be expected in 2021, due to the steady demand increase from 5G, will no longer actively invest in the development of advanced processes HPC, AI, IoT, and smartphone returning to a pattern of growth. PC sales or increase their capacity due to cost vs. benefit considerations. Instead, maintain at a high level, more emerging applications appeared, and

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Industry Overview (Continue)

automotive semiconductor and memory showed a rebound. SIA forecasts The Development Trend and Competition of Electronic worldwide semiconductor will grow 8.4%. Gartner forecasts the foundry End Products industry to grow 9.2%. Conventional electronic products can be divided into several categories: Yet there are still uncertainties which will affect future economic Computer, Communication, Consumer, Industry, and Automotive. development. The most crucial keys are how the industry will be impacted Electronic products have been developed towards compact size and light by COVID-19, the new US President’s economic policy decisions and weight, low power consumption, interconnection, artificial intelligence, the U.S.-China Trade War, the slowdown of economic growth in China, and deep learning. For example, notebooks and tablets can operate conflicts in regional politics, decisions by the U.S. Fed, degrees of inflation longer, and cellphones can be wirelessly connected to notebooks and in various countries, and international energy price trends. Therefore, tablets. In addition, the greatly enhanced bandwidth of broadband all major global wafer foundries should be prudent with their capital networks has contributed to the development of networked and smart expenditures when expanding production capacity planning. TVs. By linking all things via the access, delivery, and processing of information to form a large network, many breakthrough applications and Correlation Among Upstream, Midstream, and enormous business opportunities in the fields of smart home, health care Downstream Industry Suppliers system, and urban facilities become available. Looking towards the future, The division of labor in the semiconductor industrial chain is fairly mature the key technologies of 5G, smartphones, wearable electronics, AR/VR, and can generally be divided into IC design, mask, wafer fabrication, autonomous/electrical vehicle, AI/deep learning, voice control products, testing and packaging from upstream to downstream, and these form and IoT will be constantly adopted and commercialized. As such, complete sub-industries as well. IC design is mainly the design according professional wafer fabrication services should complete corresponding to the specifications and applications required by end products. Different process development and silicon intellectual properties in order to meet IC chips and products will have emphasis on different characteristics, the needs of different application requirements and business opportunities thus leading to different process requirements. Therefore, professional of end system products. wafer foundries must provide the most current technical foundry process technology services and adequate silicon intellectual property (IP), and continuously optimize process technology to help IC design customers in their chip development, eventually moving to mass-production with high quality and high yield rate. In the end, testing and packaging companies will perform IC packaging and pre-shipment testing to ensure customer chips are meeting their respective design specifications.

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Overview of Technology and R&D

R&D Expenses for the Past 5 Years In Thousand NTD

2020 2019 2018 2017 2016

Operating Revenues 176,820,914 148,201,641 151,252,571 149,284,706 147,870,124

Research and Development Expenses 12,895,501 11,860,244 13,025,139 13,669,589 13,532,356

Research and Development Expenses as a 7.29% 8.00% 8.61% 9.16% 9.15% Percentage of Operating Revenues

Note 1: The R&D expenses from 2016 to 2020 are determined according to the international financial report criteria approved by the Financial Supervisory Commission. Note 2: The R&D expense for 2021 was calculated up until the publication date of Feb. 24, 2021, which amounted to NTD 1,715,722 thousand.

Technologies or Products Successfully Developed Within the Past 5 Years

Year R&D Achievements

2016 ‧ Successful development of 28HPCU process technology, which was provided to an IP provider to introduce a 12.5 Gbps SerDes PHY IP programmable design solution for high speed I/O. ‧ Successful development of 40nm embedded charge trap (eCT) flash memory, which was provided to customers for mass production of MCU products. ‧ Successful development of 55nm ultra-low power (55ULP) process, which was provided to an IP provider to introduce PowerSlashTM fundamental IP solutions to meet the long-term battery life-time requirements of wireless IoT products. 2017 ‧ Successful development of a customized 14nm FinFET process technology, which entered mass production for customer ICs. UMC’s 14nm wafer yields reached industry competitive levels, with products delivered to the Company’s primary customer. ‧ Successful pilot production of 28HPCU+ process technology for customers to meet the demand for faster chips with better power saving features. ‧ Introduced a 40nm non-volatile memory technology platform, which incorporated Silicon Storage Technology’s (SST’s) embedded SuperFlash® non-volatile memory that features low power consumption, high reliability, outstanding data retention, and high durability, which can be used for automobile, industry, consumer products, and IoT applications. 2018 ‧ Successful development of 22nm ultra-low power (ULP)/ultra-low leakage (ULL) HK/MG process to provide customers chips with faster speed, better cost efficiency and improved power saving to meet future demands from IoT, automotive electronics, industrial electronics, and various wearable product applications. ‧ 14nm FinFET customized process entered mass production. In addition, UMC developed a new 14nm FinFET platform process (14FFC), with yield for the 128Mb SRAM on this process having reached industry competitive levels. 14FFC also passed process and product reliability verification to officially enter the pilot production stage for customer chips. ‧ UMC partnered with the leader in next generation STT-MRAM, USA-based Avalanche, to jointly develop and produce eMRAM.

2019 ‧ 14nm FinFET-Plus customized process entered mass production. In addition, UMC developed a new 14nm FinFET platform compact process (14FFC), with yield for the 128Mb SRAM on this process having reached industry competitive levels. 14FFC also passed process and product reliability verification to officially enter the pilot production stage for customer chips. ‧ 40nm ReRAM was co-developed with Panasonic and was already at the risk production stage. This high performance ReRAM is fully compatible with UMC’s CMOS logic process.

2020 ‧ 14nm FinFET compact process platform (14FFC) customer product yield reached 90%, passed customer product HTOL qualification, and entered the mass production stage. ‧ 22nm process reached the milestone of mass production for customers’ digital TV (DTV) chips. ‧ Product used in image signal processor (ISP), adopting high-performance computing process (28HPCU+), has been mass-produced. ‧ UMC, cooperating with eMemory and its subsidiary PUFsecurity, announced the successful joint development of the world’s first PUF (physical unclonable function)-based security embedded flash (PUFflash) solution. ‧ The second generation of CMOS-MEMS gas sensors, 90nm and 55nm RFSOI process technologies all entered the mass production stage.

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UMC’s R&D team has always been dedicated to promoting the UMC continued to optimize the process and expand the application development of logic process technology. With the adherence to the range of 22nm process products. In 2021, it is expected that more than belief of “Customer Demand Comes First,” the Company has been ten customers will apply this platform technology for pilot production on providing pure-play wafer foundry solutions to meet market trends and Internet of Things (IoT), consumer electronics, industrial applications and customer needs, which include world-class technology, customer support wearable (Mobile) products. services, and state-of-the-art manufacturing. With the expansion of UMC’s Southern Taiwan Science Park site, the Company continues to 28nm High-Performance Process Technology recruit and train a large number of R&D talent. In 2020, UMC continued UMC’s 28nm high-performance process utilizes high-k/metal gate stack to significantly invest in R&D resources with total annual R&D expense technology. The 28nm high-performance computing process (28HPCU+) reaching NTD 12.9 billion, which has led to fruitful R&D achievements in entered mass production in 2020 for image signal processor (ISP) logic and specialty technologies. products, and more advanced and high-end products are expected to begin mass production in 2021. The 28HPCU+ millimeter wave (mmWave) 14nm Process Technology process covers high-performance and low-power technology platforms; UMC reached the mass production milestone for its customized 14nm verification of the millimeter wave chip design process has already been FinFET process in early 2017, and the competitiveness of device completed. UMC further extends its SPICE model coverage to 110GHz performance and yield has reached industry leading standards. In 2018, for mmWave in order to serve mobile phone, automotive/industrial UMC’s other 14nm project (14FFC FinFET process platform) showed radar and 5G FWA/CPE applications. Customers can leverage UMC's 50% performance improvement and twice the gate density compared mmWave foundry design kit (FDK) to design a transceiver IC, or integrate to 28nm. 128Mb SRAM reached mass production quality levels for the foundry’s well-established digital and analog IP to accelerate their product yield and has passed process and product reliability verification. mmWave SoC design. Currently, several customers have designed products on UMC’s 14FFC platform, with product yield reaching 90% and performance meeting Embedded MRAM design targets. In addition, 14FFC also passed customer product HTOL For future market demands related to advanced IoT, automotive (High Temperature Operating Life) reliability qualification and already electronics, wearable products, and cloud applications, conventional entered mass production. With the successful rollout of 5G and Netcom embedded non-volatile flash memory based on eFlash is gradually applications, UMC’s 14FFC has also attracted customers to engage in showing an imbalance between cost and performance. In light of this, new product design-in, with tape out expected in 2021. UMC invested in the R&D of eMRAM in 2018. Following UMC’s eMRAM development schedule, the critical characteristics including the magnetic 22nm Ultra-low power/Ultra-low Leakage Process component bit error rate, macro circuit endurance, data retention, have Technology already reached the industry's leading competitiveness level. UMC UMC has developed 22nm process technology and its 28nm high expects to provide embedded MRAM macros on the 22nm platform for U performance compact low power process technology platform (HPC +). customers in 2021, and to further provide customers with complete SoC With the same number of mask layers and compatible design criteria as services for their circuit design solutions. 28nm, the performance of 22nm process technology has been enhanced by 10%, power consumption has been reduced by 20%, and area has ReRAM been reduced by 10%. Therefore, the cost competitiveness of 22nm ReRAM is a novel NVM with a simple structure, low operation voltage, technology has been greatly improved to provide customers with more low read current, fast program/erase speed and very good reliability. process options. 22nm ultra-low power/ultra-low leakage technologies ReRAM process is fully logic compatible with less add-on masks and low are suitable for IoT, automotive electronics, industrial applications, and extra cost. UMC started to co-develop ReRAM with Panasonic in 2017 various wearable products that utilize analog, mixed signal, RF, and other and already started mass production in 2020. Panasonic also plans to relevant technologies. UMC’s 22nm introduction has maximized the value have more product tape outs in the near future. of the Company’s 28nm process, with IP verification from 28nm to 22nm being relatively easy due to direct conversion from the use of compatible Display Driver IC Process Technology design specifications. UMC’s 22nm process has been introduced to The Display Driver IC market has demonstrated potential for rapid customers and completed pilot production. In Q4, 2020, it reached the growth and possibilities in numerous applications, including smartphone, mass production milestone for customer digital TV (DTV) chips, and portable phone/PDA, computer screen, touch screen, tablet PC, e-book,

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Overview of Technology and R&D (Continue)

TV, digital camera, on-board screen, and wearable display. UMC’s High present, 0.13um, 0.11um and 90nm processes have been widely adopted Voltage Technology has led the development of various voltages to meet by smart phones for mass production. UMC has its 55nm process ready the specification requirements of various application markets. UMC was for mass production and also started to develop 40nm RFSOI technology the first in the foundry industry to introduce a 28nm High Voltage Process, platforms to catch subsequent growth trends. and mass production has been achieved for high-end LCD Display and high-end OLED Display markets. In addition, UMC has begun developing Non-Volatile Flash Memory a 22nm High Voltage Platform to provide smaller SRAM with higher UMC has always been dedicated to providing customers with complete capacity in order to meet the demand of the 2K/4K high-end display SoC solutions including non-volatile flash memory devices, which market. are essential for most applications. Auto chips, MCU applications and consumer products such as touch control applications all require the Power Management Process Technology support of embedded flash technology. In addition to the successful mass As for the demands for various power management applications (PMIC), production of 0.18um and 0.11um technologies, 55nm embedded flash UMC’s super high voltage (5V and 30V in coordination with 300V, 500V memory has successfully entered the mass production stage. The MCU or 700V) processes have entered the mass production stage. This products equipped with 40nm embedded charge trap (eCT) flash memory technology is suitable for special applications such as power charger, is also in mass production, as well as 40nm technology platform with LED bulb, power amplifier, AC/DC converter, and motor driver and SST (Silicon Storage Technology) embedded SuperFlash® non-volatile can meet industry demand for higher voltage and reduce the energy memory, which has entered small volume pilot production in order to consumption during voltage conversion in order to save energy. As for provide customers with better performance and higher density memory. customers with demands for highly integrated power management, UMC UMC has begun developing a 28nm SST embedded SuperFlash® can provide a complete silicon IP platform compatible with the standard non-volatile memory platform and researching new materials for flash logic process, and various 0.5um, 0.35um, 0.25um, 0.18um, and 0.11um memory such as ReRAM, in order to meet customer demands for higher process technologies that integrate world-class, third generation low specifications. Embedded flash memory is embedded on UMC’s logic conduction resistance/high sustained voltage (5V~200V) devices that technology platform, such that the silicon IP on all logic technology can be used for cell phone, tablet PC, appliance, vehicle applications, platforms can support the SoC design of our customers to further etc. UMC has also begun developing a BCD+NVM technology platform enhance industry competitiveness. as a complete SoC solution for energy-saving demands. UMC 0.11um BCD-Flash platform technology will be released in 2021 for customers’ Mixed Signal/RF Foundry Design Kit design-in and tape-out. Foundry design kits can provide IC design houses with an automated design environment to eliminate unnecessary human manipulation to CMOS Image Sensor (CIS), MEMS, and RFSOI Technologies ensure the success of their chip design. UMC’s complete mixed signal/ For CMOS image sensor technology development, UMC’s 65nm RF design flows for different processes cover both the frontend and process has been verified to enter the mass production stage. The new backend of RF IC Design, which can provide channels to obtain the processes, such as back-illuminated sensor (BIS) and 55nm CIS process design and simulation of circuit level, circuit layout, layout verification, technologies, have entered the verification stage. This technology is and precise RF device mode. In the frontend flow, UMC’s fundamental expected to provide higher sensing resolution to meet product upgrade devices of its mixed signal/RF process are executed using a general requirements. With the rising popularity of MEMS sensor applications, the design environment and simulation tools. In the backend flow, it covers demand for CMOS-MEMS pure-play foundry service has also increased. parameterized cell (P-Cell), including image-oriented layout, in order to For MEMS microphone, several customers taped out new products using provide an automated and complete design flow. Meanwhile, a callback UMC’s MEMS microphone reference process, and volume continued function is provided during the design flow to reduce the data input. to grow steadily. The second generation of CMOS-MEMS gas sensors Design houses can enhance the productivity and reduce the risk of error has also entered the mass production stage. Regarding RFSOI process via this flow. technology, its unique substrate characteristics can prevent high- frequency signal harmonic frequency distortion and reduce power loss. At

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UMC has worked with EDA vendors to provide its customers with a power applications. UMC’s I/O library has an extremely small area, and parameterized spiral inductor design kit based on full-wave simulation it is qualified through a stringent Electrostatic Discharge (ESD) test to – VIL (Virtual Inductor Library). VIL can allow RF CMOS design houses help customers design competitive products that can pass the ESD test to create and simulate the customized inductors compatible with UMC’s with voltage as high as 4kV. So far, numerous customers have taped- process. VIL is established based on UMC’s EMDM (Electromagnetic out successfully and mass produced products using UMC’s I/O library Design Methodology) such that engineers can easily and precisely create on 110nm, 90nm, 65nm, 55nm, 40nm, and 28nm processes. UMC also any RF structure. EMDM allows design houses to have more flexibility to provides customized embedded flash memory (eFlash) IP on various create new geometric modes via editing parameters such as diameter, process generations according to customer needs and has successfully turn, width, and track pitch. helped customers with quick market entry for their products. In addition In addition, UMC’s foundry design kit includes Optimum Inductor Finder to UMC made IPs, the Company has also established partnerships with (OIF). OIF allows design houses to quickly and precisely create a large industry-leading IP vendors in order to provide physical library, non- amount of calibrated inductor design libraries with respect to UMC’s volatile memory IPs, and diversified analog/mixed signal IPs that support process. Meanwhile, OIF also allows users to use software to execute industrial standard interfaces (such as USB, DDR, and HDMI). This the optimized inductor via several simple steps. For example, customers year UMC has extended its long-term IP cooperation with all leading IP can define desired inductance coefficients to reach the balance between vendors to 22nm and 14nm processes in order to provide customers with quality factor and area. OIF can select a design that best fits the a competitive design support environment. specifications from the inductor design library within the shortest amount of time. Intellectual Property Facing increasing technological competition, UMC has significantly Silicon IP Support strengthened patent filings to protect intellectual property in addition to Along with the design trends toward more precise deep sub-micron greatly enhancing technological capabilities in critical fields. Following generation processes and increasing design complexity, foundry can the Company's operation and development planning, the Company’s no longer only focus on process yield improvement, but must also help IP division has formulated strategies and plans for the protection and customers shorten their design flow and reduce design cost. In terms development of intellectual property to promote the steady growth of the of library design kits, UMC strengthens its design support capability by number of patent rights. Status on the implementations is reported to the constantly providing optimized library design kits closely integrated with board of directors at least once a year. The Company was granted a total the Company’s process technology in order to help designers accelerate of 484 domestic and foreign patents in 2020, 271 of which are US patents, the completion of their chip design. From mature to advanced process 96 ROC patents, and 117 China patents. The total accumulated number technologies to specialty processes, UMC can provide complete of UMC’s patents is 13,991, which can provide a thorough and strong IP Standard Cell, I/O and customized libraries to meet customers’ chip foundation for UMC’s technologies. To keep this competitive edge, UMC design needs. In terms of logic process, UMC’s standard cell library has greatly increased the quality and quantity of critical technology patents for advanced processes can provide devices of various operating and in order to further strengthen customer service and competitiveness while threshold voltages (Vt). Along with low power library kits, they can meet helping them to create profits. various customer needs for design flexibility and high performance/low

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Long-Term and Short-Term Business Plans

UMC is committed to delivering comprehensive wafer fabrication Facing market requirements for continuously advancing semiconductor solutions to its customers based on cooperation with partners in the entire technology, in addition to UMC’s own technology R&D, the Company supply chain, including suppliers of equipment, automated electronic will work with strategic partners and supply chain vendors to jointly design tools, wafer design service, silicon IP, and packaging and testing. develop 3D chip integration technologies. UMC will also continue raising The Company provides customers with verified reference flows, broad environmental protection awareness and care for the environment. In silicon IP combinations, free design cell library databases, and diversified addition to establishing a low carbon and green chemical supply chain, options for packaging and testing. With advanced process technologies UMC is dedicated to the support of various environmental protection and world-class 12-inch wafer fabrication technology, UMC can assure activities and the promotion of environmental protection education. accelerated time-to-market for its customers’ SoC designs.

Outstanding UMC Achievements in 2020 Short-Term Objectives • UMC Leads all Semiconductor Foundries with CDP “Leadership Level” UMC’s short-term objectives are to expand the production capacity of Designation on Global Climate Change Assessment for 4th 8-inch and 12-inch specialty technologies and advanced processes, Consecutive Year enhance capacity utilization rate, and strengthen profitability. Currently, • UMC Ranked Top 5% in Corporate Governance Evaluation for 6th UMC owns four 12-inch fabs. In addition to the mass production Consecutive Year of products on process technologies above 14nm, UMC’s rich • UMC Honored by Texas Instruments 2019 Supplier Excellence Award technology platforms at various process nodes and diversified specialty • UMC Selected as a DJSI Global Component for 13th Consecutive technologies can meet all requirements of primary market applications. Year At the same time, the Company continues to conduct structural • UMC Named 2020 “Taiwan Enterprise Sustainability Platinum Award” productivity enhancements and manufacturing capacity optimization of Winner for the 3rd Consecutive Year. 8-inch and 12-inch fabs to embrace new opportunities, improve revenue • UMC Awarded with “National Enterprise Environmental Protection and improve ROE. Award” for the 18th Consecutive Year. • UMC Awarded with “Corporate Continuous Improvement Activity” Medium-to-Long-Term Objectives honors for the 17th Consecutive Year. Advanced and specialty process technology R&D and investment has always been a primary focus of UMC. The advanced processes equipment procurement will be managed more efficiently, and all important R&D work will be implemented according to plan. UMC will work to reduce expenditures and enhance operational efficiency to effectively control costs, while providing customized advanced and specialty process technology platforms to meet customers’ needs. UMC’s capital expenditure for 2021 is expected to be approximately USD 1.5 billion. In order to expand business scale, UMC is looking for existing fabs which are for sale, and will evaluate the possibility to acquire it, because acquiring an existing fab is more effective to meet UMC growth strategy -- to expand cost-effective capacity for competitiveness.

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Overview of Market, Production, and Sales Market Analysis Primary Product Sales Regions Niche of Competition UMC’s products have been well recognized by its important customers • UMC is optimistic about the demand for chips in the future market of covering all global regions. The sales regions of the Company’s products mobile communication and computers; thus proper and cautious are mainly Asia Pacific and North America, which account for 57% and capital expenditure to promote the R&D of related processes and the 30% of our operating revenues, respectively. Europe and Japan accounted expansion of production capacity has been conducted. The Company for 13% of our operating revenues. In the future, UMC will continue to has also actively deployed its specialty technology solutions, such strengthen its cooperation with world-class customers and emerging as high voltage, embedded flash memory, advanced packaging, potential start-up companies in all regions and focus on the development RFSOI, etc., to continue working with leading customers to pursue of high-end products for customers in order to ensure consistent medium more products. UMC is committed to providing sufficient production and long-term company growth. capacity and to establish an open technical platform with its back-end packaging and testing partners to provide proper services. Market Share • The overall structure of Taiwan’s semiconductor industry is complete, UMC is a world leading semiconductor wafer foundry. The total revenue exhibiting world-leading competitiveness in terms of both operational of the global pure-play wafer foundry market in 2020 was approximately efficiency and cost. Taiwan’s semiconductor industry competitiveness USD 75.4 billion. According to the estimation by market survey institution combined with UMC’s technical edge results in a positive multiplier Gartner, UMC has a 7.9% share of the pure-play wafer foundry market, effect for the Company. and its main competitors are TSMC, Globalfoundries, Samsung and SMIC. In 2020, the total operating income of these four companies Favorable Factors for Development Outlook accounted for 81.4% of the total pure-play wafer foundry market. UMC Considering the continuous growth of the IC industry, the ideal position overtook Globalfoundries for second place and is behind TSMC (note: of pure-play wafer foundry, and the company’s competitiveness, the revenue of Samsung Foundry doesn’t include income from Samsung LSI favorable factors of long-term company development are summarized as in-house ASIC business). follows: • Under the vertical division of labor trend of IC design and fabrication, Future Supply-Demand Status and Market Growth there has been prosperous development of the pure-play wafer • According to the market survey of Semiconductor Industry Association foundry market and growth of global demand for pure-play wafer (SIA), the total sales revenue of the semiconductor industry in 2020 foundry services. was close to USD 433.0 billion, which has grown by 5.1% from 2019. • IDMs have adopted the strategy of outsourcing to wafer foundry, thus The semiconductor sales revenue in 2021 is expected to rebound with contributing to the growth of the pure-play wafer foundry market. 8.4% growth to reach USD 469.0 billion. According to the market • Forming strategic alliances with major international companies and survey of Semiconductor Industry Association (SIA), the sales revenue system companies to acquire long-term stable orders. breakdown of the semiconductor industry by region in 2020 was as • A strong management team, advanced process R&D, and superior follows: North America at 21.5%, Europe at 8.4%, Asia (including business development capability can result in outstanding operational China) at 61.8%, Japan at 8.3%. performance. • Looking forward to the driving force behind the pure-play foundry • UMC is one of the most active in the foundry industry in developing market growth, the growth momentum of fabless design companies 12-inch wafer fab manufacturing capabilities, owning a 12-inch fab in typically outpaces the semiconductor industry, and IDMs have adopted the Southern Taiwan Science Park, one in Singapore, another in or raised the ratio of wafer fabrication outsourcing to save costs and Xiamen, China, and acquiring its latest one in Japan. As for the future reduce market risk. Both of these factors have contributed to the high investment in 12-inch fabs, the production capacity will be further growth of the pure-play wafer foundry market; thus the performance expanded according to customer needs and market application of the pure-play wafer foundry industry is expected to be better than trends. the overall semiconductor industry. • In response to the ongoing trends of electronic products, UMC has developed specialty technologies including embedded memory,

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mixed signal, RF, MEMS sensor, and high voltage to meet customer • UMC RFSOI technology is based on a CMOS process to meet demand for process technologies and to establish a leading position cost effective and strict technology requirements for the smartphone for UMC technology development. market. The RFSOI technology platform provides RF N-gate/P-gate • UMC has established the most powerful specialized IoT platform MOS and scalable advanced RF modeling to precisely predict the solution in the industry and provided an ultra-low-power (ULP) circuit characteristics of the process. High-density and high-voltage process with extremely low current leakage design suitable for all MIM, scalable inductor and high-precision resistors will provide UMC kinds of hybrid process technologies. IoT chip designers can customers with the best design and cost advantage. integrate various process schematics to the customized platform • The process platform of 40nm integrated with Silicon Storage based on UMC’s low power consumption technology in order to Technology (SST) embedded SuperFlash® non-volatile memory meet the specific requirements to enter the IoT and wearable is 20% smaller than the mass production 55nm unit, and the total electronic device markets. memory area has been reduced by 20%~30%. There have been more • UMC developed an advanced 28nm eHV (embedded High-Voltage) than 30 customers and products manufactured at all stages based process, and successfully mass-produced AMOLED display driver on UMC’s 55nm SST embedded flash memory process, including ICs. Compared to previous-generation technologies, display drivers SIM card, financial transaction, automobile, IoT, MCU, and other designed using 28nm eHV could improve the power efficiency of product applications. smart phone screens. Looking forward, the rising demand of 5G • The MEMS gas flow sensor process platform jointly developed by smart phones is expected to bring considerable revenue growth. UMC and one of its customers is in successful mass production and • UMC developed advanced 28nm technology, including Poly-SiON has been provided to end customers in various fields, including and high-K metal gate processes, which have already been smart home appliance and IoT. Currently the customer has mass-produced successfully for many logic/RF products. Besides successfully sent samples to major brand makers to be tested. these, an automotive-grade process was also qualified and related • UMC provided Through Silicon Via (TSV) 2.5D/3D IC technology IP is ready, with many customers designing-in now. to customers requiring advanced packaging technology under • UMC’s 22nm technology process provides customers further the environment of an open supply chain cooperative development, advantage for cost-saving and improved device efficiency. The a complementary and complete platform can be formed to provide a process design kit has been released to customers; UMC expects reliable 2.5D/3D IC solution for the semiconductor market. this process will extend the Company’s long-term competiveness. • Besides advanced silicon processes aimed to address higher voltage • UMC’s 14nm (FinFET) process technology already successfully and higher frequency device requirements of 5G, UMC developed entered mass production for customer chips in early 2017. The yield new semiconductor materials as well, including GaAs that has for shipments to primary customers has reached industry competitive already entered mass-production and GaN for high-power levels for this highly advanced process. Being one of the few applications in 5G communications. The Company expects to have a foundries in the world to achieve 14nm production capabilities, UMC place in 3rd-generation semiconductor materials, which will has fully demonstrated the advantages of 14nm FinFET in terms contribute to future revenue. of efficiency, power, and gate density in order to drive next generation ICs in the fields of communication, AI, and various consumer products. UMC’s 14nm FinFET is 55% faster with twice the gate density of 28nm, while power consumption is reduced by around 50%. • UMC developed a mmWave process technology–on nodes ranging from 55nm to 40nm ultra low power, and a 28nm high performance/ low power platform. The Company is developing 22nm ultra low power/ultra low leakage process technology, which offers customers more choices for their product planning to meet reliable, low power and cost-effective requirements.

129 United Microelectronics Corporation | Annual Report 2020

Overview of Market, Production, and Sales (Continue)

Unfavorable Factors for Development Outlook • Diversification of customer regions and products can lower the • Due to the optimism of future long-term annual growth for impact of the trade war. Besides existing strong business from China semiconductor demand, all major global pure-play wafer foundries and the U.S., UMC plans to expand more business from Europe, and China have increased their capital expenditures for expansion of Japan, Korea, etc. To avoid the uncertainty of previous high growth production capacity. UMC will be more cautious in its long-term business from server, automotive and industrial markets, UMC plans demand forecast. to gain more business opportunities from 5G, IoT, AI, etc. • The negative impact to foundry by COVID-19, include at least 3 • Avoiding blind expansion of production capacity; all investment plans possible scenarios: First is to disrupt global semiconductor supply have been carefully evaluated with complete consideration of UMC’s chain and the operation of UMC's suppliers, second is the downturn maturity of high-end processes and customer production capacity pressure for global customer's demand, third is potential production demands at various stages. delay due to shutdown of factory manufacturing or partial closure of • In response to the addition of new competitors, UMC continues operation. to enhance development of advanced processes, and maintains • Among political and economic tensions between international society, the existing advantages of stable high yield and complete services. countries have been sanctioning competing countries in an attempt The benefits of these are twofold: UMC can increase its lead against to inhibit their market expansion and technology development. This new competitors while also creating differentiation such that UMC impacts the company’s investment and operation activities. The U.S.- can continue to be the best option for its customers. China trade war was caused by a long-term trade deficit between U.S. • Providing the most advanced and proper process services with and China, and U.S. concerns about infringement of intellectual respect to IC product characteristics in all application fields in order property rights and business secrets. This trade war is not to help customers achieve the goals of lowest cost, high efficiency, expected to conclude in the near future and may even become a and low power consumption. long-term confrontation. Intervention includes tariffs, closed sales, • Strengthening marketing effectiveness and the customer service policy intervention and government subsidy, etc. The impacts to mechanism in order to continuously improve customer satisfaction. UMC, including a tariff barrier between the U.S. and China, will lower • Strengthening the development of long-term partnerships with semiconductor demand from the U.S., China and even worldwide, customers, providing competitive advanced processes and with customers reducing orders and a weakening global production capacity, helping customers expand their market share, semiconductor market. U.S. regulation to stop foreign shipments of and growing together with customers in order to seize the opportunity products containing U.S. technology to China’s companies will of new growth waves. possibly impact UMC’s shipment to China’s customers. High-tech • Taking countermeasures at all times to respond to constant market material export bans bring uncertainty to UMC’s production and time- variations while facing global recession. Expanding customer bases, to-delivery. U.S. trade bans on specific companies in China will improving product mix, and further enhancing the flexibility of possibly lead to supply chain re-arrangement, which will result in production capacity allocation in order to mitigate the impact of tighter foundry capacity allocation. periodic demand fluctuation.

Countermeasures • Continuous cost saving and efficiency enhancements to effectively reduce costs, and cautiously and effectively expanding the production capacity of advanced processes; strengthening the competitive edge of the Company by increasing the ratio and product mix towards high-end processes. • Acquiring existing fabs through a more flexible strategy to expand the footprint of fab capacity through investment participation and strategic alliances to reduce the time, risk, and cost of construction of new fabs and to serve local markets.

130 Operations Overview

Overview of Market, Production, and Sales (Continue)

Important Purposes and Production Processes of Main Products • RFSOI process: for fabricating wireless front-end chips, such as Main Process Technologies and Corresponding Products wireless switch, tuner used by mobile phones, WLAN, and wireless • CMOS Logic: for fabricating chips that execute logic computing base station. functions, such as programmable gate array, multimedia processor, • GaAs process: for power amplifier IC of handset and base station. and application processor chips. • GaN process: for RF IC of power amplifier IC, LNA in 5G base station, • Mixed-Signal: for fabricating chips which can simultaneously and DC-DC converter in high-power portable battery charger in process analog/digital mixed signal, such as ICs for broadband handset, tablet, and notebook, power supply of workstation and access communication and optical storage. server, and DC-DC converter in EV. • RF CMOS: for fabricating high frequency wireless communication • 3D IC package: for many applications in HPC, 5G, datacenter and chips, such as ICs for cellphone RF transceiver, Wireless Local Area automotive. Network (WLAN) and Bluetooth. • Embedded Memory: for fabricating integrated logic and memory chips Production and Fabrication Process for high performance with low power consumption, such as chips for A complete IC chip fabrication process can be divided into five processes, micro-controller, touch controller, and smart card. including IC design, mask fabrication, wafer fabrication, packaging, and • High Voltage: for fabricating driver ICs for LCD TV, cellphone, tablet, testing. UMC has been dedicated to the R&D of advanced IC processes e-paper screen driver IC, and power management IC. and specialty technologies in order to provide customers with wafer • CMOS Image Sensor: for fabricating CMOS image sensors used in fabrication technologies required by their IC designs. digital camera, cellphone, and webcam. • MEMS: for making application products such as microphone, inertia sensor, and pressure sensor. • 3D FinFET: for fabricating high performance chips and chips for executing fast logic computation, such as mobile phone baseband processor, application processor, and memory controller.

131 United Microelectronics Corporation | Annual Report 2020

Status of Supply of Primary Raw Material

Type of Primary Suppliers Market Status of Suppliers Procurement Strategy Primary Raw Material Silicon Wafer • S.E.H. Taiwan (manufacturing sites: US, Japan, These five makers are the world’s 1. The Company has been in long-term procurement Taiwan and Malaysia) primary silicon wafer suppliers with relationships with the world’s primary suppliers • SILTRONIC Singapore (Manufacturing sites: production sites in the US, Japan, in order to ensure the steady access to production Germany, US and Singapore) Germany, Italy, Korea, Taiwan and material. • Global Wafers (Manufacturing sites: US, Southeast Asia, who can offer 2. In recent years the ratio of procurement from Taiwan, Italy and Japan) steady and high quality silicon local makers has increased maturely, which can • SUMCO Group (Manufacturing sites: Japan and wafers. reduce the risk of international transportation and Taiwan) procurement cost. • SK Siltron (Manufacturing site: Korea) 3. The Company will convene a supplier management committee meeting every quarter to evaluate suppliers’ performance in order to adjust the ratio of procurement from these suppliers. 4. The Company established a sourcing committee to implement source integration and development more effectively and to gain the most benefit of cost reduction.

Major Suppliers In Thousand NTD

2020 2019

Name Amount Percentage of Relation to UMC Amount Percentage of Relation to UMC Net Purchase Net Purchase Supplier “ A” 5,329,822 11 None 5,675,751 14 None

Others 41,767,109 89 35,982,480 86

Net Purchase 47,096,931 100 41,658,231 100

Note: As of the Annual Report printing date, if there is any financial data of the publicly listed company (or company with stocks transaction in securities firm’s premises) certified or approved by CPA audit, it should be disclosed: None.

Reasons for changes in procurement amount: No major changes.

Major Customers In Thousand NTD

2020 2019

Name Amount Percentage Relation to UMC Amount Percentage Relation to UMC of Operating of Operating Revenues Revenues

Customer “A” 20,380,814 12 None 17,576,293 12 None

Others 156,440,100 88 130,625,348 88

Operating Revenues 176,820,914 100 148,201,641 100

Note: As of the Annual Report printing date, if there is any financial data of the publicly listed company (or company with stock transactions in securities firm’s premises) certified or approved by CPA audit, it should be disclosed: None.

Reasons for changes in sales amount: Due to the increased demand of communication products, the contribution of customer “A” increased.

132 Operations Overview

Production Figures

2020 2019

Segments Unit Capacity Production Production Value Capacity Production Production Value Quantity (In Thousand NTD) Quantity (In Thousand NTD) Wafer In Thousands 9,188 8,893 133,991,069 8,148 7,229 123,055,291 Fabrication of 8-inch Wafer Equivalents

New Business - 227,873

Total 133,991,069 123,283,164

Sales Figures

2020 2019

Segments Unit Shipments Amount Shipments Amount (In Thousand NTD) (In Thousand NTD) Wafer In Thousands Domestic 3,705 63,829,608 2,977 53,190,058 Fabrication of 8-inch Wafer Equivalents Export 5,208 106,055,593 4,212 89,434,961 New Business Domestic 468 17,627

Export 3,226 26,118

Total Domestic 63,830,076 53,207,685

Export 106,058,819 89,461,079

Note: Net Sales.

Industry Specific Key Performance Indicators

2020

KPI Target Actual Difference

Utilization Rate 89.6% 96.9% 7.3ppts

Wafer Sales Contributed from 40nm and below 33.7% 36.9% 3.2ppts Technologies

133 United Microelectronics Corporation | Annual Report 2020

Employees

Number of Workers

2021 2020 2019

Engineers 11,361 11,377 11,328

Administrators 805 795 809

Clerks 3 3 24 Technicians 7,116 7,211 7,416

Total 19,285 19,386 19,577

Average Age

2021 2020 2019

Average Age 37.9 37.7 37.1

Average Service Years

2021 2020 2019

Average Service Years 11.3 11.2 10.5

Educational Distribution Ratio (%)

2021 2020 2019

Ph.D 1.5 1.5 1.6

Master 27.2 27.2 28.1

Bachelor/Associate/Diploma 49.2 49.0 47.6

High School and Below 22.1 22.3 22.7

Note: The data represented for 2021 was gathered until February 24, 2021.

134 Operations Overview

Environmental Expenditure Information

By the publication date of the 2020 annual report, all audits on UMC by spent on annual environment monitoring to track the overall emission of environmental protection agencies showed results in compliance with pollutants. In addition, in response to RoHS (Restriction of Hazardous regulatory requirements with no environmental protection violations or any Substances), around NTD 570,000 has been spent on continuous penalty or loss resulting from environmental pollution. certification of the QC-080000 IECQ HSPM system, product inspection, UMC has identified environmental risks during the operational process and educational training. according to the spirit of international environmental management In the future, the Company’s primary environmental protection expenditures system (ISO14001) standards, based on which corrective and preventive and items will include: 1. Costs of replacement, renewal, and upgrade of existing measures can be continuously conducted, including equipment hardware pollution prevention equipment; 2. Operational costs of pollution prevention improvement, enhancement of personal educational training, and equipment; 3. Waste disposal costs, and 4. Environmental monitoring costs. strengthening of operating system management. In 2020, the total environmental protection related expenditures for all UMC fabs exceeded NTD 2.17 billion. The environmental related expenditures include investment in highly efficient pollution prevention technology and preventive equipment, totaling NTD 710 million. The monthly pollution prevention expenses and O&M of pollution prevention equipment exceeded NTD 88.8 million, while the monthly waste disposal cost exceeded NTD 20.4 million. Meanwhile, NTD 17 million has been

Labor Relations

UMC has consistently valued employee benefits and welfare, and has and health, labor relations, and the national excellence award for friendly actively cultivated talent, implemented labor laws and regulations, workplace. Among these awards, the Special Distinction Award was given protected employee rights and interests, and created a bright and by the Hsinchu Science Park Bureau for Excellent Workplace Equality and pleasant working environment. UMC complies with various local laws Southern Taiwan Science Park Bureau for Advanced Workplace Equality. and regulations, and strengthens employee awareness to prevent labor At the same time, UMC also won various corporate sustainability disputes. Through channels such as labor-management meetings, awards in 2020. For corporate sustainability, UMC ranked in the top divisional meetings, forums, suggestion boxes, grievance hotlines staffed 5% for corporate self-governance, and has won the Taiwan Corporate by complaint specialists, and communication management units, the Sustainability Platinum Award, Ministry of Economic Affairs Energy Company has achieved competent communication and effective problem- Saving Benchmark Award and National Enterprise Environmental solving. Protection Award. In addition, UMC has been listed on the Dow Jones In addition to effectively maintaining harmonious labor relations, UMC Sustainability Index (DJSI) for 13 consecutive years. respects and promotes international human rights by providing employees From recent years to the publication of this annual report, UMC with a quality employment environment. Moreover, in UMC and all its has not suffered any loss arising from labor disputes. In view of the subsidiaries, the management and implementation of labor relations abovementioned comprehensive system and diligent management, UMC such as employee welfare measures, in-service education, training and can continue to effectively avoid labor disputes or losses. retirement systems are planned and conducted in accordance with or above and beyond the requirements of law. UMC has also set up in-house physicians to provide medical services and quality counseling services for the physical and mental health needs of employees, thereby promoting harmonious labor relations. UMC is committed to providing employees with a safe and friendly working environment. Through continuous efforts, UMC has received numerous awards from the Science Park Bureau for promoting workplace safety

135 United Microelectronics Corporation | Annual Report 2020

Education and Training

High-quality talent is the cornerstone of UMC's competitiveness, and proposal improvement, project management, problem analysis comprehensive talent development and cultivation are the keys to techniques, statistical process control and experimental design. improving human resource quality. UMC's human resource cultivation • Language Training: Employee language proficiency is determined policies are tailored according to the career development needs of through language testing. Training programs targeting specific employees in their particular job type and rank. The policies provide learning needs are then provided accordingly to strengthen employee systematic training for all employees, such as new employee, technical, language skills and workplace competitiveness. management, quality control and language courses. In addition, a wide • E-Learning: UMC has established a learning webpage for employees range of learning resources such as online learning courses, on the that integrates all course information, training systems and data job training (OJT) and in-service training are also offered to provide all enquiries. The online platform enables employees to easily access employees with a working environment that is conducive for continuing needed information for planning and learning without schedule development. In 2020, UMC conducted a total of 7,368 training sessions, constraints. totaling 12,511 hours of training, with 168,064 participants and total • On the Job Training: Each fab has an Education Committee to provide training expenses of NTD 54,309,728. training for employees in the various divisions. The training is based The following is a summary of training courses provided by UMC: on skills required by specific jobs and professional skills assessment • New Employee Orientation: To help new employees quickly adapt to to ensure that employees have the required job competencies. the work environment, orientation training is provided for new Additional training based on individual differences is also provided to employees to give them a basic understanding of semiconductor improve the quality of work. The Human Resource Division conducts processes and establish a common language. In addition to basic an annual review of training outcome to determine and direct the courses on company organization, remuneration and benefits, basic operations of the Education Committee in each fab, and convenes a daily necessities and industrial safety, U-Camp courses on workplace training outcome meeting so that the fabs can share their experience. stress management and adopting a positive attitude also help new • In-service Training: UMC provides information on in-service courses employees understand the spirit and values of UMC. To help new offered by outside colleges and universities, promotes educational employees quickly develop professionalism and an appropriate job resources and offers subsidies for in-service training to encourage attitude, they are paired with a mentor to help them quickly integrate employees to develop the professional competencies or management into the corporate culture. skills required at each stage of their career. • Technical Training: To help engineers quickly master the overall • Business Ethics Training: To enhance the behavioral literacy, technologies and continue to advance technologically, UMC has professional ethics and professional competence of UMC and all its a comprehensive training blueprint for engineers that is specific to employees, courses on employee ethics, insider trading prevention divisional attributes. The curriculum includes basic courses (General and conflict of interest are conducted within the Company and to Level 2 courses) and advanced, technology-specific themed promoted in the Planning Section of the UMC intranet site. To gain seminars (Level 3 - 4 courses) to enhance the technical capability of public trust, all employees (including high-level executives and other the engineers and develop a system of internal experts. In addition, managers in the operation team) are expected to abide by the ethical to equip employees with multiple skills and promote cross-divisional spirit of the Company in their daily tasks and businesses, thereby cooperation, UMC continues to promote inter-divisional training ensuring the sustainable growth and development of the Company. courses to increase the depth and breadth of professional and To ensure effective training direction and implementation, the Human technical training for employees. Furthermore, curriculum content Resource Division develops education and training projects in the is continuously improved to meet the rapid changes and progress of fourth quarter of each year according to annual company-wide policies, technology. the General Manager's directives for training focus and direction, • Management Skills Training: Management skills development is an and company-wide survey of training needs. The projects include important task for supervisors at all levels. To this end, UMC provides company-wide, cross-divisional and divisional training programs. a series of courses targeting competencies relevant to supervisors, Program implementation is reviewed each quarter, and corrective and such as management behavior, skills, knowledge and corporate improvement measures are proposed for unachieved goals to ensure the culture integration. To assist supervisors with achieving cooperation effectiveness of specific employee training. in their work and management, learning resources such as foreman/ sectional chief, grassroots supervisor, middle-level supervisor and UMC believes that creating a high-quality work and learning environment senior executive training courses are conducted. can increase employee performance output and retention, and that high- • Quality Training: Training courses relevant to UMC quality policies and quality employees who continue to develop are the key foundation to the quality requirements are conducted, such as knowledge management, sustainable development of UMC.

136 Operations Overview

Employee Benefits

Employee Welfare System • Accommodation and transportation assistance: UMC provides safe UMC believes that employees are the most important assets of the and comfortable accommodations for both direct labor and indirect Company, and that a company can continue to develop and progress labor. Free scheduled transportation and shuttle services are also only with appropriate and sufficient talent. To this end, UMC is committed provided for convenient and quick connections. to creating a healthy workplace environment. In addition to providing At the same time, the UMC Welfare information platform was optimized competitive salaries and dividends, a comprehensive education and in 2018 with the introduction of the Welfare Club APP; through GPS, training system, diverse benefits and a safe and healthy working employees can instantly find contract stores, thereby further enhancing environment, UMC has also developed a comprehensive employee their after-work life. welfare system in accordance with local laws and regulations and UMC also holds employee health in high regard, and plans and regional needs. implements benefits in accordance with or above and beyond the UMC provides a variety of welfare measures as follow: requirements of the law. For example, UMC complies with the Act • Nutritionally balanced and delicious meals: Each fab has its of Gender Equality in Employment, the Regulations for Establishing independently operated cafeteria and a variety of meal options. By Measures of Prevention, Correction, Complaint and Punishment of combining the cafeteria, cafe and convenience store into an integrated Sexual Harassment at Workplace, and regulations for leave such as dining area, employees can enjoy healthy and balanced meals. personal, sick, maternity, paternity, menstrual, family care, marital, • Fitness Sports Center: UMC operates its own recreation center in the bereavement, occupational sickness, annual, parental and nursing Hsinchu science park, and Tainan Fab 12A has the UMC Park Activity leaves. Center, a multi-purpose sports center gym and the LM Dormitory In particular, UMC is the first private enterprise in the country to promote gym. In addition, other facilities such as gyms and aerobics a 12-hour rotating shift for its direct labor. Further worth mentioning is classrooms are located in appropriate areas of UMC fabs to reflect the the Company’s comprehensive insurance system where from the day concept of a healthy workplace. of their employment, employees are provided with numerous insurance • Welfare Events: The Welfare Committee routinely organizes events services. In addition to labor, health and free group insurance (NTD 2 (such as Family Day, art activities, movies, trips), and in coordination million group insurance and cancer insurance), the spouse and children with company celebrations, organizes inter-fab competitions to of employees can enjoy life insurance, accident insurance and group cultivate team unity. At the same time, other inter-divisional and medical insurance, and their parents can enjoy accident and medical inter-fab activities are held during holidays to enhance employee work- insurance, thereby freeing them of worry and enabling them to work their life balance. best for the Company and society. • Club Recreation: UMC has five major categories of clubs, such as sports, arts and community service. Whether active or more sedentary, employees can choose from a variety of content. In 2020, UMC had a total of 30 clubs and about 2,369 participants.

137 United Microelectronics Corporation | Annual Report 2020

Employee Benefits (Continue)

Employee Health Health Center has installed an internal reporting system for potential UMC has a longstanding commitment to creating a workplace occupational chronic injury and disease, with regular hearing inspections environment that is physically, mentally and spiritually healthy. UMC is and vision care programs to effectively prevent occupational injuries. convinced that only employees who are physical and mentally healthy can Moreover, as of 2020, UMC’s IT divisions have integrated their existing be highly efficient and produce excellent work performance. In addition systems to construct a customized personal Health Care System for to assisting employees in all aspects of health management and health employees. In addition to checking their own health check reports over promotion, UMC also reaches out to their families in the hope of boosting the years, colleagues can also receive system notifications on the day employee work morale and improving the quality of their work. of consultation with medical staff, and immediately read and confirm While valuing the physical condition of employees, UMC also spares consultation related information, which improves the timeliness and care no effort in their mental health management. Through a confidential rate of the medical team’s care. In addition to regulatory annual checkups, agreement mechanism, employees are also provided with free UMC also offers a variety of preventive screening and health promoting professional psychological counseling. Moreover, employees and their activities such as other cancer screening, flu vaccination, abdominal families are given new health knowledge through online platforms, ultrasound and other out-of-pocket items so that employees can choose lectures, conference and publicity materials to help them maintain good appropriate health checks according to their needs. physical and mental health. Risk control identifies and mitigates risks before they can cause harm, To help employees balance their physical and mental health and that and to minimize the probability of occurrence and degree of damage, the of their families in their busy work life, UMC provides free counseling Health Center must naturally assume frontline duty. The above-mentioned services to ensure the mental health of employees. Through confidential health management methods and health promotion activities are intended professional counseling, employees are assisted in addressing their to ensure that employees sufficiently understand and actively participate psychological and spiritual issues. In addition, through the Internet, in improving their own health condition, so that the purpose of early brochures and lectures, employees are given the knowledge and skills diagnosis and treatment can be achieved. It is hoped that every employee for healthy living, thus enabling them to meet the multiple challenges of can support and grow with the Company, and can work together for the work and family. sustainable development of UMC. In 2020, UMC adopted the “2020 Health Care 2.0” as the main focus of health promotion activities for each quarter, and integrated occupational Labor Pension System safety and health laws such as maternal protection, overwork prevention, In terms of labor pension system, UMC allocates the worker’s retirement human factors engineering and healthy body posture guidelines to protect reserve funds to the Labor Pension Reserve Supervisory Committees in employee health. At the same time, medical checks for employees and compliance with regulations, and processes the employee labor pension hospital check-ups for their families are provided annually. A variety payment in accordance with the Labor Standards Law. Since July 1, 2005, of health promoting activities and education are then organized for for employees who opt for the retirement system under the Labor Pension employees accordingly to give them further knowledge and skills for Act, 6% of their monthly salary is paid into their individual labor pension self-managing their health and the health of their families. Furthermore, account to secure their rights and interests. through occupational safety and health project management, UMC’s

138 Operations Overview

Major Contracts Supply and Marketing The Company has signed sales and service contracts with the following UMC maintains long-term business relationships with major wafer companies to grasp the current situation of the global market. In addition, material suppliers. The main supply and sales contracts are as follows:

Contract Contracted Party Contract Period Key Content Restrictive Type Clause Sales UMC Group（USA） Jan. 1, 2019～Dec. 31, 2024 Sales and related service for semiconductor None products Service United Microelectronics （Europe）B.V. Jan. 1, 2018～Dec. 31, 2022 Marketing support service for semiconductor None products Service UMC Korea Co., Ltd. Jan. 1, 2020～Dec. 31, 2020 Marketing support service for semiconductor None Jan. 1, 2021～Dec. 31, 2025 products Service HeJian Technology (Suzhou) Co., Ltd. Jan. 1, 2020～Dec. 31, 2024 Marketing support service for semiconductor None products Service United Semiconductor Japan Co., Ltd. Jan. 1, 2020～Dec. 31, 2024 Marketing support service for semiconductor None products Purchase Shin-Etsu Handotai Taiwan Co., Ltd. Indefinite Wafer material supply None

Patent and Technology Licenses UMC values and protects intellectual property rights. With nearly 40 or technology patent holders to ensure that UMC’s customers are not years dedication in earning semiconductor patents, UMC has achieved subject to the risk of wafer process infringement. The following are patent a predominant position in the semiconductor industry. UMC also enters licensing contracts received and given by UMC: into patent or technology license contracts with major semiconductor

Contract Type Contracted Party Contract Period Key Content Restrictive Clause

Patent International Business Jun. 25, 2009～Jun. 30, 2029 Patent cross-licensing for None Cross-license Machines Corporation semiconductor process, semiconductor device and semiconductor design.

Technology International Business From Jun. 29, 2012 IBM licensed its 20nm CMOS None License Machines Corporation and FinFET technology to UMC. Patent License Conversant Intellectual From Feb. 08, 2018 License for specific patents. None Property Management Inc. & Conversant IP (Taiwan) Inc.

Patent International Business Jun. 13, 2013～Dec. 30, 2035 Patent cross-license for None Cross-license Machines Corporation semiconductor process, semiconductor device and semiconductor design.

Technology HeJian Technology (Suzhou) Jul. 11, 2013～Jul. 10, 2028 UMC licensed its 0.13um UMC signed and implemented the contract License Co., Ltd. process technology to HeJian in accordance with the scope approved by Technology (Suzhou) Co., Ltd. the Investment Commission, Ministry of Economic Affairs.

Technology Mie Fujitsu Semiconductor From Aug. 29, 2014 UMC licensed its 40nm None License Limited process technology to Mie Fujitsu Semiconductor Limited.

139 United Microelectronics Corporation | Annual Report 2020

Major Contracts (Continue)

Contract Type Contracted Party Contract Period Key Content Restrictive Clause

Patent Avago Technologies Sep. 29, 2018～Dec .31, 2023 Patent cross-license for None Cross-license International Sales Pte. semiconductor device related Limited patents. Patent License NXP B.V. Sep. 30, 2015～Sep. 29, 2020 Patent license and None assignment of right for patent application. Patent Katana Silicon From Nov. 05, 2019 License for specific patents. None Cross-license Technologies, LLC

Technology United Semiconductor Apr. 01, 2017～Mar. 31, 2022 UMC licensed its 28nm UMC signed and implemented the License (Xiamen) Co., Ltd. process technology to United contract in accordance with the scope Semiconductor (Xiamen) approved by the Investment Commission, Co., Ltd. Ministry of Economic Affairs.

Technology United Semiconductor Nov. 23, 2018～Nov. 22, 2028 UMC licensed its 80/90nm UMC signed and implemented the contract License (Xiamen) Co., Ltd. process technology to United in accordance with the scope approved by Semiconductor (Xiamen) the Investment Commission, Ministry of Co., Ltd. Economic Affairs.

Patent Polaris Innovation Limited From Mar. 20, 2020 License for specific patents. None Cross-license

Technology Collaboration

Contract Type Contracted Party Contract Period Key Content Restrictive Clause

Technology Fujian Jinhua Integrated May 13, 2016～May 12, 2021 Collaborative development of UMC signed and implemented the Development Circuit, Co., Ltd. DRAM process technology contract in accordance with the scope approved by the Investment Commission, Ministry of Economic Affairs.

Construction

Contract Type Contracted Party Contract Date Key Content Restrictive Clause Construction Wholetech System Hitech Limited, From Jan., 2020 For building the facilities of Fab 12A in the Tainan None Hueng Luei Process Industry Co. Ltd., Science Park, UMC signed construction contracts Worldwide Co. Ltd., with the vendors including but not limited to those Princeton Precision Industries Co., major vendors listed in the second column. The Ling-yong International Engineering Corporation, total contracted amount exceeded NTD 2 billion. L&K Engineering Co. Ltd. and others. Construction L&K Engineering (Suzhou) Co., Ltd., Jan. 01, 2020~ United Semiconductor (Xiamen) Co., Ltd. entered None Wholetech Group (Shanghai) Trading Co.,Ltd., Dec. 31, 2020 into construction contracts with the vendors Shanghai Nomura Engineering Co, Ltd., including but not limited to those major vendors Hengyuan Allis Electric Co., Ltd. and others. listed in the second column for building fab facilities. The total contracted amount exceeded USD 20.95 million. Construction Suzhou Topco Construction Ltd. May 01, 2019~ HeJian Technology (Suzhou) Co., Ltd. entered into None Jun. 30, 2020 construction contracts with the vendors listed in the second column for HeJian New Phosphorus Wastewater Treatment System. The total contracted amount exceeded RMB 13.18 million (excluding tax).

140 Review of Financial Position, Operating Results, Risk Management

Review of Financial Position, Operating Results, Risk Management

142 Financial Position 143 Financial Performance 144 Cash Flow 144 Major Capital Expenditures from Recent Years and Impact on Company’s Finance and Business 144 Main Reasons and Improvement Plans for Recent Annual Reinvestment Policies and Profit or Loss, and Investment Plans for the Coming Year 145 Risk Management and Evaluation 154 Other Necessary Supplements

141 United Microelectronics Corporation | Annual Report 2020

Financial Position In Thousand NTD

2020 2019 Differences Differences(%)

Current assets 164,305,911 153,757,141 10,548,770 7

Property, plant and equipment 132,774,663 150,374,096 (17,599,433) (12)

Intangible assets 4,877,913 5,198,247 (320,334) (6)

Other assets 75,557,888 60,857,881 14,700,007 24

Total assets 377,516,375 370,187,365 7,329,010 2

Current liabilities 78,243,526 72,714,322 5,529,204 8

Non-current liabilities 63,499,747 90,258,621 (26,758,874) (30)

Total liabilities 141,743,273 162,972,943 (21,229,670) (13)

Capital 124,224,015 117,575,798 6,648,217 6

Additional paid-in capital 43,211,214 39,550,394 3,660,820 9

Retained earnings 80,176,360 60,820,280 19,356,080 32

Total equity 235,773,102 207,214,422 28,558,680 14

Analysis of deviation of over 20% between 2020 and 2019: 1. Other assets: Due to the increase in investments accounted for under the equity method. 2. Non-current liabilities: Due to the reclassification of long-term loans to current liabilities. 3. Retained earnings: Due to the increase in net income for the period.

142 Review of Financial Position, Operating Results, Risk Management

Financial Performance In Thousand NTD

Items Years 2020 2019 Differences Differences (%)

Operating revenues 176,820,914 148,201,641 28,619,273 19

Operating costs (137,823,813) (126,886,669) (10,937,144) 9

Gross profit 38,997,101 21,314,972 17,682,129 83

Operating expenses (23,243,584) (21,807,284) (1,436,300) 7

Net other operating income and expenses 6,253,890 5,182,162 1,071,728 21

Operating income 22,007,407 4,689,850 17,317,557 369

Non-operating income and expenses 5,918,772 1,045,787 4,872,985 466

Income from continuing operations before 27,926,179 5,735,637 22,190,542 387 income tax Income tax (expense) benefit (745,767) 393,130 (1,138,897) (290)

Net income 27,180,412 6,128,767 21,051,645 343

Analysis of deviation of over 20% between 2020 and 2019: 1. Gross profit Due to the increase in capacity utilization for the period partially offset by the impact of the appreciation of the Taiwan dollar against the US dollar. 2. Net other operating income and expenses Due to the increase in gain on disposal of buildings. 3. Non-operating income and expenses Due to the increase in net gain of financial assets and liabilities at fair value through profit or loss caused by stock market volatility and increase in share of profit of associates and joint ventures. 4. Income from continuing operations before income tax Due to the increase in gross profit for the period. 5. Income tax (expense) benefit Due to the increase in income from continuing operations before income tax for the period.

143 United Microelectronics Corporation | Annual Report 2020 Cash Flow

Analysis of Cash Flow for the Year Ended December 31, 2020 In Thousand NTD Cash at Beginning of Net Cash Flow from Net Cash Flow from Cash at End of Remedial Measures for Cash Flow Year Operating Activities Investing and Financing Year Shortfalls Activities Investment Plans Financing Plans

95,492,477 65,745,192 (67,189,633) 94,048,036 - -

Note: Net cash flow from investing and financing activities includes the effect of exchange rate changes of NTD (1,476,786). Analysis of Cash Flow 3. Financing activities: 1. Operating activities: Net cash flow from financing activities is mainly from repayments of Net cash flow from operating activities is mainly from adding back long-term and short-term loans and bonds, distribution of cash depreciation expense to net income. dividends and acquisition of treasury stock, which are partially offset 2. Investing activities: by borrowing long-term and short-term loans and treasury stock sold Net cash flow from investing activities is mainly from acquisition of to employees. property, plant and equipment, acquisition of intangible assets and 4. Remedial measures for cash flow shortfalls: increase in other financial assets. Not applicable.

Analysis of Cash Flow in the Coming Year In Thousand NTD Cash at Beginning of Estimated Net Cash Estimated Net Cash Estimated Cash at Estimated Remedial Measures for Year Flow from Operating Flow from Investing and End of Year Cash Flow Shortfalls Activities Financing Activities Investment Plans Financing Plans

94,048,036 68,664,416 (68,116,173) 94,596,279 - -

Major Capital Expenditures from Recent Years and Impact on Company’s Finance and Business Execution Status of Major Capital Expenditures and Sources of Funding In Thousand NTD Operating Project Actual and Expected Sources Completion Total Amount Capital Expenditures Plan Segment of Funding Status (Up To 2020) (Up To 2020) 2020 2019 Wafer Production Cash flows generated from operations, Completed 41,719,539 25,845,056 15,874,483 Fabrication Equipment bank loans and issuance of bonds

R&D Cash flows generated from operations, Completed 4,112,751 2,245,462 1,867,289 Equipment bank loans and issuance of bonds New Business Production and Cash flows generated from operations Completed 32,638 13,950 18,688 R&D Equipment and bank loans

Expected Benefit from Capital Expenditures Based on aforementioned capital expenditures, in 2020 the ratio of production capacity from high-end processes of 40nm or below is above 30%, of which the production capacity for high-end 28nm or below has grown by 5% from the previous year.

Main Reasons and Improvement Plans for Recent Annual Reinvestment Policies and Profit or Loss, and Investment Plans for the Coming Year

China’s domestic market demand for semiconductors now ranks No. Co., Ltd’s 12-inch fab for 28-90nm wafer service to pursue further growth 1 in the world, and the Chinese government has recently adopted a of the Company. multi-pronged approach to support its semiconductor industry. To be more aligned with the market and better meet the needs of IC design UMC’s investment policies are based on long-term strategic investments companies in China, as of December 31, 2020, UMC and its subsidiaries to match the Company’s operations and development. have invested about USD 1.37 billion into United Semiconductor (Xiamen)

144 Review of Financial Position, Operating Results, Risk Management Risk Management and Evaluation

Enterprise Risk Management Policies Enterprise Risk Management Architecture Through risk management methods and organizations, UMC effectively and Operation prevents and controls enterprise risks, comprehensively implements them in daily operations, shapes and deepens risk culture, and BOD/Chairman Audit Committee establishes transparent and smooth risk communication to maintain steady operations. Enterprise Risk Management Internal Audit & Control Committee

Divisions

Under the guidance of the risk management policy, the Enterprise Risk Management Committee coordinates relevant departments of the company to jointly review the internal and external risks that the company faces. The Committee integrates the identified various risk items, including strategy, operations, finance, hazards, etc., assesses the likelihood and severity of their occurrence, defines the priority order and risk level of risk items, and takes response actions for major corporate-wide risk issues. And, the committee makes a summary report to the Board of Directors every year. The management plan includes periodic reviews of the potential occurrence of risks and the potential for changes in severity over time, and whether the risk level of major risks is reduced after the implementation of countermeasures to grasp the effectiveness of risk management. The Committee also incorporates internal audit and internal control functions to ensure that the risks associated with operations have been effectively controlled. Risk event impacts and measures include important risks related to environmental, social or corporate governance issues of the company's operations. Future R&D Projects and the Estimated R&D Expenses Estimated annual R&D expenses for the next three years Item/Year 2021 2022 2023 R&D expenses Not applicable Not applicable Not applicable Operating revenue Not applicable Not applicable Not applicable (undisclosed financial forecast of the Company) The share of R&D expenses to operating revenue 7% to 10% 7% to 10% 7% to 10%

Major R&D Projects in the Future Latest Current Progress R&D Expenses Time of Mass Key Success Factors for Future R&D Annual Which Should Production Project Be Invested for the Next Two Years

14nm process UMC finished its 14nm FinFET process platform NTD 300 million 2020 • Customer product design verification and technology development. Customer product yield reach 90%, passed yield reached mass production levels and customer product HTOL qualification and entered the mass performance meets product design production stage. targets.

22nm process For 22nm ultra-low power/ultra-low leakage technology NTD 600 million 2021 • Customer circuit design verification and technology development, pilot production of customer products product yield qualification to meet mass has been completed. In Q4, 2020, the mass production production standard. milestone of customer DTV chips has been reached. Product optimization is continued and has been expanded to automotive electronics applications.

U 28nm Image According to the timeline of the 28HPC + image signal NTD 200 million 2021 • Customer circuit design verification Signal Processor processor process development plan, the related process and product yield qualification for mass technology development and verification were completed, and the production. mass production milestone was reached in 2020. Low- power high-pixel image signal development is proceeding as planned.

Embedded Relevant process development and verification should be NTD 700 million 2021 • Customer circuit design verification and magneto- conducted according to the development project schedule product yield qualification to meet mass resistive memory for embedded magneto-resistive memory. production standard.

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Latest Current Progress R&D Expenses Time of Mass Key Success Factors for Future R&D Annual Which Should Production Project Be Invested for the Next Two Years

Special Development and verification of 90/55/40/28/22nm NTD 2.7 billion 2022 • Cooperating with customers to create a technology R&D specialty technology platform (including HV, CIS, eFlash, RFSOI, etc.) win-win situation. • Completing IP verification on time. • Quality verification is in compliance with customer requirements.

Wafer-on-wafer Development and verification of wafer-on-wafer hybrid NTD 200 million 2023 • Cooperating with customers to create a hybrid bonding bonding win-win situation. • Customer circuit design verification. Note: The R&D expenses for the next three years will account for around 60% to 75% of the total annual R&D expenses.

In 2020, UMC has been constantly strengthening its independent range of 22nm process products. In 2021, it is expected that more than R&D capabilities and fabrication; in the future, UMC will continue to be ten customers will apply this platform technology for pilot production of dedicated to the R&D of logic and specialty processes. The Company Internet of Things (IoT), consumer electronics, industrial applications, will adhere to its R&D strategy to establish independent R&D capabilities and wearable (Mobile) products. and will work with important partners, such as IDMs and fabless, to UMC’s 28nm high-performance process utilizes high-k/metal gate stack develop key process technologies through technology licensing. UMC technology. The 28nm high-performance computing process (28HPCU+) will also work with suppliers of photomask, packaging, equipment, entered mass production in 2020 for image signal processor (ISP) material, and EDA to speed up the market launch schedule in order products. The 28HPCU+ millimeter wave (mmWave) process covers to fulfill the Company’s promise to provide customers with R&D of key high-performance and low-power technology platforms. The verification processes. of the millimeter wave chip design process has been completed. UMC In terms of independent R&D capabilities, UMC’s focus is on recruitment further extends its SPICE model coverage to 110GHz for mmWave in and cultivation of R&D talent in order to build an outstanding R&D team. order to serve mobile phone, automotive/industrial radar and 5G FWA/ The 12-inch R&D production line will continue to be expanded in the CPE applications. R&D Center located in Southern Taiwan Science Park with sufficient For the embedded magneto-resistive memory, this year’s scheduled funds for enriching the overall R&D resources. In terms of 14nm process development milestone was completed with high test-chip yield, and technology, UMC finished 14nm FFC platform development. Product the Company provided the embedded MRAM macro IP for potential yield reached 90% and performance met the product design target. customers on its 22ULL platform. At the same time, the 14FFC platform process also passed customer For specialty technologies, UMC has launched the development of product HTOL (High Temperature Operating Life) reliability qualification “More than Moore” processes and successfully provided comprehensive and entered the mass production stage. With the successful rollout of solutions such as ultra-low power platform (ULP), CMOS image 5G and Netcom applications, UMC 14FFC has also attracted customers sensor (CIS), MEMS, eFlash, embedded high voltage (eHV), power to engage new product design-ins, with tape out scheduled in 2021. management IC (PMIC), and RFSOI. UMC’s R&D team will continue to optimize 14nm to take full advantage of In order to control the technology and development schedule to fulfill the performance, power consumption, and gate density of 14nm FinFET the promise of customer market launch, UMC will continue with its in order to drive next generation Internet, AI, and consumer product independent R&D strategy, adhere to a customer-first philosophy and applications. integrate external R&D resources. The Company will also accelerate The development of a 22nm ultra-low power/ultra-low leakage shrink R&D, expand production capacity and enhance its revenue mix of key process technology can be provided as a planar process technology processes so that higher profits can be created in order to respond to the solution with lower cost and better cost efficiency for customers. UMC is challenges resulting from constant technology evolvement. offering a 22ULP (ultra Low Power) version that has compatible design rules and the same mask count as the foundry’s 28nm technology, and also a 22ULL (ultra Low Leakage) version. UMC 22ULP and 22ULL The Impacts of Interest Rates, Foreign form a super set to support a voltage domain from 1.0V to 0.6V, allowing Exchange Rates and Inflation on Corporate customers to enjoy the benefits of both technologies on system-on- Profitability and Future Countermeasures chip (SoC) designs. The 22nm platform is supported by foundation IP and is ideal for a wide variety of semiconductor applications including Interest Rate Fluctuation consumer ICs for set top box, digital TV, surveillance, power or leakage The bank loans of the Company are floating rate debts. Therefore, sensitive IoT chips (with Bluetooth or WiFi) and wearable products that changes in market interest rates will result in fluctuations in future cash require longer battery life. UMC’s 22nm process has been introduced flows. Based on bank loans as of December 31, 2020, if the interest rate to customers and, in Q4, 2020, has reached the milestone of mass increases/decreases by 10 basis points, the Company’s net profit for production of digital TV (DTV) chips for customers. There are further 2020 will decrease/increase by NTD 44,123 thousand. In order to reduce plans to continue optimizing the process and expand the application interest rate risk, the Company continues to monitor changes in market

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interest rates. Besides bank loans, the Company also utilizes various as the basis for the Company to enter into transactions mentioned above. financing instruments. To support operating needs, the Company will The Company has announced and reported these transactions, and also take advantage of long-term debts with favorable fixed rates depending established a registration book in order to review these transactions on market conditions. regularly. If necessary, measures will be taken to control financial risks. Foreign Exchange Rate Fluctuation The Company’s exposure to the risk of changes in foreign exchange Impact and Corresponding Measures of rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a different currency from the Major Domestic and International Policy Company’s functional currency) and the Company’s net investments in and Legal Changes on UMC's Finances and foreign subsidiaries. Based on the assets and liabilities of risk-avoiding Business management denominated in foreign currencies as of December 31, 2020, when the NT dollar strengthens/weakens by 10 percent against UMC complies with national policies and laws. The Company’s relevant the US dollar, the Company’s net profit for 2020 will decrease/increase divisions keep abreast of major policy and legal changes at all times. UMC by NTD 1,335,914 thousand. On the other hand, when the Chinese adjusts its internal systems and business activities accordingly to ensure Yuan strengthens/weakens by 10 percent against the US dollar, the the smooth operation of the Company. Company’s net profit for 2020 will increase/decrease by NTD 1,625,241 thousand. When the Japanese Yuan strengthens/weakens by 10 percent against the US dollar, the Company’s net profit for 2020 will increase/ Impact on the Company’s Financial Results decrease by NTD 472,837 thousand. and Corresponding Contingency Plans in The Company applies natural hedges on the foreign currency risk arising Response to Changes in Technology and from purchases or sales denominated in foreign currencies, which means balancing the assets and liabilities denominated in foreign currencies the Industry to reduce the impact from fluctuation in foreign exchange rates. The Company may use derivatives, such as currency forward contracts, The Company places significant importance on the dynamics of to partially hedge foreign currency risks associated with certain highly the semiconductor industry and continues to invest and develop probable forecast transactions. These hedges will offset only a portion semiconductor manufacturing process technology and know-how. In of, but do not eliminate, the financial impact from changes in foreign order to accelerate the development of logic and specialty technologies, exchange rates. Furthermore, as net investments in foreign subsidiaries optimize transistor performance, reduce power consumption, and are for strategic purposes, they are not hedged by the Company. The continuously enhance our technical advantages, UMC invested a total Company continues to monitor the changes in foreign exchange rates in of NTD 12.9 billion in research and development in 2020. At the same order to respond promptly to any significant fluctuation. time, the Company is also actively working with external academic and Inflation government institutions to develop new process technologies for next The inflation status in 2020: Due to the impact of the COVID-19 in generation product applications to diversify the Company’s process 2020, the price of international crude oil and raw materials fell, causing technology offerings. The Company invested approximately USD 1 billion Taiwan’s 2020 annual growth rate based on consumer price index (CPI) in capital expenditure during 2020. Looking into 2021, UMC will continue to fall below that of 2019; however the average consumer price index to appropriately invest into advanced technology node capacity, optimize (CPI) in Taiwan was 102.31%, indicating that the overall consumer price capacity to enhance product mix and penetrate emerging applications. is stable, with no deflation. The Company believes that these efforts will create higher customer adoption of our logic and specialty technologies and expand UMC’s Policies for High-Risk and Highly Leveraged market share to fuel growth. UMC will strive to enhance its operations and preserve the best interests of its shareholders. Investments, Lending, Endorsements, Guarantees for Other Parties, and The Impact of Corporate Image Change Financial Derivatives Transactions, Main on Corporate Crisis Management and Reasons for Profit and Loss, and Future Response Measures Countermeasures The Company’s business philosophy is based on the Company’s The Company has not engaged in any transaction of high-risk or highly sustainable operation and long-term partnership with customers and leveraged investments. Any financial derivatives transaction is to social groups. The Company regularly holds shareholders’ meetings and enhance the Company’s operating performance and reduce operating legal person briefings to increase financial transparency. The Company and financial risks. also actively participates in community and public welfare activities, The Company has established “Loan Procedure,” “Endorsements and effectively fulfills its responsibility as a member of society. For a and Guarantees Procedure,” and “Financial Derivatives Transaction variety of different emergencies, there are special personnel responsible Procedure” in compliance with the relevant rules and regulations issued for planning and responding to minimize the uncertainty of business by Financial Supervisory Commission. These internal procedures serve operations.

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Expected Benefits, Possible Risks and providing the means to increase revenue, profits and market share. Response Measures for Mergers and When production capacity reaches economies of scale, manufacturing costs can be dramatically reduced. However, the significant potential Acquisitions for fluctuations in the semiconductor industry economic cycle creates financial risk, as any excess capacity still must be accounted for under With UMC’s customers being located all over the world and given the depreciation of plants and equipment during demand softening caused Company’s business philosophy of continuously improving its service by economic conditions. This risk would be considered a burden to the quality to its customers, UMC understands the importance of satisfying Company. customer needs and providing local services. At the same time, UMC The Company’s capacity expansion is under deliberate capital also recognizes that with expansion through mergers and acquisitions, expenditure plans, which focus on satisfying customer needs while the Company can take advantage of increased economies of scale optimizing capital utilization. Disciplined capital expenditure can help to and operational efficiency. Based on this concept, UMC’s Board of develop a healthy industry environment. Directors approved the acquisition of the entire share capital of Mie The Company has set forth the Capital Budget Committee from 2013, Fujitsu Semiconductor Limited in June, 2018. The transaction was which comprises of members from the Company’s Independent completed on October 1, 2019 and the acquired company was renamed directors and non-executive directors. The Committee’s goal includes as UNITED SEMICONDUCTOR JAPAN CO., LTD. upon completion review of the Company’s capital expenditure budget, with the intent to of the acquisition. The acquired company is UMC’s production base in strengthen long-term corporate strategy, financial planning and business Japan for 12-inch wafer services. In addition, UMC will also continue performance. to invest in United Semiconductor (Xiamen) Co., Ltd. to provide 12- inch wafer services in China. UMC’s global operational capabilities can be strengthened, and customers are given more competitive Risk and Response Measures of foundry solutions. Moreover, UMC’s overall value can be increased and Procurement Concentration shareholder interests can be enhanced. The main possible risk of cross-border merger and acquisition involves Risk of material shortage: for example, insufficient production capacity, integration and compliance with the regulations of various countries, and accident in the factory, or natural disaster could result in material whether the production synergy following mergers and acquisitions can shortage. meet expectations. If, for some reason, the M&A cannot be successfully Risk avoidance approach: currently UMC adopts a supplier self- completed or is unable to achieve the operational synergy target, it management mode, in that these materials are stored in the Company’s may affect the company's overall operating performance and even the and suppliers’ warehouses near UMC fabs. The safety inventory level company's long-term growth strategy. is increased to meet emergency demand and to shorten the emergency UMC established a dedicated organization to execute M&A related response time in order to effectively reduce material shortage risk, activities, with a view of successfully completing equity purchases and the Company’s operation regulations are formulated according to and M&A and taking advantage of operational synergies. At the same the four subjects of “Risk Assessment Operation,” “Operational Impact time, the Company also makes plans for future sustainable business Analysis Operation,” “Accident Response and Operation Sustainability strategies, and seeks the best interests of all shareholders as the Plan” and “Emergency Material Procurement Operation.” direction of continuous efforts. Therefore, in terms of the integration In addition, UMC has established alternative suppliers and regularly and compliance of laws and regulations, UMC strives to meet the implements evaluations of supplier capabilities, flexibilities and natural requirements of the regulators to handle equity purchases or M&A disaster risk mechanisms that correspond to the production site. plans. In addition to careful planning and consultation in advance, the Currently, there are no high risk incidents. In case of emergency, Company also consults about the merger mechanism with professionals the emergency response mechanism will be activated, and it will from the respective countries; in terms of operational efficiency, the be managed according to the “Accident Response and Operation Company pays attention to cross-national cultural differences and sets Sustainability Plan” and “Emergency Material Procurement Operation.” up a communication channel at the beginning to establish full trust of the employees and customers of the acquisition target; reconciles the operation process and calibrates the quality management system to Risks of Sales Concentration and smoothly port new processes and new products; plans an expert team Response Measures to promote benchmarking and introduces best practices to maximize overall operating efficiency. UMC has established long-term steady cooperation with multiple world- class customers, and the long-term sustained growth of the Company can be ensured by combining the competitive edges of UMC and these Risk of Excess Capacity from Fluctuating customers. In 2020, the operating revenues of UMC’s top 10 customers Economic Conditions accounted for approximately 53.7% of UMC’s operating revenues. UMC will continue to closely cooperate with customers who require advanced The Company increases its production capabilities through fab and specialty processes, and provide customized solutions for specific expansion in order to accommodate more customer orders, thus products and applications. UMC will continue to provide comprehensive

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customer oriented pure-play wafer foundry solutions in order to expand On January 12, 2018, UMC filed three patent infringement actions its customer base and improve product mix. The Company will further with the Fuzhou Intermediate People’s Court against, among others, enhance the flexibility of production capacity allocation to reduce the MICRON (XI’AN) CO., LTD. and MICRON (SHANGHAI) TRADING CO., impact of periodic demand fluctuations with the goal of mitigating risk. LTD., requesting the court to order the defendants to stop manufacturing, processing, importing, selling, and committing to sell the products Risk of Change of Control and Stock Price deploying the infringing patents in questions, and also to destroy all Fluctuation from Large Scale Transfer of inventories and related molds and tools. On July 3, 2018, the Fuzhou Intermediate People’s Court granted preliminary injunction against the Shares aforementioned two defendants, holding that the two defendants must immediately cease to manufacture, sell, and import products that infringe If the Company’s directors or major shareholders holding more than the patent rights of UMC. The court approved withdrawal of one of the 10% of issued and outstanding shares transfer a significant portion of patent infringement actions on our motion while the other two actions are their shareholding in the Company, then a change of control may occur. still on trial. Furthermore, such transfer may give rise to investors’ concerns on On November 1, 2018, the Department of Justice of the United States the operation of the Company and may cause the market price of the (“DOJ”) unsealed an indictment against UMC, FUJIAN JINHUA Company’s shares to fluctuate. INTEGRATED CIRCUIT CO., LTD. (“JINHUA”), and three individuals, The share withholding status of the Company’s directors and managers including one current employee and two former employees of UMC, have been reported based on official regulations and laws. Meanwhile, alleging that UMC and others conspired to steal trade secrets of there has been no significant share transfer activity. MICRON, and used that information to develop technology that was subsequently transferred to JINHUA. On the same day, the DOJ filed a Risk of the Company Losing One or civil complaint enjoining the aforementioned defendants from exporting to the United States any products containing DRAM manufactured by More Key Personnel Without Adequate UMC or JINHUA and preventing the defendants from transferring the Replacement Due to any Change of trade secrets to anyone else. Besides, UMC has suspended the joint Company Control technology development activities with JINHUA. With respect to the criminal proceedings, on October 22, 2020, UMC filed a sentencing memorandum with the court, proposing to plead guilty to a lesser charge UMC’s future success depends to a large extent on the continued and to pay a fine of US$60 million. On October 29, 2020, the court service of the Company’s chairman and key executive officers. If the approved the above-mentioned sentencing memorandum submitted by chairman or key executive officers leave their positions as a result of a UMC. The DOJ has dismissed its corresponding civil complaint. UMC change in Company control, and qualified replacement personnel cannot has recorded the fine in non-operating other losses. be found and integrated in a short period of time, operations may be On March 14, 2019, a putative class action styled Meyer v. United adversely affected. Microelectronics Corporation and several executives, was filed under The Company’s management focuses its operations with the intent Securities Exchange Act of 1934 and Rule 10b-5 in the United States to maximize value for its shareholders, thus gaining their trust and District Court for the Southern District of New York. The court appointed recognition. If there were a replacement of management, the succeeding a lead plaintiff and approved a lead plaintiff counsel on May 23, 2019. personnel would have to recognize corporate culture, be qualified to On September 27, 2019, UMC received the service of plaintiffs’ amended assume professional duties, and be able to execute the Company’s complaint and appointed counsels to prepare the relevant procedures. policy. Currently the mediation process has been completed and is now under trial. The Company does not expect material financial impact resulting Litigation and Non-Litigation Incidents from this claim. On August 31, 2017, the Taichung District Prosecutors Office indicted Risks Relevant to Intellectual Property UMC based on the Trade Secret Act of R.O.C., alleging that employees of UMC misappropriated the trade secrets of MICRON TECHNOLOGY, UMC values technology development and respects intellectual property INC. (“MICRON”). On June 12, 2020, an adverse ruling issued by the rights, hence UMC develops independently to acquire intellectual District Court of Taichung in a suit alleged that UMC, two of its current property rights actively and devotes itself to protecting its and its employees and a former employee engaged in the misappropriation of business partners’ intellectual property rights. Although UMC dedicates trade secrets. The Company does not expect material financial impact itself to enforcing and protecting intellectual property rights, it cannot resulting from this claim. UMC appealed against the sentence. completely prevent its intellectual property rights which strongly related On December 5, 2017, MICRON filed a civil action with similar cause to UMC’s business, such as process, technology, software, trade against UMC with the United States District Court, Northern District secrets, or know-how from being infringed or misused by third parties. of California. MICRON claimed entitlement to the actual damages, In addition, responsibilities for some of the infringements of intellectual treble damages and relevant fees and requested the court to issue an property rights are strict liability and require no finding of mens rea or order that enjoins UMC from using its trade secrets in question. UMC intent, so when UMC independently develops the process, technology, has appointed counsels to prepare answers against these charges. software, trade secrets or know-how required to engage in business, it Currently the civil complaint has been stayed by the court. may infringe on third parties’ intellectual property rights unknowingly.

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Therefore, UMC may need to obtain technology or patent licenses gas emission and the impact of global warming. In the meantime, UMC from third parties on reasonable terms. However, if UMC cannot obtain supported the EPA early reduction project and acquired a carbon the technology or licenses on reasonable terms, it may be accused of reduction allowance, thus successfully turning risk into competitiveness. intellectual property infringement by third parties or even receive an Facing the issues of global climate change and the management of injunction granted by the court on third parties’ motion for injunctive energy and greenhouse gases, in recent years UMC has been actively relief, thereby jeopardizing UMC’s abilities to perform business contracts drafting environmental protection objectives through various stages and eventually leading to breach of contracts. and aspects and developed specific implementation plans for gradual UMC’s ability to compete also depends on its ability to operate without promotion. infringing on third parties’ intellectual proprietary rights. As is the Green Energy Policy may Cause Investment Pressure case for many companies in the semiconductor industry, UMC from and Unstable Power Supply Risks for Companies time to time receives letters from third parties asserting and alleging In response to global climate change mitigation and adjustment actions, infringement of some intellectual property rights of their technology. the Taiwan government has announced its 2025 renewable energy goal Due to the rising of active Non-Practicing Entity (NPE), UMC expects and asked enterprises that when their contract capacity with Taipower to receive similar letters in the future. Irrespective of the validity or the company reaches 5,000 kW, 10% of the contract capacity must come successful assertion of such claims, UMC could incur significant costs from renewable energy, such as solar energy, energy storage, renewable and management resources for defending these claims, which in turn energy voucher, or face a penalty. To adapt to the operational impact could seriously impair UMC’s business and operation. resulting from regulatory compliance, UMC proactively plans different In order to minimize the liabilities arising from third parties’ claims solutions, such as installing renewable energy generating equipment alleging UMC’s manufacturing of semiconductor devices or designs of or energy storage equipment, or the purchase of vouchers. Estimated UMC’s customers’ end products infringe on third parties’ intellectual annual amortization expense from increased operating costs or capital property rights, generally, UMC accepts orders only from companies expenditures will not exceed NTD 200 million. Also, even though the with satisfactory reputation and for products without potential percentage of installed capacity for renewable energy is gradually infringement risks. Furthermore, UMC also obtains indemnification rights growing according to Taipower’s website, there is a considerable from customers and equipment vendors to hold UMC harmless from difference across 27GW targets. If the Taipower generators break down any damages resulting from any suits or proceedings brought against and the renewable energy supplies are unstable during peak power UMC alleging UMC infringes third parties’ intellectual property rights by consumption periods, there may be a risk of power disruption due to manufacturing products for customers or using equipment supplied by insufficient backup capacity. Therefore, UMC has provided UPS for vendors. important production equipment, and plans to replace the existing lead- acid batteries UPS with lithium ion batteries year by year to improve Risk of Climate Change supply stability. In addition, UMC has also established a diesel generator safety inventory control mechanism... etc. to strengthen power supply The Risk of Climate Change may Negatively Affect resilience. UMC’s Business Operation UMC actively focuses on the business operational concern of climate Disaster Risk Management change. The Company has developed the UMC Climate Change Risk Assessment methodology based on the Fifth Assessment Report (AR5), As a leader in the semiconductor fabrication industry, UMC is fully which is published by the Intergovernmental Panel on Climate Change aware of the impacts of natural disasters and man-made accidents on (IPCC), and the government's downscaling scenario projection for production and operation. Therefore, UMC has always faced disaster identifying potential physical hazards under a climate change situation, risk management with an active attitude of prevention management, and ISO14090: Adaptation to Climate Change and the assessment and pursues the highest safety standards within the semiconductor procedure in the UK Climate Impact Programme (UKCIP). Adaptation industry through stringent risk engineering control and implementation and mitigation measures are developed in response to the identified management of safety regulations and standards. climate change risk. Fire Safety The inevitable global carbon risk resulting from climate change will UMC has applied international standards, such as Factory Mutual (FM) not only bring rising manufacturing and transportation costs due to Insurance Company, Underwriters Laboratories Inc. (UL), National Fire increased prices for petroleum and electricity, but will also directly impact Protection Association (NFPA), and Semiconductor Equipment and the economy and the operation of enterprises from the perspectives of Materials International (SEMI) to building structure, equipment, and energy tax, carbon tax, border carbon tariff, and stringent environmental risk engineering control and assessment, and the company regulations laws and regulations, and lead to additional investment costs. In addition, have been formulated to serve as definite requirements. UMC is also the UMC has also actively implemented measures in response to mitigate only company in the semiconductor industry with its own fire brigade. In the impact caused by climate change. For example, to reduce the addition to being equipped with professional fire engines and fire rescue emissions from fluorinated greenhouse gases used in wafer foundries, equipment, the fire brigade normally conducts professional training to UMC was the first in the industry to complete a two-phase fluorinated teach emergency response capabilities to employees, while having the greenhouse gases replacement plan for all its fabs (by replacing C F 2 6 ability to respond onsite in case of disaster. with C3F8 and C3F8 with C4F8) in order to greatly reduce greenhouse

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Protection Against Natural Disaster with international standards and to maintain the commitment level UMC has actively planned and established a complete and sound of Highly Protected Risk (HPR) for our customers and the insurance disaster risk management response procedure. It has worked with market. Aside from some items in older fabs, the ratings of all other fabs world-renowned structure consultation companies specialized in are maintained at the highest level. responding to earthquake disaster, such as EQE (EQE International Inc.) and JENSEN HUGHES to include seismic safety of buildings, factory Business Continuity Management (BCM) facilities, pipelines, and production machines into the design criteria at UMC recognizes that pursuing the sustainable operation of its organization the preliminary stage of fab construction. There are plans for continuous actually means providing strategic customers and important stakeholders improvement of older fabs built prior to 1999. In February 2016, an with continuous services. Therefore, the highest mission of the Company earthquake of Richter scale magnitude 6.6 took place in southern is to provide customers with diversified, high quality, and uninterrupted Taiwan, registering close to 6 at UMC’s Fab 12A in Tainan Science wafer foundry services. Park. However, hardware loss was rather moderate compared to other In 2013, UMC was the first in the industry to be granted the ISO22301 companies in the industry, which was an indication of the effectiveness Business Continuity Management System Certificate issued by SGS of UMC’s seismic design. In addition, UMC has continued to introduce Taiwan Ltd., for both its Hsinchu HQ and Fab 12A. In 2016, Fab 12i in new seismic protection technologies, including anti-earthquake damper Singapore was granted ISO22301 Business Continuity Management for buildings and seismic isolation platforms for reticle stocker and System Certificate after only its first evaluation. In 2019, Hsinchu HQ, furnace and the establishment of an onsite earthquake early warning Tainan Fab 12A, and Singapore Fab 12i passed the 3-year review cycle system for further enhancement of personal safety and reduction of risks by BSI (British Standard Institution) to extend the validity of certification. associated with losses of machine and equipment due to earthquake. Under such operation and maintenance mechanism, UMC will continue to review, refine, and ensure the maintenance and recovery of the highest Responses to Extreme Weather operational objectives upon occurrence of disaster or impact in order to UMC has always been concerned about the possible impacts from protect the rights and interests of customers and stakeholders. extreme weather. The Company has completed flood potential simulations for fabs in Taiwan since 2014, and conducted hardware Business Continuity Policies improvement to strengthen the flood control capacity of Fab 12A. UMC • The highest purpose of the Company’s sustainable operation and was also the first in this industry to develop an early warning system management is to provide customers with diversified, high quality, to detect water shortage that is integrated with quarterly long-term and uninterrupted wafer foundry services while continuously pursuing weather forecast data to provide the prediction of water conditions in the partnerships with its customers. coming three months so that water saving measures can be conducted • UMC will implement the operation of the business continuity in advance. Moreover, Taiwan is facing the most serious water shortage management organization and conduct business impact analysis condition in 56 years. To respond to the possibility of stricter water and risk assessment when the business environment changes, so measures being imposed in the near further, UMC has prepared that sustainable operation strategies and objectives can be formulated supplementary water resources by contracting with water trucks and and secure resources can be obtained for such implementation with sources, and will align with the reclaimed plant construction schedule continuous review and refinement. by the Water Resources Agency, Ministry of Economic Affairs to use • In case of disaster or impact, UMC will invest sufficient resources reclaimed water in the plant. The estimated additional cost for 20% water according to its business continuity strategies in order to maintain and supply restriction will be about NTD 3 million/day. restore optimal operations. The Company will keep good Safety Protection of Process Equipment communications with, fight for and protect the rights and interests of its customers and stakeholders. Safety, Health, and Environmental Protection Standards of Semiconductor Manufacturing Equipment (SEMI S2) is the primary international standard for UMC to establish the mechanism for review Enterprise Information Security Risk of new machines and company regulations. The “UMC Process Management Equipment ESH Procurement Specifications” has been introduced at Risk Management Organization the procurement stage. The safety of machines can be under effective control with the machine specifications compliance review before In 2018, UMC established the “Enterprise Risk Management Committee” machines are moved in and machine installation inspection after to collaborate with key organizations in the Company’s risk management machines are moved in. and control to jointly examine and manage internal and external risks. International Risk Rating (Triple-Star Rating System) In the same year, UMC established the “Corporate Security Division” responsible for the Company’s information security and physical UMC introduced the Triple-Star Rating System in 1998, and the security planning and related audit matters, which works together with Company has since invited international insurance company AIG the “Information Technology Division” to further strengthen information (American International Group) to conduct risk audits so that UMC could security. continuously enhance fab protection level in order to be in compliance

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Information Security Policy In 2014, a cross-division security committee was established. Based on UMC’s information security policy is based on the guiding principle: the need to produce secure products like smart card ICs, the Company “To establish Information Security Management rules in accordance to decided to introduce ISO15408 (CC, Common Criteria) certification. The customer requirements, to reach a consensus that information security certification is specifically designed for secure production procedures not is everyone’s responsibility through full awareness, to protect information only in data receiving, processing and destroying but also higher physical Confidentiality, Integrity, Availability for the Company and Customer, and access control request for securing entire production line purposes. to provide a safe production environment to ensure sustainable operation Continuous improvement of PDCA is then carried out through biennial of the Company’s business.” The major information security objectives recertification. are aimed at antivirus, anti-intrusion and anti-leakage through the The Arrangement of the Security Insurance building of multiple internal controls such as firewall, intrusion detection In view of recent reports about data leakage, virus infection and hacking and antivirus systems to enhance the Company’s ability to defend against events in Taiwan and the world, together with the ransomware incident external attacks. Also, with the support of top management and through of a peer semiconductor manufacturer’s information system in August regular education and training programs, security operation/awareness 2018 which caused billions of NT dollars in operational disruption (BI, is tightly involved and seamlessly integrated into every employee’s daily Business Interruption), the worldwide security threat has been drastically work. intensified. There is no guarantee that enterprises will not become the Establish Enterprise Risk Management System target of attack even if they already have good security protection in According to the Enterprise Risk Management Committee management place. UMC’s strategy is to adopt cyber security insurance as a new procedure, UMC assesses the risk level of information security, takes option for partly transferring and mitigating the risk. This insurance response actions, and regularly reviews effectiveness. has been in effect since Jan. 2019 with a retroactive option that can trace back stealth threats existing in the enterprise before the effective UMC complies with multiple ISO certification standards as a means implementation date. Initial insurance amount is set to be USD 10 million of achieving risk-oriented management and inspection purposes in and covers all UMC fabs in Taiwan and Singapore. In the future, they will the areas of quality, environment, water resources, carbon footprint, be reviewed annually to protect the Company from potential losses in the green energy, etc. Related information security certifications include event of a cyber attack. ISO15408, ISO22301 and ISO27001. The Company has also established The Impact of Major Security Incidents and corresponding risk management committees to promote standardization Corresponding Response Measures processes and reduce the risk to business operations. Please refer to the Company website for related certification information. https://www. UMC had a major WannaCry ransomware incident in 2016, causing 42 umc.com/en/Download/awards_and_certificates Servers/PCs/NBs used in the OA area to be infected and needing to be re-built. Fortunately, due to early detection and proper handling, it did Assessment of Information Security and Cyber Risks not spread to production line computers. This is considered a relatively UMC puts particular emphasis on preventing information security and serious virus incident within recent years. In addition to immediately cyber risks, and builds a complete multi-layer defense mechanism upgrading to a new version of antivirus software with behavior-based including firewall, intrusion detection, antivirus system, vulnerability detection capability and implementing strict information device in/out scanning, patch management procedure and penetration testing, management, the Company policy also requires that production line etc. In 2019, UMC also leveraged an international professional computers update critical patches to defend against such worm-type security company’s resources to help on inspecting the robustness viruses that may attack system vulnerabilities. Another countermeasure of overall security as a trusted third party verifier and a basis for is to set the Access Control List (ACL) in production line networks to further improvement. The summary of the annual information security grant necessary access between equipment tools, which can block assessment is as follows: “Overall, UMC has implemented an information viruses from spreading and limit them to a small extent of impact. After security management system. According to this system and control the virus incident in August 2018, SEMICON TAIWAN formed a task measures, conventional malicious programs such as attacks by viruses, force that included UMC to co-study equipment information security Trojans, worms and external hackers will not easily damage UMC’s standards and responsibly contribute as a local enterprise. information system.” In short, the current security risks disclosed by UMC in this annual report should be supplemented with a famous quote from the information Information Security Management System security industry: “There is no such thing as 100% security.” While new UMC is listed on NYSE and complies with the Sarbanes-Oxley Act attack techniques are constantly introduced, defense systems are faced (SOX 404) for internal key financial processes. The Company intends with a zero-day attack limitation. Past defense achievements do not to strengthen information security by introducing ISO27001 information necessarily mean or guarantee that anomalies will not happen in the security management system certification, so that information systems future. can be operated under standard management procedures to reduce Enterprises must keep pace with the times to face the ever-changing security risk and production anomalies that may be caused by human and growing information security threat. Information security has a long error. Continuous improvement of PDCA is then carried out through way to go and requires continuous improvement. UMC will uphold the annual recertification. values of “Customer-orientation, Integrity, Innovation, Accountability,

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Efficiency” as its corporate culture and well fulfill “due care/due Regarding talent retention and training & development practices, diligence” management responsibilities to provide customers with a UMC provides a comprehensive learning environment for employees secure production environment to reduce operational risk and reward to improve the skills and expertise of their colleagues. The Company shareholders with the highest possible investment value. focuses on “talent attraction, cultivation, and retention” as the key goals of training & development, while continuously improving the quality Tension in Political or Economic Relations and effectiveness of training, cultivating talent to meet the needs of the Between Major International Countries; organization, and ensuring the continuation of experience. Meanwhile, UMC also pays attention to external market salary information and the Potential Impact on the Investment provides competitive salary and welfare conditions to achieve the and Operation of the Company and Company’s sustainable operation goals. Corresponding Measures. The Impact of Contagious Diseases Internationally, due to political or economic tensions between major on the Company’s Operations and countries, national power has been exerted to penalize specific entities Countermeasures or even trigger a trade war. The main methods include raising tariffs, embargoes, policy interventions, government subsidies, etc., which may Any outbreak of infectious diseases, such as coronavirus (COVID-19), have an impact on the company's investment and operations. It also Ebola, bird flu, swine flu, or severe acute respiratory syndrome (SARS), affects revenue, delivery, and goodwill. For example, a sharp increase can affect staff attendance and even affect company operations. For in tariffs in importing countries may drive up end-market prices, thereby example, the outbreak of the coronavirus pandemic since the end of reducing consumer purchase demand and further reducing UMC’s 2019 is still spreading globally, adversely affecting the world's economic customer orders; The United States Export Control Act regulates that conditions and the stability of the supply chain. It is estimated that the if those whose content originating from the United States exceeds a epidemic will not be alleviated within a short time period. The impact of certain ratio, their products may not be exported to specific countries. emergency control measures taken by governments to curb the spread This may affect UMC's direct or indirect supply to specific customers; of the epidemic will continue, which may expose UMC to relevant risks, restrictions on the export of high-tech materials may affect UMC's including: unstable sales activities and customer orders, reduced plant production, resulting in failure to deliver on time and damage to goodwill. operations and labor, international travel and communication difficulties, UMC's countermeasures include: limiting transnational cooperation projects, etc. In addition, if any 1. Increasing the diversification of customers’ region and product employee is suspected or diagnosed with an infectious disease, the application. Besides cautiously facing existing business in North company may need to quarantine these employees or close the relevant America and the Asia Pacific regions, UMC also aggressively expands workplace to temporarily suspend some or all production operations. its business from other regions such as Europe and Japan. In addition The company pays attention to the potential risks of various contagious to the company’s original business in server, automotive and industrial diseases and tracks their dynamic changes. UMC established its applications, UMC also has active efforts aimed at expanding its coronavirus epidemic control and response center in January 2020 to opportunities in 5G, IoT, AI, etc. coordinate relevant information and resources usage, including: 2. Monitoring and evaluating the impact of external changes (including 1. Daily review for conditions of production impact, supply chain global regulations, politics, economic conditions, etc.) on the Company's management, epidemic prevention strategies and action preparation, business (raw materials, customer demand, etc.) and taking necessary etc. risk response measures. In practice, a raw material supply chain 2. Defined clear stages of infectious disease disaster management and tracking mechanism is established, and the legal compliance response prepared response measures in advance according to the situation system is strengthened. Through a more accurate grasp of the country's of each stage, and launched corresponding activities in accordance component ratio of the raw materials, UMC can analyze the possible with epidemic development. For example: reduce human infection and impacts and respond in a timely manner. production impact (for detailed related measures, please refer to UMC CSR report); increase buffer inventory, find and expedite the verification The Impact of Talent Retention and of second suppliers to reduce material shortages; reduce the operation Training & Development on the Company’s impact of specific fabs by cross-plant products and order adjustment and Operations and Corresponding Practices. transfer. Up until February 2021, the epidemic has not had a significant impact on the Company's operations. At the same time, UMC has also noticed that At UMC, employees are considered the most important asset and the the epidemic seems to have a medium to long-term impact on certain foundation of sustainable operations. External labor market competition industrial environments, such as structural changes in market demand and the attractiveness of salary conditions have caused staff turnover, and the global supply chain. The Company will maintain a positive and so the failure to effectively maintain and extend experience has potential cautious attitude and continue to pay close attention to and respond to risks to the company’s operations. the risks and opportunities associated with the pandemic.

