UMC Chairman Tsao Resigns

Online staff -- Electronic News, 12/29/2005

In response to a fine levied on the company following alleged accounting inaccuracies, Taipei, Taiwan-based pure play foundry United Microelectronics Corp. (UMC) reported today that Robert Tsao plans to resign from his positions as chairman and board member of the company.

Wednesday, the company threatened to seek delisting from the Taiwan Stock Exchange in retaliation for a fine levied on the company, as it believed it had been treated unfairly.

In a letter to UMC shareholders, Tsao stated, “With regard to the recent financial filing incident, UMC has acted in complete compliance with international standards, and has done nothing illegal or made any oversights. Unfortunately, the filing process carried out with complete professionalism and fully in accordance with global practices, has been greeted in Taiwan by distortion and political manipulation, with total disregard for right or wrong. I am shocked and surprised by the manner in which the facts have been distorted.”

“In order to avoid political pressure and in the interest of UMC shareholders, I had previously offered my resignation to the board of directors at the outset of the controversy related to Hejian. My decision was met with strong opposition by the board. With the recent controversy regarding the filing of UMC’s financial statements, I have again decided to offer my resignation at next year’s March board meeting. This time the decision is final. Before I leave my position, I will endeavor to insure a smooth leadership transition, and I am extremely confident that the operations of the company will continue unaffected,” he continued in the letter.

“After I have resigned from my position as Chairman, I hope that all external criticism or pressure being exerted by certain authorities can be focused on me as an individual, and not on the company, shareholders or innocent employees within the company. UMC and its employees are an important national asset, and the unwarranted pressure currently being exerted on UMC is the nation’s loss, and against the best interests of nearly one million shareholders in Taiwan. In its most recent statements, the Financial Supervisory Commission has resorted to accusing UMC employees of insider trading, and I hope that this reckless behavior will end with my resignation before it causes excessive damage to the credibility of the government,” he said.

Further, Tsao said that in order to show his support for UMC shareholders, he will not sell any of his UMC shares for at least two years after his resignation. “I remain optimistic about the future prospects for UMC and the foundry industry as a whole. I also believe that UMC’s CEO Jackson Hu is well prepared to take over my duties as Chairman, and that UMC shares are an excellent long-term investment,” Tsao concluded.