##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 20-F





(Mark One)

| ̈ | Registration statement pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------------------------

or



|x | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2013

or



| ̈ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from
to

or



| ̈ | Shell company report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | -------------------------------------------------------------------------------------------

Date of event requiring this shell company report

Commission file number 001-15128





United
Microelectronics Corporation

(Exact Name of Registrant as Specified in its Charter)





Taiwan, Republic of China

(Jurisdiction of Incorporation or Organization)

No. 3 Li-Hsin Road II, Hsinchu Science Park,

Hsinchu City, Taiwan, Republic of China

(Address of Principal Executive Offices)

Peter Courture, +1 (650) 968-8855, peter@courture.com,

978 Highlands Circle, Los Altos, CA 94024, USA

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)



---

##### Table of Contents

Securities registered or to be registered pursuant to Section 12(b) of the Act:



|                                                                                                            |  |                                          
|----------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Title of Each Class                                                                                         |  | Name of Each Exchange on which Registered
|American Depositary Shares, as evidenced by American Depositary Receipts, each representing 5 Common Shares |  | New York Stock Exchange                  

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for
which there is a reporting obligation pursuant to Section 15(d) of the Act:

None





Indicate the number of outstanding shares of each of the Issuers classes of capital or common stock as of the close of the period
covered by the annual report.

12,692,081,665 Common Shares of Registrant issued as of December 31, 2013 (including 200,000,000
treasury shares)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.     Yes   x     No    ̈

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes   ̈    No   x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition
of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):



|                           |  |                      |  |                         
|-------------------------- |  | -------------------- |  | ------------------------
|Large accelerated filer  x |  | Accelerated filer   ̈ |  | Non-accelerated filer   ̈

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements
included in this filing:



|             |  |                                                       |  |         
|------------ |  | ----------------------------------------------------- |  | --------
|U.S. GAAP   ̈ |  | International Financial Reporting Standards as issued |  | Other   ̈
|             |  | by the International Accounting Standards Board  x    |  |         

If Other has been checked in response to the previous question, indicate by check mark which
financial statement item the registrant has elected to follow.     Item 17   ̈     Item 18  
 ̈

If this is an annual report, indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes   ̈    No  
x









---

##### Table of Contents

UNITED MICROELECTRONICS CORPORATION

FORM 20-F ANNUAL REPORT

FISCAL YEAR ENDED DECEMBER 31, 2013

Table of Contents





|                         |  |                                                                              |   |      |    | 
|------------------------ |  | ---------------------------------------------------------------------------- | - | ---- | -- | 
|                         |  |                                                                              |   | Page |   
|SUPPLEMENTAL INFORMATION |  |                                                                              | 1 |     
|                         |  |                                                                             
|PART I                   |  |                                                                              |   |      | 3  | 
|                         |  |                                                                             
|ITEM 1.                  |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        |   |      | 3  | 
|ITEM 2.                  |  | OFFER STATISTICS AND EXPECTED TIMETABLE                                      |   |      | 3  | 
|ITEM 3.                  |  | KEY INFORMATION                                                              |   |      | 4  | 
|ITEM 4.                  |  | INFORMATION ON THE COMPANY                                                   |   |      | 23 | 
|ITEM 4A.                 |  | UNRESOLVED STAFF COMMENTS                                                    |   |      | 41 | 
|ITEM 5.                  |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 |   |      | 41 | 
|ITEM 6.                  |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   |   |      | 56 | 
|ITEM 7.                  |  | MAJOR STOCKHOLDERS AND RELATED PARTY TRANSACTIONS                            |   |      | 59 | 
|ITEM 8.                  |  | FINANCIAL INFORMATION                                                        |   |      | 60 | 
|ITEM 9.                  |  | THE OFFER AND LISTING                                                        |   |      | 61 | 
|ITEM 10.                 |  | ADDITIONAL INFORMATION                                                       |   |      | 64 | 
|ITEM 11.                 |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |   |      | 83 | 
|ITEM 12.                 |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |   |      | 85 | 
|                         |  |                                                                             
|PART II                  |  |                                                                              |   |      | 86 | 
|                         |  |                                                                             
|ITEM 13.                 |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |   |      | 86 | 
|ITEM 14.                 |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |   |      | 86 | 
|ITEM 15.                 |  | CONTROLS AND PROCEDURES                                                      |   |      | 86 | 
|ITEM 16.                 |  |                                                                              |   |      | 89 | 
|ITEM 16A.                |  | AUDIT COMMITTEE FINANCIAL EXPERT                                             |   |      | 89 | 
|ITEM 16B.                |  | CODE OF ETHICS                                                               |   |      | 89 | 
|ITEM 16C.                |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |   |      | 89 | 
|ITEM 16D.                |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |   |      | 90 | 
|ITEM 16E.                |  | PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS        |   |      | 90 | 
|ITEM 16F.                |  | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT                                 |   |      | 90 | 
|ITEM 16G.                |  | CORPORATE GOVERNANCE                                                         |   |      | 90 | 
|ITEM 16H.                |  | MINE SAFETY DISCLOSURE                                                       |   |      | 91 | 
|                         |  |                                                                             
|PART III                 |  |                                                                              |   |      | 92 | 
|                         |  |                                                                             
|ITEM 17.                 |  | FINANCIAL STATEMENTS                                                         |   |      | 92 | 
|ITEM 18.                 |  | FINANCIAL STATEMENTS                                                         |   |      | 92 | 
|ITEM 19.                 |  | EXHIBITS                                                                     |   |      | 92 | 



i



---

##### Table of Contents

SUPPLEMENTAL INFORMATION

The references to United Microelectronics, we, us, our, our company and the
Company in this annual report refer to United Microelectronics Corporation and its consolidated subsidiaries, unless the context suggests otherwise. The references to Taiwan and R.O.C. refer to Taiwan, Republic of
China. The references to shares and common shares refer to our common shares, par value NT$10 per share, and ADSs refers to our American depositary shares, each representing five common shares. The ADSs are issued
under the Deposit Agreement, dated as of October 21, 2009, as amended, supplemented or modified from time to time, among United Microelectronics, JPMorgan Chase Bank, N.A. and the holders and beneficial owners from time to time of American
Depositary Receipts issued thereunder. R.O.C. GAAP means the generally accepted accounting principles in the Republic of China, U.S. GAAP means the generally accepted accounting principles in the United States,
IFRSs means International Financial Reporting Standards as issued by the International Accounting Standards Board, or IASB. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding.

We publish our financial statements in New Taiwan dollars, the lawful currency of the R.O.C. In this annual report, NT$ and
NT dollars mean New Taiwan dollars, $, US$ and U.S. dollars mean United States dollars, ¥ means Japanese Yen, and  means EURO.

FORWARD-LOOKING STATEMENTS IN THIS ANNUAL REPORT MAY NOT BE REALIZED

Our disclosure and analysis in this annual report contain or incorporate by reference some forward-looking statements. Our forward-looking
statements contain information regarding, among other things, our financial condition, future expansion plans and business strategy. We have based these forward-looking statements on our current expectations and projections about future events. You
can identify these statements by the fact that they do not relate strictly to historical or current facts. Although we believe that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks,
uncertainties and assumptions about us, including, among other things:



| |  |  | our dependence on frequent introduction of new product services and technologies based on the latest developments;
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets;
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | risks associated with our international business activities;
| | - |  | ------------------------------------------------------------



| |  |  | our dependence on key personnel;
| | - |  | --------------------------------



| |  |  | general economic and political conditions, including those related to the semiconductor, communications, consumer electronics and computer industries;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | natural disasters, such as earthquakes and droughts, which are beyond our control;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | possible disruptions in commercial activities caused by natural and human-induced disasters, and outbreaks of contagious diseases;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | fluctuations in foreign currency exchange rates;
| | - |  | ------------------------------------------------



| |  |  | additional disclosures we make in our previous and future Form 20-F annual reports and Form 6-K periodic reports to the U.S. Securities and Exchange Commission, or the U.S. SEC; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | those other risks identified in the Item 3. Key Information-D. Risk Factors section of this annual report.
| | - |  | ------------------------------------------------------------------------------------------------------------



1



---

##### Table of Contents

The words may, will, is/are likely to,
anticipate, believe, estimate, expect, intend, plan and similar expressions are intended to identify a number of these forward-looking statements. We do not and will not
undertake the obligation to update or revise any forward-looking statements contained in this annual report whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this annual report might not occur and our actual results could differ materially from those anticipated in these forward-looking statements.

GLOSSARY



|                   |  |                                                                                                                                                                                                                                                                                                                             
|------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                   | 
|ASIC               |  | Application Specific Integrated Circuit. A custom-designed integrated circuit that performs specific functions which would otherwise require a number of off-the-shelf integrated circuits to perform.                                                                                                                      
|                   | 
|Cell               |  | Semiconductor structure in an electrical state which can store a bit of information, mainly used as the building block of memory array.                                                                                                                                                                                     
|                   | 
|Die                |  | A piece of a semiconductor wafer containing the circuitry of an unpackaged single chip.                                                                                                                                                                                                                                     
|                   | 
|DRAM               |  | Dynamic Random Access Memory. A type of volatile memory product that is used in electronic systems to store data and program instructions. It is the most common type of RAM and must be refreshed with electricity hundreds of times
per second or else it will fade away.                                                 
|                   | 
|EUV Lithography    |  | Extreme Ultraviolet Lithography                                                                                                                                                                                                                                                                                             
|                   | 
|FinFET             |  | Fin Field-Effect Transistor                                                                                                                                                                                                                                                                                                 
|                   | 
|FPGA               |  | Field Programmable Gate Array. A programmable integrated circuit.                                                                                                                                                                                                                                                           
|                   | 
|Integrated Circuit |  | Entire electronic circuit built on a single piece of solid substrate and enclosed in a small package. The package is equipped with leads needed to electrically integrate the integrated circuit with a larger electronic system.
Monolithic and hybrid integrated circuits are distinguished by the type of substrate used.
|                   | 
|Interconnect       |  | The conductive path made from copper or aluminum that is required to achieve connection from one circuit element to the other circuit elements within a circuit.                                                                                                                                                            
|                   | 
|Mask or Photomask  |  | A piece of glass on which an integrated circuit circuitry design is laid out.                                                                                                                                                                                                                                               
|                   | 
|Memory             |  | A group of integrated circuits that a computer uses to store data and programs, such as ROM, RAM, DRAM and SRAM.                                                                                                                                                                                                            
|                   | 
|Micron             |  | A unit of spatial measurement that is one-millionth of a meter.                                                                                                                                                                                                                                                             
|                   | 
|Nanometer          |  | A unit of spatial measurement that is one-billionth of a meter.                                                                                                                                                                                                                                                             
|                   | 
|PC                 |  | Personal computer.                                                                                                                                                                                                                                                                                                          
|                   | 
|RAM                |  | Random Access Memory. A type of volatile memory forming the main memory of a computer where applications and files are run.                                                                                                                                                                                                 
|                   | 
|ROM                |  | Read-Only Memory. Memory that is programmed by the manufacturer and cannot be changed. Typically, ROM is used to provide start-up data when a computer is first turned on.                                                                                                                                                  



2



---

##### Table of Contents

|                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                        | 
|Scanner                 |  | A photolithography tool used in the production of semiconductor devices. This camera-like step-and-scan tool projects the image of a circuit from a master image onto a photosensitized silicon wafer.                                                                                                                                                                                                                                                                                                                                                                        
|                        | 
|Semiconductor           |  | A material with electrical conducting properties in between those of metals and insulators. Essentially, semiconductors transmit electricity only under certain circumstances, such as when given a positive or negative electric
charge. Therefore, a semiconductors ability to conduct can be turned on or off by manipulating those charges and this allows the semiconductor to act as an electric switch. The most common semiconductor material is silicon, used as the base of
most semiconductor chips today because it is relatively inexpensive and easy to create.
|                        | 
|SoC                     |  | System-on-Chip. A chip that incorporates functions currently performed by several chips on a cost effective basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                        | 
|SOI                     |  | Silicon-On-Insulator. Silicon wafer consisting of a thin layer of oxide, on top of which semiconductor devices are built.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                        | 
|SRAM                    |  | Static Random Access Memory. A type of volatile memory product that is used in electronic systems to store data and program instructions. Unlike the more common DRAM, it does not need to be refreshed.                                                                                                                                                                                                                                                                                                                                                                      
|                        | 
|Transistor              |  | Tri-terminal semiconductor device in which input signal (voltage or current depending on the type of transistor) controls output current. An individual circuit that can amplify or switch electric current. This is the building block
of all integrated circuits.                                                                                                                                                                                                                                                                                                           
|                        | 
|Volatile memory         |  | Memory products which lose their data content when the power supply is switched off.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                        | 
|Wafer                   |  | Thin, round, flat piece of silicon that is the base of most integrated circuits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                        | 
|8-inch waferequivalents |  | Standard unit describing the equivalent amount of 8-inch wafers produced after conversion, used to quantify levels of wafer production for purposes of comparison. Figures of 8-inch wafer equivalents are derived by converting the
number of wafers of all dimensions (e.g., 6-inch, 8-inch and 12-inch) into their equivalent figures for 8-inch wafers. 100 6-inch wafers are equivalent to 56.25 8-inch wafers. 100 12-inch wafers are equivalent to 225 8-inch wafers.                                                                                                  

PART I



|ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|------- | -----------------------------------------------------

Not applicable.



|ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE
|------- | ---------------------------------------

Not applicable.



3



---

##### Table of Contents

|ITEM 3. | KEY INFORMATION
|------- | ---------------



|A. | Selected Financial Data
|-- | -----------------------

The selected consolidated balance sheets data as of
January 1, 2012, December 31, 2012 and 2013 and the selected consolidated statements of comprehensive income data for the years ended December 31, 2012 and 2013 are derived from our audited consolidated financial statements
included elsewhere in this annual report. This is our first set of annual consolidated financial statements prepared in accordance with IFRSs as issued by the IASB. In accordance with the requirements of the Taiwan Financial Supervisory Commission,
or FSC, beginning on January 1, 2013, we have adopted IFRSs, which is translated and published by Accounting Research and Development Foundation, or ARDF, referred to as TIFRSs for reporting our annual and interim consolidated
financial statements in the R.O.C.. At the same time, we have adopted IFRSs as issued by the IASB for our annual reports on Form 20-F with the U.S. SEC for the year ended December 31, 2013 and thereafter. Prior to December 31, 2012, we
prepared our consolidated financial information in accordance with R.O.C. GAAP with reconciliations to U.S. GAAP. As a result of the foregoing, our consolidated financial information with respect to the year ended December 31, 2012 included in
this annual report may differ from our consolidated financial information in our annual report last year. A description of the principal differences between our previous accounting standards and IFRSs and the impacts of the transition to IFRSs are
provided in Note 14 to the consolidated financial statements included elsewhere in this annual report. In accordance with rule amendments adopted by the U.S. SEC for foreign private issuers reporting under IFRSs, we are not required to provide
reconciliations to U.S. GAAP in this annual report following our adoption of IFRSs. Furthermore, pursuant to the transitional relief granted by the U.S. SEC for companies adopting IFRSs for the first time, no audited financial statements and
financial information prepared under IFRSs for the year ended December 31, 2011 have been included in this annual report.

The
summary financial data set forth below should be read in conjunction with Item 5. Operating and Financial Review and Prospects and our consolidated financial statements and the notes to those statements included in this annual report.



4



---

##### Table of Contents

|                                                     |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|---------------------------------------------------- |  | ------------------------------------ | ------- |  | ------------------------------------------------ |  | ------- | ----------------- |  |  | -------- | - |  |  | ------ | -
|                                                     |  |                                      |         |  | Years Ended December 31,                         | 
|                                                     |  |                                      |         |  | 2012                                             |  |         | 2013              | 
|                                                     |  |                                      |         |  | NT$                                              |  |         | NT$               |  |  | US$      |  
|                                                     |  |                                      |         |  | (in millions, except per share and per ADS data) | 
|Consolidated Statements of Comprehensive Income Data |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Net operating revenues                               |  |                                      |         |  |                                                  |  | 115,675 |                   |  |  | 123,812  |   |  |  | 4,151  |  
|Operating costs                                      |  |                                      |         |  |                                                  |  | (96,365 | )                 |  |  | (100,249 | ) |  |  | (3,361 | )
|                                                     |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Gross profit                                         |  |                                      |         |  |                                                  |  | 19,310  |                   |  |  | 23,563   |   |  |  | 790    |  
|Operating expenses                                   |  |                                      |         |  |                                                  |  | (15,697 | )                 |  |  | (19,406  | ) |  |  | (651   | )
|Net other operating income and expenses              |  |                                      |         |  |                                                  |  | (2,791  | )                 |  |  | (125     | ) |  |  | (4     | )
|                                                     |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Operating income                                     |  |                                      |         |  |                                                  |  | 822     |                   |  |  | 4,032    |   |  |  | 135    |  
|Non-operating income and expenses                    |  |                                      |         |  |                                                  |  | 5,473   |                   |  |  | 10,309   |   |  |  | 346    |  
|                                                     |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Income from continuing operations before income tax  |  |                                      |         |  |                                                  |  | 6,295   |                   |  |  | 14,341   |   |  |  | 481    |  
|Income tax expense                                   |  |                                      |         |  |                                                  |  | (2,146  | )                 |  |  | (2,257   | ) |  |  | (76    | )
|                                                     |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Net income                                           |  |                                      |         |  |                                                  |  | 4,149   |                   |  |  | 12,084   |   |  |  | 405    |  
|Other comprehensive income (loss)                    |  |                                      |         |  |                                                  |  | (6,381  | )                 |  |  | 198      |   |  |  | 7      |  
|                                                     |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Total comprehensive income (loss)                    |  |                                      |         |  |                                                  |  | (2,232  | )                 |  |  | 12,282   |   |  |  | 412    |  
|                                                     |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Net income attributable to:                          |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Stockholders of the parent                           |  |                                      |         |  |                                                  |  | 6,094   |                   |  |  | 12,609   |   |  |  | 423    |  
|Non-controlling interests                            |  |                                      |         |  |                                                  |  | (1,945  | )                 |  |  | (525     | ) |  |  | (18    | )
|Total comprehensive income (loss) attributable to:   |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Stockholders of the parent                           |  |                                      |         |  |                                                  |  | (281    | )                 |  |  | 12,796   |   |  |  | 429    |  
|Non-controlling interests                            |  |                                      |         |  |                                                  |  | (1,951  | )                 |  |  | (514     | ) |  |  | (17    | )
|Earnings per share:(1)                               |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Basic                                                |  |                                      |         |  |                                                  |  | 0.49    |                   |  |  | 1.02     |   |  |  | 0.03   |  
|Diluted(2)                                           |  |                                      |         |  |                                                  |  | 0.46    |                   |  |  | 0.96     |   |  |  | 0.03   |  
|Shares used in earnings per share calculation:       |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Basic                                                |  |                                      |         |  |                                                  |  | 12,464  |                   |  |  | 12,346   |   |  |  | 12,346 |  
|Diluted(2)                                           |  |                                      |         |  |                                                  |  | 13,289  |                   |  |  | 13,150   |   |  |  | 13,150 |  
|Earnings per ADS equivalent:                         |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Basic                                                |  |                                      |         |  |                                                  |  | 2.44    |                   |  |  | 5.11     |   |  |  | 0.17   |  
|Diluted(2)                                           |  |                                      |         |  |                                                  |  | 2.32    |                   |  |  | 4.82     |   |  |  | 0.16   |  
|                                                     | 
|                                                     |  | As of                                |        
|                                                     |  | January 1, 2012                      |         |  | December 31, 2012                                |  |         | December 31, 2013 | 
|                                                     |  | NT$                                  |         |  | NT$                                              |  |         | NT$               |  |  | US$      |  
|                                                     |  | (in millions, except per share data) |        
|Consolidated Balance Sheets Data                     |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Total assets                                         |  |                                      | 279,336 |  |                                                  |  | 281,214 |                   |  |  | 293,914  |   |  |  | 9,853  |  
|Total liabilities                                    |  |                                      | 69,780  |  |                                                  |  | 79,526  |                   |  |  | 84,270   |   |  |  | 2,825  |  
|Stockholders equity                                 |  |                                      | 209,556 |  |                                                  |  | 201,688 |                   |  |  | 209,644  |   |  |  | 7,028  |  
|Capital stock(3)                                     |  |                                      | 130,845 |  |                                                  |  | 129,521 |                   |  |  | 126,946  |   |  |  | 4,256  |  
|Dividends declared per share(4)                      |  |                                      | 1.11    |  |                                                  |  | 0.50    |                   |  |  | 0.40     |   |  |  | 0.01   |  
|                                                     |  |                                     
|                                                     |  |                                      |         |  | For the years ended December 31,                 | 
|                                                     |  |                                      |         |  | 2012                                             |  |         | 2013              | 
|                                                     |  |                                      |         |  | NT$                                              |  |         | NT$               |  |  | US$      |  
|                                                     |  |                                      |         |  | (in millions)                                    | 
|Segment Data                                         |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Net operating revenues                               |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Wafer fabrication                                    |  |                                      |         |  |                                                  |  | 108,624 |                   |  |  | 116,782  |   |  |  | 3,915  |  
|New business                                         |  |                                      |         |  |                                                  |  | 7,051   |                   |  |  | 7,030    |   |  |  | 236    |  
|Net income (loss)(5)                                 |  |                                      |         |  |                                                  |  |         |                   |  |  |          |   |  |  |        |  
|Wafer fabrication                                    |  |                                      |         |  |                                                  |  | 6,094   |                   |  |  | 12,710   |   |  |  | 426    |  
|New business                                         |  |                                      |         |  |                                                  |  | (5,583  | )                 |  |  | (2,553   | ) |  |  | (86    | )



|(1) | Earnings per share is calculated by dividing net income by the weighted average number of shares outstanding during the year.
|--- | -----------------------------------------------------------------------------------------------------------------------------

|(2) | Diluted securities include convertible bonds, employee stock options and employee bonus, if any.
|--- | ------------------------------------------------------------------------------------------------

|(3) | Changes to the number of the capital shares are primarily caused by the share-based payment transactions and the cancellation of treasury stocks, if any.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Dividends declared per share are in connection with earnings and accumulated additional paid-in capital.
|--- | --------------------------------------------------------------------------------------------------------

|(5) | There are adjustments primarily consisted of intragroup elimination entries.
|--- | ----------------------------------------------------------------------------



5



---

##### Table of Contents

Currency Translations and Exchange Rates

In portions of this annual report, we have translated New Taiwan dollar amounts into U.S. dollars for the convenience of readers. The
rate we used for the translations was NT$29.83 = US$1.00, which was the noon buying rate as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2013. The translation does not mean that New Taiwan dollars could
actually be converted into U.S. dollars at that rate. The following table shows the noon buying rates for New Taiwan dollars expressed in New Taiwan dollar per US$1.00. On April 11, 2014, the noon buying rate was NT$30.08 to US$1.00.



|                         |  |             |       |  |      |  |       |     |  |  |               |  |  |  |       | 
|------------------------ |  | ----------- | ----- |  | ---- |  | ----- | --- |  |  | ------------- |  |  |  | ----- | 
|                         |  | Average (1) |       |  | High |  |       | Low |  |  | At Period-End | 
|2009                     |  |             | 33.02 |  |      |  | 35.21 |     |  |  | 31.95         |  |  |  | 31.95 | 
|2010                     |  |             | 31.50 |  |      |  | 32.43 |     |  |  | 29.14         |  |  |  | 29.14 | 
|2011                     |  |             | 29.38 |  |      |  | 30.67 |     |  |  | 28.50         |  |  |  | 30.27 | 
|2012                     |  |             | 29.56 |  |      |  | 30.28 |     |  |  | 28.96         |  |  |  | 29.05 | 
|2013                     |  |             | 29.70 |  |      |  | 30.20 |     |  |  | 28.93         |  |  |  | 29.83 | 
|October                  |  |             | 29.38 |  |      |  | 29.49 |     |  |  | 29.32         |  |  |  | 29.42 | 
|November                 |  |             | 29.52 |  |      |  | 29.65 |     |  |  | 29.37         |  |  |  | 29.59 | 
|December                 |  |             | 29.72 |  |      |  | 30.03 |     |  |  | 29.59         |  |  |  | 29.83 | 
|2014 (through April 11)  |  |             | 30.27 |  |      |  | 30.65 |     |  |  | 29.90         |  |  |  | 30.08 | 
|January                  |  |             | 30.14 |  |      |  | 30.31 |     |  |  | 29.90         |  |  |  | 30.31 | 
|February                 |  |             | 30.31 |  |      |  | 30.37 |     |  |  | 30.25         |  |  |  | 30.29 | 
|March                    |  |             | 30.40 |  |      |  | 30.65 |     |  |  | 30.24         |  |  |  | 30.45 | 
|April (through April 11) |  |             | 30.17 |  |      |  | 30.29 |     |  |  | 29.99         |  |  |  | 30.08 | 



Source:
Federal Reserve Statistical Release, Board of Governors of the Federal Reserve System.

|(1) | Determined by averaging the rates on the last business day of each month during the relevant period for annual periods, and by averaging the rates on each business day for monthly periods.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B. | Capitalization and Indebtedness
|-- | -------------------------------

Not applicable.



|C. | Reasons for the Offer and Use of Proceeds
|-- | -----------------------------------------

Not applicable.



|D. | Risk Factors
|-- | ------------

Our business and operations are subject to various risks, many of which
are beyond our control. If any of the risks described below actually occurs, our business, financial condition or results of operations could be seriously harmed.

Risks Related to Our Business and Financial Condition

Any global systemic political, economic and financial crisis or catastrophic natural disasters (as well as the indirect effects flowing therefrom) could
negatively affect our business, results of operations, and financial condition.



6



---

##### Table of Contents

In recent times, several major systemic economic and financial crises and natural disasters
negatively affected global business, banking and financial sectors, including the semiconductor industry and markets. These types of crises cause turmoil in global markets that often result in declines in electronic products sales from which we
generate our income through our goods and services. In addition, these crises may cause a number of indirect effects such as undermining the ability of our customers to remain competitive when faced with the financial and economic challenges created
by insolvent countries and companies still struggling to survive in the wake of these crises. For example, there could be in the future knock-on effects from these types of crises on our business, including significant decreases in orders from our
customers; insolvency of key suppliers resulting in product delays; inability of customers to obtain credit to finance purchases of our products; customer insolvencies; and counterparty failures negatively impacting our treasury operations. Any
future systemic political, economic or financial crises or catastrophic natural disasters (as well as the indirect effects flowing from these crises or disasters) could cause revenues for the semiconductor industry as a whole to decline
dramatically, and if the economic conditions or financial condition of our customers were to deteriorate, additional accounting related allowances may be required in the future and such additional allowances could increase our operating expenses and
therefore reduce our operating income and net income. Thus, any future global economic crisis or catastrophic natural disaster (and their indirect effects) could materially and adversely affect our results of operations.

In 2009, we established a 100% owned subsidiary, UMC New Business Investment Corporation, or NBI, to focus on investments in the solar energy,
and light emitting diodes, or LED light source module design, epi wafer manufacturing, and packaging. In recent years, the growth of solar energy and LED industries is adversely affected by the on-going anti-subsidy and anti-dumping investigations
from various regions and the combination of an increase in supply coupled with a decrease in the availability of government subsidies resulted in an excess of supply in the solar energy and LED industries and negative pressure on the pricing. As a
result, we recognized impairment for our investments in these industries made through NBI. If the solar energy and LED industries continue to encounter significant downturns or significant reductions of government subsidies, our investments made
through NBI will be adversely affected which could adversely affect our results of operations.

The seasonality and cyclical nature of the
semiconductor industry and periodic overcapacity make us particularly vulnerable to significant and sometimes prolonged economic downturns.

The semiconductor industry has historically been highly cyclical and, at various times, has experienced significant downturns. Since most of
our customers operate in semiconductor-related industries, variations in order levels from our customers can result in volatility in our revenues and earnings. Because our business is, and will continue to be, largely dependent on the requirements
of semiconductor companies for our services, downturns in the semiconductor industry will lead to reduced demand for our services.

Our
net operating revenues are also typically affected by seasonal variations in market conditions that contribute to the fluctuations of the average selling price of semiconductor services and products. The seasonal sales trends for semiconductor
services and products closely mirror those for consumer electronics, communication and computer sales. We generally experience seasonal lows in the demand for semiconductor services and products during the first half of the year, primarily as a
result of inventory correction by our customers. Any change in the general seasonal variations, which we cannot anticipate, may result in materially adverse effects on our revenues, operations and businesses.

Our operating results fluctuate from quarter to quarter, which makes it difficult to predict our future performance.

Our revenues, expenses and results of operations have varied significantly in the past and may fluctuate significantly from quarter to quarter
in the future due to a number of factors, many of which are beyond our control. Our business and operations have at times in the past been negatively affected by, and are expected to continue to be subject to the risk of the following factors:



| |  |  | the seasonality and cyclical nature of both the semiconductor industry and the markets served by our customers;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | our customers adjustments in their inventory;
| | - |  | ----------------------------------------------



| |  |  | the loss of a key customer or the postponement of orders from a key customer;
| | - |  | -----------------------------------------------------------------------------



| |  |  | the rescheduling and cancellation of large orders;
| | - |  | --------------------------------------------------



7



---

##### Table of Contents

| |  |  | our ability to obtain equipment, raw materials, electricity, water and other required utilities on a timely and economic basis;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | outbreaks of contagious diseases, including severe acute respiratory syndrome, avian flu and swine flu;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | environmental events, such as fires and earthquakes, or industrial accidents; and
| | - |  | ---------------------------------------------------------------------------------



| |  |  | technological changes.
| | - |  | ----------------------

Due to the factors noted above and other risks discussed in this
section, many of which are beyond our control, you should not rely on quarter-to-quarter comparisons to predict our future performance. Unfavorable changes in any of the above factors may seriously harm our business, financial condition and results
of operations. In addition, our operating results may be below the expectations of public market analysts and investors in some future periods. In this event, the price of the shares or ADSs may underperform or fall.

A decrease in demand for or selling prices of communication devices, consumer electronics and computer goods may decrease the demand for our services
and reduce our margins.

Our customers generally use the semiconductors produced in our fabs in a wide variety of applications. We
derive a significant percentage of our operating revenues from customers who use our manufacturing services to make semiconductors for communication devices, consumer electronics, PCs and other computers. The semiconductor industry experienced
several downturns due to recent major financial crises and natural disasters. These downturns resulted in a reduced demand for our services and hence decreased our revenues and earnings. Any significant decrease in the demand for communication
devices, consumer electronics, PCs or other computers may further decrease the demand for our services. In addition, if the average selling price of communication devices, consumer electronics, PCs or other computers decline significantly, we will
be pressured to further reduce our selling prices, which may reduce our revenues and, therefore, reduce our margins significantly. As demonstrated by downturns in demand for high technology products in the past, market conditions can change rapidly,
without apparent warning or advance notice. In such instances, our customers will experience inventory buildup and/or difficulties in selling their products and, in turn, will reduce or cancel orders for wafers from us. The timing, severity and
recovery of these downturns cannot be predicted accurately or at all. When they occur, our business, profitability and price of the shares and ADSs are likely to suffer.

Overcapacity in the semiconductor industry may reduce our revenues, earnings and margins.

The prices that we can charge our customers for our services are significantly related to the overall worldwide supply of integrated circuits
and semiconductor products. The overall supply of semiconductor products is based in part on the capacity of other companies, which is outside of our control. For example, in light of the current market conditions, some companies, including our
largest competitors, have announced plans to increase capacity expenditures significantly. We believe such plans, if carried out as planned, will increase the industry-wide capacity and are likely to result in overcapacity in the future. In periods
of overcapacity, if we are unable to offset the adverse effects of overcapacity through, among other things, our technology and product mix, we may have to lower the prices we charge our customers for our services and/or we may have to operate at
significantly less than full capacity. Such actions could reduce our margin and weaken our financial condition and results of operations. We cannot give any assurance that an increase in the demand for foundry services in the future will not lead to
overcapacity in the near future, which could materially adversely affect our revenues, earnings and margins.

Any problem in the semiconductor
outsourcing infrastructure can adversely affect our net operating revenues and profitability.

Many of our customers depend on
third parties to provide mask tooling, assembly and test services. If these customers cannot timely obtain these services on reasonable terms, they may not order any foundry services from us. This may significantly reduce our net operating revenues
and negatively affect our profitability.



8



---

##### Table of Contents

We may be unable to implement new technologies as they become available, which may result in the decrease
of our profitability and the loss of customers and market share.

The semiconductor industry is developing rapidly and the related
technology is constantly evolving. If we do not anticipate the technology evolution and rapidly adopt new and innovative technology, we may not be able to produce sufficiently advanced services at competitive prices. There is a risk that our
competitors may adopt new technology before we do, resulting in our loss of market share. If we are unable to begin offering advanced services and processes on a competitive and timely basis, we may lose customers to our competitors providing
similar technologies, which may cause our net operating revenues to decline unless we can replace lost customers with new customers. In addition, the market prices for advanced technology and services tend to fall over time. As a result, if we are
unable to offer new advanced services and processes on a competitive and timely basis, we need to decrease the prices that we set for our existing services and processes, which would have a negative effect on our profitability. We also depend upon
the introduction of new technologies on a timely basis in order to benefit from the relatively higher prices such new technologies offer in the earlier stages of their life cycles. If we are unable to introduce new technologies on a timely and
competitive basis, we may not be able to benefit from the relatively higher prices for new technologies, and our average selling price and profits would decrease accordingly.

We may be unable to provide leading technology to our customers if we lose the support of our technology partners.

Enhancing our manufacturing process technologies is critical to our ability to provide services for our customers. We intend to continue to
advance our process technologies through internal research and development and alliances with other companies. Although we have an internal research and development team focused on developing new and improved semiconductor manufacturing process
technologies, we are also dependent on some of our technology partners to advance certain process technology portfolios. In addition, we currently have patent cross-licensing agreements with several companies, including International Business
Machines Corporation, or IBM. Some mask and equipment vendors also supply our technology development teams with masks and equipment needed to develop more advanced processing technologies. If we are unable to continue any of our joint development
arrangements, patent cross-licensing agreements and other agreements, on mutually beneficial economic terms, if we re-evaluate the technological and economic benefits of such relationships, if we are unable to enter into new technology alliances and
arrangements with other leading and specialty semiconductor companies, or if we fail to secure masks and equipment from our vendors in a timely manner sufficient to support our ongoing technology development, we may be unable to continue providing
our customers with leading edge mass-producible process technologies and may, as a result, lose important customers, which would have a materially adverse effect on our businesses, results of operations and financial condition.

In addition, some of our customers rely upon third-party vendors, or IP Vendors, for the intellectual property they embed into their designs.
Although we work and collaborate with IP Vendors with respect to such matters, there can be no guarantee that we will be successful or that the vendors will deliver according to our requirements or the needs of our customers. Failures to meet the
targets or to deliver on a timely basis could cause customers to cancel orders and/or shift capacity to other suppliers.

Our business may suffer if
we cannot compete successfully in our industry.

The worldwide semiconductor foundry industry is highly competitive. We compete
with dedicated foundry service providers such as Taiwan Semiconductor Manufacturing Company Limited, Semiconductor Manufacturing International (Shanghai) Corporation and Globalfoundries Inc., as well as the foundry operation services of some
integrated device manufacturers, such as IBM, Intel, Samsung Electronics, or Samsung, and Toshiba Corporation, or Toshiba. Integrated device manufacturers principally manufacture and sell their own proprietary semiconductor products, but may also
offer foundry services. Other competitors such as DongbuAnam Semiconductor, Grace Semiconductor Manufacturing Corp., X-FAB Semiconductors Foundries AG and Silterra Malaysia Sdn. Bhd. have initiated efforts to expand and develop substantial
additional foundry capacity. New entrants and consolidations in the foundry business, such as the acquisition of Chartered Semiconductor by Globalfoundries in 2009, are likely to initiate a trend of competitive pricing and create potential
overcapacity in legacy technology. Some of our competitors have greater access to capital and substantially greater production, research and development, marketing and other resources than we do. As a result, these companies may be able to compete
more aggressively over a longer period of time than we can.



9



---

##### Table of Contents

The principal elements of competition in the wafer foundry market include:



| |  |  | technical competence;
| | - |  | ---------------------



| |  |  | time-to-volume production and cycle time;
| | - |  | -----------------------------------------



| |  |  | time-to-market;
| | - |  | ---------------



| |  |  | research and development quality;
| | - |  | ---------------------------------



| |  |  | available capacity;
| | - |  | -------------------



| |  |  | manufacturing yields;
| | - |  | ---------------------



| |  |  | customer service and design support;
| | - |  | ------------------------------------



| |  |  | price;
| | - |  | ------



| |  |  | management expertise; and
| | - |  | -------------------------



| |  |  | strategic alliances.
| | - |  | --------------------

Our ability to compete successfully also depends on factors partially
outside of our control, including product availability, intellectual property, or IP, including cell libraries that our customers embed in their product designs, and industry and general economic trends. If we cannot compete successfully in our
industry, our business may suffer.

We may not succeed in our efforts to acquire operations in China.

R.O.C. law prohibits Taiwan entities from investment in mainland China-based semiconductor manufacturers without government approval. Since
2005, we have entered into several transactions to increase our ownership of Hejian Technology (Suzhou) Co., Ltd., or Hejian, a semiconductor manufacturer owning an 8-inch fab in Suzhou, China. Hejian is a fully owned subsidiary of Infoshine
Technology Limited, or Infoshine, and Infoshine is a fully owned subsidiary of Best Elite International Limited, or Best Elite. For more information about the transactions with Hejian and its holding companies, Infoshine and Best Elite, please see
Item 4. Information on the CompanyA. History and Development of the Company.

As part of these transactions, we need to
obtain approvals from the Investment Commission of the R.O.C. Ministry of Economic Affairs, or the R.O.C. MOEA. Investments made by R.O.C. companies in PRC companies that engage in the semiconductor foundry business are strictly regulated by the
R.O.C. government. For example, the investee may only manufacture semiconductor wafers of 8 inches or smaller, and the number of total investment projects in the semiconductor foundry business undertaken by the R.O.C. companies, taken as a whole, is
limited by a quota. As of March 31, 2014, our cumulative ownership in Best Elite was 86.88%. While we have received approvals of the Investment Commission, Ministry of Economic Affairs, Executive Yuan for our acquisition of Best Elites
shares as well as the technology transfer between Hejian and us, we cannot assure you that we will be able to continue to receive approvals from the R.O.C. government authorities for further acquisitions or transactions in the future.

We compete for business on a global basis, and we believe it is necessary to establish and develop operations in multiple strategic geographic
regions. We cannot assure you that the mergers and acquisitions we have undertaken will be closed successfully or that they will be fully closed on the terms we proposed. The failure to close these transactions or the failure to close them on terms
as favorable as we have entered into and announced may impair our ability to realize the benefits we intend to achieve and have a material and adverse effect on our operations and business.



10



---

##### Table of Contents

We may not be able to implement our planned growth if we are unable to obtain the financing necessary to
fund the substantial capital expenditures we expect to incur.

Our business and the nature of our industry require us to make
substantial capital expenditures leading to a high level of fixed costs. The costs of facilities, tools and equipment to make semiconductors with advanced technology continue to rise, with each generation typically significantly more expensive than
the larger-in-size more mature technologies which preceded. We expect to incur significant capital expenditures in connection with our growth plans. These capital expenditures will be made in advance of any additional sales to be generated by new or
upgraded fabs as a result of these expenditures. Given the fixed-cost nature of our business, we have in the past incurred, and may in the future incur, operating losses if our revenues do not adequately offset our capital expenditures.
Additionally, our actual expenditures may exceed our planned expenditures for a variety of reasons, including changes in:



| |  |  | our growth plan;
| | - |  | ----------------



| |  |  | our process technology;
| | - |  | -----------------------



| |  |  | market conditions;
| | - |  | ------------------



| |  |  | interest rates;
| | - |  | ---------------



| |  |  | exchange rate fluctuations; and
| | - |  | -------------------------------



| |  |  | prices of equipment.
| | - |  | --------------------

We cannot assure you that additional financing will be available on
satisfactory terms, if at all. If adequate funds are not available on satisfactory terms, we may be forced to curtail our expansion plans or delay the deployment of our services, which could result in a loss of customers and limit the growth of our
business.

We depend on a small number of customers for a significant portion of our net operating revenues and any loss of these customers would
result in significant declines in our net operating revenues.

We have been largely dependent on a small number of customers for a
substantial portion of our business. In 2013, our top ten customers accounted for 56.6% of our net operating revenues. We expect that we will continue to depend upon a relatively limited number of customers for a significant portion of our net
operating revenues. We cannot assure you that our net operating revenues generated from these customers, individually or in the aggregate, will reach or exceed historical levels in any future period. Loss or cancellation of business from significant
changes in scheduled deliveries to, or decreases in the prices of services sold to any of these customers could significantly reduce our net operating revenues.

Our customers generally do not place purchase orders far in advance, which makes it difficult for us to predict our future revenues, adjust
production costs and allocate capacity efficiently on a timely basis. In addition, due to the cyclical nature of the semiconductor industry, our customers purchase orders have varied significantly from period to period. As a result, we do not
typically operate with any significant backlog, except in periods of extreme capacity shortage such as that experienced in late 2009 and early 2010. The lack of significant backlog and the unpredictable length and timing of semiconductor cycles make
it difficult for us to forecast our revenues in future periods. Moreover, our expense levels are based in part on our expectations of future revenues, and we may be unable to adjust costs in a timely manner to compensate for revenue shortfalls. We
expect that in the future our net operating revenues in any quarter will continue to be substantially dependent upon purchase orders received in that quarter.



11



---

##### Table of Contents

Our inability to obtain, preserve and defend intellectual property rights could harm our competitive
position.

Our ability to compete successfully and achieve future growth will depend, in part, on our ability to protect our
proprietary technology and to secure critical processing technology that we do not own at commercially reasonable terms. We cannot assure you that in the future we will be able to independently develop, or secure from any third party, the technology
required for upgrading our production facilities or for meeting our customer needs. Our failure to successfully obtain such technology may seriously harm our competitive position.

Our ability to compete successfully also depends on our ability to operate without infringing on the proprietary rights of others. We have no
means of knowing what patent applications have been filed in the United States or in certain other countries until months after they are filed. The semiconductor industry, because of the complexity of the technology used and the multitude of
patents, copyrights and other overlapping intellectual property rights, is characterized by frequent litigation regarding patent, trade secret and other intellectual property rights. It is common for patent owners to assert their patents against
semiconductor manufacturers. We have received from time to time communications from third parties asserting patents that cover certain of our technologies and alleging infringement of intellectual property rights of others, and we expect to continue
to receive such communications in the future. See Item 4. Information on the CompanyB. Business OverviewLitigation for more details of our ongoing litigation. In the event any third party was to make a valid claim against us
or against our customers, we could be required to:



| |  |  | seek to acquire licenses to the infringed technology which may not be available on commercially reasonable terms, if at all;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | discontinue using certain process technologies, which could cause us to stop manufacturing certain semiconductors;
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | pay substantial monetary damages; and/or
| | - |  | ----------------------------------------



| |  |  | seek to develop non-infringing technologies, which may not be feasible.
| | - |  | -----------------------------------------------------------------------

Any one of these
developments could place substantial financial and administrative burdens on us and hinder our business. Litigation, which could result in substantial expenses for us and diversion of our resources, may also be necessary to enforce our patents or
other intellectual property rights or to defend us or our customers against claimed infringement of the rights of others. If we fail to obtain necessary licenses or if litigation relating to patent infringement or other intellectual property matters
occurs, it could hurt our reputation as a technology leader in our industry and prevent us from manufacturing particular products or applying particular technologies, which could reduce opportunities to generate revenues.

Our operations and business will suffer if we lose one or more of our key personnel without adequate replacements.

Our future success to a large extent depends on the continued services of our Chairman and key executive officers. We do not carry key person
insurance on any of our personnel. If we lose the services of any of our Chairman or key executive officers, it could be difficult to find and integrate replacement personnel in a short period of time, which could harm our operations and the growth
of our business.

We may have difficulty attracting and retaining skilled employees, who are critical to our future success.

The success of our business depends upon attracting and retaining experienced executives, engineers and other employees to implement our
strategy. The competition for skilled employees is intense. We expect demand for personnel in Taiwan to increase in the future as new wafer fabrication facilities and other businesses are established in Taiwan. We also expect demand for experienced
personnel in other locations to increase significantly as our competitors establish and expand their operations. Some of our competitors are willing to offer better compensation than that we do to our executives, engineers and other employees. We do
not have long-term employment contracts with any of our employees. If we were unable to retain our existing personnel or attract, assimilate and recruit new experienced personnel in the future, it could seriously disrupt our operations and delay or
restrict the growth of our business.



12



---

##### Table of Contents

Our transactions with affiliates and stockholders may hurt our profitability and competitive position.

We have provided foundry services to several of our affiliates and stockholders. These transactions were conducted on an
arms length basis. We currently do not provide any preferential treatment to any of these affiliates and stockholders. However, we may in the future reserve or allocate our production capacity to these companies if there is a shortage of
foundry services in the market to enable these companies to maintain their operations and/or to protect our investments in them. This reservation or allocation may reduce our capacity available for our other customers, which may damage our
relationships with other customers and discourage them from using our services. This may hurt our profitability and competitive position.

The trend
of adopting protectionist measures in certain countries, including the United States, could have a material adverse impact on our results of operations and financial condition.

Governments in the United States, China and certain other countries have implemented fiscal and monetary programs to stimulate economic growth
as a result of the recent economic downturn, and many of these programs include protectionist measures that encourage the use of domestic products and labor. Recent policy developments by the governments in China and elsewhere also suggest an
increased unwillingness to allow international companies to invest in or acquire local businesses. Since many of our direct customers and other downstream customers in the supply chain are located in or have operations in the countries where
protectionist measures were adopted, such protectionist measures may have a material adverse effect on demand for our manufacturing services.

Any
future outbreak of contagious diseases may materially and adversely affect our business and operations, as well as our financial condition and results of operations.

Any future outbreak of contagious diseases, such as avian or swine influenza or severe acute respiratory syndrome, may disrupt our ability to
adequately staff our business and may generally disrupt our operations. If any of our employees is suspected of having contracted any contagious disease, we may under certain circumstances be required to quarantine such employees and the affected
areas of our premises. Therefore, we may have to temporarily suspend part of or all of our operations. Furthermore, any future outbreak may restrict the level of economic activities in affected regions, including Taiwan, and affect the willingness
and ability of our employees and customers to travel, which may also adversely affect our business and prospects. As a result, we cannot assure you that any future outbreak of contagious diseases would not have a material adverse effect on our
financial condition and results of operations.

Currency fluctuations could increase our costs relative to our revenues, which could adversely
affect our profitability.

More than half of our net operating revenues are denominated in currencies other than New Taiwan
dollars, primarily in U.S. dollars and Japanese Yen. On the other hand, more than half of our costs of direct labor, raw materials and overhead are incurred in New Taiwan dollars. Although we hedge a portion of the resulting net foreign exchange
position through the use of foreign exchange spot transactions, we are still affected by fluctuations in foreign exchange rates among the U.S. dollar, the Japanese Yen, the New Taiwan dollar and other currencies. Any significant fluctuation in
exchange rates may impact on our financial condition and the U.S. dollar value of the ADSs and the U.S. dollar value of any cash dividends we distributed, which could have a corresponding effect on the market price of the ADSs.



13



---

##### Table of Contents

Risks Relating to Manufacturing

Our manufacturing processes are highly complex, costly and potentially vulnerable to impurities and other disruptions that can significantly increase our
costs and delay product shipments to our customers.

Our manufacturing processes are highly complex, require advanced and costly
equipment and are continuously being modified to improve manufacturing yields and product performance. Impurities or other difficulties in the manufacturing process or defects with respect to equipment or supporting facilities can lower
manufacturing yields, interrupt production or result in losses of products in process. As system complexity has increased and process technology has become more advanced, manufacturing tolerances have been reduced and requirements for precision have
become even more demanding. Although we have been enhancing our manufacturing capabilities and efficiency, from time to time we have experienced production difficulties that have caused delivery delays and quality control problems, as is common in
the semiconductor industry. In the past we have encountered the following problems:



| |  |  | capacity constraints due to changes in product mix or the delayed delivery of equipment critical to our production, including scanners, steppers and chemical stations;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | construction delays during expansions of our clean rooms and other facilities;
| | - |  | ------------------------------------------------------------------------------



| |  |  | difficulties in upgrading or expanding existing facilities;
| | - |  | -----------------------------------------------------------



| |  |  | manufacturing execution system or automatic transportation system failure;
| | - |  | --------------------------------------------------------------------------



| |  |  | unexpected breakdowns in our manufacturing equipment and/or related facilities;
| | - |  | -------------------------------------------------------------------------------



| |  |  | changing or upgrading our process technologies;
| | - |  | -----------------------------------------------



| |  |  | raw materials shortages and impurities; and
| | - |  | -------------------------------------------



| |  |  | delays in delivery and shortages of spare parts and in maintenance for our equipment and tools.
| | - |  | -----------------------------------------------------------------------------------------------

Should these problems repeat, we may suffer delays in delivery and/or loss of business and revenues. In addition, we cannot guarantee that we
will be able to increase our manufacturing capacity and efficiency in the future to the same extent as in the past.

Our profit margin may
substantially decline if we are unable to continuously improve our manufacturing yields, maintain high capacity utilization and optimize the technology mix of our silicon wafer production.

Our ability to maintain our profitability depends, in part, on our ability to:



| |  |  | maintain high capacity utilization, which is defined as the ratio of the wafer-out quantity of 8-inch wafer equivalents divided by our estimated total 8-inch equivalent capacity in a specified period. The estimated
capacity figures may vary depending upon equipment delivery schedules, pace of migration to more advanced processing technologies and other factors affecting production ramp-ups;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintain or improve our manufacturing yields, which is defined as the percentage of usable devices manufactured on a wafer; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | optimize the technology mix of our production by increasing the number of wafers manufactured by utilizing different processing technologies.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



14



---

##### Table of Contents

Our manufacturing yields directly affect our ability to attract and retain customers, as well as
the price of our services. Our capacity utilization affects our operating results because a large percentage of our operating costs are fixed. Our technology mix affects utilization of our equipment and process technologies, as well as the prices we
can charge, either of which can affect our margins. If we are unable to continuously improve our manufacturing yields, maintain high capacity utilization or optimize the technology mix of our wafer production, our profit margin may substantially
decline.

We may have difficulty in ramping up production in accordance with our schedule, which could cause delays in product deliveries and
decreases in manufacturing yields.

As is common in the semiconductor industry, we have from time to time experienced difficulties
in ramping up production at new or existing facilities or effecting transitions to new manufacturing processes. As a result, we have suffered delays in product deliveries or reduced manufacturing yields. We may encounter similar difficulties in
connection with:



| |  |  | the migration to more advanced process technologies, such as 45/40 and 28-nanometer and more advanced process technology;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | the joint development with vendors for more powerful tools (both in production and inspection) needed in the future to meet advanced process technology requirements; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the adoption of new materials in our manufacturing processes.
| | - |  | -------------------------------------------------------------

We may face construction
delays, interruptions, infrastructure failure and delays in upgrading or expanding existing facilities, or changing our process technologies, any of which might adversely affect our production schedule. Our failure to achieve our production schedule
could delay the time required to recover our investments and seriously affect our profitability.

Our production schedules could be delayed and we
may lose customers if we are unable to obtain raw materials and equipment in a timely manner.

We depend on our suppliers for raw
materials. To maintain competitive manufacturing operations, we must obtain from our suppliers, in a timely manner, sufficient quantities of quality materials at acceptable prices. Although we source our raw materials from several suppliers, a small
number of these suppliers account for a substantial amount of our supply of raw materials because of the consistent quality of their products. For example, in 2013, we purchased a majority of our silicon wafers from four makers, Shin-Etsu Handotai
Corporation, or Shin-Etsu, Siltronic AG, SunEdison Corporation and Sumco Group (including Sumco Corporation and Formosa Sumco Technology Corporation). We may have long-term contracts with most of our suppliers if necessary. From time to time, our
suppliers have extended lead time or limited the supply of required materials to us because of capacity constraints. Consequently, from time to time, we have experienced difficulty in obtaining the quantities of raw materials we need on a timely
basis.

In addition, from time to time we may reject materials that do not meet our specifications, resulting in declines in output or
manufacturing yields. We cannot assure you that we will be able to obtain sufficient quantities of raw materials and other supplies in a timely manner. If the supply of materials is substantially diminished or if there are significant increases in
the costs of raw materials, we may be forced to incur additional costs to acquire sufficient quantities of raw materials to sustain our operations, which may increase our marginal costs and reduce profitability.

We also depend on a limited number of manufacturers and vendors that make and maintain the complex equipment we use in our manufacturing
processes. We also rely on these manufacturers and vendors to improve our technology to meet our customers demands as technology improves. In periods of unpredictable and highly diversified market demand, the lead time from order to delivery
of this equipment can be as long as six to twelve months. If there are delays in the delivery of equipment or in the availability or performance of necessary maintenance, or if there are increases in the cost of equipment, it could cause us to delay
our introduction of new manufacturing capacity or technologies and delay product deliveries, which may result in the loss of customers and revenues.



15



---

##### Table of Contents

We may be subject to the risk of loss due to fire because the materials we use in our manufacturing
processes are highly flammable.

We use highly flammable materials such as silane and hydrogen in our manufacturing processes and
may therefore be subject to the risk of loss arising from fires. The risk of fire associated with these materials cannot be completely eliminated. We maintain insurance policies to reduce losses caused by fire, including business interruption
insurance. While we believe that our insurance coverage for damage to our property and business interruption due to fire is consistent with semiconductor industry practice, our insurance coverage is subject to deductibles and self-insured retention
and may not be sufficient to cover all of our potential losses. If any of our fabs were to be damaged or cease operations as a result of a fire, it would temporarily reduce manufacturing capacity and reduce revenues.

We and many of our customers and suppliers are vulnerable to natural disasters and other events outside of our control, which may seriously disrupt our
operations.

Most of our assets and many of our customers and suppliers are located in certain parts of Taiwan. Our operations and
the operations of our customers and suppliers are vulnerable to earthquakes, floods, droughts, power losses and similar events that affect the locations of our operations. The occurrence of any of these events could interrupt our services and cause
severe damages to wafers in process, or cause significant business interruptions. Although we maintain property damage and business interruption insurance for such risks, there is no guarantee that future damages or business loss from earthquakes
will be covered by such insurance, that we will be able to collect from our insurance carriers, should we choose to claim under our insurance policies, or that such coverage will be sufficient. In addition, our manufacturing facilities have
occasionally experienced insufficient power supplies, and our operations have been disrupted.

Our operations may be delayed or interrupted and our
business could suffer if we violate environmental, safety and health, or ESH, regulations.

The semiconductor manufacturing process
requires the use of various gases, chemicals, hazardous materials and other substances such as solvents and sulfuric acid which may have an impact on the environment. We are always subject to ESH regulations, and a failure to manage the use,
storage, transportation, emission, discharge, recycling or disposal of raw materials or to comply with these ESH regulations could result in (i) regulatory penalties, fines and other legal liabilities, (ii) suspension of production or
delays in operation and capacity expansion, (iii) a decrease in our sales, (iv) an increase in pollution cleaning fees and other operation costs, or (v) damage to our public image, any of which could harm our business. In addition, as
ESH regulations are becoming more comprehensive and stringent, we may incur a greater amount of capital expenditures in technology innovation and materials substitution in order to comply with such regulations, which may adversely affect our results
of operations.

Climate change may negatively affect our business.

There is increasing concern that climate change is occurring and may have dramatic effects on human activity without aggressive remediation
steps. A modest change in temperature would result in increased coastal flooding, changing precipitation patterns and increasing risk of extinction for the worlds species. Public expectations for reductions in greenhouse gas emissions could
result in increased energy, transportation and raw material costs.

Scientific examination of, political attention to and rules and
regulations on issues surrounding the existence and extent of climate change may result in an increase in the cost of production due to increase in the prices of energy and introduction of energy or carbon tax. Various regulatory developments have
been introduced that focus on restricting or managing emissions of carbon dioxide, methane and other greenhouse gases. Enterprises may need to purchase at higher costs emission credits, new equipment or raw materials with lower carbon footprints.
These developments and further legislation that is likely to be enacted could affect our operations negatively. Changes in environmental regulations, such those on the use of perfluorinated compounds, could increase our production costs, which could
adversely affect our results of operation and financial condition.



16



---

##### Table of Contents

In addition, more frequent droughts and floods, extreme weather conditions and rising sea levels
could occur due to climate change. The impact of such changes could be significant as most of our factories are located in islands including Taiwan and Singapore. For example, transportation suspension caused by extreme weather conditions could harm
the distribution of our products. Similarly, our operations depend upon adequate supplies of water, and extended or serious droughts may affect our ability to obtain adequate supplies of water and threaten our production. We cannot predict the
economic impact, if any, of disasters or climate change.

Disruptions in the international trading environment may seriously decrease our
international sales.

A substantial portion of our net operating revenues is derived from sales to customers located in countries
other than the countries where our fabs are located. In 2012, we operated fabs in Taiwan, Singapore and Japan, and in 2013, we operated fabs in Taiwan, Singapore, Japan and China. For the years ended December 31, 2012 and 2013, we generated
approximately 33.4% and 30.1% of our net operating revenues, respectively, from other than the countries where our fabs are located. We expect sales to customers from countries outside of Taiwan, Singapore, Japan and China will continue to represent
a significant portion of our net operating revenues. The success and profitability of our international activities depend on certain factors beyond our control, such as general economic conditions, labor conditions, political stability, tax laws,
import duties and foreign exchange controls of the countries in which we sell our products, and the political and economic relationships between these countries. As a result, our manufacturing services will continue to be vulnerable to disruptions
in the international trading environment, including adverse changes in foreign government regulations, political unrest and international economic downturns.

These disruptions in the international trading environment affect the demand for our manufacturing services and change the terms upon which we
provide our manufacturing services overseas, which could seriously decrease our international sales.

Political, Economic and Regulatory Risks

We face substantial political risks associated with doing business in Taiwan, particularly due to the tense relationship between the R.O.C. and the
Peoples Republic of China, or the PRC, that could negatively affect the value of your investment.

Our principal executive
offices and most of our assets and operations are located in Taiwan. Accordingly, our business, financial condition and results of operations and the market price of our shares and the ADSs may be affected by changes in R.O.C. governmental policies,
taxation, inflation or interest rates and by social instability and diplomatic and social developments in or affecting Taiwan which are outside of our control. Taiwan has a unique international political status. Since 1949, Taiwan and the Chinese
mainland have been separately governed. The PRC claims that it is the sole government in China and that Taiwan is part of China. Although significant economic and cultural relations have been established between the R.O.C. and the PRC in the past
few years, such as the adoption of the Economic Cooperation Framework Agreement and memorandum regarding cross-strait financial supervision, we cannot assure you that relations between the R.O.C. and PRC will not become strained again. For example,
the PRC government has refused to renounce the use of military force to gain control over Taiwan and, in March 2005, passed an Anti-Secession Law that authorized non-peaceful means and other necessary measures should Taiwan move to gain independence
from the PRC. Past developments in relations between the R.O.C. and the PRC have on occasions depressed the market prices of the securities of companies in the R.O.C. Such initiatives and actions are commonly viewed as having a detrimental effect to
reunification efforts between the R.O.C. and the PRC. Relations between the R.O.C. and the PRC and other factors affecting military, political or economic conditions in Taiwan could materially and adversely affect our financial condition and results
of operations, as well as the market price and the liquidity of our securities.

Our business depends on the support of the R.O.C. government, and a
decrease in this support may increase our labor costs and decrease our income after tax.

The R.O.C. government has been very
supportive of technology companies such as UMC. For instance, the R.O.C.s labor laws and regulations permit employees of semiconductor companies to work shifts of 10 hours each day on a two-days-on, two-days-off basis and do not require these
employees to be unionized. We cannot assure you, however, that these labor laws and regulations will not be changed in the future. In the event that the R.O.C. government requires our employees to be unionized or decreases the number of hours our
employees may work in a given day, our labor costs may increase significantly which could result in lower margins.



17



---

##### Table of Contents

We, like many R.O.C. technology companies, have benefited from substantial tax incentives
provided by the R.O.C. government. In 2013, such incentives resulted in a tax credit of NT$779 million (US$26 million). Among the incentives broadly enjoyed by R.O.C. technology companies, various tax benefits granted under Chapter 2 and Article
70-1 of the Statute for Upgrading Industries expired on December 31, 2009. Despite the fact that we can still enjoy the five-year tax holidays for the relevant investment plans approved by R.O.C. tax authority before the expiration of the
Statute for Upgrading Industries, if more incentives are curtailed or eliminated, our net income may decrease significantly.

Our future tax
obligations may adversely affect our profitability.

The R.O.C. government enacted the R.O.C. Income Basic Tax Act, also known as
the Alternative Minimum Tax Act, or the AMT Act, which became effective on January 1, 2006 to impose an alternative minimum tax and to remedy the currently excessive tax incentives for individuals and businesses. AMT is a
supplemental tax which is payable if the income tax payable pursuant to the R.O.C. Income Tax Act is below the minimum amount prescribed under the AMT Act. For the purpose of calculating the AMT, the taxable income defined under the AMT Act includes
most income that is exempted from income tax under various legislations, such as those providing tax holidays and investment tax credits.

For businesses, the income that previously enjoyed tax-exemption privileges under relevant tax regulations, such as Act for the Establishment
and Administration of the Science Parks and Statute for Upgrading Industries, will be subject to the AMT system for the calculation of business taxpayers aggregate incomes. The AMT rate for business entities was 10% prior to 2013 and was
increased to 12% beginning in 2013. Under the AMT Act, a company will be subject to a 12% AMT if its annual taxable income under the Statute exceeds NT$0.5 million. However, the AMT Act grandfathered certain tax exemptions granted prior to the
enactment of the AMT. For example, businesses who already qualified for five-year tax holidays and obtained the applicable permission issued by the competent authority before December 31, 2005 may continue to enjoy such tax incentives, and the
income exempted thereunder will not to be added to the taxable income for calculating the AMT, so long as the construction of their investment projects breaks ground within one year from January 1, 2006 and was completed within three years from
the day immediately following their receipts of the applicable permission issued by the competent authority. As the tax exemption periods expire or in the event of an increase in other taxable income subject to the AMT Act, it may adversely impact
our net income after tax.

Compliance with laws such as the US Conflict Minerals Law may affect our ability or the ability of our suppliers to
purchase raw materials at an effective cost.

Many industries rely on materials which are subject to regulations concerning certain
minerals sourced from the Democratic Republic of Congo, or the DRC, or adjoining countries, including: Sudan; Uganda; Rwanda; Burundi; United Republic of Tanzania; Zambia; Angola; Congo; and Central African Republic. These minerals are commonly
referred to as conflict minerals. Conflict minerals which may be used in our industry or by our suppliers include Columbite-tantalite (derivative of tantalum [Ta]), Cassiterite (derivative of tin [Sn]), gold [Au], Wolframite (derivative of tungsten
[W]), and Cobalt [Co]. Under present U.S. regulations, we and our customers are required to survey and disclose whether our processes or products use or rely on conflict materials. On August 22, 2012, the U.S. SEC adopted the final rule for
disclosing the use of conflict minerals that require companies similar to us to make a report in a type and format similar to Form D to disclose the use of conflict materials on an annual basis on or prior to each May 31, and our first report
will be filed by May 31, 2014. In order to comply with the aforementioned rules and regulations promulgated by the U.S. SEC, we will spare no effort to verify with our vendors all relevant factual data and file the required report. Although we
expect that we and our vendors will be able to comply with the requirements of any new regulations promulgated by the U.S. SEC, there can be no guarantee that we will be able to gather all the information required. In addition, there is increasing
public sentiment that companies should avoid using conflict materials from the DRC and adjoining countries. Although we believe our suppliers do not rely on such conflict materials, there can be no guarantee that we will continue to be able to
obtain adequate supplies of materials needed in our production from supply chains outside the DRC and adjoining countries. The failure to obtain necessary information or to maintain adequate supplies of materials from supply chains outside the DRC
and adjoining countries may delay our production, increasing the risk of losing customers and business.



18



---

##### Table of Contents

Similarly, many jurisdictions have promulgated regulations with the intention to deter disregard
and contempt for human rights within supply chains. Although our own operations comply with the relevant requirements under the laws of the jurisdictions where we have operations, possible violation by our suppliers may not be known to us and beyond
our control. While we believe our suppliers comply with applicable human rights requirements, there can be no guarantee that they will continue to do so, or that we will be able to obtain the necessary information on their activities to comply with
whatever future requirements may be enacted.

Data security and data privacy considerations and regulations may adversely affect our operations.

Our operations depend upon reliable and uninterrupted information technology services, including the integrity of our web-based
and electronic customer service systems. Although we have put in place what we believe are reasonable precautions to prevent accidental and/or malicious disruption of these services, there can be no assurance that our preventive measures will
preclude failure of the information technology, web-based and electronic customer service systems upon which our business depends. Disruption of these systems could adversely affect our ability to manufacture and to serve our customers.

In addition, in the course of our operations, we receive confidential information from and about our customers, vendors, partners and
employees. Although we take what we believe are reasonable precautions to protect such information from disclosure to or interruption, there are no guarantees our precautions will prevent accidental or malicious access to such information. In the
event of such access, our reputation could be adversely affected, customers and others may hesitate to entrust us with their confidential information, which would negatively affect our operations, and we would incur costs to remedy the breach.

Moreover, many jurisdictions have proposed regulations concerning data privacy. Although we have taken measures to comply with existing law
and regulations in this regard, future laws may impose requirements that make our operations more expensive and/or less efficient. In addition, should we experience a breakdown in our systems or failure in our precautions that results in a violation
of such regulations, we may suffer adverse customer reaction and face governmental penalties.

Risks Related to the Shares and ADSs and Our Trading
Markets

Restrictions on the ability to deposit shares into our ADS program may adversely affect the liquidity and price of the ADSs.

The ability to deposit shares into our ADS program is restricted by R.O.C. law. Under current R.O.C. law, no person or entity,
including you and us, may deposit shares into our ADS program without specific approval of the R.O.C. FSC except for the deposit of the shares into our ADS program and for the issuance of additional ADSs in connection with:



| | (1) | distribution of share dividends or free distribution of our shares;
| | --- | -------------------------------------------------------------------



| | (2) | exercise of the preemptive rights of ADS holders applicable to the shares evidenced by ADSs in the event of capital increases for cash; or
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | delivery of our shares which are purchased in the domestic market in Taiwan directly by the investor or through the depositary or are already in the possession of the investor to the custodian for deposit into our ADS
program, subject to the following conditions: (a) the re-issuance is permitted under the deposit agreement and custody agreement, (b) the depositary may accept deposit of those shares and issue the corresponding number of ADSs with regard
to such deposit only if the total number of ADSs outstanding after the issuance does not exceed the number of ADSs previously approved by the R.O.C. FSC, plus any ADSs issued pursuant to the events described in (1) and (2) above and
(c) this deposit may only be made to the extent previously issued ADSs have been withdrawn.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



19



---

##### Table of Contents

As a result of the limited ability to deposit shares into our ADS program, the prevailing market
price of our ADSs on the NYSE may differ from the prevailing market price of the equivalent number of our shares on the Taiwan Stock Exchange.

Holders of our ADSs will not have the same proposal or voting rights as the holders of our shares, which may affect the value of your investment.

Except for treasury shares and shares held by our subsidiaries which meet certain criteria provided under the R.O.C. Company Act,
each common share is generally entitled to one vote and no voting discount will be applied. However, except as described in this annual report and in the deposit agreement, holders of our ADSs will not be able to exercise voting rights attached to
the shares evidenced by our ADSs on an individual basis. Holders of our ADSs will appoint the depositary or its nominee as their representative to exercise the voting rights attached to the shares represented by the ADSs. The voting rights attached
to the shares evidenced by our ADSs must be exercised as to all matters brought to a vote of stockholders collectively in the same manner.

Moreover, holders of the ADSs do not have individual rights to propose any matter for stockholders votes at our stockholders
meetings. However, holders of at least 51% of the ADS outstanding at the relevant record date may request the depositary to submit to us one proposal per year for consideration at our annual ordinary stockholders meeting, provided that such
proposal meets certain submission criteria and limitations, including the language and the length of the proposal, the time of submission, the required certification or undertakings, and the attendance at the annual ordinary stockholders
meeting. A qualified proposal so submitted by the depositary will still be subject to review by our board of directors and there is no assurance that the proposal will be accepted by our board of directors for inclusion in the agenda of our annual
ordinary stockholders meeting. Furthermore, if we determine, at our discretion, that the proposal submitted by the depositary does not qualify, we have no obligation to notify the depositary or to allow the depositary to modify such proposal.

Furthermore, if holders of at least 51% of the ADSs outstanding at the relevant record date instruct the depositary to vote in the same
manner regarding a resolution, including election of directors, the depositary will appoint our Chairman, or his designee, to represent the ADS holders at the stockholders meetings and to vote the shares represented by the ADSs outstanding in
the manner so instructed. If by the relevant record date the depositary has not received instructions from holders of ADSs holding at least 51% of the ADSs to vote in the same manner for any resolution, then the holders will be deemed to have
instructed the depositary to authorize and appoint our Chairman, or his designee, to vote all the shares represented by ADSs at his sole discretion, which may not be in your interest.

The rights of holders of our ADSs to participate in our rights offerings may be limited, which may cause dilution to their holdings.

We may from time to time distribute rights to our stockholders, including rights to acquire our securities. Under the deposit agreement, the
depositary will not offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act or exempt from registration under the Securities Act. We are
under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such a registration statement to be declared effective. Accordingly, holders of our ADSs may be unable to
participate in our rights offerings and may experience dilution in their holdings.

Changes in exchange controls that restrict your ability to
convert proceeds received from your ownership of ADSs may have an adverse effect on the value of your investment.

Your ability to
convert proceeds received from your ownership of ADSs depends on existing and future exchange control regulations of the Republic of China. Under the current laws of the Republic of China, an ADS holder or the depositary, without obtaining further
approvals from the R.O.C. Central Bank of China, or the CBC, or any other governmental authority or agency of the Republic of China, may convert NT dollars into other currencies, including U.S. dollars, in respect of:



| |  |  | the proceeds of the sale of shares represented by ADSs or received as share dividends with respect to the shares and deposited into the depositary receipt facility; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any cash dividends or distributions received from the shares represented by ADSs.
| | - |  | ---------------------------------------------------------------------------------



20



---

##### Table of Contents

In addition, the depositary may also convert into NT dollars incoming payments for purchases of
shares for deposit in the depositary receipt facility against the creation of additional ADSs. If you withdraw the shares underlying your ADSs and become a holder of our shares, you may convert into NT dollars subscription payments for rights
offerings. The depositary may be required to obtain foreign exchange approval from the CBC on a payment-by-payment basis for conversion from NT dollars into foreign currencies of the proceeds from the sale of subscription rights of new shares.
Although it is expected that the CBC will grant approval as a routine matter, required approvals may not be obtained in a timely manner, or at all.

Under the Republic of China Foreign Exchange Control Law, the Executive Yuan of the Republic of China may, without prior notice but subject to
subsequent legislative approval, impose foreign exchange controls or other restrictions in the event of, among other things, a material change in international economic conditions.

Our public stockholders may have more difficulty protecting their interests than they would as stockholders of a U.S. corporation.

Our corporate affairs are governed by our articles of incorporation and by laws governing R.O.C. corporations. The rights of our stockholders
to bring stockholders suits against us or our board of directors under R.O.C. law are much more limited than those of the stockholders of U.S. corporations. Therefore, our public stockholders may have more difficulty protecting their interests
in connection with actions taken by our management, members of our board of directors or controlling stockholders than they would as stockholders of a U.S. corporation. Please refer to Item 10. Additional InformationB. Memorandum and
Articles of AssociationRights to Bring Stockholders Suits included elsewhere in this annual report for a detailed discussion of the rights of our stockholders to bring legal actions against us or our directors under R.O.C. law.

Holders of our ADSs will be required to appoint several local agents in Taiwan if they withdraw shares from our ADS program and become our
stockholders, which may make ownership burdensome.

Non-R.O.C. persons wishing to withdraw shares represented by their ADSs from
our ADS program and hold our shares represented by those ADSs are required to, among other things, appoint a local agent or representative with qualifications set forth by the applicable R.O.C. laws and regulations to open a securities trading
account with a local brokerage firm, pay R.O.C. taxes, remit funds and exercise stockholders rights. In addition, the withdrawing holders are also required to appoint a custodian bank or a securities firm with qualifications set forth by the
R.O.C. FSC to hold the securities in safekeeping, make confirmations, settle trades and report all relevant information, in which the securities firm is appointed as the custodian, the payments shall be held in safekeeping in a special account
opened in a bank approved by the R.O.C. FSC. Without making this appointment and opening of the accounts, the withdrawing holders would not be able to subsequently sell our shares withdrawn from a depositary receipt facility on the Taiwan Stock
Exchange. Under R.O.C. law and regulations, except under limited circumstances, PRC persons are not permitted to withdraw the shares underlying the ADSs or to register as a stockholder of our company. Under the Regulations Governing Securities
Investment and Futures Trading in Taiwan by Mainland Area Investors promulgated by the R.O.C. Executive Yuan on April 30, 2009, as amended, only qualified domestic institutional investors, or QDIIs and limited entities or individuals, are
permitted to withdraw the shares underlying the ADSs, subject to compliance with the withdrawal relevant requirements, and only QDIIs, and limited entities or individuals who meet the qualification requirements set forth therein are permitted to own
shares of an R.O.C. company listed for trading on the Taiwan Stock Exchange or the GreTai Securities Market, provided that among other restrictions generally applicable to investments made by PRC persons, their shareholdings are subject to certain
restrictions as set forth in the abovementioned regulations and that such mainland area investors shall apply for a separate approval if their investment, individually or in aggregate, amounts to or exceeds 10 percent of the shares of any R.O.C.
listing company.



21



---

##### Table of Contents

You may not be able to enforce a judgment of a foreign court in the R.O.C.

We are a company limited by shares incorporated under the R.O.C. Company Act. Most of our assets and most of our directors, executive officers
and experts named in the registration statement are located in Taiwan. As a result, it may be difficult for you to enforce judgments obtained outside Taiwan upon us or such persons in Taiwan. We have been advised by our R.O.C. counsel that any
judgment obtained against us in any court outside the R.O.C. arising out of or relating to the ADSs will not be enforced by R.O.C. courts if any of the following situations shall apply to such final judgment:



| |  |  | the court rendering the judgment does not have jurisdiction over the subject matter according to R.O.C. law;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | the judgment or the court procedure resulting in the judgment is contrary to the public order or good morals of the R.O.C.;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | the judgment was rendered by default, except where the summons or order necessary for the commencement of the action was legally served on us within the jurisdiction of the court rendering the judgment within a
reasonable period of time or with judicial assistance of the R.O.C.; or
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | judgments of the R.O.C. courts are not recognized in the jurisdiction of the court rendering the judgment on a reciprocal basis.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

We may be considered a passive foreign investment company, which could result in adverse U.S. tax consequences for U.S. investors.

We do not believe that we were a passive foreign investment company, or PFIC, for 2013 and we do not expect to become one in the future,
although there can be no assurance in this regard. Based upon the nature of our business activities, we may be classified as a passive foreign investment company for U.S. federal income tax purposes. Such characterization could result in adverse
U.S. tax consequences to you if you are a U.S. investor.

For example, if we are a PFIC, our U.S. investors may become subject to
increased tax liabilities under U.S. tax laws and regulations and will become subject to burdensome reporting requirements. The determination of whether or not we are a PFIC is made on an annual basis and will depend on the composition of our income
and assets from time to time. Specifically, for any taxable year we will be classified as a PFIC for U.S. tax purposes if either (i) 75% or more of our gross income in a taxable year is passive income or (ii) the average percentage of our
assets (which includes cash) by value in a taxable year which produce or are held for the production of passive income is at least 50%. The calculation of the value of our assets will be based, in part, on the quarterly market value of shares and
ADSs, which is subject to change. In addition, the composition of our income and assets will be affected by how, and how quickly, we spend the cash we have raised in prior offerings. See TaxationU.S. Federal Income Tax Considerations For
U.S. PersonsPassive Foreign Investment Company.

The trading price of the shares and ADSs may be adversely affected by the general
activities of the Taiwan Stock Exchange and U.S. stock exchanges, the trading price of our shares, increases in interest rates and the economic performance of Taiwan.

Our shares are listed on the Taiwan Stock Exchange. The trading price of our ADSs may be affected by the trading price of our shares on the
Taiwan Stock Exchange and the economic performance of Taiwan. The Taiwan Stock Exchange is smaller and, as a market, more volatile than the securities markets in the United States and some European countries. The Taiwan Stock Exchange has
experienced substantial fluctuations in the prices and volumes of sales of listed securities, and there are currently limits on the range of daily price movements on the Taiwan Stock Exchange. The Taiwan Stock Exchange is particularly volatile
during times of political instability, such as when the relationship between Taiwan and the PRC becomes tense. Moreover, the Taiwan Stock Exchange has experienced disturbance caused by market manipulation, insider trading and payment defaults, and
the government of Taiwan has from time to time intervened in the stock market by purchasing stocks listed on the Taiwan Stock Exchange. The recurrence of these or similar events could deteriorate the price and liquidity of our shares and ADSs.



22



---

##### Table of Contents

The market price of the ADSs may also be affected by general trading activities on the U.S. stock
exchanges, which recently have experienced significant price volatility with respect to shares of technology companies. Fluctuation in interest rates and other general economic conditions may also influence the market price of the ADSs.



|ITEM 4. | INFORMATION ON THE COMPANY
|------- | --------------------------



|A. | History and Development of the Company
|-- | --------------------------------------

Our legal and commercial name is United
Microelectronics Corporation, commonly known as UMC. We were incorporated under the R.O.C. Company Law as a company limited by shares in May 1980 and our shares were listed on the Taiwan Stock Exchange in 1985. Our principal executive
office is located at No. 3 Li-Hsin Road II, Hsinchu Science Park, Hsinchu, Taiwan, Republic of China, and our telephone number is 886-3-578-2258. Our Internet website address is www.umc.com. The information on our website does not form part of
this annual report. Our ADSs have been listed on the NYSE under the symbol UMC since September 19, 2000.

We are one of
the worlds largest independent semiconductor foundries and a leader in semiconductor manufacturing process technologies. Our primary business is the manufacture, or fabrication, of semiconductors, sometimes called chips
or integrated circuits, for others. Using our own proprietary processes and techniques, we make chips to the design specifications of our many customers. Our company maintains a diversified customer base across industries, including
communication, consumer electronics, computer, and others, while continuing to focus on manufacturing for high growth, large volume applications, including networking, telecommunications, internet, multimedia, PCs and graphics. We sell and market
mainly wafers which in turn are used in a number of different applications by our customers. Percentages of our gross wafer sales derived from our products used in communication devices, consumer electronics, computer and other applications were
49.9%, 28.6%, 17.4% and 4.1%, respectively, in 2013.

We focus on the development of leading mass-producible manufacturing process
technologies. We were among the first in the foundry industry to go into commercial operation with such advanced capabilities as producing integrated circuits with line widths of 0.25, 0.18, 0.15, 0.13 micron and 90, 65, 45/40, and 28 nanometer.
Advanced technologies have enabled electronic products, especially in relation to communication, consumer and computer products, to integrate their functions in new and innovative methods. Networking capabilities have allowed electronic products
such as computers, tablets, cell phones, televisions, PDAs, CD-ROMs and digital cameras to communicate with each other to exchange information. More powerful semiconductors are required to drive multimedia functions (e.g., processing visual data)
and to resolve network bandwidth issues. At the same time, the trend toward personal electronic devices has resulted in products that are becoming physically smaller and consume less power. Process technology must also shrink the volumes of products
aggressively to cater to this trend of integrating multiple functions, reducing the size of components needed for operation and lowering IC power consumption. Dedicated semiconductor foundries need to achieve this process improvement and at the same
time develop multiple process technologies to satisfy the varying needs of communication, consumer and computer products. We believe our superior process technologies will enable us to continue to offer our customers significant performance benefits
for their products, faster time-to-market production, cost savings and other competitive advantages.

We provide high quality service
based on our performance. In todays marketplace, we believe it is important to make available not only the most manufacturable processes, but also the best solutions to enable customers to design integrated circuits that include entire systems
on a chip. Through these efforts, we intend to be the foundry solution for SoC customer needs. To achieve this goal, we believe it is necessary to timely develop and offer the intellectual property and design support that customers need to ensure
their specific design blocks work with the other design blocks of the integrated circuit system in the manner intended. Accordingly, we have a dedicated intellectual property and design support team which focuses on timely development of the
intellectual property and process specific design blocks our customers need in order to develop products that operate and perform as intended. Our design service team actively cooperates with our customers and vendors of cell libraries and
intellectual property offerings to identify, early in the product/market cycle, the offerings needed to ensure that these coordinated offerings are available to our customers in silicon verified form in a streamlined and easy-to-use manner. As a
result, we are able to ensure the timely delivery of service offerings from the earliest time in the customer design cycle, resulting in a shorter time-to-volume production. We also provide our customers with real-time online access to their
confidential production data, resulting in superior communication and efficiency. We further address our customers needs using our advanced technology and proven methodology to achieve fast cycle time, high yield, production flexibility and
close customer communication. For example, we select and configure our clean rooms and equipment and develop our processes to maximize the flexibility in meeting and adapting to rapidly changing customer and industry needs. As a result, our cycle
time, or the period from customer order to wafer delivery, and our responsiveness to customer request changes are among the fastest in the dedicated foundry industry. We also provide high quality service and engineering infrastructure.



23



---

##### Table of Contents

Our production capacity is comparable to that of certain largest companies in the semiconductor
industry, and we believe our leading edge and high volume capability is a major competitive advantage.

Our technology and service have
attracted two principal types of foundry industry customers: fabless design companies and integrated device manufacturers. Fabless design companies design, develop and distribute proprietary semiconductor products but do not maintain internal
manufacturing capacity. Instead, these companies depend on outside manufacturing sources. Integrated device manufacturers, in contrast, traditionally have integrated internally all functionsmanufacturing as well as design, development, sales
and distribution.

Our primary customers, in terms of our sales revenues, include premier integrated device manufacturers, such as Texas
Instruments, Intel Mobile and STMicroelectronics, and leading fabless design companies, such as Xilinx, Broadcom, MediaTek, Realtek and Novatek. In 2013, our companys top ten customers accounted for 56.6% of our net operating revenues. We
believe our success in attracting these customers is a direct result of our commitment to high quality service and our intense focus on customer needs and performance.

In addition to our semiconductor foundry business, we also established UMC New Business Investment Corporation to focus on investments in the
solar energy and LED industries.

On March 16, 2011, our board of directors proposed an offer to the stockholders of Best Elite
International Limited, a British Virgin Islands corporation, or Best Elite, to acquire up to an additional 30% equity interest of Best Elite. Hejian is a wholly owned subsidiary of Infoshine, which is a wholly owned subsidiary of Best Elite. Hejian
engages in the semiconductor foundry business and owns an 8-inch fab in Suzhou, China. We received approval from the Investment Commission, Ministry of Economic Affairs, Executive Yuan on November 1, 2011, and as of December 31, 2012, we
held a 35.03% equity stake in Best Elite, which included the 15.34% equity stake held by the trustee that was originally offered to us in March 2005, plus an additional 19.69% equity stake that was purchased from shareholders pursuant to the March
2011 offer. In order to further integrate and increase our ownership of Best Elite, on April 25, 2012, our board of directors proposed a new offer to the shareholders of Best Elite to acquire up to 64.97% of the shares of Best Elite. We
received approval from the Investment Commission, Ministry of Economic Affairs, Executive Yuan on December 21, 2012 and acquired an additional 51.85% of the shares of Best Elite which we purchased through the April 25, 2012 offer. As of
March 31, 2014, our cumulative ownership in Best Elite was 86.88%.

We and Alpha Wisdom Limited, or AWL, together held 94.79% of UMCJ
shares as of December 31, 2009 and UMCJ then delisted from the Jasdaq Securities Exchange in accordance with its listing rules on March 19, 2010. Since not all of the outstanding equity securities of UMCJ were acquired, we initiated
certain squeeze-out procedures as provided in the Japanese Companies Act. Pursuant to such procedures, as of the end of 2010, we, together with AWL, owned 100% of UMCJ. On May 19, 2011, we acquired the remaining shares of UMCJ from AWL, and AWL
filed for liquidation on August 30, 2011.

On August 21, 2012, our board of directors approved the dissolution and liquidation
of UMCJ. We decided to close our foundry operations in Japan to focus on our manufacturing facilities in Taiwan and Singapore and reduce operating expenses. On November 28, 2013, we sold all our shares of UMCJ to Mach Semiconductor Co., Ltd.,
and, to continuously serve our Japanese customers, we established UMC Group Japan as our new regional sales hub.



24



---

##### Table of Contents

Please refer to Item 5. Operating and Financial Review and Prospects-B. Liquidity and
Capital Resources for a discussion of our capital expenditures in the past three years and the plan for the current year.

Our Strategy

To maintain and enhance our position as a market leader, we have adopted a business strategy with a focus on a partnership business model
designed to accommodate our customers business needs and objectives and to promote their interests as our partners. We believe that our success and profitability are inseparable from the success of our customers. The goal in this business
model is to create a network of partnerships or alliances among integrated device manufacturers, intellectual property and design houses, as well as foundry companies. We believe that we and our partners will benefit from the synergy generated
through such long-term partnerships or alliances and the added value to be shared among the partners. The key elements of our strategy are:

Operate as a Customer-Driven Foundry. We plan to operate as a customer-driven foundry. The increasing complexity of 40
nanometer, 28 nanometer, and more advanced technologies has impacted the entire chip industry, as ICs can now be designed with greater gate density and higher performance while incorporating the functions of an entire system. These advanced designs
have created a new proliferating market of advanced digital devices such as smart phones, which have decreased in size but greatly increased in functionality. We collaborate closely with our customers as well as partners throughout the entire supply
chain, including equipment, electronic design automation tool and intellectual property, or IP, vendors to work synergistically toward each customers SoC solution. We also possess experience and know-how in system design and architecture to
integrate customer designs with advanced process technologies and IP. We believe the result is a higher rate of first-pass silicon success for our SoC solutions. Our customer-driven foundry solutions begin with a common logic-based platform, where
designers can choose the process technologies and transistor options that best fit their specific application. From there, technologies such as radio frequency complementary metal-oxide-semiconductor, or RF CMOS, and embedded Flash memories can be
used to further fine-tune the process for customers individual needs. Furthermore, as IP has become critical resources for SoCs, our portfolio includes basic design building blocks as well as more complex IP of optimized portability and cost,
developed both internally and by third-party partners. With advanced technology, a broad IP portfolio, system knowledge and advanced 300-millimeter manufacturing, we offer comprehensive solutions that help customers deliver successful results in a
timely fashion.

Build up Customer-focused Partnership Business Model. We have focused on building partnership relationships
with our customers, and we strive to help our customers achieve their objectives through close cooperation. Unlike the traditional buy-and-sell relationship between a foundry and its customers, we believe our partnership business model will help us
understand our customers requirements and, accordingly, better accommodate our customers needs in a number of ways, such as customized processes and services that optimize the entire value chain (not just the foundry portion) and
intellectual property-related support. We believe that this business model will enable us to deliver our products to our customers at the earliest time our customers require for their design cycle, resulting in shorter time-to-market and
time-to-volume production. Furthermore, we believe we will render more cost-effective services by focusing our research and development expenditures on the specific requirements of our customers. We believe our partnership business model will help
us not only survive a market downturn, but also achieve a better competitive position.