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Other Significant Risks None.

Note: The analysis and valuation of Risk Items shown above include the data during 2020 and as of the Annual Report Printing Date.

Other Necessary Supplements None.

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156 Description of Corporate Social Responsibility 158 About Social Charity 162 Environmental Protection, Safety and Health Management Instructions

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To fulfill corporate social responsibility and facilitate economic, trading market. The income from this carbon trade was used for the environmental and social progress for the purpose of achieving environmental protection fund. Meanwhile, the “UMC Eco-Echo Ecology sustainable development, UMC has formulated and complies with its Preservation Hope Project” was activated to work with The Society of Corporate Social Responsibility Practice Principles. Wilderness to promote the Sauter's frog habitat preservation action Currently, through the Corporate Sustainability Committee, UMC keeps in Hsinchu, where UMC’s HQ is located, as an effort for contributing abreast of relevant domestic and international standards in corporate to environmental sustainability. In 2016, UMC extended the spirit of social responsibility and changes in the corporate environment. UMC this project and launched the UMC Eco Echo Award. It has collected regularly reviews and improves its corporate social responsibility outstanding projects and creative ideas for a friendly environment via practices, systems and management policies to improve the the execution and selection of the Eco Echo Award in order to urge more effectiveness of its corporate social responsibility implementations. people to join this environmental protection effort. By 2020, more and In 2020, UMC was awarded with multiple honors related to corporate more enterprises were participating in the care for local Taiwan ecology; social responsibility, including being listed as a FTSE4Good Emerging in terms of society, UMC also provides disadvantaged organizations with Index component and FTSE4Good TIP Taiwan ESG Index component, energy saving and carbon reduction services through its energy saving and earning the Taiwan Corporate Sustainability Report Award, Green service team in the three aspects of energy conservation and safety Chemical Application and Innovation Award, Green Procurement Award, counseling, technical information on energy resources and engineering Occupational Safety and Health Award, and Enterprises Environmental improvement in order to fully utilize corporate resources in response to Protection Award. Meanwhile, UMC has been listed as one of the Dow global warming. Jones Sustainability World Index for 13 consecutive years. DJSI is one UMC has also actively promoted clean production and green of the most credible international corporate sustainability evaluation product management. In 2006, the Company was the first among all tools, so this is an indication that UMC’s sustainability performance has semiconductor makers in the world to complete third party verification been recognized by the international investor sector as a global leading audit of its Hazardous Substance Process Management (HSPM) enterprise. system, and UMC became the first company in the world to acquire QC-080000 IECQ HSPM certification for all fabs. In 2009, it completed the first “product carbon footprint” verification of IC wafers according to the International Carbon Footprint Standard PAS2050. In 2010, UMC completed the “product water footprint” verification of IC wafers according to the Business Water Footprint Accounting criteria of the non-profit international organization “Water Footprint Network.” As an important milestone for development of green production, these results can also provide complete, scientific, and reliable product information as the basis for self-review and continuous improvement. In 2017, UMC took the initiative to launch the Triple R Major League project. UMC expects to cooperate with suppliers to promote measures for energy and resource reuse, recycling and reducing to achieve green products with lower environmental impact. On the other hand, UMC has also established a supplier management strategy to strengthen the economic, social and environmental performance by implementing supplier sustainability assessments, on-site audits, and coaching improvements and tracking to create a positive influence and enhance sustainable competitiveness of In addition to continuous dedication to this industry, the self-expectation the overall supply chain. of UMC is to become a green giant within the semiconductor industry. Furthermore, UMC referenced the nature of its businesses as well as the Energy saving and carbon reduction is a long-term undertaking, in 5 key principles of AA1000 SES (Stakeholder Engagement Standard) to which UMC is an advocator of low carbon innovation and provider of low identify the major stakeholders and formulated a management system carbon solutions as well as an implementer of low carbon actions. UMC for the identification of and communication with various stakeholders. established the Fluorinated Greenhouse Gases Reduction Work Group In accordance with the materiality principle, UMC conducts impact as early as 1999 in response to global warming, and it achieved its 2000 assessments of environmental, social and corporate governance voluntary reduction goal outlined by Taiwan Semiconductor Industry issues related to the company's operations every year, and formulates Association ahead of schedule. On Earth Day (April 22) in 2000, UMC corresponding improvement measures and plans. At the same time, the was the first in the industry to announce a “Climate Change Policy” and results were disclosed through the corporate social responsibility reports “UMC’s Low Carbon Commitment” as the highest guidelines in response and company websites. to climate change. UMC’s Corporate Social Responsibility Report issued in 2020 In 2013, UMC started an early reduction project for carbon reduction was composed by referring to the Global Reporting Initiative (GRI) allowance approved by the EPA, which was based on the company’s Standards, and the content of this report was verified by a third party carbon reduction achievements for more than a decade. UMC completed according to “Account Ability 1000 Assurance Standard.” In the same the first carbon trade recognized by Taiwan’s EPA in 2014, which year, the Corporate Social Responsibility Report published by UMC can be regarded as an important milestone for the domestic carbon was awarded the Taiwan Corporate Sustainability Report Award for the

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13th consecutive year. These honors and recognitions indicate that, Supplier Management Committee after long-term dedication to corporate social responsibility, UMC’s To establish a protective environment and emphasize the obligation to actions, transparency and completeness of information disclosure have society, labor rights, security and health while pursuing the goal of a all reached the international level, such that it has become a global continuously evolving supply chain, this sub-committee develops long- benchmark enterprise. term partnerships with vendors for quality, cost leadership, delivery, Structure of UMC’s Corporate Social Responsibility service/response, and sustainability. Organization Innovation Technology Committee UMC’s Corporate Sustainability Committee was established in April Promotes green product research and development and innovations, and 2008. This is an important milestone of UMC’s implementation of social leads in cutting-edge green technology. responsibility and direction towards the road to sustainability, and it also Human Rights and Social Participation Committee represent UMC’s focus on corporate social responsibility and resolution Responsible for protecting the basic rights of employees and promoting of promoting relevant measures. This committee is the highest level communication with outside communities and society. Integrates the organization within UMC in charge of sustainable development and UMC Science and Culture Foundation, and with a focus on education, formulation of directions and objectives of corporate social responsibility arts, sports, public service and environmental protection, strives to for the entire company. The performance and objective achievement will promote technological research and development cooperation, long- be reviewed regularly by the chairman and committee members, and term educational assistance, arts and sports activities and other social the representative of this committee will report to the board of directors welfare events. annually on the effectiveness and plan of promotion, and important Environment Committee issues and responsive measures that stakeholders are concerned about. Promotes company-wide environmental, safety and health, energy, water There are seven sub-committees under the Corporate Sustainability and greenhouse gas emission management to enhance sustainable Committee, which are Corporate Governance Committee, Customer competitiveness. Relationship Management Committee, Supplier Management Green Manufacturing Committee Committee, Innovation Technology Committee, Human Rights and Promotes company-wide green processes, such as hazardous materials Social Participation Committee, Environment Committee, and Green management and increases in resource productivity. Manufacturing Committee. Their functions are described below: The organizational structure of Corporate Sustainability Committee is as Corporate Governance Committee shown below: Helps strengthen the function of the Board and shareholder equity, integrates related regulations and policies of relevant departments, and helps complete and implement the Company’s internal control system to ensure information transparency and disclosure, and compliance with regulations. Customer Relationship Management Committee Refines customer service and quality control, improves service quality and customer satisfaction, and protects customer interests and relevant trade secrets.

Board of Directors

Corporate Sustainability Committee

Sustainability Office

Green Environment Human Rights and Innovation Supplier Customer Corporate Manufacturing Committee Social Participation Technology Management Relationship Governance Committee Committee Committee Committee Management Committee Committee

157 United Microelectronics Corporation | Annual Report 2020 About Social Charity

•UMC Science and Culture Foundation the simplest concepts of companionship, the program connects love and Established in 1996, the UMC Science and Culture Foundation has been hope. promoting social charity for many years. Currently, the focus is long- In 2020, the Foundation invested for the first time in the “Seeing term educational assistance, and encouraging colleagues to serve as Hometown” aerial photography project for rural school children. This volunteers to participate in various public welfare activities. Summary of project was initiated by Professor Su Wenyu from the Love of Self-Made key implementations in 2020: Learning Association of the Republic of China. It is hoped that students from rural areas who are relatively lacking in educational resources will •Spreading the Seeds of Hope and Cultivate Future learn about their hometown, learn to use images to record hometown Competitiveness stories, and develop a deeper sense of identity with their hometown. The foundation mediated the long-term cultivation of Yanzhou Elementary During its 25th anniversary celebration in 2005, UMC launched the School in Pingtung County to participate in the project, and used video Spreading the Seeds of Hope Project, an educational program that works to tell stories about their hometown with 6 other primary and provides after-school tutoring for children from disadvantaged families. middle school teams at the results presentation. It is hoped that through the long-term sponsorship and adoption of For more information on charity events, please refer to the UMC enterprises and calling on scientific and technological people to show Science and Culture Foundation webpage. love, students from disadvantaged families can receive better education and cultivate their future competitiveness, so as to escape the cycle of •UMC LOHAS Education Foundation poverty. This project is funded by the foundation. Cooperative units in “UMC LOHAS Education Foundation” was established in 2009, and has Hsinchu and Tainan provide venues as supplementary classrooms, hire continued to promote national sports and social welfare over the years college students as part-time supplementary teachers, and provide free and has operated its own recreation center in the Hsinchu Science Park. tutoring for students who are economically disadvantaged and need to At present, it focuses on providing a good sports environment for citizens strengthen their schoolwork. For more than ten years, this program has and employees in the park, and assists in handling various activities in not only been a lesson plan, but a public welfare platform that connects the park and the city government. social volunteers and college students to serve with actions. Summary of key implementation outcomes in 2020: •Free Consultation for Health Promotion •Supporting Diverse Education Programs Recreation center provides free exercise knowledge training on site or In order to encourage young people to learn through different ways of over the phone. Professionals in the gym teach how to use retraining thinking, the Foundation has long supported the Youth Performing Arts equipment and help answer any questions about exercise. In addition, Alliance to guide high school students to understand society through the recreation center provides body composition analysis. The machine drama creation. can analyze body composition in a comprehensive manner, such as In 2020, under the epidemic situation, there were still 30 teams body fat rate, muscle mass, basal metabolic rate, etc. Professionals participating in the drama festival activities. The love of drama was introduce the meaning of the measured data and exercise suggestions conveyed through online courses and live broadcasts. It was art to users, and establish correct exercise information. Through the stable education as well as citizenship and life education. operation of the sports hall, a safe and modern sports environment is In addition, the long-term exclusively sponsored program “Whatever provided for citizens and park employees, and a healthy sports concept Makes Sense for Voice of IC Teacher Hung Lan,” discussions are based is introduced. on brain science research and audience opinion on parent education, •Sponsoring the Activities of the Hsinchu City Education and the vast influence of media is used to jointly create smart living with Office the audience to exert the positive influence of the media. The Education Department of Hsinchu City Government organizes In physical education, the foundation has long supported the Nantou International Parent-Child Day and Grandchildren’s Day activities, and Karate team led by coach Huang Taiji and Liao Delan to cultivate UMC LOHAS Education Foundation assists in the promotion of local children from disadvantaged families in Taiwan to practice karate. Over educational activities. In 2020, UMC LOHAS Education Foundation the years, it has achieved two Asian Games gold medals and more sponsored 1,000 gifts and provided gifts for citizens after they passed than ten presidential education award winners. UMC’s 40th anniversary the game. UMC supported the management of public welfare activities, Sports Family Day specially invited the players to perform the opening providing resources and achieving social resource sharing and act, which echoed the corporate activities, and also allowed colleagues integrating resources to maximize their effectiveness. to see the results of the players’ hard work. •Sponsoring the Park Cup Sports Events Reading is another window of learning. The Foundation has long Combined with the Science Park Bureau, government and schools sponsored the Mandarin Daily newspaper education project. In 2020, to handle the Park Cup of table tennis games and badminton games, it sponsored a total of 27 class reading projects in 18 elementary the UMC LOHAS Education Foundation sponsors free venues and schools to provide students with broader reading resources. At the admission fees to promote the sports habits of the employees in the same time, it also links newspapers into the company to hold book fairs Hsinchu Science Park, promote a healthy workplace, and activate the and newspaper reading promotion, so that colleagues are informed of atmosphere of the Hsinchu Science Park through passionate sports another good media for parent-child learning. competitions. Another long-term sponsorship plan is to donate a total of 110 school children to adopt a family, so that family functions will not be affected due to economic factors and children can have a more normal family education. In addition, colleagues are also linked to serve as letter-care volunteers to give care and encouragement to adopted children. One of 158 Social Responsibility

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•Handling Health Promotion Public Welfare Education •Semiconductor programs for cultivating Taiwan’s high- Lectures tech talent UMC LOHAS Education Foundation handles sports experience courses With the mission of cultivating Taiwan’s high-tech talent, UMC not only for sports leisure and health promotion, and invites employees and invests in developing and improving the company’s existing talent, but citizens of the park to participate for free. During the activity, the coach also in cultivating seed talent for Taiwan’s semiconductor technology leads the trainees in basic core training exercises to achieve muscle through early contact. The semiconductor process practicum courses relaxation, body balance, and lower body fat while promoting health in National Kaohsiung University of Science and Technology, National through sports promotion and encouraging citizens, community residents Central University and Chung Yuan Christian University are taught by and employees in the park to develop the habit of regular exercise, experts from UMC for early cultivation of semiconductor seed talent and through healthy body formation and positive emotional training, to at the university stage so that young students can acquire deeper promote physical, mental and spiritual balance, and effectively improve semiconductor knowledge and skills in their studies. Furthermore, they people’s quality of life. can better dovetail into their subsequent workplace development and •Promoting UMC Volunteer Culture actively integrate their knowledge into their career, thereby achieving At present, a large group of eager UMC volunteers has spontaneously talent cultivation for Taiwan’s semiconductor industry. formed the Candlelight Club for community services. The volunteer In addition, UMC collaborates with National Cheng Kung University, climate has gradually expanded to various clubs. UMC is passionate National Tsing Hua University, National Chiao Tung University and about public charity. The Company recognizes the limited resources National Sun Yat-sen University on advanced technology R&D and of organizations for the disadvantaged and their great need for energy projects. The research scope includes artificial intelligence algorithms, conservation and carbon reduction. Therefore, in 2015, UMC began micro-sensors and actuators, machine learning algorithms, deep forming the Energy Conservation Service Team, which was officially learning and wafer defect detection, etc., to achieve the most effective launched in 2016. The volunteer team comprises of experts in energy industry-university cooperation for integrating theory and practice. conservation, water conservation, air conditioning, lighting and fire Summary of key implementation outcomes in 2020: prevention, and focuses on prioritizing the disadvantaged, energy Key Items Outcome conservation and safety, feedback and improvement. Based on these Industry-University National Kaohsiung Offered semiconductor positions, the volunteer team provides organizations for disadvantaged Collaboration University of Science processing practicum groups with energy and safety diagnostics, and funding for immediate and Technology, National courses in 2020. About 260 improvement projects. Central University, students enrolled. Charity services provided by clubs and the Energy Conservation Service Chung Yuan Christian Team in 2020: University industry- Clubs Services university courses on semiconductors Candlelight Club Charity bazaars (Holiday Bazaar, St. Joseph Social Welfare Foundation, Eden Social Welfare Foundation) Nano Generation course Offered an introductory Fundraisers (Mennonite Social Welfare Foundation, at National Cheng Kung course on Semiconductor St. Joseph Social Welfare Foundation, Children Are Us University Processing in the Nano Foundation) Generation at National Cheng Kung University in Ukelele Club Teaching (Nan-he Elementary School, Fu-sing Elementary 2020. About 243 students School and Xin-xing Elementary School in Hsinchu County) enrolled. Free performances (Hsinchu National Taxation Bureau Awards Ceremony, Hsinchu City Mid-Autumn Festival in Campus Domestic and Overseas Provide a specific number Jiangong Community, Rebirth Etude Second-hand Charity Cultivation Summer Internship of internship opportunities Sale ) each summer vacation. In 2020, a total of 16 interns UMC Drum Club Charity performances (St. Joseph Social Welfare were recruited. Foundation Garden Party, Saint- Hsin after-school) Music Fellow Free performances (L’arc Hotel Second-hand Market Club Activities, STSP Bureau Love-month Activity, Fab 12A Christmas Activities) Energy Taoyuan Bade Disabled Nursing Home, Catholic Missionary Conservation Sisters of Mary and Francis-Miracle Home, St. Raphael Service Team Opportunity Center, Bethlehem Foundation, St. Joseph Social Welfare Foundation.

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Key Items Outcome Key Items Outcome

Campus Equipment Intern Collaborated with Campus National Cheng Kung In its collaboration Cultivation Southern Taiwan Cultivation University Career Advisor with key schools in University of Science Program recent years, UMC and Technology, offers career seminars National United and career coaching University, Da-Yeh programs to help University, National students understand the Kaohsiung University of future pulse from the Science and Technology, perspective of industrial National Formosa professionals. Moreover, University, National based on student traits Yunlin University of and learning, the career Science and Technology coaches provide career and I-SHOU University plan suggestions to to provide student help students find internship opportunities career paths that are at UMC. In 2020, a appropriate for them. total of 30 interns were With National Cheng accepted. Kung University as Enterprise Visitations Provide enterprise visitation an example, UMC opportunity for schools. has been providing In order to cooperate with career coaching for the anti-epidemic policy 9 years, with more in 2020, only National than 200 students Cheng Kung University from the university Nano Program Class and participating each year, Kaohsiung University of and the program is still Science and Technology being implemented. In Semiconductor Process addition, students are Class were provided. About assisted with resume 140 students enrolled. writing to help them discover their strengths, Campus Ambassador for Employed students who sell themselves in their disabled students are disabled for work study. resume and capture the Strengthened campus attention of companies talent recruitment and and executives. At the encouraged disadvantaged same time, colleagues students to actively learn. from National Taiwan Since the program began in University, National 2013, a total of 152 students Tsing Hua University with physical disabilities and National Chiao were provided with work Tung University have study opportunities, and in their colleagues serve 2020, 24 students were still as career counselors employed. to provide professional Campus relationship Helped arrange a series counseling to their development (including of brand image cultivation students. technical career lectures) activities, including book discussion, career sharing, internship cooperation, and exhibits for semiconductor display. In 2020, 11 book discussion sessions were held, with a total of more than 1,029 participants.

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Key Items Outcome Summary of donations in 2020: Campus PTP Prospective Talent The early contact and In NTD Cultivation Program agreement with prospective Social Participation Amount talent on campus enhances UMC National Tsing Hua University 75,030,000 connection and interaction with targeted talent. The UMC Science and Culture Foundation 10,000,000 broadening UMC PTP also Donated to the 10th UMC Operation 3,800,000 expands the image and Management Thesis Award. influence of UMC. Since UMC began recruiting Taiwan Chess Academy Cultural Foundation 2,500,000 outstanding talent in Chinese Professional Go Association 2,500,000 2013, 4,910 students have been recruited and 1,331 The National Cheng Kung University 2,000,000 prospects are still in school. academic funding for Nano-IC Engineering Advanced Intelligent Elite To acquire higher quality Development (AIED) employees, campus Taipei Awakening Association 1,000,000 relationships and the Green Award prizes 1,000,000 connection and interaction with outstanding equipment Taiwan Semiconductor Industry Association 525,626 talents are systematically Environmental Protection Fund established. Recruitment for National Taiwan University 500,000 outstanding talent began in 2018, and 4,238 students Donated to Bethlehem Foundation 257,145 have attended in AIED Catholic Jesuit Hsinchu Social Service 114,555 campus briefings, recruiting Center a total of 1,291 members. Donated to VLSI Design/CAD Symposium 100,000

•UMC Social Participation Catholic Missionary Sisters of Mary and 98,795 Committed to the core philosophy of “people-orientation and co- Francis-Miracle Home prosperity with society,” UMC fulfills its corporate social responsibility St. Raphael Opportunity Center 91,980 according to the concept of LOHAS (Lifestyle of Health and St. Joseph Social Welfare Foundation 88,830 Sustainability). UMC believes that the success of a company not only requires personal diligence, but also the support of a harmonious society GLO Leadership Training Summit 12,302 for it to flourish and develop robustly. Therefore, since its establishment, Kaohsiung City Cerebral Palsy 1,575 UMC has declared itself a public instrument in its long-term management Association policy, and is committed to giving back to society. Therefore, in addition to their commitment to the Company’s business growth, the “Happy Total 99,620,808 Employees” of UMC are also enthusiastic about social charity. To encourage employee participation in charity, UMC provides Charity Leave for employees to participate in volunteer services. UMC has always been wholehearted in social charity, and continues to donate money to cultural, educational and academic units. Recipients include groups such as National Tsing Hua University, UMC Science and Culture Foundation, UMC Operation Management Thesis Award, National Cheng Kung University academic funding for Nano-IC Engineering, Taiwan Semiconductor Industry Association Environmental Protection Fund, Green Award prizes, VLSI Design/CAD Symposium and GLO Leadership Training Summit as well as charity events. In the days to come, UMC will remain dedicated to its philosophy of receiving from and giving back to society by supporting social charity.

161 United Microelectronics Corporation | Annual Report 2020 Environmental Protection, Safety and Health Management Instructions In terms of environmental protection, safety and health, UMC has set the the use of raw materials to the generation of waste) on the environment objective of zero pollution and zero incidents to become an enterprise and all company employees will be evaluated via a systematic approach. of sustainable development; in addition to being in compliance with As for the items which could result in major environmental impact, and exceeding the requirements of environmental safety and health the management and reduction will be applied via the assessment/ laws and regulations, the Company utilizes advanced environmental replacement/reduction approach for raw materials, control and reduction protection, safety and health, risk and disaster rescue technologies to of process pollution source, effective treatment of end-of-the-pipe actively enhance environmental protection and safety aspects based on pollution, and residual by-product reclamation. In terms of safety and a forward-looking vision. UMC has also continued with environmental health, UMC will start with management of equipment, chemical, safety and health education and advocacy for all its employees and and operation safety in order to maintain the safety and health of all encouraged active participation in related activities to strengthen the employees. environmental safety and health belief and habits of all employees In order to achieve the objective of sustainable development, the through subtle influence. Company has set clean production and zero incident as the promotion direction of environmental protection and safety and health. Every ESH Management System year UMC will set the objectives and targets of the ESH management system in coordination with the Company’s operation direction, and UMC’s ESH management system is established according to ISO14001 each fab will launch various plans for reducing environmental impact and ISO45001 standards. It is intended to integrate daily management and strengthening safety and health in order to continuously improve with total quality management (TQM) activities such that the ESH company performance of environmental protection and safety and health management plan can be integrated with actual fab operation in order management. to achieve the effectiveness of implementation. As for various ESH risks of company operation, the possible impacts of various activities (from

Achievement Status of UMC’s Important ESH Objectives/Targets in 2020:

Objective Target Achievement Status

Eliminating major accidents and continuously 1. Zero Serious occupational safety incidents Zero occupational safety incidents throughout the year promoting “Safety First. No Compromise on 2. Fewer than 9 minor (or above) accidents A total of 9 incidents throughout the year Safety. Safety Is Above Production” Promoting green management Green 2020 To reduce water, electricity, and waste by 10% over the The target of 2020 was achieved project to reduce the Company’s impact on the base year by 2020. environment 1. Water Usage: 10% reduction (Intensity) 2. Electricity Usage: 10% reduction (Intensity) 3. Waste Generation: 10% reduction (Intensity)

Note: the base year is 2015

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Environmental Protection facilities in order to directly and effectively reduce the Company’s energy Greenhouse Gas Reduction and Management consumption. In addition, UMC has promoted the implementation of Facing the issues of climate change and worsening global warming, energy saving management plans for offices and public areas together UMC has already prepared and implemented responsive strategies. with advocacy activities and educational training in order to enhance the It set up the “Fluorinated Greenhouse Gases Reduction Work Group” concepts and habits of all employees with regard to energy saving and in 1999 to be dedicated to the research and promotion of reduction of greenhouse gas reduction. fluorinated greenhouse gases. It formulated the “UMC Climate Change Water Resources Saving and Management Policy” in 2000 as the highest guiding principle of the Company in For more effective utilization of limited water resources, UMC formulated response to climate change. its “Water Management Policy and Commitment” in 2015. From the The major reduction plans with respect to fluorinated greenhouse gases perspectives of introduction of water resources risk management system, to be promoted include: development and application of diversified water resources, supply chain • Measuring the utilization rates of process tools using fluorinated cooperation, and strengthening of water resources education, UMC will greenhouse gas and the destruction and removal efficiency of continue to promote various water saving measures, actively enhance its emissions control technologies to be fully aware of the machine water efficiency, and introduce new water saving technology in order to performance and to improve those with poor performance. promote the emphasis and saving of water resources. According to the • Implementing survey and assessment of the consumption amount for fab construction schedule, the fab water recycling rate and process water fluorinated greenhouse gases in order to understand the greenhouse recycling rate of all fabs are superior to the standard set by the Science gas emission volume of each process tool. Park Bureau. The water saving measures for general water consumption • Carrying out a research project on alternative gas to reduce the include the adoption of water-efficient taps, rainwater interception consumption of process gasses that contribute to global warming for landscape watering, and water conservation of air conditioners potential (GWP) via source improvement. and kitchens. In addition to internal water resource assessment and • As for the new fluorinated greenhouse gas emissions control management and active promotion of water conservation, the Company technologies, the selection, assessment, and investment have been also serves as a representative in industrial unions & associations. The applied for the installation of high performance fluorinated greenhouse Company cooperates with the government and industrial peers in water gas abatement systems in order to reduce the emission of fluorinated resources communication and exchange counseling. greenhouse gases year by year. In 2007 and 2011, UMC led the industry in completing the 2-Phase Waste Management and Resource Recycling Management fluorinated greenhouse gases replacement plan (replacing C2F6 with

C3F8 and replacing C3F8 with C4F8) for the entire company, thus UMC’s waste management is established on an economic and greatly reducing greenhouse gas emissions and its impact on global effective waste management mechanism to achieve the objectives warming. After years of effort, UMC has achieved the objectives of the of safe, healthy and harmless resource utilization. The strategies “Carbon Reduction 333” project and the “369+ Energy and Resources include total amount reduction, recycling and reuse of resources, and Productivity Enhancement Project” in 2012 and 2015, respectively. The waste management. UMC has always adhered to the belief of green company has also formulated the “Green 2020” project to commit to production while promoting waste and resource recycling management. goals of 10% water saving, 10% power saving, and 10% waste reduction On one hand it has reduced the generation of waste through process in the future based on more stringent self-requirement standards and improvement, raw material reduction and source management; on the more active spontaneous actions. At this stage, our GHG Offset Project other hand it has actively promoted waste recycling and reuse to replace has passed EPA review in 2020, according to Taiwan's voluntary GHG the existing end-of-the-pipe treatment mode and to convert garbage reduction incentive program to apply for carbon credits. UMC estimates into useful resources. In addition to reducing the resources and cost it can build 10 years of carbon assets totaling more than 2.2 million tons. of waste treatment, the Company hopes to help alleviate increasingly serious environmental problems. Finally, in terms of waste management, Energy Saving Management manpower will be dedicated to regular auditing of the Company’s waste The use of energy will consume the Earth’s resources, and it will disposal service provider and tight control of waste destination while also generate carbon dioxide resulting in the greenhouse effect. To selecting the optimal waste disposal approach. reduce the environmental impact of the greenhouse effect, UMC has Pollution Emission and Control set annual goals and plans to reduce greenhouse gas emission. In addition to constant evaluation and introduction of various energy End-of-the-pipe treatment has been regarded as the last resort in saving technologies, UMC will carry out energy saving plans for relevant recent years. In terms of pollution control, in addition to development of

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required technologies in response to new environmental protection laws management (HSPM) system audit and to be granted the recommended and regulations or standards, UMC has also considered the tolerance registration. UMC has also become the first semiconductor manufacturer and interaction of the overall environment to apply self-management in the world to have all fabs granted with the QC-080000 IECQ HSPM and constantly introduces high performance pollution prevention certificate. technologies and equipment. All pollution prevention equipment are In addition, for laying the foundation of green product, process and operated and maintained by professional work teams, and the operation design, UMC has actively implemented comprehensive carbon/water status of all pollution prevention equipment is monitored by a central management plans. In September 2009, it completed the world’s system with shifts covering 24-hours to ensure emission quality. first “Product Carbon Footprint” and EPD (Environmental Product Declaration) verification for IC wafers, and obtained the independent Environment-related Data Disclosure verification statement issued by a third party to become the first UMC is committed to the spirit of initiative, openness, transparency semiconductor company in Taiwan to independently and completely and quality, and publicly discloses its management of environment- calculate and verify the product carbon emission information. In 2000, related information. At present, UMC has set 2025 management targets it was the first in the industry to complete the water footprint verification for important indicators such as greenhouse gas emissions, electricity of 8-inch and 12-inch fabs. With the important operational belief of consumption, water consumption, waste generation and volatile organic symbiosis with a sustainable environment, UMC has provided its compound emissions. At the same time, UMC also disclosed the data of comprehensive green production system plans to help its customers the last 5 years in the corporate social responsibility report and through produce environmental friendly, high quality products. The completion of third-party verification to confirm the latest information and verify the carbon footprint, water footprint, and environmental product declaration reduction outcome every year. The annual information for 2020 will be indicates that UMC has tracked and monitored the information of various verified by third party inspection and publicly disclosed before June environmental impacts during the IC wafer manufacturing process 2021. through rigorous systems with international certification, and helped UMC was also invited to participate in the international CDP customers completely construct the environmental information of green organization's climate change and water security disclosure project, product and supply chain. This also specifically demonstrates UMC’s and further disclosed the identification results of risks and opportunities active undertaking of social responsibility. and related management information. In 2020, UMC's water security In the future, UMC will more aggressively promote the green disclosure was awarded the Leadership band, and climate change supply chain project based on carbon footprint, water footprint, disclosure was awarded the Management band. It shows that UMC and Environmental Product Declaration to help customers produce has been recognized by international investment institutions for its green products with lower environmental impact and to enhance the sustainable information disclosure. sustainable competitiveness of the entire supply chain.

Other Environmental Management Plans Safety and Health Promoting the Culture of Individual Occupational Safety Over the years, UMC has continued with its effort in environmental protection by constantly introducing various environmental management The analysis of the causes of domestic and foreign accidents has tools such as environmental management system, product life cycle revealed that 90% of them are due to “Human Factors,” such that the assessment, and environmental accounting. The hope is to achieve the safety of personal behavior has a more profound impact on the safety substantial objectives of environmental improvement and reduction of of the organization. Therefore, UMC is dedicated to promoting the environmental impact via the environmental management approach, and safety and health culture of “Individual Occupational Safety.” Starting spontaenous and continuous improvement. from “Pay attention to your own safety and care about other’s safety” and “Occupational safety is everyone’s responsibility” and under the UMC was aware of the green wave coming from the international declaration and leadership of the chairman, UMC has introduced the environmental protection trend and customer demand as early as 2003, safety thinking mode, and established complete communication and and began the promotion of the green supply chain management system proposal channels so that employees can express their opinions and and became a SONY Green Partner in the same year. To date, the receive professional response and assistance, implement safety and Company has continuously passed re-verification, indicating that UMC’s health protection work, and continuously enhance the quality of the work hazardous substance management effectiveness has been recognized environment. It is expected that UMC can become the global role model by customers. In 2006, UMC was the first among global semiconductor of safety and health. manufacturers to complete the hazardous substance process

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Safety and Health Management UMC's sound chemical management process meets regulatory By law, all UMC fabs have formulated labor safety and health requirements. In addition to labeling and training by law, the exposure management plans every year, and the contents include: risk assessment method should be introduced and the chemical risk • ESH Risk Assessment level and classification management measures should be established in order to reduce the exposure hazard risks to workers. Ever since the founding of the Company, UMC has been introducing The working environment monitoring should be conducted every various methods for risk assessment of the Company’s processes, six months according to the Rules for Implementation of Working equipment, and chemicals. UMC has also tried to reduce the occurrence Environment Monitoring. The effective sampling strategy should be of accidents and environmental pollution caused by process and formulated, and the monitoring results should be verified by statistical equipment though engineering improvement and process replacement. analysis tool to ensure the exposure situation of every similar exposure As for the safety and health risk, UMC has divided them into preliminary group and to protect the health of employees. review, change review, and regular review. As for the execution of There are toxic gas detectors distributed in the working environment preliminary review, in addition to using a simple risk matrix for selecting in the fab for early control of trace gas leaks with timely warning and operating activities with higher risks to carry out improvement and automatic broadcasts to notify employees to evacuate to designated safe management, UMC has also conducted the review and risk reduction of areas. hazardous workplace with respect to the items listed in the Hazardous • Procurement Management and Contractor Workplace Review and Inspection Rules. Management As for the environmental and safety and health risks caused by change of equipment, and introduction of new chemicals and new machines, UMC has specified the safety and health rule of procurement in the the assessment should be carried out according to the rules of change operation regulation of the Company’s procurement department. The review. In addition to managing these according to domestic laws raw materials suppliers will be requested to conduct labeling, production, and regulations, the specification requirements of safety facilities and transportation according to domestic laws and regulations, and and environmental protection of equipment and chemicals should be there will be regular audits of suppliers to ensure that there will not be specified according to international standards, so that the ESH impacts any safety or health or environmental protection accident that would can be minimized at the beginning of such change. cause abnormal supply. In addition to the aforementioned preliminary review and change review, As for the contractor management, the active and effective management the ESH risk assessment will be conducted again for all operations ever approach should be adopted to prevent contractors from accidents. In three years, and the operation items with increased risk levels must be addition to carrying out qualified contractor evaluation and formulating examined to see if there is a need for improvement. “Notices of ESH Contractor” to be signed by the person in charge of the • Management of Machine, Equipment, or Appliance contractor, all workers entering the fab should receive UMC’s “Contractor In addition to being in compliance with domestic standards, such as ESH Educational Training.” In addition, the “Contractor Work Place CNS (Chinese National Standards) and safety standards for machine, Hazard Notification and Agreement Meeting” should be completed for equipment, and appliances, the machines used by UMC must all contractors entering the fab. A complete online application system come with the reports (provided by the equipment supplier) meeting should be established for effective control of construction application the semiconductor manufacturing equipment safety, health, and and the management before, during, and after the construction. In environmental protection standard (SEMI S2) formulated by international addition to requesting the contractor to assign onsite supervisory semiconductor equipment and material organizations. If there is any personnel, a safety agreement meeting should be convened every non-conforming item, it must be improved before entry into the fab. After day before construction. During the construction period, occupational fab entry, the water, electrical, gas, and chemical use safety inspection safety personnel should conduct frequent audits in addition to the onsite must be conducted according to different stages of machine installation supervision by the responsible department in order to ensure that all before these machines can be used. operations are in compliance with safety regulations. • Formulation of Safety and Health Operational During machine operation and maintenance, employees should receive Standard the educational training of the machine operation and be in compliance with the operation rule. Unless there is approved application and UMC has formulated the safety and health protection standard which adoption of alternative safety measures, it is prohibited to disable the is applicable to the entire company, and each operational department safety interlock device of the machine in order to avoid any significant should formulate operational standards for different operations according occupational incident. to company regulation. The content should include: operating procedure, • Management of Hazardous Chemicals operation inspection and regular inspection items, protective equipment UMC has a hazardous chemical management strategy. All chemicals to be used, and operation frequency. entering UMC must comply with the strategy and strict safety review In addition to being in compliance with the operational standard, all mechanisms before they can be used in UMC. employees should pay attention to the unsafe behaviors of others and

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offer reminders at the work place according to the spirit of individual • Health Examination, Health Management, and Health occupational safety in order to achieve the optimal effect of personal Promotion Matters discipline control. UMC values employees as the most important asset of an enterprise. • Regular Inspection, Key Points Inspection, Operation Only employees that are healthy both physically and mentally can Inspection, and Onsite Walkthrough provide highly efficient and high quality work performance. Therefore, Regular and key points inspections should be arranged for various over the years UMC has been dedicated to creating a work place that facilities and operations according to laws and regulations, and operation can contribute to physical, mental, and spiritual health. In addition to inspections should be conducted regularly by employees in charge of helping employees with comprehensive health management and health facilities and operations. promotion, care has been extended to employees’ families, hoping to In addition to the matters specified by laws and regulations, supervisors achieve the goals of work moral and work quality enhancement. at all levels and occupational safety personnel should arrange regular • Collection, Sharing, and Utilization of Safety and and irregular onsite walkthroughs and audits. The deficiencies of audits Health Information should be tracked by computer system, and these cases can only be The collection and sharing of company safety and health information are closed after the improvement is completed. conducted via diversified modes. Domestic and foreign safety and health • Safety and Health Educational Training regulations are collected and reviewed by the Risk Management and The safety and health education and training of UMC are divided into Safety and Health Division, which will suggest to carry out the proposal three categories depending on the nature of the work: within the Company to be approved by the ESH Committee. The external - General safety and health education and training for the entire major accidents and safety and health news will be advocated to company. employees via CSR newsletter or BBS within the Company. The safety - Factory area safety and health education and training organized by and health advocacy posters will be put on occupational safety bulletin each Fab. boards in all fabs frequently. In addition, communication channels such - Safety and health education and training formulated by each as ESH mailbox and ESH proposal systems have been established on department depending on its characteristics. the Company’s intranet website for employees to reflect opinions or “Safety First; Safety Is Above Production!” is UMC's commitment to its problems related to safety and health management. employees, and is also the basis for UMC to carry out the planning and • Emergency Response Measures implementation of necessary safety and health education and training for In order to allow employees to be equipped with the knowledge and its work and hazard prevention operations. Based on the organizational skills of immediate disaster relief upon occurrence of any accident, all structure of UMC, the general training courses for the entire company; employees must take basic fire-fighting, safety and emergency response the factory area training courses for each fab; and the specific training courses arranged by the Company every 5 years. These courses cover courses for each department were formulated, allowing the employees fire safety, disaster response, and actual operation of fire extinguishers, to develop a safety culture, raising their awareness in work safety, and all employees are expected to be equipped with such skills. In and reducing accidents caused by unsafe behaviors. In addition to the addition, an emergency response team (ERT) is formed in every fab, and planned courses, topic-based training courses for specific events or the members of this team should receive various emergency response major cases are also conducted on a rolling basis from time to time. For trainings and regular rehearsals with respect to various accidents in instance, the “executive safety culture seminars” for senior executives, order to strength the disaster response skills of ERT members and to the “supervisor safety awareness courses” for specific departments, and achieve the objective of protection and control at the initial stage of the professional trainings carried out by external occupational safety disaster. and health experts and scholars for UMC’s occupational safety and • Statistical Analysis of Occupational Incidents health management personnel were organized in 2020. In 2020, a total As for occupational incidents that take place at the work place, in of 2,082 sessions of education and training were conducted, with 38,776 addition to regular summaries and reports, every accident must be participants completing the training. The offered education and training registered in the accident report and investigation system to be tracked. also include e-learning courses, allowing employees to acquire safety In addition to the investigation of accident causes and improvement and and health knowledge without being limited by schedule of the physical prevention, accident prevention should be included as the Company’s courses. objective and target of safety and health management. Various activities • Management of Personal Protective Equipment must be promoted in order to achieve accident reduction and safety UMC establishes management procedures based on the type of the enhancement. hazards and provides adequate personal protective equipment (PPE) • Safety and Health Management Record, Performance for workers to use. The condition of PPE is regularly checked, and the Review, and Rewards supervisors and occupational safety personnel also occasionally inspect For facilitating management, in addition to written records, UMC has the use of PPE. established multiple computer systems as an aid for safety and health

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management, such as an automatic inspection system, ISO14001 and Granted Awards of Safety and Health and Environmental ISO45001 management systems, accident report and investigation Protection system, and walkthrough report system. In addition to facilitating data UMC has been devoted to the promotion of environmental protection and inquiry by employees, the tracking of preventive management measures labor safety and health. In addition to being dedicated to achieving the should also be strengthened. international level of risk control and environmental protection and safety For the performance of safety and health management, in addition to and health management performance, UMC’s various ESH management management review meetings regularly convened in each fab and for behaviors have also been well received by competent authorities and the entire company to review the objectives and targets, occupational among peers. competitions will be arranged in each fab, and all active occupational The awards granted to UMC in 2020 are as shown below: management indicators should be included as the evaluation items • “National Enterprise Environmental Protection Award” by the for individuals and departments. The departments with outstanding Environmental Protection Administration of Executive Yuan, R.O.C. performances should be rewarded, and the selection of outstanding (Fab 12A, Fab 8S) occupational safety achievement will be arranged every year in the • “Green Chemical Application and Innovation Award” by the Company to encourage the active improvement of safety and health Environmental Protection Administration of Executive Yuan, R.O.C. in the work environment and the exchange of safety and health • “The Best Participation of Green Procurement for Enterprises” by the improvement matters among different fabs. These will also contribute Environmental Protection Administration of Executive Yuan, R.O.C. to the promotion of individual occupational safety and reduction of • “Green Factory” by the Industrial Development Bureau, Ministry of accidents. Economic Affairs, R.O.C. (Fab 8F) • “Business with Outstanding Environmental Protection Performance” by the Southern Taiwan Science Park Bureau, Ministry of Science and Technology, R.O.C. ( Fab 12A II) • “Outstanding Occupational Safety and Health Unit” by the Southern Taiwan Science Park Bureau (Fab 12A) • “Outstanding Occupational Safety and Health Unit” by the Hsinchu Science Park Bureau, Ministry of Science and Technology, R.O.C. (Fab 8S)

167 United Microelectronics Corporation | Annual Report 2020

Special Disclosures

169 Summary of Affiliated Enterprises 181 Issuance of Private Placement Securities 181 Acquisition or Disposal of UMC Shares by Subsidiaries 181 Other Necessary Supplements 181 Disclosures of Events Which May Have a Significant Influence on Stockholders’ Equity or Share Price, in Compliance with Item 3, Paragraph 2 in Article 36 of the Securities and Exchange Law of the R.O.C.

168 Special Disclosures

Summary of Affiliated Enterprises Affliated Organization Chart

United Microelectronics Corp.

UMC Group（USA） 100.00%

United Microelectronics （Europe）B.V. 100.00%

UMC Capital Corp. 100.00%

TLC Capital Co., Ltd. 100.00% Soaring Capital Corp. 100.00% Unitruth Advisor 100.00% (Shanghai) Co., Ltd.

Tera Energy Everrich Energy Everrich (Shandong) Fortune Venture Capital 100.00% 100.00% 100.00% 100.00% Development Co., Ltd. Investment (HK) Limited Energy Co., Ltd. Corp.

UMC Korea Co., Ltd. 100.00%

Green Earth Limited United Microchip United Semiconductor 100.00% 100.00% (Xiamen) Co., Ltd. 47.02% Corporation

UMC Investment 100.00% （Samoa）Limited

Wavetek Microelectronics 81.40% Wavetek Microelectronics 100.00% Wavetek Microelectronics 100.00% Corporation Investment (Samoa) Corporation（USA） Limited

Best Elite International 100.00% Infoshine Technology 100.00% Oakwood Associates 100.00% HeJian Technology 99.9985% UnitedDS 100.00% Limited Limited Limited (Suzhou) Co., Ltd. Semiconductor (Shandong) Co., Ltd. United Semiconductor 20.74% (Xiamen) Co., Ltd.

Omni Global Limited 100.00% United Microtechnology 100.00% Corporation （California）

ECP Vita Pte. Ltd. 100.00%

UMC Technology Japan 100.00% Co., Ltd.

Sino Paragon Limited 100.00%

United Semiconductor 100.00% Japan Co., Ltd.

Note: UMC holds 80.75% of Wavetek Microelectronics Corporation (Wavetek); Fortune Venture Capital Corp. holds 0.65% of Wavetek, and the comprehensive shareholding ratio is 81.40%.

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Summary of Affiliated Enterprises (Continue)

Basic Data of Affiliated Enterprises In NTD

Name of Corporation Date of Address Capital Major Business / Establishment Production Items

UMC Group（USA） 1997.08.11 488 De Guigne Drive, Sunnyvale, 486,122,625 IC Sales CA 94085, USA

United Microelectronics 1989.05.23 De Entree77, 1101BH, 114,608,397 Marketing support activities （Europe）B.V. Amsterdam Zuidoost, The Netherlands UMC Capital Corp. 2001.01.16 190 Elgin Avenue, George Town, Grand 2,119,360,882 Investment holding Cayman, Cayman Islands UMC Korea Co., Ltd. 2013.04.12 1117, Hanshin Intervally 24, 13,805,000 Marketing support activities 322, Teheran-ro, Gangnam-gu, Seoul, Korea TLC Capital Co., Ltd. 2005.10.14 5F, No.17, Lane 120, Neihu Road Section 1, 4,001,671,030 Venture capital Taipei, Taiwan 114, R.O.C.

Fortune Venture Capital Corp. 1993.09.21 5F, No.17, Lane 120, Neihu Road Section 1, 4,017,344,480 Consulting and planning for Taipei, Taiwan 114, R.O.C. venture capital

Green Earth Limited 2009.09.09 Maystar Chambers, P.O. Box 3269, 29,988,444,000 Investment holding Apia, Samoa

UMC Investment（Samoa） 2011.03.30 Maystar Chambers, P.O. Box 3269, 43,519,120 Investment holding Limited Apia, Samoa

ECP Vita Pte. Ltd. 2012.05.10 8 Marina View, #09-05 Asia Square Tower 266,166,000 Insurance one, Singapore 018960

Soaring Capital Corp. 2008.03.25 Level 2, Lotemau Centre, 27,351,000 Investment holding Vaea Street, Apia, Samoa

Unitruth Advisor 2008.10.16 No.1468,Nanjing Road West,Suite 2908 23,659,200 Investment holding and (Shanghai) Co., Ltd. Shanghai,China advisory

Tera Energy Development Co., Ltd. 2011.07.19 1F., No.1, Jinshan 8th St., Hsinchu, Taiwan 186,550,910 Energy technical services 30080, R.O.C.

Everrich Energy Investment (HK) 2009.12.16 Room 2702-03, CC Wu Building,302-8 25,988,211 Investment holding Limited Hennessy Road, Wanchai, Hong Kong

Everrich (Shandong) 2009.11.02 Entrepreneurship Service Center, Building 22,180,500 Solar engineering Energy Co., Ltd. 4, Torch City, High-tech Zone, Jining City, integrated design services Shandong Province, China

170 Special Disclosures Summary of Affiliated Enterprises (Continue)

In NTD

Name of Corporation Date of Address Capital Major Business / Establishment Production Items

Wavetek Microelectronics 2010.10.18 3F.,No. 10, Innovation 1st Road, 1,834,121,130 Sales and manufacturing of Corporation Hsinchu Science Park, Hsinchu County, integrated circuits Taiwan, R.O.C. Wavetek Microelectronics 2013.08.28 Le Sanalele Complex, Ground Floor, Vaea 50,833,500 Investment holding Investment Street, Saleufi, Apia, Samoa (Samoa) Limited Wavetek Microelectronics 2013.09.26 488 De Guigne Drive, Sunnyvale, 1,774,440 Marketing service Corporation（USA） CA 94085, USA

Best Elite International Limited 2001.07.12 P.O. Box 957, Offshore Incorporations Centre, 7,067,465,873 Investment holding Road Town, Tortola, B.V.I.

Infoshine Technology Limited 2002.02.12 P.O. Box 957, Offshore Incorporations Centre, 10,469,196,000 Investment holding Road Town, Tortola, B.V.I.

Oakwood Associates Limited 2002.02.12 P.O. Box 957, Offshore Incorporations Centre, 10,469,196,000 Investment holding Road Town, Tortola, B.V.I.

HeJian Technology 2001.11.23 No. 333, Xinghua Street, Suzhou Industrial 13,480,730,005 Sales and manufacturing of (Suzhou) Co., Ltd. Park, Suzhou,Jiangsu Province 215025, China integrated circuits

UnitedDS Semiconductor 2014.03.25 21th Floor, Artificial Intelligence Building, 128,580,000 Design support of (Shandong) Co., Ltd. Hanyu Finance Valley, Jingshi Road, Jinan, integrated circuits Shandong Province, China Omni Global Limited 2013.07.02 Maystar Chambers, P.O. Box 3269, 130,160,000 Investment holding Apia, Samoa

United Microtechnology 2014.12.10 488 Deguigne Drive, Sunnyvale, 29,574,000 Research & development Corporation（California） CA 94085, USA

United Semiconductor 2014.10.01 No. 899, Wan Jia Chun Road, Xiang An, 58,708,745,084 Sales and manufacturing of (Xiamen) Co., Ltd. Xiamen, Fujian Province, China integrated circuits

United Microchip Corporation 2015.02.04 Suite 102, Cannon Place, P.O. Box 712 North 29,874,878,250 Investment holding Sound Rd., George Town, Grand Cayman, KY1-9006 UMC Technology Japan Co., Ltd. 2016.04.01 2000, Mizono, Tado-cho, Kuwana-shi, Mie, 4,830,000 Semiconductor Japan manufacturing technology development and consulting services

Sino Paragon Limited 2016.06.06 Maystar Chambers, P.O. Box 3269, 83,204,400 Investment holding Apia, Samoa

United Semiconductor 2014.09.18 2000, Mizono, Tado-cho, Kuwana-shi, Mie, 2,760,000,000 Sales and manufacturing of Japan Co., Ltd. Japan integrated circuits

Note: The data is dated December 31, 2020

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Data for Common Shareholders of Treated-as Controlled Companies and Affiliates None.

Business of United Microelectronics Corporation (UMC) and Its Affiliated Enterprises The business of UMC and its affiliated enterprises includes semiconductor wafer manufacturing, electronics, optronics, investment activities, insurance, and trade.

172 Special Disclosures

Summary of Affiliated Enterprises (Continue)

Directors, Supervisors and Presidents of Affiliated Enterprises

Name of Corporation Title Name or Representative Shareholding

Shares %

UMC Group （USA） Director Jason Wang － －

Director Chitung Liu － －

United Microelectronics Director Stan Hung － － （Europe）B.V. Director Jason Wang － －

UMC Capital Corp. Chairman Stan Hung － －

Director SC Chien － －

Director Jason Wang － －

Director Chitung Liu － －

Director Chih Chiang Peng － －

UMC Korea Co., Ltd. Director Carissa Tseng － －

TLC Capital Co., Ltd. Chairman United Microelectronics Corporation 400,167,103 100.00

Representative:Stan Hung － －

Director United Microelectronics Corporation 400,167,103 100.00

Representative: SC Chien － －

Director United Microelectronics Corporation 400,167,103 100.00

Representative: Jason Wang － －

Director United Microelectronics Corporation 400,167,103 100.00

Representative: Chitung Liu － －

Director United Microelectronics Corporation 400,167,103 100.00

Representative: Chih Chiang Peng － －

Supervisor United Microelectronics Corporation 400,167,103 100.00

Representative: Jinhong Lin － －

173 United Microelectronics Corporation | Annual Report 2020

Summary of Affiliated Enterprises (Continue)

Name of Corporation Title Name or Representative Shareholding

Shares %

Fortune Venture Capital Corp. Chairman United Microelectronics Corporation 401,734,448 100.00

Representative: Stan Hung － －

Director United Microelectronics Corporation 401,734,448 100.00

Representative: SC Chien － －

Director United Microelectronics Corporation 401,734,448 100.00

Representative: Jason Wang － －

Director United Microelectronics Corporation 401,734,448 100.00

Representative: Chitung Liu － －

Director and United Microelectronics Corporation 401,734,448 100.00 President

Representative: Chih Chiang Peng － －

Supervisor United Microelectronics Corporation 401,734,448 100.00

Representative: Bellona Chen － －

Green Earth Limited Director Chitung Liu － －

UMC Investment（Samoa）Limited Director United Microelectronics Corporation 1,520,000 100.00

ECP Vita Pte. Ltd. Director Chitung Liu － －

Director Bellona Chen － －

Director Vic Yen － －

Director Sofia Wang － －

174 Special Disclosures

Summary of Affiliated Enterprises (Continue)

Name of Corporation Title Name or Representative Shareholding

Shares %

Soaring Capital Corp. Director TLC Capital Co., Ltd. 900,000 100.00

Unitruth Advisor (Shanghai) Director Chih Chiang Peng － － Co., Ltd.

Tera Energy Development Co., Ltd. Chairman Fortune Venture Capital Corp. 18,655,091 100.00

Representative: Chih Chiang Peng － －

Director Fortune Venture Capital Corp. 18,655,091 100.00

Representative: Su Ying Shih － －

Director Fortune Venture Capital Corp. 18,655,091 100.00

Representative: Jinhong Lin － －

Supervisor Fortune Venture Capital Corp. 18,655,091 100.00

Representative: Tachih Lung － －

Everrich Energy Investment (HK) Director Tera Energy Development Co., Ltd. 750,000 100.00 Limited

Director Jinhong Lin － －

Everrich (Shandong) Executive Chih Chiang Peng － － Energy Co., Ltd. Director

Supervisor Su Ying Shih － －

175 United Microelectronics Corporation | Annual Report 2020

Summary of Affiliated Enterprises (Continue)

Name of Corporation Title Name or Representative Shareholding

Shares %

Wavetek Microelectronics Corporation Chairman United Microelectronics Corporation 148,112,434 80.75

Representative: M C Lai － －

Director United Microelectronics Corporation 148,112,434 80.75

Representative: G C Hung － －

Director United Microelectronics Corporation 148,112,434 80.75

Representative: Sherry Chang － －

Supervisor Chih Chiang Peng 15,001 0.00

Wavetek Microelectronics Investment Director M C Lai － － (Samoa) Limited

Wavetek Microelectronics Corporation Director Mao Jwo － － (USA)

Best Elite International Limited Director Chau-Shen Yu － －

Director Jeremy Wang － －

Director Eric Chen － －

Director Jinhong Lin － －

Infoshine Technology Limited Director Chau-Shen Yu － －

Oakwood Associates Limited Director Chau-Shen Yu － －

176 Special Disclosures Summary of Affiliated Enterprises (Continue)

Name of Corporation Title Name or Representative Shareholding

Shares %

HeJian Technology (Suzhou) Chairman Chau-Shen Yu － － Co., Ltd.

Director and M C Gao － － General Manager

Director Chitung Liu － －

Director M C Lai － －

Director Jinhong Lin － －

Supervisor Angel Sun － －

Supervisor I Cheng Lu － －

Supervisor Yann Wei Chen － －

UnitedDS Semiconductor(Shandong) Executive Stan Hung － － Co., Ltd. Director

Supervisor Wesley Chu － －

Omni Global Limited Director Chitung Liu － －

United Microtechnology Corporation Director Jason Wang － － （California）

Director Megan Su － －

177 United Microelectronics Corporation | Annual Report 2020

Summary of Affiliated Enterprises (Continue)

Name of Corporation Title Name or Representative Shareholding

Shares %

United Semiconductor (Xiamen) Co., Ltd. Chairman Chau-Shen Yu － －

Vice Chairman Chih-Ching Hsu － －

Director Jinhong Lin － －

Director Wayne Tan － －

Director T C Chen － －

Director I Cheng Lu － －

Director Yi Yan Hong － －

Director Guo Dong Di － －

Director Tao Yang － －

Supervisor Rong Fang Li － －

Supervisor Angel Sun － －

United Microchip Corporation Director Chitung Liu － －

UMC Technology Japan Co., Ltd. Director James W Wang － －

Director Jinhong Lin － －

Sino Paragon Limited Director Jason Wang － －

Director Chitung Liu － －

United Semiconductor Chairman S S Hong － － Japan Co., Ltd. Director Ming Hsu － －

Director Chitung Liu － －

Director Yen Huang － －

Director Michiari Kawano － －

Director Koichi Onomura － －

Director Tatsuya Deguchi － －

Supervisor Angel Sun － －

Note: The data is dated December 31, 2020.

178 Special Disclosures

Summary of Affiliated Enterprises (Continue)

Summarized Operating Results of UMC Subsidiaries In Thousand NTD

Company Capital Assets Liabilities Net Worth Operating Operating Net Income Earnings Revenues Income (Loss) (Loss) Per (Loss) Share (NTD)

UMC Group (USA) 486,123 9,067,653 7,250,669 1,816,984 52,375,054 65,405 66,833 4.07

United Microelectronics 114,608 163,244 29,978 133,266 47,294 2,597 461 51.21 (Europe) B.V. UMC Capital Corp. 2,119,361 4,264,981 392 4,264,589 969,687 552,087 552,087 7.70

UMC Korea Co., Ltd. 13,805 22,464 1,461 21,003 16,417 1,851 1,124 10.22

TLC Capital Co., Ltd. 4,001,671 4,661,222 94,289 4,566,933 1,052,478 316,108 294,622 0.74

Fortune Venture Capital Corp. 4,017,344 6,287,733 75,280 6,212,453 2,045,243 777,800 741,604 1.85

Green Earth Limited 29,988,444 10,166,702 - 10,166,702 - - (3,062,542) (3.13)

UMC Investment (Samoa) Limited 43,519 39,961 - 39,961 - - (2,061) (1.36)

ECP Vita Pte. Ltd. 266,166 677,866 114,901 562,965 36,656 32,540 34,369 3.82

Soaring Capital Corp. 27,351 8,174 - 8,174 0 (2,211) (2,222) (2.47)

Unitruth Advisor (Shanghai) Co., Ltd. 23,659 9,118 1,227 7,891 7,051 (2,037) (2,185) NA

Tera Energy Development Co., Ltd. 186,551 65,315 2,655 62,660 6,601 (1,903) (10,586) (0.57)

Everrich Energy Investment (HK) 25,988 41,365 39 41,326 - (39) 2,281 3.04 Limited Everrich (Shandong) Energy Co., Ltd. 22,181 49,560 9,215 40,345 9,835 2,698 2,332 NA

179 United Microelectronics Corporation | Annual Report 2020

Summary of Affiliated Enterprises (Continue)

In Thousand NTD Company Capital Assets Liabilities Net Worth Operating Operating Net Income Earnings Revenues Income (Loss) (Loss) Per (Loss) Share (NTD)

Wavetek Microelectronics 1,834,121 1,806,688 1,199,029 607,659 2,302,418 94,136 68,545 0.38 Corporation Wavetek Microelectronics 50,834 3,026 - 3,026 - (3,538) (3,503) (2.16) Investment (Samoa) Limited Wavetek Microelectronics 1,774 3,164 273 2,891 4,625 223 155 2.59 Corporation (USA) Best Elite International Limited 7,067,466 23,039,727 2,488 23,037,239 - (5,502) 2,005,823 3.02

Infoshine Technology Limited 10,469,196 22,976,677 - 22,976,677 - - 2,014,798 NA

Oakwood Associates Limited 10,469,196 22,976,677 - 22,976,677 - (205) 2,014,798 NA

HeJian Technology (Suzhou) Co., 13,480,730 25,655,214 3,746,175 21,909,039 11,788,176 3,041,093 2,048,191 0.65 Ltd.

UnitedDS Semiconductor 128,580 593,896 305,920 287,976 306,198 62,603 65,194 NA (Shandong) Co., Ltd. Omni Global Limited 130,160 585,317 - 585,317 - (315) 26,487 6.16

United Microtechnology Corporation 29,574 37,582 1,527 36,055 25,957 1,469 1,422 35,548.55 (California) United Semiconductor (Xiamen) 58,708,745 67,045,923 45,853,495 21,192,428 13,019,908 (6,009,900) (6,055,263) NA Co., Ltd. United Microchip Corporation 29,874,878 10,141,318 - 10,141,318 - - (3,061,316) (3.14)

UMC Technology Japan 4,830 8,773 50 8,723 - (165) (215) (61.54) Co., Ltd. Sino Paragon Limited 83,204 142,353 - 142,353 - - 20,513 7.89

United Semiconductor 2,760,000 23,242,364 5,402,849 17,839,515 14,980,821 351,423 154,542 1.33 Japan Co., Ltd.

Note: USD:NTD=1:29.574, JPY:NTD=1:0.2760, EUR:NTD=1:33.733, RMB:NTD=1:4.286, KRW:NTD=1:0.02510

180 Special Disclosures

Issuance of Private Placement Securities None.

Acquisition or Disposal of UMC Shares by Subsidiaries In Thousand NTD, Shares

Subsidiary Paid-in Source Holding % Acquisition Shares Disposal Profit/ As of Annual Report Capital of Capital by the or Disposal Acquired Shares and Loss Printing Date Company Date and Amount Amount Shares Amount

Fortune Venture Capital 4,017,344 New shares 100.00 2021 None None None 16,078,737 105,114 Corp. for cash 2020 None None None 16,078,737 105,114

Note: (1) The data is dated February 24, 2021. (2) None of the above companies pledged UMC shares as collateral. (3) The Company did not provide endorsements or guarantees to these subsidiaries. (4) The Company did not provide loans to these subsidiaries.

Other Necessary Supplements None.

Disclosures of Events Which May Have a Significant Influence on Stockholders’ Equity or Share Price, in Compliance with Item 3, Paragraph 2 in Article 36 of the Securities and Exchange Law of the R.O.C. During 2020 and as of the Annual Report Printing Date

None.

181 United Microelectronics Corporation | Annual Report 2020

Financial Review

183 Condensed Balance Sheets 185 Condensed Statements of Comprehensive Income 187 Financial Analysis 191 Audit Committee’s Review Report 192 Financial Statements – Consolidated 269 Financial Statements – Parent Company

182 Financial Review Condensed Balance Sheets

Condensed Balance Sheets-Consolidated In Thousand NTD

Item 2020 2019 2018 2017 2016 Current assets 164,305,911 153,757,141 141,193,432 139,160,486 110,469,594 Property, plant and equipment 132,774,663 150,374,096 172,846,595 205,741,681 224,983,404 Intangible assets 4,877,913 5,198,247 2,991,804 3,787,509 4,088,303 Other assets 75,557,888 60,857,881 47,573,075 45,409,486 47,113,881 Total assets 377,516,375 370,187,365 364,604,906 394,099,162 386,655,182 Current liabilities Before 78,243,526 72,714,322 49,899,337 88,061,070 71,978,462 distribution After * 82,479,477 56,815,442 96,618,093 78,090,621 distribution Non-current liabilities 63,499,747 90,258,621 108,169,078 92,000,508 95,935,096 Total liabilities Before 141,743,273 162,972,943 158,068,415 180,061,578 167,913,558 distribution After * 172,738,098 164,984,520 188,618,601 174,025,717 distribution Equity attributable to the parent 235,659,746 206,804,357 206,069,723 213,080,776 216,579,895 company Capital 124,224,015 117,575,798 124,243,187 126,243,187 126,243,187 Additional paid-in capital 43,211,214 39,550,394 40,399,363 40,858,350 40,997,092 Retained earnings Before 80,176,360 60,820,280 61,588,543 48,065,899 47,655,176 distribution After * 51,055,125 54,672,438 39,508,876 41,543,017 distribution Other components of equity (11,832,042) (11,022,314) (14,513,940) 2,632,377 6,403,477 Treasury stock (119,801) (119,801) (5,647,430) (4,719,037) (4,719,037) Non-controlling interests 113,356 410,065 466,768 956,808 2,161,729 Total equity Before 235,773,102 207,214,422 206,536,491 214,037,584 218,741,624 distribution After * 197,449,267 199,620,386 205,480,561 212,629,465 distribution

Note 1: *Subject to change based on resolutions of the 2021 shareholders’ meeting. Note 2: The company listed on the TWSE or traded on the TPEx shall include in its analysis the updated financial data which are audited or reviewed by a CPA for the most recent period up to the publication date of the annual report: None.

183 United Microelectronics Corporation | Annual Report 2020

Condensed Balance Sheets-Parent Company In Thousand NTD

Item 2020 2019 2018 2017 2016 Current assets 122,967,977 107,866,299 101,335,770 106,676,034 82,558,263 Property, plant and equipment 66,640,272 79,486,445 101,115,727 127,101,974 157,573,131 Intangible assets 4,167,373 4,082,826 2,886,159 3,459,829 4,015,370 Other assets 125,122,444 111,315,394 93,849,564 84,756,630 82,908,196 Total assets 318,898,066 302,750,964 299,187,220 321,994,467 327,054,960 Current liabilities Before 29,622,014 43,764,772 26,797,263 58,655,702 47,397,892 distribution After * 53,529,927 33,713,368 67,212,725 53,510,051 distribution Non-current liabilities 53,616,306 52,181,835 66,320,234 50,257,989 63,077,173 Total liabilities Before 83,238,320 95,946,607 93,117,497 108,913,691 110,475,065 distribution After * 105,711,762 100,033,602 117,470,714 116,587,224 distribution Capital 124,224,015 117,575,798 124,243,187 126,243,187 126,243,187 Additional paid-in capital 43,211,214 39,550,394 40,399,363 40,858,350 40,997,092 Retained earnings Before 80,176,360 60,820,280 61,588,543 48,065,899 47,655,176 distribution After * 51,055,125 54,672,438 39,508,876 41,543,017 distribution Other components of equity (11,832,042) (11,022,314) (14,513,940) 2,632,377 6,403,477 Treasury stock (119,801) (119,801) (5,647,430) (4,719,037) (4,719,037) Total equity Before 235,659,746 206,804,357 206,069,723 213,080,776 216,579,895 distribution After * 197,039,202 199,153,618 204,523,753 210,467,736 distribution

Note 1: * Subject to change based on resolutions of the 2021 shareholders’ meeting. Note 2: The company listed on the TWSE or traded on the TPEx shall include in its analysis the updated financial data which are audited or reviewed by a CPA for the most recent period up to the publication date of the annual report: None.

184 Financial Review Condensed Statements of Comprehensive Income Condensed Statements of Comprehensive Income-Consolidated In Thousand NTD Item 2020 2019 2018 2017 2016 Operating revenues 176,820,914 148,201,641 151,252,571 149,284,706 147,870,124 Gross profit 38,997,101 21,314,972 22,840,027 27,057,758 30,379,430 Operating income 22,007,407 4,689,850 5,797,232 6,568,321 6,193,576 Non-operating income and expenses 5,918,772 1,045,787 (3,612,833) 1,230,101 (1,346,938) Income from continuing operations before 27,926,179 5,735,637 2,184,399 7,798,422 4,846,638 income tax Net income 27,180,412 6,128,767 2,643,052 6,631,265 3,863,075 Other comprehensive income (loss), net of 4,685,534 3,408,785 949,944 (4,034,355) (4,364,780) tax Total comprehensive income (loss) 31,865,946 9,537,552 3,592,996 2,596,910 (501,705) Net income attributable to stockholders of 29,189,489 9,707,614 7,072,990 9,628,734 8,315,660 the parent Net income attributable to non-controlling (2,009,077) (3,578,847) (4,429,938) (2,997,469) (4,452,585) interests Comprehensive income attributable to 33,748,370 13,131,612 8,126,828 5,705,980 3,983,198 stockholders of the parent Comprehensive income attributable to non- (1,882,424) (3,594,060) (4,533,832) (3,109,070) (4,484,903) controlling interests Earnings per share (NTD) 2.42 0.82 0.58 0.79 0.68

Note 1: EPS was calculated based on weighted average number of shares outstanding for the period. Note 2: The company listed on the TWSE or traded on the TPEx shall include in its analysis the updated financial data which are audited or reviewed by a CPA for the most recent period up to the publication date of the annual report: None.

185 United Microelectronics Corporation | Annual Report 2020

Condensed Statements of Comprehensive Income-Parent Company In Thousand NTD Item 2020 2019 2018 2017 2016 Operating revenues 135,280,403 123,622,436 132,834,602 132,179,198 135,592,136 Gross profit 39,052,266 27,161,230 30,548,191 29,718,771 28,358,887 Operating income 23,459,030 10,281,974 12,790,237 11,538,896 9,605,769 Non-operating income and expenses 6,375,642 (1,148,875) (6,581,581) (1,114,125) (594,179) Income from continuing operations before 29,834,672 9,133,099 6,208,656 10,424,771 9,011,590 income tax Net income 29,189,489 9,707,614 7,072,990 9,628,734 8,315,660 Other comprehensive income (loss), net of 4,558,881 3,423,998 1,053,838 (3,922,754) (4,332,462) tax Total comprehensive income 33,748,370 13,131,612 8,126,828 5,705,980 3,983,198 Earnings per share (NTD) 2.42 0.82 0.58 0.79 0.68 Note 1: EPS was calculated based on weighted average number of shares outstanding for the period. Note 2: The company listed on the TWSE or traded on the TPEx shall include in its analysis the updated financial data which are audited or reviewed by a CPA for the most recent period up to the publication date of the annual report: None.

Auditors’ Opinions from 2016 to 2020

Year CPA Audit Opinion

2016 Shao-Pin Kuo, Meng-Lin Song Unqualified Opinion with Emphasis of Matter Paragraphs or Other Matter Paragraphs

2017 Shao-Pin Kuo, Wan-Ju Chiu Unqualified Opinion with Emphasis of Matter Paragraphs or Other Matter Paragraphs

2018 Wan-Ju Chiu, Hsin-Min Hsu Unqualified Opinion with Emphasis of Matter Paragraphs or Other Matter Paragraphs

2019 Wan-Ju Chiu, Hsin-Min Hsu Unqualified Opinion with Emphasis of Matter Paragraphs or Other Matter Paragraphs

2020 Wan-Ju Chiu, Hsin-Min Hsu Unqualified Opinion with Emphasis of Matter Paragraphs or Other Matter Paragraphs

186 Financial Review Financial Analysis

Financial Analysis- Consolidated

Item 2020 2019 2018 2017 2016 Capital structure Debt ratio (%) 37.55 44.02 43.35 45.69 43.43 Long-term funds to property, plant and equipment (%) 196.23 169.65 158.30 129.95 124.22 Liquidity Current ratio (%) 209.99 211.45 282.96 158.03 153.48 Quick ratio (%) 177.36 172.13 222.80 121.72 114.73 Times interest earned (times) 14.93 2.96 1.79 4.24 4.33 Operating Average receivables turnover (times) 6.67 5.98 6.75 6.78 6.98 performance Days sales outstanding 55 61 54 54 52 Average inventory turnover (times) 6.23 6.36 7.04 6.93 6.78 Average payables turnover (times) 16.47 16.19 19.26 18.26 18.34 Average inventory turnover days 59 57 52 53 54 Property, plant and equipment turnover (times) 1.25 0.92 0.80 0.69 0.72 Total assets turnover (times) 0.47 0.40 0.40 0.38 0.41 Profitability Return on assets (%) 7.70 2.31 1.28 2.21 1.35 Return on stockholders' equity attributable to the 13.19 4.70 3.37 4.48 3.75 parent company (%)

Pre-tax income to paid-in capital (%) 24.10 7.92 5.32 8.54 7.35 Net profit margin (%) 15.37 4.14 1.75 4.44 2.61 Earnings per share (NTD) 2.42 0.82 0.58 0.79 0.68 Cash Flow Cash flow ratio (%) 84.03 75.51 102.08 59.59 64.53 Cash flow adequacy ratio (%) 111.10 96.56 86.78 81.49 75.74 Cash flow reinvestment ratio (%) 5.12 4.54 4.03 4.68 4.11 Leverage Operating leverage 5.98 23.16 19.11 16.86 17.77 Financial leverage 1.10 2.67 1.91 1.58 1.25 Analysis of changes over 20% from 2019 to 2020: 1. Times interest earned: Due to increase in income before interest and tax. 2. Property, plant and equipment turnover: Due to increase in net sales. 3. Return on assets, Net profit margin: Due to increase in net income. 4. Return on stockholders’ equity attributable to the parent company, Earnings per share: Due to increase in net income attributable to stockholders of the parent company. 5. Pre-tax income to paid-in capital: Due to increase in income before tax attributable to stockholders of the parent company. 6. Operating leverage, Financial leverage: Due to increase in operating income.

187 United Microelectronics Corporation | Annual Report 2020

Financial Analysis (Continue)

Note 1: The calculation of EPS was based on weighted average number of shares outstanding for the year. Note 2: The calculation formulas of financial analysis are listed as follows: 1. Capital structure (1) Debt ratio = total liabilities / total assets (2) Long-term funds to property, plant and equipment = (total equity + bonds payable + long-term loans) / property, plant and equipment 2. Liquidity (1) Current ratio = current assets / current liabilities (2) Quick ratio = (current assets – inventory – prepaid expenses – non-current assets held for sale – other current assets) / current liabilities (3) Times interest earned = income before interest and tax / interest expenses 3. Operating performance (1) Average receivables (including accounts receivable and notes receivable arising from business operations) turnover = net sales / average receivables (including accounts receivable and notes receivable arising from business operations) for each period (2) Days sales outstanding = 365 / average receivables turnover (3) Average inventory turnover = cost of sales / average inventory (4) Average payables (including accounts payable and notes payable arising from business operations) turnover = cost of sales / average payables (including accounts payable and notes payable arising from business operations) for each period (5) Average inventory turnover days = 365 / average inventory turnover (6) Property, plant and equipment turnover = net sales / average property, plant and equipment (7) Total assets turnover = net sales / average total assets 4. Profitability (1) Return on assets = [net income + interest expenses x (1- tax rate)] / average total assets (2) Return on stockholders' equity attributable to the parent company = net income attributable to stockholders of the parent / average total equity attributable to the parent company (3) Pre-tax income to paid-in capital = income before tax attributable to stockholders of the parent / paid-in capital (4) Net profit margin = net income / net sales (5) Earnings per share = (net income attributable to stockholders of the parent – preferred shares dividends) / weighted average number of outstanding shares 5. Cash flow (1) Cash flow ratio = net cash provided by operating activities / current liabilities (2) Cash flow adequacy ratio = five-year sum of net cash provided by operating activities / five-year sum of capital expenditures, inventory increase and cash dividend (3) Cash flow reinvestment ratio = (net cash provided by operating activities – cash dividend) / (gross property, plant and equipment + long-term investments + other non-current assets + working capital) 6. Leverage (1) Operating leverage = (operating revenues – variable operating costs and expenses) / operating income (2) Financial leverage = operating income / (operating income – interest expenses) Note 3: The company listed on the TWSE or traded on the TPEx shall include in its analysis the updated financial data which are audited or reviewed by a CPA for the most recent period up to the publication date of the annual report: None.

188 Financial Review

Financial Analysis (Continue)

Financial Analysis- Parent Company

Item 2020 2019 2018 2017 2016 Capital structure Debt ratio (%) 26.10 31.69 31.12 33.82 33.78 Long-term funds to property, plant and equipment (%) 389.93 288.59 242.91 186.51 160.90 Liquidity Current ratio (%) 415.12 246.47 378.16 181.87 174.18 Quick ratio (%) 352.97 204.33 313.86 150.22 139.84 Times interest earned (times) 54.08 12.16 9.14 12.13 11.00 Operating Average receivables turnover (times) 6.80 5.95 6.02 5.69 6.50 performance Days sales outstanding 54 61 61 64 56 Average inventory turnover (times) 5.81 6.12 6.73 6.90 7.00 Average payables turnover (times) 16.70 16.41 18.60 18.47 19.18 Average inventory turnover days 63 60 54 53 52 Property, plant and equipment turnover (times) 1.85 1.37 1.16 0.93 0.83 Total assets turnover (times) 0.44 0.41 0.43 0.41 0.42 Profitability Return on assets (%) 9.54 3.44 2.47 3.21 2.73 Return on equity (%) 13.19 4.70 3.37 4.48 3.75 Pre-tax income to paid-in capital (%) 24.02 7.77 5.00 8.26 7.14 Net profit margin (%) 21.58 7.85 5.32 7.28 6.13 Earnings per share (NTD) 2.42 0.82 0.58 0.79 0.68 Cash Flow Cash flow ratio (%) 176.05 106.12 182.12 102.75 119.78 Cash flow adequacy ratio (%) 189.18 155.16 135.24 121.08 97.08 Cash flow reinvestment ratio (%) 4.18 4.09 4.20 5.95 5.56 Leverage Operating leverage 4.29 8.88 7.82 8.70 10.55 Financial leverage 1.02 1.09 1.06 1.09 1.08 Analysis of change over 20% from 2019 to 2020: 1. Long-term funds to property, plant and equipment, Times interest earned, Return on assets, Return on equity, Pre-tax income to paid-in capital, Net profit margin and Earnings per share: Due to increase in income before tax and net income. 2. Current ratio, Quick ratio and Cash flow ratio: Due to decrease in current portion of long-term liabilities. 3. Property, plant and equipment turnover: Due to decrease in property, plant and equipment. 4. Cash flow adequacy ratio: Due to decrease in the last 5 years capital expenditure. 5. Operating leverage: Due to increase in operating income.

189 United Microelectronics Corporation | Annual Report 2020

Financial Analysis (Continue)

Note 1: The calculation of EPS was based on weighted average number of shares outstanding for the year. Note 2: The calculation formulas of financial analysis are listed as follows: 1. Capital structure (1) Debt ratio = total liabilities / total assets (2) Long-term funds to property, plant and equipment = (total equity + bonds payable + long-term loans) / property, plant and equipment 2. Liquidity (1) Current ratio = current assets / current liabilities (2) Quick ratio = (current assets – inventory – prepaid expenses – non-current assets held for sale – other current assets) / current liabilities (3) Times interest earned = income before interest and tax / interest expenses 3. Operating performance (1) Average receivables (including accounts receivable and notes receivable arising from business operations) turnover = net sales / average receivables (including accounts receivable and notes receivable arising from business operations) for each period (2) Days sales outstanding = 365 / average receivables turnover (3) Average inventory turnover = cost of sales / average inventory (4) Average payables (including accounts payable and notes payable arising from business operations) turnover = cost of sales / average payables (including accounts payable and notes payable arising from business operations) for each period (5) Average inventory turnover days = 365 / average inventory turnover (6) Property, plant and equipment turnover = net sales / average property, plant and equipment (7) Total assets turnover = net sales / average total assets 4. Profitability (1) Return on assets = [net income + interest expenses x (1- tax rate)] / average total assets (2) Return on equity = net income / average total equity (3) Pre-tax income to paid-in capital = income before tax / paid-in capital (4) Net profit margin = net income / net sales (5) Earnings per share = (net income – preferred shares dividends) / weighted average number of outstanding shares 5. Cash flow (1) Cash flow ratio = net cash provided by operating activities / current liabilities (2) Cash flow adequacy ratio = five-year sum of net cash provided by operating activities / five-year sum of capital expenditures, inventory increase and cash dividend (3) Cash flow reinvestment ratio = (net cash provided by operating activities – cash dividend) / (gross property, plant and equipment + long-term investments + other non-current assets + working capital) 6. Leverage (1) Operating leverage = (operating revenues – variable operating costs and expenses) / operating income (2) Financial leverage = operating income / (operating income – interest expenses) Note 3: The company listed on the TWSE or traded on the TPEx shall include in its analysis the updated financial data which are audited or reviewed by a CPA for the most recent period up to the publication date of the annual report: None.

