N. DAMODAR REDDY


                                  June 23, 1997

Mr. Robert H. C. Tsao
Chairman, United Microelectronics Corporation
No. 13, Innovation Rd. 1
Science-Based Industrial Park
Hsin-Chu City, Taiwan, R.O.C.

Dear Bob:

                  United  Microelectronics   Corporation  ("UMC")  has  informed
Alliance  Semiconductor  Corporation  ("Alliance")  that  payment  of the second
installment of Alliance's  purchase of stock of United Silicon,  Inc. ("USI") is
due by July 7,  1997.  Alliance  understands  that this  payment  will be in the
amount of  approximately  NTD 187.5  million,  for 18.75  million  shares of USI
stock, at a per share price of NTD 10 per share.

                  Alliance  proposes  that UMC make the above NTD 187.5  million
payment,  and extend  Alliance  an option to  purchase  from UMC up to the 18.75
million shares of USI stock, on the following terms:

                  (i) The  purchase  price under these  options will be at a per
         share  price,  with the  price  per  share  being  equal to NTD 10 plus
         interest  calculated  at a  cumulative  rate of 8.5%  per  annum  (with
         interest  accruing  from July 7,  1997 to the  closing  date(s)  of the
         purchase of the shares subject to the options).  Alliance shall pay the
         purchase price in U.S. dollars, with the exchange rate calculated as of
         the day of payment.

                  (ii) Alliance may exercise these options with at least fifteen
         days  advance  written  notice to UMC given on or before  December  16,
         1997, but all  unexercised  options will expire if not fully  exercised
         (including  full  payment to UMC for the shares  involved) on or before
         midnight December 31, 1997 (Taiwan, R.O.C. time).

                  (iii)  Subject  to the  terms of this  letter  agreement  (the
         "Agreement"),  Alliance  can  exercise  its option  all at once,  or in
         installments,  and thus,  with at least fifteen  days' advance  written
         notice  to UMC,  can  select  its  closing  date(s)  at  times it finds
         convenient,  so long as the last such date occurs on or before December
         31, 1997.

                  The  parties  also agree that other than the option to acquire
18.75  million  shares of USI,  Alliance has no other  agreement,  understanding
and/or  rights  from or with UMC and/or  USI with  respect  to any  purchase  of
additional  shares of USI which  would have the  effect,  in the event  Alliance
exercises the above option,  of increasing  Alliance's  ownership in USI to more
than 5%, and/or,  in the event  Alliance does not exercise the above option,  of
increasing  Alliance's ownership in USI to more than its now-current holdings of
37.5 million shares of USI.

<PAGE>

Robert H. C. Tsao
June 23, 1997
Page 2

                  The  parties  further  agree  that (a) this  Agreement  may be
executed in counterparts,  each of which shall be deemed an original, but all of
which together shall constitute one and the same  instrument;  and (b) the terms
of Article 9 of the Foundry Venture  Agreement dated as of September 29, 1995 by
and among Alliance and UMC are  incorporated  by reference as if set forth fully
herein,  in each  case  with  this  Agreement  deemed  to be one of the  Venture
Agreements.

                  We are  pleased  with  the  history  of  cooperation  in these
matters shown by the parties,  and request that you confirm the above  agreement
in the space provided below.

                                                  Very truly yours,


                                                  /s/ N. D. Reddy
                                                  N. Damodar Reddy
                                                  President


Agreed on behalf of United Microelectronics Corporation


By:    /s/ R. Tsao
       -----------------
Name:  Robert H. C. Tsao
Title: Chairman