Continue to Focus on High Growth
Applications and Customers. We believe one measure of a successful foundry company is the quality of its customers. We focus our sales and marketing on customers who are established or emerging leaders in industries with high growth
potential. Our customers include industry leaders such as Broadcom, MediaTek, Realtek, Texas Instruments, and Xilinx. We seek to maintain and expand our relationships with these companies. We strive to demonstrate to these customers the superiority
and flexibility of our manufacturing, technology and service capabilities and to provide them with production and design assistance. We are also making efforts to further diversify our customer portfolio in order to maintain a balanced exposure to
different applications and different customers. We believe these efforts strengthen our relationships with our customers and enhance our reputation in the semiconductor industry as a leading foundry service provider.



25



---

##### Table of Contents

Maintain Our Leading Position in Mass-Producible Semiconductor Technology and Selectively
Pursue Strategic Investments in New Technologies. We believe that maintaining and enhancing our leadership in mass-producible semiconductor manufacturing technology is critical to attract and retain customers. Our reputation for
technological excellence has attracted both established and emerging leaders in the semiconductor industries who work closely with us on technology development. In addition, we believe our superior processing expertise has enabled us to provide
flexible production schedules to meet our customers particular needs. We plan to continue building internal research and development expertise, to focus on process development and to establish alliances with leading and specialty semiconductor
companies to accelerate access to next-generation and specialized technologies. For example, we introduced our 28-nanometer technology to customers in 2011 to significantly increase the competitive advantages of our customers by providing better
device performance in a smaller die size. In 2011, we achieved more than 10 customers and tapeouts for our 28-nanometer technology in 2011 and delivered pilot production on this generation to our lead customer. We believe our progress in developing
more advanced process technologies has benefited our customers in the fields of computers, communications, consumer electronics and others with special preferences in certain aspects of the products, such as the ultimate performance, density and
power consumption.

We also recognize that every company has limited resources and that the foundry industry is ever-evolving.
Accordingly, we believe we should invest in new research and development technology intelligently and in a cost-effective manner to achieve the ultimate output of the resulting technology. In doing so, we balance the rate of return of our research
and development with the importance of developing a technology at the right time to enhance our competitive edge without unduly diluting our profitability. We intend to avoid investments in technologies that do not present a commercial potential for
volume production. We believe that to develop the earliest and most advanced semiconductor technology without regard to its potential for near term volume production may prove costly to our operations and would not strengthen our competitive
position. We perceive a benefit to defer investment in the premature equipment needed to claim the earliest advanced technology and instead to purchase a more advanced and less expensive version of equipment from vendors who design such equipment
based on pre-production lessons learned from the earliest technology.

Maintain Scale and Capacity Capabilities to Meet Customer
Requirements, with a Focus on 12-inch Wafer Facilities for Future Expansion. We believe that maintaining our foundry capacity with advanced technology and facilities is critical to the maintenance of our industry leadership. Our production
capacity is currently among the largest of all semiconductor foundries in the world. We intend to increase our 12-inch wafer production capacity to meet the needs of our customers and to fully capitalize on the expected growth of our industry. We
expect our future capacity expansion plans will focus on 12-inch wafer facilities in order to maintain our technology leadership. 12-inch wafers offer manufacturing advantages over 8-inch wafers due to, among other reasons, the greater number of
chips on each wafer and the advantages only offered on newer 12-inch capable equipment. In addition, 12-inch wafer facilities present a more cost-effective solution in achieving an economic scale of production. We intend to carefully monitor current
market conditions in order to optimize the timing of our capital spending.



|B. | Business Overview
|-- | -----------------

Manufacturing Facilities

To maintain a leading position in the foundry business, we have placed great emphasis on achieving and maintaining a high standard of
manufacturing quality. As a result, we seek to design and implement manufacturing processes that produce consistent, high manufacturing yields to enable our customers to estimate, with reasonable certainty, how many wafers they need to order from
us. In addition, we continuously seek to enhance our production capacity and process technology, two important factors that characterize a foundrys manufacturing capability. Our large production capacity and advanced process technologies
enable us to provide our customers with volume production and flexible and quick-to-market manufacturing services. All of our fabs operate 24 hours per day, seven days per week. Substantially all maintenance at each of the fabs is performed
concurrently with production.

As a step in our continuing expansion of our manufacturing complex in the Tainan Science Park in southern
Taiwan, we completed the construction of our second 300mm fab in Taiwan in May 2009, and moved the equipment into this fab in July 2010.



26



---

##### Table of Contents

The following table sets forth operational data of each of our manufacturing facilities as of
December 31, 2013.



|                                  |  |                 |  |                 |  |                 |  |                 |  |                 |  |                 |  |                 |  |                 |  |                 |  |                
|--------------------------------- |  | --------------- |  | --------------- |  | --------------- |  | --------------- |  | --------------- |  | --------------- |  | --------------- |  | --------------- |  | --------------- |  | ---------------
|                                  |  | Fab 6A          |  | Fab 8A          |  | Fab 8C          |  | Fab 8D          |  | Fab 8E          |  | Fab 8F          |  | Fab 8S          |  | Fab 8N          |  | Fab 12A         |  | Fab 12i        
|Commencement of volume production |  | 1989            |  | 1995            |  | 1998            |  | 2000            |  | 1998            |  | 2000            |  | 2000            |  | 2003            |  | 2002            |  | 2004           
|Estimated full capacity(1)(2)     |  | 37,500          |  | 68,000          |  | 29,000          |  | 32,000          |  | 35,000          |  | 32,500          |  | 28,000          |  | 42,800          |  | 54,802          |  | 49,100         
|                                  |  | wafersper
month |  | wafersper
month |  | wafersper
month |  | wafersper
month |  | wafersper
month |  | wafersper
month |  | wafersper
month |  | wafersper
month |  | wafersper
month |  | wafersper
month
|Wafer size                        |  | 6-inch          |  | 8-inch          |  | 8-inch          |  | 8-inch          |  | 8-inch          |  | 8-inch          |  | 8-inch          |  | 8-inch          |  | 12-inch         |  | 12-inch        
|                                  |  | (150mm)         |  | (200mm)         |  | (200mm)         |  | (200mm)         |  | (200mm)         |  | (200mm)         |  | (200mm)         |  | (200mm)         |  | (300mm)         |  | (300mm)        



|(1) | Measured in stated wafer size.
|--- | ------------------------------

|(2) | The capacity of a fab is determined based on the capacity ratings given by manufacturers of the equipment used in the fab, adjusted for, among other factors, actual output during uninterrupted trial runs, expected down
time due to set up for production runs and maintenance and expected product mix.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table sets forth the size
and primary use of our facilities and whether such facilities, including land and buildings, are owned or leased. Our land in the Hsinchu and Tainan Science Parks is leased from the R.O.C. government.



|                                                                                                              |  |                      |  |                         |  |                                   |  |                           
|------------------------------------------------------------------------------------------------------------- |  | -------------------- |  | ----------------------- |  | --------------------------------- |  | --------------------------
|Location                                                                                                      |  | Size (Land/Building) |  | Primary Use             |  | Land (Owned or Leased)            |  | Building (Owned or Leased)
|                                                                                                              |  | (in square meters)   |  |                         |  |                                   |  |                           
|Fab 6A, 10 Innovation 1st Rd.,
Hsinchu Science Park,
Hsinchu, Taiwan 30076, R.O.C.                            |  | 27,898 / 34,609      |  | 6-inch wafer production |  | Leased (expires in December
2026) |  | Owned                     
|Fab 8A, 3, 5 Li-Hsin 2nd Rd.,
Hsinchu Science Park,
Hsinchu, Taiwan 30078, R.O.C.                             |  | 44,137 / 83,699      |  | 8-inch wafer production |  | Leased (expires in December 2033) |  | Owned                     
|Fab 8C, 6 Li-Hsin 3rd Rd.,
Hsinchu Science Park,
Hsinchu, Taiwan 30078, R.O.C.                                |  | 24,572 / 71,427      |  | 8-inch wafer production |  | Leased (expires in December 2033) |  | Owned                     
|Fab 8D, 8 Li-Hsin 3rd Rd.,
Hsinchu Science Park,
Hsinchu, Taiwan 30078, R.O.C.                                |  | 9,219 / 29,181       |  | 8-inch wafer production |  | Leased (expires in December 2033) |  | Owned                     
|Fab 8E, 17 Li-Hsin Rd.,
Hsinchu Science Park,
Hsinchu, Taiwan 30078, R.O.C.                                   |  | 35,779 / 76,315      |  | 8-inch wafer production |  | Leased (expires in February 2016) |  | Owned                     
|Fab 8F, 3 Li-Hsin 6th Rd.,
Hsinchu Science Park,
Hsinchu, Taiwan 30078, R.O.C.                                |  | 23,781 / 65,736      |  | 8-inch wafer production |  | Leased (expires in February 2018) |  | Owned                     
|Fab 8S, 16 Creation 1st Rd.,
Hsinchu Science Park,
Hsinchu, Taiwan 30077, R.O.C.                              |  | 20,365 / 65,614      |  | 8-inch wafer production |  | Leased (expires in December 2023) |  | Owned                     
|Fab 8N, 333, Xinghua St.,
Suzhou Industrial Park, Suzhou,
Jiangsu Province 215025,
Peoples Republic of China |  | 215,621 / 100,908    |  | 8-inch wafer production |  | Leased (expires in December 2052) |  | Owned                     



27



---

##### Table of Contents

|                                                                                            |  |                      |  |                                         |  |                                   |  |                                  
|------------------------------------------------------------------------------------------- |  | -------------------- |  | --------------------------------------- |  | --------------------------------- |  | ---------------------------------
|Location                                                                                    |  | Size (Land/Building) |  | Primary Use                             |  | Land (Owned or Leased)            |  | Building (Owned or Leased)       
|                                                                                            |  | (in square meters)   |  |                                         |  |                                   |  |                                  
|Fab 12A, 18, 20 Nan-Ke 2nd Rd.,
Tainan Science Park, Sinshih,
Tainan, Taiwan 74147, R.O.C.  |  | 286,112 / 353,202    |  | 12-inch wafer production                |  | Leased (expires in November
2030) |  | Owned                            
|Fab 12i, 3 Pasir Ris Drive 12
Singapore 519528                                              |  | 83,616 / 142,342     |  | 12-inch wafer production                |  | Leased (expires in March 2031)    |  | Owned                            
|United Tower, 3 Li-Hsin 2nd Rd.,
Hsinchu Science Park,
Hsinchu, Taiwan 30078, R.O.C.        |  | 8,985 / 85,224       |  | Administration office                   |  | Leased (expires in December 2033) |  | Owned                            
|Neihu Rd. office, 8F, 68. Sec. 1,
Neihu Rd., Taipei,
Taiwan 11493, R.O.C.                   |  | 626 / 4,817          |  | Administration office                   |  | Owned                             |  | Owned                            
|Testing Building, 1, Chin-Shan, 7th St.,
Hsinchu, Taiwan 30080, R.O.C.                      |  | 10,762 / 41,318      |  | Leased to several companies             |  | Owned                             |  | Owned                            
|R&D Building, 18 Nan-Ke 2nd Rd.,
Tainan Science Park, Sinshih,
Tainan, Taiwan 74147, R.O.C. |  | 42,000 / 47,396      |  | Research and development                |  | Leased (expires in December
2023) |  | Owned                            
|Nexpower, 2, Houke S. Rd.,
Houli District, Taichung,
Taiwan 42152, R.O.C.                   |  | 57,556 / 82,699      |  | Solar PV modules production             |  | Leased (expires in December 2026) |  | Owned                            
|Topcell, 1560, Sec. 1,
Zhongshan Rd., Guanyin Township,
Taoyuan, Taiwan 32852, R.O.C.       |  | -/ 35,643            |  | 6-inch cell production                  |  | N/A                               |  | Leased (expires in March
2018)   
|Unistars, 1F, 669, Sec. 4,
Zhongxing Rd., Zhudong Township,
Hsinchu, Taiwan 31061, R.O.C.   |  | -/ 1,955             |  | High-power LED package and LED
lighting |  | N/A                               |  | Leased (expires in October 2014) 
|Wavetek, 10, Chuangxin 1st Rd.,
Baoshan Township,
Hsinchu, Taiwan 30076, R.O.C.             |  | -/ 6,230             |  | 6-inch wafer production                 |  | N/A                               |  | Leased (expires in December 2014)
|Alliance, 148, Taihe Rd., Zhubei City,
Hsinchu, Taiwan 30267, R.O.C.                        |  | -/ 1,289             |  | LED lighting production                 |  | N/A                               |  | Leased (expires in June 2015)    

Process Technology

Process technology is a set of specifications and parameters that we implement for manufacturing the critical dimensions of the patterned
features of the circuitry of semiconductors. Our process technologies are currently among the most advanced in the foundry industry. These advanced technologies have enabled us to provide flexible production schedules to meet our customers
particular needs.

The continued enhancement of our process technologies has enabled us to manufacture semiconductor devices with smaller
geometries, allowing us to produce more dice on a given wafer. We pioneered the production of semiconductor products with 0.25 and 0.18 micron process technology in 1997 and 1999, respectively, and used copper interconnect metallurgic to allow
better reliability and higher conductibility than traditional aluminum interconnects. We began volume production using 0.13-micron process technology in 2002. Our extensive experience in the 0.13-micron process technology has helped smooth our
transition to 90-nanometer pilot production. Our 90-nanometer process marks further advance in our technology achievements, incorporating up to nine copper metal layers, triple gate oxide and other advanced features and using chrome-less phase-shift
masks. This technology has been in volume production since the second quarter of 2004 after passing several product certifications. In 2005, our research and development teams continued to work closely with the manufacturing staff to finalize our
90-nanometer technology portfolio. These collaborative efforts, performed in our best-in-class 300mm facilities, contributed to the improvement of high density 6T-SRAM yield to the maturity level of more than 90%. Our accomplishments led to multiple
design awards followed by first silicon success, including a PC graphic IC and the worlds first 90-nanometer Wireless Local Area Network (WLAN) RF chip featuring a unique and specially developed inductor scheme. In addition, we were able to
develop, within 6 months, several customized 90-nanometer processes tailored to our customers device specifications, and demonstrated product success by delivering record high yield for the first product lots. Our first fully-functional
65-nanometer wireless digital baseband customer IC was produced in July of 2005, after only a year since this research and development project began at this facility.



28



---

##### Table of Contents

Since the third quarter of 2006, we have begun the mass production of a next-generation
65-nanometer FPGA product, which features a 65% logic capacity increase over previous generation of FPGAs with triple gate oxide and 11 copper metal layers. Our 65/55-nanometer development team is not only independently developing our technologies
in-house but is also bringing up customized process technologies to match customer specific needs. Furthermore, our 45/40-nanometer process technologies, which are jointly developed by us and our strategic partners have been in production since the
first half of 2009, significantly increasing the competitive advantages of our customers by providing better device performance in a smaller die size. UMCs 28nm process technologies with Poly-SiON and High-k/metal gate are developed for low
power consumption and high performance applications, respectively. In October 2008, we were the first foundry to deliver fully functional 28nm SRAM chips, and have proven in customer silicon the High-k/metal gate solution used for this technology
node. UMCs 28nm progress was also recognized by the industry with the foundry being selected to present at the 2009 IEDM on a hybrid High-k/metal gate approach. Currently, we are already working with several customers to adopt their products
on UMCs 28nm technology. In 2013, 28nm Poly-SiON technology had been successfully developed and released to production, and 28nm High-k/metal gate technology is currently under development and is expected to be put into commercial production
soon. Furthermore, we joined the International Business Machine Corporation, or IBM chip alliance, for the 10nm process development. With IBMs know-how and support, we aim to continue to improve our internally developed 14nm FinFET to offer
competitive low-power technology enhancements for mobile computing and communication products, as well as develop a baseline 10nm process technology to meet the needs of our customers.

The table below sets forth our actual process technology range, categorized by line widths, or the minimum physical dimensions of the
transistor gate of integrated circuits in production by each fab, in 2013, and the estimated annual full capacity of each fab, actual total annual output and capacity utilization rates in 2011, 2012 and 2013:



|                             |  |                          |  |                                       |               |  |                                                                |  |       |      |  |  |       |   |  |  |       |  
|---------------------------- |  | ------------------------ |  | ------------------------------------- | ------------- |  | -------------------------------------------------------------- |  | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                             |  |                          |  | Year ended
December 31,
2013 Range of |               |  | Years Ended December 31,                                       | 
|                             |  | Years of                 |  | Process                               |               |  | 2011                                                           |  |       | 2012 |  |  | 2013  |  
|                             |  | Commencementof Operation |  | Technologies(in microns)              |               |  | (in thousands of 8-inch waferequivalents, except 
percentages) | 
|Fab                          |  |                          |  |                                       |               |  |                                                                |  |       |      |  |  |       |   |  |  |       |  
|Fab 6A                       |  | 1989                     |  |                                       | 0.5           |  |                                                                |  | 303   |      |  |  | 271   |   |  |  | 252   |  
|Fab 8A                       |  | 1995                     |  |                                       | 0.5 to 0.25   |  |                                                                |  | 813   |      |  |  | 815   |   |  |  | 813   |  
|Fab 8C                       |  | 1998                     |  |                                       | 0.35 to 0.13  |  |                                                                |  | 359   |      |  |  | 360   |   |  |  | 347   |  
|Fab 8D                       |  | 2000                     |  |                                       | 0.13 to 0.09  |  |                                                                |  | 364   |      |  |  | 371   |   |  |  | 382   |  
|Fab 8E                       |  | 1998                     |  |                                       | 0.5 to 0.18   |  |                                                                |  | 469   |      |  |  | 449   |   |  |  | 418   |  
|Fab 8F                       |  | 2000                     |  |                                       | 0.18 to 0.13  |  |                                                                |  | 388   |      |  |  | 389   |   |  |  | 388   |  
|Fab 8S                       |  | 2000                     |  |                                       | 0.18 to 0.13  |  |                                                                |  | 307   |      |  |  | 348   |   |  |  | 335   |  
|Fab 8N(1)                    |  | 2003                     |  |                                       | 0.5 to 0.13   |  |                                                                |  |      |      |  |  |      |   |  |  | 469   |  
|Fab 12A                      |  | 2002                     |  |                                       | 0.18 to 0.028 |  |                                                                |  | 1,128 |      |  |  | 1,304 |   |  |  | 1,465 |  
|Fab 12i                      |  | 2004                     |  |                                       | 0.13 to 0.040 |  |                                                                |  | 1,192 |      |  |  | 1,207 |   |  |  | 1,238 |  
|UMCJ(2)                      |  | 1996                     |  |                                       | 0.35 to 0.15  |  |                                                                |  | 240   |      |  |  | 240   |   |  |  |      |  
|Total estimated capacity     |  |                         |  |                                       |              |  |                                                                |  | 5,563 |      |  |  | 5,754 |   |  |  | 6,107 |  
|Total output (actual)        |  |                         |  |                                       |              |  |                                                                |  | 4,370 |      |  |  | 4,533 |   |  |  | 5,026 |  
|Average capacity utilization |  |                         |  |                                       |              |  |                                                                |  | 78.6  | %    |  |  | 78.8  | % |  |  | 82.3  | %



|(1) | In 2013, we obtained controlling interests in Best Elite, which owns 100% interests in Fab 8N.
|--- | ----------------------------------------------------------------------------------------------

|(2) | Starting November 2013, we lost our controlling interests in UMCJ.
|--- | ------------------------------------------------------------------



29



---

##### Table of Contents

The table below sets forth a breakdown of number and percentage of wafer output by process
technologies in 2011, 2012 and 2013.



|                        |  |                                                                |       |  |      |  |       |      |  |  |       |  |  |  |       |  |   |  |       |  |  |  |       | 
|----------------------- |  | -------------------------------------------------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  |  | ----- |  | - |  | ----- |  |  |  | ----- | 
|                        |  | Years Ended December 31,                                       |      
|                        |  | 2011                                                           |       |  | 2012 |  |       | 2013 | 
|                        |  | (in thousands of 8-inch wafer equivalents, except percentages) |      
|                        |  |                                                                |       |  | %    |  |       |      |  |  | %     |  |  |  |       |  | % | 
|Technology              |  |                                                                |       |  |      |  |       |      |  |  |       |  |  |  |       |  |   |  |       |  |  |  |       | 
|40 nanometers and under |  |                                                                | 159   |  |      |  | 3.6   |      |  |  | 349   |  |  |  | 7.7   |  |   |  | 632   |  |  |  | 12.6  | 
|65 nanometers           |  |                                                                | 980   |  |      |  | 22.4  |      |  |  | 1,296 |  |  |  | 28.6  |  |   |  | 1,140 |  |  |  | 22.7  | 
|90 nanometers           |  |                                                                | 333   |  |      |  | 7.6   |      |  |  | 225   |  |  |  | 5.0   |  |   |  | 235   |  |  |  | 4.7   | 
|0.13 micron             |  |                                                                | 1,049 |  |      |  | 24.0  |      |  |  | 799   |  |  |  | 17.6  |  |   |  | 828   |  |  |  | 16.5  | 
|0.15 micron             |  |                                                                | 134   |  |      |  | 3.1   |      |  |  | 112   |  |  |  | 2.5   |  |   |  | 182   |  |  |  | 3.6   | 
|0.18 micron             |  |                                                                | 510   |  |      |  | 11.7  |      |  |  | 432   |  |  |  | 9.4   |  |   |  | 614   |  |  |  | 12.2  | 
|0.25 micron             |  |                                                                | 165   |  |      |  | 3.8   |      |  |  | 176   |  |  |  | 3.9   |  |   |  | 121   |  |  |  | 2.4   | 
|0.35 micron             |  |                                                                | 621   |  |      |  | 14.2  |      |  |  | 742   |  |  |  | 16.4  |  |   |  | 912   |  |  |  | 18.1  | 
|0.50 micron or higher   |  |                                                                | 419   |  |      |  | 9.6   |      |  |  | 402   |  |  |  | 8.9   |  |   |  | 362   |  |  |  | 7.2   | 
|                        |  |                                                                |       |  |      |  |       |      |  |  |       |  |  |  |       |  |   |  |       |  |  |  |       | 
|Total                   |  |                                                                | 4,370 |  |      |  | 100.0 |      |  |  | 4,533 |  |  |  | 100.0 |  |   |  | 5,026 |  |  |  | 100.0 | 
|                        |  |                                                                |       |  |      |  |       |      |  |  |       |  |  |  |       |  |   |  |       |  |  |  |       | 

Capacity and Utilization

The fabs in Taiwan that we own directly are named Fab 6A, Fab 8A, Fab 8C, Fab 8D, Fab 8E, Fab 8F and Fab 8S, all of which are located in the
Hsinchu Science Park in Taiwan, and Fab 12A, which is located in the Tainan Science Park in Taiwan. The fab in Singapore is named Fab 12i and the fab in China is named Fab 8N.

Our average capacity utilization rate was 78.6% in 2011, 78.8% in 2012 and 82.3% in 2013.

Equipment

Considering the performance
and productivity of our manufacturing capability highly relies on the quality of our capital equipment, we generally purchase equipment that not only meet the demand of our existing process technology, but also have the capability to be upgraded to
match our future needs. The principal equipment we use to manufacture semiconductor devices are scanners/steppers, cleaners and track equipment, inspection equipment, etchers, furnaces, wet stations, strippers, implanters, sputters, CVD equipment,
probers, testers and so on. We own all of the production equipment except for a few demonstration tools.

Our policy is to purchase
high-quality equipment that demonstrates stable performance from vendors with dominant market share to ensure our continued competitiveness in the semiconductor field.

Some of the equipment is available from a limited number of qualified vendors and/or is manufactured in relatively limited quantities, and
some equipment has only recently been developed. We believe that our relationships with equipment suppliers are strong enough that we can leverage our position as a major purchaser to purchase equipment on competitive terms, including shorter lead
time, compared with the terms received by several other foundries.

Although we face the challenge of procuring the right equipment in
sufficient quantity necessary for ramp-up or expansion of our fabrication facilities under constraint of short lead times, we have not in the past experienced any material problems in procuring the latest generation equipment on a timely basis even
in periods of unpredictably high market demand. We manage the risks in the procurement process through timely internal communications among different divisions, efficient market information collection, early reservation of appropriate delivery slots
and constant communications with our suppliers as well as by utilizing our good relationships with the vendors.



30



---

##### Table of Contents

Raw Materials

Our manufacturing processes use many raw materials, primarily silicon wafers, chemicals, gases and various types of precious sputtering
targets. These raw materials are generally available from several suppliers. Our policy with respect to raw material purchases, similar to that for equipment purchases, is to select only a small number of qualified vendors who have demonstrated
quality and reliability on delivery time of the raw materials. We may have any long-term supply contracts with our vendors if necessary.

Our general inventory policy is to maintain sufficient stock of each principal raw material for production and rolling forecasts of near-term
requirements received from customers. In addition, we have agreements with several key material suppliers under which they hold similar levels of inventory in their warehouses for our use. However, we are not under any obligation to purchase raw
material inventory that is held by our vendors for our benefit until we actually order it. We typically work with our vendors to plan our raw material requirements on a quarterly basis, with indicative pricing generally set on a quarterly basis. The
actual purchase price is generally determined based on the prevailing market conditions. In the past, prices of our principal raw materials have not been volatile to a significant degree. Although we have not experienced any shortage of raw
materials that had a material effect on our operations, and supplies of raw materials we use currently are adequate, shortages could occur in various critical materials due to interruption of supply or an increase in industry demand.

The most important raw material used in our production processes is silicon wafer, which is the basic raw material from which integrated
circuits are made. The principal makers for our wafers are Shin-Etsu, Siltronic AG, SunEdison Corporation and Sumco Group. We have in the past obtained and believe that we will continue to be able to obtain a sufficient supply of silicon wafers. We
believe that we have close working relationships with our wafer suppliers. Based on such long-term relationships, we believe that these major suppliers will use their best efforts to accommodate our demand.

We use a large amount of water in our manufacturing process. We obtain water supplies from government-owned entities and recycle approximately
85% of the water that we use during the manufacturing process. We also use substantial amounts of dual loop electricity supplied by Taiwan Power Company in the manufacturing process. We maintain back-up generators that are capable of providing
adequate amounts of electricity to maintain the required air pressure in our clean rooms in case of power interruptions. We believe our back-up devices are reasonably adequate in preventing business interruptions caused by power outages and
emergency situations.

Quality Management

We believe that our advanced process technologies and reputation for high quality and reliable services and products have been important
factors in attracting and retaining leading international and domestic semiconductor companies as customers.

We structure our quality
management system in accordance with the latest international quality standards and our customers strict quality and reliability requirements. Our quality management system incorporates comprehensive quality control programs into the entire
business flow of foundry operation including, among others, new process development management, production release control, incoming raw material inspection, statistical process control and methodology development, process change management,
technical documentation control, product final inspection, metrology tool calibration and measurement system analysis, quality audit program, nonconformity management, customer complaint disposition, eight-discipline problem solving and customer
satisfaction monitoring.

We set a high quality goal to ensure consistent high yielding and reliable product performance. Our quality
program is continually enhanced through top-down annual Business Policy Management and bottom-up Total Quality Management activities. In addition, our efforts to observe best practices among fabs in the foundry industry have also contributed to the
improvement of our overall quality management system.



31



---

##### Table of Contents

Many of our customers perform physical production site qualification process in the early
development phase and routine quality conformance audits in the volume production phase. These audits include both quality system review and physical fabrication area inspection for verification of conformity with the international quality standard
and customers quality requirement. Our quality management system and quality control programs have been qualified and routinely audited by numerous customers who are recognized as world-class semiconductor companies with best-in-class quality
standards.

Our Quality Assurance Division and Reliability Technology and Assurance Division collaborate to provide quality and
reliability performance to customers. With our wafer processing quality and reliability conformance monitor program, we monitor the product quality and reliability at various stages of the entire manufacturing process before shipment to customers.

All our fabs are certified in compliance with ISO/TS 16949 and QC080000 IECQ HSPM standards. ISO/TS 16949 sets the criteria for
developing a fundamental quality management system emphasizing on customer satisfaction in quality management, continual improvement, defect prevention and variation and waste reduction. QC080000 IECQ HSPM sets the criteria for developing a process
management system for hazardous substances and focuses on developing environmentally friendly manufacturing processes. We are committed to continuously improve our quality management system and to deliver high quality product to our customers.

Services and Products

We primarily
engage in wafer fabrication for foundry customers. To optimize fabrication services for our customers, we work closely with them as they finalize circuit design and contract for the preparation of masks to be used in the manufacturing process. We
also offer our customers turnkey services by providing subcontracted assembly and test services. We believe that this ability to deliver a variety of foundry services in addition to wafer fabrication enables us to accommodate the needs of a full
array of integrated device manufacturers, system companies and fabless design customers with different in-house capabilities.

Wafer
manufacturing requires many distinct and intricate steps. Each step in the manufacturing process must be completed with precision in order for finished semiconductor devices to work as intended. The processes require taking raw wafers and turning
them into finished semiconductor devices generally through five steps: circuit design, mask tooling, wafer fabrication, assembly and test. The services we offer to our customers in each of these five steps are described below.

Circuit Design. At this initial design stage, our engineers generally work with our customers to ensure that their designs can
be successfully and cost-effectively manufactured in our facilities. We have assisted an increasing number of our customers in the design process by providing them with access to our partners electronic design analysis tools, intellectual
property and design services as well as by providing them with custom embedded memory macro-cells. In our Silicon Shuttle program, we offer customers and intellectual property providers early access to actual silicon samples with their desired
intellectual property and content in order to enable early and rapid use of our advanced technologies. The Silicon Shuttle program is a multi-chip test wafer program that allows silicon verification of intellectual property and design elements. In
the Silicon Shuttle program, several different vendors can test their intellectual property using a single mask set, greatly reducing the cost of silicon verification for us and the participating vendors. The high cost of masks for advanced
processes makes this program attractive to intellectual property vendors. ARM Limited, Faraday Technology Corp., or Faraday Technology, MIPS Technologies International, and Synopsys Inc. have utilized our Silicon Shuttle program. In our alliances
with them, we coordinate with leading suppliers of intellectual property, design and ASIC services to ensure their offerings are available to our customers in an integrated, easy to use manner which matches customers need to our technologies.
With a view to lowering customer design barriers, we expanded our design support functions from conventional design support to adding intellectual property development to complement third-party intellectual properties and to provide customers with
the widest range of silicon-verified choices. Our offerings range from design libraries to basic analog mixed-mode intellectual properties which, together, have helped shorten our customers design cycle time.

Mask Tooling. Our engineers generally assist our customers to design and/or obtain masks that are optimized for our advanced
process technologies and equipment. Actual mask production is usually provided by independent third parties specializing in mask tooling.



32



---

##### Table of Contents

Wafer Fabrication. As described above, our manufacturing service provides all
aspects of the wafer fabrication process by utilizing a full range of advanced process technologies. During the wafer fabrication process, we perform procedures in which a photosensitive material is deposited on the wafer and exposed to light
through the mask to form transistors and other circuit elements comprising of a semiconductor. The unwanted material is then etched away, leaving only the desired circuit pattern on the wafer. As part of our wafer fabrication services, we also offer
wafer probing services, which test, or probe, individual die on the processed wafers and identify dice that fail to meet required standards. We prefer to conduct wafer probing internally to obtain speedier and more accurate data on manufacturing
yield rates.

Assembly and Testing. We offer our customers turnkey services by providing the option to purchase finished
semiconductor products that have been assembled and tested. We outsource assembly and test services to leading assembly and test service providers, including Siliconware Precision Industries Co., Ltd., or Siliconware, and Advanced Semiconductor
Engineering Inc. in Taiwan. After final testing, the semiconductors are shipped to our customers designated locations.

In addition
to our foundry business, we also engage in the research, development and manufacture of products in the solar energy and LED industries.

Customers and
Markets

Our primary customers, in terms of our sales revenues, include premier integrated device manufacturers, such as Texas
Instruments, Intel Mobile and STMicroelectronics, and leading fabless design companies, such as Xilinx, Broadcom, MediaTek, Realtek and Novatek. Although we are not dependent on any single customer, a significant portion of our net operating
revenues has been generated from sales to a few customers. Our top ten customers accounted for approximately 56.6% of our net operating revenues in 2013. Set forth below is a geographic breakdown of our operating revenues in 2012 and 2013 by the
location of our customers.



|                            |  |                          |       |  |      |  |       | 
|--------------------------- |  | ------------------------ | ----- |  | ---- |  | ----- | 
|                            |  | Years Ended December 31, |      
|Region                      |  | 2012                     |       |  | 2013 | 
|                            |  |                          | %     |  |      |  | %     | 
|Taiwan                      |  |                          | 36.4  |  |      |  | 32.9  | 
|Singapore                   |  |                          | 27.7  |  |      |  | 23.8  | 
|China (including Hong Kong) |  |                          | 5.3   |  |      |  | 9.5   | 
|Japan                       |  |                          | 2.5   |  |      |  | 3.7   | 
|USA                         |  |                          | 13.3  |  |      |  | 12.4  | 
|Others                      |  |                          | 14.8  |  |      |  | 17.7  | 
|                            |  |                          |       |  |      |  |       | 
|Total                       |  |                          | 100.0 |  |      |  | 100.0 | 
|                            |  |                          |       |  |      |  |       | 

We believe our success in attracting these end customers is a direct result of our commitment to high quality
service and our intense focus on customer needs and performance. As an independent semiconductor foundry, most of our operating revenue is generated by our sales of wafers. For 2013, gross wafer sales represented 91.6% of our net operating revenue.
The following table presented the percentages of our gross wafer sales by types of customers for the years ended December 31, 2012 and 2013.



|                                |  |                          |       |  |      |  |       | 
|------------------------------- |  | ------------------------ | ----- |  | ---- |  | ----- | 
|                                |  | Years Ended December 31, |      
|Customer Type                   |  | 2012                     |       |  | 2013 | 
|                                |  |                          | %     |  |      |  | %     | 
|Fabless design companies        |  |                          | 83.6  |  |      |  | 88.6  | 
|Integrated device manufacturers |  |                          | 16.4  |  |      |  | 11.4  | 
|                                |  |                          |       |  |      |  |       | 
|Total                           |  |                          | 100.0 |  |      |  | 100.0 | 
|                                |  |                          |       |  |      |  |       | 

We focus on providing a high level of customer service in order to attract customers and maintain their
ongoing loyalty. Our culture emphasizes responsiveness to customer needs with a focus on flexibility, speed and accuracy throughout our manufacturing and delivery processes. Our customer-oriented approach is especially evident in two types of
services: customer design development services and manufacturing services. For example, in 2013, we expand our regional business by opening our UMC Korea office, in order to provide local support to our customers in Korea, and shorten time-to-market
for our Korea-based customers designing and manufacturing on UMC process technologies. We believe that our large production capacity and advanced process technology enable us to provide better customer service than many other foundries through
shorter turn-around time, greater manufacturing flexibility and higher manufacturing yields.



33



---

##### Table of Contents

We work closely with our customers throughout the design development and prototyping processes.
Our design support team closely interacts with customers and intellectual property vendors to facilitate the design process and to identify their specific requirements for intellectual property offerings. We are responsive to our customers
requirements in terms of overall turn-around time and production time-to-market by, for example, helping our customers streamline their IP offering processes and delivering prototypes in a timely and easy-to-use fashion. We also maintain flexibility
and efficiency in our technical capability and respond quickly to our customers design changes.

For IP offerings, we work with
several leading IP vendors from digital, memory and analog fields in the semiconductor industry, such as Faraday Technology Corp., Synopsys Inc., ARM Limited, Silicon Image Inc. Sidense Corp., and Kilopass Technology, to deliver quality IP blocks
that have been silicon validated using our advanced processes. Our alliances with major electronic design automation vendors, such as Cadence, Mentor and Synopsys Inc., provide our customers with digital/analog reference design procedures and
easy-to-use design solutions. By continuously enhancing our IP offerings, reference design procedures and design services through collaboration with major vendors, we aim to provide complete, accurate and user-friendly design solutions to our
customers.

As a design moves into manufacturing production, we continue to provide ongoing customer support through all phases of the
manufacturing process. The local account manager works with our customer service representative to ensure the quality of our services, drawing upon our marketing and customer engineering support teams as required.

We offer an online service, MyUMC, which gives our customers easy access to our foundry services by providing a total online
supply chain solution. MyUMC offers 24-hour access to detailed account information such as manufacturing, engineering and design support documents through each customers own customized start page. The features that are available to customers
through MyUMC include (i) viewing the status of orders from the start of production to the final shipping stages; (ii) designing layouts to shorten customers tape out time; (iii) collecting customer engineering requests;
(iv) gathering and downloading documents for design purposes; and (v) and accessing online in real-time the same manufacturing data used by our fab engineers. In addition, we have a system-to-system connecting services to provide direct
data exchange between our system and our customers systems. These services, which include our UMC Design View Room Cloud Service, facilitate our design collaborations with our customers to help reduce the cost of chip designs and
reduce the time to market. In order to continue to improve our information security management, our Information Technology Division received the certification of ISO/IEC 27001:2005 in March 2008.

We price our products on a per die or per wafer basis, taking into account the complexity of the technology, the prevailing market conditions,
the order size, the cycle time, the strength and history of our relationship with the customer and our capacity utilization. Our main sales office is located in Taiwan, which is in charge of our sales activities in Asia. United Microelectronics
(Europe) BV, our wholly-owned subsidiary based in Amsterdam, assists our sales to customers in Europe. Our sales in North America are made through UMC Group (USA), our subsidiary located in Sunnyvale, California. We also have sales offices in China,
Japan and Korea to support our customers in those regions.

We typically designate a portion of our wafer manufacturing capacity to some
of our customers primarily under two types of agreements: reciprocal commitment agreements and deposit agreements. Under a reciprocal commitment agreement, the customer agrees to pay for, and we agree to supply, a specified capacity at a specified
time in the future. Under a deposit agreement, the customer makes in advance a cash deposit for an option on a specified capacity at our fabs for a stated period of time. Option deposits are credited to wafer purchase prices as shipments are made.
If this customer does not use the specified capacity, it will forfeit the deposit but, in certain circumstances and with our permission, the customer may arrange for a substitute customer to utilize such capacity. In some cases, we also make
available capacity to customers under other types of agreements, such as capacity commitment arrangements with technology partners.



34



---

##### Table of Contents

We advertise in trade journals, organize technology seminars, hold a variety of regional and
international sales conferences and attend a number of industry trade fairs to promote our products and services. We also publish a corporate newsletter for our customers.

Competition

The worldwide semiconductor
foundry industry is highly competitive, particularly during periods of overcapacity and inventory correction. We compete internationally and domestically with dedicated foundry service providers as well as with integrated device manufacturers and
final product manufacturers which have in-house manufacturing capacity or foundry operations. Some of our competitors have substantially greater production, financial, research and development and marketing resources than we have. As a result, these
companies may be able to compete more aggressively over a longer period of time than we can. In addition, several new dedicated foundries have commenced operations and compete directly with us. Any significant increase in competition may erode our
profit margins and weaken our earnings.

We believe that our primary competitors in the foundry services market are Taiwan Semiconductor
Manufacturing Company Limited, Semiconductor Manufacturing International (Shanghai) Corporation and Globalfoundries Inc., as well as the foundry operation services of some integrated device manufacturers such as IBM, Samsung, Intel and Toshiba.
Other competitors such as DongbuAnam Semiconductor, Grace Semiconductor Manufacturing Corp., X-FAB Semiconductors Foundries AG and Silterra Malaysia Sdn. Bhd. have initiated efforts to develop substantial new foundry capacity, although much of such
capacity involves less cost-effective production than the 12-inch fabs for which we possess technical know-how. New entrants in the foundry business are likely to initiate a trend of competitive pricing and create potential overcapacity in legacy
technology. The principal elements of competition in the semiconductor foundry industry include technical competence, production speed and cycle time, time-to-market, research and development quality, available capacity, manufacturing yields,
customer service and price. We believe that we compete favorably with the new competitors on each of these elements, particularly our technical competence and research and development capabilities.

Intellectual Property

Our success
depends in part on our ability to obtain patents, licenses and other intellectual property rights covering our production processes and activities. To that end, we have acquired certain patents and patent licenses and intend to continue to seek
patents on our production processes. As of December 31, 2013, we held 4,125 U.S. patents and 6,325 patents issued outside of the United States.

Our ability to compete also depends on our ability to operate without infringing on the proprietary rights of others. The semiconductor
industry is generally characterized by frequent claims and litigation regarding patent and other intellectual property rights. As is the case with many companies in the semiconductor industry, we have from time to time received communications from
third parties asserting patents that allegedly cover certain of our technologies and alleging infringement of certain intellectual property rights of others. We expect that we will receive similar communications in the future. Irrespective of the
validity or the successful assertion of such claims, we could incur significant costs and devote significant management resources to the defense of these claims, which could seriously harm our company. See Item 3. Key InformationD. Risk
FactorsOur inability to obtain, preserve and defend intellectual property rights could harm our competitive position.

In
order to minimize our risks from claims based on our manufacture of semiconductor devices or end-use products whose designs infringe on others intellectual property rights, we in general accept orders only from companies that we believe enjoy
satisfactory reputation and for products that are not identified as risky for potential infringement claims. Furthermore, we obtain indemnification rights from customers. We also generally obtain indemnification rights from equipment vendors to hold
us harmless from any losses resulting from any suit or proceedings brought against our company involving allegation of infringement of intellectual property rights on account of our use of the equipment supplied by them.

We have entered into various patent cross-licenses with major technology companies, including a number of leading international semiconductor
companies, such as IBM and LSI. Our cross licenses may have different terms and expiry dates. Depending upon our competitive position and strategy, we may or may not renew our cross licenses and further, we may enter into different and/or additional
technology and/or intellectual property licenses in the future.



35



---

##### Table of Contents

Research and Development

In 2012 and 2013, we spent NT$9,787 million and NT$12,493 million (US$419 million), respectively, on research and development, which
represented 8.5% and 10.1% respectively, of our net operating revenues. Our research and development efforts mainly focus on delivering SoC foundry solutions that consist of the worlds leading process technologies, customer support services
and manufacturing techniques. These resources provide our foundry customers with improved opportunities to develop SoC products that supply the global market. Our commitment to research and development can be illustrated by our 2013 research and
development expenditures, which reached approximately 10.1% of net operating revenues. In June 2007, we completed the construction of a research and development center for nanometer technologies in the Tainan Science Park. The research and
development center allows for seamless application of advanced process technology in the research and development phase to the manufacturing phase.

As of March 31, 2014, we employed 1,469 professionals in our research and development activities. In addition, other management and
operational personnel are also involved in research and development activities but are not separately identified as research and development professionals.

Our Investments

Depending on the market
conditions, we intend to gradually reduce our investments through exchangeable bond offerings and other measures available to our company.

In December 2009, we issued two tranches of zero coupon exchangeable bonds due 2014. The two exchangeable bond offerings consist of US$127.2
million bonds exchangeable into common shares of Unimicron Technology Corporation, or Unimicron, and US$80 million bonds exchangeable into common shares of Novatek Microelectronics Corp., Ltd., or Novatek. As of December 31, 2012 and 2013,
certain bondholders have exercised their rights to exchange their bonds with the total principal amount of US$43 million and US$77 million into Novatek shares. On July 22, 2013, we called back all the outstanding amount of the US$3 million
bonds exchangeable into common shares of Novatek. We recognized a gain of NT$45 million from the redemption and classified the gain as other gains and losses. Gains arising from the exercise of exchange rights during the years ended
December 31, 2012 and 2013, respectively, amounted NT$1,389 million and NT$1,137 million (US$38 million) and was recognized as gain on disposal of investment.

In 2012, we sold 18 million, 10 million, 2 million, 2 million, 5 million and 2 million common shares of Novatek
Microelectronics Corp., Epistar Corp., Parade Technologies, Ltd., Sandforce, Inc., Pixart Imaging, Inc. and Simplo Technology Co., Ltd. for NT$1,728 million, NT$671 million, NT$549 million, NT$498 million, NT$448 million and NT$360 million,
respectively.

In 2013, we sold 118 million, 3 million and 6 million common shares of Industrial Bank of Taiwan Corp.,
Parade Technologies, Ltd. and Pixart Imaging Inc. for NT$722 million (US$24 million), NT$632 million (US$21 million) and NT$373 million (US$13 million), respectively.

Environmental, Safety and Health Matters

UMC implemented extensive ESH management systems since 1996. These systems enable our operations to identify applicable ESH regulations, assist
in evaluating compliance status and timely establish loss preventive and control measures. The systems we implemented in all our fabs have been certified as meeting the ISO 14001 and OHSAS 18001 standards. ISO 14001 consists of a set of standards
that provide guidance to the management of organizations to achieve an effective environmental management system. Procedures are established at manufacturing locations to ensure that all accidental spills and discharges are properly addressed. OHSAS
18001 is a recognizable occupational health and safety management system standard, which may be applied to assess and certify our management systems. Our goal in implementing ISO 14001 and OHSAS 18001 systems is to continually improve our ESH
management, comply with ESH regulations and to be a sustainable green foundry. UMCs major ESH policies include:



36



---

##### Table of Contents

Environmental Protection Aspects:



| |  |  | To be an environmentally friendly enterprise characterized by continual improvement with a goal of pollution-free production;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | To incorporate our environmental management system into the general organizational management system;
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | To take initiatives to reduce waste production and prevent pollution by introducing and developing environmentally friendly technology for design, production and operation;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To conserve energy and recycle resources in order to be a model of environmental protection for the international community;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | To fulfill corporate social responsibilities by playing an active role in public and community affairs to improve and protect the environment; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To educate employees about environmentally sound ethics and practices.
| | - |  | ----------------------------------------------------------------------

Safety and Health
Aspects:



| |  |  | To achieve a goal of zero accidents and comply with all applicable safety and regulatory requirements to ensure safety is the top priority for UMCs sustainable development;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To reinforce best safety and health management practice to reach international ESH and risk management standards;
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | To adopt risk control advanced ESH management and rescue technologies to enhance companys standards;
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | To provide safe work environment and operation through preventive management and audit;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | To eliminate hazard factors and prevent incidents through each and every ownership of responsibilities in safety and health; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | To encourage all employees to actively participate in safety and health training and promotional activities.
| | - |  | ------------------------------------------------------------------------------------------------------------

As a member of the global community and a semiconductor industry leader, we have implemented measures to deal with environmental problems and
mitigate climate change. We have introduced green concepts in our operations, including green commitment, management, procurement, production, products, recycling, office, education and marketing.

In order to conquer the green barrier formed by the RoHS (the Restriction of the Use of Certain Hazardous Substances in Electrical and
Electronic Equipment) Directive, we established a cross-division HSPM (Hazardous Substances Process Management) committee to manage all development and implementation of related work. We completed the final system audit for QC 080000 ICEQ HSPM
qualification, a certification for having a hazardous substance process management system that meets the RoHS Directive, on June 9, 2006 and became the first semiconductor manufacturer worldwide to achieve HSPM certification for all fabs. In
2009, we completed the report on the carbon footprint verification for integrated circuit wafers produced at our facilities, the first such report in the foundry industry. In 2010, UMC completed water footprint verification for our 200 mm and 300 mm
wafers. These verifications provide scientific and reliable statistics on the carbon and water information of products manufactured in our fabs as well as self-reviews of environmental impact.



37



---

##### Table of Contents

With respect to safety and health management, we realized that lowering the risks in equipment
and processes can reduce accidents, but cannot guarantee the safety of all employees. In order to achieve the goal of zero-accident, we intend to promote the concept of safety is my responsibility. We have educated the
employees with the concepts of be aware of your own safety well as the safety of others and safety is everyones responsibility, and my personal accountability.

Furthermore, we have implemented the FMEA method to foster employees capabilities in risk analysis. Therefore, we established a channel
for communication to encourage and ensure the employees to fully express their opinions for professional response and assistance. By doing so, we hope to establish a working attitude of Safety and health first to further improve the
quality of our working environment, and eventually to become a good example of global safety and hygiene management.

The following list
sets forth some of the important awards that we received in environmental protection, safety and health:



| |  |  | Selected as a member of Dow Jones Sustainability Indexes for six years since 2008;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | Awarded Taiwan Green Classics Award by Taiwan Ministry of Economic Affairs. (2012);
| | - |  | -------------------------------------------------------------------------------------



| |  |  | Awarded Taiwan Corporate Sustainability Award by Taiwan Institute for Sustainable Energy. (2008-2013);
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | Awarded Enterprises Environmental Award of the Republic of China by the Environmental Protection Administration of Executive Yuan, R.O.C. (total of 14 times since 2001);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Awarded The Best Participation of Green Procurement for Enterprises by the Environmental Protection Administration of Executive Yuan, R.O.C. (2012 and 2013);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Awarded National Industrial Safety & Health Award by Council of Labor Affairs Executive Yuan. (2007, 2013);
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | Awarded Workplace Safety & Health Performance Awards  Silver Award by Ministry of Manpower. (2006-2013); and
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | Awarded Excellent Industrial Safety and Health Executive Organization of Hsinchu Science Park by The Science Park Administration. (1998-2013).
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------

Climate Change

Our climate change
policies announced on April 22, 2010 include: (i) achieving carbon neutral status via carbon management, (ii) becoming a comprehensive low-carbon solution provider, and (iii) leveraging corporate resources to cultivate a
low-carbon economy. In order to implement these policies, we completed a carbon emission reduction plan named 333-project, which consisted of reducing electrical energy consumption by 3% and per-fluorinated compounds emissions by
33% per wafer by 2012. We surpassed these targets by implementing cleaner gases and various energy saving technologies and reached the targets of reducing normalized per-fluorinated compounds, or PFC, emissions by 39% and electricity usage by
4% by 2013 compared with the base year 2009. Thereafter, we started another aggressive project named 369+-project in 2013. We are trying to reduce the usage of electricity by 3%, the
usage of pipe water by 6% and the waste generation by 9% by 2015 compared with the base year 2012.



38



---

##### Table of Contents

Since 1999, we have been a pioneer in the foundry industry to implement measures to reduce
per-fluorinated compounds, and we completed the replacement of C3F8 with C4F8 in 2011. We have made a significant achievement by reducing normalized per-fluorinated compounds by approximately 67%, which is one of the major greenhouse gas reduction objectives of the World
Semiconductor Council, during 2000 to 2013. Currently, we reduce carbon emissions through the following two aspects: (1) we continue to implement a greenhouse gas emissions reduction plan to assist customers in establishing a low-carbon supply
chain, and (2) we continue our research and development in advanced processes to provide low power products and reduce carbon emissions at the consumer level.

We also support timely disclosure of carbon information and ensuring data quality. Since 2006, we have participated in the Carbon Disclosure
Project formed by global institutional investors and disclosed our annual greenhouse gas emission volume, reduction goals and results. In 2013, we became the first Taiwanese company that was listed on both the CDPs Climate Disclosure
Leadership Index and Climate Performance Leadership Index. Moreover, we engage third-party verifiers to ensure the quality of the data. We completed verification on greenhouse gas emission and reduction records during 2000 to 2010 for all of our
fabs in Taiwan and during 2011 to 2012 for all of our fabs in both Taiwan and Singapore.

In addition, our environmental efforts include
the establishment of our New Business Development Center, which helps promote a low carbon economy by investing across the entire supply chain of the green technology industry, including the solar energy, and LED industries. Our New Business
Development Center currently focuses its primary investments in the solar energy and LED industries.

Risk Management

Risk and safety matters are administered by our Risk Management and Environmental Safety Health Division, or the GRM & ESH,
established in 1998. We are pursuing the goal of a highly protected risk status in the semiconductor industry through the implementation of strict engineering safety procedures, regular enforcement of safety codes and standards, and compliance of
detailed industry safety guidelines.

Our hazards risk management slogans are set forth below:



| |  |  | Uniqueness in risk management;
| | - |  | ------------------------------



| |  |  | Maturity in property loss control; and
| | - |  | --------------------------------------



| |  |  | Continuous improvement in BCP.
| | - |  | ------------------------------

We have also adopted the Triple Star Ranking System of AIG
Insurance, a global leader in risk management and insurance, since 1999. All fabs have been ranked as top-class following AIGs risk evaluation and risk improvement recommendations. The ranking system focuses on 20 items, including ten Physical
Protection Elements and ten Human Elements. Our latest 12-inch lines, Fab 12A P1/2, 12A P3/4 and 12i, obtained triple-stars in all 20 elements in the very first Triple Star Audit. Furthermore, we were awarded the Outstanding Performance Award
in Risk Management by AIG Insurance again in 2013.

We have also implemented proactive efforts in earthquake risk prevention. We
believe our efforts contributed to our quick and exemplary recovery from two major earthquakes in Taiwan on September 21, 1999 and March 4, 2010, respectively. Our Hsinchu fabs and Fab 12A in Tainan sustained only minor impact to their
operations from the earthquake without interruption to the power system or water service. Normal operations resumed shortly after the incidents.

Besides, we are fully aware of the impact posed by business interruption. We are also devoted in the pursuit of corporate resilience and
continuity by committing non-interrupted services to satisfy our valued customers and important stakeholders. In 2011, we announced our Business Continuity Management policy, objective and management organization. In 2012, we followed the most
updated standard, ISO22301 and established a Business Continuity Management System to ensure our ability to minimize any impact from incidents that may affect operation and to provide resilience to our business continuity with minimal loss. In 2013,
we were the first foundry in the world to receive ISO 22301 certification for its business continuity management system from the Societe Generale de Surveillance, which demonstrates our commitment to developing our disaster response abilities and
our mechanisms for quick recovery.



39



---

##### Table of Contents

Insurance

We maintain industrial all risk insurance for our buildings, facilities, equipment and inventories as well as third-party properties. The
insurance for fabs and their equipment covers losses from physical damage and business interruption up to their respective policy limits except for policy exclusions. We purchase directors and officers liability insurance for our board directors and
executive officers, covering the liabilities incurred in relation to his/her/its operation of business and legally responsible for. We also maintain public liability insurance for losses to third parties arising from our business operations. We
believe that our insurance arrangement is adequate to cover all major types of losses relevant to the semiconductor industry practice. However, significant damage to any of our production facilities, whether as a result of fire or other causes,
could seriously harm our business.



|C. | Organizational Structure
|-- | ------------------------

The following list shows our corporate structure as of
December 31, 2013:



|                                                    |  |                              |  |                                               |        |  
|--------------------------------------------------- |  | ---------------------------- |  | --------------------------------------------- | ------ | -
|Company                                             |  | Jurisdiction ofIncorporation |  | Percentage ofOwnership as ofDecember 31, 2013 |       
|UMC Group (USA)                                     |  | U.S.A.                       |  |                                               | 100.00 | %
|United Microelectronics (Europe) B.V.               |  | The Netherlands              |  |                                               | 100.00 | %
|UMC Capital Corp.                                   |  | Cayman Islands               |  |                                               | 100.00 | %
|TLC Capital Co., Ltd.                               |  | Taiwan, R.O.C.               |  |                                               | 100.00 | %
|UMC New Business Investment Corp.                   |  | Taiwan, R.O.C.               |  |                                               | 100.00 | %
|Green Earth Limited                                 |  | Samoa                        |  |                                               | 100.00 | %
|Fortune Venture Capital Corp.                       |  | Taiwan, R.O.C.               |  |                                               | 100.00 | %
|UMC Investment (Samoa) Limited                      |  | Samoa                        |  |                                               | 100.00 | %
|Unitruth Investment Corp.                           |  | Taiwan, R.O.C.               |  |                                               | 100.00 | %
|UMC Capital (USA)                                   |  | U.S.A.                       |  |                                               | 100.00 | %
|ECP VITA PTE. LTD.                                  |  | Singapore                    |  |                                               | 100.00 | %
|Soaring Capital Corp.                               |  | Samoa                        |  |                                               | 100.00 | %
|Unitruth Advisor (Shanghai) Co., Ltd.               |  | China                        |  |                                               | 100.00 | %
|Tera Energy Development Co., Ltd.                   |  | Taiwan, R.O.C.               |  |                                               | 100.00 | %
|Nexpower Technology Corp.                           |  | Taiwan, R.O.C.               |  |                                               | 58.27  | %
|Wavetek Microelectronics Corporation                |  | Taiwan, R.O.C.               |  |                                               | 74.69  | %
|Everrich Energy Corp.                               |  | Taiwan, R.O.C.               |  |                                               | 100.00 | %
|Everrich Energy Investment (HK) Limited             |  | China                        |  |                                               | 100.00 | %
|Everrich (Shandong) Energy Co., Ltd.                |  | China                        |  |                                               | 100.00 | %
|Unistars Corp.                                      |  | Taiwan, R.O.C.               |  |                                               | 78.02  | %
|Topcell Solar International Co., Ltd.               |  | Taiwan, R.O.C.               |  |                                               | 91.82  | %
|Smart Energy Enterprises Limited                    |  | China                        |  |                                               | 100.00 | %
|Smart Energy Shandong Corporation                   |  | China                        |  |                                               | 100.00 | %
|Wavetek Microelectronics Investment (HK) Limited    |  | China                        |  |                                               | 74.69  | %
|NPT Holding Limited                                 |  | Samoa                        |  |                                               | 58.27  | %
|NLL Holding Limited                                 |  | Samoa                        |  |                                               | 58.27  | %
|SocialNex Italia 1 S.R.L.                           |  | Italy                        |  |                                               | 58.27  | %
|Tera Energy USA Inc.                                |  | U.S.A.                       |  |                                               | 100.00 | %
|UMC (Beijing) Limited                               |  | China                        |  |                                               | 100.00 | %
|Wavetek Microelectronics Investment (Samoa) Limited |  | Samoa                        |  |                                               | 74.69  | %
|Wavetek Microelectronics Corporation (USA)          |  | U.S.A.                       |  |                                               | 74.69  | %
|Best Elite International Limited                    |  | British Virgin Islands       |  |                                               | 86.88  | %
|Infoshine Technology Limited                        |  | British Virgin Islands       |  |                                               | 86.88  | %
|Oakwood Associates Limited                          |  | British Virgin Islands       |  |                                               | 86.88  | %
|Hejian Technology (Suzhou) Co., Ltd.                |  | China                        |  |                                               | 86.88  | %
|UMC Group JAPAN                                     |  | Japan                        |  |                                               | 100.00 | %
|UMC Korea Co., Ltd.                                 |  | Korea                        |  |                                               | 100.00 | %
|Allance Optotek Corp.                               |  | Taiwan, R.O.C.               |  |                                               | 74.51  | %
|Light House Global Incorp.                          |  | Samoa                        |  |                                               | 74.51  | %
|Alliance Optotek Dongguan Co., Ltd.                 |  | China                        |  |                                               | 74.51  | %
|Omni Global Limited                                 |  | Samoa                        |  |                                               | 100.00 | %
|United Microtechnology Corporation                  |  | U.S.A.                       |  |                                               | 100.00 | %



40



---

##### Table of Contents

|D. | Property, Plants and Equipment
|-- | ------------------------------

Please refer to B. Business
OverviewManufacturing Facilities for a discussion of our property, plants and equipment.



|ITEM 4A. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

Not applicable.



|ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------- | --------------------------------------------

Unless stated otherwise, the discussion
and analysis of our financial condition and results of operations in this section apply to our financial information as prepared in accordance with IFRSs. You should read the following discussion of our financial condition and results of operations
together with the consolidated financial statements and the notes to such statements included in this annual report. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Item 3. Key Information-D. Risk Factors or in other parts of this annual
report on Form 20-F.

For the convenience of readers, NT dollar amounts used in this section for, and as of, the year ended
December 31, 2013 have been translated into U.S. dollar amounts using US$1.00 = NT$29.83, the noon buying rate as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2013. The U.S. dollar translation
appears in parentheses next to the relevant NT dollar amount.

Overview

We are one of the worlds leading independent semiconductor foundries, providing comprehensive wafer fabrication services and technologies
to our customers based on their designs.

Cyclicality of the Semiconductor Industry

As the semiconductor industry is highly cyclical, revenues varied significantly over this period. It can take several years to plan and
construct a fab and bring it to operations. Therefore, during periods of favorable market conditions, semiconductor manufacturers often begin building new fabs or acquiring existing fabs in response to anticipated demand growth for semiconductors.
In addition, after commencement of commercial operations, fabs can increase production volumes rapidly. As a result, large amounts of semiconductor manufacturing capacity typically become available during the same time period. Absent a proportional
growth in demand, this increase in supply often results in semiconductor manufacturing overcapacity, which has led to a sharp decline in semiconductor prices and significant capacity under-utilization. Our average capacity utilization rate was
78.6%, 78.8% and 82.3% for the years ended December 31, 2011, 2012 and 2013, respectively. We believe that our operating results in 2012 and 2013 continue to reflect the ongoing uncertainty in the global economy, conservative corporate
information technology spending and low visibility with respect to end market demand.

Pricing

We price our products on either a per die or a per wafer basis, taking into account the complexity of the technology, the prevailing market
conditions, the order size, the cycle time, the strength and history of our relationship with the customer and our capacity utilization. Because semiconductor wafer prices tend to fluctuate frequently, we in general review our pricing on a quarterly
basis. As a majority of our costs and expenses are fixed or semi-fixed, fluctuations in our products average selling price historically have had a substantial impact on our margins. Our average selling price decreased approximately 5.5% in
2013 compared to 2012, primarily due to nominal price erosion.



41



---

##### Table of Contents

We believe that our current level of pricing is comparable to that of other leading foundries in
each respective geometry. We believe that our ability to provide a wide range of advanced foundry services and process technologies as well as large manufacturing capacity will enable us to compete effectively with other leading foundries at a
comparable price level.

Capacity Utilization Rates

Our operating results are characterized by relatively high fixed costs. In 2012 and 2013, approximately 65.7% and 66.8%, respectively, of our
manufacturing costs consisted of depreciation, a portion of indirect material costs, amortization of license fees and indirect labor costs.

If our utilization rates increase, our costs would be allocated over a larger number of units, which generally leads to lower unit costs. As a
result, our capacity utilization rates can significantly affect our margins. Our utilization rates have varied from period to period to reflect our production capacity and market demand. Our average capacity utilization rate was 78.6%, 78.8% and
82.3% for the years ended December 31, 2011, 2012 and 2013, respectively. Utilization rates were primarily affected by global macroeconomic factors. Other factors affecting utilization rates are efficiency in production facilities, product flow
management, the complexity and mix of the wafers produced, overall industry conditions, the level of customer orders, mechanical failure, disruption of operations due to expansion of operations, relocation of equipment or disruption of power supply
and fire or natural disaster.

Our production capacity is determined based on the capacity ratings of the equipment in the fab, provided
by the engineers, adjusted for, among other factors, actual output during uninterrupted trial runs, expected down time due to set up for production runs and maintenance, expected product mix and research and development. Because these factors
include subjective elements, our measurement of capacity utilization rates may not be comparable to those of our competitors.

Change in Product Mix
and Technology Migration

Because the price of wafers processed with different technologies varies significantly, the mix of wafers
that we produce is among the primary factors that affect our revenues and profitability. The value of a wafer is determined principally by the complexity and performance of the processing technology used to produce the wafer, as well as by the yield
and defect density. Production of devices with higher levels of functionality and performance, with better yields and lower defect density as well as with greater system-level integration requires better manufacturing expertise and generally
commands higher wafer prices. The increase in price generally has more than offset associated increases in production cost once an appropriate economy of scale is reached.

Prices for wafers of a given level of technology generally decline over the processing technology life cycle. As a result, we have
continuously been migrating to increasingly sophisticated technologies to maintain the same level of profitability. We began our volume production with 65-nanometer and 40-nanometer technologies in 2006 and 2009, respectively. We started
40-nanometer production in the first half of 2009. These types of technology migration require continuous capital and research and development investment. Because developing and acquiring advanced technologies involve substantial capital investment,
we expect to continue to spend a substantial amount of capital on upgrading our technologies and capabilities. We introduced our 28-nanometer technology to customers in 2011 to significantly increase the competitive advantages of our customers by
providing better device performance in a smaller die size.



42



---

##### Table of Contents

Manufacturing Yields

Manufacturing yield per wafer is measured by the number of functional dice on that wafer over the maximum number of dice that can be produced
on that wafer. A small portion of our products is priced on a per die basis, and our high manufacturing yields have assisted us in achieving higher margins. In addition, with respect to products that are priced on a per wafer basis, we believe that
our ability to deliver high manufacturing yields generally has allowed us to either charge higher prices per wafer or attract higher order volumes, resulting in higher margins.

We continually upgrade our process technologies. At the beginning of each technological upgrade, the manufacturing yield utilizing the new
technology is generally lower, sometimes substantially lower, than the yield under the current technology. The yield is generally improved through the expertise and cooperation of our research and development personnel and process engineers, as well
as equipment and at times raw material suppliers. Our policy is to offer customers new process technologies as soon as the new technologies have passed our internal reliability tests.

Investments

Most of our investments were
made to improve our market position and for strategy considerations, a significant portion of which are in foundry-related companies including fabless design customers, raw material suppliers and intellectual property vendors. In addition, we also
invest in non-foundry-related businesses, such as Cathay Financial Holding Co. Ltd. composed of insurance, securities, banking and other diversified financial institutions. We have established our NBI to identify and make strategic investments in
developing industries such as solar energy and LED.

In recent years, many countries have listed energy saving and carbon reduction as
primary administrative policies to tackle the challenge of potential energy shortages in future. Technologies for solar energy and energy saving are expected to become a focus in future technology development. On August 24, 2009, our board of
directors approved the establishment of NBI to focus on investments in the solar energy and LED industries.

In the solar manufacturing
industry, our investments consist of companies engaged in the manufacturing of crystalline PV cells and thin-film PV modules, providing engineering procurement and construction (EPC) services, and financings. Majority of our investments in the LED
industry focus on epi wafer manufacturing, as well as developing advanced wafer technologychip scale packaging.

The solar energy
and LED markets were adversely affected by over-supply in 2012 and 2013. Therefore, we have been focused on improving the operational efficiency and develop leading-end technologies, while continuously to strengthen the financial structure of our
investments. We remain committed to further optimize our investments in the solar energy and LED industries and believe that such investments will position us well for future growth. Other than our investments through our NBI, we have, from time to
time, disposed of investments for financial, strategic or other purposes in recent years. See Item 4. Information on the CompanyB. Business OverviewOur Investments for a description of our investments.

Treasury Share Programs

We have from
time to time announced plans, none of which was binding on us, to buy back up to a fixed amount of our shares on the Taiwan Stock Exchange at the price range set forth in the plans. In 2011, 2012 and 2013, we purchased an aggregate of nil, nil and
200 million, respectively, of our shares under these plans. On March 13, 2013, our board of directors resolved to purchase up to 200 million shares on the Taiwan Stock Exchange at a price between NT$7.80 and NT$16.90 per share during
the period from March 14, 2013 to May 13, 2013 to transfer to employees and nil shares have been transferred to our employees at the end of such period.



43



---

##### Table of Contents

Changes in Financial Reporting Standards  transition to IFRSs in 2013

We started to prepare our annual consolidated financial statements in accordance with IFRSs as of and for the year ended December 31,
2013. As disclosed in our audited consolidated financial statements, these consolidated financial statements have been prepared in accordance with IFRS 1, First-time Adoption of International Financial Reporting Standards. Previously, we
prepared our annual consolidated financial statements in accordance with R.O.C. GAAP. Effective January 1, 2013, companies listed on the Taiwan Stock Exchange, including us, must report their financial statements under TIFRSs pursuant to the
requirements of the Framework for Adoption of International Financial Reporting Standards by Companies in the R.O.C. promulgated by the FSC on May 14, 2009. Accordingly, we have adopted TIFRSs for reporting in the R.O.C. our annual consolidated
financial statements beginning in 2013 and our interim quarterly earnings releases beginning in the first quarter of 2013. At the same time, we have adopted IFRSs as issued by the IASB for our annual reports on Form 20-F with the U.S. SEC. We have
adjusted our consolidated financial information as of and for the year ended December 31, 2012 in accordance with IFRSs and therefore financial information set forth in this annual report as of and for the year ended December 31, 2012 may
differ from information previously published.

IFRSs differs in certain significant respects from R.O.C. GAAP. For a discussion of the
related major differences between IFRSs and R.O.C. GAAP, the impacts of the transition to IFRSs and information concerning the use of exceptions permitted or required by IFRS 1, please see Note 14 to our audited consolidated financial statements
included elsewhere in this annual report.

Critical Accounting Policies

The preparation of our consolidated financial statements requires management to make judgments, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets, liabilities, the accompanying disclosures and the disclosure of contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities affected in future periods.

The key assumptions concerning the future and
other key sources of estimation for uncertainty at the reporting date, that would have a significant risk for a material adjustment to the carrying amounts of assets or liabilities within the next fiscal year are discussed below. We based our
assumptions and estimates on information available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond
our control. Such changes are reflected in the assumptions when they occur.

The Classification and Measurement of Financial Instruments

Financial assets and financial liabilities are recognized when we become a party to the contractual provisions of the instrument. We determine
the classification of our financial assets at initial recognition. In accordance with IAS 39Financial Instruments: Recognition and Measurement, our financial assets are classified as financial assets at fair value through profit or
loss, available-for-sale financial assets, held-to-maturity financial assets and notes, accounts and other receivables. Our financial liabilities are classified as financial liabilities at fair value through profit or loss and financial liabilities
carried at amortized cost. Purchase or sale of financial assets and liabilities are recognized using trade date accounting. All financial instruments are recognized initially at fair value plus, in the case of investments not at fair value through
profit or loss, directly attributable costs, and are subsequently measured at fair value or amortized cost using the effective interest method, less impairment, based on the classification. We assess whether objective evidence of impairment exists
for a financial asset or a group of financial assets at each reporting date.

Where the fair values of financial assets and financial
liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including income approach (for example, the discounted cash flows model) or the market approach. Changes in assumptions
about these factors could affect the reported fair value of the financial instruments. Please refer to Note 11 to our audited consolidated financial statements included elsewhere in this annual report for more details.

Derivative Instruments

UMC has
exchangeable bonds where the bondholders may exchange the bonds into ordinary shares of certain public entities which UMC holds as available-for-sale financial assets. In accordance with IAS 39, if the economic characteristics and risks of the
embedded call or put options are not clearly and closely related to the host contract, the derivative financial instruments embedded in exchangeable bonds would be recognized separately as financial assets or liabilities at fair value through profit
or loss.



44



---

##### Table of Contents

Both the host contract and bifurcated embedded derivative financial instrument in exchangeable
bonds are classified as current liabilities if the bondholders have the right to demand settlement by exercising the exchange option of the bonds.

The embedded derivative features contained in exchangeable bonds are bifurcated and separately accounted for if the economic characteristics
and risks of the embedded derivative instruments are not clearly and closely related to those of the host contracts. Those bifurcated embedded derivatives are fair valued at the end of each reporting period by using the option pricing model with the
changes in fair value included in earnings. The valuation model uses the market-based observable inputs including share price, volatility, credit spread and swap rates.

Inventories

Inventories are accounted
for on a perpetual basis. Raw materials are stated at actual purchase costs, while the work in process and finished goods are stated at standard costs and subsequently adjusted to weighted-average costs at the end of each month. The cost of work in
progress and finished goods comprises raw materials, direct labor, other direct costs and related production overheads. Allocation of fixed production overheads to the costs of conversion is based on the normal capacity of the production facilities.
Cost associated with underutilization of capacity is expensed as incurred.

Inventories are valued at lower of cost and net realizable
value item by item. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Please refer to Note 6(4) to our audited
consolidated financial statements included elsewhere in this annual report. Costs of completion include direct labor and overhead, including depreciation and maintenance of production equipment, indirect labor costs, indirect material costs,
supplies, utilities and royalties that is expected to be incurred at normal production level. We estimate normal production level taking into account loss of capacity resulting from planned maintenance, based on historical experience and current
production capacity.

Post-Employment Benefits

All regular employees are entitled to a defined benefit pension plan that is managed by an independently administered pension fund committee.
Fund assets are deposited under the committees name with the Bank of Taiwan and hence, not associated with us. Therefore, fund assets are not to be included in our consolidated financial statements. Pension benefits for employees of the
overseas branch and subsidiaries are provided in accordance with the local regulations.

Post-employment benefit plan that is classified
as a defined benefit plan is accounted for under the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. We recognize all remeasurements of defined benefit pension plans in the periods which they occur
in other comprehensive income, which then are immediately recognized in retained earnings.

Cost of post-employment benefit pension plan
and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the
discount rate, future salary increases and mortality rates. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date. The assumptions used for measuring pension cost and the present value of the pension obligation are disclosed in Note 6(14) to our audited consolidated financial statements included elsewhere in this
annual report.

In determining the appropriate discount rate, management considers the interest rates of the government bonds extrapolated
from maturity corresponding to the expected duration of the defined benefit obligation. As for the rate of future salary increase, management takes account of past experiences, comparisons within the industry and the geographical region, inflation
and the discount rate.



45



---

##### Table of Contents

Share-Based Payment Transactions

The cost of equity-settled transactions between our employees and us is measured based on the fair value at the date on which they are granted.
The fair value of the equity instruments is determined using an appropriate pricing model.

The cost of equity-settled transactions is
recognized, together with a corresponding increase in other capital reserves in equity, over the periods in which the performance and/or service conditions are being fulfilled. The cumulative expense recognized for equity-settled transactions at
each reporting date reflects the extent to which the vesting period has passed and our best estimate of the quantity of equity instruments that will ultimately vest. The charge to profit or loss for a period represents the movement in cumulative
expense recognized between the beginning and the end of that period. No expense will be recognized for awards that do not ultimately vest, except for equity-settled transactions for which vesting is conditional upon a market or non-vesting
condition. These are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not
been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employees as measured
at the date of modification.

We measure the cost of equity-settled transactions with employees based on reference to the fair value of
the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant.
This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for
estimating fair value for share-based payment transactions are disclosed in Note 6(16) to our audited consolidated financial statements included elsewhere in this annual report.

Revenue Recognition-Sales Returns and Discounts

Revenue is recognized to the extent that it is probable that the economic benefits will flow to us and the revenue can be reliably measured.
Revenue is measured at the fair value of the consideration received or receivable.

Sales returns and discounts are estimated based on
customer complaints, historical experiences and any other known factors that might significantly affect the estimation.

Impairment of Property, Plant
and Equipment

At each reporting date or whenever events indicate that the assets value has declined or significant changes in
the market with an adverse effect have taken place, we assess whether there is an indication that an asset in the scope of IAS 36Impairment of Assets may be impaired. If any indication exists, we complete impairment testing for the
cash-generating unit (CGU) to which the individual assets belong. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. The recoverable amount of
an individual asset or CGU is the higher of fair value less costs to sell and its value in use. The fair value less costs to sell is based on best information available to reflect the amount that an entity could obtain from the disposal of the asset
in an arms length transaction between knowledgeable, willing parties, after deducting the costs of disposal. The value in use is measured at the net present value of the future cash flows the entity expects to derive from the asset or CGU.
Cash flow projection involves subjective judgments and estimates which include the estimated useful lives of property, plant and equipment, capacity that generates future cash flows, capacity of physical output, potential fluctuations of economic
cycle in the industry and our operating situation.



46



---

##### Table of Contents

Income Tax

Income tax expense (benefit) is the aggregate amount of current income tax and deferred income tax included in the determination of profit or
loss for the period. Current income tax assets and liabilities for the current period and prior periods are measured using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income
tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity rather than profit or loss.

Deferred income tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their
carrying amounts in financial statements at the reporting date. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and
tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow the manner in which we expect, at the end of the reporting period,
to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items not relating to profit or loss is not recognized in profit or loss but rather in other comprehensive income or directly in equity. Deferred tax
assets are reassessed and recognized at each reporting date. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax
assets to be recovered. Deferred tax assets and liabilities offset each other, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities, and the deferred taxes relate to the same taxable
entity and the same taxation authority.

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax
laws, and the amount and timing of future taxable income. We establish provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such
provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide
variety of issues depending on the conditions prevailing in our respective domicile.

Deferred tax assets are recognized for all carry
forward of unused tax losses tax credits and deductible temporary differences to the extent that it is probable that future taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses,
unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences. Please
refer to Note 6(21) to our audited consolidated financial statements included elsewhere in this annual report for more details on unrecognized deferred tax assets.

Classification of Joint Arrangements

A
joint venture is a type of joint arrangement whereby we that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement with no single
party controls the arrangement on its own, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

We hold significant percentage of the voting rights of our joint arrangements. We have joint control over these arrangements as under the
contractual agreements, unanimous consent is required from all parties to the agreements for all relevant activities.

Our joint
arrangements are structured as limited companies and provide us and the parties to the agreements with rights to the net assets of the limited companies under the arrangements. Therefore, these entities are classified as our joint ventures.



47



---

##### Table of Contents

|A. | Operating Results
|-- | -----------------

Net Operating Revenues

We generate our net operating revenues primarily from the manufacture and sales of wafer fabricating semiconductor devices, solar energy and
new generation LED. We also derive a small portion of our net operating revenues from wafer probe services that we perform internally as well as mask tooling services and assembly and test services that we subcontract to other companies.

Operating Costs

Our operating
costs consist principally of:



| |  |  | overhead, including depreciation and maintenance of production equipment, indirect labor costs, indirect material costs, supplies, utilities and royalties;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | wafer costs;
| | - |  | ------------



| |  |  | direct labor costs; and
| | - |  | -----------------------



| |  |  | service charges paid to subcontractors for mask tooling, assembly and test services.
| | - |  | ------------------------------------------------------------------------------------

Our
total depreciation expenses were NT$35,118 million and NT$37,242 million (US$1,248 million) in 2012 and 2013, respectively.

Operating Expenses

Our operating expenses consist of the following:



| |  |  | Sales and marketing expenses. Sales and marketing expenses consist primarily of intellectual property development expenses, salaries and related personnel expenses, wafer sample expenses and related marketing expenses.
Wafer samples are actual silicon samples of our customers early design ideas made with our most advanced processes and provided to those customers;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | General and administrative expenses. General and administrative expenses consist primarily of salaries for our administrative, finance and human resource personnel, fees for professional services, and cost of computer
and communication systems to support our operations; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Research and development expenses. Research and development expenses consist primarily of research testing related expenses, salaries and related personnel expenses and depreciation on the equipment used for our
research and development.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net Other Operating Income and Expenses

Net other operating income and expenses consist primarily of:



| |  |  | gains or losses arising from disposal of property, plant and equipment;
| | - |  | -----------------------------------------------------------------------



| |  |  | the recognition or reversal of impairment losses of property, plant and equipment and intangible assets; and
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | net rental income or loss from property.
| | - |  | ----------------------------------------



48



---

##### Table of Contents

Non-operating Income and Expenses

Our non-operating income and expenses primarily consist of the following:



| | 1. | Other income, which consists of:
| | -- | --------------------------------



| |  |  | interest income, which is primarily derived from time deposits; and
| | - |  | -------------------------------------------------------------------



| |  |  | dividend income, which is primarily derived from financial assets at fair value through profit or loss, available-for-sale financial assets and financial assets measured at cost.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Other gains and losses, which principally consist of:
| | -- | -----------------------------------------------------



| |  |  | gains or losses on valuation of financial assets and liabilities, which are primarily derived from disposal of and changes in the values of financial assets and liabilities classified as fair value through profit or
loss, or FVTPL, according to IAS 39;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | impairment loss, which is primarily derived from the loss recognized in available-for-sale financial assets, financial assets measured at cost, noncurrent and investments accounted for under the equity method; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | gains or losses on disposal of investments, which are primarily derived from our disposal of available-for-sale financial assets, financial assets measured at cost and investments accounted for under the equity method;
and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | other gains and losses, which are primarily derived from our branchs grant income received from the government in Singapore.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| | 3. | Finance costs, which principally consist of:
| | -- | --------------------------------------------



| |  |  | interest expenses, which are primarily derived from bonds payable and bank loans; and
| | - |  | -------------------------------------------------------------------------------------



| |  |  | financial expenses, which are primarily derived from shareholder services proxy fee.
| | - |  | ------------------------------------------------------------------------------------



| | 4. | Share of profit or loss of associates and joint ventures, which is primarily derived from the recognition of investee companies net profit based on the ownership percentage we hold.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | Bargain purchase gain, which is mainly derived from the acquisition of Best Elite. The purchase consideration was less than the fair value of Best Elites net assets due to our unique position to better utilize the
assets, such as improving utilization, and the lack of liquidity of Best Elites shares.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Taxation

Based on our status as a company engaged in the semiconductor business in Taiwan, we have been granted exemptions from income taxes in Taiwan
with respect to income attributable to capital increases for the purpose of purchasing equipment related to the semiconductor business for a period of four or five years following each such capital increase. This tax exemption resulted in tax
savings of approximately NT$55 million and nil in 2012 and 2013, respectively. Our tax rate was 17% in 2013, the same rate applicable to companies outside the Hsinchu Science Park. We also benefit from other tax incentives generally available to
technology companies in Taiwan, including tax credits applicable against corporate income tax that range from 30% to 50% of the amount of certain research and development and employee training expenses and 5% to 20% of the amount of investment in
certain qualified equipment and technology. These tax incentives resulted in tax savings of approximately NT$343 million and NT$38 million (US$1 million) in 2012 and 2013, respectively.

In 1997, the R.O.C. Income Tax Law was amended to integrate corporate income tax and stockholder dividend tax to eliminate the double taxation
effect for resident stockholders of Taiwan companies. Under the amendment, all retained earnings generated from January 1, 1998 and not distributed to stockholders as dividends in the following year will be assessed a 10% retained earnings tax.



49



---

##### Table of Contents

As a result, if we do not distribute all of our annual retained earnings generated beginning
January 1, 1998 as either cash and/or stock dividends in the following year, these earnings will be subject to the 10% retained earnings tax.

In addition, the R.O.C. government enacted the R.O.C. Income Basic Tax Act, also known as the Alternative Minimum Tax Act, or the
AMT Act, which became effective on January 1, 2006 and to impose an alternative minimum tax. AMT is a supplemental tax which is payable if the income tax payable pursuant to the R.O.C. Income Tax Act is below the minimum amount prescribed under
the AMT Act. Prior to 2013, a company is subject to a 10% AMT if its annual taxable income under the AMT Act exceeds NT$2 million. Effective January 1, 2013, after the amendment on August 8, 2012, the statutory tax rate was increased from
10% to 12%, if its annual taxable income under the AMT Act exceeds NT$0.5 million.

After taking into account the tax exemptions and tax
incentives discussed above, we recorded NT$2,146 million and NT$2,257 million (US$76 million) of income tax expenses in 2012 and 2013, respectively. Our effective income tax rate in 2013 was 15.74%.

Comparisons of Results of Operations

The following table sets forth some of our results of operations data as a percentage of our net operating revenues for the periods indicated.



|                                                    |  |                          |       |   |      |  |       |  
|--------------------------------------------------- |  | ------------------------ | ----- | - | ---- |  | ----- | -
|                                                    |  | Years Ended December 31, |      
|                                                    |  | 2012                     |       |   | 2013 | 
|                                                    |  | %                        |       |   | %    | 
|Net operating revenues                              |  |                          | 100.0 |   |      |  | 100.0 |  
|Operating costs                                     |  |                          | (83.3 | ) |      |  | (81.0 | )
|                                                    |  |                          |       |   |      |  |       |  
|Gross profit                                        |  |                          | 16.7  |   |      |  | 19.0  |  
|Operating expenses                                  |  |                          |       |   |      |  |       |  
|Sales and marketing                                 |  |                          | (2.4  | ) |      |  | (2.6  | )
|General and administrative                          |  |                          | (2.7  | ) |      |  | (2.9  | )
|Research and development                            |  |                          | (8.5  | ) |      |  | (10.1 | )
|                                                    |  |                          |       |   |      |  |       |  
|Subtotal                                            |  |                          | (13.6 | ) |      |  | (15.6 | )
|                                                    |  |                          |       |   |      |  |       |  
|Net other operating income and expenses             |  |                          | (2.4  | ) |      |  | (0.1  | )
|                                                    |  |                          |       |   |      |  |       |  
|Operating income                                    |  |                          | 0.7   |   |      |  | 3.3   |  
|Non-operating income and expenses                   |  |                          | 4.7   |   |      |  | 8.3   |  
|                                                    |  |                          |       |   |      |  |       |  
|Income from continuing operations before income tax |  |                          | 5.4   |   |      |  | 11.6  |  
|Income tax expense                                  |  |                          | (1.8  | ) |      |  | (1.8  | )
|                                                    |  |                          |       |   |      |  |       |  
|Net income                                          |  |                          | 3.6   |   |      |  | 9.8   |  
|Total other comprehensive income (loss), net of tax |  |                          | (5.5  | ) |      |  | 0.1   |  
|                                                    |  |                          |       |   |      |  |       |  
|Total comprehensive income (loss)                   |  |                          | (1.9  | ) |      |  | 9.9   |  
|                                                    |  |                          |       |   |      |  |       |  
|Net income attributable to:                         |  |                          |       |   |      |  |       |  
|Stockholders of the parent                          |  |                          | 5.3   |   |      |  | 10.2  |  
|Non-controlling interests                           |  |                          | (1.7  | ) |      |  | (0.4  | )
|Total comprehensive income (loss) attributable to:  |  |                          |       |   |      |  |       |  
|Stockholders of the parent                          |  |                          | (0.2  | ) |      |  | 10.3  |  
|Non-controlling interests                           |  |                          | (1.7  | ) |      |  | (0.4  | )

Year Ended December 31, 2013 Compared to Year Ended December 31, 2012

Net operating revenues. Net operating revenues increased by 7.0% from NT$115,675 million in 2012 to NT$123,812 million (US$4,151
million) in 2013 primarily due to the increase in shipments.



50



---

##### Table of Contents

Operating costs. Operating costs increased by 4.0% from NT$96,365 million in 2012
to NT$100,249 million (US$3,361 million) in 2013 primarily due to the increase in shipments.

Gross profit and gross margin.
Gross profit increased from NT$19,310 million in 2012 to NT$23,563 million (US$790 million) in 2013. Our gross margin increased from 16.7% in 2012 to 19.0% in 2013 primarily due to the increase in shipments, the decrease in sales returns and
allowances and the improvement of operating efficiency of our new business segment.

Operating income and operating margin.
Operating income increased from NT$822 million in 2012 to NT$4,032 million (US$135 million) in 2013. Our operating margin increased from 0.7% in 2012 to 3.3% in 2013. The increase in operating margin is largely due to the increase in gross margin
and the decrease in net other operating expenses, partially offset by the increase in operating expenses. Operating expenses increased by 23.6% from NT$15,697 million in 2012 to NT$19,406 million (US$651 million) in 2013.

Sales and marketing expenses. Our sales and marketing expenses increased by 18.1% from NT$2,749 million in 2012 to NT$3,247
million (US$109 million) in 2013. The increase in sales and marketing expenses was mainly due to an increase in mask expenses and IP royalty expenses as a result of an increase in IP under which we are granted a license. Our sales and marketing
expenses as a percentage of our net operating revenues increased from 2.4% in 2012 to 2.6% in 2013.

General and administrative
expenses. Our general and administrative expenses increased by 15.9% from NT$3,161 million in 2012 to NT$3,666 million (US$123 million) in 2013 primarily as a result of an increase in personnel expenses. Our general and administrative
expenses as a percentage of our net operating revenues were 2.7% and 2.9% in 2012 and 2013, respectively.

Research and development
expenses. Our research and development expenses increased by 27.6% from NT$9,787 million in 2012 to NT$12,493 million (US$419 million) in 2013. The increase in research and development expenses resulted primarily from an increase in research
expenses for advanced technologies and RD wafers expenses. Our research and development expenses as a percentage of our net operating revenues increased from 8.5% in 2012 to 10.1% in 2013.

Net other operating income and expenses. Net other operating expenses decreased by 95.5% from NT$2,791 million in 2012 to NT$125
million (US$4 million) in 2013. The decrease in net other operating expenses is resulted primarily from a decrease in losses arising from impairment of property, plant and equipment. Net other operating expense as a percentage of our net operating
revenue decreased from 2.4% in 2012 to 0.1% in 2013.