190 Financial Review

Audit Committee’s Review Report

The Board of Directors has prepared and submitted to us the Company’s 2020 Business Report, Financial Statements, and proposal for earnings distribution. Financial Statements were audited by Ernst & Young and they issued an audited report accordingly. We, as the Audit Committee of the Company, have reviewed the Business Report, Financial Statements, and proposal for earnings distribution and do not find any discrepancies. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

To United Microelectronics Corporation 2021 Annual General Shareholders’ Meeting

Chairman of the Audit Committee: Cheng-Li Huang

February 24, 2021

191 United Microelectronics Corporation | Annual Report 2020 Other ting and Attestation of Attestation and ting section of our report), the our the report), of section the International Financial the s are further described in the the in described are further s in forming our opinion in forming thereon, s to the consolidated financial statements, s to the consolidated financial e present fairly, in all material respects, the the respects, all material in fairly, epresent These matters were addressed in of in the context These matters were addressed rdance with the Norm of Professional Ethics for for Ethics Professional of Norm the with rdance the Regulations Governing the Preparation of of Preparation Governing the the Regulations Regulations Governing Audi y Commission of the Republic of China. section of our our of section Statements Financial the Consolidated s, Interpretations developed by Republic of China (the “Norm”), and we have fulfilled our other other our fulfilled we have “Norm”), and (the China of Republic ncial statements as a whole, and and whole, a as statements ncial sponsibilities under those standard those under sponsibilities and we do not provide a separate opinion on these matters. matters. these on opinion separate a provide not do we and Auditors’ Responsibilities forthe Audit of report. We are independent of the Company in acco in Company the of independent are We report. the of Certified Accountant Public other of reports the and audits onour Based Norm. the with accordance in responsibilities ethical appropriate to and is sufficient obtained we have audit the that evidence we believe auditors, opinion. our for basis a provide Matters Key Audit in significance most of were judgment, professional our in that, matters those are matters audit Key statements. financial consolidated 2020 of our audit offina consolidated the audit our Independent Auditors’ Report Auditors’ Independent Corporation Microelectronics United To Opinion sheets of United Microelectronics balance consolidated the accompanying have audited We the and 2019, and 2020 31, December of as “Company”) (the andsubsidiaries its Corporation and the flows cash for in equity changes income, comprehensive of statements consolidated related note and 2019, and 2020 31, December ended years includingthe summary of significant accounting policies (together“the consolidated financial statements”). to the refer (please other auditors of the reports and audits our on based opinion, our In Auditors of Component to the Audits Reference – Making Matter consolidated financial statements referred to to abov referred statements financial consolidated consolidated financial position of the Company as of December 31, 2020 and 2019, and their their and 2019, and 2020 31, December of as Company the of position financial consolidated and 31, 2020 December years ended the andfor cash flows financial performance consolidated of requirements the with conformity in 2019, FinancialReports Securitiesby Issuersand International Financial ReportingStandards, International Accounting Standard Financial Statements by Certified Public Accountants and auditing standards generally accepted in in accepted generally standards Accountants and auditing Public by Certified Statements Financial Our re China. Republic the of Reporting Interpretations Committee or as Interpretations Committee the former or Committee Interpretations endorsed Reporting Standing and becameeffective by FinancialSupervisor Basis forBasis Opinion the with accordance in audits our conducted We ge financial statements shall prevail. AND SUBSIDIARIES SUBSIDIARIES AND FOR FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 2019 AND 2020 31, DECEMBER CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS FINANCIAL CONSOLIDATED WITH REPORT OF INDEPENDENT AUDITORS AUDITORS INDEPENDENT OF REPORT WITH UNITED MICROELECTRONICS CORPORATION CORPORATION MICROELECTRONICS UNITED Address: R.O.C. Taiwan, 3 Li-Hsin No. Road II,Hsinchu City, Park,Hsinchu Science 886-3-578-2258 Telephone: the In Chinese. in originally prepared been have statements financial consolidated these that is advised reader The interpretation in or difference version Chinese original the and statements financial these between a conflict of event langua Chinese the two the versions, between

192 Financial Review consolidated financialconsolidated misstatement when it it when misstatement the International Financial the nsolidated financial statements, ission of the Republic of China and for such such and for China of the Republic of ission ways detect a ways detect material audit procedures responsive to those risks, and risks, and to those responsive procedures audit y, intentional omissions, misrepresentations, or omissions, misrepresentations, y, intentional atement, whether due to fraud or error, and to to and error, or fraud to due whether atement, ssary to enable the preparation of consolidated any, disclosing, as applicable, mattersas applicable, disclosing, related to any, arged with Governance for the Consolidated forwith the arged Governance Standing Interpretations Committee as endorsed as Committee endorsed Interpretations Standing maintain professional skepticism throughout the the throughout skepticism professional maintain to influence the economic decisions of users taken users taken of decisions economic the influence to rance about whether the the whether about rance t conducted in accordance with auditing standards standards with auditing t in accordance conducted s, Interpretations developed by icient and appropriate to provide a basis for our opinion. The our for basis a opinion. provide to and icient appropriate material misstatement of the co misstatement resulting from fraud is higher than for one resulting resulting one for than is higher fraud from resulting misstatement obtain auditobtain suffis that evidence a detecting material not risk of whether due to fraud or error, design and perform and perform design or error, due to whether fraud collusion, forger involve may error, as fraud from internal control. of the override Identify and assess the risks of Identify and risks of the assess Responsibilities of Management and Those Ch Financial Statements financial consolidated the of presentation fair and preparation the for responsible is Management of Preparation of Governing the the Regulations the requirements with accordance in statements FinancialReports Securitiesby Issuers andInternational Financial Reporting Standards, International Accounting Standard internal control as determines is management nece to intends either management unless of accounting basis going concern the using and concern going so. do to but alternative no realistic has or cease operations, to or Company the liquidate for responsible are supervisors, or audit committee including governance, with charged Those of the Company. process reporting financial the overseeing Auditor’sAuditResponsibilitiesthe of Consolidated the Financial for Statements assu reasonable obtain to are objectives Our material misst from asfree are a statements whole level of a high is assurance Reasonable our opinion. includes that report issue an auditor’s is audi an not but that a guarantee assurance, China will al in the Republic of accepted generally in or individually if, material considered are and error or fraud from arise can Misstatements exists. be expected they could reasonably the aggregate, statements. financial these consolidated of on the basis in the Republic of accepted generally standards with auditing in accordance As part of an audit and judgment we China, professional exercise also:audit. We 1. Reporting Interpretations Committee or former the or Committee Interpretations Reporting Comm Supervisory Financial by effective became and error. or due fraud to whether misstatement, material from free are that statements financial the assessing for responsible is management statements, financial consolidated the preparing In the Comp of concern as going a continue to ability reserve to historical historical to reserve age, write-off activities activities write-off age, -moving inventories was hod amounted to NT$29,507 to NT$29,507 amounted hod Please refer to Notes 5 and 6 Notes to Please refer on of the appropriate amount of the the of amount appropriate the of on ted shares of profits from the associates and and the associates from profits shares of ted ntories that are expected to be written-off or be written-off to expected are that ntories and 3.16% of consolidated total assets as of as of assets total consolidated of 3.16% and inventories reserve process. For example, we example, For process. inventories reserve related shares of other comprehensive income income comprehensive other of shares related ories amounted to NT$22,552 million. As the As the million. NT$22,552 to amounted ories s including historical us historical including s in associates and joint ventures accounted for for accounted ventures joint and associates in ts were audited by other whose reports auditors, ntories reserve, our audit procedures included, included, procedures audit our reserve, ntories e reserve method and the key inputs used in the in used inputs the and key the method reserve e e slow-moving inventories inventories slow-moving e ed to NT$6,686 million, million NT$1,231 and ntory reserve for the application of the reserve reserve the of application the for reserve ntory management’s methodology to determine inventory inventory determine to methodology management’s ntures under equity met equity ntures under ting the valuation slow ting for % and 12.41% of the consolidated total comprehensive income income comprehensive total consolidated the of and 12.41% % consider this is a matter.key audit acy of disclosures inventories.acy of of ed financial statements. financial statements. ed ntal nature of the Company’s estimati the ntal natureof ntory aging categories. categories. aging ntory to the Company’s consolidat Company’s the to Auditors Component of Audits the to Reference Making – Matter Other certa of statements the financial audit not did We statemen Those method. financial the equity under reports the on solely based are herein expressed opinions our and us, to furnished been have thereon ve joint and These associates auditors. other of 7.82% representing million, and NT$11,704 million The rela respectively. 2019, and 2020 31, December joint ventures under the equity method amount ended years the for tax before income consolidated the of 21.46% and 23.94% representing the and respectively, 2019, and 31, 2020 December and to NT$2,716 million amounted equity method the under ventures joint and the associates from 8.52 representing million, NT$1,184 respectively. and 2019, 31, 2020 December ended for the years semiconductor industry is characterized by rapid changes in technology, management had to to had management technology, in changes rapid by is characterized industry semiconductor inve slow-moving for reserve a estimate and evaluate Audi date. future at a of disposed otherwise to due the complex judgme input key utilizing reserve, inventories slow-moving we Therefore, aging. and inventory of effectiveness operating the tested and design the evaluated an understanding, We obtained slow-moving over the Company’s controls internal th of review over management’s tested the control inve slow-moving the test To process. valuation of appropriateness the others, evaluate amongst compar percentages, reserve and inventory aging in used data theunderlying of completeness and accuracy test the and activities write-off and usage such We alsodetermination. inve recalculated percentages to the inve In addition, we evaluated the adequ Valuation for slow-moving inventories invent net the Company’s 31, 2020, December As of

193 United Microelectronics Corporation | Annual Report 2020 ents and report of independent auditors are not intended intended are not auditors independent of report ents and Other Other the on Paragraph Matter Other an including opinion unqualified an expressed and audited have We December ended as of andyears the for of Company the statements financial only company parent and 2019. 31, 2020 /s/Chiu,Wan-Ju /s/Hsu, Hsin-Min Taiwan Ernst & Young, 2021 24, February Notice to Readers financial the consolidated position, to present only financialconsolidated are intended statements The accompanying resultsof operations and cash flows in accordance with accounting principlesand practices generally accepted in the such audit to practices and procedures standards, The jurisdictions. other of any not those and China of Republic consolidated financial statements are those generally accepted and appliedin the Republic of China. the accompanyingfinancial consolidated statem Accordingly, for use by those who are not informed about theprinciples accounting auditing or standards generally accepted in the practice. in applications their and China, of Republic ttention in nsolidated financial to drawa nancial statements or, such if r, future events or conditions r, conditions or future events any significant deficiencies in in deficiencies significant any l information or of the entities l e audit in order to design audit audit design in order to e audit consolidated financial statements represent statementsfinancial represent consolidated ability to continue as a going concern of ability the to continue as a going concern of a material uncertainty exists related events a uncertainty to material ty exists, we are required are exists, we ty ntent of the consolidated financial statements, statements, financial theof consolidated ntent ess an opinion on the co opinion ess an be thought to bear on our independence, and and independence, our on to bear be thought ances, but not for the purpose of expressing an an expressing of purpose the for not but ances, ion, supervision and performance of the group group the of and performance ion, supervision 2020 consolidated financial statements and are and are statements financial consolidated 2020 pendence, and to communicate with them all with all them to communicate and pendence, a manner that achieves fair presentation. fair a achieves that manner internal control of the Company.control of internal disclosures in the consolidated fi the in consolidated disclosures of of our auditor’s report. Howeve gnificant audit findings, including including findings, audit gnificant dit evidence regarding the financia onsible for our audit opinion. for our audit opinion. onsible of internal control relevant to th identify during our audit. audit. during our identify statements. We are responsible for the direct the for responsible are We statements. audit. remainWe solely resp business activities within the Company to expr business activities Obtain sufficient appropriate au appropriate sufficient Obtain Obtain an understanding understanding an Obtain procedures that are appropriate in the in circumst that are appropriate procedures the of on opinion the effectiveness Evaluate the appropriateness of accounting policies used and the reasonableness of accounting accounting of reasonableness the used and policies accounting of appropriateness the Evaluate by management. made disclosures and related estimates accounting of basis concern going the of use management’s of appropriateness on the Conclude whether obtained, evidence audit the on and, based or conditions that may cast significant doubt on the significant doubt cast may that or conditions uncertain material a that conclude we If Company. our auditor’s report to the related audit the on based are conclusions Our opinion. our modify to inadequate, are disclosures evidence obtained up to the date concern. a going as to cease continue the Company cause may Evaluate the overall presentation, structure and co the whether notes, and the accompanying including the underlying transactions and events in We communicate with those charged with governance regarding, among other matters, the planned planned the matters, other among regarding, governance with charged those with communicate We scope and timing of the audit and si internal control that we that control internal with complied we have that with a statement governance with charged those We also provide inde regarding requirements ethical relevant reasonably may that matters and other relationships related safeguards. where applicable, matters those determine we governance, with charged those with matters communicated the From of the audit in significance most that were of law or unless report in our auditor’s matters the describe these matters. We therefore key audit circumstances, rare extremely when, in matter or the disclosure about public precludes regulation that a report because the adverse in our matter be communicated should we determine not of interest benefits the public to outweigh be expected reasonably so would doing of consequences communication. such 6. 2. 3. 4. 5.

194 Financial Review 98 26,220 214,243 654,466 289,945 596,088 217,906 722,794 2,912,875 6,290,518 2,600,733 7,807,583 5,198,247 8,291,517 21,714,802 25,438,703 14,723,232 13,322,143 13,298,679 95,492,477 153,757,141 370,187,365 216,430,224 150,374,096 2019 $ $ 37,598 As of December 31, 257,841 178,918 586,333 2,324,838 1,668,874 1,501,933 2,310,961 6,832,711 4,877,913 7,748,042 1,216,634 14,926,331 22,552,486 27,094,355 10,526,144 31,225,677 14,826,087 94,048,036 164,305,911 377,516,375 213,210,464 132,774,663 2020

$

$ Notes 8 4, 5, 6(25) 4, 6(10), 7 4, 6(9), 8 4, 5, 6(8), 8 4, 5, 6(5) 4, 6(6), 7 4, 5, 6(2), 7 6(7), 6(20) 4, 5, 6(4) 4, 6(20) 4 4, 5, 6(2) 4 4,6(1) 4, 7 4, 6(3) 4- (continued) December 31, 2020 and 2019 CONSOLIDATED BALANCE SHEETS (Expressed in Thousands of New Taiwan Dollars) UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Assets English Translation of Consolidated Financial Statements Originally Issued in Chinese Total assets Other noncurrent assets-others Total non-current assets Prepayment for equipment Refundable deposits Deferred tax assets Intangible assets Right-of-use assets Investments accounted for under the equity method Property, plant and equipment Financial assets at fair value through other comprehensive income, noncurrent Total current assets Non-current assets Financial assets at fair value through profit or loss, noncurrent Prepayments Other current assets Notes receivable Inventories, net Contract assets, current Current tax assets Financial assets at fair value through profit or loss, current Other receivables Current assets Cash and cash equivalents Accounts receivable-related parties, net Accounts receivable, net 195 United Microelectronics Corporation | Annual Report 2020 - - - 1,218 13,211 332,611 573,336 123,268 214,455 410,065 482,080 988,115 939,207 569,957 196,110 (119,801) 2,744,391 1,476,405 3,031,184 2,087,366 8,877,065 6,262,604 5,461,068 4,025,373 (8,948,337) (2,073,977) 34,733,761 34,404,110 11,572,579 14,513,940 29,200,299 12,015,206 72,714,322 18,687,591 90,258,621 15,235,384 24,795,600 30,118,734 206,804,357 117,243,187 207,214,422 370,187,365 162,972,943 2019

$ $

$ $

- - - 2,326 93,880 88,504 As of December 31, 466,457 241,081 113,356 456,480 550,147 235,199 (119,801) 3,726,229 3,340,664 2,170,666 8,080,938 5,448,921 1,631,459 2,040,989 7,862,137 1,050,965 5,368,095 5,026,717 4,162,654 (3,667,395) 36,809,962 12,536,526 11,022,314 56,617,520 11,057,132 78,243,526 16,690,474 63,499,747 17,877,736 26,985,078 27,215,826 (11,890,876) 235,659,746 377,516,375 141,743,273 124,224,015 235,773,102 2020

$ $

$

Notes 4, 6(19) 4, 6(18), 6(19) 6(14), 6(27) 4, 6(13), 6(18), 6(19) 6(18) 6(18) 6(11), 6(27) 4, 6(12) 4, 6(20) 4, 5, 6(25) 4, 6(13), 6(18) 4, 6(20) 4 4, 6(16), 6(17), 6(27), 7 4, 6(13), 6(27) 4, 6(9), 6(27) 7 4, 6(9), 6(27) 4, 5, 6(15) 6(27) 4, 6(13), 6(14), 6(27) 4,6(16), 6(27), 9(5) December 31, 2020 and 2019 CONSOLIDATED BALANCE SHEETS (Expressed in Thousands of New Taiwan Dollars) UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES English Translation of Consolidated Financial Statements Originally Issued in Chinese The accompanying notes are an integral part of the consolidated financial statements. Liabilities and Equity Other components of equity Exchange differences on translation of foreign operations Unrealized gains or losses on financial assets measured at fair value through other comprehensive income Unearned employee compensation Treasury stock Additional paid-in capital Premiums Total equity attributable to the parent company Non-controlling interests Treasury stock transactions The differences between the fair value of consideration paid or received from acquiring disposing subsidiaries and the carrying amounts of Recognition of changes in subsidiaries’ ownership Share of changes in net assets associates and joint ventures accounted for using equity method Employee stock options Stock options Restricted stock for employees Other Retained earnings Legal reserve Special reserve Unappropriated earnings Current liabilities Short-term loans Financial liabilities at fair value through profit or loss, current Non-current liabilities Contract liabilities, noncurrent Long-term loans Deferred tax liabilities Capital collected in advance Total liabilities and equity Total liabilities Equity attributable to the parent company Capital Common stock Total equity Contract liabilities, current Payables on equipment Current tax liabilities Bonds payable Lease liabilities, noncurrent Notes and accounts payable Other payables Lease liabilities, current Other current liabilities Total current liabilities Net defined benefit liabilities, noncurrent Guarantee deposits Total non-current liabilities Current portion of long-term liabilities Other noncurrent liabilities-others

196 Financial Review

English Translation of Consolidated Financial Statements Originally Issued in Chinese UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

For the years ended December 31, Notes 2020 2019 Operating revenues 4,6(20), 7, 14 $ 176,820,914 $ 148,201,641 Operating costs 4, 6(4), 6(10), 6(15), 6(19), 6(20), 6(21), 7, 14 (137,823,813) (126,886,669) Gross profit 38,997,101 21,314,972 Operating expenses 4, 6(3), 6(10), 6(15), 6(19), 6(21), 7, 14 Sales and marketing expenses (4,152,242) (3,807,610) General and administrative expenses (6,664,166) (5,436,091) Research and development expenses (12,895,501) (11,860,244) Expected credit impairment gains (losses) 468,325 (703,339) Subtotal (23,243,584) (21,807,284) Net other operating income and expenses 4, 6(8), 6(16), 6(22), 14 6,253,890 5,182,162 Operating income 22,007,407 4,689,850 Non-operating income and expenses Interest income 4 737,913 994,061 Other income 4 698,155 711,614 Other gains and losses 4, 6(23), 9(6) (11,674) 1,257,299 Finance costs 6(23) (2,073,433) (2,997,643) Share of profit or loss of associates and joint ventures 4, 6(6), 14 6,667,952 1,147,495 Bargain purchase gain 4, 6(28) - 171,585 Exchange loss, net 4, 12 (100,141) (238,624) Subtotal 5,918,772 1,045,787 Income from continuing operations before income tax 27,926,179 5,735,637 Income tax (expense) benefit 4, 5, 6(25), 14 (745,767) 393,130 Net income 27,180,412 6,128,767 Other comprehensive income (loss) 6(24) Items that will not be reclassified subsequently to profit or loss Remeasurements of defined benefit pension plans 4, 5, 6(15) (192,581) 106,403 Unrealized gains or losses from equity instruments investments measured at 4,815,361 5,486,209 fair value through other comprehensive income Share of other comprehensive income (loss) of associates and joint ventures 2,824,216 1,231,722 which will not be reclassified subsequently to profit or loss Income tax related to items that will not be reclassified subsequently 4, 5, 6(25) 54,424 (158,260) Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (2,920,280) (3,277,938) Share of other comprehensive income (loss) of associates and joint ventures 60,221 15,348 which may be reclassified subsequently to profit or loss Income tax related to items that may be reclassified subsequently 4, 5, 6(25) 44,173 5,301 Total other comprehensive income, net of tax 4,685,534 3,408,785 Total comprehensive income $ 31,865,946 $ 9,537,552

Net income (loss) attributable to: Stockholders of the parent $ 29,189,489 $ 9,707,614 Non-controlling interests (2,009,077) (3,578,847) $ 27,180,412 $ 6,128,767

Comprehensive income (loss) attributable to: Stockholders of the parent $ 33,748,370 $ 13,131,612 Non-controlling interests (1,882,424) (3,594,060) $ 31,865,946 $ 9,537,552

Earnings per share (NTD) 4, 6(26) Earnings per share-basic $ 2.42 $ 0.82 Earnings per share-diluted $ 2.35 $ 0.76

The accompanying notes are an integral part of the consolidated financial statements.

197 United Microelectronics Corporation | Annual Report 2020 ------9,485 3,639 235,773,102 206,512,129 $ $ - 14,655 - 12,927 - - (1,678,272) - (29,388) - 6,510,283 - 2,639,238 - - (9,765,155) - - - - - (2,859,498) - 463,415 - 377,004 - (6,916,105) - - (51,565) (51,565) 113,356 466,768 Non- Interests Total Equity Controlling $ $ - (551,608) (551,608) ------9,485 235,659,746 206,045,361 $ $ - - 14,655 - 3,423,998 (15,213) 3,408,785 - (1,657,885) 2,092,340 434,455 - - 12,927 - - (817,850) (10,331) (828,181) - (106,879) 106,879 - (29,388) - 6,510,283 - 33,748,370 (1,882,424) 31,865,946 1) 206,804,357 410,065 207,214,422 - - 29,189,489 4,558,881 (2,009,077) 27,180,412 126,653 4,685,534 - - (9,765,155) - (3,440,471) 3,512,617 72,146 - - - (21,101) 24,740 - 463,415 - 377,004

- 13,131,612 (3,594,060) 9,537,552 - 9,707,614 (3,578,847) 6,128,767 - (6,916,105) - - (119,801) $ $ ------(1,678,272) (1,678,272) ------(119,80 ------8,387,127 - (2,859,498) (2,859,498) ------Unearned Employee Compensation Treasury Stock Total $ $ (5,647,430) ------(3,667,395) 1,678,272 2,639,238 ------2,058 (2,058) on Hedging Instruments $ (3,667,395) $ Gains or Losses ------3,726,229 (8,819,556) Income Other Components of Equity Unrealized on Financial at Fair Value through Other $ Comprehensive $ Gains or Losses Assets Measured ------551,903 - - - - (387,654) ------(1,825,365) - - - - (33,378) ------(5,706,261) Foreign (11,890,876) Exchange Operations Translation of Differences on $ $ ------56,617,520 Earnings $ $ Unappropriated Equity Attributable to the Parent Company - - (952,836) - - 1,825,365 - - (816,632) - - 33,378 - - - - - (157,529) 29,031,960 (2,942,539) (2,942,539) 7,658,949 7,658,949 - 29,189,489 - (9,765,155) - (963,947) - (3,457,987) - (551,903) - - (22,280) - - 387,654 - - - - 84,744 (3,242,076) 6,581,330 - 9,792,358 (3,242,076) 6,581,330 - 9,707,614 - (6,916,105) - (707,299) 11,022,314 $ $ 50,723,263 Retained Earnings ------(3,491,626) 3,491,626 ------14,513,940 (14,513,940) 12,536,526 10,865,280 $ $ For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars) ------963,947 ------707,299 9,485 1,179 (1,218) CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Additional $ $ Paid-in Capital Legal Reserve Special Reserve The accompanying notes are an integral part of the consolidated financial statements. English Translation of Consolidated Financial Statements Originally Issued in Chinese - - - (705,049) - - 12,927 - - - (106,879) - (29,388) - - 2,628,061 ------15,458 - - - - (1,387,127) - 14,655 - - 377,004 ------Advance Collected in $ 43,211,214 $ 40,388,936 ------332,611 130,804 ------Capital 2,000,300 (7,000,000) 124,224,015 117,243,187 332,611 39,550,394 11,572,579 14,513,940 34,733,761 (8,948,337) (2,073,977) 124,243,187 $ $ Notes Common Stock 6(18) 6(18) 6(18) 6(5) 4, 6(18) 6(18) 6(29) 4, 6(18) 4, 6(13), 6(18) 4,980,528 (332,611) 1,862,366 4, 6(19) 6(18) 6(18) 6(18) 6(18) 6(5), 6(28) 4, 6(18) 4, 6(18) 4, 6(18) 4, 6(13), 6(18) 4, 6(19) 6(18) 6(18) 6(18) ownership ’ Special reserve reversed Cash dividends Legal reserve Cash dividends Special reserve Legal reserve

Balance as of December 31, 2020 Others Non-Controlling Interests Disposal of equity instruments investments measured at fair value through other comprehensive income Adjustments for dividends subsidiaries received from parent company Changes in subsidiaries’ ownership The differences between the fair value of consideration paid or received from acquiring or disposing subsidiaries and the carrying amounts of Disposal of subsidiaries Share of changes in net assets associates and joint ventures accounted for using equity method Treasury stock acquired Conversion of convertible bonds Share-based payment transaction Total comprehensive income (loss) Other comprehensive income (loss) for the year ended December 31, 2020 6(18), 6(24) Net income (loss) for the year ended December 31, 2020 Appropriation and distribution of 2019 retained earnings Balance as of December 31, 2019 Others Disposal of equity instruments investments measured at fair value through other comprehensive income Adjustments for dividends subsidiaries received from parent company Changes in subsidiaries Share of changes in net assets associates and joint ventures accounted for using equity method Treasury stock cancelled Treasury stock acquired Conversion of convertible bonds Share-based payment transaction Total comprehensive income (loss) Other comprehensive income (loss) for the year ended December 31, 2019 6(18), 6(24) Net income (loss) for the year ended December 31, 2019 Appropriation and distribution of 2018 retained earnings Adjusted balance as of January 1, 2019

198 Financial Review

English Translation of Consolidated Financial Statements Originally Issued in Chinese UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

For the years ended December 31, 2020 2019 Cash flows from operating activities: Net income before tax $ 27,926,179 $ 5,735,637 Adjustments to reconcile net income before tax to net cash provided by operating activities: Depreciation 46,163,693 47,172,881 Amortization 2,744,383 2,216,654 Expected credit impairment (gains) losses (468,325) 703,339 Net gain of financial assets and liabilities at fair value through profit or loss (2,011,403) (1,279,931) Interest expense 2,004,418 2,933,815 Interest income (737,913) (994,061) Dividend income (698,155) (711,614) Share-based payment 959,219 366,186 Share of profit of associates and joint ventures (6,667,952) (1,147,495) Gain on disposal of property, plant and equipment (1,137,320) (43,036) Loss on disposal of investments 60,940 16,293 Impairment loss on non-financial assets - 118,134 Exchange (gain) loss on financial assets and liabilities (1,386,657) 206,612 Bargain purchase gain - (171,585) Gain on lease modification (1,765) - Amortization of deferred government grants (3,994,818) (4,062,148) Income and expense adjustments 34,828,345 45,324,044 Changes in operating assets and liabilities: Financial assets and liabilities at fair value through profit or loss 876,876 (594,847) Contract assets (49,108) (126,340) Notes receivable and accounts receivable (1,501,100) 439,400 Other receivables (224,488) 67,347 Inventories (1,014,039) (1,370,249) Prepayments 3,053,557 5,833,773 Other current assets (71,573) (64,732) Contract fulfillment costs 4,200 8,054 Contract liabilities 1,072,225 69,329 Notes and accounts payable (944,909) (739,066) Other payables 2,338,043 514,686 Other current liabilities (593,710) 819,746 Net defined benefit liabilities (55,300) (35,398) Other noncurrent liabilities-others 53,743 (3,240) Cash generated from operations 65,698,941 55,878,144 Interest received 758,235 973,241 Dividend received 1,041,972 818,691 Interest paid (1,735,327) (2,147,320) Income tax paid (18,629) (618,608) Net cash provided by operating activities 65,745,192 54,904,148

(continued)

199 United Microelectronics Corporation | Annual Report 2020

English Translation of Consolidated Financial Statements Originally Issued in Chinese UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

For the years ended December 31, 2020 2019 Cash flows from investing activities: Acquisition of financial assets at fair value through profit or loss $ (1,118,572) $ (354,249) Proceeds from disposal of financial assets at fair value through profit or loss 326,127 229,553 Proceeds from disposal of financial assets at fair value through other - 44,466 comprehensive income or loss Acquisition of investments accounted for under the equity method (59,900) (730,000) Proceeds from disposal of investments accounted for under the equity method 30,611 5,970 Increase in prepayment for investments - (17,974) Proceeds from capital reduction and liquidation of investments 27,200 32,214 Acquisition of subsidiary (net of cash acquired) - (12,800,981) Disposal of subsidiary (785,772) 32,017 Acquisition of property, plant and equipment (26,345,302) (16,518,483) Proceeds from disposal of property, plant and equipment 1,737,125 45,042 Increase in refundable deposits (160,254) (257,909) Decrease in refundable deposits 448,893 441,013 Acquisition of intangible assets (2,009,031) (2,443,593) Government grants related to assets acquisition 242,264 617,685 Increase in other financial assets (18,422,183) - Decrease in other financial assets 5,984,342 - Increase in other noncurrent assets-others (7,049) (15,074) Decrease in other noncurrent assets-others - 8,786 Net cash used in investing activities (40,111,501) (31,681,517) Cash flows from financing activities: Increase in short-term loans 16,271,732 25,732,933 Decrease in short-term loans (17,205,124) (26,726,656) Cash payments for the principal portion of the lease liability (726,626) (633,488) Redemption of bonds (13,702,875) (2,500,000) Proceeds from long-term loans 13,528,900 11,449,930 Repayments of long-term loans (13,391,980) (7,572,939) Increase in guarantee deposits 303,720 269,415 Decrease in guarantee deposits (363,539) (17,146) Cash dividends (9,765,694) (6,911,058) Treasury stock acquired (1,678,272) (2,972,243) Treasury stock sold to employees 1,677,900 - Change in non-controlling interests (551,608) 3,388 Others 2,120 10,818 Net cash used in financing activities (25,601,346) (9,867,046) Effect of exchange rate changes on cash and cash equivalents (1,476,786) (1,524,847) Net (decrease) increase in cash and cash equivalents (1,444,441) 11,830,738 Cash and cash equivalents at beginning of year 95,492,477 83,661,739 Cash and cash equivalents at end of year $ 94,048,036 $ 95,492,477

The accompanying notes are an integral part of the consolidated financial statements.

200 Financial Review IASB IASB IASB and endorsedIASB and by Effective issued by Date Effective the interest rate benchmark benchmark rate interest the January 1, 2022 1, 2022 January January 1, 2022 1, January 2022 January 1, 2022 1, January 2022 January 1, 2023 1, 2023 January 1, January 2022 January 1, 2023 1, January 2023 To be determined by IASB by IASB be determined To ancial Instruments: Recognition and and Recognition Instruments: ancial hedge accounting solely because hedge it accounting makes riods beginning on or after January 1, 2021. 2021. 1, January after or on beginning riods tions were issued by ase 2 (Amendments to IFRS 9 “Financial “Financial 9 IFRS to (Amendments 2 ase

ounting Standards Board (“IASB”) but not (“IASB”) yet Board Standards ounting ly relate to the effects of of effects the to relate ly Reporting Standards” “First-time Adoption of

A company will not have to derecognise or adjust the carrying amount of financial financial of amount carrying the or adjust derecognise to have not will company A but will reform, the by cash as required flows to contractual changes for instruments alternative to the change the reflect to rate interest effective the update instead rate; benchmark its discontinue to nothave will company A changes required by the reform, if the hedge meets other hedge accounting criteria; criteria; accounting hedge other meets hedge the if reform, the by required changes and the from arising risks new about information disclose to required be will company A rates. benchmark alternative to transition the it manages how and reform International Financial International reform on the companies’ financial statements: statements: financial companies’ the on reform i. ii. iii. The final phase amendments main phase amendments final The Instruments” (“IFRSInstruments” 9”), IAS 39 “Fin 7”), (“IFRS Disclosures” Instruments: “Financial 7 IFRS 39”), (“IAS Measurement” 16) (IFRS “Leases” 16 IFRS and 4”) (“IFRS Contracts” 4 “Insurance IFRS Amendments to IFRS 3, Amendments to IAS 16,Amendments to IFRS 3,Amendments 37 to IAS Amendments Statements”or Liabilitiesas Current – Classification of Non-current “Investments in Associates and Joint Ventures” – or – Sale Ventures” and Joint Associates in “Investments its Assets between an Investor and of Contribution Associate or Ventures Joint Amendments to IFRS 9 “Financial Instruments” Instruments” 9 to IFRS “Financial Amendments 16 to IFRS “Leases” Amendments “Agriculture” 41 IAS to Amendments 1, January 2022 Amendments to IFRS 1 Narrow-scope amendments of IFRS, including including IFRS, of amendments Narrow-scope Amendments to IAS 1 “Presentation of Financial Financial of “Presentation 1 IAS to Amendments IFRS 17 “Insurance Contracts” 17 “Insurance Contracts” IFRS IFRS 10 “Consolidated Financial Statements” and IAS 28 28 and IAS Statements” Financial 10 “Consolidated IFRS Annual Improvements to IFRS Standards 2018 – 2020: 2020: – 2018 Standards IFRS to Improvements Annual New, Revised or Amended Standards Revised andInterpretations or New, endorsed by FSC (the effective dates are to be determined by FSC) are listed below: below: by are FSC) listed are determined dates to be effective (the FSC by endorsed The abovementioned standards and interpreta and standards abovementioned The on the Company’s impact no have material listed above and interpretations The standards and performance. position financial FSC so that they are applicable for annual pe annual for applicable are they that so FSC a. InterestRate Benchmark - Ph Reform a. (3) Standards by International issued Acc

IASB IASB financial position and k Exchange (NYSE) in Effective issued by Date Effective January 1, 2021 January ting Standards, International pal operating activities of UMC and UMC of activities operating pal incorporated in Republic of China (R.O.C.) China of in Republic incorporated ct on the Company’s ct on the Company’s to satisfy customer needs. customer to satisfy ordinary UMC’s on the New York Stoc on the New York Dollars unless Specified)Otherwise unting Standards Board (“IASB”) which are which are Board (“IASB”) Standards unting Stock Exchange (TWSE) in July and its July 1985 in (TWSE) Exchange Stock

d International Financial Repor , Hsinchu City, Taiwan. The princi For the Years Ended December 31, 2020 and 2019 Years For the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS FINANCIAL CONSOLIDATED TO NOTES (Expressed Thousands in of Taiwan New New, Revised or Amended Standards Revised andInterpretations or New, Interest Rate Benchmark Reform - Phase 2 (Amendments to (Amendments 2 Phase - Reform Benchmark Rate Interest IFRSIAS9,IFRS IFRS7, and 4 39, IFRS 16) Accounting Standards, and Interpretations issued, revised or amended which are endorsed endorsed are which amended or revised issued, Interpretations and Standards, Accounting periods annual for effective become and (“FSC”) Commission Supervisory by Financial on or 2020. January 1, after beginning standards revised or adopted were no newly There interpretationsand that material impa have performance. are listed below: by the Company adopted but not yet FSC, by endorsed UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES SUBSIDIARIES AND CORPORATION MICROELECTRONICS UNITED its subsidiaries (“the Company”) are described in Notes 4(3) and 14. Notes 4(3) and 14. described in Company”) are (“the its subsidiaries September 2000. 2000. September Road II, Li-Hsin 3, is No. business of place principal and office its registered of The address Hsinchu Science Park was (UMC) Corporation Microelectronics United ISSUE issue in accordance for were authorized the Company of statements financial The consolidated 24, 2021. February on meeting of Directors’ Board of the with a resolution in May 1980 and commenced operations in April 1982. 1982. in April operations commenced and 1980 in May semiconductor service a UMC is full services a variety of provides and foundry, wafer the Taiwan were publicly listed on shares Depositary SharesAmerican were listed (ADSs) Standards Internationalby issued (2) Acco (1) The Company applie (1) 2. FOR STATEMENTS OF FINANCIAL AND PROCEDURES OF AUTHORIZATION DATE 3. INTERPRETATIONS AND REVISED STANDARDS ISSUED OR NEWLY 1. AND ORGANIZATION HISTORY

201 United Microelectronics Corporation | Annual Report 2020 ndments37) to IAS assets that would not be affected by by not be affected assets would that the company is g produced while the is items company issue of potential “day 2” gains or losses potential “day of issue Instead, a company will recognise such such recognise will a company Instead, ities. ities. clarify amendments the Besides, anges in Accounting Estimates and Errors Accounting Estimatesanges in and Errors lation to the measurement of cumulative of cumulative the measurement to lation ents” (“IAS 1”) - Disclosure - Initiative in accounting estimates from changes in in changes from estimates accounting in Accounting Estimates and Errors” (“IAS 8”) 8”) Errors” (“IAS and Estimates Accounting ary users of the financial statements. statements. the ary users financial of

ing a Contract (Ame Contract a ing ng to lessee’s leasehold improvements. improvements. leasehold ng to lessee’s costs a company should include as the cost of fulfilling cost of fulfilling the as a company should includecosts Estimates (Amendment) 9 Financial Instruments The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the 16 modifies the IFRS accompanying 13 Example to Illustrative The amendment treatment of lease incentives relati preparing the asset for its intended use. intended its for asset the preparing sales proceeds and related cost profit in or loss. The amendments clarify what is onerous. a contract whether assessing a when contract The amendments prohibit a company from deducting from the cost of property, plant plant of the cost property, from deducting a company prohibit from amendments The sellin amounts received from and equipment

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a a that becomes 1 by subsidiary IFRS simplifiesof application the The amendment first-time adopter after its parent in re differences. translation the whether when assessing includes a company the fees clarifies The amendment the from different substantially are liability financial modified or a new of terms the of liability. terms original financial 3 to avoid the of principle IFRS recognition contingentliabil and liabilities arising for contingent 3 IFRS for guidance in existing replacing the reference to the Conceptual Framework. to the Conceptual the reference replacing 16)

policies. accounting The amendments improve accounting policy disclosures that to provide more useful useful more provide to that disclosures policy accounting improve amendments The prim other and investors to information included estimatesother of and accounting the definition introduce The amendments Ch Policies, Accounting 8 IAS to amendments changes to help distinguish companies iii. Onerous Contracts -Fulfill Cost of iii.

to IAS Use (Amendments Intended before Proceeds Equipment: and Plant ii. Property, Accounting Policies (Amendment) (Amendment) Policies Accounting -Definition of Accounting i. 1 to IFRS Amendment ii. to IFRS Amendment 16 Leases IFRS Accompanying Examples to Illustrative Amendment iii. e. 2020 – 2018 Standards IFRS to Improvements Annual g. IAS 8 “Accounting Policies, Changes in f. IAS 1 “Presentation of Financial Statem of Financial “Presentation f. 1 IAS

IASB IASB ts in future periods are ts in are periods future Effective issued by Date Effective January 1, 2023 1, 2023 January January 1, 2023 1, 2023 January of a subsidiary that is contributed to an an to contributed is that subsidiary a of sociate or a joint venture to the extent of of to the extent or venture a joint sociate gain or loss resulting from the sale or from or resulting sale loss or the gain constitute a business as defined in IFRS 3 in IFRS a business as defined constitute in IFRS 3 “Business 3) (IFRS Combinations”

the associate or joint venture. venture. or joint associate the ting Policies, Changes in Company’s statemen financial Company’s e other equity holders in the associate or joint venture. joint or associate in the holders e other equity the Conceptual Framework (Amendments to IFRS 3) 3) IFRS to (Amendments Framework Conceptual the of Financial Statements” (“IAS 1”) - Classification of Liabilities as as Liabilities of Classification - 1”)(“IAS Statements” Financial of

The amendments updated IFRS 3 by replacing a reference to an old version of the to an old version of a reference 3 replacing by IFRS updated amendments The version, latest the to reference a with Reporting Financial for Framework Conceptual in March 2018. was issued which to the also added an exception The amendments Statements” – Disclosure Initiative - Accounting Initiative -Statements” – Disclosure Policies Accounting Estimates and Errors” – Definition of Definition – Errors” and Estimates Accounting Estimates Accounting The amendments address the inconsistency between the requirements in IFRS 10 10 and in IFRS the requirements between inconsistency address the The amendments control of loss the with 28, in dealing IAS from arising losses gains and 28 restricts IAS venture. joint a or associate as an to assets non-monetary of contributions interestthe attributable to th a subsidiary. control of of the loss on or profit loss recognition full 10 requires IFRS of contribution or sale the from resulting loss or gain the that so amended 28 was IAS business a constitute as assets that defined its associate joint venture investor in and or an full. recognized is between the wasthat 10 also amended so IFRS does of a subsidiary not that contribution of extent to the only is recognized venture joint or associate its and investor an between interests in investors’ unrelated the 1financial of IAS presentation of 69-76 to paragraphs These are amendments the of liabilitiesrela ted to the classification paragraphs as and the amended statements current or non-current. i. to Updating a Reference Current or Non-current (Amendment) (Amendment) or Non-current Current Amendments to IAS 37 IAS 16, Associates and Joint Ventures” - Sale or Contribution of Assets between an Investor and and an Investor Assets of between Contribution or Sale - and Joint Ventures” Associates 28”) (“IAS (Amendment) Ventures or Associate Joint its Amendments to IAS 1 “Presentation of Financial Financial of “Presentation 1 IAS to Amendments Amendments to IAS 8 “Accoun 8 IAS to Amendments New, Revised or Amended Standards Revised andInterpretations or New, c. IAS 1 “Presentation The potential effects of adopting the standards or interpretations issued by by IASB but not issued the or interpretations adopting of standards effects The potential yet endorsed by FSC on the summarized as below: as below: summarized in “Investments 28 IAS and 10”) b. (“IFRS Statements” Financial “Consolidated 10 IFRS d. d. to 3, Amendments to IFRS Amendments including IFRS, of amendments Narrow-scope

202 Financial Review

- - 100.00 - 100.00 - 93.36 As of December 31, As of December 81.40 81.40 80.49 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 2020 2019 Percentage of ownership (%) Business nature tment holding stment holding venture capital integrated circuits solar power batteries integrated circuits advisory nvestment holding nvestment holding Consulting andplanning for Marketing support activities 100.00 100.00 Investment holding Sales andmanufacturing of Investment holding Sales andmanufacturing of Sales andmanufacturing of Energy technicalEnergy services Investment holding 100.00 100.00 Investment holding and Investment holding Inves IC Sales IC Sales Marketing support activities 100.00 100.00 Investment holding Investment holding

Subsidiary CORP. (FORTUNE) (FORTUNE) CORP. LIMITED LIMITED CO., LTD. LTD. CO., LIMITED (BE) (BE) LIMITED (NEXPOWER) (NEXPOWER) (WAVETEK) CORPORATION CO., LTD. (TERA ENERGY) ENERGY) (TERA LTD. CO., (EVERRICH-HK) LIMITED (HK) CO., LTD. LTD. CO., CORPORATION CORPORATION (EUROPE) B.V. B.V. (EUROPE) UMC CAPITAL CORP. CORP. UMC CAPITAL BEST ELITE INTERNATIONAL INTERNATIONAL ELITE BEST UMC INVESTMENT (SAMOA) (SAMOA) INVESTMENT UMC GREEN EARTH LIMITED (GE) LIMITED (GE) EARTH GREEN I FORTUNE VENTURE CAPITAL CAPITAL VENTURE FORTUNE UMC GROUP JAPAN JAPAN UMC GROUP (OMNI) LIMITED GLOBAL OMNI I UNITED SEMICONDUCTOR JAPAN JAPAN SEMICONDUCTOR UNITED SINO PARAGON LIMITED LIMITED SINO PARAGON Inve NEXPOWER TECHNOLOGY CORP. CORP. TECHNOLOGY NEXPOWER TLC CAPITAL CO., LTD. (TLC) (TLC) LTD. CO., TLC CAPITAL capital Venture UNITRUTH ADVISOR (SHANGHAI) ADVISOR UNITRUTH (SHANGHAI) MICROCHIP UNITED UMC KOREA CO., LTD. CO., LTD. UMC KOREA TERA ENERGY DEVELOPMENT DEVELOPMENT ENERGY TERA SOARING CAPITAL CORP. CORP. CAPITAL SOARING Investment holding UNITED MICROELECTRONICS MICROELECTRONICS UNITED UMC GROUP (USA) UMC GROUP and 2019 December 31, 2020 of As

b. entities are as follows: The consolidated Investor TLC TLC CORP. CORP. UMC UMC UMC UMC UMC UMC UMC UMC UMC UMC UMC UMC UMC UMC UMC UMC UMC, FORTUNE and and UMC, FORTUNE TLC TLC CAPITAL SOARING UMC and FORTUNE FORTUNE UMC and MICROELECTRONICS WAVETEK CORP. CAPITAL UMC (USA) UMC CAPITAL TERA ENERGY ENERGY TERA INVESTMENT ENERGY EVERRICH FORTUNE FORTUNE GE

and has the ability to tions, unrealized gains gains unrealized tions, tion and performance, and the the and performance, and tion l ReportsSecuritiesby Issuers is profitin recognized or loss isand oup transactions are eliminated in are full. eliminated oup transactions the date when control is lost is regarded is lost when control the date prepared on a historical cost basis, except except cost basis, a historical on prepared iary, the Company derecognizes the assets the assets derecognizes Company the iary, and to the non-controlling interests even if if even interests the and to non-controlling oup balances, transac balances, oup ts (including goodwill), and liabilities of the of the goodwill), and liabilities ts (including tal comprehensive subsidiaries is income of lvement with the entity with entity the lvement

interests having a deficit balance. a deficit interests having s power over the entity. entity. the over power s the statements of financial The en the evaluation is completed. completed. is evaluation the en gnition of gnition of an investment. g the Preparation ofg the Financia Preparation and losses dividends resulting from intra-gr is control, of a change without a subsidiary, interest of ownership in the change A transaction. equity for an as accounted To the parent of stockholders the to attributed resultsthis in the non-controlling subsid a over control loses Company the If previously interests non-controlling any as as well subsidiary, the of liabilities and loss or gain A Company. the by recorded consideration of value the fair of aggregate (a) the between: difference the as calculated and is lost; control when date the at interest retained any of value fair the and received the asse of amount previous(b) the carrying interests. non-controlling any and subsidiary recognized or gain loss previously Any or transferred loss or to profit be reclassified would income other comprehensive the in any of value by other fair The TIFRSs. required if to earnings retained directly subsidiary at retained in the former investment initial reco asthe cost on affect those returns through it through returns those affect using company, parent the as period rting the same are prepared repo for subsidiaries consistent accounting policies. intra-gr All date (the acquisition on which the date of consolidatedthe from are Subsidiaries fully such that date the until be consolidated to and continue control), obtains Company ceases. control to, or is exposed when Company the an entity controls The Company has rights to, variable returns from its invo

(Regulations), IFRSs, IASs, IFRIC and SIC, which are endorsed by FSC (TIFRSs). with accordance in prepared were statements financial consolidated Company’s The RegulationsGovernin The consolidated financial statements have have been statements financial consolidated The value. at fair measured instruments for financial a. of consolidation Principles

(1) (1) of Compliance Statement (2) (2) Preparation Basis of (3) (3) Description of General Reporting Entity

related impactrelated will be disclosed wh The Company is currently evaluating the potential impact of the aforementioned standards and and standards aforementioned of the impact potential the evaluating currently is The Company posi financial listed (b) ~ (g)interpretations to the Company’s 4. OF ACCOUNTING SUMMARY SIGNIFICANT POLICIES

203 United Microelectronics Corporation | Annual Report 2020 Each entity in the Each measured at fair value as at at as value at fair measured ized for non-controlling interest over the operation withinthat unit is disposed, functional currency. functional currency. at cost less any accumulated impairment at cost less any accumulated ency and items included in the financial financial included in the items and ency e lowest level within the Company at which at which Company within the level e lowest fair value of the acquirer’s previously held acquirer’s the of value fair assessesassets acquired and the liabilities d by the acquirer will be recognized at fair not be remeasured until it is finally settled not be remeasured until it finally is testing, goodwill acquired in a business in a business acquired goodwill testing, ose units. units. ose or unit Each groupsto units of rcumstancerelativethe on based is measured t conditions as at the acquisition date. enerating cash-g each unit to (“CGU”)llocated e consideration transferred and non-controlling non-controlling and transferred e consideration her comprehensive income. income. her comprehensive contingent the If

as a gain on bargain purchase. purchase. bargain on a gain as interest in the acquiree is re red liabilities and assumed. If of the value net fair the e and the amount recogn amount e and the

the goodwill associated with the operation disposed is included in the carrying amount of of amount in the carrying is included disposed operation the with associated goodwill the operation.the disposed Goodwill this ci in of the CGU retained. the portion and disposed the of operation values When the Company acquires a business, it the contractual with accordance in designation and classification appropriate for assumed and pertinen economic circumstances terms, of the value fair date acquisition the stages, in achieved is combination business the If equity held previously acquirer’s or loss. profit date through acquisition the consideration contingent to be Any transferre date. the acquisition at value contingent value the of to the fair changes Subsequent will be in accordance recognized to be which is an deemed liability, asset or consideration or ot or loss profit in either 9, IFRS with an than larger be cannot and purposes management internal for is monitored goodwill the aggregation. before segment operating of part and a CGU part of forms goodwill Where consideration is classified as equity, it should equity, as is classified consideration equity. within the of aggregate the of excess the being cost, at measured initially is Goodwill date the acquisition transferred, consideration equity interest in the acquire or assets other whether of irrespective combination, the from benefit to is expected that to th assigned are acquiree the of liabilities represents th is so allocated goodwill the which the net identifiable assets acqui aggregat the of excess in is acquired assets is recognized the difference interests, After initial recognition, goodwill is measured the acquisition date, a combination is, from losses. For the purpose of impairment impairment of the purpose For losses.

Company determines its own functional currCompany determines its own functional currency. using that functional are measured of each entity statements (NTD), which is also the parent company’s (NTD), which parent is also the company’s Dollars Taiwan New in presented are statements financial consolidated Company’s The (5) (5) Transactions Foreign Currency

- 100.00 g the in interests As of December 31, As of December 67.76 65.22 65.22 67.76 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.9985 98.14 98.14 99.9985 Percentage of ownership (%) nature 2020 2019 2020 nature the acquisition method. method. acquisition the consideration The and entitle their holders to a proportionate proportionate a to their holders entitle and ponents of non-controllinponents of and liabilities assumed are measured at the at the are measured liabilities assumed and design services manufacturing technology development and consulting services integrated circuits integrated circuits services Research and development Research and Solar engineering integrated Research and development Research and 100.00 100.00 Semiconductor Marketing service Investment holding Investment holding Sales andmanufacturing of Investment holding Integrated design circuits

Sales andmanufacturing of

Insurance CO., LTD. LTD. CO., YORK) (NEW CORPORATION CORPORATION (CALIFORNIA) (CALIFORNIA) CORPORATION LTD. LTD. CORPORATION (USA) (USA) CORPORATION (INFOSHINE) LIMITED (HEJIAN) CO., LTD. (OAKWOOD) INVESTMENT (SAMOA) LIMITED LIMITED (SAMOA) INVESTMENT (WAVETEK-SAMOA) CO., LTD. (SHANDONG) (USCXM) LTD. CO., (XIAMEN) EVERRICH (SHANDONG) ENERGY ENERGY (SHANDONG) EVERRICH MICROTECHNOLOGY UNITED UNITED MICROTECHNOLOGY MICROTECHNOLOGY UNITED UMC TECHNOLOGY JAPAN CO., JAPAN TECHNOLOGY UMC WAVETEK MICROELECTRONICS MICROELECTRONICS WAVETEK TECHNOLOGY INFOSHINE (SUZHOU) TECHNOLOGY HEJIAN OAKWOOD ASSOCIATES LIMITED ASSOCIATES OAKWOOD WAVETEK MICROELECTRONICS MICROELECTRONICS WAVETEK SEMICONDUCTOR UNITEDDS

ECP VITA PTE. LTD. PTE. LTD. VITA ECP UNITED SEMICONDUCTOR SEMICONDUCTOR UNITED

acquiree that are present ownership interests that are ownership interests acquiree present either at measures acquirer the liquidation, of event the net assets in entity’s the of share acquiree’s the of share proportionate interest’s non-controlling or at value fair the are and incurred as expensed are costs net assets. Acquisition-related identifiable expenses. administrative under classified Business combinations are accounted for using using for combinations are accounted Business transferred, the identifiable assets acquired the com For value. acquisition date fair Investor Subsidiary Business Subsidiary Investor (4) (4) Business Combinations and Goodwill CORPORATION and CORPORATION HEJIAN EVERRICH-HK EVERRICH-HK OMNI OMNI OMNI OMNI WAVETEK- SAMOA SAMOA WAVETEK- WAVETEK WAVETEK

BE INFOSHINE OAKWOOD HEJIAN MICROCHIP UNITED

204 Financial Review nts of assets and and assets of nts at does not result in a ter the period; or reporting ght to defer settlement of the liability for for liability the of settlement defer to ght . of a liability that could, the at Terms s to the carrying amou that does not result in a loss of significant a significant loss of that does not result in foreign operation are treated as assets and assets as and treated are operation foreign the cumulative amount of the exchange exchange of the amount the cumulative nate share of the cumulative amount of the of the cumulative amount nate share of es a foreign operationes a foreign th

t twelve months after the reporting period. twelve monthsthe reporting t after expressed in its functional currency. currency. its functional in expressed liability in normaloperating cycle; lt in its settlement equity instrumentslt by the issueof do foreign operation. foreign or a of an associate disposal On partial settled within twelve months af months twelve within settled operating cycle; cycle; operating or period; or liability leas a settle at used for to at least twelve months after the reporting date after the reporting twelve months least at option of the counterparty, resu option of the counterparty, itsclassification. not affect otherAll liabilities are classified as non-current. An asset An is classified as current when: a. in normal it, its sell to consume or the or intends realize to asset, expects Company the b. trading; of purpose the for primarily asset the holds Company the to realize the Company afterc. expects months asset within twelve the the reporting d. exchanged being from is restricted the asset unless equivalent cash or a asset is the b. trading; of the purpose for primarily liability the holds Company the as non-current. assets are classified other All as current when: is classified liability A a. the expects to settle Company the partialOn disposal a subsidiary that includ of the to re-attributed is income comprehensive other in recognized differences non-controlling interests in that operation a foreign joint ventureincludes that loss of control, the proportionate of share proportionate the loss of control, control, joint only the proportio or influence exchange differences recognized in other comprehensive income is reclassified to profit or profit to reclassified is income comprehensive other in recognized differences exchange loss. value adjustment fair any and goodwill Any liabilities arising from the acquisition of a liabilities of the foreign operation and the foreign of liabilities c. the liability is due to be d. ri an unconditional not have does the Company

(7) Current and Non-Current Distinction the closing rate of of rate closing the historical cost in foreign foreign in cost historical rt of a reporting entity’s net net entity’s reporting a of rt the Company’s entities at their the Company’s rded as an adjustment to interest costs are are interest costs to an adjustment as rded gnized initially in other comprehensive are translated into functional currency at currency functional into translated are at the transaction date. at the date. transaction assets Monetary e translated into NTD at s as at the dates of the initial transactions. transactions. the initial as at the dates of s or loss upon disposal of such investment. investment. such of disposal loss or upon currency borrowings for an acquisition of a of a an acquisition for borrowings currency ement of ement items on monetary or of translating change differences relating to to that foreign relating differences change the period in which they arise except for the

at are eligible forcapitalization. ry items that are measured at measured are that items ry a monetary item monetary a pa is that cies are initially recorded are by cies Foreign currency derivatives within the scope of IFRS 9 are accounted for based on the the on based for accounted are 9 IFRS of scope the within derivatives currency Foreign instruments. financial for policy accounting on arising differences Exchange investment in a foreign operation are are reco operation in a investment foreign profit equity to from and reclassified income Exchange differences arising from foreign foreign arising from differences Exchange qualifying asset to the extent that theyrega qualifying assetto the extent that are included in the borrowing costs th b. c. The assets and liabilities operations foreign ar of exchange prevailing at the reporting date and their income and expenses are translated at at translated are expenses and income their and date reporting the at prevailing exchange the on arising differences exchange The theperiod. for rate exchange average an a foreign of income. disposal On in other comprehensive recognized are translation ex the of amount the cumulative operation, the separate in and accumulated income comprehensive in other recognized operation, loss on gain or the when loss or equity to profit from is reclassified equity, of component is recognized. disposal a. monetary items are taken to profit or loss in items loss or taken are profit to monetary following: respective functional currency rates prevailing rates prevailing currency respective functional currencies foreign in denominated liabilities and date. reporting the at exchange of rates closing the at fair measured items Non-monetary the fair when date rates at the using the exchange are translated currencies in foreign value is determined. value Non-moneta rate exchange the using translated are currencies item income, a gain or When on a comprehensive is recognized loss in non-monetary other income. comprehensive other in recognized is loss or gain that of component exchange any exchange any or loss, profit in item is recognized non-monetary a on or loss a gain When loss. or profit in is recognized loss gain or that of component

curren foreign in Transactions the settl arising on differences All exchange (6) (6) Statements Financial Currency Foreign of Translation

205 United Microelectronics Corporation | Annual Report 2020 at amortized cost, at amortized cost, jective is achieved on the principal amount amount on the principal es and other financial assets) if both of of both assets) if financial other es and ial assets measured rculation period. rculation losses are Gains and sset give rise on specified dates to cash dates to cash rise on specified sset give sset give rise on specified dates to cash dates to cash rise on specified sset give ch financial assets at fair valueat fair through assets ch financial interest method amortizationinterest process, and method business modelwhose ob

ment gains or losses,ment inte rest revenue and foreign ed at amortized cost cost amortized at ed

flows that are solely paymen ts of principal and interest on amount the principal outstanding. by both collecting contractual cash flows and selling financial assets and assets and financial and selling cash flows collecting contractual by both financial assets in order to collect contractual cash flows; and cash contractual flows; assets in order to collect financial flows that are solely paymen ts of principal and interest outstanding. outstanding.

(ii) a financial of the contractual terms the Financial assets measur exchange gains and losses are recognized in loss.or profit losses and recognized are gains exchange the When financial other in recognized or loss previously gain cumulative the are derecognized assets or to profit income comprehensive other from reclassified is income comprehensive adjustment. reclassification a as loss other comprehensive income are recognized in other comprehensive income. income. comprehensive in other are recognized income comprehensive other derecognition,Before impair the followingthe conditionsmet. are equivalent, notes, accounts and other receivabl and notes, accounts equivalent, interest income, measured by the effective effective the by measured income, interest ci during losses are recognized impairment assets derecognized. are lossor the financial profit when in recognized Subsequent changes in the fair value of su value in the fair of changes Subsequent The financial assets are measured at amortized cost (including cash and cash cash and (including amortized cost at measured assets are The financial Subsequent to initialfor recognition financ The debt instruments are measured at fair value through other comprehensive income income comprehensive other through value at fair measured are instruments debt The conditions are met: thefollowing of both if (i) within a asset is held the financial (i) (i) hold to is objective whose model a business within is held asset the financial (ii) a financial of the terms contractual the iii. ts by collateralized value and subsequently value subsequently and cluding time deposits with with deposits time cluding assets at initial recognition. In an irrevocable election an irrevocableto present election in loss but are transferred directly to the directly loss but are transferred ortized cost or at fair value through other other through value at ortized cost or fair initially atinitially fair value plus, in the case of ading. ading. such of is there a disposal When investments that are readily convertible to convertible are readily that investments loss, directly attributable loss,costs. directly Financial or loss, financial assets at fair value through at fair assets or loss, financial liabilities aretradedate recognized using are initially recognized at fair value, and recognized at fair initially are and repurchase agreemen repurchase and

cognized initially fair at cognized rough other comprehensive income income comprehensive other rough e statement of comprehensive income. income. of comprehensive e statement changes in interest rates, in changes in interest rates, nancial liabilities are recognized when the Company becomes a party a party becomes Company the when recognized are liabilities nancial ines the classification of classification the ines its financial

Financial assets valueFinancial at th fair Financial assets at valueor through profit fair loss other comprehensive income subsequent changes in the fair value of an investment in in an investment of value the fair in changes subsequent income comprehensive other instrument equity an that held not is tr for income in other comprehensive presented accumulated amounts instrument, equity or to profit transferred subsequently not are earnings. retained At initial recognition, the Company may make measured at fair value with changes in fair value recognized in profit or in loss. profit value recognized in at with changes fair value fair measured Financial assets that are not measured at am at assets not that are measured Financial comprehensive income are re ii. measurement subsequent and Classification i.

government bonds and corporate bonds. bonds. and corporate bonds government Cash equivalents are short-term, highly liquid highly short-term, are equivalents Cash of risks significant present do not that dates with maturity and cash of amounts known resulting value from in changes and fi Financial assets to the contractual provisions of the instrument. the instrument. of provisions contractual to the The Company determ originalof maturities months three orless

a. accordance with IFRS 9 and the Regulations, financial assets of the Company are classified classified are Company the of assets financial Regulations, the and 9 IFRS with accordance profit value through at fair assets as financial cost. amortized at assets measured financial and income, comprehensive other assets and financial sale of or Purchase accounting. are recognized assets All financial or investments not at fair value through profit or value through profit loss assets at fair in th transaction costs are expensed Financial Assets Assets Financial (8) Cash Equivalents (9) Instruments Financial

206 Financial Review al liability and the al liability and terest method after terest method after r from the same lender on same lender the from r as a financial liability or an equity liability equity an or financial a as ofit or ofit lossfinancialinclude liabilities using the effective in effective the using anges in own credit risk, gains or losses or losses gainsrisk, credit in own anges through the effective interest method interest method effective through the of an existing liability are substantially are substantially of an existing liability signated upon initial recognition as at fair financial difficulty of the debtor), such an an such of the debtor), difficulty financial en the obligation under the liability is recognition of the origin the of recognition

at amortized costamortized at include interest bearing and loans bility is replaced by anothe ing any non-cash assets transferred or liabilities assumed,assets transferred or ing any non-cash liabilities lity and and instrument. lity equity an ured at amortized cost financial liabilities financial

amortization process. process. amortization on premium or any discount by taking into account cost is calculated Amortized costs. transaction or and fees acquisition initial recognition. Gainsprofit or and the losslosses are r ecognized in when as liabilities are derecognized as well Financialliabilities measured measured subsequently are that borrowings on the subsequent measurement including interest paid are recognized in profit or in profit paid recognized interest are including measurement on the subsequent loss. Financial liabilitiesFinancial pr through value fair at trading and financialheld liabilities de for loss. or value through profit Excluding ch ii. Financial liabilities meas i. Financial liabilitiesor loss at profit through fair value substantially different terms, or the terms terms, different substantially modificationexchange or is treated as a de A financial liability is derecognizedwh financial A expires. or cancelled discharged, an existing financial lia When (whethermodified or not attributable to the recognition of a new liability, and the difference in the respective carrying amounts and amounts carrying in the respective and the difference a new liability, of recognition consideration paid,the includ recognized in profit orloss.is The Company classifies the instrument issued instrument the classifies Company The the and arrangement contractual the of the substance with in accordance instrument liabi a financial of definitions b. Derecognition of a. a. measurement subsequent and Classification Financial Liabilities

antly since initial initial since antly all all the risks and amount of carrying s and rewards of the s and rewards of cognized and the part part the and cognized has signific has increased allocates the previous cantly signifi initial since increased not s inues to be recognized and the part that part that and is the recognized to be inues at continues to be re llowance based on lifetime ECLs at each ECLs at each lifetime on based llowance ubstantially all the risk the all ubstantially mprehensive income is recognized in profit profit in recognized is income mprehensive financial asset and the part transferred qualifies qualifies part transferred asset and the financial in retained earnings(for equity instruments).

ansferred control of the asset. of control ansferred information including forward-looking information. information. information forward-looking including investments measured at fair value through other other through value at fair measured investments

rewards asset, tr the has of but asset have been transferred; or transferred; asset been have For notes, accounts receivable and contract assets, the Company applies a simplified simplified a applies Company the assets, contract and receivable accounts notes, For iii. the Company has neither transferred the Company has neither substantially nor retained transferred iii. i. expired; have asset the from flows cash receive to rights contractual the ii. the Company has transferred assets and s On derecognition of a financial asset in its entirety, the difference between the carrying the carrying between difference the a of asset financial in its entirety, derecognition On gain cumulative any including be received to received or and the consideration amount co other in recognized been had loss or that directly or instruments) debt (for loss or Derecognition of financial assets financial of Derecognition asset is derecognized when:financial A If the transferred asset is part of a larger a larger of is asset transferred part the If the Company derecognitionfor in its entirety, asset between the financial part larger th the that is derecognized, based on the relative fair values of those parts on the date of the of date those parts on the of values fair the relative on based is derecognized, that transfer. comprehensive other in been recognized loss that had or gain cumulative Any cont that part the between is allocated income parts. of those values fair the relative based on derecognized, between difference The consideration the of sum the and derecognized part to the allocated amount carrying the that had gain or loss allocated any cumulative and derecognized the part for received loss or or profit in is recognized income, comprehensive in other recognized been in directly earnings. retained policy Impairment losses credit expected for allowance date, an reporting each at measures, Company The (ECLs) for debt instrument assessing cost by amortized at measured assets financial and income comprehensive and supportable reasonable Where the credit risk on a financial asset ha financial on a the credit risk Where recognition, the loss allowance is measured at an amount equal to 12-month ECLs. ECLs. to 12-month equal amount at an is loss allowance measured the recognition, asset on a financial credit risk the Where recognition, the loss allowance is measured at an amount equal to the lifetime ECLs. equal to the lifetime amount at an is measured the loss allowance recognition, in calculating ECLs.approach in does changes not the track Therefore, Company loss a a recognizes but instead risk, credit credit loss historical date. reporting the based ECLs on Company’s are measured forward-looking adjusted for condition, financial current and customers’ experience environment. economic as customers’ such factors, b. c. 207 United Microelectronics Corporation | Annual Report 2020 ition cost, after reassessing ition cost, after reassessing the carrying amount of of the carrying amountthe of an entity, but is not controlof or joint t fair value of the identifiable assets and the identifiable t fair value of mpany’s shareof the net fair value of the mpany’s ciate or a joint venture at the date of of date the at venture joint a or ciate of the joint joint the venture. of control the is Joint iteria to be classified as non-current assets non-current as classified be iteria to associate or a joint venture reduce the the reduce venture joint a or associate ciates and joint ventures is accounted for as as for is accounted ventures joint and ciates ures’ profit or loss and other comprehensive comprehensive other or and loss profit ures’ arrangement where no single party controls controls party single no where arrangement t whereby the Company that has joint control Company that has joint control the wherebyt on changes in the Company’s share of profit or profit of share Company’s in the on changes

in profit or or profit in loss the on acquisition date. the associate or the joint venture. venture. joint the or associate the y and the associate or the joint venture are eliminated to are eliminated venture joint the or associate the and y goodwill and is included in goodwill and is included a joint venture overacquis the stment. Any unrealized gains and losses resulting from r Under the Equity Method acquisition is recognized as acquisition is recognized identifiable assets and liabilities an asso of assets and identifiable investment. permitted. not is goodwill of Amortization liabilities of an associate or liabilitiesof an associate as a gain is recognized the value, fair

The Company’s investments in associates and joint ventures are accounted for using the using the for are accounted ventures joint and associates in investments Company’s The cr the that meet those than other method equity activities relevant the decisions about only when exists which on its own, arrangement the parties sharing control. of the consent unanimous require value net fair the of share Company’s and the cost acquisition the between difference Any assets and liabilitiesthe identifiable of of asso held for sale. sale. for held is and that influence Company which has significant the associate over an entity An is venture. neither a subsidiary nora joint power the to influence is participate gnificant Si decisions policy operating and financial the in the net assets has rights to arrangement the of an of control of sharing agreed contractually follows: a. Co cost over the acquisition the excess of Any control over those policies. arrangemen joint type of a joint venture is A b. Any excess of the Company’s share of the ne the of share b. the Company’s of excess Any income are recognized directly in profit or loss and other comprehensive income, income, directly or loss and other comprehensive in profit recognized are income an from received Distributions respectively. Under the equity method, the investments in associates and joint ventures are carried on on carried are ventures joint and associates in investments the method, equity the Under plus post acquisiti at cost sheet the balance joint and associates ventures. income of other loss and comprehensive The Company’s vent and joint in associates’ changes of share inve amount of the carrying transactionsbetween the Compan the extent of the Company’s interest in the extent of the Company’s Financial statements of associates and joint ventures are prepared for the same reporting reporting same the for prepared are ventures joint and associates of statements Financial as the Company. period the accounting bring to are made adjustments necessary, Where Company. the of thoseline with policies in Investments (12) Accounted Fo

. Inventories at are valued s. at actual stated are materials Raw reign currency exchange risk. exchange currency reign the With pacity of theproduction of facilities. pacity Cost finished goods are stated at standard costs costs at standard are stated goods finished lity, the associated gains or losses that were gains or losses that the associated lity, item by item.item Net realizable value is the e hedging instrument is recognized directly in directly is recognized instrument hedging e subsequently results saction in the recognition

s necessary to make the sale. the to make s necessary acity incurredacity as expensed is em with the existence of an economic relationship and relationship an economic em of with the existence , terminated or exercised.

the hedged item from inception of of the the hedged item inception hedge. from Cash flow hedges hedges flow Cash basi a on perpetual for accounted are Inventories the costs, while and work purchase process in month. each of end at the costs to weighted-average adjusted subsequently and The cost s raw materials, goods comprise and directfinished work otherprogress in of direct labor, overheads. production related and costs the to overheads production fixed of Allocation the normal ca is based on conversion costs of associated with underutilized cap the lower of cost and net realizable value value realizable net and cost of lower the costs of estimated less the business of course ordinary in the price selling estimated cost estimated and the completion fo from arising exposures manages Company The of between hedging the IFRS designates9, adoption relationship a the Company hedging instrument and the hedged it effectiveness. hedge ratio the to meet the hedge determines designates The Company risks rate exchange currency the foreign hedge partially to instruments hedging certain transactions. probable forecast certain highly with associated of component The separate (in following the of the lower to is adjusted item hedged the with associated equity amounts): absolute a. and hedge; the of inception from the cumulativeinstrument hedging gain or the losson b. on flows cash future expected the of value) (present value fair in change cumulative the be an to determined that is instrument hedging the loss on or gain the of portion The the ineffective whereas hedge income, is in other recognized comprehensive effective th fairof value the ofin portion change the profit or loss. a of forecast tran a hedge If liabi asset or a non-financial a non-financial of assetthe cost of or in the initial included are income in other comprehensive recognized liability. hedging only when the hedge accounting discontinues prospectively The Company hedging the when instance criteria; for qualifying the meet to ceases relationship instrument expires or is sold

(10) Hedge Hedge (10) Accounting Inventories (11)

208 Financial Review and measured at the measured and lives of the assets are as as assets are the of lives

less it is reasonably certain that early change of consideration,change of and to obtain should be recognized act conveys the right to control the use of an an use of the control to right the conveys act e previous estimation are recorded as changes as changes are recorded estimation e previous lease and separates the lease and non-lease non-lease the and lease lease separates and

rm leases and low-value asset leases. The shorter of lease terms or useful lives or useful lease terms of The shorter lease incentives receivable; 7~56 years

borrowing rate. The paymentscomprise: exercise; and and exercise; occur. not will termination present value of the lease payments that have not been paid at that date, using the the that date, using at paid been not that have the leaseof payments present value incremental Company’s i. i. less any payments fixed ii. rate; or index an on depend that payments lease variable value guarantees; under residual by the Company to be payable expected amounts iii. certain to is reasonably if the Company option a purchase of price the exercise iv. payments terminatingfor the lease un v. Machinery and equipment equipment and Machinery equipment Transportation years 6~7 fixtures and Furniture years 6~7 improvement Leasehold years 3~7 Buildings at reviewed assets are for the values residual lives and useful methods, depreciation The th from the changes year and end, fiscal each estimates. in accounting useful estimated the depreciated, not is which land, for Except contr the if lease a contains, or is, contract A Company asset. The the identified use of from benefits all economic substantially a single as contract a lease for accounts a income on rental as leases operating from payments lease recognizes Company The lease. the of term the over basis straight-line as a lessee The Company assets right-of-use recognize to is required a lessee a lease, of date commencement At the and lease liabilities, except short-tefor a. liabilitieslease At the commencement date, identified asset for a period of time ex of in period a asset for identified in the contract. included components as a lessor The Company follows: follows: Lease (14)

lives. A lives. A

t influence over an an over t influence ply the equity method method the equity ply will be charged to additional lossa on pro ratabasis. as an acquisition of an additional equity equity an additional of acquisition an as pon loss of significan of loss pon ount of the associate or joint venture and and venture joint or associate the of ount of the associate, the Company reclassifies reclassifies the Company the associate, of meeting the recognition criteria are treated are treated criteria the recognition meeting ecognition criteria are met. Significant met. are Significant criteria ecognition ining its significant influence over that or loss in the statement comprehensive of ventures ventures are impaired. loss, An impairment d in other operating income and expenses. expenses. and income operating d in other Company continues to ap

ht-line basis over the estimated useful estimated ht-line the basis over id-in capital to profit orid-in capital to profit Any remaining difference is depreciated separately. is depreciated separately. e retainede interest. t influence over that associate, a proportionate share of sharegain a the of or associate, proportionate that over t influence

paid-in capital. capital. paid-in or profit its from result not does associate an of equity in change a When affect the Company’s do not changes and such income, comprehensive loss or other all related share of proportionate its recognizes Company the percentage, ownership equity. in changes disposal upon Accordingly, additionalthe aforementioned pa The Company ceases to use the equity method u and does not remeasure th remeasure does not and associate. associate. in an associate investment of the amount the carrying between difference Any plus investment retained the of value fair the and influence significant of loss upon in an in or will be recognized an investment profit loss. If disposal from proceeds venture joint a in investment an or venture joint a in investment an becomes associate the associate, in an investment an becomes significant part of an item of property, plant and equipment which has a different useful life life useful different a has which equipment and plant property, of item an part of significant the remainderfrom of the item Property, plant and equipment are stated at cost, net of accumulated depreciation and and accumulated depreciation are cost,stated net of at equipment plant and Property, long-term for costs incurred borrowing any, and any if losses, impairment accumulated the r if are capitalized projects construction renewals, improvements and major inspections parts are derecognized. replaced those of amounts carrying the and expenditures, as capital as incurred. inexpenses are recognized repairs and Maintenance or loss arising gain Any the of derecognition assets is recognize from a straig on is calculated Depreciation Upon an associate’s issuance of new shares, if the Company takes up more shares than its than shares more takes up Company the if new shares, of issuance associate’s an Upon mainta while holding proportionate original associate, such increase would be accounted for for be accounted would such increase associate, associate. the in interest Company the if shares, new of issuance associate’s an Upon while percentage its stockholding shares reduces and proportionate take up not does significan maintaining its evidence objective there is whether any date at each reporting determines The Company that the investments in associates and joint am recoverable the between difference the being carrying amount, its is profit in recognized of investments. the of the carrying amount part forms and income loss previously recognized in other comprehensive income is reclassified to profit and to profit loss is income reclassified in other comprehensive recognized loss previously or other appropriate account(s).

Equipment and Plant Property, (13)

209 United Microelectronics Corporation | Annual Report 2020 loss is recognized. ts may be impaired. ts may from indefinite to from finite is of the of the intangible asset is not revalued thod for an intangible asset with a finite a finite an intangible asset with thod for paired, an impairment impairment an paired, is amortized over the useful life (5~10 useful over the amortized is to non-cancellable and mutually agreed agreed mutually and non-cancellable to or estimated useful life (3~6 years) on a that the intangible asse that an intangible in other asset ar e recognized ions is not and is amortized, tested not ions is for expenses related expenses from liability the are gning of contract and obtaining the right to to the right obtaining and contract of gning ion of economicfuture benefits embodied in determine whether the indefinite useful life life useful indefinite the whether determine (3 years) of the related technology on a on technology therelated (3 years) of e amortized over the useful lives and assessed assessed lives and over the useful e amortized

not, the change in useful life life useful in change the not, any’s intangible assets are summarized as follows: assets intangible summarized are any’s nite useful lives are not amortized, but are tested for for tested are but amortized, not are lives nite useful individually or at the CGU level. The assessment of assessment The level. CGU the or at individually future fixed license fees for patent and technology is discounted, and recognized as an an as recognized and discounted, is technology and patent for fees license fixed future liability. asset and related intangible The cost impairment annually or more frequently if events or changes in circumstances suggest suggest in circumstances or changes events if frequently or more annually impairment be recoverable. not may amount the carrying that circumstances or occurs an event If is im goodwill the that indicates which change attributable portion any property, intellectual on and initial recognition, once determined straight-line basis. straight-line years) on a straight-line basis. Interest Goodwill impairment losses cannot be reversed once recognized. recognized. once reversed be cannot losses impairment Goodwill method. interest effective the on based calculated and recognized timing the on Based non-current. and as current is classified the liability payments, of contractterm or estimated useful life basis. straight-line ar assets finite lives useful with Intangible for impairment whenever there is an indication indication an is there whenever impairment for The amortization period and the amortization me useful life are reviewed at least at the end of each fiscal year. at life areuseful least at reviewed year. the each of end fiscal in the expected Changes of consumpt life or pattern useful the expected appropriate, as method, or period amortization the changing by for accounted is asset the estimates. in accounting as changes is and treated Intangible assets with indefi either impairment annually, supportable. to be continues If on a prospective basis. made orlosses arisingGains from derecognition of indefinite useful life annually indefinite useful to is reviewed and expenses. income operating Accounting policies of the Comp a. Goodwill arising from business combinat business from arising Goodwill a. c. Upon si fee: license and technology Patent b. term contract over the is amortized Software d. amortized over the shorter of property license fees, the are Others intellectual mainly ich is not accounted accounted not ichis ght-line basis over the basis over ght-line ecognition at cost. cost. ecognition at The cost ination is its fair value as at the date of value as at the date ination fair is its lease liabilities on the balance sheets, and and sheets, the balance on lease liabilities use assets are measured using cost model. cost using model. use assets are measured ere is a modification wh modification a ereis as expenses on a strai a on as expenses

assessed as either finite or indefinite. indefinite. or finite as either assessed urement of of leaseurement the liabilities; tely are measuredinitial on r recognition, intangible any less assets arecarriedcost at ich fail to meet the recognition criteria are not capitalized to ich criteria arethe recognition meet fail not capitalized ect costs incurred. incurred. costs ect comprise of: comprise i. initial the the amount of meas ii. date; and commencement the at before or made payments lease any iii. any initial dir method, interest the effective periods using in subsequent are measured Lease liabilities terms. lease the over recognized are expenses interest the and carrying the addition, In th remeasuredis if liabilities lease of amount (e.g., the lease payments in a change lease term, in the a change lease, separate as a to determine used an index or rate in a change resulting from payments to future changes underlying the to purchase option an of in the assessment change a or lease payments) such asset. which cost, b. at be measured should assets right-of-use the date, commencement At the right-of- the to initial recognition, Subsequent the from depreciated are model cost the under measured assets Right-of-use or assets right-of-use the of life useful the of end the of earlier the to date commencement a results in liabilities lease the of remeasurement Any terms. lease the of end the assets. right-of-use the of adjustment corresponding assets and presents right-of-use Company The of statements in the presented are separately expenses interest and expenses depreciation with associated payments lease the income. recognizes comprehensive Company The leases asset low-value leases and short-term lease terms. terms. lease Intangible assets acquired separa accumulated amortization and accumulated impairment losses, if any. Internally Internally any. if losses, impairment accumulated and amortization accumulated generated intangible assets wh of intangible assets acquired in a business comb a business in assets acquired intangible of acquisition. Following initial period incurred. the in loss or profit in reflected are expenditures the and The livesintangibleuseful of are assets (15) Intangible Assets

210 Financial Review rest, is recognized in other value is determined based on d benefit d liability (asset),benefit which ntly measured at measured ntly valuefair through profit ontribution payable to the plan in exchange payable to the plan in exchange ontribution t defined benefit beliability benefit shall (asset) defined t a non-current liability in all other respects. all liability in a non-current assified as a financial liability measured at at assified as a financial liability measured mponent. mponent. of amount carrying adjusted The ods. does not bond issued the convertible If ny amount already paid, is recognized as a as is recognized paid, already ny amount deducting obligation, benefit defined of e the g of the asset ceiling. for any effect Service fit fit liability (asset) are recognized as expenses ertible bonds is classified as a current liability current liability as a ertible bondsis classified ing the derivatives, its fair y amounts in net included inte lied at that time by the market to instruments of comparable comparable of instruments to by the market time at that lied Remeasurement of the net define bility component of conv

comprises actuarial gains and losses, the return on plan assets and any change in the effect effect the in change any and assets plan on return losses, the and gains actuarial comprises excluding an the asset ceiling, of comprehensive income in the period in which they occur. occur. they which in period the in income comprehensive in recognized Remeasurement be not shall and earnings retained in immediately reflected is income comprehensive other period. or loss to profit in a subsequent reclassified Under defined contribution pension plans, the c the pension plans, contribution defined Under for the service rendered by an employee during a period shall be recognized as an expense. expense. an as recognized be shall period a during employee an by rendered service the for a deducting after payable, contribution The liability. Under defined pension plans, the ne benefit of present valu as the amount the recognized any plan assets and adjustin the value of fair cost and net interest on the net defined bene defined net interest on the cost and net in the period service. of For For the liability component exclud rateinterest the app effective status. credit is cl component The liability or is converted instrument the before interest method cost the effective using amortized settled. is notcloselyrelatedthat is derivative contract, it to the host the embedded For component assubseque and liability a classified loss unless or as it qualifies component. an equity is component recognized The equity a as instrument financial compound the of value fair the between at the difference initially is not amount Its carrying component. the liability value of fair and the whole peri accounting subsequent in the remeasured with in accordance instrument as a for hybrid it is accounted component, equity an have 9. IFRS under requirements the shall UMC maturity, before right conversion their exercise bondholders convertible the If co liability the of amount carrying the adjust are component equity of amount carrying the and at conversion liability component the paid-in capital-premiums. additional stock and common to credited is or loss gain No conversion. bond upon recognized addition, lia the In if within 12 months the bondholders may exercise the put right. right. put the right exercise put the After may the bondholders months 12 within if as a be reclassified ertible bonds should conv of the component liability the expires, of the definition it liability if meets non-current (18) Post-Employment Benefits

eviously recognized previously recognized recognized previously her there is an indication that an asset in an asset in that is an indication there her s been allocated is tested for impairment impairment for is tested allocated s been s and risk of the host contract before before contract host the of risk and s GU is the higher of GU its of is the higher fair less costs value ill cannot be reversed in future periods. periods. future in reversed be cannot ill es the recoverable amount since last since the amount recoverable es the overable amount. amount. overable A pr ion or amortization, had no impairment loss loss had no impairment ion or amortization, sses is classified as other income operating itten down to its recoverable amount. The the economic UMC assesses if Furthermore, umstances indicate that indicate umstances first allocated to reduce the carrying amount of of amount to allocated reduce the carrying first

nt testing for the CGU to which the assets individual U units),(group then of to the other the assets of unit impairment loss is reversed only if there has been an increase in the estimated service service estimated the in increase an been has there if reversedonly is loss impairment potential which in turn of an asset increas loss was recognized. impairment of amount carrying is limited so reversal the that The that amount carrying the exceed nor amount, recoverable its exceed not does asset the net of depreciat determined, have been would years. the prior in asset for recognized been ha goodwill which CGUs, to of group CGU, or A of indication is any of whether there irrespective year, time every at same the annually impairment. of amount the carrying (including a CGU of amount carrying the Where an If impaired. considered is CGU the amount, recoverable its exceeds goodwill) is it recognized, to be loss is impairment to the CG goodwill allocated any unit (group asset in the each of amount the carrying basis of on the pro rata units) of (group units). of to goodw losses relating Impairment The recognition or reversal of impairment lo expenses. and recoverable amount of an individual of asset or an individual amount a C recoverable value in use. disposal and its of circ If the date, reporting each at decreased have may or exist longer no may losses impairment re-assessesCompany the asset’s rec or CGU’s belong. belong. amount, recoverable its exceeds CGU or asset an of amount carrying the Where the asset is considered impaired and is wr The Company assesses at each reporting date date whet reporting at each assesses The Company impaired. be may Assets” of “Impairment 36 IAS of scope the exists, indication any If the Company completes impairme Convertible bonds bonds Convertible contains it whether determine to issued bonds convertible the of terms the evaluates UMC both a and an liability component. equity are bonds convertible the in embedded options call and put the of risks and characteristics to characteristic the related economic closely element. equity the separating Impairment (16) of Non-Financial Assets Bonds (17)

211 United Microelectronics Corporation | Annual Report 2020 ed in expense irrespective ormance obligations treated as if it fully vests on the date of date of the it fully vests on as if treated ed as if they were a modification of the were a modification they as if ed bility over the vesting period. period. the vesting over bility The fair based payment transactions between the between based payment transactions met. substitutes award new a if However, condition is satisfied, provided that all other all other provided that condition is satisfied, e-based payment transaction,e-based or is otherwise is conditional upon a market or non-vesting upon a market or conditional non-vesting is

tity satisfies its perf rformance obligations in the contract; and contract; the in obligations rformance ed at the date of modification.ed at the date of conditions are satisfied. conditions are satisfied. payment transactions beneficial to the employee as as measur employee the to beneficial No expense is recognized for awards that do not ultimately vest, except for for vest,except ultimately not do that awards for is recognized expense No vesting where transactions equity-settled performance and/or service minimum the modified, are award tr ansaction equity-settled an of terms the Where original the if not modified, been had the terms as if expense the is recognized expense met. are the award of terms modification any for is recognized expense additional An increasesthat the total fair value theof shar it is cancelled, is award equity-settled an Where condition. receiv services the The Company shall recognize of whether or not the market or non-vesting recognized is award the for recognized yet not expense any and cancellation, immediately. control the within conditions non-vesting where award any includes This either the entity are orof not the employee is theit that date on award replacement a as designated is and cancelledaward the for treat are awards new and cancelled the granted, award. original Cash-settled share-based The compensation cost of cash-settled share- The compensation cost of and incurred the liability value of fair at the is measured its employees and Company lia corresponding with as expense recognized at the and period reporting each of end at the is remeasured liability the of value the or loss for profit through recognized value fair in movement date with the settlement period until the liability is settled.

a. customer; a with contract the identify b. contract; in the obligations the performance identify c. price; the transaction determine d. pe the to price transaction the allocate e. recognize revenue when (or as) the en

The Company recognizes revenue from contracts with customers by applying the applying by customers with contracts from revenue recognizes Company The with Customers”: Contracts from “Revenue IFRS 15 of steps following

Revenue from Contracts with Customers Customers Contracts with from Revenue Revenue (22) Recognition on the grant date, and sis over the periods in oyees, the unvested restricted restricted unvested oyees, the each reporting date until the vesting date until the vesting date date each reporting asury stocks) are recognized at repurchase at repurchase are recognized asury stocks) ansactions between the Company and its Company the and between its ansactions corresponding increase in equity, over the the over equity, in increase corresponding nning and end of the period is recognized the period is recognized of and end nning ss shall be recognized in profit or loss on profit the or loss shallss be recognized in ul lives ofthe ul assets. lives related expense An the equity instruments losssystematica on ba

g restricted stocks for empl stocks for g restricted h theh vesting periodhas bestpassed and the Company’s d payment transactions estimate of the quantity of equity instruments that will ultimately vest. vest. ultimately will that instruments equity of quantity the of estimate movement The begi at the recognized cost cumulative in is recognized as expense, together a together with expense, as recognized is vesting period. When issuin employee unearned in recognized are employees date for grant the on issued stocks be shall account such and account equity contra transitional a as compensation period. vesting the over expense compensation as amortized expense cumulative The at equity-settled transactions recognized for to the whic extent reflects loss or the period. profit for through Equity-settled share-base employees is measured at the fair value of of value fair at the is measured employees The compensation equity-settled cost of tr In accordance with IAS 20 “Accounting for Government Grants and Disclosure of of Disclosure and Grants Government for “Accounting 20 IAS with accordance In is there when grants government the recognizes Company the Assistance”, Government to attaching them the and conditions be received will such grants that assurance reasonable be complied with. will in profit and recognized deferred income as grant is recorded government asset related An or loss on a straight-line basis over the usef or is grant profit in recognized government own equity instruments repurchased (tre UMC’s equity. from deducted and cost lo or gain No instruments. equity own UMC’s of cancellation or issue sale, purchase, difference Any equity. in recognized is consideration the and amount carrying the between

which the Company recognizes as expenses the related costs for which the grant which is the grant related the costs as expenses for recognizes the Company which losses or expenses compensate. to for compensates intended that grant government A Company to the support financial immediate giving of purpose the for or incurred already profit is costs no in recognized futurewith or related loss when it becomes receivable. (19) Government Grants Share-Based (21) Payment Transactions (20) Treasury Treasury (20) Stock

212 Financial Review income tax expense e profit or loss; e profit od on temporary differences differences temporary on od in a transaction a business is that in not ductible temporary difference arises from arises from difference temporary ductible sociated with investments in subsidiaries, subsidiaries, in investments with sociated ferred tax assets are recognized only to the the to only recognized are assets tax ferred nings as is recognized erences associated with investments in with investments associated erences s and their carrying amounts in financial in financial amounts their s and carrying the initial recognition of goodwill or ofgoodwill or recognition of an the initial y differences will will reverse the in foreseeable differences y r the current period and prior periods are t a business combination t a business and, time of at the against which the temporary differences can can differences temporary the which against g to items recognized nt income tax recognized items relatin g to ing profit nor taxabl nor ing profit ble against which the deductible temporary which the deductible ble against l taxable temporary differences, except: except: differences, temporary l taxable

ined using the liabilityined meth In respect of deductible temporary diff temporary deductible of respect In de ventures, joint and associates subsidiaries, the temporar that probable that it is extent future and taxable profit will be available profit available be and taxable will future be utilized. Where the deferred tax asset relating to the de the to relating asset tax deferred the Where the the initial recognition of an asset or liability nor profit accounting the neither affects transaction, the of time the at and, combination loss; or profit taxable associates and joint ventures, when the timing of the reversal of the temporary temporary reversalthe of the of timing the when ventures, joint and associates not will differences the that temporary probable it and is controlled be can differences future. in the foreseeable reverse In respect of taxable temporary differences as differences temporary taxable of respect In When the deferred tax liability arises from arises from liability tax deferred the When that is no in a transaction or asset liability the account neither affects transaction, the

Current income tax Deferred income tax b. a. b. a. Deferred tax assets are recognized for all deductible temporary differences, the differences, temporary all deductible for recognized are assets Deferred tax that probable is it extent the to credits, tax unused and losses tax unused of carryforward that profit will be availa future taxable differences and the carryforward of unused tax losses and unused tax credits can be credits can unused tax tax losses unused and of the carryforward and differences except: utilized, liabilitiesassets and fo Current tax income is tax determ income Deferred measured using the tax rates and tax laws that have been enacted or substantively enacted enacted substantively or enacted been have laws tax that and rates tax the using measured period. the reporting of end by the Curre directly in other comprehensive income or equity is recognized in other comprehensive other in comprehensive recognized equity or is income comprehensive in other directly or loss.than profit rather income orequity The additional tax income undistributedear for the stockholders’ by approved is proposal distribution the when year subsequent the in meeting. between the tax bases of assets and liabilitie between the tax bases of date. reporting at the statements Deferred tax liabilities are recognized for al ving satisfied its d are expected to be to be expected are d y estimates based on using the effective interest using the effective of control of the goods or the goods or of control of ort term and do not contain a significant do significant a and ort contain not term ice that are determined using contractual contractual using determined that are ice gations in the in gations future, an ior to the Companyior ha satisfied. satisfied. to costs recognizes The Company ectly to the contract, generate or enhance enhance generate or contract, to the ectly ntrol promisedof goods and services. The rn and allowances based on the customer customer the on based allowances and rn nces which the Compan

tion of profit or loss for the period. terest recorded is income ideration, and the transfer ce, and other known factors. factors. known other ce, and the Company recognizes contract assets and revenues. assets and revenues. contract recognizes the Company

Revenues on the Company’s contracts with customers for the sales of wafers and joint joint and wafers of sales the for customers with contracts Company’s the on Revenues The Company recognizes accounts receivable when the Company transfers control of the control of transfers Company the when receivable accounts recognizes Company The For financial assets measured at amortized cost and financial assets at fair value through through assets at fair value and financial cost at amortized assets measured financial For income, in other comprehensive is established, the dividends to receive right the when Company’s is Revenue recognized dividend. the approve stockholders is generally when which Income tax expense (benefit) is the aggregate amount of current income tax and deferred deferred and tax income current of amount aggregate the is (benefit) tax expense Income determina the in included tax income technology development are recognized as the Company satisfies its performance performance its satisfies Company as the are recognized development technology co of transfer upon to customers obligations pr at transaction revenue recognizes Company prices reduced by sales returns and allowa method and recognized in profit loss. or in profit and recognized method Dividends a significant reversalin the amount of a significant that determined having experience historical recognizes Company The occur. to probable not are recognized revenue cumulative estimated for sales retu liabilities refund experien historical complaints, goods or services to customers and has a right to an amount of consideration is that consideration of an amount has a right to and to customers services or goods unconditional. are sh receivable accounts Such financing component. For certain contracts that do not provide the Company Company the provide do not that contracts certain For component. financing unconditional rights to the cons services has been satisfied, pr customers from received Consideration to are which transferred liabilities as contract for obligations are accounted performance are obligations performance the after revenue relate dir costs the contract when a fulfill obli performance satisfy to used be to resources recovered. The costs and revenues are recognized when the Company satisfies its satisfies Company the when recognized are revenues and costs The recovered. and goods of promised of control customers upon transfer to obligations performance services. income Interest (23) Income (23) Income Tax

213 United Microelectronics Corporation | Annual Report 2020 anges in assumptions e equivalents had been had been equivalents e unforeseen effects from COVID-19 from effects unforeseen outstanding of The weighted-average ts such as the selection of comparable comparable of selection the as such ts value of the financial assets. value Please refer sclosuresand the disclosure contingent of ing if the dilutive shar n multiples, etc.n multiples, Ch t income by the weighted-average number of of number t by the weighted-average income ent reporting period. period. reporting ent per Diluted earnings terest and other income or expenses derived derived or expenses income other and terest risk for a material adjustment to the carrying to the carrying adjustment a material for risk more challenging. challenging. more differ could results Actual e assumptionsinand estimates could result ared. Existing circumstances and assumptions and assumptions circumstances Existing ared.

next fiscal year are discussed below. next discussed year are fiscal below. mainly the market approach. The valuation of these these of valuation The approach. market the mainly s consolidated financial statements requires management to to requires management statements financial s consolidated e global economic climate and and climate economic global e l 3 Financial Instrumentsl 3 Financial about these factors could affect the reported fair could affect these factors about details.to Note 12 formore Earnings per share is computed according to IAS 33, “Earnings per Share”. Basic Basic 33, Share”. “Earnings per to IAS according is computed per share Earnings dividing ne by share is computed per earnings be sheet cannot on the balance assets recorded financial 3 level the of values the fair Where appropriate an of application the by determined are they active markets, from derived method which wasvaluation judgmen significant assets involves financial as such assumptions of application the and prices transaction equity or companies valuatio discounts offor lack marketability, ordinary shares outstanding during the curr during the outstanding shares ordinary additional plus consideration into share per earnings basic taking by is computed share that would have been shares outstand ordinary issued. is income Net adjustedalso in for dilutive share equivalents. any underlying from compensation stock and employee stock dividends for retroactively is adjusted shares issues. Earnings per Share (24) The preparation of the Company’ circumstances or changes market to due change may however, developments, future about Company. of the the control beyond arising the assumptions in are reflected changes Such occur. they when Given th revenues, of amounts reported the that affect assumptions and estimates judgments, make di liabilities, the accompanying assets, expenses, about thes uncertainty However, liabilities. or liabilities assets of amount carrying adjustment to the a material require that outcomes periods. in future affected at uncertainty estimating of sources key and other the future concerning assumptions key The significant a have would that date reporting the of within the assets or liabilities amounts the when available information on estimates and assumptions its bases Company The were prep statements financial consolidated pandemic, the process of estimation has become become has estimation of process the pandemic, financial the to consolidated be may material differences and such, as estimates, those from statements. (1) Leve of Value Fair The 5. ACCOUNTING SIGNIFICANT ASSUMPTIONS AND JUDGMENTS, ESTIMATES liabilities, and the deferred If the Company concludesIf that tax assets are reassessed and assets are tax her, if a legally enforceable right exists exists to right enforceable legally a if her, lized shall be recognized in profit or loss, loss, or profit in recognized be lized shall liabilities. liabilities. tax relating to items Deferred goodwill is nil, any remaining deferred tax goodwill deferred tax is nil, any remaining ght be realized and recognized subsequently subsequently recognized and realized ght be the tax consequences the that follow would tax consequences the lity is settled, based on tax rates and tax laws ratesand settled, based on tax lity is ognized in profit or loss but rather in other in other or loss but rather in profit ognized ty. ty. or judgement a Company reassesses The will accept an uncertain taxthe treatment, xation authority will accept an uncertain tax tax uncertain an accept will authority xation

tity and the same taxation authority. authority. taxation same the and tity profit, tax bases, unused tax losses, unused tax credits or tax credits losses, unused tax unused tax profit, bases, in its income tax filings. in rred tax assets to be recovered.rred tax ctly in equity. Deferred ctly in equity. ts against current ts against taxincome tax treatments used to be tax used or planned used in treatments its income tax other comprehensive income or equity. or equity. income comprehensive other benefits shall be recognized in profit or loss; or loss; in profit shall benefits be recognized from new information about facts and circumstances that existed at the acquisition date date at the acquisition existed that circumstances and facts about new information from that to related goodwill any of amount carrying the reduce to applied be shall acquisition. the carrying amount If of that

accept will authority a that taxation it is probable whether considered has Company The the uncertain tax treatments used Deferred tax assets and liabilities offset each ot each offset tax liabilities assets Deferred and rea benefits tax b. deferred acquired other All set off current income tax asse set off taxes relate to the same taxable en as follows: result period that a. measurement the within recognized tax benefits deferred Acquired thatis probable the it authority taxation the determines Company taxable criteria for the satisfying not but combination, business a of part as acquired benefits Tax date, mi acquisition at the recognition separate tax rates consistently with the filings. it that If ta is not probable the Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in apply to that are expected rates the tax at are measured liabilities assets and Deferred tax is realized or the liabi asset the year the when that have been enacted or substantively enacted at the reporting date. the reporting at enacted substantively or enacted been have that The measurement reflects tax assets and liabilities deferred of or to recover period, the reporting of end the expects, at the Company in which manner ofand its assetscarrying the amount settle recognized outside profit or loss is not rec or income dire comprehensive recognized at each reporting date. at each reporting recognized at reassessed assets are tax deferred Unrecognized future that probable become that has it extent to the recognized are and date reporting each taxable profits will allow the defe or the amount likely most the either using estimates makes Company the treatment, to expects Company the method which on depending treatment, tax the of value expected uncertain the resolutionthe predict better of change. circumstance and facts the if estimate

214 Financial Review

-

2,384 $5,765 $5,765 $6,074 As of Decemberof 31, As Decemberof 31, As 412,175 412,175 145,445 2020 2020 2019 2020 2019 3,299,004 3,299,004 3,299,419 6,939,663 6,939,663 9,134,997 2,674,476 2,195,524 2,195,524 2,674,476 20,163,007 20,163,007 26,384,925 $9,654,682 $9,654,682 $8,381,085 $1,216,634 $1,216,634 14,826,087 $722,794 13,298,679 66,939,601 66,939,601 59,966,481 $16,042,721 $16,042,721 $14,021,473 $16,042,721 $14,021,473 $14,021,473 $16,042,721 $94,048,036 $94,048,036 $95,492,477 it is probable that future taxable profit profit taxable futureprobable is that it tible temporary differences can be utilized. utilized. be can differences temporary tible tion may ariseona wide variety of issues tation of complex tax regulations, changes in in changes regulations, tax complex of tation which it operates. The amountof such it operates. The which xable temporary differences against which the against differences xable temporary the respective domicile of the Company. Company. the of domicile respective the

teralized by government by government teralized measuredat fair value Preferred stocks Preferred Funds bonds Convertible Forward contracts bonds and corporate notes notes corporate and bonds Common stocks stocks Common through profit or loss profit through Total Total Total Total Cash on hand and petty cash petty and hand on Cash accounts savings and Checking deposits Time Total Total Repurchase agreements agreements colla Repurchase Financial assets Financial mandatorily Current Noncurrent

Uncertainties exist with respect the interpre to respect exist with Uncertainties tax laws, and the amount and timing of future taxable income. income. taxable future of timing and amount the and laws, tax establishes Company The by the tax audits of consequences possible for estimates, reasonable on based provisions, in countries the respective authorities of audits and tax previous of experience such as various factors, on is based provisions responsible the and entity taxable the by made regulations tax of interpretations different authority. tax interpreta of differences Such in prevailing conditions the on depending losses, credits and tax tax unused of carryforward all for assets are recognized tax Deferred that extent the to differences temporary deductible ta or available there be will are sufficient unused tax losses, unused tax credits or deduc or credits tax unused tax losses, unused The amount of deferred tax assets determined to be recognized is based upon the likely the upon is based to be recognized determined assets tax deferred of amount The temporary differences. taxable and profits taxable future of level and the timing Please tax assets. to Note deferred refer 6(25) for unrecognized more details on (2) (2) or Loss Profit through Value at Assets Fair Financial (1) Cash Equivalents Cash and (5) Tax Income

6. ACCOUNTS CONTENTS OF SIGNIFICANT ment testing for the nce, based on historical experience and experience historical on nce, based that is expected tobe incurred at normal s to derive from derive to s asset the or CGU. Cash ment bonds extrapolated from maturity from bonds extrapolated ment s value in use. costs of The value less fair on, inflation and the discount rate. on, inflation Due to and net realizable value item by item.by itemvalue realizable net and Net y rate, etc., and may differ from actual actual from differ y may and rate, etc., and its long-term nature, a defined benefit benefit nature, a defined and its long-term ble to reflect the amount that an entity could could entity an that amount the reflect to ble mpany completes impair ce in the ordinary course of business less the less the of business course ordinary ce in the orderly transaction between between market participants, orderly transaction

In determining the appropriate discount rate, management management rate, discount appropriate the determining In corresponding to the expected duration of the defined benefit obligation. obligation. benefit the defined of duration expected to the corresponding rate the As for comparisons past of experiences, takes account management salary increase, future of regi geographical the and industry the within valuation the of actuarial complexity the in these assumptions. to changes sensitive highly is obligation are used The assumptions 6(15). disclosed in Note Inventories are valued at are the cost of lower Inventories valued a pension for obligation benefit of the defined value costs and the present benefit Defined valuation actuarial An method. projected unit credit the using determined are plan the determination the discount of include which assumptions, various making involves mortalit increase rate, salary rate, future considers the interest rates of the govern or declined has value the asset’s that indicate events date or reporting whenever each At Company the place, taken have effect an adverse with the market changes in significant be may 36 IAS of scope the in asset that an indication is an there whether assesses impaired. any If exists, indication Co the realizable value is the estimated selling pri realizable value is the estimated selling sale. the to make necessary costs the estimated and completion of costs estimated Please 6(4). to including Note refer overhead, labor and include direct completion Costs of labor costs, indirect indirect e quipment, production of and maintenance depreciation material costs,supplies,royalties utilities and level. production account into taking level production normal estimates Company The planned maintena capacity resulting from loss of capacity. production current developmentsin future.the CGU to which the individual assets belong. assets belong. individual the which to CGU or asset an of amount carrying the Where is down written and impaired is considered the asset amount, recoverable its exceeds CGU amount. its recoverable to or asset is the an individual CGU of amount The recoverable it and disposal less costs of value fair of higher availa information best on is based disposal an the asset in disposal of the obtain from disposal. of costs the deducting after present net the at measured is use in value The expect entity the flows cash future the of value and the estimated estimates judgments involves include subjective which projection flow that future cash and equipment, flows, capacity generates plant property, of lives useful the and industry the in cycle economic of fluctuations potential output, physical of capacity situation. operating Company’s (2) Inventories (2) (4) Plant and Equipment Impairment of Property,

(3) Benefits Post-Employment

215 United Microelectronics Corporation | Annual Report 2020

-

- December 31,December For the years ended ended years the For As of Decemberof 31, As Decemberof 31, As 170,145 170,145 175,494 881,841 881,841 1,754,137 in operating cost, of which in operating cost, of 2020 2020 2019 2020 2019 $286,795 $286,795 $365,052 $286,795 $365,052 $365,052 $286,795 2020 2020 2019 4,290,672 3,548,376 3,548,376 4,290,672 11,872,971 11,872,971 11,309,718 $5,507,002 $5,507,002 $5,102,571 $22,552,486 $21,714,802 $21,714,802 $22,552,486 $10,526,144 $14,723,232 $14,723,232 $10,526,144 $10,355,999 $10,355,999 $14,547,738

2,999 million, respectively, 2,999 million, respectively, s

Held at end of period period of end at Held period the during Derecognized Total

None of the aforementioned inventories were pledged. pledged. were inventories the None aforementioned of For the years ended December 31, 2020 and 2019, the Company recognized recognized Company the 2019, and 2020 31, December years ended the For NT$12 and NT$133,143 million NT$820 and inventories of write-down of reversal to related was million NT$272 to write-down of inventories. was related million and purposes to long-term medium for are held instruments in equity These investments income. comprehensive other through value as fair for are accounted therefore as fair designated instruments equity or from loss in profit recognized income Dividend were listed below: income other comprehensive value through Preferred stocks Preferred Common stocks stocks Common Raw materials Raw materials and spare part Supplies in process Work goods Finished Total Total Total Equity instruments

a. b.

b. a. (5) (5) Non-Current Income, Comprehensive through Other Value Assets at Fair Financial

(4) (4) Inventories, Net

December 31, December 23,774 138,788 95,39813,258 204,791 85,131 For the years ended the years ended For As of Decemberof 31, As Decemberof 31, As 635,239 1,418,475 2020 2019 2019 2020 2019 2020 2020 2019 2019 2020 (491,506) 649,438 (206,084) (697,590) $697,590 $48,152 $206,084 $697,590 2,730,865 2,364,311 $23,801,905 $21,924,797 $27,300,439 $26,136,293 s a expected credit loss rate to calculate calculate to rate loss credit s a expected the receivables past due within 60 days, 60 days, within past due receivables the reporting date to measure expected credit credit expected date to measure reporting economic environment. environment. economic the receivables For onal expected credit losses by considering considering losses by credit onal expected

the period period the 121 121 days 30 days 30 days Subtotal 3,498,534Subtotal 4,211,496 31 to 60 days 60 days 31 to 90 days 61 to days 120 to 91 ≥ ≤ et $27,094,355 $25,438,703 past either due for (reversal) recognize et

Ending balance balance Ending

Aging analysis of accounts receivable: receivable: accounts analysis of Aging Accounts receivable receivable Accounts allowance loss Less: N N due: Past $27,300,439Total $26,136,293 receivable: of accounts loss for allowance Movement balance Beginning N were sales overseas party sales third and for third party domestic periods The collection respectively. days, 30~60 net and days 30~60 month-end each at performed is analysis impairment An losses (ECLs) of accounts receivable. For For receivable. accounts of (ECLs) losses Companynot past due, the including estimate ECLs. losscredit rates the expected 2019, and 2020 31, December ended the years For 0.2%. than greater are not historical Company’s on the based determined rate is The adjusted for condition, current financial and customer’s experience loss credit as customer’s such factors forward-looking assesses rate and aforementioned the applies Company the days, over 60 due past additi recognize to whether individually ability. debt-paying and condition operating customer’s (3) (3) Net Receivable, Accounts

216 Financial Review

$1,184 million $1,184 million for these value of The fair as of December 31, 2020, $10,697 and NT$1,747 million as financial assets at fair value ity method. ity method. fair Cumulative value s a joint venture to the Company that thethe Company obtained ability illion for the years ended December 31, 31, December ended years the for illion retained earnings in the current period. the period. earnings current in retained not own the majorown not voting rights as the ectors. previously was UNIMICRON $2,716 million and NT and million $2,716 posed of the ownership of shares of of shares of ownership the of posed mpany does not control but owns significant significant control but owns not does mpany of significantof influence over it. ounted to NT

llion and NT$2,244llion million, significant influence over UNIMICRON through 020 and 2019, respectively. 2019, and 020 respectively. s are able to align and prevent the Company from ruling from Company the prevent and to align s are able es amounted to NT for limited partnerships and uses the equity method to account for these these for account to method equity the uses and partnerships limited for investees. 2020. in December disposed CLIENTRON and reclassified the investment the reclassified and CLIENTRON loss duethrough profitor to loss FARADAY as an associate given the fact given as an associate FARADAY on its representation through FARADAY over influence exercise significant to Board Directors. of the obtained the Company that the fact associate given as an UNIMICRON ability to exercise Dir of its Board on representation as reclassified and income comprehensive other through value fair at measured equ the under for accounted investments to up income other comprehensive in recognized was previously that changes to reclassified was date reclassification accounting practices in equity accounting international D: The Company follows Note IMMOBILIENWINAICO GMBH wa E: Note which for method equity the using for accounted of investments amount carrying The are published pricethere quotations am and 2019, respectively. respectively. 2019, and other were by method the equity audited under accounted for investments Certain accountants. independent of joint Shares or lossprofit and ventures these associates of m and NT$1,231 to NT$6,686 million amounted 2020 and 2019, respectively. (loss) of these respectively. income 2019, comprehensive and other 2020 of Share associates and joint ventur the years ended December 31, 2020 and 2019, respectively. The balances of of The balances respectively. 2019, and 2020 31, December ended years the and million NT$29,507 were method equity the under for accounted investments respectively. 31, and 2019, as 2020 million of December NT$11,704 some associates; after of shareholder is the largest the Company Although does Company the assessment, comprehensive remaining votingrights holder operation. relevant the Therefore, Co the influence over the aforementioned associates. associates. aforementioned over the influence pledged. were joint ventures and associates the aforementioned of None its in accounts for investment the Company June 2015, from Beginning A: Note dis Company 2020, the April In C: Note its in accounts for investment the Company June 2020, from Beginning B: Note million, as of December 31, 2 December as of million, NT$18,885 mi were investments -

36.49 21.90 45.44 25.14 25.90 44.45 30.00 44.78 42.00 40.00 10.38 30.87 13.78 2019 voting rights rights voting ownership or ownership or Percentage of - -

592 7,164

December 31,December For the years ended ended years the For ses) reclassified retainedto ses) reclassified $13,322,143 $9,012,450 $2,348,454 - 36.49 4,378,193 40.00 122,060 42.00 642,660 23.98 30.87 3,829,934 45.4444.45 18,157 40.00 2,281,631 As of December 31, voting rights rights voting Amount ownership or or ownership Percentage of

er the equity methodas follows: is

2020 2019 2019 2020 - 276,866 - -

941 6,206

26,966 96,026 25.14 121,973 195,675 195,675 823,185 823,185 174,985 174,985 10.38 172,414 9,107,377 13.36 9,107,377 $1,589,448 13.78$1,589,448 $1,470,499 Amount Amount $31,225,677 $31,225,677 details on cumulative gains (los tion $1,825,365 $(551,903) mpany’s investment strategy, the Company disposed and disposed the Company strategy, investment mpany’s eclassified to retained to retained eclassified

r Under Equity the Method earnings due to derecogni to due earnings Cumulative Cumulative (losses) r gains 2020 Fair value on the date of disposal of on the date disposal value Fair In consideration ofIn consideration the Co comprehensive other through value fair as designated investments certain derecognized income. December ended years the for investments such of derecognition on Details as follows: were and 2019 31, 2020 Details of investments accounted for und for accounted Details investments of Please refer to Note 6 (6) Please refer for to earnings due to derecognition. derecognition. to due earnings Investee companiesInvestee c. a. (6) (6) Accounted Investments fo

(Note C) (UNIMICRON) (Note(UNIMICRON) B) KONG LIMITEDKONG (FARADAY) (Note A) (FARADAY) L.P. (Note D) L.P. UNIMICRON TECHNOLOGY CORP. CORP. TECHNOLOGY UNIMICRON (CLIENTRON) CORP. CLIENTRON UNITECH CAPITAL INC. INC. CAPITAL UNITECH CORPORATION CAPITAL TRIKNIGHT 2,488,169 HSUN CHIEH CAPITAL CORP. CORP. CHIEH CAPITAL HSUN LTD. CO., INVESTMENT CHIEH HSUN YUAN INVESTMENT CO., LTD.YANN HONG 10,165,563 LED CORPORATION UNITED 6,551,136 FARADAY TECHNOLOGY CORP. CORP. TECHNOLOGY FARADAY MTIC HOLDINGS PTE. LTD. LTD. PTE.MTIC HOLDINGS INC. PURIUMFIL VSENSE CO., LTD. LTD. CO., VSENSE I, PARTNERS CAPITAL TRANSLINK WINAICO IMMOBILIEN GMBH (Note E) GMBH IMMOBILIEN WINAICO Total Total

Unlisted companies companies Unlisted Listed companies companies Listed

217 United Microelectronics Corporation | Annual Report 2020

- - 45,304,505 - (5,838,049) - (842) - (6,269,807) $- $803,346,667 $- $770,150,860 awaiting awaiting inspection Total inspection Total equipment equipment Construction Construction in progress and in progress and in progress - - 26,420,747 26,420,747 - (12,938) (6,816,087) 62 (15,528,464) 1,969,871 Leasehold Leasehold Leasehold improvement improvement - Furniture Furniture and fixtures and fixtures - (179,132) - - 246,622 - 1,082 (1,924) 16 (12,552) (2,154) Furniture equipment equipment and fixturesand Total Transportation Transportation Transportation

- 453 (6,388) - - -

Machinery Machinery Machinery Machinery and equipment and equipment and equipment - - 655 (5,824,014) - - 109,586 17,142,065 - 1,688,455- 43,089,767- 5,334 513,055 7,894 - (1,316,833) (5,305,744) (10,856) (169,716) - (788,342) (5,301,373) (10,412) (169,680) $- $19,851,288 $777,687,345 $42,732 $5,715,339 $49,963 $- $18,950,520 $745,722,965 $47,794 $5,383,434 $46,147 (13) (6,828)

(1,510) 27,169 (5,814,568) (155) (10,252) (2,171) 66,435 (5,735,052) Land Buildings Land Buildings Land Buildings Assets Used by the Company: Cost: Cost: Accumulated Depreciation and Impairment: and Impairment: Depreciation Accumulated Leases: Operating to Subject Assets

2020: 2020: a.

b. (8) (8) Equipment and Plant Property,

reclassifications reclassifications reclassifications reclassifications As of December 31,As of December 2020 $459,622 $2,451,311 $125,413 $1,315,633 $4,351,979 Depreciation Net carrying amount: 31,As of December 2020 $1,690,613 $17,406,222 $93,881,980 $12,166 $1,193,439 $13,811 $16,529,296 $130,727,527 Disposals -Exchange effect (179,132)

As of January 1, 2020 As of January $1,692,123 $38,437,588 $865,547,572 $65,909 $6,842,124 $65,883 $5,583,516 $918,234,715 1, 2020 As of January Exchange effect 31,As of December 2020 $1,690,613 $37,257,510 $871,569,325 $54,898 $6,908,778 $63,774 $16,529,296 $934,074,194 Disposals 1, 2020 As of January $459,635 $2,637,271 $125,413 $1,315,180 $4,537,499 Transfers and and Transfers Transfers and and Transfers Exchange effect As of December 31,As of December 2020 Additions Disposals - e income (loss) in mprehensive income tional the currency of For the years For As of Decemberof 31, As ended December 31, 31, December ended 548,986 559,809 2020 2019 2019 2020 2020 2019 2019 2020 2,914,560 2,914,560 1,256,622 $9,582,512 $9,582,512 $2,404,117 $14,305,779 $2,353,066 D., held 201 million and 200 million 200 million million and held 201 D., share of all its individually immaterial all its individually share of d in other comprehensiv d in other which were not included in the following any, an exchange difference arising from from arising difference an exchange any, e or joint venture for the Company. e or joint venture the for Company. When December 31, 2020 and 2019 were NT$(53) NT$(53) were 2019 and 31, 2020 December operation, and the func

operations operations $1,147,495 $6,667,952 ciates and joint ventures: ventures: joint and ciates

Total comprehensive income (loss) income comprehensive Total Income (loss) from continuing continuing from (loss) Income (loss) income comprehensive Other ventures that are accounted for using the equity method were both nil years both for the equity were using the method for that are accounted ventures 2019, respectively. and 2020 31, December ended associates that are accounted for using the equity method is as follows: as follows: is method equity the using for accounted are that associates One of UMC’s associates, HSUN CHIEH INVESTMENT CO., LTD., held 441 million CO., LTD., CHIEH INVESTMENT associates, HSUN of UMC’s One respectively. 2019, and 2020 31, December of stock as Another UMC’s of shares CO., YUANLT INVESTMENT associate, YANN respectively. and 2019, 2020 31, stock December as of UMC’s of shares of asso Financial information associat significant is no individually There a is venture or foreign joint a associate an the Comp entityfrom foreign different is translation the of foreign be recognized in other co entity will (loss). recognize differences exchange Such ended years the for statements financial the million and NT$(18) respectively, million, table. i. the Company’s of amount The aggregate ii. The aggregate amount of the Company’s share of all its individually immaterial joint joint immaterial all its individually of ii. share of the Company’s amount The aggregate months toyeara Costs to fulfill a contract contract a fulfill to Costs Others 71,566 Others $14,926,331Total $2,912,875 Time deposits with original maturities of three over of maturities with deposits original Time

b. c. (7) (7) current Other assets

218 Financial Review

66,871

- - 84,974 - - - 46,347,551 - (4,949,305) - (127,455) $- $770,150,860 awaiting inspection Total equipment Construction in progress and in progress - - Leasehold Leasehold improvement - - Furniture and fixtures - 31,075 - (325) 514 - - 10 (67,285) Furniture Furniture equipment and fixturesand Total and fixtures Total Transportation Transportation

- - (7,701) (18,731) - (3,595) (6,463) - (317) (651) - (317) (940) $- $212,371 $2,290,241 3,827 70,708 180,785 Machinery Machinery Machinery Machinery Machinery and equipment and equipment and equipment - 66,682 - 84,974 - (127,455) - (67,295) - (81,872) 3,213 (78,659) - (2,868) - - - - (136,976) (4,789,755) (182) (21,375) (1,017) - - 1,542,864 44,307,925 6,105 488,216 2,441 - - (4,624) (8,105,713) (3,563) (195,766) (5,371) (5,949) (8,320,986) $- $1,019,036 $125,413 $1,102,809 $2,247,258 $- $915,988 $188,881 $1,036,003 $2,140,872 $- $18,950,520 $745,722,965 $47,794 $5,383,434 $46,147 $- $17,549,256 $714,286,307 $45,434 $5,112,684 $49,580 $5,949 $737,049,210 (331) (10,699) Land Buildings Land Buildings Land Buildings Cost: Assets Subject to Operating Leases: Operating to Subject Assets and Impairment: Depreciation Accumulated Accumulated Depreciation and Impairment: and Impairment: Depreciation Accumulated b.

reclassifications reclassifications reclassifications reclassifications reclassifications reclassifications As of January 1, 2019 As of January As of December 31,As of December 2019 Exchange effect 31,As of December 2019 Transfers and and Transfers Disposal of a subsidiary Disposal of a subsidiary and Transfers Disposals - (334) Depreciation Disposals Net carrying amount: 31,As of December 2019 $1,692,123 $19,487,068 $119,824,607 $18,115 $1,458,690 $19,736 $5,583,516 $148,083,855 Disposals - subsidiaryAcquisition a of (623) 7,051 24,024 Depreciation - 106,250 Net carrying amount: 31,As of December 2019 $459,635 $1,618,235 Impairment loss 1, 2019 As of January $452,915 $2,624,569 $207,285 $1,319,985 $4,604,754 As of January 1, 2019 As of January Exchange effect 31,As of December 2019 $459,635 $2,637,271 $125,413 $1,315,180 $4,537,499 Exchange effect Exchange effect and Transfers - (161,781) awaiting inspection Total inspection Total equipment Construction in progress and in progress - 14,579,988 14,579,988 - Leasehold Leasehold improvement 285,891 11,712 (20,179,970) 1,055,821 Furniture and fixtures

- - 9 54,978 8,372 739,663 11,466,543 n of the Board of Directors’ meeting. meeting. Directors’ of Board nthe of The 3,557 pment located in Taichung City in the third pment located in Taichung ecorded in the other operating income and and income operating in the other ecorded Furniture equipment and fixtures Total Transportation Transportation

- 69,425 169,879 - (349) (5,054) - - (107,240) - - - $- $143,748 $2,047,136

Machinery Machinery Machinery and equipment and equipment and equipment - - (161,781) - (4,705) Land BuildingsLand Land Buildings

- 211,285 20,723,346 - - (4,637) (8,122,361) (3,563) (196,487) (6,180) (27,758) (8,360,986) - 100,454 - (107,240) Cost: Assets Used by the Company:

Accumulated Depreciation and Impairment: and Impairment: Depreciation Accumulated a. In order to improve operations, reduce fixed costs and obtain the funds required for the the for required funds the obtain and costs fixed reduce operations, improve to order In (NEXPOWER) segment business new of subsidiary the operation, future company disposed the buildingof and its equi facility resolutio a with accordance in 2020 of quarter disposal gain of NT$1,081 million was r expenses. 2019:

reclassifications reclassifications Exchange effect 31,As of December 2019 $1,692,123 $38,437,588 (41,064) $865,547,572 (538,378) $65,909 $6,842,124 (7,077,088) $65,883 (449) $5,583,516 $918,234,715 (39,174) (1,470) (79,170) (7,776,793) 31,As of December 2020 $- $1,007,545 $125,413 $1,171,885 $2,304,843 Depreciation Net carrying amount: 31,As of December 2020 $459,622 $1,443,766 As of January 1, 2019 As of January $861,487 $35,681,733 $853,481,220 $66,355 $6,736,916 $53,449 $10,550,763 $907,431,923 Disposal of a subsidiary Disposal of a subsidiary - Acquisitionsubsidiary a of and Transfers 871,700 3,087,585 6,704,236 As of January 1, 2020 As of January Disposals Exchange effect $- $1,019,036 $125,413 $1,102,809 $2,247,258 Disposals Additions 219 United Microelectronics Corporation | Annual Report 2020

December 31, December 8,145 6,001 4,531 4,030 For the years ended the years ended For As of December 31, 31, December As of 223,120 180,115 2020 2020 2019 2020 2019 2020 2019 $550,147 $569,957 $569,957 $550,147 $333,402 $366,827 5,026,717 5,461,068 5,461,068 5,026,717 $5,576,864 $6,031,025 $6,031,025 $5,576,864 and 2019, the Company’s addition to and 2019, the Company’s transfer substantially all transfer the of risks and NT$567 million and NT$264 million, st expenses on the lease liabilities. liabilities. lease the on expenses st se assets pledged as collateral.

For the years ended December 31, 2020 For years the ended December right-of-use assets amounted to right-of-use respectively. Please refer to Note 8 for right-of-u Current Noncurrent Total

i. ii. Lease Liabilities Lease Liabilities Depreciation Depreciation right) land use Land (including 120,111Buildings and equipment Machinery equipment Transportation 87,572 equipment Other $689,309Total $644,545 to Note 6(23) for the refer Please intere The Company as a lessor as a The Company lessor

(b) are which and equipment plant property, on certain leases entered into Company The not did they as leases operating as classified rewards incidental assets. of the underlying to ownership incidental rewards The are to main contracts clauses. cancellation with employees to the dormitory the lease Note to refer Please 6(8)forrelevant plant and disclosureequipment for of property, operatingleases.

b.

12,252 12,019 10,294 12,880 As of December 31, 31, December As of 2020 2019 2019 2020 2,227,035 2,092,924 land (including land use right), buildings, land use buildings, right), (including land with lease term of of years. 50 term lease with lease Most e impairment test revealed the recoverable the recoverable test revealed e impairment lease payments will be adjusted based on the lease paymentsbased will be adjusted ny reclassified SOCIALNEX ITALIA 1 S.R.L S.R.L 1 ITALIA SOCIALNEX ny reclassified -generating unit (CGU) composed of property, property, (CGU)-generating composed unit of

right) $5,146,342right) $5,700,136 expenses an impairment an million NT$85 year expenses forthe of loss

et $7,748,042 $8,291,517

Right-of-use Assets Land (including land land use Land (including 352,119Buildings equipment and Machinery equipment Transportation 473,558 N Other equipment equipment Other The Company as a The Company lessee (a) Compa the 2019, quarter of the second In sale. for held group as a disposal a subsidiary, (SOCIALNEX), As such, the Company test on the cash an impairment performed sale. for held group disposal CGU as a single the before reclassifying equipment and plant selling net the on based CGU the of amount recoverable the determined Company, The th and 3 to Level categorized was which price amount. its carrying less than be to of the CGU amount in recorded the Company Thus, the other operating income and ended December 31, 2019, on the CGU to be disposed of from the new business segment. segment. the new from business of 2019, on the CGU to be disposed 31, December ended 2019. November in SOCIALNEX disposed Company The pledged collateral. as equipment and plant to Note 8 property, for refer Please machinery and equipment, transportation equipment and other equipment with lease terms terms lease with equipment other and equipment transportation equipment, and machinery 1 the 30 years,to use of land for except rights state that R.O.C in of land located contracts value. land announced at land leased of options purchase have not does Company The the lease terms. end of the a. The Company leases various properties, as properties, such leases various The Company

(9) Leases Leases (9)

220 Financial Review - 414 414 - - 53,661 53,661 - - 7,398 - 7,398 -- (93) (93) - (93) (93) - - technology technology technology Patents and and Patents and Patents license fees Others Total license fees Others Total - - -

-- (383,745) (953,128)- (1,975,688) (638,815) (27,152) (122,850) (153,974) (3,972) - 414 -- 1,666,599- (383,745) 806,915 (953,128) 3,325,193 851,679 (1,975,688) (638,815) - (80,074) (380,092) (470,717) (10,551) - 760,010 531,790 2,166,610 874,810 - 964,903- 198,181 53,661 1,318,754 155,670 $- $601,649 $2,843,411 $5,850,757 $2,405,697 7,398 $7,398 $951,176 $2,299,223 $5,895,424 $2,637,627 $7,614 $2,395,972 $1,884,282 $5,198,247 $910,379 $15,012 $1,125,804 $4,511,629 $3,190,116 $8,842,561 $15,012 $3,347,148 $4,183,505 $11,093,671 $3,548,006 Goodwill Software Software Goodwill Software Goodwill subsidiary 2019 2019 2019 subsidiary 2019 subsidiary Write-off Write-off of a Disposal Exchange effect 31, December of As Reclassifications Reclassifications As of January 1, 2019 1, January of As 2019 1, January of As Additions Amortization amount: carrying Net 31, December of As Write-off Write-off of a Disposal Exchange effect 31, December of As loss Impairment Acquisition of a Acquisition Reclassifications Reclassifications 2019: Cost: Amortization Accumulated and Impairment: - (3,808) - 841 technology technology technology Patents and and Patents and Patents license fees Others Total license fees Others Total

- 145,714 32,341 2,886 180,941 26,884- 31,815 2,762 61,461 - 1,201,288 - 1,201,288 212,269 - (312,411) (11,023) 862,063 (3,808) - (915,703) (1,239,137) 2,275,620 - - 1,363,607 536,953 - (312,411) (11,023) 810,225 - 841 (915,703) - (1,239,137) 2,710,785 $7,398 $7,398 $951,176 $2,299,223 $2,637,627 $5,895,424 $7,398 $2,035,028 $2,852,037 $2,035,028 $7,398 $2,534,911 $7,429,374 $7,614 $2,229,530 $1,678,428 $2,229,530 $7,614 $962,341 $4,877,913 $15,012 $15,012 $3,347,148 $4,183,505 $3,548,006 $11,093,671 $15,012 $4,264,558 $4,530,465 $4,264,558 $15,012 $3,497,252 $12,307,287 Goodwill Software Goodwill Software Goodwill

2020 2020 2020 2020 2020 As of January 1, 2020 1, January of As 2020 1, January of As Exchange effect 31, December of As Exchange effect 31, December of As Additions Write-off Reclassifications Amortization Write-off Reclassifications amount: carrying Net 31, December of As 2020: Cost: Amortization Accumulated and Impairment: (10) Intangible Assets

221 United Microelectronics Corporation | Annual Report 2020 Repayment rincipal will in June be repayable rincipal will in June be repayable principal will be repayable in upon maturity. October 2024 principal will be repayable in upon maturity. October 2022 principal was repaid fully in March 2020. 2021 upon maturity. 2021 upon maturity. 2024 upon maturity. principal will be repayable in Marchupon maturity. 2022 principal will be repayable in Marchupon maturity. 2024 p p Interest will and the be paid annually Interest will and the be paid annually Interest will and the be paid annually Interest was paid annually andInterest the annually was paid Interest will and the be paid annually Interest will and the be paid annually Interest will and the be paid annually 1.13% 0.94% 1.15% 1.50% 1.95% 1.43% 1.70% illion. interest on rate effective The amounting to NT$1,894 million, after million, after to NT$1,894 amounting was determined at issuance and recognized and recognized at issuance was determined

NT$3,400 million NT$2,000 million

2017 2017

Term Issuance date Issued amount Coupon rate Seven-year In early October Ten-year mid-June In 2014 NT$3,000 million Five-year late In 2017 March NT$6,200 million Seven-year late In 2017 March NT$2,100 million Five-year In early October Seven-year mid-March In 2013 NT$2,500 million Seven-year mid-June In 2014 NT$2,000 million UMC issued domestic unsecured corporate bonds. bonds. corporate UMC issuedunsecured domestic of and conditions the The terms follows: as are bonds reduction of issuance costs amounting to NT$9 m NT$9 to costs amounting issuance of reduction to be determined 2.03%. bonds was convertible of the component the liability The the bonds are asfollows:conditions of terms and d currency linked zero coupon convertible convertible coupon zero linked currency liste d SGX-ST issued UMC 2015, 18, On May bonds. of the value Presentation”, Instruments 32 “Financial IAS with accordance In bonds right the convertible of the conversion options capital-stock paid-in in additional i. million US$600 Amount: Issue ii. date) (Maturity 2020 18, May ~ 2015 18, May Period:

a. b.

$- - 17,729,293 - 3,935,006 December 31, December December 31, December (9,616) (147,877) $2,326 For the years ended the years ended For For the years ended ended the years For As of December 31, 31, December As of As of December 31, 31, December As of As of Decemberof 31, As 2020 2019 2020 2019 2020 2019 2020 2019 2019 2020 2019 2020 $866,497 $827,596 (1,999,910) (20,093,825) $1,844,288 $1,339,014 $18,700,000 $21,200,000 $11,057,132 $8,080,200 0.00%~4.05% 0.00%~4.55%

at Fair Value through through Loss, Profit or Current Value at Fair Operating costs Operating expenses Operating loans bank Unsecured loans other Unsecured $11,057,132Total $12,015,206 applied Interest rates contracts Forward Net $16,690,474Net $18,687,591

Less:Discounts bonds on payable Unsecureddomesticpayablebonds Unsecuredconvertible bonds payable 18,690,384Total portion Current Less: 38,781,416 The amortization amounts of intangible assets is as follows: of intangible amounts The amortization and million to NT$63,177 amounted credit of lines short-term unused Company’s The respectively. and 2019, 31,2020 as million December of NT$64,169

(11) Short-Term Short-Term Loans (11) (12) Financial Liabilities Bonds (13) Payable

222 Financial Review

ber 20, 2019 to September 9, to September ber 20, 2019 2017 to July 5, 2021. July 2017 to oberOctober 20, 2016 to 20, 2024. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. Interest-only payment for the first year. Interest-only payment for the first year. Principalis repaid in 17 quarterly payments with interestmonthly payments. 2021, Interest-only paymentthe for semi-annually year. is Principal repaidin 4 semi-annualpayments with quarterly payments. interest Interest-only payment for the first year. Interest-only payment for the first year. Principalis repaid in 17 quarterly payments with interestmonthly payments. 2025. Interest-only payment for the first year. Principal is repaid in 37 quarterly payments with monthly interest payments. to August 29, 2025 with monthly interestAugust 29, 2025 to payments. May 31, 2023 with monthly monthly 31, 2023 with interestMay payments. with monthly interestAugust 13, 2025 to payments. 2024. Interest-only payment for the first andthe second year. Principal is repaid in 13 semi-annual payments with semi-annual interest payments. - November from Repayable monthly 29, 2020 - September from Repayable monthly 13, 2020 1,288August 10, 2020. August 10, 2015 to Effective $3,827 3, July Effective 10,380October October 24, 24, 2019 to Effective 71,351October October 19, 19, 2015 to Effective 29,896to 31, May from monthly 2019 Repayable 1,744,975 Septem Effective

- $1,640 19,464 59,459 21,146 56,000 28,965 As of December 31, December As of 1,702,589 22,236,343 26,892,457 Oct Effective

Details of long-term loans as of December 31, 2020 and 2019 were as follows: were 2019 and 2020 31, December as of loans long-term Details of

Lenders Lenders 2019 2020 Redemption

a. (14) Long-Term (14) Long-Term Loans Cooperative Bank (1) (1) Cooperative Bank International Commercial Bank (1) International Commercial Bank (2) Cooperative Bank (2) (2) Cooperative Bank (3) Cooperative Bank Development Bank and 6 others 6 others Bank andDevelopment (Note A) Cooperative Bank (4) (4) Cooperative Bank (5) Cooperative Bank ICBC Bank ICBC Secured Long-Term Loan from Taiwan Loan Taiwan from Secured Long-Term Secured Long-Term Loan from Mega Secured Long-Term Loan from Mega Secured Long-Term Secured Long-Term Loan from Taiwan Loan Taiwan from Secured Long-Term Loan Taiwan from Secured Long-Term Secured Syndicated Loans from China Secured Long-Term Loan from Taiwan Loan Taiwan from Secured Long-Term Loan Taiwan from Secured Long-Term Unsecured Long-Term Loan from from Loan Long-Term Unsecured options to additional d been converted into 465 into converted d been tible at any tible time on orJune 28, after ce will be subject to adjustments upon adjustments to subject be ce will tain changes in the R.O.C.’s tax rules tain changes in the R.O.C.’s ve the rightredeem require to the ve UMC to d on the Fixed Exchange Rate (NTD d on Fixed the but not in part, at the Early Redemption UMC to redeem all the bonds at the all of UMC to redeem nary shares of UMC nary shares of the TWSE, a on for nversion price. nversion Redemption The Early pal amount. The principal amount of of amount principal The amount. pal UMC reclassified cancelled convertible convertible cancelled reclassified UMC paid in capital-stock paid in capital-stock .25% per annum (the Early Redemption Redemption Early (the annum per .25% , of the bonds, at the Early Redemption bonds, the , of 20, UMC fully redeemed the remaining t: The conversion price was originallyt: The conversion price

fixed NTD amount willfixed be converted using the redemption paymentin for USD. the date upon which notice of such redemption is redemption such of notice which upon the date $215 million and US$15 million $215 million ha and prior to the maturity date, at the principal amount of the bonds with an of the bonds amount date, at the principal the maturity to and prior at calculated interest ratethe -0 of Amount) if the closing price of the ordi the of price closing the if Amount) is published, at least 125% of co the Price into will base converted NTD be of time rate at the prevailing cer of event in the at any time, Amount period of 20 out of 30 consecutive trading days, the last of which occurs not occurs not which of last days, the trading consecutive 30 of 20 out of period more than 5 days prior to 30.708=USD 1.00), and this been has already the bonds of in principal amount if least 90% at Amount cancelled. and or repurchased redeemed converted, or gross up to to gross principal, of for payments UMC up require which would interest or premium. of for payments the principal of at 99.25% 2018 18, May on bondholders option of at the amount. be listed on the to cease shares ordinary if UMC’s Amount Early Redemption Exchange. Stock Taiwan occurs to UMC, the bondholders shall ha Amount. but in part, atnot the Early Redemption the bonds, in whole however, intoto provided, prior shares; and ordinary 2020, May 2015 UMC 8, and of, beginning the from days business 5 within falls date exercise the if that to vote bonds the holder of the converting of the right closed period, any during, restrictions. certain to subject be will receives shares it the to respect with NT$17.50 per share. share. per NT$17.50 pri The conversion the indenture. set out in certain events of the occurrence (i) (i) issuance the of years part, after 3 or in whole in bonds, the redeem UMC may (ii) UMC may redeem the bonds, in whole, but not partall, UMC redeem may (iii) Amount Redemption at Early redeemable be (iv) will theof bonds portion or any All (v) to require right have the Bondholders the bonds of the in indenture as control defined of change a that event In the (vi) (i) UMC Ordinary shares of Securities: Underlying (ii) are conver The Period: bonds Conversion Adjustmen and Price Conversion (iii) million shares and 33 mill ion shares, respectively. 2020. 31, March was on bonds the of date The last conversion the years ended For of convertible the amount principal the outstanding 2019, and 2020 31, December US totaling bonds Redemption: iii. unconverted bonds at 98.76% of the princi the of 98.76% at bonds unconverted million. US$369 to amounted redemption NT$1,166 million rights of additionalfrom capital-others. paid in iv. Terms of Conversion: of Conversion: Terms iv. 20 18, of May date the maturity Upon v. v. Bonds: of Conversion

223 United Microelectronics Corporation | Annual Report 2020 ga International starting from the starting from and executed the and executed the ion, respectively. ion, respectively. KGI Commercial Bank, r 17, 2016. r 17, 2016. offered The agreement and NT$0.6 billion, respectively. This line credit willof be reduced l and therefore the loan is reclassified reclassified is loan the therefore l and notified the bank bank the notified tion date of the agreement is August 9, August is agreement the of date tion ter the first use and every three months months every three first use and ter the nil NT$0.5 bill and nil e loan covenant to to d to comply with th e covenant loan stments. The expiration date of the date of stments. The expiration stments. The expiration date of the the date of expiration stments. The credit willcredit reduced be agreement with with Me agreement on and NT$2.5 billion, respectively. reement with Taipei Fubon Bank, effective effective Bank, Fubon Taipei with reement an agreement with with agreement an

billion, respectively. end of the two years after the first use and every twelve months thereafter, with with thereafter, months twelve every use and first the after years two the of end adjustments. four of total a expira The 2023. of credit were line unused 2019, the and December 31, 2020 of As NT$0.8 billion and NT$2 2018. 11, September from effective revolving a UMC offered agreement The line of credit of NT$2.5 billion. be starting reduced This will line of credit months twelve every first and use the after year second the of end the from of four with a total adju thereafter, 11, 2023. is December agreement the 2020 and 2019, 31, December of As credit wereunused line of NT$1 billi Commercial Bank, effective Octobe from of billion. NT$3 credit of line revolving a UMC be will credit of line This use the first after six months years and two the of the end from starting reduced The six adjustments. of total a with thereafter, months six every and 2022. 16, April is agreement the date of expiration 31, 2020 December of As were credit line of the unused and 2019, a UMC offered agreement The 2016. 2, November from effective Bank, billion. credit of lineNT$3 revolving of year af the third end of the starting from adju nine total a with of thereafter, 2022. 27, the October is agreement 2019, and 2020 31, December of As credit wereunused line of NT$1.7 billion the from starting billion of cr edit NT$2 line of a revolving UMC offered which 30, 2020. December to date approval the 2019, and 2020 31, December As of respectively. billion, credit wereunused line of NT$2 nil an d from February 9, 2018. The agreement offered UMC a revolving line of of line a revolving UMC offered 9, 2018. agreement The February from credit of NT$2 billion. This line of maintain at certain its financial ratio leve USCXM current to has liabilities. process. application exemption as of obtained been not has exemption The date. the reporting Note E: UMC enteredUMC intoa 5-year lo E: Note Note B: UMC entered into a 5-year loan B: Note UMC entered a 5-yearinto Chang Commercial loan agreement with Hwa D: Note 2019, 30, December on loan credit 1-year the approved Bank Commercial F: First Note Note C: Note UMC entered a into 5-year ag loan Note A: USCXM, the subsidiary of UMC UMC faile USCXM, of subsidiary the A: Note Please refer to Note 8 for property, plant and equipment and right-of-use assets pledged and assets pledged right-of-use equipment and plant to Note 8 property, Please for refer loans. long-term for collateral as

b.

Redemption erly from October fromerly 27, 2021 to Principalis repaid payments in 9 quarterly with interestmonthly payments. with interestmonthly payments. 2022. Interest-only payment for the first semi-annually year. principal The will be repaid semi-annually of RMB 0.1 million andthe remainingprincipal will be repaid andthe interestbe will onceat maturity, paid monthly. 2020 to April 16, 2022 with monthly interest2020 to payments. with interestmonthly August 9, 2023 payments. 2024. Principalrepaid in 12 quarterly is payments with monthly interest payments. October 27, 2022 with monthly interest monthly with 2022 October 27, payments. to December 11, 2023 with monthly interestwith monthly 2023 to December 11, payments. interest payments. - 24, to May 24, 2020 November Effective - 10, to December 10, 2022 March Effective - 5, 2025. 5, 2023 to May May Effective -Augustto 9, 2021 from Repayable annually - with monthly 15, 2025 May Settlement due on -2021 December from Repayable annually 11,

$- $747,900 Settlement28, 2020 September on beforehand December 31, December For the ended years As of December 31, December As of 440,500 440,500 700,000 700,000 300,000 300,000 2,000,000 2,000,000 1,500,000 2,000,000 Repayable semi-annually October from 16, 2,000,000 2,000,000 1,000,000 1,000,000 2,400,000 quart Repayable 1,000,000 1,000,000 2020 2019 2020 2019 $8,080,938 $8,080,938 $29,200,299 33,066,106 33,066,106 33,902,074 (24,985,168) (4,701,775) 84%~4.67% 84%~4.67% 0.55%~5.56% 0.

Lenders Lenders CTBC Bank Bank CTBC Bank Xiamen Bank Cooperative Taiwan Mega International Commercial Bank (Note B) Bank of Taiwan Bank of Taiwan Taipei Fubon Bank (Note Bank C) Fubon Taipei HwaChang Commercial Bank (Note D) Bank (Note E) Bank (Note E) Commercial Bank (Note F) BankCommercial F) (Note otal Interest rates applied

Unsecured Long-Term Loan from from Loan Long-Term Unsecured from Loan Long-Term Unsecured from Loan Long-Term Unsecured portion Less: Current Unsecured Revolving Loan from Unsecured Revolving Unsecured Long-Term Loan from from Loan Long-Term Unsecured Unsecured Revolving Loan from Unsecured Revolving Loan from Unsecured Revolving Unsecured Revolving Loan from KGI Unsecured Revolving Unsecured Revolving Loan from FirstUnsecured Revolving Subtotal

T

224 Financial Review

21% 45% 24% 10%

in the market over 654) 654) (4,025,373) December 31, December 9,284 9,284 13,225 95,360 95,360 94,362 51,495 51,495 41,284 48% 25% 25% As of 31, December of As As of 31, December of As For the years ended years ended the For 2020 2020 2019 2020 2020 2019 2020 2020 2019 (142,490) (142,490) (216,510) 1,399,345 1,399,345 1,385,696 (4,162, $1,399,345 $1,399,345 $1,385,696 nsolidated balance sheets is as follows: turn on assets is determined based on based determined turnis assets on on the assets’ returns on the assets’ inable from interest rates offered by local by interest rates offered inable from ce sheets ce sheets $(4,162,654) $(4,025,373)

$61 million and NT$55 million,respectively. and $61 million in interestin income Interest income on on plan assets income Interest income (loss): Return on plan assets, excluding amounts includedassets, excluding planReturn on recognized on the consolidated balan consolidated on the recognized Fair value of plan assets at end of year assets at end of of value plan Fair

Beginning balance of fair value of plan assets assets plan of value fair of balance Beginning or loss: as profit recognized Items $1,385,696 employer by Contribution paid Benefits $1,453,335 Remeasurements recognized in other comprehensive obligation benefit the defined value of Present assets of plan value Fair status Funded $(5,561,999) definedNet benefit liabilities, noncurrent $(5,411,069)

Others 11% Others 11% Cash 16% 16% Cash Equity instruments Debt instruments Debt instruments assets are as follows: follows: as are assets year: assets during the value plan in of fair Movements 31, December ended years the for Company the of assets plan on returns actual The 2020 and 2019 were NT of Bank by the a trust administered under is deposited pension fund Employee of re rate overall The expected Taiwan. period. obligation the the by determined is fund the of utilization the Furthermore, minimum the also guarantees which committee, supervisory fund pension labor atta the earnings less than be no to earnings deposits. time two-year for banks historical trend and actuaries’ expectations expectations actuaries’ and trend historical

iii. The defined benefit on the co plan benefit The defined recognized iii. total the plan of value the fair of assets as a percentage categories of plan The major iv.

total units will not units willtotal December 31, 31, December (36,254) (51,146) (70,461) 180,095 (13,090) (21,043) 142,490 216,510 For the years ended years ended the For 2020 2019 2019 2020 ed authorities and therefore ed authorities and therefore $(5,561,999) $(5,411,069) for employees of the Singapore branch branch the Singapore of employees for ed financial statements. statements. ed financial years the For individual employee’s salary or wage to to wage or salary employee’s individual the 15th year and the and year the 15th UMC and its domesticUMC subsidiaries make d NT$1,369 million are by the contributed d benefit obligation during obligation year: the benefit d

Service cost cost Service Interest cost Arising from changes in financial assumptions assumptions financial in changes from Arising adjustments Experience (173,615) (114,976) income (loss):

Subtotal (49,344)Subtotal (72,189) Defined benefit obligation at beginning of year of at beginning obligation benefit Defined loss: or profit as recognized Items $(5,411,069) $(5,620,509) Remeasurements recognized in othercomprehensive paid Benefits year at end of obligation benefit Defined Subtotal (244,076)Subtotal 65,119 assets is as follows: Movements in present value of define i.The employee pension plan mandated by the Labor Standards Act of the R.O.C. R.O.C. is a the Act of Standards the Labor by mandated plan pension employee i.The Act the R.O.C. of the Labor Pension is a defined under plan pension The employee plan, the to Pursuant plan. contribution on each 6% based of contributions monthly accounts. pension employees’ benefits Pension regulations. the local with in accordance are provided overseas subsidiaries and Total pension expenses NT$1,478 million of an respectively. and 2019, 2020 31, December the years ended for Company defined benefit plan. The pension benefitsare disbursed based onunits the ofservice Labor the to Standards prior salary according retirement to monthly average years and Act. unit one services while of the years 15 first for awarded are year per units Two of completion the awarded after per year is the of 2% to equivalent amount an contributes Company The units. 45 exceed deposited fund pension to the basis a monthly on wages and salaries total employees’ committee. supervisory of a fund the name pension under Taiwan the Bank of with designat is managed by the government’s The pension fund is not included in the Company’s consolidat the in Company’s not included is and million NT$40 of expenses pension total 2019, and 31, 2020 December ended by the Company. were recognized respectively, million, NT$59 ii. Movements in present value of defined benefit obligation and fair value of plan plan of value fair obligation and benefit defined of value in present Movements ii.

a. plan contribution Defined b. Defined benefit plan (15) Post-Employment Benefits 225 United Microelectronics Corporation | Annual Report 2020

71,530 71,530 (484,888) As of Decemberof 31, As As of Decemberof 31, As 578,844 617,685 617,685 578,844 207,109 $13,551,553 $13,551,553 207,109 2020 2020 2019 2020 2020 2019 6,370,898 9,770,974 9,770,974 6,370,898 (3,994,818) (3,994,818) (4,062,148) $3,836,211 $3,780,579 $3,780,579 $3,836,211 $1,252,451 $1,252,451 $2,078,075 $13,551,553 $13,551,553 $17,480,904 $10,207,109 $13,551,553 $13,551,553 $10,207,109 $10, ized to be issued as of December 31, December to be issued as of ized , which were traded on the NYSE as of on shares of treasury stock, which treasury were stock, which on shares of 636 million shares and 692 million shares to equipment acquisitions received by the the by received acquisitions to equipment

under liabilities) other current riod riod ares, and 11,724 million 2019,shares and 2020 whichof ares, sh were 12,422 and 11,724 million value of a par at each respectively, and 2019, 31, 2020 December issued as of NT$10. December 31, 2020 and 2019, respectively. and 2019, respectively. 31, 2020 December The total number common of of shares were all by ADSs issued represented UMC respectively. and 2019, 2020 31, December as of five common ADS represents One shares. repurchased during the period from May 13 to June 13, 2016 for the purpose of of the purpose for 13, 2016 June 13 to May the period from during repurchased June to 26 April from period the during repurchased and employees, to transferring rights its stockholders’ and credit UMC’s maintaining of purpose for the 2019 13, interests. and Other operating income income operating Other

i. i. author shares common million 26,000 had UMC ii. UMC had 127 million and 138 million ADSs 400 milli cancelled UMC 28, 2019, On June iii. liabilities Refund Total Total

Exchange effect effect Exchange Ending balance Ending Recorded profit in or loss: Beginning balance balance Beginning pe the during Arising Current Noncurrent Noncurrent Company are amortized as income over the useful lives of related equipment and recorded recorded and related equipment of lives useful the over as income are amortized Company expenses. and income operating in the net other The significant government grants related grants related government significant The

a. stock: Capital

(17) Refund (17) Refund Liabilities (classified

(18) Equity (16) Deferred Government Grants Deferred Government (16) 0.5% 0.5% 0.5% 329,681 348,862 387,002 423,810 decrease decrease decrease 3,910,413 0.5% 0.5% increase increase increase As of 31, December of As 2020 2019 2019 2020 0.29% 0.29% 0.67% 3.50% 3.50% 3.50% As of December 31, 2020 December of 31, As 2020 0.5% 0.5% 0.5% determined based on a method method on based that a determined decrease decrease decrease As of December 31, 2019 2019 31, December As of As of December 31, 2020 2020 31, December As of

Discount rate salary future increase of Rate Discount rate salary future increase of Rate 0.5% 0.5% 0.5% $226,798 $226,798 $- $(204,390) $195,078 $235,666 $(251,131) $(215,694) $205,388 increase increase

Year Year 2021 2021 $300,260 2022 2022 2023 2024 2025 Total Total $5,700,028 2026 and thereafter thereafter and 2026 definedbenefit obligation definedbenefit obligation

Discount rate rate Discount increase salary future Rate of Decrease (increase) in Decrease (increase) in

The sensitivity analyses above have been extrapolates the impact on the net defined benefit obligation as a result of reasonable as result reasonable of benefit obligation a on the net defined the impact extrapolates period. the reporting of the end at occurring in key assumptions changes

in NT$517 million of contribution fund pension to make expects The Company 2021. 9 both are obligation benefit defined the of durations weighted-average The 2019. 31, and 2020 December as of years v. v. are as follows: actuarial assumptions underlying The principal vi. vi. follows: as is payments benefit future Expected vii. Sensitivity analysis:

226 Financial Review additional paid-in additional it be entitled to voting it bsidiaries is treated as treasury stock. PITAL CORP., held shares of UMC’s held shares UMC’s of CORP., PITAL retained earnings, retained UMC’s stock. UMC’s closing price on The UMC shall distribute it according to the still remaining a balance, in addition to ributed preferentially as preferred shares preferred as shares preferentially ributed other stockholders except for subscription subscription for except stockholders other Directors according to the dividend policy policy dividend to the Directors according nge Law of the R.O.C., treasury stock held as of December 31, 2020 and 2019, did not did 2019, and 2020 31, December of as $47.15 and NT$16.45, respectively. respectively. NT$16.45, and $47.15

not be pledged, nor should shares of UNITED UNITED SILICON of INC. these shares shares in 1997, and and dividend policies: policies: dividend and reached UMC’s paid-in capital. paid-in reached UMC’s regulations. stock through acquiring were converted to UMC’s stock in 2000 as a result of the Company’s 5 in 1 merger. 5 in 1 merger. of the Company’s as a result 2000 in stock to UMC’s were converted VENTURE FORTUNE subsidiary, 2019, UMC’s and 31, 2020 As of December held 16 million shares of CORP., CAPITAL were and 2019, NT 31, 2020 December there is and if dividends year, for the current earnings, unappropriated previous year’s the of Board the by proposed plan distribution approval. for meeting the stockholders’ to and submitted rights or receiving dividends. receiving or rights su by held Stock by the parent company should as rights same the have subsidiaries These to new stock issuance and voting rights. voting and stockto new issuance capital-premiums and realized additional paid-in capital. capital. paid-in additional and realized capital-premiums of the number such, As held UMC that stock treasury of shares the limit. exceed treasury stock shall not exceed 10% of UMC’s issued stock, and the total purchase purchase total and the stock, issued UMC’s of shall not 10% exceed treasury stock the of sum exceed the not shall amount

shall be any, if earnings, year’s current Incorporation, Articles of to UMC’s According distributedin the following order:

i. of Payment taxes. ii. years. preceding up loss for Making has reserve legal accumulated when for except reserve, legal for 10% aside Setting iii. or other officials government by reserve special reversing or Appropriating iv. dist be may applicable, if v. remaining, The iv. UMC’s subsidiary, FORTUNE VENTURE CA FORTUNE subsidiary, UMC’s iv. iii. In compliance with Securities and Excha In compliance with iii. ii. According to the Securities and Exchange Law of the R.O.C., the total shares of of shares total R.O.C., the the of Law Exchange and Securities the to According ii. c. Retained earnings - - - - 2020 2020 2019 As of As of December 31, December 31, December e repurchase and vember 7, 2018 to January 4, 2019, 4, 2019, for January vemberto 7, 2018 d its stockholders’ rights and interests. interests. and rights stockholders’ its d The purpose for th on was completed. Please refer to Note

- 105,000 105,000 480,000 220,000480,000 700,000 280,000 220,000280,000 500,000 200,000 -200,000 200,000 2020 2020 Increase Decrease 2019 Increase Decrease As of As of January 1, January 1, January Purpose Purpose credit and and credit stockholders’ rights and interests employees employees employees

To maintain UMC’s maintain UMC’s To For transfer transfer to For transfer to For For the year ended December 31, 2020 2020 31, December the year ended For (In thousands of shares) of (In thousands shares) of (In thousands For the year ended December 31, 2019 2019 31, December the year ended For centralized securities exchange market. centralized changes in treasury stock during the years ended December 31, 2020 and 2019 were were 2019 and 31, 2020 December ended the years during stock in treasury changes as follows: 6(19) for the information of restricted stocks. restricted of the6(19) for information bonds into ordinary shares of UMC for the years ended December 31, 2020 and 2020 31, December the years ended UMC for of shares into bonds ordinary respectively. 2019, each. NT$10 of value par a with shares million 200 by approved was issuance The competent authoritythe theand registrati were repurchased during the period from No period from the during were repurchased credit an the purpose of maintaining UMC’s

i. the from its shares and repurchased program stock UMC carried out a treasury

v. Please refer to Note 6(13) for the Company’s conversion of unsecured convertible convertible unsecured of conversion v. the Company’s Note 6(13) for to refer Please of total a in employees its for stocks issuedUMC restricted 2020, 1, September On vi. which stock, treasury shares of 300 million UMC cancelled 2019, 11, On March iv. b. stock: Treasury

227 United Microelectronics Corporation | Annual Report 2020

- -

December 31, December For the years ended the years ended For (51,565) (51,565) (10,331) (10,331) 24,740 126,653 126,653 (15,213) 106,879 106,879 - 2020 2020 2019 (551,608) (551,608) $113,356 $113,356 $410,065 $410,065 $410,065 $466,768 2,092,340 2,092,340 3,512,617 (2,009,077) (2,009,077) (3,578,847) and stockholders’ meeting approval can can approval meeting stockholders’ and fulfilled, together fulfilled, with corresponding a porting date. Information relevant to the of UMC. UMC. of the cost for The compensation

consideration paid or received from acquiring or from paid received or consideration of the carrying amounts subsidiaries and disposing the subsidiaries Net loss (loss) income Other comprehensive

Adjusted balance as of January 1 January as of balance Adjusted non-controlling to interests:Attributable Disposal of subsidiaries of Disposal subsidiaries The differences between the fair value of the of value fair the between differences The Changes in subsidiaries’ ownership ownership subsidiaries’ in Changes Non-controlling interests Others Others Ending balance Ending shared-based payment was measured at fair value, having recognized in expense the the in expense recognized having value, at fair measured was payment shared-based and date grant at the shares the price of market quoted closing the between difference employees. from received cash the Company’s the of price market quoted closing The per share. NT$16.95 was date grant the on shares date of the on vested stocks the For for whereas granted, once cost compensation entire the recognized Company the grant, from years two or one with stocks of the end requisite the at service conditions to vest the vesting over cost the compensation recognizes the Company of grant, date the are the services conditions in which period In August 2018, the Company executed a compensation plan to offer 200 million shares shares 200 million plan to offer a compensation executed Company the 2018, In August employees qualified stock to treasury of the 2019, 31, 2020 and December ended years the For in equity. increase were respectively, million, NT$366 and million NT$107 of cost compensation Company. the by in expenses recognized directors’ and employees the on information for 6(21) Note to refer Please compensation. approved been yet not has earnings retained 2020unappropriated of appropriation The re as the of meeting the stockholder’s by Board of Directors’ meeting recommendations meeting Directors’ Board of TWSE. the of website the on System” Post Observation the “Market from obtained be

a. a. employees plan for stock Treasury d. Non-controlling interests:

(19) Share-Based Share-Based (19) Payment

, such as as such , uity shares due to the the to shares due (NT dollars) dollars) (NT Cash dividend per share share per Cash dividend tensive industry and continues to operate operate to continues and industry tensive 2021. 2021. are as of distribution The details UMC is required to appropriate a special special a appropriate to is UMC required e reversal of special reserve in accordance in accordance special reserve of e reversal justed to NT$0.80395653 per share. share. per NT$0.80395653 to justed The in outstanding commonoutstanding in and submit it to the stockholders’ meeting meeting it stockholders’ andto submit the may be released for earnings distribution or earnings for be released may ear-end. ear-end. is prohibited special reserve Such n of earnings for 2020 was approved by the the by approved was 2020 for earnings of n

42 9,765,155 $1.60 $0.75 of stockholders’ dividend shall be allocated as cash cash allocated as be shall dividend of stockholders’ 2020 2019 2019 2020 2020 2019 (in thousand NT dollars) dollars) NT thousand (in Appropriation of earnings earnings of Appropriation $3,197,890 $3,197,890 $963,947

Legal reserve Legal reserve reserve Special (2,857,666) (3,491,626) Cash dividends Cash dividends 19,875,8 share repurchase program and the conversion of convertible bonds into ordinary shares shares ordinary into bonds of convertible conversion the and program repurchase share UMC. of unrealized loss on financial instruments and debit balance of exchange differences on on differences exchange of balance debit and instruments financial loss on unrealized y at every operations, of foreign translation the special elements is reversed, the debit any of if However, distribution. from equal reversal to the in the amount reserve deficits. accumulated offsetting held meeting stockholders’ the by was approved 2019 for earnings of appropriation The appropriatio the while 2020, 10, June on 24, on February meeting Directors’ Board of follows: with the Rule No. 10902005780 subsequently issued by the Ministry of Economic Economic of by the Ministry issued subsequently 10902005780 No. Rule the with 2020. 3, R.O.C. March on Affairs, was meeting stockholders’ by approved appropriation 2019 aforementioned The 2020. 27, April on held meeting Directors of of Board the resolutions the with consistent ad 2019 was share per for dividend cash The adjustment was decreasenet the for made June on meeting stockholders’ the by approved 2019 for earnings of appropriation The parent and consolidated the in disclosed amounts the from is different 2020 10, of because 31, 2019 December ended for the year statements only financial company th for appropriated reserve legal additional the in capital a in business conducts UMC Because in its growth phase, the dividend policy of UMC shall be determined pursuant to factors to factors pursuant determined UMC shall be of policy dividend the its growth phase, in overseas and domestic its requirements, funding environment, as investment such the as well stockholders’ forecast, its expenditure and capital landscape competitive interest, balancing long-term dividends financial and UMC’s planning. The Board of plan the distribution propose shall Directors distribution The year. every 80%. to 0% of range the in dividend stock and 100%, to 20% of range the in dividend FSC, to According of Taiwan the regulations of to under debit elements the sum eq equal in the amount reserve

228 Financial Review

4.73% $47.15 0.14%~0.19% 1.67~3.67 years 1.67~3.67 33.71%~37.64% 2020, the liabilities for liabilities2020, for the of NT$80 million was was NT$80 million of December 31, December For the years ended years ended the For As of December 31, 2020 2020 31, December of As 2020 2020 2019 6,935,713 5,576,622 $176,820,914 $148,201,641 $169,885,201 $142,625,019 vesting conditions, the Company Company conditions,the vesting nce conditions set by the Company are to NT$81 million. The intrinsic value for for value intrinsic The million. NT$81 to t employees to qualified of the Company ppreciation right to employees represents a right to employees represents ppreciation choles Pricing Option Model and will be As of As of December 31, riod until settlement. settlement. until riod used assumptions The the compensation costthe

tion right are not entitled the same rights as those of one common share of UMC. of share one common is of four the plan The life ployees who fail fail the to fulfill ployees who

Wafer Others Total Expected volatility life Expected rate interest Risk-free Expected dividend yield yield dividend Expected Shareprice of measurement date (NT$/ share) per i. By Product 31, 2020, ended December the year For by the Company. recognized in expenses stock appreciation right recognized amounted amounted right recognized appreciation stock liabilities was nil.the vested rights of

26 million grant to plan compensation a executed Company the 2020, September In cash-settledrighof stockunits appreciation without consideration. consideration. without One of stock unit a right to the intrinsic value of UMC. stock holders of common at fair was measured payment share-based cash-settled the cost for compensation The value on the grant date by using Black-S pe each reporting end of at the remeasured as below: are years. years. grant, those employees of date years since the two of the end from Beginning performa and both service period fulfill who time and percentage certain at right appreciation stock the to vested eligible gradually frame. For those em will their rights withdraw without the period, consider ation. During the vesting apprecia stock holdersthe of

a. a. revenue of Disaggregation c. employees right for plan appreciation Stock (20) Operating Operating (20) Revenues eligible to the vested to vest at the end of one of one end the at vest to ent was measured at fair ed market price of the shares at the the at shares the of price market ed ed at fair value, having recognized in recognized having value, fair at ed ll recall and cancel their stocks without stocks without cancel their ll recall and a compensation plan in their meeting to in their meeting plan compensation a e restricted stock holders are entitled the the are entitled stock holders e restricted ce of the shares on the grant date, NT$21.8 NT$21.8 shares the grant date, ce of the on ee, transfer, grant, or dispose the restricted restricted the dispose or grant, transfer, ee, issued on the grant date for employees are are employees for date grant the on issued four years. years. four two of end the from Beginning oyees who fulfill both service period and and period both service oyees who fulfill gnized the entire compensation cost once once cost compensation entire the gnized oyees were issued without consideration on e compensation costof NT$504 million e compensation was time frame. For those employees who fail to who fail employees For those frame. time oyees of UMC without consideration. oyees of The million shares. Company The common is

expenses by the Company. expenses by the Company. the Company the are gradually with conditionswith service requisite equity-settled share-based paym

105 million to offer plan a compensation executed Company the 2020, In September Company. the of employees qualified to stock treasury of compensation shares The was measur payment the shared-based for cost expense the difference between the closing quot the closing between difference the expense employees. from received cash the and date grant of price market quoted closing The share. per was NT$21.45 grant date the on shares Company’s the stocks vested the For grant, the Companyon the date of reco stocks the for whereas granted, year from the date of grant, the Company recognizes the compensation cost over the the over cost compensation the recognizes Company the grant, of date the from year corresponding a with together are fulfilled, conditions services the which in period equity. in increase of cost compensation the 2020, 31, December ended year the For NT$348 million was recognized in approved 10, 2020, the stockholders June On issue restricted stocks to qualified empl shares to be issued are 233 maximum the custody under or in installments, tranche authorized in one to issue restricted stocks registration effective the date of receiving the trust from year within one institution, of effective for was authorized plan issuance The authority. competent the from 200 accordingly, and of the FSC Bureau and Futures by the Securities registration millionrestricted shares empl stock for of 1, 2020. September is the plan of life The grant, those empl of date the since years performance conditions set by and percentage certain at stocks restricted Company wi fulfill the vesting conditions, consideration. th vesting period, During the dividends, to receive the right including stock rights holders same those as of common set guarant pledge, to sell, restricted are but “Market the from obtained be can ways. information other any in Related stocks TWSE. of the website on the System” Post Observation the cost for The compensation value based on the closing quoted market pri market closing quoted on the based value share. per stocks restricted The unvested account equity contra transitional a as compensation employee unearned in recognized period. vesting the over expense compensation as amortized be shall account such and year For 31, the ended December 2020, th the Company. by in expenses recognized b. employees plan for Restricted stock

229 United Microelectronics Corporation | Annual Report 2020

The estimate of the As of December 31, of As As of December 31, of As nd NT$616 million, respectively, respectively, in million, nd NT$616 nce at the beginning ofbeginning as the theperiod at nce n and the consideration received from from received consideration the and n 7 million as of December 31, 2020 and and 31, 2020 December as of 7 million ed amounts of variable consideration that consideration of variable ed amounts partment of Justice (DOJ) against UMCagainst (DOJ) Justice partment of to unsatisfied performance obligations obligations performance unsatisfied to allowance was mainly resulted from the from mainly resulted was allowance sed in Note 9(6). 456,480 - 482,080 2020 2020 2019 2018 2020 2020 2019 2018 (367,381) (385,248) (393,974) te, the progress cannot be reliably estimated estimated reliably be cannot te, the progress igns with progress toward completion of a $257,841 $92,210 $214,243 $2,040,989 $932,371 $988,115 $2,497,469 $932,371 $1,470,195

satisfied for the years ended December 31, 2020 31, and 2020 December ended years the for satisfied Net Total Less: Loss allowance allowance Loss Less: Current Noncurrent

Sales of goods and services goods and services Sales of $625,222 $599,491 $486,184 services and goods of Sales $2,497,469 $1,470,195 $932,371

revenues from the contract liabilities contract the bala revenues from were obligations performance The loss allowance was assessed by the Company primarily at an amount equal to equal amount an at primarily Company the by assessed was allowance The loss losses. credit expected lifetime The loss agreement. development to the joint technology related to Note 9(6). refer Please the of difference timing the by caused mainly is liabilities contract of The movement obligatio performanceof a of satisfaction customers. a NT$706 million recognized The Company 2019. indictment filed by the United States De States by the United filed indictment i. Contract assets, current 2019, respectively. respectively. 2019, its satisfies Company as the revenue recognize will Company The that al time over obligations performance future. the in contract report da the As of disclo as suspension the to due primarily amounted to NT$2,759 million and NT$2,98 million to NT$2,759 amounted ii. Contract liabilities transaction price does not include any estimat include not does price transaction are constrained. b. Contract balances c. The Company’s transaction price allocated transaction The Company’s c.

- 1,144,607 - 2,328,878 $- $147,057,034 $- $148,201,641 $- $148,201,641 and and December 31, December Adjustment Adjustment Adjustment Adjustment Elimination Consolidated Elimination Elimination Consolidated Elimination For the years ended ended years the For 2020 2019 2019 2020 22,629,388 19,115,188 - - 1,144,607

New New For the year ended December 31, 2019 ended December 31, 2019 the year For For the year ended December the For 2020year 31, Business Business Subtotal Business Business Subtotal

1,144,607 1,144,607 2,328,878 2,328,878 - 2,328,878 Wafer Wafer Fabrication Fabrication Fabrication Fabrication $148,123,306 $148,123,306 $78,335 $148,201,641 $176,810,702 $176,810,702 $14,893 $176,825,595 $(4,681) $176,820,914 $174,481,824 $174,481,824 $14,893 $174,496,717 $176,810,702 $(4,681) $14,893 $176,825,595 $174,492,036 $(4,681) $176,820,914 $146,978,699 $78,335 $148,123,306 $147,057,034 $78,335 $148,201,641 time time time contracts with customers contracts with customers At a point in At a point Over time in At a point Over time Taiwan $65,003,509Taiwan $53,966,435 Japan 15,363,352Japan 24,546,963USA 6,416,235Europe 9,855,772 19,957,615 16,806,611Others $176,820,914Total 6,900,339 14,426,949 $148,201,641 Singapore 26,054,856Singapore Kong) Hong (includes China 23,979,343

recognition: of revenue timing The Total recognition: of revenue timing The Total

Revenue from from Revenue from Revenue The geographic breakdown of the Company’s operating revenues was based on the the on was based revenues operating the Company’s of breakdown The geographic customers. Company’s of the location

iii. By operating segments iii. ii. By geography

230 Financial Review

- - (84,974) (7,398) December 31, December 32,369 10,259 For the years ended the years ended For 198,860 198,860 200,351 2020 2020 2019 2020 2019 2019 2020 (261,933) (261,933) (335,760) $6,253,890 $6,253,890 $5,182,162 $5,179,643 $5,179,643 $5,366,907 $2,581,675 $1,132,952 are as follows: are as follows: king into consideration the Articles of ectors’ compensation in the profit or loss the profitor loss compensation in ectors’ stry averages. stry averages. Directors Board of the If while the distributions of employees and and of employees distributions the while compensation for 2019 were reported to the the to reported were 2019 for compensation tion through stock, the number of stock stock of number stock, the tion through oyee compensation by the closing divided price compensation oyee e Company will recognize the change as an e Company will recognize

of distribution distribution of ant and equipment and equipment ant 1,137,320 43,036 loss in the subsequent period. Property, plant and equipment equipment and plant Property, Goodwill Gain on disposal of property, pl disposal of Gain property, on Impairment loss Government grants Government property from income Rental Others Total Total

Employees’ compensation – Cash Cash – compensation Employees’ Directors’ compensation compensation Directors’ resolves to distribute employee compensa employee to distribute resolves distributed is calculated based on total empl on total is calculated based distributed 2020, 10, June on meeting stockholders’ the Board of Directors meeting through were 2020 approved for compensation directors’ 2021. 24, February on details The of the day before the Board of Directors meeting. meeting. Directors Board of the day before the of subsequently Directors the Board of If th modifies the estimates significantly, adjustment in the profit or directors’ and employees of distributions The the during reported 2019 for compensation directors’ and employees aforementioned The Directors of Board the of the resolutions with were consistent meeting stockholders’ 2020. 26, held February on meeting can be compensation directors’ and employees the aforementioned to relevant Information TWSE. the of website the on System” Post Observation “Market the from obtained dir and employees the recognizes Company The 2019. and 2020 31, December ended years the for earned when periods the during The by ta the amount estimates Directors of Board and indu regulations government Incorporation,

(22) Net OtherOperating Incomeand Expenses (22) 395,571 1,306,608 361,281 1,428,158 1,841,954 46,910,627 1,368,440 2,216,654 expenses Total Total expenses $7,712,792 $24,822,224 Operating costs Operating e Company recognized costs to fulfill 396,696 303,358 124,631 427,989 of UMC’s subsidiaries who subsidiaries specificfulfill who of UMC’s 1,514,6961,517,727 911,037 1,066,877 Directors attended by two-thirds of the total $29,779,476 $17,109,432 sation for each profitable fiscal year after after year fiscal profitable each for sation Total Total

45,895,958 45,068,673 2,744,383 848,214 For the ended December 31, years entioned employees and directors’ compensation compensation and directors’ entioned employees

121,858 121,858 452,848 452,848 sts sts a fulfill to to contract operating costs when the and NT$560 million, respectively. Subsequently, the Subsequently, and NT$560 million, respectively. expenses expenses fulfill a contract with customer with customer a contract fulfill Operating

895,732 1,848,651 274,838 costs 1,138,429 379,298 1,061,848 43,969,732 1,926,226 Operating $20,367,325 $9,412,151

t

benefit expenses insurance As of December 31,As of 2020 and 2019, th Company will co expense from related obligations are satisfied. engineering service contracts eligible for capitalization as other current assets which which assets current as other capitalization eligible for contracts service engineering amounted to NT$549 million

Pension Other employee Salaries Labor and health expenses expenses epreciation mortization mployee benefi 2019 2020

summarized are expenses amortization and depreciation benefit, employee Company’s The as follows: compensation directors’ and the employees Incorporation, of Articles UMC’s to According shall be distributed in the following order: no more and compensation as employees’ profit of 5% no less than allocate shall UMC compen as 0.2% directors’ than profit of losses. cumulative any offsetting will be compensation employees’ aforementioned The shares or cash. in distributed employees The compensation. Directorsbe granted such may of by the Board stipulated requirements in cash. compensation only receive may Directors adopted by by a resolution UMC may, of the a meeting votea majorityBoard of at the aforem distribute directors, of number such distribution. for meeting to the stockholders’ report and d. d. to costs from recognized Asset E D A Costs and Expenses Operating (21)

231 United Microelectronics Corporation | Annual Report 2020

Other net of tax income (loss), (loss), income comprehensive comprehensive

103 2,824,319 2,824,319 103 effect Income tax 60,221 69,686 9,465 Other 4,815,361 15,805 4,831,166 2,824,216 $(192,581) $38,516 $(154,065) (2,920,280) 34,708 (2,885,572) $4,586,937 $4,685,534 $98,597 before tax income (loss), income comprehensive - - $- 22,843 (2,919) $19,924

Forthe yearsended December 31, 2020 adjustments adjustments Reclassification Reclassification during the period 37,378 mprehensive Income mprehensive Income (Loss) 2,824,216 4,815,361 $(192,581) (2,917,361) $4,567,013 the period the Arising during Arising during (24) Components of Other Co (24) income (loss) of associates income (loss) which joint ventures and may be reclassified loss or profit to subsequently income (loss) of associates income (loss) and joint ventureswhich will be reclassifiednot loss or profit to subsequently from equity instruments instruments equity from at measured investments benefit pension plans translation of foreign foreign of translation operations fair value through other other through value fair income comprehensive Share of other comprehensive comprehensive other ofShare Share of other comprehensive comprehensive other ofShare Unrealized gains or losses gains Unrealized Remeasurements of defined Exchange differences on differences Exchange income (loss) (loss) income subsequently to profit or loss: or profit to subsequently subsequently to profit or loss: or profit to subsequently Total otherTotal comprehensive Items that may be reclassifiedthat may Items Items that be not will Items reclassified

- (25,762) For the years years the For December 31, December 69,015 63,828 For the years ended ended the years For (60,940) (16,293) 154,730 178,112 ended December 31, December ended 2020 2019 2019 2020 2020 2019 2019 2020 $377,193 $672,902 1,417,028 1,808,633 $2,011,403 $1,279,931

ial assets and liabilities and assets at ial Bonds payable payable Bonds Bank loans loans Bank Lease liabilities Others 55,467 274,168 fair value through profit or loss or loss profit through value fair Investments accounted for under the equity method equity the under for accounted Investments

Financial expenses expenses Financial $2,073,433Total $2,997,643 Interest expenses expenses Interest Others (1,962,137)Others $(11,674)Total 19,423 $1,257,299

Gain on valuation of financon valuation of Gain Impairment loss Loss on disposal of investments investments of on disposal Loss The Company recognized the losses for the charges brought by the U.S. Department of of the by Department U.S. brought charges the for losses the recognized Company The Justice regarding allegation of conspiracy to engage in theft of trade secrets. trade secrets. of in theft conspiracy of to engage allegation Justice regarding Please referto Note 9(6). b. costs Finance

a. and lossesgains Other and Expenses Income Non-Operating (23)

232 Financial Review

(1,033,780)

103 103 - December 31, December December 31,December (1,736) (327,359) 46,156 468,407 468,407 46,156 15,805 15,805 (136,979) For the years ended the years ended For For the years ended ended years the For 827,859 827,859 (243,981) $38,516 $38,516 $(21,281) 2020 2019 2020 2020 2019 2019 2020 (1,140,060) $1,259,721 $1,259,721 $622,394 profit loss: or subsequently to subsequently

ntures which which not will ntures ted to originationted and items that will not be not items that will losses from equity equity losses from reclassified subsequently to profit or loss or profit to subsequently reclassified $54,424 $(158,260) plans plans fair at measured investments instruments income comprehensive other through value associates and joint ve and joint associates to be reclassified subsequently or profit loss Remeasurements of defined benefit pension Unrealized gains or

Share of other comprehensive income (loss) of of (loss) income comprehensive other of Share Income tax related to tax Income Items that will not be reclassified be not will that Items derecognition of tax losses and unused tax losses and unused tax of derecognition credits prior periods prior periods reversal of temporary differences differences temporary of reversal reversal of write-down of deferred tax assets tax deferred of write-down reversal of

Deferred tax related to income recognition and Adjustment of prior year’s deferred income tax income deferred prior year’s of Adjustment write-down arising from tax income Deferred or (246,173) 121,189 Deferred income tax rela Deferred income Current income tax charge charge tax income Current tax of of current income respect in Adjustments Deferred income tax expense (benefit): (benefit): tax expense Deferred income Current income tax expense (benefit): (benefit): tax expense income Current

Income tax expense recorded in profit or loss recorded expense tax Income $745,767 $(393,130) Income tax expense (benefit) recorded in profit or loss profit in recorded (benefit) tax expense Income Income tax related to components of other comprehensive income (loss) (loss) income of other comprehensive components tax related to Income (i)

i. ii. 31, 2020 and 2019 were as follows: as follows: were and 2019 2020 31,

a. December ended the years for (benefit) tax expense income of components The major (25) Income (25) Income Tax

7,247 $85,122 Other 1,231,722 5,349,230 (3,264,536) $3,408,785 net of tax income (loss), (loss), income comprehensive comprehensive -

(8,101) 13,402 $(21,281) (136,979) effect $(152,959) Income tax 15,348 $106,403 Other 5,486,209 1,231,722 (3,277,938) $3,561,744 before tax income (loss), income comprehensive

- - $- 6,594 14,085 $20,679

Forthe yearsended December 31, 2019 adjustments adjustments Reclassification Reclassification during the period

8,754 $106,403 5,486,209 1,231,722 (3,292,023) $3,541,065 the period the Arising during Arising during translation of foreign foreign of translation operations benefit pension plans instruments equity from at measured investments of associates income (loss) and joint ventureswhich will be reclassifiednot loss or profit to subsequently of associates income (loss) which joint ventures and may be reclassified loss or profit to subsequently fair value through other other through value fair income comprehensive Remeasurements of defined or losses gains Unrealized comprehensive other ofShare comprehensive other ofShare Exchange differences on on differences Exchange subsequently to profit or loss: or profit to subsequently loss: or profit to subsequently (loss) income Items that not be will reclassified Items be reclassifiedthat may Items otherTotal comprehensive

233 United Microelectronics Corporation | Annual Report 2020

- - (69,484) (687) (687) (11,793) December 31, December 2,803 2,803 3,215 32,268 32,268 110,991 25,193 25,193 19,749 40,165 339,185 For the years ended ended years the For As of December 31, December of As 595,910 595,910 628,725 685,531 685,531 1,310,300 225,304 225,304 257,689 331,174 331,174 475,952 828,410 828,410 800,734 461,160 461,160 767,665 487,628 487,628 91,228 2 500,688) 500,688) $(1,778,820) 2020 2019 2019 2020 2020 2019 2019 2020 (156,000) (156,000) (550,772) (316,049) (321,459) (130,672) (130,672) (139,093) (599,389) (599,389) (568,683) (559,334) (559,334) (565,175) (191,687) (191,687) (102,608) $745,767 $745,767 $(393,130) 6,832,711 6,832,711 7,807,583 1,348,202 1,348,202 1,568,645 (1,511,065) (1,511,065) (477,043) (1,631,459) (2,087,366) $2,116,855 $2,116,855 $1,658,688 $5,201,252 $5,201,252 $5,720,217 $(2,

deferred income income deferred assets tax as liabilities are and follows: Depreciation Depreciation Loss carry-forward Pension Pension liabilitiesRefund Investment tax credits credits tax Investment Others Others Depreciation Depreciation option bond Convertible Unrealized exchange gain gain exchange Unrealized gain Investment assets Amortizable Others Allowance for inventory valuation valuation losses inventory for Allowance Investment loss Investment sales on intercompany profit Unrealized Tax exempt income income exempt Tax Investment gain gain Investment Dividend income Dividend Others subsidiaries expenses: Net deferred income tax income assets deferred Net

Deferred income tax assets Total deferred income tax liabil ities Total

Deferred income tax liabilities tax Deferred income Tax effect of non-taxable incomeTax and non-deductible Total deferred income tax assets income deferred Total Others Others or loss profit in recorded benefit tax Income Taxes withheld in other jurisdictions jurisdictions in other withheld Taxes Basic tax tax rates of different applicable to UMC and its Effect c. c. Significant components of

- (514) December 31, December December 31,December December 31, December 9,465 (8,101) $3,691 $(45) For the years ended the years ended For For the years ended ended years the For For the years ended ended years the For $34,708 $13,402 592,348 1,911,970 2020 2019 2019 2020 2020 2019 2019 2020 2020 2019 2019 2020 (505,537) (146,067) 5,585,236 1,147,128 (1,140,060) (1,033,780) $27,926,179 $5,735,637

rrent income tax of prior tax income of rrent ged directly to equity reclassified subsequently to profit orloss $44,173 $5,301 operations operations may which ventures joint and associates of or profit loss to subsequently be reclassified

Income tax relatedIncome to that items may be Exchange differences on translation of foreign foreign of translation on differences Exchange (loss) income other comprehensive of Share Items that may be reclassified subsequently to profitor loss: that Items may be reclassified arising from initial arising from the recognition of equity financial the compound of component instrument to profit be reclassified subsequently orlossnot

Defferred income tax charged directly to equity to equity directly charged tax income Defferred $3,691 $(559) Recognize (reversal) of temporary difference difference temporary of (reversal) Recognize instruments orlosseshedging Gains on will which

(ii) Deferred income tax char income Deferred

credits write-downs/reversals and different jurisdictional and different write-downs/reversals tax rates periods periods et changes in loss carry-forward and investment tax tax and investment carry-forward in loss changes et

Income before tax tax before Income income tax rate statutory At UMC’s cu of Adjustments in respect N Adjustment of deferred tax assets/liabilities for for tax assets/liabilities deferred Adjustment of iii. applicable tax rate was as follows: follows: was rate tax as applicable

b. before tax at UMC’s and income between expense (benefit) income tax A reconciliation

234 Financial Review

- NT$2,942 million and December 31, 31, December December 31, December $2.42 $2.42 $0.82 $2.35 $0.76 30,911 69,019 289,121 65,657 90,047 For the years ended ended years the For For the years ended ended the years For 303,630 1,295,729 2020 2020 2019 2020 2019 2019 2020 12,072,969 12,072,969 11,785,108 12,473,167 13,170,884 12,072,969 11,785,108 recognized to amounted recognized

d shares) shares) d basic earnings per share (thousand shares) (thousand per share basic earnings dilution (thousand shares) (thousand shares) dilution Unsecured convertible bonds bonds convertible Unsecured employees Restricted stocks for compensation Employees’ bonds convertible Unsecured basic earnings per share (thousan share per earnings basic et income attributable to the parent company company parent the to attributable income et $29,189,489 $9,707,614 Net income attributable to the parent company company parent the to attributable income Net of dilution Effect $29,189,489 $9,707,614 of dilution Effect (NTD) share-diluted per Earnings Income attributable to stockholders of the parent the of stockholders to attributable Income $29,258,508 $9,996,735

Weighted-average number of common stocks for for stocks common of number Weighted-average

Weighted-average number of stocks after common of number Weighted-average N shares for ordinary of number Weighted-average (NTD) share-basic per Earnings NT$2,881 million, respectively. NT$2,881 million, respectively. to amounted subsidiaries in investments with associated liabilities tax deferred million,respectively. million and NT$11,389 NT$11,463 deferred income tax assets have been assets deferred income tax i. unrecognized of differences temporary taxable the and 2019, 2020 31, December As of whichfor no differences temporary deductible 2019, and 31, of As h. 2020 December

a. Earnings share-basic per b. Earnings share-diluted per (26) Earnings Earnings (26) Per Share

93 - - 1,542,895 December 31, December 3,691 (559) 4,853 (73,213) 98,597 (152,959) For the years ended ended the years For As of 31, December of As other foreign jurisdictions, jurisdictions, other foreign thoritiesof the respective 2020 2019 2019 2020 2020 2019 2019 2020 2,674,422 9,588,002 5,720,217 4,422,309 $5,201,252 $5,720,217 $5,720,217 $4,422,216 $40,910,279 $38,708,327 e income tax returns of certain companies certain of e income tax returns an and other foreign jurisdictions.other foreign an and As of ificant accounting judgments, estimates and and estimates judgments, accounting ificant

be accepted by the tax au ss during the period period the during ss (626,106) (18,256) x exemption withx exemption for several periods respect to income horities through 2017,in while completed the examination through 2012. 2012. through examination the completed an is There 1~5 years years 1~5 years 6~10 (loss) (loss) Balance as of December 31 December as Balance of Adjusted balance as of January 1 1 January of as balance Adjusted

Total $43,584,701Total $48,296,329 Amounts recognized in equity equity in recognized Amounts adjustments Exchange Balance as of January 1 Balance as of January applications of retroactive Impact Acquisition from business combinations income comprehensive other in recognized Amounts period Expiry Amounts recognized in profitor lo

C and its subsidiaries in Taiwan have UM C and its tax returns of income subsidiaries 31, 2020, in Taiwan December aut the tax by been examined operations. of countries tax income deferred of and measurement recognition the For sign involved which tax income current and 5(5). to Note refer please assumptions, relevant tax authoritiestax relevant have within the Company may not uncertain tax position that the outcome of th outcome position that the tax uncertain derived from the expansion of operations. operations. of expansion the from derived on expired had exemption tax Theincome 31, 2020. December is as follows: recognized been have assets d. Movement of deferred tax e. The Company is subject to taxation in Taiw f. UMC was granted income ta g. g. tax income deferred no which for carry-forward loss tax of unused the information The

235 United Microelectronics Corporation | Annual Report 2020 2,572 2,303,988 2,303,988 (2,910,389) (2,910,389) $15,711,370 $15,711,370 $12,800,981 $12,800,981 that is currentlythat

e specialty and logic technologies to serve to serve technologies logic and specialty e a 300mm fab in Japan in Japan fab a 300mm

m growth projections. Company’s the USJC will increase the effective interest method. interest effective the

acquisition

Gains orGains losseshedging on instruments Total $18,017,930 $18,017,930 Total Consideration Transferred:Consideration $15,711,370 Cash before immediately Fair interest value of previously held e quity Cash flows analysis of acquisition: Consideration Cash Net cash acquired from the subsidiary subsidiary the from acquired cash Net acquisition from outflows cash Net Japanese and international customers. international and Japanese manufacturing 90nm, 65nm and 40nm products. products. and 40nm 65nm 90nm, manufacturing specialty The fab fits the Company’s long-tertechnology focus and scale of economies from benefit and synergies business provide share, foundry market while broadening comprehensiv the Company’s UNITED SEMICONDUCTOR JAPAN CO., LTD. (USJC) CO., LTD. UNITED JAPAN SEMICONDUCTOR FUJI between agreement venture a joint of option call the exercised Company The SEMICONDUCTORLIMITED (FSL) acquire to ownership84.1% interest inMIE LIMITEDFUJITSU SEMICONDUCTOR 54.4 billion on October (MIFS) 1, JPY for MIFS MIFS. in interest ownership of 15.9% held previously Company The 2019. upon as USJC was renamed and the Company of subsidiary a wholly-owned became is USJC acquisition. the of completion Note A: Other non-cash changes mainly consisted of discount amortization measured by by measured amortization discount of consisted mainly changes non-cash A: Other Note Note B: Note bonds. convertible the Company’s for to 6(13) Note refer Please C: Note a subsidiary. of acquisition the from impact Including D: Note other on financial details liabilities-noncurrent. to Note 9(5) more refer for Please

(28) Business Combinations

2020 2019 As of As of 6,031,025 18,690,384 December 31, December December 31, December

(Note B) Others Others Others (Note C) (Note A) (Note A)

5) 1,843 33,902,074 751) $51,069 $11,057,132 036) 282,501 5,576,864 Non-cash changes Non-cash changes Non-cash Foreign Foreign Foreign exchange exchange

- 281,219 371,964 20,746,624 875) -875) (6,388,157)

252,269 252,269 (2,021) (619,347) 296,694 3,876,991 3,876,991 (802,97 $(993,723) $(993,723) $(368,507) $273,628 $12,015,206 Cash Flows Cash Flows sing from Financing Activities Activities Financing from sing

296,694 (883) (59,819) - 235,992 665,793 2020 2019 As of As of 6,031,025 (10, (726,626) 6,006,457 (633,488) (78,432) 736,488 33,902,074 (972,888) 136,920 38,781,416 (13,702, - 33,066,106 20,093,441 30,826,215 41,378,182 (2,500,000) - (96,766) 38,781,416 20,410,355 - (698,127) 381,213 20,093,441 January 1, January 1, January $12,015,206 $(75, $(933,392) $13,103,808

Items Items Items

2019: 31, December the year ended For For the year ended December 31, 2020: 2020: 31, December the year ended For

(27) Reconciliation of Liabilities Ari

(current portion (current portion (current included) included) liabilities-noncurrent liabilities-noncurrent (current portion portion (current included) (current portion portion (current included) (current portion portion (current included) portion (current included)

Short-term loans Short-term loans Short-term Lease liabilities Lease liabilities Other financial financial Other Other financial financial Other Guarantee deposits deposits Guarantee Bonds payable payable Bonds deposits Guarantee Bonds payable payable Bonds Long-term loans Long-term loans Long-term Lease liabilities Lease liabilities

236 Financial Review 18 (194) (194) (194) (194) 4,061 4,061 $4,061 $4,061 51,565 51,565 (776,410) (776,410) $724,845 $724,845 $776,410 $776,410 $776,586 $776,586 of operating revenues and of ized its relevant assets and liabilities relevantassets at ized its lved for dissolution and liquidation by the the by liquidation and dissolution for lved 2019. 2019. place taken had combination the If

dation consideration. d related questions and answers issued, the Company has lost has lost Company issued, the answers and questions related d as other gains and losses in the consolidated statement of comprehensive comprehensive of statement consolidated in the losses and gains as other income. has received not liqui

Receivable from liquidation consideration (Note A) (Note consideration liquidation from Receivable deconsolidation the Less: Net assets of Add: Non-controlling interests Non-controlling Add: B) (Note on deconsolidation Gain Other comprehensive income from equity reclassified to profit or profit to reclassified equity from income comprehensive Other to derecognition due loss 776,604 776,604 Net assets of deconsolidation assets of deconsolidation Net Assets Assets Liabilities payables Other

Cash and cash equivalents equivalents cash Cash and assets current Others Note B: B: Note recognized was 2020 31, December ended year the for deconsolidation on Gain Consideration received and gain recognized from the deconsolidation: the deconsolidation: from recognized gain and received Consideration Derecognized assets and liab ilities consistedDerecognized assets and mainly of: Note A: NEXPOWER was deconsolidated when the control was lost. the control when A: NEXPOWER was deconsolidated company The Note NEXPOWER TECHNOLOGY CORP. (NEXPOWER) NEXPOWER, theUMC, subsidiary of was reso on same the control took the liquidator and 2020 11, on November meeting stockholder’s IFRS an 10 to According day. derecogn NEXPOWER therefore over and control b. the date when the control was lost. date when the control the a. Upon the acquisition, NT$4,277 million USJC contributed the Company, of operations tax continuing before from to million profit NT$305 31, December ended year the for respectively, at the beginning of the year, operating revenues from the continuing operations would have would have operations the continuing from revenues operating year, the of beginning the at the for operations continuing from tax before profit the and million NT$160,767 been December year the ended for respectively, million, NT$6,535 been have would Company 31, 2019.