Non-operating income and expenses. Non-operating income increased by
88.4% from NT$5,473 million in 2012 to NT$10,309 million (US$346 million) in 2013, mainly due to a bargain purchase gain of NT$7,154 million (US$240 million) in 2013 and a decrease in gain on disposal of investments from NT$4,830 million in 2012 to
NT$2,224 million (US$75 million) in 2013.

Other comprehensive income (loss), net of tax.Our other comprehensive income was
NT$198 million (US$7 million) in 2013, compared to our other comprehensive loss of NT$6,381 million in 2012. We attributed this change primarily to an increase in exchange differences on translation of foreign operations from a loss of NT$3,228
million in 2012 to an income of NT$270 million (US$9 million) in 2013, and a decrease in unrealized loss on available-for-sale financial assets from NT$2,492 million in 2012 to NT$784 million (US$26 million) in 2013.

Net income attributable to the stockholders of the parent. Due to the factors described above, our net income increased by
106.9% from NT$6,094 million in 2012 to NT$12,609 million (US$423 million) in 2013.

Total comprehensive income (loss) attributable
to the stockholders of the parent. Due to the factors described above, our comprehensive income amounted to NT$12,796 million (US$429 million) in 2013 compared to a comprehensive loss of NT$281 million in 2012.



51



---

##### Table of Contents

|B. | Liquidity and Capital Resources
|-- | -------------------------------

The foundry business is highly capital intensive. Our
development over the past three years has required significant investments. Additional expansion for the future generally will continue to require significant cash for acquisition of plant and equipment to support increased capacities, particularly
for the production of 12-inch wafers, although our expansion program will be adjusted from time to time to reflect market conditions. In addition, the semiconductor industry has historically experienced rapid changes in technology. To maintain
competitiveness at the same capacity, we are required to make adequate investments in plant and equipment. In addition to our need for liquidity to support the large fixed costs of capacity expansion and the upgrading of our existing plants and
equipment for new technologies, as we ramp up production of new plant capacity, we require significant working capital to support purchases of raw materials for our production and to cover variable operating costs such as salaries until production
yields provide sufficiently positive margins for a fabrication facility to produce operating cash flows.

We incurred capital expenditures
of NT$52,186 million and NT$32,911 million (US$1,103 million) in 2012 and 2013, respectively. Constructing a fab requires a significant amount of funding from financing activities. Once a fab is in operation at acceptable capacity and yield rates,
it can provide significant cash flows.

We have financed our capital expenditure requirements in recent years from operating cash inflows
as well as from bank borrowings, the issuance of bonds and equity-linked securities denominated in NT dollars and U.S. dollars. Cash inflows significantly exceed operating income, reflecting the significant non-cash depreciation expense. We
generated cash flows from operations of NT$40,398 million and NT$43,472 million (US$1,457 million) in 2012 and 2013, respectively.

On
May 24, 2011, we issued US$500 million aggregate principal amount of currency linked zero coupon convertible bonds due 2016. Each bond, at the option of the holder, will be convertible into our ADSs. The proceeds of this offering will be used
for purchasing machinery and equipment. As of December 31, 2012 and 2013, no bonds had been converted into our ADSs, and we have repurchased and cancelled US$5 million and US$71 million principal amount of these bonds in the open market
transactions for the years ended December 31, 2012 and 2013, respectively.

In early June 2012, we issued five-year and seven-year
domestic unsecured corporate bonds totaling NT$10,000 million, with a face value of NT$1 million per unit. The five-year domestic unsecured corporate bond was issued in the amount of NT$7,500 million. Interest will be paid annually at 1.43%, and the
principal will be repayable in June 2017 upon maturity. The seven-year domestic unsecured corporate bond was issued in the amount of NT$2,500 million. Interest will be paid annually at 1.63%, and the principal will be repayable in June 2019 upon
maturity. The proceeds of this offering are used for purchasing machinery and equipment. As of December 31, 2013, NT$10,000 million aggregate principal amount of these bonds were outstanding.

In mid-March 2013, we issued another five-year and seven-year domestic unsecured corporate bonds totaling NT$10,000 million, with a face value
of NT$1 million per unit. The five-year domestic unsecured corporate bond was issued in the amount of NT$7,500 million. Interest will be paid annually at 1.35%, and the principal will be repayable in March 2018 upon maturity. The seven-year domestic
unsecured corporate bond was issued in the amount of NT$2,500 million. Interest will be paid annually at 1.50%, and the principal will be repayable in March 2020 upon maturity. The proceeds of this offering are used for purchasing machinery and
equipment. As of December 31, 2013, NT$10,000 million aggregate principal amount of these bonds were outstanding.

As of
December 31, 2013, we had NT$50,831 million (US$1,704 million) of cash and cash equivalents and NT$633 million (US$21 million) of FVTPL, current. Cash equivalents included time deposits and commercial paper with original maturities of three
months or less and repurchase agreements collateralized by government bonds and corporate bonds. These agreements bore interest rates ranging from 0.46% to 0.60%; and 0.48% to 0.56% in 2012 and 2013, respectively. The terms of these agreements were
typically less than two weeks. As of December 31, 2012 and 2013, we held repurchase agreements in the amount of NT$4,585 million and NT$5,669 million (US$190 million), respectively.

We believe that our working capital, cash inflows from operations and unused lines of credit are sufficient for our present requirements.



52



---

##### Table of Contents

At our 2013 annual general meeting, our stockholders authorized our board of directors to raise
capital from private placement, through issuing instruments such as common shares, depositary receipts (including but not limited to ADS), or Euro/Domestic convertible bonds (including secured or unsecured corporate bonds), based on market
conditions and our needs. The amount of shares issued or convertible is proposed to be no more than 10% of our total shares issued (i.e., no more than 1,295,180,554 shares). According to Item 6, Article 43-6 of the R.O.C. Security and Exchange
Act, any private placement of our shares must be conducted separately within one year after approval at the annual general meeting of stockholders. The approval to conduct a private placement of our shares will expire on June 10, 2014.
Considering market conditions, our board of directors has resolved to terminate any plans for a private placement of our shares under the 2013 general meeting authorization.

Operating Activities

Cash generated by operating activities increased from NT$40,398 million in 2012 to NT$43,472 million (US$1,457 million) in 2013, primarily due
to an increase in cash collected from our customers.

Investing Activities

Net cash used in our investing activities decreased from NT$49,123 million in 2012 to NT$31,516 million (US$1,057 million) in 2013, primarily
because the cash we used to purchase equipment at our fabs decreased from NT$52,186 million in 2012 to NT$32,911 million (US$1,103 million) in 2013, partially offset by the decrease in net cash provided by acquisition and disposal of
available-for-sale financial assets from NT$3,965 million in 2012 to NT$2,232 million (US$75 million) in 2013.

Financing Activities

Net cash used in our financing activities was NT$3,924 million (US$132 million) in 2013, compared to net cash provided by financing
activities of NT$3,588 million in 2012. This was primarily due to increase in the bank loans we drew down from NT$424 million in 2012 to NT$4,684 million (US$157 million) in 2013 and increase in redemption of bonds from NT$139 million in 2012 to
NT$2,153 million (US$72 million) in 2013, as well as our acquisition of treasury stock of NT$2,245 million (US$75 million) in 2013. Such increase in net cash used is partially offset by decrease in cash dividends paid from NT$6,316 million in 2012
to NT$5,061 million (US$170 million) in 2013.

We had NT$4,644 million (US$156 million) outstanding short-term loans as of
December 31, 2013. We had total availability under existing short-term lines of credit of NT$18,587 million (US$623 million) as of December 31, 2013.

We had bonds payable of NT$33,606 million (US$1,127 million) in the aggregate as of December 31, 2013.

As of December 31, 2013, our outstanding long-term debts primarily consisted of NT$503 million (US$17 million) secured long-term bank
loans due in 2014, NT$2,462 million (US$83 million) unsecured and NT$760 million (US$25 million) secured long-term bank loans due in 2015, NT$2,000 million (US$67 million) unsecured and NT$3,114 million (US$104 million) secured long-term bank loans
due in 2016, NT$1,900 million (US$64 million) unsecured and NT$232 million (US$8 million) secured long-term bank loans due in 2017, and NT$300 million (US$10 million) unsecured and NT$87 million (US$3 million) secured long-term bank loans due in
2018. The interest rates of our long-term bank loans range from 1.23% to 2.51%.

As of December 31, 2013, the current portion of
bonds due within one year was NT$13,627 million (US$457 million), and the current portion of long-term bank loans due within one year was NT$2,918 million (US$98 million).



53



---

##### Table of Contents

Capital Expenditures

We have continued to expand our manufacturing capacity, especially our 40 nanometer and 28 nanometer technology processes. As a result, our
capital expenditures have been used for expanding our factory space and purchasing equipment for both research and development and production purposes. We have entered into several construction contracts for the expansion of our factory space in
Taiwan. As of December 31, 2013, these construction contracts amounted to NT$6,038 million (US$202 million) with an unpaid portion of the contracts, which would be accrued, of approximately NT$2,100 million (US$70 million). In 2012 and 2013, we
spent approximately NT$52,186 million and NT$32,911 million (US$1,103 million) respectively, primarily to purchase equipment for research and development and production purposes.

We continue to maintain high levels of capital expenditures as we believe there are promising opportunities for 28-nanometer and 40-nanometer
technologies. We continue to devote most of our capital expenditure to improvement of advanced technology within 12-inch fabs. We will focus on our addressable markets (i.e., 40 & 28-nanometer) and continue to build up our production
capacity. We believe our 28-nanometer technology progress will propel our advanced process growth, strengthen our future competitiveness, and enhance our portfolio of comprehensive foundry solutions available to our customers.

We believe that our existing cash and cash equivalents and short-term investments will be sufficient to meet our working capital and capital
expenditure requirements at least through the end of 2014. Due to rapid changes in technology in the semiconductor industry, however, we have frequent demand for investment in new manufacturing technologies. We cannot assure you that we will be able
to raise additional capital, should that become necessary, on terms acceptable to us, or at all. If financing is not available on terms acceptable to us, management intends to reduce expenditures so as to delay the need for additional financing. To
the extent that we do not generate sufficient cash flows from our operations to meet our cash requirements, we may rely on external borrowings and securities offerings to finance our working capital needs or our future expansion plans. The sale of
additional equity or equity-linked securities may result in additional dilution to our stockholders. Our ability to meet our working capital needs from cash flow from operations will be affected by the demand for our products and change in our
product mix, which in turn may be adversely affected by several factors. Many of these factors are beyond our control, such as economic downturns and declines in the average selling price of our products. The average selling price of our products
have been subjected to downward pressure in the past and are reasonably likely to be subject to further downward pressure in the future. We have not historically relied on, and we do not plan to rely on in the foreseeable future, off-balance sheet
financing arrangements to finance our operations or expansion.

Transactions with Related Parties

Our transactions with related parties have been conducted on arms-length terms. See Item 7. Major Stockholders and Related Party
TransactionsB. Related Party Transactions and Note 7 to our audited consolidated financial statements included in this annual report.

Inflation/Deflation

We do not believe
that inflation in the R.O.C. has had a material impact on our results of operations.



|C. | Research, Development, Patents and Licenses, Etc.
|-- | -------------------------------------------------

The semiconductor industry is
characterized by rapid changes in technology, frequently resulting in obsolescence of process technologies and products. As a result, effective research and development is essential to our success. We invested approximately NT$9,787 million and
NT$12,493 million (US$419 million) in 2012 and 2013, respectively, in research and development, which represented 8.5% and 10.1%, respectively, of net operating revenues for such years. We believe that our continuous spending on research and
development will help us maintain our position as a technological leader in the foundry industry. As of March 31, 2014, we employed 1,469 professionals in our research and development division.



54



---

##### Table of Contents

Our current research and development activities seek to upgrade and integrate manufacturing
technologies and processes, as well as to drive 28 nanometer High-k/metal gate technology in mass production, and to develop 14 nanometer technology including EUV (Extreme Ultraviolet) lithography, and FinFET (Fin Field-Effect Transistor). Although
we emphasize firm-wide participation in the research and development process, we maintain central research and development teams primarily responsible for developing cost-effective technologies that can serve the manufacturing needs of our
customers. Monetary incentives are provided to our employees if projects result in successful patents. We believe we have a strong foundation in research and development and intend to continue our efforts on technology developments. Our top
management believes in the value of continued support of research and development efforts and intends to continue our foundry leadership position by providing customers with comprehensive technology and SoC solutions in the industry.



|D. | Trend Information
|-- | -----------------

Please refer to Item 5. Operating and Financial Review and
ProspectsOverview for a discussion of the most significant recent trends in our production, sales, costs and selling prices. In addition, please refer to discussions included in this Item for a discussion of known trends, uncertainties,
demands, commitments and events that we believe are reasonably likely to have a material effect on our net operating revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial
information not necessarily to be indicative of future operating results or financial condition.



|E. | Off-balance Sheet Arrangements
|-- | ------------------------------

We do not generally provide letters of credit to, or
guarantees for, or engage in any repurchase financing transactions with any entity other than our consolidated subsidiaries. We have, from time to time, entered into foreign currency forward contracts to hedge our existing assets and liabilities
denominated in foreign currencies and identifiable foreign currency purchase commitments. We do not engage in any speculative activities using derivative instruments. See Item 11. Quantitative and Qualitative Disclosure About Market
Risk.



|F. | Tabular Disclosure of Contractual Obligations
|-- | ---------------------------------------------

The following table sets forth our
contractual obligations and commitments with definitive payment terms on a consolidated basis which will require significant cash outlays in the future as of December 31, 2013.



|                                   |  |                        |        |  |                 |  |        |           |  |  |           |  |  |              |        |  |  |  |       | 
|---------------------------------- |  | ---------------------- | ------ |  | --------------- |  | ------ | --------- |  |  | --------- |  |  | ------------ | ------ |  |  |  | ----- | 
|                                   |  | Payments Due by Period |       
|                                   |  | Total                  |        |  | Less than1 Year |  |        | 1-3 Years |  |  | 4-5 Years |  |  | After5-Years |       
|                                   |  | (in NT$ millions)      |       
|Long-term debt(1)                  |  |                        |        |  |                 |  |        |           |  |  |           |  |  |              |        |  |  |  |       | 
|Unsecured bonds                    |  |                        | 33,965 |  |                 |  | 3,709  |           |  |  | 10,256    |  |  |              | 15,000 |  |  |  | 5,000 | 
|Long-term loans                    |  |                        | 11,358 |  |                 |  | 2,918  |           |  |  | 7,369     |  |  |              | 1,071  |  |  |  |      | 
|Operating lease obligations (2)    |  |                        | 3,569  |  |                 |  | 411    |           |  |  | 706       |  |  |              | 497    |  |  |  | 1,955 | 
|Purchase obligations (3)           |  |                        | 174    |  |                 |  | 134    |           |  |  | 40        |  |  |              |       |  |  |  |      | 
|Other long-term obligations (4)    |  |                        | 4,572  |  |                 |  | 4,235  |           |  |  | 296       |  |  |              |       |  |  |  | 41    | 
|                                   |  |                        |        |  |                 |  |        |           |  |  |           |  |  |              |        |  |  |  |       | 
|Total contractual cash obligations |  |                        | 53,638 |  |                 |  | 11,407 |           |  |  | 18,667    |  |  |              | 16,568 |  |  |  | 6,996 | 
|                                   |  |                        |        |  |                 |  |        |           |  |  |           |  |  |              |        |  |  |  |       | 



|(1) | Assuming the exchangeable bonds, convertible bonds and domestic bonds are paid off upon maturity.
|--- | -------------------------------------------------------------------------------------------------

|(2) | Represents our obligations to make lease payments to use machineries, equipment and land on which our fabs are located, primarily in the Hsinchu Science Park and the Tainan Science Park in Taiwan, Pasir Ris Wafer Fab
Park in Singapore.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Represents commitments for purchase of raw materials. These commitments are not recorded on our balance sheet as of December 31, 2013.
|--- | --------------------------------------------------------------------------------------------------------------------------------------

|(4) | Represents intellectual properties and royalties payable under our technology license agreements. The amounts of payments due under these agreements are determined based on fixed contract amounts.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



55



---

##### Table of Contents

|ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------- | ------------------------------------------



|A. | Directors and Senior Management
|-- | -------------------------------

The following table sets forth the name, age, position,
tenure and biography of each of our directors and executives as of March 31, 2014. There is no family relationship among any of these persons.

The business address of our directors and executive officers is the same as our registered address.



|                    |  |     |  |                                                                                             |  |              |    | 
|------------------- |  | --- |  | ------------------------------------------------------------------------------------------- |  | ------------ | -- | 
|Name                |  | Age |  | Position                                                                                    |  | Yearswith Us |   
|Stan Hung           |  | 53  |  | Chairman and Director                                                                       |  |              | 22 | 
|Shih-Wei Sun        |  | 56  |  | Vice-Chairman and Director (Representative of Silicon Integrated Systems Corp.)             |  |              | 19 | 
|Po-Wen Yen          |  | 57  |  | Chief Executive Officer and Director (Representative of Hsun Chieh Investment Co.)          |  |              | 27 | 
|Wen-Yang Chen       |  | 61  |  | Director (Representative of UMC Science and Culture Foundation) and Chief Operating Officer |  |              | 34 | 
|Ting-Yu Lin         |  | 53  |  | Director                                                                                    |  |              | 8  | 
|Paul S.C. Hsu (1)   |  | 78  |  | Independent Director                                                                        |  |              | 10 | 
|Chung-Laung Liu (1) |  | 80  |  | Independent Director                                                                        |  |              | 8  | 
|Chun-Yen Chang (1)  |  | 77  |  | Independent Director                                                                        |  |              | 8  | 
|Cheng-Li Huang (1)  |  | 65  |  | Independent Director                                                                        |  |              | 5  | 
|Chitung Liu         |  | 48  |  | Chief Financial Officer                                                                     |  |              | 13 | 



|(1) | Member of the Audit Committee.
|--- | ------------------------------

Stan Hung is a director and the Chairman of our
company. Mr. Hung was our CFO & Senior Vice President from 2000 to 2007. He was also the Chairman of Epitech Technology Corporation in 2007 and ITE Technology Corporation for a portion of 2008, respectively. Prior to re-joining United
Microelectronics Corporation in 1991, Mr. Hung was a financial manager at Optoelectronics Corporation. He is also the Chairman of Fortune Venture Capital Corporation, TLC Capital Co., Nexpower Technology Corporation, UMC New Business Investment
Corporation, and a Director of Epistar Corporation and Crystalwise Technology Inc. Mr. Hung received a bachelors degree in accounting from Tam Kang University in 1982.

Shih-Wei Sun is a director and the Vice-Chairman of our company. Dr. Sun is a representative of Silicon Integrated Systems Corp.
Dr. Sun joined us in 1995 and has been responsible for the operation of our Fabs 6A, 8A, 8D and 12A, along with Central Research & Development. Prior to joining us, Dr. Sun worked for Motorola in the Advanced Products Research and
Development Laboratory for ten years. Dr. Sun is also the Chairman of UMC Science and Culture Foundation. Dr. Sun holds a Ph.D. degree in electronics materials from Northwestern University in 1986.

Po-Wen Yen is a director of our company and our Chief Executive Officer. Prior to becoming our Chief Executive Officer, Mr. Yen
was our senior vice president responsible for 12-inch operations. Mr. Yen is a representative of Hsun Chieh Investment Co. Mr. Yen joined us in 1986 and was responsible for the operation of Fabs 8A and 8C. He also served as the vice
president for UMC-SG, our 300mm operation in Singapore. He is also a director of Fortune Venture Capital Corporation, TLC Capital Co., and UMC New Business Investment Corporation. In 2003, Mr. Yen received the National Manager Excellence Award
from Chinese Professional Management Association. Mr. Yen earned a bachelors degree in Chemical Engineering from National Tsing Hua University and his masters degree in chemical engineering from National Taiwan University.

Wen-Yang Chen is a director of our company. Mr. Chen is a representative of UMC Science and Culture Foundation. Mr. Chen was
our Chief Operating Officer from 2009 to 2013. Prior to joining us, Mr. Chen worked for companies including Digital Equipment Corporation and Vishay. Mr. Chen joined us in 1980 and was responsible for the operation of our 6A, 8A, 8E, 8D
and 8F Fabs, specializing in development and integration of semiconductor processes and factory management. Mr. Chen is also the Chairman of Wavetek Microelectronics Corporation as well as a director of Fortune Venture Capital Corporation, TLC
Capital Co., UMC New Business Investment Corporation, and a director of UMC Science and Culture Foundation. Mr. Chen received Award of the Excellent Engineers from Chinese Institute of Engineers in 1994 and Manager Excellence Award in 2002.



56



---

##### Table of Contents

Ting-Yu Lin is a director of our company. Mr. Lin is also the chairman of Sunrox
International Inc. Mr. Lin received a masters degree in international finance from Meiji University in 1993.

Paul S.C.
Hsu is an independent director of our company. Professor Hsu is a Chair Professor & University Professor of Yuan-Ze University, Taiwan, the Chairman of Social Ethics Association and the Chairman of Taiwan Institute of Directors.
Professor Hsu is an independent director of Gintech Energy Corporation, a director of Faraday Technology Corporation and Far Eastern Electronic Toll Collection Co, Ltd as well as a supervisor of Far Eastern International Bank. Professor Hsu received
a Ph.D. degree in business administration from the University of Michigan in 1974.

Chung-Laung Liu is an independent director of
our company. Professor Liu is the William M.W. Mong Honorary Chair Professor of National Tsing Hua University, Taiwan. Professor Liu is also the Chairman of TrendForce Corp., a supervisor of MediaTek Incorporation, an independent director of
Richteck Technology Corp., and Powerchip semiconductor Corp., as well as a director of Macronix International Co., Ltd. Professor Liu received a doctorate degree in science from Massachusetts Institute of Technology in 1962.

Chun-Yen Chang is an independent director of our company. Professor Chang is an academician of Academia Sinica and a chair professor
and president of National Chiao Tung University, Taiwan. Professor Chang is also an independent director of BizLink Holding Inc. Professor Chang received a Ph.D. degree in electrical engineering from National Chiao Tung University in 1970.

Cheng-Li Huang is an independent director of our company. Dr. Huang was a professor of Tamkang University and served as its
Comptroller. He was also the chief executive of Tamkang Accounting Education Foundation and the publisher of Journal of Contemporary Accounting. Professor Huang is also a supervisor of Win Semiconductors Corp. Professor Huang received a Ph.D. degree
in accounting from University of Warwick in 1999.

Chitung Liu is the Chief Financial Officer of our company. Prior to joining our
company in 2001, Mr. Liu was a managing director of UBS. Mr. Liu is also a director of Unimicron Corporation, UMC New Business Investment Corporation Fortune Venture Capital Corporation, TLC Capital Co., Ltd. and Nexpower Technology Corp.,
Mr. Liu received an executive MBA degree from National Taiwan University in 2009.



|B. | Compensation
|-- | ------------

The aggregate compensation paid and benefits in kind granted to our
directors in 2013 were approximately NT$15 million. The remuneration was out of our 2013 earnings distribution plan, and the distribution percentage for directors is 0.1%. See Item 10. Additional InformationB. Memorandum and Articles of
AssociationDividends and Distributions. Some of the remuneration was paid to the legal entities that certain directors represent. The aggregate compensation paid and benefits in kind granted to our executive officers in 2013 were
approximately NT$128 million, which include NT$31 million as bonus. Certain of our directors who also served as executive officers held stock options to purchase 8.8 million shares as of March 31, 2014.



|C. | Board Practices
|-- | ---------------

All of our directors were elected in June 2012 for a term of three
years. Neither we nor any of our subsidiaries has entered into a contract with any of our directors by which our directors are expected to receive benefits upon termination of their employment.



57



---

##### Table of Contents

Our board of directors established an audit committee in March 2005. In the annual ordinary
stockholders meeting held on June 13, 2008, we amended our articles of incorporation to introduce the mechanism of an Audit Committee. See Item 10. Additional InformationB. Memorandum and Articles of
AssociationDirectors. After the re-election of directors in the stockholders meeting on June 12, 2012, our board of directors appointed Paul S.C. Hsu, Chung-Laung Liu, Chun-Yen Chang and Cheng-Li Huang to be the members of the
audit committee. Each audit committee member is an independent director who is financially literate with accounting or related financial management expertise. The audit committee meets as often as it deems necessary to carry out its
responsibilities. Pursuant to an audit committee charter, the audit committee has responsibility for, among other things, overseeing the qualifications, independence and performance of our internal audit function and independent auditors, and
overseeing the accounting policies and financial reporting and disclosure practices of our company. The audit committee also has the authority to engage special legal, accounting or other consultants it deems necessary in the performance of its
duties.

Remuneration Committee

The
R.O.C. Securities and Exchange Act, as amended on November 24, 2010, further introduced the mechanism of a Remuneration Committee, which requires all the publicly listed companies in the R.O.C., including our company, to adopt a
remuneration committee. On March 18, 2011, R.O.C. FSC promulgated the Regulations Governing the Establishment and Exercise of Powers by Compensation Committees of Public Companies, according to which, listing companies of our size shall set up
the compensation committee no later than September 30, 2011 and the remuneration committee shall be composed of no less than three members commissioned by the board of directors. In addition, for a company with independent directors, such as
us, at least one of the committee members shall be the independent director of such company. We established a remuneration committee in accordance with Article 14-6 of the R.O.C. Securities and Exchange Act on April 27, 2011. The members of the
remuneration committee are independent directors Chun-Yen Chang, Chung-Laung Liu, Paul S.C. Hsu, and Cheng-Li Huang, with Chun-Yen Chang serving as convener and chairperson. We amended our articles of incorporation to introduce the mechanism of our
remuneration committee in the annual ordinary stockholders meeting held on June 15, 2011.

In November 2003, the Securities and
Exchange Commission approved changes to the NYSEs listing standards related to the corporate governance practices of listed companies. Under these rules, listed foreign private issuers, like us, must disclose any significant ways in which
their corporate governance practices differ from those followed by NYSE-listed U.S. domestic companies under the NYSEs listing standards. A copy of the significant differences between our corporate governance practices and NYSE corporate
governance rules applicable to U.S. companies is available on our website http://www.umc.com/english/investors/Corpgovdifference.asp.



|D. | Employees
|-- | ---------

As of March 31, 2014, we had 17,685 employees, which includes 9,689
engineers, 7,183 technicians and 813 administrative staff performing administrative functions on a consolidated basis. We have in the past implemented, and may in the future evaluate the need to implement, labor redundancy plans based on the work
performance of our employees.



|                     |  |                    |        |  |      |  |        |      |  |  |        | 
|-------------------- |  | ------------------ | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                     |  | As of December 31, |       
|                     |  | 2011(1)            |        |  | 2012 |  |        | 2013 | 
|Employees            |  |                    |        |  |      |  |        |      |  |  |        | 
|Engineers            |  |                    | 7,581  |  |      |  | 8,640  |      |  |  | 9,698  | 
|Technicians          |  |                    | 5,456  |  |      |  | 6,215  |      |  |  | 7,232  | 
|Administrative Staff |  |                    | 462    |  |      |  | 769    |      |  |  | 854    | 
|                     |  |                    |        |  |      |  |        |      |  |  |        | 
|Total                |  |                    | 13,499 |  |      |  | 15,624 |      |  |  | 17,784 | 
|                     |  |                    |        |  |      |  |        |      |  |  |        | 



|(1) | The number of employees in 2011 includes only employees in UMC Taiwan and our Singapore branch.
|--- | -----------------------------------------------------------------------------------------------

Employee salaries are reviewed annually. Salaries are adjusted based on industry standards, inflation and individual performance. As an
incentive, additional bonuses in cash may be paid at the discretion of management based on the performance of individuals. In addition, except under certain circumstances, R.O.C. law requires us to reserve from 10% to 15% of any offerings of our new
shares for employees subscription.



58



---

##### Table of Contents

Our employees participate in our profit distribution pursuant to our articles of incorporation.
Employees are entitled to receive additional bonuses based on a certain percentage of our allocable surplus income. On April 16, 2014, our board of directors proposed an employee bonus in cash in the amount of NT$1,163 million (US$39 million)
in relation to retained earnings in 2013.

Our employees are not covered by any collective bargaining agreements. We believe we have a
good relationship with our employees.



|E. | Share Ownership
|-- | ---------------

As of March 31, 2014, each of our directors and executive officers
held shares and/or ADSs of United Microelectronics, either directly for their own account or indirectly as the representative of another legal entity on our board of directors, except for Chung-Laung Liu, Paul S.C. Hsu, Chun-Yen Chang and Cheng-Li
Huang, our independent directors. As of March 31, 2014, none of our directors or executive officers held, for their own account, 0.1% or more of our outstanding shares. As of April 13, 2014, our most recent record date, Hsun Chieh
Investment Co. held approximately 441 million of our shares, representing approximately 3.48% of our issued shares. Silicon Integrated Systems Corp. held approximately 315 million of our shares, representing approximately 2.48% of our
issued shares. Stan Hung held approximately 14 million of our shares, representing approximately 0.11% of our issued shares. Ting-Yu Lin held approximately 13 million of our shares, representing approximately 0.1% of our issued shares.

We have adopted employee stock option plans in the past, pursuant to which options may be granted to our full-time regular employees,
including those of our domestic and overseas subsidiaries. The exercise price for the options would be the closing price of our common shares on the Taiwan Stock Exchange on the day the options are granted, while the expiration date for such options
is 6 years from the date of its issuance. The 23 million stock options with exercise price of 22.37 that we granted in April 2005, the 54 million stock options with exercise price of 29.47 that we granted in August 2005, the
52 million stock options with exercise price of 26.89 that we granted in September 2005, and the 39 million stock options with exercise price of 23.17 that we granted in January 2006, expired on April 28, 2011, August 15,
2011, September 28, 2011 and January 3, 2012, respectively.

According to our Employee Stock Options Plan, an option holder
may exercise an increasing portion of his or her options starting two years after the grant of the options. According to the vesting schedule, 50%, 75% and 100% of such option holders options shall vest two, three and four years after the
grant of the options, respectively. Upon a voluntary termination or termination in accordance with the R.O.C. Labor Law, the option holder shall exercise his or her vested options within 30 days, subject to exceptions provided therein, and after the
termination otherwise such options shall terminate. If termination was due to death, the heirs of such option holder have one year starting from the date of the death to exercise his or her vested options. If termination was due to retirement or
occupational casualty, the option holder or his or her heirs may exercise all his or her options within a certain period as provided. The options are generally not transferable or pledgeable by the option holders. The total number of shares issuable
upon exercise of option held by our directors and executive officers as of March 31, 2014 was 20.6 million. The units granted to each of our directors and executive officers as a percentage of our total shares as of March 31, 2014 were
less than 1%.



|ITEM 7. | MAJOR STOCKHOLDERS AND RELATED PARTY TRANSACTIONS
|------- | -------------------------------------------------



|A. | Major Stockholders
|-- | ------------------

The following table sets forth information known to us with respect
to the beneficial ownership of our shares as of (i) April 13, 2014, our most recent record date and (ii) as of certain record dates in each of the preceding three years, for (1) the stockholders known by us to beneficially own
more than 2% of our shares and (2) all directors and executive officers as a group. Beneficial ownership is determined in accordance with Securities and Exchange Commission rules.



59



---

##### Table of Contents

|                                            |  |                                       |      |   |                                       |  |      |                                       |  |  |                                   |   |  |  |             | 
|------------------------------------------- |  | ------------------------------------- | ---- | - | ------------------------------------- |  | ---- | ------------------------------------- |  |  | --------------------------------- | - |  |  | ----------- | 
|                                            |  | As of April 14,2012                   |      |   | As of April 13,2013                   |  |      | As of April 13, 2014                  | 
|                                            |  | Percentage ofshares beneficiallyowned |      |   | Percentage ofshares beneficiallyowned |  |      | Percentage ofshares beneficiallyowned |  |  | Number ofshares beneficiallyowned |  
|Name of Beneficial Owner                    |  |                                       |      |   |                                       |  |      |                                       |  |  |                                   |   |  |  |             | 
|Hsun Chieh Investment Co., Ltd. (1)         |  |                                       | 3.4  | % |                                       |  | 3.4  | %                                     |  |  | 3.48                              | % |  |  | 441,371,000 | 
|Silicon Integrated Systems Corp.            |  |                                       | 2.4  | % |                                       |  | 2.4  | %                                     |  |  | 2.48                              | % |  |  | 315,380,242 | 
|Directors and executive officers as a group |  |                                       | 6.26 | % |                                       |  | 6.27 | %                                     |  |  | 6.39                              | % |  |  | 810,469,915 | 



|(1) | 36.5% owned by United Microelectronics Corp. as of March 31, 2014.
|--- | ------------------------------------------------------------------

None of our major
stockholders have different voting rights from those of our other stockholders. To the best of our knowledge, we are not directly or indirectly controlled by another corporation, by any foreign government or by any other natural or legal person
severally or jointly.

For information regarding our shares held or beneficially owned by persons in the United States, see Item 9.
The Offer and ListingA. Offer and Listing DetailsMarket Price Information for Our American Depositary Shares in this annual report.



|B. | Related Party Transactions
|-- | --------------------------

From time to time we have engaged in a variety of
transactions with our affiliates. We generally conduct transactions with our affiliates on an arms-length basis. The sales and purchase prices with related parties are determined through negotiation, generally based on market price.

The following table shows our aggregate ownership interest, on a consolidated basis, in major related fabless design companies that we enter
into transactions from time to time as of December 31, 2013.



|                                 |  |             |       | 
|-------------------------------- |  | ----------- | ----- | 
|Name                             |  | Ownership % |      
|Silicon Integrated Systems Corp. |  |             | 19.70 | 

We provide foundry services to this fabless design company and the sales price was determined on arms
length prices and terms, through mutual agreement based on the market conditions. We derived NT$256 million and NT$156 million (US$5 million) of our net operating revenues in 2012 and 2013, from the provision of our foundry services. For more
information, please refer to Note 7 to our audited consolidated financial statements included in this annual report.



|C. | Interests of Experts and Counsel
|-- | --------------------------------

Not applicable.



|ITEM 8. | FINANCIAL INFORMATION
|------- | ---------------------



|A. | Consolidated Statements and Other Financial Information
|-- | -------------------------------------------------------

Please refer to Item 18
for a list of all financial statements filed as part of this annual report on Form 20-F.

Except as described in Item 4. Information
on the CompanyB. Business OverviewLitigation, we are not currently involved in material litigation or other proceedings that may have, or have had in the recent past, significant effects on our financial position or profitability.



60



---

##### Table of Contents

As for our policy on dividend distributions, see Item 10. Additional InformationB.
Memorandum and Articles of Association Dividends and Distributions. On June 15, 2011, our stockholders approved a cash dividend of NT$1.12 per share for an aggregate of NT$14,033,575,265. On July 8, 2011, our board of directors
resolved to adjust the cash dividend ratio to NT$1.11164840 per share, because the outstanding common shares had increased accordingly as a result of the exercise of employee stock options. On June 12, 2012, our stockholders approved a cash
dividend of NT$0.5 per share for an aggregate of NT$6,316,434,833. On June 20, 2012, our board of directors resolved to adjust the cash dividend ratio to NT$0.49980232 per share, because the outstanding common shares had increased accordingly
as a result of the exercise of employee stock options. On June 11, 2013, our stockholders approved a cash dividend of NT$0.4 per share for an aggregate of NT$5,061,310,216. On June 19, 2013, our board of directors resolved to adjust the
cash dividend ratio to NT$0.40639654 per share because the number of outstanding common shares had changed as a result of the exercise of employee stock options and our repurchase of treasury shares.

In addition, the Board of Directors held on April 16, 2014 resolved a cash distribution of approximate to NT$0.5 per share, among which
approximate to NT$0.49 per share is from additional paid-in capital while the remaining is from earnings.

The following table sets forth
the cash dividends per share and stock dividends per share as a percentage of shares outstanding paid during each of the years indicated in respect of shares outstanding at the end of each such year, except as otherwise noted.



|     |  |                        |             |  |                        |  |            |                                               |  |  |                                       |  |  |  |                | 
|---- |  | ---------------------- | ----------- |  | ---------------------- |  | ---------- | --------------------------------------------- |  |  | ------------------------------------- |  |  |  | -------------- | 
|     |  | Cash Dividendper Share |             |  | StockDividend perShare |  |            | Total Number ofShares Issued asStock Dividend |  |  | Number ofOutstandingShares at YearEnd | 
|     |  | NT$                    |             |  | NT$                    |  |            |                                               |  |  |                                       | 
|1997 |  |                        |            |  |                        |  | 3.0        |                                               |  |  | 868,629,276                           |  |  |  | 4,117,758,265  | 
|1998 |  |                        |            |  |                        |  | 2.9        |                                               |  |  | 1,199,052,940                         |  |  |  | 5,480,221,725  | 
|1999 |  |                        |            |  |                        |  | 1.5        |                                               |  |  | 834,140,790                           |  |  |  | 6,638,054,462  | 
|2000 |  |                        |            |  |                        |  | 2.0        |                                               |  |  | 1,809,853,716                         |  |  |  | 11,439,016,900 | 
|2001 |  |                        |            |  |                        |  | 1.5        |                                               |  |  | 1,715,104,035                         |  |  |  | 13,169,235,416 | 
|2002 |  |                        |            |  |                        |  | 1.5        |                                               |  |  | 1,968,018,212                         |  |  |  | 15,238,578,646 | 
|2003 |  |                        |            |  |                        |  | 0.4        |                                               |  |  | 607,925,145                           |  |  |  | 15,941,901,463 | 
|2004 |  |                        |            |  |                        |  | 0.8        |                                               |  |  | 1,288,558,185                         |  |  |  | 17,550,800,859 | 
|2005 |  |                        | 0.1029      |  |                        |  | 1.029      |                                               |  |  | 1,758,736,435                         |  |  |  | 18,856,632,324 | 
|2006 |  |                        | 0.409141420 |  |                        |  | 0.10228530 |                                               |  |  | 179,031,672                           |  |  |  | 19,131,192,690 | 
|2007 |  |                        | 0.7         |  |                        |  |           |                                               |  |  |                                      |  |  |  | 13,214,494,883 | 
|2008 |  |                        | 0.75        |  |                        |  | 0.45       |                                               |  |  | 562,958,816                           |  |  |  | 12,987,771,315 | 
|2009 |  |                        |            |  |                        |  |           |                                               |  |  |                                      |  |  |  | 12,987,771,315 | 
|2010 |  |                        | 0.5         |  |                        |  |           |                                               |  |  |                                      |  |  |  | 12,987,912,315 | 
|2011 |  |                        | 1.11164840  |  |                        |  |           |                                               |  |  |                                      |  |  |  | 13,084,341,565 | 
|2012 |  |                        | 0.49980232  |  |                        |  |           |                                               |  |  |                                      |  |  |  | 12,951,805,540 | 
|2013 |  |                        | 0.40639654  |  |                        |  |           |                                               |  |  |                                      |  |  |  | 12,694,649,915 | 



|(1) | We declare stock dividends in a NT dollar amount per share, but we pay the stock dividends to our stockholders in the form of shares. The amount of shares distributed to each stockholder is calculated by multiplying the
dividend declared by the number of shares held by the given stockholder, divided by the par value of NT$10 per share. Fractional shares are not issued but are paid in cash.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B. | Significant Changes
|-- | -------------------

For the significant subsequent events following the close of the
last financial year up to the date of this annual report on Form 20-F, please refer to Note 10 to our audited consolidated financial statements included elsewhere in this annual report.



|ITEM 9. | THE OFFER AND LISTING
|------- | ---------------------



|A. | Offer and Listing Details
|-- | -------------------------

Market Price Information for Our Shares

Our shares have been listed on the Taiwan Stock Exchange since July 1985. There is no public market outside Taiwan for our shares. The table
below shows, for the periods indicated, the high and low closing prices and the average daily volume of trading activity on the Taiwan Stock Exchange for our shares. The closing price for our shares on the Taiwan Stock Exchange on April 16,
2014 was NT$12.85 per share.



61



---

##### Table of Contents

|                                  |  |      |       |  |     |  |       |                            |  |  |           | 
|--------------------------------- |  | ---- | ----- |  | --- |  | ----- | -------------------------- |  |  | --------- | 
|                                  |  | High |       |  | Low |  |       | Average DailyTradingVolume | 
|                                  |  | NT$  |       |  | NT$ |  |       | (in thousands
of shares)   | 
|2008                              |  |      | 20.30 |  |     |  | 6.80  |                            |  |  | 37,521.00 | 
|2009                              |  |      | 17.20 |  |     |  | 7.10  |                            |  |  | 85,869.55 | 
|2010                              |  |      | 18.60 |  |     |  | 12.95 |                            |  |  | 53,660.37 | 
|2011                              |  |      | 18.10 |  |     |  | 10.45 |                            |  |  | 44,048.44 | 
|2012                              |  |      | 15.65 |  |     |  | 10.10 |                            |  |  | 39,247.79 | 
|First Quarter                     |  |      | 15.65 |  |     |  | 12.60 |                            |  |  | 43,434.55 | 
|Second Quarter                    |  |      | 15.55 |  |     |  | 11.80 |                            |  |  | 37,797.20 | 
|Third Quarter                     |  |      | 13.40 |  |     |  | 11.65 |                            |  |  | 32,337.63 | 
|Fourth Quarter                    |  |      | 12.10 |  |     |  | 10.10 |                            |  |  | 43,721.73 | 
|2013                              |  |      | 12.40 |  |     |  | 10.90 |                            |  |  | 41,684.47 | 
|First Quarter                     |  |      | 12.40 |  |     |  | 10.90 |                            |  |  | 3,528.18  | 
|Second Quarter                    |  |      | 14.50 |  |     |  | 11.00 |                            |  |  | 82,540.32 | 
|Third Quarter                     |  |      | 15.05 |  |     |  | 11.75 |                            |  |  | 74,070.55 | 
|Fourth Quarter                    |  |      | 13.10 |  |     |  | 11.90 |                            |  |  | 37,050.69 | 
|October                           |  |      | 13.10 |  |     |  | 12.30 |                            |  |  | 54,954.40 | 
|November                          |  |      | 12.45 |  |     |  | 11.90 |                            |  |  | 31,923.71 | 
|December                          |  |      | 12.40 |  |     |  | 12.05 |                            |  |  | 24,040.93 | 
|2014 (through April 16)           |  |      | 13.20 |  |     |  | 12.00 |                            |  |  | 48,958.13 | 
|First Quarter                     |  |      | 13.05 |  |     |  | 12.00 |                            |  |  | 50,562.17 | 
|January                           |  |      | 12.95 |  |     |  | 12.25 |                            |  |  | 58,277.69 | 
|February                          |  |      | 12.35 |  |     |  | 12.00 |                            |  |  | 32,275.08 | 
|March                             |  |      | 13.05 |  |     |  | 12.40 |                            |  |  | 58,495.56 | 
|Second Quarter (through April 16) |  |      | 13.20 |  |     |  | 12.85 |                            |  |  | 40,792.07 | 
|April (through April 16)          |  |      | 13.20 |  |     |  | 12.85 |                            |  |  | 40,792.07 | 



Source:
Taiwan Stock Exchange.

|(1) | Information has been adjusted to give effect to 562,958,816 Shares and 114,616,567 Shares issued as stock dividend and employee bonus, respectively, in August 2008.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

Market Price Information for Our American Depositary Shares

Our ADSs have been listed on the NYSE under the symbol UMC since September 19, 2000. The outstanding ADSs are identified by
the CUSIP number 910873 40 5. The table below shows, for the periods indicated, the high and low closing prices and the average daily volume of trading activity on the NYSE for our ADSs. The closing price for our ADSs on the New York Stock Exchange
on April 16, 2014 was US$2.10 per ADS. Each of our ADSs represents the right to receive five shares.



62



---

##### Table of Contents

|                                  |  |      |      |  |     |  |      |                            |  |  |           | 
|--------------------------------- |  | ---- | ---- |  | --- |  | ---- | -------------------------- |  |  | --------- | 
|                                  |  | High |      |  | Low |  |      | Average DailyTradingVolume | 
|                                  |  | NT$  |      |  | NT$ |  |      | (in thousandsof shares)    | 
|2008                              |  |      | 3.71 |  |     |  | 1.51 |                            |  |  | 5,780,890 | 
|2009                              |  |      | 3.88 |  |     |  | 1.65 |                            |  |  | 5,106,249 | 
|2010                              |  |      | 4.22 |  |     |  | 2.55 |                            |  |  | 3,932,515 | 
|2011                              |  |      | 3.46 |  |     |  | 1.79 |                            |  |  | 3,454,527 | 
|2012                              |  |      | 2.72 |  |     |  | 1.75 |                            |  |  | 2,733,811 | 
|First Quarter                     |  |      | 2.72 |  |     |  | 2.14 |                            |  |  | 3,363,260 | 
|Second Quarter                    |  |      | 2.72 |  |     |  | 1.95 |                            |  |  | 3,401,801 | 
|Third Quarter                     |  |      | 2.24 |  |     |  | 1.98 |                            |  |  | 2,305,720 | 
|Fourth Quarter                    |  |      | 2.10 |  |     |  | 1.75 |                            |  |  | 1,860,593 | 
|2013                              |  |      | 2.15 |  |     |  | 1.77 |                            |  |  | 2,458,650 | 
|First Quarter                     |  |      | 2.15 |  |     |  | 1.80 |                            |  |  | 2,651,914 | 
|Second Quarter                    |  |      | 2.34 |  |     |  | 1.77 |                            |  |  | 2,145,941 | 
|Third Quarter                     |  |      | 2.43 |  |     |  | 1.88 |                            |  |  | 1,638,086 | 
|Fourth Quarter                    |  |      | 2.15 |  |     |  | 1.94 |                            |  |  | 1,064,906 | 
|October                           |  |      | 2.15 |  |     |  | 2.04 |                            |  |  | 1,027,289 | 
|November                          |  |      | 2.03 |  |     |  | 1.94 |                            |  |  | 1,113,917 | 
|December                          |  |      | 2.04 |  |     |  | 1.95 |                            |  |  | 1,059,428 | 
|2014 (through April 16)           |  |      | 2.19 |  |     |  | 1.97 |                            |  |  | 1,067,197 | 
|First Quarter                     |  |      | 2.15 |  |     |  | 1.97 |                            |  |  | 995,294   | 
|January                           |  |      | 2.15 |  |     |  | 2.00 |                            |  |  | 1,331,179 | 
|February                          |  |      | 2.01 |  |     |  | 1.97 |                            |  |  | 667,903   | 
|March                             |  |      | 2.10 |  |     |  | 2.00 |                            |  |  | 995,619   | 
|Second Quarter (through April 16) |  |      | 2.19 |  |     |  | 2.08 |                            |  |  | 1,432,702 | 
|April (through April 16)          |  |      | 2.19 |  |     |  | 2.08 |                            |  |  | 1,432,702 | 



Sources:
Bloomberg

As of March 31, 2014, there were a total of 168,250,585 ADSs listed on the NYSE. With certain limited exceptions, holders
of shares that are not R.O.C. persons are required to hold these shares through a brokerage or custodial account in the R.O.C. As of March 31, 2014, 841,252,925 ordinary shares were registered in the name of a nominee of JPMorgan
Chase & Co., the depositary under the deposit agreement. JPMorgan Chase & Co. has advised us that, as of March 31, 2014, 168,053,261 ADSs representing these 840,266,305 shares were held of record by Cede & Co., and
197,324 ADSs were held by U.S. registered stockholders. We have no further information as to shares held or beneficially owned by U.S. persons.



|B. | Plan of Distribution
|-- | --------------------

Not applicable.



|C. | Markets
|-- | -------

The principal trading markets for our shares are the Taiwan Stock Exchange and
the New York Stock Exchange, on which our shares trade in the form of ADSs.



|D. | Selling Stockholders
|-- | --------------------

Not applicable.



|E. | Dilution
|-- | --------

Not applicable.



|F. | Expenses of the Issue
|-- | ---------------------

Not applicable.



63



---

##### Table of Contents

|ITEM 10. | ADDITIONAL INFORMATION
|-------- | ----------------------



|A. | Share Capital
|-- | -------------

Not applicable.



|B. | Memorandum and Articles of Association
|-- | --------------------------------------

The following statements summarize the material
elements of our capital structure and the more important rights and privileges of stockholders conferred by the R.O.C. law and our articles of incorporation.

Objects and Purpose

The scope of
business of United Microelectronics as set forth in Article 2 of our articles of incorporation, includes (i) integrated circuits; (ii) semiconductor parts and components; (iii) parts and components of microcomputers, microprocessors,
peripheral support and system products; (iv) parts and components of semiconductor memory systems products; (v) semiconductor parts and components for digital transceiver product and system products; (vi) semiconductor parts and
components for telecom system and system products; (vii) testing and packaging of integrated circuits; (viii) mask production; (ix) research and development, design, production, sales, promotion and after-sale services related to our
business; and (x) export/import trade related to our business.

Directors

The R.O.C. Company Act and our articles of incorporation provide that our board of directors is elected by stockholders and is responsible for
the management of our business. As of March 31, 2014, our board of directors consisted of [nine] directors, out of which four are independent directors. In the annual ordinary stockholders meeting held on June 11, 2007, we amended
our articles of incorporation to abolish the managing director mechanism. In the annual ordinary stockholders meeting held on June 13, 2008, we amended our articles of incorporation to introduce the mechanism of an Audit Committee. The
Chairman presides at all meetings of our board of directors, and also has the authority to represent our company. The term of office for our directors is three years, and our directors are elected by our stockholders by means of cumulative voting.
The amendment to our articles of incorporation on June 11, 2007 also adopts a nomination system which provides that holders of one percent or more of the total issued and outstanding shares of our company would be entitled to submit a roster of
candidates to be considered for nomination to our companys board of directors at a stockholders meeting involving the election of directors. Pursuant to the R.O.C. Company Act, a person may serve as our director in his or her personal
capacity or as the representative of another legal entity. A legal entity that owns our shares may be elected as a director, in which case a natural person must be designated to act as the legal entitys representative. A legal entity that is
our stockholder may designate its representative to be elected as our director on its behalf. In the event several representatives are designated by the same legal entity, any or all of them may be elected. A director who serves as the
representative of a legal entity may be removed or replaced at any time at the discretion of such legal entity, and the replacement director may serve the remainder of the term of office of the replaced director. As of March 31, 2014, three of
our nine directors are representatives of other legal entities, as shown in Item 6. Directors, Senior Management and EmployeesA. Directors and Senior Management.

According to the R.O.C. Company Act and the rules promulgated under the R.O.C. Securities and Exchange Act, a director who has a personal
interest in a matter to be discussed at the meeting of the board of directors, the outcome of which may conflict with his interests, shall explain the essential contents of such personal interest in the meeting of the board of directors and then
abstain from joining the discussion and voting on such matter. Our articles of incorporation, as amended on June 13, 2008, provide that our board of directors is authorized, by taking into account of the extent of his/her/its involvement of our
operation activities and the value of his/her/its contribution, to determine the compensation for each director at a comparable rate adopted by other companies of the same industry regardless of the profit received by our company. In addition,
according to our articles of incorporation, we may distribute 0.1% of the balance of our earnings after deduction of payment of all taxes and dues, deduction of any past losses, allocation of 10% of our net income as a legal reserve, and allocation
of special reserve according to applicable laws and regulations or the order of the competent authority, if any, as remuneration to directors. Our articles of incorporation do not impose a mandatory retirement age limit for our directors.
Furthermore, our articles of incorporation do not impose a shareholding qualification for each director, while the laws and regulations require the aggregate shareholding of all directors, excluding independent directors, to meet certain thresholds
considering the paid-in capital and the numbers of the independent directors. According to our current internal Loan Procedures, we shall not extend any loan to our directors.



64



---

##### Table of Contents

In order to strengthen corporate governance of companies in Taiwan, effective from
January 1, 2007, the amended R.O.C. Securities and Exchange Act authorizes the R.O.C. FSC, after considering certain factors, including the scale, shareholding structure and business nature of a public company, to require that a public company,
such as our company, meet certain criteria, including having at least two independent directors but not less than one fifth of the total number of directors.

In addition, pursuant to the amended R.O.C. Securities and Exchange Act, a public company is required to either establish an audit committee,
or R.O.C. Audit Committee, or retain supervisors, provided that the R.O.C. FSC may, after considering the scale and business nature of a public company and other necessary situation, require the company to establish an audit committee in place of
its supervisors. We have amended our articles of incorporation in the annual ordinary stockholders meeting held on June 13, 2008, introducing the mechanism of an R.O.C. Audit Committee. On February 20, 2013, the R.O.C. FSC has ruled
that a public company with certain scale or of certain business nature, including us, shall establish an R.O.C. Audit Committee instead of the supervisors. According to our latest amended articles of incorporation and audit committee charter, our
R.O.C. Audit Committee is composed of all independent directors and performs the power and duties provided by applicable laws and regulations, including without limitation the powers and the duties of supervisors provided under the R.O.C. Company
Act. A company is not allowed to maintain both supervisors and a R.O.C. Audit Committee, so we chose to eliminate our supervisors when we established our R.O.C. Audit Committee in 2009.

According to our current articles of incorporation, we may purchase directors and officers liability insurance for our directors, covering the
liabilities incurred in relation to his/her/its operation of business and legally responsible for.

Shares

As of December 31, 2013, our authorized share capital was NT$260 billion, divided into 26 billion shares, of which 12,694,649,915 shares
were issued and 12,694,649,915 shares were outstanding (including 2,568,250 shares of capital collected in advance). All shares presently issued are fully paid and in registered form, and existing stockholders are not subject to any capital calls.
We had US$358 million convertible bonds outstanding as of March 31, 2014. As of March 31, 2014, we had neither warrant nor option on our shares, except for the options exercisable for 79 million common shares granted to our employees
under our Employee Stock Options Plan discussed below.

Employee Stock Option

According to our Employee Stock Options Plan, options may be granted to our full-time regular employees, including those of our domestic and
overseas subsidiaries. In September 2004, December 2005, October 2007 and May 2009, we obtained approval by relevant R.O.C. authorities to grant up to 150 million, 350 million, 500 million and 500 million stock options,
respectively, to acquire our common shares under our Employee Stock Option Plan. According to the plan, an option holder may exercise an increasing portion of his or her options in time starting two years after the grant of the options. According to
the vesting schedule, 50%, 75% and 100% of such option holders options shall vest two, three and four years after the grant of the options, respectively.



65



---

##### Table of Contents

The table below shows the number of options granted and outstanding and the month in which they
were granted:



|                                                        |  |         |    | 
|------------------------------------------------------- |  | ------- | -- | 
|                                                        |  | January |   
|                                                        |  | 2006    |   
|Number of Options Granted                               |  |         | 39 | 
|Number of Options Outstanding as of March 31, 2014      |  |         | 0  | 
|Shares available to option holders as of March 31, 2014 |  |         | 0  | 



|                                                        |  |         |    |  |            |  |    |              |  |  |          |  |  |  |     | 
|------------------------------------------------------- |  | ------- | -- |  | ---------- |  | -- | ------------ |  |  | -------- |  |  |  | --- | 
|                                                        |  | May2006 |    |  | August2006 |  |    | December2007 |  |  | June2009 | 
|Number of Options Granted                               |  |         | 42 |  |            |  | 28 |              |  |  | 500      |  |  |  | 300 | 
|Number of Options Outstanding as of March 31, 2014      |  |         | 0  |  |            |  | 0  |              |  |  | 0        |  |  |  | 79  | 
|Shares available to option holders as of March 31, 2014 |  |         | 0  |  |            |  | 0  |              |  |  | 0        |  |  |  | 79  | 



|Note: | The employee stock options granted prior to August 7, 2007, the effective date of capital reduction, were adjusted in accordance with capital reduction rate. Each option unit entitles an optionee to subscribe for
about 0.7 share of our common stock. The exercise price of the options was also adjusted according to the capital reduction rate. Each stock option unit granted after August 7, 2007 remains to be subscribed for one share of our common stock.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

New Shares and Preemptive Rights

New shares may only be issued with the prior approval of our board of directors. If our issuance of any new shares will result in any change in
our authorized share capital, we are required under R.O.C. law to amend our articles of incorporation and obtain approval of our stockholders in a stockholders meeting. We must also obtain the approval of, or submit a registration with, the
R.O.C. FSC and the Science Park Administration. According to the R.O.C. Company Act, when a company issues capital stock for cash, 10% to 15% of the issue must be offered to its employees. In addition, if a listed company intends to offer new shares
for cash, at least 10% of the issue must also be offered to the public. This percentage can be increased by a resolution passed at a stockholders meeting, which will reduce the number of new shares in which existing stockholders may have
preemptive rights. Unless the percentage of the shares offered to the public is increased by a resolution, existing stockholders of the company have a preemptive right to acquire the remaining 75% to 80% of the issue in proportion to their existing
shareholdings. According to the Corporate Merger and Acquisition Act of the R.O.C., as effective on February 8, 2002, and amended on May 5, 2004, if new shares issued by our company are solely for the purpose of acquisition, share swap or
spin-off, the above-mentioned restrictions, including the employee stock ownership plan, the preemptive rights of the existing stockholders and the publicity requirement of a listed company, to such issuance of new shares may not be applied.

Stockholders

We only recognize persons
registered in our register as our stockholders. We may set a record date and close our register of stockholders for specified periods to determine which stockholders are entitled to various rights pertaining to our shares.

Transfer of Shares

Under the R.O.C.
Company Act, a public company, such as our company, may issue individual share certificates, one master certificate or no certificate at all, to evidence common shares. Our articles of incorporation, as amended on June 13, 2008, provide that we
may deliver shares in book-entry form instead of by means of issuing physical share certificates. We have issued our shares in uncertificated/scripless form since 2007. Therefore, the transfer of our shares is carried out on the book-entry system.
The settlement of trading of our shares is normally carried out on the book-entry system maintained by the Taiwan Depositary and Clearing Corporation. Transferees must have their names and addresses registered on our register in order to assert
stockholders rights against us. Our stockholders are required to file their respective specimen seals with our share registrar, Horizon Securities Co., Ltd.



66



---

##### Table of Contents

Stockholders Meetings

We are required to hold an annual ordinary stockholders meeting once every calendar year within six months from the end of each fiscal
year. Our board of directors may convene an extraordinary meeting whenever the directors deem necessary, and they must do so if requested in writing by stockholders holding no less than 3% of our paid-in share capital who have held these shares for
more than a year. At least 15 days advance written notice must be given of every extraordinary stockholders meeting and at least 30 days advance written notice must be given of every annual ordinary stockholders meeting.
Unless otherwise required by law or by our articles of incorporation, voting for an ordinary resolution requires an affirmative vote of a simple majority of those present. A distribution of cash dividends would be an example of an ordinary
resolution. The R.O.C. Company Act also provides that in order to approve certain major corporate actions, including any amendment of our articles of incorporation, dissolution, merger or spin-off, entering into, amendment, or termination of any
contract for lease of the companys business in whole, or for entrusted business, or for joint operation with others, on regular basis, the transfer of all or an essential part of the business or assets, accept all of the business or assets of
any other company which would have a significant impact on our operations, removing directors or the distribution of dividend in stock form, a special resolution shall be adopted by the holders of the majority of our shares represented at a
stockholders meeting at which holders of at least two-thirds of our issued and outstanding shares are present. However, in the case of a public company, such as our company, such resolution may be adopted by the holders of at least two-thirds
of the shares represented at a stockholders meeting at which holders of at least a majority of our issued and outstanding shares are present. However, if we are the controlling company and hold no less than 90% of our subordinate
companys outstanding shares, our merger with the subordinate company can be approved by a board resolution adopted by majority consent at a meeting with two-thirds of our directors present without stockholders approval. In addition,
according to the Corporate Merger and Acquisition Act of the R.O.C., if a company intends to transfer all or an essential part of its business or assets to its wholly-owned subsidiary, subject to the qualifications set forth in the said act, such
transaction only needs to be approved by majority board resolution rather than special resolution by the stockholders meeting as required by the R.O.C. Company Act.

Voting Rights

Each common share is
generally entitled to one vote and no voting discount will be applied. However, treasury shares and our common shares held by (i) an entity in which we own more than 50% of the voting shares or paid-in capital, or (ii) a third party in
which we and an entity controlled by us jointly own, directly or indirectly, more than 50% of the voting shares or paid-in capital are not entitled to any vote. Except as otherwise provided by law or our articles of incorporation, a resolution can
be adopted by the holders of a simple majority of the total issued and outstanding shares represented at a stockholders meeting. The quorum for a stockholders meeting to discuss the ordinary resolutions is a majority of the total issued
and outstanding shares. Pursuant to the R.O.C Company Act amended on December 28, 2011, the election of directors by our stockholders shall be conducted by means of cumulative voting rather than other voting mechanisms adopted in our articles
of incorporation. In all other matters, a stockholder must cast all his or her votes in the same manner when voting on any of these matters.

Our stockholders may be represented at an ordinary or extraordinary stockholders meeting by proxy if a valid proxy form is delivered to
us five days before the commencement of the ordinary or extraordinary stockholders meeting, unless such proxy has been revoked no later than two days before the date of the stockholders meeting. Voting rights attached to our shares
exercised by our stockholders proxy are subject to the proxy regulation promulgated by the R.O.C. FSC.

Authorized by latest
amendment of the R.O.C Company Act, the R.O.C. FSC has issued an administrative order on February 20, 2012 to require Taiwan Stock Exchange-listed companies, such as our company, and GreTai Securities Market-listed companies in the R.O.C. with
NT$10 billion or more of paid-in share capital and with 10,000 or more stockholders as of the first date of the close period applicable to the stockholders meeting to adopt an e-voting system for stockholders meeting. The R.O.C. FSC has
issued another administrative order on November 8, 2013 to require more listed companies to adopt an e-voting system for stockholders meeting. According to the new order, the listed companies in the R.O.C. with NT$5 billion or more
paid-in share capital and with 10,000 or more stockholders as of the first date of the close period applicable to the last stockholders meeting shall adopt an e-voting system for stockholders meeting as well. The e-voting system provides
a new platform for stockholders to exercise their voting rights online. As a company that meets the foregoing criteria, we have successfully adopted the e-voting system in the 2012 stockholders meeting and voted by poll on each agenda for
discussion.

Any stockholder who has a personal interest in a matter to be discussed at our stockholders meeting, the outcome of
which may impair our interests, shall not vote or exercise voting rights on behalf of another stockholder on such matter.



67



---

##### Table of Contents

According to the R.O.C. Company Act newly amended on January 4, 2012, a stockholder of a
public company who holds shares for others, such as a depositary, may choose to exercise his/her/its voting power separately. On April 13, 2012, R.O.C. FSC promulgated the Regulations Governing the Split Voting of the Stockholders and
Compliance Matters for Public Companies, the implementation rules of such split voting method, which stipulates that the depository of the overseas depositary receipts may exercise its voting power separately in accordance with the instructions of
the respective holders of the ADS. Notwithstanding the foregoing, before any amendment to the currently effective Deposit Agreement is made, holders of our ADSs generally will not be able to exercise voting rights on the shares underlying their ADSs
on an individual basis.

Dividends and Distributions

We are not allowed under R.O.C. law to pay dividends on our treasury shares. We may distribute dividends on our issued and outstanding shares
if we have earnings. Before distributing a dividend to stockholders, among other things, we must recover any past losses, pay all outstanding taxes and set aside a legal reserve equivalent to 10% of our net income until our legal reserve equals our
paid-in capital, and a special reserve, if any.

At an annual ordinary stockholders meeting, our board of directors submits to the
stockholders for their approval proposals for the distribution of dividends or the making of any other distribution to stockholders from our net income or reserves for the preceding fiscal year. Dividends are paid to stockholders proportionately.
Dividends may be distributed either in cash or in shares or a combination of cash and shares, as determined by the stockholders at such meeting.

Our articles of incorporation provide that we may distribute as remuneration to directors 0.1% of the balance of our earnings deducted by:



| |  |  | payment of all taxes and dues;
| | - |  | ------------------------------



| |  |  | deduction of any past losses;
| | - |  | -----------------------------



| |  |  | allocation of 10% of our net income as a legal reserve; and
| | - |  | -----------------------------------------------------------



| |  |  | special reserve, if any.
| | - |  | ------------------------

The amount of no less than 5% of the residual amount after the
deductions illustrated above, plus, at discretion, any undistributed earnings from previous years, shall be distributed as bonus to employees. Originally, the distribution of employee bonus were in the form of new shares; in the annual ordinary
stockholders meeting held in June 2005, our stockholders approved an amendment of our articles of incorporation to enable the distribution of employee bonus in the form of cash or in shares. Employees eligible for such distribution may include
certain qualified employees from our subordinate companies and the qualification of such employees is to be determined by our board of directors. The remaining amount may be distributed according to the distribution plan proposed by our board of
directors based on our dividend policy, and submitted to the stockholders meeting for approval.

In the annual ordinary
stockholders meeting held in June 2005, our stockholders approved a change of the percentage of stock dividend issued to our stockholders, if any, to no more than 80% and cash dividend, if any, to no less than 20%.

In addition to permitting dividends to be paid out of net income, we are permitted under the R.O.C. Company Act to make distributions to our
stockholders of additional shares by capitalizing reserves, including the legal reserve and capital surplus of premiums from issuing stock and earnings from gifts received, or make such distributions by cash, if we do not have losses. However, where
legal reserve is distributed by capitalization or in cash, only the portion of legal reserve which exceeds 25 percent of the paid-in capital may be distributed.

For information as to R.O.C. taxes on dividends and distributions, see E. R.O.C. Tax Considerations in this Item.



68



---

##### Table of Contents

Acquisition of Our Shares by Us

An R.O.C. company may not acquire its own common shares, except under certain exceptions provided in the R.O.C. Company Act or the R.O.C.
Securities and Exchange Act. Under the amendments to the R.O.C. Company Act, which took effect on November 14, 2001, a company may purchase up to 5% of its issued common shares for transfer to employees in accordance with a resolution of its
board of directors, passed by a majority vote, at a meeting with at least two-thirds of the directors present.

Under Article 28-2, an
amendment to the R.O.C. Securities and Exchange Act, which took effect on July 21, 2000, we may, by a board resolution adopted by majority consent at a meeting with two-thirds or more of our directors present, purchase up to 10% of our issued
shares on the Taiwan Stock Exchange or by a tender offer, in accordance with the procedures prescribed by the R.O.C. FSC, for any of the following purposes:



| |  |  | to transfer shares to our employees;
| | - |  | ------------------------------------



| |  |  | to transfer upon conversion of bonds with warrants, preferred shares with warrants, convertible bonds, convertible preferred shares or certificates of warrants issued by us; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if necessary, to maintain our credit and our stockholders equity; provided that the shares so purchased shall be canceled thereafter.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------

We have from time to time announced plans, none of which was binding on us, to buy back up to a fixed amount of our common shares on the
Taiwan Stock Exchange at the price range set forth in the plans disclosed in Item 16E. Purchase Of Equity Securities By The Issuer And Affiliated Purchasers. We may not spend more than the aggregate amount of the retained earnings,
the premium from issuing stock and the realized portion of the capital reserve to purchase our common shares. Historically, we have cancelled some of the repurchased common shares and transferred some of the repurchased common shares to our
employees. In 2010 and 2013, we purchased an aggregate of 300 million and 200 million, respectively, of our common shares under these plans. From February 3, 2010 to April 2, 2010, we purchased 300 million of our common
shares on the Taiwan Stock Exchange at an average price of NT$16.15 per share to transfer to our employees. From March 15, 2013 to May 6, 2013, we purchased 200 million of our common shares on the Taiwan Stock Exchange at an average
price of NT$11.23 per share to transfer to our employees.

On March 14, 2012, our board of directors approved the cancellation of
157,934,400 treasury shares, which were purchased from December 17, 2008 to February 16, 2009. On April 24, 2013, our board of directors approved the cancellation of 300,000,000 treasury shares, which were purchased from
February 3, 2010 to April 2, 2010.

We may not pledge or hypothecate any purchased shares. In addition, we may not exercise any
stockholders rights attached to such shares. In the event that we purchase our common shares on the Taiwan Stock Exchange, our affiliates, directors, managers and their respective spouses and minor children and/or nominees are prohibited from
selling any of our shares during the period in which we purchase our shares.

In addition to the share purchase restriction, the Company
Act provides that our subsidiaries may not acquire our shares or the shares of our majority-owned subsidiaries if the majority of the outstanding voting shares or paid-in capital of such subsidiary is directly or indirectly held by us.

Liquidation Rights

In a liquidation, you
will be entitled to participate in any surplus assets after payment of all debts, liquidation expenses and taxes proportionately.



69



---

##### Table of Contents

Rights to Bring Stockholders Suits

Under the R.O.C. Company Act, a stockholder may bring suit against us in the following events:



| |  |  | within 30 days from the date on which a stockholders resolution is adopted, a stockholder may file a lawsuit to annul a stockholders resolution if the procedure for convening a stockholders meeting or
the method of resolution violates any law or regulation or our articles of incorporation. However, if the court is of the opinion that such violation is not material and does not affect the result of the resolution, the court may reject the
stockholders claim.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if the substance of a resolution adopted at a stockholders meeting contradicts any applicable law or regulation or our articles of incorporation, a stockholder may bring a suit to determine the validity of such
resolution.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Stockholders may bring suit against our directors under the following circumstances:



| |  |  | Stockholders who have continuously held 3% or more of our issued shares for a period of one year or longer may request in writing that the audit committee institute an action against a director on our behalf. In case
the audit committee fails to institute an action within 30 days after receiving such request, the stockholders may institute an action on our behalf. In the event stockholders institute an action, a court may, upon the defendants motion, order
such stockholders to furnish appropriate security.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Stockholders who hold more than 3% or more of our total issued shares may institute an action with a court to remove a director of ours who has materially violated the applicable laws or our articles of incorporation or
has materially damaged the interests of our company if a resolution for removal on such grounds has first been voted on and rejected by our stockholders and such suit is filed within 30 days of such stockholders vote.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In the event that any director, manager or stockholder holding more than 10% of our shares or any respective spouses or minor children and/or nominees of any of them sells shares within six months after acquisition of
such shares, or repurchases the shares within six months after the sale, we may claim for recovery of any profits realized from the sale and purchase. If our board of directors or audit committee fail to claim for recovery, any stockholder may set
forth a 30-day period for our board of directors or audit committee to exercise the right. In the event our directors or audit committee fail to exercise the right during such 30-day period, such requesting stockholder shall have the right to claim
such recovery on our behalf. Our directors shall be jointly and severally liable for damages suffered by us as a result of their failure to exercise the right of claim.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other Rights of Stockholders

Under the
R.O.C. Company Act and the Corporate Merger and Acquisition Act, dissenting stockholders are entitled to appraisal rights in the event of a spin-off or a merger and various other major corporate actions. Dissenting stockholders may request us to
redeem all their shares at a then fair market price to be determined by mutual agreement. If no agreement can be reached, the valuation will be determined by a court. Subject to applicable law, dissenting stockholders may, among other things,
exercise their appraisal rights by notifying us in writing before the related stockholders meeting and/or by raising and registering their dissent at the stockholders meeting and also waive their voting rights.

One or more stockholders who have held 3% or more of the issued and outstanding shares one year or longer may require our board of directors
to call an extraordinary stockholders meeting by sending a written request to our board of directors.

Effective from June 24,
2005, the R.O.C. Company Law allows stockholder(s) holding 1% or more of the total issued shares of a company to, during the period of ten days or more prescribed by the company, submit one proposal in writing containing no more than three hundred
words (in terms of Chinese characters) for discussion at the annual ordinary stockholders meeting.



70



---

##### Table of Contents

Financial Statements

For a period of at least 10 days before our annual ordinary stockholders meeting, we must make available our annual financial statements
at our principal offices in Hsinchu, Taiwan, and our share registrar in Taipei for our stockholders inspection.

Transfer Restrictions

Our directors, managers and stockholders holding more than 10% of our shares are required to report any changes in their shareholding to us on
a monthly basis. In addition, the number of shares that they can sell or transfer on the Taiwan Stock Exchange on a daily basis is limited by R.O.C. law. Further, they may sell or transfer our shares on the Taiwan Stock Exchange only after reporting
to the R.O.C. FSC at least three days before the transfer, provided that such reporting is not required if the number of shares transferred does not exceed 10,000 in one business day.



|C. | Material Contracts
|-- | ------------------

Cross License Agreement, dated as of January 1, 2006, between United
Microelectronics Corporation and International Business Machine Corporation.

We entered into a five-year cross license agreement with
IBM effective as of January 1, 2006, which provides for the cross license of certain semiconductor patents including process, topography and design. Under this agreement, IBM had granted to us and our subsidiaries, nonexclusive and
non-transferable licenses, without the right to grant sublicenses, for making our and our subsidiaries licensed products in R.O.C., Japan and Singapore and selling, leasing, licensing, using and/or transferring our and our subsidiaries
licensed products worldwide under IBMs patents filed prior to January 1, 2011; we granted IBM, royalty-free, worldwide and non-transferable licenses, without the right to grant sublicenses, for the term of the cross license for making,
selling, leasing, licensing, using and/or transferring IBMs licensed products under our patents filed prior to January 1, 2011. We also agreed to pay IBM certain royalty fees under this agreement. This five-year cross license agreement
with IBM terminated on December 31, 2010. We entered into a new life-of-the-patents cross license agreement with IBM that will be effective until June 30, 2029, the expiration date of the last-to-expire of the licensed patents
thereunder. Under this agreement, IBM has granted to us and our subsidiaries, nonexclusive and non-transferable licenses, without the right to grant sublicenses, for making our and our subsidiaries licensed products in R.O.C., Japan, Singapore
and PRC and selling, leasing, licensing, using and/or transferring our and our subsidiaries licensed products worldwide under IBMs patents filed effectively prior to July 1, 2009; we granted IBM, royalty-free, worldwide and
non-transferable licenses, without the right to grant sublicenses, for the term of the cross license for making, selling, leasing, licensing, using and/or transferring IBMs licensed products under our patents filed effectively prior to
July 1, 2009. We also agreed to pay IBM certain royalty fees under this agreement. In addition, we have renewed the aforesaid patent cross license agreement with IBM on June 13, 2013, under which IBM grants us a license under all its
patents entitling to an effective filing date prior to December 31, 2015.

Technology Agreement, dated as of June 29, 2012, between United
Microelectronics Corporation and International Business Machine Corporation.

We entered into a technology license agreement with
International Business Machine Corporation (IBM) on June 29, 2012. Under this agreement, IBM granted us a perpetual license under its 20nm bulk industry standard CMOS technology and developmental processes associated with
manufacturing integrated circuits using a three dimensional FinFet device technology for using, offering for sale, selling, importing or otherwise transferring our licensed products.

Membership Participation Agreement, dated as of June 13, 2013, between United Microelectronics Corporation and International Business Machine
Corporation.

We entered into a membership participation agreement with IBM to participate in its 10nm CMOS process technology
development project.



71



---

##### Table of Contents

Patent Portfolio License Agreement, dated as of February 8, 2013, between United Microelectronics
Corporation and Mosaid Technologies Incorporated.

We entered into a Patent Portfolio License Agreement with Mosaid Technologies
Incorporated, or Mosaid, effective from February 8, 2013, which provides for the license under its semiconductor manufacturing process patents during the period from February 8, 2013 to February 8, 2018. Under this agreement, Mosaid
grants to us and our subsidiaries, a nonexclusive and non-transferable license for making, selling, importing or otherwise disposing of our and our subsidiaries licensed products. The parties further agree not to assert patent claims against
each other prior to February 8, 2018. We also agree to pay Mosaid certain royalty fees under this agreement.

Major Long-term Supply and Marketing
Agreements

We have entered into long-term distribution, sales, service and marketing agreements with the following companies: UMC
Group (USA), an agreement effective from January 1, 2013 through December 3, 2018; United Microelectronics (Europe) B.V., an agreement effective from January 1, 2013 through December 3, 2017; UMC Group Japan Co., Ltd., an
agreement effective from February 8, 2013 through December 31, 2017.

Major Construction Agreements

We entered into various major facility construction agreements with companies such as Excel Air Condition Co., Ltd. and Gwo Jieh Fire
Protection Co., Ltd. for the phase 5 facilities in our Fab12A in the Tainan Science Park. These agreements are effective from April 1, 2013 to April 1, 2015, and the total contractual amount exceeds NT$0.14 billion.

Major Long-term Loan Agreements

We
entered into a long-term secured loan agreement effective from November 28, 2008 through November 28, 2018 with the Bank of Taiwan for up to NT$4.8 billion. We pledged the equipment at our semiconductor facilities in Tainan Science Park as
collateral. On April 1, 2013, we repaid the loan in full and the loan agreement expired accordingly.

We also entered into a
long-term secured loan agreement effective from January 30, 2013 through January 30, 2020 with the Land Bank of Taiwan for up to NT$6 billion. We pledged the equipment at our semiconductor facilities in Tainan Science Park as collateral.



|D. | Exchange Controls
|-- | -----------------

Foreign Investment and Exchange Controls in Taiwan

We have extracted from publicly available documents the information presented in this section. Please note that citizens of the
Peoples Republic of China and entities organized in the Peoples Republic of China are subject to special R.O.C. laws, rules and regulations, which are not discussed in this section.

General

Historically, foreign
investments in the securities market of Taiwan were restricted. However, commencing in 1983, the Taiwan government has from time to time enacted legislation and adopted regulations to make foreign investment in the Taiwan securities market possible.
Initially, only overseas investment trust funds of authorized securities investment trust enterprises established in Taiwan were permitted to invest in the Taiwan securities market. Since January 1, 1991, qualified foreign institutional
investors are allowed to make investments in the Taiwan public securities market. Since March 1, 1996, non-resident foreign institutional and individual investors, called general foreign investors, are permitted to make direct
investments in the Taiwan public securities market. On September 30, 2003, the Executive Yuan amended the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals, or the Investment Regulations, under which the
Qualified Foreign Institutional Investors, or QFII, designations have been abolished and the restrictions on foreign portfolio investors have been revised. According to the Investment Regulations, Foreign Institutional
Investor, or FINI, means an entity which is incorporated under the laws of countries other than the R.O.C. or the branch of a foreign entity that is established within the territory of the R.O.C., and Foreign Individual Investor,
or FIDI, means an overseas Chinese or a foreign natural person. In addition, the Investment Regulations also lifted some restrictions and simplified procedures of investment application.



72



---

##### Table of Contents

On April 30, 2009, the R.O.C. FSC promulgated regulations allowing QDIIs under PRC
regulations and certain other PRC persons to invest in the securities of R.O.C. companies. However, prior approval from the Investment Commission of the R.O.C. Ministry of Economic Affairs is required for QDIIs or certain other PRC persons to own
10% or more of the issued and outstanding shares of a listed R.O.C. company.

Foreign Ownership Limitations

Foreign ownership of the issued share capital in a Taiwan Stock Exchange-listed company or a GreTai Securities Market-listed company has been
limited to 50% in the past. Since December 30, 2000, the 50% limit has been lifted. Foreign investors can now hold such investments without any foreign ownership percentage limitations, unless the law has imposed restrictions otherwise.

Foreign Investors

Each FINI who wishes
to invest directly in the R.O.C. securities market is required to register with the Taiwan Stock Exchange and obtain an investment identification number if the FINI is a non-resident and has no sub-investment accounts in the R.O.C. Except for some
restrictions imposed by specific laws and regulations, the individual and aggregate foreign ownership of the issued share capital in a Taiwan Stock Exchange-listed company or a GreTai Securities Market-listed company is not restricted. An R.O.C.
custodian for a non-resident FINI or FIDI is required to submit to the CBC, and the Taiwan Stock Exchange a report of trading activities, inward and outward remittance of capital and status of assets under custody and other matters every month.
Foreign institutional investors are not subject to any ceiling for investment in the R.O.C. securities market.

Each FIDI who wishes to
invest directly in the R.O.C. securities market is also required to register with the Taiwan Stock Exchange and obtain an investment identification number. The R.O.C. FSC has lifted the limitation on the amount of investment in the R.O.C. securities
market for a non-resident FIDI.

Foreign Investment Approval

Foreign investors (both institutional and individual) who wish to make direct investments in the shares of R.O.C. companies are required to
submit a foreign investment approval application to the Investment Commission of the R.O.C. MOEA, or other government authority and enjoy benefits granted under the Statute for Foreigners Investment and the Statute for Overseas
Chineses Investment. The Investment Commission of the R.O.C. MOEA or other government authority reviews each foreign investment approval application and approves or disapproves the application after consultation with other governmental
agencies, if necessary. Any non-R.O.C. person possessing a foreign investment approval may repatriate annual net profits and interests attributable to an approved investment. Investment capital and capital gains attributable to the investment may be
repatriated with approval of the Investment Commission of the R.O.C. MOEA or other government authority.

In addition to the general
restrictions against direct investments by foreign investors in R.O.C. companies, foreign investors are currently prohibited from investing in certain prohibited industries in Taiwan under the Negative List. The prohibition on direct
foreign investment in the prohibited industries in the Negative List is absolute in the absence of a specific exemption from the application of the Negative List. Under the Negative List, some other industries are restricted so that foreign
investors may directly invest only up to a specified level and with the specific approval of the relevant authority responsible for enforcing the legislation that the Negative List is intended to implement. Our business does not operate in a
restricted industry under the Negative List.



73



---

##### Table of Contents

In June of 2009, the R.O.C. MOEA further allowed PRC persons to make direct investments in
Taiwan. However, such direct investment is still subject to various restrictions, such as that that only the industries listed in the Positive List, as promulgated by the Executive Yuan, are legally permitted targets and that all the PRC persons who
wish to make direct investments in R.O.C. are required to submit an investment approval application to the Investment Commission of the R.O.C. MOEA.

Exchange Controls

Taiwans Foreign
Exchange Control Statute and regulations provide that all foreign exchange transactions must be executed by banks designated to handle foreign exchange transactions by the Ministry of Finance and the CBC. Current regulations favor trade-related
foreign exchange transactions. Consequently, foreign currency earned from exports of merchandise and services may now be retained and used freely by exporters. All foreign currency needed for the importation of merchandise and services may be
purchased from the designated foreign exchange banks.

Aside from trade-related foreign exchange transactions, R.O.C. companies and
residents may remit to and from Taiwan foreign currencies of up to US$50 million (or its equivalent) and US$5 million, (or its equivalent) respectively in each calendar year. These limits apply to remittances involving a conversion between NT
dollars and U.S. dollars or other foreign currencies. A requirement is also imposed on all private enterprises to register all medium- and long-term foreign debt with the CBC.

In addition, foreign currency earned from or needed to be paid for direct investment or portfolio investments, which are approved by the
competent authorities, may be retained or sold by the investors or purchased freely from the designated bank.

Aside from the transactions
discussed above, a foreign person without an alien resident card (or who has relevant resident card with a validity of less than one year) or an unrecognized foreign entity may remit to and from Taiwan foreign currencies of up to US$100,000 per
remittance without obtaining prior approval or permit if required documentation is provided to Taiwan authorities. This limit applies to remittances involving a conversion between NT dollars and U.S. dollars or other foreign currencies.

Depositary Receipts

In April 1992, the
R.O.C. SFB (the predecessor of the R.O.C. FSC) began allowing R.O.C. companies listed on the Taiwan Stock Exchange to sponsor the issuance and sale of depositary receipts evidencing depositary shares. Notifications for these issuances are still
required. In December 1994, the Ministry of Finance began allowing companies whose shares are traded on the GreTai Securities Market to sponsor the issuance and sale of depositary receipts evidencing depositary shares. On October 24, 2002, the
R.O.C. SFB began allowing public companies that are not listed on the Taiwan Stock Exchange or the GreTai Securities Market to sponsor the issuance and sale of depositary receipts by way of private placements outside the R.O.C.

A holder of depositary shares wishing to withdraw common shares underlying depositary shares is required to appoint a local agent or
representative with qualifications set forth by the R.O.C. FSC to, among other things, open a securities trading account with a local brokerage firm, pay R.O.C. taxes, remit funds, and exercise stockholders right. In addition, the withdrawing
holder is also required to appoint a custodian bank or a securities firm with qualifications set forth by the R.O.C. FSC to hold payments and the securities in safekeeping, make confirmations, settle trades and report all relevant information in
which the securities firm is appointed as the custodian, and the payments be held in safekeeping in a special account opened in a bank approved by the R.O.C. FSC. Without making this appointment and the opening of accounts, the withdrawing holder
would be unable to subsequently sell the common shares withdrawn from a depositary receipt facility on either the Taiwan Stock Exchange or the GreTai Securities Market.

After the issuance of a depositary share, a holder of the depositary share may immediately, comparing to a three-month waiting period
restriction which was lifted in 2003, request the depositary issuing the depositary share to cause the underlying common shares to be sold in the R.O.C. or to withdraw the common shares represented by the depositary receipt and deliver the common
shares to the holder. On April 30, 2009 and July 3, 2009, the R.O.C. Executive Yuan approved the Regulations Governing Securities Investment and Futures Trading in Taiwan by Mainland Area Investors and the Regulations Governing Investment
in Taiwan by Mainland Area Persons, respectively, under which qualified PRC persons are permitted to invest in Taiwan companies under limited circumstances, including purchase of the depositary receipts issued by a Taiwan company. However, prior
approval from the Investment Commission of the R.O.C. Ministry of Economic Affairs is required for a qualified PRC persons ownership of 10% or more of the issued and outstanding shares of a listed R.O.C. company or certain other manners of
investment by a qualified PRC person.



74



---

##### Table of Contents

No deposits of shares may be made in a depositary receipt facility and no depositary receipts may
be issued against deposits without specific R.O.C. FSC approval, unless they are:



| | (1) | stock dividends;
| | --- | ----------------



| | (2) | free distributions of common shares;
| | --- | ------------------------------------



| | (3) | due to the exercise by a holder of his or her preemptive rights in the event of capital increases for cash; or
| | --- | --------------------------------------------------------------------------------------------------------------



| | (4) | permitted under the deposit agreement and the custody agreement, due to the direct purchase of shares or purchase through the depositary in the domestic market or the surrender of shares under the possession of
investors and then delivery of such shares to the custodian for deposit in the depositary receipt facility, provided that the total number of depositary receipts outstanding after an issuance cannot exceed the number of issued depositary shares
previously approved by the R.O.C. FSC in connection with the offering plus any depositary shares issued pursuant to the events described in (1), (2) and (3) above. These issuances may only be made to the extent previously issued depositary
shares have been withdrawn.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A depositary may convert New Taiwan dollars from the proceeds of the sale of common shares or
cash distributions received into other currencies, including U.S. dollars. A depositary may be required to obtain foreign exchange approval from the CBC on a payment-by-payment basis for conversion into New Taiwan dollars of subscription payments
for rights offerings or conversion into foreign currencies from the proceeds from the sale of subscription rights for new common shares. It is expected that the CBC will grant this approval as a routine matter.

A holder of depositary shares may convert NT dollars into other currencies from proceeds from the sale of any underlying common shares.
Proceeds from the sale of the underlying common shares withdrawn from the depositary receipt facility may be used for reinvestment in securities listed on both the Taiwan Stock Exchange and the GreTai Securities Market, provided that the investor
designates a local securities firm or financial institution as agent to open an NT dollar bank account in advance.



|E. | Taxation
|-- | --------

R.O.C. Tax Considerations

The following summarizes the principal R.O.C. tax consequences of owning and disposing of the ADSs or shares to a holder of ADSs or shares that
is not a resident of the R.O.C. An individual holder will be considered as not a resident of the R.O.C. for the purposes of this section if he or she is not physically present in Taiwan for 183 days or more during any calendar year, except if the
individual holder has both R.O.C. and non-R.O.C. nationalities and has a registered address in the R.O.C. An entity holder will be considered as not a resident of the R.O.C. if it is organized under the laws of a jurisdiction other than Taiwan and
has no fixed place of business or other permanent establishment or business agent in the R.O.C. Prospective purchasers of ADSs or shares should consult their own tax advisors concerning the tax consequences of owning ADSs or shares in the R.O.C. and
any other relevant taxing jurisdiction to which they are subject.