(29) Deconsolidation Deconsolidation (29) of Subsidiaries 479,547 (479,547) 1,318,754 3,561,827 1,563,553 $(171,585) (1,962,119) (3,170,323) 11,497,618 $2,910,389 (18,189,515) $18,017,930 $18,189,515 Fair value acquisition date date acquisition recognized on the on the recognized assumed excess in was the bargain purchase gain. purchase the bargain nd the difference was recognized as bargain bargain as recognized was difference the nd acquired and liabilities

the acquisition dateresulting in

Others (189,231) Others (5,801,220) Assets equivalents cash and Cash Liabilities payable Accounts equipment on payables and payables Other Lease liabilities assetsTotal identifiable net Accounts receivable receivable Accounts 2,428,616 Inventories equipment and plant Property, assets Right-of-use assets Intangible assets tax Deferred 230,431 Others 23,990,735 Gain on bargain purchase: purchase: on bargain Gain transferred Consideration Less: Fair value of identifiable net assets identifiable Less: Fair value of purchase gain Bargain The fair value of the identifiable assets and liabilities of USJC as of the date of acquisition acquisition of date the of as USJC of liabilities and assets identifiable the of value fair The were: of the aggregate consideration transferred and the previously held ownership interest of ownership interest held previously the and transferred consideration aggregate the of 15.9% in USJC at the acquisition date,a purchase gain. The previously held ownership interest of 15.9% in USJC was previously income, comprehensive other through value at fair assets financial as for accounted non-current. a for consideration with value at the fair remeasured It was subsequently minority interest discount on and million NT$375 of disposal on loss a recognized Company the acquisition, the Upon was interest held previously ownership the losses on unrealized accumulated the ended year the for earnings retained to income comprehensive other from reclassified 31, 2019. December The the net valueoffair identifiable assets

237 United Microelectronics Corporation | Annual Report 2020

37,211 37,211 $25,000 $25,000 $32,923 $32,923 mutual agreement in in agreement mutual 36 48 Purchase price Purchase price $1,186 $1,186 $7,880 $1,222 $1,222 $7,928 For the year ended year ended the For For the year ended year ended the For December 31, 2020 2020 31, December December 31, 2019 December As of 31, December of As 2020 2019 2019 2020 ion period for domestic sales to related domestic ion period for

was determined through INC. underlying underlying underlying underlying

Transaction Transaction Transaction Transaction value through profit or loss, noncurrent RADIO LTD. LTD. RADIO MATERIALS MATERIALS TECHNOLOGY TECHNOLOGY WELLYSUN INC. WELLYSUN er other current liabilities) 500 of Stock 1,900 GEAR of Stock

of shares) shares) of of shares) shares) of (In thousands (In thousands (In thousands Trading Volume Volume Trading Associates Associates

Total Total $70,134 Associates 1,000 Stock of Associates ANALYSIS Total Total Associates Others

Significant asset transactions at fair assets of financial Acquisition

related above the parties to price sales The conditions. market to reference The collect parties were month-end 30~60 days, while the collection period for overseas sales was sales was overseas the collectionfor period days, while 30~60 were month-end parties days. 30~60 net liabilitiesRefund (classified und

b. $- (776,586) $(776,586) December 31, December For the years ended years ended the For As of 31, December of As 085,425 $1,532,339 2020 2019 2019 2020 2020 2019 2019 2020 Relationship Relationship Company the with Associate Associate Associate Associate Other related parties parties related Other Otherrelated parties Associate Associate Other related parties parties related Other The Company’s director Company’s The tween the Company and related parties during

om deconsolidation of the subsidiary: of subsidiary: the deconsolidation om Namerelatedof parties

Associates $2, Associates Others 26,856$2,112,281 Total $1,577,862 45,523 Associates $172,808Others 6,110$178,918 Total $278,702 11,243 $289,945

Cash received Net cash of subsidiary derecognized derecognized cash of subsidiary Net deconsolidation cash outflow from Net Analysis of net cash outflow arising fr arising of cash outflow Analysis net Operating revenues revenues Operating

Accounts receivable, net net receivable, Accounts

FARADAY TECHNOLOGY CORP. and its Subsidiaries and its Subsidiaries CORP. TECHNOLOGY FARADAY Associate HSUN CHIEH INVESTMENT CO., LTD. LTD. CO., INVESTMENT CHIEH HSUN MASK PHOTRONICSCORPORATION DNP UNITEDVISIONSEMICONDUCTOR CO., LTD. CORP. SEMICONDUCTOR UPI Otherrelated parties HSUN CHIEN CAPITAL CORP. CORP. HSUNCHIEN CAPITAL CORPORATION TRIKNIGHTCAPITAL CORP. TECHNOLOGY UNIMICRON SYSTEMS CORP. INTEGRATED SILICON CORPORATION UNISTARS Significant Related Party Transactions Transactions Related Party Significant Name and Relationship of Related Parties Parties Related of Relationship and Name c.

a. transactions Operating

(2) The following is a summarytransactions be a of The following is the financial reporting periods: periods: reporting the financial (1)

7. 7. TRANSACTIONS PARTY RELATED

238 Financial Review guarantee guarantee lease lease long-term loans long-term dormitory lease dormitory long-term loans long-term guarantee guarantee guarantee loans long-term long-term loans long-term loans long-term Customs duty duty Customs Collateral for Collateral for land land Collateral for Collateral for for Collateral Collateral for for Collateral Energy resources resources Energy for Collateral Collateral for for Collateral for Collateral Bank Bank performance

Bureau Bureau was pledged pledged was of pledge Purpose Party to which asset(s) to Party Secured Syndicated Loans from from Syndicated Secured Loans 6 and Bank China Development others China Development Bank and 6 6 and Bank China Development others Division, CPC Corporation, Taiwan Taiwan Corporation, CPC Division, from SyndicatedSecured Loans 6 and Bank China Development others and Bank International Commercial China Development Bank and 6 6 and Bank China Development others 6 and Bank China Development others

- Secured Syndicated from Loans - Secured Syndicated from Loans 19,510 Science Park Bureau 41,785 LiquefiedGas Business Natural the Company pledged as collateral: as pledged Company the 3,174 Carrying Amount Amount Carrying 18,215 41,785 As of December 31, 234,286 348,117 Science Park 281,663 $811,072 $811,035 Customs 1,000,000 1,000,000 Bank of China 5,310,769 5,381,590 and Bank Cooperative Taiwan 21,370,450 19,029,077 Mega Bank, Cooperative Taiwan

Items Items 2019 2020 The table following lists assets of 2019 and 2020 31, December of As (Time deposit) deposit) (Time equipment equipment fixtures equipment equipment (Time deposit) (Time (Time deposit) (Time (Time deposit) (Time (Time deposit) (Time Refundable Deposits Refundable 8. AS COLLATERAL PLEDGED ASSETS Refundable Deposits Refundable Deposits Refundable Transportation Transportation Refundable Deposits Refundable Furniture and and Furniture Refundable Deposits Refundable Buildings Machinery and Right-of-use assets Right-of-use assets 289,552Total $29,360,966 $26,923,234 292,120 from Secured Syndicated Loans 578 $720,000 $720,000 283 3,415 December 31, December December 31, December December 31, December Purchase price Purchase Purchase price Purchase 2,458 2,406 For the year ended ended year the For For the years ended the years ended For For the years ended ended the years For December 31, 2019 31, 2019 December For the years ended ended the years For As of December 31, 31, December of As 365,666 62,203 2020 2019 2019 2020 2020 2019 2020 2019 2019 2020 2020 2019 2019 2020 $435,251 $271,135 underlying underlying

Transaction Transaction

shares) shares) (In thousands of of (In thousands Trading Volume $1,811,827 $2,346,263 $532,810 $683,892 Associates Associates 72,000 Stock $335,425Associates $339,463 Others Others benefits employee Short-term benefits Post-employment Termination benefits benefits Termination 571 Others $804,229Total $339,737 Share-based payment payment Share-based

None. 2020: 31, December year ended the For assets intangible of Acquisition Others expenditure Mask expenditure mask of payables Other compensation personnel Key management

Acquisition of investments accounted for under the equity method the equity method under for accounted investments of Acquisition c. d.

239 United Microelectronics Corporation | Annual Report 2020 ct of New York. ct of New York. The and committing to sell and committing to Exchange Act of Exchange Act of 1934 and fees and requested the court the court and requested fees requesting the court to order the hers conspired to steal trade secrets of of secrets steal trade to hers conspired ll be dismissed. dismissed. be ll the recorded has UMC nst these charges. Currently the civil nst these charges. the United States any products containing containing products any States United the and to pay a fine of US$60 million. of pay a fine to and On e e a filed DOJ the complaint enjoining civil action with similar against UMC with cause ately cease to manufacture, sell, and import import and sell, manufacture, to cease ately District of California. claimedMICRON for the Southernfor Distri ng one current employee and two former ing its trade secrets in question. trade secrets ing its UMC has se. suspendedBesides, UMC has the joint ng, importing, selling,

es, was filed under Securities ities with JINHUA. With respect to the criminal ities JINHUA. With with s, trebles, relevant and damages ary injunction against the aforementioned two defendants, two defendants, the aforementioned against ary injunction on our motion otherwhile the actions aretwo on still trial. court appointed a lead plaintiff and approved lead plaintiff counsels on May 23, 2019. 2019. 23, counsels on May lead plaintiff and approved a lead plaintiff court appointed On and complaint amended plaintiffs’ of the service UMC received 2019, 27, September procedures. relevant the prepare to counsels appointed process mediation the Currently material expect not does trial. Company The under and now completed been has claim. this financial impactresulting from Rule 10b-5 in the United States District Court 10b-5 in the United States Rule On November 1, 2018, the Department of Justice of the United States (“DOJ”) unsealed an an unsealed (“DOJ”) States United the of Justice of Department the 2018, 1, November On CO., CIRCUIT LTD. INTEGRATED indictment UMC, against JINHUA FUJIAN (“JINHUA”), and three individuals, includi employees of UMC, alleging that UMC and ot subsequently was that technology develop to information that used and MICRON, transferred to JINHUA. th day, the same On civil a filed MICRON 5, 2017, On December District Court, the United States Northern entitlementthe actual damage to us order that enjoins UMC from to issue an answers agai to prepare counsels appointed hascomplaint been the by stayed court. with Fuzhou the actions infringement patent UMC three 12, filed 2018, January On and others, (XI’AN) Court against, MICRON among CO., LTD. Intermediate People’s (SHANGHAI)MICRON CO.,TRADING LTD., defendants to stop processimanufacturing, all destroy also and to in questions, patents infringing the deploying products the Intermediate Fuzhou the 2018, 3, On July and tools. related molds and inventories Court granted prelimin People’s immedi must that defendants two the holding UMC. of rights infringe the patent products that one of of withdrawal approved The court actions patent infringement the to exporting from defendants aforementioned from the defendants preventing and JINHUA or UMC by manufactured DRAM el anyone secrets to trade the transferring technology development activ proceedings, on October 22, 2020, UMC filed a sentencing memorandum with the court, thecourt, with memorandum a sentencing filed UMC 2020, 22, October on proceedings, toproposing plead guilty to a charge lesser losses. other non-operating in fine United Microelectronics v. Meyer styled class action putative a 14, 2019, On March several executiv Corporation and October 29, 2020, the court approved the above-mentioned sentencing memorandum memorandum sentencing above-mentioned the approved court the 2020, 29, October submitted by UMC. The suit wi parallel civil

(7) On June 12, 2020, an adverse an adverse 2020, June 12, On institutes to open performance institutes to open performance

acts for the expansion of its its of expansion the acts for in the misappropriation of trade secrets. of in the misappropriation investmentinterest totally plus cost es a financial liability a financial es forits commitment the seventh year (2022) following the last following year (2022) seventh the s. s. recognizes Company the Accordingly, October 2014 to participate in a 3-way government authority’s approval for the the approval for authority’s government RS 9, at the same time 9,RS derecognizing the 10 during the reporting period. period. reporting the 10 during end the At nd development fees not yet recognized was yetwas not recognized fees development nd osecutors Office indicted UMC based on the UMC based on the indicted osecutors Office for the purchase from the other investors of of investors the other from purchase the for and customs tax guarantee, amounting to NT$ to NT$ tax amounting guarantee, customs and employees UMC of misappropriated the trade

contract amount of approximately NT$ 3.7 billion. NT$ 3.7 billion. approximately of amount contract As of e is recognized in equity. e is recognized in equity. Court of Taichung in a suit alleged that UMC, two of its of two UMC, that alleged suit a in Taichung of Court to several construction contr to construction several the Company entrusted the financial

were NT$ 0.6 billion. NT$ 0.6 billion. were NT$ 1.0 billion. The Company entered in to amounted contracts construction these 31, 2020, December As of operations. approximatelyNT$ 1.1billion andthe was portioncontractsrecognized yet ofthe not NT$ 0.5 billion. approximately in resolved UMC Directors of Board of The and ELECTRONICFUJIAN Government & Municipal with XiamenPeople’s agreement foundry wafer 12’’ on will focus which a company to form GROUP INFORMATION services. The Company obtainedR.O.C. investment and invested RMB 8.3 billion in USCXM in instalments Januaryfrom 2015 to to the ability obtained the Company that theto agreement 2018, according September financial a recognized UMC agreement, the on based Furthermore, exercise control. liability in other liabilities-others noncurrent original their at USCXM in their investments from beginning 4.9 billion, RMB to amounting investor other the by made payment instalment non-controlling interests required as IFRS by recogniz Company the period, reporting each of IF with in to the other investors accordance financial liability and between ce the the non-controlling interests. differen Any non-controlling interests balanc R.O.C., of that alleging Act Secret Trade INC. (“MICRON”). secrets MICRON TECHNOLOGY, of December 31, 2020, the portion of royaltiesDecember 31, 2020, the portion of a Pr District Taichung 2017, the On August 31, guarantee, mainly related to the litigationsguarantee, 1.6 billion. of contracts development and agreements license patent several into entered Company The intellectual property for total a As of December 31, 2020, 31, December of As As of December 31, 2020, amounts available under unused letters of credit for importing importing for credit of letters unused under available amounts 2020, 31, December of As and equipment machinery ruling issued by the District the by issued ruling engaged employee former a and employees current claim. this resulting from impact financial material expect not does Company The UMC sentence. the appeal against to intends

(4) (5) (6) (3) (2) (1) 9. AND UNRECOGNIZED COMMITMENTS CONTRACT CONTINGENCIES SIGNIFICANT

240 Financial Review denominated in a denominated tes relates primarily ion and NT$2,200 million, venue or venue or expense is ign currency risk arising from purchases purchases risk arising from currency ign as net investments in net as foreign subsidiaries NT$1,009 million, respectively. When When million, respectively. NT$1,009 in foreign exchange ra exchange in foreign gnificant monetary items denominated in in denominated items monetary gnificant tary financial assets and liabilities is minor. tary financial assets liabilities and is minor. ematically in opposite directions givenematically for the possible change in foreign exchange rates exchange foreign in change possible the 84.1% in USJC on October 1, 2019. 2019. 1, October on USJC in 84.1% Please ses/increases by NT$473 million and NT$430 NT$430 and million NT$473 by ses/increases nge contracts to manage foreign currency risk risk currency foreign to manage nge contracts of cash a future flows instrument financial will rting period. period. rting strengthens/weakens NTD When

risk (suchas equity price risk).risk acts designated by the Company to hedge foreign currency currency foreign hedge to the Company by acts designated /decreases by NT$1,625 mill by /decreases ral hedges on the fore When JPY strengthens/weakens against USD by 10%, the profit for the years the years 10%, the profit for by USD against strengthens/weakens JPY When

on the Company’s profit is performed on si performed profit is Company’s the on of repo the end the of as currencies foreign 2019 and 31, 2020 December profit ended USD by the 10%, for the years against NT$1,336 milliondecreases/increases and by December ended the years for the profit by 10%, USD against RMB strengthens/weakens 31, 2020 and 2019 increases respectively. exchange rate risks associated with the purchase of additional shares of USJC in JPY, in JPY, USJC of additional shares with purchase of the rate risks associated exchange 2018. 31, December to prior expired billion, 23 JPY to amounting hedge flow cash The as was recognized million, NT$(3) to amounting of equity, other components in reserve of interest ownership the for consideration to Noterefer 6(28). of analysis sensitivity currency foreign The and the net effect of the risks related to mone to of related risks the effect net the and the of amount as the same are the contracts currency foreign of the amounts notional The exchange forward any out carry not does Company the principle, In items. hedged commitments. uncertain for contracts currency forward certain designates Company The risk exchange to foreign currency exposure its to hedge hedges as cash flow contracts t transactions. forecas probable highly certain with associated assessment, basis of the On value the and contracts exchange currency forward of value that the expects Company the theof hedged transactions will change syst rates. exchange foreign in changes relationships hedging in these ineffectiveness Hedge of movements value fair the impacting risk, credit the counterparties’ arises from mainly items. hedged and instruments hedging the emerged ineffectiveness of sources other No relationships. these hedging from Furthermore, the Company. by hedged they not are purposes, strategic are for contr exchange Certain forward or sales, and utilizes spot or forward excha or forward utilizes spot sales, and or to the Company’s operating activities operating (when re to the Company’s net Company’s the and currency) functional Company’s the from currency different investments in subsidiaries. foreign The Company natu applies or value fair the that risk the is risk Market risk, currency comprise risks prices. Market in market changes because of fluctuate and other price risk interest rate changes the risk of to exposure The Company’s risk currency Foreign ended December 31, 2020 and 2019 decrea 2019 and 31, 2020 December ended million, respectively. million, respectively.

(3) (3) risk Market

$-

ial activities, approval activities, ial

As of Decemberof 31, As 235,992 296,694 942,147 26,383,212 2020 2020 2019 2,310,961 2,600,733 5,576,864 6,031,025 11,057,132 12,015,206 20,746,624 20,093,441 14,386,131 2,353,066 18,690,38433,066,106 38,781,416 33,902,074 10,526,144 14,723,232 into significant financ ies. ies. and measures identifies, Company The ocedures. The Company complies with its with complies Company The ocedures.

h profit loss or h profit $16,042,721 $14,021,473 n included) included) n e through profit or loss $2,326 ed at amortized cost ed at amortized cost cost amortized at ed Refundable deposits deposits Refundable Other financial assets Other financial comprehensive income income comprehensive loans Short-term 31,188,794Payables 27,342,495 Long-term loans (current portion included) included) portion (current loans Long-term liabilities Lease liabilities Other financial Cash and cash equivalents (excludes cash on hand) hand) cash on (excludes equivalents Cash and cash 28, Receivables 94,042,271 95,486,403 Guarantee deposits (current portion included) included) portion (current deposits Guarantee portio (current payable Bonds Total $166,250,375Total $155,568,119 Financial Assets Financial Financial Liabilities Liabilities Financial Financial assets measur Financial assets at value throug fair Financial assets at value through otherfair liabilitiesFinancial measur Financial liabilities at fair valu

Total $120,564,222Total $138,462,351

risk and credit risk, market the are to manage objectives risk management Company’s The risk related liquidity to its operating activit manages the aforementioned risks based on policy and risk preference. preference. risk and on policy risks based the aforementioned manages for controls internal and procedures policies, appropriate established has Company The risk management. financial Before entering process by the Board of Directors and Audit Committee must be carried out based on on based out carried be must Committee Audit and Directors of Board the by process pr control and internal related protocols times. all at policies risk management financial

None. None. None. (1) instruments financial of Categories (2) Financial risk management objectivesand policies 10. DISASTER SIGNIFICANT LOSS 11. 11. EVENTS SUBSEQUENT SIGNIFICANT 12. OTHERS OTHERS 12. 241 United Microelectronics Corporation | Annual Report 2020

- - 34,200,279 - - 27,106,617 - - 31,008,010 - 19,422,001 - 21,400,751 - - (395,768) - 21,114,113 - 21,114,113 - 39,939,843 $- $(2,326) $- $11,240,785 $- $393,442 $- $- $12,211,621 mpany’s financial liabilities liabilities financial mpany’s - - 71,581 235,992 - - - 296,694 99,002 $- $- $- $-

years > 5 years Total years > 5 years Total 4 to 5 4 to 5 - - As of December 31, 2019 2019 31, of December As As of December 31, 2020 2020 31, of December As $- $- $- $- equivalents, bank loans, bonds and lease. lease. bonds and bank loans, equivalents,

years years 2 to 3 2 to 3 2 to 3 2 to 3 maturity profile of the Co - 17,120,418 4,280,333 - 12,668,287 8,445,826 793 163,618 $(2,326) 100,584 97,108 (395,768) $393,442 1 year 1 year year 1 Less than than Less Less than than Less $71,205,897 $32,938,287 $16,370,340 $3,425,798 $123,940,322 $66,725,301 $44,600,431 $31,414,738 $3,903,194 $146,643,664 liabilities liabilities liabilities liabilities deposits deposits deposits contracts contracts Bonds payable payable Bonds loans Long-term liabilities Lease 20,659,607Other financial 6,104,795 10,590,265 740,939 19,631,931 8,689,971 13,097,986 1,413,978 1,180,955 12,000 3,792,192 38,846,712 7,128,064 Lease liabilities Lease liabilities Other financial 695,790 1,280,476 1,102,021 3,354,217 Outflow 6,432,504 Payables Payables Guarantee payable Bonds 31,008,010 loans Long-term 2,374,587 25,885,932 8,484,393 5,889,382 8,563,021 2,424,965 Guarantee Inflow Short-term loansShort-term $11,240,785 exchange Forward settlement Gross loansShort-term Payables $12,211,621 26,907,755 198,862 financial liabilities financial liabilities financial liabilities liabilities on-derivative et on-derivative Total Total based on the contractual undiscounted payments and contractual maturity: maturity: contractual and payments undiscounted on the contractual based Total Total The Company’s objectives are to maintain a balance between continuity of funding and and of funding continuity a between maintain balance are to objectives The Company’s cash and the use of through flexibility the The table below summarizes N Derivative financial N N

(5) Liquidity ri management sk rm and long-term bank bank long-term and rm e change in in value change e fair asof institutions with good credit with good institutions credit financial institutions. The Company’s Company’s The institutions. financial creditworthythird parties. Wherethe ties are susceptible to market price risk less credit, it will request collateral from of counter-parties is limitedcounter-parties to of the carrying financial institutions by institutions financial limiting its counter omers who wish to trade on credit terms are are terms credit on trade to wish who omers rates would not affect the future cash flows. cash flows. the future not affect rates would ive income of listedive income of companies could In addition, notes and accounts receivable and 6(14) for the range of interest rates of the 6(14) the interest rates of for and range of e price of the aforementioned financial assets assets e aforementioned the price of financial mpanies could increase/decrease the Company’s Company’s the increase/decrease could mpanies the Company’s short-te Company’s the

nd NT$46 million, respectively. nd NT$46 million, respectively. st rate risk arising borrowing from at floating interest ic or international financial financial international or ic terest rates would affect the future cash flows but not the but the flows cash future affect would rates terest dings among various by NT$453 million and NT$ 671 million, respectively. by NT$453 million and NT$ 671 respectively. million, Equity price risk loans are floating, changes in in in changes floating, are loans value. fair 6(13) refer to Note 6(11), Please loans. bank and bonds Company’s rate in a reporting of aperiod 10 of basis interest points change dates, the reporting At to 2019 and 2020 31, December ended the years for profit the cause could million by NT$44 decrease/increase a Interest rate risk rates. All of the Company’s bonds have fixed interest rates and are measured at are measured and rates interest fixed have bonds Company’s the of rates. All cost. amortized interest in changes such, As of hand, as the interest rates the other On markets. equity of performance future about uncertainties from arising Company’s The a ssets at fair value through profit or loss financial as are classified and investments equity income. other comprehensive assets at value fair financial through on The sensitivity analysis for the eq uityth instrumentsbased is The Company is exposed to intere and unlistedsecuri equity listed The Company’s and approved with trades only Company The the reporting date. reporting the assets at financial the aforementioned in price of 5% the of change A fair value through profit or loss of listed co and NT$252 million by NT$263 2019 and 2020 31, December ended years the profit for million, respectively. 5% in th change of A comprehens other value through fair at years ended the for income comprehensive other Company’s the increase/decrease 31, 2020 and 2019 December Company trades with third parties which have them. all cust that policy It is the Company’s procedures. verification subject to credit to credit exposure the Company’s basis to decrease ongoing on an are monitored balances risk. risksThe Company mitigates the credit from only reputable domest to parties standing and spreading its hol default arising the creditto from risk exposure of these instruments. amount the top ten customers from receivable accounts 31, and 2019, of December 2020 As respectively. Company, of the receivable accounts the total of 44% and 62% represent insignificant. is receivable accounts other of risk concentration credit The (4) (4) risk management Credit

242 Financial Review

- 2,326 2,326 - on a recurring basis, basis, recurring a on any’s development, development, market any’s - 10,526,144 1,467,772 - 14,723,232 1,305,924 $- $722,794 $54,318 value basis:on a recurring As of December 31, 2019 2019 31, December of As As of December 31, 2020 2020 31, December of As st level input that is significant to fair the cash flow forecast, recent fund raising raising fund forecast, recent flow cash occurred between hierarchy the in levels occurred between the valuation techniques (income approach approach (income techniques valuation the - 2,326 the financial statements the financial through profit or loss and financial assets at assets at financial or loss and profit through

Level 1 1 Level 2 Level 3 Level Total Level 1 1 Level 2 Level 3 Level Total $668,476 5,546,320 393,8569,058,372 14,826,087 8,885,911 4,737,027 340,255 13,298,679 8,221,397 $1,049,334 $2,384 $1,216,634 $164,916 13,417,308 r comp companies, individual measured and recorded at fair

through profit or loss, current throughprofit loss, or noncurrent other through income, comprehensive noncurrent value through profit loss, or current throughprofit loss, or noncurrent other through income, comprehensive noncurrent through profit current loss, through or Financial assets at fair value Financial assets at fair value Financial assets at fair value fair at liabilities Financial Financial assets at fair value Financial assets at fair value Financial assets at fair value Financial liabilities: Financial assets: Financial assets: activities, valuation of valuationsimila of activities, fair value assets at financial of values Fair level 1 are into are categorized that income comprehensive other through value fair prices in active market markets. on quoted the based the If there is no active market, Company estimates the value fair by using of consideration in approach) market and indicators.other economic conditions and Assets and liabilities

in assets recognized liabilities are For and that have transfers whether determines Company the the lowe (based on categorization by re-assessing period. each reporting as a at the end of whole) value measurement a. a market participant’s a market participant’s t that is significant to the tothe thatt significant is paid to transfer to a in liability paid west level input that tothe west is significant 05, 2021 2020~February 11, December is measured or disclosed in the financial liability, assuming that market participants liability, on that the transaction to sell the asset orasset the sell to transaction the that on incipal market for the asset or liability, or in orthe asset liability, market for incipal sset takes into account uld use the asset in its highest and best use. best and its in highest asset the use uld measured using the assumptions that market that the assumptions using measured nominated in foreign currency. currency. in foreign nominated of details The rket must be accessible by the Company. the Company. by accessible be rket must

by UMC are summarized as follows: to the fair value measurement as a whole: whole: a as measurement value fair the to for which the lowest level inpu which the lowest for d be received to sell an asset asset or an sell to d received be Notional Amount Amount Notional Contract Period million million fair value measurement is directly or indirectly observable; observable; indirectly or directly is measurement value fair liabilities; fair value measurement is unobservable. is unobservable. value fair measurement Type Type Forward exchange contracts exchange Forward 82 Sell USD arising rate risk the exchange hedging contracts for UMC entered into forward exchange de the net monetary assets or liabilities from December 31, 2019 As of None. value isFair the that woul price forward exchange contracts into entered contracts exchange forward December 31, 2020 As of Level 3 — techniques Valuation an orderly transaction between market participants at the date. at participants measurement the market between transaction an orderly The fair is the presumpti based on value measurement either in the pr takesplace transfer the liability asset the liability. or for market advantageous most the in market, principal a of absence the ma advantageous the or most principal The asset an The liability a or fairof value is or participants would use when pricing the asset interest. best economic their in act a non-financial a of measurement value fair A ability to generate economic benefits by usin g the asset in its highest and best use or by wo that participantmarket another to it selling for and circumstances the in appropriate are that techniques valuation uses Company The relevant use of the value, fair maximizing to data are available measure sufficient which inputs. unobservable of the use minimizing and inputs observable liabilities and which fair value assets All for based on follows, as described the within value hierarchy, fair are categorized statements the lowest level input that is significant — 1 Level or assets identical markets for in active prices market (unadjusted) Quoted — 2 Level techniques which the lo for Valuation (6) (6) risk management currency Foreign (7) (7) instruments of financial value Fair

243 United Microelectronics Corporation | Annual Report 2020

inputs and fair value and inputs discount for lack of of the marketability fairaforementioned unlisted of values stocks could decrease/increase the profit (loss) Company’s for year ended December 31, by 2020 and NT$283 million million, NT$231 and respectively, decrease/increase the other Company’s comprehensive income (loss) for the year ended December 31, NT$106 by 2020 million. Sensitivity analysis of Level 3 fair value value fair 3 Level interrelationship between between interrelationship A change of 5% in the the in of 5% change A degree degree of lack of marketability, the thelower fair estimated is value determined. and fair value between inputs inputs between Interrelationship Interrelationship into and out of fair value hierarchy value fair outof and into and NT$(113) million for the years ended ended years the million for and NT$(113) value measurement in information Quantitative Quantitative 0%~50% 0%~50% greater The

As of December 31, 2020 31, December of As inputs Significant Significant lack of of lack marketability iscount for iscount unobservable unobservable D Approach Valuation Valuation technique Market Market equity equity stock securities securities Category of Category Unlisted The total profit (loss) of NT$721 million to the is attributable inprofit or lossincluded that were 2019, and 31, 2020 December quoted assets to without relating those financial or gains losses in unrealized change period.reporting the the end of pricesheld at market transfer the recognize to policy Company’s The the transfer. that caused circumstances in changes or event is based on the levels of fair inputs unobservable Significant hierarchy are as follows: as follows: are hierarchy

------190,712 (2,303,988) $3,419,200 $1,305,924 ------(8,532) stock Total Total stock stock Total stock Total $184,026 $175,494 Preferred Preferred ------other comprehensive income other comprehensive income 199,244 Financial assetsat fair value through Financial assetsat fair value through stock stock (2,303,988) $3,235,174 $1,130,430 Common Common - (7,131) 49,706 (80,171) (14,954) (53,300) 812,404 (329,846) $7,899,007 $8,275,715

vel 3 fair value hierarchy is as follows: is as value hierarchy follows: vel 3 fair - - - - - (1,903) - (428,188) $- et price with et price with for appropriatethe discounts lowest level input that is significant to the significant that is input level lowest 6,145 transfer of a financial asset, which are a are which a financial asset, of transfer the asset will be determined based on similar asset will the (3,099) 51,956 49,706 $104,708 bonds Total bondsTotal bonds Total bondsTotal

Convertible

Convertible

------(5,349) 167,197 161,848 - (227,223) (909,376) lue through profit or loss lue through profit or loss ------stock Funds Funds stock stock Funds Funds stock Preferred Preferred Financial assets at fair va fair at assets Financial va fair at assets Financial --- - (1,475) (328,371) (14,954) (53,300) (14,451) (33,800) (28,821) 159,476 396,890 204,082 (272,299) 273,047 (14,024) stock stock $3,077,691 $2,971,528 $1,849,788 $2,880,688 $3,279,294 $2,011,025

Common (308,041) (374,112)

Common -

characteristic of the asset, the fair value of of value the fair the asset, of characteristic but unrestricted quoted mark financial assets’ restrictions. the if values, fair measure To are assets the financial then observable, orindirectly is directly measurement value fair 3. Level as otherwise hierarchy, value fair the of 2 Level as classified were no significant there December and 2019, 31, the2020 years During ended measurements. value 2 fair Level and 1 Level between transfers Le in value measurement fair Reconciliation for or the sale on restrictions are there If

comprehensive income (loss) comprehensive income (loss) Exchange effect 2020of December As 31, $3,241,478 $3,279,003 (38,674) $2,314,016 (100,953) $216,330 $9,050,827 (56,943) $1,297,627 (4,259) $170,145 (200,829) $1,467,772 Return of capital (1,903) Transfer out of Level 3 (428,188) As of January 1, 2020 (loss) profit in Recognized $2,880,688 589,664 $3,279,294 $2,011,025 180,523 $104,708 $8,275,715 19,611 $1,130,430 39,648 $175,494 829,446 $1,305,924 As of January 1, 2019 (loss) in profit Recognized Recognized in other Acquisition Disposal Return of capital Transfer to Level 3 Transfer out of Level 3 Exchange effect 2019of December As 31, Recognized in other Disposal Acquisition Acquisition 547,932 294,251 340,323 303,456 1,485,962 244 Financial Review NTD amount Carrying Carrying (thousand) (thousand)

- 33,902,074 33,902,074 - $- $38,781,416 $- $38,781,416 Rate Rate Exchange Exchange Foreign Foreign Currency (thousand) - 33,902,074 reporting period using using period reporting NTD As of December 31, 31, December of As rrency. rrency. and assets financial The significant Fair value measurements during during measurements Fair value (thousand)

Rate Rate Exchange Exchange Fair value Level 1 Level 2 Level 3 33,902,074 $39,571,920 $21,347,047 $18,224,873 1,957 4.355 8,525 1,655 4.296 7,109 $711,855 28.43 $20,238,047 $638,729 30.03 $19,181,035 Currency (thousand) Items 2020 2019 portion included) included) portion included) portion (current payables Bonds loansLong-term (current December 31, 2019 of As onetary items onetary items SD:NTD SD:NTD SD:RMB SD:JPY items on-Monetary 182,252 SD:NTD 6.5249 195,035 5,178,866 103.52 143,991 5,544,168 SD:NTD 257,120 28.43 7,705,833 6.9762 173,135 4,093,667 241,111 5,217,806 109.55 SD:RMB 127,409 28.53 SD:JPY 6,878,910 3,826,103 30.03 763,407 220,514 6.5249 29,542 21,941,982 103.52 6,644,079 30.13 881,426 852,317 26,723,580 6.9762 36,183 1,106,693 109.55 MB:NTD MB:NTD C) (Note MB:NTD 4,710,181 4.405 20,748,348 4,623,788 4.346 20,094,983 inancial Assets inancial Liabilities Foreign Foreign The following information was summarized by the foreign currencies other than the than other currencies foreign by the summarized was information following The Company. the of currency functional translate to used were disclosed rates exchange The the foreign currencies the into functional cu follows: as are currencies foreign in denominated liabilities Significant financial assets and liabilities denominated in foreign currencies currencies foreign in denominated liabilities and assets financial Significant SGD:USD 87,190 0.7596 1,893,220 82,301 1,851,568 0.7454 SGD:USD 48,101 0.7559 1,033,694 66,197 1,474,822 0.7419 F M U R U U N U F M U R U U

(8) amount Carrying Carrying

- 33,066,106 $- $18,690,384 inputs and fair value and inputs discount for lack of of the marketability fairaforementioned unlisted of values stocks could decrease/increase the profit (loss) Company’s for the ended year December 31, by 2019 and NT$267 million million, NT$191 Other respectively. income comprehensive (loss) for the year ended December 31, NT$87 by 2019 million. Sensitivity analysis of interrelationship between between interrelationship A change of 5% in the the in of 5% change A degree degree of lack of marketability, the thelower fair estimated is value determined. and fair value between inputs inputs between Interrelationship Interrelationship servable inputs share price, including servable inputs reporting period using using period reporting financial instruments including cash and rates. is loans long-term of value The fair lue but for which fair value is disclosed: is value fair which butlue for Fair value measurements during during measurements value Fair information Quantitative Quantitative 0%~50% The greater

As of December 31, 2019 31, December of As inputs Significant Significant lack of of lack marketability iscount for iscount unobservable unobservable D Fair value Level 1 Level 2 Level 3 33,066,106 33,066,106 - 33,066,106 $18,861,597 $18,861,597 $18,861,597 $18,861,597 $- Approach Valuation Valuation technique Market Market Items equity equity portion included) included) portion portion included) portion stock securities securities Category of Category Unlisted The fair value of bonds payable is estimated by the market price or using a valuation a valuation byprice is using or estimated the payable market bonds of value The fair ob market-based uses model The model. volatility, credit spread and risk-free interest interest risk-free and spread credit volatility, current Company’s the on based model, cash flow discounted using determined rates ofincremental borrowing similar loans. short-term The fair the values Company’s of assets-current, other financial deposits, refundable receivables, equivalents, cash amount carrying their approximate deposits and guarantee payables loans, short-term due to their within one maturities year. December 31, 2020 of As Assets and liabilities not recorded at fair va (current payables Bonds loans (current Long-term

b.

245 United Microelectronics Corporation | Annual Report 2020 l stock for the year ended December 31, December the year ended l stock for e capital stock for the year ended December ended December year stock for the capital e (excluding subsidiaries, associates and joint joint and associates subsidiaries, (excluding the Company and its affiliates as requiredaffiliates its and Company the by ear ended December 31, 2020: Please refer to to refer Please 2020: 31, December ear ended ounts exceeding the lower of NT$100 million NT$100 million of the lower exceeding ounts ed of with accumulated amount exceeding the the exceeding amount accumulated with ed of

ina): Please refer to Attachment 10.

Attachment 7. Attachment the capita or 20 percent of million NT$100 million or 20 percent of the capital stock for the year ended December 31, 2020: Please Please 2020: 31, December ended year the for stock capital the of percent 20 or million Attachment 6.refer to stock y the for of capital the percent 20 or 8. Attachment to refer Please 2020: Please refer to Attachment 3. to Attachment refer Please venture): Please refer to Attachment 4. Attachment to refer Please venture): of th NT$300 percent of 20 or lower million 31, 2020: Please refer to Attachment 5. 9. Attachment to refer Please 2020: 31, December of as stock capital of percent 20 or (excludinginvestment in Mainland Ch Attachment 2. 2. Attachment

the R.O.C. Securities and Futures Bureau: refer to Please a. 31, 2020: December ended for the year to provided others Financing g. Related party transactions for purchases and sales amounts exceeding the lower of lower of the exceeding amounts sales and purchases transactions for party Related g. c. 31, 2020 December held as of Securities d. Individual securities acquired or dispos NT$300 of the lower exceeding with amount estate real individual of Acquisition e. f. million NT$300 of lower the exceeding amount with estate real individual of Disposal h. related am with from parties Receivables b. Endorsement/Guarantee provided to others for the year ended December 31, 2020: 31, 2020: December ended year for the to others provided Endorsement/Guarantee b. i. 2020 31, of December as of investees information and related locations Names, (1) arefollowing The disclosuresadditional for 13. ADDITIONAL DISCLOSURES 62,972,943 that it maintains liabilities-noncurrent. 16.83% 24.57% As of Decemberof 31, As 2020 2019 2019 2020 47,695,237 67,480,466 41,743,273 $1 (94,048,036) (95,492,477) 235,773,102 207,214,422 $283,468,339 $274,694,888 $1 r related parties, while maintaining any was unable to disclose foreign any was unable to disclose foreign nagementensure is to ns and functional currencies within the within currencies functional and ns s on other financial res its ability to operate continuously to continuously ability to operate res its total equity (including capital, additional capital, additional (including equity total vided by its total capital. capital. its total by vided is debt net The for the reporting reporting periods,for is to maintain a the components of equity and of equity components non-controlling ong consolidated entities for the years ended the Company adjust the the Company payment may dividend

any’s capital ma any’s y monitors its capital based on debt to capital ratio. ratio. capital to debt on based capital its y monitors The stockholders and the interests of interestsothe of and the stockholders amount before elimination. of realized and unrealized foreign exchange gain and loss. and gain exchange foreign unrealized and realized of were there Since transactio foreign of currency varieties subsidiaries of the Company, the Comp the Company, subsidiaries of significant impact. with currency foreign towards each (loss) gain exchange The foreign currency transactions mentioned above are expressed in terms of the of in terms are expressed above mentioned currency transactions The foreign Please refer to the consolidated statements of comprehensive income for the total total the for income comprehensive of statements consolidated the to refer Please Please refer toNote 9(5) detail refer more for Please ： ： ： et debt et debt

Total capital Total Total liabilities Total cash equivalents Cash and Less: N equity Total ratios capital to Debt A Note B Note Note C Note December 31, 2020 and 2019 are disclosed in Attachment 1. Attachment in disclosed are and 2019 31, 2020 December ratio is calculated as the Company’s net debt di ratio as is calculated the Company’s the optimal capital structure to reduce costs of capital. costs of reduce optimal structure the capital to structure, the capital adjust or maintain To redeem to assets dispose or shares new issue stockholders, to capital return stockholders, to liabilities. Similar to its peers, the Compan and cash sheets minus balance consolidated the on total liabilities the taking by derived cash equivalents. The total capital consists of paid-in capital, retained other earnings, plus net debt. interests) is unchanged which strategy, Company’s The cost. reasonable with capital raise to in order ratio reasonable as ratios capital to debt The were as 2019 follows: and December 31, 2020 of Comp of the objective primary The a strong credit rating and healthy capital ratios to support its business and maximize the the and maximize business to support its ratios capital healthy rating and credit strong a value. also ensu The Company stockholders’ provide returns to (9) (9) am transactions intercompany Significant (10) Capital management

246 Financial Review - - - 745,767 - 46,163,693 - 26,345,302 - 726,626 - - 2,009,031 - - (393,130) -118,134 - 47,172,881 47,172,881 - - 16,518,483 - 16,518,483 - 633,488 - 633,488 - 2,443,593 - 2,443,593 $- $176,820,914 $- $176,820,914 $- $148,201,641 $- $148,201,641 Elimination Elimination Consolidated Elimination Consolidated Adjustment and and Adjustment and Adjustment - 7,657,587 (989,635) 6,667,952 - 26,345,302 - 2,009,031 - 733,044 1,147,495 414,451 - 16,518,483 - 2,443,593 782 745,767

For the year ended December the For 2020year 31, ended December the For 2019year 31, - 4,681 4,681 (4,681) 33,160 84,974 118,134 712,676 13,950 726,626 614,845 18,643733,044 633,488 7,657,587 Wafer Wafer 6,156,681 (442,365) 5,714,316 6,128,767 414,451 2,443,593 46,111,203 52,490 46,163,693 27,109,258 1,060,78926,345,302 28,170,047 (989,635) 27,180,412 47,038,876 134,005 47,172,881 16,518,483 Fabrication Fabrication Business New Subtotal Fabrication Business New Subtotal $176,810,702 $10,212 $176,820,914 $148,123,306 $78,335 $148,201,641 as were 2019 and 2020 31, December ended years the for information segment Reportable follows: principal portion of the lease liability associates joint ventures and and equipment and of tax external customers external customers intersegments among external customers of tax and equipment and non-financial assets non-financial assets associates joint ventures and principal portion of the lease liability

Income tax expense (benefit) expense tax Income 744,985 Acquisition of intangible assets intangible of Acquisition for the Cash payments 2,009,031 Depreciation Share of profit or loss of Acquisition of property, plant property, of Acquisition Segment net income (loss), net net Segment income Operating revenues from from revenues Operating sales from revenues Operating from revenues Operating (loss), net net Segment income

Acquisition of property, plant property, of Acquisition Impairment loss of Depreciation Depreciation Share of profit or loss of (benefit) expense tax Income (414,104) 20,974 (393,130) Acquisition of intangible assets intangible of Acquisition for the Cash payments ities with discrete chipsacture of to plications, including including plications, ment income (loss), (loss), income ment ified customer base across industries, industries, across base ified customer based on business activ owth, large volume ap owth, large ting results and financial condition: Please and ting results ion segment is the manuf is the segment ion cs, computer, memory and others, while while others, and memory cs, computer, of ownership, invest of ownership, ns through third regions the investees with in n business. new and segment The operating by using our own proprietary processes and and processes own proprietary our by using ces. Company the 31, 2020, December As of December 31, 2020: Please refer to Attachment

transactions: Please refer to Note 12. 12. Note to refer Please transactions: Please refer to Attachment 11. to Attachment refer Please ice, payment terms, unrealized gain or loss, and other or and other loss, unrealized gain terms, payment ice, Mainland China carrying amount of investments, cumulated inward remittance of earnings and limits on limits on and earnings of inward cumulated remittance of investments, amount carrying investment in Mainland China: Mainland China, including pr on effects the with opera events significant 1, 2, 3, 9. 8 and Attachment to refer of investment, accumulated inflow and outflow of investments from Taiwan, net income net income Taiwan, from investments of and outflow inflow accumulated investment, of percentage (loss) of investee company, 12.

k. shareholders as of major of Information a. of method totalcapital, amount and products, name, businesses main company Investee j. derivative instruments and Financial b. or indirectly Directly transactio significant networking, telecommunications, internet, multimedia, PCs and graphics. graphics. and PCs internet, multimedia, telecommunications, networking, business New solar providing and manufacturing, developing, includes researching, primarily segment energy. financial information regularly reported through the Company’s internal reporting protocols protocols reporting internal the Company’s through reported regularly financial information into organized is The Company maker. decision operating chief Company’s to the servi and products its on based units business fabricatio wafer segments: following the had 4. Note in policies described accounting to the according prepared was information The fabricat wafer the of activity operating primary customers our of specifications design the divers a maintains Company The techniques. electroni consumer communication, including gr high for manufacturing on focus to continuing The Company determined its operating segments operating its determined Company The (1) (2) in Investment 14. INFORMATION SEGMENT OPERATING

247 United Microelectronics Corporation | Annual Report 2020 December 31, December For the years ended years ended the For 2020 2020 2019 $20,380,814 $20,380,814 $17,576,293

segment segment

Customer A from wafer fabrication fabrication wafer from A Customer

years ended for the revenues operating of 10% least at for customers accounting Individual follows: were 2019 as and 31, 2020 December (3) (3) customers Major

(Note) Consolidated (Note) Consolidated

Elimination Elimination Elimination Elimination As of Decemberof 31, As 2020 2019 2019 2020 Adjustment and Adjustment Adjustment and Adjustment 59,643,273 63,622,327 2020 December 31, December d equipment, right-of-use assets, intangible intangible assets, right-of-use equipment, d 4 $377,579,555 $(63,180) $377,516,375 As of December As 2019 31, As of

consisted of elimination entries for wafer fabrication fabrication wafer for entries elimination consisted of Wafer Wafer Fabrication Fabrication Business New Subtotal Fabrication Fabrication Business New Subtotal segment’s investments in new business segment that was accounted for under the the under for accounted was that segment business new in investments segment’s equity method. Total $147,488,884Total $164,659,880

Japan 11,591,851Japan 46,484USA 12,265,769 21,257Europe 1,126Others 70,498 24,383 3,309 Taiwan $64,563,752Taiwan $73,481,714

Singapore 11,621,141Singapore Kong) (includes Hong China 15,191,880 assets, prepayment for equipment and other noncurrent assets-others. assets-others. noncurrent and other equipment for assets, prepayment Non-current assets include property, plant an plant property, include assets Non-current Note: The adjustment primarily Note: Segment assets assets Segment liabilities Segment $377,504,731 $141,731,629 $74,82 $12,164 $141,743,793 $(520) $141,743,273 assets Segment liabilities Segment $369,189,983 $161,955,970 $924,149 $1,157,878 $370,114,132 $163,113,848 $(140,905) $73,233 $162,972,943 $370,187,365 (2) assets information non-current Geographic

248 Financial Review 0% 0% 0% 0% 0% 0% 0% 1% 0% 0% 0% 2% 3% 0% 1% 0% 0% 1% 1% 1% 1% 1% 32% 28% (Note 4) (Note 4) revenues or consolidated total assets revenues or consolidated total assets Percentage of consolidated operating Percentage of consolidated operating ------(Note 3) (Note 3) Net 60 days Net 60 days Net 30 days Net 60 days Net 60 days Net 30 days Net 60 days Collection periods Collection periods Transactions Transactions ) 31,334 33,242 21,138 51,150 24,831 33,069 Note 5 608,622 970,358 250,092 137,860 106,077456,860 Net 60 days 745,226152,012 Net 60 days 250,736 Net 60 days Net 60 days ( (Note 5) 5,937,706 3,933,9641,209,310 Net 60 days 5,388,172 1,220,419 1,183,180 1,395,094 $49,357,981 $47,736,335 Net 60 days Amount Amount Account Account Sales Accounts receivable Sales Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable 5 billion which was recognized as deferred revenue. 1 1 1 1 1 3 3 3 3 3 3 3 1 1 1 1 1 1 3 3 3 3 3 3 (Note 2) (Note 2) the Company the Company Relationship with Relationship with ch item's balance at period-end. Counterparty Counterparty UMC GROUP (USA) UMC GROUP (USA) UMC GROUP JAPAN UMC GROUP (USA) UMC GROUP (USA) UMC GROUP (USA) UMC GROUP (USA) UMC GROUP JAPAN UMC GROUP JAPAN : Related party Related party UNITED MICROELECTRONICS CORPORATIONUNITED MICROELECTRONICS CORPORATIONUNITED MICROELECTRONICS CORPORATIONUNITED MICROELECTRONICS CORPORATION UMC GROUP (USA) UMC GROUP (USA) UNITED MICROELECTRONICS CORPORATION UMC GROUP JAPAN UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UNITED SEMICONDUCTOR (XIAMEN) CO., LTD.HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UMC GROUP (USA) HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. UMC GROUP (USA) HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. UNITED SEMICONDUCTOR JAPAN CO., LTD. UNITED SEMICONDUCTOR JAPAN CO., LTD. UNITED MICROELECTRONICS CORPORATIONUNITED MICROELECTRONICS CORPORATIONUNITED MICROELECTRONICS CORPORATIONUNITED MICROELECTRONICS CORPORATION UMC GROUP (USA) UNITED MICROELECTRONICS CORPORATION UMC GROUP (USA) UMC GROUP JAPAN UNITED MICROELECTRONICS CORPORATION UMC GROUP JAPAN UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UNITED SEMICONDUCTOR (XIAMEN) CO., LTD.HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UMC GROUP (USA) HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. UMC GROUP (USA) HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. 0 0 0 0 0 1 1 2 2 2 3 3 0 0 0 0 0 0 1 1 2 2 2 2 No. No. (Note 1) (Note 1) For profit or loss items, cumulative balances are used as basis. Note 5: UMC authorized technology licenses to its subsidiary, UNITED SEMICONDUCTOR (XIAMEN) CO., LTD., in the amount of USD 0.3 Since it was a downstream transaction, the deferred revenue would be realized over time. ATTACHMENT 1 (Significant intercompany transactions between consolidated entities) (Amount in thousand; Currency denomination NTD or foreign currencies) For the year ended December 31, 2020 For the year ended December 31, 2019 Note 1: UMC and its subsidiaries are coded as follows: 1. UMC is coded "0". 2. The subsidiaries are coded consecutively beginning from "1" in the order presented table above. Note 2: Transactions are categorized as follows 1. The holding company to subsidiary. 2. Subsidiary to holding company. 3. Subsidiary to subsidiary. Note 3: The sales price to the above related parties was determined through mutual agreement in reference market conditions. Note 4: The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on ea

249 United Microelectronics Corporation | Annual Report 2020 (Note2) Limit of total financing amount $23,565,975 $94,263,898 (Note2) Limit of financing amount for individual counter-party Collateral Item Value $- None $- turnover financing Loss allowance Reason for $- Business counter-party (purchases from) Amount of sales to financing financing Nature of short-term The need for 2.56% $- 0.90013%- provided Interest rate Actual amount period. period Ending balance Maximum balance for the Yes $12,793,500 $10,519,100 Related Party Other account Financial statement receivables - related parties Counter-party UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. Lender MICROELECTRONICS CORPORATION 0 UNITED No. (Note 1) Note 1: The parent company and its subsidiaries are coded as follows: (i) The parent company is coded "0". (ii) The subsidiaries are coded consecutively beginning from "1" in the order presented table above. Note 2: Limit of financing amount for individual counter-party shall not exceed 10% the lender's net assets value as Limit of total financing amount shall not exceed 40% the Company’s net asset value. ATTACHMENT 2 (Financing provided to others for the year ended December 31, 2020) (Amount in thousand; Currency denomination NTD or foreign currencies) UNITED MICROELECTRONICS CORPORATION

250 Financial Review $10,017,788 $106,046,886 Limit of total Limit of total amount (Note 4) amount (Note 6) guarantee/endorsement guarantee/endorsement . 8.11% 30.98% SD 13 million SD 41 million. Percentage of accumulated Percentage of accumulated from the latest financial statement from the latest financial statement guarantee amount to net assets value guarantee amount to net assets value $- $- Amount of collateral Amount of collateral guarantee/endorsement guarantee/endorsement (Note 5) $10,350,164 provided provided Actual amount Actual amount (Note 5) Ending balance Ending balance the endorsement for short-term loans agreement amounted to CNY 900 million. for short-term loans agreement the endorsement for the period for the period loan from banks including China Development Bank in the amount up to USD 310 million. Maximum balance Maximum balance ue as of December 31, 2020. (SUZHOU) CO., LTD.'s net assets value as of December 31, 2020. the amount of endorsements/guarantees for any single entity are as follows: vided was NT$10.35 billion. Securities and Futures Bureau, receiving parties should be disclosed as one of the following:

5% of the Company's net worth, and aggregate amount 45% of the Company's net worth, and aggregate amount iling rules abovementioned shall not exceed the needed amounts arising from ment for loans agreement amounted to CNY 1.97 billion. $10,017,788 $8,361,765 $6,896,607 $4,564,118 152 million, on October 24, 2018, the board of directors resolved to increase endorsement for syndicated loan amounted U USD 29 million, of a sales contract for pre-construction homes pursuant to the Consumer Protection Act each other. SD 32 million. 26 million, on December 18, 2019, the board of directors resolved to decrease endorsement for syndicated loan amounted U 32 million and to increase $106,046,886 $19,122,525 $19,122,525 antor. mpany in the same industry or for joint builders purposes of undertaking a construction project. company in proportion to their shareholding percentages. or and the receiving party. Limit of Limit of (Note 6) (Note 3) guarantee/endorsement guarantee/endorsement amount for receiving party amount for receiving party rth of endorsor/guar (Note 2) (Note 2) Releationship Releationship 2 6 exceed 45% of net wo Receiving party Receiving party Company name Company name single entity shall not single entity UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. Endorsor/Guarantor Endorsor/Guarantor nts/guarantees for any amount of endorseme nts/guarantees for any CORPORATION (SUZHOU) CO., LTD. 0 UNITED MICROELECTRONICS 1 HEJIAN TECHNOLOGY No. No. (Note 1) (Note 1) Note 1: The parent company and its subsidiaries are coded as follows: 1. The parent company is coded "0". 2. The subsidiaries are coded consecutively beginning from "1" in the order presented table above. Note 2: According to the "Guidelines Governing Preparation of Financial Reports by Securities Issuers" issued R.O.C. 1. A company with which it does business. 2. A company in which the public directly and indirectly holds more than 50% of voting shares. 3. A company that directly and indirectly holds more than 50 % of the voting shares in public company. 4. A company in which the public holds, directly or indirectly, 90% more of voting shares. 5. A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another co 6. A company that all capital contributing shareholders make endorsements/ guarantees for their jointly invested 7. Companies in the same industry provide among themselves joint and several security for a performance guarantee Note 3: The amount of endorsements/guarantees shall not exceed 45% the net worth endorsor/guarantor; and ceilings on The 1. ATTACHMENT 3 (Endorsement/Guarantee provided to others for the year ended December 31, 2020) (Amount in thousand; Currency denomination NTD or foreign currencies) UNITED MICROELECTRONICS CORPORATION On July 24, 2019, the board of directors resolved to decrease endorsement for syndicated loan amounted USD On July 29, 2020, the board of directors resolved to decrease endorsement for syndicated loan amounted USD On October 29, 2020, the board of directors resolved to decrease endorsement for syndicated loan amounted U On December 16, 2020, the board of directors resolved to decrease endorsement for syndicated loan amounted to decrease the endorsement for short-term loans agreement amounted CNY 900 million and increase endorse Total endorsement amount is up to USD 371 million and CNY 1.97 billion. As of December 31, 2020, actual pro Note 6: Limit of total endorsed/guaranteed amount shall not exceed 45% HEJIAN TECHNOLOGY (SUZHOU) CO., LTD.'s net assets val The amount of endorsements/guarantees for any single entity shall not exceed 45% net worth HEJIAN TECHNOLOGY The aggregate amount of endorsements/guarantees that the Company as a whole is permitted to make shall not exceed 4 endorsements/guarantees for any single entity shall not exceed 45% of the Company's net worth. 2. The amount of endorsements/guarantees for a company which endorsor/guarantor does business with, except the ce business dealings which is the higher amount of total sales or purchase transactions between endorsor/guarant The aggregate amount of endorsements/guarantees that the Company as a whole is permitted to make shall not exceed endorsements/guarantees for any single entity shall not exceed 45% of the Company's net worth. Note 4: Limit of total guarantee/endorsement amount shall not exceed 45% UMC's net assets value as December 31, 2020. Note 5: On Feburary 22, 2017, the board of directors resolved to guarantee UNITED SEMICONDUCTOR (XIAMEN) CO., LTD.'s syndicated On March 7, 2018, the board of directors resolved to increase endorsement for syndicated loan amounted USD HEJIAN TECHNOLOGY (SUZHOU) CO., LTD.

251 United Microelectronics Corporation | Annual Report 2020 e one one collateral Shares as (thousand) 5,629 None - None 93,873 None 92,956 None 32,728 None 20,000 None 307,200 None 194,845 None 170,740 None 468,012 N 185,307 None 950,674 None 170,145 None 722,122 None 711,774 N 443,601 None $189,720 None 1,607,673 Non 1,44 6,068,053 None 2,039,645 None - None - None Fair value/ Net assets value 0 1.7 1.25 1.13 0.30 0.22 0.21 9.79 9.29 7.66 4.714.29 8.67 1.68 0.98 2.70 0.83 0.72 17.63 15.75 - None 12.67 19.02 - - None - Percentage of ownership (%) - - - - None 93,873 92,956 20,000 32,728 307,200 194,845 170,740 468,012 185,307 950,674 711,774 443,601 722,122 170,145 - December 31, 2020 $189,720 1,607,673 1,445,629 6,068,053 2,039,645 Carrying amount 0 57 586 938 - 324 - 1,208 1,600 2,675 9,883 - 6,692 5,627 - 1,166 1,184 18,000 17,51122,144 16,680 12,521 10,715 13,960 20,483 20,000 16,445 12,000 119,979 (thousand) bonds/ shares Units (thousand)/ Financial statement account Financial assets at fair value through profit or loss, current Financial assets at fair value through profit or loss, current Financial assets at fair value through profit or loss, current Financial assets at fair value through profit or loss, current Financial assets at fair value through profit or loss, current Financial assets at fair value through profit or loss, current Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent income, noncurrent income, noncurrent income, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent ------Associate Financial assets at fair value through other comprehensive Associate Financial assets at fair value through other comprehensive Relationship The Company's director Financial assets at fair value through other comprehensive Name of securities LIQUIDITY FUND Fund MILLERFUL NO.1 REAL ESTATE INVESTMENT TRUST Fund RED ARC GLOBAL INVESTMENTS (IRELAND) ICAV TERM Stock HUT 8 MINING CORP. Stock PIXART IMAGING, INC. Stock PHISON ELECTRONICS CORP. Stock KING YUAN ELECTRONICS CO., LTD. Stock PIXTECH, INC. StockStock UNITED FU SHEN CHEN TECHNOLOGY CORP. HOLTEK SEMICONDUCTOR INC. Stock OCTTASIA INVESTMENT HOLDING INC. Stock UNITED INDUSTRIAL GASES CO., LTD. Stock AMIC TECHNOLOGY CORP. Stock NOVATEK MICROELECTRONICS CORP. Stock ITE TECH. INC. Stock SUBTRON TECHNOLOGY CO., LTD. Stock UNIMICRON HOLDING LIMITED Stock EPISTAR CORP. Stock KING YUAN ELECTRONICS CO., LTD. Stock SILICON INTEGRATED SYSTEMS CORP. StockStock TOPOINT TECHNOLOGY CO., LTD. PROMOS TECHNOLOGIES INC. Type of securities Stock-Preferred stock MTIC HOLDINGS PTE. LTD. Stock-Preferred stock TONBU, INC. Stock-Preferred stock AETAS TECHNOLOGY INC. Stock-Preferred stock TA SHEE GOLF & COUNTRY CLUB ATTACHMENT 4 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) (Amount in thousand; Currency denomination NTD or foreign currencies) UNITED MICROELECTRONICS CORPORATION

252 Financial Review ne ne collateral Shares as (thousand) 400 None 1,616 None 6,621 None 9,625 None 55,571 None 29,325 None 1 54,237 None 13,644 None 50,139 None 38, $2,090 None 145,803 None 203,400 None 207,470 No 152,487 No 122,107 None 106,583 None 148,870 None - None - None 20,025 None 42,000 None 112,080 None 9,180 None - None - None Fair value/ Net assets value 9.12 7.29 6.67 8.18 7.507.43 5.32 6.93 68,355 None 4.98 3.72 4.74 3.71 4.53 3.453.16 4.12 3.11 4.20 - None 2.87 2.96 19.65 15.94 15.06 14.49 13.25 11.69 10.23 Percentage of ownership (%) 139 ,355 1,616 6,621 55,571 29,325 19,625 54,237 13,644 50, 38,400 $2,090 145,803 203,400 207,470 152,487 148,870 122,107 106,583 December 31, 2020 - Carrying amount 15 11 957 - 900 9,180 445 20,025 300 265 - - 1,514 1,800 - 8,428 3,750 2,500 1,800 1,500 42,000 6,609 - 3,150 68 3,000 6,374 4,600 2,400 112,080 1,114 4,416 1,200 10,719 10,059 (thousand) bonds/ shares Units (thousand)/ Financial statement account Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent 3,838 Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent ------Relationship Name of securities I SP Fund TRENDFORCE CAPITAL FUND SPC-TRENDFORCE Fund TRANSLINK CAPITAL PARTNERS IV, L.P. Stock DARCHUN VENTURE CORP. Stock SOLARGATE TECHNOLOGY CORP. Stock TRONC-E CO., LTD. StockStock CLIENTRON CORP. CENTERA PHOTONICS INC. Stock ADVANCE MATERIALS CORP. Stock EVERGLORY RESOURCE TECHNOLOGY CO., LTD. Stock MONTJADE ENGINEERING CO., LTD. StockStock WIN PRECISION TECHNOLOGY CO., LTD. RISELINK VENTURE CAPITAL CORP. Stock EXCELSIUS MEDICAL CO., LTD. Stock LICO TECHNOLOGY CORP. Stock NEW SMART TECHNOLOGY CO., LTD. Stock AMPAK TECHNOLOGY INC. Stock TAIWAN REDEYE BIOMEDIAL INC. Stock ACT GENOMICS HOLDINGS CO., LTD. Stock EMPASS TECHNOLOGY INC. Stock EXCELLENCE OPTOELECTRONICS INC. StockStock SOLID STATE SYSTEM CO., LTD. SUBTRON TECHNOLOGY CO., LTD. StockStock MERIDIGEN BIOTECH CO., LTD. TAIWAN AULISA MEDICAL DEVICES TECHNOLOGIES, INC. StockStock ANIMATION TECHNOLOGIES INC. TOPOINT TECHNOLOGY CO., LTD. Stock BRIGHT SHELAND INTERNATIONAL CO., LTD. Type of securities ATTACHMENT 4 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) (Amount in thousand; Currency denomination NTD or foreign currencies) FORTUNE VENTURE CAPITAL CORP.

253 United Microelectronics Corporation | Annual Report 2020 one collateral Shares as (thousand) 0 None 58 None 416 None ,715 None 8,70 3,476 None 6,357 None 78,412 None 77,034 None 15,518 None 73,008 None 27,594 None 49,822 None 32,125 None 56,291 None 49,326 None 10,750 None 47,451 None 149,433 None 114,811 None $373,856 N 30,063 None 26,190 None Fair value/ Net assets value 3 7,480 None 68 6,862 None 1.02 1.08 1.89 1.07 2.15 1.51 23,650 None 2.06 1.63 185,000 None 2.70 0.70 - None 0.46 39 2.07 0. 0.04 0.02 0.6 ------None Percentage of ownership (%) 0 3 - 58 416 ,008 8,700 3,476 6,357 78,412 77,034 73 15,518 39,715 32,125 27,594 56,291 49,326 49,822 47,451 10,750 - 149,43 114,811 December 31, 2020 $373,856 Carrying amount 1 - 2 21 60 888 30,063 615 694 550 23,65 627 514 6,862 200 250 311 455 379 100 1,500 26,190 4,000 1 85,000 9,930 - 6,741 1,300 1,000 7,480 2,250 1,449 2,400 23,909 (thousand) bonds/ shares Units (thousand)/ Financial statement account Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent 131 Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrentFinancial assets at fair value through profit or loss, noncurrent - Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent ------Relationship Name of securities . ) ENERGY CORP. Fund VERTEX V (C.I.) FUND L.P. Stock POWERTEC ELECTROCHEMICAL CORP.(formerly Stock CRYSTALWISE TECHNOLOGY INC. Stock WALTOP INTERNATIONAL CORP. Stock LINTES TECHNOLOGY CO., LTD. StockStock YUEN FOONG YU CONSUMER PRODUCTS CO., LTD. ACER E-ENABLING SERVICE BUSINESS INC. StockStock FORMOSA PHARMACEUTICALS, INC. M3 TECHNOLOGY INC. Stock CHITEC TECHNOLOGY CORP., LTD. Stock TAIWAN SEMICONDUCTOR CO., LTD. StockStock TAIWANJ PHARMACEUTICALS CO., LTD. Stock NORATECH PHARMACEUTICALS, INC. Stock TIGERAIR TAIWAN CO., LTD. SOLAR APPLIED MATERIALS TECHNOLOGY CORP. Stock FORTEMEDIA, INC. Type of securities Convertible bonds CHANG WAH ELECTROMATERIALS INC. Convertible bonds YEONG GUAN ENERGY TECHNOLOGY GROUP CO., LTD. Convertible bonds IBASE TECHNOLOGY INC. Convertible bonds PCHOME ONLINE INC. Convertible bonds TEAM GROUP INC. Stock-Preferred Stock BRAVOTEK CORP. Stock-Preferred Stock EJOULE INTERNATIONAL LIMITED Stock-Preferred Stock FLOADIA CORP. Stock-Preferred Stock CEREBREX, INC. Stock-Preferred Stock FORTEMEDIA, INC. Stock-Preferred Stock ACEPODIA, INC. Stock-Preferred Stock GEAR RADIO LTD. ATTACHMENT 4 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) (Amount in thousand; Currency denomination NTD or foreign currencies) FORTUNE VENTURE CAPITAL CORP

254 Financial Review ne collateral collateral Shares as Shares as (thousand) (thousand) 93 None 20 None ,902 None 9,4 59 80,320 None 56,692 None 27,500 None 10,210 None 24,400 None 46,537 None 46,250 None 46,250 None 181,859 None 575,505 None 758,112 None 326,200 None 103,610 No 164,944 None 497,869 None 148,152 None $24,308 None $149,997 None - None Fair value/ Fair value/ Net assets value Net assets value 5 7.00 0.13 4.91 4.62 3.27 3.20 1.86 4.24 0.86 0.77 0.64 0.64 2.67 0.46 - None 18.18 13.99 16.13 10.99 13.00 Percentage of Percentage of ownership (%) ownership (%) 93 ,308 - 9,420 59,902 80,320 56,692 27,500 10,210 24,400 46,537 46,250 0.2 46,250 0.41 575,505 181,859 758,112 326,20 0 103,610 164,944 497,869 148,152 $24 December 31, 2020 December 31, 2020 $149,997 - Carrying amount Carrying amount - 13 - 250 117 - 365 - - 6,433 1,200 5,435 1,000 3,183 1,422 1,978 1,000 6,470 - 1,000 1,000 - 10,500 16,079 150,500 (thousand) (thousand) bonds/ shares bonds/ shares Units (thousand)/ Units (thousand)/ Financial statement account Financial statement account Financial assets at fair value through profit or loss, current income, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent ------Relationship Relationship Parent company Financial assets at fair value through other comprehensive Name of securities Name of securities . . ENERGY CORP.) Fund EVERYI CAPITAL ASIA FUND, L.P. Fund EVERYI CAPITAL ASIA FUND II, L.P. Fund OAK HILL OPPORTUNITIES FUND, SEGREGATED PORTFOLIO Fund TRANSLINK CAPITAL PARTNERS III, L.P. Fund H&QAP GREATER CHINA GROWTH FUND, L.P. Stock SHIN-ETSU HANDOTAI TAIWAN CO., LTD. Stock UNITED MICROELECTRONICS CORP. Stock BEAUTY ESSENTIALS INTERNATIONAL LTD. Stock WINKING ENTERTAINMENT LTD. Stock EVERGLORY RESOURCE TECHNOLOGY CO., LTD. Stock ADVANCE MATERIALS CORP. Stock SUNDIA MEDITECH GROUP Stock WELLYSUN INC. Stock SIMPLO TECHNOLOGY CO., LTD. Stock EXCELLENCE OPTOELECTRONICS INC. Stock HANDA PHARMACEUTICALS, INC. Stock TXC CORP. Stock POWTEC ELECTROCHEMICAL CORP.(formerly POWERTEC Stock LINTES TECHNOLOGY CO., LTD. StockStock YUEN FOONG YU CONSUMER PRODUCTS CO., LTD. EVERGREEN STEEL CORP. Type of securities Type of securities Convertible bonds BRIGHT SHELAND INTERNATIONAL CO., LTD. Convertible bonds EJOULE INTERNATIONAL LTD. ATTACHMENT 4 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) (Amount in thousand; Currency denomination NTD or foreign currencies) FORTUNE VENTURE CAPITAL CORP TLC CAPITAL CO., LTD 255 United Microelectronics Corporation | Annual Report 2020 collateral collateral Shares as Shares as (thousand) (thousand) 190 None 335 None 739 None 4,069 None 2,636 None 9,613 None 6,986 None 4,100 None 59,101 None 15,420 None 64,589 None 99,966 None 28,430 None 85,892 None $ 286,997 None 224,149 None 106,617 None Fair value/ Fair value/ Net assets value Net assets value 8.87 USD 11,247 None - 14.33 USD 11.47 USD 15,686 None - - - - 9.76 USD 17,306 None 0.08 - - - - None Percentage of Percentage of - ownership (%) ownership (%) - 86 5.03 USD 190 - USD 335 - USD 739 9,613 2,636 4,069 - - - None 99,966 85,892 64,589 28,430 59,101 - 15,420 - $4,100 0.10 286,997 224,149 106,617 December 31, 2020 December 31, 2020 D Carrying amount Carrying amount SD 99 40 49 99 - - - None 770 279 717 667 672 - USD - USD 11,247 - USD 15,686 2,377 2,685 5,3328,519 - 2,000 7,035 USD 17,306 35,863 26,4 120 (thousand) (thousand) bonds/ shares bonds/ shares Units (thousand)/ Units (thousand)/ nt Financial statement account Financial statement account Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurre Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, current - U Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, current - US Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent 7 USD 6,9 Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent ------Associate Financial assets at fair value through profit or loss, noncurrent Relationship Relationship Name of securities Name of securities . Fund TRANSLINK CAPITAL PARTNERS III, L.P. Fund TRANSLINK CAPITAL PARTNERS IV, L.P. Stock ADVANCED ENERGY SOLUTION HOLDING CO., LTD. Stock VALUE VALVES CO., LTD. Stock OCTTASIA INVESTMENT HOLDING INC. Stock ALL-STARS SP IV LTD. Capital TRANSLINK MANAGEMENT III, L.L.C. Type of securities Type of securities Convertible bonds TECHCENTIAL INTERNATIONAL LTD. Convertible bonds CLOUDWORDS, INC. Convertible bonds CHANG WAH ELECTROMATERIALS INC. Convertible bonds CNEX LABS, INC. Stock-Preferred stock YOUJIA GROUP LTD. Stock-Preferred stock ALO7 LTD. Stock-Preferred stock ADWO MEDIA HOLDINGS LTD. Stock-Preferred stock TURNING POINT LASERS LTD. Stock-Preferred stock ARTERY TECHNOLOGY CORP. Stock-Preferred stock JSAB HOLDING LTD. Stock-Preferred stock IMO, INC. Stock-Preferred stock HIGHLANDER FINANCIAL GROUP CO., LTD. Stock-Preferred stock GAME VIDEO LTD. Stock-Preferred stock PLAYNITRIDE INC. Stock-Preferred stock EJOULE INTERNATIONAL LTD. Capital-Preferred stock GUANGXI CHIPBETTER MICROELECTRONICS INC. UMC CAPITAL CORP. ATTACHMENT 4 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) (Amount in thousand; Currency denomination NTD or foreign currencies) TLC CAPITAL CO., LTD

256 Financial Review collateral Shares as (thousand) 77 None 519 None 562 None 978 None 166 None 200 None 1,664 None 3,924 None 3,940 None 9,053 None 5,949 None 3,538 None 7,243 None 3,329 None 6,131 None 1,400 None 8,623 None 2,266 None 1,006 None Fair value/ Net assets value - USD - USD Percentage of ownership (%) 06 - USD 5,006 None 77 0.46 USD 19 3.82 USD 5 562 1.38 USD 978 - USD 166 - USD 200 - USD - - - None 3,924 1.76 USD - - - None December 31, 2020 D Carrying amount SD 3,538 - USD SD 7,243 - USD USD 3,940 1.69 USD 4 USD 0 USD 5,949 - USD 6 USD 1,400 - USD 1 USD 8,623 - USD 80 USD 980 - - - None ,075 USD 6,131 - USD 174 USD - USD 1,664 4.53 USD 6,555 9,461 USD 5,0 2,7701,287 USD 2,266 3,352 USD 1,006 64 USD 3,329 - USD 175 USD 2,644 USD 9,053 - USD 3,500 USD 9,222 - USD 9,222 None (thousand) bonds/ shares Units (thousand)/ Financial statement account Financial assets at fair value through profit or loss, noncurrent - USD Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent - USD Financial assets at fair value through profit or loss, noncurrent - Financial assets at fair value through profit or loss, noncurrent - US Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent 3,92 Financial assets at fair value through profit or loss, noncurrent 1,349Financial assets at fair value through profit or loss, noncurrent U 8,520 U Financial assets at fair value through profit or loss, noncurrent 61 Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent 30 Financial assets at fair value through profit or loss, noncurrent 3,86 Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent 12,24 Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent 4, Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent ------Relationship Name of securities Fund GROVE VENTURES II, L.P. Fund TRANSLINK CAPITAL PARTNERS II, L.P. Fund SIERRA VENTURES XI, L.P. Fund STORM VENTURES FUND V, L.P. Fund SIERRA VENTURES XII, L.P. Stock ACHIEVE MADE INTERNATIONAL LTD. Type of securities Stock-Preferred stock ACHIEVE MADE INTERNATIONAL LTD. Stock-Preferred stock CNEX LABS, INC. Stock-Preferred stock GLYMPSE, INC. Stock-Preferred stock ATSCALE, INC. Stock-Preferred stock SENSIFREE LTD. Stock-Preferred stock APPIER HOLDINGS, INC. Stock-Preferred stock DCARD HOLDINGS LTD. Stock-Preferred stock NEXTINPUT, INC. Stock-Preferred stock GCT SEMICONDUCTOR, INC. Stock-Preferred stock NEXENTA SYSTEMS, INC. Stock-Preferred stock NEVO ENERGY, INC. Stock-Preferred stock FORTEMEDIA, INC. Stock-Preferred stock SIFOTONICS TECHNOLOGIES CO., LTD. Stock-Preferred stock CLOUDWORDS, INC. Stock-Preferred stock EAST VISION TECHNOLOGY LTD. Stock-Preferred stock RENIAC, INC. Stock-Preferred stock BLUESPACE.AI, INC. Stock-Preferred stock REED SEMICONDUCTOR CORP. ATTACHMENT 4 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) (Amount in thousand; Currency denomination NTD or foreign currencies) UMC CAPITAL CORP.

257 United Microelectronics Corporation | Annual Report 2020 ne ne collateral collateral collateral collateral Shares as Shares as Shares as Shares as (thousand) (thousand) (thousand) (thousand) 3,414 None 1,808 None $5,407 No $100,364 None Fair value/ Fair value/ Fair value/ Fair value/ Net assets value Net assets value Net assets value Net assets value 1.18 5.00 39,320 None 11.13 - USD Percentage of Percentage of Percentage of Percentage of ownership (%) ownership (%) ownership (%) ownership (%) $5,407 December 31, 2020 December 31, 2020 December 31, 2020 December 31, 2020 $100,364 Carrying amount Carrying amount Carrying amount Carrying amount SD 1,808 - USD - RMB 29,949 9.71 RMB 29,949 No - - 39,320 4 USD 3,414 375 (thousand) (thousand) (thousand) (thousand) bonds/ shares bonds/ shares bonds/ shares bonds/ shares Units (thousand)/ Units (thousand)/ Units (thousand)/ Units (thousand)/ Financial statement account Financial statement account Financial statement account Financial statement account Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent - U Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent ------Relationship Relationship Relationship Relationship . Name of securities Name of securities Name of securities Name of securities . Fund SPARKLABS GLOBAL VENTURES FUND I, L.P. Fund LANHOR FUND Fund SPARKLABS KOREA FUND II, L.P. Stock TIAN TAI PHOTOELECTRICITY CO., LTD. Type of securities Type of securities Type of securities Type of securities Convertible bonds GLYMPSE, INC. Stock-Preferred stock A.A.A TARANIS VISUAL LTD. SINO PARAGON LIMITED ATTACHMENT 4 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) (Amount in thousand; Currency denomination NTD or foreign currencies) UMC CAPITAL CORP. TERA ENERGY DEVELOPMENT CO., LTD UNITED SEMICONDUCTOR (XIAMEN) CO., LTD

258 Financial Review Amount Ending balance (thousand) bonds/shares Units (thousand)/ Gain (Loss) from disposal Cost Disposal Amount (thousand) bonds/shares Units (thousand)/ Amount Addition (thousand) bonds/shares Units (thousand)/ Amount Beginning balance percent of the capital stock for year ended December 31, 2020) (thousand) bonds/shares Units (thousand)/ Relationship Counter-party None Type of securities Name of the securities Financial statement account (Amount in thousand; Currency denomination NTD or foreign currencies) ATTACHMENT 5 (Individual securities acquired or disposed of with accumulated amount exceeding the lower NT$300 million 20

259 United Microelectronics Corporation | Annual Report 2020 Other commitments utilization and status of Date of acquisition Price reference amount Transaction Date of transaction tal stock for the year ended December 31, 2020) former holder and acquirer of property Relationship between Where counter-party is a related party, details of prior transactions of property Former holder p Relationshi y Counter-part amount Payment status Transaction date Transaction None Name of properties (Amount in thousand; Currency denomination NTD or foreign currencies) ATTACHMENT 6 (Acquisition of individual real estate with amount exceeding the lower NT$300 million or 20 percent capi 260 Financial Review None Other commitments Price reference The valuation report Reason of disposal and reduce the fixed costs. None In order to improve the company's operations Relationship Counter-party LIMITED Gain (Loss) from disposal collection stock for the year ended December 31, 2020) Status of proceeds amount Transaction amount Carrying Date of original acquisition date Transaction June 16, 2020 February 1, 2008~June 2017 $601,042 $1,766,666 Received $1,081,497 GENERAL INTERFACE SOLUTION Names of properties ATTACHMENT 7 (Disposal of individual real estate with amount exceeding the lower NT$300 million or 20 percent capital Construction plant and its facility equipment (Amount in thousand; Currency denomination NTD or foreign currencies) NEXPOWER TECHNOLOGY CORP.

261 United Microelectronics Corporation | Annual Report 2020 Note Note Note Note Note Note - - 1% 0% 0% 7% 4% 1% 1% 0% 2% - 27 % 88 % 12 % 16 % Percentage of total Percentage of total Percentage of total Percentage of total Percentage of total Percentage of total receivables (payable) receivables (payable) receivables (payable) receivables (payable) receivables (payable) receivables (payable) - - $5,388,172 - - Balance Balance Balance Balance 1,663,728 Balance Balance 116,415 190,038 24,831 16,072 57,427 8,815 1,164 7,593 5,335 109 Notes and accounts receivable (payable) Notes and accounts receivable (payable) Notes and accounts receivable (payable) Notes and accounts receivable (payable) Notes and accounts receivable (payable) Notes and accounts receivable (payable) Term Term Term transaction transaction transaction transaction transaction transaction N/AN/A N/A N/A N/AN/AN/A N/A N/A USD N/A USD USD N/A N/A N/AN/AN/A N/A N/A RMB N/A RMB N/AN/A N/A N/A RMB RMB N/A N/A N/A N/A USD N/A N/A N/A N/A JPY Unit price Unit price Unit price Term Unit price Unit price Term Unit price Term Details of non-arm's length Details of non-arm's length Details of non-arm's length Details of non-arm's length Details of non-arm's length Details of non-arm's length Term Term Term Term Term Term 1 %1 % Month-end 60 days1 % Net 60 days N/A Net 30 days N/A 3 %2 %0 % Net 60 days Net 60 days Net 60 days 9 % Net 60 days 5 %1 %1 % Net 45 days Net 60 days Net 60 days 7 %1 % Net 60 days Net 60 days 9 % Net 60 days 36 % Net 60 days 95 % Net 60 days 91 % Net 60 days purchases (sales) purchases (sales) purchases (sales) purchases (sales) purchases (sales) purchases (sales) Percentage of total Percentage of total Percentage of total Percentage of total Percentage of total Percentage of total Transactions Transactions Transactions Transactions Transactions Transactions f capital stock for the year ended December 31, 2020) $49,357,981 1,225,941 1,220,419 1,183,180 1,616,198 3,987,383 5,054,690 370,700 139,051 226,402 43,335 33,546 32,165 24,750 35,053 4,660 Amount Amount Amount Amount Amount Amount Sales SalesSales RMB RMB Sales RMB Sales JPY Sales Sales Sales RMB Sales RMB Sales (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) Purchases Purchases Purchases Purchases Purchases Purchases AssociateAssociate Purchases Purchases USD USD Associate Purchases USD Associate Purchases JPY Associate Associate Associate Associate Associate Associate Associate Subsidiary Subsidiary Subsidiary Relationship Relationship Relationship Relationship Relationship Relationship Parent company Purchases USD Parent company Purchases JPY Counter-party Counter-party Counter-party Counter-party Counter-party Counter-party HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UMC GROUP JAPAN UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UMC GROUP (USA) UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. UMC GROUP JAPAN UNITED SEMICONDUCTOR JAPAN CO., LTD. FARADAY TECHNOLOGY CORPORATION UNITED SEMICONDUCTOR JAPAN CO., LTD. FARADAY TECHNOLOGY CORPORATION HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. UMC GROUP (USA) UMC GROUP JAPAN ATTACHMENT 8 ( Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent o UMC GROUP (USA) UNITED MICROELECTRONICS CORPORATION UNITED MICROELECTRONICS CORPORATION FARADAY TECHNOLOGY CORPORATION UMC GROUP (USA) UMC GROUP (USA) (Amount in thousand; Currency denomination NTD or foreign currencies) UNITED MICROELECTRONICS CORPORATION

262 Financial Review $- Loss allowance $5,402,791 $14,619 112,226 173 subsequent period Loss allowance subsequent period Loss allowance subsequent period JPY 1,663,728 Amount received in Amount received in Amount received in RMB 25,611 RMB 92 Collection status subsequent period $- - $- - $- - Overdue receivables Overdue receivables Overdue receivables Amount Amount Collection status Amount Collection status Turnover Turnover Turnover rate (times) rate (times) rate (times) k as of December 31, 2020) 116,415 12.15 89 Collection in $5,388,172 8.72 Total Total Total $- JPY 1,663,728 6.13 $- RMB 57,427 6.95 $- Other Other Other receivables receivables receivables Ending balance Ending balance Ending balance $5,388,172 Accounts Accounts Accounts receivable receivable receivable $- JPY 1,663,728 $- RMB 57,427 $- Notes Notes Notes receivable receivable receivable Associate Associate - 116,415 - Associate Subsidiary Relationship Relationship Relationship Counter-party Counter-party Counter-party UNITED SEMICONDUCTOR JAPAN CO., LTD. UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UMC GROUP (USA) (Amount in thousand; Currency denomination NTD or foreign currencies) UMC GROUP (USA) ATTACHMENT 9 (Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent capital stoc FARADAY TECHNOLOGY CORP. UMC GROUP (USA) UNITED MICROELECTRONICS CORPORATION 263 United Microelectronics Corporation | Annual Report 2020 Note 461 5,741 4,505 1,124 (2,061) 13,400 Note 1 56,019 26,487 05,823 20,513 256,055 511,596 Note 2 139,989 233,738 294,622 223,409 728,678 154,542 553,778 $66,833 5,790,187 2,0 (3,062,542) (loss) recognized Investment income 461 1,124 (2,061) 13,400 41,674 68,545 20,546 26,487 20,513 453,444 584,345 294,622 531,925 741,604 154,542 552,087 $66,833 1,914,492 1,071,376 2,005,823 (3,062,542) 15,866,872 investee company Net income (loss) of - - 26,966 21,834 39,961 374,434 823,185 135,624 585,317 142,353 9,107,377 1,589,448 6,551,136 2,488,169 4,566,933 5,400,821 4,087,620 10,165,563 22,926,322 10,166,702 17,668,765 $1,722,181

Carrying amount - - 13.36 13.78 36.49 30.87 40.00 80.75 45.44 42.00 (%) ownership Percentage of 9 100.00 - - Investment as of December 31, 2020 shares (thousand) Number of 5,421 4,300 4,300 100.00 2,600 2,600 100.00 1,520 1,520 100.00 38,918 34,240 336,241 364,102 5,956,791 2,438,565 196,136 2,300,000 46,000 2,370,000 234,280 4,610,000 400,167 100.00 1,894,660 148,112 3,440,053 401,734 100.00 urviving company. Initial Investment 38,918 336,241 2,438,565 2,300,000 2,342,800 4,610,000 1,903,741 3,440,053 t in Mainland China) - - JPY 60,000 Ending balance Beginning balance JPY 64,421,068 JPY 64,421,068 116,247 100.00 SGD 12,000 SGD 12,000 12,000 USD 21,000 USD 21,000 21,000 USD 309,102 USD 309,102 664,966 100.00 USD 977,000 USD 977,000 977,000 100.00 USD 5,421 USD USD 4,300 USD USD 81,500 USD 81,500 71,663 100.00 USD 2,600 USD USD 1,520 USD USD 16,438 USD 16,438 16,438 100.00 KRW 550,000 KRW 550,000 110 100.00 Main businesses and products batteries IC Sales circuit Investment holding circuits circuits Investment holding capital Marketing support activities Investment holding Sales and manufacturing of integrated Investment holding Investment holding IC Sales Address Taichung City, Taiwan Sales and manufacturing of solar power Japan Taoyuan City, Taiwan Manufacturing of PCB Taipei City, Taiwan Investment holding Taipei City, Taiwan Investment holding Singapore British Virgin Islands Investment holding British Virgin Islands Investment holding Taipei City, Taiwan Investment holding Samoa Taipei City, Taiwan Venture capital Korea Samoa Cayman Islands Investment holding Taipei City, Taiwan Consulting and planning for venture Samoa USA Samoa Investee company UMC GROUP JAPAN UNITED MICROELECTRONICS CORPORATION NEXPOWER TECHNOLOGY CORP. Note 1: As of November 1, 2020, UMC GROUP JAPAN was merged with UNITED SEMICONDUCTOR CO., LTD. (USJC) and USJC is the s Note 2: NEXPOWER TECHNOLOGY CORP. was dissolved and liquidated on November 11, 2020. UNIMICRON TECHNOLOGY CORP. FARADAY TECHNOLOGY CORPORATION Hsinchu City, Taiwan Design of application-specific integrated YANN YUAN INVESTMENT CO., LTD. HSUN CHIEH INVESTMENT CO., LTD. MTIC HOLDINGS PTE. LTD. UNITECH CAPITAL INC. TRIKNIGHT CAPITAL CORPORATION WAVETEK MICROELECTRONICS CORPORATION Hsinchu County, Taiwan Sales and manufacturing of integrated UMC KOREA CO., LTD. OMNI GLOBAL LIMITED SINO PARAGON LIMITED BEST ELITE INTERNATIONAL LIMITED UNITED SEMICONDUCTOR JAPAN CO., LTD. Japan (Amount in thousand; Currency denomination NTD or foreign currencies) UMC GROUP (USA) UMC CAPITAL CORP. GREEN EARTH LIMITED UMC INVESTMENT (SAMOA) LIMITED ATTACHMENT 10 (Names, locations and related information of investee companies as December 31, 2020) (Not including investmen UNITED MICROELECTRONICS (EUROPE) B.V. The Netherlands Marketing support activities TLC CAPITAL CO., LTD. FORTUNE VENTURE CAPITAL CORP.

264 Financial Review Note Note Note - Note - Note 3 (0) Note 586) 414 450 (959) (5,884) $2,281 13,392 Note 1 22,976 (27,428) $(2,222) 130,091 Note 358,535 Note 2 $(10, D (loss) recognized (loss) recognized Note (loss) recognized (loss) recognized Investment income Investment income Investment income Investment income - - (0) USD (2,157) $2,281 74,637 68,545 56,935 (31,763) $(2,222) (109,104) $(10,586) 1,071,376 1,071,376 investee company investee company investee company investee company Net income (loss) of Net income (loss) of Net income (loss) of Net income (loss) of ------941 6,155 USD 4,979 US 3,954 6,206 96,026 $8,174 $41,326 $62,660 195,675

USD Carrying amount Carrying amount Carrying amount Carrying amount - - - - 0.65 10.38 USD 23.98 25.14 44.45 40.00 (%) (%) (%) (%) ownership ownership ownership ownership Percentage of Percentage of Percentage of Percentage of - - - - Investment as of December 31, 2020 Investment as of December 31, 2020 Investment as of December 31, 2020 Investment as of December 31, 2020 shares shares shares shares (thousand) (thousand) (thousand) (thousand) Number of Number of Number of Number of 750 750 100.00 200 - - 900 900 100.00 2,160 4,036 - 5,900 6,000 8,000 95,916 4,251 10,000 1,000 888,019 - - 277,508 $100,752 18,655 100.00 1,688,630 Beginning balance 750 USD 900 USD 8,856 8,856 1,194 Initial Investment Initial Investment Initial Investment Initial Investment 95,916 10,000 $100,752 t in Mainland China) - - - EUR - USD - - EUR tments accounted for under the equity method to financial assets at fair value through profit or loss, noncurrent. Ending balance Beginning balance Ending balance Ending balance Beginning balance Ending balance Beginning balance USD USD 4,036 USD USD 22,500 USD 22,500 22,500 USD 8,000 USD USD Main businesses and products Main businesses and products Main businesses and products Main businesses and products batteries Investment holding Solar project Investment holding reagents and consumables Investment holding circuits batteries Microcontamination control service Investment holding Investment holding Solar project ) Address Address Address Address Hongkong Taichung City, Taiwan Sales and manufacturing of solar power Cayman IslandsUSA Investment holding Hongkong Germany Taipei City, Taiwan Medical devices, measuring equipment, Xinbei City, Taiwan Thin client Taichung City, Taiwan Sales and manufacturing of solar power Samoa Samoa Germany Hsinchu City, Taiwan Chemicals and filtration products & Investee company Investee company Investee company Investee company Note: In August, 2020, UMC CAPITAL (USA) was dissolved. EVERRICH ENERGY INVESTMENT (HK) LIMITED WINAICO IMMOBILIEN GMBH Note: WINAICO IMMOBILIEN GMBH was disposed in December 2020. NEXPOWER TECHNOLOGY CORP. Note: NEXPOWER TECHNOLOGY CORP. was dissolved and liquidated on November 11, 2020. TRANSLINK CAPITAL PARTNERS I, L.P. UMC CAPITAL (USA) FORTUNE VENTURE CAPITAL CORP. VSENSE CO., LTD. UNITED LED CORPORATION HONG KONG LIMITED WAVETEK MICROELECTRONICS CORPORATION Hsinchu County, Taiwan Sales and manufacturing of integrated CLIENTRON CORP. HSUN CHIEH CAPITAL CORP. NEXPOWER TECHNOLOGY CORP. Note 1: As FORTUNE VENTURE CAPITAL CORP. lost its significant influence in April 2020, the investee was reclassified from inves Note 2: NEXPOWER TECHNOLOGY CORP. was dissolved and liquidated on November 11, 2020. Note 3: WINAICO IMMOBILIEN GMBH was disposed in December 2020. SOARING CAPITAL CORP. WINAICO IMMOBILIEN GMBH TERA ENERGY DEVELOPMENT CO., LTD. PURIUMFIL INC. ATTACHMENT 10 (Names, locations and related information of investee companies as December 31, 2020) (Not including investmen TERA ENERGY DEVELOPMENT CO., LTD. Hsinchu City, Taiwan Energy Technical Services (Amount in thousand; Currency denomination NTD or foreign currencies TLC CAPITAL CO., LTD. UMC CAPITAL CORP.

265 United Microelectronics Corporation | Annual Report 2020 Note 18 Note (215) $155 $1,422 34,369 $(3,503) (3,061,316) $2,014,798 $2,014,798 $ (loss) recognized Note (loss) recognized (loss) recognized Note (loss) recognized Note (loss) recognized Note (loss) recognized Note Investment income Investment income Investment income Investment income Investment income Investment income 18 (215) $155 14,798 $1,422 34,369 $(3,503) ,014,798 $2 $2,0 $(3,061,316) investee company investee company investee company investee company investee company investee company Net income (loss) of Net income (loss) of Net income (loss) of Net income (loss) of Net income (loss) of Net income (loss) of - 8,678 $3,026 $2,778 $34,655 541,146 $22,976,677 $22,976,677 $10,141,318

Carrying amount Carrying amount Carrying amount Carrying amount Carrying amount Carrying amount - (%) (%) (%) (%) (%) (%) ownership ownership ownership ownership ownership ownership Percentage of Percentage of Percentage of Percentage of Percentage of Percentage of - 0 100.00 4 100.00 Investment as of December 31, 2020 Investment as of December 31, 2020 Investment as of December 31, 2020 Investment as of December 31, 2020 Investment as of December 31, 2020 Investment as of December 31, 2020 60 100.00 shares shares shares shares shares shares (thousand) (thousand) (thousand) (thousand) (thousand) (thousand) Number of Number of Number of Number of Number of Number of 60 950 1,500 1,650 100.00 1,000 9,000 9,000 100.00 - USD 60 USD Initial Investment Initial Investment Initial Investment Initial Investment Initial Investment Initial Investment t in Mainland China) Ending balance Beginning balance Ending balance Beginning balance Ending balance Beginning balance Ending balance Beginning balance Ending balance Beginning balance Ending balance Beginning balance JPY 35,000 JPY 35,000 USD USD 1,650 USD USDUSD 1,000 USD 9,000 USD USD 354,000 USD 354,000 -USD 354,000 100.00 USD 354,000 - 100.00 USD 974,050 USD 974,050 974,050 100.00 was dissolved. ) Main businesses and products Main businesses and products Main businesses and products Main businesses and products Main businesses and products Main businesses and products Marketing service Investment holding Insurance development and consulting services Research & Development Research & Development Semiconductor manufacturing technology Investment holding NEW YORK ( Address Address Address Address Address Address USA USA Samoa USA Singapore British Virgin Islands Investment holding British Virgin Islands Investment holding Japan Cayman Investee company Investee company Investee company Investee company Investee company Investee company WAVETEK MICROELECTRONICS CORPORATION (USA) UNITED MICROTECHNOLOGY CORPORATION (NEW YORK) WAVETEK MICROELECTRONICS CORPORATION ATTACHMENT 10 (Names, locations and related information of investee companies as December 31, 2020) (Not including investmen (Amount in thousand; Currency denomination NTD or foreign currencies) WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED INFOSHINE TECHNOLOGY LIMITED OAKWOOD ASSOCIATES LIMITED UNITED MICROTECHNOLOGY CORPORATION (CALIFORNIA) ECP VITA PTE. LTD. UMC TECHNOLOGY JAPAN CO., LTD. Note: In November, 2020, UNITED MICROTECHNOLOGY CORPORATION WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED BEST ELITE INTERNATIONAL LIMITED UNITED MICROCHIP CORPORATION OMNI GLOBAL LIMITED GREEN EARTH LIMITED INFOSHINE TECHNOLOGY LIMITED

266 Financial Review $- 4,392) 124,865 as of - - - - December 31, 2020 December Accumulated inward Accumulated remittance of earnings of remittance (USD $8,004 40,887 44,848 67,189) 10,298) 292,608 3,350,261) 5,111,691) 22,261,414 14,590,387 as of Carrying amount Carrying December 31, 2020 (RMB (RMB (RMB (RMB (ii) (ii) (ii) (ii) (ii) (iii) 2,332 66,244 15,211) $(2,185) 477,872) (71,152) (16,338)) (924,780)) 2,081,133 (4,027,417) (Note 2) (Note (loss) recognized (loss) Investment income (RMB (RMB (RMB 67.76% 25.14% (Note 4)(Note (RMB 99.9985% 99.9985% ownership Percentage of 2,332 100.00% 66,244 15,211) $(2,185) 100.00% 477,879) 2,081,163 (283,031) (64,990)) (6,152,744) (1,412,800)) investee company investee Net income (loss) of (RMB (RMB (RMB (RMB - 800) 750) 21,323 (Note5) 20,250) $22,744 575,707 964,966) 309,102) 8,787,770 27,433,983 Taiwan as of of investment from December 31, 2020 Accumulated outflow Accumulated (USD (USD (USD (USD (USD $- Inflow - - $- -- - Investment flows rectly invested in USCXM via investment in GREEN EARTH in LIMITED. USCXM investment in via invested rectly Outflow $141,395,848 - - - - ITED, an equity investee. The investment has been approved the by Investment Commission, MOEA 800) 750) 21,323 (Note5) 20,250) $22,744 575,707 964,966) 309,102) 22,349 thousand. 8,787,770 27,433,983 outflow of Upper limit on investment Taiwan as of Taiwan Accumulated pany in third region). third in pany January 1, 2020 January investment from ing firm. (USD (USD (USD (USD ollowing basis: es at the financial report date. financial es at the $60,491,023 (USD 2,127,718) CORP. (Note 1) (Note LIMITED (ii)OAKWOOD (ii)UNITED LED (ii)UNITED KONG LIMITED Method of investment INVESTMENT (HK) INVESTMENT CORPORATION and CORPORATION (SUZHOU) CO., LTD. (SUZHOU) CO., LTD. (ii)SOARING CAPITAL (ii)SOARING CORPORATION HONG CORPORATION ASSOCIATES LIMITEDASSOCIATES (USD (ii)EVERRICH ENERGY (ii)UNITED MICROCHIP (ii)UNITED (iii)HEJIAN TECHNOLOGY(iii)HEJIAN (iii)HEJIAN TECHNOLOGY(iii)HEJIAN 800) 750) Commission, MOEA 21,323 84,000) $22,744 130,650 30,000) 2,388,120 3,145,294) 59,653,893 13,697,755 13,697,794) Investment amounts authorized Investment by paid-in capital paid-in Total amount of (USD (RMB (USD (USD (RMB (RMB r 31, 2020, the amount of investment has been all remitted. all been has investment of amount r 31, 2020, the $36,841,527 nt USD 357,138 thousand has not yet been remitted. been yet not has USDnt 357,138 thousand (USD 1,295,868) Main businessesMain products and Solar engineering integrated design integrated engineering Solar services Investment Holding and advisory Research, manufacturing and sales and Research, manufacturing wafers LED epitaxial in Sales and manufacturing of manufacturing Sales and circuits integrated Design support of integrated circuits integrated of support Design Sales and manufacturing of manufacturing Sales and circuits integrated December 31, 2020 (i) The financial report was audited an by international certified public accounting firm cooperation in with an R.O.C. account (ii) The financial statements were audited by the auditors of the parent company. parent the of auditors statements the were by audited financial The (ii) (iii) Others. (iii) Other methods. Other (iii) (i) Direct investment Mainland in China. com the of name the (Please specify region a third registered in companies through China Mainland in investment Indirectly (ii) Accumulated investment in Mainland China as of China Mainland in investment Accumulated in the total amount of USD 383,569 thousand. As of Decembe of As USD 383,569 thousand. of amount total the in The consent to invest USCXM's in investment has been approved the by Investment Commission, MOEA the in total amount of USD 1,7 investme of amount December 31, 2020, the of As Investee company Investee Note 4 : 4Note : HEJIAN TECHNOLOGY in invested (SUZHOU) BEST INTERNATIONAL ELITE LIM in indirectly CO., investment Company LTD. The via Note 5 : 5Note : UNITED to SEMICONDUCTOR investment The (XIAMEN) CO., LTD. (USCXM) HEJIAN TECHNOLOGY from (SUZHOU) CO., LTD. indi and Note 3 : Initial investment amounts denominated foreign in currencies are translated into New Taiwan Dollars using the spot rat UNITRUTH ADVISOR UNITRUTH LTD. CO., (SHANGHAI) (SHANDONG) EVERRICH ENERGY CO., LTD. UNITED LED CORPORATION TECHNOLOGY HEJIAN LTD. CO., (SUZHOU) SEMICONDUCTOR UNITEDDS LTD. CO., (SHANDONG) SEMICONDUCTOR UNITED CO., LTD. (XIAMEN) Note 2 : 2Note : f the based (loss) were on determined income investment the current period, in (loss) recognized income investment The Note 1 : The methods for engaging investment in Mainland in China include the following: ATTACHMENT 11 (Investment in Mainland China as of December 31, 2020) as of China Mainland in 11 (Investment ATTACHMENT (Amount thousand; in Currency denomination NTD in or foreign in currencies)

267 United Microelectronics Corporation | Annual Report 2020 5.12 (%) ownership Percentage of 636,313,225 Number of shares Name ATTACHMENT 12 (Information of major shareholders as December 31, 2020) JPMorgan Chase Bank, N.A. acting in its capacity as depositary and representative to the holders of ADRs UNITED MICROELECTRONICS CORPORATION

268 Financial Review Other section section ting and Attestation ofting and s are further described in the the in described are further s sectionourof report), the parent ic of Chinaic “Norm”), (the have fulfilled and we ce we have obtained is sufficient and appropriate accounting policies (together “the parent company company parent “the (together policies accounting Regulations Governing Audi e Parent Company Only Financial Statements Statements Financial Only Company Parent e sponsibilities under those standard those under sponsibilities Report Translated from Chinese Chinese from Translated ’ Report Auditors’ Responsibilities th of Audit the for to provide a basis for our opinion. opinion. our for basis a provide to Matters Key Audit in significance most of were judgment, professional our in that, matters those are matters audit Key the in addressed were These matters statements. financial only company parent 2020 of audit our our and in as a whole, forming statements financial only company the parent of our audit of context on these matters. opinion a separate not provide and do we thereon, opinion Financial Statements by Certified Public Accountants and auditing standards generally accepted in in accepted generally standards Accountants and auditing Public by Certified Statements Financial Our re China. Republic the of Professional of Norm the with accordance in Company the of are independent report. We our of CertifiedRepublEthics Accountant offor Public the reports the and audits our on Based Norm. the with accordance in responsibilities ethical other our eviden the audit that we believe auditors, other of only financial statements”). statements”). financial only to refer the (please the reports audits other and of based on our auditors opinion, In our the respects, in all material fairly, present above to referred statements financial only company performance its financial and and 2019, 2020 31, December as of Company the of position financial the with in conformity 2019, and 2020 31, December ended the years for flows and cash Securities by Reports Financial of Preparation the Governing Regulations the of requirements Issuers. forBasis Opinion the with accordance in audits our conducted We To United Microelectronics Corporation Corporation Microelectronics United To Opinion United of sheets balance only company parent the accompanying have audited We Microelectronics Corporation (the “Company”)as of December 31, 2020 and 2019, and the related for flows cash and equity in changes income, comprehensive of statements only company parent financial only company parent the to notes and and 2019, 31, 2020 December ended the years significant of the summary including statements, Auditors Component of Audits the to Reference Making – Matter Independent Auditors Independent ements have been prepared originally in Chinese. In the In Chinese. in originally prepared been have ements uage financial statements shall prevail. FOR FOR THE YEARS ENDED PARENT COMPANY ONLY ONLY COMPANY PARENT FINANCIAL STATEMENTS STATEMENTS FINANCIAL DECEMBER 31, 2020 AND 2019 AND 31, 2020 DECEMBER WITH REPORT OF INDEPENDENT AUDITORS AUDITORS INDEPENDENT OF REPORT WITH UNITED MICROELECTRONICS CORPORATION CORPORATION MICROELECTRONICS UNITED event of a conflict between these financial statements and the original Chinese version or difference in interpretation interpretation in or difference version Chinese original the and statements financial these between a conflict of event lang Chinese the the two versions, between Address: R.O.C. Taiwan, 3 Li-Hsin No. Road II,Hsinchu City, Park,Hsinchu Science 886-3-578-2258 Telephone: financial thatThe company parent only reader is advised stat

269 United Microelectronics Corporation | Annual Report 2020 ance for the Parent collusion, forgery, intentional omissions, omissions, intentional collusion, forgery, cient and appropriate to a and appropriate to provide our cient basis for committee, are responsible for overseeing the the overseeing for responsible are committee, atement of the parent company only financial financial only company the parent of atement d fair presentation of the parent company only only company the of parent presentation d fair gn and perform audit procedures responsive to to responsive procedures audit perform and gn Charged withCharged Govern sstatement resulting from fraud is higher than for for is higher than from fraud resulting sstatement maintain professional skepticism throughout the the throughout skepticism professional maintain to influence the economic decisions of users taken users taken of decisions economic the influence to Company, disclosing, as applicable, matters related related as applicable, matters disclosing, Company, t conducted in accordance with auditing standards standards with auditing t in accordance conducted e Parent Company Only Financial Statements Statements Financial Only Company Parent e one resulting from error, as fraud may involve may error, as fraud resulting from one control. of internal or the override misrepresentations, opinion. opinion. The not risk of a mi detecting material Identify and assess the risks of material misst material risks of andassess the Identify desi or error, fraud to due whether statements, that evidence is those risks, suffi audit and obtain Company Only Financial Statements Statements Only Financial Company an the preparation for responsible is Management the Governing Regulations the of requirements with the in accordance statements financial as management control internal such for and Issuers Securities by Reports Financial of Preparation that statements financial only company parent of preparation enable the to is necessary determines error. or fraud to due whether misstatement, material from free are assessing for is responsible management statements, financial only company parent the preparing In the ability tocontinue as a going ofconcern the either intends unless management of accounting basis the concern going using and toconcern going so. to do but alternative realistic no or has operations, cease to or Company the liquidate to audit including governance, with charged Those Company. the of process reporting financial Auditor’sAuditResponsibilitiesth of the for financial only company parent the whether about assurance reasonable obtain to are objectives Our to and error, or fraud to due whether misstatement, material from free are as a whole statements level of a high is assurance Reasonable our opinion. includes that report issue an auditor’s is audi an not but that a guarantee assurance, when it misstatement a China material always detect in the Republic of will accepted generally in or individually if, material considered are and error or fraud from arise can Misstatements exists. be expected they could reasonably the aggregate, statements. financial only company parent these of basis the on in the Republic of accepted generally standards with auditing in accordance As part of an audit and judgment we China, professional exercise also:audit. We 1. Responsibilities of Management and Those the comprehensive reserve to historical historical to reserve age, write-off activities activities write-off age, -moving inventories was Please refer to Notes 5 and 6 Notes to Please refer on of the appropriate amount of the the of amount appropriate the of on % of the income before tax for the years years the tax for before income the of % ventories reserve process. For example, we we example, For process. reserve ventories ntories that are expected to be written-off or be written-off to expected are that ntories 32 million, representing 9.14% and 3.68% of of 3.68% 9.14% and representing 32 million, ories amounted to NT$16,838 million. As the As the million. NT$16,838 to amounted ories ting ting 8.04% and 9.06% of s including historical us historical including s es, associates and joint ventures under equity equity under ventures joint and es, associates ntories reserve, our audit procedures included, included, procedures audit our reserve, ntories e reserve method and the key inputs used in the in used inputs the and key the method reserve e e slow-moving inventories inventories slow-moving e ntory reserve for the application of reserve the the application ntory reserve for management’s methodology to determine inventory inventory to determine methodology management’s ting the valuation slow ting for consider this is a matter.key audit acy of disclosures inventories.acy of of ntal nature of the Company’s estimati the ntal natureof ntory aging categories. categories. aging ntory Valuationfor slow-moving inventories semiconductor industry is characterized by rapid changes in technology, management had to to had management technology, in changes rapid by is characterized industry semiconductor inve slow-moving for reserve a estimate and evaluate Audi date. future at a of disposed otherwise As of December 31, 2020, the Company’s net invent net the Company’s 31, 2020, December As of complex due to to due the complex judgme input key utilizing reserve, inventories slow-moving we Therefore, aging. inventory and of effectiveness operating the tested and design the evaluated an understanding, We obtained controlsinternal over the Company’s slow-moving in th of review over management’s tested the control inve slow-moving the test To process. valuation of appropriateness the others, evaluate amongst compar percentages, reserve and inventory aging in used data theunderlying of completeness and accuracy test the and activities write-off and usage inve We also recalculated such determination. percentages to the inve In addition, we evaluated the adequ to the parent company only financial statements. statements. only financial company parent the to Auditors Component of Audits the to Reference Making – Matter Other ventures joint and associates subsidiaries, certain of statements financial the audit not did We auditors, other by were audited statements financial Those method. equity the for under accounted solely based are herein expressed opinions our and to us, furnished been have thereon reports whose subsidiari other auditors. These reports of on the NT$11,1 and million to NT$29,135 amounted method the from profits of shares respectively. The related and 2019, total December 31, 2020 assets of as million to NT$6,643 amounted the equity method under joint ventures and associates subsidiaries, 12.85 and 22.27% million, representing and NT$1,174 other comprehensive of related shares and the 2019, respectively, and 2020 31, December ended to amounted method the equity ventures under joint and subsidiaries, associates the income from NT$2,714 andmillion NT$1,189 million, represen income for the years ended December 31, 2020 and 2019, respectively. respectively. 2019, and 2020 31, December ended the years for income

270 Financial Review r’s report or unless law e intended only to present the financial position, results results position, financial tothe present only e intended ese matters our in audito 2020 parent company only financial statements and statements only financial company parent 2020 Notice to Readers ar statements financial only company parent accompanying The of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic the Republic acceptedin accordancein principleswith practicesflows generally and accounting cash of and operations company parent such toaudit practices and procedures standards, The jurisdictions. other any of those not and of China China. of Republic in the applied and accepted generally those are statements financial only the accompanying parentfinancial company only report and statements independent auditorsof are Accordingly, not intendedfor use those by who arenotinformed about theaccounting principles or auditingstandards generallyaccepted the of responsibility the are statements financial the As practice. in applications their and China, of Republic the in any for or translation English the on, reliance or of, use the for liability any accept cannot Young & Ernst management, errors or misunderstandingsthat mayderive from the translation. are therefore the key audit matters. We describe th matters. describe key audit the We are therefore circumstances, rare extremely when, in matter or the disclosure about public precludes regulation that a report because the adverse in our matter be communicated should we determine not of interest benefits the public to outweigh be expected reasonably so would doing of consequences communication. such Wan-Ju Chiu, Hsu, Hsin-Min Taiwan Ernst & Young, 2021 24, February From the matters communicated with those charged with governance, we determine those matters matters those determine we governance, with charged those with matters communicated the From of the audit significance in were of most that ttention in to drawa any significant deficiencies in in deficiencies significant any l information or of the entities l e audit in order to design audit audit design in order to e audit ability to continue as a going concern of the of concern as a going to continue ability a material uncertainty exists related events a uncertainty to material ty exists, we are required are exists, we ty and events in a manner that achieves fair fair achieves that manner a in events and be thought to bear on our independence, and and independence, our on to bear be thought ances, but not for the purpose of expressing an an expressing of purpose the for not but ances, our opinion. Our conclusions are based on the the on are based conclusions Our our opinion. pendence, and to communicate with them all with all them to communicate and pendence, internal control of the Company.control of internal mpany to express an opinion on the parent company only only on the company parent opinion to express an mpany gnificant audit findings, including including findings, audit gnificant d disclosures in the parent company only financial statements or, statements financial only company parent in the d disclosures dit evidence regarding the financia to the date of our auditor’s report. However, future events or events or However, future report. to the our auditor’s date of of internal control relevant to th identify during our audit. audit. during our identify business activities within the Co the of performance and supervision direction, the for are responsible statements. We financial our opinion. audit responsible for remain solely audit. We group Obtain an understanding understanding an Obtain procedures that are appropriate in the in circumst that are appropriate procedures the of on opinion the effectiveness presentation. au appropriate sufficient Obtain Evaluate the appropriateness of accounting policies used and the reasonableness of accounting accounting of reasonableness the used and policies accounting of appropriateness the Evaluate by management. made disclosures and related estimates accounting of basis concern going the of use management’s of appropriateness on the Conclude whether obtained, evidence audit the on and, based concern. a going as continue to cease the Company cause may conditions financial only company the parent of content and structure Evaluate overall presentation, the financial only company the parent and whether notes, the accompanying including statements, transactions the represent underlying statements or conditions that may cast significant doubt on the significant doubt cast may that or conditions uncertain material a that conclude we If Company. our auditor’s report to the relate up evidence obtained audit if such if disclosures to are inadequate, modify internal control that we that control internal with complied we have that with a statement governance with charged those We also provide inde regarding requirements ethical relevant reasonably may that matters and other relationships related safeguards. where applicable, We communicate with those charged with governance regarding, among other matters, the planned planned the matters, other among regarding, governance with charged those with communicate We scope and timing of the audit and si 2. 6. 3. 4. 5.

271 United Microelectronics Corporation | Annual Report 2020 98 19,227 27,699 106,290 668,476 533,567 6,683,936 1,727,109 1,691,526 1,229,680 4,445,752 3,261,999 4,082,826 5,618,879 2,532,392 12,900,009 16,305,112 66,534,836 14,388,597 80,506,509 79,486,445 107,866,299 302,750,964 194,884,665 2019

$ $

-

17,563 As of December 31, of As December 111,094 552,414 5,546,739 1,090,430 1,044,791 1,051,718 4,914,724 9,950,639 2,823,209 4,167,373 4,422,010 2,253,285 1,469,539 14,662,518 16,838,262 13,554,966 69,049,896 98,736,624 66,640,272 122,967,977 318,898,066 195,930,089 2020

$ $

Notes 4, 6(1) 4, 5, 6(2) 4, 6(20) 4 4, 6(3) 4, 7 4 4 4, 5, 6(4) 6(7), 6(20) 4, 5, 6(2) 4, 5, 6(5) 4, 6(6), 7 4, 5, 6(8), 7 4, 6(9) 4, 6(10), 7 4, 5, 6(25) 8 (continued) December 31, 2020 and 2019 December (Expressed in Thousands ofTaiwan New Dollars) PARENT COMPANY ONLY BALANCE SHEETS UNITED MICROELECTRONICS CORPORATION Assets English Translation of Parent Company Only Financial Statements Originally Issued in Chinese Financial TranslationEnglish Issued Only Originally Statements of Parent Company Current assetsCurrent and cash Cash equivalents Total assets Financial assets at fair profit through value or loss, current Contract assets, current Notes receivable Accounts receivable, net Accounts receivable-related parties, net Other receivables Current tax assets Inventories, net Inventories, Prepayments Other current assets Total current assets Non-current assets Financial assets at fair profit through value or loss, noncurrent Financial assets noncurrent at income, fair other through value comprehensive accounted for under the method equity Investments plant Property, and equipment assets Right-of-use assets Intangible Deferred tax assets for equipment Prepayment Refundable deposits Other noncurrent assets-others Total non-current assets

272

Financial Review - - - 1,218 95,887 13,211 123,268 214,455 547,024 415,719 248,788 482,080 332,611 573,336 (119,801) 1,355,850 1,966,284 3,900,000 1,629,818 2,988,314 4,025,373 1,476,405 6,008,570 2,047,760 2,744,391 (2,073,977) (8,948,337) 34,404,110 11,572,579 14,513,940 20,593,825 10,580,952 43,764,772 18,687,591 20,372,772 52,181,835 95,946,607 34,733,761 117,243,187 206,804,357 302,750,964 2019

$

$

- - -

2,326

93,880 88,504 As of December 31, December of As

723,046 724,873 244,751 456,480 162,973 466,457 241,081 (119,801) 2,999,910 1,283,850 1,423,623 7,500,000 1,178,595 2,586,813 4,162,654 5,518,361 3,061,761 3,340,664 2,170,666 3,726,229 (3,667,395) 13,639,513 29,622,014 16,690,474 20,878,317 53,616,306 83,238,320 36,809,962 12,536,526 11,022,314 56,617,520

(11,890,876) 124,224,015 235,659,746 318,898,066

2020

$

$

Notes 4, 6(27) 6(14), 6(13), 6(11), 6(27) 6(11), 4, 6(12) 4, 6(20) 7 4 4, 6(27) 6(9), 4, 7 6(27), 6(17), 6(16), 4, 6(20) 4, 6(27) 6(13), 6(27) 6(14), 4, 5, 6(25) 4, 6(27) 6(9), 4, 5, 6(15) 6(27) 4, 9(4) 6(27), 6(16), 4, 6(18) 6(13), 4, 6(19) 6(18), 6(13), 6(18) 4, 6(19) 4, 6(19) 6(18), December 31, 2020 and 2019 31, 2020 and December (Expressed in Thousands of New Taiwan Dollars) New Taiwan of Thousands in (Expressed PARENT COMPANY ONLY BALANCE SHEETS BALANCE ONLY COMPANY PARENT UNITED MICROELECTRONICS CORPORATION MICROELECTRONICS UNITED The accompanying notes are an integral part of the parent company only financial statements. financial only company parent the of part integral are an notes accompanying The English Translation of ParentCompany Only Financial Statements Originally Issued Chinese in Liabilities and Equity Current liabilities Current loans Short-term Financial liabilities atfair value through profitor loss, current current liabilities, Contract payable Accounts payables Other equipment on Payables Currenttax liabilities current liabilities, Lease liabilities long-term of portion Current Other currentliabilities liabilities current Total liabilities Non-current noncurrent liabilities, Contract payable Bonds loans Long-term liabilities tax Deferred noncurrent liabilities, Lease noncurrent liabilities, benefit Netdefined deposits Guarantee liabilities-others noncurrent Other liabilities non-current Total liabilities Total Equity Capital stock Common advance in collected Capital capital paid-in Additional Premiums transactions stock Treasury or acquiring from received or paid consideration the of value fair the between differences The disposing subsidiaries and the carrying amounts of the subsidiaries Recognition of changes subsidiaries’ in ownership Share of changes net in assets of associates and joint ventures accounted for using equity method stock options Employee options Stock employees for stock Restricted Other earnings Retained reserve Legal reserve Special earnings Unappropriated equity of components Other operations foreign of translation on differences Exchange income comprehensive other through value fair at assets measured financial on losses or gains Unrealized compensation employee Unearned stock Treasury equity Total equity and liabilities Total

273 United Microelectronics Corporation | Annual Report 2020

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNITED MICROELECTRONICS CORPORATION PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

For the years ended December 31, Notes 2020 2019 Operating revenues 4, 6(20), 7 $ 135,280,403 $ 123,622,436 Operating costs 4, 6(4), 6(10), 6(15), (96,228,137) (96,461,206) 6(19), 6(20), 6(21), 7 Gross profit 39,052,266 27,161,230 Operating expenses 4, 6(3), 6(10), 6(15), 6(19), 6(21), 7 Sales and marketing expenses (3,075,837) (2,870,050) General and administrative expenses (4,388,589) (3,791,439) Research and development expenses (9,536,311) (9,719,780) Expected credit impairment gains (losses) 472,167 (689,095) Subtotal (16,528,570) (17,070,364) Net other operating income and expenses 4, 6(16), 6(22), 7 935,334 191,108 Operating income 23,459,030 10,281,974 Non-operating income and expenses Interest income 4 426,172 584,052 Other income 4 539,709 619,123 Other gains and losses 4, 6(23), 9(5) (1,116,244) 1,017,178 Finance costs 6(23) (609,520) (861,601) Share of profit or loss of subsidiaries, associates and joint ventures 4, 6(6) 8,022,897 (2,872,245) Bargain purchase gain 6(6) - 171,585 Exchange gain, net 4,12 - 193,033 Exchange loss, net 4,12 (887,372) - Subtotal 6,375,642 (1,148,875) Income from continuing operations before income tax 29,834,672 9,133,099 Income tax (expense) benefit 4, 5, 6(25) (645,183) 574,515 Net income 29,189,489 9,707,614 Other comprehensive income (loss) 6(24) Items that will not be reclassified subsequently to profit or loss Remeasurements of defined benefit pension plans 4, 5, 6(15) (192,581) 106,403 Unrealized gains or losses from equity instruments investments measured at 4,574,491 5,605,384 fair value through other comprehensive income Share of other comprehensive income (loss) of subsidiaries, associates 3,065,086 1,112,547 and joint ventures which will not be reclassified subsequently to profit or loss Income tax related to items that will not be reclassified subsequently 4, 5, 6(25) 54,424 (158,260) Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (2,920,173) (1,045,504) Share of other comprehensive income (loss) of subsidiaries, associates (64,686) (2,204,824) and joint ventures which may be reclassified subsequently to profit or loss Income tax related to items that may be reclassified subsequently 4, 5, 6(25) 42,320 8,252 Total other comprehensive income, net of tax 4,558,881 3,423,998 Total comprehensive income $ 33,748,370 $ 13,131,612

Earnings per share (NTD) 4, 6(26) Earnings per share-basic $ 2.42 $ 0.82 Earnings per share-diluted $ 2.35 $ 0.76

The accompanying notes are an integral part of the parent company only financial statements.

274 Financial Review ------9,485 14,655 12,927 (29,388) (21,101) 463,415 377,004 (817,850) (106,879) 3,423,998 4,558,881 2,639,238 6,510,283 9,707,614 (6,916,105) (9,765,155) (1,657,885) (3,440,471) (2,859,498) (1,678,272) 29,189,489 13,131,612 33,748,370 235,659,746 206,804,357 206,045,361

Total Equity $

$ ------(119,801) (119,801)

8,387,127 1,678,272 (5,647,430) (2,859,498) (1,678,272)

Treasury Stock $ $

------(3,667,395) (3,667,395) Unearned Employee Compensation $ $

------2,058 (2,058)

on Hedging Instruments $ $ Gains or Losses or Gains ------(33,378) 551,903 (387,654) 6,581,330 7,658,949 3,726,229 6,581,330 7,658,949

(8,819,556) (1,825,365) (2,073,977)

Income Other Components of Equity Unrealized on Financial at Fair Value Fair at through Other Comprehensive $ $

Gains or Losses or Gains Assets Measured Assets ------(5,706,261) (3,242,076) (2,942,539) (8,948,337) (3,242,076) (2,942,539)

Foreign (11,890,876)

Exchange Operations Translation of Differences on $ $

------84,744 33,378 (22,280) 387,654 (707,299) (963,947) (157,529) (816,632) (952,836) (551,903) 3,491,626 1,825,365 9,707,614 9,792,358 (6,916,105) (9,765,155) (3,457,987) 50,723,263 56,617,520 29,189,489 34,733,761 29,031,960

(14,513,940) Earnings $ Unappropriated $

------(3,491,626) 11,022,314 14,513,940 14,513,940

$ $

Special Reserve Retained Earnings ------707,299 963,947 12,536,526 10,865,280 11,572,579

Legal Reserve $ $

------9,485 1,179 (1,218) 14,655 12,927 15,458 (29,388) 130,804 377,004 (705,049) (106,879) 2,628,061 1,862,366 (1,387,127) 43,211,214 40,388,936 39,550,394

Additional Paid-in Capital $ $

- -

------332,611 332,611 (332,611) For the years ended December 31, 2020 and 2019 For the years ended December (Expressed in Thousands of New in Thousands (Expressed Taiwan Dollars) Advance UNITED MICROELECTRONICS CORPORATION MICROELECTRONICS UNITED Collected in $ $

------Capital PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY IN OF CHANGES STATEMENTS ONLY COMPANY PARENT 2,000,300 4,980,528 (7,000,000)

117,243,187 124,224,015 124,243,187 Common StockCommon $ $ The accompanying notes are an integral part of the parent company only financial statements. English Translation of Parent Company Only Financial Statements Originally Issued in Chinese Issued Originally Only Financial Statements Translation of Parent Company English Notes 6(24) 6(24) 4 6(18) 4, 6(19) 4, 6(18) 6(13), 4, 6(18) 4, 6(18) 6(5) 6(18) 6(18) 4, 6(19) 4, 6(18) 6(13), 4, 6(18) 6(5) 6(18) 4 ownership ’ Others Others Adjusted balance as of January 1, January 2019 as of balance Adjusted Appropriation and distribution of 2018 retained earnings Legal reserve Special reserve Cash dividends Net income for the year ended December 31, 2019 Other comprehensive (loss) income for the year December ended 31, 2019 Total comprehensive (loss) income Share-based payment transaction Conversion of convertible bonds Treasury stock acquired Treasury stock cancelled Share of changes in net assets of associates and joint ventures accounted for using equity method Changes in subsidiaries Adjustments for dividends subsidiaries received from parent company Disposal of equity instruments investments measured at fair value through other comprehensive income 31, 2019 December as of Balance Appropriation and distribution of 2019 retained earnings Legal reserve Cash dividends Special reserve reversed Net income for the year ended December 31, 2020 Other comprehensive (loss) income for the year December ended 31, 2020 Total comprehensive (loss) income Share-based payment transaction Conversion of convertible bonds Treasury stock acquired Share of changes in net assets of associates and joint ventures accounted for using equity method The differences between the fair value of the consideration paid or received from acquiring or disposing subsidiaries and the carrying amounts of the subsidiaries Changes in subsidiaries’ ownership Adjustments for dividends subsidiaries received from parent company Disposal of equity instruments investments measured at fair value through other comprehensive income 31, 2020 December as of Balance

275 United Microelectronics Corporation | Annual Report 2020

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNITED MICROELECTRONICS CORPORATION PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

For the years ended December 31, 2020 2019 Cash flows from operating activities: Net income before tax $ 29,834,672 $ 9,133,099 Adjustments to reconcile net income before tax to net cash provided by operating activities: Depreciation 28,330,741 31,630,966 Amortization 2,029,391 1,872,075 Expected credit impairment (gains) losses (472,167) 689,095 Net gain of financial assets and liabilities at fair value through profit or loss (828,003) (964,614) Interest expense 562,082 818,313 Interest income (426,172) (584,052) Dividend income (539,709) (619,123) Share-based payment 959,219 366,186 Share of (profit) loss of subsidiaries, associates and joint ventures (8,022,897) 2,872,245 Gain on disposal of property, plant and equipment (249,572) (137,308) Gain on disposal of investments (499) - Exchange gain on financial assets and liabilities (71,664) (209,799) Bargain purchase gain - (171,585) Amortization of deferred government grants (1,410,008) (1,138,743) Income and expense adjustments 19,860,742 34,423,656 Changes in operating assets and liabilities: Financial assets and liabilities at fair value through profit or loss 199,655 151,453 Contract assets (9,980) (26,198) Notes receivable and accounts receivable (525,464) 1,406,598 Other receivables (123,130) 14,542 Inventories (752,559) (1,165,198) Prepayments (272,585) 737,806 Other current assets (71,566) 895,067 Contract fulfillment costs (21,960) 36,539 Contract liabilities 190,417 101,987 Accounts payable (413,353) 464,631 Other payables 2,926,889 (857,045) Other current liabilities (176,758) 537,918 Net defined benefit liabilities (55,300) (35,398) Other noncurrent liabilities-others 10,750 - Cash generated from operations 50,600,470 45,819,457 Interest received 468,405 552,382 Dividend received 972,612 715,515 Interest paid (408,427) (391,559) Income tax refunded (paid) 517,370 (253,547) Net cash provided by operating activities 52,150,430 46,442,248

(continued)

276 Financial Review

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNITED MICROELECTRONICS CORPORATION PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

For the years ended December 31, 2020 2019 Cash flows from investing activities: Acquisition of financial assets at fair value through profit or loss $ (172,452) $ - Proceeds from disposal of financial assets at fair value through other - 44,466 comprehensive income or loss Acquisition of investments accounted for under the equity method (9,082) (16,485,610) Proceeds from capital reduction of investments 27,200 750,000 Acquisition of property, plant and equipment (15,629,312) (10,966,528) Proceeds from disposal of property, plant and equipment 482,602 323,807 Increase in refundable deposits (18,308) (248,459) Decrease in refundable deposits 296,368 268,717 Increase in other receivables (2,113,720) (1,253,320) Decrease in other receivables 3,204,940 - Acquisition of intangible assets (1,891,020) (2,112,818) Government grants related to assets acquisition 20,230 51,862 Increase in other financial assets (16,645,591) - Decrease in other financial assets 3,955,778 - Increase in other noncurrent assets-others (7,049) (15,074) Decrease in other noncurrent assets-others - 8,786 Net cash used in investing activities (28,499,416) (29,634,171) Cash flows from financing activities: Increase in short-term loans 1,918,175 4,199,985 Decrease in short-term loans (1,912,310) (4,177,125) Cash payments for the principal portion of the lease liability (323,743) (462,642) Redemption of bonds (13,702,875) (2,500,000) Proceeds from long-term loans 13,000,000 8,859,840 Repayments of long-term loans (8,900,000) (5,279,660) Increase in guarantee deposits 142,298 207,596 Decrease in guarantee deposits (172,566) (16,748) Cash dividends (9,765,694) (6,911,058) Treasury stock acquired (1,678,272) (2,972,243) Treasury stock sold to employees 1,677,900 - Others 2,120 10,818 Net cash used in financing activities (19,714,967) (9,041,237) Effect of exchange rate changes on cash and cash equivalents (1,420,987) (574,174) Net increase in cash and cash equivalents 2,515,060 7,192,666 Cash and cash equivalents at beginning of year 66,534,836 59,342,170 Cash and cash equivalents at end of year $ 69,049,896 $ 66,534,836

The accompanying notes are an integral part of the parent company only financial statements.

277 United Microelectronics Corporation | Annual Report 2020 IASB IASB IASB and endorsedIASB and by Effective issued by Date Effective the interest rate benchmark benchmark rate interest the January 1, 2022 1, 2022 January January 1, 2023 1, 2023 January 1, January 2022 January 1, 2023 1, 2023 January January 1, 2022 1, January 2022 January 1, 2022 1, January 2022 January 1, 2023 1, January 2023 To be determined by IASB by IASB be determined To Instruments: Disclosures” 7”), Instruments: (“IFRS ancial Instruments: Recognition and and Recognition Instruments: ancial hedge accounting solely because hedge it accounting makes riods beginning on or after January 1, 2021. 2021. 1, January after or on beginning riods tions were issued by

ounting Standards Board (“IASB”) but not (“IASB”) yet Board Standards ounting ly relate to the effects of of effects the to relate ly Reporting Standards” “First-time Adoption of

A company will not have to derecognise or adjust the carrying amount of financial financial of amount carrying the or adjust derecognise to have not will company A but will reform, the by cash as required flows to contractual changes for instruments alternative to the change the reflect to rate interest effective the update instead rate; benchmark its discontinue to nothave will company A changes required by the reform, if the hedge meets other hedge accounting criteria; criteria; accounting hedge other meets hedge the if reform, the by required changes and the from risks arising new about information disclose to required be will company A rates. benchmark alternative to transition the it manages how and reform Statements” – Disclosure Initiative - Accounting Initiative -Statements” – Disclosure Policies International Financial International Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9 “Financial “Financial 9 to IFRS 2 (Amendments - Phase Reform Rate Benchmark Interest Instruments” (“IFRS 9”), IAS 39 “Fin 7 “Financial IFRS 39”), (“IAS Measurement” 16) (IFRS “Leases” 16 4”) IFRS and Contracts” (“IFRS 4 “Insurance IFRS main phase amendments final The statements: financial companies’ the on reform i. ii. iii. Amendments to IFRS 3, Amendments to IAS 16,Amendments to IFRS 3,Amendments 37 to IAS Amendments Statements”or Liabilitiesas Current – Classification of Non-current “Investments in Associates and Joint Ventures” – or – Sale Ventures” and Joint Associates in “Investments its Assets between an Investor and of Contribution Associate or Ventures Joint Amendments to IFRS 9 “Financial Instruments” Instruments” 9 to IFRS “Financial Amendments 16 to IFRS “Leases” Amendments “Agriculture” 41 IAS to Amendments Financial of “Presentation 1 IAS to Amendments 1, January 2022 Amendments to IFRS 1 Narrow-scope amendments of IFRS, including including IFRS, of amendments Narrow-scope IFRS 17 “Insurance Contracts” Contracts” 17 “Insurance IFRS Financial of “Presentation 1 IAS to Amendments IFRS 10 “Consolidated Financial Statements” and IAS 28 28 and IAS Statements” Financial 10 “Consolidated IFRS Annual Improvements to IFRS Standards 2018 – 2020: 2020: – 2018 Standards IFRS to Improvements Annual New, Revised or Amended Standards Revised andInterpretations or New, endorsed by FSC (the effective dates are to be determined by FSC) are listed below: below: by are listed FSC) dates are determined to be (the effective FSC by endorsed The abovementioned standards and interpreta and standards abovementioned The on the Company’s impact no have material listed above and interpretations The standards and performance. position financial FSC so that they are applicable for annual pe annual for applicable are they that so FSC a. (3) Standards by International issued Acc

IASB IASB financial position and Effective issued by Date Effective January 1, 2021 January ting Standards, International ety of services to satisfy customer needs. needs. customer satisfy services to ety of any) China was in Republic of incorporated ct on the Company’s ct on the Company’s (ADSs) were listed on the New York Stock Stock (ADSs) on listed were York New the Dollars unless Specified)Otherwise unting Standards Board (“IASB”) which are which are Board (“IASB”) Standards unting

d International Financial Repor For the Years Ended December 31, 2020 and 2019 2019 and 2020 31, December Ended Years the For UNITED MICROELECTRONICS CORPORATION CORPORATION UNITED MICROELECTRONICS

(Expressed Thousands in of Taiwan New New, Revised or Amended Standards Revised andInterpretations or New, Interest Rate Benchmark Reform - Phase 2 (Amendments to (Amendments 2 Phase - Reform Benchmark Rate Interest IFRSIAS9,IFRS 7, 39, IFRS IFRS and 4 16) Accounting Standards, and Interpretations issued, revised or amended which are endorsed endorsed are which amended or revised issued, Interpretations and Standards, Accounting periods annual for effective become and (“FSC”) Commission Supervisory by Financial on or 2020. January 1, after beginning standards revised or adopted were no newly There interpretationsand that material impa have performance. are listed below: by the Company adopted but not yet FSC, by endorsed NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS STATEMENTS FINANCIAL ONLY COMPANY PARENT TO NOTES (the Comp Corporation Microelectronics United is a service full The Company 1982. in April operations and commenced 1980 (R.O.C.) in May vari a provides and foundry, wafer semiconductor in (TWSE) Exchange Stock on the Taiwan publicly listed shares were ordinary The Company’s Shares American its Depositary and 1985 July 2000. in September (NYSE) Exchange Road II, Li-Hsin 3, is No. business of place principal and office its registered of The address Taiwan. City, Park, Hsinchu Hsinchu Science ISSUE issue in of were authorized for the Company statements only financial company The parent 24, 2021. on February meeting Directors’ of the of with a resolution Board accordance Standards Internationalby issued (2) Acco

(1) The Company applie (1) 3. INTERPRETATIONS AND REVISED STANDARDS ISSUED OR NEWLY 2. FOR STATEMENTS OF FINANCIAL AND PROCEDURES OF AUTHORIZATION DATE 1. AND ORGANIZATION HISTORY

278 Financial Review tion and performance, and the the and performance, and tion the company is g produced while the is items company Instead, a company will recognise such such recognise will a company Instead, anges in Accounting Estimates and Errors Accounting Estimatesanges in and Errors lation to the measurement of cumulative of cumulative the measurement to lation ents” (“IAS 1”) - Disclosure - Initiative in accounting estimates from changes in in changes from estimates accounting in Accounting Estimates and Errors” (“IAS 8”) 8”) Errors” (“IAS and Estimates Accounting ary users of the financial statements. statements. the ary users financial of

ing a Contract (Amendments to IAS 37) ng to lessee’s leasehold improvements. improvements. leasehold ng to lessee’s costs a company should include as the cost of fulfilling cost of fulfilling the as a company should includecosts e Preparation of Financial Reports by Securities Issuers Issuers by Securities Reports Financial of Preparation e en the evaluation is completed. completed. is evaluation the en Estimates (Amendment) 9 Financial Instruments The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the 16 the modifies IFRS accompanying 13 Example Illustrative to The amendment treatment of lease incentives relati

The amendments prohibit a company from deducting from the cost of property, plant plant of the cost property, from deducting a company prohibit from amendments The sellin amounts received from and equipment use. intended its for asset the preparing sales proceeds and related cost profit in or loss. The amendments clarify what a contract when assessing whether a contract is onerous. is onerous. a contract whether assessing a when contract

translation differences. differences. translation the whether when assessing includes a company the fees clarifies The amendment the from different substantially are liability financial modified or a new of terms the of liability. terms original financial The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a a that becomes 1 by subsidiary IFRS simplifiesof application the The amendment first-time adopter after its parent in re 16)

Annual Improvements to IFRS Standards 2018 – 2020 – 2020 Standards 2018 to IFRS Improvements Annual The amendments improve accounting policy disclosures that to provide more useful useful more provide to that disclosures policy accounting improve amendments The prim other and investors to information included estimatesother of and accounting the definition introduce The amendments Ch Policies, Accounting 8 IAS to amendments changes to help distinguish companies policies. accounting iii. Onerous Contracts -Fulfill Cost of iii. ii. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS to IAS Use (Amendments Intended before Proceeds Equipment: and Plant ii. Property, Accounting Policies (Amendment) (Amendment) Policies Accounting -Definition of Accounting ii. to IFRS Amendment 16 Leases IFRS Accompanying Examples to Illustrative Amendment iii. i. 1 to IFRS Amendment e. f. IAS 1 “Presentation of Financial Statem of Financial “Presentation f. 1 IAS (Regulations). accordance in prepared were statements only financial company parent Company’s The Governing th Regulations with g. IAS 8 “Accounting Policies, Changes in

(1) (1) of Compliance Statement

related impactrelated will be disclosed wh The Company is currently evaluating the potential impact of the aforementioned standards and and standards aforementioned of the impact potential the evaluating currently is The Company posi financial listed (b) ~ (g)interpretations to the Company’s 4. ACCOUNTING POLICIES SIGNIFICANT OF SUMMARY

IASB IASB ts in future periods are ts in are periods future Effective issued by Date Effective January 1, 2023 1, 2023 January assets that would not be affected by by not be affected assets would that issue of potential “day 2” gains or losses potential “day of issue ities. ities. clarify amendments the Besides, of a subsidiary that is contributed to an an to contributed is that subsidiary a of sociate or a joint venture to the extent of of to the extent or venture a joint sociate (“IAS 1”) - Classification of Liabilities as ribution of Assets between an Investor and an and Investor between Assets of ribution gain or loss resulting from the sale or from or resulting sale loss or the gain constitute a business as defined in IFRS 3 in IFRS a business as defined constitute

the associate or joint venture. venture. or joint associate the ting Policies, Changes in Company’s statemen financial Company’s e other equity holders in the associate or joint venture. joint or associate in the holders e other equity the Conceptual Framework (Amendments to IFRS 3) 3) IFRS to (Amendments Framework Conceptual the

The amendments updated IFRS 3 by replacing a reference to an old version of the to an old version of a reference 3 replacing by IFRS updated amendments The version, latest the to reference a with Reporting Financial for Framework Conceptual 2018. March in issued was which the to exception an added also amendments The 3 to avoid the of principle IFRS recognition contingentliabil and liabilities arising for contingent 3 for IFRS in guidance existing Framework. Conceptual the to reference the replacing Accounting Estimates and Errors” – Definition of Definition – Errors” and Estimates Accounting Estimates Accounting IAS 1 “Presentation of Financial Statements” Statements” Financial of “Presentation 1 IAS IFRS 10 “Consolidated Financial Statements” (“IFRS 10”) and IAS 28 “Investments in in “Investments 28 IAS and 10”) (“IFRS Statements” Financial “Consolidated 10 IFRS Associates and Joint Ventures” - Sale or Cont or Sale - Ventures” Joint and Associates (Amendment) (“IAS 28”) AssociateVentures or Joint its 10 and in IFRS the requirements between inconsistency address the The amendments control of loss the with 28, in dealing IAS from arising losses gains and 28 restricts IAS venture. joint a or associate as an to assets non-monetary of contributions interestthe attributable to th a subsidiary. control of of the loss on or profit loss recognition full 10 requires IFRS of contribution or sale the from resulting loss or gain the that so amended was 28 IAS assets constitute that a business as defined in IFRS 3 “Business 3) (IFRS Combinations” its associate joint venture investor and or an between is recognized in full. the wasthat 10 also amended so IFRS does of a subsidiary not that contribution of extent to the only is recognized venture joint or associate its and investor an between interests in investors’ unrelated the (Amendment) or Current Non-current financial of 1 IAS presentation of 69-76 paragraphs to amendments are These the of liabilitiesrela ted to the classification paragraphs as and the amended statements current or non-current. to Amendments 3, IFRS to Amendments including IFRS, of amendments Narrow-scope to 37 IAS Amendments 16, IAS i. to Updating a Reference

Amendments to IAS 8 “Accoun 8 IAS to Amendments New, Revised or Amended Standards Revised andInterpretations or New, c. The potential effects of adopting the standards or interpretations issued by by IASB but not issued the or interpretations adopting of standards effects The potential yet endorsed by FSC on the as below: summarized b. d.

279 United Microelectronics Corporation | Annual Report 2020 the closing rate of of rate closing the at does not result in a ter the period; or reporting ght to defer settlement of the liability for for liability the of settlement defer to ght . of a liability that could, the at Terms e translated into NTD at within twelve months after the reporting s to the carrying amounts and of assets intends to sell or in consume it, its normal change differences relating to to that foreign relating differences change foreign operation are treated as assets and assets as and treated are operation foreign the cumulative amount of the exchange exchange of the amount the cumulative nate share of the cumulative amount of the of the cumulative amount nate share of es a foreign operationes a foreign th

twelve months aftertwelve the period. reporting arily for the purpose of trading; the purposeof arily for ily for the purpose of trading; of purpose the ily for ability in normal operating cycle; expressed in its functional currency. currency. its functional in expressed lt in its settlement equity instrumentslt by the issueof do foreign operation. foreign or a of an associate disposal On partial settled within twelve months af months twelve within settled operating cycle; cycle; operating at least twelve months after the reporting date reporting the after months twelve least at option of the counterparty, resu option of the counterparty, itsclassification. not affect period; or or period; or used to settle a liability at least for exchange prevailing at the reporting date and their income and expenses are translated at at translated are expenses and income their and date reporting the at prevailing exchange arising on the differences the period. exchange The for rate exchange an average a foreign of income. disposal On in other comprehensive recognized are translation ex the of amount the cumulative operation, the separate in and accumulated income comprehensive in other recognized operation, loss on gain or the when loss or equity to profit from is reclassified equity, of component is recognized. disposal partialOn disposal a subsidiary that includ of the to re-attributed is income comprehensive other in recognized differences non-controlling interests in that a significant loss of that does not result in operation a foreign includes that venture joint control,joint only the proportio or influence or profit to reclassified is income comprehensive other in recognized differences exchange loss. value adjustment fair any and goodwill Any liabilities arising from the acquisition of a The assets and liabilities operations foreign ar of of share proportionate the loss of control, operation and the foreign of liabilities asset An is classified as current when: as non-current. assets are classified other All as iscurrent when: classified liability A otherAll liabilities are classified as non-current.

a. a. or asset, the realize to expects Company the b. primar asset the holds Company the asset realize the to expects the Company c. d. ri an unconditional not have does the Company a. the Company expects to settle the li b. the Company holds liability prim c. the liability is due to be d. exchanged being from is restricted the asset unless equivalent is cashasset or a cash the (4) (4) Statements Financial Currency Foreign of Translation (5) Current and Non-Current Distinction ency at closing ency the ssets and ssets liabilities ey arise except for the the for except arise ey company presented in in presented company rt of a reporting entity’s net net entity’s reporting a of rt included in the financial statements are are statements financial the in included rded as an adjustment to interest costs are are interest costs to an adjustment as rded gnized initially in other comprehensive or loss upon disposal of such investment. investment. such of disposal loss or upon ed into functional curr functional into ed currency borrowings for an acquisition of a of a an acquisition for borrowings currency ement of ement items on monetary or of translating ted in the parent companyted only financial theperiod whichin th ented in the consolidated financial statements financial consolidated the in ented ttributable to the parent tion date. Monetary a tion date. Monetary initially recorded by the Company functional by the Company initiallyfunctional recorded at the dates of the initial transactions. the dates of at

at are eligible forcapitalization. a monetary item monetary a pa is that Foreign currency derivatives within the scope of IFRS 9 are accounted for based on the the on based for accounted are 9 IFRS of scope the within derivatives currency Foreign instruments. financial for policy accounting on arising differences Exchange investment in a foreign operation are are reco operation in a investment foreign profit equity to from and reclassified income Exchange differences arising from foreign foreign arising from differences Exchange qualifying asset to the extent that theyrega qualifying assetto the extent that are included in the borrowing costs th

b. c. a.

with statements in accordance only financial company parent prepared Company The other or loss and profit the that provided which the Regulations, 21Article of financial only parent company in the presented period the for income comprehensive income comprehensive or loss be the same as the other profit shall statements and pres the parent of to stockholders attributable presen equity total the and period, the for equity shallstatements be the same as a the the consolidated financial statements. Therefore, the Company accounted its the accounted statements. Company for Therefore, financial the consolidated necessary made accordingly, and, method equity using in subsidiaries investments adjustments. When a gain or loss on a non-monetary item is recognized in other comprehensive income, item income, a gain or When on a comprehensive is recognized loss in non-monetary other income. comprehensive other in recognized is loss or gain that of component exchange any exchange any or loss, profit in item is recognized non-monetary a on or loss a gain When loss. or profit in is recognized loss gain or that of component following: denominated in foreign currencies are translat are currencies foreign in denominated date. reporting the at exchange of rates in value fair at measured items Non-monetary value fair is when the at the date rates the exchange translated using currencies are foreign determined. currencies foreign in cost historical at measured are that items Non-monetary rates as exchange using the are translated the settl arising on differences All exchange profitin to taken orare items monetary loss The parent company only financial statements have been prepared on a historical cost cost historical a on prepared been have statements only financial company parent The value. at fair measured instruments financial for basis, except in its functional presented are financial statements only company parent Company’s The Dollars (NTD). New Taiwan Items currency, currency. that using functional measured currencies are in foreign Transactions at the transac prevailing rates currency (2) (2) Preparation Basis of (3) (3) Transactions Foreign Currency

280 Financial Review at amortized cost, at amortized cost, all all the risks and s and rewards of the s and rewards of Gains and losses are Gains and losses are se on specified dates to cash cash to se dates on specified es and other financial assets) if both of of both assets) if financial other es and ial assets measured pal and interest on the principal amount amount and interest on the principal pal rculation period. rculation sset give rise on specified dates to cash dates to cash rise on specified sset give ch financial assets at fair valueat fair through assets ch financial interest method amortizationinterest process, and method ubstantially all the risk the all ubstantially business model whose objective is to is hold objective business model whose a business model whose objective is achieved objective is achieved whose model a business

ment gains or losses,ment inte rest revenue and foreign ansferred control of the asset. of control ansferred the financial asset give ri

outstanding. by both collecting contractual cash flows and selling financial assets selling and financial and cash flows contractual collecting by both princi aresolely payments of that flows financial assets in order to collect contractual cash flows; and cash contractual flows; financial assets in order to collect flows that are solely paymen ts of principal and interest on amount the principal outstanding.

other comprehensive income are recognized in other comprehensive income. income. comprehensive in other are recognized income comprehensive other derecognition,Before impair exchange gains and losses are recognized in and losses loss.or gains profit are recognized exchange the financial When other in recognized or loss previously gain cumulative the are derecognized assets or to profit income comprehensive other from reclassified is income comprehensive adjustment. reclassification a as loss equivalent, notes, accounts and other receivabl and notes, accounts equivalent, followingthe conditionsmet. are interest income, measured by the effective effective the by measured income, interest ci during losses are recognized impairment assets derecognized. are lossor the financial profit when in recognized Subsequent changes in the fair value of su value in the fair of changes Subsequent (ii) (ii) of terms contractual the The debt instruments are measured at fair value through other comprehensive income income comprehensive other through value at fair measured are instruments debt The conditions are met: thefollowing of both if (i) the financial asset is held within The financial assets are measured at amortized cost (including cash and cash cash and cash (including cost amortized at measured are assets The financial (i) a within is held asset the financial (ii) a financial of the terms contractual the Subsequent to initialfor recognition financ or transferred; asset been have rewards asset, tr the has of but iii. Financial Financial assets cost amortized at measured iii. i. expired; have asset the from flows cash receive to rights contractual the ii. the Company has transferred assets and s the Company has neither substantially nor retained transferred iii. Derecognition of financial assets financial of Derecognition asset is derecognized when:financial A b.

ts by collateralized value and subsequently value subsequently and including time deposits with with deposits time including assets at initial recognition. In an irrevocable election an irrevocableto present election in itiallyat fair value plus, in the case of ortized cost or at fair value through other other through value at ortized cost or fair investments that are readily convertible to convertible are readily that investments loss, directly attributable loss,costs. directly Financial or loss, financial assets at fair value through at fair assets or loss, financial are initially recognized at fair value, and recognized at fair initially are and repurchase agreemen repurchase and

cognized initially fair at cognized e statement of comprehensive income. income. of comprehensive e statement through other comprehensive income income comprehensive other through changes in interest rates, nancial liabilities are recognized when the Company becomes a party a party becomes Company the when recognized are liabilities nancial ines the classification of classification the ines its financial

other comprehensive income subsequent changes in the fair value of an investment in in an investment of value the fair in changes subsequent income comprehensive other held not is that trading. for instrument equity an such of is there disposal a When income in other comprehensive presented amounts accumulated instrument, equity to the directly or loss but are transferred to profit transferred subsequently not are earnings. retained At initial recognition, the Company may make measured at fair value with changes in fair value recognized in profit or in loss. profit value recognized in at with changes fair value fair measured Financial assets that are not measured at am at assets not that are measured Financial comprehensive income are re ii. value fair Financial assets at i. through profitor lossvalue Financial assetsfair at measurement subsequent and Classification

government bonds and corporate bonds. bonds. and corporate bonds government original maturities of three months of months originalorthree maturities less Cash equivalents are short-term, highly liquid highly short-term, are equivalents Cash of risks significant present do not that dates with maturity and cash of amounts known resulting value from in changes and fi Financial assets to the contractual provisions of the instrument. the instrument. of provisions contractual to the The Company determ

a. accordance with IFRS 9 and the Regulations, financial assets of the Company are classified classified are of assets Company the financial Regulations, the 9 and IFRS with accordance profit value through at fair assets as financial cost. amortized at assets measured financial and income, comprehensive other and liabilities aretrade assets financial sale of recognized using date or Purchase accounting. in recognized are assets All financial or investments not at fair value through profit or value through profit loss assets at fair in th transaction costs are expensed Financial Assets Assets Financial (6) Cash Equivalents (7) Instruments Financial

281 United Microelectronics Corporation | Annual Report 2020 al liability and the the and liability al terest method after terest method after r from the same lender on same lender the from r ofit or ofit lossfinancialinclude liabilities using the effective in effective the using reign currency exchange risk. exchange currency reign the With anges in own credit risk, gains or losses losses gainsor risk, credit in own anges through the effective interest method method interest effective the through of an existing liability are substantially are substantially of an existing liability signated upon initial recognition as at fair financial difficulty of the debtor), such an an such debtor), the of difficulty financial en the obligation under the liability is recognition of the origin the of recognition

at amortized costamortized at include interest bearing and loans bility is replaced by anothe ing any non-cash assets transferred or liabilities assumed,assets transferred or ing any non-cash liabilities em with the existence of an economic relationship and relationship an economic em of with the existence ured at amortized cost

Financial liabilitiesFinancial pr through value fair at process. amortization on premium or any discount by taking into account is calculated cost Amortized costs. transaction or and fees acquisition held for trading and financialheld liabilities de for loss. or value through profit Excluding ch measured subsequently are that borrowings initial recognition. Gainsprofit or and the losslosses are r ecognized in when as liabilities are derecognized as well on the subsequent measurement including interest paid are recognized in profit or in profit paid recognized interest are including measurement on the subsequent loss. Financialliabilities measured i. Financial liabilitiesor loss at profit through fair value ii. Financial liabilities meas Derecognition of liabilities Derecognition financial liability is derecognizedwh financial A discharged, cancelled or expires. expires. or cancelled discharged, an existing financial lia When or the terms terms, different substantially (whethermodified or not attributable to the modificationexchange or is treated as a de and amounts carrying in the respective and the difference a new liability, of recognition consideration paid,the includ recognized in profit orloss.is the cumulative gain or loss on the hedging instrument from inception of the hedge; and and the hedge; of inception from instrument or loss on the hedging gain the cumulative on flows cash future expected the of value) (present value fair in change cumulative the hedge. inception the of from hedged item the b. determines the hedge ratio to meet the hedge effectiveness. effectiveness. hedge ratio to the meet the hedge determines designates The Company risks rate exchange currency the foreign hedge partially to instruments hedging certain transactions. probable forecast certain highly with associated of component The separate (in following the of the lower to is adjusted item hedged the with associated equity amounts): absolute a. b. Cash flow hedges hedges flow Cash fo from arising exposures manages Company The of between hedging the IFRS designates9, adoption relationship a the Company hedging instrument and the hedged it (8) Accounting Hedge antly since initial initial since antly amount of carrying cognized and the part part the and cognized equity instruments). as a financial liability or an equity liability equity an or financial a as has signific has increased allocates the previous cantly signifi initial since increased not s inues to be recognized and the part that part that and is the recognized to be inues at continues to be re llowance based on lifetime ECLs at each ECLs at each lifetime on based llowance financial asset and the part transferred qualifies qualifies part transferred asset and the financial in in retained earnings (for

information including forward-looking information. information. information forward-looking including investments measured at fair value through other other through value at fair measured investments lity and and instrument. lity equity an

For notes, accounts receivable and contract assets, the Company applies a simplified simplified a applies Company the assets, contract and receivable accounts notes, For Classification and subsequent measurement measurement subsequent and Classification issued instrument the classifies Company The the and arrangement contractual the of the substance with in accordance instrument liabi a financial of definitions On derecognition of a financial asset in its entirety, the difference between the carrying the carrying between difference the a of asset financial in its entirety, derecognition On gain cumulative any including be received to received or and the consideration amount in profit is recognized income comprehensive other in recognized been had loss or that directly or instruments) debt (for loss or If the transferred asset is part of a larger a larger of is asset transferred part the If the Company derecognitionfor in its entirety, the larger asset between the financial part larger th the that is derecognized, based on the relative fair values of those parts on the date of the of date those parts on the of values fair the relative on based is derecognized, that transfer. comprehensive other in recognized been had that loss or gain cumulative Any cont that part the between is allocated income parts. of those values fair the relative based on derecognized, between difference The consideration the of sum the and derecognized part to the allocated amount carrying the that had gain or loss allocated any cumulative and derecognized the part for received loss or or profit in is recognized income, comprehensive in other recognized been in directly earnings. retained policy Impairment losses credit expected for allowance date, an reporting each at measures, Company The (ECLs) for debt instrument comprehensive income and financial assets measured at amortized cost by assessing assessing cost by amortized at measured assets financial and income comprehensive and supportable reasonable Where the credit risk on a financial asset ha financial on a the credit risk Where ECLs. to 12-month equal amount at an is loss allowance measured the recognition, asset on a financial credit risk the Where ECLs. equal to the lifetime amount at an is measured the loss allowance recognition, in calculating ECLs.approach in does changes not the track Therefore, Company loss a a recognizes but instead risk, credit credit loss historical date. reporting the based ECLs on Company’s are measured forward-looking adjusted for condition, financial current and customers’ experience environment. economic as customers’ such factors, a. c. Financial Liabilities

282 Financial Review ributions received ements to the extent ements rests in subsidiariesin reststhat mpany or the sales between be recognized in profit or be recognized loss. an If made to bring the accounting policies in made to bring the accounting ntrol and the fair value of the retained ntrol and the value of fair any only financial statany only financial the carrying amount of investment in the of investment amount the carrying or associate an in or venture ment joint a iary were not resulted from their profit or profit their from resulted not were iary s the from Company to subsidiaries are impaired. An impairment loss, being the the being loss, impairment An impaired. nture becomes an investment in a subsidiary,

the Company’s ownership inte ownership the Company’s omto the Co subsidiaries the consideration paid or received is recognized directly directly is recognized received or paid consideration the the investments. do not result in the Company losing control over the subsidiaries are accounted for as as for accounted subsidiaries are over the losingcontrol in the Company result not do transactions. equity between difference Any subsidiaryvalue of and the fair equity. in significant and control of loss method upon equity the use to ceases Company The the of amount carrying the between difference Any subsidiary. the over influence co of loss upon subsidiary a in investment will disposal plus proceeds from investment an invest becomes subsidiary in a investment ve or a joint associate in an investment an interest. the retained and the remeasures equity method to apply continues Company the evidence objective any is there whether date reporting each at determines Company The are subsidiaries in investments the that amount, is of the and its carrying amount subsidiary between recoverable the difference part of forms and income comprehensive of statement in the or loss profit in recognized of amount carrying the eliminated in the Company’s parent company only financial statements. statements. financial only company parent Company’s the in profits The eliminated to the sales fr due losses and comp in the parent are recognized subsidiaries Under the equity method, the investment in the subsidiary is carried on the balance balance the on carried is in subsidiary the investment the method, equity the Under or loss and profit share of Company’s in the changes acquisition post plus at cost sheet subsidiary. of the in income changes of comprehensive share other Company’s The the in directly is recognized income comprehensive or and other loss profit subsidiaries’ nsive income. comprehe other or loss and Dist profit Company’s of the investment. the carrying amount a subsidiary reduce from sale to due and losses profits Unrealized by the Company. owned interests the shares of are not which of as the reporting period the same for prepared are of subsidiaries statements Financial Company. are adjustments necessary, Where Company. the of those with line netthe in changes subsid the of assets When the Company’s affect not do changes such income, and or other comprehensive loss related all of share its proportionate recognizes Company the percentages, ownership equity. in changes in Changes

. Inventories at are valued cost, after reassessing the fair value, is s. at actual stated are materials Raw pacity of theproduction of facilities. pacity Cost iteria to be classified as non-current assets non-current as classified be to iteria finished goods are stated at standard costs costs at standard are stated goods finished lity, the associated gains or losses that were gains or losses that the associated lity, and associates are accounted for using the using for are accounted and associates item by item.item Net realizable value is the e hedging instrument is recognized directly in directly is recognized instrument hedging e subsequently results saction in the recognition

ts and liabilities of subsidiaries are accounted for as as for accounted are subsidiaries of liabilities and ts acity incurredacity as expensed is which the Company has control. has control. the Company which , terminated or exercised. r Under Equity the Method the identifiable assets and liabilities of a subsidiary at the date of acquisition is acquisition theof at date subsidiary a of liabilities assets and identifiable the investment. the of amount carrying the in included is and goodwill as recognized Amortization of goodwill is not permitted. subsidiary over the acquisition ofliabilities a recognized as a gain in profit or loss on the acquisition date. the acquisition loss or on in profit a gain as recognized

Investment in Investment subsidiaries Any difference between the acquisition cost and the Company’s share of the net fair net the of share Company’s and the cost acquisition the between difference Any the identifiableof asse value follows: i. of the net fair value of share Company’s cost over the acquisition the of excess Any and assets identifiable the of net value fair the of ii. share Company’s the of excess Any A subsidiary is an entity over entity an is subsidiary A

Inventories are accounted for on a perpetual basi a on perpetual for accounted are Inventories the costs, while and work purchase process in month. each of end at the costs to weighted-average adjusted subsequently and The cost s raw materials, goods comprise and directfinished work otherprogress in of direct labor, overheads. production related and costs the to overheads production fixed of Allocation the normal ca is based on conversion costs of associated with underutilized cap value realizable net and cost of lower the costs of estimated less the business of course ordinary in the price selling estimated sale. the make to costs necessary estimated the and completion Company’s in subsidiaries The investments cr the that meet those than other method equity sale. held for a. The portion of the gain or loss on the hedging instrument that is determined to be an an be to determined that is instrument hedging the loss on or gain the of portion The the ineffective whereas hedge income, is in other recognized comprehensive effective th fairof value the ofin portion change the profit or loss. of a a hedge forecast If tran liabi asset or a non-financial a non-financial of asset the cost of or in the initial included are income in other comprehensive recognized liability. the hedging when only hedge accounting discontinues prospectively The Company hedging the when instance criteria; for qualifying the meet to ceases relationship instrument expires or is sold

Inventories (9) (10) Investments Accounted fo

283 United Microelectronics Corporation | Annual Report 2020 lives. A lives. A lives of the assets are as as assets are the of lives in profit or loss. profit in an investment If in an meeting the recognition criteria are treated are treated criteria the recognition meeting ecognition criteria are met. Significant met. are Significant criteria ecognition e previous estimation are recorded as changes as changes are recorded estimation e previous d in other operating income and expenses. expenses. and income operating d in other

ht-line basis over the estimated useful estimated ht-line the basis over is depreciated separately. is depreciated separately. years 20~56 associate becomes an investment in a joint venture or an investment in a joint venture venture joint a in investment an or venture joint in a investment an becomes associate equity the to apply continues anassociate, the Company in an investment becomes not remeasureand does the retained interest. method evidence objective any is there whether date reporting each at determines Company The impaired. are ventures joint and in associates investments the that loss, impairment An joint venture or of the associate amount recoverable the between difference the being of or the statement loss in in profit is recognized amount, carrying its and investments. the of amount carrying the of part and forms income comprehensive The Company ceases to use the equity method upon loss of significant influence over an an over influence significant of loss upon method equity the use to ceases Company The an in investment the of amount carrying the between difference Any associate. investment retained the of value fair the and influence significant of loss upon associate disposal will be recognized plus proceeds from

Buildings Buildings Machinery and equipment equipment and Machinery equipment Transportation years 6 fixtures and Furniture 6 years years 6 as capital expenditures, and the carrying amounts of those replaced parts are derecognized. parts are derecognized. replaced those of amounts carrying the and expenditures, as capital as incurred. inexpenses are recognized repairs and Maintenance or loss arising gain Any the of derecognition assets is recognize from life useful different a has which equipment and plant property, of item an part of significant the remainderfrom of the item at reviewed assets are for the values residual lives and useful methods, depreciation The th from the changes year and end, fiscal each Property, plant and equipment are stated at cost, net of accumulated depreciation and and accumulated depreciation are cost,stated net of at equipment plant and Property, long-term for costs incurred borrowing any, and any if losses, impairment accumulated the r if are capitalized projects construction renewals, improvements and major inspections a straig on is calculated Depreciation estimates. in accounting useful estimated the depreciated, not is which land, for Except follows: Equipment and Plant Property, (11)

d the associate are an associate does not an associate influence is the power to influence is sions of an entity, but is not control sions of an entity, s). Any remaining difference will be will difference Any remaining s). change in of equity n cost, after n cost, reassessing the fairafter value, is mpany’s share of profit or loss and other other and loss or profit of share mpany’s taining significantits influence over that at associate, a proportionate share of the the of share proportionate a associate, at rdingly, upon disposal of the associate, the associate, the of disposal upon rdingly, ared for the same reporting period as the as the period reporting same the for ared tween the Companytween the an ate’s issuance of new shares, if the Company Company the if new shares, of issuance ate’s

int venture. Significant is accounted for as follows: follows: as for liabilities of and associates is accounted d operating policy deci se would be accounted for as an acquisition of an additional equity equity additional an of as an acquisition accounted be for would se recognized as a gain in profit or loss on the acquisition date. the acquisition loss or on in profit a gain as recognized the identifiable assets and liabilities of an associate at the date of acquisition is acquisition of thedate at associate an liabilities of assets and identifiable the investment. the of amount carrying the in included is and goodwill as recognized Amortization of goodwill is not permitted. acquisitio the over of associate an liabilities

Under the equity method, the investment in the associate is carried on the balance sheet sheet balance carried on the is in the associate the investment method, the equity Under Co in the changes post acquisition cost plus at in changes of share Company’s The associate. the of income comprehensive directly in the income recognized is profit loss or comprehensive other and associates’ received income. Distributions comprehensive other or loss and profit Company’s investment. the of amount carrying the reduce associate an from gains unrealized Any and lossesresulting from transactions be eliminated to the extent of the Company’s interest in the associate. the associate. in interest the Company’s of to the extent eliminated prep are of associates statements Financial Company. in policies accounting the bring to made are adjustments necessary, Where Company. the of those with line than more shares up takes the Company if shares, new of issuance associate’s an Upon main while holding proportionate original its associate, such increa associate. the in interest associ an Upon while percentage its stockholding reduces and shares proportionate up take not does maintaining its significantoverinfluence th to reclassified is income comprehensive other in recognized loss previously or gain account( appropriate and loss or other profit additional paid-in capital. charged to a When not do changes such and income, comprehensive or other or loss profit its from result proportionate its recognizes Company the percentage, ownership Company’s the affect share all related changes in of equity. Acco a on loss or profit to capital paid-in additional aforementioned the reclassifies Company pro rata basis. or joint control over those policies. fair net the of share Company’s and the cost acquisition the between difference Any the identifiable value of assets i. of the net fair value of share Company’s cost over the acquisition the of excess Any and assets identifiable the of net value fair the of ii. share Company’s the of excess Any participate in the financial an participate in Investment in in associates Investment that is and influence the Company has associate is significant entity over which An an subsidiary nor a jo neither a

b.

284 Financial Review ts may be impaired. ts may ght-line basis over the basis over ght-line from indefinite to from finite is ecognition at cost. cost. ecognition at The cost thod for an intangible asset with a finite a finite an intangible asset with thod for ination is its fair value as at the date of value as at the date ination fair is its that the intangible asse that use assets are measured using cost model. cost using model. use assets are measured ion of economicfuture benefits embodied in as expenses on a strai a on as expenses determine whether the indefinite useful life life useful indefinite the whether determine e amortized over the useful lives and assessed assessed lives and over the useful e amortized

assessed as either finite or indefinite. indefinite. or finite as either assessed not, the change in useful life life useful in change the not, tely are measuredinitial on r recognition, intangible any less assets arecarriedcost at ich fail to meet the recognition criteria are not capitalized to ich criteria arethe recognition meet fail not capitalized nite useful lives are not amortized, but are tested for for tested are but amortized, not are lives nite useful individually or at the CGU level. The assessment of assessment The level. CGU the or at individually i. of amount the the initial of the leasemeasurement liabilities; ii. and date; commencement the before or at made payments lease any any initial direct costs incurred. iii. At the commencement date, the right-of-use assets should be measured at cost, which which cost, at be measured should assets right-of-use the date, commencement At the of: comprise

Subsequent to initial recognition, right-of- the to initial recognition, Subsequent Right-of-use assets measured under the cost model are depreciated from the from depreciated are model cost the under measured assets Right-of-use or assets right-of-use the of life useful the of end the of earlier the to date commencement a results in liabilities lease the of remeasurement Any terms. lease the of end the assets. right-of-use the of adjustment corresponding sheets, and balance on the lease liabilities assets and right-of-use presents The Company of statements in the presented are separately expenses interest and expenses depreciation with associated payments lease the income. recognizes comprehensive Company The leases asset low-value leases and short-term lease terms. terms. lease ar assets finite lives useful with Intangible indication an is there whenever impairment for The amortization period and the amortization me and the expenditures are reflected in profit or loss in the period incurred. period incurred. the in loss or profit in reflected are expenditures the and The livesintangibleuseful of are assets at life areuseful least at reviewed year. the each of end fiscal in the expected Changes of consumpt life or pattern useful the expected appropriate, as method, or period amortization the changing by for accounted is asset the estimates. in accounting as changes is and treated Intangible assets with indefi either impairment annually, supportable. to be continues If on a prospective basis. made accumulated amortization and accumulated impairment losses, if any. Internally Internally any. if losses, impairment accumulated and amortization accumulated generated intangible assets wh life annually indefinite useful to is reviewed Intangible assets acquired separa comb a business in assets acquired intangible of acquisition. Following initial b. (13) Intangible Assets

ich is not accounted accounted not ichis and measured at the measured and hould be recognized be hould if the Company is reasonably certain to less it is reasonably certain early that change of consideration,change of and to obtain the lease terms. terms. lease the carrying the addition, In ere is a modification wh modification a ereis act conveys the right to control the use of an an use of the control to right the conveys act lease and separates the lease and non-lease non-lease the and lease lease separates and

rm leases and low-value asset leases. lting from lting a change from in an index or rate used to determine borrowing rate. The paymentscomprise: termination will not occur. termination will not occur. exercise; and exercise; and

present value of the lease payments that have not been paid at that date, using the the that date, using at paid been not that have the leaseof payments present value incremental Company’s At the commencement date, lease liabilities s i. receivable; incentives payments any lease less fixed ii. rate; or index an on depend that lease payments variable guarantees; value residual under by the Company to be payable expected amounts iii. option a purchase price of the exercise iv. v. payments for terminating the lease un the terminating for payments v. A contract is, or contains, a lease if the contr if a lease is, or contains, contract A time ex of in period a asset for identified Company asset. The the identified use of from benefits all economic substantially a single as contract a lease for accounts in the contract. included components as a lessor The Company such lease payments) or a change in the assessment of an option to purchase the underlying underlying the to purchase option an of in the assessment change a or lease payments) such asset. as a separate lease, a change in the lease term, a change in the lease payments (e.g., (e.g., the lease payments in a change lease term, in the a change lease, separate as a changes to future payments resu amount of lease liabilities is remeasured if th remeasuredis if liabilities lease of amount Lease liabilities are measured in subsequent periods using the effective interest method, method, interest the effective periods using in subsequent are measured Lease liabilities over recognized are expenses the interest and a income on rental as leases operating from payments lease recognizes Company The lease. the of term the over basis straight-line as a The Company lessee assets right-of-use recognize to is required a lessee a lease, of date commencement At the and lease liabilities, except short-tefor a.

Lease (12)

285 United Microelectronics Corporation | Annual Report 2020 l paid-in capital-premiums. capital-premiums. paid-in l value is determined based on ntly measured at measured ntly value fair through profit tible bondsissued to determine whether it ontribution payable to the plan in exchange payable to the plan in exchange ontribution onomic characteristics and risk of the host the host and risk of characteristics onomic a non-current liability in all other respects. respects. other all in liability a non-current assified as a financial liability measured at at assified as a financial liability measured ods. does not bond issued the convertible If t at conversion and the carrying amount of of amount the carrying and at conversion t ertible bonds is classified as a current liability current liability as a ertible bondsis classified

ing the derivatives, its fair to stock and common additiona rrying amount of the liability component. The adjusted adjusted The component. ofliability the amount rrying lied at that time by the market to instruments of comparable comparable of instruments to by the market time at that lied bility component of conv

Under defined contribution pension plans, the c the pension plans, contribution defined Under expense. an as recognized be shall period a during employee an by rendered service the for a as recognized is paid, already amount any deducting after payable, contribution The liability. equity component are credited are credited equity component conversion. bond upon is recognized gain or loss No addition, lia the In Convertible bonds bonds Convertible conver the of terms the evaluates Company The componen theliability of amount carrying contains both a liability and an equity component. component. and an equity a liability both contains assesses if the Company Furthermore, in the embedded options put and call the of and risks characteristics the economic ec to the related closely are bonds convertible element. equity the separating before contract For the liability component exclud rateinterest the app effective status. credit is cl component The liability or is converted instrument the before interest method cost the effective using amortized settled. is notcloselyrelatedthat is derivative it to the host contract, the embedded For component assubseque and liability a classified loss unless or as it qualifies component. an equity is component recognized The equity a as instrument financial compound the of value fair the between at the difference initially is not amount Its carrying component. the liability value of fair and the whole peri accounting subsequent in the remeasured with in accordance instrument as a for hybrid it is accounted component, equity an have 9. IFRS under requirements the the maturity, before right conversion their exercise bondholders convertible the If ca the adjust shall Company right. put the right exercise put the After may the bondholders months 12 within if as a be reclassified ertible bonds should of the conv component liability the expires, of the definition it liability if meets non-current Bonds (15) (16) Post-Employment Benefits eviously recognized previously recognized recognized previously of the of the intangible asset is not revalued her there is an indication that an asset in an asset in that is an indication there her is amortized over the useful life (5~10 useful over the amortized is to non-cancellable and mutually agreed agreed mutually and non-cancellable to GU is the higher of GU its of is the higher fair less costs value an intangiblein other asset ar e recognized expenses related expenses from liability the are rm or estimated useful life (3 years) on a a on years) (3 life useful estimated or rm es the recoverable amount since last since the amount recoverable es the gning of contract and obtaining the right to to the right obtaining and contract of gning overable amount. amount. overable A pr sses is classified as other income operating (3 years) of the related technologyona itten down to its recoverable amount. The umstances indicate that indicate umstances

nt testing for the CGU to which the assets individual any’s intangible assets are summarized as follows: assets intangible summarized are any’s straight-line basis. straight-line attributable portion any property, intellectual an as recognized and discounted, is technology and patent for fees license fixed future liability. asset and related intangible The cost on and initial recognition, once determined years) on a straight-line basis. Interest method. interest effective the on based calculated and recognized timing the on Based non-current. and as current is classified the liability payments, of contract term or estimated useful life basis. straight-line orlosses arisingGains from derecognition of and expenses. income operating Accounting policies of the Comp

impairment loss is reversed only if there has been an increase in the estimated service service estimated the in increase an been has there if reversedonly is loss impairment potential which in turn of an asset increas loss was recognized. impairment of amount carrying is limited so reversal the that The that amount carrying the exceed nor amount, recoverable its exceed not does asset the loss had no impairment amortization, or of depreciation net determined, have been would years. the prior in asset for recognized been The recognition or reversal of impairment lo expenses. and recoverable amount of of an individual amount asset or a C recoverable value in use. disposal and its of circ If the date, reporting each at decreased have may or exist longer no may losses impairment re-assessesCompany the asset’s rec or CGU’s belong. belong. amount, recoverable its exceeds CGU or asset an of amount carrying the Where the asset is considered impaired and is wr The Company assesses at each reporting date date whet reporting at each assesses The Company impaired. be may Assets” of “Impairment 36 IAS of scope the exists, indication any If the Company completes impairme a. te contract the over is Software amortized b. si Upon fee: license technology and Patent c. amortized over the shorter of property license fees, the are Others intellectual mainly Impairment (14) of Non-Financial Assets

286 Financial Review granted, the cancelled granted, the cancelled except for except for equity-settled transactions between the unvested restricted stocks restricted stocks unvested g date reflects the extent to ment in cumulative cost for the award is recognized immediately. immediately. award is recognized the for treated as if it fully vests on the date of of date the on vests fully it if as treated nditions within the nditions the controleither of in expense irrespective of whether of not or irrespective whether expense in on the date that it is od is recognized through profit or loss for lossor for profit through recognized is od reporting period and at the settlement date at the settlement and period reporting lity over the vestinglityperiod. over the value fair The if a new if award a new substitutes the cancelled for ansactions Companyand the between its cognized for any modification that increases increases that modification any for cognized not ultimatelynot vest,

reporting date until the vestinthe until date reporting ssed and the Company’s best estimate the quantity of of ssed and the Company’s ed stocks for employees, the employees, for stocks ed ultimately vest. The move e-based payment transaction, or is otherwise beneficial to the or is otherwise transaction, beneficial payment e-based d payment transactions

Equity-settled share-base equity-settledcost of tr The compensation condition. or non-vesting upon a market is conditional vesting where transactions The received services the recognize shall Company and/or performance other that provided all is satisfied, condition or non-vesting the market service conditions are satisfied. expense the minimum are modified, award transaction an equity-settled of the terms Where the of terms the original if been modified, not had terms the if as expense the is recognized met. are award re An additional expense is the total fair value of the shar modification. of date the at as measured employee it is is cancelled, award equity-settled an Where yet recognized not expense any and cancellation, The h-settled share-based payment cas compensation cost of and incurred the liability value of at the fair measured is its employees and Company liabi corresponding with expense as recognized each of end at the is remeasured the liability of employees is measured is at the measured value the equity fair of and is instruments on employees grant date, the the vesting over equity, in increase with a corresponding together expense, as recognized restrict issuing When period. co where non-vesting any award includes This the until theperiod or loss for profit through recognized value in fair the movement with liability settled. is entity or the employee are met. not employee the orentity However, award replacement a as designated is and award award. of original the were a they modification as if treated are new awards and Cash-settled transactions share-based payment which the vesting period has pa which equity instruments that will issued on the grant date for employees are recognized in unearned employee compensation compensation employee unearned in recognized are employees for date grant the on issued as amortized be shall account such and account equity contra a as transitional period. the vesting over expense compensation for recognized expense The cumulative equity-settled each transactions at peri the of end and beginning the at recognized period. the do that awards for recognized is expense No (19) Share-Based Share-Based (19) Payment Transactions

cognized in equity. equity. in cognized sis over the periods in rest, is recognized in other d benefit d liability (asset),benefit which the is reconsideration hased (treasury stocks) are recognized at at are recognized stocks) (treasury hased t defined benefit beliability benefit shall (asset) defined t ul lives ofthe ul assets. lives related expense An e of the defined benefit obligation, deducting deducting obligation, benefit defined of e the g for any effect ceiling. of asset the g effect for any Service fit fit liability (asset) are recognized as expenses losssystematica on ba

y amounts in net included inte Remeasurement of the net define comprises actuarial gains and losses, the return on plan assets and any change in the effect effect in the assets any change on plan and losses, actuarial return gains and the comprises excluding an the asset ceiling, of comprehensive income in the period in which they occur. occur. they which in period the in income comprehensive in recognized Remeasurement be not shall and earnings retained in immediately reflected is income comprehensive other period. or loss to profit in a subsequent reclassified Under defined pension plans, the ne benefit of present valu as the amount the recognized adjustin any plan assets and the value of fair bene defined net interest on the cost and net in the period service. of In accordance with IAS 20 “Accounting for Government Grants and Disclosure of of Disclosure and Grants Government for “Accounting 20 IAS with accordance In is there when grants government the recognizes Company the Assistance”, Government to attaching them the and conditions be received will such grants that assurance reasonable be complied with. will in profit and recognized deferred income as grant is recorded government asset related An or loss on a straight-line basis over the usef repurc instruments equity own Company’s The government grant is recognized in profit or is grant profit in recognized government equity. from deducted and cost repurchase or profit in recognized be shall loss or gain No instruments. equity own Company’s the of sale, issue or cancellation loss on the purchase, and amount the carrying between difference Any which the Company recognizes as expenses the related costs for which the grant which is the grant related the costs as expenses for recognizes the Company which losses or expenses compensate. to for compensates intended that grant government A Company to the support financial immediate giving of purpose the for or incurred already profit is costs no in recognized futurewith or related loss when it becomes receivable. (17) Government Grants

(18) Treasury Treasury (18) Stock

287 United Microelectronics Corporation | Annual Report 2020 income tax expense e profit or loss; e profit using the effective interest using the effective od on temporary differences differences temporary on od sociated with investments in subsidiaries, subsidiaries, in investments with sociated nings as is recognized s and their carrying amounts in financial in financial amounts their s and carrying the initial recognition of goodwill or ofgoodwill or recognition of an the initial r the current period and prior periods are t a business combination and, at the time of time of t a business combination and, at the g to items recognized recognized nt income taxitems to relatin g ing profit nor taxabl nor ing profit l taxable temporary differences, except: except: differences, temporary l taxable

tion of profit or loss for the period. terest recorded is income ined using the liabilityined meth e income or equity is recognized in other comprehensive in other or equity is comprehensive recognized e income In respect of taxable temporary differences as differences temporary taxable of respect In associates and joint ventures, when the timing of the reversal of the temporary temporary reversalthe of the of timing the when ventures, joint and associates not will differences the that temporary probable it and is controlled be can differences future. in the foreseeable reverse When the deferred tax liability arises from arises from liability tax deferred the When that is no in a transaction or asset liability the account neither affects transaction, the

Current income tax Deferred income tax b. a. For financial assets measured at amortized cost and financial assets at fair value through through assets at fair value and financial cost at amortized assets measured financial For income, in other comprehensive is established, the dividends to receive right the when Company’s is Revenue recognized dividend. the approve stockholders is generally when which liabilitiesassets and fo Current tax income enacted substantively or enacted been have laws tax that and rates tax the using measured period. the reporting of end by the Curre directly in othercomprehensiv or loss.than profit rather income orequity The additional tax income undistributedear for the stockholders’ by approved is proposal distribution the when year subsequent the in meeting. Interest income income Interest is tax determ income Deferred Income tax expense (benefit) is the aggregate amount of current income tax and deferred deferred and tax income current of amount aggregate the is (benefit) tax expense Income determina the in included tax income method and recognized in profit loss. or in profit and recognized method Dividends between the tax bases of assets and liabilitie between the tax bases of date. reporting at the statements Deferred tax liabilities are recognized for al (21) Income (21) Income Tax ving satisfied its d are expected to be to be expected are d y estimates based on the contract; the and of control of the goods or the goods or of control of ort and do term not contain a significant ice that are determined using contractual contractual using determined are that ice gations in the in gations future, an ior to the Companyior ha ectly to the contract, generate or enhance enhance generate or contract, to the ectly ntrol promisedof goods and services. The at a significant reversal in the amount of of amount the in reversal significant a at rn and allowances based on the customer customer the on based allowances and rn nces which the Compan satisfies its performance obligations ormance obligations in

ideration, and the transfer ligations in the contract; ce, and other known factors. factors. known other ce, and recognize revenue when (or as) the entity the as) (or when revenue recognize

determine the transaction price;determine perf the to price the transaction allocate identify the contract with a customer; customer; a with contract the identify ob the performance identify

Revenues on the Company’s contracts with customers for the sales of wafers and joint joint and wafers of sales the for customers with contracts Company’s the on Revenues The Company recognizes accounts receivable when the Company transfers control of the control of transfers Company the when receivable accounts recognizes Company The e. technology development are recognized as the Company satisfies its performance its performance satisfies Company as the are recognized development technology co of transfer upon to customers obligations Company recognizes revenue at transaction pr transaction at revenue recognizes Company prices reduced by sales returns and allowa c. d. historical experience having determined th determined having experience historical recognizes Company The occur. to probable not are recognized revenue cumulative estimated for sales retu liabilities refund experien historical complaints, goods or services to customers and has a right to an amount of consideration is that consideration of an amount has a right to and to customers services or goods unconditional. are sh receivable accounts Such financing component. For certain contracts that do not provide the Company Company the provide do not that contracts certain For component. financing unconditional rights to the cons

The Company recognizes revenue from contracts with customers by applying the applying by customers with contracts from revenue recognizes Company The with Customers”: Contracts from “Revenue IFRS 15 of steps following a. b. services has been satisfied, the Company recognizes contract assets and revenues. assets and revenues. contract recognizes the Company been satisfied, has services pr customers from received Consideration to are which transferred liabilities as contract for obligations are accounted performance satisfied. are obligations performance the after revenue to costs recognizes The Company relate dir costs the when a contract fulfill obli performance satisfy to used be to resources recovered. The costs and revenues are recognized when the Company satisfies its satisfies Company the when recognized are revenues and costs The recovered. and goods of promised of control transfer upon customers to obligations performance services. Revenue from Contracts with Customers Customers with Contracts from Revenue (20) Revenue Revenue (20) Recognition

288 Financial Review ssesses a judgement or or judgement ssesses a If the Company concludes that that concludes Company the If unforeseen effects from COVID-19 from effects unforeseen outstanding of The weighted-average t income by the weighted-average number of of number t by the weighted-average income ent reporting period. period. reporting ent per Diluted earnings terest and other income or expenses derived derived or expenses income other and terest risk for a material adjustment to the carrying to the carrying adjustment a material for risk ty. The Company rea Company The ty. more challenging. challenging. more differ could results Actual will accept an uncertain tax treatment, the tax will uncertain treatment, an accept about these assumptions and about these and estimates could assumptions

next fiscal year are discussed below. next discussed year are fiscal below. profit, tax bases, unused tax losses, unused tax credits or tax credits losses, unused tax unused tax profit, bases, in its income tax filings. in tax treatments used to be tax used or planned used in treatments its income tax e global economic climate and and climate economic global e accept will authority a that taxation it is probable whether considered has Company The the uncertain tax treatments used thatis probable the it authority taxation the determines Company taxable tax rates consistently with the filings. If it is not probable that the taxation authority will accept an uncertain tax tax uncertain an accept will authority taxation that the probable not it is If filings. or the amount likely most the either using estimates makes Company the treatment, to expects Company the method which on depending treatment, tax the of value expected the uncertain better predict the resolution of estimate if the facts and circumstance change. change. circumstance and facts the if estimate Earnings per share is computed according to IAS 33, “Earnings per Share”. Basic Basic 33, Share”. “Earnings per to IAS according is computed per share Earnings dividing ne by share is computed per earnings ordinary shares outstanding during the curr during the outstanding shares ordinary additional plus consideration into share per earnings basic taking by is computed share had been equivalents share if the dilutive been outstanding would have that shares ordinary issued. is income Net adjustedalso in for from any underlying dilutive share equivalents. any underlying from shares is adjusted retroactively for stock dividends and employee stock compensation compensation stock and employee stock dividends for retroactively is adjusted shares issues. Earnings per Share (22) result in outcomes that require a material adjustment to the carrying amount of assets or of or assets amount carrying to the adjustment material a require that outcomes in result periods. in future affected liabilities at uncertainty estimating of sources key and other the future concerning assumptions key The significant a have would that date reporting the of within the assets or liabilities amounts parent when available the on information and estimates bases its assumptions Company The prepared. were statements only financial company assumptions and Existing circumstances circumstances or changes market to due change may however, developments, future about Company. of the the control beyond arising the assumptions in are reflected changes Such occur. they when Given th requires statements financial only company parent the Company’s of preparation The of amounts reported the affect that assumptions and estimates judgments, make to management of disclosure the and disclosures the accompanying liabilities, assets, expenses, revenues, uncertainty contingent liabilities. However,

pandemic, the process of estimation has become become has estimation of process the pandemic, financial the to consolidated be may material differences and such, as estimates, those from statements.