75



---

##### Table of Contents

Dividends

Dividends, whether in cash or shares, declared by us out of retained earnings and paid out to a holder that is not an R.O.C. resident in
respect of shares represented by ADSs are subject to R.O.C. withholding tax at the time of distribution. The rate of withholding for non-resident individuals and non-resident entities is currently 20% of the amount of the distribution in the case of
cash dividends or of the par value of the shares distributed in the case of stock dividends. Under current practice adopted by tax authorities, a 20% withholding rate is applied to a non-resident ADS holder without requiring the holder to apply for
or obtain foreign investment approval. As discussed in the section Tax Reform below, certain of our retained earnings will be subject to a 10% undistributed retained earnings tax. To the extent dividends are paid out of retained
earnings that have been subject to the retained earnings tax, the amount of such tax will be used by us to offset a non-residents withholding tax liability on such dividend. Consequently, the effective rate of withholding on dividends paid out
of retained earnings previously subject to the retained earnings tax may be less than 20%. There is no withholding tax with respect to stock dividends declared out of our capital reserve.

Capital Gains

According to the R.O.C. Income Tax Act as amended on July 10, 2013, starting from January 1, 2013, any capital gain generated from
the sale of securities by any individual shall be subject to capital gain tax. The capital gain generated from sale of shares listed on the Taiwan Stock Exchange, Gre-Tai Securities Market or Emerging Stock Market shall be deemed zero except for the
following situations, in which the capital gain shall be the net capital gain (after deduction of any losses incurred by the seller from trading of shares within the year) calculated in accordance with the applicable formula as provided under the
tax relevant laws and rules: if the seller is an individual who (i) sells more than 100,000 shares on the Emerging Stock Market within a year; (ii) sells shares, which had been obtained before the initial public offering of such shares
(IPO), on the Taiwan Stock Exchange or Gre-Tai Securities Market (unless such IPO is completed before December 31, 2012 or the shares were acquired (x) during the pre-IPO underwriting process and (y) in the volume of no
more than 10,000 shares); or (iii) is a non-R.O.C. resident.

The capital gains are taxed at a flat rate of 15% and only half of the
capital gains are subject to income tax if the shares so sold have been held for one year or longer. For disposal of shares obtained before the IPO, if the individual holder continuously holds such shares for at least three (3) years after IPO,
only one-fourth (1/4) of the amount of actual capital gain generated from the sale of shares (after deduction of any losses incurred by the seller from trading of shares within the year) is subject to 15% income tax.

Further, effective from January 1, 2015, if an R.O.C. resident sells shares listed on the Taiwan Stock Exchange, GreTai Securities Market
or Emerging Stock Market for more than NT$1 billion within a year, 0.5% of the amount in excess of NT$1 billion shall be deemed the capital gain and shall be subject to the capital tax at the rate of 20%; provided, however, that such R.O.C. resident
may choose to calculate the net capital gain in accordance with the applicable formula and have such gain be taxed as provided in the preceding two paragraphs.

It is unclear whether a non-ROC resident holder of ADSs will be considered to be the ultimate holder and seller for the purpose of calculation
and application of capital gain tax when the holder of ADSs withdraw the ADSs and request the depositary to sell the underlying common shares in the R.O.C. [Note: MOF so far has yet issued any ruling in this regard. However, in the absence of
the explicit exemption and referring to the current ruling with respect to the collective account for the foreign employees, we are unable to rule out this possibility.]

Subject to the Alternative Minimum Tax Act, gains realized from various securities transactions by an R.O.C.-resident entity shall be
calculated as taxable income for the purpose of the Statute and may further be subject to income tax. If the above entity has held shares for more than three (3) years, 50% of capital gain may be exempted from AMT. In addition, transfers of
ADSs by non-R.O.C. resident holders are not regarded as sales of R.O.C. securities and, as a result, any gains derived therefrom are currently not subject to R.O.C. income tax.



76



---

##### Table of Contents

Securities Transaction Tax

The R.O.C. government imposes a securities transaction tax that will apply to sales of shares, but not to sales of ADSs. The securities
transaction tax, which is payable by the seller, is generally levied on sales of shares at the rate of 0.3% of the sales proceeds. Withdrawals of our shares from our depositary facility are not subject to the R.O.C. securities transaction tax.

Preemptive Rights

Distribution of statutory preemptive rights for shares in compliance with the R.O.C. Company Act is not subject to R.O.C. tax. Proceeds derived
from sales of statutory preemptive rights evidenced by securities by a non-resident holder may be subject to the R.O.C. securities transaction tax, currently at the rate of 0.3% of the gross amount received. Proceeds derived from sales of statutory
preemptive rights that are not evidenced by securities are subject to capital gains tax at the rate of 20% of the gains realized for non-R.O.C. entity holders and non-R.O.C. individual holders. Subject to compliance with the R.O.C. law, we have sole
discretion to determine whether statutory preemptive rights are evidenced by securities or not.

Estate Taxation and Gift Tax

R.O.C. estate tax is payable on any property within the R.O.C. of a deceased individual who is a non-resident individual and R.O.C.
gift tax is payable on any property located within the R.O.C. donated by any such person. Under the newly amended Articles 13 and 19 of the R.O.C. Estate and Gift Tax Act, which became effective on January 23, 2009, estate tax is currently
payable at the rate of 10% and gift tax is payable at the rate of 10%. Under R.O.C. estate and gift tax laws, the shares will be deemed located in the R.O.C. irrespective of the location of the owner. It is unclear whether a holder of ADSs will be
considered to own shares for this purpose.

Tax Treaties

The Republic of China does not have an income tax treaty with the United States. On the other hand, the Republic of China has income tax
treaties with Indonesia, Singapore, South Africa, Australia, Vietnam, New Zealand, Malaysia, Macedonia, Swaziland, the Netherlands, the United Kingdom, Gambia, Senegal, Sweden, Belgium, Denmark, Israel, Paraguay, Hungary, France, India, Slovakia,
Switzerland, Germany and Thailand which may limit the rate of Republic of China withholding tax on dividends paid with respect to common shares in Taiwan companies. It is unclear whether a non-R.O.C. holder of ADSs will be considered to own shares
for the purposes of such treaties. Accordingly, a holder of ADSs who is otherwise entitled to the benefit of a treaty should consult its own tax advisors concerning eligibility for benefits under the treaty with respect to the ADSs.

Tax Reform

In order
to increase Taiwans competitiveness, an amendment to the R.O.C. Income Tax law was enacted on January 1, 1998, to integrate the corporate income tax and the stockholder dividend tax with the aim of eliminating the double taxation effect
for resident stockholders of Taiwanese corporations.

Under this amendment, a 10% retained earnings tax will be imposed on a company for
its after-tax earnings generated after January 1, 1998 that are not distributed in the following year. The retained earnings tax so paid will further reduce the retained earnings available for future distribution. When the company declares
dividends out of those retained earnings, up to a maximum amount of 10% of the declared dividends will be credited against the 20% withholding tax imposed on the non-resident holders of its shares.

U.S. Federal Income Tax Considerations for U.S. Persons

The following is a summary of certain U.S. federal income tax consequences for beneficial owners of our shares or ADSs, that hold the shares or
ADSs as capital assets and that are U.S. holders that are not citizens of the R.O.C., do not have a permanent establishment in the R.O.C. and are not physically present in the R.O.C. for 183 days or more within a calendar year. You are a U.S. holder
if you are, for U.S. federal income tax purposes, any of the following:



77



---

##### Table of Contents

| |  |  | an individual citizen or resident of the United States;
| | - |  | -------------------------------------------------------



| |  |  | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an estate the income of which is subject to U.S. federal income taxation regardless of its source;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | a trust that is subject to the primary supervision of a court within the United States and that has one or more U.S. persons with the authority to control all substantial decisions of the trust; or
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a trust that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
| | - |  | ----------------------------------------------------------------------------------------------------------------------

This summary is based on the provisions of the Internal Revenue Code of 1986, as amended, or the Code, and regulations, rulings and judicial
decisions thereunder as of the date hereof, and such authorities may be replaced, revoked or modified so as to result in U.S. federal income tax consequences different from those discussed below. It is for general purposes only and you should not
consider it to be tax advice. In addition, it is based in part on representations by the depositary and assumes that each obligation under the deposit agreement and any related agreement will be performed in accordance with its terms. This summary
does not represent a detailed description of all the U.S. federal income tax consequences to you in light of your particular circumstances and does not address the effects of any state, local or non-U.S. tax laws (or other U.S. federal tax
consequences, such as U.S. federal estate or gift tax consequences). In addition, it does not represent a detailed description of the U.S. federal income tax consequences applicable to you if you are subject to special treatment under the U.S.
federal income tax laws, including if you are:



| |  |  | a dealer in securities or currencies;
| | - |  | -------------------------------------



| |  |  | a trader in securities if you elect to use a mark-to-market method of accounting for your securities holdings;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | a financial institution or an insurance company;
| | - |  | ------------------------------------------------



| |  |  | a tax-exempt organization;
| | - |  | --------------------------



| |  |  | a regulated investment company;
| | - |  | -------------------------------



| |  |  | a real estate investment trust;
| | - |  | -------------------------------



| |  |  | a person liable for alternative minimum tax;
| | - |  | --------------------------------------------



| |  |  | a person holding shares or ADSs as part of a hedging, integrated or conversion transaction, constructive sale or straddle;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | a partnership or other pass-through entity for U.S. federal income tax purposes;
| | - |  | --------------------------------------------------------------------------------



| |  |  | a person owning, actually or constructively, 10% or more of our voting stock; or
| | - |  | --------------------------------------------------------------------------------



| |  |  | a U.S. holder whose functional currency is not the U.S. dollar.
| | - |  | -----------------------------------------------------------------

We cannot assure
you that a later change in law will not alter significantly the tax considerations that we describe in this summary.



78



---

##### Table of Contents

If a partnership holds our shares or ADSs, the tax treatment of a partner will generally depend
upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our shares or ADSs, you should consult your tax advisor.

You should consult your own tax advisor concerning the particular U.S. federal income tax consequences to you of the ownership and
disposition of the shares or ADSs, as well as the consequences to you arising under the laws of any other taxing jurisdiction.

In
general, for U.S. federal income tax purposes, a U.S. person who is the beneficial owner of an ADS will be treated as the owner of the shares underlying its ADS. Accordingly, deposits or withdrawals of shares by U.S. holders for ADSs generally will
not be subject to U.S. federal income tax.

Taxation of Dividends

Except as discussed below with respect to the passive foreign investment company rules, the amount of distributions (including net amounts
withheld in respect of R.O.C. withholding taxes) you receive on your shares or ADSs (other than certain pro rata distributions of shares to all stockholders) will generally be treated as dividend income to you if the distributions are made from our
current and accumulated earnings and profits as calculated according to U.S. federal income tax principles. In determining the net amounts withheld in respect of R.O.C. taxes, any reduction in the amount withheld on account of an R.O.C. credit in
respect of the 10% retained earnings tax imposed on us is not considered a withholding tax and will not be treated as distributed to you or creditable by you against your U.S. federal income tax. Such income (including withheld taxes) will be
includible in your gross income as ordinary income on the day you actually or constructively receive it, which in the case of an ADS will be the date actually or constructively received by the depositary. The amount of any distribution of property
other than cash will be the fair market value of such property on the date it is distributed. You will not be entitled to claim a dividend received deduction with respect to distributions you receive from us.

With respect to non-corporate U.S. holders, certain dividends received from a qualified foreign corporation may be subject to reduced rates of
taxation. A foreign corporation is treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares (or ADSs backed by such shares) that are readily tradable on an established securities market in the United
States. U.S. Treasury Department guidance indicates that our ADSs (which are listed on the NYSE), but not our shares, are readily tradable on an established securities market in the United States. Thus, we do not believe that dividends we pay on our
shares that are not backed by ADSs currently meet the conditions required for these reduced tax rates. Moreover, there can be no assurance that our ADSs will continue to be readily tradable on an established securities market in later years.
Non-corporate U.S. holders that do not meet a minimum holding period requirement during which they are not protected from the risk of loss or that elect to treat the dividend income as investment income pursuant to Section 163(d)
(4) of the Code will not be eligible for the reduced rates of taxation regardless of our status as a qualified foreign corporation. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make
related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. Non-corporate U.S. holders will also not be eligible for the reduced rates of
taxation on dividends if we are a passive foreign investment company in the taxable year in which such dividends are paid or in the preceding taxable year. Holders should consult their own tax advisors regarding the application of these rules given
their particular circumstances.

The amount of any dividend paid in NT dollars will equal the U.S. dollar value of the NT dollars you
receive (calculated by reference to the exchange rate in effect on the date you actually or constructively receive the dividend, which in the case of an ADS will be the date actually or constructively received by the depositary), regardless of
whether the NT dollars are actually converted into U.S. dollars. If the NT dollars received as a dividend are converted into U.S. dollars on the date they are actually or constructively received, you generally will not be required to recognize
foreign currency gain or loss with respect of the dividend income. If the NT dollars received as a dividend are not converted into U.S. dollars on the date of receipt, you will have a basis in the NT dollars equal to their U.S. dollar value on the
date of receipt. Any gain or loss you realize if you subsequently sell or otherwise dispose of the NT dollars will be ordinary income or loss from sources within the United States for foreign tax credit limitation purposes.



79



---

##### Table of Contents

Subject to certain limitations under the Code, you may be entitled to a credit or deduction
against your U.S. federal income taxes for the net amount of any R.O.C. taxes that are withheld from dividend distributions made to you. The election to receive a credit or deduction must be made annually, and applies to all foreign taxes for the
applicable tax year. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends we pay with respect to shares or ADS will generally be considered passive
category income from sources outside the United States. Furthermore, you will not be allowed a foreign tax credit for foreign taxes imposed on dividends paid on shares or ADSs if you (1) have held the shares or ADSs for less than a specified
minimum period during which you are not protected from risk of loss, or (2) are obligated to make payments related to the dividends. The rules governing the foreign tax credit are complex. We therefore urge you to consult your tax advisors
regarding the availability of the foreign tax credit under your particular circumstances.

To the extent that the amount of any
distribution you receive exceeds our current and accumulated earnings and profits for a taxable year, as determined under U.S. federal income tax principles, the distribution will first be treated as a tax-free return of capital, causing a reduction
in your adjusted basis in the shares or ADSs and thereby increasing the amount of gain, or decreasing the amount of loss, you will recognize on a subsequent disposition of the shares or ADSs. The balance in excess of adjusted basis, if any, will be
taxable to you as capital gain recognized on a sale or exchange. However, we do not expect to keep earnings and profits in accordance with U.S. federal income tax principles. Therefore, you should expect that a distribution will generally be treated
as a dividend (as discussed above).

It is possible that pro rata distributions of shares or ADSs to all stockholders may be made in a
manner that is not subject to U.S. federal income tax. In the event that such distributions are tax-free, the basis of any new shares or ADSs so received will generally be determined by allocating the U.S. holders basis in the old shares or
ADSs between the old shares or ADSs and the new shares or ADSs, based on their relative fair market values on the date of distribution. For U.S. tax purposes, any such tax-free share or ADS distribution generally would not result in foreign source
income to you. Consequently, you may not be able to use the foreign tax credit associated with any R.O.C. withholding tax imposed on such distributions unless you can use the credit against U.S. tax due on other foreign source income in the
appropriate category for foreign tax credit purposes. You should consult your own tax advisors regarding all aspects of the foreign tax credit.

Taxation of Capital Gains

Except
as discussed below with respect to the passive foreign investment company rules, when you sell or otherwise dispose of your shares or ADSs, you will generally recognize capital gain or loss in an amount equal to the difference between the U.S.
dollar value of the amount realized for the shares or ADSs and your basis in the shares or ADSs, determined in U.S. dollars. If you are an individual or other non-corporate holder, and the shares or ADSs being sold or otherwise disposed of are
capital assets that you have held for more than one year, your gain recognized will be eligible for reduced rates of taxation. Your ability to deduct capital losses is subject to limitations. Any gain or loss you recognize will generally be treated
as U.S. source gain or loss. Consequently, you may not be able to use the foreign tax credit arising from any R.O.C. tax imposed on the disposition of shares or ADSs unless such credit can be applied (subject to applicable limitations) against tax
due on other income treated as derived from foreign sources.

If you pay any R.O.C. securities transaction tax, such tax is not treated as
an income tax for U.S. federal income tax purposes, and therefore will not be a creditable foreign tax for U.S. federal income tax purposes. However, subject to limitations under the Code, such tax may be deductible. You are urged to consult your
tax advisors regarding the U.S. federal income tax consequences of these taxes.

Passive Foreign Investment Company

Based on the current and projected composition of our income and valuation of our assets, including goodwill, we do not believe that we are
currently (or that we were in 2013) a passive foreign investment company, or PFIC, and we do not expect to become one in the future, although there can be no assurance in this regard.



80



---

##### Table of Contents

In general, a company is considered a PFIC for any taxable year if either:



| |  |  | at least 75% of its gross income is passive income, which generally includes income derived from certain dividends, interest, royalties and rents (other than royalties and rents derived in the active conduct of a trade
or business and not derived from a related person), annuities or property transactions; or
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | at least 50% of the value of its assets is attributable to assets that produce or are held for the production of passive income.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

The 50% of value test is based on the average of the value of our assets for each quarter during the taxable year. If we own at least 25% by
value of another companys stock, we will be treated, for purposes of the PFIC rules, as owning our proportionate share of the assets and receiving our proportionate share of the income of that company.

In addition, the determination of whether we are a PFIC is made annually. Accordingly, it is possible that we may become a PFIC in the current
or any future taxable year due to changes in our asset or income composition. Because we have valued our goodwill based on the market value of our shares, a decrease in the price of our shares may also result in our becoming a PFIC. If we are a PFIC
for any taxable year during which you hold shares or ADSs, you will be subject to special tax rules discussed below.

If we are a PFIC for
any taxable year during which you hold shares or ADSs, you will be subject to special tax rules with respect to any excess distribution that you receive and any gain you realize from a sale or other disposition (including a pledge) of
shares or ADSs. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for shares or ADSs will be treated
as excess distributions. Under these special tax rules:



| |  |  | the excess distribution or gain will be allocated ratably over your holding period for shares or ADSs;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax
attributable to each such year.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If you hold shares or ADSs in any year in which we are a PFIC, you are required to file
Internal Revenue Service Form 8621.

If we are a PFIC for any taxable year and any of our non-U.S. subsidiaries is also a PFIC, a U.S.
Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. You are urged to consult your tax advisors about the application of the PFIC rules to any of our
subsidiaries.

Under certain circumstances, a U.S. holder, in lieu of being subject to the excess distribution rules discussed above, may
make an election to include gain on the stock of a PFIC as ordinary income under a mark-to-market method provided that such stock is regularly traded on a qualified exchange. Under this method, any difference between the stocks fair market
value and its adjusted basis at the end of the year is accounted for by either an inclusion in income or, subject to limitations, a deduction from income, as described below. Under current U.S. Treasury Department guidance, the mark-to-market
election may be available to holders of ADSs because the ADSs are listed on the NYSE, which constitutes a qualified exchange, although there can be no assurance that the ADSs will be regularly traded for purposes of the mark-to-market
election. You should also note that only the ADSs and not the shares are listed on the NYSE. Our shares are listed on the Taiwan Stock Exchange, which must meet certain trading, listing, financial disclosure and other requirements to be treated as a
qualified exchange under applicable U.S. Treasury regulations for purposes of the mark-to-market election, and no assurance can be given that the shares will be regularly traded for purposes of the mark-to-market election.



81



---

##### Table of Contents

If you make an effective mark-to-market election, you will include in income each year that we
are a PFIC as ordinary income the excess of the fair market value of your shares or ADSs at the end of the year over your adjusted tax basis in the shares or ADSs. You will be entitled to deduct as an ordinary loss each year the excess of your
adjusted tax basis in the shares or ADSs over their fair market value at the end of the year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. If you make an effective mark-to-market
election, in each year that we are a PFIC any gain you recognize upon the sale or other disposition of your shares or ADSs will be treated as ordinary income and any loss will be treated as ordinary loss, but only to the extent of the net amount of
previously included income as a result of the mark-to-market election.

Your adjusted tax basis in shares or ADSs will be increased by the
amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules. If you make a mark-to-market election it will be effective for the taxable year for which the election is made and all subsequent taxable
years unless the shares or ADSs are no longer regularly traded on a qualified exchange or the Internal Revenue Service consents to the revocation of the election. You should consult your tax advisors about the availability of the mark-to-market
election, and whether making the election would be advisable under your particular circumstances.

Alternatively, a U.S. holder of shares
or ADSs in a PFIC can sometimes avoid the rules described above by electing to treat the PFIC as a qualified electing fund under Section 1295 of the Code. This option is not available to you because we do not intend to comply with
the requirements necessary to permit you to make this election.

Non-corporate U.S. holders will not be eligible for reduced rates of
taxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year. You should consult your own tax advisors concerning the U.S. federal income tax consequences of
holding shares or ADSs if we are considered a PFIC in any taxable year.

Information Reporting and Backup Withholding

In general, unless you are an exempt recipient such as a corporation, information reporting will apply to dividends in respect of the shares or
ADSs and to the proceeds from the sale, exchange or redemption of your shares or ADSs that are paid to you within the United States (and in some cases, outside of the United States). Additionally, if you fail to provide your taxpayer identification
number, or fail either to report in full dividend and interest income or to make the necessary certifications of other exempt status, you may be subject to backup withholding.

Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax
liability, provided you furnish the required information to the Internal Revenue Service.



|F. | Dividends and Paying Agents
|-- | ---------------------------

Not applicable.



|G. | Statement by Experts
|-- | --------------------

Not applicable.



|H. | Documents on Display
|-- | --------------------

We have filed this annual report on Form 20-F, including exhibits,
with the Securities and Exchange Commission. As allowed by the Securities and Exchange Commission, in Item 19 of this annual report, we incorporate by reference certain information we filed with the Securities and Exchange Commission. This
means that we can disclose important information to you by referring you to another document filed separately with the Securities and Exchange Commission. The information incorporated by reference is considered to be part of this annual report.



82



---

##### Table of Contents

You may read and copy this annual report, including the exhibits incorporated by reference in
this annual report, at the Securities and Exchange Commissions Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and at the Securities and Exchange Commissions regional offices in New York, New York and Chicago,
Illinois. You can also request copies of this annual report, including the exhibits incorporated by reference in this annual report, upon payment of a duplicating fee, by writing information on the operation of the Securities and Exchange
Commissions Public Reference Room.

The Securities and Exchange Commission also maintains a website at www.sec.gov that contains
reports, proxy statements and other information regarding registrants that file electronically with the Securities and Exchange Commission. Our annual report and some of the other information submitted by us to the Securities and Exchange Commission
may be accessed through this web site.



|I. | Subsidiary Information
|-- | ----------------------

Not applicable.



|ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------

Market risk is the risk of
loss related to adverse changes in market prices, including interest rates and foreign exchange rates, of financial instruments. We are exposed to various types of market risks, including changes in interest rates and foreign currency exchange
rates, in the normal course of business.

We use financial instruments, including variable rate debt and swaps and foreign exchange spot
transactions, to manage risks associated with our interest rate and foreign currency exposures through a controlled program of risk management in accordance with established policies. These policies are reviewed and approved by our board of
directors and stockholders meeting. Our treasury operations are subject to internal audit on a regular basis. We do not hold or issue derivative financial instruments for speculatively purposes.

Since export sales are primarily conducted in U.S. dollars, we had U.S. dollar-denominated accounts receivable of US$548 million as of
December 31, 2013. As of the same date, we also had Japanese Yen-denominated accounts receivable of ¥1,744 million attributable to our Japanese operations and Euro-denominated accounts receivable of 1 million attributable to
our Europe operations. We had U.S. dollar- and Japanese Yen-denominated accounts payables of US$163 million and ¥1,285 million, respectively, as of December 31, 2013.

Our primary market risk exposures relate to interest rate movements on borrowings and exchange rate movements on foreign currency-denominated
accounts receivable, capital expenditures relating to equipment used in manufacturing processes (including photo etching and chemical vapor deposition) and purchased primarily from Japan and the United States.

The following table provides information as of December 31, 2013 on our market risk sensitive financial instruments.



|                                      |  |                         |        |  |            |  |        | 
|------------------------------------- |  | ----------------------- | ------ |  | ---------- |  | ------ | 
|                                      |  | As of December 31, 2013 |       
|                                      |  | Book Value              |        |  | Fair Value | 
|                                      |  | (in NT$ millions)       |       
|Time Deposits: Non-Trading Purpose    |  |                         | 38,260 |  |            |  | 38,260 | 
|Short-term Loans: Non-Trading Purpose |  |                         | 4,644  |  |            |  | 4,644  | 
|Bonds: Non-Trading Purpose            |  |                         | 33,606 |  |            |  | 33,415 | 
|Long-term Loans: Non-Trading Purpose  |  |                         | 11,354 |  |            |  | 11,354 | 

Interest Rate Risk

Our major market risk exposure is changing interest rates. Our exposure to market risk for changes in interest rates relates primarily to our
long-term debt obligations. We primarily enter into debt obligations to support general corporate purposes including capital expenditures and working capital needs.



83



---

##### Table of Contents

The tables below provide information of UMC as of December 31, 2013 about our financial
instruments that are sensitive to changes in interest rates, including debt obligations and certain assets. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. The
information is presented in the currencies in which the instruments are denominated.



|                                 |  |                                                |       |   |          |  |       |      |  |  |       |   |  |            |       |   |       |  |       |            |  |  |       |   |  |  |       |  
|-------------------------------- |  | ---------------------------------------------- | ----- | - | -------- |  | ----- | ---- |  |  | ----- | - |  | ---------- | ----- | - | ----- |  | ----- | ---------- |  |  | ----- | - |  |  | ----- | -
|                                 |  | Expected Maturity DatesAs of December 31, 2013 |       |   | 2018 and |  |       |      |  |  |       |  
|                                 |  | 2014                                           |       |   | 2015     |  |       | 2016 |  |  | 2017  |   |  | thereunder |       |   | Total |  |       | Fair Value | 
|                                 |  | (in millions, except percentages)              |      
|Time Deposits:                   |  |                                                |       |   |          |  |       |      |  |  |       |   |  |            |       |   |       |  |       |            |  |  |       |   |  |  |       |  
|Fixed Rate (US$)                 |  |                                                | 569   |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 569   |   |  |  | 569   |  
|Average Interest Rate            |  |                                                | 0.54  | % |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 0.54  | % |  |  | 0.54  | %
|Fixed Rate (¥ JPY)               |  |                                                | 2,000 |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 2,000 |   |  |  | 2,000 |  
|Average Interest Rate            |  |                                                | 0.175 | % |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 0.175 | % |  |  | 0.175 | %
|Fixed Rate ()                   |  |                                                | 10    |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 10    |   |  |  | 10    |  
|Average Interest Rate            |  |                                                | 0.34  | % |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 0.34  | % |  |  | 0.34  | %
|Fixed Rate (¥ CNH)               |  |                                                | 52    |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 52    |   |  |  | 52    |  
|Average Interest Rate            |  |                                                | 2.51  | % |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 2.51  | % |  |  | 2.51  | %
|Fixed Rate (NT$)                 |  |                                                | 9,900 |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 9,900 |   |  |  | 9,900 |  
|Average Interest Rate            |  |                                                | 0.68  | % |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 0.68  | % |  |  | 0.68  | %
|Short-term Loans:                |  |                                                |       |   |          |  |       |      |  |  |       |   |  |            |       |   |       |  |       |            |  |  |       |   |  |  |       |  
|Variable Rate (US$)              |  |                                                | 80    |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 80    |   |  |  | 80    |  
|Average Interest Rate            |  |                                                | 0.64  | % |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 0.64  | % |  |  | 0.64  | %
|Unsecured Long-term Loans:       |  |                                                |       |   |          |  |       |      |  |  |       |   |  |            |       |   |       |  |       |            |  |  |       |   |  |  |       |  
|Variable Rate (NT$)              |  |                                                | 1,231 |   |          |  | 1,422 |      |  |  | 3,015 |   |  |            | 902   |   |       |  | 92    |            |  |  | 6,662 |   |  |  | 6,662 |  
|Average Interest Rate            |  |                                                | 1.343 | % |          |  | 1.343 | %    |  |  | 1.343 | % |  |            | 1.343 | % |       |  | 1.343 | %          |  |  | 1.343 | % |  |  | 1.343 | %
|Secured Long-term Loans:         |  |                                                |       |   |          |  |       |      |  |  |       |   |  |            |       |   |       |  |       |            |  |  |       |   |  |  |       |  
|Variable Rate (NT$)              |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  |      |   |  |  |      |  
|Average Interest Rate            |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  |      |   |  |  |      |  
|Bonds:                           |  |                                                |       |   |          |  |       |      |  |  |       |   |  |            |       |   |       |  |       |            |  |  |       |   |  |  |       |  
|Unsecured (NT$)                  |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            | 7,500 |   |       |  |      |            |  |  | 7,500 |   |  |  | 7,544 |  
|Fixed Rate                       |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            | 1.43  | % |       |  |      |            |  |  | 1.43  | % |  |  | 1.43  | %
|Unsecured (NT$)                  |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  | 2,500 |            |  |  | 2,500 |   |  |  | 2,498 |  
|Fixed Rate                       |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  | 1.63  | %          |  |  | 1.63  | % |  |  | 1.63  | %
|Unsecured (NT$)                  |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  | 7,500 |            |  |  | 7,500 |   |  |  | 7,513 |  
|Fixed Rate                       |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  | 1.35  | %          |  |  | 1.35  | % |  |  | 1.35  | %
|Unsecured (NT$)                  |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  | 2,500 |            |  |  | 2,500 |   |  |  | 2,498 |  
|Fixed Rate                       |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  | 1.50  | %          |  |  | 1.50  | % |  |  | 1.50  | %
|Unsecured (US$)                  |  |                                                | 124   |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 124   |   |  |  | 122   |  
|Fixed Rate                       |  |                                                | 0     | % |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 0     | % |  |  | 0     | %
|Unsecured (US$)                  |  |                                                | 357   |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 357   |   |  |  | 348   |  
|Fixed Rate                       |  |                                                | 0     | % |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  | 0     | % |  |  | 0     | %
|Interest Rate Derivatives        |  |                                                |       |   |          |  |       |      |  |  |       |   |  |            |       |   |       |  |       |            |  |  |       |   |  |  |       |  
|Interest Rate Swaps:             |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  |      |   |  |  |      |  
|Variable to Fixed (denomination) |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  |      |   |  |  |      |  
|Average pay rate                 |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  |      |   |  |  |      |  
|Average receive rate             |  |                                                |      |   |          |  |      |      |  |  |      |   |  |            |      |   |       |  |      |            |  |  |      |   |  |  |      |  

Foreign Currency Risk

Although the majority of our transactions are in NT dollars, some transactions are based in other currencies. The primary currencies to which
we are exposed are the U.S. dollar and the Japanese Yen. We have in the past, and may in the future, enter into short-term, foreign currency forward contracts to hedge the impact of foreign currency fluctuations on certain underlying assets,
liabilities, and firm commitments for operating expenses and capital expenditures denominated in U.S. dollars and other foreign currencies. The purpose of entering into these hedges is to minimize the impact of foreign currency fluctuations on the
results of operations. We use the policy of natural hedging to reduce our foreign exchange exposure arising out of changes in the rates of exchange among the Japanese Yen, the U.S. dollar and other foreign currencies. As a general matter, our
natural hedging strategy relies on matching revenues and costs for the same currency or offsetting losses in one currency with gains in another.



84



---

##### Table of Contents

|ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|-------- | ------------------------------------------------------



|A. | Debt Securities
|-- | ---------------

Not applicable.



|B. | Warrants and Rights
|-- | -------------------

Not applicable.



|C. | Other Securities
|-- | ----------------

Not applicable.



|D. | American Depositary Shares
|-- | --------------------------

Depositary Fees and Charges

Under the terms of the deposit agreement for our ADSs, an ADS holder may have to pay the following service fees to the depositary:



|                                                                                                  |  |                               
|------------------------------------------------------------------------------------------------- |  | ------------------------------
|Service                                                                                           |  | Fees                          
|Issuance of ADSs                                                                                  |  | Up to US$0.05 per ADS issued  
|Cancellation of ADSs                                                                              |  | Up to US$0.05 per ADS canceled
|Distribution of cash dividends or other cash distributions                                        |  | Up to US$0.05 per ADS held    
|Distribution of ADSs pursuant to stock dividends, free stock distributions or exercises of rights |  | Up to US$0.05 per ADS held    
|Distribution of securities other than ADSs or rights to purchase additional ADSs                  |  | Up to US$0.05 per ADS held    

In addition, an ADS holder shall be responsible for the following charges:



| |  |  | taxes (including applicable interest and penalties) and other governmental charges;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | such registration fees as may from time to time be in effect for the registration of common shares or other deposited securities on the share register and applicable to transfers of common shares or other deposited
securities to or from the name of the custodian, the depositary or any nominees upon the making of deposits and withdrawals, respectively;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the deposit agreement to be at the expense of ADS holders and beneficial owners of ADSs;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the expenses and charges incurred by the depositary in the conversion of foreign currency;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | such fees and expenses as are incurred by the depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to common shares, deposited securities, ADSs and
ADRs;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the fees and expenses incurred by the depositary, the custodian or any nominee in connection with the servicing or delivery of deposited securities; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary by the brokers (on behalf of their clients) receiving the newly-issued ADSs from the depositary and by the brokers
(on behalf of their clients) delivering the ADSs to the depositary for cancellation. The brokers in turn charge these transaction fees to their clients.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



85



---

##### Table of Contents

Depositary fees payable in connection with distributions of cash or securities to ADS holders and
the depositary services fee are charged by the depositary to the holders of record of ADSs as of the applicable ADS record date. The depositary fees payable for cash distributions are generally deducted from the cash being distributed. In the case
of distributions other than cash (i.e., stock dividends, rights offerings), the depositary charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor
(whether certificated or un-certificated in direct registration), the depositary sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts via the central clearing and settlement system,
The Depository Trust Company, or DTC, the depositary generally collects its fees through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts.
The brokers and custodians who hold their clients ADSs in DTC accounts in turn charge their clients accounts the amount of the fees paid to the depositary.

In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested service
until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder.

The fees
and charges ADS holders may be required to pay may vary over time and may be changed by us and by the depositary. ADS holders will receive prior notice of such changes.

Depositary Payments

In 2013, we received
the following payments from JPMorgan Chase & Co., the depositary for our ADR program through December 31, 2013.



|                                                                                                   |  |                 
|-------------------------------------------------------------------------------------------------- |  | ----------------
|Service                                                                                            |  | Fees            
|Reimbursement of listing fees                                                                      |  |                
|Reimbursement of U.S. SEC filing fees                                                              |  |                
|Reimbursement of accounting supporting fees for FASB and Public Company Accounting Oversight Board |  |                
|Reimbursement of annual ordinary stockholders meeting expenses                                    |  |                
|Reimbursement of fees in connection with annual financial and Sarbanes-Oxley Act of 2002 audit     |  | US$ 1,146,348.00
|Contribution to our companys investor relations efforts                                           |  | US$ 2,240.00    
|Others                                                                                             |  | US$ 105,489.26  
|Total                                                                                              |  | US$ 1,254,077.26

PART II



|ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|-------- | -----------------------------------------------

None of these events occurred in any of
2011, 2012 and 2013.



|ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|-------- | ----------------------------------------------------------------------------

None.



|ITEM 15. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Disclosure Controls and Procedures

As of December 31, 2013, an evaluation has been carried out under the supervision and with the participation of our management, including
our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as
amended. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2013.



86



---

##### Table of Contents

Managements Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in
Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, for our company. A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements in accordance with International Financial Reporting Standards as issued by International Accounting Standards Board.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our managements assessment of and conclusion on the effectiveness of internal controls over financial reporting did not include the
internal controls of Best Elite International Limited, which was acquired on February 1, 2013 and included in our 2013 consolidated financial statements. Best Elite International Limited constituted 6.94% and 8.79% of our total and net assets,
respectively, as of December 31, 2013 and 5.36% and 8.33% of our revenues and net income, respectively, for the year then ended.

As
required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules as promulgated by the Securities and Exchange Commission, our management assessed the effectiveness of our internal control over financial reporting as of
December 31, 2013 using the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework), or the COSO criteria. Based on this assessment, our
management concluded that our internal control over financial reporting was effective as of December 31, 2013 based on the COSO criteria. Our independent registered public accounting firm, Ernst & Young has issued an attestation report
with unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2013, which is included immediately following this report.



87



---

##### Table of Contents

Attestation Report of the Independent Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of United Microelectronics Corporation:

We have audited United Microelectronics Corporation and subsidiaries (the Company) internal control over financial reporting as of
December 31, 2013, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). The Companys management is
responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Managements Annual Report on Internal
Control over Financial Reporting. Our responsibility is to express an opinion on the Companys internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.

A companys internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys
internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

In our opinion, United Microelectronics Corporation and subsidiaries maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria.

We also have audited, in
accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of United Microelectronics Corporation and subsidiaries as of January 1, 2012, December 31, 2012 and
December 31, 2013, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2012 and 2013 of United Microelectronics Corporation and subsidiaries and our report dated
April 18, 2014 expressed an unqualified opinion thereon.

Ernst & Young

Taipei, Taiwan

Republic of China

April 18, 2014



88



---

##### Table of Contents

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2013 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In 2013, we adopted
IFRSs for the first time to prepare our financial statements, and retrospectively adjusted our financial statements for the year ended December 31, 2012. We updated relevant controls in its financial statement process and reserves evaluation
process to ensure the effectiveness of internal control over financial reporting. We have performed appropriate tests to ensure the effectiveness of internal control over financial reporting, and did not find any significant issue.



|ITEM 16. | 
|-------- | 



|ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT
|--------- | --------------------------------

Our board of directors has determined that Paul S.C.
Hsu and Cheng-Li Huang, two of our independent directors, qualify as audit committee financial experts as defined in Item 16A of Form 20-F and are independent in accordance with the applicable requirements of Rule 10A-3 of the Securities
Exchange Act of 1934 requirement.

The U.S. Securities and Exchange Commission has indicated that the designation of Mr. Hsu and
Mr. Huang as the audit committee financial experts does not: (i) make Mr. Hsu or Mr. Huang an expert for any purpose, including without limitation for purposes of Section 11 of the Securities Act of 1933, as
amended, as a result of this designation; (ii) impose any duties, obligations or liability on Mr. Hsu or Mr. Huang that are greater than those imposed on him as a member of the audit committee and our board of directors in the absence
of such designation; or (iii) affect the duties, obligations or liability of any other member of the audit committee or our board of directors.



|ITEM 16B. | CODE OF ETHICS
|--------- | --------------

We amended the Code of Ethics for Directors and Officers in June 2009,
and the Employee Code of Conduct in October 2011. The Employee Code of Conduct, which is applicable to all employees, replaced the code of ethics filed with the Securities and Exchange Commission in our 2003 annual report on Form 20-F. We have also
created a separate code of ethics applicable to our directors and officers. A copy of each of the Code of Ethics for Directors and Officers and the Employee Code of Conduct are displayed on our website at http://www.umc.com/english/pdf/Code of
Ethics.pdf and http://www.umc.com/english/pdf/Code of Conduct.pdf, respectively. Stockholders may request a hard copy of the Code of Ethics for Directors and Officers and the Employee Code of Conduct free of charge. Please contact the investor
relations department of our company at ir@umc.com.



|ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|--------- | --------------------------------------

The following table sets forth the aggregate
fees by categories specified below in connection with certain professional services rendered by Ernst & Young, our principal external auditors, for the years indicated.



|                       |  |                          |        |  |      |  |        |     |  |  |       | 
|---------------------- |  | ------------------------ | ------ |  | ---- |  | ------ | --- |  |  | ----- | 
|                       |  | Years ended December 31, |       
|                       |  | 2012                     |        |  | 2013 | 
|                       |  | NT$                      |        |  | NT$  |  |        | US$ | 
|                       |  | (in thousands)           |       
|Audit Fees (1)         |  |                          | 70,942 |  |      |  | 61,276 |     |  |  | 2,054 | 
|Audit-related Fees (2) |  |                          | 2,032  |  |      |  | 1,658  |     |  |  | 56    | 
|Tax Fees (3)           |  |                          | 8,189  |  |      |  | 3,105  |     |  |  | 104   | 
|All Other Fees (4)     |  |                          | 5,810  |  |      |  |       |     |  |  |      | 
|                       |  |                          |        |  |      |  |        |     |  |  |       | 
|Total                  |  |                          | 86,973 |  |      |  | 66,039 |     |  |  | 2,214 | 
|                       |  |                          |        |  |      |  |        |     |  |  |       | 



|(1) | Audit fees consist of fees associated with the annual audit, review of our quarterly financial statements, statutory audits and internal control review. They also include fees billed for those services that are normally
provided by the independent accountants in connection with statutory and regulatory filings.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Audit-related fees consist of fees billed for assurance and services related to the performance of the audit or review of our financial statements but not described in footnote (1) above. These services include
review of regulatory checklist for the adoption of our employee stock option plan, certification of our Singapore Branch to Singapore authorities and application for corporation registration.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Tax fees include fees billed for professional services rendered by Ernst & Young, primarily in connection with our tax compliance activities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------

|(4) | All other fees consist of professional services rendered by Ernst & Young for IFRSs adoption.
|--- | ---------------------------------------------------------------------------------------------



89



---

##### Table of Contents

All audit and non-audit services performed by Ernst & Young were pre-approved by our
audit committee. In certain circumstances, the audit committee delegates to one designated member to pre-approve such audit and non-audit services. Pre-approval by a designated member should be reported to the audit committee at its upcoming
meeting.



|ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|--------- | ----------------------------------------------------------

None.



|ITEM 16E. | PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|--------- | ---------------------------------------------------------------------

Since March 2004,
we have from time to time announced plans, which were not binding on us, to buy back our shares up to a certain amount on the Taiwan Stock Exchange. Set for below contains certain information regarding our share buyback programs in 2013.



|                                 |  |                                       |             |  |                                         |  |       |                                                                                   |  |  |                                                                          |  |  |  |             | 
|-------------------------------- |  | ------------------------------------- | ----------- |  | --------------------------------------- |  | ----- | --------------------------------------------------------------------------------- |  |  | ------------------------------------------------------------------------ |  |  |  | ----------- | 
|Period                           |  | Total Number ofCommon SharesPurchased |             |  | Average PricePaid per CommonShare (NT$) |  |       | Total Number ofCommon SharesPurchased as Partof PubliclyAnnounced Plansor Program |  |  | MaximumNumber of Sharesthat May Yet bePurchased Underthe Plans orProgram | 
|March 2013 (from March 14, 2013) |  |                                       | 58,300,000  |  |                                         |  | 11.20 |                                                                                   |  |  | 58,300,000                                                               |  |  |  | 141,700,000 | 
|April 2013                       |  |                                       | 123,000,000 |  |                                         |  | 11.20 |                                                                                   |  |  | 181,300,000                                                              |  |  |  | 18,700,000  | 
|May 2013 (ended on May 13, 2013) |  |                                       | 18,700,000  |  |                                         |  | 11.23 |                                                                                   |  |  | 200,000,000                                                              |  |  |  |            | 

Our 15th share buy-back plan was announced on March 13, 2013 to repurchase up to 200 million shares during the
period from March 14, 2013 to May 13, 2013.



|ITEM 16F. | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
|--------- | --------------------------------------------

Not applicable.



|ITEM 16G. | CORPORATE GOVERNANCE
|--------- | --------------------

As a R.O.C. company listed on the New York Stock Exchange, or
NYSE, we are subject to the U.S. corporate governance rules to the extent that these rules are applicable to foreign private issuers. The following summary details the significant differences between our corporate governance practices and corporate
governance standards for U.S. companies (i.e. non-foreign private issuers) under the NYSE listing standards.



90



---

##### Table of Contents

The Legal Framework. In general, corporate governance principles for Taiwanese companies
are set forth in the Company Act of the Republic of China, or the R.O.C. Company Act, the R.O.C. Securities Exchange Act and, to the extent they are listed on the Taiwan Stock Exchange, under listing rules of the Taiwan Stock Exchange. Corporate
governance principles under provisions of R.O.C. law may differ in significant ways to corporate governance standards for U.S. companies listed on the NYSE. Committed to high standards of corporate governance, we have generally brought our corporate
governance in line with U.S. regulations, including the formation of an audit committee. However, we have not adopted certain recommended NYSE corporate governance standards where such standards are contrary to R.O.C. laws or regulations or
generally prevailing business practices in Taiwan.

Independent Board Members. Under the NYSE listing standards applicable
to U.S. companies, independent directors must comprise a majority of the board of directors. We currently have four independent directors out of a total of nine directors on our board of directors. Our standards for determining director independence
substantially comply with the NYSE listing standards, which include detailed tests for determining director independence. In addition, even though our independent directors meet in committee meetings of which they are committee members, we will not
hold executive sessions of non-management directors. Such requirement is contrary to the R.O.C. Company Act.

Board
Committees. Under the NYSE listing standards, companies are required to have a nominating/corporate governance committee, composed entirely of independent directors. In addition to identifying individuals qualified to become board members, the
nominating/corporate committee must develop and recommend to the board a set of corporate governance principles. We do not currently have a corporate governance committee or a nominating committee. In accordance with an interpretation letter issued
under the R.O.C. Company Act, the power to nominate directors shall not vest only in the directors. Any holder of the companys voting common stock may nominate directors to be voted on by stockholders. Therefore, we do not have a nominating
committee because vesting such nominating rights in a body of independent directors may result in conflict with the R.O.C. Company Act. Furthermore, we do not have a corporate governance committee, as such committee is not required under R.O.C.
requirements. Our board of directors is responsible for regularly reviewing our corporate governance standards and practices.

Under the NYSE listing standards, companies are required to have a compensation committee, composed entirely of independent directors. Under
the R.O.C. Company Act, however, companies incorporated in the R.O.C. are not required to have a compensation committee. The R.O.C. Company Act requires that director compensation be determined either in accordance with the companys articles
of incorporation or by the approval of the stockholders. Currently, in addition to compensation approved at the stockholders meeting, in the event we have net income, we will distribute 0.1% of our earnings after payment of all income taxes,
deduction of any past losses and allocation of 10% of our net income for legal reserves, as remunerations to our directors pursuant to our articles of incorporation. Currently, our board of directors is responsible for determining the form and
amount of compensation for each of our directors and executive officers within the guidelines of our articles of incorporation.

Equity
Compensation Plans. The NYSE listing standards also require that a companys stockholders must approve equity compensation plans. Under the corresponding requirements in the R.O.C. Company Act and the R.O.C. Securities Exchange Act,
stockholders approval is required for the distribution of employee bonuses in the form of stock, while the board of directors has authority, subject to the approval of the R.O.C. Securities and Futures Bureau, to approve employee stock option
plans and to grant options to employees pursuant to such plans and also has authority to approve share buy-back programs for the purpose of selling shares so purchased to employees and the sale of such shares to employees pursuant to such programs.
We intend to follow only the R.O.C. requirements.



|ITEM 16H. | MINE SAFETY DISCLOSURE
|--------- | ----------------------

Not applicable.



91



---

##### Table of Contents

PART III



|ITEM 17. | FINANCIAL STATEMENTS
|-------- | --------------------

Not applicable.



|ITEM 18. | FINANCIAL STATEMENTS
|-------- | --------------------

The following is a list of the audited consolidated financial
statements and report of independent registered public accounting firm included in this annual report beginning on page F-1.



|                                                                                               |  |      |     | 
|---------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                               |  | Page |    
|Consolidated Financial Statements of United Microelectronics Corporation and Subsidiaries      |  |      |     | 
|Report of Independent Registered Public Accounting Firm                                        |  |      | F-2 | 
|Consolidated Balance Sheets as of January 1, 2012, December 31, 2012 and 2013                  |  |      | F-3 | 
|Consolidated Statements of Comprehensive Income for the years ended December 31, 2012 and 2013 |  |      | F-5 | 
|Consolidated Statements of Changes in Equity for the years ended December 31, 2012 and 2013    |  |      | F-6 | 
|Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2013           |  |      | F-7 | 
|Notes to the Consolidated Financial Statements                                                 |  |      | F-9 | 



|ITEM 19. | EXHIBITS
|-------- | --------



|              |  |                                                                                                                                                                                                                                                                            
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibits                                                                                                                                                                                                                                                    
|              | 
|*1.1          |  | Articles of Incorporation of the Company as last amended on June 15, 2011                                                                                                                                                                                                  
|              | 
|2.1           |  | Form of Amendment No. 1 to Deposit Agreement among the Company, and Holders and Beneficial Owners of American Depositary Shares issued thereunder, including the form of American Depositary Shares (1)                                                                    
|              | 
|2.2           |  | Form of Amendment No. 2 to Deposit Agreement among the Company, and Holders and Beneficial Owners of American Depositary Shares issued thereunder, including the form of American Depositary Shares (2)                                                                    
|              | 
|4.1           |  | Lease Agreement with Hsinchu Science Park Administration in relation to government-owned land located at Hsinchu Science Park, Ko-Kuan Section, No. 20-22, Hsinchu, Taiwan, R.O.C., the site of Fab 6A (in Chinese with English summary
translation) (3)                   
|              | 
|4.2           |  | Lease Agreement with Hsinchu Science Park Administration in relation to government-owned land located at Hsinchu Science Park, third section of first phase, Hsinchu, Taiwan, R.O.C., the site of Fab 8A and United Tower (in Chinese
with English summary translation) (4)
|              | 
|4.3           |  | Lease Agreement with Hsinchu Science Park Administration in relation to government-owned land located at Hsinchu Science Park, third section of first phase, Hsinchu, Taiwan, R.O.C., the site of Fab 8C (in Chinese with English
summary translation) (5)                 
|              | 
|4.4           |  | Lease Agreement with Hsinchu Science Park Administration in relation to government-owned land located at Hsinchu Science Park, third section of first phase, Hsinchu, Taiwan, R.O.C., the site of Fab 8D (in Chinese with English
summary translation) (6)                 
|              | 
|4.5           |  | Lease Agreement with Hsinchu Science Park Administration in relation to government-owned land located at Hsinchu Science Park, third section of second phase, Hsinchu, Taiwan, R.O.C., the site of Fab 8E (in Chinese with English
summary translation) (7)                
|              | 
|4.6           |  | Lease Agreement with Hsinchu Science Park Administration in relation to government-owned land located at Hsinchu Science Park, Gin-Shan section, Hsinchu, Taiwan, R.O.C., the site of Fab 8F (in Chinese with English summary
translation) (8)                             
|              | 
|4.7           |  | Lease Agreement with Southern Taiwan Science Park Administration in relation to government-owned land located at Tainan Science Park, Tainan, Taiwan, R.O.C., the site of Fab 12A (in Chinese with English summary translation)
(9)                                        



92



---

##### Table of Contents

|              |  |                                                                                                                                                                                                                                               
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibits                                                                                                                                                                                                                       
|              | 
|4.8           |  | Merger Agreement, entered into as of February 26, 2004, between United Microelectronics Corporation and SiS Microelectronics Corporation (English Translation) (10)                                                                           
|              | 
|4.9           |  | Lease Agreement with Hsinchu Science Park Administration in relation to government-owned land located at Hsinchu Science Park, Ko-Kuan section, Hsinchu, Taiwan, R.O.C., the site of Fab 8S (in Chinese with English summary
translation) (11)
|              | 
|4.10          |  | Lease Agreement with JTC Corporation in relation to land located at Pasir Ris Wafer Fab Park, Singapore, the site of Fab12i (summary) (12)                                                                                                    
|              | 
|4.11          |  | Merger Agreement, entered into as of April 29, 2009, among United Microelectronics Corporation, Infoshine Technology Limited and Best Elite International Limited (13)                                                                        
|              | 
|*8.1          |  | List of Significant Subsidiaries of United Microelectronics Corporation                                                                                                                                                                       
|              | 
|11.1          |  | Code of Ethics for Directors and Officers (14)                                                                                                                                                                                                
|              | 
|11.2          |  | Employee Code of Conduct (15)                                                                                                                                                                                                                 
|              | 
|*12.1         |  | Certification of our Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                        
|              | 
|*12.2         |  | Certification of our Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                        
|              | 
|*13.1         |  | Certification of our Chief Executive Officer pursuant to 18 U.S.C.§ 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                
|              | 
|*13.2         |  | Certification of our Chief Financial Officer pursuant to 18 U.S.C.§ 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                
|              | 
|*15.1         |  | Consent of Independent Registered Public Accounting Firm                                                                                                                                                                                      



|* | Filed herewith.
|- | ---------------

|(1) | Incorporated by reference to Exhibit (a) to the Registrants Registration Statement on Form F-6 (File No. 333-13796) filed with the Commission on March 2, 2006.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to Exhibit (a) (iii) to the Registrants Registration Statement on Form F-6 (File No. 333-98591) filed with the Commission on March 19, 2007.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to Exhibit 4.1 to Registrants Annual Report on Form 20-F for the fiscal year ended December 31, 2006 (File No. 001-15128) filed with the Commission on May 9, 2007.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to Exhibit 10.7 to the Registrants Registration Statement on Form F-1 (File No. 333-12444) filed with the Commission on August 28, 2000, as amended.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Incorporated by reference to Exhibit 10.8 to the Registrants Registration Statement on Form F-1 (File No. 333-12444) filed with the Commission on August 28, 2000, as amended.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Incorporated by reference to Exhibit 10.9 to the Registrants Registration Statement on Form F-1 (File No. 333-12444) filed with the Commission on August 28, 2000, as amended.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Incorporated by reference to Exhibit 10.10 to the Registrants Registration Statement on Form F-1 (File No. 333-12444) filed with the Commission on August 28, 2000, as amended.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Incorporated by reference to Exhibit 10.11 to the Registrants Registration Statement on F-1 (File No. 333-12444) filed with the Commission on August 28, 2000, as amended.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Incorporated by reference to Exhibit 10.12 to the Registrants Registration Statement on F-1 (File No. 333-12444) filed with the Commission on August 28, 2000, as amended.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Incorporated by reference to Exhibit 4.8 to the Registrants Annual Report on Form 20-F for the fiscal year ended December 31, 2003 (File No. 1-15128) filed with the Commission on June 17, 2004.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Incorporated by reference to Exhibit 4.9 to Registrants Annual Report on Form 20-F for the fiscal year ended December 31, 2006 (File No. 001-15128) filed with the Commission on May 9, 2007.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(12) | Incorporated by reference to Exhibit 4.10 to Registrants Annual Report on Form 20-F for the fiscal year ended December 31, 2006 (File No. 001-15128) filed with the Commission on May 9, 2007.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Incorporated by reference to Exhibit 99.1 to the Form 6-K furnished to the Commission on May 8, 2009.
|---- | -----------------------------------------------------------------------------------------------------

|(14) | Incorporated by reference to Exhibit 99.1 to the Form 6-K furnished to the Commission on May 25, 2005.
|---- | ------------------------------------------------------------------------------------------------------

|(15) | Incorporated by reference to Exhibit 99.2 to the Form 6-K furnished to the Commission on March 26, 2006.
|---- | --------------------------------------------------------------------------------------------------------



93



---

##### Table of Contents

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.

UNITED MICROELECTRONICS CORPORATION

|    |  |                 |  |                        
|--- |  | --------------- |  | -----------------------
|    | 
|By: |  | /s/ CHITUNG LIU
|    |  | Name:           |  | Chitung Liu            
|    |  | Title:          |  | Chief Financial Officer

Date: April 18, 2014



1



---

##### Table of Contents

United Microelectronics Corporation and Subsidiaries

Consolidated Financial Statements for years ended December 31, 2012 and 2013

Together with Report of Independent Registered Public Accounting Firm



F-1



---

##### Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of United Microelectronics Corporation

We have audited the accompanying consolidated balance sheets of United Microelectronics Corporation and subsidiaries (the Company) as of
January 1, 2012, December 31, 2012, and December 31, 2013, the related consolidated statements of comprehensive income, changes in equity, and cash flows for the years ended December 31, 2012 and 2013. These consolidated
financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of United Microelectronics Corporation and subsidiaries at January 1, 2012, December 31, 2012, and December 31, 2013, and the consolidated results of their operations and their cash flows for the years ended
December 31, 2012 and 2013, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), United Microelectronics
Corporation and subsidiaries internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (1992 framework) and our report dated April 18, 2014 expressed an unqualified opinion thereon.

ERNST & YOUNG

CERTIFIED PUBLIC ACCOUNTANTS

Taipei, Taiwan

Republic of China

April 18, 2014



F-2



---

##### Table of Contents

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of January 1, 2012, December 31, 2012 and December 31, 2013

(Expressed in Thousands, Except for Par Value)



|                                                                  |  |                      |  |                |             |  |                  |  |             |                  |  |  |             |  |  |  |           | 
|----------------------------------------------------------------- |  | -------------------- |  | -------------- | ----------- |  | ---------------- |  | ----------- | ---------------- |  |  | ----------- |  |  |  | --------- | 
|                                                                  |  |                      |  | As of          |            
|                                                                  |  | Notes                |  | January 1,2012 |             |  | December 31,2012 |  |             | December 31,2013 | 
|                                                                  |  |                      |  | NT$            |             |  | NT$              |  |             | NT$              |  |  | US$         | 
|Assets                                                            |  |                      |  |                |             |  |                  |  |             |                  |  |  |             |  |  |  |           | 
|Current assets                                                    |  |                      |  |                |             |  |                  |  |             |                  |  |  |             |  |  |  |           | 
|Cash and cash equivalents                                         |  | 4, 6(1)              |  |                | 49,062,128  |  |                  |  | 42,488,490  |                  |  |  | 50,830,678  |  |  |  | 1,704,012 | 
|Financial assets at fair value through profit or loss, current    |  | 4, 6(2), 11(6)       |  |                | 695,931     |  |                  |  | 655,994     |                  |  |  | 633,264     |  |  |  | 21,229    | 
|Available-for-sale financial assets, current                      |  | 4, 6(5), 11(6)       |  |                | 5,124,780   |  |                  |  | 4,330,880   |                  |  |  | 2,134,379   |  |  |  | 71,551    | 
|Held-to-maturity financial assets, current                        |  | 4                    |  |                | 13,524      |  |                  |  |            |                  |  |  |            |  |  |  |          | 
|Notes receivable                                                  |  | 4                    |  |                | 74,572      |  |                  |  | 25,308      |                  |  |  | 194,939     |  |  |  | 6,535     | 
|Accounts receivable, net                                          |  | 4, 6(3)              |  |                | 14,390,541  |  |                  |  | 16,220,832  |                  |  |  | 16,624,352  |  |  |  | 557,303   | 
|Accounts receivable-related parties, net                          |  | 4, 7                 |  |                | 130,553     |  |                  |  | 81,741      |                  |  |  | 2,854       |  |  |  | 96        | 
|Other receivables                                                 |  | 4                    |  |                | 653,542     |  |                  |  | 768,991     |                  |  |  | 725,083     |  |  |  | 24,307    | 
|Current tax assets                                                |  | 4                    |  |                | 84,566      |  |                  |  | 77,861      |                  |  |  | 54,626      |  |  |  | 1,831     | 
|Inventories, net                                                  |  | 4, 5, 6(4)           |  |                | 12,703,706  |  |                  |  | 13,023,710  |                  |  |  | 13,993,259  |  |  |  | 469,100   | 
|Prepayments                                                       |  |                      |  |                | 791,243     |  |                  |  | 1,918,783   |                  |  |  | 1,604,349   |  |  |  | 53,783    | 
|Non-current assets held for sale                                  |  | 4                    |  |                | 583         |  |                  |  | 313,171     |                  |  |  |            |  |  |  |          | 
|Other current assets                                              |  |                      |  |                | 28,331      |  |                  |  | 121,370     |                  |  |  | 1,998,441   |  |  |  | 66,995    | 
|                                                                  |  |                      |  |                |             |  |                  |  |             |                  |  |  |             |  |  |  |           | 
|Total current assets                                              |  |                      |  |                | 83,754,000  |  |                  |  | 80,027,131  |                  |  |  | 88,796,224  |  |  |  | 2,976,742 | 
|                                                                  |  |                      |  |                |             |  |                  |  |             |                  |  |  |             |  |  |  |           | 
|Non-current assets                                                |  |                      |  |                |             |  |                  |  |             |                  |  |  |             |  |  |  |           | 
|Financial assets at fair value through profit or loss, noncurrent |  | 4, 6(2), 11(6)       |  |                | 119,711     |  |                  |  | 72,706      |                  |  |  | 60,441      |  |  |  | 2,026     | 
|Available-for-sale financial assets, noncurrent                   |  | 4, 5, 6(5), 7, 11(6) |  |                | 23,444,547  |  |                  |  | 19,975,737  |                  |  |  | 19,556,141  |  |  |  | 655,586   | 
|Financial assets measured at cost, noncurrent                     |  | 4, 6(6)              |  |                | 3,053,958   |  |                  |  | 3,162,118   |                  |  |  | 4,085,292   |  |  |  | 136,952   | 
|Investments accounted for under the equity method                 |  | 4, 5, 6(7)           |  |                | 9,142,488   |  |                  |  | 9,865,883   |                  |  |  | 6,420,900   |  |  |  | 215,250   | 
|Property, plant and equipment                                     |  | 4, 5, 6(8), 8        |  |                | 141,861,562 |  |                  |  | 159,943,805 |                  |  |  | 162,352,900 |  |  |  | 5,442,605 | 
|Intangible assets                                                 |  | 4, 6(9)              |  |                | 1,483,781   |  |                  |  | 2,798,159   |                  |  |  | 4,739,647   |  |  |  | 158,889   | 
|Deferred tax assets                                               |  | 4, 5, 6(21)          |  |                | 3,750,645   |  |                  |  | 3,433,535   |                  |  |  | 2,724,257   |  |  |  | 91,326    | 
|Prepayment for equipments                                         |  |                      |  |                | 10,319,826  |  |                  |  | 343,869     |                  |  |  | 409,860     |  |  |  | 13,740    | 
|Deposits-out                                                      |  | 8                    |  |                | 1,316,904   |  |                  |  | 1,377,327   |                  |  |  | 1,289,975   |  |  |  | 43,244    | 
|Prepayment for investments                                        |  |                      |  |                | 44,392      |  |                  |  | 34,803      |                  |  |  |            |  |  |  |          | 
|Other assets                                                      |  |                      |  |                | 1,044,412   |  |                  |  | 178,720     |                  |  |  | 3,478,290   |  |  |  | 116,604   | 
|                                                                  |  |                      |  |                |             |  |                  |  |             |                  |  |  |             |  |  |  |           | 
|Total non-current assets                                          |  |                      |  |                | 195,582,226 |  |                  |  | 201,186,662 |                  |  |  | 205,117,703 |  |  |  | 6,876,222 | 
|                                                                  |  |                      |  |                |             |  |                  |  |             |                  |  |  |             |  |  |  |           | 
|Total assets                                                      |  |                      |  |                | 279,336,226 |  |                  |  | 281,213,793 |                  |  |  | 293,913,927 |  |  |  | 9,852,964 | 
|                                                                  |  |                      |  |                |             |  |                  |  |             |                  |  |  |             |  |  |  |           | 

The accompanying notes are an integral part of the consolidated
financial statements.



F-3



---

##### Table of Contents

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of January 1, 2012, December 31, 2012 and December 31, 2013

(Expressed in Thousands, Except for Par Value)



|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------- |  | -------------- | ----------- | - | ---------------- |  | ----------- | ---------------- |  |  | ----------- | - |  |  | --------- | -
|                                                                                                                                                                   |  |                           |  | As of          |            
|                                                                                                                                                                   |  | Notes                     |  | January 1,2012 |             |   | December 31,2012 |  |             | December 31,2013 | 
|                                                                                                                                                                   |  |                           |  | NT$            |             |   | NT$              |  |             | NT$              |  |  | US$         |  
|Liabilities and Equity                                                                                                                                             |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Current liabilities                                                                                                                                                |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Short-term loans                                                                                                                                                   |  | 4, 6(10)                  |  |                | 9,411,877   |   |                  |  | 5,772,615   |                  |  |  | 4,643,573   |   |  |  | 155,668   |  
|Financial liabilities at fair value through profit or loss, current                                                                                                |  | 4, 5, 6(11), 11(6)        |  |                | 741,531     |   |                  |  | 767,605     |                  |  |  | 1,928       |   |  |  | 65        |  
|Notes and accounts payable                                                                                                                                         |  |                           |  |                | 5,010,222   |   |                  |  | 6,265,920   |                  |  |  | 7,414,188   |   |  |  | 248,548   |  
|Other payables                                                                                                                                                     |  |                           |  |                | 9,771,320   |   |                  |  | 10,961,670  |                  |  |  | 11,052,981  |   |  |  | 370,532   |  
|Payables on equipment                                                                                                                                              |  |                           |  |                | 8,517,694   |   |                  |  | 5,382,395   |                  |  |  | 6,700,743   |   |  |  | 224,631   |  
|Current tax liabilities                                                                                                                                            |  | 4                         |  |                | 514,977     |   |                  |  | 1,191,790   |                  |  |  | 961,169     |   |  |  | 32,222    |  
|Current portion of long-term liabilities                                                                                                                           |  | 4, 6(12), 6(13)           |  |                | 8,002,051   |   |                  |  | 8,887,006   |                  |  |  | 16,545,226  |   |  |  | 554,651   |  
|Other current liabilities                                                                                                                                          |  |                           |  |                | 870,104     |   |                  |  | 891,511     |                  |  |  | 884,162     |   |  |  | 29,640    |  
|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Total current liabilities                                                                                                                                          |  |                           |  |                | 42,839,776  |   |                  |  | 40,120,512  |                  |  |  | 48,203,970  |   |  |  | 1,615,957 |  
|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Non-current liabilities                                                                                                                                            |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Bonds payable                                                                                                                                                      |  | 4, 6(12)                  |  |                | 11,984,404  |   |                  |  | 21,932,193  |                  |  |  | 19,979,354  |   |  |  | 669,774   |  
|Long-term loans                                                                                                                                                    |  | 4, 6(13), 8               |  |                | 9,110,982   |   |                  |  | 10,222,620  |                  |  |  | 8,435,851   |   |  |  | 282,798   |  
|Deferred tax liabilities                                                                                                                                           |  | 4, 5, 6(21)               |  |                | 1,442,274   |   |                  |  | 2,661,036   |                  |  |  | 3,325,432   |   |  |  | 111,479   |  
|Accrued pension liabilities                                                                                                                                        |  | 4, 5, 6(14)               |  |                | 3,960,939   |   |                  |  | 4,239,243   |                  |  |  | 3,797,785   |   |  |  | 127,314   |  
|Deposits-in                                                                                                                                                        |  |                           |  |                | 105,617     |   |                  |  | 153,745     |                  |  |  | 321,856     |   |  |  | 10,790    |  
|Other liabilities                                                                                                                                                  |  |                           |  |                | 336,009     |   |                  |  | 197,147     |                  |  |  | 205,693     |   |  |  | 6,895     |  
|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Total non-current liabilities                                                                                                                                      |  |                           |  |                | 26,940,225  |   |                  |  | 39,405,984  |                  |  |  | 36,065,971  |   |  |  | 1,209,050 |  
|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Total liabilities                                                                                                                                                  |  |                           |  |                | 69,780,001  |   |                  |  | 79,526,496  |                  |  |  | 84,269,941  |   |  |  | 2,825,007 |  
|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Commitments and contingencies                                                                                                                                      |  | 9                         |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Equity attributable to the parent company                                                                                                                          |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Capital                                                                                                                                                            |  | 4, 5, 6(15), 6(16)        |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Common stock - NT$10 par value                                                                                                                                     |  |                           |  |                | 130,843,416 |   |                  |  | 129,518,055 |                  |  |  | 126,920,817 |   |  |  | 4,254,804 |  
|Authorized: 26,000,000 thousand shares                                                                                                                             |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Issued: 13,084,342 thousand shares as of January 1, 2012                                                                                                           |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Issued: 12,951,806 thousand shares as of December 31, 2012                                                                                                         |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Issued: 12,692,082 thousand shares as of December 31, 2013                                                                                                         |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Capital collected in advance                                                                                                                                       |  |                           |  |                | 1,140       |   |                  |  | 3,038       |                  |  |  | 25,682      |   |  |  | 861       |  
|Additional paid-in capital                                                                                                                                         |  | 4, 5, 6(12), 6(15), 6(16) |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Premiums                                                                                                                                                           |  |                           |  |                | 44,499,645  |   |                  |  | 44,043,498  |                  |  |  | 43,156,776  |   |  |  | 1,446,757 |  
|Treasury stock transactions                                                                                                                                        |  |                           |  |                | 1,155,222   |   |                  |  | 2,448,810   |                  |  |  | 1,706,750   |   |  |  | 57,216    |  
|The differences between the fair value of the consideration paid or received from acquiring or disposing subsidiaries and the carrying
amounts of the subsidiaries |  |                           |  |                |            |   |                  |  | 5,501       |                  |  |  | 251,480     |   |  |  | 8,430     |  
|Employee stock options                                                                                                                                             |  |                           |  |                | 580,933     |   |                  |  | 353,879     |                  |  |  | 266,314     |   |  |  | 8,928     |  
|Stock options - conversion right                                                                                                                                   |  |                           |  |                | 491,876     |   |                  |  | 486,235     |                  |  |  | 406,136     |   |  |  | 13,615    |  
|Retained earnings                                                                                                                                                  |  | 6(15)                     |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Legal reserve                                                                                                                                                      |  |                           |  |                | 3,442,856   |   |                  |  | 4,476,570   |                  |  |  | 5,248,824   |   |  |  | 175,958   |  
|Unappropriated earnings                                                                                                                                            |  |                           |  |                | 27,575,539  |   |                  |  | 25,900,780  |                  |  |  | 33,054,952  |   |  |  | 1,108,111 |  
|Other components of equity                                                                                                                                         |  | 4                         |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Exchange differences on translation of foreign operations                                                                                                          |  |                           |  |                | (2,193,611  | ) |                  |  | (5,680,855  | )                |  |  | (5,243,972  | ) |  |  | (175,795  | )
|Unrealized gain or loss on available-for-sale financial assets                                                                                                     |  |                           |  |                | 12,522,526  |   |                  |  | 10,051,872  |                  |  |  | 9,423,321   |   |  |  | 315,901   |  
|Treasury stock                                                                                                                                                     |  | 4, 6(15)                  |  |                | (13,751,193 | ) |                  |  | (12,491,225 | )                |  |  | (9,893,082  | ) |  |  | (331,649  | )
|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Total equity attributable to the parent company                                                                                                                    |  |                           |  |                | 205,168,349 |   |                  |  | 199,116,158 |                  |  |  | 205,323,998 |   |  |  | 6,883,137 |  
|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Non-controlling interests                                                                                                                                          |  | 6(15)                     |  |                | 4,387,876   |   |                  |  | 2,571,139   |                  |  |  | 4,319,988   |   |  |  | 144,820   |  
|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Total equity                                                                                                                                                       |  |                           |  |                | 209,556,225 |   |                  |  | 201,687,297 |                  |  |  | 209,643,986 |   |  |  | 7,027,957 |  
|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  
|Total liabilities and equity                                                                                                                                       |  |                           |  |                | 279,336,226 |   |                  |  | 281,213,793 |                  |  |  | 293,913,927 |   |  |  | 9,852,964 |  
|                                                                                                                                                                   |  |                           |  |                |             |   |                  |  |             |                  |  |  |             |   |  |  |           |  

The accompanying notes are an integral part of the consolidated financial statements.



F-4



---

##### Table of Contents

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2012 and 2013

(Expressed in Thousands, Except for Earnings per Share)



|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|-------------------------------------------------------------------- |  | ---------------------------- |  | -------------------------------- | ----------- | - | ---- |  | ------------ | --- |  |  | ---------- | -
|                                                                     |  |                              |  | For the years ended December 31, |            
|                                                                     |  | Notes                        |  | 2012                             |             |   | 2013 | 
|                                                                     |  |                              |  | NT$                              |             |   | NT$  |  |              | US$ | 
|Net operating revenues                                               |  | 4, 5, 7                      |  |                                  | 115,674,763 |   |      |  | 123,811,636  |     |  |  | 4,150,575  |  
|Operating costs                                                      |  | 4, 6(4), 6(14), 6(16), 6(17) |  |                                  | (96,365,215 | ) |      |  | (100,248,661 | )   |  |  | (3,360,666 | )
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Gross profit                                                         |  |                              |  |                                  | 19,309,548  |   |      |  | 23,562,975   |     |  |  | 789,909    |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Operating expenses                                                   |  | 4, 6(14), 6(16), 6(17), 7    |  |                                  |             |   |      |  |              |     |  |  |            |  
|Sales and marketing expenses                                         |  |                              |  |                                  | (2,748,807  | ) |      |  | (3,247,000   | )   |  |  | (108,850   | )
|General and administrative expenses                                  |  |                              |  |                                  | (3,161,271  | ) |      |  | (3,665,472   | )   |  |  | (122,879   | )
|Research and development expenses                                    |  |                              |  |                                  | (9,786,506  | ) |      |  | (12,493,051  | )   |  |  | (418,808   | )
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Subtotal                                                             |  |                              |  |                                  | (15,696,584 | ) |      |  | (19,405,523  | )   |  |  | (650,537   | )
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Net other operating income and expenses                              |  | 4, 6(18)                     |  |                                  | (2,790,775  | ) |      |  | (125,332     | )   |  |  | (4,202     | )
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Operating income                                                     |  |                              |  |                                  | 822,189     |   |      |  | 4,032,120    |     |  |  | 135,170    |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Non-operating income and expenses                                    |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Other income                                                         |  | 4, 6(19)                     |  |                                  | 1,243,822   |   |      |  | 1,091,309    |     |  |  | 36,584     |  
|Other gains and losses                                               |  | 4, 6(19)                     |  |                                  | 3,983,147   |   |      |  | 1,851,210    |     |  |  | 62,059     |  
|Finance costs                                                        |  | 6(19)                        |  |                                  | (538,269    | ) |      |  | (678,406     | )   |  |  | (22,742    | )
|Share of profit or loss of associates and joint ventures             |  | 4, 6(7)                      |  |                                  | 663,379     |   |      |  | 697,931      |     |  |  | 23,397     |  
|Bargain purchase gain                                                |  | 4, 6(23)                     |  |                                  |            |   |      |  | 7,153,529    |     |  |  | 239,810    |  
|Exchange gain, net                                                   |  | 4                            |  |                                  | 120,337     |   |      |  | 192,779      |     |  |  | 6,462      |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Subtotal                                                             |  |                              |  |                                  | 5,472,416   |   |      |  | 10,308,352   |     |  |  | 345,570    |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Income from continuing operations before income tax                  |  |                              |  |                                  | 6,294,605   |   |      |  | 14,340,472   |     |  |  | 480,740    |  
|Income tax expense                                                   |  | 4, 5, 6(21)                  |  |                                  | (2,145,983  | ) |      |  | (2,256,834   | )   |  |  | (75,657    | )
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Net income                                                           |  |                              |  |                                  | 4,148,622   |   |      |  | 12,083,638   |     |  |  | 405,083    |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Other comprehensive income (loss)                                    |  | 4, 6(20)                     |  |                                  |             |   |      |  |              |     |  |  |            |  
|Items that may be reclassified subsequently to profit or loss        |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Exchange differences on translation of foreign operations            |  |                              |  |                                  | (2,802,004  | ) |      |  | (154,613     | )   |  |  | (5,183     | )
|Unrealized loss on available-for-sale financial assets               |  |                              |  |                                  | (2,589,508  | ) |      |  | (856,326     | )   |  |  | (28,707    | )
|Share of other comprehensive income of associates and joint ventures |  |                              |  |                                  | (263,921    | ) |      |  | 362,491      |     |  |  | 12,152     |  
|Income tax effect                                                    |  | 6(21)                        |  |                                  | (307,627    | ) |      |  | 468,000      |     |  |  | 15,689     |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Subtotal                                                             |  |                              |  |                                  | (5,963,060  | ) |      |  | (180,448     | )   |  |  | (6,049     | )
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Items that will not be reclassified subsequently to profit or loss   |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Remeasurements of defined benefit pension plans                      |  | 6(14)                        |  |                                  | (499,226    | ) |      |  | 456,478      |     |  |  | 15,303     |  
|Income tax effect                                                    |  | 6(21)                        |  |                                  | 81,736      |   |      |  | (77,623      | )   |  |  | (2,602     | )
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Subtotal                                                             |  |                              |  |                                  | (417,490    | ) |      |  | 378,855      |     |  |  | 12,701     |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Total other comprehensive income (loss), net of tax                  |  |                              |  |                                  | (6,380,550  | ) |      |  | 198,407      |     |  |  | 6,652      |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|                                                                     |  |                              |  |                                 
|Total comprehensive income (loss)                                    |  |                              |  |                                  | (2,231,928  | ) |      |  | 12,282,045   |     |  |  | 411,735    |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|                                                                     |  |                              |  |                                 
|Net income attributable to:                                          |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Stockholders of the parent                                           |  |                              |  |                                  | 6,094,148   |   |      |  | 12,608,881   |     |  |  | 422,691    |  
|Non-controlling interests                                            |  |                              |  |                                  | (1,945,526  | ) |      |  | (525,243     | )   |  |  | (17,608    | )
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|                                                                     |  |                              |  |                                  | 4,148,622   |   |      |  | 12,083,638   |     |  |  | 405,083    |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Total comprehensive income (loss) attributable to:                   |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Stockholders of the parent                                           |  |                              |  |                                  | (281,240    | ) |      |  | 12,796,068   |     |  |  | 428,966    |  
|Non-controlling interests                                            |  |                              |  |                                  | (1,950,688  | ) |      |  | (514,023     | )   |  |  | (17,231    | )
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|                                                                     |  |                              |  |                                  | (2,231,928  | ) |      |  | 12,282,045   |     |  |  | 411,735    |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Earnings per share (NTD)                                             |  | 4, 6(22)                     |  |                                  |             |   |      |  |              |     |  |  |            |  
|Earnings per share-basic                                             |  |                              |  |                                  | 0.49        |   |      |  | 1.02         |     |  |  | 0.03       |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  
|Earnings per share-diluted                                           |  |                              |  |                                  | 0.46        |   |      |  | 0.96         |     |  |  | 0.03       |  
|                                                                     |  |                              |  |                                  |             |   |      |  |              |     |  |  |            |  

The accompanying notes are an integral part of the consolidated financial statements.



F-5



---

##### Table of Contents

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2012 and 2013

(Expressed in Thousands)



|                                                                                                  |  |                    |  |             |             |   |                    |  |        |                          |  |  |                                                     |   |  |                                                           |           |  |     |  |               |     |  |       |            |   |                          |     |            |             |     |  |             |     |  |  |             |   |  |  |            |   |  |  |             |  
|------------------------------------------------------------------------------------------------- |  | ------------------ |  | ----------- | ----------- | - | ------------------ |  | ------ | ------------------------ |  |  | --------------------------------------------------- | - |  | --------------------------------------------------------- | --------- |  | --- |  | ------------- | --- |  | ----- | ---------- | - | ------------------------ | --- | ---------- | ----------- | --- |  | ----------- | --- |  |  | ----------- | - |  |  | ---------- | - |  |  | ----------- | -
|                                                                                                  |  |                    |  | Capital     |             |   |                    |  |        | Retained Earnings        |  |  | ExchangeDifferencesonTranslationofForeignOperations |   |  | UnrealizedGain orLoss onAvailable-for-saleFinancialAssets |           |  |     |  |               |     |  |       |            |   |                          |     |           
|                                                                                                  |  | Notes              |  | CommonStock |             |   | CollectedinAdvance |  |        | AdditionalPaid-inCapital |  |  | LegalReserve                                        |   |  | UnappropriatedEarnings                                    |           |  |     |  | TreasuryStock |     |  | Total |            |   | Non-controllingInterests |     |            | TotalEquity |    
|                                                                                                  |  |                    |  | NT$         |             |   | NT$                |  |        | NT$                      |  |  | NT$                                                 |   |  | NT$                                                       |           |  | NT$ |  |               | NT$ |  |       | NT$        |   |                          | NT$ |            |             | NT$ |  |             | NT$ | 
|Balance as of January 1, 2012                                                                     |  | 6(15)              |  |             | 130,843,416 |   |                    |  | 1,140  |                          |  |  | 46,727,676                                          |   |  |                                                           | 3,442,856 |  |     |  | 27,575,539    |     |  |       | (2,193,611 | ) |                          |     | 12,522,526 |             |     |  | (13,751,193 | )   |  |  | 205,168,349 |   |  |  | 4,387,876  |   |  |  | 209,556,225 |  
|Appropriation and distribution of 2011 retained earnings                                          |  | 6(15)              |  |             |             |   |                    |  |        |                          |  |  |                                                     |   |  |                                                           |           |  |     |  |               |     |  |       |            |   |                          |     |            |             |     |  |             |     |  |  |             |   |  |  |            |   |  |  |             |  
|Legal reserve                                                                                     |  |                    |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           | 1,033,714 |  |     |  | (1,033,714    | )   |  |       |           |   |                          |     |           |             |     |  |            |     |  |  |            |   |  |  |           |   |  |  |            |  
|Cash dividends                                                                                    |  |                    |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  | (6,316,435    | )   |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | (6,316,435  | ) |  |  |           |   |  |  | (6,316,435  | )
|Net income in 2012                                                                                |  | 6(15)              |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  | 6,094,148     |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | 6,094,148   |   |  |  | (1,945,526 | ) |  |  | 4,148,622   |  
|Other comprehensive loss, net of tax in 2012                                                      |  | 6(15), 6(20)       |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  | (417,490      | )   |  |       | (3,487,244 | ) |                          |     | (2,470,654 | )           |     |  |            |     |  |  | (6,375,388  | ) |  |  | (5,162     | ) |  |  | (6,380,550  | )
|                                                                                                  |  |                    |  |             |             |   |                    |  |        |                          |  |  |                                                     |   |  |                                                           |           |  |     |  |               |     |  |       |            |   |                          |     |            |             |     |  |             |     |  |  |             |   |  |  |            |   |  |  |             |  
|Total comprehensive loss                                                                          |  |                    |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  | 5,676,658     |     |  |       | (3,487,244 | ) |                          |     | (2,470,654 | )           |     |  |            |     |  |  | (281,240    | ) |  |  | (1,950,688 | ) |  |  | (2,231,928  | )
|                                                                                                  |  |                    |  |             |             |   |                    |  |        |                          |  |  |                                                     |   |  |                                                           |           |  |     |  |               |     |  |       |            |   |                          |     |            |             |     |  |             |     |  |  |             |   |  |  |            |   |  |  |             |  
|Share-based payment transactions                                                                  |  | 4, 5, 6(15), 6(16) |  |             | 253,983     |   |                    |  | 1,898  |                          |  |  | 212,998                                             |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | 468,879     |   |  |  |           |   |  |  | 468,879     |  
|Convertible bonds repurchased                                                                     |  |                    |  |             |            |   |                    |  |       |                          |  |  | (6,403                                              | ) |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | (6,403      | ) |  |  |           |   |  |  | (6,403      | )
|Treasury stock cancelled                                                                          |  | 4, 6(15)           |  |             | (1,579,344  | ) |                    |  |       |                          |  |  | 319,376                                             |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  | 1,259,968   |     |  |  |            |   |  |  |           |   |  |  |            |  
|Share of changes in net assets of associates and joint ventures accounted for using equity method |  |                    |  |             |            |   |                    |  |       |                          |  |  | 2,934                                               |   |  |                                                           |          |  |     |  | 9,312         |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | 12,246      |   |  |  |           |   |  |  | 12,246      |  
|Adjustments arising from changes in percentage of ownership in subsidiaries                       |  | 4, 6(15)           |  |             |            |   |                    |  |       |                          |  |  | 2,567                                               |   |  |                                                           |          |  |     |  | (10,580       | )   |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | (8,013      | ) |  |  | 165,774    |   |  |  | 157,761     |  
|Adjustments due to reciprocal shareholdings held by subsidiaries and associates                   |  |                    |  |             |            |   |                    |  |       |                          |  |  | 77,620                                              |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | 77,620      |   |  |  |           |   |  |  | 77,620      |  
|Effect of deconsolidation of subsidiaries                                                         |  | 6(15)              |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  |            |   |  |  | (31,823    | ) |  |  | (31,823     | )
|Others                                                                                            |  |                    |  |             |            |   |                    |  |       |                          |  |  | 1,155                                               |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | 1,155       |   |  |  |           |   |  |  | 1,155       |  
|                                                                                                  |  |                    |  |             |             |   |                    |  |        |                          |  |  |                                                     |   |  |                                                           |           |  |     |  |               |     |  |       |            |   |                          |     |            |             |     |  |             |     |  |  |             |   |  |  |            |   |  |  |             |  
|Balance as of December 31, 2012                                                                   |  | 6(15)              |  |             | 129,518,055 |   |                    |  | 3,038  |                          |  |  | 47,337,923                                          |   |  |                                                           | 4,476,570 |  |     |  | 25,900,780    |     |  |       | (5,680,855 | ) |                          |     | 10,051,872 |             |     |  | (12,491,225 | )   |  |  | 199,116,158 |   |  |  | 2,571,139  |   |  |  | 201,687,297 |  
|Appropriation and distribution of 2012 retained earnings                                          |  | 6(15)              |  |             |             |   |                    |  |        |                          |  |  |                                                     |   |  |                                                           |           |  |     |  |               |     |  |       |            |   |                          |     |            |             |     |  |             |     |  |  |             |   |  |  |            |   |  |  |             |  
|Legal reserve                                                                                     |  |                    |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           | 772,254   |  |     |  | (772,254      | )   |  |       |           |   |                          |     |           |             |     |  |            |     |  |  |            |   |  |  |           |   |  |  |            |  
|Cash dividends                                                                                    |  |                    |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  | (5,061,310    | )   |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | (5,061,310  | ) |  |  |           |   |  |  | (5,061,310  | )
|Net income in 2013                                                                                |  | 6(15)              |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  | 12,608,881    |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | 12,608,881  |   |  |  | (525,243   | ) |  |  | 12,083,638  |  
|Other comprehensive income (loss), net of tax in 2013                                             |  | 6(15), 6(20)       |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  | 378,855       |     |  |       | 436,883    |   |                          |     | (628,551   | )           |     |  |            |     |  |  | 187,187     |   |  |  | 11,220     |   |  |  | 198,407     |  
|                                                                                                  |  |                    |  |             |             |   |                    |  |        |                          |  |  |                                                     |   |  |                                                           |           |  |     |  |               |     |  |       |            |   |                          |     |            |             |     |  |             |     |  |  |             |   |  |  |            |   |  |  |             |  
|Total comprehensive income (loss)                                                                 |  |                    |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  | 12,987,736    |     |  |       | 436,883    |   |                          |     | (628,551   | )           |     |  |            |     |  |  | 12,796,068  |   |  |  | (514,023   | ) |  |  | 12,282,045  |  
|                                                                                                  |  |                    |  |             |             |   |                    |  |        |                          |  |  |                                                     |   |  |                                                           |           |  |     |  |               |     |  |       |            |   |                          |     |            |             |     |  |             |     |  |  |             |   |  |  |            |   |  |  |             |  
|Share-based payment transactions                                                                  |  | 4, 5, 6(15), 6(16) |  |             | 402,762     |   |                    |  | 22,644 |                          |  |  | 46,073                                              |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | 471,479     |   |  |  |           |   |  |  | 471,479     |  
|Convertible bonds repurchased                                                                     |  | 4, 6(12)           |  |             |            |   |                    |  |       |                          |  |  | (74,360                                             | ) |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | (74,360     | ) |  |  |           |   |  |  | (74,360     | )
|Treasury stock acquired                                                                           |  | 4, 6(15)           |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  | (2,245,445  | )   |  |  | (2,245,445  | ) |  |  |           |   |  |  | (2,245,445  | )
|Treasury stock cancelled                                                                          |  | 4, 6(15)           |  |             | (3,000,000  | ) |                    |  |       |                          |  |  | (1,843,588                                          | ) |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  | 4,843,588   |     |  |  |            |   |  |  |           |   |  |  |            |  
|Share of changes in net assets of associates and joint ventures accounted for using equity method |  |                    |  |             |            |   |                    |  |       |                          |  |  | (5,933                                              | ) |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | (5,933      | ) |  |  |           |   |  |  | (5,933      | )
|Adjustments arising from changes in percentage of ownership in subsidiaries                       |  | 4, 6(15)           |  |             |            |   |                    |  |       |                          |  |  | 251,136                                             |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | 251,136     |   |  |  | (600,009   | ) |  |  | (348,873    | )
|Adjustments due to reciprocal shareholdings held by subsidiaries and associates                   |  |                    |  |             |            |   |                    |  |       |                          |  |  | 59,023                                              |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | 59,023      |   |  |  |           |   |  |  | 59,023      |  
|Effect of consolidation of subsidiaries                                                           |  | 6(15)              |  |             |            |   |                    |  |       |                          |  |  |                                                    |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  |            |   |  |  | 2,862,881  |   |  |  | 2,862,881   |  
|Others                                                                                            |  |                    |  |             |            |   |                    |  |       |                          |  |  | 17,182                                              |   |  |                                                           |          |  |     |  |              |     |  |       |           |   |                          |     |           |             |     |  |            |     |  |  | 17,182      |   |  |  |           |   |  |  | 17,182      |  
|                                                                                                  |  |                    |  |             |             |   |                    |  |        |                          |  |  |                                                     |   |  |                                                           |           |  |     |  |               |     |  |       |            |   |                          |     |            |             |     |  |             |     |  |  |             |   |  |  |            |   |  |  |             |  
|Balance as of December 31, 2013                                                                   |  | 6(15)              |  |             | 126,920,817 |   |                    |  | 25,682 |                          |  |  | 45,787,456                                          |   |  |                                                           | 5,248,824 |  |     |  | 33,054,952    |     |  |       | (5,243,972 | ) |                          |     | 9,423,321  |             |     |  | (9,893,082  | )   |  |  | 205,323,998 |   |  |  | 4,319,988  |   |  |  | 209,643,986 |  
|                                                                                                  |  |                    |  |             |             |   |                    |  |        |                          |  |  |                                                     |   |  |                                                           |           |  |     |  |               |     |  |       |            |   |                          |     |            |             |     |  |             |     |  |  |             |   |  |  |            |   |  |  |             |  

The accompanying notes are an integral part of the consolidated financial statements.