5. ACCOUNTING SIGNIFICANT ASSUMPTIONS AND JUDGMENTS, ESTIMATES liabilities, and deferred the tax assets are reassessed and assets are tax in a transaction a business is that in not ductible temporary difference arises from arises from difference temporary ductible ferred tax assets are recognized only to the the to only recognized are assets tax ferred lized shall be recognized in profit or loss, loss, or profit in recognized be lized shall erences associated with investments in with investments associated erences liabilities. liabilities. tax relating to items Deferred goodwill is nil, any remaining deferred tax goodwill deferred tax is nil, any remaining ght be realized and recognized subsequently subsequently recognized and realized ght be y differences will will reverse the in foreseeable differences y against which the temporary differences can can differences temporary the which against the tax consequences that would follow the follow would that consequences tax the all deductible temporary differences, the differences, temporary all deductible lity is settled, based on tax rates and tax laws rates and settled, based on tax lity is ognized in profit or loss but rather in other in other or loss but rather in profit ognized ble against which the deductible temporary which the deductible ble against

tity and the same taxation authority. authority. taxation same the and tity rred tax assets to be recovered.rred tax ctly in equity. Deferred ctly in equity. ts against current ts against taxincome other comprehensive income or equity. or equity. income comprehensive other benefits shall be recognized in profit or loss; or loss; in profit shall benefits be recognized from new information about facts and circumstances that existed at the acquisition date date at the acquisition existed that circumstances and facts about new information from that to related goodwill any of amount carrying the reduce to applied be shall acquisition. the carrying amount If of that subsidiaries, associates and joint ventures, de ventures, joint and associates subsidiaries, the temporar that probable that it is extent profit available be and taxable will future be utilized. In respect of deductible temporary diff temporary deductible of respect In the the initial recognition of an asset or liability nor profit accounting the neither affects transaction, the of time the at and, combination loss; or profit taxable Where the deferred tax asset relating to the de the to relating asset tax deferred the Where

b. a. Deferred tax assets and liabilities offset each other, if a legally enforceable right exists to to exists right enforceable legally a if other, each offset liabilities and assets tax Deferred current income tax asse set off rea benefits tax b. deferred acquired other All taxes relate to the same taxable en as follows: result period that a. measurement the within recognized tax benefits deferred Acquired criteria for the satisfying not but combination, business a of part as acquired benefits Tax date, mi acquisition at the recognition separate Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in apply to that are expected rates the tax at are measured liabilities assets and Deferred tax is realized or the liabi asset the year the when date. the reporting at enacted substantively or enacted been have that The measurement reflects tax assets and liabilities deferred of or to recover period, the reporting of end the expects, at the Company in which manner ofand its assetscarrying the amount settle recognized outside profit or loss is not rec comprehensive income or dire recognized at each reporting date. at each reporting recognized at reassessed assets are tax deferred Unrecognized future that probable become that has it extent to the recognized are and date reporting each taxable profits will allow the defe for recognized are assets Deferred tax that it is probable extent the to tax credits, tax losses and unused unused of carryforward that profit will be availa future taxable be credits can tax tax losses unused unused and of the carryforward and differences except: utilized,

289 United Microelectronics Corporation | Annual Report 2020 ment testing for the it is probable that future taxable profit profit taxable futureprobable is that it s to derive from derive to s asset the or CGU. Cash s value in use. costs of The value less fair tible temporary differences can be utilized. utilized. be can differences temporary tible tation of complex tax regulations, changes in in changes regulations, tax complex of tation ble to reflect the amount that an entity could could entity an that amount the reflect to ble mpany completes impair xable temporary differences against which the against differences xable temporary orderly transaction between market participants, orderly transaction between

unused tax losses, unused tax credits or deduc or credits tax unused tax losses, unused At each reporting date or whenever events indicate that the asset’s value has declined or or declined has value the asset’s that indicate events date or reporting whenever each At Company the place, taken have effect an adverse with the market changes in significant 36 may be that IAS there is an asset in the scope of assesses whether an indication impaired. any If exists, indication Co the the interpre to respect exist with Uncertainties income. taxable future of timing and the amount and laws, tax establishes The Company by the tax audits of consequences possible for estimates, reasonable on based provisions, authority. such as experience factors, is based on such provisions various of The amount by the made regulations of tax interpretations different and audits tax previous of responsible tax authority. losses, credits and tax tax unused of carryforward all for assets are recognized tax Deferred that extent the to differences temporary deductible ta or available there be will are sufficient likely the upon is based to be recognized determined assets tax deferred of amount The temporary differences. taxable and profits taxable future of level and the timing Please tax assets. to Note deferred refer 6(25) for unrecognized more details on CGU to which the individual assets belong. assets belong. individual the which to CGU or asset an of amount carrying the Where down written and is impaired is considered the asset amount, recoverable its exceeds CGU amount. its recoverable to asset or is the CGU an individual of amount The recoverable it and disposal less costs of value fair of higher availa information best on is based disposal an the asset in disposal of the obtain from disposal. of costs the deducting after present net the at measured is use in value The expect entity the flows cash future the of value and the estimated estimates judgments involves include subjective which projection flow that future cash and equipment, capacity flows, generates plant property, lives of useful the and industry the in cycle economic of fluctuations potential output, physical of capacity situation. operating Company’s

(4) Equipment Plant and Impairment of Property, (5) Tax Income anges in assumptions nce, based on historical experience and experience historical on nce, based that is expected tobe incurred at normal ts such as the selection of comparable comparable of selection the as such ts value of the financial assets. value Please refer ment bonds extrapolated from maturity from bonds extrapolated ment n multiples, etc.n multiples, Ch and net realizable value item by item.by itemvalue realizable net and Net y rate, etc., and may differ from actual actual from differ y may and rate, etc., and its long-term nature, a defined benefit benefit nature, a defined and its long-term ce in the ordinary course of business less the less the of business course ordinary ce in the

In determining the appropriate discount rate, management management rate, discount appropriate the determining In l 3 Financial Instrumentsl 3 Financial about these factors could affect the reported fair could affect these factors about details.to Note 12 formore obligation. benefit defined the of duration expected the to corresponding rate the As for comparisons past of experiences, takes account management salary increase, future of rate. the discount and inflation region, geographical the and industry the within to Due valuation the of actuarial complexity the in these assumptions. to changes sensitive highly is obligation are used The assumptions 6(15). disclosed in Note considers the interest rates of the govern companies or equity transaction prices and the application of assumptions such as as such assumptions of application the and prices transaction equity or companies valuatio discounts offor lack marketability, pri realizable value is the estimated selling sale. the to make necessary costs the estimated and completion of costs estimated Please 6(4). to including Note refer overhead, labor and include direct completion Costs of labor costs, indirect indirect e quipment, production of and maintenance depreciation material costs,supplies,royalties utilities and level. production account into taking level production normal estimates Company The planned maintena capacity resulting from loss of capacity. production current developmentsin future.the assets recorded on the balance sheet cannot be sheet cannot on the balance assets recorded financial 3 level the of values the fair Where appropriate an of application the by determined are they active markets, from derived these of valuation The approach. market the mainly which was method valuation judgmen significant involves assets financial at are the cost of lower Inventories valued a pension for obligation benefit of the defined value costs and the present benefit Defined valuation actuarial An method. projected unit credit the using determined are plan the determination the discount of include which assumptions, various making involves mortalit increase rate, salary rate, future

(1) Leve of Value Fair The (2) Inventories (2) (3) Benefits Post-Employment

290 Financial Review

December 31, December 7,165 7,165 84,043 50,226 50,226 129,322 12,045 12,045 95,137 For the years ended ended the years For As ofAs December 31, As ofAs December 31, 455,910 455,910 1,038,210 593,295 593,295 1,266,390 (476,084) (476,084) 663,686 2020 2019 2019 2020 2020 2020 2019 2020 2020 2019 $187,602 $187,602 $663,686 $663,686 $663,686 $- 2,551,677 2,551,677 2,061,059 9,173,522 9,173,522 8,791,223 2,610,534 2,610,534 3,332,244 1,947,803 1,947,803 1,757,352 $4,657,153 $4,657,153 $4,414,620 $12,239,586 $12,239,586 $10,231,451 $16,838,262 $16,838,262 $16,305,112 $14,850,120 $14,850,120 $13,563,695 rateassesses individually whetherand to s a expected credit loss rate to calculate calculate to rate loss credit s a expected ent. 60 over due past the receivables For the receivables past due within 60 days, 60 days, within past due receivables the

30 days days 30 121 121 days ≤ 60 days 31 to 90 days 61 to 91 to 120 days days 120 to 91 ≥ Subtotal either past due past either due Beginning balance Beginning period the for (reversal) Net recognize balance Ending Raw materials and spare parts Supplies Total Work in process process in Work goods Finished

receivable: accounts analysis of Aging N due: Past Total receivable: of accounts loss allowance for Movement were sales overseas party sales third and for third party domestic periods The collection days, respectively. 30~60 days and net 30~60 month-end credit expected date to measure reporting at each is performed analysis impairment An For receivable. accounts (ECLs)losses of Companynot past due, the including estimate ECLs. For the years ended December 31, 2020 and 2019, the expected credit loss rates are are rates loss credit expected the 2019, and 2020 31, December ended years the For ECLs. 0.2%. greater than not credit historical the Company’s based on determined The rate is forward-looking for adjusted condition, financial current and customer’s loss experience environm economic customer’s such as factors days, the Company applies the aforementioned the aforementioned applies Company days, the condition operating customer’s considering by losses credit expected additional recognize and debt-paying ability.

(4) (4) Inventories, Net -

2,384 20,000 20,000 20,125 $4,751 $4,751 $4,733 As of December 31, As of As of December 31, 31, December As of As of December 31, of As 360,460 184,500 360,460 (187,602) (663,686) 20202019 2020 2019 2019 2020 2020 2019 2019 2020 4,914,724 4,445,752 4,914,724 4,321,850 4,321,850 5,688,872 5,272,658 7,918,278 7,918,278 5,272,658 $5,966,442 $5,114,228 $5,966,442 $5,966,442 $5,114,228 $5,966,442 $5,583,598 $5,583,598 $4,909,603 $1,051,718 $668,476 $1,051,718 59,450,637 59,450,637 52,922,953 $14,850,120 $14,850,120 $13,563,695 $14,662,518 $12,900,009 $12,900,009 $14,662,518 $69,049,896 $66,534,836 $66,534,836 $69,049,896

teralized by government by government teralized measuredat fair value Funds Funds Preferred stocks Preferred Forward contracts bonds and corporate notes notes corporate and bonds Common stocks stocks Common through profit or loss profit through et Cash on hand and petty cash cash petty and hand on Cash accounts savings and Checking Time deposits deposits Time Total Total Total Total

Total Total Repurchase agreements agreements colla Repurchase Noncurrent Noncurrent Financial assets Financial mandatorily Current allowance loss Less:

Accounts receivable receivable Accounts N (2) (2) or Loss Profit through Value at Assets Fair Financial (3) Net Receivable, Accounts (1) Cash Equivalents Cash and 6. ACCOUNTS CONTENTS SIGNIFICANT OF

291 United Microelectronics Corporation | Annual Report 2020 - - 100.00 100.00 voting rights rights voting ownership or or ownership Percentage of

- - - - 47.75 1,470,499 1,470,499 11,150,575 11,150,575 67,885,435 67,885,435 $80,506,509 $80,506,509

- 95,116 100.00 - 87,327 - As of DecemberAs 31, voting rightsvoting Amount ownership or ownership Percentage of 2020 2019 2019 2020 - - 26,966 45.44 18,157 45.44 39,961 100.00 42,022 100.00 21,834 100.00 20,499 100.00 585,317142,353 100.00 100.00 590,702 121,840 100.00 100.00 823,185 42.00 642,660 42.00 145,913 er the equity methodas follows: is Amount Amount 6,551,136 30.87 3,829,934 30.87 1,722,181 100.00 1,755,033 100.00 2,488,169 40.00 2,281,631 40.00 4,087,620 100.00 3,756,049 100.00 9,107,377 13.36 5,400,821 100.00 4,398,331 4,566,933 100.00 4,273,912 100.00 10,166,702 100.00 11,643,953 100.00 22,926,322 100.00 23,183,005 100.00 10,696,825 20,055,019 17,668,765 100.00 17,515,233 100.00 10,165,563 36.49 4,378,193 36.49 67,984,780

$98,736,624 V. V. 135,624 100.00 142,378 100.00 r Under the Equity Method Investee companies Details of investments accounted for und for accounted Details investments of

a. (6) (6) Accounted Investments fo Subtotal Subtotal Subtotal Subtotal Subtotal Subtotal (Note B) (Note C) (Note G) (Note D, E) FARADAY TECHNOLOGY CORP. (FARADAY) (Note A) (Note (FARADAY) CORP. TECHNOLOGY FARADAY $1,589,448 (UNIMICRON) CORP. TECHNOLOGY UNIMICRON 13.78 $1,470,499 13.78 GREEN EARTH LIMITED LIMITED GREEN EARTH LTD. CO., TLC CAPITAL UMC GROUP (USA) (USA) GROUP UMC CORP. CAPITAL UMC LIMITED (SAMOA) INVESTMENT UMC (FORTUNE) CORP. CAPITAL VENTURE FORTUNE UNITED MICROELECTRONICS (EUROPE) B. (EUROPE) MICROELECTRONICS UNITED D) (Note JAPAN GROUP UMC Investments in associates in associates Investments LTD. PTE. HOLDINGS MTIC INC. CAPITAL UNITECH Total TRIKNIGHT CAPITAL CORPORATION CORPORATION CAPITAL TRIKNIGHT LTD. CO., INVESTMENT CHIEH HSUN YUAN INVESTMENT CO., LTD. YANN OMNI GLOBAL LIMITED LIMITED GLOBAL OMNI LIMITED SINO PARAGON LIMITED INTERNATIONAL ELITE BEST (USJC) CO., LTD. UNITED SEMICONDUCTOR JAPAN UMC KOREA CO., LTD. LTD. CO., KOREA UMC CORPORATION MICROELECTRONICS WAVETEK F) (Note CORP. TECHNOLOGY NEXPOWER 374,434 80.75 260,035 79.83 UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. LTD. CO., (XIAMEN) SEMICONDUCTOR UNITED

Listed companies companies Listed associates in Investments companies Unlisted Investments Investments in subsidiaries

- - December 31, December December 31, December For the years ended ended the years For For the years ended ended the years For As of December 31, As of 170,145 170,145 175,494 2020 2019 2020 2019 2020 2019 2019 2020 $255,295 $339,327 $339,327 $255,295 $255,295 $339,327 $339,327 $255,295 $9,012,450 $9,012,450 $2,348,454 $9,950,639 $14,388,597 $14,388,597 $9,950,639 $9,780,494 $9,780,494 $14,213,103 $1,825,365 $1,825,365 $(551,903) tive gains (losses) reclassified to retained y, in operating cost, of cost, which NT$439of in operating y, from equity instruments designated as fair as fair designated instruments equity from 2019, the Company recognized NT$93,109 NT$93,109 the Company recognized 2019,

Other Comprehensive Income, Non-Current Non-Current Income, Comprehensive Other

mpany’s investment strategy, the Company disposed and and disposed Company the strategy, investment mpany’s

earnings due to derecognition to derecognition due earnings

Fair value on the date of disposal disposal of date the on value Fair Total

Held at end Held at end of period the period during Derecognized to retained Cumulative reclassified gains (losses) None of the aforementioned inventories were pledged. pledged. were inventories the None aforementioned of million and NT$93,322 million, million, respectivel NT$93,322 million and For the years ended December 31, 2020 and 31, 2020 and December ended For the years value through other comprehensive income were listed below: income other comprehensive value through These investments in equity instruments are held for medium to long-term purposes and and purposes to long-term medium for are held instruments in equity These investments income. comprehensive other through value as fair for are accounted therefore or loss in profit recognized income Dividend In consideration ofIn consideration the Co comprehensive other through value fair as designated investments certain derecognized income. December ended years the for investments such of derecognition on Details as follows: were and 2019 31, 2020 Preferred stocks Preferred million was related to reversal of write-down of inventories and NT$1,174 million was million NT$1,174 and inventories of write-down of reversal was related to million related to write-down of inventories. cumula on 6(6) for details to Note refer Please earnings due to derecognition. Common stocks stocks Common

Total Total Equity instruments

b. a. a. b. c.

(5) (5) through Value at Assets Fair Financial

292 Financial Review 19, respectively. 19, respectively. these value of The fair of the foreign entity will be entity the foreign of $10,697 and NT$1,470 million $(44) million and NT$(19) million, $(44) and million NT$(19) million, not own the majorown not voting rights as the oss) in the financial statementsoss) in the financial for the of the foreign entity is different from the from the foreign entity is different of $1,928 million, as of December 31, 2020 2020 31, December of as million, $1,928 and NT$1,174 million for the years ended years ended the for million NT$1,174 and for the Company. the for Company. an is a associate When ber 31, 2020 20 and mpany does not control butowns significant joint ventures amounted to NT$2,714 million million NT$2,714 to amounted ventures joint ounted to NT

and 2019 were NT uded following the in table. 020 and 2019, respectively. 020 and 2019, respectively. s are able to align and prevent the Company from ruling from the Company prevent and to align s are able ence arising from translation

November 11, 2020. 11, November was dissolved andliquidated on CORP. NEXPOWER TECHNOLOGY F: Note G:Note Please refer to Note 9(4). which for method equity the using for accounted of investments amount carrying The are published pricethere quotations am million, as of December 31, 2 December as of million, NT and million were NT$18,885 investments some associates; after of shareholder is the largest the Company Although does Company the assessment, comprehensive remaining votingrights holder operation. relevant the Co the Therefore, were which not incl respectively, and 2019, respectively. respectively. 2019, and other by were audited method equity the under for accounted investments Certain accountants. independent or of Shares lossprofit of these subsidiaries, and associates NT$6,643 million to amounted ventures joint associates. aforementioned over the influence were method equity the using for accounted investments the aforementioned of None pledged. of associates: Financial information associate significant is no individually There 31, 2020 years ended December December 31, 2020 and 2019, respectively. income comprehensive other of Share 2019, respectively. and 2020 31, December and associates subsidiaries, these (loss) of respectively. 2019, and 31, 2020 December ended years the for million NT$1,189 and NT$29,135 were method equity the under for accounted investments of balances The Decem of as million NT$11,132 and million the operation,functional currency foreign and differ exchange an Company, differences exchange Such (loss). income comprehensive other in recognized (l income comprehensive other in recognized b. 2019, respectively. 2019, respectively. that thethe Company obtained ability ideration of minority interest discount minority interestof discount ideration retained earnings in the current period. the period. earnings current in retained values totalled NT$5,401and million ilities assumed the excess of was in ectors. previously was UNIMICRON 2020 and 2020 and tion of a joint venture agreement between between agreement venture a joint of tion

significant influence over UNIMICRON through FUJI SEMICONDUCTOR LIMITED (FSL) to acquired 84.1% ownership interest in MIE FUJITSU SEMICONDUCTOR LIMITED (MIFS) for JPY 1, 2019. October on of billion 15.9% 54.4 held previously The Company MIFS. in interest ownership the of subsidiary a wholly-owned became MIFS LTD. CO., JAPAN SEMICONDUCTOR UNITED as renamed and was Company the net of value The fair acquisition. the of upon completion (USJC) identifiable assets acquired and liab aggregate consideration transferred and the previously held ownership interest interest held previously ownership and the transferred consideration aggregate as recognized was the difference and date, acquisition the at USJC in 15.9% of resulted gain purchase the bargain of gain. Recognition purchase bargain 15.9% in USJC interest of which was held ownership the previously from valueat with cons remeasured fair the USJC is the surviving company. is the surviving company. USJC date. immediately at the acquisition to exercise significant influence over FARADAY through representation on its on its representation through FARADAY over influence exercise significant to Board Directors. of the obtained the Company that the fact associate given as an UNIMICRON ability to exercise Dir of its Board on representation as reclassified and income comprehensive other through value fair at measured method. equity the under for accounted investments fair value Cumulative to up income other comprehensive in recognized was previously that changes to reclassified date was reclassification respectively. million, NT$4,518 and million Company’s the deducting After of Company) the by stock treasury as (treated subsidiary the by held stock book residual the million, NT$120 31, NT$4,398 as of December million FARADAY as an associate given the fact given as an associate FARADAY USJC with and merged was JAPAN D: November of 1, As UMC 2020, GROUP Note E: the call opNote exercised The Company its in accounts for investment the Company June 2020, from Beginning B: Note NT$5,521 were investment of costs the 2019, and 2020 31, C: December of As Note its in accounts for investment the Company June 2015, from Beginning A: Note

293 United Microelectronics Corporation | Annual Report 2020

- 1,377 - 27,905,106 - (7,186,884) - (3,872,393) $- $729,669,762 $- $712,822,556 awaiting awaiting inspection Total equipment progress and progress Construction in - Furniture and fixtures and - (1,377) - (90) (17,901) Furniture Furniture equipment and fixtures Total and fixtures Total Transportation Transportation - (1,785) (10,275) - (1,693) (6,614) $- $73,165 $1,838,859 1,377 42,077 132,603 1,377 (1,377)

Machinery Machinery Machinery Machinery Machinery Machinery and equipment and equipment and equipment - - - (3,853,955) (3,772) (14,666) - 968,854 26,575,178 3,723 357,351 - - (8,490) - (4,921) - - (76,975) (7,091,918) - $- $16,289,905 $691,756,590 $34,964 $4,741,097 $- $17,181,784 $707,387,272 $34,825 $5,065,881 $- $989,966 $125,413 $1,077,298 $2,192,677 $- $905,738 $125,413 $1,036,914 $2,068,065 $452,915 $2,311,235 $125,413 $1,152,248 $4,041,811 Land Buildings Land Buildings Land Buildings Accumulated Depreciation and Impairment: and Impairment: Depreciation Accumulated Assets Subject to Operating Leases: Operating to Subject Assets Cost: Accumulated Depreciation and Impairment: and Impairment: Depreciation Accumulated

b.

Exchange effect Exchange effect Transfers and reclassifications Transfers Disposals As of December 31, of 2020 As December $452,915 $2,302,745 $125,413 $1,150,463 $4,031,536 31, of 2020 As December Depreciation Exchange effect Depreciation - 89,149 Exchange effect As of January 1, 2020 2020 1, of January As and reclassifications Transfers

As of January 1, 2020 2020 1, ofAs January As of December 31, of 2020 As December amount: carrying Net 31, of 2020 As December $861,487 $8,306,120 $47,515,961 $8,715 $753,922 $7,355,208 $64,801,413 amount: carrying Net 31, of 2020 As December $452,915 $1,312,779 As of January 1, 2020 of 1, As January

awaiting awaiting

inspection Total inspection Total equipment progress and progress Construction in - 15,151,893 15,151,893 405 424,747 405 424,747 December 31, December 71,566 - 71,566 For the years ended ended the years For As of December 31, 31, December As of 2020 2019 2020 2019 2019 2020 Furniture 2,912,770 2,912,770 1,264,480 and fixtures and $9,566,394 $9,566,394 $2,399,050 $13,554,966 $1,229,680 $1,229,680 $13,554,966 $13,043,995 $804,933 $804,933 $13,043,995 - - 159,338 (11,104,442) 975,138 are of all its individually all immaterial its individually are of equipment Transportation Transportation - -

Machinery Machinery and equipment and equipment operations operations $1,134,570 $6,653,624

- - - - (4,150,613) (4,216) (14,666) (12,938) (4,182,433) - - (134,356) (7,621,867) (304) (19,656) (32,495) (7,808,678) - - 36,558 11,883,684 ract 439, ract Land Buildings

Total comprehensive income (loss) income comprehensive Total

Income (loss) from continuing continuing from (loss) Income (loss) income comprehensive Other Assets Used by the Company: Cost: One of the Company’s associates, HSUN CHIEH INVESTMENT CO., LTD., held 441 held 441 CO., LTD., CHIEH INVESTMENT associates, HSUN the One of Company’s respectively. and 2019, 31, 2020 December as of stock shares of the Company’s million shares 201 held million LTD., CO., YUAN INVESTMENT YANN associate, Another 2019, 2020 and 31, December as of stock the Company’s shares of million and 200 respectively. sh of the Company’s amount The aggregate associates that are accounted for using the equity as is method using the equity follows: for are accounted that associates Time deposits with original maturities of over three over of maturities original with deposits Time year a to months Costs to fulfill a cont Others Total

2020 2020 a. c. (7) (7) current Other assets (8) (8) Equipment and Plant Property,

Exchange effect Exchange effect As of December 31, of 2020 As December $861,487 $25,487,904 $754,903,233 $43,540 $5,819,803 $7,355,208 $794,471,175 Transfers and reclassifications and reclassifications Transfers As of January 1, 2020 of 1, As January $861,487 $25,585,702 $754,792,029 $48,060 $5,694,787 $3,353,190 $790,335,255 Disposals Additions

294 Financial Review that lease payments payments be will that lease 10 (67,285) (317) (940) (908) (5,173) (850) (3,279) (317) (651) Furniture Furniture and fixtures Total and fixtures Total - - - - $- $115,334 $1,973,746 3,827 42,155 135,467

Machinery Machinery Machinery Machinery and equipment and equipment - (81,872) 3,213 (78,659) - (67,295) (623) of land located of in R.O.C state - (2,429) - - (4,265) - $- $905,738 $125,413 $1,036,914 $2,068,065 $- $819,016 $188,881 $995,916 $2,003,813 $452,915 $2,316,123 $207,285 $1,150,260 $4,126,583 Land Buildings Land Buildings Assets Subject to Operating Leases: Operating to Subject Assets Cost: Accumulated Depreciation and Impairment: and Impairment: Depreciation Accumulated b. The Company leases various properties, such as land , buildings, machinery and and machinery , buildings, land such as properties, leases various Company The 2 of 30 to with lease terms other equipment and equipment transportation equipment, years. Most lease contracts adjusted based on the announced land value. The Company does not have purchase purchase have not does value. Company land The announced the on based adjusted the lease terms. of the end of leased land at options as collateral. pledged not were plant and equipment Property, (9) Leases Leases (9)

Transfers and reclassifications Transfers 2019 1, of January As Depreciation -Disposals - 89,485 (334) As of December 31, of 2019 As December $452,915 $2,311,235 $125,413 $1,152,248 $4,041,811 Exchange effect Exchange effect As of January 1, 2019 2019 1, of January As As of December 31, of 2019 As December Exchange effect Exchange effect Transfers and reclassifications Transfers Disposals - Disposals amount: carrying Net 31, of 2019 As December $452,915 $1,405,497

- 31,203,508 - 67,285 - (2,841,979) - (2,577,512) $- $712,822,556 $- $686,971,254 awaiting awaiting awaiting awaiting inspection Total inspection Total inspection Total inspection Total equipment equipment progress and progress progress and progress Construction in Construction in - 9,557,500 9,557,500 (10) Furniture Furniture and fixtures and and fixtures and - - 25 (6,844) equipment equipment Transportation Transportation Transportation Transportation

-

Machinery Machinery Machinery Machinery and equipment and equipment and equipment and equipment

- - - - 67,295 - 990,980 29,858,993 4,320 349,215 - - - (29,574) (2,805,586) - (52,450) (3,039,442) (76) (7,655) (21,468) (3,121,091) -- (4,637) 30,577 (2,736,247) 10,900,865 (2,327) 3,557 (12,776) 211,284 (67,457) (10,388,204) (2,823,444) 758,079 - (4,624) (2,557,858) (2,327) (12,703) $- $15,333,123 $667,193,746 $32,946 $4,411,439 $- $16,289,905 $691,756,590 $34,964 $4,741,097 Land Buildings Land Buildings

Cost: Assets Used by the Company: and Impairment: Depreciation Accumulated 2019 a.

Depreciation

Transfers and reclassifications and reclassifications Transfers Disposals Exchange effect As of January 1, 2019 of 1, As January $861,487 $25,612,212 $749,666,853 $46,906 $5,503,934 $4,272,819 $785,964,211 amount: carrying Net 31, of 2019 As December $861,487 $9,295,797 $63,035,439 $13,096 $953,690 $3,353,190 $77,512,699 As of January 1, 2019 of 1, As January As of December 31, of 2019 As December $861,487 $25,585,702 $754,792,029 $48,060 $5,694,787 $3,353,190 $790,335,255 Transfers and reclassifications and reclassifications Transfers Exchange effect As of December 31, of 2019 As December Disposals Additions

295 United Microelectronics Corporation | Annual Report 2020 - - (56,414) - - (33,132) - (15,210) 4 4 $5,584,709 882 882 $9,667,535 603 603 $6,488,518 15,703) 15,703) (1,071,292) 15,703) (1,071,292) -- (9 - (9 061 850,655 2,131,272 494 730,192 2,008,233 technology technology technology Patents and and Patents and Patents license feeslicense Others Total feeslicense $2,385,592 Others $2,616,11 Total rlying assets. The contracts are to main t transfer substantially all of the risks and the risks all of substantially transfer t 477 $4,424,176 $3,402, 083 $2,836,832 $2,430, plant and equipment for operating leases. operating for and plant equipment (878) (32,254)

5,210) (1,907) (54,507) $583,003 Software Software Software The Company as The Company a lessor lease the dormitory to the employees with cancellation clauses. with cancellation dormitory to the employees lease the to Note refer Please property, of disclosure relevant 6(8) for rewards incidental to ownership of the unde the of ownership to incidental rewards are which equipment and plant property, certain on leases into entered Company The did no as they leases as operating classified

As of January 1, 2020 1, 2020 January of As $1,840, 1, January 2020 As of Exchange effect effect Exchange 2020 31, December of As $2,778,327 $4,539,730 $3,337,834 $10,655,891 Additions 1,110,556Additions Disposals (155,589) 170, (1 Reclassifications 794,547Amortization Disposals (155,589) 483, effect Exchange amount: carrying Net 2020 31, December of As $1,557,244 $1,702,898 $907,231 $4,167,373 As of December 31, 2020 2020 31, December of As $1,221, Amortization Accumulated and Impairment: Cost: 2020 b. (10) Intangible Assets December 31, December 4,747 4,747 5,262 9,509 7,450 6,127 4,907 2,186 2,186 2,193 8,400 8,308 8,308 8,400 42,558 42,558 19,385 16,970 24,925 24,925 16,970 For the years ended ended the years For As of December 31, 31, December As of As of December 31, 31, December As of 269,003 269,003 314,207 2020 2019 2019 2020 2020 2019 2019 2020 2020 2019 2019 2020 $293,032 $291,991 $291,991 $293,032 $233,761 $257,198 $257,198 $233,761 $244,751 $248,788 $248,788 $244,751 2,586,813 2,988,314 2,988,314 2,586,813 $2,831,564 $3,237,102 $3,237,102 $2,831,564 $2,527,227 $2,905,908 $2,905,908 $2,527,227 $2,823,209 $3,261,999 $3,261,999 $2,823,209 and 2019, the Company’s addition to and 2019, the Company’s NT$55 million and NT$204 million, st expenses on the lease liabilities. liabilities. lease the on expenses st

pledged as collateral. For the years ended December 31, 2020 For years the ended December respectively. Right-of-use assets were not right-of-use assets amounted toright-of-use Machinery and equipment and equipment Machinery Net equipment Transportation equipment Other Land Land Buildings equipment Transportation Land Buildings and equipment Machinery Total Current Total Total

Depreciation Other equipment equipment Other Noncurrent Noncurrent

Right-of-use Assets i. ii. Lease Liabilities Please refer to Note 6(23) for to Note 6(23) for the refer Please intere (a) (b) The Company as The Company a lessee

a.

296 Financial Review $- Repayment - 17,729,293 rincipal will in June be repayable rincipal will in June be repayable principal will be repayable in upon maturity. October 2024 principal will be repayable in upon maturity. October 2022 principal wasfully repaid in March 2020. principal will be repayable in Marchupon maturity. 2022 principal will be repayable in Marchupon maturity. 2024 p 2021 upon maturity. p 2024 upon maturity. (9,616) (147,877) $2,326 $2,326 As of December 31, 31, December As of As of December 31, 31, December As of Interest will be paid annually and the Interest will and the be paid annually Interest will and the be paid annually Interest was paid annually andInterest the annually was paid Interest will and the be paid annually Interest will and the be paid annually Interest will and the be paid annually 2020 2019 2019 2020 2020 2019 (1,999,910) (1,999,910) (20,093,825) 18,690,384 18,690,384 38,781,416 $16,690,474 $16,690,474 $18,687,591 $18,700,000 $21,200,000 1.13% 0.94% 1.15% 1.50% 1.43% 1.95% 1.70%

NT$3,400 million NT$2,000 million

at Fair Value through through Loss,Profit or Current Value at Fair 2017 2017

Term Issuance date Issued amount Coupon rate

Seven-year In early October Seven-year late In 2017 March NT$2,100 million Five-year In early October Ten-year mid-June In 2014 NT$3,000 million Five-year late In 2017 March NT$6,200 million Seven-year mid-March In 2013 NT$2,500 million Seven-year mid-June In 2014 NT$2,000 million The Company issued domestic unsecured corporate bonds. bonds. corporate unsecured domestic issued Company The conditions and terms The are as follows: the of bonds t e Forward contracts contracts Forward

Unsecureddomesticpayable bonds Unsecuredconvertible bonds payable portion Current Less: N Less: Discounts bondson payable a. Total Total

(12) Financial Liabilities (13) Bonds Bonds (13) Payable

- (10,033) - (19,716) - 36,210 5,599 $5,581,266 December 31, December December 31, December 190,018 $8,467,425 402,882 $9,667,535 For the years ended ended the years For For the years ended ended the years For As of December 31, 31, December As of 2020 2019 2020 2019 2020 2019 2019 2020 $634,202 $634,202 $664,315 $1,374,031 $1,374,031 $1,159,963 $1,283,850 $1,283,850 $1,355,850 0.53%~1.97% 1.96%~2.89% ,128) (638,815) (1,810,802) 53,128) (638,815) (1,810,802) 806,915 851,679 2,994,418 510,020 849,330 1,824,278 technology technology technology technology Patents and and Patents Patents and and Patents license feeslicense Others Total license feeslicense Others Total $2,838,058 $2,40 $2,385,592 $2,616,114 $5,584,709 271 271 $4,589,136 $3, (675) (675) (9,358)

0,477 0,477 $4,424,176 $3, 36,210 36,210 - 464,928 464,928 (218,859) (218,859) (953 $337,609 31, 2020 and 2019, respectively. respectively. and 2019, 31, 2020 1,335,824 (969) (18,747) Software Software Software Software (218,859) (9 (218,859)

Operating costs Operating expenses Operating loans bank Unsecured applied Interest rates

As of January 1, 2019 1, January 2019 As of As of January 1, 2019 1, January 2019 As of $688, As of December 31, 2019 2019 31, December of As $583,003 As of December 31, 2019 2019 31, December of As $1,84 Additions Additions Amortization amount: carrying Net 2019 31, December of As $1,257,474 $2,038,584 $786,768 $4,082,826 Disposals Reclassifications effect Exchange Disposals effect Exchange Amortization Accumulated and Impairment: Cost: 2019 The amortization amounts of intangible assets is as follows: of intangible amounts The amortization

NT$33,063 million as of December as of December million NT$33,063 The Company’s unused short-term lines of credit amounted to NT$27,835 million and million and NT$27,835 to credit amounted of lines short-term unused Company’s The (11) Short-Term Short-Term Loans (11)

297 United Microelectronics Corporation | Annual Report 2020

ital-stockoptions to 2025. 2025. is repaid in 9 Principal with monthly payments quarterly payments. interest December 10, 2024. December is Principal payments quarterly 12 in repaid payments. interest with monthly tible at any tible time on orJune 28, after - May 5, May5, to 2023 Effective ice will be subject to adjustments upon upon adjustments to subject be will ice $- to 2022 10, March Effective ght of the converting holder of the bonds theof bonds holder theof converting ght additional paid in cap in paid additional t: The conversion price was originallyt: The conversion price

n and US$15 million into 465 converted had been ion shares, respectively. ion shares, respectively. As of December 31, ofDecember As 2,000,000 2,000,000 $2,000,000 $2,000,000 to vote with respect to the shares it recei ves will beshares it subject to vote with respect to the certain to restrictions. 2015 and prior to May 8, 2020, into the Company ordinary shares; provided, provided, shares; ordinary Company the into 2020, May 8, to prior and 2015 beginning the days from 5 business within falls date if the exercise that however, ri the period, closed any during, and of, NT$17.50 per share. share. per NT$17.50 pr The conversion the occurrence of certain events set out in the indenture. set out in certain events of the occurrence

(iii) Conversion Price and Adjustmen and Price Conversion (iii) (i) the Company Ordinary shares of Securities: Underlying (ii) The are conver Period: bonds Conversion 2020. 31, March was on bonds the date of The last conversion the years ended For of convertible amount the principal the outstanding 2019, and 2020 31, December US$215 millio bonds totaling million shares and 33 mill

additional paid in capital-others. paid capital-others. in additional Upon the maturity date of May 18, 2020, the Company fully redeemed the remaining remaining the redeemed fully Company the 2020, 18, May of date the maturity Upon of amount principal The amount. principal of the at 98.76% bonds unconverted cancelled reclassified The Company million. to US$369 amounted redemption from million NT$1,166 of rights convertible iv. Terms of Conversion: of Conversion: Terms iv. v. v. Bonds: of Conversion Lenders Lenders 2019 2020 Redemption as follows: were 31, 2020 and 2019 December long-term of loans as of Details (14) Long-Term (14) Long-Term Loans from Bank of Taiwan from Bank of Taiwan Cooperative Taiwan from Bank Unsecured Long-Term Loan Long-Term Unsecured Loan Long-Term Unsecured

rmined at issuance at issuance rmined shall have the right to require the the require to right the shall have the principal amount of the bonds with the bonds with amount of the principal incipal amount of the bonds has already has already of bonds the amount incipal not part, of the bonds, at the Early Early at the bonds, the of part, not rtible bonds was dete 5% of the conversion price. price. conversion the of 5% Early The be redeemable at Early Redemption Amount Amount at Early Redemption be redeemable the convertible bonds was determined to be be to determined was bonds convertible the of redemption for payment in USD. in payment redemption for of ), and this fixed NTD amount will converted be and this fixedNTD amount ),

s, in whole but not in part,at the Early Redemption issuance costs amounting to NT$9 million. amounting costs issuance The effective Stock Exchange. Exchange. Stock using the prevailing rate at the time issuance and prior to the maturity date, prior to the maturity at and issuance Redemption Early (the annum per -0.25% of rate the at calculated interest an the on the Company of shares the ordinary of closing price the if Amount) which of last the days, trading 30of consecutive out 20 of period a for TWSE, such of notice which upon the date prior to 5 days more than occurs not 12 is at least is published, redemption Redemption Price will to NTDbe converted Fixed in the Exchange based on Rate (NTD 30.708=USD 1.00 if at Amount Redemption least 90% in pr cancelled. and repurchased or redeemed converted, been in the changes R.O.C.’s in at of any time, Amount event Redemption certain the of payments to gross up for the Company require would tax rules which interest of premium. or payments for up gross to or principal, Company to redeem the bond to redeem Company Amount. occurs to the Company, the bondholders bondholders the the Company, occurs to at the option of bondholders on May 18, 2018 at 99.25% of the principalthe of 99.25% at 2018 18, May on bondholders of option the at amount. be to cease shares ordinary Company’s the if Amount Redemption Early the listed on the Taiwan (i) (i) the of 3 years after or in part, in whole bonds, the redeem may Company The (ii) Early the at part, in not but whole, in bonds, the redeem may Company The but all, redeem may Company The (iii) (iv) of All or portion the bonds will any (vi) In the event that a change of control as defined in the indenture of the bonds the bonds of the in indenture as control defined of change a that event In the (vi) (v) (v) at of the bonds all to redeem Company the to require the right have Bondholders 2.03%. 2.03%. follows: are as bonds the of conditions and terms The interest rate ofon the component liability and recognized in additional paid-in capital-stock options amounting to NT$1,894 amounting options paid-in capital-stock in additional and recognized million, after reduction of On May 18, 2015, the Company issued SGX-ST listed currency linked zero coupon coupon zero linked currency listed SGX-ST issued Company the 2015, 18, May On bonds. convertible Presentation”, Instruments 32 “Financial IAS with accordance In of right the conve of the conversion the value i. million US$600 Amount: Issue ii. date) (Maturity 2020 18, May ~ 2015 18, May Period: Redemption: iii.

b.

298 Financial Review KGI Commercial Bank, Bank, Commercial KGI it of NT$2 billion starting from the the from starting billion NT$2 of it reduced will be of credit line This s. agreement the of date expiration The s. The expiration date of the agreement adjustments. adjustments. the date of The expiration on. This line of credit will be reduced on. This line of credit will be reduced loan agreement with agreement loan

$2 billion, respectively. respectively. $2 billion, il and NT$2 billion, respectively. Bank, effective from November 2, 2016. November from effective Bank, a Company the offered agreement The billi NT$3 of credit of revolving line three months every use and the first the third year after of the end starting from thereafter, with a total of nine adjustment 2022. 27, is October of line unused the 2019, and 31, 2020 December of As respectively. billion, and NT$0.6 billion NT$1.7 credit were a Company the offered agreement The 2018. 11, September from effective billion. of NT$2.5 credit line of revolving every twelve the use and thestarting the end from year after first second of four of total a with thereafter, months the 2019, and 2020 31, December 11, 2023. As of is December agreement respectively. billion, and NT$2.5 bil lion were credit of NT$1 line unused cred line of a revolving UMC offered which 30, 2020. to December date approval the 2019, and 2020 31, December As of werecredit n of unused line effective from February 9, 2018. The agreement offered the Company a a Company the offered agreement The 9, 2018. February from effective billi NT$2 of credit of revolving line twelve months every use and the first two years after the of the end starting from thereafter, with a total of adjustment four 2023. 9, is August credit line of the unused 2019, and 2020 December 31, As of and NT billion NT$0.8 were Act the R.O.C. of the Labor Pension is a defined under plan pension The employee plan. contribution of contributions monthly makes Company the the plan, to Pursuant pension employees’ to wage or salary employee’s individual each on based 6% accounts. in provided are branch the Singapore of benefits employees for Pension local regulations. the with accordance and million NT$915 of expenses pension Total 31, December ended years the for Company the by contributed are million NT$893 respectively. 2019, and 2020 a. plan contribution Defined C: Note Commercial with Chang Hwa agreement 5-year loan a into entered Company The D: 5-year The Company entered into a Note 2019, 30, E: on December loan credit 1-year the approved Bank Commercial First Note

Fubon Bank, Taipei with into a 5-year agreement loan entered Company The B: Note (15) Post-Employment (15) Post-Employment Benefits

Redemption Redemption October 16, 2020 to April April 16, 2020to 16, October interest with 2022 monthly payments. with 2023 9, August to 2021 payments. interest monthly with 2022 27, October to 2021 27, payments. interest monthly 2023 11, December to 2021 11, payments. interest with monthly payments. interest with monthly - Repayable annually August from 9, - May15, on 2025 due Settlement - December from annually Repayable $3 billion. This line of credit will be tal of tal adjustments. six expiration The r 17, 2016. 2016. r 17, the offered agreement The

and NT$0.5 billion, respectively. into a 5-year loan agreement with Mega International International with Mega agreement loan a 5-year into December31, For theFor years ended As of December 31, ofDecember As 700,000 700,000 300,000 2020 2020 2019 2020 2020 2019 8,500,000 8,500,000 4,400,000 1,000,000 1,000,000 2,400,000 from October quarterly Repayable 1,000,000 (1,000,000) (1,000,000) (500,000) $7,500,000 $7,500,000 $3,900,000 $1,500,000 $1,500,000 $2,000,000 from semi-annually Repayable 0.84%~1.20% 0.84%~1.20% 0.55%~1.22% Commercial Bank, effective from Octobe from effective Bank, Commercial NT of credit Company a revolving line of first use the after six and years months the two the of end from starting reduced to a with thereafter, six months every and is April 16, 2022. the agreement of date 2019, the 31, and As 2020 December of werecredit nil of unused line

Lenders Lenders Note A:Note The Company entered from Chang Hwa Hwa Chang from C) (Note Bank Commercial D) (Note Bank KGI from fromFirst Commercial Bank (NoteE) from Mega International from Commercial Bank A) (Note Fubon Bank Taipei from (NoteB) otal otal Interest rates applied applied rates Interest Unsecured Revolving Loan Revolving Loan Unsecured Revolving Loan Unsecured Revolving Loan Unsecured Unsecured Revolving Loan Revolving Loan Unsecured Revolving Loan Unsecured Subtotal Subtotal Less: Current portion Less:

T

299 United Microelectronics Corporation | Annual Report 2020

21% 21% 45% 24% 10%

2019 2019

December 31, December 9,284 9,284 13,225 51,495 51,495 41,284 95,360 95,360 94,362 48% 25% For the years ended the years ended For As of December31, As of December 31, As of (142,490) (216,510) 2020 2019 2020 2020 2019 2020 2019 1,399,345 1,399,345 1,385,696 (4,162,654) (4,162,654) (4,025,373) $1,385,696 $1,385,696 $1,453,335 $1,399,345 $1,399,345 $1,385,696 $(4,162,654) $(4,162,654) $(4,025,373) alance alance b

in other comprehensive

$61 million and NT$55 million,respectively. and $61 million excluding amountsexcluding included in interest in interest income recognized on the parent company only company parent on the recognized sheets sheets income (loss): Interest income on plan assets assets plan on income Interest Returnplan assets, on

obligation benefit defined the of value Present assets of value plan Fair $(5,561,999) status Funded $(5,411,069) definedNet benefit liabilities, noncurrent

Fair value of plan assets at end of year of plan assets at end of Fair value Debt instruments Others 11% Others 11% Beginning balance of fair value of plan assets fair value of balance of Beginning as profit or loss: recognized Items Remeasurementsrecognized 16% Cash Equity instruments Benefits paid Contribution by employer by employer Contribution follows: follows: follows: as are assets

Movements in fair value of plan assets during the year: assets during the value plan in of fair Movements 31, December ended years the for Company the of assets plan on returns actual The 2020 and 2019 were NT e parent company only balance sheets is as company only balance sheets parent th e recognized benefit plan on The defined iii. total the plan of value the fair of assets as a percentage categories of plan The major iv.

December 31, December For the years ended years ended the For (70,461) 180,095 (13,090)(36,254)(49,344) (21,043) (51,146) (72,189) 142,490 216,510 216,510 142,490 (173,615) (114,976) (244,076) 65,119 2020 2019 $(5,411,069) $(5,620,509) $(5,561,999) $(5,411,069) NT$59 million, respectively, were NT$59 respectively, million, completion of thecompletion of total the and year15th in the Company’s parentthein company Company’s only

Service cost Service Interest cost Experience adjustments adjustments Experience Arising from changes in financial assumptions assumptions in financial changes from Arising income (loss):

Subtotal Subtotal Defined benefit obligation at beginning of year of at beginning benefit obligation Defined as profit or loss: recognized Items Remeasurementsrecognized in other comprehensive Benefits paid of year end at obligation benefit Defined Subtotal Subtotal units will not exceed 45 units. 45 units. not exceed will units to equivalent amount an contributes The Company fund pension the to basis monthly a on wages salaries and total employees’ the of 2% supervisory fund pension a of name the under Taiwan of Bank the with deposited designated government’s the by is managed fund pension The committee. included not is and therefore authorities total 2019, and 2020 31, years December ended the For statements. financial expenses million and pension of NT$40 by the Company. recognized assets is as follows: defined benefit plan. of units the plan. on benefit based are benefits disbursed defined pension The Labor the to according retirement to prior salary monthly average and years service Act. Standards services of years the first 15 for awarded are units per year Two the after awarded is per year unit while one during the year: obligation defined of benefit in present value Movements

i. a is R.O.C. the of Act Standards Labor the by mandated plan pension employee The ii. Movements in present value of defined benefit obligation and fair value of plan plan of value fair obligation and benefit defined of value in present Movements ii. b. Defined benefit plan

300 Financial Review

0.5% 0.5% decrease decrease

0.5% increase increase (14,227) (14,227) (3,947) As of December 31, of As As of December 31, 31, December As of 356,810 356,810 51,862 $98,368 $55,063 $55,063 $98,368 107,731 138,480 138,480 107,731 (330,027) (330,027) (58,763) 2020 2019 2020 2019 2020 2019 $193,543 $193,543 $204,391 $206,099 $206,099 $193,543 $206,099 $193,543 $193,543 $206,099 $1,203,896 $1,203,896 $1,684,617 0.5% 0.5% determined based on a method method on based that a determined decrease decrease As of December 31, 2019 2019 31, December As of to equipment acquisitions received by the the by received acquisitions to equipment

Discount rate salary future increase of Rate 0.5% 0.5% increase under liabilities) other current defined benefit obligation benefit defined $235,666 $(251,131) $(215,694) $205,388 Decrease (increase) in

The sensitivity analyses above have been as result reasonable of benefit obligation a on the net defined the impact extrapolates period. the reporting of the end at occurring in key assumptions changes

Other operating income income operating Other Refund liabilities liabilities Refund

Beginning balance balance Beginning period the during Arising Recorded profit in or loss: effect Exchange balance Ending Current Noncurrent Total grants related government significant The recorded and related equipment lives of the useful over as income are amortized Company expenses. and income operating in the net other

(17) Refund (17) Refund Liabilities (classified (16) Deferred Government Grants Deferred Government (16) 0.5% 0.5% 329,681 348,862 387,002 423,810 decrease decrease 3,910,413 in the market over 0.5% increase increase As ofAs December 31, 0.29% 0.67% 3.50% 3.50% 2020 2019 As of December 31, 2020 December As of 31, 2020 0.5% 0.5% decrease decrease turn on assets is determined based on based determined turnis assets on on the assets’ returns on the assets’ inable from interest rates offered by local by interest rates offered inable from As of December 31, 2020 2020 31, December As of

Discount rate increase salary future of Rate 0.5% 0.5% $226,798 $226,798 $- $(204,390) $195,078 increase

Year Year 2022 2022 2023 2024 2025 2021 2021 $300,260 Total Total $5,700,028 2026 and thereafter thereafter and 2026 definedbenefit obligation Discount rate Discount futureRate of salary increase Decrease (increase) in

in NT$517 million of contribution fund pension to make expects The Company 2021. 9 both were obligation benefit defined the of durations weighted-average The 2019. 31, and 2020 December as of years

historical trend and actuaries’ expectations expectations actuaries’ and trend historical period. obligation the the by determined is fund the of utilization the Furthermore, minimum the also guarantees which committee, supervisory fund pension labor atta the earnings less than be no to earnings deposits. time two-year for banks of Bank by the a trust administered under is deposited pension fund Employee of re rate overall The expected Taiwan.

v. v. are as follows: actuarial assumptions underlying The principal payments benefit future asis Expected follows: vi. vii. Sensitivity analysis:

301 United Microelectronics Corporation | Annual Report 2020 2019 2019 2020 2020 As of As of December 31, December December 31, December As of - - 200,000 et. and repurchase the for The purpose

200,000 280,000 220,000 - 500,000 2020 2020 Decrease Increase 2019 Increase Decrease As of As of January 1, January 1, January

Purpose Purpose employees employees employees employees - 105,000 - 105,000 Company’s Company’s credit and its stockholders’ and rights interests

For transfer to For transfer to To maintain the the maintain To 480,000 220,000 - 700,000 (In thousands of shares) of (In thousands shares) of (In thousands For the year ended December 31, 2019 2019 31, December the year ended For For the year ended December 31, 2020 31, December the year ended For treasury stock shall not exceed 10% of the Company’s issued stock, and the total and issued stock, Company’s the of 10% exceed not shall treasury stock paid-in additional earnings, retained of the sum the not exceed shall amount purchase capital. paid-in additional and realized capital-premiums of the number such, As 2019, and 2020 31, December held of as Company the that stock treasury of shares did not exceed the limit. the centralized securities exchange mark exchange the centralized securities were 2019 and 31, 2020 December ended the years during stock in treasury changes as follows:

ii. According to the Securities and Exchange Law of the R.O.C., the total shares of of shares total R.O.C., the the of Law Exchange and Securities the to According ii. i. from shares its repurchased and program stock treasury a out carried Company The b. stock: Treasury ares, and 11,724 million million ares, and 11,724 300 million shares of treasury stock, treasury of shares million 300 restricted stocks for its employees in a in employees its for stocks restricted ted by all issued ADSs were 636 million value of NT$10 each. NT$10 each. value of The issuance was mber 31, 2020 and 2019, respectively. respectively. 2019, and 2020 31, mber One

, of which 12,422 million sh 12,422 which of million , December 31, 2020 and 2019 December shares were issued as of December 31, 2020 and 2019, respectively, each at a par at a each respectively, 2019, and 31, 2020 December as of issued shares were NT$10. of value of totalnumber The respectively. 2019, and 2020 31, December of as NYSE the represen Company sharescommon of Dece as of shares million 692 shares and shares. common represents five ADS the for 2016 13 to June 13, May from the period during were repurchased which April period the from during repurchased and employees, to transferring of purpose its and credit Company’s the maintaining of purpose the for 2019 13, June to 26 interests. and rights stockholders’ 4, January to 2018 7, November from the period during were repurchased which rights its stockholders’ and credit the Company’s maintaining of purpose the 2019 for interests. and 2020 31, December ended years the for Company the of shares ordinary into bonds respectively. 2019, and with a sharespar 200 million of total completed. was registration the and authority competent the by approved Please refer to Note 6(19) the information restricted stocks. of for i. of as issued be to shares authorized common million 26,000 had Company The cancelled the Company 2019, On March 11, iv. the on traded were which ADSs, million 138 and million 127 had Company The ii. stock, treasury of shares million 400 cancelled Company the 2019, 28, June On iii. convertible unsecured of conversion v. the Company’s to Note 6(13) for refer Please issued Company the 1, 2020, September On vi.

a. stock: Capital

(18) Equity

302 Financial Review

, such as as such , uity shares due to the the to shares due

(NT dollars) dollars) (NT Cash dividend per share share per Cash dividend 2021. 2021. are as of distribution The details e reversal of special reserve in accordance in accordance special reserve of e reversal justed to NT$0.80395653 per share. share. per NT$0.80395653 to justed The in outstanding common porting date. Information relevant to the may be released for earnings distribution or earnings for be released may ear-end. ear-end. is prohibited special reserve Such n of earnings for 2020 was approved by the the by approved was 2020 for earnings of n

42 9,765,155 $0.75 $1.60 2020 2020 2019 2020 2019 (in thousand NT dollars) dollars) NT thousand (in Appropriation of earnings earnings of Appropriation $3,197,890 $963,947

Cash dividends Cash dividends 19,875,8 Legal reserve Legal reserve reserve Special (2,857,666) (3,491,626) a appropriate to required is Company the FSC, of Taiwan regulations the to According eq under elements debit of sum equal to the the amount in reserve special unrealized loss on financial instruments and debit balance of exchange differences on on differences exchange of balance debit and instruments financial loss on unrealized y at every operations, of foreign translation the special elements is reversed, the debit any of if However, distribution. from equal reversal to the in the amount reserve deficits. accumulated offsetting held meeting stockholders’ the by was approved 2019 for earnings of appropriation The the appropriatio 2020, while June 10, on 24, on February meeting Directors’ of Board follows: Board of Directors’ meeting recommendations and stockholders’ meeting approval can approval meeting stockholders’ and recommendations meeting Directors’ of Board TWSE. the of website the on System” Post Observation the “Market from obtained be directors’ and employees the on information for 6(21) Note to refer Please compensation. approved been yet not has earnings retained 2020unappropriated of appropriation The as of the re meeting the stockholder’s by with the Rule No. 10902005780 subsequently issued by the Ministry of Economic Economic of by the Ministry issued subsequently 10902005780 No. Rule the with 2020. 3, R.O.C. March on Affairs, was meeting stockholders’ by approved appropriation 2019 aforementioned The 2020. April 27, held on of meeting Directors Board of the with the resolutions consistent ad 2019 was share per for dividend cash The June on meeting stockholders’ the by approved 2019 for earnings of appropriation The parent and consolidated the in disclosed amounts the from is different 2020 10, of because 31, 2019 December ended for the year statements only financial company th for appropriated reserve legal additional the adjustment was made for the net decrease share repurchase program and the conversion of convertible bonds into ordinary shares shares ordinary into bonds of convertible conversion the and program repurchase share the Company. of iture forecast, as iture forecast, entitled to voting rights or voting entitled to mpany shall be determined mpany shall be determined RP., held 16 million the shares of RP., ital intensive industry and continues to ital ries is treated as treasury stock. stock. treasury as treated ries is These by the Board of Directors according to to according Directors of the Board by still a remaining balance, in addition to ributed preferentially as preferred shares preferred as shares preferentially ributed e and its capital expend s shall propose the distribution plan and and plan distribution the propose s shall stockholders except for subscription to new subscription for except stockholders nge Law of the R.O.C., treasury stock held policy of the Co the of policy

and dividend policies: policies: dividend and reached the Company’s paid-in capital. capital. paid-in Company’s the reached regulations. dividends for the current year, and if there is and if dividends year, for the current it distribute shall Company the earnings, unappropriated year’s previous the to the distribution plan proposed according approval. for meeting stockholders’ the to submitted and policy dividend the the Company’s stock through acquiring shares of UNITED SILICON INC. in 1997, 1997, INC. SILICON in UNITED of shares acquiring through stock Company’s the the of result as a 2000 in stock Company’s the to converted were these shares and 1 merger. the Company’s in 5 2019, and 31, 2020 December As of Company’s CO VENTURE CAPITAL FORTUNE subsidiary, 2019, were and 31, 2020 December on price The closing stock. Company’s respectively. NT$16.45, and NT$47.15 receiving dividends. dividends. receiving held by subsidia Stock as rights other the same have subsidiaries stock issuance and voting rights. pledged, be shouldnor not should Company be it the by

well as stockholders’ interest, balancing dividends and the Company’s long-term long-term Company’s the and dividends balancing interest, stockholders’ as well planning. financial Director of The Board year. every meeting stockholders’ of toit distribution The submit the stockholders’ stock and 100%, to 20% of range in the dividend as cash allocated be shall dividend dividend in therange to 80%. of 0% operate in its growth phase, the dividend dividend the phase, growth its in operate in a cap business conducts Company the Because any, if earnings, year’s current Incorporation, of Articles to the Company’s According order: in the be distributed following shall pursuant to factors such as the investment environment, its funding requirements, its requirements, funding environment, such as the investment to factors pursuant landscap competitive overseasand domestic i. of Payment taxes. ii. years. preceding up loss for Making has reserve legal accumulated when for except reserve, legal for 10% aside Setting iii. or other officials government by reserve special reversing or Appropriating iv. dist be may applicable, if v. remaining, The

iv. The Company’s subsidiary, FORTUNE VENTURE CAPITAL CORP., held shares of held CORP., VENTURE CAPITAL FORTUNE subsidiary, The Company’s iv. iii. In compliance with Securities and Excha In compliance with iii. c. Retained earnings

303 United Microelectronics Corporation | Annual Report 2020 s measured at fair d information can be be can information d the Company without vesting conditions, the Company Company conditions,the vesting nce conditions set by the Company are nce conditions set by the Company are n right to employees represents a right to right a represents employees n right to vesting period, the restricted During the share-based payment wa share-based payment on shares of restricted stock for employees employees stock for restricted on shares of e registration by the Securities and and Futures e registration by the Securities alified employees of of alified employees ce of the shares on the grant date, NT$21.8 NT$21.8 shares the grant date, ce of the on cted to sell, pledge, set guarantee, transfer, pledge, cted sell, to set guarantee, transfer, issued on the grant date for employees are are employees for date grant the on issued vesting conditions, the Company will recall recall will vesting Company conditions, the e compensation costof NT$504 million e compensation was st System” on the website of the TWSE. TWSE. the of website on the st System” any other ways. Relate

ployees who fail fail the to fulfill ployees who and cancel their stocks without consideration. without stocks their cancel and stock holders are the entitled same rights as of common those holders stock including restri are but dividends, to receive right the share. per stocks restricted The unvested account equity contra transitional a as compensation employee unearned in recognized period. vesting the over expense compensation as amortized be shall account such and year For 31, the ended December 2020, th Company. the by in expenses recognized units to 3 plan grant million executed a compensation the Company 2020, In September right to qu cash-settled stock appreciation of gradually eligible to the vested restricted stocks at certain percentage and time frame. frame. time and percentage stocks at certain restricted the vested eligible to gradually employees who those failFor the to fulfill stocksgrant, the restricted in or dispose equity-settled the cost for The compensation pri market closing quoted on the based value were issued without consideration on September 1, 2020. 1, on 2020. September consideration without issued were is of plan the four life The years. those employees grant, of date since the years two of the end from Beginning performa and both service period fulfill who Po Observation the “Market from obtained effectiv for authorized was plan issuance The milli 200 accordingly, and the FSC of Bureau consideration. consideration. appreciatio of stock unit One the shareCompany. of one common of value intrinsic the four the plan of is The life years. grant, those employees of date years since the two of the end from Beginning performa and both service period fulfill who gradually eligible to the vested stock appreciation right at certain percentage and time time and right at certain percentage appreciation stock to the eligible vested gradually frame. For those em the period, will their rightswithdraw without vesting the During consider ation. rights as those of the same are not right entitled stock appreciation the of holders the Company. stock holders of common

c. employees right for plan appreciation Stock to vest at the end of one of one end the at vest to ed at fair value, having recognized in recognized having value, fair at ed fulfilled, together with correspondinga a compensation plan in their to a compensation meeting 33 million common shares.33 The Company is

expenses by the Company. expenses by the Company. with conditionswith service requisite In August 2018, the Company executed a compensation plan to offer 200 million shares shares 200 million plan to offer a compensation executed Company the 2018, In August the Company. of employees qualified to stock treasury of cost for compensation The the expense in recognized having value, at fair was measured payment shared-based the and date grant at the shares the price of market quoted closing the between difference employees. from received cash the Company’s the of price market quoted closing The per share. NT$16.95 was date grant the on shares date of the on vested stocks the For for whereas granted, once cost compensation entire the recognized Company the grant, from years two or one with stocks of the end requisite the at service conditions to vest the vesting over cost the compensation recognizes the Company of grant, date the are the services conditions in which period the 2019, 31, 2020 and December years ended the For in equity. increase were respectively, million, NT$366 and million NT$107 of cost compensation the Company. by in expenses recognized 105 million to offer plan a compensation executed Company the 2020, In September Company. the of employees qualified to stock treasury of compensation shares The was measur payment the shared-based for cost at the the shares price of market quoted the closing between the difference expense employees. from received the cash date and grant of price market quoted The closing share. per was NT$21.45 grant date the on shares Company’s the stocks vested the For once cost compensation entire the recognized grant, Company the of date the on stocks the for whereas granted, year from the date of grant, the Company recognizes the compensation cost over the the over cost compensation the recognizes Company the grant, of date the from year corresponding a with together are fulfilled, conditions services the which in period equity. in increase of cost compensation the 2020, 31, December ended year the For NT$348 million was recognized in approved 10, 2020, the stockholders June On consideration. without the Company of employees stocks to qualified restricted issue 2 are issued be The to shares maximum the custody under or in installments, tranche authorized in one to issue restricted stocks registration effective the date of receiving the trust from year within one institution, of authority. competent the from

a. a. employees plan for stock Treasury b. employees plan for Restricted stock

(19) Share-Based Share-Based (19) Payment

304 Financial Review - - The estimate of the As of December 31, 31, December As of As of December 31, As of

nd NT$249 million, respectively, respectively, in million, nd NT$249 velopment agreement. agreement. velopment to refer Please nce at the beginning ofbeginning as the theperiod at nce n and the consideration received from from received consideration the and n 7 million as of December 31, 2020 and and 31, 2020 as December of 7 million ed amounts of variable consideration that consideration of variable ed amounts to unsatisfied performance obligations obligations performance unsatisfied to allowance was mainly resulted from the from mainly resulted was allowance sed in Note 9(5). Department of (DOJ)the Justice against Department igns withof progress a toward completion 456,480 482,080 456,480 (329,654) (348,033) (355,451) 2020 2020 2019 2018 2020 2020 2019 2018 $111,094 $106,290$111,094 $81,187 $723,046 $547,024$723,046 $447,702 $1,179,526 $1,029,104$1,179,526 $447,702

satisfied for the years ended December 31, 2020 31, and 2020 December ended the for years satisfied The Company will recognize revenue as the Company satisfies its its satisfies Company as the revenue recognize will Company The

Sales of goods and services and services goods of Sales Loss allowance Less: $440,748 $454,323 $436,638 and services goods of Sales Current $1,179,526 Noncurrent $1,029,104 $447,702 Net Total Total

Note 9(5). indictment filed by the United States de to related technology Company joint the The loss allowance was assessed by the Company primarily at an amount equal to equal amount an at primarily Company the by assessed was allowance The loss losses. credit expected lifetime The loss the of difference timing the by caused mainly is liabilities contract of The movement obligatio performanceof a of satisfaction liabilities contract the bala revenues from were obligations performance customers. customers. a NT$350 million recognized The Company 2019. i. Contract assets, current 2019, respectively. respectively. 2019, amounted to NT$2,759 million and NT$2,98 million to NT$2,759 amounted ii. Contract liabilities

contract in the future. future. the in contract estimated reliably be cannot progress the date, report the of As disclo as suspension the to due primarily performance obligations over time that al time over obligations performance transaction price does not include any estimat include not does price transaction are constrained. b. Contract balances c. The Company’s transaction price allocated transaction The Company’s c.

4.73% $47.15 0.14%~0.19% 1.67~3.67 years 1.67~3.67 33.71%~37.64% December 31, December December 31, December As of December 31, 2020 31, December of As For the years ended ended the years For For the years ended ended the years For illion. The intrinsic value 2020 2019 2019 2020 2020 2019 2019 2020 1,466,223 1,466,223 850,656 5,706,971 5,731,637 5,731,637 5,706,971 ment. The assumptions used $133,814,180 $133,814,180 $122,771,780 $135,280,403 $123,622,436 $123,622,436 $135,280,403 $135,280,403 $123,622,436 $123,622,436 $135,280,403 $129,573,432 $117,890,799 $117,890,799 $129,573,432 are-based payment was at are-based payment fair measured of of December31, 2020, liabilities the for choles Pricing Option Model and will be

ognized amounted to NT$11 m ognized amounted to NT$11 ach reporting period until settle period ach reporting

Wafer Wafer At a inpoint time Total Total Total Total

Others Over time time Over Expected volatility Expected life life Expected rate interest Risk-free Expected dividend yield yield dividend Expected Shareprice of measurement date (NT$/ share) per ii. recognition revenue By the timing of i. By Product For the year ended December 31, 2020, the compensation cost of NT$11 million was was million NT$11 cost of compensation the 31, 2020, December ended year the For the Company. by recognized in expenses As rec right appreciation stock for the liabilities vested rights wasof the nil.for

The compensation cost for the cash-settled sh cash-settled the cost for compensation The value on the grant date by using Black-S ofremeasured end e the at below: as are

a. a. revenue of Disaggregation (20) Operating Operating (20) Revenues 305 United Microelectronics Corporation | Annual Report 2020 32,369 32,369 10,259 employees and directors’ and directors’ employees 2020 2019 $2,581,675 $2,581,675 $1,132,952 taking into consideration the Articles of of Articles the consideration into taking the resolutions of the Board of Directors Directors of Board the of resolutions the be granted such compensation. such compensation. granted be Directors owing order: The Company shall allocate no shall allocate Company owing The order: tes significantly, theCompany will recognize tes significantly,

distribute the aforementioned aforementioned the distribute the employees and directors’ compensation in the profit or profit the in compensation directors’ and employees the

held on February 26, 2020 . 2020 26, February on held

Directors’ compensation compensation Directors’ Employees’ compensation – Cash Cash – compensation Employees’ meeting can compensation directors’ and employees the aforementioned to relevant Information TWSE. the of website the on System” Post Observation the “Market from obtained be The aforementioned employees and directors’ compensation for 2019 reported during during reported 2019 for compensation directors’ and employees aforementioned The with consistent were meeting stockholders’ the may only receive compensation in cash. cash. in compensation receive only may adopted resolution a by may, Company The by two-thirds of the of Directors attended of at a the Board meeting vote a by majority of directors, number total distribution. such for meeting stockholders’ the to report and compensation recognizes The Company directors’ and employees the Incorporation, of Articles the Company’s to According in the compensation foll shall be distributed as profit of 0.2% than more no and compensation profit as employees’ of 5% than less any cumulative offsetting year after fiscal each profitable for compensation directors’ losses. or in shares will be distributed compensation employees’ The aforementioned cash. requirements specific fulfill who subsidiaries Company’s the of employees The by Boardthe stipulated of Directors may loss during the periods when earned for the years ended December 31, 2020 and 2019. 2019. and 31, 2020 December ended years the for earned when the periods during loss by the amount estimates Directors Board of The of the Board and industry If averages. regulations government Incorporation, of number the stock, through compensation employee to distribute resolves Directors the by divided compensation employee total on based calculated is distributed stock of If the Board meeting. of Directors the Board before pricethe day of closing estima the subsequently modifies Directors in the or period. profit loss in the subsequent an adjustment as change the to reported were 2019 for compensation directors’ and of employees distributions The and employees of distributions the while 2020, 10, June on meeting stockholders’ the the Directors Board of through were approved 2020 for compensation directors’ 24 2021. on February meeting are as of distribution follows: The details The Company developed a comprehensive employee welfare system in accordance with accordance system in welfare employee comprehensive a developed Company The competitive with employees to provide needs regional and regulations government laws, salary, monthly includes compensation Employees’ conditions. welfare and salary Company’s the on based compensation the and performance, operation on based bonus a conducts Company The articles. the by regulated and performance earnings performance job their understand to year every employees all of evaluation performance distributing and training promotions, for as a reference information such uses and compensation.

1,363,390 31,467,770 1,189,389 1,872,075 expenses Total Total expenses $6,010,762 $19,970,279 Operating uneration Committeeuneration to - 17,339 17,339 costs Operating 610 813,373 309,732 1,123,105 811 227,893 81,520 309,413 lts, future risks, corporate strategies, strategies, corporate risks, future lts, established the Rem the established $22,966,375 $13,959,517 Total Total

955,396 703,096 248,719 951,815 28,170,706 30,104,380 2,029,391 682,686 For the ended December years 31,

sts sts a fulfill to to contract operating costs when the and NT$425 million, respectively. Subsequently, the Subsequently, and NT$425 million, respectively. expenses expenses fulfill a contract with customer with customer a contract fulfill Operating

- 42,169 42,169 - 42,169 individual contribution. contribution. individual 650,997 1,378,394 822,935 285,675 1,108, 186,935 60,876 247, costs Operating $16,049,294 $6,917,081 benefit expenses insurance directors Salaries Labor and health Pension 723,862 231,534 Other employee Remuneration to Remuneration to expenses expenses epreciation mortization 26,830,084 1,340,622 mployee benefit

2019 2020 evaluate and monitor the Company’s remuneration system for its directors and and directors its for system remuneration Company’s the monitor and evaluate The and of directors shall assess Company the performance officers. executive of Board the of Assessment Performance for the Rules to according officers executive to order in Company, the of employees for Appraisal Performance the and Directors their determine compensation. will be calculated scheme compensation An adequate resu operation Company’s the referencing by also and trends industry The Company set the policy for directors and employees’ compensation in in the compensation employees’ and directors for policy the set The Company and Incorporation of Articles Company’s As of December 31, 2020 and 2019, the Company recognized costs to fulfill to costs fulfill recognized Company the 2019, and 2020 31, December As of follows: summarized as follows: follows: as summarized engineering service contracts eligible for capitalization as other current assets which which assets current as other capitalization eligible for contracts service engineering amounted to NT$439 million Company will co expense from related obligations are satisfied. E D A b. The Company’s policy for compensation of directors, managers and employees is as is as and employees managers directors, of compensation for policy b. The Company’s are expenses amortization and depreciation benefit, employee Company’s The a. d. to costs from recognized Asset

Costs and Expenses Operating (21)

306 Financial Review

Other net of tax net tax of income (loss), income comprehensive

- - (2,920,173)

103 3,065,189

effect effect 186 186 155 December 31, December Income tax 61,854 82,821 47,438 47,438 43,288 For the years ended ended the years For 122,849 122,849 62,435 2020 2019 $377,193 $377,193 $672,902 $609,520 $609,520 $861,601 Other before tax before tax income (loss), income comprehensive

- 4,574,491 15,805 - 4,590,296 3,065,086 $- $(192,581) $38,516 $(154,065) (67) (64,686) (22,366) 42,320 (432) (2,920,173) $(499) $4,462,137 $96,744 $4,558,881

For the year ended December 31, 2020 adjustments adjustments Reclassification during theduring period

(64,619) mprehensive Income (Loss) Income mprehensive 4,574,491 3,065,086 $(192,581) (2,919,741) $4,462,636 the period the period Arising during during Arising Bonds payable payable Bonds Bank loans Bank loans Lease liabilities Others Interest expenses expenses Interest Financial expenses expenses Financial Total

b. costs Finance

(24) Components of Other Co Other Components of (24) from equity instruments instruments equity from investments atmeasured fair value through other comprehensive income (loss) of subsidiaries, income ventures joint and associates be not which will reclassified to subsequently profit or loss benefit pension benefitplans pension translation of foreign operations income (loss) of subsidiaries, income ventures joint and associates which may be reclassified loss or to profit subsequently Unrealized gains or losses or gains Unrealized of comprehensive Share other Remeasurements of defined of defined Remeasurements Exchange differences on Share of comprehensive Share other subsequently to profit or loss: or to profit subsequently subsequently to profit or loss: or to profit subsequently income (loss) income

Items that will not be reclassified be reclassified not that will Items Items that may be reclassified be that Items may Total other comprehensive comprehensive other Total

- 499 499 December 31, December December 31, December 99,846 98,245 98,245 99,846 For the years ended ended the years For For the years ended ended the years For 249,572 249,572 137,308 716,046 716,046 77,832 2020 2019 2020 2019 2019 2020 $935,334 $191,108 $191,108 $935,334 $828,003 $964,614 $964,614 $828,003 $(130,130) $(122,277) engage in theft of of secrets. in theft trade engage Please were 14,313 and 14,589, including 5 and 6 6 5 and including 14,589, and 14,313 were

illion and NT$2 million, respectively. illion and NT$2 million, respectively. The Company's ncial assets and liabilities and assets ncial at fair value through profit loss or profit value at through fair Gain on disposal of investments investments on disposal of Gain Others (1,944,746)Others $(1,116,244)Total $1,017,178 52,564

Gain on valuation of finaon valuation of Gain The Company recognized the losses for the charges brought by the U.S. Department of of Department U.S. the by brought charges the for losses the recognized Company The to conspiracy allegation of regarding Justice to Noterefer 9(5). non-employee directors as of December 31, 2020 and 2019, respectively. respectively. 2019, and 2020 31, December of as directors non-employee 2020 and 2019 were NT$2 m NT$2 were 2019 and 2020 31, December ended years for the expenses salary average and NT$1 million million. the for adjustment expense average salary The Company's by 17.2%. 31, increased 2020 December ended year 31, 2020 and December ended the for years remuneration the supervisors’ therefore nil. both were 2019 Gain on disposal of property, plant and equipment and equipment plant property, disposal of Gain on Total Net rental property Net rental from loss grants Government Others

31, d. December the years ended for expenses benefit employee average Company's The and supervisors of replace in Committee Audit the established has Company The e. c. employees the Company’s of The number

a. and lossesgains Other (22) Net OtherOperating Incomeand Expenses (22)

(23) Non-Operating Income and Expenses and Expenses Income Non-Operating (23)

307 United Microelectronics Corporation | Annual Report 2020

(824,921) $163,773 $163,773 $(574,515) $(574,515)

- (268,986) 103 103 - December 31, December December 31, December 15,805 15,805 (136,979) For the years ended the years ended For For the years ended ended the years For $38,516 $38,516 $(21,281) 748,837 748,837 (226,634) 238,712 463,869 463,869 238,712 (846,238) (846,238) 2020 2020 2019 2020 2019 $639,110 $639,110 profit loss: or subsequently to subsequently other comprehensive income (loss) income comprehensive other

ted to originationted and of subsidiaries, associates and joint ventures which will not be reclassified subsequently profit to or loss reclassified subsequently to profit or loss or profit to subsequently reclassified $54,424 $(158,260) plans at fair measured investments instruments comprehensive other through value income Share of other comprehensive income (loss) income other comprehensive of Share Income tax related to items that will not be not that will relatedto tax items Income

Remeasurements of defined benefit pension pension benefit defined of Remeasurements equity gains orUnrealized losses from Items that will not be reclassified be not will that Items or reversal of write-down of tax deferred of write-down or of reversal assets derecognition of tax lossesandtax unused credits prior periods prior periods reversal of temporary differences differences temporary of reversal

Adjustment of prior year’s deferred income tax income deferred prior year’s of Adjustment write-down arising from tax Deferred income (135,238) 118,384 Deferred tax related to income recognition and Adjustments in respect of current income tax of tax of of current income respect in Adjustments Deferred income tax rela Deferred income Current income tax charge charge tax income Current Incometax expense (benefit) recordedin profit or Deferred income tax expense (benefit): (benefit): tax expense Deferred income loss $645,183 $645,183 loss Current income tax expense (benefit): (benefit): tax expense income Current

(i)

31, 2020 and 2019 were as follows: as follows: were and 2019 2020 31, i. or loss in profit recorded (benefit) tax expense Income ii. components of to Income tax related

a. December ended the years for (benefit) expense tax income of components The major (25) Income (25) Income Tax

Other net of tax net tax of income (loss), income comprehensive

- (1,045,504) - 1,112,547

effect effect Income tax Other $106,403 $(21,281) $85,122 5,605,384 (136,979) 5,468,405 before tax before tax income (loss), income comprehensive

- - - 1,112,547 - - (2,204,824) 8,252 (2,196,572) - - (1,045,504) $- $- $3,574,006 $(150,008) $3,423,998 $-

For the year ended December 31, 2019 adjustments adjustments Reclassification Reclassification during the period

$106,403 $106,403 1,112,547 1,112,547 5,605,384 (2,204,824) (2,204,824) (1,045,504) (1,045,504) $3,574,006 $3,574,006 the period Arising during Arising during benefit pension benefitplans pension from equity instruments instruments equity from investments measured at fair value through other income comprehensive income (loss) of subsidiaries, income ventures joint and associates which may be reclassified loss or to profit subsequently translation of foreign operations income (loss) of subsidiaries, income ventures joint and associates be not which will reclassified to subsequently profit or loss Remeasurements of defined defined of Remeasurements Unrealized gains or losses or gains Unrealized Share of comprehensive other Share Exchange differences on Share ofShare comprehensive other subsequently to profit or loss: or to profit subsequently income (loss)income subsequently to profit or loss: or to profit subsequently

Items that will not be reclassified be reclassified not that will Items Total other comprehensive comprehensive other Total Items that may be reclassified be that Items may

308 Financial Review

- 93 - 499,539 - (69,485)

(687) (687) (11,792) December 31, December 3,691 3,691 (559) 6,230 6,230 4,967 96,744 96,744 (150,008) For the years ended years ended the For (66,827) (66,827) (453,176) As of December 31, 31, December As of 449,139 449,139 570,450 240,165 240,165 339,185 331,174 331,174 475,952 101,384 101,384 117,515 824,888 824,888 797,432 128,222 128,222 139,084 (551,747) (551,747) (530,190) (559,334) (559,334) (565,175) 2020 2019 2020 2019 2019 2020 $998,836 $998,836 $1,111,077 3,989,061 3,989,061 4,221,294 4,422,010 4,422,010 5,618,879 1,348,202 1,348,202 1,568,645 (1,178,595) (1,629,818) $3,989,061 $3,989,061 $4,221,201 $3,243,415 $3,243,415 $3,989,061 $3,243,415 $3,243,415 $3,989,061

during the period the during (852,311) (86,633) deferred income income deferred assets tax as liabilities are and follows:

Loss carry-forward Loss carry-forward Depreciation Depreciation Pension Investment tax tax credits Investment Others Unrealized exchange gain gain exchange Unrealized Depreciation gain Investment option bond Convertible Others Refund liabilities liabilities Refund losses valuation inventory for Allowance loss Investment sales on intercompany profit Unrealized (loss) (loss)

Adjusted balance as of January 1 1 January balance as of Adjusted Deferred income tax assets tax assets income Net deferred 1 January of as Balance applications of retroactive Impact Amounts recognized in profitor loss income comprehensive other in recognized Amounts equity in recognized Amounts adjustments Exchange 31 Balance as of December Total deferred income tax liabil ities Total Total deferred income tax assets assets tax income deferred Total Deferred income tax liabilities tax Deferred income d. Movement of deferred tax

c. c. Significant components of

- (514) December 31, December December 31, December December 31, December $3,691 $(559) $3,691 $(45) $3,691 70,051 129,800 129,800 70,051 25,337 25,337 13,254 For the years ended the years ended For For the years ended ended the years For For the years ended ended the years For $42,320 $42,320 $8,252 482,509 90,904 90,904 482,509 (106,486) (123,825) (468,013)(442,391) (300,718) (75,647) (846,238) (824,921) 2020 2019 2019 2020 2020 2019 2020 2019 2019 2020 5,966,934 1,826,620 1,826,620 5,966,934 (2,382,622) (1,716,029) (1,653,898) 406,047 $29,834,672 $29,834,672 $9,133,099 ence arising

mporary differ rate was as follows: current income tax of tax of income current rate subsequently to profit or loss loss profit or subsequently to of subsidiaries, associates and joint reclassified be which ventures may profit loss or to subsequently

Share of other comprehensive income (loss) income other comprehensive of Share Items that may be reclassified subsequently to profitor loss: that Items may be reclassified from initialrecognition of the equitycomponent the compoundof financial instrument not be reclassified

Recognize(reversal) te of orGains losses which will on hedging instruments Deferred directlyequity to income tax charged

(ii)

tax credits tax credits income exempt Tax Investment loss (gain) (gain) loss Investment income Dividend Others write-downs/reversals and different jurisdictional and different write-downs/reversals tax rates expenses: non-deductible prior periods prior periods et changes in loss carry-forward and investment investment and carry-forward in loss changes et Adjustment of deferred tax assets/liabilities for for tax assets/liabilities deferred Adjustment of and of income non-taxable effect Tax Income before tax tax before Income tax At statutory income Adjustments of in respect N Others Others Incometax expense(benefit) recorded in profitor loss $645,183 $(574,515) Taxes withheld in other jurisdictions jurisdictions in other withheld Taxes Company’s applicable tax iii. Deferred income to equitytax charged directly iii.

b. A reconciliation between income tax expense (benefit) and income before tax at the the at tax before income and (benefit) expense tax income between b. reconciliation A

309 United Microelectronics Corporation | Annual Report 2020

-

2020 As of December 31, December 18,690,384 18,690,384

- - 8,500,000

December 31, December $2.35 $2.35 $0.76 (Note B) Others Others 30,911 30,911 65,657 65,657 90,047 For the years ended ended years the For (Note A) 303,630 303,630 1,295,729 2020 2019 12,473,167 12,473,167 13,170,884 12,072,969 11,785,108 11,785,108 12,072,969

- 0) (52,115) 2,831,564 865) $- $1,283,850 Non-cash changes Non-cash Foreign exchange - 281,219 371,964 20,746,624

Cash Flows sing from Financing Activities Activities Financing from sing

194,711 (30,268) (1,470) - 162,973 2020 As of 4,400,000 4,100,000 3,237,102 (323,743) (29,68 $1,355,850 $5,865 $(77, 38,781,416 (13,702,875) - (6,388,157) 20,093,441 January 1, January

dilution (thousand shares) (thousand shares) dilution basic earnings per share (thousand shares) (thousand per share basic earnings Restricted stocks for employees employees Restricted stocks for compensation Employees’ bonds convertible Unsecured Effect of dilution Effect (NTD) share-diluted per Earnings Weighted-average number of stocks after common of number Weighted-average

Weighted-average number of common stocks for for stocks common of number Weighted-average

For the year ended December 31, 2020: 2020: 31, December the year ended For Items Items

(27) Reconciliation of Liabilities Ari (current portion portion (current included) (current portion portion (current included) liabilities-noncurrent portion included) portion

Short-term loans Short-term

Guarantee deposits deposits Guarantee Long-term loans Long-term Lease liabilities liabilities Lease financial Other Bondspayable (current

x authorities through x authorities through gn jurisdictions.gn The December 31, December 31, December $2.42 $0.82 69,019 69,019 289,121 For the years ended ended the years For ended the years For 2020 2019 2020 2019 $29,189,489 $29,189,489 $9,707,614 $29,189,489 $29,189,489 $9,707,614 ption for several periods with respect to ptionwith to periods respect several for of December 31, 2020, income tax returns returns tax income 2020, 31, December of at the outcome of the income tax returns of of returns tax income the of outcome the at iwan and other forei other and iwan e examination by the ta the by examination e

d shares) shares) d 12,072,969 11,785,108 d by the tax authorities of the respective countries of of countries tax authorities ofthe the respective d by the Company’s stockholders stockholders Company’s the $29,258,508 $9,996,735 Unsecured convertible bonds bonds convertible Unsecured basic earnings per share (thousan share per earnings basic et income et income

Net income income Net of dilution Effect to attributable Income

N shares for ordinary of number Weighted-average (NTD) Earnings per share-basic Company’s income tax returns for all the fiscal years up to 2018 have been assessed and and assessed been have to 2018 years up all the fiscal for returns tax income Company’s Authority. the R.O.C. by Tax approved As completedbeen th Singapore branch has of income derived from the expansion of operations. had operations. of exemption tax expansion the income from The derived income 31, 2020. on December expired to amounted subsidiaries in investments with associated liabilities tax deferred million,respectively. million and NT$11,389 NT$11,463 2014. tax position There is an uncertain th accepte be not may Company the operations. operations. tax and current income deferred of and measurement the recognition For and estimates judgments, accounting significant which tax involved income 5(5). to Note refer please assumptions, e. taxation to Ta in subject is Company The g. unrecognized of differences temporary taxable the and 2019, 2020 31, December As of f. f. exem tax income was granted Company The a. Earnings share-basic per b. Earnings share-diluted per

310 Earnings (26) Per Share

Financial Review 2019 2019 mutual agreement in in agreement mutual 36 48 26 8,168

December 31, December 1,059 592 6,119 6,119 9,540 35,567 35,567 654,583 25,159 25,159 40,049 For the years ended ended the years For (14,802) (14,802) (11,180) As of December 31, of As As of December 31, 31, December As of 117,063 117,063 93,287 2020 2019 2020 2019 $259,191 $292,483 $260,312 $301,291 1,240,161 830,682 830,682 1,240,161 2,501,607 5,182,626 5,182,626 2,501,607 5,561,541 5,561,541 6,695,116 $5,402,792 $5,402,792 $5,937,706 $5,546,739 $5,546,739 $6,683,936 $49,357,981 $47,736,335 $47,736,335 $49,357,981 $53,124,908 $53,789,692 $53,789,692 $53,124,908 ion period for domestic sales to related domestic ion period for was determined through

er other current liabilities)

UMC-USA UMC-USA Others Others Subsidiaries Associates Total UMC-USA Subsidiaries Total Less: Loss allowance Net UMC-USA Subsidiaries Associates Others Total Associates Others

2020 Operating revenues revenues Operating reference to market conditions. conditions. market to reference collect The related above the parties to price sales The sales was overseas the collectionfor period days, while 30~60 were month-end parties days. 30~60 net liabilitiesRefund (classified und Accounts receivable, net net receivable, Accounts

Significant Related Party Transactions Transactions Related Party Significant a. transactions Operating

(2)

2019 As of

December 31, December

l liabilities-noncurrent. lated parties Others Others (Note A) Relationship Companythe with

Subsidiary Subsidiary Associate Associate Subsidiary Other relatedOther parties Other relatedOther parties Other re Other The Company’s director TheCompany’s 4,408 117,265 3,237,102 Non-cash changes changes Non-cash Foreign (180,180) - 4,400,000 $(51,660) $- $1,355,850 exchange

tails on othertails on financia

- - (698,127) 381,213 20,093,441 tween the Company and related parties during

ATION ATION Cash Flows

622,033 190,848 1,177 (619,347) 194,711 2019 As of 1,000,000 3,580,180 3,578,071 (462,642) $1,384,650 $22,860 41,378,182 (2,500,000) -20,410,355 (96,766) 38,781,416 January 1, January Namerelatedof parties

t

the effective interest method. the effective

UPISEMICONDUCTOR CORP. UNITEDVISIONSEMICONDUCTOR CO., LTD. UNITED SEMICONDUCTOR JAPAN CO., LTD. LTD. CO., JAPAN SEMICONDUCTOR UNITED MICROELECTRONICS CORPORATION WAVETEK UMC JAPAN GROUP Subsidiary Subsidiary HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. UNITEDDS SEMICONDUCTOR (SHANDONG) CO.,UNITEDDS SEMICONDUCTOR LTD. Subsidiary LTD. CO., (XIAMEN) UNITED SEMICONDUCTOR and its Subsidiaries CORP. TECHNOLOGY FARADAY CORP. TECHNOLOGY UNIMICRON Associate Subsidiary CORP. SYSTEMS INTEGRATED SILICON PHOTRONICSMASK CORPOR DNP UMC GROUP (USA)UMC GROUP (UMC-USA)

Name and Relationship of Related Parties Parties Related of Relationship and Name Note A: Note by measured amortization discount consisted of mainly changes non-cash Other B: Note bonds. convertible the Company’s for 6(13) Note to refer Please C:Note Please refer to Note 9(4) for more de

For the year ended December 31, 2019: 2019: 31, December the year ended For

Items Items

The following is a summarytransactions be a of The following is the financial reporting periods: periods: reporting the financial (1) portion included) portion (current portion portion (current included) (current portion portion (current included) liabilities-noncurrent

Short-term loans Short-term 7. 7. TRANSACTIONS PARTY RELATED Lease liabilities liabilities Lease Bondspayable (curren Guarantee deposits deposits Guarantee Long-term loans Long-term Other financial financial Other

311 United Microelectronics Corporation | Annual Report 2020 guarantee guarantee lease lease dormitory lease guarantee guarantee guarantee guarantee

Customs duty duty Customs

Energy resources Energy Bank performance December 31, December 2,255 2,255 2,147 For the years ended ended the years For 323,317 323,317 62,135 2020 2019 $307,779 $307,779 $159,990 $633,351 $633,351 $224,272 Bureau Collateral for land Bureau Collateral for was pledged pledged was of pledge Purpose Party to which asset(s) to Party Division, CPC Corporation, Corporation, CPC Division, Taiwan

19,510 Park Science 41,785 LiquefiedGas Business Natural the Company pledged as collateral: as pledged Company the

Carrying Amount Amount Carrying 18,215 41,785 As of DecemberAs 31, 217,530 331,361 Science Park $811,072 $810,035 Customs 1,000,000 1,000,000 Bank of China Short-term employee benefits benefits employee Short-term benefits Post-employment payment Share-based Total

to others provided and Endorsement/Guarantee to others provided Financing 2. Attachment 1 and Attachment to Please refer compensation personnel Key management d. e. Items Items 2019 2020

The table following lists assets of As of December 31, 2020 and 2019 2019 and 2020 31, December of As (Time deposit) deposit) (Time (Time deposit) (Time (Time deposit) (Time (Time deposit) (Time (Time deposit) (Time Refundable Deposits Refundable

Refundable Deposits Deposits Refundable 8. AS COLLATERAL PLEDGED ASSETS Deposits Refundable

Refundable Deposits Deposits Refundable Refundable Deposits Deposits Refundable Total $2,088,602 $2,202,691 Disposal/ Disposal/ Deferred gain Deferred Deferred gain Deferred December 31, December 31, December Purchase price For the years ended ended the years For For the years ended ended the years For As of December 31, 31, December As of 2020 2019 2020 2019 2020 2019 $335,425 $339,463 $339,463 $335,425 $522,329 $448,302 $448,302 $522,329 $478,270 $184,153 $184,153 $478,270 amount amount amount amount Disposal Disposal Disposal $1,754,657 $1,755,085 $1,755,085 $1,754,657

For the year ended December 31, 2020 2020 31, December ended year the For For the year ended December 31, 2019 2019 31, December ended year the For Item Item Item Item equipment equipment $287,092equipment $45,422

Associates Associates Others Others

Subsidiaries Subsidiaries and plant of Disposal property, Subsidiaries and plant of Disposal property, Others expenditure Mask assets intangible of Acquisition method equity the under investments of Acquisition for accounte d 9. Item Accounting Major to refer Please Significant asset transactions equipment and plant of property, Disposal Other payables of mask expenditure expenditure mask of payables Other

c. b.

312 Financial Review ct of New York. ct of New York. The and committing to sell and committing to it willit be dismissed. The Exchange Act of Exchange Act of 1934 and

JINHUA and preventing the JINHUA requesting the court to order the ivities with JINHUA. respect to the With to anyone else. to anyone has the Company Besides, ately cease to manufacture, sell, and import import and sell, manufacture, to cease ately for the Southernfor Distri e same day, the DOJ filed a civil complaint e same day, vant procedures. Currentlyvant procedures. the mediation ng one current employee and two former Company and others conspired to steal trade steal trade to conspired others and Company our motion while the other two actions are still motionour the other two while ng, importing, selling, the Company. Company. the withdrawal approved court The

mpany. mpany. The parallel civilsu es, was filed under Securities ary injunction against the aforementioned two defendants, two defendants, the aforementioned against ary injunction nufactured by the Company or Company the by nufactured

process has been completed and now under trial. trial. under now and completed been process has material not expect does Company The claim. this financial impactresulting from court appointed a lead plaintiff and approved lead plaintiff counsels on May 23, 2019. 2019. 23, counsels on May lead plaintiff and approved a lead plaintiff court appointed On complaint amended plaintiffs’ of service the received Company the 27, 2019, September to prepare the rele counsels and appointed Rule 10b-5 in the United States District Court 10b-5 in the United States Rule Company has recorded the fine in non-operating other losses. other in non-operating the fine recorded has Company On March 14, 2019, a putative class action styled Meyer v. United Microelectronics United Microelectronics v. Meyer styled action class putative a 14, 2019, On March several executiv Corporation and On January 12, 2018, the Company filed three patent infringement actions with the Fuzhou Fuzhou actionsthe with patent infringement filed three the Company 2018, 12, On January and others, (XI’AN) Court against, MICRON among CO., LTD. Intermediate People’s (SHANGHAI)MICRON CO.,TRADING LTD., defendants to stop processimanufacturing, all destroy also and to in questions, patents infringing the deploying products the Intermediate Fuzhou the 2018, 3, On July and tools. related molds and inventories Court granted prelimin People’s immedi must that defendants two the holding of rights the patent infringe that products actions on theinfringement of patent of one on trial. an unsealed (“DOJ”) the United States of Justice of the Department On November 1, 2018, CO.,LTD. CIRCUIT INTEGRATED JINHUA FUJIAN againstindictmentthe Company, (“JINHUA”), and three individuals, includi was that technology develop to that information used and MICRON, of secrets subsequently transferred to JINHUA. On th employees of the Company, alleging that alleging the Company, of the employees products any United States the to exporting from defendants the aforementioned enjoining containing DRAM ma the trade secrets transferring from defendants act technology development suspended the joint memorandum a sentencing filed the Company 2020, 22, October on proceedings, criminal US$60 of fine a to pay and charge lesser a to guilty plead to proposing court, the with sentencing above-mentioned the approved court the 2020, 29, October On million. memorandum submitted by the Co

(6) None. None. None. None. 10. DISASTER SIGNIFICANT LOSS

11. 11. EVENTS SUBSEQUENT SIGNIFICANT

t yet recognized was

for the expansion of its the expansion for x guarantee, amounting to institutes to open performance institutes to open performance urt, Northern District of California. of urt,California. Northern District of approximately NT$3.6 billion. billion. NT$3.6 approximately of of As in October 2014 to participate in a 3-way in October 2014 to participate beginning yearseventh the (2022) from CXM at their original investment cost plus cost at original their CXM investment n of the contracts no the contractsn of rrent liabilities-others for the purchase from from purchase the liabilities-othersrrent for nd development fees not yet recognized was yetwas not recognized fees development nd obtained R.O.C. government authority’s authority’s government R.O.C. obtained e District Court of Taichung in a suit alleged in a suit alleged Taichung e District Court of any intends to appeal the sentence. against any intends

veral construction contracts the litigations and customs ta rol. Furthermore, based on the agreement, the Company the Company agreement, the on based Furthermore, rol. the Company entrusted the financial

On December 5, 2017, MICRON filed a civil action with similar cause against the the against cause similar with action civil a filed MICRON 2017, 5, December On Co District States with the United Company and fees and relevant damages treble damages, actual to the entitlement claimed MICRON trade secrets its using from Company the enjoins that order an to issue court the requested these against answers prepare to counsels appointed has Company The question. in charges. court. the by stayed has complaint been civil the Currently On August 31, 2017, the Taichung District Prosecutors Office indicted the Company based based the Company indicted Office Prosecutors District the 31, 2017, Taichung On August the of Act of Company that employees R.O.C., alleging Secret on the Trade INC. (“MICRON”). MICRONTECHNOLOGY, of misappropriated the trade secrets On th by issued ruling an adverse 2020, 12, June the in engaged employee a former and employees its current two of Company, that the financial material expect not does The Company secrets. trade of misappropriation impact resulting fromclaim. this The Comp operations. As of December 31, 2020, these construction contracts amounted to amounted contracts construction these 31, 2020, December As of operations. approximately NT$0.2 billion and the portio approximately NT$0.2 billion. resolved the Company of Directors Board of The and ELECTRONICFUJIAN Government & Municipal with XiamenPeople’s agreement foundry wafer 12’’ on will focus which a company to form GROUP INFORMATION subsidiaries and Company The services. from instalments in USCXM in 8.3billion RMB invested and investment the for approval obtained Company the that agreement the to according 2018, to September 2015 January cont exercise to the ability financial a recognized liabilityotherin noncu in US investments their of investors the other interest totallyamounting to RMB4.9 billion, investors. by the other payment made following the last instalment The Company entered into several patent license agreements and development contracts of of contracts development and agreements license patent several into entered Company The amount contract total a for property intellectual NT$1.1 billion. NT$1.1 royaltiesDecember 31, 2020, the portion of a billion. NT$1.0 The Company entered into se guarantee, mainly guarantee, related to As of December 31, 2020, 31, December of As

(5) (4) (2) (3) (1)

9. AND UNRECOGNIZED COMMITMENTS CONTRACT CONTINGENCIES SIGNIFICANT

313 United Microelectronics Corporation | Annual Report 2020 denominated in a denominated tes relates primarily ising from purchases rm and long-term bank bank long-term and rm rrowing at floating interest floating interest rrowing at venue or venue or expense is g to NT$(3) million, was recognized as as was recognized NT$(3)g million, to ign currency risk ar as net investments in net as foreign subsidiaries in foreign exchange ra exchange in foreign gnificant monetary items denominated in denominated items monetary gnificant tary financial assets and liabilities is minor. tary financial assets liabilities and is minor. rates would not affect the future cash flows. cash flows. the future not affect rates would ematically in opposite directions givenematically for and 6(14) for the range of interest rates of the 6(14) the interest rates of for and range of the possible change in foreign exchange rates exchange foreign in change possible the 84.1% in USJC on October 1, 2019. 2019. 1, October on USJC in 84.1% Please nge contracts to manage foreign currency risk risk currency foreign manage to contracts nge rting period. period. rting strengthens/weakens NTD When the Company’s short-te Company’s the

and NT$1,009 million, respectively. and NT$1,009 million, respectively. st rate risk arising bo from terest rates would affect the future cash flows but not the but the flows cash future affect would rates terest acts designated by the Company to hedge foreign currency currency foreign hedge to the Company by acts designated ral hedges on the fore on the Company’s profit is performed on si performed profit is Company’s the on of repo end the the as of currencies foreign 2019 and 31, 2020 December profit ended USD by the 10%, for the years against million NT$883 by decreases/increases Interest rate risk exchange rate risks associated with the purchase of additional shares of USJC in JPY, in JPY, USJC of shares additional with purchase of the rate risks associated exchange 2018. 31, December to prior expired billion, 23 JPY to amounting hedge flow cash The amountin of equity, other components in reserve to Noterefer 6(6). of analysis sensitivity currency foreign The or sales, and utilizes spot or forward excha or forward utilizes spot sales, and or mone to of related risks the effect net the and the of amount as the same are the contracts currency foreign of the amounts notional The exchange forward any out carry not does Company the principle, In items. hedged commitments. uncertain for contracts currency forward certain designates Company The risk exchange to foreign currency exposure its to hedge hedges as cash flow contracts t transactions. forecas probable highly certain with associated assessment, basis of the On value the and contracts exchange currency forward of value that the expects Company the thechange syst of hedged transactions will rates. exchange foreign in changes relationships hedging in these ineffectiveness Hedge of movements value fair the impacting risk, credit the counterparties’ arises from mainly items. hedged and instruments hedging the emerged ineffectiveness of sources other No relationships. these hedging from Furthermore, the Company. by hedged they not are purposes, strategic are for contr exchange Certain forward of interest ownership the for consideration to the Company’s operating activities operating (when re to the Company’s net Company’s the and currency) functional Company’s the from currency different investments in subsidiaries. foreign The Company natu applies loans are floating, changes in in in changes floating, are loans loans. bank and bonds Company’s The Company’s exposure to the risk of changes changes the risk of to exposure The Company’s The Company is exposed to intere of hand, as the interest rates the other On value. fair 6(13) refer to Note 6(11), Please rates. All of the Company’s bonds have fixed interest rates and are measured at are measured and rates interest fixed have bonds Company’s the of rates. All cost. amortized interest in changes such, As Foreign currency risk currency Foreign

$-

ial activities, approval activities, ial As of December 31, 31, December As of As of December 31, 31, December As of 162,973 162,973 194,711 299,687 21,311,152 21,311,152 299,687 2020 2020 2019 2020 2020 2019 2,831,564 2,831,564 3,237,102 1,283,850 1,283,850 1,355,850 8,500,000 8,500,000 4,400,000 2,253,285 2,253,285 2,532,392 9,950,639 14,388,597 14,388,597 9,950,639 20,746,624 20,746,624 20,093,441 22,219,635 18,637,282 18,637,282 22,219,635 18,690,384 18,690,384 38,781,416 13,124,347 13,124,347 804,933 $74,437,356 $86,699,802 $86,699,802 $74,437,356 $121,639,545 $110,681,405 $110,681,405 $121,639,545 s, procedures and internal controls for for controls internal and procedures s, into significant financ ies. ies. and measures identifies, Company The ocedures. The Company complies with its with complies Company The ocedures. of cash a future flows instrument financial will

h profit loss or h profit $5,966,442 $5,114,228 through profit or loss through profit $2,326 rtion included) included) rtion risk (suchas equity price risk).risk at amortized cost at amortized cost cost amortized at Other financial assets assets financial Other Payables comprehensive income income comprehensive Refundable deposits deposits Refundable loans Short-term Bonds payable (current portion included) included) portion (current payable Bonds included) portion (current loans Long-term Lease liabilities liabilities Lease liabilities Other financial Cash and cash equivalents (excludes cash on hand) hand) on cash (excludes equivalents cash and Cash 21, Receivables 69,045,145 66,530,103 Guarantee depositsGuarantee (current po Financial liabilitiesFinancial at fair value Financial Assets Financial Liabilities Financial Total Total Total Total Financial assets at value throug fair Financial assets at value through otherfair liabilitiesFinancial measured Financial assets measured

risk and credit risk, market the are to manage objectives risk management Company’s The risk related liquidity to its operating activit preference. risk and on policy risks based the aforementioned manages policie appropriate established has The Company risk management. financial Before entering or value fair the that risk the is risk Market risk, currency comprise risks prices. Market in market changes because of fluctuate and other price risk interest rate

process by the Board of Directors and Audit Committee must be carried out based on on based out carried be must Committee Audit and Directors of Board the by process pr control internal and protocols related times. all at policies risk management financial (1) instruments financial of Categories (2) Financial risk management objectivesand policies (3) (3) risk Market 12. OTHERS OTHERS 12.

314 Financial Review

- 21,114,113 - 21,114,113 - - 4,508,614 - 21,400,751 21,400,751 - - (395,768) (395,768) - - - 19,422,001 8,790,107 194,711 - - 162,973 162,973 - - 39,939,843 - 22,073,362 22,073,362 - - 18,464,191 18,464,191 - $- $- $1,300,497 $- $- $1,389,620 $- $393,442 $393,442 $- $- $(2,326) mpany’s financial liabilities liabilities financial mpany’s ------$- $- $- $-

720,082 $89,396,676 $2,250,847 713,777 $76,396,014 $1,815,393 years > 5 years Total years > 5 years Total 4 to 5 4 to 5 - - - As of December 31, 2020 2019 31, of December As $- $- $- $-

years years 2 to 3 2 to 3 2 to 3 maturity profile of the Co - 162,973 - 17,120,418 4,280,333 - 12,668,287 8,445,826 98,824 95,887 $(2,326) 1 year year 1 year 1 Less than than Less than Less deposits deposits liabilities deposits liabilities Forward exchange contracts financial liabilities financial liabilities Short-term loansShort-term Payables $1,300,497 22,073,362 loansShort-term $1,389,620 payable Bonds 20,659,607 10,590,265 8,689,971 Long-term loans loans Long-term 539,584 3,969,030 Gross settlement Inflow $393,442 Outflow Outflow (395,768) Guarantee Guarantee Payables Payables 18,464,191 Lease liabilities 325,059 625,393 584,285 2,250,847 3,785,584 Guarantee Guarantee Other financial Other financial financial liabilities financial Bonds payable payable Bonds loans Long-term Lease liabilities 2,374,587 1,090,481 8,484,393 308,258 5,352,775 8,563,021 2,346,851 599,100 523,572 1,815,393 3,246,323 Total $41,476,885Total $27,948,862 $17, Non-derivative Derivative financial Non-derivative Total $27,147,185Total $31,719,659 $15, Net based on the contractual undiscounted payments and contractual maturity: contractual maturity: and payments undiscounted on the contractual based The table below summarizes the The table below summarizes

e change in in value change e fair asof million, respectively. respectively. million, institutions with good credit with good institutions credit financial institutions. The Company’s Company’s The institutions. financial creditworthythird parties. Wherethe ties are susceptible to market price risk less credit, it will request collateral from of counter-parties is limitedcounter-parties to of the carrying financial institutions by institutions financial limiting its counter ive income of listedive income of companies could In addition, notes and accounts receivable e price of the aforementioned financial assets assets e aforementioned the price of financial equivalents, bank loans, bonds and lease. lease. bonds and bank loans, equivalents, mpanies could increase/decrease the Company’s Company’s the increase/decrease could mpanies

and NT$6 million, respectively. NT$6 and million, respectively. y that all customers who wish to trade on credit are terms credit to trade on wish who all customers y that ic or international financial financial international or ic dings among various by NT$453 million and NT$671

Equity price risk At the reporting dates, a change of 10 basis points of interest rate rate in a reporting of aperiod 10 of basis interest points change dates, the reporting At to 2019 and 2020 31, December ended the years for profit the cause could million by NT$10 decrease/increase The Company’s objectives are to maintain a balance between continuity of funding and and of funding continuity a between maintain balance are to objectives The Company’s cash and the use of through flexibility The Company’s listed and unlistedsecuri equity listed The Company’s markets. equity of performance future about uncertainties from arising Company’s The a ssets at fair value through profit or financial as loss are classified and investments equity income. other comprehensive assets at value fair financial through on The sensitivity analysis for the eq uityth instrumentsbased is date. reporting the at assets financial aforementioned the of price in the 5% of change A fair value through profit or loss of listed co and NT$174 million by NT$193 2019 and 2020 31, December ended years the profit for million, respectively. 5% in th change of A comprehens other value through fair at years ended the for income comprehensive other Company’s the increase/decrease 31, 2020 and 2019 December and approved with trades only Company The Company trades with third parties which have them. polic It is the Company’s procedures. verification subject to credit to credit exposure the Company’s basis to decrease ongoing on an are monitored balances risk. risksThe Company mitigates the credit from only reputable domest to parties standing and spreading its hol default arising the creditto from risk exposure of these instruments. amount the top ten customers from receivable accounts 31, and 2019, of December 2020 As respectively. Company, of the receivable accounts the total of 84% and 81% represent insignificant. is receivable accounts other of risk concentration credit The (4) (4) risk management Credit

(5) (5) Liquidity ri management sk

315 United Microelectronics Corporation | Annual Report 2020

- 2,326 - 2,326 sed in the financial the in sed financial on a recurring basis, on a recurring basis, 913,641 4,914,724 4,914,724 913,641 608,991 4,445,752 4,445,752 608,991 - 9,950,639 892,267 - 14,388,597 971,289 2,326 As of December 31, 2019 31, 2019 December of As As of December 31, 2020 31, 2020 December of As west level input that tothe west is significant level input that tothe west is significant st level input that is significant to fair the occurred between hierarchy the in levels occurred between is measured or disclo - the financial statements the financial rded at fair value on a recurring basis: basis: on a recurring value rded at fair

to the fair value measurement as a whole: whole: a as measurement value fair the to Level 1 1 Level 2 Level 3 Level Total Level 1 1 Level 2 Level 3 Level Total $668,476 $- $668,476 $- 2,981,083 20,0009,058,372 1, 2,816,636 20,125 1, $1,049,334 $2,384 $1,051,718 $- 13,417,308

liabilities; observable; indirectly or directly is measurement value fair is unobservable. value fair measurement through profit or loss, current through profit or loss, current value value through profit loss, or current through other other through income, comprehensive noncurrent throughprofit loss, or noncurrent throughprofit loss, or noncurrent through other other through income, comprehensive noncurrent Financial assets at fair value Financial assets at fair value Financial liabilities at fair fair at liabilities Financial Financial assets at fair value Financial liabilities: Financial assets at fair value Financial assets at fair value Financial assets at fair value Financial assets: Financial assets:

All assets and liabilities and which fair value assets All for

statements are categorized within the fair value hierarchy, described as follows, based on follows, based on as described within the value hierarchy, fair are categorized statements the lowest level input that is significant — 1 Level or assets identical markets for in active prices market (unadjusted) Quoted — 2 Level techniques which the lo for Valuation — 3 Level techniques which the lo for Valuation in assets recognized liabilities are For and that have transfers whether determines Company the the lowe (based on categorization by re-assessing period. each reporting as a at the end of whole) value measurement a. reco and measured liabilities and Assets a market participant’s a market participant’s Contract Period February 5, 2021 5, 2021 February paid to transfer to a in liability paid liability, assuming that market participants liability, on that the transaction to sell the asset orasset the sell to transaction the that on incipal market for the asset or liability, or in orthe asset liability, market for incipal d into by the Company are summarized as as summarized are Company the by into d sset takes into account uld use the asset in its highest and best use. use. best and its highest in asset use the uld measured using the assumptions that market that the assumptions using measured ilities denominated in foreign currency. ilities denominated in foreign currency. The

d be received to sell an asset asset or an sell to d received be Notional Amount Type Type Forward exchange contracts contracts exchange Forward 82 Sell USD million 2020~ 11, December details of forward exchange contracts entere contracts exchange forward of details follows: December 31, 2020 As of risk rate exchange the hedging for contracts exchange forward into entered Company The or liab net monetary assets the arising from December 31, 2019 As of None. value isFair the that woul price an orderly transaction between market participants at the date. at participants measurement the market between transaction an orderly The fair is the presumpti based on value measurement either in the pr transfer the liability takesplace asset the liability. or for market advantageous most the in market, principal a of absence the the by Company. must be market accessible advantageous or the The principal most asset an The liability a or fairof value is or participants would use when pricing the asset interest. best economic their in act a non-financial a of measurement value fair A ability to generate economic benefits by usin g the asset in its highest and best use or by wo that participantmarket another to it selling for and circumstances the in appropriate are that techniques valuation uses Company The relevant use of the value, fair maximizing to data are available measure sufficient which inputs. unobservable the use of and minimizing inputs observable (6) (6) risk management currency Foreign (7) (7) instruments of financial value Fair

316 Financial Review

inputs and fair value and inputs inputs and fair value and inputs discount for lack of of the marketability fairaforementioned unlisted of values stocks could decrease/increase the profit (loss) Company’s discount for lack of of the marketability fairaforementioned unlisted of values stocks could decrease/increase the profit (loss) Company’s and other comprehensive income (loss) for the year ended December 31, NT$96 million by 2020 million, NT$48 and respectively. and other comprehensive income (loss) for the year ended December 31, NT$85 million by 2019 million, NT$53 and respectively. Sensitivity analysis of Sensitivity analysis of Level 3 fair value value fair 3 Level interrelationship between between interrelationship interrelationship between between interrelationship A change of 5% in the the in of 5% change A A change of 5% in the the in of 5% change A degree degree of lack of marketability, the thelower fair estimated is value determined. degree degree of lack of marketability, the thelower fair estimated is value determined. and fair value and fair value between inputs inputs between between inputs inputs between Interrelationship Interrelationship Interrelationship Interrelationship into and out of fair value hierarchy value fair outof and into value measurement in on and NT$165 million for the years ended years ended the for million and NT$165 on 0%~30% The greater information information Quantitative Quantitative Quantitative Quantitative 20%~30% 20%~30% The greater 2

As of December 31, 2020 31, December of As 2019 31, December of As inputs inputs Significant Significant Significant Significant lack of of lack marketability lack of lack of marketability iscount for iscount iscount for iscount unobservable unobservable unobservable unobservable D D Approach Approach Valuation Valuation Valuation technique technique Market Market Market equity equity equity equity stock stock securities securities securities securities Category of Category Category of Category Unlisted Unlisted

December 31, 2020 and 2019, were included in profit or loss that is attributable to the is attributable lossinor profit included that were 2019, and 2020 31, December quoted assets to without relating those financial or gains losses in unrealized change period.reporting the the end of pricesheld at market transfer the recognize to policy Company’s The transfer. that caused the circumstances in changes or event is based on the levels of fair inputs unobservable Significant The total profit (loss) of NT$305 NT$305 of milli (loss) profit total The as follows: are hierarchy

- - - (2,303,988) - - stock Total Total stock Total stock Preferred Preferred any’s development, development, market any’s restrictions or sale the on other comprehensive income income comprehensive other income other comprehensive Financial assets at fair value through value atfair assets Financial through value atfair assets Financial stock stock stock vel 3 fair value hierarchy is as follows: is as value hierarchy follows: vel 3 fair e restrictions. e restrictions. if values, fair measure To cash flow forecast, recent fund raising fund recent forecast, flow cash but unrestricted financial assets’ quoted but unrestricted financial assets’ the valuation techniques (income approach approach (income techniques valuation the Common Common Common the fair value measurement is directly or the or directly measurementvalue fair is through profit or loss and financial assets at assets at financial or loss and profit through - (73,673) (5,349) (79,022) - 318,419 (8,532) 309,887 - (2,303,988)

304,650 304,650 - 164,722 - $1,913,641 $1,913,641 $722,122 $170,145 $892,267 $1,608,991 $795,795 $175,494 $971,289 $1,608,991 $1,608,991 $795,795 $175,494 $971,289 $1,444,269 $2,781,364 $184,026 $2,965,390 r companies, individual comp r individual companies, profit or loss or profit loss or profit Common stock Common stock Common stock fair value through value fair through value fair Financialatassets Financialatassets onomic indicators. If there are If there indicators. onomic 2020 2019 comprehensive comprehensive income (loss) comprehensive income (loss) As of January 1, 2020 1, January of As in profit Recognized 2019 1, January of As in profit Recognized As of December 31, December of As Disposal 31, December of As Recognized in other Recognized in other Recognized transfer of a financial asset, which are a characteristic of the asset, the fair value of the the of value thefair of the asset, a characteristic are which asset, a of financial transfer asset bewill determined based on similar th for discounts appropriate price with market levelthatsignificantis to input lowest the value the fair of 2 Level as classified are assets financial the then observable, indirectly as Level 3. otherwise hierarchy, were no significant there December and 2019, 31, the2020 years During ended measurements. value 2 fair Level and 1 Level between transfers Le in value measurement fair Reconciliation for

fair value through other comprehensive income that are categorized into level 1 are into are categorized that income comprehensive other through value fair markets. active in prices market quoted on the based the market, there active no is If Company estimates the value fair by using of in consideration approach) market and valuationsimila of activities, conditions other and ec Fair values of financial assets at fair value fair value assets at financial of values Fair

317 United Microelectronics Corporation | Annual Report 2020 NTD (thousand) (thousand)

that it maintains disclose foreign disclose foreign Rate Rate liabilities-noncurrent. Exchange Exchange Foreign Foreign foreign currencies currencies foreign Currency (thousand) r related parties, while maintaining nagementensure is to mpanyto was unable s on other financial res its ability to operate continuously to continuously ability to operate res its NTD As of December 31, 31, December of As rrency. rrency. and assets financial The significant (thousand)

any’s capital ma any’s ilities denominated in Rate Rate Exchange Exchange 235,896 28.53 6,730,102 216,611 30.13 6,526,475 Currency (thousand) stockholders and the interests of interestsothe of and the stockholders amount before elimination. and loss. gain exchange foreign unrealized and realized total of the there Since within currencies and functional transactions currency foreign were varieties of the Co the subsidiaries the Company, of significant impact. with currency foreign towards each (loss) gain exchange The foreign currency transactions mentioned above are expressed in terms of the of in terms are expressed above mentioned currency transactions The foreign Please refer to the parent company only statements of comprehensive income for income comprehensive of statements only to company Please refer the parent Please refer toNote 9(4) detail refer more for Please 2020 2019

： ： ： onetary items onetary items SD:NTD SD:NTD items on-Monetary $629,508 SD:NTD 28.43 $17,896,912 47,868 SD:NTD $564,331 28.43 30.03 $16,946,864 1,360,874 37,542 1,127,372 30.03 MB:NTD (Note C) (Note MB:NTD 4,710,181 4.405 20,748,348 4,623,788 4.346 20,094,983 inancial Assets inancial Liabilities Foreign Foreign liabilities denominated in foreign currencies are as follows: follows: as are currencies foreign in denominated liabilities The following information was summarized by the foreign currencies other than the than other currencies foreign by the summarized was information following The Company. the of currency functional translate to used were disclosed rates exchange The the foreign currencies the into functional cu A Note B Note C Note Comp of the objective primary The the optimal capital structure to reduce costs of capital. costs of reduce optimal structure the capital to a strong credit rating and healthy capital ratios to support its business and maximize the the and maximize business to support its ratios capital healthy rating and credit strong a value. also ensu The Company stockholders’ provide returns to F M U N U F M U R SGD:USD 48,101 0.7559 1,033,694 66,197 1,474,822 0.7419 SGD:USD 87,190 0.7596 1,893,220 82,301 1,851,568 0.7454 (8) (8) Significant assets and liab financial

(9) (9) Capital management amount amount Carrying Carrying Carrying

- 8,500,000 - 4,400,000 $- $18,690,384 $- $38,781,416 ich fair is value disclosed: servable inputs share price, including servable inputs reporting period using using period reporting using period reporting financial instruments including cash and rates. is loans long-term of value The fair Fair value measurements during during measurements value Fair during measurements value Fair

rded at fair value but for wh for but value fair at rded 8,500,000 8,500,000 8,500,000 - 4,400,000 4,400,000 - Fair value Level 1 Level 2 Level 3 Fair value Level 1 Level 2 Level 3 $18,861,597 $18,861,597 $18,861,597 $18,861,597 $- $39,571,920 $18,224,873 $39,571,920 $21,347,047 Items Items portion included) included) portion portion included) included) portion included) portion included) portion volatility, credit spread and risk-free interest interest risk-free and spread credit volatility, current Company’s the on based model, flow cash discounted using determined rates ofincremental borrowing similar loans. short-term The fair the values Company’s of assets-current, other deposits, refundable receivables, financial equivalents, cash amount carrying their approximate deposits and guarantee payables loans, short-term due to their within one maturities year. December 31, 2020 of As The fair value of bonds payable is estimated by the market price or using a valuation or a valuation byprice is using estimated the payable market bonds of value The fair ob market-based uses model The model. Bonds payables (current (current loans Long-term December 31, 2019 of As (current payables Bonds (current loans Long-term

b. Assets and liabilities not reco

318 Financial Review ment income (loss), (loss), income ment l stock for the year ended December 31, December the year ended l stock for ting results and financial condition: Please and ting results of ownership, invest of ownership, s, the Company is not required to prepare ns through third regions the investees with in ear ended December 31, 2020: Please refer to to refer Please 2020: 31, December ear ended ounts exceeding the lower of NT$100 million NT$100 million of lower the exceeding ounts December Attachment 2020:to refer 31, Please of United Microelectronics Corporation and and Corporation of United Microelectronics ina): Please refer to Attachment 9. Attachment to refer ina): Please

transactions: Please refer to Note 12. Note 12. to refer Please transactions: 2, Attachment 7 and Attachment 8. Attachment 2, Attachment 7 and Please refer to Attachment 10. to Attachment refer Please ice, payment terms, unrealized gain or loss, and other or and other loss, unrealized gain terms, payment ice, ng segment information. information. ng segment Mainland China million or 20 percent of the capital stock for the year ended December 31, 2020: Please Please 2020: 31, December ended year the for stock capital the of percent 20 or million Attachment 5.refer to of stock 20 percent or the capital the for y 6. Attachment the capita or 20 percent of million NT$100 2020: Please refer to Attachment 7. 7. Attachment to refer Please 2020: limits on and earnings of inward cumulated remittance of investments, amount carrying investment in Mainland China: of investment, accumulated inflow and outflow of investments from Taiwan, net income net income Taiwan, from investments of and outflow inflow accumulated investment, of percentage (loss) of investee company, Mainland China, including pr on effects the opera with events significant Attachmentrefer to Attachment 1, or 20 percent of capital stock as of December 31, 2020: Please refer to Attachment 8. Attachment to refer Please 2020: 31, December of as stock capital of percent 20 or (excludinginvestment in Mainland Ch 11.

e. Acquisition of individual real estate with amount exceeding the lower of NT$300 NT$300 of the lower exceeding with amount estate real of individual Acquisition e. f. million NT$300 of lower the exceeding amount with estate real individual of Disposal lower of the exceeding amounts sales and purchases transactions for party Related g. h. related am with from parties Receivables j. derivative instruments and Financial k. shareholders as of major of Information a. of method totalcapital, amount and products, name, businesses main company Investee b. or indirectly Directly transactio significant i. 2020 31, of December as of investees information and related locations Names, (2) in Investment Regulation the of 22 Article with accordance In operating segment information for the parent company only financial statements. statements. financial only company parent the for information segment operating refer Please statements financial the consolidated to subsidiaries for operati 14. INFORMATION SEGMENT OPERATING ital, additional paid-in 5.68% 12.45% As of December 31, As of 2020 2019 2019 2020 14,188,424 29,411,771 29,411,771 14,188,424 (69,049,896) (66,534,836) $83,238,320 $95,946,607 $95,946,607 $83,238,320 206,804,357 235,659,746 $249,848,170 $236,216,128 $236,216,128 $249,848,170 r periods, the reporting is to maintain a vided by its total capital. capital. its total by vided is debt net The e capital stock for the year ended December ended December year stock for the capital e (excluding subsidiaries, associates and joint joint and associates subsidiaries, (excluding the Company and its affiliates as requiredaffiliates its and Company the by tal (including equity cap ed of with accumulated amount exceeding the the exceeding amount accumulated with ed of the Company adjust the the Company payment may dividend

y monitors its capital based on debt to capital ratio. ratio. capital to debt on based capital its y monitors The

Attachment 1. Attachment 2. to Attachment refer Please venture): Please refer to Attachment 3. Attachment to refer Please venture): of th NT$300 percent of 20 or lower million 31, 2020: Please referto Attachment 4. et debt debt et

Total liabilities Total cash equivalents Less: Cash and N equity Total capital Total Debt to capital ratios ratio is calculated as the Company’s net debt di ratio as is calculated the Company’s To maintain or adjust the capital structure, the capital adjust or maintain To redeem to assets dispose or shares new issue stockholders, to capital return stockholders, to liabilities. Similar to its peers, the Compan cash and cash minus sheets balance the on liabilities total the taking by derived equivalents. consists of to capital The total plus debt. net equity) of components other and earnings retained capital, fo unchanged which is strategy, The Company’s cost. reasonable with capital raise to in order ratio reasonable as ratios capital to debt The were as 2019 follows: and December 31, 2020 of

the R.O.C. Securities and Futures Bureau: refer to Please 31, 2020: a. December ended year the for to others provided Financing 31, 2020: December ended year for the to others provided Endorsement/Guarantee b. c. 31, 2020 December held as of Securities d. Individual securities acquired or dispos

(1) arefollowing The disclosuresadditional for 13. ADDITIONAL DISCLOSURES

319 United Microelectronics Corporation | Annual Report 2020 $94,263,898 (Note2) Limit of total of Limit financing amount financing $23,565,975 (Note2) Limit of financing amount financing of Limit for individual counter-party individual for $- Value Collateral Item None $- Loss allowance turnover Business financing Reason for Reason $- counter-party (purchases from) (purchases Amount of sales to sales of Amount term The need for short- for financing financing Nature of Nature 2.56% 0.90013%- Interest rate Interest $- Actual amount provided balance Ending $10,519,100 the period the Maximum $12,793,500 balance for balance Yes Related Party Related Other account Financial statement receivables - receivables related parties related Counter-party UNITED SEMICONDUCTOR LTD. CO., (XIAMEN) Lender UNITED MICROELECTRONICS CORPORATION 0 No. (Note 1) (Note ATTACHMENT 1 (Financing provided to others for the year ended December 31, 2020) 31, ended December year the for others to provided 1 (Financing ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount UNITED MICROELECTRONICS CORPORATION follows: coded as are subsidiaries and its company The parent 1: Note coded "0". is company The parent (i) above. table the in presented order the in "1" from beginning coded consecutively are The subsidiaries (ii) period. the of as value assets net lender's the of exceed 10% not shall counter-party individual for amount financing of Limit 2: Note value. asset net Company’s the of exceed 40% not shall amount financing total of Limit

320 Financial Review $10,017,788 $106,046,886 Limit of total Limit of total amount (Note 4) (Note amount 6) (Note amount guarantee/endorsement guarantee/endorsement 8.11% 30.98% statement statement Percentage of accumulated Percentage of accumulated value from the latest financial value from the latest financial guarantee amount to net assets guarantee amount to net assets $- $- Amount of collateral Amount of collateral guarantee/endorsement guarantee/endorsement (Note 5) (Note $4,564,118 $10,350,164 provided provided Actual amount Actual amount (Note 5) (Note $6,896,607 $19,122,525 Ending balance Ending balance $8,361,765 period period $19,122,525 Maximum Maximum balance for the balance for the $10,017,788 $106,046,886 Limit of Limit of (Note 3) (Note 6) (Note guarantee/endorsement guarantee/endorsement amount for receiving party amount for receiving party 2 6 (Note 2) (Note 2) (Note Releationship Releationship Receiving party Receiving party Company name Company name UNITED SEMICONDUCTOR CO., LTD. (XIAMEN) UNITED SEMICONDUCTOR CO., LTD. (XIAMEN) Endorsor/Guarantor Endorsor/Guarantor UNITED MICROELECTRONICS UNITED CORPORATION TECHNOLOGY HEJIAN CO., LTD. (SUZHOU) 0 1 No. No. (Note 1) (Note (Note 1) (Note ATTACHMENT 2 (Endorsement/Guarantee provided to others for the year ended December 31, 2020) 31, December ended year the for others to provided 2 (Endorsement/Guarantee ATTACHMENT (Amount in thousand; Currency denomination in NTD or in foreign currencies) CORPORATION MICROELECTRONICS UNITED LTD. CO., (SUZHOU) TECHNOLOGY HEJIAN Note 1: parent The company and its subsidiaries are coded as follows: 1. parent The company iscoded "0". 2. subsidiaries The are coded consecutively beginning from"1" order the in presented tablethe in above. Note 2: According to the "Guidelines Governing the Preparation of Financial Reports by issued Securities Issuers" by the R.O.C. Securities and Futures Bureau, receiving parties should be disclosed as one of the following: 1. company A withwhich itdoes business. 2. company A inwhich the publiccompany directly and indirectly holds morethan 50% of the voting shares. 3. company A directly and holds that indirectly more 50 than %public the of in company.shares voting the 4. public the company A companywhich in holds,directly orindirectly, 90% or more of shares. voting the 5. company A fulfills that obligations contractual its byproviding for endorsements/guarantees mutual company another or same industry the for in joint builders for purposesof construction a project. undertaking 6. company A capital forall contributing shareholders that endorsements/make company jointly invested guarantees their proportion in toshareholding percentages. their 7. Companies provide same industry the for in security joint among and performance a themselves several of contract forguarantee sales a pre-constructionhomes topursuant Consumerthe Protection for Act other. each Note 3: amount The of endorsements/guarantees shall not exceed 45% of the net worth of endorsor/guarantor; and the ceilings on the amount of endorsements/guarantees for single any entity are as follows: amount not 1. of The exceed shall forentity 45%endorsements/guarantees single any ofworth of net endorsor/guarantor. 2. amount The ofendorsements/guarantees for companya endorsor/guarantor which does business with, except rules abovementioned ceiling the shallnot exceed needed the amounts from arising amountof higher the is endorsor/guarantor party. between or totaltransactions which dealings sales purchase receiving andbusiness the amount aggregate The of endorsements/guaranteesCompany the that whole a as is permitted tomake not shall exceed 45%of Company's the worth, net and amount aggregate the of endorsements/guarantees for any singleentity shall not exceed 45% of the Company's net worth. 310 million. USD to up amount the in Bank Note Development 4: Limit of China total guarantee/endorsement amount shall not including exceed 45% banks from of UMC's loan net assets value as of December 31, syndicated 2020. LTD.'s CO., (XIAMEN) million. 41 USD to SEMICONDUCTOR amounted UNITED loan guarantee to syndicated for resolved endorsement of directors the board the 2017, 22, increase to Feburary On 5: Note resolved ofdirectors board the 2018, 24, October on million, 152 USD to amounted loan syndicated for million. 13 USD to endorsement amounted the loan increase syndicated to for resolved endorsement the of directors board the 2018, 7, decrease to March On resolved of directors board the 2019, 18, December on million, 26 USD to amounted loan syndicated for endorsement the decrease to resolved ofdirectors board the 2019, 24, July On On July 29, 2020,board the of directors resolvedto endorsement the decrease for syndicatedloan amountedto USD 32 millionendorsement andthe to for increase short-term million. 32 amounted loans agreement to USD CNY to 900 million. amounted loan syndicated for endorsement the decrease to resolved of directors board the 2020, 29, October On million, 29 USD to amounted loan syndicated for endorsement the decrease to resolved of directors board the 2020, 16, December On to endorsement the decrease for short-term amountedloans agreement to CNY 900 millionendorsement andthe to for increase amounted loans agreement to CNY 1.97 billion. billion. NT$10.35 was provided amount actual 2020, 31, of December As billion. 1.97 CNY and million 371 USD to up is amount endorsement Total Note 6: Limit of total endorsed/guaranteed amount shall not exceed 45% of HEJIAN TECHNOLOGY (SUZHOU) CO.,

321 United Microelectronics Corporation | Annual Report 2020 None None None None None None None None None None None None None None None None None None None None None None None None None collateral Shares as Shares (thousand) 93,873 92,956 32,728 20,000 722,122 170,740 307,200 468,012 950,674 170,145 194,845 185,307 711,774 443,601 $189,720 6,068,053 2,039,645 1,607,673 1,445,629 ------Fair value/ Fair Net assets value assets Net 4.71 2.70 0.21 1.70 1.25 1.13 0.22 9.79 9.29 7.66 0.83 0.72 8.67 0.30 4.29 1.68 0.98 19.02 17.63 12.67 15.75 Percentage of Percentage ownership (%) ownership - - - - 93,873 92,956 32,728 20,000 170,740 307,200 468,012 722,122 950,674 170,145 194,845 185,307 711,774 443,601 December 31, 2020 31, December $189,720 6,068,053 2,039,645 1,607,673 1,445,629 ------Carrying amount Carrying 0 57 586 324 938 1,208 1,600 2,675 9,883 6,692 5,627 1,184 1,166 20,000 13,960 16,445 12,000 18,000 17,511 22,144 16,680 12,521 20,483 10,715 119,979 (thousand) bonds/ shares bonds/ Units (thousand)/ Units Financial statement account statement Financial Financial assets at fair value through other comprehensive other through value fair at assets Financial noncurrent income, comprehensive other through value fair at assets Financial noncurrent income, comprehensive other through value fair at assets Financial noncurrent income, comprehensive other through value fair at assets Financial noncurrent income, comprehensive other through value fair at assets Financial noncurrent income, Financial assets at fair value through profit or loss, current loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, current loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, current loss, or profit through value fair at assets Financial current loss, or profit through value fair at assets Financial current loss, or profit through value fair at assets Financial current loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial ------Associate Associate Relationship The Company's director The Company's Name of securities of Name MILLERFUL NO.1 ESTATE REAL INVESTMENT TRUST HUT 8 CORP.HUT MINING INC. PIXART IMAGING, ELECTRONICSPHISON CORP. LTD. CO., ELECTRONICS YUAN KING PIXTECH, INC. CORP. TECHNOLOGY CHEN UNITED SHEN FU SEMICONDUCTOR INC. HOLTEK INC. INVESTMENT HOLDING OCTTASIA LTD. CO., GASES UNITED INDUSTRIAL TECHNOLOGY CORP.AMIC SUBTRON LTD. CO., TECHNOLOGY LTD. CO., ELECTRONICS YUAN KING EPISTAR CORP. TOPOINT LTD. CO., TECHNOLOGY PROMOS TECHNOLOGIES INC. INTEGRATEDSILICON SYSTEMS CORP. LIMITED HOLDING UNIMICRON ITE TECH. INC. MICROELECTRONICSNOVATEK CORP. RED ARC GLOBAL INVESTMENTS (IRELAND) ICAV TERM GLOBAL INVESTMENTSRED ARC (IRELAND) ICAV FUND LIQUIDITY TONBU, INC. INC. TECHNOLOGY AETAS GOLF & COUNTRYTA SHEE CLUB PTE.MTIC LTD. HOLDINGS Fund Fund Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Type of securities of Type Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred ATTACHMENT 3 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) and joint associates subsidiaries, (Excluding 2020) 31, December of as held 3 (Securities ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount UNITED MICROELECTRONICS CORPORATION 322 Financial Review None None None None None None None None None None None None None None None None None None None None None None None None None None None collateral Shares as Shares (thousand) 1,616 6,621 55,571 29,325 19,625 54,237 13,644 50,139 38,400 $2,090 145,803 106,583 203,400 152,487 207,470 122,107 - - 9,180 - - - 42,000 68,355 20,025 112,080 148,870 Fair value/ Fair Net assets value assets Net 6.67 2.96 9.12 8.18 7.50 7.29 6.93 5.32 4.98 4.74 4.53 4.20 4.12 3.72 3.71 3.16 3.11 2.87 7.43 3.45 15.06 19.65 15.94 14.49 13.25 11.69 10.23 Percentage of Percentage ownership (%) ownership 1,616 6,621 55,571 29,325 19,625 54,237 13,644 50,139 38,400 $2,090 106,583 145,803 203,400 152,487 207,470 122,107 148,870 December 31, 2020 31, December - - 9,180 - - - 42,000 68,355 20,025 112,080 Carrying amount Carrying 15 11 957 445 900 300 265 1,514 1,800 8,428 3,750 2,500 1,800 1,500 3,150 6,609 3,000 4,600 1,114 6,374 2,400 4,416 1,200 10,719 10,059 (thousand) bonds/ shares bonds/ - 3,838 Units (thousand)/ Units Financial statement account statement Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial ------Relationship Name of securities of Name TRANSLINK CAPITAL PARTNERS IV, L.P. PARTNERSTRANSLINK CAPITAL IV, DARCHUN VENTURE CORP. DARCHUN TECHNOLOGY CORP.SOLARGATE TRONC-E LTD. CO., CLIENTRON CORP. CENTERA PHOTONICS INC. RESOURCE TECHNOLOGYEVERGLORY CO., LTD. CORP. MATERIALS ADVANCE LTD. CO., MONTJADE ENGINEERING CO., LTD. MEDICAL EXCELSIUS TAIWAN REDEYE BIOMEDIAL INC. NEW LTD. CO., TECHNOLOGY SMART WIN LTD. CO., WIN TECHNOLOGY PRECISION VENTURECORP. CAPITAL RISELINK TECHNOLOGYLICO CORP. INC. TECHNOLOGY AMPAK LTD. CO., HOLDINGS GENOMICS ACT INC. TECHNOLOGY EMPASS BIOTECH LTD. CO., MERIDIGEN TECHNOLOGIES, INC. DEVICES MEDICAL TAIWAN AULISA EXCELLENCE OPTOELECTRONICS INC. STATE SYSTEMSOLID LTD.CO., SUBTRON LTD. CO., TECHNOLOGY INC. TECHNOLOGIES ANIMATION TOPOINT LTD. CO., TECHNOLOGY LTD. CO., INTERNATIONAL BRIGHT SHELAND TRENDFORCE FUND SPC-TRENDFORCE CAPITAL CAPITAL SP I FUND Fund Fund Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Type of securities of Type ATTACHMENT 3 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) and joint associates subsidiaries, (Excluding 2020) 31, December of as held 3 (Securities ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount FORTUNE CAPITAL VENTURE CORP.

323 United Microelectronics Corporation | Annual Report 2020 None None None None None None None None None None None None None None None None None None None None None None None None None None None None collateral Shares as Shares (thousand) 58 416 6,357 3,476 8,700 73,008 27,594 56,291 49,326 15,518 77,034 78,412 10,750 47,451 49,822 32,125 149,433 114,811 $373,856 - - 6,862 7,480 26,190 39,715 23,650 30,063 185,000 Fair value/ Fair Net assets value assets Net 0.70 2.70 2.07 2.15 2.06 1.89 1.63 1.08 0.68 0.63 0.46 0.04 1.51 1.07 1.02 0.02 Percentage of Percentage ownership (%) ownership ------58 416 6,357 3,476 8,700 73,008 27,594 56,291 49,326 15,518 77,034 78,412 39,715 10,750 47,451 49,822 32,125 149,433 114,811 December 31, 2020 31, December $373,856 - - 6,862 7,480 26,190 23,650 30,063 185,000 Carrying amount Carrying 2 1 21 60 311 627 694 550 615 888 514 200 100 379 455 250 9,930 1,449 2,250 2,400 6,741 1,500 4,000 1,000 1,300 23,909 (thousand) bonds/ shares bonds/ 131 - Units (thousand)/ Units Financial statement account statement Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial ------Relationship Name of securities of Name VERTEX V (C.I.) L.P. FUND V VERTEX EJOULE INTERNATIONAL LIMITED CORP. FLOADIA CEREBREX, INC. INC. FORTEMEDIA, INC. ACEPODIA, BRAVOTEK CORP. LTD. RADIO GEAR TAIWAN SEMICONDUCTOR CO., LTD. SEMICONDUCTOR CO., TAIWAN TECHNOLOGYCHITEC CORP., LTD. INC. PHARMACEUTICALS, FORMOSA M3 INC. TECHNOLOGY PRODUCTS YU CONSUMER FOONG YUEN LTD. CO., BUSINESS INC. SERVICE E-ENABLING ACER LTD. CO., LINTES TECHNOLOGY WALTOP INTERNATIONAL CORP. CRYSTALWISE TECHNOLOGY INC. CO., LTD.TAIWANJ PHARMACEUTICALS INC. PHARMACEUTICALS, NORATECH LTD. CO., TAIWAN TIGERAIR TECHNOLOGY APPLIED CORP. MATERIALS SOLAR INC. FORTEMEDIA, YEONG GUAN ENERGY TECHNOLOGY GROUP TECHNOLOGY LTD. CO., ENERGY GUAN YEONG INC. TECHNOLOGY IBASE TEAM GROUP INC. INC. ONLINE PCHOME ELECTROMATERIALS INC. WAH CHANG POWERTEC CORP.(formerly ELECTROCHEMICAL POWERTEC ENERGY CORP.) Fund Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Type of securities of Type Convertible bonds Convertible bonds Convertible bonds Convertible bonds Convertible bonds Convertible Stock-Preferred Stock Stock-Preferred Stock Stock-Preferred Stock Stock-Preferred Stock Stock-Preferred Stock Stock-Preferred Stock Stock-Preferred Stock Stock-Preferred ATTACHMENT 3 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) and joint associates subsidiaries, (Excluding 2020) 31, December of as held 3 (Securities ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount FORTUNE CAPITAL VENTURE CORP. 324 Financial Review None None None None None None None None None None None None None None None None None None None None None None None collateral collateral Shares as Shares as Shares (thousand) (thousand) 93 9,420 80,320 59,902 56,692 27,500 10,210 24,400 46,537 46,250 46,250 181,859 326,200 164,944 103,610 497,869 148,152 575,505 758,112 $24,308 $149,997 - - Fair value/ Fair Fair value/ Fair Net assets value assets Net Net assets value assets Net 4.91 0.46 4.24 2.67 4.62 3.27 3.20 1.86 0.86 0.77 0.64 0.64 7.00 0.13 18.18 16.13 13.00 13.99 10.99 Percentage of Percentage of Percentage ownership (%) ownership (%) ownership 0.41 0.25 - - 93 9,420 80,320 59,902 56,692 27,500 10,210 24,400 46,537 46,250 46,250 181,859 326,200 164,944 103,610 497,869 148,152 575,505 758,112 $24,308 December 31, 2020 31, December 2020 31, December $149,997 - - Carrying amount Carrying amount Carrying 13 117 365 250 6,470 6,433 1,200 5,435 1,000 3,183 1,000 1,422 1,978 1,000 1,000 10,500 16,079 150,500 (thousand) (thousand) bonds/ shares bonds/ shares bonds/ - - - - - Units (thousand)/ Units (thousand)/ Units Financial statement account statement Financial account statement Financial Financial assets at fair value through other comprehensive other through value fair at assets Financial noncurrent income, comprehensive other through value fair at assets Financial noncurrent income, Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial current loss, or profit through value fair at assets Financial ------Relationship Relationship Parent company Parent Name of securities of Name securities of Name EVERYI CAPITAL ASIA FUND, L.P. ASIA CAPITAL EVERYI L.P. FUND II, ASIA CAPITAL EVERYI OPPORTUNITIES PORTFOLIO HILL SEGREGATED FUND, OAK PARTNERS L.P.TRANSLINK CAPITAL III, GROWTH L.P. FUND, CHINA GREATER H&QAP SHIN-ETSU HANDOTAI TAIWAN CO., LTD. CO., TAIWAN HANDOTAI SHIN-ETSU UNITED MICROELECTRONICS CORP. BEAUTY INTERNATIONAL LTD. ESSENTIALS WINKING ENTERTAINMENT LTD. RESOURCE TECHNOLOGYEVERGLORY CO., LTD. CORP. MATERIALS ADVANCE WELLYSUN INC. GROUP MEDITECH SUNDIA EXCELLENCE OPTOELECTRONICS INC. HANDA PHARMACEUTICALS, INC. LTD. CO., SIMPLO TECHNOLOGY TXC CORP. LTD. CO., LINTES TECHNOLOGY PRODUCTS YU CONSUMER FOONG YUEN LTD. CO., STEELEVERGREEN CORP. BRIGHT SHELAND INTERNATIONAL CO., LTD. CO., INTERNATIONAL BRIGHT SHELAND EJOULE INTERNATIONAL LTD. POWTEC CORP.(formerly ELECTROCHEMICAL POWERTEC ENERGY CORP.) Fund Fund Fund Fund Fund Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Type of securities of Type securities of Type Convertible bonds Convertible bonds Convertible ATTACHMENT 3 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) and joint associates subsidiaries, (Excluding 2020) 31, December of as held 3 (Securities ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount FORTUNE CAPITAL VENTURE CORP. CAPITALTLC CO., LTD.

325 United Microelectronics Corporation | Annual Report 2020 None None None None None None None None None None None None None None None None None None None None None None None collateral collateral Shares as Shares as Shares (thousand) (thousand) 739 190 335 9,613 2,636 4,069 6,986 99,966 15,686 11,247 17,306 15,420 59,101 85,892 64,589 28,430 $4,100 286,997 106,617 224,149 - - - Fair value/ Fair value/ Fair Net assets value assets Net value assets Net USD USD USD USD USD USD USD 8.87 11.47 14.33 Percentage of Percentage of Percentage ownership (%) ownership (%) ownership 0.10 9.76 0.08 5.03 ------739 190 335 4,069 9,613 2,636 6,986 15,686 11,247 17,306 99,966 15,420 59,101 85,892 64,589 28,430 $4,100 286,997 106,617 224,149 December 31, 2020 31, December 2020 31, December - - - Carrying amount Carrying amount Carrying USD USD USD USD USD USD USD 40 49 99 770 672 279 717 667 7,035 2,685 2,377 5,332 8,519 2,000 26,499 35,863 (thousand) (thousand) bonds/ shares bonds/ shares bonds/ 7 120 - - - - - Units (thousand)/ Units (thousand)/ Units Financial statement account statement Financial account statement Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial current loss, or profit through value fair at assets Financial current loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial ------Associate Relationship Relationship Name of securities of Name securities of Name TRANSLINK CAPITAL PARTNERS L.P.TRANSLINK CAPITAL III, L.P. PARTNERSTRANSLINK CAPITAL IV, TRANSLINK MANAGEMENT III, L.L.C. III, MANAGEMENT TRANSLINK VALUE VALVES CO., LTD. VALVES VALUE LTD. CO., SOLUTION HOLDING ENERGY ADVANCED INC. INVESTMENT HOLDING OCTTASIA LTD. SP IV ALL-STARS TECHCENTIAL INTERNATIONAL LTD.TECHCENTIAL ELECTROMATERIALS INC. WAH CHANG CLOUDWORDS, INC. CNEX LABS, INC. GUANGXI CHIPBETTERGUANGXI MICROELECTRONICS INC. YOUJIA GROUP LTD.YOUJIA ALO7 LTD. LTD. HOLDINGS ADWO MEDIA IMO, INC. GROUP LTD. CO., FINANCIAL HIGHLANDER LTD. VIDEO GAME PLAYNITRIDE INC. EJOULE INTERNATIONAL LTD. LTD.TURNING POINT LASERS ARTERY TECHNOLOGY CORP. LTD. JSAB HOLDING Fund Fund Stock Stock Stock Stock Capital Type of securities of Type securities of Type Convertible bonds Convertible bonds Convertible bonds Convertible bonds Convertible Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred Capital-Preferred stock Capital-Preferred ATTACHMENT 3 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) and joint associates subsidiaries, (Excluding 2020) 31, December of as held 3 (Securities ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount CAPITALTLC CO., LTD. UMC CAPITAL CORP.

326 Financial Review None None None None None None None None None None None None None None None None None None None None None None None None collateral Shares as Shares (thousand) 77 519 562 978 166 200 2,266 1,006 9,053 5,949 3,538 7,243 6,131 1,400 8,623 1,664 3,924 3,940 3,329 - - - 5,006 9,222 Fair value/ Fair Net assets value assets Net USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD Percentage of Percentage ownership (%) ownership 3.82 1.38 4.53 1.76 1.69 0.46 ------77 519 562 978 166 200 1,664 3,924 3,940 2,266 1,006 9,053 5,949 3,538 7,243 6,131 1,400 8,623 3,329 December 31, 2020 31, December - 5,006 - 9,222 - Carrying amount Carrying USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD 6,555 9,461 2,770 1,287 3,352 (thousand) bonds/ shares bonds/ 80 64 614 175 174 - - - - - 2,644 3,920 1,349 8,520 3,866 3,500 4,980 30,075 12,241 Units (thousand)/ Units Financial statement account statement Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial ------Relationship Name of securities of Name TRANSLINK CAPITAL PARTNERSTRANSLINK CAPITAL L.P. II, L.P. VENTURES II, GROVE VENTURES L.P. XI, SIERRA L.P. V, STORM FUND VENTURES L.P. VENTURES XII, SIERRA ACHIEVE MADE INTERNATIONAL LTD. MADE ACHIEVE ACHIEVE MADE INTERNATIONAL LTD. MADE ACHIEVE CNEX LABS, INC. GLYMPSE, INC. INC. ATSCALE, LTD.SENSIFREE INC. HOLDINGS, APPIER LTD. HOLDINGS DCARD NEXTINPUT, INC. GCT SEMICONDUCTOR, INC. INC. FORTEMEDIA, LTD. CO., TECHNOLOGIES SIFOTONICS INC. ENERGY, NEVO SYSTEMS, INC. NEXENTA CLOUDWORDS, INC. LTD. TECHNOLOGY VISION EAST INC. RENIAC, INC. BLUESPACE.AI, REED SEMICONDUCTOR CORP. Fund Fund Fund Fund Fund Stock Type of securities of Type Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred stock Stock-Preferred ATTACHMENT 3 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) and joint associates subsidiaries, (Excluding 2020) 31, December of as held 3 (Securities ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount UMC CAPITAL CORP.

327 United Microelectronics Corporation | Annual Report 2020 None None None None None None collateral collateral collateral collateral Shares as Shares as Shares as Shares as Shares (thousand) (thousand) (thousand) (thousand) 1,808 3,414 29,949 $5,407 $100,364 39,320 Fair value/ Fair value/ Fair Fair value/ Fair value/ Fair Net assets value assets Net value assets Net Net assets value assets Net value assets Net RMB USD USD 1.18 Percentage of Percentage of Percentage of Percentage of Percentage ownership (%) ownership (%) ownership (%) ownership (%) ownership 5.00 9.71 11.13 - - 1,808 3,414 29,949 $5,407 December 31, 2020 31, December 2020 31, December 2020 31, December 2020 31, December $100,364 39,320 Carrying amount Carrying amount Carrying amount Carrying amount Carrying RMB USD USD - - - 4 375 (thousand) (thousand) (thousand) (thousand) bonds/ shares bonds/ shares bonds/ shares bonds/ shares bonds/ - Units (thousand)/ Units (thousand)/ Units (thousand)/ Units (thousand)/ Units Financial statement account statement Financial account statement Financial account statement Financial account statement Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial Financial assets at fair value through profit or loss, noncurrent loss, or profit through value fair at assets Financial ------Relationship Relationship Relationship Relationship Name of securities of Name securities of Name securities of Name securities of Name SPARKLABS GLOBAL VENTURES FUND I, L.P. I, FUND VENTURES GLOBAL SPARKLABS L.P. II, FUND KOREA SPARKLABS FUND LANHOR TIAN TAI PHOTOELECTRICITY TAI TIAN CO., LTD. GLYMPSE, INC. A.A.A TARANIS VISUAL LTD. Fund Fund Fund Stock Type of securities of Type securities of Type securities of Type securities of Type Convertible bonds Convertible Stock-Preferred stock Stock-Preferred ATTACHMENT 3 (Securities held as of December 31, 2020) (Excluding subsidiaries, associates and joint ventures) and joint associates subsidiaries, (Excluding 2020) 31, December of as held 3 (Securities ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount UMC CAPITAL CORP. DEVELOPMENT ENERGY TERA CO., LTD. SINO PARAGON LIMITED UNITED SEMICONDUCTOR (XIAMEN) CO., LTD.

328 Financial Review Amount Ending balance bonds/ Units (thousand)/ Units shares (thousand) shares Gain (Loss)Gain from disposal from Cost Disposal Amount bonds/ Units (thousand)/ Units shares (thousand) shares Amount Addition bonds/ Units (thousand)/ Units shares (thousand) shares Amount Beginning balanceBeginning bonds/ Units (thousand)/ Units shares (thousand) shares Relationship Counter-party Financial statement account statement Financial Name of the securities Namethe of None Type of securities of Type ATTACHMENT 4 (Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended December year 31, orfor the stock 20 2020) capital percent the of NT$300 acquired of lower accumulated the or million amount securities disposed with of exceeding ATTACHMENT 4 (Individual currencies) foreign NTD or in in denomination thousand;Currency (Amountin

329 United Microelectronics Corporation | Annual Report 2020 Other commitments utilization and status of Date of acquisition of Date Price reference amount Transaction Date of transaction former holder and acquirer of property Relationship between of property Where counter-party is a related party, details of prior transactions Former holder Relationship Counter-party Payment status amount Transaction date Transaction None Name of properties ATTACHMENT 5 (Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended December 31, 2020) (Amount in thousand; Currency denomination in NTD or in foreign currencies)

330 Financial Review Other commitments None Price reference Price The valuation report disposal Reason of In order to the improve company's operations and reduce the fixed costs. Relationship None Counter-party GENERAL INTERFACE SOLUTION LIMITED $1,081,497 Gain (Loss) from disposal from Received collection Status of proceeds Status of amount $1,766,666 Transaction $601,042 amount Carrying acquisition Date original of February 1, February 2008~June 1, 2017 date Transaction June 16, 2020 Names of properties ATTACHMENT 6 (Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended December 31, 2020) ended December the year for the capital 20 percentstock of or NT$300 of million lower the exceeding amount real estateATTACHMENT with individual of 6 (Disposal currencies) in foreign in NTD or denomination Currency thousand; in (Amount TECHNOLOGY CORP. NEXPOWER Construction plant and its facility equipment

331 United Microelectronics Corporation | Annual Report 2020 Note Note Note Note Note Note % % % % % % % % % % % % % - - 1 0 0 7 4 1 1 0 2 - 27 88 12 16 Percentage of total Percentage of total Percentage of total Percentage of total Percentage of total Percentage of total receivables (payable) receivables (payable) receivables (payable) receivables (payable) receivables (payable) receivables (payable) - - $5,388,172 - - Balance Balance Balance Balance Balance Balance 1,663,728 116,415 190,038 24,831 16,072 57,427 8,815 1,164 7,593 5,335 109 Notes and accounts receivable (payable) Notes and accounts receivable (payable) Notes and accounts receivable (payable) Notes and accounts receivable (payable) Notes and accounts receivable (payable) Notes and accounts receivable (payable) USD USD USD RMB RMB RMB RMB USD JPY N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Term Term Term Term Term Term transaction transaction transaction transaction transaction transaction N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Unit price Unit price Unit price Unit price Unit price Unit price Details of length non-arm's Details of length non-arm's Details of length non-arm's Details of length non-arm's Details of length non-arm's Details of length non-arm's Term Term Term Term Term Term Net 60 days Net 30 days Net 60 days Net 60 days Net 60 days Net 60 days Net 45 days Net 60 days Net 60 days Net 60 days Net 60 days Net Net 60 days Net 60 days Net 60 days Net Net 60 days Net Month-end 60 days % % % % % % % % % % % % % % % % 1 1 1 3 2 0 9 5 1 1 7 1 9 36 95 91 purchases (sales) purchases (sales) purchases (sales) purchases (sales) purchases (sales) purchases (sales) Percentage of total Percentage of total Percentage of total Percentage of total Percentage of total Percentage of total Transactions Transactions Transactions Transactions Transactions Transactions $49,357,981 370,700 139,051 226,402 43,335 33,546 32,165 24,750 35,053 4,660 1,225,941 1,220,419 1,183,180 1,616,198 3,987,383 5,054,690 Amount Amount Amount Amount Amount Amount USD USD USD USD JPY JPY RMB RMB RMB RMB RMB JPY Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Associate Associate Associate Associate Associate Associate Associate Associate Associate Associate Associate Subsidiary Subsidiary Subsidiary Relationship Relationship Relationship Relationship Relationship Relationship Parent company Parent company Counter-party Counter-party Counter-party Counter-party Counter-party Counter-party ATTACHMENT 7 ( Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of capital stock for the year ended December 31, 2020) (Amount in thousand; Currency denomination in NTD or in foreign currencies) CORPORATION MICROELECTRONICS UNITED GROUPUMC (USA) CORPORATION TECHNOLOGY FARADAY GROUPUMC JAPAN CO., LTD. (XIAMEN) SEMICONDUCTOR UNITED GROUP (USA) UMC CORPORATION MICROELECTRONICS UNITED CO., LTD. JAPAN SEMICONDUCTOR UNITED CO., LTD. (XIAMEN) SEMICONDUCTOR UNITED CO., LTD. (SUZHOU) TECHNOLOGY HEJIAN GROUP JAPANUMC CORPORATION MICROELECTRONICS UNITED CO., LTD. (SUZHOU) TECHNOLOGY HEJIAN LTD. CO., (SUZHOU) TECHNOLOGY HEJIAN CORPORATION TECHNOLOGY FARADAY GROUPUMC (USA) GROUPUMC JAPAN LTD. CO., (XIAMEN) SEMICONDUCTOR UNITED GROUPUMC (USA) CORPORATION TECHNOLOGY FARADAY JAPAN LTD. CO., SEMICONDUCTOR UNITED GROUPUMC (USA)

332 Financial Review $- $14,619 RMB 92 RMB 173 Loss allowance Loss allowance Loss allowance 25,611 1,663,728 $5,402,791 112,226 subsequent period subsequent period subsequent period Amount received in Amount received in Amount received in JPY RMB Collection status Collection Collection status Collection Collection status Collection - Collection in Collection subsequent period - - $- $- $- Overdue receivables Overdue receivables Overdue receivables Amount Amount Amount 89 8.72 6.95 6.13 12.15 Turnover Turnover Turnover rate (times) rate rate (times) rate (times) rate 57,427 116,415 1,663,728 $5,388,172 Total Total Total JPY RMB $- $- $- Other Other Other receivables receivables receivables - Ending balance Ending balance Ending balance 57,427 1,663,728 $5,388,172 116,415 Accounts Accounts Accounts receivable receivable receivable JPY RMB $- $- $- Notes Notes Notes - receivable receivable receivable Associate Associate Associate Subsidiary Relationship Relationship Relationship Counter-party Counter-party Counter-party UNITED SEMICONDUCTOR JAPAN CO., LTD. ATTACHMENT 8 (Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of December 31, 2020) (Amount in thousand; Currency denomination in NTD or in foreign currencies) UMC GROUP (USA) TECHNOLOGY FARADAY CORP. UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. UMC GROUP (USA) UMC GROUP (USA) UNITED MICROELECTRONICS CORPORATION

333 United Microelectronics Corporation | Annual Report 2020 Note Note 2 Note Note 1 Note 461 1,124 5,741 4,505 (2,061) 26,487 20,513 56,019 13,400 $66,833 233,738 553,778 294,622 223,409 139,989 256,055 154,542 728,678 511,596 2,005,823 5,790,187 (3,062,542) (loss) recognized (loss) Investment income Investment 461 1,124 (2,061) 26,487 20,513 68,545 41,674 20,546 13,400 $66,833 584,345 552,087 294,622 531,925 453,444 154,542 741,604 1,914,492 2,005,823 1,071,376 (3,062,542) 15,866,872 investee company investee Net income (loss) of (loss) income Net - - 21,834 39,961 26,966 135,624 585,317 142,353 823,185 374,434 2,488,169 9,107,377 4,087,620 4,566,933 6,551,136 1,589,448 5,400,821 $1,722,181 10,166,702 22,926,322 10,165,563 17,668,765

Carrying amount Carrying - - 40.00 13.36 45.44 42.00 36.49 30.87 80.75 13.78 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 (%) ownership Percentage of Percentage 9 - - Investment as of December 31, 2020 31, December of as Investment 110 1,520 4,300 2,600 16,438 71,663 12,000 21,000 46,000 34,240 400,167 234,280 196,136 977,000 664,966 364,102 401,734 148,112 116,247 shares Number of Number (thousand) 5,421 1,520 4,300 2,600 16,438 81,500 12,000 21,000 60,000 38,918 550,000 977,000 309,102 336,241 4,610,000 2,370,000 2,300,000 2,438,565 5,956,791 3,440,053 1,894,660 64,421,068 Beginning balance Beginning JPY JPY USD USD USD USD USD USD SGD USD USD USD KRW 5,421 1,520 4,300 2,600 Initial Investment Initial 16,438 81,500 12,000 21,000 38,918 550,000 977,000 309,102 336,241 4,610,000 2,342,800 2,300,000 2,438,565 3,440,053 1,903,741 64,421,068 - - Ending balance Ending JPY USD USD USD USD USD USD USD USD SGD USD KRW Main businesses and products businesses Main IC Sales IC activities support Marketing holding Investment holding Investment capital Venture holding Investment activities support Marketing holding Investment holding Investment holding Investment holding Investment holding Investment holding Investment holding Investment holding Investment PCB of Manufacturing Sales IC Consulting and planning for venture for and planning Consulting capital integrated of and manufacturing Sales circuits integrated of and manufacturing Sales circuits integrated application-specific of Design circuit power solar of and manufacturing Sales batteries Address USA The Netherlands Islands Cayman Samoa Taiwan City, Taipei Samoa Taiwan City, Taipei Korea Samoa Samoa Islands British Virgin Japan Taiwan County, Hsinchu Singapore Islands British Virgin Taiwan City, Taipei Taiwan City, Taipei Taiwan City, Taipei Taiwan City, Hsinchu Taiwan City, Taoyuan Japan Taiwan City, Taichung Investee company Investee ATTACHMENT 9 (Names, locations and related information of investee companies as of December 31, 2020) (Not including investment in Mainland China) Mainland in investment including (Not 2020) 31, December of as companies investee of information and related locations 9 (Names, ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount UNITED MICROELECTRONICS CORPORATION UMC GROUP (USA) UNITED MICROELECTRONICS (EUROPE) B.V. UMC CORP. CAPITAL LIMITEDGREEN EARTH TLC CO., CAPITAL LTD. UMC INVESTMENT (SAMOA) LIMITED FORTUNE VENTURE CORP. CAPITAL LTD. CO., UMC KOREA OMNI GLOBAL LIMITED LIMITED PARAGON SINO BEST ELITE INTERNATIONAL LIMITED LTD. CO., UNITED SEMICONDUCTOR JAPAN WAVETEK MICROELECTRONICS CORPORATION PTE.MTIC LTD. HOLDINGS INC. UNITECH CAPITAL TRIKNIGHT CORPORATION CAPITAL LTD. INVESTMENT CO., CHIEH HSUN LTD. INVESTMENT CO., YUAN YANN CORPORATION TECHNOLOGY FARADAY CORP. TECHNOLOGY UNIMICRON UMC GROUP JAPAN NEXPOWER CORP. TECHNOLOGY company. surviving the is and USJC (USJC) LTD. CO., JAPAN SEMICONDUCTOR UNITED with merged was JAPAN GROUP UMC 2020, 1, November of As 1: Note 2020. 11, on November and liquidated dissolved was CORP. TECHNOLOGY NEXPOWER 2: Note

334 Financial Review Note Note Note Note Note Note Note Note 1 Note 3 Note Note 2 Note - - (0) 414 450 (959) (5,884) 22,976 $2,281 13,392 $(2,222) (27,428) 358,535 130,091 $(10,586) (loss) recognized (loss) recognized (loss) (loss) recognized (loss) recognized (loss) Investment income Investment income Investment Investment income Investment income Investment USD USD - - (0) 4,979 (2,157) 56,935 $2,281 74,637 68,545 $(2,222) (31,763) $(10,586) (109,104) 1,071,376 1,071,376 investee company investee company investee investee company investee company investee Net income (loss) of (loss) income Net of (loss) income Net of (loss) income Net of (loss) income Net USD USD ------941 6,155 3,954 6,206 $8,174 96,026 $41,326 195,675 $62,660

Carrying amount Carrying Carrying amount Carrying Carrying amount Carrying amount Carrying USD - - - - - 0.65 10.38 40.00 25.14 44.45 23.98 100.00 100.00 100.00 (%) (%) (%) (%) ownership ownership ownership ownership Percentage of Percentage Percentage of Percentage Percentage of Percentage of Percentage ------Investment as of December 31, 2020 31, December of as Investment 2020 31, December of as Investment 2020 31, December of as Investment 2020 31, December of as Investment 900 750 8,000 1,000 4,251 18,655 22,500 shares shares shares shares Number of Number (thousand) Number of Number (thousand) Number of Number (thousand) of Number (thousand) - 1,194 900 200 750 5,900 6,000 4,036 2,160 22,500 10,000 95,916 277,508 888,019 $100,752 1,688,630 8,856 Beginning balance Beginning Beginning balance Beginning Beginning balance Beginning balance Beginning EUR USD USD USD USD USD EUR USD - - - - 900 750 8,000 4,036 8,856 Initial Investment Initial Investment Initial Investment Initial Investment Initial 22,500 10,000 95,916 $100,752 - - Ending balance Ending Ending balance Ending Ending balance Ending balance Ending USD USD USD USD USD Main businesses and products businesses Main and products businesses Main Main businesses and products businesses Main and products businesses Main Energy Technical Services Technical Energy client Thin project Solar holding Investment holding Investment holding Investment holding Investment holding Investment project Solar Chemicals and filtration products & products and filtration Chemicals service control Microcontamination holding Investment integrated of and manufacturing Sales circuits power solar of and manufacturing Sales batteries equipment, measuring devices, Medical and consumables reagents power solar of and manufacturing Sales batteries Address Address Address Address Hsinchu City, Taiwan City, Hsinchu Taiwan City, Hsinchu Taiwan County, Hsinchu Taiwan Xinbei City, Taiwan City, Taichung Germany Samoa Samoa Taiwan City, Taipei Taiwan City, Taichung Islands Cayman USA Hongkong Germany Hongkong Investee company Investee company Investee company Investee company Investee ATTACHMENT 9 (Names, locations and related information of investee companies as of December 31, 2020) (Not including investment in Mainland China) Mainland in investment including (Not 2020) 31, December of as companies investee of information and related locations 9 (Names, ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount FORTUNE CAPITAL VENTURE CORP. TERA ENERGY DEVELOPMENT CO., LTD. PURIUMFIL INC. KONG UNITED HONG CORPORATION LED LIMITED WAVETEK MICROELECTRONICS CORPORATION CLIENTRON CORP. NEXPOWER CORP. TECHNOLOGY WINAICO IMMOBILIEN GMBH noncurrent. loss, or profit through value fair at assets financial to method equity the under for accounted investments from reclassified was investee the 2020, April in influence significant its lost CORP. CAPITAL VENTURE FORTUNE As 1: Note 2020. 11, on November and liquidated dissolved was CORP. TECHNOLOGY NEXPOWER 2: Note 2020. December in disposed was GMBH IMMOBILIEN WINAICO 3: Note CAPITALTLC CO., LTD. CORP. CAPITAL SOARING CORP. CAPITAL CHIEH HSUN LTD. CO., VSENSE NEXPOWER CORP. TECHNOLOGY 2020. 11, on November and liquidated dissolved was CORP. TECHNOLOGY NEXPOWER Note: UMC CAPITAL CORP. PARTNERSTRANSLINK CAPITAL L.P. I, UMC CAPITAL (USA) dissolved. was (USA) CAPITAL UMC 2020, August, In Note: DEVELOPMENT ENERGY TERA CO., LTD. ENERGY INVESTMENT (HK) LIMITEDEVERRICH WINAICO IMMOBILIEN GMBH 2020. December in disposed was GMBH IMMOBILIEN WINAICO Note:

335 United Microelectronics Corporation | Annual Report 2020 Note Note Note Note Note Note Note 18 (215) $155 34,369 $1,422 $(3,503) $2,014,798 $2,014,798 $(3,061,316) (loss) recognized (loss) (loss) recognized (loss) recognized (loss) recognized (loss) recognized (loss) recognized (loss) Investment income Investment Investment income Investment income Investment income Investment income Investment income Investment 18 (215) $155 34,369 $1,422 $(3,503) $2,014,798 $2,014,798 $(3,061,316) investee company investee investee company investee company investee company investee company investee company investee Net income (loss) of (loss) income Net Net income (loss) of (loss) income Net of (loss) income Net of (loss) income Net of (loss) income Net of (loss) income Net - 8,678 $3,026 $2,778 541,146 $34,655 $10,141,318 $22,976,677 $22,976,677

Carrying amount Carrying amount Carrying amount Carrying amount Carrying amount Carrying Carrying amount Carrying - 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 (%) (%) (%) (%) (%) (%) ownership ownership ownership ownership ownership ownership Percentage of Percentage of Percentage of Percentage of Percentage of Percentage Percentage of Percentage - 0 4 Investment as of December 31, 2020 31, December of as Investment Investment as of December 31, 2020 31, December of as Investment 2020 31, December of as Investment 2020 31, December of as Investment 2020 31, December of as Investment 2020 31, December of as Investment 60 9,000 1,650 shares shares shares shares shares shares Number of Number (thousand) of Number (thousand) of Number (thousand) of Number (thousand) of Number (thousand) Number of Number (thousand) - - 974,050 60 950 9,000 1,500 1,000 35,000 974,050 354,000 354,000 Beginning balance Beginning balance Beginning balance Beginning balance Beginning balance Beginning Beginning balance Beginning JPY USD USD USD USD USD USD USD USD - 60 9,000 1,650 1,000 Initial Investment Initial Initial Investment Initial Investment Initial Investment Initial Investment Initial Investment Initial 35,000 354,000 354,000 974,050 Ending balance Ending balance Ending balance Ending balance Ending balance Ending Ending balance Ending JPY USD USD USD USD USD USD USD Main businesses and products businesses Main and products businesses Main and products businesses Main and products businesses Main and products businesses Main and products businesses Main Investment holding Investment holding Investment Insurance holding Investment Investment holding Investment service Marketing Research & Development & Research manufacturing Semiconductor and consulting development technology services Development & Research Address Address Address Address Address Address British Virgin Islands British Virgin Islands British Virgin Singapore Japan Cayman Samoa USA USA USA Investee company Investee company Investee company Investee company Investee company Investee company Investee ATTACHMENT 9 (Names, locations and related information of investee companies as of December 31, 2020) (Not including investment in Mainland China) Mainland in investment including (Not 2020) 31, December of as companies investee of information and related locations 9 (Names, ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount WAVETEK MICROELECTRONICS CORPORATION WAVETEK MICROELECTRONICS INVESTMENT LIMITED(SAMOA) WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED WAVETEK MICROELECTRONICS CORPORATION (USA) BEST ELITE INTERNATIONAL LIMITED LIMITED TECHNOLOGY INFOSHINE INFOSHINE TECHNOLOGY LIMITED LIMITED OAKWOOD ASSOCIATES OMNI GLOBAL LIMITED CORPORATION UNITED MICROTECHNOLOGY (CALIFORNIA) PTE.ECP VITA LTD. LTD. CO., JAPAN UMC TECHNOLOGY CORPORATION UNITED MICROTECHNOLOGY (NEW YORK) Note: In November, 2020, (NEW CORPORATION UNITED MICROTECHNOLOGY YORK) was dissolved. GREEN EARTH LIMITED UNITED CORPORATION MICROCHIP

336 Financial Review $- 4,392) 124,865 as of - - - - December 31, 2020 31, December Accumulated inward Accumulated remittance of earnings of remittance (USD $8,004 40,887 44,848 67,189) 10,298) 292,608 5,111,691) 3,350,261) 22,261,414 14,590,387 as of Carrying amount Carrying December 31, 2020 31, December (RMB (RMB (RMB (RMB (ii) (ii) (ii) (ii) (ii) (iii) 2,332 66,244 15,211) $(2,185) 477,872) (71,152) (16,338)) (924,780)) 2,081,133 (4,027,417) (Note 2) (Note (loss) recognized (loss) Investment income (RMB (RMB (RMB (RMB 25.14% 67.76% (Note 4) (Note 100.00% 100.00% 99.9985% 99.9985% ownership Percentage of Percentage thousand has not yet been remitted. been yet not has thousand 2,332 357,138 66,244 15,211) $(2,185) 477,879) 2,081,163 (283,031) (64,990)) (6,152,744) (1,412,800))

investee company investee Net income of(loss) (RMB (RMB (RMB (RMB investment USD - 800) 750) 21,323 20,250) (Note5) $22,744 575,707 309,102) 964,966) 8,787,770 27,433,983 Taiwan as of of investmentof from December 31, 2020 31, December Accumulated outflow Accumulated (USD (USD (USD (USD (USD - - $- - - - Inflow - - $- - - - Investment flows Outflow $141,395,848 - 800) 750) 21,323 20,250) (Note5) $22,744 575,707 309,102) 964,966) 8,787,770 27,433,983 outflow of outflow Upper limit on investment limit Upper Taiwan as of Accumulated January 1, 2020 1, January investment from (USD (USD (USD (USD (USD $60,491,023 (USD 2,127,718) (USD CORP. (Note 1) (Note LIMITED (ii)OAKWOOD (ii)UNITED LED KONG LIMITED INVESTMENT (HK) CORPORATION and Method of investment of Method (SUZHOU) CO., LTD. (SUZHOU) CO., LTD. (ii)SOARING CAPITAL CORPORATION HONG ASSOCIATES LIMITED ASSOCIATES (ii)EVERRICH ENERGY (ii)UNITED MICROCHIP (iii)HEJIAN TECHNOLOGY (iii)HEJIAN TECHNOLOGY 800) 750) Commission, MOEA 21,323 84,000) $22,744 130,650 30,000) 2,388,120 3,145,294) 13,697,755 59,653,893 13,697,794) Investment amounts authorized by Investment by authorized amounts Investment paid-in capital paid-in Total amount of amount Total (USD (USD (USD (RMB (RMB (RMB $36,841,527 (USD 1,295,868) (USD Main businesses and products and businesses Main Investment Holding and advisory and Holding Investment design integrated engineering Solar services sales and manufacturing Research, wafers epitaxial in LED of manufacturing and Sales circuits integrated integrated of support Design circuits of manufacturing and Sales circuits integrated December 31, 2020 31, December (i) Direct investment in Mainland China. in Mainland investment Direct (i) region). third in company the of name the specify (Please region third a in registered companies through China Mainland in investment Indirectly (ii) methods. Other (iii) firm. accounting R.O.C. an with cooperation in firm accounting public certified international an by audited was report The financial (i) company. parent the of auditors the by audited were statements The financial (ii) Others. (iii) Accumulated investment in Mainland China as of as China Mainland in investment Accumulated The methods for engaging in investment in Mainland China include the following: following: the include China Mainland in investment in engaging for The methods basis: following on the based determined were (loss) income investment the period, current in recognized (loss) income The investment date. report financial the at rates spot the using Dollars Taiwan New into translated are currencies foreign in denominated amounts investment Initial equity investee. an The LIMITED, investment investment LTD. via been CO., has in the approved BEST Investment Commission, by (SUZHOU) INTERNATIONAL ELITE The TECHNOLOGY MOEA indirectly Company invested in HEJIAN remitted. all been has investment of amount the 2020, 31, December of As thousand. 383,569 USD of amount total the in The investment to UNITED SEMICONDUCTOR CO., (XIAMEN) LTD. (USCXM) TECHNOLOGY fromHEJIAN (SUZHOU) CO., LTD. and indirectly invested in USCXM via investment of amount in the 2020, 31, GREEN EARTH December LIMITED. of As thousand. 1,722,349 USD of amount total the in MOEA Commission, Investment the by approved been has investment USCXM's in invest to The consent Investee company Investee ATTACHMENT 10 (Investment in Mainland China as of December 31, 2020) 2020) 31, December of as China Mainland in 10 (Investment ATTACHMENT currencies) foreign in or NTD in denomination Currency thousand; in (Amount UNITRUTH ADVISOR CO., LTD.(SHANGHAI) EVERRICH (SHANDONG) ENERGY CO., LTD. UNITED LED CORPORATION TECHNOLOGYHEJIAN (SUZHOU) CO., LTD. UNITEDDS SEMICONDUCTOR CO.,(SHANDONG) LTD. UNITED SEMICONDUCTOR CO.,(XIAMEN) LTD. 1 : Note Note 4 : 4 : Note 5 : Note Note 2 : 2 : Note 3 : Note

337 United Microelectronics Corporation | Annual Report 2020 5.12 (%) ownership Percentage of 636,313,225 Number of shares of Number Name ATTACHMENT 11 (Information of major shareholders as of December 31, 2020) 31, December of as shareholders major of 11 (Information ATTACHMENT MICROELECTRONICSUNITED CORPORATION depositary and representative as holdersto ADRs the of capacity its in JPMorgan acting N.A. Bank, Chase

338 Financial Review

The Company and Its Affiliated Enterprises Have Not Experienced Any Financial Difficulties During the Most Recent Year up to the Publication Date.

339 United Microelectronics Corporation Representative: Stan Hung