F-6



---

##### Table of Contents

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2012 and 2013

(Expressed in Thousands)



|                                                                                             |  |                                  |             |   |      |  |             |     |  |  |            |  
|-------------------------------------------------------------------------------------------- |  | -------------------------------- | ----------- | - | ---- |  | ----------- | --- |  |  | ---------- | -
|                                                                                             |  | For the years ended December 31, |            
|                                                                                             |  | 2012                             |             |   | 2013 | 
|                                                                                             |  | NT$                              |             |   | NT$  |  |             | US$ | 
|Cash flows from operating activities:                                                        |  |                                  |             |   |      |  |             |     |  |  |            |  
|Net income before tax                                                                        |  |                                  | 6,294,605   |   |      |  | 14,340,472  |     |  |  | 480,740    |  
|Adjustments to reconcile net income before tax to net cash provided by operating activities: |  |                                  |             |   |      |  |             |     |  |  |            |  
|Depreciation                                                                                 |  |                                  | 35,118,398  |   |      |  | 37,241,788  |     |  |  | 1,248,468  |  
|Amortization                                                                                 |  |                                  | 723,770     |   |      |  | 1,190,524   |     |  |  | 39,910     |  
|Bad debt expenses                                                                            |  |                                  | (12,059     | ) |      |  | (36,821     | )   |  |  | (1,234     | )
|Net loss (gain) of financial assets at fair value through profit or loss                     |  |                                  | 617,841     |   |      |  | (191,686    | )   |  |  | (6,426     | )
|Interest expense                                                                             |  |                                  | 458,007     |   |      |  | 596,232     |     |  |  | 19,988     |  
|Interest revenue                                                                             |  |                                  | (211,371    | ) |      |  | (301,726    | )   |  |  | (10,115    | )
|Dividend revenue                                                                             |  |                                  | (1,032,451  | ) |      |  | (789,583    | )   |  |  | (26,469    | )
|Share-based payment                                                                          |  |                                  | 195,905     |   |      |  | 28,337      |     |  |  | 950        |  
|Share of profit of associates and joint ventures                                             |  |                                  | (663,379    | ) |      |  | (697,931    | )   |  |  | (23,397    | )
|Gain on disposal of property, plant and equipment                                            |  |                                  | (386,561    | ) |      |  | (40,897     | )   |  |  | (1,371     | )
|Gain on disposal of investments                                                              |  |                                  | (4,830,419  | ) |      |  | (2,224,418  | )   |  |  | (74,570    | )
|Impairment loss on financial assets                                                          |  |                                  | 683,487     |   |      |  | 1,275,775   |     |  |  | 42,768     |  
|Impairment loss on non-financial assets                                                      |  |                                  | 3,496,131   |   |      |  | 56,693      |     |  |  | 1,901      |  
|Gain on repurchases of bonds                                                                 |  |                                  | (105,106    | ) |      |  | (83,629     | )   |  |  | (2,804     | )
|Exchange loss (gain) on financial assets and liabilities                                     |  |                                  | (117,602    | ) |      |  | 208,493     |     |  |  | 6,989      |  
|Exchange loss (gain) on long-term liabilities                                                |  |                                  | (103,406    | ) |      |  | 190,737     |     |  |  | 6,394      |  
|Bargain purchase gain                                                                        |  |                                  |            |   |      |  | (7,153,529  | )   |  |  | (239,810   | )
|Amortization of deferred income                                                              |  |                                  | (101,248    | ) |      |  | (44,101     | )   |  |  | (1,478     | )
|Exchange gain on disposal of non-current assets held for sale                                |  |                                  | (279        | ) |      |  |            |     |  |  |           |  
|                                                                                             |  |                                  |             |   |      |  |             |     |  |  |            |  
|Income and expense adjustments                                                               |  |                                  | 33,729,658  |   |      |  | 29,224,258  |     |  |  | 979,694    |  
|Changes in operating assets and liabilities:                                                 |  |                                  |             |   |      |  |             |     |  |  |            |  
|Financial assets and liabilities at fair value through profit or loss                        |  |                                  | 80,909      |   |      |  | 460         |     |  |  | 15         |  
|Notes receivable and accounts receivable                                                     |  |                                  | (1,882,697  | ) |      |  | 886,762     |     |  |  | 29,727     |  
|Other receivables                                                                            |  |                                  | 39,022      |   |      |  | 89,343      |     |  |  | 2,995      |  
|Inventories                                                                                  |  |                                  | (479,630    | ) |      |  | (112,589    | )   |  |  | (3,774     | )
|Prepayments                                                                                  |  |                                  | (648,202    | ) |      |  | 373,795     |     |  |  | 12,531     |  
|Other current assets                                                                         |  |                                  | (95,711     | ) |      |  | (1,889,239  | )   |  |  | (63,334    | )
|Notes and accounts payable                                                                   |  |                                  | 1,341,039   |   |      |  | 845,365     |     |  |  | 28,339     |  
|Other payables                                                                               |  |                                  | 1,036,798   |   |      |  | (176,478    | )   |  |  | (5,916     | )
|Other current liabilities                                                                    |  |                                  | 123,726     |   |      |  | (16,168     | )   |  |  | (542       | )
|Accrued pension liabilities                                                                  |  |                                  | (164,547    | ) |      |  | 15,020      |     |  |  | 504        |  
|Other liabilities-others                                                                     |  |                                  | 159,303     |   |      |  | 62,928      |     |  |  | 2,109      |  
|                                                                                             |  |                                  |             |   |      |  |             |     |  |  |            |  
|Cash generated from operations                                                               |  |                                  | 39,534,273  |   |      |  | 43,643,929  |     |  |  | 1,463,088  |  
|Interest received                                                                            |  |                                  | 214,841     |   |      |  | 282,564     |     |  |  | 9,472      |  
|Dividend received                                                                            |  |                                  | 1,089,222   |   |      |  | 808,564     |     |  |  | 27,106     |  
|Interest paid                                                                                |  |                                  | (341,100    | ) |      |  | (446,070    | )   |  |  | (14,954    | )
|Income tax paid                                                                              |  |                                  | (99,287     | ) |      |  | (816,526    | )   |  |  | (27,372    | )
|                                                                                             |  |                                  |             |   |      |  |             |     |  |  |            |  
|Net cash provided by operating activities                                                    |  |                                  | 40,397,949  |   |      |  | 43,472,461  |     |  |  | 1,457,340  |  
|                                                                                             |  |                                  |             |   |      |  |             |     |  |  |            |  
|Cash flows from investing activities:                                                        |  |                                  |             |   |      |  |             |     |  |  |            |  
|Acquisition of financial assets at fair value through profit or loss                         |  |                                  | (22,220     | ) |      |  | (79,758     | )   |  |  | (2,674     | )
|Proceeds from disposal of financial assets at fair value through profit or loss              |  |                                  |            |   |      |  | 104,302     |     |  |  | 3,497      |  
|Acquisition of available-for-sale financial assets                                           |  |                                  | (1,291,681  | ) |      |  | (733,034    | )   |  |  | (24,574    | )
|Proceeds from disposal of available-for-sale financial assets                                |  |                                  | 5,257,003   |   |      |  | 2,965,245   |     |  |  | 99,405     |  
|Proceeds from maturity of held-to-maturity financial assets                                  |  |                                  | 13,524      |   |      |  |            |     |  |  |           |  
|Acquisition of financial assets measured at cost                                             |  |                                  | (597,853    | ) |      |  | (1,263,269  | )   |  |  | (42,349    | )
|Proceeds from disposal of financial assets measured at cost                                  |  |                                  | 513,424     |   |      |  | 84,120      |     |  |  | 2,820      |  
|Acquisition of investments accounted for under the equity method                             |  |                                  | (281,695    | ) |      |  | (8,560      | )   |  |  | (287       | )
|Proceeds from disposal of investments accounted for under the equity method                  |  |                                  | 1,705       |   |      |  | 161         |     |  |  | 5          |  
|Decrease in prepayment for investments                                                       |  |                                  |            |   |      |  | 34,803      |     |  |  | 1,167      |  
|Proceeds from capital reduction and liquidation of investments                               |  |                                  | 299,845     |   |      |  | 372,550     |     |  |  | 12,489     |  
|Acquisition of subsidiaries (net of cash acquired)                                           |  |                                  | (1,525      | ) |      |  | 2,641,314   |     |  |  | 88,546     |  
|Net cash paid for disposal of subsidiaries                                                   |  |                                  | (241,261    | ) |      |  | (93,284     | )   |  |  | (3,127     | )
|Acquisition of non-current assets held for sale                                              |  |                                  | (313,171    | ) |      |  |            |     |  |  |           |  
|Acquisition of property, plant and equipment                                                 |  |                                  | (52,185,910 | ) |      |  | (32,911,352 | )   |  |  | (1,103,297 | )
|Proceeds from disposal of property, plant and equipment                                      |  |                                  | 1,157,822   |   |      |  | 576,634     |     |  |  | 19,331     |  
|Increase in deposits-out                                                                     |  |                                  | (764,415    | ) |      |  | (184,306    | )   |  |  | (6,179     | )
|Decrease in deposits-out                                                                     |  |                                  | 696,309     |   |      |  | 277,333     |     |  |  | 9,297      |  
|Acquisition of intangible assets                                                             |  |                                  | (1,354,142  | ) |      |  | (2,881,754  | )   |  |  | (96,606    | )
|Increase in other assets-others                                                              |  |                                  | (41,848     | ) |      |  | (430,857    | )   |  |  | (14,444    | )
|Decrease in other assets-others                                                              |  |                                  | 32,799      |   |      |  | 13,548      |     |  |  | 454        |  
|                                                                                             |  |                                  |             |   |      |  |             |     |  |  |            |  
|Net cash used in investing activities                                                        |  |                                  | (49,123,290 | ) |      |  | (31,516,164 | )   |  |  | (1,056,526 | )
|                                                                                             |  |                                  |             |   |      |  |             |     |  |  |            |  

The accompanying notes are an integral part of the consolidated financial statements.



F-7



---

##### Table of Contents

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2012 and 2013

(Expressed in Thousands)



|                                                             |  |                                  |             |   |      |  |             |     |  |  |           |  
|------------------------------------------------------------ |  | -------------------------------- | ----------- | - | ---- |  | ----------- | --- |  |  | --------- | -
|                                                             |  | For the years ended December 31, |            
|                                                             |  | 2012                             |             |   | 2013 | 
|                                                             |  | NT$                              |             |   | NT$  |  |             | US$ | 
|Cash flows from financing activities:                        |  |                                  |             |   |      |  |             |     |  |  |           |  
|Increase in short-term loans                                 |  |                                  | 13,480,075  |   |      |  | 13,149,006  |     |  |  | 440,798   |  
|Decrease in short-term loans                                 |  |                                  | (17,024,565 | ) |      |  | (14,371,089 | )   |  |  | (481,766  | )
|Proceeds from bonds issued                                   |  |                                  | 10,000,000  |   |      |  | 10,000,000  |     |  |  | 335,233   |  
|Bonds issuance costs                                         |  |                                  | (12,830     | ) |      |  | (12,010     | )   |  |  | (402      | )
|Redemption of bonds                                          |  |                                  | (139,408    | ) |      |  | (2,153,438  | )   |  |  | (72,190   | )
|Proceeds from long-term loans                                |  |                                  | 17,062,355  |   |      |  | 2,737,337   |     |  |  | 91,765    |  
|Repayments of long-term loans                                |  |                                  | (13,942,144 | ) |      |  | (6,199,532  | )   |  |  | (207,829  | )
|Increase in deposits-in                                      |  |                                  | 64,294      |   |      |  | 171,267     |     |  |  | 5,741     |  
|Decrease in deposits-in                                      |  |                                  | (9,092      | ) |      |  | (33,865     | )   |  |  | (1,135    | )
|Cash dividends                                               |  |                                  | (6,316,420  | ) |      |  | (5,061,303  | )   |  |  | (169,671  | )
|Exercise of employee stock options                           |  |                                  | 266,116     |   |      |  | 442,423     |     |  |  | 14,831    |  
|Treasury stock acquired                                      |  |                                  |            |   |      |  | (2,245,445  | )   |  |  | (75,275   | )
|Proceeds from disposal of treasury stock                     |  |                                  | 4,207       |   |      |  | 967         |     |  |  | 32        |  
|Acquisition of non-controlling interests                     |  |                                  |            |   |      |  | (343,989    | )   |  |  | (11,532   | )
|Change in non-controlling interests                          |  |                                  | 155,161     |   |      |  | (4,618      | )   |  |  | (155      | )
|                                                             |  |                                  |             |   |      |  |             |     |  |  |           |  
|Net cash provided by (used in) financing activities          |  |                                  | 3,587,749   |   |      |  | (3,924,289  | )   |  |  | (131,555  | )
|                                                             |  |                                  |             |   |      |  |             |     |  |  |           |  
|Effect of exchange rate changes on cash and cash equivalents |  |                                  | (1,436,046  | ) |      |  | 310,180     |     |  |  | 10,399    |  
|                                                             |  |                                  |             |   |      |  |             |     |  |  |           |  
|Net increase (decrease) in cash and cash equivalents         |  |                                  | (6,573,638  | ) |      |  | 8,342,188   |     |  |  | 279,658   |  
|Cash and cash equivalents at beginning of period             |  |                                  | 49,062,128  |   |      |  | 42,488,490  |     |  |  | 1,424,354 |  
|                                                             |  |                                  |             |   |      |  |             |     |  |  |           |  
|Cash and cash equivalents at end of period                   |  |                                  | 42,488,490  |   |      |  | 50,830,678  |     |  |  | 1,704,012 |  
|                                                             |  |                                  |             |   |      |  |             |     |  |  |           |  
|Investing activities partially paid by cash:                 |  |                                  |             |   |      |  |             |     |  |  |           |  
|Cash paid for acquiring property, plant and equipment        |  |                                  |             |   |      |  |             |     |  |  |           |  
|Increase in property, plant and equipment                    |  |                                  | 49,068,718  |   |      |  | 34,140,108  |     |  |  | 1,144,489 |  
|Add: Effect of acquisition of subsidiaries                   |  |                                  |            |   |      |  | 89,592      |     |  |  | 3,003     |  
|Add: Payable at beginning of period                          |  |                                  | 8,517,694   |   |      |  | 5,382,395   |     |  |  | 180,436   |  
|Less: Effect of disposal of subsidiaries                     |  |                                  | (18,107     | ) |      |  |            |     |  |  |          |  
|Less: Payable at end of period                               |  |                                  | (5,382,395  | ) |      |  | (6,700,743  | )   |  |  | (224,631  | )
|                                                             |  |                                  |             |   |      |  |             |     |  |  |           |  
|Cash paid                                                    |  |                                  | 52,185,910  |   |      |  | 32,911,352  |     |  |  | 1,103,297 |  
|                                                             |  |                                  |             |   |      |  |             |     |  |  |           |  

The accompanying notes are an integral part of the consolidated financial statements.



F-8



---

##### Table of Contents

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2012 and 2013

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)



|1. | HISTORY AND ORGANIZATION
|-- | ------------------------

United Microelectronics Corporation (UMC) was incorporated in
Republic of China ( R.O.C. ) in May 1980 and commenced operations in April 1982. UMC is a full service semiconductor wafer foundry, and provides a variety of services to satisfy customer needs. UMCs ordinary shares were publicly listed on the
Taiwan Stock Exchange (TSE) in July 1985 and its American Depositary Shares (ADSs) were listed on the New York Stock Exchange (NYSE) in September 2000.

The address of its registered office and principal place of business is No. 3, Li-Hsin Road II, Hsinchu Science Park, Hsinchu City,
Taiwan. The principal operating activities of UMC and its subsidiaries (collectively asthe Company) were described in Notes 4(3) and 12.



|2. | DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS FOR ISSUE
|-- | ----------------------------------------------------------------------

The consolidated
financial statements of the Company for the years ended December 31, 2012 and 2013 were approved and authorized for issue by the audit committee of the Board of Directors on April 16, 2014.



|3. | NEW ACCOUNTING PRONOUNCEMENT UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs)
|-- | --------------------------------------------------------------------------------------



| | a. | The Company has not early adopted the following new, revised or amended IFRSs that have been issued and will be effective for annual periods beginning on or after January 1, 2014 in preparing its consolidated
financial statements:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-9



---

##### Table of Contents

|                     |  |                                                                                             |  |                                                 
|-------------------- |  | ------------------------------------------------------------------------------------------- |  | ------------------------------------------------
|No.                  |  | The projects of Standards or Interpretations                                                |  | Effective for annualperiods beginningon or after
|IAS 32               |  | Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities |  | January 1, 2014                                 
|IFRS 10, 12
& IAS 27 |  | Investment Entities                                                                         |  | January 1, 2014                                 
|IFRIC 21             |  | Levies                                                                                      |  | January 1, 2014                                 
|IAS 39               |  | Novation of Derivatives and Continuation of Hedge Accounting                                |  | January 1, 2014                                 
|IAS 19               |  | Defined Benefit Plans: Employee Contributions                                               |  | July 1, 2014                                    
|                     |  | Improvements to International Financial Reporting Standards (2010-2012 cycle)               |  |                                                 
|IFRS 2               |  | Share-based Payment                                                                         |  | July 1, 2014                                    
|IFRS 3               |  | Business Combinations                                                                       |  | July 1, 2014                                    
|IFRS 8               |  | Operating Segments                                                                          |  | July 1, 2014                                    
|IAS 16               |  | Property, Plant and Equipment                                                               |  | July 1, 2014                                    
|IAS 24               |  | Related Party Disclosures                                                                   |  | July 1, 2014                                    
|IAS 38               |  | Intangible Assets                                                                           |  | July 1, 2014                                    
|                     |  | Improvements to International Financial Reporting Standards (2011-2013 cycle)               |  |                                                 
|IFRS 3               |  | Business Combinations                                                                       |  | July 1, 2014                                    
|IFRS 13              |  | Fair Value Measurement                                                                      |  | July 1, 2014                                    
|IAS 40               |  | Investment Property                                                                         |  | July 1, 2014                                    
|IFRS 14              |  | Regulatory Deferral Accounts                                                                |  | January 1, 2016                                 
|IFRS 9               |  | Financial Instruments                                                                       |  | January 1, 2018                                 



| | b. | Other than those discussed below, the Company believes that these standards will not have significant impact or will not be applicable to its financial position or results of operations.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

IFRS 9 Financial Instruments (IFRS 9)

IFRS 9 which is divided in three distinct phases is designed by the International Accounting Standards Board (IASB) to eventually replace
IAS 39, Financial Instruments: Recognition and Measurement (IAS 39) in its entirety. The first phase introduces new requirements for the classification and measurement of financial assets and liabilities. The second phase addresses
the impairment of financial assets, which proposes to replace the incurred loss approach to the impairment of financial assets carried at amortized cost in IAS 39 with an expected credit loss approach, and requires that the expected credit loss
approach be applied to other categories of financial instrument, including loan commitments and financial guarantees. The third phase of the project addresses general hedge accounting. The IASB expects to issue the completed version of IFRS 9, which
will include those limited amendments and the impairment requirements, in the second quarter of 2014. All phases of IFRS 9 are expected to be applied from the same effective date, the IASB has tentatively decided that the effective date is
January 1, 2018. The Company is currently assessing the impact that may have on its consolidated financial statements.



F-10



---

##### Table of Contents

IFRS 10 Consolidated Financial Statements (Amendment) (IFRS 10)

The amendments related to investment entities provide an exception to the consolidation requirements in IFRS 10 and require investment entities
to account for particular subsidiaries at fair value through profit or loss, rather than consolidating them. The amendments also set out disclosure requirements for investment entities. The amendment is effective for annual periods beginning on or
after January 1, 2014 and is not expected to have a material impact on the Companys consolidated financial statements.

IFRIC 21 Levies

This interpretation provides guidance on when to recognize a liability for a levy imposed by a government (both for levies that are accounted
for in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets and those where the timing and amount of the levy is certain). The interpretation is effective for annual periods beginning on or after
January 1, 2014 and is not expected to have a material impact on the Companys consolidated financial statements.

IAS 39
Financial Instruments: Recognition and Measurement (Amendment) - Novation of Derivatives and Continuation of Hedge Accounting

Under the amendment, there would be no need to discontinue hedge accounting if a hedging derivative was novated, provided certain criteria are
met. The interpretation is effective for annual periods beginning on or after January 1, 2014. The Company does not expect this amendment to have a material impact on the Companys consolidated financial statements.

IFRS 8 Operating Segments

The amendments require an entity to disclose the judgments made by management in applying the aggregation criteria to operating segments. The
amendments also clarify that an entity shall only provide reconciliations of the total of the reportable segments assets to the entitys assets if the segment assets are reported regularly to the chief operating decision maker. The
amendment is effective for annual periods beginning on or after July 1, 2014 and is not expected to have a material impact on the Companys consolidated financial statements.



F-11



---

##### Table of Contents

IAS 24 Related Party Disclosures

The amendment clarifies that an entity providing key management personnel services to the reporting entity or to the parent of the reporting
entity is a related party of the reporting entity. The amendment is effective for annual periods beginning on or after July 1, 2014 and is not expected to have a material impact on the Companys consolidated financial statements.

IFRS 3 Business Combinations (IFRS 3)

The standard is amended to clarify that IFRS 3 does not apply to the accounting for the formation of any joint arrangement under IFRS 11,
Joint Arrangements. The amendment also clarifies that the scope exemption only applies in the financial statements of the joint arrangement itself. The amendment is effective for annual periods beginning on or after July 1, 2014 and
is not expected to have a material impact on the Companys consolidated financial statements.

IFRS 13 Fair Value
Measurement (IFRS 13)

The amendment clarifies that paragraph 52 of IFRS 13 includes a scope exception for measuring the
fair value of a group of financial assets and financial liabilities on a net basis. The objective of this amendment is to clarify that this portfolio exception applies to all contracts within the scope of IAS 39 or IFRS 9 regardless of whether they
meet the definitions of financial assets or financial liabilities as defined in IAS 32, Financial Instruments: Presentation. The amendment is effective for annual periods beginning on or after July 1, 2014 and is not expected to
have a material impact on the Companys consolidated financial statements.



|4. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------



| | (1) | Statement of Compliance
| | --- | -----------------------

The Companys consolidated financial statements as of and
for the years ended December 31, 2012 and 2013 were prepared in accordance with IFRSs, including International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations, as issued by IASB.



| | (2) | Basis of Preparation
| | --- | --------------------

The consolidated financial statements have been prepared on a
historical cost basis, except for financial instruments measured at fair value.



F-12



---

##### Table of Contents

| | (3) | General Description of Reporting Entity
| | --- | ---------------------------------------



| | a. | Principles of consolidation
| | -- | ---------------------------

Subsidiaries are fully consolidated from the date of
acquisition (the date on which the Company obtains control), and continue to be consolidated until the date that such control ceases. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting
policies. All intra-group balances, transactions, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction. Total comprehensive
income of subsidiaries is attributed to the stockholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the Company loses control over a subsidiary, the Company derecognizes the assets and liabilities of the subsidiary, as well as any
non-controlling interests previously recorded by the Company. A gain or loss is recognized in profit or loss and is calculated as the difference between: (a) the aggregate of the fair value of consideration received and the fair value of any
retained interest at the date when control is lost; and (b) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Any gain or loss previously recognized in the
other comprehensive income would be reclassified to profit or loss or transferred directly to retained earnings if required by other IFRSs. The fair value of any investment retained in the former subsidiary at the date when control is lost is
regarded as the cost on initial recognition of an investment.



F-13



---

##### Table of Contents

| | b. | The consolidated entities as of January 1, 2012, December 31, 2012 and December 31, 2013 were as follows:
| | -- | ---------------------------------------------------------------------------------------------------------



|         |  |                                                 |  |                                                        |  |                                   |  |                  |  |                 
|-------- |  | ----------------------------------------------- |  | ------------------------------------------------------ |  | --------------------------------- |  | ---------------- |  | ----------------
|         |  |                                                 |  |                                                        |  | Percentage of ownership (%)
As of
|Investor |  | Subsidiary                                      |  | Business nature                                        |  | January 1,2012                    |  | December 31,2012 |  | December 31,2013
|UMC      |  | UMC GROUP (USA)                                 |  | IC sales                                               |  | 100.00                            |  | 100.00           |  | 100.00          
|UMC      |  | UNITED MICROELECTRONICS (EUROPE) B.V.           |  | Marketing support activities                           |  | 100.00                            |  | 100.00           |  | 100.00          
|UMC      |  | UMC CAPITAL CORP.                               |  | Investment holding                                     |  | 100.00                            |  | 100.00           |  | 100.00          
|UMC      |  | GREEN EARTH LIMITED                             |  | Investment holding                                     |  | 100.00                            |  | 100.00           |  | 100.00          
|UMC      |  | TLC CAPITAL CO., LTD. (TLC)                     |  | New business investment                                |  | 100.00                            |  | 100.00           |  | 100.00          
|UMC      |  | UMC NEW BUSINESS INVESTMENT CORP. (NBI)         |  | Investment holding                                     |  | 100.00                            |  | 100.00           |  | 100.00          
|UMC      |  | UMC INVESTMENT (SAMOA) LIMITED                  |  | Investment holding                                     |  | 100.00                            |  | 100.00           |  | 100.00          
|UMC      |  | FORTUNE VENTURE CAPITAL CORP. (FORTUNE)         |  | Consulting and planning for investment in new business |  | 100.00                            |  | 100.00           |  | 100.00          
|UMC      |  | UMC GROUP JAPAN                                 |  | IC sales                                               |  |                                  |  |                 |  | 100.00          
|UMC      |  | UMC KOREA CO., LTD.                             |  | Marketing support activities                           |  |                                  |  |                 |  | 100.00          
|UMC      |  | OMNI GLOBAL LIMITED (OMNI)                      |  | Investment holding                                     |  |                                  |  |                 |  | 100.00          
|UMC      |  | BEST ELITE INTERNATIONAL LIMITED (BE)           |  | Investment holding                                     |  |                                  |  |                 |  | 86.88           
|UMC      |  | WAVETEK MICROELECTRONICS CORPORATION (WAVETEK)  |  | GaAs foundry service                                   |  |                                  |  |                 |  | 74.69           
|UMC      |  | NEXPOWER TECHNOLOGY CORP. (NEXPOWER)            |  | Sales and manufacturing of solar power batteries       |  | 44.16                             |  | 44.16            |  | 44.16           
|UMC      |  | UMC JAPAN                                       |  | Sales and manufacturing of integrated circuits         |  | 100.00                            |  | 100.00           |  |                
|FORTUNE  |  | UNITRUTH INVESTMENT CORP. (UNITRUTH)            |  | Investment holding                                     |  | 100.00                            |  | 100.00           |  | 100.00          
|FORTUNE  |  | TOPCELL SOLAR INTERNATIONAL CO., LTD. (TOPCELL) |  | Sales and manufacturing of solar power cell            |  | 8.81                              |  | 8.79             |  | 26.04           
|FORTUNE  |  | ALLIANCE OPTOTEK CORP. (ALLIANCE)               |  | Design and manufacturing of LED                        |  |                                  |  |                 |  | 21.77           



F-14



---

##### Table of Contents

|                               |  |                                                 |  |                                                  |  |                                   |  |                  |  |                 
|------------------------------ |  | ----------------------------------------------- |  | ------------------------------------------------ |  | --------------------------------- |  | ---------------- |  | ----------------
|                               |  |                                                 |  |                                                  |  | Percentage of ownership (%)
As of
|Investor                       |  | Subsidiary                                      |  | Business nature                                  |  | January 1,2012                    |  | December 31,2012 |  | December 31,2013
|FORTUNE                        |  | NEXPOWER                                        |  | Sales and manufacturing of solar power batteries |  | 5.05                              |  | 5.05             |  | 5.99            
|UNITRUTH                       |  | ALLIANCE                                        |  | Design and manufacturing of LED                  |  |                                  |  |                 |  | 6.86            
|UNITRUTH                       |  | NEXPOWER                                        |  | Sales and manufacturing of solar power batteries |  | 2.25                              |  | 2.25             |  | 2.25            
|UNITRUTH                       |  | TOPCELL                                         |  | Sales and manufacturing of solar power cell      |  | 3.81                              |  | 3.80             |  | 1.03            
|UMC CAPITAL CORP.              |  | UMC CAPITAL (USA)                               |  | Investment holding                               |  | 100.00                            |  | 100.00           |  | 100.00          
|UMC CAPITAL CORP.              |  | ECP VITA PTE. LTD.                              |  | Insurance                                        |  |                                  |  | 100.00           |  | 100.00          
|UMC CAPITAL CORP.              |  | ECP VITA LTD.                                   |  | Insurance                                        |  | 100.00                            |  |                 |  |                
|TLC                            |  | SOARING CAPITAL CORP.                           |  | Investment holding                               |  | 100.00                            |  | 100.00           |  | 100.00          
|TLC                            |  | ALLIANCE                                        |  | Design and manufacturing of LED                  |  |                                  |  |                 |  | 45.88           
|TLC                            |  | NEXPOWER                                        |  | Sales and manufacturing of solar power batteries |  | 5.87                              |  | 5.87             |  | 5.87            
|TLC                            |  | TOPCELL                                         |  | Sales and manufacturing of solar power cell      |  | 8.81                              |  | 8.79             |  | 2.37            
|SOARING CAPITAL CORP.          |  | UNITRUTH ADVISOR (SHANGHAI) CO., LTD.           |  | Investment holding and advisory                  |  | 100.00                            |  | 100.00           |  | 100.00          
|UMC INVESTMENT (SAMOA) LIMITED |  | UMC (BEIJING) LIMITED                           |  | Marketing support activities                     |  |                                  |  | 100.00           |  | 100.00          
|NBI                            |  | TERA ENERGY DEVELOPMENT CO., LTD. (TERA ENERGY) |  | Energy technical services                        |  | 100.00                            |  | 100.00           |  | 100.00          
|NBI                            |  | EVERRICH ENERGY CORP. (EVERRICH)                |  | Solar engineering integrated design services     |  | 90.61                             |  | 89.38            |  | 100.00          
|NBI                            |  | UNISTARS CORP.                                  |  | High brightness LED packages                     |  | 72.83                             |  | 72.04            |  | 78.02           



F-15



---

##### Table of Contents

|                            |  |                                                                     |  |                                              |  |                                   |  |                  |  |                 
|--------------------------- |  | ------------------------------------------------------------------- |  | -------------------------------------------- |  | --------------------------------- |  | ---------------- |  | ----------------
|                            |  |                                                                     |  |                                              |  | Percentage of ownership (%)
As of
|Investor                    |  | Subsidiary                                                          |  | Business nature                              |  | January 1,2012                    |  | December 31,2012 |  | December 31,2013
|NBI                         |  | TOPCELL                                                             |  | Sales and manufacturing of solar power cell  |  | 48.66                             |  | 48.53            |  | 62.38           
|NBI                         |  | WAVETEK                                                             |  | GaAs foundry service                         |  | 72.16                             |  | 74.69            |  |                
|NBI                         |  | GREEN FIELD (SAMOA) LIMITED                                         |  | Investment holding                           |  | 100.00                            |  |                 |  |                
|NBI                         |  | UNITED LIGHTING OPTO-ELECTRONIC INC. (UNITED LIGHTING)              |  | LED lighting manufacturing and sale          |  | 55.25                             |  |                 |  |                
|EVERRICH                    |  | EVERRICH ENERGY INVESTMENT (HK) LIMITED (EVERRICH-HK)               |  | Investment holding                           |  | 100.00                            |  | 100.00           |  | 100.00          
|EVERRICH                    |  | SMART ENERGY ENTERPRISES LIMITED (SMART ENERGY)                     |  | Investment holding                           |  | 100.00                            |  | 100.00           |  | 100.00          
|EVERRICH-HK                 |  | EVERRICH (SHANDONG) ENERGY CO., LTD.                                |  | Solar engineering integrated design services |  | 100.00                            |  | 100.00           |  | 100.00          
|SMART ENERGY                |  | SMART ENERGY SHANDONG CORPORATION                                   |  | Solar engineering integrated design services |  | 100.00                            |  | 100.00           |  | 100.00          
|TERA ENERGY                 |  | TERA ENERGY USA INC.                                                |  | Solar project                                |  |                                  |  | 100.00           |  | 100.00          
|GREEN FIELD (SAMOA) LIMITED |  | NEW BUSINESS REALTY (SAMOA) LIMITED                                 |  | Investment holding                           |  | 100.00                            |  |                 |  |                
|UNITED LIGHTING             |  | UNITED LIGHTING OPTO-ELECTRONIC INVESTMENT (HK) LIMITED             |  | Investment holding                           |  | 100.00                            |  |                 |  |                
|UNITED LIGHTING             |  | POWER LIGHT INVESTMENTS LIMITED (POWER LIGHT (SAMOA))               |  | Investment holding                           |  | 100.00                            |  |                 |  |                
|POWER LIGHT (SAMOA)         |  | BAO LIN (SHANDONG) GUANG DIAN KE JI YOU XIAN GONGSI                 |  | Sales and manufacturing of LED lighting      |  | 100.00                            |  |                 |  |                
|OMNI                        |  | UNITED MICROTECHNOLOGY CORPORATION                                  |  | Research and development                     |  |                                  |  |                 |  | 100.00          
|WAVETEK                     |  | WAVETEK MICROELECTRONICS INVESTMENT (HK) LIMITED                    |  | Investment holding                           |  | 100.00                            |  | 100.00           |  | 100.00          
|WAVETEK                     |  | WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED (WAVETEK-SAMOA) |  | Investment holding                           |  |                                  |  |                 |  | 100.00          
|WAVETEK- SAMOA              |  | WAVETEK MICROELECTRONICS CORPORATION (USA)                          |  | Sales and marketing service                  |  |                                  |  |                 |  | 100.00          



F-16



---

##### Table of Contents

|                            |  |                                          |  |                                                                            |  |                                   |  |                  |  |                 
|--------------------------- |  | ---------------------------------------- |  | -------------------------------------------------------------------------- |  | --------------------------------- |  | ---------------- |  | ----------------
|                            |  |                                          |  |                                                                            |  | Percentage of ownership (%)
As of
|Investor                    |  | Subsidiary                               |  | Business nature                                                            |  | January 1,2012                    |  | December 31,2012 |  | December 31,2013
|NEXPOWER                    |  | NPT HOLDING LIMITED                      |  | Investment holding                                                         |  | 100.00                            |  | 100.00           |  | 100.00          
|NEXPOWER                    |  | SOCIALNEX ITALIA 1 S.R.L.                |  | Photovoltaic power plant                                                   |  |                                  |  | 100.00           |  | 100.00          
|NEXPOWER                    |  | NEWENERGY HOLDING LIMITED                |  | Investment holding                                                         |  | 100.00                            |  |                 |  |                
|NPT HOLDING LIMITED         |  | NLL HOLDING LIMITED                      |  | Investment holding                                                         |  | 100.00                            |  | 100.00           |  | 100.00          
|NEWENERGY HOLDING LIMITED   |  | FUTUREPOWER HOLDING LIMITED              |  | Investment holding                                                         |  | 100.00                            |  |                 |  |                
|FUTUREPOWER HOLDING LIMITED |  | NEXPOWER (SHANDONG) ENERGY CO., LTD.     |  | Sales and manufacturing of photovoltaic batteries and photovoltaic modules |  | 100.00                            |  |                 |  |                
|BE                          |  | INFOSHINE TECHNOLOGY LIMITED (INFOSHINE) |  | Investment holding                                                         |  |                                  |  |                 |  | 100.00          
|INFOSHINE                   |  | OAKWOOD ASSOCIATES LIMITED (OAKWOOD)     |  | Investment holding                                                         |  |                                  |  |                 |  | 100.00          
|OAKWOOD                     |  | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD.     |  | Sales and manufacturing of integrated circuits                             |  |                                  |  |                 |  | 100.00          
|ALLIANCE                    |  | LIGHT HOUSE GLOBAL INCORP. (LIGHT HOUSE) |  | Investment holding                                                         |  |                                  |  |                 |  | 100.00          
|LIGHT HOUSE                 |  | ALLIANCE OPTOTEK DONGGUAN CO., LTD.      |  | LED lighting manufacturing and sale                                        |  |                                  |  |                 |  | 100.00          



| | (4) | Business Combinations and Goodwill
| | --- | ----------------------------------

Business combinations are accounted for using the
acquisition method. The consideration transferred, the identifiable assets acquired and liabilities assumed are measured at the acquisition date fair value. For the components of non-controlling interests in the acquiree that are present ownership
interests and entitle their holders to a proportionate share of the entitys net assets in the event of liquidation, the acquirer measures at either fair value or at the non-controlling interests proportionate share of the acquirees
identifiable net assets. Acquisition-related costs are expensed as incurred and are classified under administrative expenses.

When the
Company acquires a business, it assesses the assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
This includes the separation of embedded derivatives in host contracts held by the acquiree.



F-17



---

##### Table of Contents

If the business combination is achieved in stages, the acquisition date fair value of the
acquirers previously held equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes to
the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance with IAS 39, either in profit or loss or other comprehensive income. If the contingent consideration is classified as
equity, it should not be remeasured until it is finally settled within equity.

Goodwill is initially measured at cost, being the excess of
the aggregate of the consideration transferred and the amount recognized for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the difference is recognized as a gain on bargain purchase.

After initial recognition, goodwill is measured at
cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each cash-generating unit that is expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each unit or groups of units to which the goodwill is so allocated represents the lowest level within the Company at which the goodwill is monitored for
internal management purposes and cannot be larger than an operating segment before aggregation.

Where goodwill forms part of a
cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed is included in the carrying amount of the operation. Goodwill disposed in these circumstance is measured based on the
relative values of the operation disposed and the portion of the cash-generating unit retained.



| | (5) | Foreign Currency Transactions
| | --- | -----------------------------

The Companys consolidated financial statements are
presented in New Taiwan Dollars (NTD), which is also the parent companys functional currency. Each entity in the Company determines its own functional currency and items included in the financial statements of each entity are measured using
that functional currency.



F-18



---

##### Table of Contents

Transactions in foreign currencies are initially recorded by the Companys entities at their
respective functional currency rates prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date. Non-monetary items
measured at fair value in foreign currencies are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in foreign currencies are translated using the exchange rates
as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating
monetary items are taken to profit or loss in the period in which they arise except for the following:



| | a. | Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are
eligible for capitalization.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Foreign currency derivatives within the scope of IAS 39 are accounted for based on the accounting policy for financial instruments.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------



| | c. | Exchange differences arising on a monetary item that is part of a reporting entitys net investment in a foreign operation are recognized initially in other comprehensive income and reclassified from equity to
profit or loss upon disposal of such investment.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

When a gain or loss on a non-monetary item is recognized in other
comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in
profit or loss.



| | (6) | Translation of Foreign Currency Financial Statements
| | --- | ----------------------------------------------------

The assets and liabilities of
foreign operations are translated into NTD at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average exchange rate for the period. The exchange differences arising on the translation
are recognized in other comprehensive income. On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate
component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized.



F-19



---

##### Table of Contents

On partial disposal of a subsidiary that includes a foreign operation that does not result in a
loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. On partial disposal of an associate
or a joint venture that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income
is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising
from the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.



| | (7) | Convenience Translation into U.S. Dollars
| | --- | -----------------------------------------

Translations of amount from NTD into U.S.
dollars (USD) for the readers convenience were calculated at the rate of USD1.00 to NTD29.83 on December 31, 2013 released by Board of Governors of the Federal Reserve System. No representation is made that the NTD amounts could have
been, or could be, converted into USD at this rate.



| | (8) | Current and Non-Current Distinction
| | --- | -----------------------------------

An asset is classified as current when:



| | a. | the Company expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
| | -- | ----------------------------------------------------------------------------------------------------------



| | b. | the Company holds the asset primarily for the purpose of trading;
| | -- | -----------------------------------------------------------------



| | c. | the Company expects to realize the asset within twelve months after the reporting period; or
| | -- | --------------------------------------------------------------------------------------------



| | d. | the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All other assets are classified as non-current.



F-20



---

##### Table of Contents

A liability is classified as current when:



| | a. | the Company expects to settle the liability in normal operating cycle;
| | -- | ----------------------------------------------------------------------



| | b. | the Company holds the liability primarily for the purpose of trading;
| | -- | ---------------------------------------------------------------------



| | c. | the liability is due to be settled within twelve months after the reporting period; or
| | -- | --------------------------------------------------------------------------------------



| | d. | the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in
its settlement by the issue of equity instruments do not affect its classification.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All other liabilities are classified as
non-current.



| | (9) | Cash Equivalents
| | --- | ----------------

Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and with maturity dates that do not present significant risks on changes in value resulting from changes in interest rates, including time deposits with original maturities of three months or less and
repurchase agreements collateralized by government bonds and corporate bonds.



| | (10) | Financial Instruments
| | ---- | ---------------------

Financial assets and financial liabilities are recognized when
the Company becomes a party to the contractual provisions of the instrument.

The Company determines the classification of its financial
assets at initial recognition. In accordance with IAS 39, financial assets of the Company are classified as financial assets at fair value through profit or loss, available-for-sale financial assets, held-to-maturity financial assets and notes,
accounts and other receivables.

Purchase or sale of financial assets and liabilities are recognized using trade date accounting. All
financial assets are recognized initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable costs.

Financial Assets



| | a. | Classification and subsequent measurement
| | -- | -----------------------------------------



F-21



---

##### Table of Contents

| | i. | Financial assets at fair value through profit or loss
| | -- | -----------------------------------------------------

Financial assets at fair value through
profit or loss are comprised of financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss.

Financial assets acquired for the purpose of selling or repurchasing in the near term, and derivative financial instruments that are not
designated as hedging instruments in hedge accounting are classified as financial assets at fair value through profit or loss. Financial assets at fair value through profit or loss are measured at fair value with changes in fair value recognized in
profit or loss.



| | ii. | Available-for-sale financial assets
| | --- | -----------------------------------

Available-for-sale investments are those non-derivative
financial assets that are designated as available-for-sale or are not classified as financial assets at fair value through profit or loss, held-to-maturity financial assets, or loans and receivables.

Available-for-sale financial investments are subsequently measured at fair value. Other than impairment losses and foreign exchange gains and
losses arising from monetary financial assets which are recognized in profit or loss, subsequent measurement of available-for-sale equity instrument financial assets are recognized in other comprehensive income until the investment is derecognized,
at which time the cumulative gain or loss is recognized in profit or loss. If equity instrument investments do not have quoted prices in an active market and their fair value cannot be reliably measured, then they are classified as financial assets
measured at cost on the balance sheet.



| | iii. | Held-to-maturity financial assets
| | ---- | ---------------------------------

Non-derivative financial assets with fixed or determinable
payments and fixed maturities are classified as held-to-maturity when the Company has positive intention and ability to hold them to maturity.

After initial measurement, held-to-maturity financial assets are measured at amortized cost using the effective interest rate (EIR) method,
less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs. The EIR method amortization and impairment, if any, is recognized in profit or loss.



F-22



---

##### Table of Contents

| | iv. | Notes, accounts and other receivables
| | --- | -------------------------------------

Notes and accounts receivable are creditors
rights as a result of sales of goods or services. Other receivables are any receivable not classified as notes and accounts receivable. Notes, accounts and other receivables are initially measured and recognized at their fair values. After initial
recognition, the notes, accounts and other receivables are subsequently measured at amortized cost using the EIR method, less impairment. If the effect of discounting is immaterial, the short term notes, accounts and other receivables are measured
at the original amount.



| | b. | Derecognition of financial assets
| | -- | ---------------------------------

A financial asset is derecognized when:



| | i. | the contractual rights to receive cash flows from the asset have expired;
| | -- | -------------------------------------------------------------------------



| | ii. | the Company has transferred assets and substantially all the risks and rewards of the asset have been transferred; or
| | --- | ---------------------------------------------------------------------------------------------------------------------



| | iii. | the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or to be
received including any cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.



| | c. | Impairment policy
| | -- | -----------------

The carrying amount of a financial asset is reduced as a result of
impairment, except for accounts receivable for which the carrying amount is reduced through use of an allowance account. When an account receivable is deemed to be uncollectible, it is written off from the allowance account.



| | i. | Notes, accounts and other receivables
| | -- | -------------------------------------

The Company first assesses at each reporting date
whether objective evidence of impairment exists for notes, accounts and other receivables that are individually significant. If there is objective evidence that an impairment loss has occurred, the amount of impairment loss is assessed individually.
For notes, accounts and other receivables other than those mentioned above, the Company groups those assets with similar credit risk characteristics and collectively assess them for impairment. If, in a subsequent period, the amount of the
impairment loss decreases, and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and recognized through profit or loss. The reversal shall not
result in a carrying amount of notes, accounts and other receivables that exceeds what the amortized cost would have been had the impairment not been recognized at the date the impairment is reversed.



F-23



---

##### Table of Contents

| | ii. | Other financial assets
| | --- | ----------------------

The Company assesses, at each reporting date, whether there is
objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more
loss events that has occurred since the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the individual financial asset or a set of financial assets.

For the financial assets carried at amortized cost, the amount of the impairment loss is measured as the difference between the carrying
amount and the present value of estimated future cash flows, discounted at its original effective interest rate. For equity investments classified as available-for-sale, objective evidence of an impairment would include a significant or prolonged
decline in the fair value of the investment below its cost. When there is objective evidence of an impairment for available-for-sale equity securities, the full amount of the losses previously recognized in other comprehensive income is reclassified
to profit or loss. Impairment losses recognized on equity investments cannot be reversed through profit or loss. Any subsequent increases in their fair value after impairment are recognized in other comprehensive income.

Financial Liabilities



| | a. | Classification and subsequent measurement
| | -- | -----------------------------------------

The Company classifies the instrument issued as a
financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument.



| | i. | Financial liabilities at fair value through profit or loss
| | -- | ----------------------------------------------------------

Financial liabilities at fair
value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on the subsequent measurement, including interest
paid, are recognized in profit or loss.



| | ii. | Financial liabilities carried at amortized cost
| | --- | -----------------------------------------------

Financial liabilities measured at amortized
cost include interest bearing loans and borrowings that are subsequently measured using the EIR method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR
method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or
transaction costs.



| | b. | Derecognition of financial liabilities
| | -- | --------------------------------------

A financial liability is derecognized when the
obligation under the liability is discharged, cancelled or expires.

When an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of
the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.



F-24



---

##### Table of Contents

| | (11) | Inventories
| | ---- | -----------

Inventories are accounted for on a perpetual basis. Raw materials are
stated at actual purchase costs, while the work in process and finished goods are stated at standard costs and subsequently adjusted to weighted-average costs at the end of each month. The cost of work in progress and finished goods comprises raw
materials, direct labor, other direct costs and related production overheads. Allocation of fixed production overheads to the costs of conversion is based on the normal capacity of the production facilities. Cost associated with underutilization of
capacity is expensed as incurred. Inventories are valued at the lower of cost and net realizable value item by item. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated costs necessary to make the sale.



| | (12) | Non-current Assets Held for Sale
| | ---- | --------------------------------

Non-current assets are classified as held for sale if
they are available for immediate sale in their present condition subject only to terms that are usual and customary for sales of such assets and that are highly probable to complete the sale within one year from the date of classification.
Non-current assets classified as held for sale are measured at the lower of their carrying amounts and fair values less costs to sell. Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or
amortized.

Impairment losses of non-current assets held for sale are recognized in the income statement in the current period for the
excess of the carrying amounts over fair values less costs to sell. Any subsequent increase in fair value less cost to sell of an asset up to the cumulative impairment loss previously recognized in accordance with the IAS 36, Impairment of
Assets (IAS 36) would be recognized as a gain.



| | (13) | Investments Accounted for Under the Equity Method
| | ---- | -------------------------------------------------

The Companys investments in
associates and joint ventures are accounted for using the equity method other than those that meet the criteria to be classified as non-current assets held for sale.

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant
influence is the power to participate in the financial and operating policy decisions of an entity, but is not control or joint control over those policies.

A joint venture is a type of joint arrangement whereby the Company that has joint control of the arrangement has rights to the net assets of
the joint venture. Joint control is the contractually agreed sharing of control of an arrangement with no single party controls the arrangement on its own, which exists only when decisions about the relevant activities require unanimous consent of
the parties sharing control.



F-25



---

##### Table of Contents

Any difference between the acquisition cost and the Companys share of the net fair value of
the identifiable assets and liabilities of associates and joint ventures is accounted for as follows:



| | a. | Any excess of the acquisition cost over the Companys share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture at the date of acquisition is recognized as goodwill
and is included in the carrying amount of the investment. Amortization of goodwill is not permitted.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Any excess of the Companys share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture over the acquisition cost after reassessing is recognized as gain in profit or
loss on the acquisition date.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Under the equity method, the investments in associates and joint ventures are carried in the
balance sheet at cost plus post acquisition changes in the Companys share of profit or loss and other comprehensive income of associates and joint ventures. The Companys share of changes in associates and joint ventures
profit or loss and other comprehensive income are recognized directly in profit or loss and other comprehensive income, respectively, of the Company. Distributions received from an associate or a joint venture reduce the carrying amount of the
investment. Any unrealized gains and losses resulting from transactions between the Company and the associate or the joint venture are eliminated to the extent of the Companys interest in the associate or the joint venture.

Financial statements of associates and joint ventures are prepared for the same reporting period as the Company. Where necessary, adjustments
are made to bring the accounting policies in line with those of the Company.

Upon an associates issuance of new shares, if the
Company takes up more shares than its original proportionate holding while maintaining its significant influence over that associate, such increase would be accounted for as an acquisition of an additional equity interest in the associate. Upon an
associates issuance of new shares, if the Company does not take up proportionate shares and reduces its shareholding percentage while maintaining its significant influence over that associate, the Company will treat the transaction as deemed
disposal and reclassify to profit or loss the proportion of the gain or loss previously recognized in other comprehensive income relating to that reduction in ownership interest where appropriate.



F-26



---

##### Table of Contents

The Company ceases to use the equity method upon loss of significant influence over an associate.
Any difference between the carrying amount of the investment in an associate upon loss of significant influence and the fair value of the retained investment plus proceeds from disposal will be recognized in profit or loss. If an investment in an
associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Company continues to apply the equity method and does not remeasure the retained interest.

The Company determines at each reporting date whether there is any objective evidence that the investments in associates and joint ventures are
impaired. The impairment loss as the difference between the recoverable amount of the associate and joint venture and its carrying value, if any, is recognized in profit or loss in the statement of comprehensive income and forms part of the carrying
amount of the investments.



| | (14) | Property, Plant and Equipment
| | ---- | -----------------------------

Property, plant and equipment is stated at cost, net of
accumulated depreciation and accumulated impairment losses, if any, and any borrowing costs incurred for long-term construction projects are capitalized if the recognition criteria are met. Significant renewals, improvements and major inspections
meeting the recognition criteria are treated as capital expenditures, and the carrying amounts of those replaced parts are derecognized. Maintenance and repairs are recognized in profit or loss as incurred. Any gain or loss arising from
derecognition of the assets is recognized in other operating income and expenses.

Depreciation is calculated on a straight-line basis over
the estimated economic lives. A significant part of an item of property, plant and equipment which has a different useful life from the remainder of the item is depreciated separately.

The depreciation methods, useful lives and residual values for the assets are reviewed at each fiscal year end, and the differences resulted
from the previous estimation are recorded as changes in accounting estimates.

Except for land, which is not depreciated, the estimated
economic lives of the assets are as follows:



|                         |  |                                                    
|------------------------ |  | ---------------------------------------------------
|Buildings                |  | 20~56 years                                        
|Machinery and equipment  |  | 3~11 years                                         
|Transportation equipment |  | 5~7 years                                          
|Furniture and fixtures   |  | 1~9 years                                          
|Leasehold improvement    |  | The shorter of lease terms or economic useful lives



F-27



---

##### Table of Contents

| | (15) | Intangible Assets
| | ---- | -----------------

Intangible assets acquired separately are measured on initial
recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and
accumulated impairment losses, if any. Internally generated intangible assets which fail to meet the recognition criteria are not capitalized and the expenditures are reflected in profit or loss in the period incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication
that the intangible assets may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each fiscal year. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and is treated as changes in accounting estimates.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the
cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are recognized in other operating income and expenses.

Accounting policies of the Companys intangible assets are summarized as follows:



| | a. | Goodwill arising from business combination is not amortized, and is tested for impairment annually or more frequently if events or changes in circumstances suggest that the carrying amount may not be recoverable. If an
event occurs or circumstances change which indicates that the goodwill is impaired, an impairment loss is recognized. Goodwill impairment losses cannot be reversed once recognized.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-28



---

##### Table of Contents

| | b. | Software is amortized over 1~6 years on a straight-line basis.
| | -- | --------------------------------------------------------------



| | c. | Patent and technology license fee: Upon signing of contract and obtaining the right to intellectual property, any portion attributable to non-cancellable and mutually agreed future fixed license fees for patent and
technology is discounted, and recognized as an intangible asset and related liability. The cost of the intangible asset is not revalued once determined on initial recognition, and is depreciated over the economic life (5~10 years) on a straight-line
basis. Interest expenses from the related liability are recognized and calculated based on the effective interest rate method. Based on the timing of payments, the liability is classified as current and non-current.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d. | Others are mainly the intellectual property license fees and amortized over the shorter of the contract term or estimated economic life (3 years) of the related technology on a straight-line basis.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (16) | Impairment of Non-Financial Assets
| | ---- | ----------------------------------

The Company assesses at each reporting date whether
there is an indication that an asset in the scope of IAS 36 may be impaired. If any indication exists, the Company completes impairment testing for the cash-generating unit (CGU) to which the individual assets belong. Where the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. The recoverable amount of an individual asset or a CGU is the higher of its fair value less costs to sell and its value in
use. If circumstances indicate that previously recognized impairment losses may no longer exist or may have decreased at each reporting date, the Company re-assesses the assets or CGUs recoverable amount. A previously recognized
impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying
amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation or amortization, had no impairment loss been recognized for the asset in prior years.

A CGU, or groups of CGU, to which goodwill has been allocated is tested for impairment annually at the same time every year, irrespective of
whether there is any indication of impairment. Where the carrying amount of a CGU (including the carrying amount of goodwill) exceeds its recoverable amount, the CGU is considered impaired. If an impairment loss is to be recognized, it is first
allocated to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of
units). Impairment losses relating to goodwill cannot be reversed in future periods.

The recognition or reversal of impairment losses is
classified as other operating income and expenses.



F-29



---

##### Table of Contents

| | (17) | Bonds
| | ---- | -----

Convertible bonds

UMC evaluates the terms of the convertible bonds issued to determine whether it contains both a liability and an equity component. Furthermore,
UMC assesses if the economic characteristics and risks of the put and call options embedded in the convertible bonds are closely related to the economic characteristics and risk of the host contract before separating the equity element.

For the liability component excluding the derivatives, its fair value is determined based on the effective interest rate applied at that time
by the market to instruments of comparable credit status. The liability component is classified as a financial liability measured at amortized cost using the effective interest method before the instrument is converted or settled. For the embedded
derivative that is not closely related to the host contract, it is classified as a liability component and subsequently measured at fair value through profit or loss unless it qualifies as an equity component. The equity component is assigned the
residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. Its carrying amount is not remeasured in the subsequent accounting periods. If the convertible bond issued
does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IAS 39.

If the
convertible bondholders exercise their conversion right before maturity, UMC shall adjust the carrying amount of the liability component. The adjusted carrying amount of the liability component at conversion and the carrying amount of equity
component are credited to common stock and additional paid-in capital - premiums. No gain or loss is recognized upon bond conversion.

In
addition, the liability component of convertible bonds is classified as a current liability if within 12 months the bondholders may exercise the put right. After the put right expires, the liability component of the convertible bonds should be
reclassified as a non-current liability if it meets the definition of a non-current liability in all other respects.



F-30



---

##### Table of Contents

Exchangeable bonds

UMC also has exchangeable bonds where the bondholders may exchange the bonds into ordinary shares of certain public entities which UMC holds as
available-for-sale financial assets. When exchangeable bondholders exercise their right to exchange their bonds for reference shares, the book value of the bonds is offset against the book value of the investments in reference shares and the related
stockholders equity accounts, with the difference recognized as a gain or loss on disposal of investments.

In accordance with IAS
39, if the economic characteristics and risks of the embedded call or put options are not clearly and closely related to the host contract, the derivative financial instruments embedded in exchangeable bonds would be recognized separately as
financial assets or liabilities at fair value through profit or loss.

Both the host contract and bifurcated embedded derivative financial
instrument in exchangeable bonds are classified as current liabilities if the bondholders have the right to demand settlement by exercising the exchange option of the bonds.



| | (18) | Post-Employment Benefits
| | ---- | ------------------------

All regular employees are entitled to a defined benefit
pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committees name with the Bank of Taiwan and hence, not associated with the Company. Therefore, fund assets are not to be
included in the Companys consolidated financial statements. Pension benefits for employees of the overseas branch and subsidiaries are provided in accordance with the local regulations.

The Labor Pension Act of the R.O.C. (the Act), which adopts a defined contribution plan, became effective on July 1, 2005. Employees
eligible for the Labor Standards Law, a defined benefit plan, were allowed to elect either the pension calculation under the Act or continue to be subject to the pension calculation under the Labor Standards Law. Those employees that elected to be
subject to the Act will have their seniority achieved under the Labor Standards Law retained upon election of the Act, and the Company will make monthly contributions and recognized in expense of no less than 6% of these employees monthly
wages to the employees individual pension accounts. Overseas subsidiaries and branches make contributions to the respective benefit plans based on the specific percentage requirement of local regulations. Post-employment benefit plan that is
classified as a defined benefit plan is accounted for under the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. The Company recognizes all actuarial gains and losses in the periods which they occur
in other comprehensive income, which then are immediately recognized in retained earnings.



F-31



---

##### Table of Contents

| | (19) | Treasury Stock
| | ---- | --------------

UMC own equity instruments repurchased (treasury shares) are recognized
at repurchase cost and deducted from equity. Any difference between the carrying amount and the consideration is recognized in equity.



| | (20) | Share-Based Payment Transactions
| | ---- | --------------------------------

The cost of equity-settled transactions between the
Company and its employees is measured based on the fair value at the date on which they are granted. The fair value of the equity instruments is determined using an appropriate pricing model.

The cost of equity-settled transactions is recognized, together with a corresponding increase in other capital reserves in equity, over the
periods in which the performance and/or service conditions are being fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has passed and the
Companys best estimate of the quantity of equity instruments that will ultimately vest. The charge to profit or loss for a period represents the movement in cumulative expense recognized between the beginning and the end of that period.

No expense will be recognized for awards that do not ultimately vest, except for equity-settled transactions for which vesting is conditional
upon a market or non-vesting condition. These are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been
modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the
date of modification.



F-32



---

##### Table of Contents

Where an equity-settled award is cancelled, it is treated as if it fully vests on the date of
cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award substitutes
for the cancelled award and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.



| | (21) | Revenue Recognition
| | ---- | -------------------

Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. The recognition criteria and methods are described below:

Sales revenue

Revenue
from sale of goods is recognized when all the following conditions have been satisfied:



| | a. | the significant risks and rewards of ownership of the goods have been transferred to the buyer;
| | -- | -----------------------------------------------------------------------------------------------



| | b. | neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold have been retained;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------



| | c. | the amount of revenue can be measured reliably;
| | -- | -----------------------------------------------



| | d. | it is probable that the economic benefits associated with the transaction will flow to the entity; and
| | -- | ------------------------------------------------------------------------------------------------------



| | e. | the costs incurred or to be incurred in respect of the transaction can be measured reliably.
| | -- | --------------------------------------------------------------------------------------------

Sales returns and discounts are estimated based on customer complaints, historical experiences and any other known factors that might
significantly affect the estimation and recorded in the same period in which sales are made.

Interest income

For financial assets measured at amortized cost (including held-to-maturity financial assets) and financial assets at fair value through profit
or loss, interest income is recorded using the effective interest rate and recognized in profit or loss.



F-33



---

##### Table of Contents

Dividends

Revenue is recognized when the Companys right to receive the dividends is established.



| | (22) | Income Tax
| | ---- | ----------

Income tax expense (benefit) is the aggregate amount of current income tax
and deferred income tax included in the determination of profit or loss for the period.

Current income tax

Current income tax assets and liabilities for the current period and prior periods are measured using the tax rates and tax laws that have been
enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity rather than profit or loss.

Undistributed earnings, calculated based on Business Entity Accounting Act are subject to a 10% tax in accordance with the Income Tax Law
of the R.O.C. Accordingly, the undistributed tax impact of 10% is provided in the period the income is earned, assuming that no earnings are distributed. Any reduction in the liability will be recognized when the income is distributed upon the
stockholders approval in the subsequent year. Tax on undistributed earnings may be offset by the Companys available tax credits carried forward, where applicable. As such, the incremental tax accrued on undistributed earnings may be
offset by a corresponding reduction in deferred income tax assets, where applicable.

Deferred income tax

Deferred income tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their
carrying amounts in financial statements at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary
differences, except:



| | a. | When the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-34



---

##### Table of Contents

| | b. | In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable
that the temporary differences will not be reversed in the foreseeable future.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Deferred tax assets are recognized for all
deductible temporary differences, carry forward of unused tax credits and any unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilized, except:



| | a. | Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the
liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow the manner in which
the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items not relating to profit or loss is not recognized in profit or loss but rather in other
comprehensive income or directly in equity. Deferred tax assets are reassessed and recognized at each reporting date. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable
that future taxable profits will allow the deferred tax assets to be recovered.

Deferred tax assets and liabilities offset each other, if
a legally enforceable right exists to set off current income tax assets against current income tax liabilities, and the deferred taxes relate to the same taxable entity and the same taxation authority.



F-35



---

##### Table of Contents

Tax benefits acquired as part of a business combination, but not satisfying the criteria for
separate recognition at that date, would be recognized subsequently if new information about changes in facts and circumstances becomes known. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill)
if it occurs during the measurement period or recognized in profit or loss.



| | (23) | Earnings per Share
| | ---- | ------------------

Earnings per share is computed according to IAS 33, Earnings
Per Share. Basic earnings per share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the current reporting period. Diluted earnings per share is computed by taking basic earnings per share
into consideration plus additional ordinary shares that would have been outstanding if the dilutive share equivalents had been issued. Net income is also adjusted for interest and other income or expenses derived from any underlying dilutive share
equivalents. The weighted-average of outstanding shares is adjusted retroactively for stock dividends and employee stock bonus issues.



|5. | SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
|-- | -----------------------------------------------------------

The preparation of the
Companys consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, the accompanying disclosures and the disclosure of
contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation for uncertainty at the reporting date, that would have a
significant risk for a material adjustment to the carrying amounts of assets or liabilities within the next fiscal year are discussed below.

The Company bases its assumptions and estimates on information available when the consolidated financial statements were prepared. Existing
circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.



F-36



---

##### Table of Contents

| | (1) | The Fair Value of Financial Instruments
| | --- | ---------------------------------------

Where the fair values of financial assets and
financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including income approach (for example, the discounted cash flows model) or the market approach. Changes in
assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 11 for more details.



| | (2) | Derivative Instruments
| | --- | ----------------------

The embedded derivative features contained in exchangeable bonds are
bifurcated and separately accounted for if the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to those of the host contracts. Those bifurcated embedded derivatives are fair valued at the
end of each reporting period by using the option pricing model with the changes in fair value included in earnings. The valuation model uses the market-based observable inputs including share price, volatility, credit spread and swap rates.



| | (3) | Inventories
| | --- | -----------

Inventories are valued at lower of cost and net realizable value item by item. Net
realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Please refer to Note 6(4). Costs of completion include direct labor and
overhead, including depreciation and maintenance of production equipment, indirect labor costs, indirect material costs, supplies, utilities and royalties that is expected to be incurred at normal production level. The Company estimates normal
production level taking into account loss of capacity resulting from planned maintenance, based on historical experience and current production capacity.



| | (4) | Post-Employment Benefits
| | --- | ------------------------

Cost of post-employment benefit pension plan and the present value of
the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary
increases and mortality rates. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each
reporting date. The assumptions used for measuring pension cost and the present value of the pension obligation are disclosed in Note 6(14).



F-37



---

##### Table of Contents

In determining the appropriate discount rate, management considers the interest rates of the
government bonds extrapolated from maturity corresponding to the expected duration of the defined benefit obligation. As for the rate of future salary increase, management takes account of past experiences, comparisons within the industry and the
geographical region, inflation and the discount rate.



| | (5) | Share-Based Payment Transactions
| | --- | --------------------------------

The Company measures the cost of equity-settled transactions
with employees based on reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is
dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions
about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 6(16).



| | (6) | Revenue Recognition-Sales Returns and Discounts
| | --- | -----------------------------------------------

The Company estimates sales returns and
discounts based on customer complaints, historical experience and other known factors that might significantly affect the estimation.



| | (7) | Impairment of Property, Plant and Equipment
| | --- | -------------------------------------------

At each reporting date or whenever events indicate
that the assets value has declined or significant changes in the market with an adverse effect have taken place, the Company assesses whether there is an indication that an asset in the scope of IAS 36 may be impaired. If any indication
exists, the Company completes impairment testing for the CGU to which the individual assets belong. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount. The recoverable amount of an individual asset or CGU is the higher of fair value less costs to sell and its value in use. The fair value less costs to sell is based on best information available to reflect the amount that an entity could
obtain from the disposal of the asset in an arms length transaction between knowledgeable, willing parties, after deducting the costs of disposal. The value in use is measured at the net present value of the future cash flows the entity
expects to derive from the asset or CGU. Cash flow projection involves subjective judgments and estimates which include the estimated useful lives of property, plant and equipment, capacity that generates future cash flows, capacity of physical
output, potential fluctuations of economic cycle in the industry and the Companys operating situation.



F-38



---

##### Table of Contents

| | (8) | Income Tax
| | --- | ----------

Uncertainties exist with respect to the interpretation of complex tax regulations,
changes in tax laws, and the amount and timing of future taxable income. The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates.
The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may
arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the Company.

Deferred tax assets
are recognized for all carryforward of unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profit will be available or there are sufficient taxable temporary differences against
which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable
temporary differences. Please refer to Note 6(21) for more details on unrecognized deferred tax assets.



| | (9) | Classification of Joint Arrangements
| | --- | ------------------------------------

The Company holds significant percentage of the voting
rights of its joint arrangements. The Company has joint control over these arrangements as under the contractual agreements, unanimous consent is required from all parties to the agreements for all relevant activities.

The Companys joint arrangements are structured as limited companies and provide the Company and the parties to the agreements with rights
to the net assets of the limited companies under the arrangements. Therefore, these entities are classified as joint ventures of the Company.



F-39



---

##### Table of Contents

|6. | CONTENTS OF SIGNIFICANT ACCOUNTS
|-- | --------------------------------



| | (1) | CASH AND CASH EQUIVALENTS
| | --- | -------------------------



|                                                                             |  |                 |            |  |                  |   |            |                  |  |   |            | 
|---------------------------------------------------------------------------- |  | --------------- | ---------- |  | ---------------- | - | ---------- | ---------------- |  | - | ---------- | 
|                                                                             |  | As of           |           
|                                                                             |  | January 1, 2012 |            |  | December 31,2012 |   |            | December 31,2013 | 
|Cash on hand                                                                 |  | $               | 4,470      |  |                  | $ | 3,971      |                  |  | $ | 3,639      | 
|Checking and savings accounts                                                |  |                 | 13,795,814 |  |                  |   | 10,656,261 |                  |  |   | 8,894,827  | 
|Time deposits                                                                |  |                 | 31,729,840 |  |                  |   | 27,243,501 |                  |  |   | 36,263,171 | 
|Repurchase agreements collateralized by government bonds and corporate bonds |  |                 | 3,532,004  |  |                  |   | 4,584,757  |                  |  |   | 5,669,041  | 
|                                                                             |  |                 |            |  |                  |   |            |                  |  |   |            | 
|Total                                                                        |  | $               | 49,062,128 |  |                  | $ | 42,488,490 |                  |  | $ | 50,830,678 | 
|                                                                             |  |                 |            |  |                  |   |            |                  |  |   |            | 



| | (2) | FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
| | --- | -----------------------------------------------------



|                                                                 |  |                |         |  |                  |   |         |                  |  |   |         | 
|---------------------------------------------------------------- |  | -------------- | ------- |  | ---------------- | - | ------- | ---------------- |  | - | ------- | 
|                                                                 |  | As of          |        
|                                                                 |  | January 1,2012 |         |  | December 31,2012 |   |         | December 31,2013 | 
|Designated financial assets at fair value through profit or loss |  |                |         | 
|Convertible bonds                                                |  | $              | 184,046 |  |                  | $ | 43,680  |                  |  | $ | 60,441  | 
|Preferred stocks                                                 |  |                | 26,295  |  |                  |   | 29,026  |                  |  |   |        | 
|                                                                 |  |                |         |  |                  |   |         |                  |  |   |         | 
|Subtotal                                                         |  |                | 210,341 |  |                  |   | 72,706  |                  |  |   | 60,441  | 
|                                                                 |  |                |         |  |                  |   |         |                  |  |   |         | 
|Financial assets held for trading                                |  |                |         | 
|Listed stocks                                                    |  |                | 202,081 |  |                  |   | 256,685 |                  |  |   | 234,583 | 
|Corporate bonds                                                  |  |                | 403,220 |  |                  |   | 399,309 |                  |  |   | 398,681 | 
|                                                                 |  |                |         |  |                  |   |         |                  |  |   |         | 
|Subtotal                                                         |  |                | 605,301 |  |                  |   | 655,994 |                  |  |   | 633,264 | 
|                                                                 |  |                |         |  |                  |   |         |                  |  |   |         | 
|Total                                                            |  | $              | 815,642 |  |                  | $ | 728,700 |                  |  | $ | 693,705 | 
|                                                                 |  |                |         |  |                  |   |         |                  |  |   |         | 
|                                                                 |  |                |        
|Current                                                          |  | $              | 695,931 |  |                  | $ | 655,994 |                  |  | $ | 633,264 | 
|Noncurrent                                                       |  |                | 119,711 |  |                  |   | 72,706  |                  |  |   | 60,441  | 
|                                                                 |  |                |         |  |                  |   |         |                  |  |   |         | 
|Total                                                            |  | $              | 815,642 |  |                  | $ | 728,700 |                  |  | $ | 693,705 | 
|                                                                 |  |                |         |  |                  |   |         |                  |  |   |         | 



F-40



---

##### Table of Contents

| | (3) | ACCOUNTS RECEIVABLE, NET
| | --- | ------------------------



|                                                |  |                 |            |   |                  |   |            |                  |  |   |            |  
|----------------------------------------------- |  | --------------- | ---------- | - | ---------------- | - | ---------- | ---------------- |  | - | ---------- | -
|                                                |  | As of           |           
|                                                |  | January 1, 2012 |            |   | December 31,2012 |   |            | December 31,2013 | 
|Accounts receivable                             |  | $               | 15,235,258 |   |                  | $ | 17,426,163 |                  |  | $ | 17,714,962 |  
|Less: allowance for sales returns and discounts |  |                 | (165,000   | ) |                  |   | (592,043   | )                |  |   | (516,189   | )
|Less: allowance for doubtful accounts           |  |                 | (679,717   | ) |                  |   | (613,288   | )                |  |   | (574,421   | )
|                                                |  |                 |            |   |                  |   |            |                  |  |   |            |  
|Net                                             |  | $               | 14,390,541 |   |                  | $ | 16,220,832 |                  |  | $ | 16,624,352 |  
|                                                |  |                 |            |   |                  |   |            |                  |  |   |            |  

Aging analysis of accounts receivable:



|                                                                    |  |                                  |            |   |                  |   |            |                  |  |   |            | 
|------------------------------------------------------------------- |  | -------------------------------- | ---------- | - | ---------------- | - | ---------- | ---------------- |  | - | ---------- | 
|                                                                    |  | As of                            |           
|                                                                    |  | January 1, 2012                  |            |   | December 31,2012 |   |            | December 31,2013 | 
|Neither past due nor impaired                                       |  | $                                | 12,382,985 |   |                  | $ | 13,713,487 |                  |  | $ | 14,204,640 | 
|                                                                    |  |                                  |            |   |                  |   |            |                  |  |   |            | 
|Past due but not impaired:                                          |  |                                  |            |   |                  |   |            |                  |  |   |            | 
|£ 30 days                                                           |  |                                  | 1,277,971  |   |                  |   | 2,185,203  |                  |  |   | 2,113,439  | 
|31 to 60 days                                                       |  |                                  | 406,722    |   |                  |   | 129,133    |                  |  |   | 279,047    | 
|61 to 90 days                                                       |  |                                  | 129,561    |   |                  |   | 70,481     |                  |  |   | 14,204     | 
|91 to 120 days                                                      |  |                                  | 129,020    |   |                  |   | 6,274      |                  |  |   | 13,022     | 
|> 120 days                                                          |  |                                  | 64,282     |   |                  |   | 116,254    |                  |  |   |           | 
|                                                                    |  |                                  |            |   |                  |   |            |                  |  |   |            | 
|Subtotal                                                            |  |                                  | 2,007,556  |   |                  |   | 2,507,345  |                  |  |   | 2,419,712  | 
|                                                                    |  |                                  |            |   |                  |   |            |                  |  |   |            | 
|Total                                                               |  | $                                | 14,390,541 |   |                  | $ | 16,220,832 |                  |  | $ | 16,624,352 | 
|                                                                    |  |                                  |            |   |                  |   |            |                  |  |   |            | 
|Movement on allowance for individually evaluated doubtful
accounts: |  |                                  |            |  
|                                                                    |  | For the years ended December 31, |            |   |                  |  
|                                                                    |  | 2012                             |            |   | 2013             |   |           
|Beginning balance                                                   |  | $                                | 679,717    |   |                  | $ | 613,288    |                  | 
|Net charge for the period                                           |  |                                  | (66,429    | ) |                  |   | (38,867    | )                | 
|                                                                    |  |                                  |            |   |                  |   |            |                  | 
|Ending balance                                                      |  | $                                | 613,288    |   |                  | $ | 574,421    |                  | 
|                                                                    |  |                                  |            |   |                  |   |            |                  | 



F-41



---

##### Table of Contents

The terms for third party domestic sales were net 30~60 days, while the collection periods for
third party overseas sales were month end 30~60 days.

The impairment losses assessed individually as of December 31, 2012 and 2013
primarily resulted from the financial difficulties of the counter trading parties and the amounts recognized were the difference between the carrying amount of the accounts receivable and the present value of expected collectable amounts. The
Company has no collateral with respect to those accounts receivables.



| | (4) | INVENTORIES, NET
| | --- | ----------------



|                                               |  |                 |            |   |                  |   |            |                  |  |   |            |  
|---------------------------------------------- |  | --------------- | ---------- | - | ---------------- | - | ---------- | ---------------- |  | - | ---------- | -
|                                               |  | As of           |           
|                                               |  | January 1, 2012 |            |   | December 31,2012 |   |            | December 31,2013 | 
|Raw materials                                  |  | $               | 2,394,427  |   |                  | $ | 1,847,533  |                  |  | $ | 2,327,044  |  
|Supplies and spare parts                       |  |                 | 2,276,999  |   |                  |   | 2,142,737  |                  |  |   | 2,397,733  |  
|Work in process                                |  |                 | 7,789,462  |   |                  |   | 9,369,975  |                  |  |   | 8,894,291  |  
|Finished goods                                 |  |                 | 3,212,117  |   |                  |   | 2,567,077  |                  |  |   | 2,351,067  |  
|                                               |  |                 |            |   |                  |   |            |                  |  |   |            |  
|Total                                          |  |                 | 15,673,005 |   |                  |   | 15,927,322 |                  |  |   | 15,970,135 |  
|Less: allowance for inventory valuation losses |  |                 | (2,969,299 | ) |                  |   | (2,903,612 | )                |  |   | (1,976,876 | )
|                                               |  |                 |            |   |                  |   |            |                  |  |   |            |  
|Net                                            |  | $               | 12,703,706 |   |                  | $ | 13,023,710 |                  |  | $ | 13,993,259 |  
|                                               |  |                 |            |   |                  |   |            |                  |  |   |            |  



| | a. | For the years ended December 31, 2012 and 2013, the Company recognized NT$93,932 million and NT$97,675 million, respectively, for costs of inventories in expenses, of which NT$5 million and NT$974 million,
respectively, were related to gains recognized when the circumstances that caused the net realizable value of inventory to be lower than its cost no longer existed.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Inventories were not pledged.
| | -- | -----------------------------



F-42



---

##### Table of Contents

| | (5) | AVAILABLE-FOR-SALE FINANCIAL ASSETS
| | --- | -----------------------------------



|                    |  |                 |            |  |                  |   |            |                  |  |   |            | 
|------------------- |  | --------------- | ---------- |  | ---------------- | - | ---------- | ---------------- |  | - | ---------- | 
|                    |  | As of           |           
|                    |  | January 1, 2012 |            |  | December 31,2012 |   |            | December 31,2013 | 
|Common stocks       |  | $               | 28,277,121 |  |                  | $ | 23,682,805 |                  |  | $ | 21,250,880 | 
|Preferred stocks    |  |                 | 181,200    |  |                  |   | 165,300    |                  |  |   | 312,600    | 
|Depositary receipts |  |                 | 37,400     |  |                  |   | 299,908    |                  |  |   |           | 
|Funds               |  |                 | 73,606     |  |                  |   | 158,604    |                  |  |   | 127,040    | 
|                    |  |                 |            |  |                  |   |            |                  |  |   |            | 
|Total               |  | $               | 28,569,327 |  |                  | $ | 24,306,617 |                  |  | $ | 21,690,520 | 
|                    |  |                 |            |  |                  |   |            |                  |  |   |            | 
|                    |  |                 |           
|Current             |  | $               | 5,124,780  |  |                  | $ | 4,330,880  |                  |  | $ | 2,134,379  | 
|Noncurrent          |  |                 | 23,444,547 |  |                  |   | 19,975,737 |                  |  |   | 19,556,141 | 
|                    |  |                 |            |  |                  |   |            |                  |  |   |            | 
|Total               |  | $               | 28,569,327 |  |                  | $ | 24,306,617 |                  |  | $ | 21,690,520 | 
|                    |  |                 |            |  |                  |   |            |                  |  |   |            | 

UMC issued bonds that are exchangeable at any time on or after January 1, 2010 and prior to
November 22, 2014, for common stocks originally owned and classified as available-for-sale financial assets, noncurrent. Therefore, these common stocks were classified as current assets since the exchangeable date.



F-43



---

##### Table of Contents

| | (6) | FINANCIAL ASSETS MEASURED AT COST, NON-CURRENT
| | --- | ----------------------------------------------



|                 |  |                 |           |  |                  |   |           |                  |  |   |           | 
|---------------- |  | --------------- | --------- |  | ---------------- | - | --------- | ---------------- |  | - | --------- | 
|                 |  | As of           |          
|                 |  | January 1, 2012 |           |  | December 31,2012 |   |           | December 31,2013 | 
|Common stocks    |  | $               | 774,480   |  |                  | $ | 622,729   |                  |  | $ | 610,006   | 
|Preferred stocks |  |                 | 1,898,071 |  |                  |   | 2,160,749 |                  |  |   | 3,062,449 | 
|Funds            |  |                 | 381,407   |  |                  |   | 378,640   |                  |  |   | 412,837   | 
|                 |  |                 |           |  |                  |   |           |                  |  |   |           | 
|Total            |  | $               | 3,053,958 |  |                  | $ | 3,162,118 |                  |  | $ | 4,085,292 | 
|                 |  |                 |           |  |                  |   |           |                  |  |   |           | 

Since these financial assets mostly consist of non-publicly traded stocks and private venture funds, for which
the fair value cannot be reliably measured due to lack of sufficient financial information available, the Company measures these financial assets at cost.



| | (7) | INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD
| | --- | -------------------------------------------------



| | a. | Details of investments accounted for under the equity method were as follows:
| | -- | -----------------------------------------------------------------------------



|                                                  |  |                 |         |  |                                        |  |       |                   |  |   |                                        |  |  |        |       |  |                                        |   |         |  |  |  |       | 
|------------------------------------------------- |  | --------------- | ------- |  | -------------------------------------- |  | ----- | ----------------- |  | - | -------------------------------------- |  |  | ------ | ----- |  | -------------------------------------- | - | ------- |  |  |  | ----- | 
|                                                  |  | As of           |        
|                                                  |  | January 1, 2012 |         |  | December 31, 2012                      |  |       | December 31, 2013 | 
|Investee companies                                |  | Amount          |         |  | Percentage ofOwnership orVoting Rights |  |       | Amount            |  |   | Percentage ofOwnership orVoting Rights |  |  | Amount |       |  | Percentage ofOwnership orVoting Rights |  
|Listed companies                                  |  |                 |         |  |                                        |  |       |                   |  |   |                                        |  |  |        |       |  |                                        |   |         |  |  |  |       | 
|CRYSTALWISE TECHNOLOGY INC. (CRYSTALWISE)(Note A) |  | $               | 87,483  |  |                                        |  | 4.25  |                   |  | $ | 78,621                                 |  |  |        | 4.21  |  |                                        | $ |        |  |  |  |      | 
|                                                  |  |                 |         |  |                                        |  |       |                   |  |   |                                        |  |  |        |       |  |                                        |   |         |  |  |  |       | 
|Subtotal                                          |  |                 | 87,483  |  |                                        |  |       |                   |  |   | 78,621                                 |  |  |        |       |  |                                        |   |        |  |  |  |       | 
|                                                  |  |                 |         |  |                                        |  |       |                   |  |   |                                        |  |  |        |       |  |                                        |   |         |  |  |  |       | 
|Unlisted companies                                |  |                 |         |  |                                        |  |       |                   |  |   |                                        |  |  |        |       |  |                                        |   |         |  |  |  |       | 
|MOS ART PACK CORP. (MAP) (Note B)                 |  |                 | 238,373 |  |                                        |  | 72.98 |                   |  |   | 238,373                                |  |  |        | 72.98 |  |                                        |   | 238,373 |  |  |  | 72.98 | 



F-44



---

##### Table of Contents

|                                                                    |  |                 |           |  |                                        |  |       |                   |  |  |                                        |  |  |        |       |  |                                        |  |           |  |  |  |       | 
|------------------------------------------------------------------- |  | --------------- | --------- |  | -------------------------------------- |  | ----- | ----------------- |  |  | -------------------------------------- |  |  | ------ | ----- |  | -------------------------------------- |  | --------- |  |  |  | ----- | 
|                                                                    |  | As of           |          
|                                                                    |  | January 1, 2012 |           |  | December 31, 2012                      |  |       | December 31, 2013 | 
|Investee companies                                                  |  | Amount          |           |  | Percentage ofOwnership orVoting Rights |  |       | Amount            |  |  | Percentage ofOwnership orVoting Rights |  |  | Amount |       |  | Percentage ofOwnership orVoting Rights | 
|UNITED LIGHTING OPTO-ELECTRONIC INC. (UNITED LIGHTING) (Note C)     |  |                 |          |  |                                        |  |      |                   |  |  | 12,493                                 |  |  |        | 55.25 |  |                                        |  | 12,473    |  |  |  | 55.25 | 
|SHANDONG HUAHONG ENERGY INVEST CO., INC. (SHANDONG HUAHONG)(Note D) |  |                 | 725,381   |  |                                        |  | 50.00 |                   |  |  | 688,008                                |  |  |        | 50.00 |  |                                        |  | 714,120   |  |  |  | 50.00 | 
|WINAICO SOLAR PROJEKT 1 GMBH(Note D)                                |  |                 | 45,573    |  |                                        |  | 50.00 |                   |  |  | 45,647                                 |  |  |        | 50.00 |  |                                        |  | 45,947    |  |  |  | 50.00 | 
|ACHIEVE MADE INTERNATIONAL LTD.                                     |  |                 | 42,910    |  |                                        |  | 44.06 |                   |  |  | 147,207                                |  |  |        | 49.38 |  |                                        |  | 119,357   |  |  |  | 49.38 | 
|LIST EARN ENTERPRISE INC.                                           |  |                 | 9,688     |  |                                        |  | 49.00 |                   |  |  | 9,616                                  |  |  |        | 49.00 |  |                                        |  | 9,798     |  |  |  | 49.00 | 
|MTIC HOLDINGS PTE. LTD.                                             |  |                 | 214,918   |  |                                        |  | 46.49 |                   |  |  | 189,012                                |  |  |        | 45.44 |  |                                        |  | 152,713   |  |  |  | 45.44 | 
|YUNG LI INVESTMENTS, INC.                                           |  |                 | 205,519   |  |                                        |  | 45.16 |                   |  |  | 195,383                                |  |  |        | 45.16 |  |                                        |  | 258,527   |  |  |  | 45.16 | 
|MEGA MISSION LIMITED PARTNERSHIP                                    |  |                 | 1,298,748 |  |                                        |  | 45.00 |                   |  |  | 1,458,458                              |  |  |        | 45.00 |  |                                        |  | 1,977,433 |  |  |  | 45.00 | 
|WINAICO IMMOBILIEN GMBH (Note D)                                    |  |                 |          |  |                                        |  |      |                   |  |  |                                       |  |  |        |      |  |                                        |  | 300,692   |  |  |  | 44.78 | 
|UNITECH CAPITAL INC.                                                |  |                 | 700,433   |  |                                        |  | 42.00 |                   |  |  | 667,781                                |  |  |        | 42.00 |  |                                        |  | 687,078   |  |  |  | 42.00 | 
|LTI REENERGY CO., LTD. (LTI) (Note D)                               |  |                 | 2,918     |  |                                        |  | 40.00 |                   |  |  | 4,264                                  |  |  |        | 40.00 |  |                                        |  | 5,503     |  |  |  | 40.00 | 
|UNITED LED CORPORATION HONG KONG LIMITED                            |  |                 | 593,479   |  |                                        |  | 45.00 |                   |  |  | 403,941                                |  |  |        | 45.00 |  |                                        |  | 481,227   |  |  |  | 39.13 | 
|HSUN CHIEH INVESTMENT CO., LTD.                                     |  |                 | 651,089   |  |                                        |  | 36.49 |                   |  |  | 704,658                                |  |  |        | 36.49 |  |                                        |  | 1,027,624 |  |  |  | 36.49 | 
|UC FUND II                                                          |  |                 | 44,992    |  |                                        |  | 35.45 |                   |  |  | 51,561                                 |  |  |        | 35.45 |  |                                        |  | 3,953     |  |  |  | 35.45 | 
|EXOJET TECHNOLOGY CORP.                                             |  |                 | 103,277   |  |                                        |  | 33.40 |                   |  |  | 94,999                                 |  |  |        | 33.10 |  |                                        |  | 84,213    |  |  |  | 33.10 | 



F-45



---

##### Table of Contents

|                                                                                     |  |                 |           |  |                                        |  |       |                   |  |   |                                        |  |  |        |        |  |                                        |   |           |  |  |  |       | 
|------------------------------------------------------------------------------------ |  | --------------- | --------- |  | -------------------------------------- |  | ----- | ----------------- |  | - | -------------------------------------- |  |  | ------ | ------ |  | -------------------------------------- | - | --------- |  |  |  | ----- | 
|                                                                                     |  | As of           |          
|                                                                                     |  | January 1, 2012 |           |  | December 31, 2012                      |  |       | December 31, 2013 | 
|Investee companies                                                                   |  | Amount          |           |  | Percentage ofOwnership orVoting Rights |  |       | Amount            |  |   | Percentage ofOwnership orVoting Rights |  |  | Amount |        |  | Percentage ofOwnership orVoting Rights |  
|CTC CAPITAL PARTNERS I, L.P.                                                         |  |                 | 127,784   |  |                                        |  | 31.40 |                   |  |   | 124,492                                |  |  |        | 31.40  |  |                                        |   | 195,622   |  |  |  | 31.40 | 
|TRANSLINK CAPITAL PARTNERS I, L.P. (Note E)                                          |  |                 | 120,097   |  |                                        |  | 10.38 |                   |  |   | 98,641                                 |  |  |        | 10.38  |  |                                        |   | 106,247   |  |  |  | 10.38 | 
|NEWENERGY HOLDING LIMITED (NEWENERGY) (Note F)                                       |  |                 |          |  |                                        |  |      |                   |  |   | 185,143                                |  |  |        | 100.00 |  |                                        |   |          |  |  |  |      | 
|ECP VITA LTD. (Note J)                                                               |  |                 |          |  |                                        |  |      |                   |  |   |                                       |  |  |        | 100.00 |  |                                        |   |          |  |  |  |      | 
|ASEPOWER I S.R.L. (ASEPOWER) (Note D, K)                                             |  |                 |          |  |                                        |  |      |                   |  |   |                                       |  |  |        | 75.00  |  |                                        |   |          |  |  |  |      | 
|ALLIANCE OPTOTEK CORP. (ALLIANCE) (Note G)                                           |  |                 | 77,545    |  |                                        |  | 47.99 |                   |  |   | 16,547                                 |  |  |        | 47.99  |  |                                        |   |          |  |  |  |      | 
|BEST ELITE INTERNATIONAL LIMITED (Note H, I)                                         |  |                 | 3,141,108 |  |                                        |  | 34.90 |                   |  |   | 3,776,610                              |  |  |        | 35.03  |  |                                        |   |          |  |  |  |      | 
|UNIMICRON HOLDING LIMITED                                                            |  |                 | 626,021   |  |                                        |  | 21.93 |                   |  |   | 651,845                                |  |  |        | 21.93  |  |                                        |   |          |  |  |  |      | 
|DAIWA QUANTUM CAPITAL PARTNERS I, L.P. (Note E, L)                                   |  |                 | 26,102    |  |                                        |  | 12.50 |                   |  |   | 22,583                                 |  |  |        | 12.50  |  |                                        |   |          |  |  |  |      | 
|SHENYANG PIONEER U-LIGHTING OPTO-ELECTRONIC CO., LTD. (SHENYANG U-LIGHTING) (Note D) |  |                 | 4,080     |  |                                        |  | 49.00 |                   |  |   |                                       |  |  |        |       |  |                                        |   |          |  |  |  |      | 
|SOLAR GATE TECHNOLOGY CO., LTD.                                                      |  |                 | 39,418    |  |                                        |  | 32.73 |                   |  |   |                                       |  |  |        |       |  |                                        |   |          |  |  |  |      | 
|HIGH POWER LIGHTING CORP.                                                            |  |                 | 15,552    |  |                                        |  | 20.24 |                   |  |   |                                       |  |  |        |       |  |                                        |   |          |  |  |  |      | 
|                                                                                     |  |                 |           |  |                                        |  |       |                   |  |   |                                        |  |  |        |        |  |                                        |   |           |  |  |  |       | 
|Subtotal                                                                             |  |                 | 9,055,005 |  |                                        |  |       |                   |  |   | 9,787,262                              |  |  |        |        |  |                                        |   | 6,420,900 |  |  |  |       | 
|                                                                                     |  |                 |           |  |                                        |  |       |                   |  |   |                                        |  |  |        |        |  |                                        |   |           |  |  |  |       | 
|Total                                                                                |  | $               | 9,142,488 |  |                                        |  |       |                   |  | $ | 9,865,883                              |  |  |        |        |  |                                        | $ | 6,420,900 |  |  |  |       | 
|                                                                                     |  |                 |           |  |                                        |  |       |                   |  |   |                                        |  |  |        |        |  |                                        |   |           |  |  |  |       | 



F-46



---

##### Table of Contents

| | Note A: | The Company acquired 2.7 million shares of CRYSTALWISE through private placement in August 2010. The exchange of these securities listed above was restricted by Article 43 paragraph 8 of the Securities and Exchange
Law. The above-mentioned restriction of CRYSTALWISE was lifted on September 23, 2013. The Company accounted for the investment in CRYSTALWISE using equity method because UMCs Chairman of the board of directors was also the Chairman of
CRYSTALWISE, and the Company had significant influence. Since August 2013, the Company lost significant influence over CRYSTALWISE, given the UMCs Chairman resigned from CRYSTALWISE, the Company reclassified this investment from investments
accounted for under the equity method to available-for-sale financial assets, noncurrent.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Note B: | On March 10, 2011, MAP filed for liquidation through a decision at its stockholders meeting. The liquidation has not been completed as of December 31, 2013.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Note C: | On September 19, 2012, UNITED LIGHTING filed for liquidation through a decision at its stockholders meeting. The liquidation has not been completed as of December 31, 2013.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Note D: | The Company uses the equity method to account for its investment in SHANDONG HUAHONG, WINAICO SOLAR PROJEKT 1 GMBH, WINAICO IMMOBILIEN GMBH, LTI, ASEPOWER and SHENYANG U-LIGHTING, which are joint ventures.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Note E: | The Company follows international accounting practices in equity accounting for limited partnerships because no equivalent type of business exists domestically. Therefore, the Company uses the equity method to account
for these investees.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Note F: | On August 22, 2012, NEWENERGY filed for liquidation through a decision at its stockholders meeting. The liquidation was completed on June 24, 2013.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | Note G: | The Company acquired additional shares of ALLIANCE on May 2, 2013. The Company previously held 47.99% of ALLIANCEs equity interest immediately before the business combination. Therefore, the Company increased
its cumulative ownership in ALLIANCE to 74.51% and obtained a controlling interest in ALLIANCE post acquisition. Please refer to Note 6 (23) for further discussion.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-47



---

##### Table of Contents

| | Note H: | During March 2005, the Company received an offer of approximately 106 million ordinary shares from Best Elite International Limited (Best Elite), the holding company of HeJian Technology Corp. (HeJian). The offered
shares represented approximately 50% of Best Elites outstanding ordinary shares and approximately 15% of the total outstanding shares of Best Elite. The Company filed an inquiry with the Investment Commission of the Ministry of Economic
Affairs on March 18, 2005 (Ref. No. 94-Lian-Tung-Tzu-0222), for their executive guidance with respect to the offer. Subsequent to Best Elite Board approval, the offered ordinary shares were placed in a trust while the Company awaited the
Investment Commissions guidance. While in trust, the Company could not receive ownership (nor any potential stock dividend or cash dividend distributed) and was not the beneficiary thereof unless the Company received approval from the
Investment Commission. In the event that any stock dividend or cash dividend was distributed, the Companys potential stake in Best Elite would have accumulated accordingly.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | No response from the Investment Commission of the Ministry of Economic Affairs was received on the Companys inquiry for many years. In June 2011, the Company filed an application for the acquisition of the
aforementioned donated Best Elite shares as well as for an additional purchase of Series B and B-1 preferred shares (Note I). Thereafter, on November 1, 2011, the Company received the approval letter from the Investment Commission of the
Ministry of Economic Affairs (Ref. No. Jing-Shen-Er-Zi-10000274530). With such an approval, the Company was able to formally accept the ordinary shares, which have been held in trust since 2006. Based on the approval letter from the Investment
Commission of the Ministry of Economic Affairs, which designated the ordinary shares offered by Best Elite as a donation, the Company recognized the said shares at their fair value of USD 23 million on the day of transfer, December 12,
2011, as an investment accounted for under the equity method with a corresponding gain recorded in other income.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-48



---

##### Table of Contents

| | Note I: | On March 16, 2011, in order to achieve its global market objectives, the Companys board of directors approved an offer to the stockholders of Best Elite to purchase up to 30% of the preferred shares of Best
Elite. In June 2011, the Company filed an application on the 15.34% donated shares (in trust as described above) as well as 20.41% of the preferred shares of Best Elite based on the said stockholders offering. Such purchase of 20.41% of the
preferred shares of Best Elite was approved on November 1, 2011 in the same letter from the Investment Commission of the Ministry of Economic Affairs (Ref. No. Jing-Shen-Er-Zi-10000274530) granting approval for the Companys ownership of
Best Elite ordinary shares placed in trust. Pursuant to such approval, the Company acquired by way of purchase at fair value Series B and B-1 preferred shares representing 19.56% of Best Elites total outstanding shares on December 12,
2011 and the Company thereby increased its cumulative ownership in Best Elite to 34.90%. The Company accounted for its investment as an investment under the equity method in accordance with IAS 28, Investments in Associates and Joint
Ventures. The Company acquired an additional 48.07% of Best Elites total outstanding shares on February 1, 2013 and obtained control of Best Elite accordingly. Please refer to Note 6 (23) for further discussion on the business
combination.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Note J: | On December 21, 2012, ECP VITA LTD. filed for liquidation through a decision at its stockholders meeting. The liquidation was completed on February 18, 2013.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Note K: | The liquidation of ASEPOWER, the Companys joint venture, was completed on September 10, 2013.
| | ------- | ----------------------------------------------------------------------------------------------



| | Note L: | The liquidation of DAIWA QUANTUM CAPITAL PARTNERS I, L.P. was completed on December 27, 2013.
| | ------- | ---------------------------------------------------------------------------------------------

The carrying amount of investments accounted for using the equity method for which there are published price quotations amounted to NT$87
million, NT$79 million and nil, as of January 1, 2012, December 31, 2012 and December 31, 2013, respectively. The fair value of these investments were NT$78 million, NT$95 million and nil as of January 1,
2012, December 31, 2012 and December 31, 2013, respectively.

No investment accounted for using the equity method was
pledged.



F-49



---

##### Table of Contents

| | b. | Financial information of associates and joint ventures :
| | -- | --------------------------------------------------------

There is no individually significant
associate or joint venture for the Company. For individually immaterial associates and joint ventures, the following tables summarized the amount recognized by the Company at its share of those associates and joint ventures separately. When an
associate or a joint venture is a foreign operation, and the functional currency of the foreign entity is different from the Company, an exchange difference arising from translation of the foreign entity will be recognised in other comprehensive
income. Such exchange differences recognized in other comprehensive income (loss) in the financial statements for the years ended December 31, 2012 and 2013 were NT$(118) million and NT$83 million, respectively, which was not included in the
following tables.



| | i. | The aggregate amount of the Companys share of its all individually immaterial associates that are accounted for using the equity method was as follows:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------



|                                  |  |                                  |          |   |      |   |         | 
|--------------------------------- |  | -------------------------------- | -------- | - | ---- | - | ------- | 
|                                  |  | For the years ended December 31, |         
|                                  |  | 2012                             |          |   | 2013 |  
|Profit from continuing operations |  | $                                | 683,888  |   |      | $ | 732,380 | 
|Other comprehensive income (loss) |  |                                  | (124,273 | ) |      |   | 250,070 | 
|                                  |  |                                  |          |   |      |   |         | 
|Total comprehensive income        |  | $                                | 559,615  |   |      | $ | 982,450 | 
|                                  |  |                                  |          |   |      |   |         | 



| | ii. | The aggregate amount of the Companys share of its all individually immaterial joint ventures that are accounted for using the equity method was as follows:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                  |  |                                  |         |   |      |   |         |  
|--------------------------------- |  | -------------------------------- | ------- | - | ---- | - | ------- | -
|                                  |  | For the years ended December 31, |        
|                                  |  | 2012                             |         |   | 2013 |  
|Loss from continuing operations   |  | $                                | (20,509 | ) |      | $ | (34,449 | )
|Other comprehensive income (loss) |  |                                  |        |   |      |   |        |  
|                                  |  |                                  |         |   |      |   |         |  
|Total comprehensive loss          |  | $                                | (20,509 | ) |      | $ | (34,449 | )
|                                  |  |                                  |         |   |      |   |         |  

The Company began to use the equity method to account for its investments in SHENYANG U-LIGHTING, SHANDONG
HUAHONG, LTI, WINAICO SOLAR PROJEKT 1 GMBH, ASEPOWER, SOCIALNEX ITALIA 1 S.R.L. and WINAICO IMMOBILIEN GMBH, on July 6, 2010, January 7, 2011, September 28, 2011, December 7, 2011, March 31,
2012, March 31, 2012 and March 31, 2013, respectively. The Company ceased to use the equity method to account for its investments in SHENYANG U-LIGHTING, SOCIALNEX ITALIA 1 S.R.L. and ASEPOWER since June 19,
2012, June 30, 2012 and September 10, 2013, respectively.



F-50



---

##### Table of Contents

| | (8) | PROPERTY, PLANT AND EQUIPMENT
| | --- | -----------------------------



|                                                           |  |                |             |  |                  |   |             |                  |  |   |             | 
|---------------------------------------------------------- |  | -------------- | ----------- |  | ---------------- | - | ----------- | ---------------- |  | - | ----------- | 
|                                                           |  | As of          |            
|                                                           |  | January 1,2012 |             |  | December 31,2012 |   |             | December 31,2013 | 
|Land                                                       |  | $              | 2,605,228   |  |                  | $ | 2,640,388   |                  |  | $ | 1,925,691   | 
|Buildings                                                  |  |                | 15,379,227  |  |                  |   | 12,597,260  |                  |  |   | 13,679,387  | 
|Machinery and equipment                                    |  |                | 109,318,670 |  |                  |   | 123,571,531 |                  |  |   | 125,170,755 | 
|Transportation equipment                                   |  |                | 13,102      |  |                  |   | 16,684      |                  |  |   | 15,047      | 
|Furniture and fixtures                                     |  |                | 1,174,696   |  |                  |   | 1,339,197   |                  |  |   | 1,148,689   | 
|Leasehold improvement                                      |  |                | 635,815     |  |                  |   | 1,278,589   |                  |  |   | 1,044,943   | 
|Construction in progress and equipment awaiting inspection |  |                | 12,734,824  |  |                  |   | 18,500,156  |                  |  |   | 19,368,388  | 
|                                                           |  |                |             |  |                  |   |             |                  |  |   |             | 
|Net                                                        |  | $              | 141,861,562 |  |                  | $ | 159,943,805 |                  |  | $ | 162,352,900 | 
|                                                           |  |                |             |  |                  |   |             |                  |  |   |             | 

Cost:



|                                |  |      |            |   |           |   |            |                       |  |   |                         |   |  |                      |        |   |                      |   |           |                                                       |  |   |           |   |  |   |             |   |  |   |             |  
|------------------------------- |  | ---- | ---------- | - | --------- | - | ---------- | --------------------- |  | - | ----------------------- | - |  | -------------------- | ------ | - | -------------------- | - | --------- | ----------------------------------------------------- |  | - | --------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                |  | Land |            |   | Buildings |   |            | Machineryandequipment |  |   | Transportationequipment |   |  | Furnitureandfixtures |        |   | Leaseholdimprovement |   |           | Constructionin progressandequipmentawaitinginspection |  |   | Total     |  
|As of January 1, 2012           |  | $    | 3,222,065  |   |           | $ | 31,742,456 |                       |  | $ | 573,348,044             |   |  | $                    | 65,705 |   |                      | $ | 5,037,391 |                                                       |  | $ | 836,313   |   |  | $ | 12,734,824  |   |  | $ | 626,986,798 |  
|Additions                       |  |      |           |   |           |   |           |                       |  |   |                        |   |  |                      |       |   |                      |   |          |                                                       |  |   |          |   |  |   | 46,601,760  |   |  |   | 46,601,760  |  
|Acquisitions of subsidiaries    |  |      |           |   |           |   |           |                       |  |   | 180,097                 |   |  |                      |       |   |                      |   |          |                                                       |  |   |          |   |  |   |            |   |  |   | 180,097     |  
|Disposals                       |  |      |           |   |           |   |           |                       |  |   | (16,264,527             | ) |  |                      | (4,116 | ) |                      |   | (105,718  | )                                                     |  |   |          |   |  |   |            |   |  |   | (16,374,361 | )
|Disposals of subsidiaries       |  |      |           |   |           |   |           |                       |  |   | (38,962                 | ) |  |                      |       |   |                      |   | (2,733    | )                                                     |  |   | (811      | ) |  |   | (358,995    | ) |  |   | (401,501    | )
|Transfers and reclassifications |  |      | 135,246    |   |           |   | 90,056     |                       |  |   | 50,862,705              |   |  |                      | 6,953  |   |                      |   | 631,962   |                                                       |  |   | 919,355   |   |  |   | (40,383,072 | ) |  |   | 12,263,205  |  
|Exchange effect                 |  |      | (185,960   | ) |           |   | (1,381,066 | )                     |  |   | (6,276,613              | ) |  |                      | (715   | ) |                      |   | (74,951   | )                                                     |  |   | (1,733    | ) |  |   | (94,361     | ) |  |   | (8,015,399  | )
|                                |  |      |            |   |           |   |            |                       |  |   |                         |   |  |                      |        |   |                      |   |           |                                                       |  |   |           |   |  |   |             |   |  |   |             |  
|As of December 31, 2012         |  | $    | 3,171,351  |   |           | $ | 30,451,446 |                       |  | $ | 601,810,744             |   |  | $                    | 67,827 |   |                      | $ | 5,485,951 |                                                       |  | $ | 1,753,124 |   |  | $ | 18,500,156  |   |  | $ | 661,240,599 |  
|                                |  |      |            |   |           |   |            |                       |  |   |                         |   |  |                      |        |   |                      |   |           |                                                       |  |   |           |   |  |   |             |   |  |   |             |  
|                                |  |      |            |   |           |   |            |                      
|                                |  | Land |            |   | Buildings |   |            | Machineryandequipment |  |   | Transportationequipment |   |  | Furnitureandfixtures |        |   | Leaseholdimprovement |   |           | Constructionin progressandequipmentawaitinginspection |  |   | Total     |  
|As of January 1, 2013           |  | $    | 3,171,351  |   |           | $ | 30,451,446 |                       |  | $ | 601,810,744             |   |  | $                    | 67,827 |   |                      | $ | 5,485,951 |                                                       |  | $ | 1,753,124 |   |  | $ | 18,500,156  |   |  | $ | 661,240,599 |  
|Additions                       |  |      |           |   |           |   |           |                       |  |   |                        |   |  |                      |       |   |                      |   |          |                                                       |  |   |          |   |  |   | 31,485,078  |   |  |   | 31,485,078  |  
|Acquisitions of subsidiaries    |  |      |           |   |           |   | 2,298,543  |                       |  |   | 3,965,968               |   |  |                      | 258    |   |                      |   | 25,275    |                                                       |  |   | 1,193     |   |  |   | 34,655      |   |  |   | 6,325,892   |  
|Disposals                       |  |      | (106,946   | ) |           |   | (95,304    | )                     |  |   | (3,425,740              | ) |  |                      | (4,089 | ) |                      |   | (181,384  | )                                                     |  |   | (1,388    | ) |  |   | (282,265    | ) |  |   | (4,097,116  | )
|Disposals of subsidiaries       |  |      | (1,056,531 | ) |           |   | (7,180,478 | )                     |  |   | (6,837,604              | ) |  |                      | (480   | ) |                      |   | (195,656  | )                                                     |  |   |          |   |  |   |            |   |  |   | (15,270,749 | )
|Transfers and reclassifications |  |      | 10,626     |   |           |   | 25,455     |                       |  |   | 32,616,495              |   |  |                      | 2,740  |   |                      |   | 170,053   |                                                       |  |   | 46,711    |   |  |   | (30,359,069 | ) |  |   | 2,513,011   |  
|Exchange effect                 |  |      | (92,809    | ) |           |   | 347,247    |                       |  |   | 2,836,866               |   |  |                      | 298    |   |                      |   | (18,776   | )                                                     |  |   | 1,281     |   |  |   | (10,167     | ) |  |   | 3,063,940   |  
|                                |  |      |            |   |           |   |            |                       |  |   |                         |   |  |                      |        |   |                      |   |           |                                                       |  |   |           |   |  |   |             |   |  |   |             |  
|As of December 31, 2013         |  | $    | 1,925,691  |   |           | $ | 25,846,909 |                       |  | $ | 630,966,729             |   |  | $                    | 66,554 |   |                      | $ | 5,285,463 |                                                       |  | $ | 1,800,921 |   |  | $ | 19,368,388  |   |  | $ | 685,260,655 |  
|                                |  |      |            |   |           |   |            |                       |  |   |                         |   |  |                      |        |   |                      |   |           |                                                       |  |   |           |   |  |   |             |   |  |   |             |  



F-51



---

##### Table of Contents

Accumulated depreciation and impairment:



|                                      |  |      |          |   |           |   |            |                       |  |   |                         |   |  |                      |        |   |                      |   |           |                                                        |  |   |         |   |  |   |   |  |  |   |             |  
|------------------------------------- |  | ---- | -------- | - | --------- | - | ---------- | --------------------- |  | - | ----------------------- | - |  | -------------------- | ------ | - | -------------------- | - | --------- | ------------------------------------------------------ |  | - | ------- | - |  | - | - |  |  | - | ----------- | -
|                                      |  | Land |          |   | Buildings |   |            | Machineryandequipment |  |   | Transportationequipment |   |  | Furnitureandfixtures |        |   | Leaseholdimprovement |   |           | Constructionin progressand equipmentawaitinginspection |  |   | Total   |  
|As of January 1, 2012                 |  | $    | 616,837  |   |           | $ | 16,363,229 |                       |  | $ | 464,029,374             |   |  | $                    | 52,603 |   |                      | $ | 3,862,695 |                                                        |  | $ | 200,498 |   |  | $ |  |  |  | $ | 485,125,236 |  
|Depreciation                          |  |      |         |   |           |   | 1,152,612  |                       |  |   | 33,290,972              |   |  |                      | 3,116  |   |                      |   | 392,673   |                                                        |  |   | 276,028 |   |  |   |  |  |  |   | 35,115,401  |  
|Impairment loss                       |  |      |         |   |           |   | 1,555,232  |                       |  |   | 1,676,789               |   |  |                      | 82     |   |                      |   | 29,238    |                                                        |  |   |        |   |  |   |  |  |  |   | 3,261,341   |  
|Disposals                             |  |      |         |   |           |   |           |                       |  |   | (15,419,328             | ) |  |                      | (4,116 | ) |                      |   | (103,677  | )                                                      |  |   |        |   |  |   |  |  |  |   | (15,527,121 | )
|Disposals of subsidiaries             |  |      |         |   |           |   |           |                       |  |   | (24,933                 | ) |  |                      |       |   |                      |   | (2,203    | )                                                      |  |   | (331    | ) |  |   |  |  |  |   | (27,467     | )
|Transfers and reclassifications       |  |      |         |   |           |   |           |                       |  |   | (40,372                 | ) |  |                      |       |   |                      |   | 40,372    |                                                        |  |   |        |   |  |   |  |  |  |   |            |  
|Exchange effect                       |  |      | (85,874  | ) |           |   | (1,216,887 | )                     |  |   | (5,273,289              | ) |  |                      | (542   | ) |                      |   | (72,344   | )                                                      |  |   | (1,660  | ) |  |   |  |  |  |   | (6,650,596  | )
|                                      |  |      |          |   |           |   |            |                       |  |   |                         |   |  |                      |        |   |                      |   |           |                                                        |  |   |         |   |  |   |   |  |  |   |             |  
|As of December 31, 2012               |  | $    | 530,963  |   |           | $ | 17,854,186 |                       |  | $ | 478,239,213             |   |  | $                    | 51,143 |   |                      | $ | 4,146,754 |                                                        |  | $ | 474,535 |   |  | $ |  |  |  | $ | 501,296,794 |  
|                                      |  |      |          |   |           |   |            |                       |  |   |                         |   |  |                      |        |   |                      |   |           |                                                        |  |   |         |   |  |   |   |  |  |   |             |  
|                                      |  |      |          |   |           |   |            |                      
|                                      |  | Land |          |   | Buildings |   |            | Machineryandequipment |  |   | Transportationequipment |   |  | Furnitureandfixtures |        |   | Leaseholdimprovement |   |           | Constructionin progressand equipmentawaitinginspection |  |   | Total   |  
|As of January 1, 2013                 |  | $    | 530,963  |   |           | $ | 17,854,186 |                       |  | $ | 478,239,213             |   |  | $                    | 51,143 |   |                      | $ | 4,146,754 |                                                        |  | $ | 474,535 |   |  | $ |  |  |  | $ | 501,296,794 |  
|Depreciation                          |  |      |         |   |           |   | 1,211,097  |                       |  |   | 35,363,090              |   |  |                      | 4,014  |   |                      |   | 382,267   |                                                        |  |   | 280,885 |   |  |   |  |  |  |   | 37,241,353  |  
|Gain from reversal of impairment loss |  |      |         |   |           |   |           |                       |  |   | (984                    | ) |  |                      |       |   |                      |   |          |                                                        |  |   |        |   |  |   |  |  |  |   | (984        | )
|Disposals                             |  |      | (208     | ) |           |   | (93,202    | )                     |  |   | (3,365,310              | ) |  |                      | (3,341 | ) |                      |   | (179,812  | )                                                      |  |   | (617    | ) |  |   |  |  |  |   | (3,642,490  | )
|Disposals of subsidiaries             |  |      | (487,896 | ) |           |   | (7,095,675 | )                     |  |   | (6,708,746              | ) |  |                      | (462   | ) |                      |   | (193,201  | )                                                      |  |   |        |   |  |   |  |  |  |   | (14,485,980 | )
|Transfers and reclassifications       |  |      |         |   |           |   |           |                       |  |   | (572                    | ) |  |                      |       |   |                      |   | 51        |                                                        |  |   |        |   |  |   |  |  |  |   | (521        | )
|Exchange effect                       |  |      | (42,859  | ) |           |   | 291,116    |                       |  |   | 2,269,283               |   |  |                      | 153    |   |                      |   | (19,285   | )                                                      |  |   | 1,175   |   |  |   |  |  |  |   | 2,499,583   |  
|                                      |  |      |          |   |           |   |            |                       |  |   |                         |   |  |                      |        |   |                      |   |           |                                                        |  |   |         |   |  |   |   |  |  |   |             |  
|As of December 31, 2013               |  | $    |         |   |           | $ | 12,167,522 |                       |  | $ | 505,795,974             |   |  | $                    | 51,507 |   |                      | $ | 4,136,774 |                                                        |  | $ | 755,978 |   |  | $ |  |  |  | $ | 522,907,755 |  
|                                      |  |      |          |   |           |   |            |                       |  |   |                         |   |  |                      |        |   |                      |   |           |                                                        |  |   |         |   |  |   |   |  |  |   |             |  

Please refer to Note 8 for property, plant and equipment pledged as collateral. As of December 31, 2012,
the Company identified indicators of impairment at certain subsidiaries due to its net operating profit being lower than expected. The Company determined that certain property, plant and equipment would not generate the expected future cash flows.
The Company determined the recoverable amounts of these assets based on the fair values less costs to sell. The impairment test revealed that the total carrying amount of these assets was greater than their total recoverable amount. After
considering the relevant objective evidence, the Company recorded an impairment loss of NT$3,261 million for the year ended December 31, 2012, of which, wafer fabrication segment recorded NT$1,987 million and new business segment recorded
NT$1,274 million.



F-52



---

##### Table of Contents

The amounts of total interest expense before capitalization of borrowing costs were NT$755
million and NT$803 million for the years ended December 31, 2012 and 2013, respectively. Details of capitalized borrowing costs were as follows:



|                           |  |                                  |             |  |      |   |             | 
|-------------------------- |  | -------------------------------- | ----------- |  | ---- | - | ----------- | 
|                           |  | For the years ended December 31, |            
|                           |  | 2012                             |             |  | 2013 |  
|Land                       |  | $                                | 143         |  |      | $ |            | 
|Buildings                  |  |                                  | 7,516       |  |      |   | 43,199      | 
|Machinery and equipment    |  |                                  | 288,987     |  |      |   | 163,206     | 
|Others                     |  |                                  | 13          |  |      |   | 30          | 
|                           |  |                                  |             |  |      |   |             | 
|Total interest capitalized |  | $                                | 296,659     |  |      | $ | 206,435     | 
|                           |  |                                  |             |  |      |   |             | 
|                           |  |                                 
|Interest rates applied     |  |                                  | 0.17%~2.29% |  |      |   | 0.19%~2.28% | 
|                           |  |                                  |             |  |      |   |             | 



| | (9) | INTANGIBLE ASSETS
| | --- | -----------------



|                         |  |                |           |  |                  |   |           |                  |  |   |           | 
|------------------------ |  | -------------- | --------- |  | ---------------- | - | --------- | ---------------- |  | - | --------- | 
|                         |  | As of          |          
|                         |  | January 1,2012 |           |  | December 31,2012 |   |           | December 31,2013 | 
|Goodwill                 |  | $              | 50,863    |  |                  | $ | 50,863    |                  |  | $ | 50,863    | 
|Software                 |  |                | 150,466   |  |                  |   | 200,790   |                  |  |   | 173,252   | 
|Patents and royalty fees |  |                | 730,030   |  |                  |   | 1,894,111 |                  |  |   | 3,400,769 | 
|Others                   |  |                | 552,422   |  |                  |   | 652,395   |                  |  |   | 1,114,763 | 
|                         |  |                |           |  |                  |   |           |                  |  |   |           | 
|Net                      |  | $              | 1,483,781 |  |                  | $ | 2,798,159 |                  |  | $ | 4,739,647 | 
|                         |  |                |           |  |                  |   |           |                  |  |   |           | 

Cost:



|                             |  |          |        |  |          |   |         |                       |  |   |           |   |  |       |           |   |  |   |           |  
|---------------------------- |  | -------- | ------ |  | -------- | - | ------- | --------------------- |  | - | --------- | - |  | ----- | --------- | - |  | - | --------- | -
|                             |  | Goodwill |        |  | Software |   |         | Patentsandroyaltyfees |  |   | Others    |   |  | Total |          
|As of January 1, 2012        |  | $        | 50,863 |  |          | $ | 355,029 |                       |  | $ | 964,583   |   |  | $     | 1,186,389 |   |  | $ | 2,556,864 |  
|Additions                    |  |          |       |  |          |   | 1,674   |                       |  |   | 1,344,681 |   |  |       | 486,681   |   |  |   | 1,833,036 |  
|Disposals                    |  |          |       |  |          |   | (27,022 | )                     |  |   |          |   |  |       | (239,473  | ) |  |   | (266,495  | )
|Reclassifications            |  |          |       |  |          |   | 163,139 |                       |  |   |          |   |  |       |          |   |  |   | 163,139   |  
|Acquisitions of subsidiaries |  |          |       |  |          |   |        |                       |  |   |          |   |  |       | 106       |   |  |   | 106       |  
|Disposals of subsidiaries    |  |          |       |  |          |   | (3,641  | )                     |  |   |          |   |  |       |          |   |  |   | (3,641    | )
|Exchange effect              |  |          |       |  |          |   | (17,192 | )                     |  |   | (10,737   | ) |  |       | (204      | ) |  |   | (28,133   | )
|                             |  |          |        |  |          |   |         |                       |  |   |           |   |  |       |           |   |  |   |           |  
|As of December 31, 2012      |  | $        | 50,863 |  |          | $ | 471,987 |                       |  | $ | 2,298,527 |   |  | $     | 1,433,499 |   |  | $ | 4,254,876 |  
|                             |  |          |        |  |          |   |         |                       |  |   |           |   |  |       |           |   |  |   |           |  



F-53



---

##### Table of Contents

|                                         |  |          |        |  |          |   |          |                       |  |   |           |   |  |       |           |   |  |   |           |  
|---------------------------------------- |  | -------- | ------ |  | -------- | - | -------- | --------------------- |  | - | --------- | - |  | ----- | --------- | - |  | - | --------- | -
|                                         |  | Goodwill |        |  | Software |   |          | Patentsandroyaltyfees |  |   | Others    |   |  | Total |          
|As of January 1, 2013                    |  | $        | 50,863 |  |          | $ | 471,987  |                       |  | $ | 2,298,527 |   |  | $     | 1,433,499 |   |  | $ | 4,254,876 |  
|Additions                                |  |          |       |  |          |   | 490      |                       |  |   | 1,823,274 |   |  |       | 1,082,896 |   |  |   | 2,906,660 |  
|Disposals                                |  |          |       |  |          |   | (138,722 | )                     |  |   | (13,737   | ) |  |       | (467,914  | ) |  |   | (620,373  | )
|Reclassifications                        |  |          |       |  |          |   | 74,832   |                       |  |   | 39,951    |   |  |       |          |   |  |   | 114,783   |  
|Acquisitions of subsidiaries             |  |          |       |  |          |   | 36,132   |                       |  |   | 9,283     |   |  |       | 61,700    |   |  |   | 107,115   |  
|Disposals of subsidiaries                |  |          |       |  |          |   | (6,888   | )                     |  |   |          |   |  |       |          |   |  |   | (6,888    | )
|Exchange effect                          |  |          |       |  |          |   | (5,369   | )                     |  |   | (1,631    | ) |  |       | (93       | ) |  |   | (7,093    | )
|                                         |  |          |        |  |          |   |          |                       |  |   |           |   |  |       |           |   |  |   |           |  
|As of December 31, 2013                  |  | $        | 50,863 |  |          | $ | 432,462  |                       |  | $ | 4,155,667 |   |  | $     | 2,110,088 |   |  | $ | 6,749,080 |  
|                                         |  |          |        |  |          |   |          |                       |  |   |           |   |  |       |           |   |  |   |           |  
|Accumulated amortization and impairment: |  |          |        |  |          |   |          |                       |  |   |           |   |  |       |           |   |  |   |           |  
|                                         |  | Goodwill |        |  | Software |   |          | Patentsandroyaltyfees |  |   | Others    |   |  | Total |          
|As of January 1, 2012                    |  | $        |       |  |          | $ | 204,563  |                       |  | $ | 234,553   |   |  | $     | 633,967   |   |  | $ | 1,073,083 |  
|Amortization                             |  |          |       |  |          |   | 113,448  |                       |  |   | 164,108   |   |  |       | 385,776   |   |  |   | 663,332   |  
|Impairment loss                          |  |          |       |  |          |   | 154      |                       |  |   | 10,302    |   |  |       | 639       |   |  |   | 11,095    |  
|Disposals                                |  |          |       |  |          |   | (27,038  | )                     |  |   |          |   |  |       | (239,473  | ) |  |   | (266,511  | )
|Disposals of subsidiaries                |  |          |       |  |          |   | (3,178   | )                     |  |   |          |   |  |       |          |   |  |   | (3,178    | )
|Exchange effect                          |  |          |       |  |          |   | (16,752  | )                     |  |   | (4,547    | ) |  |       | 195       |   |  |   | (21,104   | )
|                                         |  |          |        |  |          |   |          |                       |  |   |           |   |  |       |           |   |  |   |           |  
|As of December 31, 2012                  |  | $        |       |  |          | $ | 271,197  |                       |  | $ | 404,416   |   |  | $     | 781,104   |   |  | $ | 1,456,717 |  
|                                         |  |          |        |  |          |   |          |                       |  |   |           |   |  |       |           |   |  |   |           |  
|                                         |  |          |        |  |         
|                                         |  | Goodwill |        |  | Software |   |          | Patentsandroyaltyfees |  |   | Others    |   |  | Total |          
|As of January 1, 2013                    |  | $        |       |  |          | $ | 271,197  |                       |  | $ | 404,416   |   |  | $     | 781,104   |   |  | $ | 1,456,717 |  
|Amortization                             |  |          |       |  |          |   | 139,626  |                       |  |   | 362,727   |   |  |       | 538,413   |   |  |   | 1,040,766 |  
|Impairment loss                          |  |          |       |  |          |   |         |                       |  |   | 677       |   |  |       | 57,000    |   |  |   | 57,677    |  
|Disposals                                |  |          |       |  |          |   | (138,712 | )                     |  |   | (13,749   | ) |  |       | (467,914  | ) |  |   | (620,375  | )
|Reclassifications                        |  |          |       |  |          |   |         |                       |  |   |          |   |  |       | 86,818    |   |  |   | 86,818    |  
|Disposals of subsidiaries                |  |          |       |  |          |   | (6,888   | )                     |  |   |          |   |  |       |          |   |  |   | (6,888    | )
|Exchange effect                          |  |          |       |  |          |   | (6,013   | )                     |  |   | 827       |   |  |       | (96       | ) |  |   | (5,282    | )
|                                         |  |          |        |  |          |   |          |                       |  |   |           |   |  |       |           |   |  |   |           |  
|As of December 31, 2013                  |  | $        |       |  |          | $ | 259,210  |                       |  | $ | 754,898   |   |  | $     | 995,325   |   |  | $ | 2,009,433 |  
|                                         |  |          |        |  |          |   |          |                       |  |   |           |   |  |       |           |   |  |   |           |  



F-54



---

##### Table of Contents

The amortization amounts of intangible assets are as follows:



|                  |  |                                  |         |  |      |   |         | 
|----------------- |  | -------------------------------- | ------- |  | ---- | - | ------- | 
|                  |  | For the years ended December 31, |        
|                  |  | 2012                             |         |  | 2013 |  
|Operating cost    |  | $                                | 241,420 |  |      | $ | 440,342 | 
|                  |  |                                  |         |  |      |   |         | 
|Operating expense |  | $                                | 421,912 |  |      | $ | 600,424 | 
|                  |  |                                  |         |  |      |   |         | 

The carrying amounts of significant technology license fees and royalty fees obtained by the Company were nil,
NT$1,277 million and NT$3,211 million as of January 1, 2012, December 31, 2012 and December 31, 2013, respectively. The remaining amortization periods as of December 31, 2012 and 2013 were 9~10 years and 8~9 years,
respectively.



| | (10) | SHORT TERM LOANS
| | ---- | ----------------



|                       |  |                |           |  |                                  |   |             |                  |  |   |             | 
|---------------------- |  | -------------- | --------- |  | -------------------------------- | - | ----------- | ---------------- |  | - | ----------- | 
|                       |  | As of          |          
|                       |  | January 1,2012 |           |  | December 31,2012                 |   |             | December 31,2013 | 
|Unsecured bank loans   |  | $              | 9,411,877 |  |                                  | $ | 5,772,615   |                  |  | $ | 4,643,573   | 
|                       |  |                |           |  |                                  |   |             |                  |  |   |             | 
|                       |  |               
|                       |  |                |           |  | For the years ended December 31, |  
|                       |  |                |           |  | 2012                             |   |             | 2013             | 
|Interest rates applied |  |                |           |  |                                  |   | 0.55%~2.98% |                  |  |   | 0.57%~4.38% | 
|                       |  |                |           |  |                                  |   |             |                  |  |   |             | 

The Companys unused short-term lines of credits amounted to NT$19,609 million, NT$18,293 million and
NT$18,587 million as of January 1, 2012, December 31, 2012 and December 31, 2013, respectively.



| | (11) | FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS, CURRENT
| | ---- | -------------------------------------------------------------------



|                                           |  |                |         |  |                  |   |         |                  |  |   |       | 
|------------------------------------------ |  | -------------- | ------- |  | ---------------- | - | ------- | ---------------- |  | - | ----- | 
|                                           |  | As of          |        
|                                           |  | January 1,2012 |         |  | December 31,2012 |   |         | December 31,2013 | 
|Derivatives embedded in exchangeable bonds |  | $              | 741,531 |  |                  | $ | 767,605 |                  |  | $ | 1,928 | 
|                                           |  |                |         |  |                  |   |         |                  |  |   |       | 



F-55



---

##### Table of Contents

| | (12) | BONDS PAYABLE
| | ---- | -------------



|                                                          |  |                |            |   |                  |   |            |                  |  |   |             |  
|--------------------------------------------------------- |  | -------------- | ---------- | - | ---------------- | - | ---------- | ---------------- |  | - | ----------- | -
|                                                          |  | As of          |           
|                                                          |  | January 1,2012 |            |   | December 31,2012 |   |            | December 31,2013 | 
|Unsecured convertible bonds payable                       |  | $              | 12,420,903 |   |                  | $ | 12,278,461 |                  |  | $ | 10,255,791  |  
|Unsecured exchangeable bonds payable                      |  |                | 6,125,110  |   |                  |   | 4,651,323  |                  |  |   | 3,709,339   |  
|Unsecured domestic bonds payable                          |  |                |           |   |                  |   | 10,000,000 |                  |  |   | 20,000,000  |  
|Less: Discounts on bonds payable                          |  |                | (1,141,225 | ) |                  |   | (705,431   | )                |  |   | (358,713    | )
|                                                          |  |                |            |   |                  |   |            |                  |  |   |             |  
|Total                                                     |  |                | 17,404,788 |   |                  |   | 26,224,353 |                  |  |   | 33,606,417  |  
|Less: Current or exchangeable portion due within one year |  |                | (5,420,384 | ) |                  |   | (4,292,160 | )                |  |   | (13,627,063 | )
|                                                          |  |                |            |   |                  |   |            |                  |  |   |             |  
|Net                                                       |  | $              | 11,984,404 |   |                  | $ | 21,932,193 |                  |  | $ | 19,979,354  |  
|                                                          |  |                |            |   |                  |   |            |                  |  |   |             |  



| | A. | On December 2, 2009, UMC issued SGX-ST listed zero coupon exchangeable bonds. The terms and conditions of the bonds are as follows:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------



| | a. | Issue Amount: US$127.2 million
| | -- | ------------------------------



| | b. | Period: December 2, 2009 ~ December 2, 2014 (Maturity date)
| | -- | -----------------------------------------------------------



| | c. | Redemption:
| | -- | -----------



| | i. | UMC may redeem the bonds, in whole or in part, after 12 months of the issuance and prior to the maturity date, at the principal amount of the bonds with an interest calculated at the rate of -0.5% per annum (the
Early Redemption Price) if the closing price of the ordinary shares of Unimicron Technology Corporation (Unimicron) on the TSE, translated into U.S. dollars at the prevailing exchange rate, for a period of 20 consecutive trading days, the last of
which occurs not more than 10 days prior to the date upon which notice of such redemption is published, is at least 130% of the exchange price then in effect translated into U.S. dollars at the rate of NTD 32.197=USD 1.00.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | UMC may redeem the bonds, in whole, but not in part, at the Early Redemption Price if at least 90% in principal amount of the bonds has already been exchanged, redeemed or purchased and cancelled.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | UMC may redeem all, but not part, of the bonds, at the Early Redemption Price at any time, in the event of certain changes in the R.O.C.s tax rules which would require UMC to gross up for payments of principal, or
to gross up for payments of interest or premium.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv. | All, or any portion, of the bonds would be redeemable in U.S. dollars at the option of bondholders on December 2, 2011 at 99% of the principal amount.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | v. | Bondholders have the right to require UMC to redeem all or any portion of the bonds at the Early Redemption Price if the ordinary shares of the exchanged securities are officially delisted on the TSE for a period of
five consecutive trading days.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-56



---

##### Table of Contents

| | vi. | In the event that a change of control as defined in the indenture of the bonds occurs to UMC or Unimicron, the bondholders shall have the right to require UMC to redeem the bonds, in whole or in part, at the Early
Redemption Price.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d. | Terms of Exchange:
| | -- | ------------------



| | i. | Underlying Securities: Ordinary shares of Unimicron
| | -- | ---------------------------------------------------



| | ii. | Exchange Period: The bonds are exchangeable at any time on or after January 1, 2010 and prior to November 22, 2014, into Unimicron ordinary shares; provided, however, that if the exercise date falls within 5
business days from the beginning of, and during, any closed period, the right of the exchanging holder of the bonds to vote with respect to the shares it receives will be subject to certain restrictions.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | Exchange Price and Adjustment: The exchange price was originally NT$51.1875 per share, determined on the basis of a fixed exchange rate of NTD 32.197=USD 1.00. The exchange price will be subject to adjustments upon the
occurrence of certain events set out in the indenture. The exchange price was NT$43.3650 per share on December 31, 2013.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | e. | Redemption on the Maturity Date: On the maturity date, UMC will redeem the bonds at 97.53% of the principal amount unless, prior to such date:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | i. | UMC shall have redeemed the bonds at the option of UMC, or the bonds shall have been redeemed at option of the bondholder;
| | -- | --------------------------------------------------------------------------------------------------------------------------



| | ii. | The bondholders shall have exercised the exchange right before maturity; or
| | --- | ---------------------------------------------------------------------------



| | iii. | The bonds shall have been redeemed or purchased by UMC and cancelled.
| | ---- | ---------------------------------------------------------------------



| | B. | On December 2, 2009, UMC issued SGX-ST listed zero coupon exchangeable bonds. The terms and conditions of the bonds are as follows:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------



| | a. | Issue Amount: US$80 million
| | -- | ---------------------------



| | b. | Period: December 2, 2009 ~ December 2, 2014 (Maturity date)
| | -- | -----------------------------------------------------------



| | c. | Redemption:
| | -- | -----------



| | i. | UMC may redeem the bonds, in whole or in part, after 12 months of the issuance and prior to the maturity date, at the principal amount of the bonds with an interest calculated at the rate of -0.5% per annum (the
Early Redemption Price) if the closing price of the ordinary shares of Novatek Microelectronics Corp., Ltd. (Novatek) on the TSE, translated into U.S. dollars at the prevailing exchange rate, for a period of 20 consecutive trading days, the last of
which occurs not more than 10 days prior to the date upon which notice of such redemption is published, is at least 130% of the exchange price then in effect translated into U.S. dollars at the rate of NTD 32.197=USD 1.00.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-57



---

##### Table of Contents

| | ii. | UMC may redeem the bonds, in whole, but not in part, at the Early Redemption Price if at least 90% in principal amount of the bonds has already been exchanged, redeemed or purchased and cancelled.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | UMC may redeem all, but not part, of the bonds, at the Early Redemption Price at any time, in the event of certain changes in the R.O.C.s tax rules which would require UMC to gross up for payments of principal, or
to gross up for payments of interest or premium.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv. | All, or any portion, of the bonds would be redeemable in U.S. dollars at the option of bondholders on December 2, 2011 at 99% of the principal amount.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | v. | Bondholders have the right to require UMC to redeem all or any portion of the bonds at the Early Redemption Price if the ordinary shares of the exchanged securities are officially delisted on the TSE for a period of
five consecutive trading days.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | vi. | In the event that a change of control as defined in the indenture of the bonds occurs to UMC or Novatek, the bondholders shall have the right to require UMC to redeem the bonds, in whole or in part, at the Early
Redemption Price.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d. | Terms of Exchange:
| | -- | ------------------



| | i. | Underlying Securities: Ordinary shares of Novatek
| | -- | -------------------------------------------------



| | ii. | Exchange Period: The bonds are exchangeable at any time on or after January 1, 2010 and prior to November 22, 2014, into Novatek ordinary shares; provided, however, that if the exercise date falls within 5
business days from the beginning of, and during, any closed period, the right of the exchanging holder of the bonds to vote with respect to the shares it receives will be subject to certain restrictions.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | Exchange Price and Adjustment: The exchange price was originally NT$108.58 per share, determined on the basis of a fixed exchange rate of NTD 32.197=USD 1.00. The exchange price will be subject to adjustments upon the
occurrence of certain events set out in the indenture.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | e. | Exchange of the Bonds:
| | -- | ----------------------

As of December 31, 2012 and 2013, certain bondholders have
exercised their rights to exchange their bonds with the total principal amount of US$43 million and US$77 million into Novatek shares. Gains from disposal of investments and gains from exchange of bonds from bondholders exercising exchange rights
during the years ended December 31, 2012 and 2013 amounted NT$1,389 million and NT$1,137 million, respectively, and were recognized as other gains and losses.



F-58



---

##### Table of Contents

| | f. | Early Redemption of the Bonds:
| | -- | ------------------------------

Since over 90% principal amount of the bonds has already been
exchanged, UMC redeemed the bonds in whole at the Early Redemption Price on July 22, 2013. The remaining principal amount of the redeemed bonds was US$3 million. UMC recognized a gain of NT$45 million from the redemption and classified the gain
as other gains and losses.



| | g. | Redemption on the Maturity Date: On the maturity date, UMC will redeem the bonds at 97.53% of the principal amount unless, prior to such date:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | i. | UMC shall have redeemed the bonds at the option of UMC, or the bonds shall have been redeemed at option of the bondholder;
| | -- | --------------------------------------------------------------------------------------------------------------------------



| | ii. | The bondholders shall have exercised the exchange right before maturity; or
| | --- | ---------------------------------------------------------------------------



| | iii. | The bonds shall have been redeemed or purchased by UMC and cancelled.
| | ---- | ---------------------------------------------------------------------



| | C. | On May 24, 2011, UMC issued SGX-ST listed currency linked zero coupon convertible bonds. The terms and conditions of the bonds are as follows:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | a. | Issue Amount: US$500 million
| | -- | ----------------------------



| | b. | Period: May 24, 2011 ~ May 24, 2016 (Maturity date)
| | -- | ---------------------------------------------------



| | c. | Redemption:
| | -- | -----------



| | i. | UMC may redeem the bonds, in whole or in part, after 3 years of the issuance and prior to the maturity date, at the principal amount of the bonds with an interest calculated at the rate of -0.25% per annum (the
Early Redemption Amount) if the closing price of UMCs ADS on the New York Stock Exchange, for a period of 20 out of 30 consecutive ADS trading days, the last of which occurs not more than 5 ADS trading days prior to the date upon which notice
of such redemption is published, is at least 130% of the conversion price. The Early Redemption Price will be converted into NTD based on the Fixed Exchange Rate (NTD 28.846=USD 1.00), and this fixed NTD amount will be converted using the prevailing
rate at the time of redemption for payment in USD.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-59



---

##### Table of Contents

| | ii. | UMC 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 converted, redeemed or repurchased and cancelled.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | UMC 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 R.O.C.s tax rules which would require UMC to gross up for payments of principal,
or to gross up for payments of interest or premium.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv. | All or any portion of the bonds will be redeemable at Early Redemption Amount at the option of bondholders on May 24, 2014 at 99.25% of the principal amount.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| | v. | Bondholders have the right to require UMC to redeem all of the bonds at the Early Redemption Amount if UMCs ADS cease to be listed or admitted for trading on the New York Stock Exchange, or UMCs ordinary
shares cease to be listed on the Taiwan Stock Exchange.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | vi. | In the event that a change of control as defined in the indenture of the bonds occurs to UMC, the bondholders shall have the right to require UMC to redeem the bonds, in whole but not in part, at the Early Redemption
Amount.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d. | Terms of Conversion:
| | -- | --------------------



| | i. | Underlying Securities: ADS of UMC
| | -- | ---------------------------------



| | ii. | Conversion Period: The bonds are convertible at any time on or after July 4, 2011 and prior to May 14, 2016, into UMCs ADS; provided, however, that if the exercise date falls within 8 business days from
the beginning of, and during, any closed period, the right of the converting holder of the bonds to vote with respect to the ADS it receives will be subject to certain restrictions.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | Conversion Price and Adjustment: The conversion price was originally USD 3.77 per ADS, determined on the basis of a Fixed Exchange Rate of NTD 28.846=USD 1.00. The conversion price will be subject to adjustments
upon the occurrence of certain events set out in the indenture. The conversion price was USD 3.2482 per ADS on December 31, 2013.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | e. | Redemption on the Maturity Date: On the maturity date, UMC will redeem the bonds at 98.76% of the principal amount unless, prior to such date:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | i. | UMC shall have redeemed the bonds at the option of UMC, or the bonds shall have been redeemed at option of the bondholder;
| | -- | --------------------------------------------------------------------------------------------------------------------------



| | ii. | The bondholders shall have exercised the conversion right before maturity; or
| | --- | -----------------------------------------------------------------------------



| | iii. | The bonds shall have been redeemed or repurchased by UMC and cancelled.
| | ---- | -----------------------------------------------------------------------



F-60



---

##### Table of Contents

In accordance with IAS 32, the value of the conversion right of the convertible bonds was
determined at issuance and recognized in additional paid-in capital  stock options amounting to NT$680 million, after reduction of issuance costs amounting to NT$3 million. The effective interest rate on the liability component of the
convertible bonds was determined to be 0.82%.



| | D. | In early June 2012, UMC issued five-year and seven-year domestic unsecured corporate bonds amounting to NT$10,000 million, with a face value of NT$1 million per unit. The five-year domestic unsecured corporate bond was
issued in the amount of NT$7,500 million. Interest will be paid annually at a rate of 1.43% and the principal will be repayable in June 2017 upon maturity. The seven-year domestic unsecured corporate bond was issued in the amount of NT$2,500
million. Interest will be paid annually at a rate of 1.63% and the principal will be repayable in June 2019 upon maturity.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | In mid-March 2013, UMC issued five-year and seven-year domestic unsecured corporate bonds amounting to NT$10,000 million, with a face value of NT$1 million per unit. The five-year domestic unsecured corporate bond was
issued in the amount of NT$7,500 million. Interest will be paid annually at a rate of 1.35% and the principal will be repayable in March 2018 upon maturity. The seven-year domestic unsecured corporate bond was issued in the amount of NT$2,500
million. Interest will be paid annually at a rate of 1.50% and the principal will be repayable in March 2020 upon maturity.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | F. | Repayments of the above-mentioned bonds in the future years are as follows:
| | -- | ---------------------------------------------------------------------------



|                       |  |        |            | 
|---------------------- |  | ------ | ---------- | 
|Bonds repayable (Year) |  | Amount |           
|2014                   |  | $      | 3,709,339  | 
|2015                   |  |        |           | 
|2016                   |  |        | 10,255,791 | 
|2017                   |  |        | 7,500,000  | 
|2018 and thereafter    |  |        | 12,500,000 | 
|                       |  |        |            | 
|Total                  |  | $      | 33,965,130 | 
|                       |  |        |            | 



F-61



---

##### Table of Contents

| | (13) | LONG TERM LOANS
| | ---- | ---------------



| | a. | Details of long-term loans as of January 1, 2012, December 31, 2012 and December 31, 2013 were as follows:
| | -- | ----------------------------------------------------------------------------------------------------------



|                                                                   |  |                |           |  |                  |   |           |                  |  |   |            |  |  |                                                                                                                                                                              
|------------------------------------------------------------------ |  | -------------- | --------- |  | ---------------- | - | --------- | ---------------- |  | - | ---------- |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                   |  | As of          |           |  |                 
|Lenders                                                            |  | January 1,2012 |           |  | December 31,2012 |   |           | December 31,2013 |  |   | Redemption
|Secured Long-Term Loan from Bank of Taiwan (1)                     |  | $              | 466,667   |  |                  | $ | 233,333   |                  |  | $ |           |  |  | Repayable quarterly from March 30, 2011 to December 30, 2013 and interest is paid monthly.                                                                                   
|Secured Long-Term Loan from Bank of Taiwan (2)                     |  |                | 1,437,160 |  |                  |   | 1,347,338 |                  |  |   | 988,048    |  |  | Effective July 13, 2011 to July 13, 2016. Interest-only payment for the first year. Principal is repaid in 16 quarterly payments with
interest payments due monthly.         
|Secured Long-Term Loan from First Commercial Bank (1)              |  |                | 620,000   |  |                  |   | 542,500   |                  |  |   | 310,000    |  |  | Effective December 31, 2010 to December 31, 2015. Interest-only payment for the first year. Principal is repaid in 8 semi-annual
payments with interest payments due monthly.
|Secured Long-Term Loan from First Commercial Bank (2)              |  |                | 200,000   |  |                  |   | 175,000   |                  |  |   | 125,000    |  |  | Effective June 24, 2011 to June 24, 2016. Interest-only payment for the first year. Principal is repaid in 8 semi-annual payments
with interest payments due monthly.        
|Secured Long-Term Loan from First Commercial Bank (3)              |  |                | 200,000   |  |                  |   | 200,000   |                  |  |   | 103,000    |  |  | Bullet repayment on May 16, 2014 and interest is paid monthly.                                                                                                               
|Secured Long-Term Loan from First Commercial Bank (4)              |  |                | 400,000   |  |                  |   | 400,000   |                  |  |   | 400,000    |  |  | Bullet repayment on June 27, 2014 and interest is paid monthly.                                                                                                              
|Secured Long-Term Loan from Mega International Commercial Bank (1) |  |                | 944,000   |  |                  |   | 924,705   |                  |  |   | 616,470    |  |  | Repayable quarterly from June 30, 2011 to June 30, 2016 and interest is paid monthly.                                                                                        
|Secured Long-Term Loan from Mega International Commercial Bank (2) |  |                |          |  |                  |   | 58,853    |                  |  |   | 109,580    |  |  | Effective August 1, 2012 to August 1, 2017. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments
with interest payments due monthly.       
|Secured Long-Term Loan from Mega International Commercial Bank (3) |  |                |          |  |                  |   |          |                  |  |   | 17,000     |  |  | Effective November 21, 2013 to November 21, 2018. Interest-only payment for the first year. Principal is repaid in 17 quarterly
payments with interest payments due monthly. 
|Secured Long-Term Loan from Taiwan Cooperative Bank (1)            |  |                |          |  |                  |   | 149,000   |                  |  |   | 122,706    |  |  | Effective May 25, 2012 to May 25, 2017. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with
interest payments due monthly.           



F-62



---

##### Table of Contents

|                                                                     |  |                |           |  |                  |  |           |                  |  |  |            |  |  |                                                                                                                                                                     
|-------------------------------------------------------------------- |  | -------------- | --------- |  | ---------------- |  | --------- | ---------------- |  |  | ---------- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                     |  | As of          |           |  |                 
|Lenders                                                              |  | January 1,2012 |           |  | December 31,2012 |  |           | December 31,2013 |  |  | Redemption
|Secured Long-Term Loan from Taiwan Cooperative Bank (2)              |  |                |          |  |                  |  |          |                  |  |  | 70,000     |  |  | Effective July 10, 2013 to July 10, 2018. Interest-only payment for the first year. Principal is repaid in 17 quarterly
payments with interest payments due monthly.
|Secured Syndicated Loans from Bank of Taiwan and 7 others (1)        |  |                | 2,770,000 |  |                  |  | 1,385,000 |                  |  |  |           |  |  | Repayable semi-annually from February 10, 2012 to August 10, 2013 and interest is paid monthly.                                                                     
|Secured Syndicated Loans from Bank of Taiwan and 7 others (2)        |  |                |          |  |                  |  |          |                  |  |  | 1,385,000  |  |  | Repayable semi-annually from February 7, 2015 to February 7, 2016 and interest is paid monthly.                                                                     
|Secured Syndicated Loans from Taiwan Cooperative Bank and 5 others   |  |                | 1,050,000 |  |                  |  | 750,000   |                  |  |  | 450,000    |  |  | Repayable semi-annually from October 25, 2010 to April 25, 2015 and interest is paid monthly.                                                                       
|Unsecured Long-Term Loan from Bank of Taiwan                         |  |                |          |  |                  |  | 400,000   |                  |  |  | 900,000    |  |  | Repayable quarterly from October 31, 2015 to July 31, 2017 and interest is paid monthly.                                                                            
|Unsecured Long-Term Loan from Mega International Commercial Bank (1) |  |                | 1,000,000 |  |                  |  | 3,692,308 |                  |  |  | 2,461,538  |  |  | Repayable quarterly from December 28, 2012 to December 28, 2015 and interest is paid monthly.                                                                       
|Unsecured Long-Term Loan from Mega International Commercial Bank (2) |  |                |          |  |                  |  |          |                  |  |  | 300,000    |  |  | Repayable quarterly from October 4, 2015 to October 4, 2018 and interest is paid monthly.                                                                           
|Unsecured Long-Term Loan from First Commercial Bank (1)              |  |                | 62,500    |  |                  |  | 12,500    |                  |  |  |           |  |  | Repayable quarterly from May 22, 2011 to February 22, 2013 and interest is paid monthly.                                                                            
|Unsecured Long-Term Loan from First Commercial Bank (2)              |  |                | 150,000   |  |                  |  | 50,000    |                  |  |  |           |  |  | Repayable quarterly from September 30, 2011 to June 30, 2013 and interest is paid monthly.                                                                          
|Unsecured Long-Term Loan from E. Sun Bank                            |  |                |          |  |                  |  | 300,000   |                  |  |  | 500,000    |  |  | Repayable quarterly from December 24, 2015 to December 24, 2017 and interest is paid monthly.                                                                       
|Unsecured Revolving Loan from China Trust Commercial Bank (Note A)   |  |                | 1,500,000 |  |                  |  | 2,500,000 |                  |  |  | 1,000,000  |  |  | Settlement due on August 30, 2016 and interest is paid monthly.                                                                                                     
|Unsecured Revolving Loan from Chang Hwa Commercial Bank (Note B)     |  |                | 500,000   |  |                  |  | 1,000,000 |                  |  |  | 1,000,000  |  |  | Settlement due on December 29, 2016 and interest is paid monthly.                                                                                                   



F-63



---

##### Table of Contents

|                                                      |  |                |            |   |                                 |   |             |                  |  |   |             |   |  |                                                                                           
|----------------------------------------------------- |  | -------------- | ---------- | - | ------------------------------- | - | ----------- | ---------------- |  | - | ----------- | - |  | ------------------------------------------------------------------------------------------
|                                                      |  | As of          |            |   |                                
|Lenders                                               |  | January 1,2012 |            |   | December 31,2012                |   |             | December 31,2013 |  |   | Redemption 
|Unsecured Long-Term Loan from Taiwan Cooperative Bank |  |                |           |   |                                 |   | 300,000     |                  |  |   | 500,000     |   |  | Repayable quarterly from March 24, 2016 to December 24, 2017 and interest is paid monthly.
|Unsecured Long-Term Loan from Taishin Bank            |  |                | 400,000    |   |                                 |   | 400,000     |                  |  |   |            |   |  | Bullet repayment on August 25, 2013 and interest is paid monthly.                         
|                                                      |  |                |            |   |                                 |   |             |                  |  |   |             |   |  |                                                                                           
|Subtotal                                              |  |                | 11,700,327 |   |                                 |   | 14,820,537  |                  |  |   | 11,358,342  |   |  |                                                                                           
|Less: Administrative expenses from syndicated loans   |  |                | (7,678     | ) |                                 |   | (3,071      | )                |  |   | (4,328      | ) |  |                                                                                           
|Less: Current portion                                 |  |                | (2,581,667 | ) |                                 |   | (4,594,846  | )                |  |   | (2,918,163  | ) |  |                                                                                           
|                                                      |  |                |            |   |                                 |   |             |                  |  |   |             |   |  |                                                                                           
|Total                                                 |  | $              | 9,110,982  |   |                                 | $ | 10,222,620  |                  |  | $ | 8,435,851   |   |  |                                                                                           
|                                                      |  |                |            |   |                                 |   |             |                  |  |   |             |   |  |                                                                                           
|                                                      |  |                |           
|                                                      |  |                |            |   | For the years endedDecember 31, |   |             |                 
|                                                      |  |                |            |   | 2012                            |   |             | 2013             |  |  
|Interest Rates                                        |  |                |            |   |                                 |   | 1.24%~2.51% |                  |  |   | 1.23%~2.51% |   | 
|                                                      |  |                |            |   |                                 |   |             |                  |  |   |             |   |  |                                                                                           



| | Note A: | UMC entered into a 5-year loan agreement with China Trust Commercial Bank, effective August 30, 2011. The agreement offered UMC a revolving line of credit of NT$2.5 billion starting from the first use of the loan
to the expiry date of the agreement, August 30, 2016. As of January 1, 2012, December 31, 2012 and December 31, 2013, the unused lines of credit were NT$1 billion, nil and NT$1.5 billion, respectively.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Note B: | UMC entered into a 5-year loan agreement with Chang Hwa Commercial Bank, effective December 29, 2011. The agreement offered UMC a revolving line of credit of NT$3 billion starting from the first use of the loan to
the expiry date of the agreement, December 29, 2016. As of January 1, 2012, December 31, 2012 and December 31, 2013, the unused lines of credit were NT$2.5 billion, NT$2 billion and NT$2 billion, respectively.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-64



---

##### Table of Contents

| | b. | The long-term loans of the Company will be repaid in installments with the last payment on November 21, 2018. Repayments in the coming years are as follows:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                 |  |                |            |  |                  |   |            |                  |  |   |            | 
|-------------------------------- |  | -------------- | ---------- |  | ---------------- | - | ---------- | ---------------- |  | - | ---------- | 
|                                 |  | As of          |           
|Long-term loans repayable
(Year) |  | January 1,2012 |            |  | December 31,2012 |   |            | December 31,2013 | 
|2012                             |  | $              | 2,581,667  |  |                  | $ |           |                  |  | $ |           | 
|2013                             |  |                | 3,474,933  |  |                  |   | 4,594,846  |                  |  |   |           | 
|2014                             |  |                | 1,994,100  |  |                  |   | 2,990,554  |                  |  |   | 2,918,163  | 
|2015                             |  |                | 1,244,100  |  |                  |   | 2,323,887  |                  |  |   | 3,021,530  | 
|2016                             |  |                | 2,405,527  |  |                  |   | 4,450,001  |                  |  |   | 4,348,042  | 
|2017                             |  |                |           |  |                  |   | 461,249    |                  |  |   | 961,946    | 
|2018 and thereafter              |  |                |           |  |                  |   |           |                  |  |   | 108,661    | 
|                                 |  |                |            |  |                  |   |            |                  |  |   |            | 
|Total                            |  | $              | 11,700,327 |  |                  | $ | 14,820,537 |                  |  | $ | 11,358,342 | 
|                                 |  |                |            |  |                  |   |            |                  |  |   |            | 



| | c. | Please refer to Note 8 for property, plant and equipment pledged as collateral for long-term loans.
| | -- | ---------------------------------------------------------------------------------------------------



| | d. | On December 19, 2012, the board of directors resolved to provide endorsement for NEXPOWERs syndicated loans from banks including Bank of Taiwan for the amount up to NT$1,400 million. As of December 31,
2012 and 2013, the actual amount provided were nil and NT$1,385 million, respectively.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (14) | POST-EMPLOYMENT BENEFITS
| | ---- | ------------------------



| | a. | Defined contribution plan
| | -- | -------------------------

The Labor Pension Act of the R.O.C. (the Act) which became
effective on July 1, 2005 is a defined contribution plan. Employees can elect to continue to apply the relevant pension rules under the Labor Standards Law of the R.O.C., or to apply the pension rules under the Act and maintain the seniority
achieved under the Labor Standards Law. Under the Act, the monthly contributions percentage shall not be less than 6% of these employees monthly wages. The Company and its domestic subsidiaries have been making monthly contributions of 6%
based on each individual employees salary or wage to employees pension accounts beginning July 1, 2005. Based on the Act, a total of NT$522 million and NT$554 million were contributed by the Company for the years ended
December 31, 2012 and 2013, respectively. Pension benefits for employees of the Singapore branch, and other subsidiaries overseas were provided in accordance with the local regulations, and during the years ended December 31, 2012 and
2013, the Company made total contributions of NT$193 million and NT$393 million, respectively.



F-65



---

##### Table of Contents

| | b. | Defined benefit plan
| | -- | --------------------

The employee pension plan mandated by the Labor Standard Act of the
R.O.C. is a defined benefit plan. The pension benefits are disbursed based on the units of service years and the average salary in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit
per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company contributes an amount equivalent to 2% of the
employees total salaries and wages on a monthly basis to the pension fund deposited with the Bank of Taiwan under the name of an administered pension fund committee. The Company recognized pension expenses of NT$172 million and NT$124 million
for the years ended December 31, 2012 and 2013, respectively.



| | i. | Changes in defined benefit obligation during the year:
| | -- | ------------------------------------------------------



|                                                  |  |                                 |            |   |      |   |            |  
|------------------------------------------------- |  | ------------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                  |  | For the years endedDecember 31, |           
|                                                  |  | 2012                            |            |   | 2013 |  
|Balance at January 1                              |  | $                               | (6,237,822 | ) |      | $ | (6,685,524 | )
|Service cost                                      |  |                                 | (102,691   | ) |      |   | (60,378    | )
|Interest cost                                     |  |                                 | (101,908   | ) |      |   | (86,420    | )
|Remeasurements:                                   |  |                                 |            |   |      |   |            |  
|Loss from changes in demographic assumptions      |  |                                 | (75,431    | ) |      |   |           |  
|Gain (loss) from changes in financial assumptions |  |                                 | (245,699   | ) |      |   | 465,677    |  
|Experience adjustments                            |  |                                 | (178,866   | ) |      |   | (5,436     | )
|Benefits paid                                     |  |                                 | 114,777    |   |      |   | 828,678    |  
|Loss on curtailment                               |  |                                 | (4,748     | ) |      |   |           |  
|Others                                            |  |                                 | (159       | ) |      |   | 56,169     |  
|Exchange effect                                   |  |                                 | 147,023    |   |      |   | 84,884     |  
|                                                  |  |                                 |            |   |      |   |            |  
|Balance at December 31                            |  | $                               | (6,685,524 | ) |      | $ | (5,402,350 | )
|                                                  |  |                                 |            |   |      |   |            |  



F-66



---

##### Table of Contents

| | ii. | Changes in fair value of plan assets during the year:
| | --- | -----------------------------------------------------



|                                                                     |  |                                  |           |   |      |   |           |  
|-------------------------------------------------------------------- |  | -------------------------------- | --------- | - | ---- | - | --------- | -
|                                                                     |  | For the years ended December 31, |          
|                                                                     |  | 2012                             |           |   | 2013 |  
|Balance at January 1                                                 |  | $                                | 2,276,883 |   |      | $ | 2,249,262 |  
|Interest income on plan assets                                       |  |                                  | 37,077    |   |      |   | 22,831    |  
|Contribution by employer                                             |  |                                  | 165,340   |   |      |   | 269,289   |  
|Payment of benefit obligation                                        |  |                                  | (114,777  | ) |      |   | (828,678  | )
|Remeasurements:                                                      |  |                                  |           |   |      |   |           |  
|Return on plan assets, excluding amounts included in interest income |  |                                  | 770       |   |      |   | (3,763    | )
|Others                                                               |  |                                  |          |   |      |   | (37,589   | )
|Exchange effect                                                      |  |                                  | (116,031  | ) |      |   | (66,787   | )
|                                                                     |  |                                  |           |   |      |   |           |  
|Balance at December 31                                               |  | $                                | 2,249,262 |   |      | $ | 1,604,565 |  
|                                                                     |  |                                  |           |   |      |   |           |  

Employee pension fund is deposited under a trust administered by the Bank of Taiwan. Furthermore, the
utilization of the fund is determined by the labor pension fund supervisory committee, which also guarantees the minimum earnings to be no less than the earnings attainable from interest rates offered by local banks for two-year time deposits. The
deployment and operation of defined benefit plan assets is available on the Council of Labor Affairs website http://www.mol.gov.tw.

The actual returns on plan assets of the Company for the years ended December 31, 2012 and 2013 were NT$38 million and NT$19 million,
respectively.



| | iii. | Reconciliations of liability of the defined benefit plan were as follows:
| | ---- | -------------------------------------------------------------------------



As ofJanuary 1,2012


December 31,2012


December 31,2013Present value of the defined benefit obligation

$
(6,237,822
)

$
(6,685,524
)

$
(5,402,350
)Fair value of plan assets


2,276,883



2,249,262



1,604,565Accrued pension liabilities recognized on the consolidated balance sheets

$
(3,960,939
)

$
(4,436,262
)

$
(3,797,785
)




F-67



---

##### Table of Contents

| | iv. | The principal underlying actuarial assumptions were as follows:
| | --- | ---------------------------------------------------------------



|                        |  |                         |       |  |         |  |       |           |  |  |       | 
|----------------------- |  | ----------------------- | ----- |  | ------- |  | ----- | --------- |  |  | ----- | 
|                        |  | As of January 1, 2012   |      
|                        |  | UMC                     |       |  | FORTUNE |  |       | UMC JAPAN | 
|Discount rate           |  |                         | 1.75% |  |         |  | 2.00% |           |  |  | 1.50% | 
|Rate of salary increase |  |                         | 4.00% |  |         |  | 3.00% |           |  |  | 2.55% | 
|                        | 
|                        |  | As of December 31, 2012 |      
|                        |  | UMC                     |       |  | FORTUNE |  |       | UMC JAPAN | 
|Discount rate           |  |                         | 1.50% |  |         |  | 1.50% |           |  |  | 1.50% | 
|Rate of salary increase |  |                         | 4.00% |  |         |  | 3.00% |           |  |  | 2.55% | 
|                        |  |                        
|                        |  | As of December 31, 2013 |       |  |         | 
|                        |  | UMC                     |       |  | FORTUNE |  |      
|Discount rate           |  |                         | 2.00% |  |         |  | 2.00% |           | 
|Rate of salary increase |  |                         | 4.00% |  |         |  | 3.00% |           | 



| | v. | Expected future benefit payments are as follows:
| | -- | ------------------------------------------------



|                        |  |        |           | 
|----------------------- |  | ------ | --------- | 
|Year                    |  | Amount |          
|2014                    |  | $      | 22,408    | 
|2015                    |  |        | 31,516    | 
|2016                    |  |        | 50,205    | 
|2017                    |  |        | 65,747    | 
|2018                    |  |        | 87,357    | 
|2019 and thereafter     |  |        | 5,442,934 | 
|                        |  |        |           | 
|Total expected payments |  | $      | 5,700,167 | 
|                        |  |        |           | 

The Company expects to make pension fund contribution of NT$92 million in 2014. The weighted-average duration
of the defined benefit obligation is both 17 years as of December 31, 2012 and 2013.



| | vi. | The sensitivity analysis of the defined benefit obligation to changes in the weighted principal assumptions was:
| | --- | ----------------------------------------------------------------------------------------------------------------



|                                     |  |               |         |  |                      |   |            |             |  |   |             |   |  |   |         | 
|------------------------------------ |  | ------------- | ------- |  | -------------------- | - | ---------- | ----------- |  | - | ----------- | - |  | - | ------- | 
|As of December 31, 2012              |  | Assumptions   |        
|                                     |  | Discount rate |         |  | Salary increase rate |  
|                                     |  | 1% increase   |         |  | 1% decrease          |   |            | 1% increase |  |   | 1% decrease |  
|Impact on defined benefit obligation |  | $             | 911,717 |  |                      | $ | (1,121,146 | )           |  | $ | (1,014,711  | ) |  | $ | 852,537 | 
|                                     | 
|As of December 31, 2013              |  | Assumptions   |        
|                                     |  | Discount rate |         |  | Salary increase rate |  
|                                     |  | 1% increase   |         |  | 1% decrease          |   |            | 1% increase |  |   | 1% decrease |  
|Impact on defined benefit obligation |  | $             | 805,485 |  |                      | $ | (980,143   | )           |  | $ | (888,861    | ) |  | $ | 753,703 | 



F-68



---

##### Table of Contents

The sensitivity analyses above have been determined based on a method that extrapolates the
impact on the net defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.



| | (15) | EQUITY
| | ---- | ------



| | a. | Capital Stock:
| | -- | --------------



| | i. | UMC had 26,000 million common shares authorized to be issued as of January 1, 2012, December 31, 2012, and December 31, 2013, of which 13,084 million shares, 12,952 million shares and
12,692 million shares were issued as of January 1, 2012, December 31, 2012, and December 31, 2013, respectively, each at a par value of NT$10.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | UMC had 230 million, 230 million and 168 million ADSs, which were traded on the NYSE as of January 1, 2012, December 31, 2012, and December 31, 2013, respectively. The total number of
common shares of UMC represented by all issued ADSs were 1,148 million shares, 1,148 million shares and 842 million shares as of January 1, 2012, December 31, 2012, and December 31, 2013, respectively. One ADS
represents five common shares.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | On March 14, 2012, UMC cancelled 158 million shares of treasury stock, which were repurchased during the period from January 7 to February 16, 2009 for the purpose of transferring to employees.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv. | On April 24, 2013, UMC cancelled 300 million shares of treasury stock, which were repurchased during the period from February 4 to March 22, 2010 for the purpose of transferring to employees.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | v. | Among the employee stock options issued by UMC on June 19, 2009, 26 million options were exercised during the year ended December 31, 2012. The issuance process was completed through the authority as of
December 31, 2012.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | vi. | Among the employee stock options issued by UMC on June 19, 2009, there were 43 million options exercised during the year ended December 31, 2013, of which the issuance of 40 million common shares was
approved by the authority, and the share registry was updated as of December 31, 2013. The remaining 3 million shares were still pending for authorization as of December 31, 2013, thus, they were classified as Capital collected in
advance.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-69



---

##### Table of Contents

| | b. | Treasury stock:
| | -- | ---------------



| | i. | UMC carried out treasury stock programs and repurchased its shares from the centralized securities exchange market. The purpose for repurchase and changes in treasury stock for the years ended December 31, 2012 and
2013 are as follows:
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For the year ended December 31, 2012

(In thousands of shares)



Purpose

As ofJanuary 1,2012


Increase


Decrease


As ofDecember 31,2012For transfer to employees


457,934







157,934



300,000For the year ended December 31, 2013
 (In thousands of shares)Purpose

As ofJanuary 1,2013


Increase


Decrease


As ofDecember 31,2013For transfer to employees


300,000



200,000



300,000



200,000




| | ii. | According to the Securities and Exchange Law of the R.O.C., the total shares of treasury stock shall not exceed 10% of UMCs issued stock, and the total purchase amount shall not exceed the sum of the retained
earnings, additional paid-in capital-premiums and realized additional paid-in capital. As of December 31, 2012 and 2013, the treasury stock held by UMC did not exceed the threshold.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | In compliance with Securities and Exchange Law of the R.O.C., treasury stock should not be pledged, nor should it be entitled to voting rights or receiving dividends. Stock held by subsidiaries and associates is treated
as treasury stock. According to the Company Act of R.O.C., these subsidiaries have the same rights as other stockholders except for subscription to new stock issuance and voting rights.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-70



---

##### Table of Contents

| | iv. | As of January 1, 2012, December 31, 2012 and December 31, 2013, UMCs subsidiary, FORTUNE VENTURE CAPITAL CORP., and associate, HSUN CHIEH INVESTMENT CO., LTD., held 16 million and
441 million shares, respectively, of UMCs stock as available-for-sale financial assets. The closing prices of UMCs stock on January 1, 2012, December 31, 2012 and December 31, 2013 were NT$12.70, NT$11.70 and
NT$12.35, respectively.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c. | Retained earnings and dividend policies:
| | -- | ----------------------------------------

According to UMCs Articles of Incorporation,
current years earnings, if any, shall be distributed in the following order:



| | i. | Payment of all taxes and dues;
| | -- | ------------------------------



| | ii. | Offset prior years operation losses;
| | --- | -------------------------------------



| | iii. | Appropriate 10% of the remaining amount after deducting items (i) and (ii) as a legal reserve;
| | ---- | ----------------------------------------------------------------------------------------------



| | iv. | Appropriate or reverse special reserve in accordance with relevant laws or regulations, and
| | --- | -------------------------------------------------------------------------------------------



| | v. | Appropriate 0.1% of the remaining amount after deducting items (i), (ii), (iii) and (iv) as directors remuneration; and
| | -- | ------------------------------------------------------------------------------------------------------------------------



| | vi. | After deducting items (i), (ii), (iii) and (iv) above from the current years earnings, no less than 5% of the remaining amount together with the prior years unappropriated earnings is to be
allocated as employee bonus, which will be settled through issuance of new shares of UMC, or cash. Employees of UMCs subsidiaries, meeting certain requirements determined by the board of directors, are also eligible for the employee stock
bonus.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | vii. | The distribution of the remaining portion, if any, will be recommended by the board of directors and resolved in the stockholders meeting.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------

The policy for dividend distribution should reflect factors such as the current and future investment environment, funding requirements,
domestic and international competition and capital budgets; as well as the benefit of stockholders, stock dividend equilibrium, and long-term financial planning. The board of directors shall make the distribution proposal annually and present it at
the stockholders meeting. UMCs Articles of Incorporation further provide that no more than 80% of the dividends to stockholders, if any, may be paid in the form of stock dividends. Accordingly, at least 20% of the dividends must be paid
in the form of cash.



F-71



---

##### Table of Contents

According to the regulations of Taiwan Financial Supervisory Commission (FSC), UMC is required
to appropriate a special reserve in the amount equal to the sum of debit elements under equity, such as unrealized loss on financial instruments and negative cumulative translation adjustment, at every year-end. Such special reserve is prohibited
from distribution. However, if any of the debit elements is reversed, the special reserve in the amount equal to the reversal may be released for earnings distribution or offsetting accumulated deficit.

The Company estimated the amounts of the employee bonuses and remunerations to director for the years ended December 31, 2012 and 2013.
The board of directors estimated the amount by taking into consideration UMCs Articles of Incorporation, government regulations and industry averages. The estimated employee bonus and remunerations to directors are recognized in the profit or
loss during the period when earned. If the board of directors subsequently modifies the estimates significantly, UMC will recognize the change as an adjustment in the profit or loss in the same period. The difference between the estimation and the
resolution of the stockholders meeting will be recognized in profit or loss in the subsequent year. Upon stockholders approval, the number of shares distributed as share dividends is calculated based on the total approved bonus amount
divided by the closing price one day prior to the approved date with the consideration of the impacts of ex-right/ex-dividend. Compensation expense relating to stock bonus is remeasured at fair market value at the date of stock distribution.
Information on the above mentioned employees bonuses and remuneration to directors and supervisors can be obtained from the Market Observation Post System on the website of the TSE.

The appropriation and compensation of 2013 unappropriated retained earnings have not yet been approved by the stockholders meeting as of
the reporting date. Information on the board of directors recommendations and stockholders approval can be obtained from the Market Observation Post System on the website of the TSE.



F-72



---

##### Table of Contents

The distributions of cash dividend, employee bonus and directors remuneration for 2012 and
2013 were approved through the stockholders meeting and the board of directors meeting held on June 11, 2013 and April 16, 2014, respectively. The details of distribution were as follows:



|                                          |  |      |                |  |      |     |                | 
|----------------------------------------- |  | ---- | -------------- |  | ---- | --- | -------------- | 
|                                          |  | 2012 |                |  | 2013 |    
|Cash Dividend                             |  | NT$  | 0.40 per share |  |      | NT$ | 0.01 per share | 
|Employee bonus  Cash (in thousand NT$)   |  |      | 1,040,179      |  |      |     | 1,162,656      | 
|Directors remuneration (in thousand NT$) |  |      | 6,950          |  |      |     | 11,746         | 

The aforementioned 2012 employees bonuses and remuneration to directors approved during stockholders
meeting, were consistent with the resolutions of meeting of board of directors held on March 13, 2013.

The aforementioned cash
dividend for 2012 was adjusted to NT$0.40639654 per share due to the net decrease in outstanding common stock as a result of newly issued shares to settle employee stock options exercised and the outstanding shares that the Company bought back from
the market. The distribution was approved through the board of directors meeting held on June 19, 2013.

In addition, the board
of directors meeting held on April 16, 2014 resolved a cash distribution of approximate to NT$0.5 per share, among which approximate to NT$0.49 per share is from additional paid-in capital while the remaining is from earnings.



| | d. | Non-controlling interests:
| | -- | --------------------------



|                                                                            |  |                                 |            |   |      |   |           |  
|--------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ---- | - | --------- | -
|                                                                            |  | For the years endedDecember 31, |           
|                                                                            |  | 2012                            |            |   | 2013 |  
|Balance as of January 1                                                     |  | $                               | 4,387,876  |   |      | $ | 2,571,139 |  
|Attributable to non-controlling interests:                                  |  |                                 |            |   |      |   |           |  
|Net loss                                                                    |  |                                 | (1,945,526 | ) |      |   | (525,243  | )
|Other comprehensive income (loss)                                           |  |                                 | (5,162     | ) |      |   | 11,220    |  
|Adjustments arising from changes in percentage of ownership in subsidiaries |  |                                 | 165,774    |   |      |   | (600,009  | )
|Effect of consolidation (deconsolidation) of subsidiaries                   |  |                                 | (31,823    | ) |      |   | 2,862,881 |  
|                                                                            |  |                                 |            |   |      |   |           |  
|Balance as of December 31                                                   |  | $                               | 2,571,139  |   |      | $ | 4,319,988 |  
|                                                                            |  |                                 |            |   |      |   |           |  



F-73



---

##### Table of Contents

| | (16) | EMPLOYEE STOCK OPTIONS
| | ---- | ----------------------

On December 22, 2005, October 9, 2007 and
May 12, 2009, the Company was authorized by the Securities and Futures Bureau of FSC, Executive Yuan, to issue employee stock options with a total number of 350 million, 500 million and 500 million units, respectively. Each unit
entitled an optionee to subscribe to 1 share of the Companys common stock. Settlement upon the exercise of the options would be made through the issuance of new shares by the Company. The exercise prices of the options were set at the closing
prices of the Companys common stock on the dates of grant. The contractual lives were 6 years and an optionee might exercise the options in accordance with certain schedules as prescribed by the plans after 2 years from the dates of grant.
Detailed information relevant to the employee stock options was disclosed as follows:



|                  |  |                                             |         |  |                                                                       |  |        |                                                                             |  |  |                            |  |  |   |       | 
|----------------- |  | ------------------------------------------- | ------- |  | --------------------------------------------------------------------- |  | ------ | --------------------------------------------------------------------------- |  |  | -------------------------- |  |  | - | ----- | 
|Date of grant     |  | Total numberof optionsgranted(in thousands) |         |  | Total number ofoptionsoutstanding asof December 31,2013(in thousands) |  |        | Shares availableto option holdersas of December31, 2013(in thousands)(Note) |  |  | Exercise price(NT$) (Note) | 
|January 4, 2006   |  |                                             | 39,290  |  |                                                                       |  |       |                                                                             |  |  |                           |  |  | $ | 23.17 | 
|May 22, 2006      |  |                                             | 42,058  |  |                                                                       |  |       |                                                                             |  |  |                           |  |  | $ | 25.19 | 
|August 24, 2006   |  |                                             | 28,140  |  |                                                                       |  |       |                                                                             |  |  |                           |  |  | $ | 24.09 | 
|December 13, 2007 |  |                                             | 500,000 |  |                                                                       |  |       |                                                                             |  |  |                           |  |  | $ | 18.03 | 
|June 19, 2009     |  |                                             | 300,000 |  |                                                                       |  | 87,768 |                                                                             |  |  | 87,768                     |  |  | $ | 10.40 | 
|                  |  |                                             |         |  |                                                                       |  |        |                                                                             |  |  |                            |  |  |   |       | 
|Total             |  |                                             | 909,488 |  |                                                                       |  | 87,768 |                                                                             |  |  | 87,768                     |  |  |   |       | 
|                  |  |                                             |         |  |                                                                       |  |        |                                                                             |  |  |                            |  |  |   |       | 



| | Note: | The employee stock options granted prior to August 7, 2007, the effective date of capital reduction, were adjusted in accordance with the capital reduction rate. Each option unit entitled an optionee to subscribe
approximately 0.7 share of the Companys common stock. The exercise prices of the options were also adjusted according to capital reduction rate. The number of subscribed shares that each stock option granted after August 7, 2007 remains
to be 1.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-74



---

##### Table of Contents

| | a. | A summary of the Companys stock option plan and related information for the years ended December 31, 2012 and 2013 was as follows:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------



|                                   |  |                                  |         |   |                                                |  |         |                                              |  |   |                       |  |  |                                                |          |   |                                               |  |          |   |  |   |       | 
|---------------------------------- |  | -------------------------------- | ------- | - | ---------------------------------------------- |  | ------- | -------------------------------------------- |  | - | --------------------- |  |  | ---------------------------------------------- | -------- | - | --------------------------------------------- |  | -------- | - |  | - | ----- | 
|                                   |  | For the years ended December 31, |        
|                                   |  | 2012                             |         |   | 2013                                           | 
|                                   |  | Options(in thousands)            |         |   | Sharesavailable tooption holders(in thousands) |  |         | Weighted-averageexercise priceper share(NTD) |  |   | Options(in thousands) |  |  | Sharesavailable tooption holders(in thousands) |          |   | Weighted-average exerciseprice per share(NTD) | 
|Outstanding at beginning of period |  |                                  | 560,526 |   |                                                |  | 547,724 |                                              |  | $ | 16.09                 |  |  |                                                | 465,006  |   |                                               |  | 465,006  |   |  | $ | 15.86 | 
|Exercised                          |  |                                  | (25,588 | ) |                                                |  | (25,588 | )                                            |  | $ | 10.40                 |  |  |                                                | (42,540  | ) |                                               |  | (42,540  | ) |  | $ | 10.40 | 
|Forfeited                          |  |                                  | (38,969 | ) |                                                |  | (35,544 | )                                            |  | $ | 18.23                 |  |  |                                                | (12,000  | ) |                                               |  | (12,000  | ) |  | $ | 16.73 | 
|Expired                            |  |                                  | (30,963 | ) |                                                |  | (21,586 | )                                            |  | $ | 24.37                 |  |  |                                                | (322,698 | ) |                                               |  | (322,698 | ) |  | $ | 18.03 | 
|                                   |  |                                  |         |   |                                                |  |         |                                              |  |   |                       |  |  |                                                |          |   |                                               |  |          |   |  |   |       | 
|Outstanding at end of period       |  |                                  | 465,006 |   |                                                |  | 465,006 |                                              |  | $ | 15.86                 |  |  |                                                | 87,768   |   |                                               |  | 87,768   |   |  | $ | 10.40 | 
|                                   |  |                                  |         |   |                                                |  |         |                                              |  |   |                       |  |  |                                                |          |   |                                               |  |          |   |  |   |       | 
|Exercisable at end of period       |  |                                  | 395,142 |   |                                                |  | 395,142 |                                              |  | $ | 16.71                 |  |  |                                                | 82,839   |   |                                               |  | 82,839   |   |  | $ | 10.40 | 
|                                   |  |                                  |         |   |                                                |  |         |                                              |  |   |                       |  |  |                                                |          |   |                                               |  |          |   |  |   |       | 



| | b. | The information on the Companys outstanding stock options as of December 31, 2013 was as follows:
| | -- | --------------------------------------------------------------------------------------------------



|                   |  |                             |       |  |                           |  |        |                                                |  |  |                                        |  |  |                                             |      |  |                       |   |       |                                                |  |  |                                             |  |  |  |        |  |  |   |       | 
|------------------ |  | --------------------------- | ----- |  | ------------------------- |  | ------ | ---------------------------------------------- |  |  | -------------------------------------- |  |  | ------------------------------------------- | ---- |  | --------------------- | - | ----- | ---------------------------------------------- |  |  | ------------------------------------------- |  |  |  | ------ |  |  | - | ----- | 
|                   |  |                             |       |  | Outstanding Stock Options |  |        | Exercisable Stock Options                      | 
|Authorization
Date |  | Range ofExercise Price(NTD) |       |  | Options(in thousands)     |  |        | Sharesavailable tooption holders(in thousands) |  |  | Weighted-averageexpectedremainingyears |  |  | Weighted-averageexerciseprice pershare(NTD) |      |  | Options(in thousands) |   |       | Sharesavailable tooption holders(in thousands) |  |  | Weighted-averageexerciseprice pershare(NTD) | 
|2009.05.12         |  | $                           | 10.40 |  |                           |  | 87,768 |                                                |  |  | 87,768                                 |  |  |                                             | 1.46 |  |                       | $ | 10.40 |                                                |  |  | 82,839                                      |  |  |  | 82,839 |  |  | $ | 10.40 | 

The weighted-average share price at the date of exercise of employee stock options for the years ended
December 31, 2012 and 2013 were NT$13.44 and NT$13.46, respectively.



| | c. | The options granted between January 1, 2004 and December 31, 2007 have all been vested before the transition date to IFRSs (January 1, 2012), and there has not been any modification to the stock option plans.
Effective 2008, the compensation expenses related to the Companys compensatory employee stock option plan were calculated based on fair value. The compensation expenses for the years ended December 31, 2012 and 2013 were NT$78 million and
NT$29 million, respectively.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-75



---

##### Table of Contents

The fair values of the options outstanding as of December 31, 2012 and 2013 were estimated
at the dates of grant using the Black-Scholes options pricing model with the following weighted-average assumptions. The factors for the adoption of IFRS 2 Share-based Payment to account for share-based payments were as follows:



|                                                                              |  |         |                 | 
|----------------------------------------------------------------------------- |  | ------- | --------------- | 
|Items                                                                         |  | Factors |                
|Expected dividend yields                                                      |  |         | 1.98%           | 
|Volatility factors of the expected market price of the Companys common stock |  |         | 40.63%          | 
|Risk-free interest rate                                                       |  |         | 1.01%           | 
|Weighted-average expected life                                                |  |         | 3.16~5.03 years | 

The aforementioned expected volatility reflects that the assumption that the historical volatility over a
period similar to the life of the option is indicative of future trends. The expected option life is based on the historical data of periods for previously granted options. The expected dividend yield is based historical dividend yield. The
risk-free interest rate is based on average interest rate for Taiwan Government Bond over a period similar to the life of the option. The estimates used to calculate the fair value of employee stock option cannot predict future events that are
likely to occur or the final amounts employees will benefit from these options. In addition, future events will not affect the reasonableness of the initial calculation for fair value for the stock options. The compensation expenses for the stock
options will be adjusted annually for the changes in expected forfeiture rates, with the effects recognized in the current period.



F-76



---

##### Table of Contents

| | (17) | OPERATING COSTS AND EXPENSES
| | ---- | ----------------------------

The Companys personnel, depreciation, and
amortization expenses were summarized as follows:



|                           |  |                                  |            |  |                   |   |           |       |  |   |                |  |  |                   |            |  |       |   |           |  |  |   |            | 
|-------------------------- |  | -------------------------------- | ---------- |  | ----------------- | - | --------- | ----- |  | - | -------------- |  |  | ----------------- | ---------- |  | ----- | - | --------- |  |  | - | ---------- | 
|                           |  | For the years ended December 31, |           
|                           |  | 2012                             |            |  | 2013              |  
|                           |  | Operatingcosts                   |            |  | Operatingexpenses |   |           | Total |  |   | Operatingcosts |  |  | Operatingexpenses |            |  | Total |  
|Personnel expenses         |  |                                  |            |  |                   |   |           |       |  |   |                |  |  |                   |            |  |       |   |           |  |  |   |            | 
|Salaries                   |  | $                                | 12,096,177 |  |                   | $ | 4,499,346 |       |  | $ | 16,595,523     |  |  | $                 | 12,591,125 |  |       | $ | 4,944,704 |  |  | $ | 17,535,829 | 
|Labor and health insurance |  |                                  | 781,756    |  |                   |   | 259,429   |       |  |   | 1,041,185      |  |  |                   | 719,009    |  |       |   | 297,857   |  |  |   | 1,016,866  | 
|Pension                    |  |                                  | 650,444    |  |                   |   | 237,118   |       |  |   | 887,562        |  |  |                   | 799,176    |  |       |   | 281,573   |  |  |   | 1,080,749  | 
|Other personnel expenses   |  |                                  | 141,524    |  |                   |   | 53,068    |       |  |   | 194,592        |  |  |                   | 178,025    |  |       |   | 74,493    |  |  |   | 252,518    | 
|Depreciation               |  |                                  | 32,867,330 |  |                   |   | 2,224,916 |       |  |   | 35,092,246     |  |  |                   | 34,990,350 |  |       |   | 2,180,969 |  |  |   | 37,171,319 | 
|Amortization               |  |                                  | 276,070    |  |                   |   | 447,700   |       |  |   | 723,770        |  |  |                   | 530,897    |  |       |   | 659,627   |  |  |   | 1,190,524  | 



| | (18) | NET OTHER OPERATING INCOME AND EXPENSES
| | ---- | ---------------------------------------



|                                                            |  |                                  |            |   |      |   |          |  
|----------------------------------------------------------- |  | -------------------------------- | ---------- | - | ---- | - | -------- | -
|                                                            |  | For the years ended December 31, |           
|                                                            |  | 2012                             |            |   | 2013 |  
|Net rental income (loss) from property                      |  | $                                | 95,100     |   |      | $ | (38,665  | )
|Gain on disposal of property, plant and equipment           |  |                                  | 386,561    |   |      |   | 40,897   |  
|Impairment reversal (loss) of property, plant and equipment |  |                                  | (3,261,341 | ) |      |   | 984      |  
|Impairment loss of intangible assets                        |  |                                  | (11,095    | ) |      |   | (57,677  | )
|Others                                                      |  |                                  |           |   |      |   | (70,871  | )
|                                                            |  |                                  |            |   |      |   |          |  
|Total                                                       |  | $                                | (2,790,775 | ) |      | $ | (125,332 | )
|                                                            |  |                                  |            |   |      |   |          |  



F-77



---

##### Table of Contents

| | (19) | NON-OPERATING INCOME AND EXPENSES
| | ---- | ---------------------------------



| | a. | Other income
| | -- | ------------



|                |  |                                  |           |  |      |   |           | 
|--------------- |  | -------------------------------- | --------- |  | ---- | - | --------- | 
|                |  | For the years ended December 31, |          
|                |  | 2012                             |           |  | 2013 |  
|Interest income |  |                                  |           |  |      |   |           | 
|Bank deposits   |  | $                                | 181,413   |  |      | $ | 264,320   | 
|Others          |  |                                  | 29,958    |  |      |   | 37,406    | 
|Dividend income |  |                                  | 1,032,451 |  |      |   | 789,583   | 
|                |  |                                  |           |  |      |   |           | 
|Total           |  | $                                | 1,243,822 |  |      | $ | 1,091,309 | 
|                |  |                                  |           |  |      |   |           | 



| | b. | Other gains and losses
| | -- | ----------------------



|                                                                                            |  |                                  |           |   |      |   |            |  
|------------------------------------------------------------------------------------------- |  | -------------------------------- | --------- | - | ---- | - | ---------- | -
|                                                                                            |  | For the years ended December 31, |          
|                                                                                            |  | 2012                             |           |   | 2013 |  
|Gain on valuation of financial assets and liabilities at fair value through profit or loss: |  |                                  |           |   |      |   |            |  
|Designated financial assets at fair value through profit or loss                            |  | $                                | 37,452    |   |      | $ | 11,446     |  
|Financial assets held for trading                                                           |  |                                  | 11,866    |   |      |   |           |  
|Embedded derivative financial liabilities                                                   |  |                                  |          |   |      |   | 229,262    |  
|Loss on valuation of financial assets and liabilities at fair value through profit or loss: |  |                                  |           |   |      |   |            |  
|Financial assets held for trading                                                           |  |                                  |          |   |      |   | (49,022    | )
|Embedded derivative financial liabilities                                                   |  |                                  | (667,159  | ) |      |   |           |  
|Impairment loss:                                                                            |  |                                  |           |   |      |   |            |  
|Available-for-sale financial assets, noncurrent                                             |  |                                  | (501,407  | ) |      |   | (1,132,353 | )
|Financial assets measured at cost, noncurrent                                               |  |                                  | (182,080  | ) |      |   | (143,422   | )
|Investments accounted for under the equity method                                           |  |                                  | (223,695  | ) |      |   |           |  
|Gain on disposal of investments                                                             |  |                                  | 4,830,419 |   |      |   | 2,224,418  |  
|Other gains and losses                                                                      |  |                                  | 677,751   |   |      |   | 710,881    |  
|                                                                                            |  |                                  |           |   |      |   |            |  
|Total                                                                                       |  | $                                | 3,983,147 |   |      | $ | 1,851,210  |  
|                                                                                            |  |                                  |           |   |      |   |            |  



F-78



---

##### Table of Contents

| | c. | Finance costs
| | -- | -------------



|                   |  |                                  |         |  |      |   |         | 
|------------------ |  | -------------------------------- | ------- |  | ---- | - | ------- | 
|                   |  | For the years ended December 31, |        
|                   |  | 2012                             |         |  | 2013 |  
|Interest expenses  |  |                                  |         |  |      |   |         | 
|Bonds payable      |  | $                                | 194,034 |  |      | $ | 356,586 | 
|Bank loans         |  |                                  | 263,058 |  |      |   | 239,438 | 
|Others             |  |                                  | 915     |  |      |   | 208     | 
|Financial expenses |  |                                  | 80,262  |  |      |   | 82,174  | 
|                   |  |                                  |         |  |      |   |         | 
|Total              |  | $                                | 538,269 |  |      | $ | 678,406 | 
|                   |  |                                  |         |  |      |   |         | 



F-79



---

##### Table of Contents

| | (20) | COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS)
| | ---- | -----------------------------------------------



|                                                                                                                         |  |                                      |            |   |                                             |   |            |                                   |  |   |                 |   |  |                                    |          |   |  |   |            |  
|------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------ | ---------- | - | ------------------------------------------- | - | ---------- | --------------------------------- |  | - | --------------- | - |  | ---------------------------------- | -------- | - |  | - | ---------- | -
|                                                                                                                         |  | For the year ended December 31, 2012 |           
|                                                                                                                         |  | Arisingduring theperiod              |            |   | Reclassificationadjustmentsduring theperiod |   |            | Othercomprehensiveloss, beforetax |  |   | Incometaxeffect |   |  | Othercomprehensiveloss, net of tax |         
|Items that may be reclassified subsequently to profit or loss:                                                           |  |                                      |            |   |                                            
|Exchange differences on translation of foreign operations                                                                |  | $                                    | (2,802,004 | ) |                                             | $ |           |                                   |  | $ | (2,802,004      | ) |  | $                                  | (426,326 | ) |  | $ | (3,228,330 | )
|Unrealized gain (loss) on available-for-sale financial assets                                                            |  |                                      | 1,563,832  |   |                                             |   | (4,153,340 | )                                 |  |   | (2,589,508      | ) |  |                                    | 97,021   |   |  |   | (2,492,487 | )
|Share of changes in other comprehensive income (loss) of associates and joint ventures accounted for using equity method |  |                                      | (263,908   | ) |                                             |   | (13        | )                                 |  |   | (263,921        | ) |  |                                    | 21,678   |   |  |   | (242,243   | )
|Items that will not be reclassified subsequently to profit or loss:                                                      |  |                                      |            |   |                                             |   |            |                                   |  |   |                 |   | 
|Remeasurements of defined benefit pension plans                                                                          |  |                                      | (499,226   | ) |                                             |   |           |                                   |  |   | (499,226        | ) |  |                                    | 81,736   |   |  |   | (417,490   | )
|                                                                                                                         |  |                                      |            |   |                                             |   |            |                                   |  |   |                 |   |  |                                    |          |   |  |   |            |  
|Total other comprehensive loss                                                                                           |  | $                                    | (2,001,306 | ) |                                             | $ | (4,153,353 | )                                 |  | $ | (6,154,659      | ) |  | $                                  | (225,891 | ) |  | $ | (6,380,550 | )
|                                                                                                                         |  |                                      |            |   |                                             |   |            |                                   |  |   |                 |   |  |                                    |          |   |  |   |            |  



|                                                                                                                         |  |                                      |           |  |                                             |   |            |                                            |  |   |                 |   |  |                                            |         |   |  |   |          |  
|------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------ | --------- |  | ------------------------------------------- | - | ---------- | ------------------------------------------ |  | - | --------------- | - |  | ------------------------------------------ | ------- | - |  | - | -------- | -
|                                                                                                                         |  | For the year ended December 31, 2013 |          
|                                                                                                                         |  | Arisingduring theperiod              |           |  | Reclassificationadjustmentsduring theperiod |   |            | Othercomprehensiveincome (loss),before tax |  |   | Incometaxeffect |   |  | Othercomprehensiveincome (loss),net of tax |        
|Items that may be reclassified subsequently to profit or loss:                                                           |  |                                      |           |  |                                            
|Exchange differences on translation of foreign operations                                                                |  | $                                    | 1,416,910 |  |                                             | $ | (1,571,523 | )                                          |  | $ | (154,613        | ) |  | $                                          | 424,551 |   |  | $ | 269,938  |  
|Unrealized gain (loss) on available-for-sale financial assets                                                            |  |                                      | 223,917   |  |                                             |   | (1,080,243 | )                                          |  |   | (856,326        | ) |  |                                            | 72,674  |   |  |   | (783,652 | )
|Share of changes in other comprehensive income (loss) of associates and joint ventures accounted for using equity method |  |                                      | 381,170   |  |                                             |   | (18,679    | )                                          |  |   | 362,491         |   |  |                                            | (29,225 | ) |  |   | 333,266  |  
|Items that will not be reclassified subsequently to profit or loss:                                                      |  |                                      |           |  |                                             |   |            |                                            |  |   |                 |   | 
|Remeasurements of defined benefit pension plans                                                                          |  |                                      | 456,478   |  |                                             |   |           |                                            |  |   | 456,478         |   |  |                                            | (77,623 | ) |  |   | 378,855  |  
|                                                                                                                         |  |                                      |           |  |                                             |   |            |                                            |  |   |                 |   |  |                                            |         |   |  |   |          |  
|Total other comprehensive income (loss)                                                                                  |  | $                                    | 2,478,475 |  |                                             | $ | (2,670,445 | )                                          |  | $ | (191,970        | ) |  | $                                          | 390,377 |   |  | $ | 198,407  |  
|                                                                                                                         |  |                                      |           |  |                                             |   |            |                                            |  |   |                 |   |  |                                            |         |   |  |   |          |  



F-80



---

##### Table of Contents

| | (21) | INCOME TAX
| | ---- | ----------



| | a. | The major components of income tax expense for the years ended December 31, 2012 and 2013 were as follows:
| | -- | ----------------------------------------------------------------------------------------------------------



| | i. | Income tax expense recorded in profit or loss
| | -- | ---------------------------------------------



|                                                                                                  |  |                                  |            |   |      |   |           |  
|------------------------------------------------------------------------------------------------- |  | -------------------------------- | ---------- | - | ---- | - | --------- | -
|                                                                                                  |  | For the years ended December 31, |           
|                                                                                                  |  | 2012                             |            |   | 2013 |  
|Current income tax expense:                                                                       |  |                                  |            |   |      |   |           |  
|Current income tax charge                                                                         |  | $                                | 851,782    |   |      | $ | 554,592   |  
|Adjustments in respect of current income tax of prior periods                                     |  |                                  | (13,437    | ) |      |   | 55,318    |  
|Deferred income tax expense (benefit):                                                            |  |                                  |            |   |      |   |           |  
|Deferred income tax expense related to origination and reversal of temporary differences          |  |                                  | 877,756    |   |      |   | 1,086,871 |  
|Deferred income tax related to recognition and derecognition of tax losses and unused tax credits |  |                                  | 1,844,276  |   |      |   | 1,402,632 |  
|Adjustment of prior years deferred income tax                                                    |  |                                  | 7,064      |   |      |   | (201,548  | )
|Deferred tax expense arising from write-down or reversal of write-down of deferred tax asset      |  |                                  | (1,421,458 | ) |      |   | (641,031  | )
|                                                                                                  |  |                                  |            |   |      |   |           |  
|Income tax expense recorded in profit or loss                                                     |  | $                                | 2,145,983  |   |      | $ | 2,256,834 |  
|                                                                                                  |  |                                  |            |   |      |   |           |  



F-81



---

##### Table of Contents

| | ii. | Income tax relating to components of other comprehensive income (loss)
| | --- | ----------------------------------------------------------------------



|                                                                                                                         |  |                                  |          |   |      |   |         |  
|------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------- | -------- | - | ---- | - | ------- | -
|                                                                                                                         |  | For the years ended December 31, |         
|                                                                                                                         |  | 2012                             |          |   | 2013 |  
|Exchange differences on translation of foreign operations                                                                |  | $                                | (426,326 | ) |      | $ | 424,551 |  
|Unrealized loss on available-for-sale financial assets                                                                   |  |                                  | 97,021   |   |      |   | 72,674  |  
|Share of changes in other comprehensive income (loss) of associates and joint ventures accounted for using equity method |  |                                  | 21,678   |   |      |   | (29,225 | )
|Remeasurements of defined benefit pension plans                                                                          |  |                                  | 81,736   |   |      |   | (77,623 | )
|                                                                                                                         |  |                                  |          |   |      |   |         |  
|Income tax relating to components of other comprehensive income (loss)                                                   |  | $                                | (225,891 | ) |      | $ | 390,377 |  
|                                                                                                                         |  |                                  |          |   |      |   |         |  



| | iii. | Deferred income tax charged directly to equity
| | ---- | ----------------------------------------------



|                                                                                                                          |  |                                  |       |  |      |   |        | 
|------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ----- |  | ---- | - | ------ | 
|                                                                                                                          |  | For the years ended December 31, |      
|                                                                                                                          |  | 2012                             |       |  | 2013 |  
|Temporary difference arising from the initial recognition of the equity component separately from the liability component |  | $                                | 1,155 |  |      | $ | 16,406 | 
|Adjustment of net assets of investee accounted for using equity method                                                    |  |                                  | 56    |  |      |   | 1,237  | 
|                                                                                                                          |  |                                  |       |  |      |   |        | 
|Income tax relating to equity                                                                                             |  | $                                | 1,211 |  |      | $ | 17,643 | 
|                                                                                                                          |  |                                  |       |  |      |   |        | 



F-82



---

##### Table of Contents

| | b. | A reconciliation between income tax expense and income before tax at UMCs applicable tax rate was as follows:
| | -- | --------------------------------------------------------------------------------------------------------------



|                                                                     |  |                                 |            |   |      |   |            |  
|-------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                     |  | For the years endedDecember 31, |           
|                                                                     |  | 2012                            |            |   | 2013 |  
|Income before tax from continuing operations                         |  | $                               | 6,294,605  |   |      | $ | 14,340,472 |  
|                                                                     |  |                                 |            |   |      |   |            |  
|At UMCs statutory income tax rate of 17%                            |  |                                 | 1,070,083  |   |      |   | 2,437,880  |  
|Adjustments in respect of current income tax of prior periods        |  |                                 | (13,437    | ) |      |   | 55,318     |  
|Net change in loss carry-forward and investment tax credits          |  |                                 | 951,777    |   |      |   | 1,837,319  |  
|Tax effect of deferred tax assets/liabilities                        |  |                                 | 545,805    |   |      |   | (396,514   | )
|Tax effect of non-taxable income and not-deductible expenses:        |  |                                 |            |   |      |   |            |  
|Tax exempt income                                                    |  |                                 | (143,568   | ) |      |   | (97,322    | )
|Investment gain-domestic                                             |  |                                 | (1,188,791 | ) |      |   | (1,744,070 | )
|Dividend income                                                      |  |                                 | (171,479   | ) |      |   | (107,915   | )
|Other not-deductible expenses                                        |  |                                 | 398,712    |   |      |   | 240,408    |  
|Basic tax                                                            |  |                                 | 7,985      |   |      |   |           |  
|Effect of different tax rates applicable to UMC and its subsidiaries |  |                                 | 597,997    |   |      |   | (52,235    | )
|Others                                                               |  |                                 | 90,899     |   |      |   | 83,965     |  
|                                                                     |  |                                 |            |   |      |   |            |  
|Total income tax expenses recorded in profit or loss                 |  | $                               | 2,145,983  |   |      | $ | 2,256,834  |  
|                                                                     |  |                                 |            |   |      |   |            |  



F-83



---

##### Table of Contents

| | c. | Significant components of deferred income tax assets and liabilities were as follows:
| | -- | -------------------------------------------------------------------------------------



|                                             |  |                       |             |   |                         |   |            |                         |  |   |             |   |  |        |            |   |            |   |             |   |  |   |            |  
|-------------------------------------------- |  | --------------------- | ----------- | - | ----------------------- | - | ---------- | ----------------------- |  | - | ----------- | - |  | ------ | ---------- | - | ---------- | - | ----------- | - |  | - | ---------- | -
|                                             |  | As of January 1, 2012 |             |   | As of December 31, 2012 |   |            | As of December 31, 2013 | 
|                                             |  | Amount                |             |   | Tax effect              |   |            | Amount                  |  |   | Tax effect  |   |  | Amount |            |   | Tax effect |  
|Deferred income tax assets                   |  |                       |             |   |                         |   |            |                         |  |   |             |   |  |        |            |   |            |   |             |   |  |   |            |  
|Investment tax credit                        |  |                       |             |   |                         | $ | 2,402,503  |                         |  |   |             |   |  | $      | 1,875,168  |   |            |   |             |   |  | $ | 1,057,519  |  
|Depreciation                                 |  | $                     | 44,861      |   |                         |   | 12,103     |                         |  | $ | 25,160      |   |  |        | 8,248      |   |            | $ | 2,966,796   |   |  |   | 449,343    |  
|Loss carry-forward                           |  |                       | 29,767      |   |                         |   | 5,308      |                         |  |   | 22,783      |   |  |        | 2,889      |   |            |   | 17,013      |   |  |   | 1,988      |  
|Pension                                      |  |                       | 3,723,028   |   |                         |   | 632,915    |                         |  |   | 4,218,265   |   |  |        | 717,105    |   |            |   | 3,774,866   |   |  |   | 641,727    |  
|Allowance for sales returns and discounts    |  |                       | 121,147     |   |                         |   | 20,595     |                         |  |   | 543,101     |   |  |        | 92,327     |   |            |   | 311,006     |   |  |   | 52,871     |  
|Allowance for inventory valuation losses     |  |                       | 1,220,211   |   |                         |   | 207,436    |                         |  |   | 1,929,123   |   |  |        | 327,951    |   |            |   | 1,402,764   |   |  |   | 234,236    |  
|Investment loss                              |  |                       | 2,837,924   |   |                         |   | 428,260    |                         |  |   | 2,476,372   |   |  |        | 383,910    |   |            |   | 1,213,920   |   |  |   | 231,485    |  
|Others                                       |  |                       | 150,302     |   |                         |   | 41,525     |                         |  |   | 119,591     |   |  |        | 25,937     |   |            |   | 230,337     |   |  |   | 55,088     |  
|                                             |  |                       |             |   |                         |   |            |                         |  |   |             |   |  |        |            |   |            |   |             |   |  |   |            |  
|Total deferred income tax assets             |  |                       |             |   |                         |   | 3,750,645  |                         |  |   |             |   |  |        | 3,433,535  |   |            |   |             |   |  |   | 2,724,257  |  
|                                             |  |                       |             |   |                         |   |            |                         |  |   |             |   |  |        |            |   |            |   |             |   |  |   |            |  
|Deferred income tax liabilities              |  |                       |             |   |                         |   |            |                         |  |   |             |   |  |        |            |   |            |   |             |   |  |   |            |  
|Unrealized exchange gain                     |  |                       | (1,529,494  | ) |                         |   | (260,016   | )                       |  |   | (1,610,646  | ) |  |        | (273,810   | ) |            |   | (1,696,869  | ) |  |   | (288,468   | )
|Depreciation                                 |  |                       |            |   |                         |   |           |                         |  |   | (5,783,132  | ) |  |        | (983,133   | ) |            |   | (10,179,003 | ) |  |   | (1,708,899 | )
|Investment gain                              |  |                       | (12,613,762 | ) |                         |   | (1,056,474 | )                       |  |   | (12,538,014 | ) |  |        | (1,302,367 | ) |            |   | (10,153,845 | ) |  |   | (864,082   | )
|Convertible bond option                      |  |                       | (515,348    | ) |                         |   | (87,609    | )                       |  |   | (390,766    | ) |  |        | (66,430    | ) |            |   | (178,868    | ) |  |   | (30,407    | )
|Amortizable assets                           |  |                       |            |   |                         |   |           |                         |  |   |            |   |  |        |           |   |            |   | (2,629,442  | ) |  |   | (394,416   | )
|Others                                       |  |                       | (265,285    | ) |                         |   | (38,175    | )                       |  |   | (247,652    | ) |  |        | (35,296    | ) |            |   | (258,940    | ) |  |   | (39,160    | )
|                                             |  |                       |             |   |                         |   |            |                         |  |   |             |   |  |        |            |   |            |   |             |   |  |   |            |  
|Total deferred income tax liabilities        |  |                       |             |   |                         |   | (1,442,274 | )                       |  |   |             |   |  |        | (2,661,036 | ) |            |   |             |   |  |   | (3,325,432 | )
|                                             |  |                       |             |   |                         |   |            |                         |  |   |             |   |  |        |            |   |            |   |             |   |  |   |            |  
|Net deferred income tax assets (liabilities) |  |                       |             |   |                         | $ | 2,308,371  |                         |  |   |             |   |  | $      | 772,499    |   |            |   |             |   |  | $ | (601,175   | )
|                                             |  |                       |             |   |                         |   |            |                         |  |   |             |   |  |        |            |   |            |   |             |   |  |   |            |  



F-84



---

##### Table of Contents

| | d. | Movement of deferred tax
| | -- | ------------------------



|                                                       |  |                                 |            |   |      |   |            |  
|------------------------------------------------------ |  | ------------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                       |  | For the years endedDecember 31, |           
|                                                       |  | 2012                            |            |   | 2013 |  
|Balance at January 1                                   |  | $                               | 2,308,371  |   |      | $ | 772,499    |  
|Increase from business combination                     |  |                                 |           |   |      |   | (132,264   | )
|Disposal of subsidiaries                               |  |                                 | (2,095     | ) |      |   |           |  
|Amounts recognized in profit or loss during the period |  |                                 | (1,307,638 | ) |      |   | (1,646,924 | )
|Amounts recognized in other comprehensive income       |  |                                 | (225,891   | ) |      |   | 390,377    |  
|Amounts recognized in equity                           |  |                                 | 1,211      |   |      |   | 17,643     |  
|Exchange adjustments                                   |  |                                 | (1,459     | ) |      |   | (2,506     | )
|                                                       |  |                                 |            |   |      |   |            |  
|Balance at December 31                                 |  | $                               | 772,499    |   |      | $ | (601,175   | )
|                                                       |  |                                 |            |   |      |   |            |  



| | e. | The Company is subject to taxation in Taiwan and other foreign jurisdictions. As of December 31, 2013, tax years of 2011 and 2012 are open to Tax Authoritys examination in Taiwan, while in other foreign
jurisdictions, years 2008-2012 are open to relevant Tax Authoritys examination.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | f. | UMC was granted several five-year income tax exemption periods with respect to income derived from the expansion of operations. The income tax exemption periods will expire on December 31, 2015.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | g. | The Company generates investment tax credits for the amount invested in production equipment, research and development, and employee training. The Companys unused investment tax credits were as follows:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of January 1, 2012



|                |  |                               |           |  |                                         |   |           | 
|--------------- |  | ----------------------------- | --------- |  | --------------------------------------- | - | --------- | 
|Expiration year |  | Investment tax credits earned |           |  | Balance of unusedinvestment tax credits |  
|2012            |  | $                             | 1,974,696 |  |                                         | $ | 1,974,696 | 
|2013            |  |                               | 1,915,663 |  |                                         |   | 1,915,614 | 
|2014            |  |                               | 2,144,587 |  |                                         |   | 2,144,587 | 
|2015            |  |                               | 263,971   |  |                                         |   | 263,971   | 
|                |  |                               |           |  |                                         |   |           | 
|                |  | $                             | 6,298,917 |  |                                         | $ | 6,298,868 | 
|                |  |                               |           |  |                                         |   |           | 



F-85



---

##### Table of Contents

As of December 31, 2012



|                |  |                               |           |  |                                         |   |           | 
|--------------- |  | ----------------------------- | --------- |  | --------------------------------------- | - | --------- | 
|Expiration year |  | Investment tax credits earned |           |  | Balance of unusedinvestment tax credits |  
|2013            |  | $                             | 1,890,302 |  |                                         | $ | 1,889,355 | 
|2014            |  |                               | 2,146,028 |  |                                         |   | 2,146,028 | 
|2015            |  |                               | 304,011   |  |                                         |   | 304,011   | 
|                |  |                               |           |  |                                         |   |           | 
|                |  | $                             | 4,340,341 |  |                                         | $ | 4,339,394 | 
|                |  |                               |           |  |                                         |   |           | 

As of December 31, 2013



|                |  |                               |           |  |                                         |   |           | 
|--------------- |  | ----------------------------- | --------- |  | --------------------------------------- | - | --------- | 
|Expiration year |  | Investment tax credits earned |           |  | Balance of unusedinvestment tax credits |  
|2014            |  | $                             | 2,146,004 |  |                                         | $ | 2,140,053 | 
|2015            |  |                               | 584,388   |  |                                         |   | 584,388   | 
|2016            |  |                               | 5,596     |  |                                         |   | 5,596     | 
|                |  |                               |           |  |                                         |   |           | 
|                |  | $                             | 2,735,988 |  |                                         | $ | 2,730,037 | 
|                |  |                               |           |  |                                         |   |           | 



| | h. | The unutilized accumulated losses for the Company were as follows:
| | -- | ------------------------------------------------------------------

As of January 1,
2012



|                |  |                  |            |  |                            |   |            | 
|--------------- |  | ---------------- | ---------- |  | -------------------------- | - | ---------- | 
|Expiration year |  | Accumulated loss |            |  | Unutilizedaccumulated loss |  
|2012            |  | $                | 4,857,839  |  |                            | $ | 4,857,839  | 
|2013            |  |                  | 1,376,899  |  |                            |   | 1,376,899  | 
|2014            |  |                  | 275,708    |  |                            |   | 275,708    | 
|2015            |  |                  | 1,835,513  |  |                            |   | 1,835,513  | 
|2016            |  |                  | 2,367,031  |  |                            |   | 2,367,031  | 
|2017            |  |                  | 1,143,998  |  |                            |   | 1,143,998  | 
|2018            |  |                  | 1,816,248  |  |                            |   | 1,816,248  | 
|2019            |  |                  | 699,350    |  |                            |   | 699,350    | 
|2020            |  |                  | 928,998    |  |                            |   | 928,998    | 
|2021            |  |                  | 9,600,438  |  |                            |   | 9,600,438  | 
|                |  |                  |            |  |                            |   |            | 
|                |  | $                | 24,902,022 |  |                            | $ | 24,902,022 | 
|                |  |                  |            |  |                            |   |            | 



F-86



---

##### Table of Contents

As of December 31, 2012



|                |  |                  |            |  |                            |   |            | 
|--------------- |  | ---------------- | ---------- |  | -------------------------- | - | ---------- | 
|Expiration year |  | Accumulated loss |            |  | Unutilizedaccumulated loss |  
|2013            |  | $                | 1,185,211  |  |                            | $ | 1,185,211  | 
|2014            |  |                  | 178,024    |  |                            |   | 178,024    | 
|2015            |  |                  | 149,827    |  |                            |   | 149,827    | 
|2016            |  |                  | 24,588     |  |                            |   | 21,616     | 
|2017            |  |                  | 1,447,962  |  |                            |   | 1,447,962  | 
|2018            |  |                  | 2,161,114  |  |                            |   | 2,161,114  | 
|2019            |  |                  | 1,571,628  |  |                            |   | 1,571,274  | 
|2020            |  |                  | 2,230,864  |  |                            |   | 2,226,388  | 
|2021            |  |                  | 10,440,087 |  |                            |   | 10,430,802 | 
|2022            |  |                  | 4,445,380  |  |                            |   | 4,445,380  | 
|2032            |  |                  | 13,013     |  |                            |   | 12,064     | 
|                |  |                  |            |  |                            |   |            | 
|                |  | $                | 23,847,698 |  |                            | $ | 23,829,662 | 
|                |  |                  |            |  |                            |   |            | 

As of December 31, 2013



|                   |  |                  |            |  |                            |   |            | 
|------------------ |  | ---------------- | ---------- |  | -------------------------- | - | ---------- | 
|Expiration year    |  | Accumulated loss |            |  | Unutilizedaccumulated loss |  
|2014               |  | $                | 68         |  |                            | $ | 68         | 
|2015               |  |                  | 149,827    |  |                            |   | 149,827    | 
|2016               |  |                  | 60,750     |  |                            |   | 60,750     | 
|2017               |  |                  | 79,201     |  |                            |   | 79,201     | 
|2018               |  |                  | 232,219    |  |                            |   | 232,219    | 
|2019               |  |                  | 657,265    |  |                            |   | 657,265    | 
|2020               |  |                  | 893,746    |  |                            |   | 889,270    | 
|2021               |  |                  | 9,558,545  |  |                            |   | 9,541,695  | 
|2022               |  |                  | 4,502,030  |  |                            |   | 4,502,030  | 
|2023               |  |                  | 5,884,261  |  |                            |   | 5,884,261  | 
|2032               |  |                  | 7,153      |  |                            |   | 6,391      | 
|Unlimited duration |  |                  | 9,650      |  |                            |   | 9,650      | 
|                   |  |                  |            |  |                            |   |            | 
|                   |  | $                | 22,034,715 |  |                            | $ | 22,012,627 | 
|                   |  |                  |            |  |                            |   |            | 



F-87



---

##### Table of Contents

| | i. | As of January 1, 2012, December 31, 2012 and December 31, 2013, deferred tax assets that have not been recognized as they may not be used to offset taxable profits amounted to NT$11,695 million,
NT$8,687 million and NT$4,826 million, respectively.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | j. | Imputation credit information
| | -- | -----------------------------



|                                      |  |                |         |  |                  |   |         |                  |  |   |           | 
|------------------------------------- |  | -------------- | ------- |  | ---------------- | - | ------- | ---------------- |  | - | --------- | 
|                                      |  | As of          |        
|                                      |  | January 1,2012 |         |  | December 31,2012 |   |         | December 31,2013 | 
|Balances of imputation credit amounts |  | $              | 917,442 |  |                  | $ | 706,674 |                  |  | $ | 1,107,537 | 
|                                      |  |                |         |  |                  |   |         |                  |  |   |           | 

The actual creditable ratio for 2012 and the expected creditable ratio for 2013 were 7.21% and 4.07%,
respectively.



| | k. | UMCs earnings generated in the year ended December 31, 1997 and prior years have been fully appropriated.
| | -- | ----------------------------------------------------------------------------------------------------------



| | l. | As of January 1, 2012, December 31, 2012 and December 31, 2013, the taxable temporary differences of unrecognized deferred tax liabilities associated with investments in subsidiaries, amounted to
NT$7,977 million, NT$2,396 million and NT$7,928 million, respectively.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-88



---

##### Table of Contents

| | (22) | EARNINGS PER SHARE
| | ---- | ------------------



| | a. | Earnings per share-basic
| | -- | ------------------------

Basic earnings per share amounts are calculated by dividing the net
income for the year attributable to ordinary equity holders of the parent entity by the weighted-average number of ordinary shares outstanding during the year. The reciprocal shareholdings held by subsidiaries and associates are deducted from the
computation of weighted-average number of shares outstanding.



|                                                                                          |  |                                 |            |  |      |   |            | 
|----------------------------------------------------------------------------------------- |  | ------------------------------- | ---------- |  | ---- | - | ---------- | 
|                                                                                          |  | For the years endedDecember 31, |           
|                                                                                          |  | 2012                            |            |  | 2013 |  
|Net income attributable to the parent company                                             |  | $                               | 6,094,148  |  |      | $ | 12,608,881 | 
|                                                                                          |  |                                 |            |  |      |   |            | 
|Weighted-average number of ordinary shares for basic earnings per share (thousand shares) |  |                                 | 12,463,761 |  |      |   | 12,346,456 | 
|                                                                                          |  |                                 |            |  |      |   |            | 
|Earnings per share-basic (NTD)                                                            |  | $                               | 0.49       |  |      | $ | 1.02       | 
|                                                                                          |  |                                 |            |  |      |   |            | 



| | b. | Earnings per share-diluted
| | -- | --------------------------

Diluted earnings per share is calculated by taking basic earnings
per share plus the effect of additional common shares that would have been outstanding if the dilutive share equivalents had been issued. The net income attributable to ordinary equity holders of the parent would be also adjusted for the interest
and other income or expenses derived from any underlying dilutive share equivalents, such as convertible bonds. For employee bonus that may be distributed in shares, the number of shares to be distributed is taken into consideration assuming the
distribution will be made entirely in shares when calculating diluted earnings per share. Additionally, the dilutive effect of outstanding employee options generally should be reflected in diluted earnings per share by application of treasury stock
method. The assumed proceeds include the exercise price of the options and the average measured but unrecognized compensation expense during the period.



F-89



---

##### Table of Contents

|                                                                      |  |                                 |            |  |      |   |            | 
|--------------------------------------------------------------------- |  | ------------------------------- | ---------- |  | ---- | - | ---------- | 
|                                                                      |  | For the years endedDecember 31, |           
|                                                                      |  | 2012                            |            |  | 2013 |  
|Net income attributable to the parent company                         |  | $                               | 6,094,148  |  |      | $ | 12,608,881 | 
|Effect of dilution                                                    |  |                                 |            |  |      |   |            | 
|Unsecured convertible bonds                                           |  |                                 | 81,339     |  |      |   | 79,686     | 
|                                                                      |  |                                 |            |  |      |   |            | 
|Income attributable to the Companys stockholders                     |  | $                               | 6,175,487  |  |      | $ | 12,688,567 | 
|                                                                      |  |                                 |            |  |      |   |            | 
|Weighted-average number of common stocks for basic earnings per share |  |                                 | 12,463,761 |  |      |   | 12,346,456 | 
|Effect of dilution                                                    |  |                                 |            |  |      |   |            | 
|Employee bonus                                                        |  |                                 | 151,031    |  |      |   | 128,787    | 
|Employee stock options                                                |  |                                 | 22,170     |  |      |   | 15,949     | 
|Unsecured convertible bonds                                           |  |                                 | 652,022    |  |      |   | 659,219    | 
|                                                                      |  |                                 |            |  |      |   |            | 
|Weighted-average number of common stocks after dilution               |  |                                 | 13,288,984 |  |      |   | 13,150,411 | 
|                                                                      |  |                                 |            |  |      |   |            | 
|Diluted earnings per share (NTD)                                      |  | $                               | 0.46       |  |      | $ | 0.96       | 
|                                                                      |  |                                 |            |  |      |   |            | 

As of December 31, 2012 and 2013, there were respectively 332,656 thousand and nil issued and
outstanding stock options, which were not included in the computation of diluted earnings per share due to their antidilutive effect.



| | (23) | BUSINESS COMBINATIONS
| | ---- | ---------------------

Acquisition of Best Elite International Limited (Best Elite)

The Company acquired additional stocks of Ordinary shares, Series A-1, Series B and B-1 preferred shares representing 48.07% of Best
Elites total outstanding shares on February 1, 2013 from stockholders of Best Elite, the holding company of HeJian Technology Corp. (HeJian). Therefore, the Company increased its ownership interest in Best Elite from 35.03% to 83.10%. The
Company obtained control over Best Elite and the results of Best Elites operations have been included in the consolidated financial statements since that date. As a result of the acquisition, the Company expects to expand overseas market,
accelerate the growth of sales and to develop operations in multiple strategic geographic regions through HeJian.



F-90



---

##### Table of Contents

The fair values of the identifiable assets and liabilities of Best Elite as of the date of
acquisition were:



|                                            |  |                                     |             |  
|------------------------------------------- |  | ----------------------------------- | ----------- | -
|                                            |  | Fair value recognizedon acquisition |            
|Assets                                      |  |                                     |             |  
|Cash and cash equivalents                   |  | $                                   | 7,018,229   |  
|Accounts receivable                         |  |                                     | 1,180,790   |  
|Inventories                                 |  |                                     | 725,688     |  
|Property, plant and equipment               |  |                                     | 6,318,208   |  
|Intangible assets                           |  |                                     | 43,858      |  
|Deferred tax assets                         |  |                                     | 433,427     |  
|Other assets                                |  |                                     | 2,853,479   |  
|Others                                      |  |                                     | 234,050     |  
|                                            |  |                                     |             |  
|                                            |  |                                     | 18,807,729  |  
|                                            |  |                                     |             |  
|Liabilities                                 |  |                                     |             |  
|Accounts payable                            |  |                                     | (312,922    | )
|Other payables                              |  |                                     | (588,621    | )
|Deferred tax liabilities                    |  |                                     | (565,691    | )
|Others                                      |  |                                     | (48,653     | )
|                                            |  |                                     |             |  
|                                            |  |                                     | (1,515,887  | )
|                                            |  |                                     |             |  
|Total identifiable net assets               |  | $                                   | 17,291,842  |  
|                                            |  |                                     |             |  
|                                            | 
|Gain on bargain purchase:                   |  |                                     |             |  
|Consideration transferred                   |  | $                                   | 7,328,163   |  
|Add: Value of non-controlling interests     |  |                                     | 2,823,193   |  
|Less: Fair value of identifiable net assets |  |                                     | (17,291,842 | )
|                                            |  |                                     |             |  
|Bargain purchase gain                       |  | $                                   | (7,140,486  | )
|                                            |  |                                     |             |  

The transaction resulted in a bargain purchase gain, which is mainly attributed to the Companys unique
position to better utilize the assets, such as improving utilization, and the lack of liquidity of Best Elites shares.

The Company
elected to measure the non-controlling interests in Best Elite at the non-controlling interests proportionate share of Best Elites identifiable net assets.

Prior to the acquisition date, the Company accounted for its 35.03% interest in Best Elite as an equity-method investment. The Company
remeasured the fair value of the previously held equity interest and recognized a loss from disposal of investments of NT$987 million.



F-91



---

##### Table of Contents

The amounts of revenue and profit before tax of Best Elite included in the Companys
consolidated income statement from the acquisition date to the year ended December 31, 2013 were NT$6,636 million and NT$1,161 million, respectively. The pro forma revenue and the profit before tax were NT$124,410 million and NT$14,252 million,
respectively, as if Best Elite had been included in the consolidated results of the Company for the entire year of 2013.



|                                                            |  |   |            |  
|----------------------------------------------------------- |  | - | ---------- | -
|Consideration transferred:                                  |  |   |            |  
|Cash                                                        |  | $ | 4,359,660  |  
|Value of previously held equity interest before acquisition |  |   | 2,968,503  |  
|                                                            |  |   |            |  
|Total                                                       |  | $ | 7,328,163  |  
|                                                            |  |   |            |  
|Cash flows analysis of acquisition:                         |  |   |            |  
|Cash consideration                                          |  | $ | 4,359,660  |  
|Net cash acquired from the subsidiary                       |  |   | (7,018,229 | )
|                                                            |  |   |            |  
|Net cash inflows from acquisition                           |  | $ | (2,658,569 | )
|                                                            |  |   |            |  

Additional purchases of Best Elites equity interests

The Company purchased additional ordinary shares, Series A-1 and Series B-1 preferred shares representing 3.78% of Best Elites total
outstanding shares on March 14, 2013, and increased its cumulative ownership in Best Elite to 86.88%.

A cash consideration of NT$285
million was paid to the non-controlling interest stockholders. The carrying value of the additional interest acquired was NT$629 million. The difference of NT$344 million between the consideration and the carrying value of the interest acquired was
recognized in additional paid-in capital within equity.

Obtained controlling interests in ALLIANCE OPTOTEK CORP. (ALLIANCE)

On May 2, 2013, due to the possible future success of LED lighting industry, the Company acquired additional stocks issued by ALLIANCE,
which increased the Companys ownership interest from 47.99% to 74.51%. The Company obtained control over ALLIANCE and the results of ALLIANCEs operations have been included in the consolidated financial statements since that date.



F-92



---

##### Table of Contents

The fair values of identifiable assets and liabilities of ALLIANCE as of the date of acquisition
were:



|                                            |  |                                     |          |  
|------------------------------------------- |  | ----------------------------------- | -------- | -
|                                            |  | Fair value recognizedon acquisition |         
|Assets                                      |  |                                     |          |  
|Cash and cash equivalents                   |  | $                                   | 65,045   |  
|Accounts receivable                         |  |                                     | 15,482   |  
|Inventories                                 |  |                                     | 45,732   |  
|Property, plant and equipment               |  |                                     | 7,683    |  
|Intangible assets                           |  |                                     | 63,257   |  
|Others                                      |  |                                     | 7,006    |  
|                                            |  |                                     |          |  
|                                            |  |                                     | 204,205  |  
|                                            |  |                                     |          |  
|Liabilities                                 |  |                                     |          |  
|Short-term loans                            |  |                                     | (25,000  | )
|Notes and accounts payable                  |  |                                     | (9,403   | )
|Other payables                              |  |                                     | (12,681  | )
|Others                                      |  |                                     | (1,388   | )
|                                            |  |                                     |          |  
|                                            |  |                                     | (48,472  | )
|                                            |  |                                     |          |  
|Total identifiable net assets               |  | $                                   | 155,733  |  
|                                            |  |                                     |          |  
|Gain on bargain purchase:                   |  |                                     |          |  
|Consideration transferred                   |  | $                                   | 103,002  |  
|Add: Value of non-controlling interest      |  |                                     | 39,688   |  
|Less: Fair value of identifiable net assets |  |                                     | (155,733 | )
|                                            |  |                                     |          |  
|Bargain purchase gain                       |  | $                                   | (13,043  | )
|                                            |  |                                     |          |  

The Company elected to measure the non-controlling interests in ALLIANCE at the non-controlling interests
proportionate share of ALLIANCEs identifiable net assets.

Prior to the acquisition date, the Company accounted for its 47.99%
interest in ALLIANCE as an equity-method investment. The Company remeasured the fair value of the previously held equity interest and recognized a gain from disposal of investments of NT$19 million.

The amounts of revenue and loss of ALLIANCE included in the Companys consolidated income statement from the acquisition date to the year
ended December 31, 2013 were NT$65 million and NT$113 million, respectively. The pro forma revenue and the profit before tax were NT$123,837 million and NT$14,333 million, respectively, as if ALLIANCE had been included in the consolidated
results of the Company for the entire year of 2013.



F-93



---

##### Table of Contents

|                                                            |  |   |         |  
|----------------------------------------------------------- |  | - | ------- | -
|Consideration transferred:                                  |  |   |         |  
|Cash                                                        |  | $ | 74,000  |  
|Value of previously held equity interest before acquisition |  |   | 29,002  |  
|                                                            |  |   |         |  
|Total                                                       |  | $ | 103,002 |  
|                                                            |  |   |         |  
|Cash flows analysis of acquisition:                         |  |   |         |  
|Cash consideration                                          |  | $ | 74,000  |  
|Net cash acquired from the subsidiary                       |  |   | (65,045 | )
|                                                            |  |   |         |  
|Net cash outflows from acquisition                          |  | $ | 8,955   |  
|                                                            |  |   |         |  



| | (24) | DECONSOLIDATION OF ONE OF THE COMPANYS SUBSIDIARIES
| | ---- | ----------------------------------------------------

In November 2013, the Company
lost control over UMC JAPAN (UMCJ) due to the Company selling 100% shares of UMCJ to a third party, MACH SEMICONDUCTOR CO.; accordingly, the Company derecognized the related assets and liabilities of UMCJ.



| | a. | Assets and liabilities of UMCJ over which the Company lost control:
| | -- | -------------------------------------------------------------------



|                              |  |                        |          |  
|----------------------------- |  | ---------------------- | -------- | -
|                              |  | As ofNovember 30, 2013 |         
|Assets                        |  |                        |          |  
|Cash and cash equivalents     |  | $                      | 141,501  |  
|Accounts receivable           |  |                        | 603      |  
|Property, plant and equipment |  |                        | 758,993  |  
|Others                        |  |                        | 26,677   |  
|                              |  |                        |          |  
|                              |  |                        | 927,774  |  
|                              |  |                        |          |  
|Liabilities                   |  |                        |          |  
|Accounts payable              |  |                        | (75,201  | )
|Accrued pension liabilities   |  |                        | (18,218  | )
|Others                        |  |                        | (22,522  | )
|                              |  |                        |          |  
|                              |  |                        | (115,941 | )
|                              |  |                        |          |  
|Net assets deconsolidated     |  | $                      | 811,833  |  
|                              |  |                        |          |  



F-94



---

##### Table of Contents

| | b. | Consideration received and gain recognized from the transaction:
| | -- | ----------------------------------------------------------------



|                                                              |  |   |           |  
|------------------------------------------------------------- |  | - | --------- | -
|Cash received                                                 |  | $ | 48,217    |  
|Less: Net assets of the subsidiary deconsolidated             |  |   | (811,833  | )
|Amounts transferred from other comprehensive income to profit |  |   | 1,571,489 |  
|Amounts transferred from deferred unrealized gain to profit   |  |   | 30,497    |  
|Other amounts transferred to profit                           |  |   | 1,484     |  
|                                                              |  |   |           |  
|Gain on disposal of the subsidiary                            |  | $ | 839,854   |  
|                                                              |  |   |           |  

The gain on disposal of the subsidiary was recognized under other gains and losses in the consolidated
statement of comprehensive income for the year ended December 31, 2013.



| | c. | Analysis of net cash outflow arising from deconsolidation of the subsidiary:
| | -- | ----------------------------------------------------------------------------



|                                      |  |   |          |  
|------------------------------------- |  | - | -------- | -
|Cash received                         |  | $ | 48,217   |  
|Net cash of subsidiary derecognized   |  |   | (141,501 | )
|                                      |  |   |          |  
|Net cash outflow from deconsolidation |  | $ | (93,284  | )
|                                      |  |   |          |  



|7. | SIGNIFICANT RELATED PARTY TRANSACTIONS
|-- | --------------------------------------



| | a. | Significant intercompany transactions between consolidated entities were as follows:
| | -- | ------------------------------------------------------------------------------------

For
the year ended December 31, 2012



|       |  |              |  |                       |  |   |               |  |                                                                                 |             |  |  |     | 
|------ |  | ------------ |  | --------------------- |  | - | ------------- |  | ------------------------------------------------------------------------------- | ----------- |  |  | --- | 
|Entity |  | Counterparty |  | Transactions (Note 1) | 
|       |  | Account      |  | Amount                |  |   | Terms(Note 2) |  | Percentage ofconsolidated operatingrevenues orconsolidated total assets(Note 3) |            
|UMC    |  | UMC-USA      |  | Sales                 |  | $ | 49,403,054    |  |                                                                                 | Net 60 days |  |  | 43% | 
|UMC    |  | UMC-USA      |  | Accounts receivable   |  |   | 4,645,653     |  |                                                                                 |            |  |  | 2%  | 
|UMC    |  | UMCJ         |  | Sales                 |  |   | 1,060,035     |  |                                                                                 | Net 60 days |  |  | 1%  | 
|UMC    |  | UMCJ         |  | Accounts receivable   |  |   | 180,275       |  |                                                                                 |            |  |  | 0%  | 



F-95



---

##### Table of Contents

For the year ended December 31, 2013



|       |              |                 |         |                       |        |   |            |                |  |                                                                                 |  |  |     | 
|------ | ------------ | --------------- | ------- | --------------------- | ------ | - | ---------- | -------------- |  | ------------------------------------------------------------------------------- |  |  | --- | 
|Entity |              |                 |         | Transactions (Note 1) |       
|       | Counterparty |                 | Account |                       | Amount |   |            | Terms
(Note 2) |  | Percentage ofconsolidated operatingrevenues orconsolidated total assets(Note 3) | 
|UMC    |              | UMC-USA         |         | Sales                 |        | $ | 52,581,667 |                |  | Net 60 days                                                                     |  |  | 42% | 
|UMC    |              | UMC-USA         |         | Accounts receivable   |        |   | 5,599,526  |                |  |                                                                                |  |  | 2%  | 
|UMC    |              | UMCJ            |         | Sales                 |        |   | 403,888    |                |  | Net 60 days                                                                     |  |  | 0%  | 
|UMC    |              | UMC GROUP JAPAN |         | Sales                 |        |   | 3,885,762  |                |  | Net 60 days                                                                     |  |  | 3%  | 
|UMC    |              | UMC GROUP JAPAN |         | Accounts receivable   |        |   | 845,690    |                |  |                                                                                |  |  | 0%  | 



| | Note 1: | All the significant intercompany transactions listed above are downstream transactions.
| | ------- | ---------------------------------------------------------------------------------------



| | Note 2: | The sales price to the above related parties was determined through mutual agreement based on the market conditions.
| | ------- | --------------------------------------------------------------------------------------------------------------------



| | Note 3: | The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on each items balance at year-end. For profit or loss items, cumulative balances are used as bases.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Significant transactions between the Company and other related parties were as follows:
| | -- | ---------------------------------------------------------------------------------------



| | (i) | Operating income
| | --- | ----------------



|                               |  |                                  |         |  |      |   |         | 
|------------------------------ |  | -------------------------------- | ------- |  | ---- | - | ------- | 
|                               |  | For the years ended December 31, |        
|                               |  | 2012                             |         |  | 2013 |  
|Associates                     |  | $                                | 2,325   |  |      | $ | 4,942   | 
|Joint ventures                 |  |                                  | 217,971 |  |      |   | 51,154  | 
|Other related parties (Note A) |  |                                  | 260,892 |  |      |   | 156,004 | 
|                               |  |                                  |         |  |      |   |         | 
|Total                          |  | $                                | 481,188 |  |      | $ | 212,100 | 
|                               |  |                                  |         |  |      |   |         | 



| | Note A: | Transactions with other related parties are primarily from the operating transactions with SILICON INTEGRATED SYSTEMS CORP. (SIS). The amounts for the years ended December 31, 2012 and 2013 were NT$256 million and
NT$156 million, respectively.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-96



---

##### Table of Contents

| | (ii) | Accounts receivable, net
| | ---- | ------------------------



|                                                |  |                |         |   |                  |   |        |                  |  |   |       |  
|----------------------------------------------- |  | -------------- | ------- | - | ---------------- | - | ------ | ---------------- |  | - | ----- | -
|                                                |  | As of          |        
|                                                |  | January 1,2012 |         |   | December 31,2012 |   |        | December 31,2013 | 
|Joint ventures                                  |  | $              | 125,132 |   |                  | $ | 12,067 |                  |  | $ | 1,081 |  
|Other related parties (Note B)                  |  |                | 5,498   |   |                  |   | 70,070 |                  |  |   | 1,839 |  
|                                                |  |                |         |   |                  |   |        |                  |  |   |       |  
|Total                                           |  |                | 130,630 |   |                  |   | 82,137 |                  |  |   | 2,920 |  
|Less: Allowance for sales returns and discounts |  |                | (77     | ) |                  |   | (396   | )                |  |   | (66   | )
|                                                |  |                |         |   |                  |   |        |                  |  |   |       |  
|Net                                             |  | $              | 130,553 |   |                  | $ | 81,741 |                  |  | $ | 2,854 |  
|                                                |  |                |         |   |                  |   |        |                  |  |   |       |  



| | Note B: | Balances of other related parties are accounts receivables primarily from SIS. As of January 1, 2012, December 31, 2012 and December 31, 2013, the balances were NT$4 million, NT$70 million and NT$2
million, respectively.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The sales price to the above related parties was determined through mutual agreement based on the
market rates. The collection periods for domestic sales to related parties were month-end 45~60 days, while the term for overseas sales was net 60 days.



| | (iii) | Significant asset transactions
| | ----- | ------------------------------



|                                     |  |                                                          |  |               |         |  |                |   |   |              |  |   |   | 
|------------------------------------ |  | -------------------------------------------------------- |  | ------------- | ------- |  | -------------- | - | - | ------------ |  | - | - | 
|For the year ended December 31, 2013 |  |                                                          |  |               |         |  |                |   |   |              | 
|                                     |  | Item                                                     |  | Purchaseprice |         |  | Disposalamount |   |   | Disposalgain | 
|Associates                           |  | Purchase available-for-sale financial assets, noncurrent |  | $             | 104,919 |  |                | $ |  |              |  | $ |  | 
|                                     |  |                                                          |  |               |         |  |                |   |   |              |  |   |   | 



| | c. | Key management personnel compensation
| | -- | -------------------------------------



|                             |  |                                  |         |  |      |   |         | 
|---------------------------- |  | -------------------------------- | ------- |  | ---- | - | ------- | 
|                             |  | For the years ended December 31, |        
|                             |  | 2012                             |         |  | 2013 |  
|Short-term employee benefits |  | $                                | 253,432 |  |      | $ | 277,659 | 
|Post-employment benefits     |  |                                  | 3,707   |  |      |   | 3,629   | 
|Termination benefits         |  |                                  | 3,534   |  |      |   |        | 
|Share-based payments         |  |                                  | 8,120   |  |      |   | 1,935   | 
|Others                       |  |                                  |        |  |      |   | 932     | 
|                             |  |                                  |         |  |      |   |         | 
|Total                        |  | $                                | 268,793 |  |      | $ | 284,155 | 
|                             |  |                                  |         |  |      |   |         | 



F-97



---

##### Table of Contents

|8. | ASSETS PLEDGED AS COLLATERAL
|-- | ----------------------------



|                                                           |  |                |            |  |                  |   |            |                  |  |   |                                     |  |                  |                                                                                                                  |  |                               
|---------------------------------------------------------- |  | -------------- | ---------- |  | ---------------- | - | ---------- | ---------------- |  | - | ----------------------------------- |  | ---------------- | ---------------------------------------------------------------------------------------------------------------- |  | ------------------------------
|                                                           |  | As of          |            |  |                  |   |           
|                                                           |  | January 1,2012 |            |  | December 31,2012 |   |            | December 31,2013 |  |   | Party to which asset(s)
was pledged |  | Purpose ofpledge
|Deposits-out
(Time deposit)                                |  | $              | 645,906    |  |                  | $ | 815,040    |                  |  | $ | 815,079                             |  |                  | Customs                                                                                                          |  | Customs duty guarantee        
|Deposits-out
(Time deposit)                                |  |                | 122,728    |  |                  |   | 122,729    |                  |  |   | 156,658                             |  |                  | Science Park Administration                                                                                      |  | Collateral for land lease     
|Deposits-out
(Time deposit)                                |  |                | 43,800     |  |                  |   | 52,800     |                  |  |   | 52,800                              |  |                  | Liquefied Natural Gas Business Division, CPC Corporation, Taiwan                                                 |  | Energy resources guarantee    
|Deposits-out
(Time deposit)                                |  |                | 1,246      |  |                  |   | 1,246      |                  |  |   | 1,246                               |  |                  | Bureau of Energy, Ministry of Economic Affairs                                                                   |  | Energy resources guarantee    
|Deposits-out
(Time deposit)                                |  |                |           |  |                  |   |           |                  |  |   | 1,110                               |  |                  | Hsinchu Kuang-Fu High School                                                                                     |  | Cooperative education         
|Deposits-out
(Time deposit)                                |  |                | 26,624     |  |                  |   |           |                  |  |   |                                    |  |                  | Securities and Futures Investors Protection Center                                                               |  | Negotiation guarantee         
|Land                                                       |  |                | 699,627    |  |                  |   | 699,627    |                  |  |   | 600,664                             |  |                  | First Commercial Bank                                                                                            |  | Collateral for long-term loans
|Buildings                                                  |  |                | 2,007,176  |  |                  |   | 1,814,811  |                  |  |   | 1,630,477                           |  |                  | Syndicated Loans from Bank of Taiwan and 7 others and Syndicated Loans from Taiwan Cooperative Bank and 5 others |  | Collateral for long-term loans
|Machinery and equipment                                    |  |                | 9,071,782  |  |                  |   | 7,480,728  |                  |  |   | 6,285,141                           |  |                  | Syndicated Loans from Bank of Taiwan and 7 others and Syndicated Loans from Taiwan Cooperative Bank and 5 others |  | Collateral for long-term loans
|Furniture and fixtures                                     |  |                | 84,204     |  |                  |   | 60,702     |                  |  |   | 44,373                              |  |                  | Syndicated Loans from Bank of Taiwan and 7 others and Syndicated Loans from Taiwan Cooperative Bank and 5 others |  | Collateral for long-term loans
|Construction in progress and equipment awaiting inspection |  |                | 1,721,465  |  |                  |   | 249,434    |                  |  |   | 87,981                              |  |                  | Bank of Taiwan, First Commercial Bank and Mega International Commercial Bank                                     |  | Collateral for long-term loans
|                                                           |  |                |            |  |                  |   |            |                  |  |   |                                     |  |                  |                                                                                                                  |  |                               
|Total                                                      |  | $              | 14,424,558 |  |                  | $ | 11,297,117 |                  |  | $ | 9,675,529                           |  |                  |                                                                                                                  |  |                               
|                                                           |  |                |            |  |                  |   |            |                  |  |   |                                     |  |                  |                                                                                                                  |  |                               



F-98



---

##### Table of Contents

|9. | SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENTS
|-- | ---------------------------------------------------------------



| | (1) | The Company entered into several patent license agreements and development contracts of intellectual property for a total contract amount of approximately NT$12.7 billion. Royalties and development fees payable in
future years was NT$4.6 billion as of December 31, 2013.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The Company entered into several construction contracts for the expansion of its factory premises. As of December 31, 2013, these construction contracts amounted to approximately NT$6 billion and the unpaid portion
of the contracts was approximately NT$2.1 billion.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | The Company entered into several operating lease contracts for land and offices. These renewable operating leases will expire in various years through 2033. Future minimum lease payments under those leases are as
follows:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                    |  |                |           |  |                  |   |           |                  |  |   |           | 
|------------------- |  | -------------- | --------- |  | ---------------- | - | --------- | ---------------- |  | - | --------- | 
|                    |  | As of          |          
|Year                |  | January 1,2012 |           |  | December 31,2012 |   |           | December 31,2013 | 
|2012                |  | $              | 392,709   |  |                  | $ |          |                  |  | $ |          | 
|2013                |  |                | 351,778   |  |                  |   | 465,508   |                  |  |   |          | 
|2014                |  |                | 307,260   |  |                  |   | 409,259   |                  |  |   | 410,788   | 
|2015                |  |                | 284,195   |  |                  |   | 377,037   |                  |  |   | 376,789   | 
|2016                |  |                | 304,152   |  |                  |   | 348,965   |                  |  |   | 329,199   | 
|2017                |  |                | 177,418   |  |                  |   | 308,400   |                  |  |   | 294,506   | 
|2018 and thereafter |  |                | 1,237,940 |  |                  |   | 2,269,247 |                  |  |   | 2,157,375 | 
|                    |  |                |           |  |                  |   |           |                  |  |   |           | 
|Total               |  | $              | 3,055,452 |  |                  | $ | 4,178,416 |                  |  | $ | 3,568,657 | 
|                    |  |                |           |  |                  |   |           |                  |  |   |           | 



|10. | SIGNIFICANT SUBSEQUENT EVENTS
|--- | -----------------------------

In order to integrate resources and expand operation for
improving operating performance and industrial competitiveness, the merger with WIESON TECHNOLOGIES CO., LTD. (WIESON) was resolved by the ALLIANCE OPTOTEK CORP.s (ALLIANCE) board of directors meeting held on January 23, 2014 and WIESON
will be the surviving company. One share of WIESONs common stock will be given in exchange for 3.75 shares of ALLIANCEs common stock and the provisional merger date is June 3, 2014. The follow up procedures will be determined after
this merger is approved by the ALLIANCEs stockholders and the authority in charge. ALLIANCE is currently a subsidiary, and upon completion of this merger, the Company will lose control over ALLIANCE.



F-99



---

##### Table of Contents

|11. | FINANCIAL RISK AND FAIR VALUE DISCLOSURES
|--- | -----------------------------------------



| | (1) | Categories of financial instruments
| | --- | -----------------------------------



|                                                                 |  |                |            |  |                  |   |            |                  |  |   |            | 
|---------------------------------------------------------------- |  | -------------- | ---------- |  | ---------------- | - | ---------- | ---------------- |  | - | ---------- | 
|                                                                 |  | As of          |           
|Financial Assets                                                 |  | January 1,2012 |            |  | December 31,2012 |   |            | December 31,2013 | 
|Financial assets at fair value through profit or loss            |  |                |            |  |                  |   |            |                  |  |   |            | 
|Designated financial assets at fair value through profit or loss |  | $              | 210,341    |  |                  | $ | 72,706     |                  |  | $ | 60,441     | 
|Held for trading at fair value                                   |  |                | 605,301    |  |                  |   | 655,994    |                  |  |   | 633,264    | 
|                                                                 |  |                |            |  |                  |   |            |                  |  |   |            | 
|Subtotal                                                         |  |                | 815,642    |  |                  |   | 728,700    |                  |  |   | 693,705    | 
|                                                                 |  |                |            |  |                  |   |            |                  |  |   |            | 
|Available-for-sale financial assets                              |  |                | 28,569,327 |  |                  |   | 24,306,617 |                  |  |   | 21,690,520 | 
|                                                                 |  |                |            |  |                  |   |            |                  |  |   |            | 
|Financial assets measured at cost                                |  |                | 3,053,958  |  |                  |   | 3,162,118  |                  |  |   | 4,085,292  | 
|                                                                 |  |                |            |  |                  |   |            |                  |  |   |            | 
|Held-to-maturity financial assets                                |  |                | 13,524     |  |                  |   |           |                  |  |   |           | 
|                                                                 |  |                |            |  |                  |   |            |                  |  |   |            | 
|Loans and receivables                                            |  |                |            |  |                  |   |            |                  |  |   |            | 
|Cash and cash equivalents (excludes cash on hand)                |  |                | 49,057,658 |  |                  |   | 42,484,519 |                  |  |   | 50,827,039 | 
|Receivables                                                      |  |                | 15,249,208 |  |                  |   | 17,096,872 |                  |  |   | 17,547,228 | 
|Deposits-out                                                     |  |                | 1,316,904  |  |                  |   | 1,377,327  |                  |  |   | 1,289,975  | 
|Other financial assets-current                                   |  |                | 8,000      |  |                  |   | 104,235    |                  |  |   | 1,997,209  | 
|                                                                 |  |                |            |  |                  |   |            |                  |  |   |            | 
|Subtotal                                                         |  |                | 65,631,770 |  |                  |   | 61,062,953 |                  |  |   | 71,661,451 | 
|                                                                 |  |                |            |  |                  |   |            |                  |  |   |            | 
|Total                                                            |  | $              | 98,084,221 |  |                  | $ | 89,260,388 |                  |  | $ | 98,130,968 | 
|                                                                 |  |                |            |  |                  |   |            |                  |  |   |            | 



|                                                                |  |                |            |  |                  |   |            |                  |  |   |            | 
|--------------------------------------------------------------- |  | -------------- | ---------- |  | ---------------- | - | ---------- | ---------------- |  | - | ---------- | 
|                                                                |  | As of          |           
|Financial Liabilities                                           |  | January 1,2012 |            |  | December 31,2012 |   |            | December 31,2013 | 
|Financial liabilities at fair value through profit or loss      |  |                |            |  |                  |   |            |                  |  |   |            | 
|Embedded derivative financial liabilities in exchangeable bonds |  | $              | 741,531    |  |                  | $ | 767,605    |                  |  | $ | 1,928      | 
|                                                                |  |                |            |  |                  |   |            |                  |  |   |            | 
|Financial liabilities at amortized cost                         |  |                |            |  |                  |   |            |                  |  |   |            | 
|Short-term loans                                                |  |                | 9,411,877  |  |                  |   | 5,772,615  |                  |  |   | 4,643,573  | 
|Payables                                                        |  |                | 23,299,236 |  |                  |   | 22,609,985 |                  |  |   | 25,167,912 | 
|Capacity deposit (current portion included)                     |  |                | 3,031      |  |                  |   | 34,896     |                  |  |   | 90,863     | 
|Bonds payable (current portion included)                        |  |                | 17,404,788 |  |                  |   | 26,224,353 |                  |  |   | 33,606,417 | 
|Long-term loans (current portion included)                      |  |                | 11,692,649 |  |                  |   | 14,817,466 |                  |  |   | 11,354,014 | 
|                                                                |  |                |            |  |                  |   |            |                  |  |   |            | 
|Subtotal                                                        |  |                | 61,811,581 |  |                  |   | 69,459,315 |                  |  |   | 74,862,779 | 
|                                                                |  |                |            |  |                  |   |            |                  |  |   |            | 
|Total                                                           |  | $              | 62,553,112 |  |                  | $ | 70,226,920 |                  |  | $ | 74,864,707 | 
|                                                                |  |                |            |  |                  |   |            |                  |  |   |            | 



F-100



---

##### Table of Contents

| | (2) | Financial risk management objectives and policies
| | --- | -------------------------------------------------

The Companys risk management
objectives are to manage market risk, credit risk and liquidity risk related to its operating activities. The Company identifies measures and manages the aforementioned risks based on policy and risk preference.

The Company has established appropriate policies, procedures and internal controls for financial risk management. Before entering into
significant financial activities, due approval process by the board of directors and audit committee must be carried out based on related protocols and internal control procedures. The Company complies with its financial risk management policies at
all times.



| | (3) | Market risk
| | --- | -----------

Market risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices. Market risks comprise of currency risk, interest rate risk, and other price risk (such as equity price risk).

Foreign currency risk

The Companys exposure to the risk of changes in foreign exchange rates relates primarily to the Companys operating activities (when
revenue or expense is denominated in a different currency from the Companys functional currency) and the Companys net investments in foreign subsidiaries.

The Company applies natural hedges on the foreign currency risk arising from purchases or sales, and the net effect of the risks related to
monetary financial assets and liabilities was minor. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Company.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Companys profit is performed on
significant monetary items denominated in foreign currencies as of the end of the reporting period. When NTD strengthens/weakens against USD by 10%, the profit for the years ended December 31, 2012 and 2013 increases/decreases by NT$185 million
and NT$172 million, respectively.



F-101



---

##### Table of Contents

Interest rate risk

The Company is exposed to interest rate risk arising from borrowing at floating interest rates. All of the Companys bonds have fixed
interest rates and are measured at amortized cost. As such, changes in interest rates would not affect the future cash flows. On the other hand, due to the interest rates of the Companys short-term and long-term bank loans are floating,
changes in interest rates would affect the future cash flows but not the fair value. Please refer to Note 6(10), 6(12) and 6(13) for the range of interest rate of the Companys bonds and bank loans.

At the reporting dates, a change of 10 basis points of interest rate in a reporting period could cause the profit for the years ended
December 31, 2012 and 2013 to increase/decrease by NT$21 million and NT$16 million, respectively.

Equity price risk

The Companys listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future
performance of equities markets. The Companys listed equity investments are classified as financial assets at fair value through profit or loss and available-for-sale financial assets, while unlisted equity securities are classified as
available-for-sale financial assets which are subsequently measured using a valuation model and financial assets measured at cost.

The
sensitivity analysis for the equity instruments is based on the change in fair value as of the reporting date. A change of 5% in the price of the aforementioned financial assets at fair value through profit or loss could increase/decrease the
Companys profit for the years ended December 31, 2012 and 2013 by NT$14 million and NT$12 million, respectively. A change of 5% in the price of the aforementioned available-for-sale financial instruments could increase/decrease the
Companys other comprehensive income for the years ended December 31, 2012 and 2013 by NT$1,212 million and NT$1,083 million, respectively.



| | (4) | Credit risk management
| | --- | ----------------------

The Company only trades with approved and creditworthy third parties.
Where the Company trades with third parties which have less favorable financial positions, it will request collateral from them. It is the Companys policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. In addition, notes and accounts receivable balances are monitored on an ongoing basis, which consequently minimizes the Companys exposure to bad debts.



F-102



---

##### Table of Contents

The Company mitigate the credit risks from financial institutions by limiting its counter parties
to only reputable domestic or international financial institutions with good credit standing and spreading its holdings among various financial institutions. The Companys exposure to credit risk arising from the default of counter-parties is
limited to the carrying amount of these instruments.

As of January 1, 2012, December 31, 2012 and December 31, 2013,
accounts receivables from the top ten customers represented 65%, 57% and 49% of the total accounts receivables of the Company, respectively. The credit concentration risk of other accounts receivables is insignificant.



| | (5) | Liquidity risk management
| | --- | -------------------------

The Companys objectives are to maintain a balance between
continuity of funding and flexibility through the use of cash and cash equivalents, bank loans and bonds.

The table below summarizes the
maturity profile of the Companys financial liabilities based on the contractual undiscounted payments and contractual maturity:



|                  |  |                         |            |  |             |   |           |             |  |   |            |  |  |       |           |  |  |   |            | 
|----------------- |  | ----------------------- | ---------- |  | ----------- | - | --------- | ----------- |  | - | ---------- |  |  | ----- | --------- |  |  | - | ---------- | 
|                  |  | As of January 1, 2012   |           
|                  |  | Less than1 year         |            |  | 2 to 3years |   |           | 4 to 5years |  |   | > 5 years  |  |  | Total |          
|Short-term loans  |  | $                       | 9,425,054  |  |             | $ |          |             |  | $ |           |  |  | $     |          |  |  | $ | 9,425,054  | 
|Payables          |  |                         | 23,299,236 |  |             |   |          |             |  |   |           |  |  |       |          |  |  |   | 23,299,236 | 
|Capacity deposits |  |                         | 3,031      |  |             |   |          |             |  |   |           |  |  |       |          |  |  |   | 3,031      | 
|Bonds payable     |  |                         | 6,125,110  |  |             |   |          |             |  |   | 12,420,903 |  |  |       |          |  |  |   | 18,546,013 | 
|Long-term loans   |  |                         | 2,796,883  |  |             |   | 5,808,708 |             |  |   | 3,786,852  |  |  |       |          |  |  |   | 12,392,443 | 
|                  |  |                         |            |  |             |   |           |             |  |   |            |  |  |       |           |  |  |   |            | 
|Total             |  | $                       | 41,649,314 |  |             | $ | 5,808,708 |             |  | $ | 16,207,755 |  |  | $     |          |  |  | $ | 63,665,777 | 
|                  |  |                         |            |  |             |   |           |             |  |   |            |  |  |       |           |  |  |   |            | 
|                  | 
|                  |  | As of December 31, 2012 |           
|                  |  | Less than1 year         |            |  | 2 to 3years |   |           | 4 to 5years |  |   | > 5 years  |  |  | Total |          
|Short-term loans  |  | $                       | 5,781,106  |  |             | $ |          |             |  | $ |           |  |  | $     |          |  |  | $ | 5,781,106  | 
|Payables          |  |                         | 22,526,118 |  |             |   |          |             |  |   |           |  |  |       |          |  |  |   | 22,526,118 | 
|Capacity deposits |  |                         |           |  |             |   | 34,896    |             |  |   |           |  |  |       |          |  |  |   | 34,896     | 
|Bonds payable     |  |                         | 4,883,189  |  |             |   | 296,000   |             |  |   | 20,013,687 |  |  |       | 2,558,408 |  |  |   | 27,751,284 | 
|Long-term loans   |  |                         | 4,854,732  |  |             |   | 5,681,088 |             |  |   | 5,086,582  |  |  |       |          |  |  |   | 15,622,402 | 
|                  |  |                         |            |  |             |   |           |             |  |   |            |  |  |       |           |  |  |   |            | 
|Total             |  | $                       | 38,045,145 |  |             | $ | 6,011,984 |             |  | $ | 25,100,269 |  |  | $     | 2,558,408 |  |  | $ | 71,715,806 | 
|                  |  |                         |            |  |             |   |           |             |  |   |            |  |  |       |           |  |  |   |            | 



F-103



---

##### Table of Contents

|                  |  |                         |            |  |             |   |           |             |  |   |            |  |  |       |           |  |  |   |            | 
|----------------- |  | ----------------------- | ---------- |  | ----------- | - | --------- | ----------- |  | - | ---------- |  |  | ----- | --------- |  |  | - | ---------- | 
|                  |  | As of December 31, 2013 |           
|                  |  | Less than1 year         |            |  | 2 to 3years |   |           | 4 to 5years |  |   | > 5 years  |  |  | Total |          
|Short-term loans  |  | $                       | 4,671,351  |  |             | $ |          |             |  | $ |           |  |  | $     |          |  |  | $ | 4,671,351  | 
|Payables          |  |                         | 24,965,039 |  |             |   |          |             |  |   |           |  |  |       |          |  |  |   | 24,965,039 | 
|Capacity deposits |  |                         | 8,967      |  |             |   | 81,896    |             |  |   |           |  |  |       |          |  |  |   | 90,863     | 
|Bonds payable     |  |                         | 14,445,976 |  |             |   | 573,500   |             |  |   | 15,325,037 |  |  |       | 5,062,867 |  |  |   | 35,407,380 | 
|Long-term loans   |  |                         | 3,068,914  |  |             |   | 7,601,215 |             |  |   | 1,101,865  |  |  |       |          |  |  |   | 11,771,994 | 
|                  |  |                         |            |  |             |   |           |             |  |   |            |  |  |       |           |  |  |   |            | 
|Total             |  | $                       | 47,160,247 |  |             | $ | 8,256,611 |             |  | $ | 16,426,902 |  |  | $     | 5,062,867 |  |  | $ | 76,906,627 | 
|                  |  |                         |            |  |             |   |           |             |  |   |            |  |  |       |           |  |  |   |            | 



| | (6) | Fair value of financial instruments
| | --- | -----------------------------------

Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place
either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes
into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair
value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for
which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

 Level 1  Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

 Level 2  Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable;

 Level 3  Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.



F-104



---

##### Table of Contents

For assets and liabilities that are recognized in the financial statements on a recurring basis,
the Company determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.



| | a. | Assets and liabilities measured and recorded at fair value:
| | -- | -----------------------------------------------------------

The following tables summarize
the assets and liabilities measured and recorded at fair value on a recurring basis.



|                                                                    |  |                       |            |  |         |   |         |         |  |   |           |  |  |   |            | 
|------------------------------------------------------------------- |  | --------------------- | ---------- |  | ------- | - | ------- | ------- |  | - | --------- |  |  | - | ---------- | 
|                                                                    |  | As of January 1, 2012 |           
|                                                                    |  | Level 1               |            |  | Level 2 |   |         | Level 3 |  |   | Total     | 
|Financial assets:                                                   |  |                       |            |  |         |   |         |         |  |   |           |  |  |   |            | 
|Financial assets at fair value through profit or loss, current      |  | $                     | 695,931    |  |         | $ |        |         |  | $ |          |  |  | $ | 695,931    | 
|Available-for-sale financial assets, current                        |  |                       | 5,124,780  |  |         |   |        |         |  |   |          |  |  |   | 5,124,780  | 
|Financial assets at fair value through profit or loss, noncurrent   |  |                       | 119,711    |  |         |   |        |         |  |   |          |  |  |   | 119,711    | 
|Available-for-sale financial assets, noncurrent                     |  |                       | 20,662,353 |  |         |   | 140,121 |         |  |   | 2,642,073 |  |  |   | 23,444,547 | 
|Financial liabilities:                                              |  |                       |            |  |         |   |         |         |  |   |           |  |  |   |            | 
|Financial liabilities at fair value through profit or loss, current |  |                       |           |  |         |   | 741,531 |         |  |   |          |  |  |   | 741,531    | 



F-105



---

##### Table of Contents

|                                                                    |  |                         |            |  |         |   |         |         |  |   |           |  |  |   |            | 
|------------------------------------------------------------------- |  | ----------------------- | ---------- |  | ------- | - | ------- | ------- |  | - | --------- |  |  | - | ---------- | 
|                                                                    |  | As of December 31, 2012 |           
|                                                                    |  | Level 1                 |            |  | Level 2 |   |         | Level 3 |  |   | Total     | 
|Financial assets:                                                   |  |                         |            |  |         |   |         |         |  |   |           |  |  |   |            | 
|Financial assets at fair value through profit or loss, current      |  | $                       | 655,994    |  |         | $ |        |         |  | $ |          |  |  | $ | 655,994    | 
|Available-for-sale financial assets, current                        |  |                         | 4,330,880  |  |         |   |        |         |  |   |          |  |  |   | 4,330,880  | 
|Financial assets at fair value through profit or loss, noncurrent   |  |                         | 72,706     |  |         |   |        |         |  |   |          |  |  |   | 72,706     | 
|Available-for-sale financial assets, noncurrent                     |  |                         | 17,164,189 |  |         |   | 91,233  |         |  |   | 2,720,315 |  |  |   | 19,975,737 | 
|Financial liabilities:                                              |  |                         |            |  |         |   |         |         |  |   |           |  |  |   |            | 
|Financial liabilities at fair value through profit or loss, current |  |                         |           |  |         |   | 767,605 |         |  |   |          |  |  |   | 767,605    | 



|                                                                    |  |                         |            |  |         |   |         |         |  |   |           |  |  |   |            | 
|------------------------------------------------------------------- |  | ----------------------- | ---------- |  | ------- | - | ------- | ------- |  | - | --------- |  |  | - | ---------- | 
|                                                                    |  | As of December 31, 2013 |           
|                                                                    |  | Level 1                 |            |  | Level 2 |   |         | Level 3 |  |   | Total     | 
|Financial assets:                                                   |  |                         |            |  |         |   |         |         |  |   |           |  |  |   |            | 
|Financial assets at fair value through profit or loss, current      |  | $                       | 633,264    |  |         | $ |        |         |  | $ |          |  |  | $ | 633,264    | 
|Available-for-sale financial assets, current                        |  |                         | 2,134,379  |  |         |   |        |         |  |   |          |  |  |   | 2,134,379  | 
|Financial assets at fair value through profit or loss, noncurrent   |  |                         | 60,441     |  |         |   |        |         |  |   |          |  |  |   | 60,441     | 
|Available-for-sale financial assets, noncurrent                     |  |                         | 15,548,402 |  |         |   | 177,406 |         |  |   | 3,830,333 |  |  |   | 19,556,141 | 
|Financial liabilities:                                              |  |                         |            |  |         |   |         |         |  |   |           |  |  |   |            | 
|Financial liabilities at fair value through profit or loss, current |  |                         |           |  |         |   | 1,928   |         |  |   |          |  |  |   | 1,928      | 



F-106



---

##### Table of Contents

Fair values of financial assets at fair value through profit or loss and available-for-sale
financial assets that are categorized into level 1 are based on the quoted market prices in active markets. If there is no active market, the Company estimates the fair value by using the market method valuation techniques based on parameters such
as recent fund raising activities, valuation of similar companies, individual companys development, market conditions and other economic indicators. If there are restrictions on the sale or transfer of an available-for-sale financial asset,
which are a characteristic of the asset, the fair value of the asset will be determined based on similar but unrestricted financial assets quoted market price with appropriate discounts for the restrictions.

The Company issued exchangeable bonds which contain a compound derivative instrument, comprising of the exchange option with a fixed foreign
exchange rate feature and a call option. The compound derivative instrument is classified as liabilities carried at fair value through profit or loss. The derivatives are fair valued using the valuation model. The valuation model uses the
market-based observable inputs including share price, volatility, credit spread, and swap rates.

During the years ended December 31,
2012 and 2013, there were no significant transfers between Level 1 and Level 2 fair value measurements.

Reconciliations for fair value
measurement in Level 3 fair value hierarchy were as follows:



|                                                |  |                                     |           |   |       |   |         |                 |  |   |         |   |  |   |           |  
|----------------------------------------------- |  | ----------------------------------- | --------- | - | ----- | - | ------- | --------------- |  | - | ------- | - |  | - | --------- | -
|                                                |  | Available-for-sale financial assets |          
|                                                |  | Common stock                        |           |   | Funds |   |         | Preferred stock |  |   | Total   |  
|As of January 1, 2012                           |  | $                                   | 2,417,477 |   |       | $ | 43,396  |                 |  | $ | 181,200 |   |  | $ | 2,642,073 |  
|Recognized in profit (loss)                     |  |                                     | (233,470  | ) |       |   | (30,749 | )               |  |   |        |   |  |   | (264,219  | )
|Recognized in other comprehensive income (loss) |  |                                     | 286,055   |   |       |   | 32,631  |                 |  |   | (15,900 | ) |  |   | 302,786   |  
|Acquisition                                     |  |                                     | 257,396   |   |       |   |        |                 |  |   |        |   |  |   | 257,396   |  
|Disposal                                        |  |                                     | (276,151  | ) |       |   |        |                 |  |   |        |   |  |   | (276,151  | )
|Transfer to Level 3                             |  |                                     | 62,275    |   |       |   |        |                 |  |   |        |   |  |   | 62,275    |  
|Exchange effect                                 |  |                                     | (3,845    | ) |       |   |        |                 |  |   |        |   |  |   | (3,845    | )
|                                                |  |                                     |           |   |       |   |         |                 |  |   |         |   |  |   |           |  
|As of December 31, 2012                         |  | $                                   | 2,509,737 |   |       | $ | 45,278  |                 |  | $ | 165,300 |   |  | $ | 2,720,315 |  
|                                                |  |                                     |           |   |       |   |         |                 |  |   |         |   |  |   |           |  



F-107



---

##### Table of Contents

|                                                |  |                                     |           |   |       |   |         |                 |  |   |         |  |  |   |           |  
|----------------------------------------------- |  | ----------------------------------- | --------- | - | ----- | - | ------- | --------------- |  | - | ------- |  |  | - | --------- | -
|                                                |  | Available-for-sale financial assets |          
|                                                |  | Common stock                        |           |   | Funds |   |         | Preferred stock |  |   | Total   | 
|As of January 1, 2013                           |  | $                                   | 2,509,737 |   |       | $ | 45,278  |                 |  | $ | 165,300 |  |  | $ | 2,720,315 |  
|Recognized in profit (loss)                     |  |                                     | (737,299  | ) |       |   | (8,004  | )               |  |   |        |  |  |   | (745,303  | )
|Recognized in other comprehensive income (loss) |  |                                     | 396,061   |   |       |   | 1,932   |                 |  |   | 147,300 |  |  |   | 545,293   |  
|Acquisition                                     |  |                                     | 795,499   |   |       |   |        |                 |  |   |        |  |  |   | 795,499   |  
|Disposal                                        |  |                                     | (32,432   | ) |       |   | (39,206 | )               |  |   |        |  |  |   | (71,638   | )
|Transfer to Level 3                             |  |                                     | 646,167   |   |       |   |        |                 |  |   |        |  |  |   | 646,167   |  
|Transfer out of Level 3                         |  |                                     | (60,000   | ) |       |   |        |                 |  |   |        |  |  |   | (60,000   | )
|                                                |  |                                     |           |   |       |   |         |                 |  |   |         |  |  |   |           |  
|As of December 31, 2013                         |  | $                                   | 3,517,733 |   |       | $ |        |                 |  | $ | 312,600 |  |  | $ | 3,830,333 |  
|                                                |  |                                     |           |   |       |   |         |                 |  |   |         |  |  |   |           |  

The Companys policy to recognize the transfer into and out of fair value hierarchy levels is based on the
event or changes in circumstances that caused the transfer.

The following tables summarize the assets measured and recorded at fair
value on a nonrecurring basis.

For the year ended December 31, 2012



|                                                         |  |            |           |  |                                                      |   |   |         |  |   |         |  |  |              |           |  |  |   |           | 
|-------------------------------------------------------- |  | ---------- | --------- |  | ---------------------------------------------------- | - | - | ------- |  | - | ------- |  |  | ------------ | --------- |  |  | - | --------- | 
|                                                         |  |            |           |  | Fair value measurements duringreporting period using |   |   |         | 
|Items                                                    |  | Fair value |           |  | Level 1                                              |   |   | Level 2 |  |   | Level 3 |  |  | Total losses |          
|Financial assets measured at cost, noncurrent            |  | $          |          |  |                                                      | $ |  |         |  | $ |        |  |  | $            |          |  |  | $ | 182,080   | 
|Investments accounted for under the equity method        |  |            | 201,689   |  |                                                      |   |  |         |  |   | 185,143 |  |  |              | 16,546    |  |  |   | 223,695   | 
|Property, plant and equipment and intangible assets, net |  |            | 6,015,699 |  |                                                      |   |  |         |  |   |        |  |  |              | 6,015,699 |  |  |   | 3,272,436 | 

Financial assets measured at cost, noncurrent, investments accounted for under the equity method, property,
plant and equipment and intangible assets, net with a total carrying amount of NT$9,895 million were written down to their fair values in total of NT$6,217 million, resulting in an aggregate impairment charge of NT$3,678 million included in earnings
for the year ended December 31, 2012.



F-108



---

##### Table of Contents

For the year ended December 31, 2013



Fair value measurements duringreporting period usingItems

Fair value


Level 1


Level 2


Level 3


Total lossesFinancial assets measured at cost, noncurrent

$



$



$



$



$
143,422Property, plant and equipment and intangible assets, net


















56,693


Financial assets measured at cost, noncurrent, property, plant and equipment and intangible assets, net
with a total carrying amount of NT$200 million were written down to nil for the year ended December 31, 2013.

Some of the
Companys non-public instruments classified as financial assets measured at cost, noncurrent and investments accounted for under the equity method were considered to be impaired. The fair value of certain investments classified as financial
assets measured at cost, noncurrent are determined to be zero because the net assets of these investees are so low that the deficit is unlikely to be recovered. The fair value of some of the Companys equity investments accounted for under the
equity method was determined based on the contract selling price which the Company considered to be quoted prices in an inactive market, or determined using the discounted cash flow model, considering the investees current and expected
operating performance, industry trends, and competitive advantages.

For the property, plant and equipment and intangible assets which were
impaired, as their carrying amount exceeds the recoverable amount, recoverable amount of these assets was determined based on observable inputs by reference to comparable sales data and published market price with insignificant adjustment for
economic lives, local price index, capacity utilization, equipment-related inflation indices and physical condition.

Upon early adoption
of the IAS 36 amendment which was issued in May 2011 and effective for annual periods beginning on or after January 1, 2014, the Company revised the disclosure of the recoverable amount of an asset (including goodwill) or a cash-generating unit
when an impairment loss has been recognized or reversed during the period.



F-109



---

##### Table of Contents

| | b. | Assets and liabilities not recorded at fair value on a recurring basis but for which fair value is disclosed:
| | -- | -------------------------------------------------------------------------------------------------------------

The fair value of bonds payables was estimated by the market price or estimated using valuation model. The model uses market-based observable
inputs including share price, volatility, credit spread and swap rates. The fair value of long-term loans was determined using discounted cash flow model, based on the Companys current incremental borrowing rates of similar loans.

The fair values of the Companys short-term financial instruments including cash and cash equivalents, receivables, held to maturity
financial assets-current, deposits-out, short-term loans, payables and capacity deposits approximated their carrying amount due to their maturities within one year.

As of January 1, 2012



Fair value measurements duringreporting period usingItems

Fair value


Level 1


Level 2


Level 3


Book valueBonds payables (current portion included)

$
15,458,061


$



$
15,458,061


$



$
17,404,788Long-term loans (current portion included)


11,692,649







11,692,649







11,692,649Investments accounted for under the equity method with quoted market price


77,930



77,930











87,483


As of December 31, 2012



Fair value measurements duringreporting period usingItems

Fair value


Level 1


Level 2


Level 3


Book valueBonds payables (current portion included)

$
25,583,972


$
10,049,710


$
15,534,262


$



$
26,224,353Long-term loans (current portion included)


14,817,466







14,817,466







14,817,466Investments accounted for under the equity method with quoted market price


94,922



94,922











78,621




F-110



---

##### Table of Contents

As of December 31, 2013



Fair value measurements duringreporting period usingItems

Fair value


Level 1


Level 2


Level 3


Book valueBonds payables (current portion included)

$
33,414,971


$
20,054,158


$
13,360,813


$



$
33,606,417Long-term loans (current portion included)


11,354,014







11,354,014







11,354,014




| | (7) | Significant assets and liabilities denominated in foreign currencies
| | --- | --------------------------------------------------------------------

| | 
| | 

The functional currency of UMC and some of its subsidiaries is New Taiwan Dollar,
while other subsidiaries have functional currencies in U.S. Dollar, Japanese Yen or Chinese Renminbi. The exchange rates used to translate the Companys assets and liabilities denominated in foreign currencies are disclosed as follows:



F-111



---

##### Table of Contents

|                                                                   |  |                           |            |  |                   |  |        |                   |  |   |                           |  |  |              |            |  |               |  |        |                           |  |   |              |  |  |               |           |  |  |  |        |  |  |   |            | 
|------------------------------------------------------------------ |  | ------------------------- | ---------- |  | ----------------- |  | ------ | ----------------- |  | - | ------------------------- |  |  | ------------ | ---------- |  | ------------- |  | ------ | ------------------------- |  | - | ------------ |  |  | ------------- | --------- |  |  |  | ------ |  |  | - | ---------- | 
|                                                                   |  | As of                     |           
|                                                                   |  | January 1, 2012           |            |  | December 31, 2012 |  |        | December 31, 2013 | 
|                                                                   |  | Foreigncurrency(thousand) |            |  | Exchangerate      |  |        | NTD(thousand)     |  |   | Foreigncurrency(thousand) |  |  | Exchangerate |            |  | NTD(thousand) |  |        | Foreigncurrency(thousand) |  |   | Exchangerate |  |  | NTD(thousand) |          
|Financial Assets                                                   |  |                           |            |  |                   |  |        |                   |  |   |                           |  |  |              |            |  |               |  |        |                           |  |   |              |  |  |               |           |  |  |  |        |  |  |   |            | 
|Monetary items                                                     |  |                           |            |  |                   |  |        |                   |  |   |                           |  |  |              |            |  |               |  |        |                           |  |   |              |  |  |               |           |  |  |  |        |  |  |   |            | 
|USD                                                                |  | $                         | 1,205,374  |  |                   |  | 30.20  |                   |  | $ | 36,401,034                |  |  | $            | 1,494,046  |  |               |  | 28.97  |                           |  | $ | 43,281,274   |  |  | $             | 1,668,006 |  |  |  | 29.79  |  |  | $ | 49,687,584 | 
|JPY                                                                |  |                           | 17,724,488 |  |                   |  | 0.3887 |                   |  |   | 6,888,793                 |  |  |              | 11,346,947 |  |               |  | 0.3343 |                           |  |   | 3,792,840    |  |  |               | 6,532,160 |  |  |  | 0.2812 |  |  |   | 1,837,052  | 
|EUR                                                                |  |                           | 11,088     |  |                   |  | 39.07  |                   |  |   | 433,230                   |  |  |              | 8,333      |  |               |  | 38.09  |                           |  |   | 317,432      |  |  |               | 19,132    |  |  |  | 41.01  |  |  |   | 784,571    | 
|SGD                                                                |  |                           | 36,370     |  |                   |  | 23.22  |                   |  |   | 844,517                   |  |  |              | 35,696     |  |               |  | 23.66  |                           |  |   | 844,562      |  |  |               | 37,260    |  |  |  | 23.58  |  |  |   | 878,590    | 
|RMB                                                                |  |                           | 47,833     |  |                   |  | 4.79   |                   |  |   | 229,150                   |  |  |              | 72,813     |  |               |  | 4.61   |                           |  |   | 335,485      |  |  |               | 92,829    |  |  |  | 4.91   |  |  |   | 456,035    | 
|                                                                   |  |                           |            |  |                   |  |        |                   | 
|Non-monetary items                                                 |  |                           |            |  |                   |  |        |                   |  |   |                           |  |  |              |            |  |               |  |        |                           |  |   |              |  |  |               |           |  |  |  |        |  |  |   |            | 
|USD                                                                |  |                           | 88,644     |  |                   |  | 30.21  |                   |  |   | 2,677,938                 |  |  |              | 47,556     |  |               |  | 29.05  |                           |  |   | 1,381,468    |  |  |               | 65,170    |  |  |  | 29.80  |  |  |   | 1,942,062  | 
|CHF                                                                |  |                           | 1,764      |  |                   |  | 32.10  |                   |  |   | 56,624                    |  |  |              | 2,324      |  |               |  | 31.73  |                           |  |   | 73,741       |  |  |               | 1,968     |  |  |  | 33.57  |  |  |   | 66,060     | 
|                                                                   |  |                           |            |  |                   |  |        |                   | 
|Investments accounted for under the equity method - associates     |  |                           |            |  |                   |  |        |                   |  |   |                           |  |  |              |            |  |               |  |        |                           |  |   |              |  |  |               |           |  |  |  |        |  |  |   |            | 
|USD                                                                |  |                           | 226,017    |  |                   |  | 29.80  |                   |  |   | 6,734,280                 |  |  |              | 256,113    |  |               |  | 28.94  |                           |  |   | 7,412,734    |  |  |               | 120,420   |  |  |  | 29.74  |  |  |   | 3,580,715  | 
|SGD                                                                |  |                           | 9,313      |  |                   |  | 23.08  |                   |  |   | 214,918                   |  |  |              | 8,089      |  |               |  | 23.37  |                           |  |   | 189,012      |  |  |               | 6,654     |  |  |  | 22.95  |  |  |   | 152,713    | 
|                                                                   |  |                           |            |  |                   |  |        |                   | 
|Investments accounted for under the equity method - joint ventures |  |                           |            |  |                   |  |        |                   |  |   |                           |  |  |              |            |  |               |  |        |                           |  |   |              |  |  |               |           |  |  |  |        |  |  |   |            | 
|EUR                                                                |  |                           | 1,120      |  |                   |  | 40.69  |                   |  |   | 45,573                    |  |  |              | 1,192      |  |               |  | 38.28  |                           |  |   | 45,647       |  |  |               | 8,581     |  |  |  | 40.40  |  |  |   | 346,639    | 
|RMB                                                                |  |                           | 155,324    |  |                   |  | 4.70   |                   |  |   | 729,461                   |  |  |              | 149,297    |  |               |  | 4.61   |                           |  |   | 688,008      |  |  |               | 146,505   |  |  |  | 4.87   |  |  |   | 714,120    | 
|                                                                   |  |                           |            |  |                   |  |        |                   | 
|Financial Liabilities                                              |  |                           |            |  |                   |  |        |                   |  |   |                           |  |  |              |            |  |               |  |        |                           |  |   |              |  |  |               |           |  |  |  |        |  |  |   |            | 
|Monetary items                                                     |  |                           |            |  |                   |  |        |                   |  |   |                           |  |  |              |            |  |               |  |        |                           |  |   |              |  |  |               |           |  |  |  |        |  |  |   |            | 
|USD                                                                |  |                           | 688,356    |  |                   |  | 30.31  |                   |  |   | 20,863,644                |  |  |              | 651,891    |  |               |  | 29.08  |                           |  |   | 18,957,030   |  |  |               | 649,976   |  |  |  | 29.90  |  |  |   | 19,434,286 | 
|JPY                                                                |  |                           | 7,486,308  |  |                   |  | 0.3924 |                   |  |   | 2,937,409                 |  |  |              | 7,328,597  |  |               |  | 0.3386 |                           |  |   | 2,481,464    |  |  |               | 6,280,286 |  |  |  | 0.2872 |  |  |   | 1,803,698  | 
|EUR                                                                |  |                           | 7,230      |  |                   |  | 39.36  |                   |  |   | 284,563                   |  |  |              | 7,158      |  |               |  | 38.67  |                           |  |   | 276,796      |  |  |               | 8,082     |  |  |  | 41.46  |  |  |   | 335,075    | 
|SGD                                                                |  |                           | 25,851     |  |                   |  | 23.40  |                   |  |   | 604,925                   |  |  |              | 30,192     |  |               |  | 23.84  |                           |  |   | 719,785      |  |  |               | 35,601    |  |  |  | 23.76  |  |  |   | 845,888    | 
|RMB                                                                |  |                           | 21,647     |  |                   |  | 4.81   |                   |  |   | 104,137                   |  |  |              | 33,243     |  |               |  | 4.62   |                           |  |   | 153,702      |  |  |               | 17,189    |  |  |  | 4.96   |  |  |   | 85,311     | 



F-112



---

##### Table of Contents

|12. | OPERATING SEGMENT INFORMATION
|--- | -----------------------------



| | (1) | The Company determined its operating segments based on business activities with discrete financial information regularly reported through the Companys internal reporting protocols to the Companys chief
operating decision maker. The Company is organized into business units based on its products and services. As of December 31, 2013, the Company had the following segments: wafer fabrication and new business. There were no material differences
between the accounting policies, described in Note 4, and those applied by the operating segments. The primary operating activity of the wafer fabrication segment is the manufacture of chips to the design specifications of our customers by using our
own proprietary processes and techniques. The Company maintains a diversified customer base across industries, including communication, consumer electronics, computer, memory and others, while continuing to focus on manufacturing for high growth,
large volume applications, including networking, telecommunications, internet, multimedia, PCs and graphics. New business segment primarily includes researching, developing, manufacturing, and providing solar energy and new generation light-emitting
diode (LED), each of which discrete financial information was not regularly reported to the Companys chief operating decision maker separately.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-113



---

##### Table of Contents

Reportable segment information for the years ended December 31, 2012 and 2013 were as
follows:



|                                                         |  |                                      |             |   |             |   |            |          |  |   |                                |   |  |              |           |   |  |   |             | 
|-------------------------------------------------------- |  | ------------------------------------ | ----------- | - | ----------- | - | ---------- | -------- |  | - | ------------------------------ | - |  | ------------ | --------- | - |  | - | ----------- | 
|                                                         |  | For the year ended December 31, 2012 |            
|                                                         |  | Waferfabrication                     |             |   | Newbusiness |   |            | Subtotal |  |   | Adjustmentandelimination(Note) |   |  | Consolidated |          
|Net revenue from external customers                      |  | $                                    | 108,623,475 |   |             | $ | 7,051,288  |          |  | $ | 115,674,763                    |   |  | $            |          |   |  | $ | 115,674,763 | 
|Net revenue from sales among intersegments               |  |                                      | 72,502      |   |             |   | 2,100      |          |  |   | 74,602                         |   |  |              | (74,602   | ) |  |   |            | 
|Segment net income (loss), net of tax                    |  |                                      | 6,094,148   |   |             |   | (5,582,991 | )        |  |   | 511,157                        |   |  |              | 3,637,465 |   |  |   | 4,148,622   | 
|Capital expenditure                                      |  |                                      | 51,035,489  |   |             |   | 1,150,421  |          |  |   | 52,185,910                     |   |  |              |          |   |  |   | 52,185,910  | 
|Depreciation                                             |  |                                      | 32,933,134  |   |             |   | 2,185,264  |          |  |   | 35,118,398                     |   |  |              |          |   |  |   | 35,118,398  | 
|Share of profit or loss of associates and joint ventures |  |                                      | (2,807,797  | ) |             |   | (199,676   | )        |  |   | (3,007,473                     | ) |  |              | 3,670,852 |   |  |   | 663,379     | 
|Income tax expense                                       |  |                                      | 2,095,121   |   |             |   | 50,862     |          |  |   | 2,145,983                      |   |  |              |          |   |  |   | 2,145,983   | 
|Impairment loss                                          |  |                                      | 2,657,634   |   |             |   | 1,521,984  |          |  |   | 4,179,618                      |   |  |              |          |   |  |   | 4,179,618   | 



|                                                         |  |                                      |             |   |             |   |            |          |  |   |                                |   |  |              |           |   |  |   |             | 
|-------------------------------------------------------- |  | ------------------------------------ | ----------- | - | ----------- | - | ---------- | -------- |  | - | ------------------------------ | - |  | ------------ | --------- | - |  | - | ----------- | 
|                                                         |  | For the year ended December 31, 2013 |            
|                                                         |  | Waferfabrication                     |             |   | Newbusiness |   |            | Subtotal |  |   | Adjustmentandelimination(Note) |   |  | Consolidated |          
|Net revenue from external customers                      |  | $                                    | 116,781,465 |   |             | $ | 7,030,171  |          |  | $ | 123,811,636                    |   |  | $            |          |   |  | $ | 123,811,636 | 
|Net revenue from sales among intersegments               |  |                                      | 94,116      |   |             |   | 13,190     |          |  |   | 107,306                        |   |  |              | (107,306  | ) |  |   |            | 
|Segment net income (loss), net of tax                    |  |                                      | 12,710,001  |   |             |   | (2,553,381 | )        |  |   | 10,156,620                     |   |  |              | 1,927,018 |   |  |   | 12,083,638  | 
|Capital expenditure                                      |  |                                      | 31,970,899  |   |             |   | 940,453    |          |  |   | 32,911,352                     |   |  |              |          |   |  |   | 32,911,352  | 
|Depreciation                                             |  |                                      | 35,008,525  |   |             |   | 2,233,263  |          |  |   | 37,241,788                     |   |  |              |          |   |  |   | 37,241,788  | 
|Share of profit or loss of associates and joint ventures |  |                                      | (1,244,083  | ) |             |   | 14,996     |          |  |   | (1,229,087                     | ) |  |              | 1,927,018 |   |  |   | 697,931     | 
|Income tax expense                                       |  |                                      | 2,224,378   |   |             |   | 32,456     |          |  |   | 2,256,834                      |   |  |              |          |   |  |   | 2,256,834   | 
|Impairment loss                                          |  |                                      | 1,047,500   |   |             |   | 284,968    |          |  |   | 1,332,468                      |   |  |              |          |   |  |   | 1,332,468   | 



F-114



---

##### Table of Contents

|                    |  |                       |             |  |             |   |            |          |  |   |                                |  |  |              |            |   |  |   |             | 
|------------------- |  | --------------------- | ----------- |  | ----------- | - | ---------- | -------- |  | - | ------------------------------ |  |  | ------------ | ---------- | - |  | - | ----------- | 
|                    |  | As of January 1, 2012 |            
|                    |  | Waferfabrication      |             |  | Newbusiness |   |            | Subtotal |  |   | Adjustmentandelimination(Note) |  |  | Consolidated |           
|Segment assets      |  | $                     | 259,300,475 |  |             | $ | 29,638,985 |          |  | $ | 288,939,460                    |  |  | $            | (9,603,234 | ) |  | $ | 279,336,226 | 
|                    |  |                       |             |  |             |   |            |          |  |   |                                |  |  |              |            |   |  |   |             | 
|Segment liabilities |  | $                     | 54,132,162  |  |             | $ | 15,692,674 |          |  | $ | 69,824,836                     |  |  | $            | (44,835    | ) |  | $ | 69,780,001  | 
|                    |  |                       |             |  |             |   |            |          |  |   |                                |  |  |              |            |   |  |   |             | 



|                    |  |                         |             |  |             |   |            |          |  |   |                                |  |  |              |            |   |  |   |             | 
|------------------- |  | ----------------------- | ----------- |  | ----------- | - | ---------- | -------- |  | - | ------------------------------ |  |  | ------------ | ---------- | - |  | - | ----------- | 
|                    |  | As of December 31, 2012 |            
|                    |  | Waferfabrication        |             |  | Newbusiness |   |            | Subtotal |  |   | Adjustmentandelimination(Note) |  |  | Consolidated |           
|Segment assets      |  | $                       | 266,038,231 |  |             | $ | 21,030,652 |          |  | $ | 287,068,883                    |  |  | $            | (5,855,090 | ) |  | $ | 281,213,793 | 
|                    |  |                         |             |  |             |   |            |          |  |   |                                |  |  |              |            |   |  |   |             | 
|Segment liabilities |  | $                       | 66,922,360  |  |             | $ | 12,629,902 |          |  | $ | 79,552,262                     |  |  | $            | (25,766    | ) |  | $ | 79,526,496  | 
|                    |  |                         |             |  |             |   |            |          |  |   |                                |  |  |              |            |   |  |   |             | 



|                    |  |                         |             |  |             |   |            |          |  |   |                                |  |  |              |            |   |  |   |             | 
|------------------- |  | ----------------------- | ----------- |  | ----------- | - | ---------- | -------- |  | - | ------------------------------ |  |  | ------------ | ---------- | - |  | - | ----------- | 
|                    |  | As of December 31, 2013 |            
|                    |  | Waferfabrication        |             |  | Newbusiness |   |            | Subtotal |  |   | Adjustmentandelimination(Note) |  |  | Consolidated |           
|Segment assets      |  | $                       | 281,932,440 |  |             | $ | 17,775,044 |          |  | $ | 299,707,484                    |  |  | $            | (5,793,557 | ) |  | $ | 293,913,927 | 
|                    |  |                         |             |  |             |   |            |          |  |   |                                |  |  |              |            |   |  |   |             | 
|Segment liabilities |  | $                       | 74,267,468  |  |             | $ | 10,030,536 |          |  | $ | 84,298,004                     |  |  | $            | (28,063    | ) |  | $ | 84,269,941  | 
|                    |  |                         |             |  |             |   |            |          |  |   |                                |  |  |              |            |   |  |   |             | 

Note: The adjustment primarily consisted of intragroup elimination entries.



F-115



---

##### Table of Contents

| | (2) | Geographic information
| | --- | ----------------------



| | a. | Revenue from external customers
| | -- | -------------------------------



|                           |  |                                 |             |  |      |   |             | 
|-------------------------- |  | ------------------------------- | ----------- |  | ---- | - | ----------- | 
|                           |  | For the years endedDecember 31, |            
|                           |  | 2012                            |             |  | 2013 |  
|Taiwan                     |  | $                               | 42,129,998  |  |      | $ | 40,749,257  | 
|Singapore                  |  |                                 | 32,045,103  |  |      |   | 29,467,778  | 
|China (includes Hong Kong) |  |                                 | 6,081,805   |  |      |   | 11,798,261  | 
|Japan                      |  |                                 | 2,918,334   |  |      |   | 4,584,979   | 
|USA                        |  |                                 | 15,370,089  |  |      |   | 15,311,681  | 
|Others                     |  |                                 | 17,129,434  |  |      |   | 21,899,680  | 
|                           |  |                                 |             |  |      |   |             | 
|Total                      |  | $                               | 115,674,763 |  |      | $ | 123,811,636 | 
|                           |  |                                 |             |  |      |   |             | 

The geographic breakdown of the Companys operating revenues was based on the location of the
Companys customers.



| | b. | Non-current assets
| | -- | ------------------



|                           |  |                 |             |  |                  |   |             |                  |  |   |             | 
|-------------------------- |  | --------------- | ----------- |  | ---------------- | - | ----------- | ---------------- |  | - | ----------- | 
|                           |  | As of           |            
|                           |  | January 1, 2012 |             |  | December 31,2012 |   |             | December 31,2013 | 
|Taiwan                     |  | $               | 119,957,637 |  |                  | $ | 140,128,297 |                  |  | $ | 137,691,859 | 
|Singapore                  |  |                 | 29,992,938  |  |                  |   | 21,989,707  |                  |  |   | 24,241,732  | 
|China (includes Hong Kong) |  |                 | 600,334     |  |                  |   | 3,449       |                  |  |   | 8,813,088   | 
|Japan                      |  |                 | 4,128,297   |  |                  |   | 908,573     |                  |  |   | 90          | 
|USA                        |  |                 | 20,905      |  |                  |   | 16,406      |                  |  |   | 19,591      | 
|Others                     |  |                 | 9,470       |  |                  |   | 218,121     |                  |  |   | 214,337     | 
|                           |  |                 |             |  |                  |   |             |                  |  |   |             | 
|Total                      |  | $               | 154,709,581 |  |                  | $ | 163,264,553 |                  |  | $ | 170,980,697 | 
|                           |  |                 |             |  |                  |   |             |                  |  |   |             | 

Non-current assets include property, plant and equipment, intangible assets, prepayment for equipments and
other noncurrent assets.



F-116



---

##### Table of Contents

| | (3) | Major customers
| | --- | ---------------

Individual customers accounting for at least 10% of net sales for the years
ended December 31, 2012 and 2013 were as follows:



|                                          |  |                                 |            |  |      |   |            | 
|----------------------------------------- |  | ------------------------------- | ---------- |  | ---- | - | ---------- | 
|                                          |  | For the years endedDecember 31, |           
|                                          |  | 2012                            |            |  | 2013 |  
|Customer A from wafer fabrication segment |  | $                               | 15,992,963 |  |      | $ | 17,122,660 | 
|Customer B from wafer fabrication segment |  |                                 | 13,713,938 |  |      |   | 7,836,021  | 
|                                          |  |                                 |            |  |      |   |            | 
|Total                                     |  | $                               | 29,706,901 |  |      | $ | 24,958,681 | 
|                                          |  |                                 |            |  |      |   |            | 



|13. | CAPITAL MANAGEMENT
|--- | ------------------

The primary objective of the Companys capital management is to
ensure that it maintains a strong credit rating and healthy capital ratios to support its business and maximize the stockholders value. The Company is to also ensure its ability to operate continuously to provide returns to stockholders and
the interests of other related parties, while maintaining the optimal capital structure to reduce costs of capital.

To maintain or adjust
the capital structure, the Company may adjust the dividend payment to stockholders, return capital to stockholders, issue new shares or dispose assets to redeem liabilities.

Similar to its peers, the Company monitors its capital based on debt to capital ratio. The ratio is calculated as the Companys net debt
divided by its total capital. The net debt is derived by taking the total liabilities on the balance sheet minus cash and cash equivalents. The total capital consists of total equity (including capital, additional paid-in capital, retained earnings,
other components of equity and non-controlling interests) plus net debt.

During 2013, the Companys strategy, which was unchanged
from 2012, was to maintain a reasonable ratio in order to raise capital with reasonable cost. The debt to capital ratios as of January 1, 2012, December 31, 2012 and December 31, 2013 were as follows:



|                                |  |                 |             |   |                  |   |             |                  |  |   |             |  
|------------------------------- |  | --------------- | ----------- | - | ---------------- | - | ----------- | ---------------- |  | - | ----------- | -
|                                |  | As of           |            
|                                |  | January 1, 2012 |             |   | December 31,2012 |   |             | December 31,2013 | 
|Total liabilities               |  | $               | 69,780,001  |   |                  | $ | 79,526,496  |                  |  | $ | 84,269,941  |  
|Less: Cash and cash equivalents |  |                 | (49,062,128 | ) |                  |   | (42,488,490 | )                |  |   | (50,830,678 | )
|                                |  |                 |             |   |                  |   |             |                  |  |   |             |  
|Net debt                        |  |                 | 20,717,873  |   |                  |   | 37,038,006  |                  |  |   | 33,439,263  |  
|Total equity                    |  |                 | 209,556,225 |   |                  |   | 201,687,297 |                  |  |   | 209,643,986 |  
|                                |  |                 |             |   |                  |   |             |                  |  |   |             |  
|Total capital                   |  | $               | 230,274,098 |   |                  | $ | 238,725,303 |                  |  | $ | 243,083,249 |  
|                                |  |                 |             |   |                  |   |             |                  |  |   |             |  
|Debt to capital ratios          |  |                 | 9.00%       |   |                  |   | 15.51%      |                  |  |   | 13.76%      |  
|                                |  |                 |             |   |                  |   |             |                  |  |   |             |  



F-117



---

##### Table of Contents

|14. | FIRST TIME ADOPTION OF IFRSs
|--- | ----------------------------



| | (1) | Basis of preparation of IFRSs
| | --- | -----------------------------

For all periods up to and including the year ended
December 31, 2012, the Company prepared its financial statements in accordance with generally accepted accounting principles in R.O.C. (R.O.C. GAAP). The year ended December 31, 2013 was the first reporting period the Company prepared
consolidated financial statements in accordance with IFRSs.

Accordingly, the Company prepared its financial statements to comply with
IFRSs beginning from January 1, 2013 as described in Note 4 with retrospective adjustments made to the opening balance as of January 1, 2012 (date of transition to IFRSs) in accordance with IFRS 1.



| | (2) | Exemptions applied in accordance with IFRS 1
| | --- | --------------------------------------------

IFRS 1 allows first-time adopters certain
exemptions from the retrospective application of certain IFRSs. The Company applied the exemptions of IFRS 3 which was not applied to acquisitions of subsidiaries or of interests in associates and joint ventures that occurred before January 1,
2012. By applying this exemption, immediately after the business combination, the carrying amount in accordance with R.O.C. GAAP of assets acquired and liabilities assumed in that business combination, shall be their deemed cost in accordance with
IFRSs at that date. The subsequent measurement of these assets and liabilities will be in accordance with IFRSs. Under IFRS 1, the carrying amount of goodwill in the opening IFRSs balance sheet shall be its carrying amount in accordance with R.O.C.
GAAP at December 31, 2011, after testing for impairment and any reclassification to intangible assets that are required to be recognized. The Company performed goodwill impairment testing as at the date of transition to IFRSs and no impairment
loss was recognized as at that date.



F-118



---

##### Table of Contents

| | (3) | Impacts of transition to IFRSs
| | --- | ------------------------------

The following tables contain reconciliations in accordance with
IFRS 1 of consolidated balance sheets as of January 1, 2012 and December 31, 2012 and statement of comprehensive income for the year ended December 31, 2012:



| | a. | Reconciliation of the consolidated balance sheet as of January 1, 2012
| | -- | ----------------------------------------------------------------------



|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |            | 
|----------------------------------------------------------------- |  | ------ | ----------------------------- |  | -------------- | ----- | ---------- | ------------ |  | - | ---------- | - |  | ----- | ----------- | ---- |  | ----------------------------------------------------------------- |  |  | ---------- | 
|R.O.C. GAAP                                                       |  |        | Impact of transition to IFRSs |  |                | IFRSs |            |              | 
|Items                                                             |  | Amount |                               |  | Remeasurements |       |            | Presentation |  |   | Amount     |   |  | Items |             | Note | 
|Current assets                                                    |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  | Current assets                                                    |  |  |            | 
|Cash and cash equivalents                                         |  | $      | 49,070,128                    |  |                | $     |           |              |  | $ | (8,000     | ) |  | $     | 49,062,128  |      |  | Cash and cash equivalents                                         |  |  |            | 
|Financial assets at fair value through profit or loss, current    |  |        | 695,931                       |  |                |       |           |              |  |   |           |   |  |       | 695,931     |      |  | Financial assets at fair value through profit or loss, current    |  |  |            | 
|Available-for-sale financial assets, current                      |  |        | 5,124,780                     |  |                |       |           |              |  |   |           |   |  |       | 5,124,780   |      |  | Available-for-sale financial assets, current                      |  |  |            | 
|Held-to-maturity financial assets, current                        |  |        | 13,524                        |  |                |       |           |              |  |   |           |   |  |       | 13,524      |      |  | Held-to-maturity financial assets, current                        |  |  |            | 
|Notes receivable                                                  |  |        | 74,572                        |  |                |       |           |              |  |   |           |   |  |       | 74,572      |      |  | Notes receivable                                                  |  |  |            | 
|Accounts receivable, net                                          |  |        | 14,390,541                    |  |                |       |           |              |  |   |           |   |  |       | 14,390,541  |      |  | Accounts receivable, net                                          |  |  |            | 
|Accounts receivable-related parties, net                          |  |        | 130,553                       |  |                |       |           |              |  |   |           |   |  |       | 130,553     |      |  | Accounts receivable- related parties, net                         |  |  |            | 
|Other receivables                                                 |  |        | 724,563                       |  |                |       |           |              |  |   | (71,021    | ) |  |       | 653,542     |      |  | Other receivables                                                 |  |  |            | 
|                                                                 |  |        |                              |  |                |       |           |              |  |   | 84,566     |   |  |       | 84,566      |      |  | Current tax assets                                                |  |  |            | 
|Inventories, net                                                  |  |        | 12,709,276                    |  |                |       | (5,570     | )            |  |   |           |   |  |       | 12,703,706  |      |  | Inventories, net                                                  |  |  | ii         | 
|Prepaid expenses                                                  |  |        | 804,789                       |  |                |       |           |              |  |   | (13,546    | ) |  |       | 791,243     |      |  | Prepayments                                                       |  |  |            | 
|Non-current assets held for sale                                  |  |        | 583                           |  |                |       |           |              |  |   |           |   |  |       | 583         |      |  | Non-current assets held for sale                                  |  |  |            | 
|Deferred income tax assets, current                               |  |        | 297,943                       |  |                |       |           |              |  |   | (297,943   | ) |  |       |            |      |  |                                                                  |  |  | vi         | 
|Restricted assets                                                 |  |        | 20,331                        |  |                |       |           |              |  |   | 8,000      |   |  |       | 28,331      |      |  | Other current assets                                              |  |  |            | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |            | 
|Total current assets                                              |  |        | 84,057,514                    |  |                |       | (5,570     | )            |  |   | (297,944   | ) |  |       | 83,754,000  |      |  | Total current assets                                              |  |  |            | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |            | 
|Funds and investments                                             |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  | Non-current assets                                                |  |  |            | 
|Financial assets at fair value through profit or loss, noncurrent |  |        | 119,711                       |  |                |       |           |              |  |   |           |   |  |       | 119,711     |      |  | Financial assets at fair value through profit or loss, noncurrent |  |  |            | 
|Available-for-sale financial assets, noncurrent                   |  |        | 18,835,224                    |  |                |       | 4,609,323  |              |  |   |           |   |  |       | 23,444,547  |      |  | Available-for-sale financial assets, noncurrent                   |  |  | i          | 
|Financial assets measured at cost, noncurrent                     |  |        | 8,298,967                     |  |                |       | (5,245,009 | )            |  |   |           |   |  |       | 3,053,958   |      |  | Financial assets measured at cost, noncurrent                     |  |  | i          | 
|Long-term investments accounted for under the equity method       |  |        | 11,275,894                    |  |                |       | (2,133,406 | )            |  |   |           |   |  |       | 9,142,488   |      |  | Investments accounted for under the equity method                 |  |  | i,vii,viii | 
|Prepayment for long-term investments                              |  |        | 44,392                        |  |                |       |           |              |  |   |           |   |  |       | 44,392      |      |  | Prepayment for investments                                        |  |  |            | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |            | 
|Total funds and investments                                       |  |        | 38,574,188                    |  |                |       | (2,769,092 | )            |  |   |           |   |  |       | 35,805,096  |      |  |                                                                  |  |  |            | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |            | 
|Property, plant and equipment, net                                |  |        | 149,324,300                   |  |                |       | 1,784,051  |              |  |   | (9,246,789 | ) |  |       | 141,861,562 |      |  | Property, plant and equipment                                     |  |  | ii,iii     | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |            | 
|Total intangible assets                                           |  |        | 350,860                       |  |                |       |           |              |  |   | 1,132,921  |   |  |       | 1,483,781   |      |  | Intangible assets                                                 |  |  | iv         | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |            | 
|Other assets                                                      |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                  |  |  |            | 
|Deferred charges                                                  |  |        | 1,513,157                     |  |                |       |           |              |  |   | (1,513,157 | ) |  |       |            |      |  |                                                                  |  |  | ii,iv      | 
|Deferred income tax assets, noncurrent                            |  |        | 2,993,953                     |  |                |       | 80,346     |              |  |   | 676,346    |   |  |       | 3,750,645   |      |  | Deferred tax assets                                               |  |  | vi         | 
|                                                                 |  |        |                              |  |                |       |           |              |  |   | 10,319,826 |   |  |       | 10,319,826  |      |  | Prepayment for equipments                                         |  |  | iii        | 
|                                                                 |  |        |                              |  |                |       |           |              |  |   | 1,316,904  |   |  |       | 1,316,904   |      |  | Deposits-out                                                      |  |  |            | 
|Other assets-others                                               |  |        | 3,017,774                     |  |                |       | 36,343     |              |  |   | (2,009,705 | ) |  |       | 1,044,412   |      |  | Other assets                                                      |  |  | ii,iii,iv  | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |            | 
|Total other assets                                                |  |        | 7,524,884                     |  |                |       | 116,689    |              |  |   | 8,790,214  |   |  |       | 16,431,787  |      |  |                                                                  |  |  |            | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |            | 
|Total assets                                                      |  | $      | 279,831,746                   |  |                | $     | (873,922   | )            |  | $ | 378,402    |   |  | $     | 279,336,226 |      |  | Total assets                                                      |  |  |            | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |            | 



F-119



---

##### Table of Contents

|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|------------------------------------------------------------------- |  | ------ | ----------------------------- | - | -------------- | ----- | ---------- | ------------ |  | - | ------- | - |  | ----- | ----------- | ---- |  | ------------------------------------------------------------------- |  |  | ---------------------- | 
|R.O.C. GAAP                                                         |  |        | Impact of transition to IFRSs |   |                | IFRSs |            |              | 
|Items                                                               |  | Amount |                               |   | Remeasurements |       |            | Presentation |  |   | Amount  |   |  | Items |             | Note | 
|Current liabilities                                                 |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  | Current liabilities                                                 |  |  |                        | 
|Short-term loans                                                    |  | $      | 9,411,877                     |   |                | $     |           |              |  | $ |        |   |  | $     | 9,411,877   |      |  | Short-term loans                                                    |  |  |                        | 
|Financial liabilities at fair value through profit or loss, current |  |        | 741,531                       |   |                |       |           |              |  |   |        |   |  |       | 741,531     |      |  | Financial liabilities at fair value through profit or loss, current |  |  |                        | 
|Notes and accounts payable                                          |  |        | 5,010,222                     |   |                |       |           |              |  |   |        |   |  |       | 5,010,222   |      |  | Notes and accounts payable                                          |  |  |                        | 
|Accrued expenses                                                    |  |        | 9,756,579                     |   |                |       |           |              |  |   | 14,741  |   |  |       | 9,771,320   |      |  | Other payables                                                      |  |  | viii                   | 
|Payable on equipment                                                |  |        | 8,517,694                     |   |                |       |           |              |  |   |        |   |  |       | 8,517,694   |      |  | Payables on equipment                                               |  |  |                        | 
|Income tax payable                                                  |  |        | 514,977                       |   |                |       |           |              |  |   |        |   |  |       | 514,977     |      |  | Current tax liabilities                                             |  |  |                        | 
|Current portion of long-term liabilities                            |  |        | 8,002,051                     |   |                |       |           |              |  |   |        |   |  |       | 8,002,051   |      |  | Current portion of long-term liabilities                            |  |  |                        | 
|Deferred income tax liabilities, current                            |  |        | 32,985                        |   |                |       | (31,519    | )            |  |   | (1,466  | ) |  |       |            |      |  |                                                                    |  |  | vi                     | 
|Other current liabilities                                           |  |        | 918,038                       |   |                |       |           |              |  |   | (47,934 | ) |  |       | 870,104     |      |  | Other current liabilities                                           |  |  | viii                   | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Total current liabilities                                           |  |        | 42,905,954                    |   |                |       | (31,519    | )            |  |   | (34,659 | ) |  |       | 42,839,776  |      |  | Total current liabilities                                           |  |  |                        | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Long-term liabilities                                               |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  | Non-current liabilities                                             |  |  |                        | 
|Bonds payable                                                       |  |        | 11,984,404                    |   |                |       |           |              |  |   |        |   |  |       | 11,984,404  |      |  | Bonds payable                                                       |  |  |                        | 
|Long-term loans                                                     |  |        | 9,110,982                     |   |                |       |           |              |  |   |        |   |  |       | 9,110,982   |      |  | Long-term loans                                                     |  |  |                        | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Total long-term liabilities                                         |  |        | 21,095,386                    |   |                |       |           |              |  |   |        |   |  |       | 21,095,386  |      |  |                                                                    |  |  |                        | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Other liabilities                                                   |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                    |  |  |                        | 
|Deferred income tax liabilities, noncurrent                         |  |        | 35,908                        |   |                |       | 1,026,497  |              |  |   | 379,869 |   |  |       | 1,442,274   |      |  | Deferred tax liabilities                                            |  |  | vi                     | 
|Accrued pension liabilities                                         |  |        | 3,261,101                     |   |                |       | 699,838    |              |  |   |        |   |  |       | 3,960,939   |      |  | Accrued pension liabilities                                         |  |  | v                      | 
|Deposits-in                                                         |  |        | 105,617                       |   |                |       |           |              |  |   |        |   |  |       | 105,617     |      |  | Deposits-in                                                         |  |  |                        | 
|Other liabilities-others                                            |  |        | 302,817                       |   |                |       |           |              |  |   | 33,192  |   |  |       | 336,009     |      |  | Other liabilities                                                   |  |  | viii                   | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Total other liabilities                                             |  |        | 3,705,443                     |   |                |       | 1,726,335  |              |  |   | 413,061 |   |  |       | 5,844,839   |      |  |                                                                    |  |  |                        | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Total liabilities                                                   |  |        | 67,706,783                    |   |                |       | 1,694,816  |              |  |   | 378,402 |   |  |       | 69,780,001  |      |  | Total liabilities                                                   |  |  |                        | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Stockholders equity of parent company                              |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  | Equity attributable to the parent company                           |  |  |                        | 
|Capital                                                             |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  | Capital                                                             |  |  |                        | 
|Common stock                                                        |  |        | 130,843,416                   |   |                |       |           |              |  |   |        |   |  |       | 130,843,416 |      |  | Common stock                                                        |  |  |                        | 
|Capital collected in advance                                        |  |        | 1,140                         |   |                |       |           |              |  |   |        |   |  |       | 1,140       |      |  | Capital collected in advance                                        |  |  |                        | 
|Additional paid-in capital                                          |  |        | 46,460,665                    |   |                |       | 267,011    |              |  |   |        |   |  |       | 46,727,676  |      |  | Additional paid-in capital                                          |  |  | vi,vii                 | 
|Retained earnings                                                   |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  | Retained earnings                                                   |  |  |                        | 
|Legal reserve                                                       |  |        | 3,442,856                     |   |                |       |           |              |  |   |        |   |  |       | 3,442,856   |      |  | Legal reserve                                                       |  |  |                        | 
|Unappropriated earnings                                             |  |        | 21,056,268                    |   |                |       | 6,519,271  |              |  |   |        |   |  |       | 27,575,539  |      |  | Unappropriated earnings                                             |  |  | i,ii,iii,v,vi,vii,viii | 
|Adjusting items in stockholders equity                             |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  | Other components of equity                                          |  |  |                        | 
|Cumulative translation adjustment                                   |  |        | (2,268,792                    | ) |                |       | 75,181     |              |  |   |        |   |  |       | (2,193,611  | )    |  | Exchange differences on translation of foreign operations           |  |  | i,ii,iii,v,vi,viii     | 
|Unrealized gain or loss on financial instruments                    |  |        | 14,424,891                    |   |                |       | (1,902,365 | )            |  |   |        |   |  |       | 12,522,526  |      |  | Unrealized gain or loss on available-for-sale financial assets      |  |  | i,vi,vii,viii          | 
|Treasury stock                                                      |  |        | (6,223,357                    | ) |                |       | (7,527,836 | )            |  |   |        |   |  |       | (13,751,193 | )    |  | Treasury stock                                                      |  |  | vii                    | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Total stockholders equity of parent company                        |  |        | 207,737,087                   |   |                |       | (2,568,738 | )            |  |   |        |   |  |       | 205,168,349 |      |  | Total equity attributable to the parent company                     |  |  |                        | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Minority interests                                                  |  |        | 4,387,876                     |   |                |       |           |              |  |   |        |   |  |       | 4,387,876   |      |  | Non-controlling interests                                           |  |  |                        | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Total stockholders equity                                          |  |        | 212,124,963                   |   |                |       | (2,568,738 | )            |  |   |        |   |  |       | 209,556,225 |      |  | Total equity                                                        |  |  |                        | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 
|Total liabilities and stockholders equity                          |  | $      | 279,831,746                   |   |                | $     | (873,922   | )            |  | $ | 378,402 |   |  | $     | 279,336,226 |      |  | Total liabilities and equity                                        |  |  |                        | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |         |   |  |       |             |      |  |                                                                     |  |  |                        | 



F-120



---

##### Table of Contents

| | b. | Reconciliation of the consolidated balance sheet as of December 31, 2012
| | -- | ------------------------------------------------------------------------



|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |           | 
|----------------------------------------------------------------- |  | ------ | ----------------------------- |  | -------------- | ----- | ---------- | ------------ |  | - | ---------- | - |  | ----- | ----------- | ---- |  | ----------------------------------------------------------------- |  |  | --------- | 
|R.O.C. GAAP                                                       |  |        | Impact of transition to IFRSs |  |                | IFRSs |            |              | 
|Items                                                             |  | Amount |                               |  | Remeasurements |       |            | Presentation |  |   | Amount     |   |  | Items |             | Note | 
|Current assets                                                    |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  | Current assets                                                    |  |  |           | 
|Cash and cash equivalents                                         |  | $      | 42,592,725                    |  |                | $     |           |              |  | $ | (104,235   | ) |  | $     | 42,488,490  |      |  | Cash and cash equivalents                                         |  |  |           | 
|Financial assets at fair value through profit or loss, current    |  |        | 655,994                       |  |                |       |           |              |  |   |           |   |  |       | 655,994     |      |  | Financial assets at fair value through profit or loss, current    |  |  |           | 
|Available-for-sale financial assets, current                      |  |        | 4,330,880                     |  |                |       |           |              |  |   |           |   |  |       | 4,330,880   |      |  | Available-for-sale financial assets, current                      |  |  |           | 
|Notes receivable                                                  |  |        | 25,308                        |  |                |       |           |              |  |   |           |   |  |       | 25,308      |      |  | Notes receivable                                                  |  |  |           | 
|Accounts receivable, net                                          |  |        | 16,220,832                    |  |                |       |           |              |  |   |           |   |  |       | 16,220,832  |      |  | Accounts receivable, net                                          |  |  |           | 
|Accounts receivable-related parties, net                          |  |        | 81,741                        |  |                |       |           |              |  |   |           |   |  |       | 81,741      |      |  | Accounts receivable- related parties, net                         | 
|Other receivables                                                 |  |        | 836,234                       |  |                |       |           |              |  |   | (67,243    | ) |  |       | 768,991     |      |  | Other receivables                                                 |  |  |           | 
|                                                                 |  |        |                              |  |                |       |           |              |  |   | 77,861     |   |  |       | 77,861      |      |  | Current tax assets                                                |  |  |           | 
|Inventories, net                                                  |  |        | 13,023,710                    |  |                |       |           |              |  |   |           |   |  |       | 13,023,710  |      |  | Inventories, net                                                  |  |  |           | 
|Prepaid expenses                                                  |  |        | 1,929,401                     |  |                |       |           |              |  |   | (10,618    | ) |  |       | 1,918,783   |      |  | Prepayments                                                       |  |  |           | 
|Non-current assets held for sale                                  |  |        | 313,171                       |  |                |       |           |              |  |   |           |   |  |       | 313,171     |      |  | Non-current assets held for sale                                  |  |  |           | 
|Deferred income tax assets, current                               |  |        | 890,391                       |  |                |       |           |              |  |   | (890,391   | ) |  |       |            |      |  |                                                                  |  |  | vi        | 
|Restricted assets                                                 |  |        | 17,135                        |  |                |       |           |              |  |   | 104,235    |   |  |       | 121,370     |      |  | Other current assets                                              |  |  |           | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |           | 
|Total current assets                                              |  |        | 80,917,522                    |  |                |       |           |              |  |   | (890,391   | ) |  |       | 80,027,131  |      |  | Total current assets                                              |  |  |           | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |           | 
|Funds and investments                                             |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  | Non-current assets                                                |  |  |           | 
|Financial assets at fair value through profit or loss, noncurrent |  |        | 72,706                        |  |                |       |           |              |  |   |           |   |  |       | 72,706      |      |  | Financial assets at fair value through profit or loss, noncurrent |  |  |           | 
|Available-for-sale financial assets, noncurrent                   |  |        | 15,116,740                    |  |                |       | 4,858,997  |              |  |   |           |   |  |       | 19,975,737  |      |  | Available-for-sale financial assets, noncurrent                   |  |  | i,ix      | 
|Financial assets measured at cost, noncurrent                     |  |        | 7,963,242                     |  |                |       | (4,801,124 | )            |  |   |           |   |  |       | 3,162,118   |      |  | Financial assets measured at cost, noncurrent                     |  |  | i,ix      | 
|Long-term investments accounted for under the equity method       |  |        | 11,792,007                    |  |                |       | (1,926,124 | )            |  |   |           |   |  |       | 9,865,883   |      |  | Investments accounted for under the equity method                 |  |  | viii,ix   | 
|Prepayment for long-term investments                              |  |        | 34,803                        |  |                |       |           |              |  |   |           |   |  |       | 34,803      |      |  | Prepayment for investments                                        |  |  |           | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |           | 
|Total funds and investments                                       |  |        | 34,979,498                    |  |                |       | (1,868,251 | )            |  |   |           |   |  |       | 33,111,247  |      |  |                                                                  |  |  |           | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |           | 
|Property, plant and equipment, net                                |  |        | 158,854,035                   |  |                |       | 382,968    |              |  |   | 706,802    |   |  |       | 159,943,805 |      |  | Property, plant and equipment                                     |  |  | ii,iii    | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |           | 
|Total intangible assets                                           |  |        | 1,357,492                     |  |                |       |           |              |  |   | 1,440,667  |   |  |       | 2,798,159   |      |  | Intangible assets                                                 |  |  | iv        | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |           | 
|Other assets                                                      |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                  |  |  |           | 
|Deferred charges                                                  |  |        | 1,523,909                     |  |                |       | (353       | )            |  |   | (1,523,556 | ) |  |       |            |      |  |                                                                  |  |  | ii,iv     | 
|Deferred income tax assets, noncurrent                            |  |        | 828,256                       |  |                |       | 227,156    |              |  |   | 2,378,123  |   |  |       | 3,433,535   |      |  | Deferred tax assets                                               |  |  | v,vi      | 
|                                                                 |  |        |                              |  |                |       |           |              |  |   | 343,869    |   |  |       | 343,869     |      |  | Prepayment for equipments                                         |  |  | iii       | 
|                                                                 |  |        |                              |  |                |       |           |              |  |   | 1,377,327  |   |  |       | 1,377,327   |      |  | Deposits-out                                                      |  |  |           | 
|Other assets-others                                               |  |        | 2,498,206                     |  |                |       | 25,622     |              |  |   | (2,345,108 | ) |  |       | 178,720     |      |  | Other assets                                                      |  |  | ii,iii,iv | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |           | 
|Total other assets                                                |  |        | 4,850,371                     |  |                |       | 252,425    |              |  |   | 230,655    |   |  |       | 5,333,451   |      |  |                                                                  |  |  |           | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |           | 
|Total assets                                                      |  | $      | 280,958,918                   |  |                | $     | (1,232,858 | )            |  | $ | 1,487,733  |   |  | $     | 281,213,793 |      |  | Total assets                                                      |  |  |           | 
|                                                                  |  |        |                               |  |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                   |  |  |           | 



F-121



---

##### Table of Contents

|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|------------------------------------------------------------------- |  | ------ | ----------------------------- | - | -------------- | ----- | ---------- | ------------ |  | - | --------- | - |  | ----- | ----------- | ---- |  | ------------------------------------------------------------------- |  |  | --------------------- | 
|R.O.C. GAAP                                                         |  |        | Impact of transition to IFRSs |   |                | IFRSs |            |              | 
|Items                                                               |  | Amount |                               |   | Remeasurements |       |            | Presentation |  |   | Amount    |   |  | Items |             | Note | 
|Current liabilities                                                 |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  | Current liabilities                                                 |  |  |                       | 
|Short-term loans                                                    |  | $      | 5,772,615                     |   |                | $     |           |              |  | $ |          |   |  | $     | 5,772,615   |      |  | Short-term loans                                                    |  |  |                       | 
|Financial liabilities at fair value through profit or loss, current |  |        | 767,605                       |   |                |       |           |              |  |   |          |   |  |       | 767,605     |      |  | Financial liabilities at fair value through profit or loss, current |  |  |                       | 
|Notes and accounts payable                                          |  |        | 6,265,920                     |   |                |       |           |              |  |   |          |   |  |       | 6,265,920   |      |  | Notes and accounts payable                                          |  |  |                       | 
|Accrued expenses                                                    |  |        | 10,782,582                    |   |                |       |           |              |  |   | 179,088   |   |  |       | 10,961,670  |      |  | Other payables                                                      |  |  | v                     | 
|Payable on equipment                                                |  |        | 5,382,395                     |   |                |       |           |              |  |   |          |   |  |       | 5,382,395   |      |  | Payables on equipment                                               |  |  |                       | 
|Income tax payable                                                  |  |        | 1,191,790                     |   |                |       |           |              |  |   |          |   |  |       | 1,191,790   |      |  | Current tax liabilities                                             |  |  |                       | 
|Current portion of long-term liabilities                            |  |        | 8,887,006                     |   |                |       |           |              |  |   |          |   |  |       | 8,887,006   |      |  | Current portion of long-term liabilities                            |  |  |                       | 
|Deferred income tax liabilities, current                            |  |        | 16                            |   |                |       |           |              |  |   | (16       | ) |  |       |            |      |  |                                                                    |  |  |                       | 
|Other current liabilities                                           |  |        | 983,892                       |   |                |       |           |              |  |   | (92,381   | ) |  |       | 891,511     |      |  | Other current liabilities                                           |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Total current liabilities                                           |  |        | 40,033,821                    |   |                |       |           |              |  |   | 86,691    |   |  |       | 40,120,512  |      |  | Total current liabilities                                           |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Long-term liabilities                                               |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  | Non-current liabilities                                             |  |  |                       | 
|Bonds payable                                                       |  |        | 21,932,193                    |   |                |       |           |              |  |   |          |   |  |       | 21,932,193  |      |  | Bonds payable                                                       |  |  |                       | 
|Long-term loans                                                     |  |        | 10,222,620                    |   |                |       |           |              |  |   |          |   |  |       | 10,222,620  |      |  | Long-term loans                                                     |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Total long-term liabilities                                         |  |        | 32,154,813                    |   |                |       |           |              |  |   |          |   |  |       | 32,154,813  |      |  |                                                                    |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Other liabilities                                                   |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                    |  |  |                       | 
|Deferred income tax liabilities, noncurrent                         |  |        | 32,304                        |   |                |       | 1,140,984  |              |  |   | 1,487,748 |   |  |       | 2,661,036   |      |  | Deferred tax liabilities                                            |  |  | vi                    | 
|Accrued pension liabilities                                         |  |        | 3,366,143                     |   |                |       | 959,806    |              |  |   | (86,706   | ) |  |       | 4,239,243   |      |  | Accrued pension liabilities                                         |  |  | v                     | 
|Deposits-in                                                         |  |        | 153,745                       |   |                |       |           |              |  |   |          |   |  |       | 153,745     |      |  | Deposits-in                                                         |  |  |                       | 
|Other liabilities-others                                            |  |        | 197,147                       |   |                |       |           |              |  |   |          |   |  |       | 197,147     |      |  | Other liabilities                                                   |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Total other liabilities                                             |  |        | 3,749,339                     |   |                |       | 2,100,790  |              |  |   | 1,401,042 |   |  |       | 7,251,171   |      |  |                                                                    |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Total liabilities                                                   |  |        | 75,937,973                    |   |                |       | 2,100,790  |              |  |   | 1,487,733 |   |  |       | 79,526,496  |      |  | Total liabilities                                                   |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Stockholders equity of parent company                              |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  | Equity attributable to the parent company                           |  |  |                       | 
|Capital                                                             |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  | Capital                                                             |  |  |                       | 
|Common stock                                                        |  |        | 129,518,055                   |   |                |       |           |              |  |   |          |   |  |       | 129,518,055 |      |  | Common stock                                                        |  |  |                       | 
|Capital collected in advance                                        |  |        | 3,038                         |   |                |       |           |              |  |   |          |   |  |       | 3,038       |      |  | Capital collected in advance                                        |  |  |                       | 
|Additional paid-in capital                                          |  |        | 46,994,672                    |   |                |       | 343,251    |              |  |   |          |   |  |       | 47,337,923  |      |  | Additional paid-in capital                                          |  |  | i,vi,viii,ix          | 
|Retained earnings                                                   |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  | Retained earnings                                                   |  |  |                       | 
|Legal reserve                                                       |  |        | 4,476,570                     |   |                |       |           |              |  |   |          |   |  |       | 4,476,570   |      |  | Legal reserve                                                       |  |  |                       | 
|Unappropriated earnings                                             |  |        | 21,428,655                    |   |                |       | 4,472,125  |              |  |   |          |   |  |       | 25,900,780  |      |  | Unappropriated earnings                                             |  |  | i,ii,v,vi,vii,viii,ix | 
|Adjusting items in stockholders equity                             |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  | Other components of equity                                          |  |  |                       | 
|Cumulative translation adjustment                                   |  |        | (5,725,284                    | ) |                |       | 44,429     |              |  |   |          |   |  |       | (5,680,855  | )    |  | Exchange differences on translation of foreign operations           |  |  | i,ii,v,vi,vii,ix      | 
|Unrealized gain or loss on financial instruments                    |  |        | 10,717,489                    |   |                |       | (665,617   | )            |  |   |          |   |  |       | 10,051,872  |      |  | Unrealized gain or loss on available-for-sale financial assets      |  |  | i,vi,viii,ix          | 
|Treasury stock                                                      |  |        | (4,963,389                    | ) |                |       | (7,527,836 | )            |  |   |          |   |  |       | (12,491,225 | )    |  | Treasury stock                                                      |  |  | viii                  | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Total stockholders equity of parent company                        |  |        | 202,449,806                   |   |                |       | (3,333,648 | )            |  |   |          |   |  |       | 199,116,158 |      |  | Total equity attributable to the parent company                     |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Minority interests                                                  |  |        | 2,571,139                     |   |                |       |           |              |  |   |          |   |  |       | 2,571,139   |      |  | Non-controlling interests                                           |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Total stockholders equity                                          |  |        | 205,020,945                   |   |                |       | (3,333,648 | )            |  |   |          |   |  |       | 201,687,297 |      |  | Total equity                                                        |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 
|Total liabilities and stockholders equity                          |  | $      | 280,958,918                   |   |                | $     | (1,232,858 | )            |  | $ | 1,487,733 |   |  | $     | 281,213,793 |      |  | Total liabilities and equity                                        |  |  |                       | 
|                                                                    |  |        |                               |   |                |       |            |              |  |   |           |   |  |       |             |      |  |                                                                     |  |  |                       | 



F-122



---

##### Table of Contents

| | c. | Reconciliation of the consolidated statement of comprehensive income for the year ended December 31, 2012
| | -- | ---------------------------------------------------------------------------------------------------------



|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|---------------------------------------------------------- |  | ------ | ----------------------------- | - | -------------- | ----- | ---------- | ------------ |  | - | ---------- | - |  | ----- | ----------- | ---- |  | -------------------------------------------------------------------- |  |  | ------ | 
|R.O.C. GAAP                                                |  |        | Impact of transition to IFRSs |   |                | IFRSs |            |              | 
|Items                                                      |  | Amount |                               |   | Remeasurements |       |            | Presentation |  |   | Amount     |   |  | Items |             | Note | 
|Net operating revenues                                     |  | $      | 115,674,763                   |   |                | $     |           |              |  | $ |           |   |  | $     | 115,674,763 |      |  | Net operating revenues                                               |  |  |        | 
|Operating costs                                            |  |        | (96,263,178                   | ) |                |       | (102,313   | )            |  |   |           |   |  |       | (96,365,491 | )    |  | Operating costs                                                      |  |  | i,iv   | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Gross profit                                               |  |        | 19,411,585                    |   |                |       | (102,313   | )            |  |   |           |   |  |       | 19,309,272  |      |  | Gross profit                                                         |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Unrealized intercompany profit                             |  |        | (89                           | ) |                |       |           |              |  |   |           |   |  |       | (89         | )    |  | Unrealized sales profit                                              |  |  |        | 
|Realized intercompany profit                               |  |        | 365                           |   |                |       |           |              |  |   |           |   |  |       | 365         |      |  | Realized sales profit                                                |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Gross profit-net                                           |  |        | 19,411,861                    |   |                |       | (102,313   | )            |  |   |           |   |  |       | 19,309,548  |      |  | Gross profit-net                                                     |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Operating expenses                                         |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  | Operating expenses                                                   |  |  |        | 
|Sales and marketing expenses                               |  |        | (2,748,753                    | ) |                |       | (54        | )            |  |   |           |   |  |       | (2,748,807  | )    |  | Sales and marketing expenses                                         |  |  | i,iv   | 
|General and administrative expenses                        |  |        | (3,371,646                    | ) |                |       | 210,375    |              |  |   |           |   |  |       | (3,161,271  | )    |  | General and administrative expenses                                  |  |  | i,iv   | 
|Research and development expenses                          |  |        | (9,786,831                    | ) |                |       | 325        |              |  |   |           |   |  |       | (9,786,506  | )    |  | Research and development expenses                                    |  |  | iv     | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Subtotal                                                   |  |        | (15,907,230                   | ) |                |       | 210,646    |              |  |   |           |   |  |       | (15,696,584 | )    |  | Subtotal                                                             |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|                                                          |  |        |                              |   |                |       |           |              |  |   | (2,790,775 | ) |  |       | (2,790,775  | )    |  | Net other operating income and expenses                              |  |  | iv     | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Operating income                                           |  |        | 3,504,631                     |   |                |       | 108,333    |              |  |   | (2,790,775 | ) |  |       | 822,189     |      |  | Operating income                                                     |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Non-operating income                                       |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  | Non-operating income and expenses                                    |  |  |        | 
|Interest revenue                                           |  |        | 211,371                       |   |                |       |           |              |  |   | (211,371   | ) |  |       |            |      |  |                                                                     |  |  |        | 
|Investment gain accounted for under the equity method, net |  |        | 718,527                       |   |                |       | (55,148    | )            |  |   |           |   |  |       | 663,379     |      |  | Share of profit or loss of associates and joint ventures             |  |  | iii,iv | 
|Dividend revenue                                           |  |        | 1,021,699                     |   |                |       | 10,752     |              |  |   | (1,032,451 | ) |  |       |            |      |  |                                                                     |  |  | iv     | 
|Gain on disposal of property, plant and equipment          |  |        | 661,309                       |   |                |       |           |              |  |   | (661,309   | ) |  |       |            |      |  |                                                                     |  |  |        | 
|Gain on disposal of investments                            |  |        | 5,345,609                     |   |                |       | (488,401   | )            |  |   | (4,857,208 | ) |  |       |            |      |  |                                                                     |  |  | iv     | 
|Exchange gain, net                                         |  |        | 353,157                       |   |                |       | (310,703   | )            |  |   | 77,883     |   |  |       | 120,337     |      |  | Exchange gain, net                                                   |  |  | ii     | 
|Gain on valuation of financial assets                      |  |        | 49,319                        |   |                |       |           |              |  |   | (49,319    | ) |  |       |            |      |  |                                                                     |  |  |        | 
|Other income                                               |  |        | 815,249                       |   |                |       |           |              |  |   | (815,249   | ) |  |       |            |      |  |                                                                     |  |  |        | 
|                                                          |  |        |                              |   |                |       |           |              |  |   | 1,243,822  |   |  |       | 1,243,822   |      |  | Other income                                                         |  |  |        | 
|                                                          |  |        |                              |   |                |       |           |              |  |   | 3,983,147  |   |  |       | 3,983,147   |      |  | Other gains and losses                                               |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Subtotal                                                   |  |        | 9,176,240                     |   |                |       | (843,500   | )            |  |   | (2,322,055 | ) |  |       | 6,010,685   |      |  |                                                                     |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Non-operating expenses                                     |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                     |  |  |        | 
|Interest expense                                           |  |        | (458,007                      | ) |                |       |           |              |  |   | 458,007    |   |  |       |            |      |  |                                                                     |  |  |        | 
|Loss on disposal of property, plant and equipment          |  |        | (30,706                       | ) |                |       | (244,043   | )            |  |   | 274,749    |   |  |       |            |      |  |                                                                     |  |  | i      | 
|Financial expenses                                         |  |        | (80,262                       | ) |                |       |           |              |  |   | 80,262     |   |  |       |            |      |  |                                                                     |  |  |        | 
|Impairment loss                                            |  |        | (3,369,694                    | ) |                |       | (809,924   | )            |  |   | 4,179,618  |   |  |       |            |      |  |                                                                     |  |  | i,iv   | 
|Exchange loss, net                                         |  |        |                              |   |                |       | 77,883     |              |  |   | (77,883    | ) |  |       |            |      |  |                                                                     |  |  | ii     | 
|Loss on valuation of financial liabilities                 |  |        | (667,160                      | ) |                |       |           |              |  |   | 667,160    |   |  |       |            |      |  |                                                                     |  |  |        | 
|Other losses                                               |  |        | (72,083                       | ) |                |       | 2,897      |              |  |   | 69,186     |   |  |       |            |      |  |                                                                     |  |  | i,iv   | 
|                                                          |  |        |                              |   |                |       |           |              |  |   | (538,269   | ) |  |       | (538,269    | )    |  | Finance costs                                                        |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Subtotal                                                   |  |        | (4,677,912                    | ) |                |       | (973,187   | )            |  |   | 5,112,830  |   |  |       | (538,269    | )    |  |                                                                     |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|                                                          |  |        | 4,498,328                     |   |                |       | (1,816,687 | )            |  |   | 2,790,775  |   |  |       | 5,472,416   |      |  | Subtotal                                                             |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Income from continuing operations before income tax        |  |        | 8,002,959                     |   |                |       | (1,708,354 | )            |  |   |           |   |  |       | 6,294,605   |      |  | Income from continuing operations before income tax                  |  |  |        | 
|Income tax expense                                         |  |        | (2,129,038                    | ) |                |       | (16,945    | )            |  |   |           |   |  |       | (2,145,983  | )    |  | Income tax expense                                                   |  |  | iv     | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|Net income                                                 |  | $      | 5,873,921                     |   |                | $     | (1,725,299 | )            |  | $ |           |   |  |       | 4,148,622   |      |  | Net income                                                           |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  | Other comprehensive income                                           |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       | (2,802,004  | )    |  | Exchange differences on translation of foreign operations            |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       | (2,589,508  | )    |  | Unrealized loss on available-for-sale financial assets               |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       | (499,226    | )    |  | Remeasurements of defined benefit pension plans                      |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       | (263,921    | )    |  | Share of other comprehensive income of associates and joint ventures |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       | (225,891    | )    |  | Income tax related to components of other comprehensive income       |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       | (6,380,550  | )    |  | Total other comprehensive loss, net of tax                           |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  | $     | (2,231,928  | )    |  | Total comprehensive loss, net of tax                                 |  |  |        | 
|                                                           |  |        |                               |   |                |       |            |              |  |   |            |   |  |       |             |      |  |                                                                      |  |  |        | 



F-123



---

##### Table of Contents

| | d. | Material adjustments to the consolidated statement of cash flows for the year ended December 31, 2012
| | -- | -----------------------------------------------------------------------------------------------------

The transition from R.O.C. GAAP to IFRSs did not have a material impact on the statement of cash flows. The statement of cash flows prepared
under R.O.C. GAAP was reported using the indirect method. Furthermore, cash flows from interest and dividends received and interest paid were classified as cash flows from operating activities and interest and dividends received were not disclosed
separately. However, in accordance with the requirements under IAS 7 Statement of Cash Flows, the interest received for the year ended December 31, 2012, is disclosed in the statement of cash flows in the amount of NT$215 million.
The interest payments for the year ended December 31, 2012, was disclosed in the statement of cash flows in the amount of NT$341 million. The dividends received for the year ended December 31, 2012, was disclosed in the statement of cash
flows in the amount of NT$1,089 million. Interest and dividends received and interest paid were classified as cash flows from operating activities.

Apart from the aforementioned differences, there were no material differences between the statements of cash flows prepared under R.O.C. GAAP
and IFRSs.



F-124



---

##### Table of Contents

| | (4) | Notes to the reconciliation of the material adjustments
| | --- | -------------------------------------------------------



| | a. | Material adjustments to consolidated balance sheet as of January 1, 2012 (the date of transition to IFRSs)
| | -- | ----------------------------------------------------------------------------------------------------------



| | i. | Financial instruments
| | -- | ---------------------

Under IFRSs, the Company reclassified certain financial assets measured
at cost, noncurrent to available-for-sale financial assets measured at fair value, noncurrent. In addition, when the Company discontinues the use of the equity method because it ceases to have significant influence over an associate, the Company
remeasures its investments retained in the former associate at fair value as well as eliminates all amounts previously recognized in other comprehensive income in relation to that investment in current profit or loss, which resulted in the
adjustment in retained earnings at the date of transition to IFRSs. These changes caused available-for-sale financial assets, noncurrent to increase by NT$4,609 million, financial assets measured at cost, noncurrent to decrease by NT$5,245 million,
investments accounted for under the equity method to decrease by NT$15 million, retained earnings to decrease by NT$538 million, unrealized gain or loss on available-for-sale financial assets to decrease by NT$93 million and exchange differences on
translation of foreign operations to decrease by NT$20 million.



| | ii. | Acquisition of a non-controlling interest
| | --- | -----------------------------------------

Under IFRSs, the acquisition of a non-controlling
interest is not within the scope of business combination, and therefore, it is not in the scope of exemptions for business combination in IFRS 1. As a result, a retroactive adjustment is required to adjust the differences for acquisitions of
non-controlling interests prior to the transition date. This change in accounting principles caused inventories, net to decrease by NT$6 million, property, plant and equipment, net to increase by NT$1,754 million, other non-current assets to
increase by NT$36 million, retained earnings to increase by NT$1,694 million and other adjusting items in equity to increase by NT$90 million.



F-125



---

##### Table of Contents

| | iii. | The classification of assets leased to others and prepayment for equipment
| | ---- | --------------------------------------------------------------------------

Under R.O.C. GAAP,
the Companys property that is leased to another entity was recorded as leased property under other assets. Under IFRSs, the Company reclassified these assets from other assets to property, plant and equipment as they do not meet the definition
of investment property. In addition, prepayment for equipment is reclassified from property, plant and equipment to other non-current assets as they do not meet the definition of property, plant and equipment. These changes in accounting principles
caused property, plant and equipment, net to decrease by NT$9,308 million and other non-current assets to increase by NT$9,308 million while other adjustments caused property, plant and equipment, net to increase by NT$92 million, other non-current
assets to decrease by NT$62 million, retained earnings to increase by NT$29 million and other adjusting items in equity to increase by NT$1 million.



| | iv. | The classification of intangible assets
| | --- | ---------------------------------------

Software, patent licenses and intellectual property
are reclassified to intangible assets as they meet the definition of intangible assets. This change caused intangible assets to increase by NT$1,433 million and other non-current assets to decrease by NT$1,433 million. The land use rights of a
subsidiary are reclassified to other non-current assets as they meet the definition of operating leases since the ownership does not belong to the subsidiary. This caused intangible assets to decrease by NT$300 million and other non-current assets
to increase by NT$300 million.



| | v. | Employee benefits
| | -- | -----------------

For the first time adoption of IAS 19 Employee Benefits, the
Company remeasured the net defined benefit liability and recognized actuarial gains and losses immediately in full on transition, as other comprehensive income and transfer within equity. Subsequent reclassification to earnings is not permitted. The
adjustment caused the accrued pension liabilities to increase by NT$700 million and retained earnings to decrease by NT$681 million and other adjusting items in equity to decrease by NT$19 million.



F-126



---

##### Table of Contents

| | vi. | Income tax
| | --- | ----------

Under the requirements of IAS 1 Presentation of Financial Statements,
deferred tax assets and liabilities are classified as non-current. Therefore, deferred tax assets and liabilities, current, are reclassified as non-current. Under the requirements of IAS 12 Income Tax, an entity shall offset deferred tax
assets and liabilities if, and only if, the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and if the deferred tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend, in each future period in which significant amounts of deferred tax are expected to be settled or recovered, to settle their current tax assets and liabilities
either on a net basis or simultaneously. Further, if the tax base of the liability component of the compound financial instrument on initial recognition is equal to the initial carrying amount of the sum of the liability and equity components, the
resulting taxable temporary differences should be recognized as a deferred tax liability. The deferred tax is charged directly to the carrying amount of the equity component and subsequent changes in the deferred tax liability are recognized in
profit or loss as deferred tax expense (benefit). Additionally, undistributed earnings generated after 1997 are subject to a 10% tax in compliance with the Income Tax Law of the R.O.C. Under R.O.C. GAAP, the 10% tax on undistributed earnings is
recorded as an expense at the time stockholders resolve that its earnings shall be retained. In accordance with IAS 12, 10% income tax impact is provided in the period the income is earned, assuming that no earnings are distributed. Any reduction in
the liability will be recognized when the income is distributed upon the stockholders approval in the subsequent year. Due to differences discussed above, deferred income tax assets, current decreased from NT$298 million to nil, deferred tax
assets increased by NT$757 million, deferred income tax liabilities, current decreased from NT$33 million to nil, deferred tax liabilities increased by NT$1,406 million, additional paid-in capital decreased by NT$101 million, retained earnings
increased by NT$106 million and other adjusting items in equity decreased by NT$919 million.



| | vii. | Treasury stock and related disposal
| | ---- | -----------------------------------

Some of the Companys subsidiaries and investees
also hold the Companys stocks as investments. Under R.O.C. GAAP, reciprocal shareholdings held by subsidiaries, but not associates, are recorded as treasury stocks on the Companys books. Under IFRSs, however, reciprocal shareholdings,
whether being held by subsidiaries or associates, are recorded as treasury stocks on the Companys books. Therefore, the impact of the transition to IFRSs was to decrease the investments accounted for under the equity method by NT$1,975
million, to increase additional paid-in capital by NT$368 million, to increase retained earnings by NT$5,964 million, to decrease unrealized gain or loss on available-for-sale financial assets by NT$779 million and to increase treasury stock by
NT$7,528 million.



F-127



---

##### Table of Contents

| | viii. | Others
| | ----- | ------

Other adjustments would cause the other non-current assets to decrease by NT$143
million, current liabilities to decrease by NT$33 million, other non-current liabilities to increase by NT$33 million, retained earnings to decrease by NT$55 million and other adjusting items in equity to decrease by NT$88 million.



| | b. | Material adjustments to consolidated balance sheet as of December 31, 2012
| | -- | --------------------------------------------------------------------------



| | i. | Financial instruments
| | -- | ---------------------

Under IFRSs, the Company reclassified certain financial assets measured
at cost, noncurrent to available-for-sale financial assets measured at fair value, noncurrent. In addition, when the Company discontinues the use of the equity method because it ceases to have significant influence over an associate, the Company
remeasures its investments retained in the former associate at fair value as well as eliminates all amounts previously recognized in other comprehensive income in relation to that investment in current profit or loss, which resulted in the
adjustment in retained earnings at the date of transition to IFRSs. This change in accounting principles caused available-for-sale financial assets, noncurrent to increase by NT$4,854 million, financial assets measured at cost, noncurrent to
decrease by NT$4,804 million, additional paid-in capital to decrease by NT$3 million, retained earnings to decrease by NT$929 million, unrealized gain or loss on available-for-sale financial assets to increase by NT$999 million and exchange
differences on translation of foreign operations to decrease by NT$17 million.



| | ii. | Acquisition of a non-controlling interest
| | --- | -----------------------------------------

Under IFRSs, the acquisition of a non-controlling
interest is not within the scope of business combination, and therefore, it is not in the scope of exemptions for business combination in IFRS 1. As a result, a retroactive adjustment is required to adjust the differences for acquisitions of
non-controlling interests prior to the transition date. This change in accounting principles caused property, plant and equipment, net to increase by NT$383 million, other non-current assets to increase by NT$25 million, retained earnings to
increase by NT$443 million and other adjusting items in equity to decrease by NT$35 million.



F-128



---

##### Table of Contents

| | iii. | The classification of assets leased to others and prepayment for equipment
| | ---- | --------------------------------------------------------------------------

Under R.O.C. GAAP,
the Companys property that is leased to another entity is recorded as leased property under other non-current assets. Under IFRSs, the Company reclassified these assets from other non-current assets to property, plant and equipment as they do
not meet the definition of investment property. In addition, prepayment for equipments is reclassified out from property, plant and equipment as they do not meet the definition of property, plant and equipment. This change in accounting principles
caused property, plant and equipment, net to increase by NT$654 million and other non-current assets to decrease by NT$654 million while other adjustments caused property, plant and equipment, net to increase by NT$53 million and other non-current
assets to decrease by NT$53 million.



| | iv. | The classification of intangible assets
| | --- | ---------------------------------------

Software, patent licenses and intellectual property
are reclassified to intangible assets as they meet the definition of intangible assets. This change caused intangible assets to increase by NT$1,469 million and other non-current assets to decrease by NT$1,469 million. The land use rights of a
subsidiary are reclassified to other non-current assets as they meet the definition of operating leases since the ownership does not belong to the subsidiary. This caused intangible assets to decrease by NT$29 million and other non-current assets to
increase by NT$29 million.



| | v. | Employee benefits
| | -- | -----------------

For the first time adoption of IAS 19, the Company remeasured the net
defined benefit liability and recognized actuarial gains and losses immediately in full in the period in which they occur, as other comprehensive income and transfer within equity. Subsequent reclassification to earnings is not permitted. The
adjustments caused other non-current assets to increase by NT$81 million, current liability to increase by NT$87 million, accrued pension liabilities to increase by NT$873 million, retained earnings to decrease by NT$885 million and other adjusting
items in equity to increase by NT$6 million.



F-129



---

##### Table of Contents

| | vi. | Income tax
| | --- | ----------

Under the requirements of IAS 1, deferred tax assets or liabilities are classified
as non-current. Therefore, deferred tax assets or liabilities, current, are reclassified as non-current. Under the requirements of IAS 12, an entity shall offset deferred tax assets and liabilities if, and only if, the entity has a legally
enforceable right to set off current tax assets against current tax liabilities; and if the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable
entities which intend, in each future period in which significant amounts of deferred tax are expected to be settled or recovered, to settle their current tax assets and liabilities either on a net basis or simultaneously. Further, if the tax base
of the liability component of the compound financial instrument on initial recognition is equal to the initial carrying amount of the sum of the liability and equity components, the resulting taxable temporary differences should be recognized as
deferred tax liabilities. The deferred tax is charged directly to the carrying amount of the equity component and subsequent changes in the deferred tax liability are recognized in profit or loss as deferred tax expense (benefit). Additionally,
undistributed earnings generated after 1997 are subject to a 10% tax in compliance with the Income Tax Law of the R.O.C. Under R.O.C. GAAP, the 10% tax on undistributed earnings is recorded as an expense at the time stockholders resolve that its
earnings shall be retained. In accordance with IAS 12, 10% income tax impact is provided in the period the income is earned, assuming that no earnings are distributed. Any reduction in the liability will be recognized when the income is distributed
upon the stockholders approval in the subsequent year. Due to differences discussed above, current assets were decreased from NT$890 million to nil, other non-current assets were increased by NT$2,524 million, other non-current liabilities
were increased by NT$2,629 million, additional paid-in capital were decreased by NT$100 million, retained earnings were increased by NT$89 million and other adjusting items in equity were decreased by NT$984 million.



| | vii. | Capital reduction and return from foreign subsidiaries
| | ---- | ------------------------------------------------------

The Company decreased its equity
interests in a foreign operation through capital reduction and return of capital, and the differences of the accumulated currency translation adjustments before and after the capital reduction is recognized in profit or loss under R.O.C. GAAP. Under
IAS 21 The Effects of Changes in Foreign Exchange Rates, as the entity did not lose control over its foreign operations, the Company was not considered to have a partial disposal of its foreign operations. Accordingly, none of the
accumulated currency translation adjustments associated with the foreign operations were reclassified to profit or loss. This difference resulted in the decrease of retained earnings by NT$233 million and an increase in other adjusting items in
equity by NT$233 million.



F-130



---

##### Table of Contents

| | viii. | Treasury stock and related disposal
| | ----- | -----------------------------------

Some of the Companys subsidiaries and investees
also hold the Companys stocks as investments. Under R.O.C. GAAP, reciprocal shareholdings held by subsidiaries, but not associates, are recorded as treasury stocks on the Companys books. Under IFRSs, however, reciprocal shareholdings,
whether being held by subsidiaries or associates, are recorded as treasury stocks on the Companys books. Therefore, the impact of the transition to IFRSs was to decrease the investments accounted for under the equity method by NT$1,827
million, to increase additional paid-in capital by NT$437 million, to increase retained earnings by NT$5,895 million, to decrease unrealized gain or loss on available-for-sale financial assets by NT$631 million and to increase treasury stock by
NT$7,528 million.



| | ix. | Others
| | --- | ------

Other adjustments would cause available-for-sale financial assets, noncurrent to
increase by NT$5 million, financial assets measured at cost, noncurrent to increase by NT$3 million, other non-current assets to decrease by NT$99 million, additional paid-in capital to increase by NT$9 million, retained earnings to increase by
NT$93 million and other adjusting items in equity to decrease by NT$193 million.



| | c. | Material adjustments to the consolidated statement of comprehensive income for the year ended December 31, 2012
| | -- | ---------------------------------------------------------------------------------------------------------------



| | i. | Acquisition of a non-controlling interest
| | -- | -----------------------------------------

Under IFRSs, the acquisition of a non-controlling
interest is not within the scope of business combination, and therefore, it is not in the scope of exemptions for business combination in IFRS 1. As a result, a retroactive adjustment is required to adjust the differences for acquisitions of
non-controlling interests prior to the transition date. This would cause operating costs to increase by NT$75 million, operating expenses to increase by NT$2 million and non-operating income to decrease by NT$1,174 million, primarily due to
additional depreciation and impairment loss arising from the transition date adjustments to property, plant and equipment.



| | ii. | Capital reduction and return from foreign subsidiaries
| | --- | ------------------------------------------------------

The Company decreased its equity
interests in a foreign operation through capital reduction and return of capital, and the differences of the accumulated currency translation adjustments before and after the capital reduction is recognized in profit or loss under R.O.C. GAAP. Under
IAS 21, as the entity did not lose control over its foreign operations, the Company was not considered to have partially disposed of its foreign operations. Accordingly, none of the accumulated currency translation adjustments associated with the
foreign operations were reclassified to profit or loss. This difference resulted in the decrease in non-operating income by NT$233 million.



F-131



---

##### Table of Contents

| | iii. | Treasury stock and related disposal
| | ---- | -----------------------------------

Under IFRSs, reciprocal shareholdings held by associates
are also treated as treasury stocks while in accordance with R.O.C. GAAP only reciprocal shareholdings held by subsidiaries are treated as treasury stocks. The adjustment caused share of profit or loss of associates and joint ventures to decrease
NT$69 million.



| | iv. | Others
| | --- | ------

Other adjustments caused operating costs to increase by NT$27 million, operating
expenses to decrease by NT$212 million, other operating expenses to increase by NT$2,791 million, non-operating income to increase by NT$2,450 million and income tax expense to increase by NT$17 million.



F-132